Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 000-20259
SEAMLESS CORPORATION
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(Exact name of small business issuer as specified in its charter)
Nevada 33-0845463
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
800 N. Rainbow Blvd., Ste. 208, Las Vegas, NV 89109
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(Address of principal executive offices)
(702) 448-1861
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(Issuer's telephone number)
N/A
---
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of November 20, 2009, the number of shares of common stock issued and
Outstanding was 16,324,424,763.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
INDEX
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet - September 30, 2009 and June 30, 2009 (audited) 2
Statements of Operations -
For the three months ended September 30, 2009 and 2008 3
Statements of Cash Flow -
For the three months ended September 30, 2009 and 2008 4
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures about Market Risk 17
Item 4T. Controls and Procedures 17
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits 18
SIGNATURES 19
1
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SEAMLESS CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, 2009 June 30, 2009
(unaudited) Audited-Restated
---------------- ----------------
Current assets
Cash $ 3,751 $ 1,460
Other current assets 800 22,634
---------------- ----------------
Total current assets 4,551 24,094
Property and equipment (net of accumulated depreciation of $52,993 and
$52,763 at September 30, 2009 and June 30, 2009, respectively) 2,077,102 2,077,331
Security deposit 13,910 13,910
---------------- ----------------
TOTAL ASSETS $ 2,095,562 $ 2,115,335
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses 1,334,572 1,125,368
Other current liabilities 600 600
Loan Payable 726,554 399,941
Payable to officer 94,379 6,738
Preferred Stock Liability 2,499,342 3,088,805
Convertible Debt-Conversion Feature Liability 878,453 1,426,044
Current liabilities of discontinued operations 361,054 361,054
---------------- ----------------
Total current liabilities 5,894,954 6,408,550
---------------- ----------------
Commitments and contingencies (See Note 9)
Stockholders' equity (deficit)
Preferred A stock, par value $0.001, 2,000,000 shares and 10,000,000 - -
shares authorized at September 30, 2009 and June 30, 2009,
615,403 shares issued and outstanding
Preferred B stock, par value $0.001, 1,000,000 and 10,000,000 shares - -
authorized at September 30, 2009 and June 30, 2009
zero shares issued and outstanding
Preferred C stock, par value $0.001, 3,000,000 shares authorized at - -
September 30, 2009 and June 30, 2009, 1,380,848 shares and
1,852,848 issued and outstanding
Preferred D Stock, par value $.0.001 4,000,000 and zero authorized at
September 30, 2009 and June 30, 2009 1,306,646 and 1,286,848 shares issued
And outstanding at September 30, 2009 and June 30, 2009 1,307 1,287
Common stock, par value $0.001, 19,989,800,000 shares and 19,990,000,000 shares
authorized at September 30, 2009 and June 30, 2009, 14,758,680,963 shares
and 10,348,080,963 shares issued and outstanding
at September 30, 2009 and June 30, 2009 14,758,681 10,348,081
Additional paid-in capital 10,057,712 14,017,272
Accumulated deficit (28,517,712) (28,559,854)
---------------- ----------------
Total stockholders' equity (3,699,391) (4,193,214)
Less: Treasury stock at cost (100,000) (100,000)
---------------- ----------------
Stockholders' equity (3,799,391) (4,293,214)
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,095,562 $ 2,115,335
================ ================
The accompanying notes are an integral part of these financial statements.
2
SEAMLESS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(unaudited)
2009 2008
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Revenues $ - $ 498
Cost of revenues 27,170 5,951
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Gross Income (Loss) (27,170) (4,951)
------------- -------------
Expenses:
Selling, general and admin. 354,708 254,922
Consulting - 10,000
Financing Fee Expense 8,000 -
Interest 21 2,295
Officer Payroll 75,000 75,000
Depreciation and amortization 229 12,073
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Total Expenses 437,938 351,995
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(Loss) from continuing operations
before interest and other items (465,108) (356,946)
Other income
Cancellation of indebtedness 18,965 12,119
Unrealized Gain from change in derivative liabilities 725,994 -
Interest (237,085) (21)
------------- -------------
Income (Loss) from continuing operations
before income taxes 42,767 (344,848)
Income taxes (benefit) (note 8) -- --
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Income (loss) from continuing operations 42,767 (344,848)
LOSS from discontinued operations -- (13,660)
(Benefit from) provisions for income taxes -- --
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Total discontinued operations -- (13,660)
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Net Income (Loss) $ 42,767 $ (358,508)
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Preferred C stock dividends-deemed -- (405,400)
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Net income (loss) available to common stockholders $ 42,767 $ (763,908)
============= =============
Basic and Diluted income (loss) per common shares
Income (loss) from continuing operations,
after preferred dividends $ -- $ --
Income (Loss) from discontinued operations -- --
============== =============
NET INCOME (LOSS) PER SHARE AVAILABLE TO
COMMON STOCKHOLDERS $ -- $ --
Weighted average basic and diluted common shares 13,239,250,258 582,151,883
============== =============
The accompanying notes are an integral part of these financial statements.
3
SEAMLESS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(unaudited)
2009 2008
------------- -------------
Cash flows used in operating activities
Net income (loss) from continuing operations $ 42,767 $ (344,848)
Depreciation and amortization 229 12,073
Non cash interest expenses 18,471 --
Amortization of Debt Discount 218,614 --
Unrealized loss from change in derivative
liabilities (725,994) --
Non cash financing fee 8,000 --
Cancellation of indebtedness (12,119) (12,119)
Issuance of common stock for services -- 10,000
Settlement Fee 2,560 --
Changes in operating assets and liabilities
Other current assets -- 2,300
Accounts payable 227,439 (63,641)
Other current liabilities -- (54,858)
Payable to officer 87,641 51,154
Restricted cash - Escrow -- 75,000
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Net cash provided by (used in) operating activities (157,709) (399,939)
------------- -------------
Cash flows from financing activities
Proceeds from sale of common stock -- 28,416
Proceeds from sale of preferred A stock -- 100,000
Proceeds from sale of preferred C stock -- 296,744
Proceeds from Loans Payable 160,000 --
Bank overdraft -- (2,930)
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Net cash provided by financing activities 160,000 422,230
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Increase (decrease) in cash 2,291 22,291
Cash at beginning of period 1,460 --
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Cash at end of period $ 3,751 $ 22,291
============= =============
The accompanying notes are an integral part of these financial statements.
4
SEAMLESS CORPORATION
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(unaudited)
2009 2008
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Cash paid for:
Interest $ -- $ 21
Noncash investing, and financing activities
Common stock issued for conversion of preferred C stock $ 471,060 --
Common stock issued for conversion of preferred A stock $ -- $ 1,206,500
Of preferred C stock $ -- $ 50,000
Preferred A stock issued for conversion of preferred C stock $ -- $ 50,000
Deemed dividends recorded for Preferred C stock $ -- $ 405,400
The accompanying notes are an integral part of these financial statements.
5
SEAMLESS CORPORATION
F/K/A SEAMLESS WI-FI INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: ORGANIZATION AND OPERATIONS
Prior to December 31, 1997, Seamless Corporation ("The Company") formerly known
as Seamless Wi-Fi, Inc. "the Company" was in the food product manufacturing
business and formerly known as International Food and Beverage, Inc. In November
1998, new stockholders bought majority control from the previous Chief Executive
Officer through a private transaction. Immediately thereafter, the former CEO
resigned and the new stockholders assumed the executive management positions. In
December 1998, after new management was in place, a decision was made to change
the Company's principal line of business from manufacturing to high technology.
The Company changed its name from International Food & Beverage, Inc. to
Internet Business's International, Inc., and reincorporated the Company on
December 8, 1998 in the state of Nevada. During April of 1999, the Company
announced the opening of its first e-commerce site and engaged in the
development, operation and marketing of a number of commercial web sites. The
Company's subsidiaries consisted of: Lending on Line (providing real estate
loans and equipment leasing), Internet Service Provider (providing national
Internet access dial-up service, wireless high speed Internet, and Internet web
design and hosting), E. Commerce (providing Auction sites), and Direct Marketing
(providing direct marketing of long distance phone service, computers with
Internet access, and Internet web design hosting). The Company ceased operations
during the fiscal year ended June 30, 2003. During the fiscal year ended June
30, 2004, the Company changed its name to Alpha Wireless Broadband, Inc, and
started a wireless operation through it's wholly owned subsidiary Skyy-Fi, Inc a
Nevada Corporation. Skyy-Fi began providing access to the Internet, by
installing equipment in locations such as hotels and coffee shops for use by
their patrons for a fee or free basis. As of June 30, 2008, Skyy-Fi closed the
internet service and tech support for these locations.
In January 2005, the Company acquired the assets of Seamless P2P, LLC and
contributed these assets to its 80% owned subsidiary Seamless Peer to Peer,
Inc., which is a developer and provider of a patent pending software program
Phenom Encryption Software that encrypts Wi-Fi transmissions based upon RSA's
government certified 256 bit AES encryption coupled with RSA's Public Key
Infrastructure flexible telecom data and voice transport solutions.
In May 2005, the Company changed its name from Alpha Wireless Broadband, Inc. to
Seamless Wi-Fi, Inc, which was approved by the Board of Directors and its
subsidiary from Skyy-Fi, Inc. to Seamless Skyy-Fi, Inc.
In December 2005, the Company started a hosting company Seamless Internet
offering Seamless clients a high-security hosting facility.
In July 2008, the Company changed the name of its subsidiary, Seamless Skyy-Fi,
Inc. to Seamless Tek Labs, Inc. The Company's subsidiary, Seamless Peer 2 Peer
Inc. became a subsidiary of Seamless Tek Labs, Inc. Both Tek Labs and Peer 2
Peer concentrate on software development.
In July 2008, the Company started a marketing company, Seamless Sales, LLC for
all of the products the Company and its subsidiaries produce.
In July 2008, the Company changed its name from Seamless Wi-Fi, Inc. to Seamless
Corporation which was approved by the Board of Directors. The Company now
concentrates on production of the S-Gen a Pocket Personal Computer, the SNBK-1 a
Mini Note Book, and MP3-4 players.
In July 2008 Seamless discontinued its operations of providing Wi-Fi to
hospitality providers. The incomes from those operations were from fees paid by
the hotels and businesses and the cost associated from those operations include
customer support and providing Internet Bandwidth. Therefore the Assets,
Liabilities, Income and Expenses associated with those operations are delineated
on the financials statements.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
The financial statements include the accounts of the Company and its wholly
owned subsidiaries and majority-owned subsidiary. They have been prepared in
conformity with (i) accounting principles generally accepted in the United
States of America; and (ii) the rules and regulations of the United States
Securities and Exchange Commission. All significant intercompany accounts and
transactions between the Company and its subsidiaries have been eliminated in
consolidation.
6
UNAUDITED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements of Seamless
Corporation. and its Subsidiaries (the Company) have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information, pursuant to the rules and regulations of the
Securities and Exchange Commission. The results f or the periods indicated are
unaudited, but reflect all adjustments (consisting only of normally recurring
adjustments) which management considers necessary for a fair presentation of
operating results.
The operating results for the three-month period ended September 30, 2009 are
not necessarily indicative of the results that may be expected for the year
ended June 30, 2010. These unaudited consolidated financial statements should be
read in conjunction with the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
June 30, 2009.
RECLASSIFICATIONS
Certain reclassifications have been made in the 2009 financial statements to
conform to the 2008 presentation. These reclassifications did not have any
effect on net income (loss) or shareholders' equity.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Significant estimates include allowances for doubtful accounts and notes and
mortgage loans receivable. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all short-term, highly liquid investments with an original
maturity date of three months or less to be cash equivalents.
ACCOUNTS RECEIVABLE
Accounts receivable are judged as to collectibility by management and an
allowance for bad debts has not been established.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost and depreciated using the straight-line
method over the estimated useful life of the assets, which is generally three to
five years for computers and computer related equipment and five to seven years
for furniture and other non-computer equipment. Leasehold improvements are
amortized using the straight-line method over the shorter of their estimated
useful lives or the term of the lease, ranging from one to five years.
INVENTORY
Inventory is valued at lower of cost (first-in, first out method) or market.
PROPRIETARY SOFTWARE IN DEVELOPMENT
In accordance with SFAS No. 86, accounting for the Cost of Computer Software to
be Sold, Leased, or Otherwise Marketed Software ("FAS 86") (CODIFIED WITHIN ASC
985.20, SOFTWARE INDUSTRY COSTS OF SOFTWARE TO BE SOLD, LEASED OR MARKETED), the
Company has capitalized certain computer software development costs upon the
establishment of technological feasibility. Technological feasibility is
considered to have occurred upon completion of a detailed program design which
has been confirmed by documenting and tracing the detailed program design to
product specifications. Amortization is provided based on the greater of the
ratios that current gross revenues for a product bear to the total of current
and anticipated future gross revenues for that product. The estimated useful
life for the straight-line method is determined to be 2 to 5 years. For the
quarters ended September 30, 2009 and September 30, 2008, there was no
amortization for the capitalized costs.
REVENUE RECOGNITION
Sales are recognized upon shipment of goods to customers. Amounts billed related
to shipping and handling are included in net sales.
ADVERTISING EXPENSE
All advertising costs are expensed when incurred. Advertising costs were
$161,100 and $66,157 for the years ended September 30, 2009 and 2008,
respectively.
7
CONCENTRATION OF CREDIT RISK
The Company is subject to credit risk through trade receivables. Sales through
its website are generally billed to the customer's credit card, thus reducing
the credit risk. The Company routinely assesses the financial strength of
significant customers and this assessment, combined with the large number and
geographic diversity of its customers, limits the Company's concentration of
risk with respect to trade accounts receivable.
INCOME TAXES
The Company accounts for income taxes under the asset and liability approach of
reporting for income taxes. Deferred taxes are recorded based upon the tax
impact of items affecting financial reporting and tax filings in different
periods. A valuation allowance is provided against net deferred tax assets where
the Company determines realization is not currently judged to be more likely
than not. The Company and its 80% of more owned U.S. subsidiaries file a
consolidated federal income tax return.
EARNINGS (LOSS) PER SHARE ("EPS")
Basic EPS is computed by dividing income (loss) by the weighted average number
of common shares outstanding for the period. Diluted EPS is computed giving
effect to all dilutive potential common shares that were outstanding during the
period. Dilutive potential common shares consist of incremental shares issuable
upon conversion of preferred stock outstanding. At September 30, 2009, Series A
Preferred shares are convertible to 6,184,030,000 common shares and Series C
Preferred shares are convertible to 13,809,400,000 common shares. Because the
convertible preferred shares have an anti-dilutive effect, there is no
difference between basic and diluted earnings per share. There were also 975,000
stock options outstanding that were not included in the basic EPS calculations
as their effect would have been anti-dilutive to basic EPS.
FAIR VALUE MEASUREMENT
On July 1, 2008, the Company adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 157, (CODIFIED WITHIN ACCOUNTING STANDARDS
CODIFICATION (ASC) 820, FAIR VALUE MEASUREMENTS AND DISCLOSURES) "FAIR VALUE
MEASUREMENTS" as required for financial assets and liabilities. The adoption of
SFAS No. 157 had no material impact on the Company's financial position, results
of operations or cash flows during the quarter ended September 30, 2009. SFAS
No. 157 was effective July 1, 2008 for financial assets and liabilities and was
effective July 1, 2009 for non-financial assets and liabilities. The standard
provides guidance for establishing a frame work for measuring fair values of
assets and liabilities. Under the standard, fair value refers to the price that
would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date (i.e. an exit
price). The standard clarifies the principle that fair value should be based on
the assumptions or inputs market participants would use when pricing the asset
or liability.
In support of this principle, the accounting standard establishes a three level
hierarchy for fair value measurements based on the quality or transparency of
inputs used to measure the fair value of an asset or liability at the
measurement date.
The three levels are defined as follows:
O Level 1 (the highest priority) -- inputs to the valuation methodology are
quoted market prices (unadjusted) for identical financial assets or
liabilities in active markets.
O Level 2 -- inputs to the valuation methodology include quoted market
prices for similar assets and liabilities in active markets, and inputs
that are observable for an asset or liability, either directly or
indirectly, for substantially the full term of a financial instrument.
O Level 3 (the lowest priority) -- inputs to the valuation methodology are
unobservable and significant to the fair value measurement. These inputs
reflect management's own assumptions about the assumptions a market
participant would use in pricing a financial instrument.
A financial instrument's categorization within the valuation hierarchy is based
upon the lowest level or priority of input that is significant to the fair value
measurement of the financial asset or liability.
The Company's only financial assets or liabilities subject to the accounting
standard are its conversion feature liability on its convertible debt. Following
is a description of the valuation methodologies used to determine the fair value
of the Company's financial a ssets including the general classification of such
instruments pursuant to the valuation hierarchy
8
FAIR VALUE MEASUREMENTS AT REPORTING DATE USING
-----------------------------------------------
Quoted Prices in Active
Description September 30, 2009 Markets for Identical Assets
------------------------------------------------------
(Level 1)
Conversion feature liability-convertible debt $ 878,453 $ 878,453
NEW ACCOUNTING PRONOUNCEMENTS
In June 2009, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard ("SFAS") No. 168, THE FASB ACCOUNTING STANDARDS
CODIFICATION AND THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, A
REPLACEMENT OF FASB STATEMENT NO. 162. This statement modifies the Generally
Accepted Accounting Principles ("GAAP") hierarchy by establishing only two
levels of GAAP: authoritative and nonauthoritative accounting literature.
Effective September 2009, the FASB Accounting Standards Codification ("ASC"),
also known collectively as the "Codification," is considered the single source
of authoritative U.S. accounting and reporting standards, except for additional
authoritative rules and interpretive releases issued by the SEC.
Nonauthoritative guidance and literature would include, among other things, FASB
Concepts Statements, American Institute of Certified Public Accountants Issue
Papers and Technical Practice Aids and accounting textbooks. The Codification
was developed to organize GAAP pronouncements by topic so that users can more
easily access authoritative accounting guidance. It is organized by topic,
subtopic, section, and paragraph, each of which is identified by a numerical
designation. This statement applies beginning in the quarter ended September 30,
2009. All accounting references have been updated, and therefore SFAS references
have been replaced with ASC references.
NOTE 3: OPERATIONS AND LIQUIDITY
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
company as a going concern. The Company has experienced significant losses in
recent years. At September 30, 2009 the Company had an accumulated deficit of
$28,498,616.
The Company is actively pursuing additional equity financing through discussions
with investment bankers and private investors. There can be no assurance the
Company will be successful in its effort to secure additional equity financing.
The Company's ability to continue as a going concern is contingent upon its
ability to secure financing and attain profitable operations. The financial
statements do not include any adjustment to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the possible inability of the
Company to continue as a going concern.
NOTE 4: INVENTORY
Inventory consists of parts and materials held by a manufacturer in China. The
Company transferred the ownership of the inventory in the amount of $150,000 to
Kelly's Inc. according to the settlement agreement with them in the second
quarter of year 2009.
NOTE 5: PROPERTY AND EQUIPMENT, AT COST
Property and equipment consists of the following:
June 30
--------------------------------
2009 2008
---------- ----------
Machinery and
Equipment $ 53,390 $ 53,390
Technology 2,076,704 2,076,704
Tooling 0 0
---------- ----------
2,130,094 2,130,094
Less: Accumulated
Depreciation 52,992 52,763
---------- ----------
2,077,102 2,227,036
Estimated useful life for machinery and equipment is 5 years. The production for
technology is not completed and the estimated useful life is not determined yet.
Depreciation expense for the year ended September 30, 2009 and 2008 was $229 and
$12,073 respectively.
9
No amortization has been taken on tooling and technology as the production of
inventory has not commenced as of September 30, 2009.
$44,611 of fixed assets and $28,743 of depreciation were written off for a loss
of $15,868.
The Company transferred the ownership of the tooling in the amount of $128,500
to Kelly's Inc. according to the settlement agreement with them in the second
quarter of year 2009.
NOTE 6: RELATED PARTY TRANSACTIONS
The Company had the following loans and advances to related parties:
September 30, 2008
------------------
Allowance
Loan/Advance for uncollectible Balance
Balance loans/advances Net
-------------- -------------- --------------
Carbon Jungle, Inc. (A) 243,332 243,332 0
DLR Funding (B) 900,153 -- 900,153
1st Global Financial Service (C, D) 1,442,847 -- 1,442,847
-------------- -------------- --------------
Total $ 2,586,332 $ 243,332 $ 2,343,000
============== ============== ==============
A. The President of the Company was a Director of this company; the
Secretary of the Company was an officer of this company.
B. The President of the Company was a stockholder and director of this
company. The Secretary of the Company was an officer and stockholder of
this company.
C. The President of the Company was a stockholder and director of this
company. The Secretary of the Company was an officer and stockholder of
this company. A director of 1st Global was paid $10,000 per month by
the Company, which was recorded as a loan receivable by the Company.
D. The President of the Company was an officer of this company.
During the quarter ended September 30, 2008, the Company wrote off $100,000
against DLR Funding's loan as uncollectible. During the quarter ended December
31, 2008, the Company wrote off $1,442,847 against 1st Global Financial
Service's loan and $900,152 against DLR Funding's loan as uncollectible. At June
30, 2008 Carbon Jungle's loan of $243,332 was fully reserved and during the
quarter ended December 2008, the notes receivable and the allowance were both
removed. At September 30, 2009, there was no note receivable from related
parties.
The above interest at annual rates ranged from 6% to 12%. The Company recorded
interest income on the above for the year ended June 30, 2008 in the amount of
$317,380. As all of the notes receivable and the accrued interest receivable
were written off in the second quarter of the year 2009, the interest income was
not recorded for the quarter ended September 30, 2009. During the quarter ended
December 31, 2008, the Company wrote off the accrued interest receivable of
$553,512. At September 30, 2009, there was no accrued interest receivable.
The total of notes receivable and accrued interest, in the amount of $2,996,512
is classified as current assets of discontinued operations at June 30, 2008.
During the year ended June 30, 2008, Reda Family Trust converted 10,000
preferred stock shares into 100,000,000 shares of common stock. The trust owned
44% of total common stock shares as of June 30, 2008.
Al Reda, the Company's Chief Executive Officer, Chief Financial officer and a
member of the Board of Directors, is a trustee of the trust.
The Company issued 858,298 shares of Preferred D stock to AR Corp. in June 2009
in exchange for the officer loan in the amount of $339,149. The Company's chief
executive officer and the director of the board is a majority shareholder of AR
Corp.
10
NOTE 7: STOCKHOLDER EQUITY
The Company filed a certificate of designation with the Nevada Secretary of
State on June 25, 2009. According to the certificate of designation, the Company
is authorized to issue 19,989,800,000 shares of common stock, par value $0.001
per share, 2,000,000 shares of convertible Series A Preferred Stock, par value
$0.001 per share, 1,000,000 shares of convertible Series B Preferred Stock, par
value $0.001 per share, and 3,000,000 shares of convertible Series C Preferred
Stock, par value $0.001 per share, and 4,000,000 shares of convertible Series D
Preferred Stock, par value $0.001 per share.
The Board of Directors has the authority to issue such shares of common and/or
preferred stock in one or more series, with the designation, number, full or
limited voting powers, or the denial of voting powers, preferences and relative,
participating, optional, and other special rights and the qualifications,
limitations, restrictions, and other distinguishing characteristics as shall be
stated in the resolution or resolutions.
The Board of Directors has adopted the following resolutions regarding the
preferred stock.
LIQUIDATION RIGHTS. In the event of any liquidation, dissolution or
winding up of the corporation, after setting apart or paying in full
the preferential amounts due to holders of senior capital stock, if
any, the holders of Series "A" "B" "C" "D" Preferred Stock and parity
capital stock, if any, shall be entitled to receive, prior and in
preference to any distribution of any of the assets of surplus funds of
the corporation to the holders of junior capital stock, including
Common Stock, an amount equal to approximately $1.98 per share.
DIVIDENDS. The Preferred Stock shall not be entitled to receive any
dividends.
CONVERSION RIGHTS. Each share of Series "A" Preferred Stock shall be
convertible, at the option of the holder, into 10,000 fully paid and
non-assessable shares of the Company's Common Stock. Each share of
Series "B" Preferred Stock shall be convertible, at the option of the
holder, into 1,000 fully paid and non-assessable shares of the
Company's Common Stock. Each share of Series "C" Preferred Stock shall
be convertible at the option of the holder, based upon the following
formula. One Share of "C" Preferred Stock shall convert into One Dollar
worth of fully paid and non-assessable shares of the Company's Common
Stock based upon the most recent 10 day average closing price effective
the date of receipt of the conversion request. Each share of Series "D"
shall have no conversion rights.
VOTING RIGHTS. The holders of shares of Preferred Stock "A" "B" "C"
shall NOT be entitled to vote on any matters considered and voted upon
by the corporation's Common Stock. Preferred Stock "D" with voting
rights as follows. One share of Series of "D" will be equivalent to
voting 10,000 shares of common stock.
MANDATORY REDEMPTION. There shall be no mandatory redemption for
preferred stocks.
STOCK ISSUANCE
--------------
During the fiscal year ended June 30, 2009, the following securities were
issued:
10,000,000 shares of common stock were issued for consulting services and
$10,000 was recorded as such.
251,819 shares of Series A Preferred Stock were converted to 2,518,190,000
shares of common stock.
748,000 shares of Series C Preferred Stock were converted into 7,480,000,000
shares of common stock.
100,000 shares of Series C Preferred Stock were converted into 10,000,000 share
of common stock and 9,000 shares of Series A Preferred Stock.
320,000 shares of Series D Preferred Stock were issued for $320 to Alpha Blue
Inc. in lieu of 320,000 shares of Series A Preferred Stock that was owed to
Alpha Blue in consideration of $208,489 paid for the Series A Preferred Stock.
80,000 shares of Series D Preferred Stock were issued to MAKR Inc. in lieu of
80,000 shares of Series C Preferred Stock that was owed to MAKR in consideration
of $106,544 paid for the Series C Preferred Stock.
28,550 shares of Series D Preferred Stock were issued to Omega Inc. in lieu of
285,500,000 shares of Common Stock that was owed to Omega in consideration of
$28,350 paid for the Common Stock.
858,298 shares of Series D Preferred Stock were issued to AR Corporation to
settle an officer loan payable of $339,149. The loan payable was money due to Al
Reda, the majority shareholder of AR Corporation.
168,910 shares of series A Preferred were issued to Omega LLC for $129,150.
MAKR's stock subscription was $800,000 at June 30, 2008 and the payment of the
$296,744 was received in the quarter ended September 30, 2008. At September 30,
2008 the remaining $97,856 was receivable and $405,400 was recorded as deemed
dividend during the quarter ended September 30, 2008.
Antigua LLC paid $100,000 for 500,000 shares of the Series A Preferred Stock
which was issued in the year ended June 30, 2008.
11
During the quarter ended September 30, 2009, the following securities were
issued:
200,000,000 shares of common stock were purchased from Adobe Oil for $20,000 and
subsequently retired.
100,000,000 shares of common stock were converted into 20,000 shares of Series D
Preferred Stock which are to be issued in the second quarter of fiscal year end
2010.
471,060 shares of Series C Preferred Stock were converted into 4,710,600,000
shares of common stock.
STOCK OPTION
------------
During the year ended June 30, 2008, Dettman Group LLC was granted an option to
purchase 975,000 shares of common stock at a strike price of $0.01 as a
consulting fee. The option was evaluated using the Black Scholes option pricing
model to be worth $268,418. The Black Scholes input variables were as follows:
Volatility: 100%
Risk free rate: 1.965%
Term: 1.5 years
Exercise price: $0.01
Stock price: $0.285
Dividend yield: $-0-
Beneficial Conversion-Deemed Dividend
-------------------------------------
As a result of the issuance of series A preferred convertible stock, the Company
recorded a "Deemed Dividend" in the amount of $405,400. The deemed dividend is
the result of the conversion price, at issuance, being less than the common
stock market price, at issuance, since the preferred stock was immediately
convertible. This is considered a "beneficial conversion feature" and is shown
as a deemed dividend on the statement of operations for the year ended June 30,
2009.
NOTE 8: INCOME TAXES
No provision for income taxes has been recorded in the accompanying financial
statements as a result of the Company's net operating losses. The Company has
unused tax loss carry forwards of approximately $28,000,000 and $20,000,000 at
September 30, 2009 and September 30, 2008 respectively to offset future taxable
income. Such carry forwards expire in the years beginning 2021. The deferred tax
asset recorded by the Company as a result of these tax loss carry forwards is
approximately $9,500,000 and $7,000,000 at September 30, 2009 and 2008
respectively. The Company has reduced the deferred tax asset resulting from its
tax loss carry forwards by a valuation allowance of an equal amount as the
realization of the deferred tax asset is uncertain.
NOTE 9: COMMENTS AND CONTINGENCIES
LEASE
The Company entered into lease agreements for an office space which expires on
August 31, 2010 and a server co-location facility which expires on November 2,
2010. The Company rents additional office space in Nevada, on a month to month
basis. Rent expense under these leases for the quarters ended September 30, 2009
and 2008 were $21,137 and $43,351, respectively. The annual minimum future lease
payments required under the Company's operating leases are as follows.
June 30, 2010 $164,645
June 30, 2011 18,265
--------
Total $182,910
========
LEGAL PROCEEDINGS
The Company is a party to the following legal proceedings:
GLOBALIST V. INTERNET BUSINESS'S INTERNATIONAL, INC. ET AL
----------------------------------------------------------
In July 2003, Globalist sued the Company and was awarded a judgment plus
interest in the amount of approximately $301,000. The Company appealed the
Court's decision and the award amount. In February 2005 the Company reached a
settlement agreement with Globalist. However, Globalist later rejected the
settlement agreement and an appeal was filed in the second quarter with the
appellate court by the Company seeking confirmation of the settlement agreement.
The current liability in the amount of $361,054 reflects the current liability
of discontinued operations in the accompanying financial statements.
EMPLOYMENT CONTRACT
The Company has an employment contract with their Chief Executive Officer,
Albert Reda that calls for a base salary of $300,000 for the year ended June 30,
2008 and thereafter, a base salary of $25,000 a month from July 2007 until its
expiration date in June 2012. In the event that the company becomes profitable
according to generally accepted accounting principles, the employee's monthly
salary shall be increased to $30,000 for the remainder of the employment term.
In addition, the contract includes a bonus that will be determined by the
company's Board of Directors.
LOANS PAYABLE
Loans Payable includes the balances due, after amortization for discounts, on
the Convertible Instruments as discussed in Note 10 and the following notes:
$90,000 Note Payable, due November 12, 2010, 10% annual interest.
$18,000 Note Payable, due on demand, no stated interest.
12
NOTE 10: CONVERTIBLE INSTRUMENTS
The Company issued the following convertible instruments:
$260,000 Senior Secured Convertible Promissory Note, Due February 11, 2010
--------------------------------------------------------------------------
This Note carries interest at 10% per annum, payable monthly. This Note
is convertible into common stock at the holder's option at a conversion
price of the lesser of: (a) $.0001 and (b) sixty percent (60%) of the
average of the three (3) lowest closing bid prices for the ten (10)
trading days immediately preceding the conversion date. This note is
secured by a first priority security interest in certain assets of the
Company.
Convertible Promissory Notes
----------------------------
$50,000, due December 9, 2009
$100,000, due October 14, 2009
$150,000, due August 19, 2009
$100,000, due July 15, 2009
$309,760, due June 21, 2010
$60,000, due June 30, 2010
These Convertible Promissory Notes carries interest at 7% per annum and
are convertible into common stock as follows: Unpaid principal and
accrued but unpaid interest divided by the lesser of (a) $5.00 or (b)
the product of 50% discount to market times 10,000.
The conversion feature embedded within all of the above Notes has been
classified as a derivative liability and has been fair valued using the Black
Scholes option pricing model at June 30, 2009 and September 30, 2009 in
accordance with ASC 815 "Derivatives and Hedging". The conversion feature has
been classified as a derivative liability, with the corresponding change in
value reported in the statement of operations, because the conversion option of
each note could potentially require the issuance of an unlimited number of
common shares as a result of the conversion.
The fair value of the conversion option ("options") was $878,453 at September
30, 2009. The options were originally valued at $1,704,707 at issuance. However,
since the value of the options at issuance exceeded the face amount of the debt,
the Company recognized a loss of $826,254 as a result of the issuance of these
Notes. The gain on the change in value related to these options was $725,994 for
the year ended September 30, 2009.
As a result of the issuance of all these Notes, the Company recorded a discount
on the Convertible Debt of $969,760. The discount was amortized to interest
expense during the quarter ended September 30, 2009 in the amount of $618,554.
The following assumptions were used in the Black Scholes calculation of the fair
value of the conversion feature liabilities:
Volatility: 401%;
Risk free rate: 0.2% to 2.2%;
Term: ranges from 1 month to 1 year
Exercise price: ranges from $0.00005 to $0.000925
Stock price: ranges from $0.0001 to $0.00025
Dividend yield: $-0-
Number of common shares convertible into: ranges from 108,108,108 to 3,097,600,
NOTE 11: PREFERRED STOCK LIABILITY
The company issued Preferred A stock ("A") and Preferred C stock ("C"). Both
issues of stock are convertible into common stock. The A stock is convertible
into 10,000 shares of common stock for each share of A stock. Pursuant to ASC
815 "Derivatives and Hedging", the value of A stock that is convertible into
common stock is reflected as a liability at September 30, 2009 of $618,403. The
C stock is convertible into common stock based on the number of outstanding C
shares outstanding. At September 30, 2009, there were 1,380,940 shares of C
stock outstanding. The C stock is convertible into $1,380,940 worth of common
stock at September 30, 2009. Therefore, 13,809,400,000 shares of common stock
would have to be issued (based on the common stock price of $.0001 at September
30, 2009). Since the C stock could result in an unlimited number of common
shares issued, the C stock has been shown as a liability of $1,380,940 in the
balance sheet at September 30, 2009.
NOTE 12: SUBSEQUENT EVENTS
On October 2, 2009, the Company, approved the issuance of a warrant to purchase
shares of common stock in the Company by Ayuda Equity Funding, LLC or its
registered assigns. The warrant allows for the purchase of up to One Billion
Five Hundred Million (1,500,000,000) shares at $0.0001 per share, subject to
adjustment, expiring on October 2, 2014.
On November 16, 2009, the Company executed a Senior Secured Convertible
Promissory Note (Senior Note) in the amount of $90,000. The Senior Note bears
interest at 10%, is convertible into common shares of the Company at $0.0001 per
share, subject to adjustment.
The Company has evaluated subsequent events through November 20, 2009 when the
financial statements were available to be issued.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with our
financial statements, including the notes thereto, appearing elsewhere in this
Report.
FORWARD-LOOKING STATEMENTS
The following information contains certain forward-looking statements of our
management. Forward-looking statements are statements that estimate the
happening of future events and are not based on historical fact. Forward-looking
statements may be identified by the use of forward-looking terminology, such as
"may," "could," "expect," "estimate," "anticipate," "plan," "predict,"
"probable," "possible," "should," "continue," or similar terms, variations of
those terms or the negative of those terms. The forward-looking statements
specified in the following information have been compiled by our management on
the basis of assumptions made by management and considered by management to be
reasonable. Our future operating results, however, are impossible to predict and
no representation, guaranty, or warranty is to be inferred from those
forward-looking statements.
OVERVIEW
Seamless Corporation has one operating subsidiary: Seamless Sales LLC which
incorporates the TEK Labs, and TEK Ware. TEK Labs develops security software for
accessing the Internet with a patent pending software program for Secure
Internet browsing (S-SIB) and Secure Internet video conferencing Phenom(R) that
encrypts Internet communications and provides flexible telecom data and voice
transport solutions, TEK Ware manufactures the patented ultra mobile personal
computer named the S-Gen a mini-notebook the SNBK-1, a 10 inch, 120 G. HD, 1G
RAM with OS Windows XP home edition and Seamless Sales LLC which sells the
products and software programs developed by Seamless Sales subsidiaries. The
evolution of from a Wi-Fi provider to a hardware manufacture and software
developer began during the last quarter of this fiscal year ended June 30, 2008
and was completed during the first quarter of fiscal year ending June 30, 2009.
Seamless Sales eCommerce activities started May of 2009 in association with
Amazon on the new Seamless Sales eCommerce website (www.seamlesssale.com). The
Amazon (www.amazon.com) partnership allowed Seamless to offer additional
products that it currently does not carry
14
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, our selected
financial information:
Three Months Ended Three Months Ended
September 30, 2009 September 30, 2008
(Unaudited) (Unaudited)
------------------ ------------------
Revenues $ -- $ 498
Cost of Revenues 27,170 5,449
------------------ ------------------
(Gross Loss) (27,170) (4,951)
Expenses 437,938 351,995
Loss from continuing Operations
Before interest and other items (465,108) (356,946)
Other Income 18,965 12,119
Loss from continuing operations
before income taxes $ 42,767 $ (344,848)
Income taxes (note 8) -- --
Loss for continuing operations 42,767 (344,848)
Income (loss) for discontinued
Operations $ -- (13,660)
Net Income (Loss) $ 42,767 $ (358,508)
Preferred C stock dividends-deemed $ -- $ (405,400)
----------- --------
Net Income (Net Loss) $ 42,767 $ (763,908)
============= =============
THREE MONTHS ENDED SEPTEMBER 30, 2009 (UNAUDITED) COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2008 (UNAUDITED)
REVENUES
Revenues for the three months ended September 30, 2009 is not compared to
revenue from discontinued operations of providing Wi-Fi at hotels and
hospitality locations.
COST OF REVENUES
The cost of revenues for the three months ended September 30, 2009 was $27,170
compared to $5,449 for the three months ended September 30, 2008, a increase of
497%. The increase in cost of revenue was the website upgrades and improvement
transactional software upgrades for the eCommerce website.
OPERATING EXPENSES
Operating expenses increased by approximately 24% from $437,938 for the three
months ended September 30, 2009 compared to $351,995 for the three months ended
September 30, 2008. This increase in operating expenses was a result of
transition to an eCommerce company increase and marketing for the new products
corresponding period.
15
OTHER INCOME
DEBT FORGIVENESS: for the three months ended September 30, 2009 of $18,965 as
compared To $12,119 for the same period in 2008. Debt forgiveness are accounts
payable from prior operations that were not paid within the prescribed time as
required by law and we now have to report that debt as income and reduce
accounts payable owed by the Company. The increase in the debt forgiveness is
due to the fact additional aged payables were written off during this quarter
and are not indicative of further debt forgiveness available to the Company in
the future.
DERIVATIVE INCOME: The Company also recorded unrealized gain from change in
derivative liabilities of $725,994. Derivative income primarily reflects the
impact of the change in value of the underlying market indices for the Company.
AMORTIZATION OF DEBT DISCOUNT: The Company also recorded $218,614 interest
expense due to the amortization of unamortized debt discount and expense on
outstanding long-term debt. Amounts charged to amortized debt discount shall be
so kept to support the debt discount and expense on each class and series of
debt.
NET INCOME/LOSS FROM CONTINUING OPERATIONS
The Company recorded a net income due to "OTHER INCOME" of $42,767 from
continuing operations for the three months ended September 30, 2009 as compared
to a net loss of $(344,848) for the three months ended September 30, 2008. The
net income recorded is not indicative future operations which is primarily from
unrealized gain from a change in derivate liabilities.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents from continuing operations of $ 0 for the three months
ended September 30, 2009 is a decrease compared to $22,291 cash for and 2008
respectively. The decrease in cash and cash equivalents is due to reduced
funding for the Company
Net cash used by continuing operating activities was $(157,709) and $(399,939)
for September 30, 2009 and 2008, respectively. This reduction in the negative
Net cash used is due to the increase in accounts payable..
As a result of the Company's in net operation losses, our working capital
deficiency has increased. We have funded our losses through loans secured by
preferred stock or by the purchase of preferred stock. Repayments of certain
loans occurred by the lender taking possession of the collateral. We anticipate
these losses to continue through 2010.
We have a working capital deficiency of $(5,890,403) as of September 30, 2009
compared to a working capital deficiency of $(6,384,456)as of June 30, 2009. The
reduction in the working capital deficiency is due the reduction in preferred
stock liability and convertible debt liability which was offset in part by an
increase in loans payable. We expect the working capital deficient to remain
constant within its current range till the company has sales.
As shown in the accompanying financial statements, we have incurred an
accumulated deficit of $(28,517,088) and a working capital deficiency of
approximately $(5,890,403) as of September 30, 2009. Our ability to continue as
a going concern is dependent on obtaining additional capital and financing and
operating at a profitable level. We intend to seek additional capital either
through debt or equity offerings and to increase sales volume and operating
margins to achieve profitability.
We will consider both the public and private sale of securities and/or debt
instruments for expansion of our operations if such expansion would benefit our
overall growth and income objectives. Should sales growth not materialize, we
may look to these public and private sources of financing. There can be no
assurance, however, that we can obtain sufficient capital on acceptable terms,
if at all. Under such conditions, failure to obtain such capital likely would at
a minimum negatively impact our ability to timely meet our business objectives.
16
NET OPERATING LOSS CARRY FORWARD
No provision for income taxes has been recorded in the accompanying financial
statements as a result of the Company's net operating losses. The Company has
unused tax loss carry forwards of approximately $28,000,000 and $20,000,000 at
September 30, 2009 and September 30, 2008 respectively to offset future taxable
income. Such carry forwards expire in the years beginning 2021. The deferred tax
asset recorded by the Company as a result of these tax loss carry forwards is
approximately $9,500,000 and $7,000,000 at September 30, 2009 and 2008
respectively. The Company has reduced the deferred tax asset resulting from its
tax loss carry forwards by a valuation allowance of an equal amount as the
realization of the deferred tax asset is uncertain.
OFF BALANCE SHEET ARRANGEMENTS
We have not entered into any off balance sheet arrangements that have, or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, result of operations,
liquidity, capital expenditure, or capital resources which would be considered
material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
N/A
Item 4T. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined In Rule 13a- 15(e) and 15d-15e under the Securities
Exchange Act of 1934 (the "Exchange Act") as of the end of the period covered by
this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures as of the end of the period covered by this report were
not effective such that the information required to be disclosed by us in the
reports filed under the Securities Exchange Act of 1934 is (i) recorded,
processed, summarized and reported within the time periods specified in SEC's
rules and forms and (ii) accumulated and communicated to our management to allow
timely decisions regarding disclosure. A controls system cannot provide absolute
assurance however, that the effectiveness of the controls system are met and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud if any, within a company have been detected.
Management has determined that, as of Sept, 30, 2009, there were material
weaknesses in both the design and effectiveness of our internal control over
financial reporting. Management has assessed these deficiencies and determined
that there were weaknesses in the Company's internal control over financial
reporting. As a result of our assessment that material weaknesses in our
internal control over financial reporting existed as of Sept. 30, 2009,
management has concluded that our internal control over financial reporting was
not effective as of Sept. 30, 2009. A material weakness is a deficiency, or a
combination of deficiencies, in internal control over financial reporting such
that there is a reasonable possibility that a material misstatement of our
annual or interim financial statements will not be prevented or detected on a
timely basis.
The deficiencies in our internal controls over financial reporting and our
disclosure controls and procedures are related to limited financial backgrounds
of our management and a lack of segregation of duties due to the size of our
accounting department. When our financial position improves, we intend to hire
additional personnel to remedy such deficiencies.
Changes in internal control
Our management, with the participation our Chief Executive Officer and Chief
Financial Officer, performed and evaluation as to whether any change in our
internal controls over financial reporting occurred during the Sept. 30 Quarter
ended 2009. Based on that evaluation, our Chief Executive officer and Chief
Financial Officer concluded that no change occurred in the Company's internal
controls over financial reporting during the Quarter ended Sept. 30, 2009 that
has materially affected, or is reasonably likely to materially affect, the
Company's internal controls over financial reporting.
17
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In July 2003, Globalist sued the Company and was awarded a judgment plus
interest in the amount of approximately $301,000. The Company appealed the
Court's decision and the award amount. In February 2005 the Company reached a
settlement agreement with Globalist. However, Globalist later rejected the
settlement agreement and an appeal was filed in the second quarter with the
appellate court by the Company seeking confirmation of the settlement agreement.
The current liability in the amount of $361,054 reflects the current liability
of discontinued operations in the accompanying financial statements.
To the best knowledge of management, there are no other legal proceedings
pending or threatened against us.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following Exhibits are filed herein:
No. Title
---- -----
31.1 Certification of Chief Executive Officer Pursuant to the
Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
31.2 Certification of Chief Financial Officer Pursuant to the
Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
18
SIGNATURES
In accordance with the Exchange Act, the registrant caused this report
to be signed on its behalf by the undersigned, duly authorized.
DATED: November 20, 2009 SEAMLESS CORPORTION
/s/ Albert Reda
-------------------------------------
By: Albert Reda
Its: Chief Executive Officer and
Chief Financial Officer
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
1
