Attached files
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EX-32.2 - EXHIBIT 32.2 - BioCube, INC. | ex322.htm |
EX-31.1 - EXHIBIT 31.1 - BioCube, INC. | ex311.htm |
EX-31.2 - EXHIBIT 31.2 - BioCube, INC. | ex312.htm |
EX-32.1 - EXHIBIT 32.1 - BioCube, INC. | ex321.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
þ
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
For the
quarterly period ended October 31, 2009
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
transition period from
to
Commission file number:
333-137920
ALLIANCE
NETWORK COMMUNICATIONS
HOLDINGS,
INC.
(Exact
name of Company as specified in its charter)
Delaware
|
20-3547389
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
120
Wall Street, Suite 2401
New York, NY
|
10005
|
(Address of Company’s principal executive
offices)
|
(Zip Code)
|
(646)
808-3093
(Company’s
telephone number, including area code)
(Former
name, former address and former fiscal year, if changed since last report)
Indicate
by check mark whether the Company: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes þ No
o
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. (Check
one):
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o (Do
not check if a smaller reporting
company)
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes o No þ
As of
December 11, 2009, there were outstanding 19,977,778 Common Shares, $.001 par
value per share, of the Company.
1
TABLE
OF CONTENTS
PART
I
|
||
Item 1.
|
Financial
Statements
|
3
|
Condensed
Consolidated Balance Sheet at October 31, 2009
(unaudited)
|
3
|
|
Condensed
Consolidated Statements of Operations for the three months
ended October 31, 2009 and from inception (April 20, 2009) to
October 31, 2009 (unaudited)
|
4
|
|
Condensed
Consolidated Statement of Stockholders’ Equity from inception (April 20,
2009) to October 31, 2009 (unaudited)
|
5
|
|
Condensed
Consolidated Statements of Cash Flows from inception (April 20, 2009) to
October 31, 2009 (unaudited)
|
6
|
|
Notes
to Condensed Consolidated Financial Statements
(unaudited)
|
7
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
10
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
11
|
Item 4.
|
Controls
and Procedures
|
|
PART
II
|
13
|
|
Item 1.
|
Legal
Proceedings
|
13
|
Item 1A.
|
Risk
Factors
|
13
|
Item 2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
17
|
Item 3.
|
Defaults
Upon Senior Securities
|
17
|
Item 4.
|
Submission
of Matters to a Vote of Security Holders
|
18
|
Item 5.
|
Other
Information
|
18
|
Item 6.
|
Exhibits
|
18
|
EX
- 31.1
|
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934.
|
|
EX
- 31.2
|
Certification
of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934.
|
|
EX
- 32.1
|
Certification
of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. 1350).
|
|
EX
- 32.2
|
Certification
of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. 1350).
|
2
PART
I — FINANCIAL INFORMATION
Item
1. FINANCIAL STATEMENTS
ALLIANCE
NETWORK COMMUNICATIONS HOLDINGS, INC
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED BALANCE SHEET
October
31, 2009
(unaudited)
ASSETS
|
||||
CURRENT
ASSETS
|
||||
Cash
|
$ | 2,358 | ||
Prepaid
assets
|
3,400 | |||
Finance
cost
|
6,510 | |||
Total
current assets
|
12,268 | |||
Note
and interest receivable
|
100,417 | |||
TOTAL
ASSETS
|
$ | 112,685 | ||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||
CURRENT
LIABILITIES
|
||||
Accounts
payable
|
$ | 9,920 | ||
Notes
payable - related party net of discount of $6,711
|
10,582 | |||
Total
current liabilities
|
20,502 | |||
STOCKHOLDERS'
EQUITY
|
||||
Preferred
stock – Series A – $.001 par value, 21,000 shares authorized, issued
and outstanding
|
21 | |||
Common
stock - $.001 par value, authorized 300,000,000 shares
19,977,778
shares
issued and outstanding
|
19,978 | |||
Additional
paid in capital
|
94,268 | |||
Deficit
accumulated during the development stage
|
(22,084 | ) | ||
Total
stockholders' equity
|
92,183 | |||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 112,685 |
See notes
to the condensed consolidated financial statements.
3
ALLIANCE
NETWORK COMMUNICATIONS HOLDINGS, INC
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three
Months Ended
October
31,
2009
|
From
Inception (April 20, 2009) to
October
31, 2009
|
|||||||
Expenses
|
||||||||
General
and administrative
|
$
|
18,663
|
$
|
21,163
|
||||
Interest
– net
|
4,615
|
921
|
||||||
Total
expenses
|
23,278
|
22,084
|
||||||
Net
loss
|
$
|
(23,278
|
) |
$
|
(22,084
|
)
|
||
Net
loss per common share – (basic and diluted)
|
$
|
-0-
|
$
|
-0-
|
||||
Average
number of shares outstanding – (basic and diluted)
|
19,977,778
|
19,977,778
|
See notes
to the condensed consolidated financial statements.
4
ALLIANCE
NETWORKS COMMUNICATIONS INC.
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
From
Inception (April 20, 2009) to October 31, 2009
Preferred
Stock
|
Common
Stock
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Paid
In Capital
|
Deficit
Accumulated During Development Stage
|
Total
Stockholders’
Equity
|
||||||||||||||||||||||
Common
stock issued to founders for cash
|
|
|
|
1,000,000
|
$
|
100
|
|
|
-
|
$
|
100
|
|||||||||||||||||
Effect
of recapitalization – reverse acquisition
|
21,000
|
$ |
21
|
18,977,778
|
19,878
|
$ |
80,001
|
-
|
99,900
|
|||||||||||||||||||
Issuance
of warrants in connection of financing – related
party
|
14,267
|
- |
14,267
|
|||||||||||||||||||||||||
Net
(loss) for period ended October 31, 2009
|
-
|
-
|
-
|
-
|
-
|
$ |
(22,084
|
)
|
(22,084
|
)
|
||||||||||||||||||
Balance,
October 31, 2009
|
21,000
|
$
|
21
|
19,977,778
|
$
|
19,978
|
$
|
94,268
|
$
|
(22,084
|
)
|
$
|
92,183
|
|||||||||||||||
See notes
to the condensed consolidated financial statements
5
ALLIANCE
NETWORK COMMUNICATIONS HOLDINGS, INC
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
From
Inception (April 20, 2009) to October 31, 2009
(unaudited)
CASH
FLOWS USED IN OPERATING ACTIVITIES
|
||||
Net
loss
|
$
|
(22,084
|
)
|
|
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||
Amortization
and interest accruals
|
921
|
|||
C Changes
in operating assets and liabilities:
Prepaid
assets
|
(3,400)
|
|||
Accounts
payable
|
10,020
|
|||
NET
CASH USED IN OPERATING ACTIVITIES
|
(14,743)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||
Issuance
of common stock
|
100
|
|||
Notes
payable – related party
|
17,000
|
|||
NET
CASH USED IN FINANCING ACTIVITIES
|
17,100
|
|||
NET
CHANGE IN CASH
|
2,357
|
|||
CASH
- BEGINNING OF THE PERIOD
|
-0-
|
|||
CASH
- END OF THE PERIOD
|
$
|
2,357
|
See notes
to the condensed consolidated financial statements.
6
Alliance Network Communications
Holdings, Inc.
Notes
to the Condensed Consolidated Financial Statements
(unaudited)
Note
1. Description of Business
Alliance
Network Communications Holdings, Inc. (formerly Halcyon Jets Holdings, Inc.)
operating through its wholly-owned subsidiary Alliance Networks Communications,
Inc. (“ANC”) (collectively the “Company”) is a development stage
company. The Company plans to research, design, manufacture, market
and distribute a number of generic and custom application electrical surge
protection devices.
On August
21, 2009, Alliance Network Communications Holdings, Inc acquired ANC from its
shareholders in exchange for 18,266,667 shares of the Company’s common stock.
Simultaneously, the Company sold all of the outstanding shares of our Halcyon
Jets, Inc. subsidiary to Halcyon Jets Acquisition Group, LLC (“HJAG”), the
principal of which is our former Chief Executive Officer. As
consideration for the acquisition HJAG:
1.
|
Provided
a promissory note for $100,000, payable 10-years from closing, bearing
interest at the rate of 2% per
annum;
|
2.
|
Assumed
all liabilities of the Company and its subsidiary, including the pending
litigation, in which the Company was a named party;
and
|
3.
|
Released
the Company of its obligation under his consulting agreement to pay the
former CEO $600,000 as a result of the transactions referred to in this
Information Statement.
|
The
promissory note is unsecured and there are no guaranties issued with respect to
the note. HJAG and Mr. Cohen, personally, have agreed to indemnify
the Company with respect to any claims against the former Halcyon Jets
subsidiary, including pending litigation.
As a
result of the above transactions, the former stockholders of ANC were the
controlling stockholders of the Company and the Company discontinued its former
business. Accordingly, the transactions were treated for accounting purposes as
a reverse acquisition, and the transactions have been accounted for as a
recapitalization of the Company, rather than a business combination. Therefore,
the historical financial statements of ANC are the historical financial
statements of the Company and historical stockholders' equity of ANC has been
restated to reflect the recapitalization. Pro forma information has not been
presented since the transaction is not a business combination.
Upon the
effectiveness and as a result of these transactions, the Company changed its
name to Alliance Network Communications Holdings, Inc and effectuated a reverse
stock split in the ratio 1-for-15. All share amounts have been retroactively
restated for the split. On September 2, 2009, the Company’s trading
symbol was changed to ALHN.
Note
2. Basis of Preparation
The
accompanying condensed consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which assume the
continuation of the Company as a going concern. This basis of accounting
contemplates the recovery of the Company’s assets and the satisfaction of
liabilities in the normal course of business. Since the Company ‘s formation in
April 2009, the Company has not begun its efforts to produce and market
electrical surge protection devises and its activities, to date, have been
organizational in nature, and have been directed towards the raising of capital
and to discussions of potential business combinations which was completed in
August 2009.
The
Company may not be able to execute its current business plan and fund business
operations long enough to archive profitability without obtaining financing. The
Company's ultimate success depends upon its ability to raise capital. There can
be no assurance that funds will be available to the Company when needed
from any source or; if available, on terms that are favorable to the
Company. The consolidated financial statements do not include any
adjustments 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 outcome of these uncertainties.
7
Alliance
Network Communications Holdings, Inc.
Notes
to the Condensed Consolidated Financial Statements - continued
(unaudited)
Note
2. Basis of Preparation (continued)
The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all information and
notes required by generally accepted accounting principles for complete
financial statement. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The results of operations for interim periods
are not necessarily indicative of results to be expected for the entire fiscal
year or any other period.
Note
3. Loss per share
Loss per
common share is based upon the weighted average number of common shares
outstanding during the periods. Diluted loss per common share is the
same as basic loss per share, as the effect of potentially dilutive securities
(options – 176,334 and warrants – 462,668) are anti-dilutive.
Note
4. Preferred Stock
The Board
of Directors is authorized to issue up to 10 million shares of preferred stock
in one or more series. Each series of preferred stock will have such number of
shares, designations, preferences, voting powers, qualifications and special or
relative rights or privileges as shall be determined by the board of directors,
which may include, among others, dividend rights, voting rights, liquidation
preferences, conversion rights and preemptive rights.
Each
share of the Preferred Stock -Series A is entitled to 67 votes with respect to
each matter presented to the stockholders of the Company for approval. The
Series A Preferred Stock has a liquidation value of $1.00 per share ($21,000 in
the aggregate) and is not entitled to receive any dividends. The Series A
Preferred shares are not convertible into common stock and are mandatorily
redeemable at par per share on the earlier of March 31, 2011 or the date on
which any shares of Series A are owned by any person other than the one to whom
they were originally issued.
Note
5. Notes and interest payable related party
In
September and October 2009, the Company borrowed an aggregate of $17,000 from
LeadDog Capital LP through issuances of notes payable for periods of 1 year with
interest payable at 16% per year. In connection with the issuance of
these notes the Company granted the lender warrants to 90,000 shares of the
Company’s common stock at $.001. In addition, the Company issued
warrants to purchase 45,000 shares of the Company’s common stock at $.001 to
LeadDog Capital Markets LLC (the general partner) for due diligence services.
LeadDog Capital LP and its affiliates are shareholders and warrant holders
however the group is restricted from becoming a beneficially owner (as such term
is defined under Section 13(d) and Rule 13d-3 of the Securities Exchange Act of
1934, as amended, (the 1934 Act)), of the Company’s common stock which would
exceed 4.99% of the number of shares of common stock outstanding.
The
proceeds from issuance of the promissory notes were allocated to the notes and
the warrants based upon their relative fair values. This allocation resulted in
allocating $9,484 to the notes and $7,516 to the warrants. The warrants issued
for services were recorded as prepaid financing fees of $6,750 and will be
amortized to interest expense over the related loan periods. During
the three months ended October 31, 2009, the Company recorded $1,045 as
additional interest expense related to the amortization of the debt discount and
prepaid financing fees. The fair value of the warrants was determined
using the Black-Scholes option pricing model using the following
weighted-average assumptions: volatility of 100%; risk-free interest rate
of .87% and .94%; expected life of 3 years and estimated dividend yield of
0%.
Subsequent to October 31, 2009 through December
11, 2009, the Company borrowed an aggregate of $30,400 from LeadDog Capital
LP with interest payable at 14% per year and due three years from the
dates of the borrowings. The indebtedness including interest is
convertible to common stock at the lesser of $.10 or 75% of the lowest closing
bid price during the 15 day period prior to the conversion date; however, the
conversion price may be no lower than $.005.
Note
6. Litigation
In
September 2008, Jet One Group, Inc. ("Jet One") commenced an action against
Halcyon Jets Holdings, Inc., the Company’s predecessor, and several of its
former officers, directors and employees in the United States District
Court, alleging, among other matters, that the Company’s predecessor
fraudulently induced Jet One to enter into a Letter of Intent to
acquire Jet One's business. The Complaint alleged that the Company violated
the federal Racketeering Influenced Corrupt Organizations Act,
8
Alliance Network Communications
Holdings, Inc.
Notes
to the Condensed Consolidated Financial Statements - continued
(unaudited)
the
federal Computer Fraud and Abuse Act, the New York consumer fraud and Business
law statutes and committed various common law torts, and sought compensatory
damages of $15 million and treble or punitive damages of $45 million. On August
14, 2009, the Court dismissed the complaint without prejudice to Jet One's right
to re-file the lawsuit.
On or
about October 28, 2009, Jet One Group filed a new action against the Company’s
predecessor, its former subsidiary and the other defendants in the matter
discussed above, in the Supreme Court of New York, which repeats the factual
allegations of the dismissed federal court complaint and asserts claims for
conversion, fraud, tortious interference with contract and violation of the
state consumer fraud statute. The new complaint seeks compensatory
damages of $15 million, attorneys’ fees of $100,000 and punitive damages against
each of the defendants in the amount of $45 million. To date, the
complaint has not been served upon any of the defendants.
Separately,
the Company’s predecessor filed an action against Jet One and its principals in
the Supreme Court of New York in which the Company’s predecessor alleges that
the Complaint in Jet One’s Federal Court Action contains false and defamatory
statements regarding the Company and that Jet One filed its suit for the sole
purpose of circulating a press release publicizing the false and defamatory
allegations. Jet One moved to dismiss the suit for failure to state a
claim upon which relief may be granted, but this motion was denied by the
court. Jet One subsequently filed an appeal of the denial of its
motion to dismiss. The appeal has been fully briefed, but no argument
has been scheduled.
In
October and December 2008, Blue Star Jets, LLC (“Blue Star”) filed a
complaint against the Company and certain former employees, including our former
President, who were former employees of Blue Star (“former Blue Star employee”)
in the Supreme Court of New York, New York County alleging, among other matters,
that the Blue Star’s former employees stole confidential information belonging
to Blue Star prior to joining the Company and that one or more of such former
employees violated post-employment restrictive covenants by joining the
Company. The complaint seeks $7 million in damages. This action is a
revival of an earlier action that was voluntarily discontinued by Blue Star in
2007.
The
Company and the other defendants, in February 2009, filed a motion to dismiss
the counts of the complaint for violation of the federal Computer Fraud and
Abuse Act and for civil conspiracy for failure to state a claim upon which
relief may be granted.
In February 2009,
Blue Star served a second amendment to its complaint which withdrew plaintiff’s
claims under the federal Computer Fraud and Abuse Act and added Alfred Palagonia
and Apollo Jets as additional defendants. The Company has filed a
cross-motion to strike the second amendment on the ground that it was improperly
filed or in the alternative to dismiss the certain portions related to the civil
conspiracy. On May 20, 2009, the Court dismissed plaintiff’s civil
conspiracy claims and ordered plaintiff to file a third amended complaint. In
October 2009, the parties entered into a "global stipulation" agreeing to stay
all proceedings for 90 days.
On or
about October 23, 2009, Mitchell Blatt, the former Chairman of the Board and
Chief Executive Officer of Company’s predecessor, commenced an action against
the Company’s predecessor, its former subsidiary and the Company relating to
alleged breach of an agreement between and among the Company’s predecessor, its
former subsidiary and Mr. Blatt dated as of August 12, 2008. In his
complaint, Mr. Blatt has alleged causes of action for breach of contract, fraud
in the inducement, fraud in the execution, unjust enrichment and
conversion. The complaint seeks compensatory damages of $232,500,
punitive damages of $5 million and attorneys’ fees and costs. The Company
denies the all the allegations and intends to vigorously defend against this
matter.
Except as
set forth above, there are no other pending or threatened legal proceedings
against the Company. Based on the advice of counsel, it is management's
opinion that we have made adequate provision for potential liabilities, if any,
arising from potential claims arising from litigation, governmental
investigations, legal and administrative cases and proceedings. In connection
with the sale of the Company’s Halcyon Jet subsidiary to the Company’s former
Chief Executive Officer the Company was indemnified by the buyer against any
liability which may arise from the above litigation.
Note
7. Subsequent Events
The
Company has no material events other than the borrowings and litigation,
discussed in Notes 5 and6, respectively above, to report subsequent to the
measurement date of these financial statements through the date that such were
issued on December 11, 2009.
9
Item
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
|
INTRODUCTION
AND CERTAIN CAUTIONARY STATEMENTS
You
should read the following discussion and analysis of our financial condition and
results of operations together with our condensed consolidated financial
statements and related notes appearing elsewhere in this quarterly report on
Form 10-Q. This discussion and analysis contains forward-looking statements that
involve risks, uncertainties and assumptions. The actual results may differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including, but not limited to, those set forth under
‘‘Risk Factors’’ under Part II. Item 1A.
OVERVIEW
Our
discussion and analysis of operations is based upon our condensed consolidated
financial statements, which have been prepared in accordance with generally
accepted accounting principles in the United States. The preparation of these
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results could differ materially
from these estimates under different assumptions or conditions.
Critical
Accounting Policies
As the
Company has not begun to execute its business plan we have identified
only the following policies as critical to understanding of our financial
results for the periods presented.
As a
result of the transactions described in Note 1 – to the Condensed Consolidated
Financial Statements, the former stockholders of ANC were the controlling
stockholders of the Company and the Company discontinued its former business.
Accordingly, the transactions were treated for accounting purposes as a reverse
acquisition, and the transactions have been accounted for as a recapitalization
of the Company, rather than a business combination. Therefore, the historical
financial statements of ANC are the historical financial statements of the
Company and historical stockholders' equity of ANC has been restated to reflect
the recapitalization. Pro forma information has not been presented since the
transaction is not a business combination.
The
condensed consolidated financial statements have been prepared in conformity
with generally accepted accounting principles, which assume the continuation of
the Company as a going concern. This basis of accounting contemplates the
recovery of the Company’s assets and the satisfaction of liabilities in the
normal course of business. Since the Company ‘s formation in April 2009, the
Company has not begun its efforts to produce and market electrical surge
protection devises and its activities, to date, have been organizational in
nature, and have been directed towards the raising of capital and to discussions
of potential business combinations which was completed in August
2009.
The
Company may not be able to execute its current business plan and fund business
operations long enough to archive profitability without obtaining financing. The
Company's ultimate success may depend its ability to raise capital. There can be
no assurance that funds will be available to the Company when needed from
any source or; if available, on terms that are favorable to the
Company. The consolidated financial statements do not include any
adjustments 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 outcome of these uncertainties.
Business
Plan
We are
a development stage company which plans to research, design,
manufacture, market and distribute a number of generic and custom application
electrical surge protection devices. The primary product focus will be
electrical surge limiting terminals that combine easy field line installation
with protection from transient voltage, lightning, induction or electronic
discharge.
We plan
to develop the ability to quickly research, design, and produce specialty
products to allow us to develop a market niche to supply both generic and custom
built products to a number of industry players in both the United States and
Canada. We initially intend to sell devices that provide over-voltage
current/ limiting protection for sensitive communication systems requiring high
speed modems.
10
Results
of Operations
Three
months ended October 31, 2009 and from inception (April 20, 2009) to October 31,
2009
During
these periods the Company had no revenues as its activities principally
involved its formation and negotiation of the reverse acquisition. Expenses
incurred are general and administrative principally consulting fees and
professional fees. The interest cost relates to notes payable and
includes amortization of debt discount and finance costs of approximately
$5,000.
Liquidity and Capital
Resources
The
Company may not be able to execute its current business plan and fund business
operations long enough to archive profitability without obtaining financing. The
Company has received interim financing from a related party. The
Company's ultimate success may depend upon its ability to raise capital. There
can be no assurance that funds will be available to the Company when needed
from any source or; if available, on terms that are favorable to the
Company. The consolidated financial statements do not include any
adjustments 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 outcome of these uncertainties.
Except as
set forth under Part II. Item 1 – Legal Proceedings, there are
no pending or threatened legal proceedings against the Company. In the
opinion of management, on the advice of counsel, we have made adequate provision
for potential liabilities, if any, arising from potential claims arising from
litigation, governmental investigations, legal and administrative cases and
proceedings. In connection with the sale of the Company’s Halcyon Jet subsidiary
to the Company’s former Chief Executive Officer the Company was indemnified by
the buyer against any liability which may arise from the above
litigation.
Off-Balance
Sheet Arrangements
We have
no off-balance sheet arrangements.
Item
3. QUALITITATIVE AND QUALITIATIVE DISCLOSURES ABOUT
MARKET RISK
Not
applicable
Item
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
The
Company is in the process of implementing disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of
1934 (the ‘‘Exchange Act’’), that are designed to ensure that information
required to be disclosed in the Company’s Exchange Act reports are recorded,
processed, summarized, and reported within the time periods specified in rules
and forms of the Securities and Exchange Commission, and that such information
is accumulated and communicated to our Chief Executive Officer to allow timely
decisions regarding required disclosure.
As of
October 31, 2009, the Chief Executive Officer carried out an
assessment, of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b)
and 15d-15(b). As of the date of this assessment, the Chief Executive Officer
concluded that the Company’s disclosure controls and procedures were not
effective as of October 31, 2009, because of the material weakness described
below.
The Chief
Executive Officer performed additional accounting and financial analyses and
other post-closing procedures including detailed validation work with regard to
balance sheet account balances, additional analysis on income statement amounts
and managerial review of all significant account balances and disclosures in the
Quarterly Report on Form 10-Q, to ensure that the Company’s Quarterly Report and
the financial statements forming part thereof are in accordance with accounting
principles generally accepted in the United States of America. Accordingly,
management believes that the financial statements included in this Quarterly
Report fairly present, in all material respects, the Company’s financial
condition, results of operations, and cash flows for the periods
presented.
11
Management’s
Report on Internal Control over Financial Reporting
Management
of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes in
accordance with accounting principles generally accepted in the United States of
America. Internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company’s assets that
could have a material effect on the interim or annual financial
statements.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with policies or procedures may deteriorate.
The Chief
Executive Officer assessed the effectiveness of the Company’s internal control
over financial reporting as of October 31, 2009. In performing its assessment of
the effectiveness of the Company’s internal control over financial reporting,
management applied the criteria described in the Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (‘‘COSO’’).
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 the Company’s annual or interim financial
statements will not be prevented or detected on a timely basis.
The
material weakness identified during management's assessment was the lack of
sufficient resources with SEC, generally accepted accounting principles (GAAP)
and tax accounting expertise. This control deficiency did not result in
adjustments to the Company’s interim financial statements. However, this control
deficiency could result in a material misstatement of significant accounts or
disclosures that would result in a material misstatement to the Company’s
interim or annual financial statements that would not be prevented or detected.
Accordingly, management has determined that this control deficiency constitutes
a material weakness.
Because
of the material weakness, management concluded that the Company did not maintain
effective internal control over financial reporting as of October 31, 2009,
based on the criteria in Internal Control-Integrated Framework issued by
COSO.
Changes
in Internal Control over Financial Reporting
The
Company is in the process of correcting the internal control deficiency through
the employment of a new Chief Financial Officer who assumed this position in
September 2009.
12
PART
II — OTHER INFORMATION
Item
1. LEGAL PROCEEDINGS
In
September 2008, Jet One Group, Inc. ("Jet One") commenced an action against
Halcyon Jets Holdings, Inc., the Company’s predecessor, and several of its
former officers, directors and employees in the United States District
Court, alleging, among other matters, that the Company’s predecessor
fraudulently induced Jet One to enter into a Letter of Intent to
acquire Jet One's business. The Complaint alleged that the Company violated
the federal Racketeering Influenced Corrupt Organizations Act,
the
federal Computer Fraud and Abuse Act, the New York consumer fraud and Business
law statutes and committed various common law torts, and sought compensatory
damages of $15 million and treble or punitive damages of $45 million. On August
14, 2009, the Court dismissed the complaint without prejudice to Jet One's right
to re-file the lawsuit.
On or
about October 28, 2009, Jet One Group filed a new action against the Company’s
predecessor, its former subsidiary and the other defendants in the matter
discussed above, in the Supreme Court of New York, which repeats the factual
allegations of the dismissed federal court complaint and asserts claims for
conversion, fraud, tortious interference with contract and violation of the
state consumer fraud statute. The new complaint seeks compensatory
damages of $15 million, attorneys’ fees of $100,000 and punitive damages against
each of the defendants in the amount of $45 million. To date, the
complaint has not been served upon any of the defendants.
Separately,
the Company’s predecessor filed an action against Jet One and its principals in
the Supreme Court of New York in which the Company’s predecessor alleges that
the Complaint in Jet One’s Federal Court Action contains false and defamatory
statements regarding the Company and that Jet One filed its suit for the sole
purpose of circulating a press release publicizing the false and defamatory
allegations. Jet One moved to dismiss the suit for failure to state a
claim upon which relief may be granted, but this motion was denied by the
court. Jet One subsequently filed an appeal of the denial of its
motion to dismiss. The appeal has been fully briefed, but no argument
has been scheduled.
In
October and December 2008, Blue Star Jets, LLC (“Blue Star”) filed a
complaint against the Company and certain former employees, including our former
President, who were former employees of Blue Star (“former Blue Star employee”)
in the Supreme Court of New York, New York County alleging, among other matters,
that the Blue Star’s former employees stole confidential information belonging
to Blue Star prior to joining the Company and that one or more of such former
employees violated post-employment restrictive covenants by joining the
Company. The complaint seeks $7 million in damages. This action is a
revival of an earlier action that was voluntarily discontinued by Blue Star in
2007.
The
Company and the other defendants, in February 2009, filed a motion to dismiss
the counts of the complaint for violation of the federal Computer Fraud and
Abuse Act and for civil conspiracy for failure to state a claim upon which
relief may be granted.
In February 2009,
Blue Star served a second amendment to its complaint which withdrew plaintiff’s
claims under the federal Computer Fraud and Abuse Act and added Alfred Palagonia
and Apollo Jets as additional defendants. The Company has filed a
cross-motion to strike the second amendment on the ground that it was improperly
filed or in the alternative to dismiss the certain portions related to the civil
conspiracy. On May 20, 2009, the Court dismissed plaintiff’s civil
conspiracy claims and ordered plaintiff to file a third amended complaint. In
October 2009, the parties entered into a "global stipulation" agreeing to
stay all proceedings for 90 days.
On or
about October 23, 2009, Mitchell Blatt, the former Chairman of the Board and
Chief Executive Officer of Company’s predecessor, commenced an action against
the Company’s predecessor, its former subsidiary and the Company relating to
alleged breach of an agreement between and among the Company’s predecessor, its
former subsidiary and Mr. Blatt dated as of August 12, 2008. In his
complaint, Mr. Blatt has alleged causes of action for breach of contract, fraud
in the inducement, fraud in the execution, unjust enrichment and
conversion. The complaint seeks compensatory damages of $232,500,
punitive damages of $5 million and attorneys’ fees and costs. The
Company denies the all the allegations and intends to vigorously defend against
this matter.
Except as
set forth above, there are no other pending or threatened legal proceedings
against the Company. Based on the advice of counsel, it is management's
opinion that we have made adequate provision for potential liabilities, if any,
arising from potential claims arising from litigation, governmental
investigations, legal and administrative cases and proceedings. In connection
with the sale of the Company’s Halcyon Jet subsidiary to the Company’s former
Chief Executive Officer the Company was indemnified by the buyer against any
liability which may arise from the above litigation.
Item
1A. RISK FACTORS
There
are numerous and varied risks, known and unknown, that may prevent us from
achieving our goals. If any of these risks actually occur, our business,
financial condition or results of operation may be materially adversely
affected. In such case, the trading price of our common stock could decline and
investors could lose all or part of their investment.
13
Risks
Relating to Our Business
We
can provide no assurance that our business plan will materialize.
We are a
development stage company that has not produced product revenue to date and does
not expect to do so in the immediate future. There can be no assurance that we
will be able to successfully introduce our products, which are primarily only in
the development stage, or achieve or sustain significant commercial revenue or
profitability in the future. The development of our products will
require the commitment of substantial resources to conduct the research and
development necessary to bring any products to market, and the rate at which we
incur development expenses is expected to increase. We will
require additional financing in order to fulfill our objectives.
We will need
financing to execute our business plan and fund operations, which financing may
not be available.
We may
not be able to execute our current business plan and fund business operations
long enough to achieve profitability without obtaining financing. Our ultimate
success may depend upon our ability to raise capital. There can be no assurance
that funds will be available when needed from any source or, if available, will
be available on terms that are acceptable to us.
We may be
required to pursue sources of capital through various means, including joint
venture projects and debt or equity financings. Future financings through equity
investments are likely to be dilutive to existing stockholders. Also, the terms
of securities we may issue in future capital transactions may be more favorable
for our new investors. Newly issued securities may include preferences, superior
voting rights, the issuance of warrants or other derivative securities, and the
issuances of incentive awards under equity employee incentive plans, which may
have additional dilutive effects. Further, we may incur substantial costs in
pursuing future capital and/or financing, including investment banking fees,
legal fees, accounting fees, printing and distribution expenses and other costs.
We may also be required to recognize non-cash expenses in connection with
certain securities we may issue, such as convertible notes and warrants, which
will adversely impact our financial condition.
Our
ability to obtain needed financing may be impaired by such factors as the
capital markets, both generally and specifically in the aviation industry, and
the fact that we are not profitable, which could impact the
availability and cost of future financings. If the amount of capital we are
able to raise from financing activities, together with our revenues from
operations, is not sufficient to satisfy our capital needs, even to the extent
that we reduce our operations accordingly, we may be required to cease
operations.
We
will be dependent upon the acceptance of our products in the
marketplace.
The
commercial success of any products that we develop will depend upon acceptance
of these products by the business community as safe, useful and cost-effective.
While we believe the benefits of electrical surge protection and of our
prospective products will be able to be demonstrated, there can be no assurance
that the benefits will be considered sufficient by the business community to
enable any such products to gain market acceptance.
The
electrical surge protection market is highly competitive and designs change
often to adjust to patent constraints and to changing market preferences.
Therefore, product life cycles can be relatively short. Therefore, any delays in
our product launches may significantly impede our ability to enter or compete in
a given market, and may reduce the revenue that it is able to generate from
these products. We may experience delays in any phase of a product
launch, including during research and development, clinical trials,
manufacturing, marketing and the education process. If we suffer delays in
product introductions, our sales could be adversely affected.
We
will need to protect our intellectual property in order to achieve and maintain
a competitive position.
Our
success depends significantly on our ability to protect our proprietary rights
to technologies used in our prospective products. We will rely on
patent protection, as well as a combination of non-disclosure, confidentiality
and other contractual arrangements to protect our proprietary technology.
However, these legal means afford only limited protection and may not adequately
protect our rights or permit us to obtain or keep any competitive
advantage. Our success will depend upon our ability to protect our
proprietary rights in our technology, and the failure to obtain patent
protection could severely limit our ability to grow and be successful. There can
be substantial delays in obtaining patent approval, and it may take up to two
years or more to complete that process. Any delays in obtaining a
patent, as well as the inability to obtain a patent at all, could have a
material adverse effect on our business.
14
We
will encounter manufacturing risks and may face product liability
claims.
Our
manufacture and sale of electrical surge protection devices will expose us to
significant risk of product liability claims. We intend to obtain product
liability insurance but such coverage may be inadequate to protect us from any
liabilities we may incur, or we may not be able to maintain adequate product
liability insurance at acceptable rates. If a product liability claim or series
of claims were brought against us for uninsured liabilities or for amounts in
excess of insurance coverage, and it is ultimately determined that we are
liable, our business could suffer. In addition, we could experience some
material design or manufacturing failure, a quality system failure, other safety
issues or heightened regulatory scrutiny that would warrant a recall of our
products. A recall of any of our products could also result in increased product
liability claims.
We
may be negatively affected by the changing economic conditions including the
current economic downturn.
A general
downturn in economic, business and financial conditions, including recession,
inflation and higher interest rates, could have an adverse effect on our
business.
Since
we lack a meaningful operating history, it is difficult for potential investors
to evaluate our business.
Our
limited operating history makes it difficult for potential investors to evaluate
our business or prospective operations. We are subject to all the risks inherent
in the initial organization, financing, expenditures, complications and delays
inherent in a new business. Investors should evaluate an investment in us in
light of the uncertainties encountered by new companies in an intensely
competitive industry. Our business is dependent upon the implementation of our
business plan, as well as our ability to enter into agreements with third
parties for, among other things, for the manufacturing of our products on
commercially favorable terms. There can be no assurance that our efforts will be
successful or that we will be able to attain
profitability.
We
will be dependent upon key personnel whose loss may adversely impact our
business.
We will
be relying heavily on the expertise, experience and cthe services of our senior
management and sales personnel once engaged. The loss, or any inability to
attract or retain key individuals, could materially adversely affect us. We will
seek to compensate and motivate our executives, as well as other employees and
independent contractors, through competitive salaries, commissions and bonus
plans, but there can be no assurance that these programs will allow us to retain
key employees and contractors or hire or attract new key employees and
contractors. As a result, if we are not able to engage key personnel or once
retained were to leave or cease to be available or our ability to utilize their
skills, contacts and other resources impeded, we could face substantial
difficulty in take on qualified successors and could experience a loss in
productivity while any such successors obtain the necessary training and
experience
The electrical
surge protection device is extremely competitive.
We will
compete with a number of companies that are engaged in business similar to
ours. Our competitors have been in business far longer than we have
and they may have significantly greater financial stability, access to capital
markets and name recognition. Unanticipated shortfalls in expected revenues due
to price competition or inadequate supply of raw materials would negatively
impact our financial results and harm our business. There is no assurance that
we will be able to successfully compete in this industry.
We may not be
able to effectively control and manage our growth.
Our
strategy envisions a period of potentially rapid growth. We currently maintain
nominal administrative and personnel capacity due to the startup nature of our
business, and our expected growth may impose a significant burden on our future
planned administrative and operational resources. The growth of our business may
require significant investments of capital and increased demands on our
management, workforce and facilities. We will be required to substantially
expand our administrative and operational resources and attract, train, manage
and retain qualified management and other personnel. Failure to do so or satisfy
such increased demands would interrupt or would have a material adverse effect
on our business and results of operations.
15
Risks
Relating to Our Organization
Failure
to achieve and maintain effective disclosure controls or internal controls could
have a material adverse effect on our ability to report our financial results
timely and accurately.
We are a
public reporting company and, accordingly, subject to the information and
reporting requirements of the Exchange Act and other federal and state
securities laws, including compliance with the Sarbanes-Oxley Act of 2002. The
costs of preparing and filing annual and quarterly reports, proxy statements and
other information with the SEC and furnishing audited reports to stockholders
will cause our expenses to be higher than they would have been if we were
privately-held. In addition, we have identified that we have a material weakness
in our system of internal accounting controls and accounting and financial
reporting processes as a result of a lack of sufficient resources with SEC,
generally accepted accounting principles (GAAP) and tax accounting
expertise.
It may be
time consuming, difficult and costly for us to develop and implement the
internal controls and reporting procedures required by the Sarbanes-Oxley Act.
We need to hire financial reporting, internal controls and other finance
personnel in order to develop and implement appropriate internal controls and
reporting procedures. If we are unable to comply with the internal controls
requirements of the Sarbanes-Oxley Act, we may not be able to obtain the
independent accountant certifications required by that Act. In
addition, effective internal controls and procedures are necessary for us to
provide reliable financial reports. If we continue to have material weaknesses
in our internal controls and procedures, we may not be able to provide reliable
financial reports and our business and operating results could be harmed.
Public company
compliance requirements may make it more difficult to attract and retain
officers and directors.
The
Sarbanes-Oxley Act and rules subsequently implemented by the SEC have required
changes in corporate governance practices of public companies. Compliance with
the new rules and regulations increases our operating costs and makes certain
activities more time consuming and costly than if we were not a public company.
As a public company, these new rules and regulations make it more difficult and
expensive for us to obtain director and officer liability insurance. As a
result, it may be more difficult for us to attract and retain qualified persons
to serve on our Board of Directors or as executive officers.
Because we became
public by means of a reverse acquisition, we may not be able to attract the
attention of major brokerage firms.
There may
be risks associated with our company becoming public through a “reverse
acquisition”. Securities analysts of major brokerage firms may not provide
coverage of us since there is no incentive to brokerage firms to recommend the
purchase of our common stock. No assurance can be given that brokerage firms
will, in the future, want to conduct any secondary offerings on behalf of our
post-merger company.
Risks Relating to our Common
Stock
Our
stock price may be volatile.
The
market price of our common stock is likely to be highly volatile and could
fluctuate widely in price in response to various factors, many of which are
beyond our control, including the following:
·
|
changes
in our industry;
|
|
·
|
competitive
pricing pressures;
|
|
·
|
our
ability to obtain working capital financing;
|
|
·
|
additions
or departures of key personnel;
|
|
·
|
limited
“public float”, in the hands of a small number of persons whose sales or
lack of sales, could result in positive or negative pricing pressure on
the market price for our common stock;
|
|
·
|
our
ability to execute our business plan;
|
|
·
|
operating
results that fall below expectations;
|
|
·
|
loss
of any strategic relationship;
|
|
·
|
regulatory
developments;
|
|
·
|
economic
and other external factors; and
|
|
·
|
period-to-period
fluctuations in our financial
results.
|
In
addition, the securities markets have from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. These market fluctuations may also materially and
adversely affect the market price of our common stock.
16
We do not expect
to pay dividends in the future. Any return on investment may be limited to the
value of our common stock.
We do not
anticipate paying cash dividends on our common stock in the foreseeable future.
The payment of dividends on our common stock will depend on earnings, financial
condition and other business and economic factors affecting us at such time as
our board of directors may consider relevant. If we do not pay dividends, our
common stock may be less valuable because a return on investment will only occur
if our stock price appreciates.
There is
currently no liquid trading market for our common stock and we cannot ensure
that one will ever develop or be sustained.
To date
there has been no liquid trading market for our common stock. We cannot predict
how liquid the market for our common stock might become. Our common
stock is quoted on the automated quotation service known as the OTC
Bulletin Board and although we are not presently eligible, we intend to apply
for listing of our common stock on either The Nasdaq Capital Market or other
national securities exchanges if and when we meet the requirements for listing.
We cannot ensure that we will be able to satisfy such listing standards or that
our common stock will be accepted for listing on any of
these exchanges. Should our company fail to satisfy the initial listing
standards of the exchanges, or our common stock is otherwise rejected for
listing and remain listed on the OTC Bulletin Board or suspended from the OTC
Bulletin Board, the trading price of our common stock could suffer and the
trading market for our common stock may be less liquid and our common stock
price may be subject to increased volatility.
Our common stock
is deemed a “penny stock”, which may make it more difficult for our investors to
sell their shares.
Our
common stock is subject to the “penny stock” rules adopted under Section 15(g)
of the Securities Exchange Act of 1934. The penny stock rules apply to companies
whose common stock is not listed on a national securities exchange and trades at
less than $5.00 per share or that have tangible net worth of less than
$5,000,000 ($2,000,000 if the company has been operating for three or more
years). These rules require, among other things, that brokers who trade penny
stock to persons other than “established customers” complete certain
documentation, make suitability inquiries of investors and provide investors
with certain information concerning trading in the security, including a risk
disclosure document and quote information under certain circumstances. Many
brokers have decided not to trade penny stocks because of the requirements of
the penny stock rules and, as a result, the number of broker-dealers willing to
act as market makers in such securities is limited. If we remain subject to the
penny stock rules for any significant period, it could have an adverse effect on
the market, if any, for our securities. Insofar as many of our shares are
subject to the penny stock rules, investors will find it more difficult to
dispose of those shares.
Offers or
availability for sale of a substantial number of shares of our common stock may
cause the price of our common stock to decline.
If our
stockholders sell substantial amounts of our common stock in the public market,
or upon the expiration of any holding period under Rule 144 it could create a
circumstance commonly referred to as an “overhang” and in anticipation of which
the market price of our common stock could fall. The existence of an overhang,
whether or not sales have occurred or are occurring, also could make more
difficult our ability to raise additional financing through the sale of equity
or equity-related securities in the future at a time and price that we deem
reasonable or appropriate. The shares of common stock issued to the former
shareholders of Alliance, upon the expiration of the applicable holding period
under Rule 144, will become freely tradable, subject to securities laws and SEC
regulations regarding sales by insiders. Recent revisions to Rule 144 shortened
the holding period under Rule 144, as a result of which the overhang period
arises earlier than would previously have been the case.
Item
2. UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS
During
the quarter ended October 31, 2009, the Company issued 18,266,667 common shares
for the acquisition of Alliance Networks Communications, Inc., as previously
reported in our Report on Form 8-K, filed with the SEC on August 27, 2009. This
issuance of the Company's common stock was exempt from registration under
Section 4(2) of the Securities Act of 1933 as a transaction by an issuer not
involving any public offering.
Item
3. DEFAULTS UPON SENIOR
SECURITIES
None.
17
Item
4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
As
previously reported in our Report on Form 8-K, filed with the SEC on August 27,
2009, we entered into a series of transactions resulting in the sale of
our previous operating subsidiary, Halcyon Jets, Inc., and the acquisition of
Alliance Networks Communications, Inc., which were approved by written consent
of a majority of our shareholders and reported to our shareholders in the
Information Statement on Form DEF 14C filed with the Securities and Exchange
Commission on July 30, 2009.
The Board
of Directors of the Company also approved an amendment to our certificate of
incorporation to effect a reverse stock split of all outstanding shares of our
common stock at an exchange ratio of one-for-fifteen. The reverse stock
split became effective at 5:00 p.m. Eastern Standard time on August 21, 2009
with the filing of the amendment with the Secretary of State of the State of
Delaware.
As a
result of the one-for-fifteen reverse stock split, each fifteen shares of
outstanding common stock were exchanged for one new share of common stock.
Except for adjustments that resulted from the treatment of fractional shares,
each stockholder holds the same percentage of outstanding common stock
immediately following the reverse stock split as such stockholder held
immediately prior to the reverse stock split. Currently, we are authorized to
issue up to a total of 300,000,000 shares of common stock. This reverse stock
split did not change the number of total authorized shares of our capital stock.
In addition to the 19,977,778 shares of common stock issued and outstanding on
September 11, 2009, the Board must reserve up to approximately 504,002 shares of
common stock which may be issued upon the exercise of warrants, options or
rights, including options and rights granted under our stock option and
incentive plan. Except with respect to the shares of common stock issuable upon
the exercise, at the option of the holder, of any options or warrants, at
present the Board has no other commitment to issue additional shares of common
stock.
As a
result of the common stock reverse split, the voting rights of the Preferred
Stock Series A was adjusted to reflect the one for fifteen reverse split and
therefore each share of the outstanding Preferred Stock have voting rights
equivalent to 67 common shares.
Item
5. OTHER INFORMATION
None.
ITEM
6. EXHIBITS
31.1
|
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934.
|
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934.
|
|
32.1
|
Certification
of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. 1350).
|
|
32.2
|
Certification
of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. 1350).
|
18
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
ALLIANCE
NETWORK COMMUNICATIONS HOLDINGS, INC.
|
|
Date:
December 15, 2009
|
/s/
Boris Rubizhevsky
|
Boris
Rubizhevsky
Chief
Executive Officer
|
|
Date:
December 15, 2009
|
/s/
Jan E. Chason
|
Jan
E. Chason
Chief
Financial Officer
|
19