Attached files
file | filename |
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EX-99.2 - UNAUDITED FINANCIAL STATEMENTS - Formulawon, Inc | f8k020310ex99ii_reach.htm |
EX-10.1 - SUBSCRIPTION AGREEMENT - Formulawon, Inc | f8k020310ex10i_reach.htm |
EX-99.1 - AUDITED FINANCIAL STATEMENTS - Formulawon, Inc | f8k020310ex99i_reach.htm |
EX-10.3 - EMPLOYMENT AGREEMENT WITH DAVID R. WELLS - Formulawon, Inc | f8k020310ex10iii_reach.htm |
EX-2.1 - SHARE EXCHANGE AGREEMENT - Formulawon, Inc | f8k020310ex2i_reach.htm |
EX-10.2 - EMPLOYMENT AGREEMENT WITH SHANE GAU - Formulawon, Inc | f8k020310ex10ii_reach.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
February
3, 2010
Date of Report (Date of
earliest event reported)
FormulaWon,
Inc.
(Exact
name of Registrant as specified in its charter)
Delaware
|
333-150424
|
[●]
|
||
(State
or other jurisdiction Identification No.)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
2801
Ocean Park Blvd., Suite 355
Santa
Monica, California 90405
(Address
of principal executive offices) (Zip Code)
(888)
631-8555
(Registrant’s
telephone number, including area code)
2800
Neilson Way #910
Santa
Monica, CA 90405
(Former
Address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2.below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425).
o
Soliciting material pursuant to Rule I4a-12 under the Exchange Act
(17CFR240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION
This
Current Report on Form 8-K (this “Report”), the other reports, statements, and
information that we have previously filed or that we may subsequently file with
the Securities and Exchange Commission (the “SEC”), and public announcements
that we have previously made or may subsequently make include, may include or
may incorporate by reference certain statements that may be deemed to be
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995 and are intended to enjoy the benefits of that
act. Unless the context is otherwise, the forward-looking statements included or
incorporated by reference in this Report and those reports, statements,
information and announcements address activities, events or developments that
Reach Messaging, Inc., a California corporation (herein after referred to as
“we,” “us,” “our,” or “our Company” unless context otherwise requires) expects
or anticipates, will or may occur in the future. Any statements in this Report
about expectations, beliefs, plans, objectives, assumptions or future events or
performance are not historical facts and are forward-looking statements. These
statements are often, but not always, made through the use of words or phrases
such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will
likely result,” “expect,” “will continue,” “anticipate,” “seek,” “estimate,”
“intend,” “plan,” “projection,” “would” and “outlook,” and similar expressions.
Accordingly, these statements involve estimates, assumptions and uncertainties,
which could cause actual results to differ materially from those expressed in
them. Any forward-looking statements are qualified in their entirety by
reference to the factors discussed throughout this Report. All forward-looking
statements concerning economic conditions, rates of growth, rates of income or
values as may be included in this document are based on information available to
us on the dates noted, and we assume no obligation to update any such
forward-looking statements. It is important to note that our actual results may
differ materially from those in such forward-looking statements due to
fluctuations in interest rates, inflation, government regulations, economic
conditions and competitive product and pricing pressures in the geographic and
business areas in which we conduct operations, including our plans, objectives,
expectations and intentions and other factors discussed elsewhere in this
Report.
The risk
factors referred to in this Report could materially and adversely affect our
business, financial conditions and results of operations and cause actual
results or outcomes to differ materially from those expressed in any
forward-looking statements made by us, and you should not place undue reliance
on any such forward-looking statements. Any forward-looking statement speaks
only as of the date on which it is made and we do not undertake any obligation
to update any forward-looking statement or statements to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. The risks and uncertainties described below
are not the only ones we face. New factors emerge from time to time,
and it is not possible for us to predict which will arise. There may be
additional risks not presently known to us or that we currently believe are
immaterial to our business. In addition, we cannot assess the impact of each
factor on our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements. If any such risks occur, our
business, operating results, liquidity and financial condition could be
materially affected in an adverse manner. Under such circumstances,
you may lose all or part of your investment.
The
industry and market data contained in this Report are based either on our
management’s own estimates or, where indicated, independent industry
publications, reports by governmental agencies or market research firms or other
published independent sources and, in each case, are believed by our management
to be reasonable estimates. However, industry and market data is subject to
change and cannot always be verified with complete certainty due to limits on
the availability and reliability of raw data, the voluntary nature of the data
gathering process and other limitations and uncertainties inherent in any
statistical survey of market shares. We have not independently verified market
and industry data from third-party sources. In addition, consumption patterns
and customer preferences can and do change. As a result, you should be aware
that market share, ranking and other similar data set forth herein, and
estimates and beliefs based on such data, may not be verifiable or
reliable.
2
Item 1.01 Entry Into Material Definitive Agreement
Share
Exchange Agreement
As more
fully described in Item 2.01 below, on February 3, 2010, we entered into a Share
Exchange Agreement (the “Share Exchange Agreement”) by and between FormulaWon,
Inc., a Delaware corporation (the “Company”) and Reach Messaging, Inc., a
California corporation (“Reach Messaging”). The closing of the
transaction (the “Closing”) took place on February 3, 2010 (the “Closing
Date”).
Pursuant
to the Share Exchange Agreement, we issued 48,000,000 shares of our common stock
to the shareholders of Reach Messaging, representing 44% of the Company’s issued
and outstanding stock, not including any share issuances for the financing
transaction or the consulting services described in more detail
below.
This
transaction is more fully discussed in Item 2.01 of this Current Report. This
brief discussion is qualified by reference to the provisions of the Share
Exchange Agreement which is attached in full to this Current Report as Exhibit
2.1.
Financing
Transaction
In
connection with the closing of the Share Exchange Agreement, on February 3,
2010, we entered into a Subscription Agreement for the sale of shares of common
stock of the Company aggregating $315,000 at a per share purchase price of $0.05
(the “Subscription Agreement”). A copy of the Subscription Agreement
is attached hereto as Exhibit 10.1. Pursuant to the Subscription
Agreement, we sold 6,300,000 shares of common stock. Additionally, we
issued 368,000 shares of common stock as a finder’s fee in conjunction with the
sale.
The
financing closed simultaneously with the Share Exchange
Agreement.
Business
Consulting Agreements
In
connection with the closing of the Share Exchange Agreement, we entered into
consulting agreements with five separate service providers to provide us
business consulting advice and certain guidance in this transaction and on-going
work. As consideration for their services, we agreed to issue these
consultants an aggregate of 12,000,000 shares of our common stock.
Item
2.01 Completion of Acquisition and Disposition of Assets
Closing
of the Share Exchange Agreement
On the
Closing Date, pursuant to the Share Exchange Agreement, the shareholders of
Reach Messaging exchanged 48,000,000 shares of common stock of Reach Messaging,
representing 100% of the issued and outstanding stock of Reach Messaging, for
48,000,000 newly issued shares of the Company’s common stock, par value $0.001
per share, representing 44% of the Company’s issued and outstanding common
stock, not including the shares issued to investors in our financing transaction
or to consultants for their services rendered.
Immediately
following the Closing, the Company intends to change its name to Reach Messaging
Holdings, Inc to better reflect its business.
Pursuant
to the terms of the Share Exchange Agreement, Fitra Iriani, the sole officer and
director of the Company, agreed to cancel 76,860,000 shares of the Company’s
common stock held in her name.
Additionally,
simultaneous to the Closing, we closed on a financing transaction in the
aggregate amount of $315,000 and issued 6,300,000 shares of common stock to
certain accredited investors and an additional 368,000 shares to a finder
pursuant to the terms of a finder’s agreement.
As more
fully described in Item 5.02 below, on the Closing Date, Fitra Iriani, resigned
from all positions held and Reach Messaging simultaneously appointed executive
officers and three members of the Board of Directors of the
Company. The Board of Directors now consists of three members, each
serving terms until a vote can take place at the next annual meeting of the
Company, pursuant to the By-laws of the Company.
3
BUSINESS
General
We were incorporated in the state of
California as of September 19, 2007. Reach Messaging (hereinafter the
“Company”) was formed to assist publishers and advertisers reaching the millions
of ‘tweens’, teens and ‘generation Y’ through the Internet and mobile Instant
Messaging platforms.
Reach
Messaging is a technology development and media distribution company. The
Company began in the Bot development business when we contracted with America
Online (“AOL”) to build 4 Bots to run on their “AIM” network. The AIM Network is
s an instant messaging and presence computer program that uses the proprietary
OSCAR instant messaging protocol and the TOC protocol to allow registered users
to communicate in real time. It was released by the American Online company in
May 1997. These 4 Bots, GossipinGabby, SportsFanStan, My TV Bud and ProfGilzot
are currently the most popular Bots on the AIM Network as measured by the AOL
host infrastructure. Reach Messaging has also built numerous Bots in the retail
field (AOL Shortcuts) and in the education field (PurdueBuddy). Differentiating
features from other Bot vendors and platforms include instant messaging gaming
(TD Mania, celeb hangman), sports score alerts, instant messaging surveys and
interactive polls and quizzes. Our partners have included Waste Management,
Britney Spears, Alloy Media, AOL, Hearst Publishing, Purdue University and
Stylecaster.
Through
the use of ‘IM Bots’ (or “Bots”) and web properties, Reach Messaging currently
touches over 1,500,000 unique users on a monthly basis. An IM Bot is
a screen name that can respond automatically to the Instant Messages (“IM” or
“IMs”) or text messages it receives. It is capable of maintaining high volume IM
conversations with multiple users simultaneously. IM Bots allow publishers to
easily provide dynamic content and information via IM or another instant
messaging technology called SMS (“Short Message Service”). They allow users to
create real-time interactive experiences, such as providing song lyrics, state
capitals, jokes, celeb gossip, TV line-up, sporting news or pictures, to a large
audience on demand. IM Bots can initiate conversations to users that have the
Bot on their Buddy List or if they have subscribed to receive alerts (i.e. celeb
gossip, sports scores).
Our
unique technology will position us to become the IM and SMS solution for media
partners, high school and university networking, retail outlets and service
industry communications. Currently, Reach Messaging has 5
applications that appear on every AOL users AOL Instant Messaging buddy
list:
GossipinGabby: Our
most popular Bot. It was launched in June 2008 and this Bot reports
on celebrity news. It has 600,000 monthly unique users and over 2.6
million page views. This Bot features polls, quizzes and jokes
related to celebrity news.
SportsFanStan: This
Bot was launched in August 2008 and has everything related to
sports. This Bot is very popular with guys between the ages of 13 and
25. It has 150,000 monthly unique visitors and over 1 million monthly
page views. On NFL game day, this Bot provides over 200,000 game day
alerts to users. This Bot features polls and sports scoring
alerts.
MyTVBud: This
Bot was launched in February 2009 and provides users with updates on TV shows
and news related to TV stars. It has 170,000 monthly unique visitors
and over 700,000 monthly page views. It provides over 36,000
subscribers with update alerts and features polls, quizzes and videos related to
current TV shows.
ProfGilzot: This
Bot was launched in June 2007 and is focused on education and educational
trivia. It was the first content Bot provided by AOL Instant
Messenger. This Bot has 140,000 unique monthly visitors and over
1,400,000 monthly page views. Over 51,000 subscribers receive alerts
from this Bot.
LivGreene: This
Bot was launched in January 2008 with the intent of providing environmentally
friendly tips to subscribers. It has 115,000 monthly unique visitors
and over 460,000 monthly page views. It has 12,000 subscribers who
receive alerts and this Bot provides tips for living healthier and protecting
the environment.
The
growth of handheld and other mobile devices makes the products offered by us
relevant. Reach Messaging intends to apply the experience it has gained over the
past several years and launch products on new technology platforms including
Android, Apple iPhone and Blackberry, and to new communication protocols
including SMS. Reach Messaging is also exploring other opportunities on
web-based platforms including Facebook.
Location
and Facilities
Our
corporate mailing address is 2801 Ocean Park Blvd, Suite 355, Santa Monica,
California 90405. Our employees work virtually throughout the United
States.
4
Employees
Currently
there are 4 employees. We periodically utilize contractors and consultants to
perform additional services.
Legal
Proceedings
In the
normal course of our business we may periodically become subject to various
lawsuits. Currently there are no legal actions pending against us
nor, to our knowledge, are any such proceedings contemplated.
Material
Contracts
Employment
Agreements
On
February 3, 2010 we entered into an employment agreement with Shane Gau to
become our Chief Executive Officer. We have agreed to pay to Mr. Gau a salary of
$180,000 per year. Mr. Gau will be eligible to receive a performance bonus of up
to 50% of his annual compensation, which, if earned, will be paid one-half in
cash and one-half in shares of the Company’s common stock. The
performance bonus will be paid upon the executive achieving certain objectives
during the 2010 fiscal year. This compensation can be accrued based on our cash
demands, and our available cash balances as payment of wages and bonuses come
due. A copy of his employment agreement is attached hereto as Exhibit
10.2.
On
February 3, 2010 we entered into an employment agreement with David R. Wells to
become our Chief Financial Officer. We have agreed to pay to Mr. Wells at the
rate of $160,000 per year based on the actual amount of time spent related to
Company activities, as mutually agreed with the Chief Executive Officer. Mr.
Wells will be eligible to receive a performance bonus of up to 30% of his annual
compensation (as earned as noted above), which, if earned, will be paid one-half
in cash and one-half in shares of the Company’s common stock. The
performance bonus will be paid upon the executive achieving certain objectives
during the 2010 fiscal year. This compensation can be accrued based on our cash
demands, and our available cash balances as payment of wages and bonuses come
due. A copy of his employment agreement is attached as Exhibit
10.3.
Each
executive is also entitled to participate in benefit programs offered to other
executives of Reach Messaging, including, life, health, dental, accident,
disability, or other insurance programs; pension, profit-sharing, 401(k),
savings, or other retirement programs, although we are not obligated to adopt or
maintain any particular benefit program.
Consulting
Agreements
On February 3, 2010, we entered into
consulting agreements with five separate service providers to provide us
business consulting advice and certain guidance in this transaction and on-going
work. As consideration for their services, we agreed to issue these
consultants an aggregate of 12,000,000 shares of our common
stock.
RISK
FACTORS
The common shares
offered are highly speculative in nature, involve a high degree of risk and
should be purchased only by persons who can afford to lose their entire
investment. Accordingly, prospective investors should carefully consider, along
with other matters referred to herein, the following risk factors in evaluating
our business before purchasing any common shares. This Report
contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in the following risk factors and elsewhere in this
Report.
Risks
Relating to Our Business
WE
HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE
LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES,
DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL
DEVELOPING COMPANY.
We were
incorporated in California in September 2007. We have no significant assets or
financial resources. The likelihood of our success must be considered in light
of the problems, expenses, difficulties, complications and delays frequently
encountered by a small developing company starting a new business enterprise and
the highly competitive environment in which we will operate. Since we have a
limited operating history, we cannot assure you that our business will be
profitable or that we will ever generate sufficient revenues to meet our
expenses and support our anticipated activities.
5
WE
NEED TO MANAGE GROWTH IN OPERATIONS TO MAXIMIZE OUR POTENTIAL GROWTH AND ACHIEVE
OUR EXPECTED REVENUES AND OUR FAILURE TO MANAGE GROWTH WILL CAUSE A DISRUPTION
OF OUR OPERATIONS RESULTING IN THE FAILURE TO GENERATE REVENUE.
In order
to maximize potential growth in our current and potential markets, we believe
that we must expand our marketing operations. This expansion will place a
significant strain on our management and our operational, accounting, and
information systems. We expect that we will need to continue to improve our
financial controls, operating procedures, and management information systems. We
will also need to effectively train, motivate, and manage our employees. Our
failure to manage our growth could disrupt our operations and ultimately prevent
us from generating the revenues we expect.
In order
to achieve the above-mentioned targets, the general strategies of our Company
are to maintain and search for hard-working employees who have innovative
initiatives; on the other hands, our Company will also keep a close eye on
expanding opportunities.
IF
WE NEED ADDITIONAL CAPITAL TO FUND OUR GROWING OPERATIONS, WE MAY NOT BE ABLE TO
OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR
OPERATIONS.
If
adequate additional financing is not available on reasonable terms, we may not
be able to undertake expansion, continue our marketing efforts and we would have
to modify our business plans accordingly. There is no assurance that additional
financing will be available to us.
In
connection with our growth strategies, we may experience increased capital needs
and accordingly, we may not have sufficient capital to fund our future
operations without additional capital investments. Our capital needs will depend
on numerous factors, including (i) our profitability; (ii) the release of
competitive products by our competition; (iii) the level of our investment in
research and development; and (iv) the amount of our capital expenditures,
including acquisitions. We cannot assure you that we will be able to obtain
capital in the future to meet our needs.
Even if
we do find a source of additional capital, we may not be able to negotiate terms
and conditions for receiving the additional capital that are acceptable to us.
Any future capital investments could dilute or otherwise materially and
adversely affect the holdings or rights of our existing shareholders. In
addition, new equity or convertible debt securities issued by us to obtain
financing could have rights, preferences and privileges senior to our common
stock. We cannot give you any assurance that any additional financing will be
available to us, or if available, will be on terms favorable to us.
NEED
FOR ADDITIONAL EMPLOYEES.
Our
Company’s future success also depends upon its continuing ability to attract and
retain highly qualified personnel. Expansion of our Company’s business and the
management and operation will require additional managers and employees with
industry experience, and the success of the Company will be highly dependent on
the Company’s ability to attract and retain skilled management personnel and
other employees. Competition for such personnel is intense. There can be no
assurance that we will be able to attract or retain highly qualified personnel.
Competition for skilled personnel in our industry is significant. This
competition may make it more difficult and expensive to attract, hire and retain
qualified managers and employees. Our Company’s inability to attract skilled
management personnel and other employees as needed could have a material adverse
effect on the Company’s business, operating results and financial condition. Our
Company’s arrangement with its current employees is at will, meaning its
employees may voluntarily terminate their employment at any time. We anticipate
that the use of stock options, restricted stock grants, stock appreciation
rights, and phantom stock awards will be valuable in attracting and retaining
qualified personnel. However, the effects of such plan cannot be
certain.
OUR
FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED SERVICE
OF OUR OFFICERS.
We are
presently dependent to a great extent upon the experience, abilities and
continued services of Shane Gau, David R. Wells and Jason Campbell, our
management team. The loss of services of Mr. Gau, Mr. Wells or Mr.
Campbell could have a material adverse effect on our business, financial
condition or results of operation.
WE
ARE IN AN INTENSELY COMPETITIVE INDUSTRY AND THERE CAN BE NO ASSURANCE THAT WE
WILL BE ABLE TO COMPETE WITH OUR COMPETITORS WHO MAY HAVE GREATER
RESOURCES.
We could
face strong competition within the local area by competitors in the instant
messaging platform industry who could duplicate the model. These
competitors may have substantially greater financial resources and marketing,
development and other capabilities than the Company. In addition, there
are very few barriers to enter into the market for our
services. There can be no assurance, therefore, that any of our
competitors, many of whom have far greater resources will not independently
develop services that are substantially equivalent or superior to our
services. Therefore, an investment in the Company is very risky and
speculative due to the competitive environment in which the Company intends to
operate.
6
OUR
ABILITY TO CONTINUE TO DEVELOP AND EXPAND OUR PRODUCT OFFERINGS TO ADDRESS
EMERGING CONSUMER DEMANDS AND TECHNOLOGICAL TRENDS WILL IMPACT OUR FUTURE
GROWTH. IF WE ARE NOT SUCCESSFUL IN MEETING THESE BUSINESS CHALLENGES, OUR
RESULTS OF OPERATIONS AND CASH FLOWS WILL BE MATERIALLY AND ADVERSELY
AFFECTED.
Our
ability to implement solutions for our customers incorporating new developments
and improvements in technology which translate into productivity improvements
for our customers and to develop product offerings that meet the current and
prospective customers’ needs are critical to our success. The markets we serve
are highly competitive. Our competitors may develop solutions or services which
make our offerings obsolete. Our ability to develop and implement up to date
solutions utilizing new technologies which meet evolving customer needs in
internet and mobile instant messaging platforms solutions will impact our future
revenue growth and earnings.
OUR
FUTURE SUCCESS IS DEPENDENT UPON OUR ABILITY TO PROTECT OUR INTELLECTUAL
PROPERTY.
We may
not be able to protect unauthorized use of its intellectual property and take
appropriate steps to enforce our rights. Although management does not
believe that its services infringes on the intellectual rights of others, there
is no assurance that the Company may not be the target of infringement or other
claims. Such claims, even if not true, could result in significant
legal and other costs associated and may be a distraction to
management. We plan to rely on a combination of copyright, trade
secret, trademark laws and non-disclosure and other contractual provisions to
protect our proprietary rights. We use and intend to use the
trademark “Reach Messaging” name and logo. We intend to file federal
trademark applications for “Reach Messaging” and to secure the Internet trade
domain “www.reachmessaging.com” and related logo. There can be no assurance that
the registrations applied for will be accepted. Because the policing
of intellectual and intangible rights may be difficult and the ideas and other
aspects underlying our business model may not in all cases be protectable under
intellectual property laws, there can be assurance that we can prevent
competitors from marketing the same or similar products and
services.
Risks
Associated with Our Shares of Common Stock
BROAD
DISCRETION OF MANAGEMENT TO USE OF PROCEEDS.
Our
Company’s management will have broad discretion with respect to the expenditure
of the net proceeds of this Offering. Accordingly, Subscribers will be
entrusting their funds to the Company’s management, upon whose judgment they
must depend, with limited information concerning the specific working capital
requirements and general corporate purposes to which the funds will be
ultimately applied.
RESTRICTED
SECURITIES; LIMITED TRANSFERABILITY.
Purchase
of the Securities should be considered a long-term, illiquid investment. The
Securities have not been registered under the Act, are being offered by reason
of a specific exemption from registration and are “restricted securities” under
Rule 144 promulgated under the Act, and cannot be sold without registration
under the Act or any exemption from registration. In addition, the Securities
will not be registered under any state securities laws that would permit their
transfer. Because of these restrictions and the absence of a trading market for
the Securities, a Subscriber will likely be unable to liquidate an investment
even though other personal financial circumstances would dictate such
liquidation.
OUR
COMMON STOCK IS QUOTED ON THE OTC BULLETIN BOARD WHICH MAY HAVE AN
UNFAVORABLE IMPACT ON OUR STOCK PRICE AND
LIQUIDITY.
Our
common stock is quoted on the OTC Bulletin Board. The OTC Bulletin Board
is a significantly more limited market than the New York Stock Exchange or
Nasdaq system. The quotation of our shares on the OTC Bulletin Board may
result in a less liquid market available for existing and potential stockholders
to trade shares of our common stock, could depress the trading price of our
common stock and could have a long-term adverse impact on our ability to raise
capital in the future.
IF
WE FAIL TO ESTABLISH AND MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROL, WE
MAY NOT BE ABLE TO REPORT OUR FINANCIAL RESULTS ACCURATELY OR TO PREVENT
FRAUD. ANY INABILITY TO REPORT AND FILE OUR FINANCIAL RESULTS
ACCURATELY AND TIMELY COULD HARM OUR REPUTATION AND ADVERSELY IMPACT THE TRADING
PRICE OF OUR COMMON STOCK.
Effective
internal control is necessary for us to provide reliable financial reports and
prevent fraud. If we cannot provide reliable financial reports or
prevent fraud, we may not be able to manage our business as effectively as we
would if an effective control environment existed, and our business and
reputation with investors may be harmed. As a result, our small size
and any current internal control deficiencies may adversely affect our financial
condition, results of operation and access to capital. We have not
performed an in-depth analysis to determine if in the past un-discovered
failures of internal controls exist, and may in the future discover areas of our
internal control that need improvement.
7
OUR
SHARES OF COMMON STOCK ARE VERY THINLY TRADED, AND THE PRICE MAY NOT REFLECT OUR
VALUE AND THERE CAN BE NO ASSURANCE THAT THERE WILL BE AN ACTIVE MARKET FOR OUR
SHARES OF COMMON STOCK EITHER NOW OR IN THE FUTURE.
Our
shares of common stock are very thinly traded, and the price if traded may not
reflect our value. There can be no assurance that there will be an active market
for our shares of common stock either now or in the future. The market liquidity
will be dependent on the perception of our operating business and any steps that
our management might take to bring us to the awareness of investors. There can
be no assurance given that there will be any awareness generated. Consequently,
investors may not be able to liquidate their investment or liquidate it at a
price that reflects the value of the business. If a more active market should
develop, the price may be highly volatile. Because there may be a low price for
our shares of common stock, many brokerage firms may not be willing to effect
transactions in the securities. Even if an investor finds a broker willing to
effect a transaction in the shares of our common stock, the combination of
brokerage commissions, transfer fees, taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not permit
the use of such shares of common stock as collateral for any loans.
OUR COMMON STOCK
ARE CLASSIFIED AS A “PENNY STOCK” AS THAT TERM IS GENERALLY DEFINED IN THE
SECURITIES EXCHANGE ACT OF 1934 TO MEAN EQUITY SECURITIES WITH A PRICE OF LESS
THAN $5.00. OUR COMMON STOCK WILL BE SUBJECT TO RULES THAT IMPOSE SALES PRACTICE
AND DISCLOSURE REQUIREMENTS ON BROKER-DEALERS WHO ENGAGE IN CERTAIN TRANSACTIONS
INVOLVING A PENNY STOCK.
We
will be subject to the penny stock rules adopted by the Securities and Exchange
Commission (“SEC”) that require brokers to provide extensive
disclosure to its customers prior to executing trades in penny stocks. These
disclosure requirements may cause a reduction in the trading activity of our
Common Stock, which in all likelihood would make it difficult for our
stockholders to sell their securities.
Rule
3a51-1 of the Securities Exchange Act of 1934 establishes the definition of a
"penny stock," for purposes relevant to us, as any equity security that has a
minimum bid price of less than $5.00 per share or with an exercise price of less
than $5.00 per share, subject to a limited number of exceptions which are not
available to us. It is likely that our shares will be considered to be penny
stocks for the immediately foreseeable future. This classification severely and
adversely affects any market liquidity for our Common Stock.
For any
transaction involving a penny stock, unless exempt, the penny stock rules
require that a broker or dealer approve a person's account for transactions in
penny stocks and the broker or dealer receive from the investor a written
agreement to the transaction setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must obtain financial
information and investment experience and objectives of the person and make a
reasonable determination that the transactions in penny stocks are suitable for
that person and that that person has sufficient knowledge and experience in
financial matters to be capable of evaluating the risks of transactions in penny
stocks.
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the SEC relating to the penny stock market,
which, in highlight form, sets forth:
·
|
the
basis on which the broker or dealer made the suitability determination,
and
|
·
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to
be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks.
Because
of these regulations, broker-dealers may not wish to engage in the
above-referenced necessary paperwork and disclosures and/or may encounter
difficulties in their attempt to sell shares of our Common Stock, which may
affect the ability of selling shareholders or other holders to sell
their shares in any secondary market and have the effect of reducing the
level of trading activity in any secondary market. These additional sales
practice and disclosure requirements could impede the sale of our common stock,
if and when our common stock becomes publicly traded. In addition, the liquidity
for our common stock may decrease, with a corresponding decrease in the price of
our common stock. Our Common Stock, in all probability, will be subject to such
penny stock rules for the foreseeable future and our shareholders will, in all
likelihood, find it difficult to sell their common stock.
MANGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The
following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and the
related notes appearing elsewhere in this Report. This discussion and analysis
may contain forward-looking statements based on assumptions about our future
business. Our actual results could 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” and elsewhere in this
Report.
8
Forward-Looking
Statements
This
Report contains forward-looking statements. The forward-looking statements are
contained principally in, but not limited to, the sections entitled “Risk
Factors,” “Management’s Discussion and Analysis or Plan of Operation” and
“Business.” Forward-looking statements provide our current expectations or
forecasts of future events. Forward-looking statements include statements about
our expectations, beliefs, plans, objectives, intentions, assumptions and other
statements that are not historical facts. Words or phrases such as “anticipate,”
“believe,” “continue,” “ongoing,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project” or similar words or phrases, or the negatives
of those words or phrases, may identify forward-looking statements, but the
absence of these words does not necessarily mean that a statement is not
forward-looking.
Forward-looking
statements are subject to known and unknown risks and uncertainties and are
based on potentially inaccurate assumptions that could cause actual results to
differ materially from those expected or implied by the forward-looking
statements. Our actual results could differ materially from those anticipated in
forward-looking statements for many reasons, including the factors described in
the section entitled “Risk Factors” in this Report. Accordingly, you should not
unduly rely on these forward-looking statements, which speak only as of the date
of this Report.
Unless
required by law, we undertake no obligation to publicly revise any
forward-looking statement to reflect circumstances or events after the date of
this Report or to reflect the occurrence of unanticipated events. You should,
however, review the factors and risks we describe in the reports we will file
from time to time with the SEC after the date of this Report.
Management
cautions that these statements are qualified by their terms and/or important
factors, many of which are outside of our control, and involve a number of
risks, uncertainties and other factors that could cause actual results and
events to differ materially from the statements made, including, but not limited
to, the following:
● actual
or anticipated fluctuations in our quarterly and annual operating
results;
● actual
or anticipated product constraints;
● decreased
demand for our products resulting from changes in consumer
preferences;
● product
and services announcements by us or our competitors;
● loss
of any of our key executives;
● regulatory
announcements, proceedings or changes;
● announcements
in the motorcycle community;
● competitive
product developments;
● intellectual
property and legal developments;
● mergers
or strategic alliances in the motorcycle industry;
● any
business combination we may propose or complete;
● any
financing transactions we may propose or complete; or
● broader
industry and market trends unrelated to its performance.
Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance,
or achievements.
Plan
of Operation
The
Company has not generated sufficient revenue so it intends to report its plan of
operation below. The ability of the Company to achieve its business
objectives is contingent upon its success in raising additional capital until
adequate revenues are realized from operations.
Reach
Messaging is a technology development and media distribution company. Reach
Messaging began in the Bot development business when they contracted with
America Online (“AOL”) to build 4 Bots to run on their “AIM” network. The AIM
Network is an instant messaging and presence computer program that uses the
proprietary OSCAR instant messaging protocol and the TOC protocol to allow
registered users to communicate in real time. It was released by the American
Online company in May 1997. These 4 Bots, GossipinGabby, SportsFanStan, My TV
Bud and ProfGilzot are currently the most popular Bots on the AIM Network as
measured by as measured by the
AOL host infrastructure. Reach Messaging has also built numerous Bots in
the retail field (AOL Shortcuts) and in the education field (PurdueBuddy).
Differentiating features from other Bot vendors and platforms include instant
messaging gaming (TD Mania, celeb hangman), sports score alerts, instant
messaging surveys and interactive polls and quizzes. Our partners have included
Waste Management, Britney Spears, Alloy Media, AOL, Hearst Publishing, Purdue
University and Stylecaster.
9
Through the use of ‘IM Bots’ (or
“Bots”) and web properties, Reach Messaging currently touches over 1,500,000
unique users on a monthly basis. An IM Bot is a screen name that can
respond automatically to the Instant Messages (“IM” or “IMs”) or text messages
it receives. It is capable of maintaining high volume IM conversations with
multiple users simultaneously. IM Bots allow publishers to easily provide
dynamic content and information via IM or another instant messaging technology
called SMS (“Short Message Service”). They allow users to create real-time
interactive experiences, such as providing song lyrics, state capitals, jokes,
celeb gossip, TV line-up, sporting news or pictures, to a large audience on
demand. IM Bots can initiate conversations to users that have the Bot on their
Buddy List or if they have subscribed to receive alerts (i.e. celeb gossip,
sports scores).
The Company’s unique technology will
position it to become the IM and SMS solution for media partners, high school
and university networking, retail outlets and service industry
communications. Currently, Reach Messaging has 5 applications that
appear on every AOL users AOL Instant Messaging buddy list:
GossipinGabby: Reach
Messaging’s most popular Bot. It was launched in June 2008 and this
Bot reports on celebrity news. It has 600,000 monthly unique users
and over 2.6 million page views. This Bot features polls, quizzes and
jokes related to celebrity news.
SportsFanStan: This
Bot was launched in August 2008 and has everything related to
sports. This Bot is very popular with men between the ages of 13 and
25. It has 150,000 monthly unique visitors and over 1 million monthly
page views. On NFL game day, this Bot provides over 200,000 game day
alerts to users. This Bot features polls and sports scoring
alerts.
MyTVBud: This
Bot was launched in February 2009 and provides users with updates on TV shows
and news related to TV stars. It has 170,000 monthly unique visitors
and over 700,000 monthly page views. It provides over 36,000
subscribers with update alerts and features polls, quizzes and videos related to
current TV shows.
ProfGilzot: This
Bot was launched in June 2007 and is focused on education and educational
trivia. It was the first content Bot provided by AOL Instant
Messenger. This Bot has 140,000 unique monthly visitors and over
1,400,000 monthly page views. Over 51,000 subscribers receive alerts
from this Bot.
LivGreene: This
Bot was launched in January 2008 with the intent of providing environmentally
friendly tips to subscribers. It has 115,000 monthly unique visitors
and over 460,000 monthly page views. It has 12,000 subscribers who
receive alerts and this Bot provides tips for living healthier and protecting
the environment.
The
growth of handheld and other mobile devices makes the products offered by the
Company relevant. 2010 will be a year of expansion and diversification for Reach
Messaging. In addition to hiring a sales force to fully monetize the current
Bot, SMS and web ad inventory, the Company anticipates taking the experience
gained since its inception on the AIM Network and expect to migrate its most
popular features and products to ubiquitous social platforms such as Facebook
and MySpace, and to Mobile apps for the Android, iPhone and Blackberry devices.
Reach Messaging is also exploring other opportunities on web-based platforms
including Facebook.
Year ended December 31, 2008
Compared to the Year ended December 31, 2007
For the
period ended December 31, 2008 we generated $205,632 in revenue from normal
operations. We earned $120,882 in Lead Conversion revenue, which represents
revenue earned through the converting of leads from our Bot agents into closed
business for our advertisers. This is a substantial increase from the period
ended December 2007 where we earned $1,367. Our revenue in 2007 were our first
revenues, therefore the increase is due to a full year operations related to
this revenue type. We also generated $60,000 in Hosting revenue, an increase of
$50,000 from the year ended December 31, 2007, due to a contract with a
well-known performer to provide hosting services. Our Bot sales were
substantially unchanged in 2008 over 2007, $24,750 and $25,025 respectively, as
we earned recurring revenue from long-term sales arrangements.
Our costs
of revenue increased to $51,090 for the period ended December 31, 2008 from
$19,053 for the period ended December 31, 2007 due mainly to our costs
associated customizing advertising associated with our Lead conversion
revenue.
Our
operating expenses increased to $236,959 for the period ended December 31, 2008
from 73,714 for the period ended December 31, 2007 due mainly to increase
Research and Development costs. Costs associated with the development of our Bot
technology increased from $65,000 in 2007 to $223,950 in 2008, an increase of
$158,950 or 245%.
Nine Months ended September
30, 2009 Compared to the Nine Months ended September 30,
2008
For the
Nine months ended September 30, 2009 we generated $90,639 in revenue from normal
operations compared to $143,240 for the Nine months ended September 30, 2008. We
earned $45,639 in Lead Conversion revenue, which is advertising revenue
generated through our Bot properties. This is a decrease from the period ended
September 30, 2008 where we earned $73,490. This was due to the loss of certain
customers in 2009 related to prevailing economic conditions. We also generated
$45,000 in Hosting revenue which is the same for the period in 2007 due to a
recurring revenue contract. Hosting revenue is a periodic fee charged to host
and maintain a partners server and content related to the Bot properties. We had
no revenue from Bot sales for the nine months ended September 30, 2009 compared
to $24,750 for the nine months ended September 20, 2008 due to the loss of
certain customers in 2009 related to prevailing economic
conditions.
10
Our costs
of revenue decreased to $24,477 for the nine months ended September 30, 2009
from $36,932 for the nine months ended September 30, 2008 due mainly to costs
associated with the delivery of Bots which were $18,000 for the nine months
ended September 30, 2008 but $0 for the nine months ended September 30, 2009 as
we had no Bot revenue for that period, but were partially offset by increased
costs associated with the customizing of advertising associated with our Lead
Conversion revenue, which increased by $5,561 to $22,243 for the nine months
ended September 30, 2009 compared to $16,682 in the same period in
2008.
Our
operating expenses increased to $188,423 for the nine months ended September 30,
2009 from $144,451 for the nine months ended September 30, 2008 due mainly to
increase Research and Development costs. Costs associated with the development
of our Bot technology increased to $170,050 for the nine months ended September
30, 2009 from $135,000 for the nine months ended September 30, 2008, an increase
of $35,050 or 26%.
Liquidity and Capital
Resources
Our cash
and cash equivalents of $8,656 and $372 for the periods ended September 30, 2009
and September 30, 2008 respectively. Despite capital contributions and sales,
and both related party and third party loan commitments, we may experience cash
flow shortages that can slow our expected growth. We have primarily financed our
activities from sales of our capital stock and from loans from related and third
parties. A significant portion of the funds raised from the sale of
capital stock will be used to cover working capital needs such as office
expenses and various professional fees.
Our cash
flow requirements during this period have been met by contributions of capital
and debt financing. We anticipate that financing will be required
until such time as we are able to generate adequate cash flow from operations to
support both our cash needs for normal operations, and to support the cash needs
for our investment into additional resources and assets to support our
growth. Currently we cannot determine when either will occur and as
such we will need to obtain financing to cover our costs for the foreseeable
future. No assurance can be given that these sources of financing
will continue to be available. If we are unable to generate profits,
or unable to obtain additional funds for its working capital needs, we may have
to curtail normal operations, or cease operations completely.
MANAGEMENT
Directors
and Executive Officers
The
following table sets forth, as of February 3, 2010, the names and ages of all of
our directors and executive officers; and all positions and offices
held. The directors will hold such office until the next annual
meeting of shareholders and until his or her successor has been elected and
qualified.
Name
|
Age
|
Principal
Positions With Us
|
|||
Shane
Gau
|
45 |
Chief
Executive Officer and Chairman
|
|||
Jason
Campbell
|
38 |
Chief
Technology Officer and Director
|
|||
David
R. Wells
|
47 |
Chief
Financial Officer, Secretary and
Director
|
The board
of directors has no standing committees.
Family
Relationships
There are
no family relationships between the officers or directors of Reach
Messaging.
Business
Experience
The
following summarizes the occupation and business experience of our officers and
directors:
Shane Gau, Chief
Executive Officer and Chairman
Shane Gau
spent 12 years at AOL in numerous product and programming roles, including a
principal product manager leading the AOL email and AIM product lines. He was
also instrumental in launching Video@AOL. The last 4 years he has been
Programming Director for AOL Network Solutions, where he launched and oversaw
the AIM Bot and Expressions programs. Under his pervue, he grew the IP Bot relay
program into a $3MM per year business and the AIM Expressions program generated
over $2.5MM per year in 2009. He also grew the stable of AIM bots from 5 to over
100 and oversaw numerous initiatives that enabled partners to expand their reach
on the AOL network. Prior to joining AOL, he spent 6 years as a US Navy Intel
officer. He is fluent in French and Russian.
11
Jason Campbell, Chief
Technology Officer and Director
Jason
Campbell began private technical consulting in 1992 after serving as a PATRIOT
missileman in Desert Storm. In 1994, he founded Got.net, which would become
Santa Cruz's most successful Internet business services company, and the
county's second largest consumer ISP. From 1999 to 2001, Jay joined
enterprise email solution provider Mirapoint in Sunnyvale as web platform
manager and interim business solutions manager. In 2002, Jay returned
to project work by forming what would become Santa Cruz Tech, a consultancy
focusing on emerging online technologies. SCT provided solutions to companies
such as Yahoo!, the Center for Investigative Research, UC Berkeley, and several
smaller web start-ups. In 2007 Jay co-founded Reach Messaging to
architect a platform capable of scalable interaction with an indefinite number
of AOL AIM instant messaging users. He currently serves as CTO, translating
customer needs into technical solutions and driving software
development.
David R. Wells, Chief
Financial Officer, Secretary and Director
Mr. Wells
is a senior financial executive with substantial financial management expertise,
including representing public companies in its SEC reporting and compliance,
investor relations, Sarbanes-Oxley compliance and implementation and
fund-raising, significant experience in startup companies managing finance,
accounting, administration, human resources and information systems departments,
specializing in the technology and services industries. From December 2005 to
September 2009, Mr. Wells was the CFO of Voyant International Corporation
(OTCBB: VOYT) where Mr. Wells was responsible for all SEC filings, finance and
accounting for the Company and participating in acquisitions, fund-raising and
budgeting for future growth. In 1988, Mr. Wells obtained his M.B.A. in finance
from Pepperdine University and he holds an undergraduate from Seattle Pacific
University in finance and entrepreneurship.
Employment
Agreements / Terms of Office
We have
entered into formal employment agreements with Mr. Gau our Chief Executive
Officer and Mr. Wells, our Chief Financial Officer, copies of which are attached
hereto as Exhibits. We have not entered into a formal written employment
agreement with our Chief Technology Officer; however, we intend to enter into
written employment agreements with him subsequent to the Closing.
Director
Compensation
All
directors will be reimbursed for their reasonable out-of-pocket expenses
incurred in connection with attending board of director and committee
meetings.
Option
Plan
Currently
there is no stock option plan. We intend to implement a stock option plan to
attract and retain employees.
Certain
Relationships and Related Transactions
We will
present all possible transactions between us and our officers, directors or 5%
stockholders, and our affiliates to the board of directors for our consideration
and approval. Any such transaction will require approval by a majority of the
disinterested directors and such transactions will be on terms no less favorable
than those available to disinterested third parties.
PRINCIPAL
SHAREHOLDERS
The
following table sets forth certain information concerning stock ownership of all
persons known by us to own beneficially five percent (5%) or more of the
outstanding Common Stock, each director and certain executive officers and
directors as a group, and as adjusted to reflect the sale of the total amount of
Shares offered hereby.
Name
of Beneficial Owner
|
Number of
Common
Shares
Owned
|
Percentage
of
Class
of
Common
Stock (1)
|
||||||||
Shane
Gau
|
14,000,000 | 11.0 | % | |||||||
Jason
Campbell
|
14,000,000 | 11.0 | % | |||||||
David
R. Wells
|
6,000,000 | 4.7 | % | (2 | ) |
(1)
|
Based
on 126,699,901 common shares issued outstanding, including the 6,668,000
shares issued to the PIPE investors and 12,000,000 shares issued to the
consultants.
|
(2)
|
4,800,000
shares granted to Mr. Wells on February 3, 2010 are subject to a lock-up
agreement whereby Mr. Wells is released from his lock-up over the next 24
months on a pro-rata basis of 200,000 shares per
month.
|
12
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
None of
the following persons has any direct or indirect material interest in any
transaction to which we are a party since our incorporation or in any proposed
transaction to which we are proposed to be a party:
|
(A)
|
Any
of our directors or officers;
|
|
(B)
|
Any
proposed nominee for election as our
director;
|
|
(C)
|
Any
person who beneficially owns, directly or indirectly, shares carrying more
than 10% of the voting rights attached to our Common Stock;
or
|
|
(D)
|
Any
relative or spouse of any of the foregoing persons, or any relative of
such spouse, who has the same house as such person or who is a director or
officer of any parent or subsidiary of our
company.
|
DESCRIPTION
OF SECURITIES
Common
Stock
We are
authorized to issue 500,000,000 shares of common stock, $0.001 par value per
share. Immediately prior to the Closing Date, there were 136,897,306
common shares issued and outstanding. After Closing (including the issuance of
the shares in the Share Exchange Agreement, the PIPE investors and the
consulting shares and subsequent to the cancellation of 76,860,000 shares),
there will be 126,699,901 common shares issued and outstanding.
Holders
of our common stock are entitled to one vote for each share on all matters
submitted to a stockholder vote. Holders of common stock do not have
cumulative voting rights. Therefore, holders of a majority of the
shares of common stock voting for the election of directors cannot necessarily
elect all of the directors. Holders of our common stock representing a majority
of the voting power of our capital stock issued and outstanding and entitled to
vote, represented in person or by proxy, are necessary to constitute a quorum at
any meeting of our stockholders. A vote by the holders of a majority of our
outstanding shares is required to effectuate certain fundamental corporate
changes such as liquidation, merger or an amendment to our Articles of
Incorporation.
Holders
of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of liquidation, dissolution or winding up, each outstanding share entitles
its holder to participate pro rata in all assets that remain after payment of
liabilities and after providing for each class of stock, if any, having
preference over the common stock. Holders of our common stock have no
pre-emptive rights, no conversion rights and there are no redemption provisions
applicable to our common stock.
Preferred
Stock
We are
authorized to issue up to 10,000,000 shares of preferred stock, $0.001 par value
per share. As of the Closing there were no preferred shares issued or
outstanding.
Warrants
At this time we have no warrants issued
or outstanding.
Dividend
Policy
It is
unlikely that we will declare or pay cash dividends in the foreseeable future.
We intend to retain earnings, if any, to expand our operations.
LIMITATIONS
ON TRANSFER OF SHARES
The
shares offered hereby have not been registered with the Commission pursuant to
the Securities Act; however, they are deemed to be exempt from such registration
pursuant to Regulation D Rule 506 of the Securities Act or Regulation
S. Even so, the shares are subject to a restriction on re-sale and
will be marked as such on the face of the certificate. In addition,
there are limits on the resale of the shares by virtue of their corporate
issuance. Accordingly, an investment in the shares offered herein
should be considered highly illiquid.
13
Item
3.02 Unregistered Sales of Equity Securities
Pursuant
to the Share Exchange Agreement, on February 3, 2010, we issued 48,000,000
shares of our common stock to the shareholders of Reach Messaging, Inc., in
exchange for the shares held by these shareholders pursuant to the Share
Exchange Agreement. Such securities were not registered
under the Securities Act of 1933. The issuance of these shares was exempted from
registration pursuant to Section 4(2) of the Securities Act of 1933. We made
this determination based on the representations that the Reach Messaging
Shareholders were either (a) “accredited investors” within the meaning of Rule
501 of Regulation D promulgated under the Securities Act, or (b) not a “U.S.
person” as that term is defined in Rule 902(k) of Regulation S under the Act,
and that the Reach Messaging Shareholders were acquiring our common stock, for
investment purposes for their own respective accounts and not as nominees or
agents and not with a view to the resale or distribution thereof, and that the
Reach Messaging Shareholders understood that the shares of our common stock may
not be sold or otherwise disposed of without registration under the Securities
Act or an applicable exemption therefrom.
As
referenced in Item 1.01, the Company entered into a financing transaction with
certain accredited investors. Pursuant to the financing, we sold
6,300,000 shares of common stock for a total purchase price of $315,000 or $0.05
per share. The
foregoing securities were issued in reliance upon the exemption set forth in
Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated
thereunder.
As
referenced in Item 1.01, the Company entered into consulting agreements with
five service providers. Pursuant to the agreements, we agreed to
issue 12,000,000 shares of common stock as consideration for services
rendered. The
foregoing securities were issued in reliance upon the exemption set forth in
Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated
thereunder.
Item
5.01 Changes in Control of Registrants
As more
fully described in Item 2.01, on February 3, 2010, pursuant to the terms of the
Share Exchange Agreement, the shareholders of Reach Messaging acquired a total
of 48,000,000 shares of our issued and outstanding common stock and Fitra Iriani
agreed to cancel her 76,860,000 shares of common stock. As such,
immediately following the Share Exchange Agreement, the shareholders of Reach
Messaging, Inc. held approximately 44% of the voting power of our outstanding
common stock, not including the shares issued to the PIPE Investors or the
consultants. Reference is made to the disclosures set forth under
Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated
by reference.
As more
fully explained in Item 5.02, in connection with the Closing of the Share
Exchange Agreement, Fitra Iriani, the former Chairman of the Board of Directors,
Chief Executive Officer and Chief Financial Officer, resigned from these
positions and all other positions held in the Company.
Item
5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(a)
|
Resignation
of Directors
|
Effective
February 3, 2010, Fitra Iriani resigned as the chairman and the sole member of
our board of directors. Her resignation was not the result of any disagreements
with us on any matters relating to our operations, policies and
practices.
(b)
|
Resignation
of Officers
|
Effective
February 3, 2010, Fitra Iriani resigned as our Chief Executive Officer and all
other offices that he held. Her resignation was not the result of any
disagreements with us on any matters relating to our operations, policies and
practices.
(c)
|
Appointment
of Directors
|
Effective
February 3, 2010, the following persons were appointed as members of the Board
of Directors:
Name
|
Age
|
Principal
Positions With Us
|
|||
Shane
Gau
|
45 |
Chairman
of the Board of Directors
|
|||
Jason
Campbell
|
38 |
Director
|
|||
David
R. Wells
|
47 |
Director
|
The
business background descriptions of the newly appointed directors are as
follows:
Shane Gau, Chief
Executive Officer and Chairman
Shane Gau spent 12 years at AOL in
numerous product and programming roles, including a principal product manager
leading the AOL email and AIM product lines. He was also instrumental in
launching Video@AOL. The last 4 years he has been Programming Director for AOL
Network Solutions, where he launched and oversaw the AIM Bot and Expressions
programs. Under his pervue, he grew the IP Bot relay program into a $3MM per
year business and the AIM Expressions program generated over $2.5MM per year in
2009. He also grew the stable of AIM Bots from 5 to over 100 and oversaw
numerous initiatives that enabled partners to expand their reach on the AOL
network. Prior to joining AOL, he spent 6 years as a US Navy Intel officer. He
is fluent in French and Russian.
14
Jason
Campbell, Chief Technology Officer and Director
Jason
Campbell began private technical consulting in 1992 after serving as a PATRIOT
missileman in Desert Storm. In 1994, he founded Got.net, which would become
Santa Cruz's most successful Internet business services company, and the
county's second largest consumer ISP. From 1999 to 2001, Jay joined
enterprise email solution provider Mirapoint in Sunnyvale as web platform
manager and interim business solutions manager. In 2002, Jay returned
to project work by forming what would become Santa Cruz Tech, a consultancy
focusing on emerging online technologies. SCT provided solutions to companies
such as Yahoo!, the Center for Investigative Research, UC Berkeley, and several
smaller web start-ups. In 2007 Jay co-founded Reach Messaging to
architect a platform capable of scalable interaction with an indefinite number
of AOL AIM instant messaging users. He currently serves as CTO, translating
customer needs into technical solutions and driving software
development.
David R. Wells, Chief
Financial Officer, Secretary and Director
Mr. Wells
is a senior financial executive with substantial financial management expertise,
including representing public companies in its SEC reporting and compliance,
investor relations, Sarbanes-Oxley compliance and implementation and
fund-raising, significant experience in startup companies managing finance,
accounting, administration, human resources and information systems departments,
specializing in the technology and services industries. From December 2005 to
September 2009, Mr. Wells was the CFO of Voyant International Corporation
(OTCBB: VOYT) where Mr. Wells was responsible for all SEC filings, finance and
accounting for the Company and participating in acquisitions, fund-raising and
budgeting for future growth. In 1988, Mr. Wells obtained his M.B.A. in finance
from Pepperdine University and he holds an undergraduate from Seattle Pacific
University in finance and entrepreneurship.
Family
Relationships
There are
no relationships between any of the officers or directors of the
Company.
(d)
|
Appointment
of Officers
|
Effective
February 3, 2010, the directors appointed the following persons as our executive
officers, with the respective titles as set forth opposite his or her name
below:
Name
|
Age
|
Principal
Positions With Us
|
|||
Shane
Gau*
|
45 |
Chief
Executive Officer
|
|||
Jason
Campbell*
|
38 |
Chief
Technology Officer
|
|||
David
R. Wells*
|
47 |
Chief
Financial Officer and Secretary
|
*See descriptions of the Company’s
officers above.
(e)
|
Employment
Agreements of the Executive
Officers
|
The
Company has entered into formal employment agreements with Mr. Gau its Chief
Executive Officer and Mr. Wells, its Chief Financial Officer, copies of such
agreements are filed hereto as Exhibits. The Company has not entered into a
formal written employment agreement with its President and Chief Technology
Officer, however, intends to enter into written employment agreements with him
subsequent to the Closing.
As
described in Item 1.01 of this Form 8-K, on February 3, 2010, the Company
entered into the Exchange Agreement and consummated the Share Exchange, pursuant
to which it acquired all of the issued and outstanding common shares of Reach
Messaging, Inc. in exchange for the issuance of the Company’s Common Stock to
the shareholders of the Company.
As a
result of the Share Exchange, the shareholders of Reach Messaging exchanged
48,000,000 shares of common stock of Reach Messaging, representing 100% of the
issued and outstanding stock of Reach Messaging, for 48,000,000 newly issued
shares of the Company’s common stock, par value $0.001 per share, representing
44% of the Company’s issued and outstanding common stock.
As the
result of the consummation of the Share Exchange, we are no longer a shell
company as that term is defined in Rule 12b-2 of the Securities Exchange Act of
1934, as amended.
Item
9.01 Financial Statements and Exhibits
Exhibit
Number
|
Description
|
|
2.1 |
Share
Exchange Agreement by and among FormulaWon, Inc. and Reach Messaging,
Inc.
|
|
10.1 |
Subscription
Agreement dated February 3, 2010
|
|
10.2 |
Employment
Agreement dated February 3, 2010 with Shane Gau
|
|
10.3 |
Employment
Agreement dated February 3, 2010 with David R.
Wells
|
|
99.1 |
Audited
Financial Statements for Reach Messaging, Inc. for the period ended
December 31, 2008
|
|
99.2 |
Unaudited
Financial Statements for Reach Messaging, Inc. for the period ended
September 31, 2009
|
15
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.
FormulaWon,
Inc.
|
|||
/s/
Shane Gau
|
|||
Shane
Gau
Chief
Executive Officer
|
|||
/s/
David R. Wells
|
|||
David
R. Wells
Chief
Financial Officer
|
Dated:
February 4, 2010
16