Attached files
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 10-K
___________
ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
COMMISSION FILE NUMBER: 333-152376
___________________________________
TRIANGLE ALTERNATIVE NETWORK INCORPORATED
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(Exact name of registrant as specified in its charter)
DELAWARE 26-2691611
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
230 NORTH PARK BLVD, SUITE 230 76051
GRAPEVINE, TEXAS
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(Address of principal executive offices) (Zip Code)
(817) 416-2533
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(Issuer's telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
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None
Securities registered under Section 12(g) of the Exchange Act:
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Common Stock, $0.005 Par Value
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [ ] Yes [X] No
Indicate by check mark whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days. [X] Yes [ ] No
Indicate by check mark if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-K contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge, in
definitive proxy information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K or any amendment to this
Form 10-K.
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 definitions of "large accelerated filer," "accelerated filer"
and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
LARGE ACCELERATED FILER [ ] ACCELERATED FILER [ ]
NON-ACCELERATED FILER [ ] SMALLER REPORTING COMPANY [X]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
[X] Yes [ ]No
Issuer's revenues for its most recent fiscal year: None.
The aggregate market value of the voting and non-voting common equity on
December 31, 2009 held by non-affiliates of the registrant is not applicable as
the Company has not yet achieved trading status
As of March 31, 2010, there were 3,208,250 shares of the registrant's
Common Stock outstanding.
TRIANGLE ALTERNATIVE NETWORK INC.
REPORT ON FORM 10-K
PART I.
Item 1. Description of Business 1
Item 1A. Risk Factors 3
Item 2. Description of Property 6
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II.
Item 5. Market for Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities 6
Item 6. Selected Financial Data 7
Item 7. Management's Discussion and Analysis of Financial Condition 7
and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 8
Item 8. Financial Statements 8
Item 9. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure 9
Item 9A(T) Controls and Procedures 9
Item 9B. Other Information 10
PART III.
Item 10. Directors, Executive Officers and Corporate Governance 10
Item 11. Executive Compensation 12
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 14
Item 13. Certain Relationships and Related Transactions 15
Item 14. Principal Accountant Fees and Services 15
Item 15. Exhibits 16
PART I.
FORWARD LOOKING STATEMENTS
This annual report contains certain forward-looking statements and for this
purpose any statements contained in this annual report that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended
to identify forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, and actual results may differ
materially depending on a variety of factors, many of which are not within our
control. These factors include but are not limited to economic conditions
generally and in the markets in which the Company may participate, competition
within the Company's chosen industry, technological advances and failure by us
to successfully develop business relationships.
ITEM 1.DESCRIPTION OF BUSINESS.
(A)BUSINESS DEVELOPMENT
Triangle Alternative Network Incorporated ("TAN, Inc.") is a development
stage company that was incorporated in the state of Delaware on April 1, 2008
and is the holding company for Triangle Alternative Network, LLC ("TAN, LLC"
and, together with TAN, Inc., "TAN", the "Company", "we", "us" or "our"). We
are a start-up company that was originally organized to develop a television
network to provide programming to the Gay, Lesbian, Bi-Sexual and Trans-gender
("GLBT") Community.
After attempting to develop programming, it was determined that the
company did not want to develop this particular programming and had not entered
into a definitive contract to sell the programming. The film and production
costs have been transferred to related parties in exchange for the debt owed to
them for advances to the Company.
(B) BUSINESS OF ISSUER
The Company, based on current proposed business activities, is a "blank check"
company. The Securities and Exchange Commission (the "SEC") defines those
companies as "any development stage company that is issuing a penny stock,
within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and that has no specific business plan or
purpose, or has indicated that its business plan is to merge with an
unidentified company or companies." Under SEC Rule 12b-2 under the Securities
Act of 1933, as amended (the "Securities Act"), the Company also qualifies as a
"shell company," because it has no or nominal assets (other than cash) and no
or nominal operations. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in our securities, either debt or equity, until we have
successfully concluded a business combination. The Company intends to comply
with the periodic reporting requirements of the Exchange Act for so long as we
are subject to those requirements.
The analysis of new business opportunities will be undertaken by or under the
supervision of the officers and directors of the Company. Neither the Company
nor any of its officers or directors has had any preliminary contact or
discussions with any representative of any other entity regarding a business
combination. The Company has unrestricted flexibility in seeking, analyzing and
participating in potential business opportunities. In its efforts to analyze
potential acquisition targets, the Company will consider the following kinds of
factors:
(a) Potential for growth, indicated by new technology, anticipated market
expansion or new products;
(b) Competitive position as compared to other firms of similar size and
experience within the industry segment as well as within the industry as a
whole;
(c) Strength and diversity of management, either in place or scheduled for
recruitment;
(d) Capital requirements and anticipated availability of required funds,
to be provided by the Company or from operations, through the sale of
additional securities, through joint ventures or similar arrangements or
from other sources;
(e) The cost of participation by the Company as compared to the perceived
tangible and intangible values and potentials;
(f) The extent to which the business opportunity can be advanced;
(g) The accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required items; and
(h) Other relevant factors.
1
In applying the foregoing criteria, no one of which will be controlling,
management will attempt to analyze all factors and circumstances and make a
determination based upon reasonable investigative measures and available data.
Potentially, available business opportunities may occur in many different
industries, and at various stages of development, all of which will make the
task of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Due to the Company's limited capital available
for investigation, the Company may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.
FORM OF ACQUISITION
The manner in which the Company participates in an opportunity will depend
upon the nature of the opportunity, the respective needs and desires of the
Company and the promoters of the opportunity, and the relative negotiating
strength of the Company and such promoters.
It is likely that the Company will acquire its participation in a business
opportunity through the issuance of common stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), depends upon whether the owners of the acquired business own 80% or
more of the voting stock of the surviving entity. If a transaction were
structured to take advantage of these provisions rather than other "tax free"
provisions provided under the Code, all prior stockholders would in such
circumstances retain 20% or less of the total issued and outstanding shares of
the surviving entity. Under other circumstances, depending upon the relative
negotiating strength of the parties, prior stockholders may retain
substantially less than 20% of the total issued and outstanding shares of the
surviving entity. This could result in substantial additional dilution to the
equity of those who were stockholders of the Company prior to such
reorganization.
In the case of an acquisition, the transaction may be accomplished upon the
sole determination of management without any vote or approval by stockholders.
In the case of a statutory merger or consolidation directly involving the
Company, it will likely be necessary to call a stockholders' meeting and obtain
the approval of the holders of a majority of the outstanding shares. The
necessity to obtain such stockholder approval may result in delay and
additional expense in the consummation of any proposed transaction and will
also give rise to certain appraisal rights to dissenting stockholders. Most
likely, management will seek to structure any such transaction so as not to
require stockholder approval.
We presently have no employees. Our officers and directors are engaged in
outside business activities and we anticipate they will devote to our business
very limited time until the acquisition of a successful business opportunity
has been consummated. We expect no significant changes in the number of our
employees other than such changes, if any, incident to a business combination.
(C) REPORTS TO SECURITY HOLDERS
(1) The Company is not required to deliver an annual report to security
holders and at this time does not anticipate the distribution of such a
report.
(2) The Company will file reports with the SEC. The Company is currently a
reporting company and will comply with the requirements of the Exchange
Act.
(3) The public may read and copy any materials the Company files with the
SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC- 0330. Additionally,
the SEC maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC, which can be found at http://www.sec.gov.
2
COMPETITION
Our primary goal is the acquisition of a target company or business seeking the
perceived advantages of being a publicly held corporation. The Company faces
vast competition from other shell companies with the same objectives. The
Company is in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. A large number of established and well-financed entities,
including small public companies and venture capital firms, are active in
mergers and acquisitions of companies that may be desirable target candidates
for us. Nearly all these entities have significantly greater financial
resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination.
These competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.
PATENT AND TRADEMARKS
We currently do not own any patents, trademarks or licenses of any kind.
GOVERNMENT REGULATIONS
There are no government approvals necessary to conduct our current business.
EMPLOYEES
We presently have no employees apart from our management. Our officers and
director are engaged in outside business activities and anticipate they will
devote to our business very limited time until the acquisition of a successful
business opportunity has been identified. We expect no significant changes in
the number of our employees other than such changes, if any, incident to a
business combination.
ITEM 1A. RISK FACTORS
AN INVESTMENT IN THE COMPANY IS HIGHLY SPECULATIVE IN NATURE AND INVOLVES AN
EXTREMELY HIGH DEGREE OF RISK. THERE MAY BE CONFLICTS OF INTEREST BETWEEN OUR
MANAGEMENT AND OUR NON-MANAGEMENT STOCKHOLDERS.
Conflicts of interest create the risk that management may have an
incentive to act adversely to the interests of other investors. A conflict of
interest may arise between our management's personal pecuniary interest and its
fiduciary duty to our stockholders. Further, our management's own pecuniary
interest may at some point compromise its fiduciary duty to our stockholders.
OUR BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE HAVE NO OPERATING HISTORY.
As the Company has no operating history or revenue and only minimal
assets, there is a risk that we will be unable to continue as a going concern
and consummate a business combination. The Company has had no recent operating
history nor any revenues or earnings from operations since inception. We have
no significant assets or financial resources. We will, in all likelihood,
sustain operating expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in our incurring a net
operating loss that will increase continuously until we can consummate a
business combination with a profitable business opportunity. We cannot assure
you that we can identify a suitable business opportunity and consummate a
business combination.
THERE IS COMPETITION FOR THOSE PRIVATE COMPANIES SUITABLE FOR A MERGER
TRANSACTION OF THE TYPE CONTEMPLATED BY MANAGEMENT.
The Company is in a highly competitive market for a small number of
business opportunities which could reduce the likelihood of consummating a
successful business combination. We are and will continue to be an
insignificant participant in the business of seeking mergers with, joint
ventures with and acquisitions of small private and public entities. A large
number of established and well-financed entities, including small public
companies and venture capital firms, are active in mergers and acquisitions of
companies that may be desirable target candidates for us. Nearly all these
entities have significantly greater financial resources, technical expertise
and managerial capabilities than we do; consequently, we will be at a
competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination. These competitive factors may
reduce the likelihood of our identifying and consummating a successful business
combination.
3
FUTURE SUCCESS IS HIGHLY DEPENDENT ON THE ABILITY OF MANAGEMENT TO LOCATE AND
ATTRACT A SUITABLE ACQUISITION.
The nature of our operations is highly speculative and there is a
consequent risk of loss of your investment. The success of our plan of
operation will depend to a great extent on the operations, financial condition
and management of the identified business opportunity. While management intends
to seek business combination(s) with entities having established operating
histories, we cannot assure you that we will be successful in locating
candidates meeting that criterion. In the event we complete a business
combination, the success of our operations may be dependent upon management of
the successor firm or venture partner firm and numerous other factors beyond
our control.
THE COMPANY HAS NO EXISTING AGREEMENT FOR A BUSINESS COMBINATION OR OTHER
TRANSACTION.
We have no arrangement, agreement or understanding with respect to
engaging in a merger with, joint venture with or acquisition of, a private or
public entity. No assurances can be given that we will successfully identify
and evaluate suitable business opportunities or that we will conclude a
business combination. Management has not identified any particular industry or
specific business within an industry for evaluation. We cannot guarantee that
we will be able to negotiate a business combination on favorable terms, and
there is consequently a risk that funds allocated to the purchase of our shares
will not be invested in a company with active business operations.
MANAGEMENT INTENDS TO DEVOTE ONLY A LIMITED AMOUNT OF TIME TO SEEKING A TARGET
COMPANY WHICH MAY ADVERSELY IMPACT OUR ABILITY TO IDENTIFY A SUITABLE
ACQUISITION CANDIDATE.
While seeking a business combination, management anticipates devoting no
more than a few hours per week to the Company's affairs in total. Our officers
have not entered into a written employment agreement with us and is not
expected to do so in the foreseeable future. This limited commitment may
adversely impact our ability to identify and consummate a successful business
combination.
THE TIME AND COST OF PREPARING A PRIVATE COMPANY TO BECOME A PUBLIC REPORTING
COMPANY MAY PRECLUDE US FROM ENTERING INTO A MERGER OR ACQUISITION WITH THE
MOST ATTRACTIVE PRIVATE COMPANIES.
Target companies that fail to comply with SEC reporting requirements may
delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act
require reporting companies to provide certain information about significant
acquisitions, including certified financial statements for the company
acquired, covering one, two, or three years, depending on the relative size of
the acquisition. The time and additional costs that may be incurred by some
target entities to prepare these statements may significantly delay or
essentially preclude consummation of an acquisition. Otherwise suitable
acquisition prospects that do not have or are unable to obtain the required
audited statements may be inappropriate for acquisition so long as the
reporting requirements of the Exchange Act are applicable.
THE COMPANY MAY BE SUBJECT TO FURTHER GOVERNMENT REGULATION WHICH WOULD
ADVERSELY AFFECT OUR OPERATIONS.
Although we will be subject to the reporting requirements under the
Exchange Act, management believes we will not be subject to regulation under
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
since we will not be engaged in the business of investing or trading in
securities. If we engage in business combinations which result in our holding
passive investment interests in a number of entities, we could be subject to
regulation under the Investment Company Act. If so, we would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. We have obtained no formal determination
from the SEC as to our status under the Investment Company Act and,
consequently, violation of the Investment Company Act could subject us to
material adverse consequences.
ANY POTENTIAL ACQUISITION OR MERGER WITH A FOREIGN COMPANY MAY SUBJECT US TO
ADDITIONAL RISKS.
If we enter into a business combination with a foreign concern, we will be
subject to risks inherent in business operations outside of the United States.
These risks include, for example, currency fluctuations, regulatory problems,
punitive tariffs, unstable local tax policies, trade embargoes, risks related
to shipment of raw materials and finished goods across national borders and
cultural and language differences. Foreign economies may differ favorably or
unfavorably from the United States economy in growth of gross national product,
rate of inflation, market development, rate of savings, and capital investment,
resource self-sufficiency and balance of payments positions, and in other
respects.
THERE IS CURRENTLY NO TRADING MARKET FOR OUR COMMON STOCK.
Our shares of common stock are not registered under the securities laws of
any state or other jurisdiction, and accordingly there is no public trading
market for our common stock. Further, no public trading market is expected to
develop in the foreseeable future unless and until the Company completes a
business combination with an operating business. Therefore, outstanding shares
of our common stock cannot be offered, sold, pledged or otherwise transferred
unless subsequently registered pursuant to, or exempt from registration under,
the Securities Act of 1933, as amended ("Securities Act") and any other
applicable federal or state securities laws or regulations. Shares of our
common stock cannot be sold under the exemptions from registration provided by
Rule 144 under or Section 4(1) of the Securities Act ("Rule 144"), unless they
meet the requirements of Rule 144(i) of the Securities Act.
4
WE HAVE NEVER PAID DIVIDENDS ON OUR COMMON STOCK.
We have never paid dividends on our common stock and do not presently
intend to pay any dividends in the foreseeable future. We anticipate that any
funds available for payment of dividends will be re-invested into the Company
to further its business strategy.
THE COMPANY MAY BE SUBJECT TO CERTAIN TAX CONSEQUENCES IN OUR BUSINESS, WHICH
MAY INCREASE OUR COST OF DOING BUSINESS.
We may not be able to structure our acquisition to result in tax-free
treatment for the companies or their stockholders, which could deter third
parties from entering into certain business combinations with us or result in
being taxed on consideration received in a transaction. Currently, a
transaction may be structured so as to result in tax-free treatment to both
companies, as prescribed by various federal and state tax provisions. We intend
to structure any business combination so as to minimize the federal and state
tax consequences to both us and the target entity; however, we cannot guarantee
that the business combination will meet the statutory requirements of a tax-
free reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying reorganization
could result in the imposition of both federal and state taxes that may have an
adverse effect on both parties to the transaction.
OUR BUSINESS WILL HAVE NO REVENUES UNLESS AND UNTIL WE MERGE WITH OR ACQUIRE AN
OPERATING BUSINESS.
We are a development stage company and have had no revenues from
operations. We may not realize any revenues unless and until we successfully
merge with or acquire an operating business.
THE COMPANY INTENDS TO ISSUE MORE SHARES IN A MERGER OR ACQUISITION, WHICH WILL
RESULT IN SUBSTANTIAL DILUTION.
Our Certificate of Incorporation authorizes the issuance of a maximum of
50,000,000 shares of common stock. Any merger or acquisition effected by us may
result in the issuance of additional securities without stockholder approval
and may result in substantial dilution in the percentage of our common stock
held by our then existing stockholders. Moreover, the common stock issued in
any such merger or acquisition transaction may be valued on an arbitrary or
non-arm's-length basis by our management, resulting in an additional reduction
in the percentage of common stock held by our then existing stockholders. Our
Board of Directors has the power to issue any or all of such authorized but
unissued shares without stockholder approval. To the extent that additional
shares of common stock or preferred stock are issued in connection with a
business combination or otherwise, dilution to the interests of our
stockholders will occur and the rights of the holders of common stock might be
materially and adversely affected.
THE COMPANY HAS CONDUCTED NO MARKET RESEARCH OR IDENTIFICATION OF BUSINESS
OPPORTUNITIES, WHICH MAY AFFECT OUR ABILITY TO IDENTIFY A BUSINESS TO MERGE
WITH OR ACQUIRE.
The Company has neither conducted nor have others made available to us
results of market research concerning prospective business opportunities.
Therefore, we have no assurances that market demand exists for a merger or
acquisition as contemplated by us. Our management has not identified any
specific business combination or other transactions for formal evaluation by
us, such that it may be expected that any such target business or transaction
will present such a level of risk that conventional private or public offerings
of securities or conventional bank financing will not be available. There is no
assurance that we will be able to acquire a business opportunity on terms
favorable to us. Decisions as to which business opportunity to participate in
will be unilaterally made by our management, which may act without the consent,
vote or approval of our stockholders.
BECAUSE WE MAY SEEK TO COMPLETE A BUSINESS COMBINATION THROUGH A "REVERSE
MERGER", FOLLOWING SUCH A TRANSACTION WE MAY NOT BE ABLE TO ATTRACT THE
ATTENTION OF MAJOR BROKERAGE FIRMS.
Additional risks may exist since we will assist a privately held business
to become public through a "reverse merger." Securities analysts of major
brokerage firms may not provide coverage of our Company 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 want to conduct any secondary
offerings on behalf of our post-merger company in the future.
WE CANNOT ASSURE YOU THAT FOLLOWING A BUSINESS COMBINATION WITH AN OPERATING
BUSINESS, OUR COMMON STOCK WILL BE LISTED ON NASDAQ OR ANY OTHER SECURITIES
EXCHANGE.
Following a business combination, we may seek the listing of our common
stock on NASDAQ or other securities exchange. However, we cannot assure you
that following such a transaction, we will be able to meet the initial listing
standards of either of those or any other stock exchange, or that we will be
able to maintain a listing of our common stock on either of those or any other
stock exchange. After completing a business combination, until our common stock
is listed on the NASDAQ or another stock exchange, we expect that our common
stock would be eligible to trade on the OTC Bulletin Board, another over-the-
counter quotation system, or on the "pink sheets," where our stockholders may
find it more difficult to dispose of shares or obtain accurate quotations as to
the market value of our common stock. In addition, we would be subject to an
SEC rule that, if it failed to meet the criteria set forth in such rule,
imposes various practice requirements on broker-dealers who sell securities
governed by the rule to persons other than established customers and accredited
investors. Consequently, such rule may deter broker-dealers from recommending
or selling our common stock, which may further affect its liquidity. This would
also make it more difficult for us to raise additional capital following a
business combination.
5
WE HAVE NEVER PAID DIVIDENDS ON OUR COMMON STOCK.
We have never paid dividends on our common stock and do not presently intend to
pay any dividends in the foreseeable future. We anticipate that any funds
available for payment of dividends will be re-invested into the Company to
further its business strategy
ITEM 2. DESCRIPTION OF PROPERTY
Our headquarters are located at 230 North Park Boulevard Suite 104,
Grapevine, Texas 76051. At the current time the Company shares office space in
the office of the current CEO and is not charged rent due to a lack of
operations.
ITEM 3. LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and there are no material
legal proceedings pending with respect to our property. We are not aware of any
legal proceedings contemplated by any governmental authorities involving either
us or our property. None of our directors, officers or affiliates is an adverse
party in any legal proceedings involving us or our subsidiaries, or has an
interest in any proceeding which is adverse to us or our subsidiaries.
Lyle Mortensen, CFO and his consulting company Aritex Consultants, Inc., have
been included in a legal proceeding that has requested the cancellation of
certificates issued in another company when he was an officer and director of
that company. The shares were issued pursuant to a plan of reorganization and
it is the position of Mr. Mortensen that the claim of the petitioners is
without merit. Even if the petitioners were to prevail it would have no direct
monetary or indirect affect on the Company
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS.
None
PART II.
ITEM 5.MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
MARKET INFORMATION
The Company's common stock is not actively trading as of December 31,
2009.
HOLDERS OF OUR COMMON STOCK
As of March 31, 2010, we had 65 stockholders of record based on Company
information and provided by our transfer agent.
6
DIVIDENDS
We have not declared or paid cash dividends on our common stock since our
inception. We intend to retain all future earnings, if any, to fund the
operation of our business, and, therefore, do not anticipate paying dividends
in the foreseeable future. Future cash dividends, if any, will be determined by
our board of directors.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
None
ISSUER PURCHASES OF EQUITY SECURITIES
There were no stock repurchases during the year ended December 31, 2009.
RECENT SALES OF UNREGISTERED SECURITIES
During the year ended December 31, 2009 the Company issued 225,000 shares of
common stock at $0.01 per share as consideration for services rendered.
ITEM 6.SELECTED FINANCIAL DATA
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the information
under this item.
ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis is intended as a review of significant
factors affecting our financial condition and results of operations for the
periods indicated. The discussion should be read in conjunction with our
consolidated financial statements and the notes presented herein. In addition
to historical information, the following Management's Discussion and Analysis
of Financial Condition and Results of Operations contains forward-looking
statements that involve risks and uncertainties. Our actual results could
differ significantly from those anticipated in these forward-looking statements
as a result of certain factors discussed in this annual report.
A. MANAGEMENT'S PLAN OF OPERATION
The following discussion of our financial condition, changes in financial
condition and results of operations for the year ended December 31, 2009 should
be read in conjunction with our audited financial statements and related notes
for the year ended December 31, 2009.
The analysis of new business opportunities will be undertaken by or under
the supervision of the officers and directors of the Company. Neither the
Company nor any of its officers or directors has had any preliminary contact or
discussions with any representative of any other entity regarding a business
combination. The Company has unrestricted flexibility in seeking, analyzing and
participating in potential business opportunities
RESULTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2009 COMPARED TO THE PERIOD ENDED DECEMBER 31,
2008.
From our inception on May 23, 2007, (inception) to December 31, 2009, we
have generated no revenue. We earned no revenues during the twelve month
period ended December 31, 2009 and no revenues for the period ended December
31, 2008.
Operating expenses for the twelve months ended December 31, 2009 totaled
$37,487, resulting in an increase of 10% percent from the comparable period of
2008. This increase resulted primarily from the fact that operations taking
place prior to September 30, 2008 have been discontinued, and are classified in
the financial statements as such.
We incurred a net loss of $37,487 during the twelve month period ended
December 31, 2009, resulting in an increased loss of approximately 28% from the
loss of $29,370 for the period ended December 31, 2008. Basic net loss per
share from continuing operations was $0.01 for the twelve month period ended
December 31, 2009, compared to $0.01 for the comparable period of 2008.
7
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2009, we had a negative working capital of $73,369
compared to a negative working capital of $38,132 at December 31, 2008. The
change of $35,237 or 92% in working capital resulted primarily from our
operating losses.
During the twelve months ended December 31, 2009 we experienced negative
cash flow of $36,250 from operating activities. We recognized positive cash
flow from financing activities, relating to proceeds from related party loans,
in the amount of $36,368.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the information
under this item.
ITEM 8.FINANCIAL STATEMENTS.
TRIANGLE ALTERNATIVE NETWORK, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
December 31, 2009 and 2008
C O N T E N T S
Report of Independent Registered Public Accounting Firm F-2
Balance Sheets F-3
Statements of Operations F-4
Statement of Stockholders' Deficit F-5
Statements of Cash Flows F-6
Notes to the Financial Statements F-7
8
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Triangle Alternative Networks Inc
Grapevine, Texas
We have audited the accompanying balance sheets of Triangle Alternative
Network, Inc. (A Development Stage Company) as of December 31, 2009 and the
related statements of operations, stockholders' deficit and cash flows for the
year then ended and for the period from inception (May 23, 2007) through
December 31, 2009. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, based upon our audit, the financial statements referred to
above present fairly, in all material respects, the financial position of
Triangle Alternative Network, Inc. (A Development Stage Company) as of December
31, 2009, and the results of its operations and cash flows for the year then
ended and from inception (May 23, 2007) through December 31, 2009 in conformity
with generally accepted accounting principles in the United States.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company has suffered recurring losses from operations, which
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 4. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ De Joya Griffith & Company, LLC
Henderson, Nevada
April 5, 2010
2580 Anthem Village Drive Henderson, NV 89052
Telephone (702) 588-5960 Facsimile (702) 588-5979
F-2
TRIANGLE ALTERNATIVE NETWORK, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
December 31, December 31,
2009 2008
(audited) (audited)
------------ -----------
CURRENT ASSETS
Cash and cash equivalents $ 118 $ -
------------ -----------
Total current assets 118 -
------------ -----------
TOTAL ASSETS $ 118 $ -
============ ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 20,060 $ 21,073
Related party payable 53,427 17,059
------------ -----------
Total current liabilities 73,487 38,132
------------ -----------
TOTAL LIABILITIES 73,487 38,132
STOCKHOLDERS' DEFICIT
Common stock; 50,000,000 shares authorized
at par value of $0.005, 3,208,250
and 2,983,250 shares issued and
outstanding, respectively 16,041 14,916
Additional paid-in capital 63,209 62,084
Accumulated deficit from development stage (152,619) (115,132)
------------ -----------
Total Stockholders' Deficit (73,369) (38,132)
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
DEFICIT $ 118 $ -
============ ===========
The accompanying notes are an integral part of these financial statements.
F-3
(A Development Stage Company)
Statements of Operations
(Audited)
From Inception
For the Twelve For the Twelve (May 23, 2007)
Months Ended Months Ended through
12/31/09 12/31/08 December 31, 2009
--------------- --------------- -----------------
REVENUES $ - $ - $ -
OPERATING EXPENSES
General and administrative 37,487 34,214 71,701
--------------- --------------- -----------------
Total Operating Expenses 37,487 34,214 71,701
--------------- --------------- -----------------
LOSS FROM OPERATIONS (37,487) (34,214) (71,701)
--------------- --------------- -----------------
Income taxes - - -
--------------- --------------- -----------------
LOSS FROM CONTINUING OPERATIONS (37,487) (34,214) -
DISCONTINUED OPERATIONS 4,844 (80,918)
--------------- --------------- -----------------
NET INCOME (LOSS) $ (37,487) $ (29,370) $ (152,619)
=============== =============== =================
BASIC INCOME (LOSS) PER COMMON SHARE
CONTINUING OPERATIONS $ (0.01) $ (0.01)
=============== ===============
DISCONTINUED OPERATIONS $ - $ 0.00
=============== ===============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 3,015,305 3,987,875
=============== ===============
The accompanying notes are an integral part of these financial statements
F-4
TRIANGLE ALTERNATIVE NETWORK, INC.
(A Development Stage Company)
Consolidated Statement of Stockholders' Deficit
Deficit
Accumulated Total
Additional During the Stockholders'
Common Stock Paid-In Development Equity
Shares Amount Capital Stage (Deficit)
--------- -------- ---------- ------------ -----------
Balance, May 23, 2007 - $ - $ - $ - $ -
Common stock issued for
services at $0.075 per share 5,000,000 25,000 50,000 - 75,000
Net loss for the year ended
December 31, 2007 - - - (85,762) (85,762)
--------- -------- ---------- ------------- -----------
Balance, December 31, 2007 5,000,000 25,000 50,000 (85,762) (10,762)
Common stock cancelled (2,216,750) (11,084) 11,084 - -
Common stock issued for
services at $0.01 per share 200,000 1,000 1,000 - 2,000
Net loss for the year ended
December 31, 2008 - - - (29,370) (29,370)
--------- -------- ---------- ------------- -----------
Balance, December 31, 2008 2,983,250 14,916 62,084 (115,132) (38,132)
Common stock issued for
services at $0.01 per share 225,000 1,125 1,125 - 2,250
Net loss for the twelve months
ended December 31, 2009 - - - (37,487) (37,487)
--------- -------- ---------- ------------- -----------
Balance, December 31, 2009 3,208,250 $ 16,041 $ 63,209 $ (152,619) $ (73,369)
========= ======== ========== ============= ===========
The accompanying notes are an integral part of these financial statements.
F-5
TRIANGLE ALTERNATIVE NETWORK, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Audited)
From Inception
For the Twelve For the Twelve (May 23, 2007)
Month Ended Month Ended through
December 31, 2009 December 31, 2008 December 31, 2009
---------------- ---------------- -----------------
OPERATING ACTIVITIES
Net income (loss) $ (37,487) $ (29,370) $ (152,619)
Adjustments to Reconcile Net Income (Loss) to Net
Cash used by operating activities:
Discontinued operations - (480) 48,249
Common stock issued for services 2,250 2,000 79,250
Changes in operating assets and liabilities:
Changes in accounts payable (1,013) 21,073 20,060
---------------- ---------------- -----------------
Net cash used by operating activities (36,250) (6,777) (5,060)
---------------- ---------------- -----------------
INVESTING ACTIVITIES
Discontinued operations - (100) (54,553)
---------------- ---------------- -----------------
Net cash used in investing activities - (100) (54,553)
---------------- ---------------- -----------------
FINANCING ACTIVITIES
Discontinued operations - 6,304 6,304
Proceeds from related party loans 36,368 53,427
---------------- ---------------- -----------------
Net cash provided by financing 36,368 6,304 59,731
---------------- ---------------- -----------------
activities
NETINCREASE (DECREASE) IN CASH 118 (573) 118
CASH AT BEGINNING OF PERIOD - 573 -
---------------- ---------------- ----------------- -
CASH AT END OF PERIOD $ 118 $ - 118
================ ================ =================
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ - $ - $ 625
================ ================ =================
Income Taxes $ - $ - $ -
================ ================ =================
The accompanying notes are an integral part of these financial statements.
F-6
TRIANGLE ALTERNATIVE NETWORK, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009 and December 31, 2008
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Triangle Alternative Network, Inc. (TAN, Inc.) was incorporated in the
State of Delaware on April 1, 2008. TAN, Inc. was a holding company for
and operated through its wholly owned subsidiary Triangle Alternative
Networks LLC, (TAN, LLC) a limited liability company organized in the
State of Florida on May 23, 2007. TAN LLC was organized to engage in the
business of producing and broadcasting television programming which
focuses on the GLBT (Gay-Bi-Sexual-Transgender) community. During 2008,
the Company disposed of TAN LLC and recorded its operations as
discontinued. The Company has not realized significant revenues as of
December 31, 2009 and is classified as a development stage enterprise in
accordance with ASC Topic 915.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Basic (Loss) per Share
Basic (loss) per share is calculated by dividing the Company's net loss
applicable to the weighted average number of shares outstanding during
the period. Diluted earnings per share are calculated by dividing the
Company's net income available to shareholders by the diluted weighted
average number of shares outstanding during the period. The diluted
weighted average number of shares outstanding is the basic weighted
number of shares outstanding adjusted for any potentially dilutive debt
or equity. There are no such shares outstanding as of December 31, 2009
and December 31, 2008.
For the Year ENDED For the Year ENDED
December 31, 2009 December 31, 2008
---------------- -------------------
Loss (numerator) $ (37,487) $ (29,370)
Units (denominator) 3,208,250 2,983,250
Per share amount $ (0.01) $ (0.01)
Dividends
The Company has not adopted any policy regarding payment of dividends.
No dividends have been paid during any of the periods shown.
Advertising Costs
The Company's policy regarding advertising is to expense advertising
when incurred. The Company incurred $-0- and $-0- of advertising expense
during the periods ended December 31, 2009 and December 31, 2008,
respectively.
F-7
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid instruments purchased with a maturity of three months or
less to be cash equivalents to the extent the funds are not being held
for investment purposes.
Income Taxes
The Company provides for income taxes under ASC Topic 740, Accounting
for Income Taxes. ASC Topic 740 requires the use of an asset and
liability approach in accounting for income taxes. Deferred tax assets
and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax
rates in effect when these differences are expected to reverse. The
Company has elected to be taxed as a corporation for Federal and State
income taxes.
ASC Topic 740 requires the reduction of deferred tax assets by a
valuation allowance if, based on the weight of available evidence, it is
more likely than not that some or all of the deferred tax assets will
not be realized.
The provision for income taxes differs from the amounts which would be
provided by applying the statutory federal income tax rate of 35% to the
net loss before provision for income taxes for the following reasons:
Net deferred tax assets consist of the following components as of:
December 31, 2009 December 31, 2008
----------------- -----------------
NOL carryover 152,000 115,000
Deferred tax asset $ 53,417 $ 40,250
Valuation allowance (53,417) (40,250)
Net deferred tax asset $ - $ -
At December 31, 2009, the Company had deferred tax assets before
offsetting valuation allowance calculated at an expected rate of
35% of approximately $53,417. At December 31, 2008, the Company had
deferred tax assets before offsetting valuation allowance
calculated at an expected rate of 35% of approximately $40,250
As management of the Company cannot determine that it is more likely
than not that the Company will realize the benefit of the its
deferred tax assets, a valuation allowance equal to the deferred tax
assets was recorded at the Company's year-end financial reporting
dates.
At December 31, 2009 and 2008, the Company has net operating loss
carry forwards of approximately $152,000 and $115,000, respectively,
which will expire through the year 2029. The change in valuation
allowance from December 31, 2009 to December 31, 2008 is $13,167.
This change is primarily due to the change in the Company's net
operating loss carry forwards.
F-8
The valuation allowance will be evaluated at the end of each year,
considering positive and negative evidence about whether the asset
will be realized. At that time, the allowance will either be increased
or reduced. Reduction could result in the complete elimination of
the allowance if positive evidence indicates that the value of the
deferred tax asset is no longer impaired and the allowance is no longer
required.
Due to the change in ownership provisions of the Tax Reform Act of
1986, net operating loss carry forwards of $53,417 for federal income
tax reporting purposes are subject to annual limitations. Should a
change in ownership occur net operating loss carry forwards may be
limited as to use in future years.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances
that could indicate carrying amounts of long-lived assets may not be
recoverable. When such events or changes in circumstances are present,
the Company assesses the recoverability of long-lived assets by
determining whether the carrying value of such assets will be recovered
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
through undiscounted expected future cash flows. If the total of the
future cash flows is less than the carrying amount of those assets, the
Company recognizes an impairment loss based on the excess of the
carrying amount over the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or the fair value
less costs to sell.
Accounting Basis
The basis is accounting principles generally accepted in the United
States of America. The Company has adopted a December 31 fiscal year
end.
Stock-based compensation.
As of December 31, 2009 and December 31, 2008, the Company has not
issued any share-based payments to its employees.
The Company adopted ASC Topic 718 effective January 1, 2006 using the
modified prospective method. Under this transition method, stock
compensation expense includes compensation expense for all stock-based
compensation awards granted on or after January 1, 2006, based on the
grant-date fair value estimated in accordance with the provisions of ASC
Topic 718.
Recent Accounting Pronouncements
In June 2009, the FASB issued ASC Topic 810, "Amendments to FASB
Interpretation No. 46(R)," ("SFAS 167"). The amendments include: (1) the
elimination of the exemption for qualifying special purpose entities,
(2) a new approach for determining who should consolidate a variable-
interest entity, and (3) changes to when it is necessary to reassess who
should consolidate a variable-interest entity. ASC Topic 810 is
effective for the first annual reporting period beginning after November
15, 2009 and for interim periods within that first annual reporting
period. The Company will adopt ASC Topic 810 in fiscal 2010. The Company
does not expect that the adoption of ASC Topic 810 will have a material
impact on the financial statements.
F-9
In June 2009, the FASB issued ASC Topic 860, "Accounting for Transfers
of Financial Assets. ASC Topic 860, eliminates the concept of a
"qualifying special-purpose entity," changes the requirements for
derecognizing financial assets, and requires additional disclosures in
order to enhance information reported to users of financial statements
by providing greater transparency about transfers of financial assets,
including securitization transactions, and an entity's continuing
involvement in and exposure to the risks related to transferred
financial assets. ASC Topic 860, is effective for fiscal years beginning
after November 15, 2009. The Company will adopt ASC Topic 860, in fiscal
2010. The Company does not expect that the adoption of ASC Topic 860,
will have a material impact on the financial statements.
None of the above new pronouncements has current application to the
Company, but may be applicable to the Company's future financial
reporting.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements (Continued)
None of the above new pronouncements has current application to the
Company, but may be applicable to the Company's future financial
reporting.
2. COMMON STOCK
On June 16, 2008, the Company completed a forward stock split of 5
shares for 1 increasing the total shares outstanding from 1,000,000
shares to 5,000,000 shares. During the year ended December 31, 2008,
Mr. Grunberg resigned his position as a member of the Company's Board of
Directors and he returned all of his common stock to the Company.
Likewise Mr. Altfeld resigned as Interim CEO and Mr. Pancoast as COO and
their common stock shares were returned to the Company. A total of
2,216,750 shares were returned to the Company and cancelled as a result
of these resignations and the discontinuation of TAN LLC.
In October, 2008, the Company issued 200,000 shares of common stock at
$0.01 per share to a consultant for services performed.
In December, 2009, the Company issued 225,000 shares of common stock at
$0.01 per share to consultants for services performed.
3. RELATED PARTY PAYABLES
All current expenses of the Company including general and administrative
expenses and interest expense have been paid for by a related party .
These payments are recorded as related party payable. The related party
payables are non-interest bearing, unsecured, and due upon demand. At
December 31, 2009 and 2008, the Company owes $53,427 and 17,059
respectively for these payables.
F-10
4. GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company
has accumulated deficit of $152,619 as of December 31, 2009. The
Company currently has limited liquidity, and has not established a
stabilized source of revenues sufficient to cover operating costs over
an extended period of time.
Management anticipates that the Company will be dependent, for the near
future, on additional investment capital to fund operating expenses. The
Company intends to position itself so that it may be able to raise
additional funds through the capital markets. In light of management's
efforts, there are no assurances that the Company will be successful in
this or any of its endeavors or become financially viable and continue
as a going concern. These financial statements do not include any
adjustments relating to the recoverability and classification of
recorded asset amounts, or amounts and classification of liabilities
that might result from this uncertainty.
5. DISCONTINUED OPERATIONS
During 2008, the Company discontinued the operations of its wholly owned
subsidiary TAN LLC. The Company sold assets with a net book value of
$54,661 to satisfy liabilities in the amount of $72,962. Discontinued
operations was $4,844 as of December 31, 2008. The summarized financial
statements of the discontinued operations are as follows at December
31, 2008:
ASSETS
------
ASSETS HELD FOR SALE
Cash and cash equivalents $ 441
Equipment, net 19,610
Film and production costs 34,500
Deposits 110
TOTAL ASSETS $ 54,661
LIABILITIES USED TO SATISFY ASSETS
Notes Payable 12,979
Related party payables 59,983
TOTAL LIABILITIES 72,962
6. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through
April 5, 2010 and determined that there are no other items that require
disclosure.
F-11
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
ITEM 9A(T). CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Based on an evaluation as of the date of the end of the period covered by
report, our Chief Executive Officer and Chief Financial Officer, conducted an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures, as required by Exchange Act Rule 13a-15. Based on that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective as of the end of the
period covered by this report to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
by the SEC's rules and forms.
Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and our Chief Financial
Officer, to allow timely decisions regarding required disclosure.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Exchange Act Rule 13a-
15(f). Management conducted an evaluation of the effectiveness of the internal
control over financial reporting as of December 31, 2008, using the criteria
established in Internal Control - Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). 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 the
policies or procedures may deteriorate.
A material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be
prevented or detected. As a result of management's assessment, management has
determined that there is a material weakness due to the lack of proper
segregation of duties. In order to address and resolve this weakness we will
endeavor to locate and appoint additional qualified personnel to the board of
directors and pertinent officer positions as the Company operations increase.
This Annual Report does not include an attestation report of the company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the company to provide only management's
report in this annual report.
9
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There has been no change in our internal control over financial reporting
that occurred during our last fiscal quarter (our fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.
The term "internal control over financial reporting" is defined as a
process designed by, or under the supervision of, the Company's principal
executive and principal financial officers, or persons performing similar
functions, and effected by the Company's board of directors, management and
other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:
(a) Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the Company;
(b) 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
(c) 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 financial statements.
ITEM 9B. OTHER INFORMATION.
None. Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.
IDENTITY OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding our executive
officers and directors. Each of our executive officers has been elected by our
board of directors and serves until his or her successor is duly elected and
qualified:
NAME AGE POSITION
---------------- --- --------
Lyle J Mortensen 70 Chief Executive Officer, Director
Gerry Shirren 51 Chief Financial Officer, Director
Tiffany Kalahiki 36 Secretary, Director
The principal occupations and business experience for at least the past five
years of each director and executive officer is as follows.
LYLE J MORTENSEN- CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
Mr. Mortensen is the owner and operator of Lyle J. Mortensen CPA, a consulting
and accounting firm in practice since 1978. After graduation from Arizona State
University, he worked for Touche Ross & Company in their Los Angeles, Phoenix,
and Salt Lake City offices, serving as Director of Tax Operations (Salt Lake
City office) from 1975 until 1978, when he established his private practice.
Recently he served as the Chief Financial Officer for Advanced Growing Systems,
Inc. from the date of inception through the registration process with the SEC
and transition from a private company to a publicly held company that trades on
the NASDAQ over the counter (Pink Sheets). He remains as an active member of
the Board of Directors.
His experience in accounting and consulting includes serving as the chief
financial officer of an international investment banking firm; representing
clients before the Internal Revenue Service, NASD, and other regulatory bodies;
and preparing Securities and Exchange Commission documents. He has also
functioned as the chief financial officer for several small companies, giving
them financial and accounting structure and direction as needed.
10
GERRY SHIRREN- CHIEF FINANCIAL OFFICER AND DIRECTOR
Mr. Shirren is a Fellow of the Association of Certified Accountants FCCA and
has been involved in the media industry for nearly 20 years. From 2006 to the
present, Mr. Shirren has served as a financial consultant to U.S. companies
involved in film, television, rights acquisitions and exploitation, bankruptcy
turnarounds, corporate acquisition and financing. From June 2005 to March
2008, Mr. Shirren has served as Chief Executive Officer and joint managing
Director of Digital Animation Media Limited, an Ireland-based company involved
in the development production and exploitation of animation properties for film
and television. From August 2005 to January 2008, Mr. Shirren has served as
Chief Executive Officer and Director of Cambridge Animation Systems Limited, a
United Kingdom based animation software tolls company with operations based in
Ireland and the United Kingdom. From 1995 to June 2005, Mr. Shirren served as
Chief Executive Officer and Joint Managing Director of TerraGlyph, which was
initially the European Production center for the Chicago based TerraGlyph
Interactive and subsequently became an independent film, television and
interactive production studio. Mr. Shirren obtained his Business Diploma, with
Honors, from the Athlone Institute of Technology in Ireland.
TIFFANY KALAHIKI- SECRETARY, TREASURER AND DIRECTOR
Ms. Kalahiki graduated cum laude from the University of Nevada in 2003 with a
BS in Elementary Education. Since 2004, she has worked in the Clark County
School District as a teacher and substitute teacher. Ms. Kalahiki has been the
Vice President of ICAG, Inc., and Investment and Holding Company, since
1998. Since 2008, Ms. Kalahiki has served as Secretary of BPT, Inc.
There are no family relationships among any of our directors or executive
officers.
CORPORATE GOVERNANCE GUIDELINES
Our Board has long believed that good corporate governance is important to
ensure that we are managed for the long-term benefit of our stockholders. Our
common stock is not currently quoted on any listed exchange. However, our Board
believes that the corporate governance rules of NASDAQ and AMEX represent good
governance standards and, accordingly, during the past year, our Board has
continued to review our governance practices in light of the Sarbanes-Oxley Act
of 2002, the new rules and regulations of the Securities and Exchange
Commission and the new listing standards of NASDAQ and AMEX, and it has
implemented certain of the foregoing rules and listing standards during this
past fiscal year. TAN has also adopted a Code of Ethics for Senior Financial
Officers that is applicable to our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions. Our Board is also considering adopting during
this current fiscal year additional corporate governance guidelines to assist
it in the exercise of its duties and responsibilities and to serve the best
interests of TAN and its stockholders.
BOARD DETERMINATION OF INDEPENDENCE
Under NASDAQ and AMEX rules, generally speaking, a director will only
qualify as an "independent director" if, in the opinion of our Board, that
person does not have a relationship which would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. Our
Board has determined that Lyle J Mortensen. Gerry Shirren and Tiffany Kalahiki
do not have a relationship which would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director and
that, consequently, each of these directors is an "independent director" as
defined under Rule 4200(a)(15) of the NASDAQ Marketplace Rules and similar AMEX
rules.
The standing committees of the Board are the Audit Committee and the
Compensation Committee. The Board does not currently have a nominating
committee and has not established any specific procedure for selecting
candidates for director. Directors are currently nominated by a majority vote
of the Board. There is also no established procedure for stockholder
communications with members of the Board or the Board as a whole. However,
stockholders may communicate with our Company at the number indicated, and such
communications are either responded to immediately or are referred to the
president or chief financial officer for a response. During fiscal 2009, each
of the incumbent directors, during his period of service, attended at least 75%
of the total number of meetings held by the Board.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
During the last five years, except as indicated below, no director,
executive officer, promoter or control person of the Company has had or has
been subject to:
(1) any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time;
(2) any conviction in a criminal proceeding or being subject to a
pending criminal proceeding;
(3) any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities; or
(4) being found by a court of competent jurisdiction, the Commission
or the Commodity Futures Trading Commission to have violated any federal
or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.
11
On August 5, 2008, the United States Bankruptcy Court for the Central District
of California entered an Order Confirming Second Amended Plan of Reorganization
under Chapter 11 of the Bankruptcy Code of Valcom, Inc., of which Vince
Vellardita, a former director and officer, was also Chief Executive Officer.
CODE OF ETHICS
Our board of directors has not adopted a code of ethics due to the fact
that we presently have three directors, and we are in the development stage of
our operations. We anticipate that we will adopt a code of ethics when we
increase either the number of our directors and officers or the number of our
employees.
AUDIT COMMITTEE
Our board of directors is comprised of three directors and has not
established an audit committee. Accordingly, our Board of Directors presently
performs the functions that would customarily be undertaken by an audit
committee.
ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS AND DIRECTORS
The following tables set forth certain information about compensation
paid, earned or accrued for services by (i) our Chief Executive Officer and
(ii) all other executive officers who earned in excess of $100,000 in the
fiscal years ended December 31, 2009 and 2008 ("Named Executive Officers"):
NON-EQUITY
INCENTIVE
NAME AND STOCK OPTION PLAN DEFERRED ALL OTHER
PRINCIPAL SALARY BONUS AWARDS AWARDS COMPENSATION COMPENSATION COMPENSATION TOTAL
POSITION YEAR ($) ($) ($)* ($)* ($) ($) ($) ($)
------------- ---- ------- ----- ------ ------ ------------ ------------ ------------ -----
Lyle J Mortensen
Chief Exeuctive
Officer, and
Director
Gerry Shirren 2008
Chief Financial 2009
Officer, and
Director
Tiffany Kalahiki 2008
Secretary and 2009
Director
Vince Vellardita 2008 $10,000 $2,000
Former CEO, 2009
and Director
Phil Kizel 2008
Former CEO 2009
Rick Kizel 2008
Former CFO 2009
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EQUITY COMPENSATION, PENSION OR RETIREMENT PLANS
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Company for the benefit of its
employees.
AUDIT COMMITTEE
Presently, our Board of Directors is performing the duties that would normally
be performed by an audit committee. We intend to form a separate audit
committee, and plan to seek potential independent directors. In connection with
our search, we plan to appoint an individual qualified as an audit committee
financial expert.
OPTIONS/SARS GRANTS DURING LAST FISCAL YEAR
None.
DIRECTOR COMPENSATION
The Company's directors currently serve without compensation.
POTENTIAL CONFLICTS OF INTEREST
NONE.
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE COMPENSATION GUIDING PRINCIPLES
None of the officers have received compensation. Management is prepared to
accept modest initial salaries to obtain financing for startup. Going forward,
our general compensation philosophy is further guided by the following
principles specific to our executives:
* A strong link between pay and Company performance
* Executives aligned with stockholders and managing from the perspective
of owners with a meaningful equity stake in TAN in the form of grants
of stock options and restricted stock.
* A competitive compensation package that will enable the Company to
attract and motivate high-performing talent and that is strongly
competitive with other companies in our industry.
* A simple and cost-efficient program design
The Compensation Committee of our Board of Directors determines the base
salary (and any bonus and equity-based compensation) for each executive officer
annually.
13
LIMITATION OF LIABILITY AND INDEMNIFICATION
As permitted by the Delaware General Corporation Law, we have adopted
provisions in our by-laws to be in effect that limits or eliminates the
personal liability of our directors. Consequently, a director will not be
personally liable to us or our stockholders for monetary damages or breach of
fiduciary duty as a director, except for liability for:
* any breach of the director's duty of loyalty to us or our
stockholders;
* any act or omission not in good faith or that involves
intentional misconduct or a knowing violation of law;
* any unlawful payments related to dividends or unlawful stock
repurchases, redemptions or other distributions; or
* any transaction from which the director derived an improper
personal benefit.
These limitations of liability do not alter director liability under the
federal securities laws and do not affect the availability of equitable
remedies such as an injunction or rescission.
In addition, our by-laws provide that:
* we will indemnify our directors, officers and, in the discretion
of our board of directors, certain employees to the fullest extent
permitted by the Delaware and Florida General Corporation Law; and
* we will advance expenses, including attorneys' fees, to our directors
and, in the discretion of our board of directors, to our officers
and certain employees, in connection with legal proceedings, subject
to limited exceptions.
We intend to obtain and thereafter maintain general liability insurance that
covers certain liabilities of our directors and officers arising out of claims
based on acts or omissions in their capacities as directors or officers,
including liabilities under the Securities Act of 1933, as amended. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers, or persons controlling the Company pursuant
to the foregoing provisions, we have been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
These provisions may discourage stockholders from bringing a lawsuit
against our directors for breach of their fiduciary duty. These provisions may
also have the effect of reducing the likelihood of derivative litigation
against directors and officers, even though such an action, if successful,
might otherwise benefit us and our stockholders. Furthermore, a stockholder's
investment may be adversely affected to the extent we pay the costs of
settlement and damage awards against directors and officers pursuant to these
indemnification provisions. We believe that these provisions, the
indemnification agreements and the insurance are necessary to attract and
retain talented and experienced directors and officers.
At present, there is no pending litigation or proceeding involving any of our
directors or officers where indemnification will be required or permitted. We
are not aware of any threatened litigation or proceeding that might result in a
claim for such indemnification.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTE14RS.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the beneficial ownership information of our
common stock at December 31, 2009, for:
* each person known to us to be the beneficial owner of more
than 5% of our common stock;
* each named executive officer;
* each of our directors; and
* all of our executive officers and directors as a group.
We have determined beneficial ownership in accordance with the rules of the
SEC. Except as indicated by the footnotes below, we believe, based on the
information furnished to us, that the persons and entities named in the table
below have sole voting and investment power with respect to all shares of
common stock reflected as beneficially owned. We have based our calculation of
the percentage of beneficial ownership on 3,208,250 shares of common stock
outstanding on December 31, 2009.
14
In computing the number of shares of common stock beneficially owned by a
person and the percentage ownership of that person, we deemed outstanding
shares of common stock subject to options or warrants held by that person that
are currently exercisable or exercisable within 60 days of December 31, 2009.
We did not deem these shares outstanding, however, for the purpose of computing
the percentage ownership of any other person. It should be noted that no
shareholder of the Company currently holds any options or warrants exercisable
within 60 days of December 31, 2009. Beneficial ownership representing less
than 1% is denoted with an asterisk (.*)
NAME OF SHARES BENEFICIALLY PERCENTAGE
BENEFICIAL OWNER OWNED OWNERSHIP(%)
---------------- ------------------- ------------
Vince Vellardita 225,000 7 %
ICAG, Inc. 2,321,000 72.3 %
Sichenzia, Ross, Friedman, 150,000 4.7 %
Florrence, LLP
Tiffany Kalahiki -0- *
Gerry Shirren -0- *
Officers and Directors (4 persons) 225,000 7 %
CHANGES IN CONTROL.
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
In a private sale of his stock, Rick Kizel the former Chief Financial Officer
of the Company sold his stock holdings to ICAG, Inc., a private operating
Company during the year ending 12-31-08. This sale resulted in ICAG obtaining
a majority control of the Company's outstanding stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE.
At December 31, 2009, the Company is indebted to ICAG, Inc., a shareholder
of the Company holding greater than 10% of the issued and outstanding stock, in
the amount of $53,427.
Other than listed above, none of the directors or executive officers of
the Company, nor any person who owned of record or was known to own
beneficially more than 5% of the Company's outstanding shares of its Common
Stock, nor any associate or affiliate of such persons or companies, has any
material interest, direct or indirect, in any transaction that has occurred
since inception, or in any proposed transaction, which has materially affected
or will affect the Company.
ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
During the fiscal year ended December 31, 2009, we incurred approximately
$7,000 in fees to our principal independent accountants for professional
services rendered in connection with the audit and reviews of our financial
statements for fiscal year ended December 31, 2009.
During the fiscal year ended December 31, 2008, we incurred approximately
$4,500 in fees to our principal independent accountants for professional
services rendered in connection with the audit and reviews of our financial
statements for fiscal year ended December 31, 2008.
AUDIT-RELATED FEES
The aggregate fees billed during the fiscal years ended December 31, 2009
for assurance and related services by our principal independent accountants
that are reasonably related to the performance of the audit or review of our
financial statements (and are not reported under Item 9(e)(1) of Schedule 14A
was $0 and $0, respectively.
TAX FEES
The aggregate fees billed during the fiscal years ended December 31, 2009
and 2008 for professional services rendered by our principal accountant tax
compliance, tax advice and tax planning was $0 and $0, respectively.
ALL OTHER FEES
The aggregate fees billed during the fiscal years ended December 31, 2009 for
products and services provided by our principal independent accountants (other
than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A)
was $0 and $0, respectively.
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ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
3.1 Articles of Incorporation (incorporated by reference to our Form S-1as
filed with the Securities and Exchange Commission on July 17, 2008).
3.2 Bylaws (incorporated by reference to our Form S-1as filed with the
Securities and Exchange Commission on July 17, 2008).
31.1 Certification by Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification by Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of the Chief Executive Officer and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
TRIANGLE ALTERNATIVE NETWORK INC.
Dated: April 15, 2010 /s/ Lyle J Mortensen
--------------------
By: Lyle J Mortensen
Its: Principal Executive Officer
Dated: April 15, 2010 /s/ Gerry Shirren
--------------------
By: Gerry Shirren
Its: Chief Financial Officer and Principal
Accounting Officer
In accordance In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the issuer and in the capacities
and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- -----
By: /s/ Lyle J Mortensen Chief Executive Officer, April 15, 2010
-------------------- Chairman of the Board
Lyle J Mortensen
By: /s/ Gerry Shirren Chief Financial Officer/
-------------------- Director April 15, 2010
Gerry Shirren
By: /s/ Tiffany Kalahiki Secretary/Treasurer
-------------------- Director April 15, 2010
Tiffany Kalahiki
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