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EX-5 - ITRACKR SYSTEMS INC | v182046_ex-5.htm |
EX-3.3 - ITRACKR SYSTEMS INC | v182046_ex3-3.htm |
As
filed with the Securities and Exchange Commission on ______________,
2010
Registration
No. ________________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
S-1
Registration
Statement
Under
The Securities
Act of 1933
iTrackr
Systems, Inc.
(Exact
name of Registrant as specified in its charter)
Florida
(State or other jurisdiction of
incorporation or organization)
|
|
2340
(Primary Standard Industrial
Classification Code number)
|
|
050597678
(I.R.S. Employer
Identification No.)
|
1507
Presidential Way
North
Miami Beach FL33179
(305)
469-4178
(Address,
including zip code, and telephone number, including area code, of Registrant’s
principal executive offices)
John
Rizzo
Chairman
iTrackr
Systems, Inc.
1507
Presidential Way
North
Miami Beach FL 33179
(561) 962-4111
(Name,
address, including zip code, and telephone number, including area code, of agent
for service)
Copies
to:
Joel D.
Mayersohn
350 East
Las Olas Boulevard
Suite
1150
Fort
Lauderdale, FL 33301
Approximate
date of commencement of proposed sale to the public:
From time
to time after the Registration Statement becomes effective.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, check the
following box. þ
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement number for the
same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
CALCULATION
OF REGISTRATION FEE
Amount
to be registered
(1)
|
Proposed
maximum
offering
price (2)
|
Amount
of registration
fee
|
||||||||||
Common
Stock, no par value
|
15,254,391 | 0.25 | $ | 271.91 | ||||||||
Common
Stock, underlying $0.05 option
|
157,500 | 0.25 | $ | 2.81 | ||||||||
Common
Stock, underlying $0.10 option
|
2,000,000 | 0.25 | $ | 35.61 | ||||||||
Common
Stock, underlying $0.25 option
|
50,000 | 0.25 | $ | 0.89 | ||||||||
Common
Stock, underlying $0.10 warrant
|
1,000,000 | 0.25 | $ | 17.83 | ||||||||
Common
Stock, underlying $0.30 warrant
|
166,666 | 0.25 | $ | 2.97 | ||||||||
Common
Stock, underlying $0.40 warrant
|
1,000,000 | 0.25 | $ | 17.83 |
(1)
|
Pursuant
to Rule 416, this Registration Statement also covers such additional
securities that may be issuable as a result of stock splits, stock
dividends and similar transactions. Includes 4,374,166 shares issuable
upon the exercise of options and
warrants.
|
(2)
|
Estimated
solely for the purpose of calculating the registration fee pursuant to
Rule 457(o) under the Securities Act of 1933, as
amended.
|
The
information in this preliminary prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed with the
U.S. Securities and Exchange Commission (“SEC”) is effective. This preliminary
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any jurisdiction where the offer or sale is not
permitted.
PRELIMINARY
PROSPECTUS
Subject
to Completion, dated April __, 2010
19,627,891 Shares of Common
Stock
iTrackr
Systems, Inc.
This
prospectus relates solely to resale of up to an aggregate of 19,628,557 shares
of common stock of iTrackr Systems, Inc., including 4,374,166 shares of common
stock underlying options and warrants issued by iTrackr Systems,
Inc., by the Selling Stockholders identified in the section entitled “Selling
Stockholders” on page 30 of this prospectus or their transferees.
The
Selling Stockholders may, from time to time, sell, transfer or otherwise dispose
of any or all of their shares of common stock or interests in shares of common
stock on any stock exchange, market or trading facility on which the shares are
traded or in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices. For additional information, you should refer to the section
entitled “Plan of Distribution” on page 39 of this prospectus. We will not
receive any proceeds from the sale or other disposition of the shares of common
stock covered hereby by the Selling Stockholders. However, we will receive the
exercise price of the options if the options are exercised for cash. All
expenses of registration incurred in connection with this offering are being
borne by us, but all selling and other expenses incurred by the selling
stockholders will be borne by the selling stockholders.
Prior to
this offering, there has been no market for our securities. Our common stock is
not listed on any national securities exchange, the NASDAQ stock market or the
Over the Counter Bulletin Board. There is no assurance that our securities will
ever become qualified for quotation on the OTC Bulletin Board. There is no
assurance that the selling shareholders will sell their shares or that a market
for our shares will develop even if our shares are quoted on the OTC Bulletin
Board.
You
should rely only on the information contained in this prospectus. We have not
authorized any other person to provide you with different
information.
You
should consider carefully the risks that we have described in “Risk Factors”
beginning on page 2 before deciding whether to invest in our common
stock.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful and complete. Any representation to the contrary is a criminal
offense.
The date
of this Prospectus is ____, 2010
TABLE
OF CONTENTS
Page
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Part
I – Information Required in Prospectus
|
|||
Prospectus
Summary
|
1 | ||
Risk
Factors
|
2 | ||
Information
Regarding Forward-Looking Statements
|
10 | ||
Market
and Industry Data
|
11 | ||
Use
of Proceeds
|
11 | ||
Dividend
Policy
|
11 | ||
Management’s
Discussion and Analysis of
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|||
Financial
Condition and Results of Operations
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12 | ||
Business
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17 | ||
Management
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25 | ||
Executive
Compensation
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26 | ||
Selling
Stockholders
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30 | ||
Security
Ownership of Certain beneficial Owners and Management
|
36 | ||
Certain
Relationships and Related Party Transactions
|
37 | ||
Description
of Capital Stock
|
38 | ||
Plan
of Distribution
|
39 | ||
Legal
Matters
|
41 | ||
Experts
|
41 | ||
Where
You Can Find More Information
|
41 | ||
Consolidated
Financial Statements
|
42 |
You
should rely only on the information contained in this prospectus or contained in
any free writing prospectus filed with the Securities and Exchange Commission,
or SEC. We have not authorized anyone to provide you with information different
from that contained in this prospectus. The Selling Stockholders are offering to
sell, and seeking offers to buy, shares of our common stock only in
jurisdictions where offers and sales are permitted. The information in this
prospectus is accurate only as of the date of this prospectus, regardless of the
time of delivery of this prospectus or of any sale or other disposition of our
common stock.
PROSPECTUS
SUMMARY
This
summary highlights selected information more fully described elsewhere in this
prospectus. You should read the following summary together with the entire
prospectus, including the more detailed information regarding us and the common
stock being sold in this offering and our financial statements and the related
notes appearing elsewhere in this prospectus. You should carefully consider,
among other things, the matters discussed in the section entitled “Risk Factors”
beginning on page 2 before deciding to invest in our common stock. Unless
otherwise stated or the context requires otherwise, references in this
prospectus to “we,” “our,” “us,” “Must Haves” “iTrackr” or the Company refer to
iTrackr Systems, Inc., and its subsidiaries.
Corporate
History
We were
incorporated in the State of Wyoming on May 10, 2006 to develop, market and
commercialize a product and inventory search application through a social
networking site designed to leverage the best of Internet and mobile
technologies.
On
November 27, 2007 we adopted Articles of Merger to merge iTrackr, the Wyoming
corporation with and into iTrackr, Inc., a Florida corporation. On
December 10, 2009, we entered into a Plan of Merger with Must Haves, Inc.
which closed on January 12, 2010 pursuant to which (i) we received an aggregate
of 17,875,695 shares, or 93.5% of Must Haves, Inc. common stock, and (ii) Must
Haves, Inc. assumed 6,555,000 options and warrants of iTrackr, which are
exercisable at prices from $0.01 to $0.40.
On March
9, 2010, we amended our Articles of Incorporation with the State of Florida to
change our name to iTrackr Systems, Inc., which more appropriately reflects the
nature of our underlying business.
On
February 5, 2010, we issued a warrant to an accredited investor to purchase up
to 1,000,000 shares of our common stock at a purchase price of $0.40, in
exchange for $50,000 to be used towards expenses related to
the filing of this registration statement.
Overview
We are an
emerging ecommerce software and services company. In 2006, we began development
of an online search application for retailers and consumers and launched www.itrackr.com, a
social networking website designed to enable consumers the ability to search for
products and services at brick-and-mortar retail stores on location-based, and
inventory-available basis, within their geographic communities. In 2009, we
acquired online customer support software from ChatStat, which enables us to
provide retailers with a support and sales tool for agents with the goal of
increasing transactional business. We serve customers primarily in North America
in a variety of industries with a particular emphasis on ecommerce
markets.
Our
principal executive offices are located at 475 Plaza Real, Suite 275 Boca Raton,
Fl, and our telephone number is (561) 962-4111. Our website address is http://www.itrackr.com.
Information on or accessed through our website is not incorporated into this
prospectus and is not a part of this prospectus.
The
Offering
Common
Stock offered by selling shareholders:
|
19,628,557
shares of common stock, consisting of 9,291,040 shares issued debt
conversion, 4,374,166 shares underlying options and warrants,
and 6,282,545 related to shares issued for services
rendered.
|
Common
Stock outstanding prior to
Offering:
|
19,827,331 |
1
Common
Stock outstanding after this Offering:
|
27,164,332(1)
|
Use
of Proceeds:
|
We
will not receive any proceeds from the sale of shares in this offering by
the selling stockholders. However, we will receive proceeds from the
exercise of the options and warrants if the options and warrants are
exercised for cash
|
Risk
Factors:
|
You
should carefully consider the information set forth in this prospectus
and, in particular, the specific factors set forth in the “Risk Factors”
section beginning on page 2 of this prospectus before deciding whether or
not to invest in shares of our common
stock.
|
(1)
|
The
number of outstanding shares after the offering is based upon 19,827,331
shares outstanding as of March 30, 2010 and assumes the full exercise of
all warrants with respect to which the underlying shares are being
registered pursuant to the registration statement of which this prospectus
forms a part.
|
The
number of shares of common stock outstanding after this offering excludes
3,297,500 shares of common stock available for future issuance under certain
agreements.
RISK
FACTORS
You
should carefully consider the risks described below before making a decision to
buy our common stock. If any of the following risks actually occurs, our
business, financial condition and results of operations could be harmed. In that
case, the trading price of our common stock could decline and you might lose all
or part of your investment in our common stock. You should also refer to the
other information set forth in this prospectus, including our financial
statements and the related notes.
Risks
Related to Our Business
iTrackr
has a history of losses and may not be able to generate sufficient net revenue
from its business in the future to achieve or sustain
profitability.
iTrackr
has incurred losses since inception. To date, iTrackr’s revenues have largely
come from click through referral fees and call center service revenue from
ChatTracker. iTrackr’s primary expenses relate to personnel, website development
and maintenance, professional and stock based compensation and significantly
exceed revenues. iTrackr’s consolidated financial statements have been prepared
assuming that iTrackr will continue as a going concern. Successful transition to
profitable operations is dependent upon obtaining a level of sales adequate to
support the Company’s cost structure. The Company has suffered recurring losses
resulting in a stockholders’ deficit of approximately $592,827 and a working
capital deficiency of $692,182 as of December 31, 2009. Historically, the
Company has been able to finance operations from the capital obtained through
the issuance of convertible debt. Management intends to continue to finance the
operations of the Company through future cash flows from operations and future
financings. However, iTrackr’s expenses are expected to increase as it incurs
additional costs of becoming publicly traded, and increasing operational
infrastructure, and there is no assurance that iTrackr will be able to obtain
sufficient financing (or financing on acceptable terms) or earn sufficient
revenues to generate positive cash flow and attain profitability.
2
If
iTrackr is unable to fund its operations and capital expenditures, iTrackr may
not be able to continue to develop and market its products and services which
would have a material adverse effect on its business.
iTrackr
has experienced significant negative cash flow since its inception. In order to
fund iTrackr’s operations and capital expenditures, iTrackr may be required to
incur borrowings or raise capital through the sale of debt or equity securities.
The Company’s ability to borrow or access the capital markets for future
offerings may be limited by its financial condition at the time of any such
offering as well as by adverse market conditions resulting from, among other
things, general economic conditions and contingencies and uncertainties that are
beyond our control. iTrackr’s failure to obtain the funds for necessary future
capital expenditures would limit its ability to develop and market its services
and could have a material adverse effect on our business, results of operations
and financial condition.
iTrackr
is dependent upon key personnel whose loss may adversely impact iTrackr’s
business.
iTrackr
depends on the expertise, experience and continued services of its senior
management employees, especially John Rizzo, its founder, Chairman, Chief
Executive Officer and Chief Financial Officer, and Ramesh Anand, its Chief
Operating Officer. Both Mr. Rizzo and Mr. Anand have acquired specialized
knowledge and skills with respect to iTrackr and its operations and most
decisions concerning the business of iTrackr will be made or significantly
influenced by them. iTrackr does not maintain life insurance with respect to
Messrs. Anand and Rizzo. The loss of Messrs. Anand and Rizzo or other senior
management employees, or an inability to attract or retain other key
individuals, could materially adversely affect the Company. The Company seeks to
compensate and incentivize its key executives, as well as other employees,
through competitive salaries and bonus plans, but there can be no assurance that
these programs will allow iTrackr to retain key or hire new employees. As a
result, if Messrs. Anand and Rizzo were to leave iTrackr, the Company could face
substantial difficulty in hiring qualified successors and could experience a
loss in productivity while any such successors obtain the necessary training and
experience. In January, 2010, iTrackr entered into a one year employment
agreement with Mr. Anand which expires in January 2011, and it extended its
existing employment agreement with Mr. Rizzo. However, there can be no assurance
that a successor employment agreement will be entered into with Messrs. Anand
and Rizzo following their respective employment contractual terms or that the
terms of this employment agreement will be sufficient to retain
Messrs. Anand and Rizzo.
iTrackr’s
management systems and personnel may not be sufficient to effectively manage its
growth.
iTrackr’s
growth strategy involves expanding its customer based amongst online retailers
with high transaction websites, increasing agent-hours for its customer support
software and increasing consumer demand for its product search applications.
Achieving iTrackr’s growth strategy is critical in order for its business to
achieve economies of scale and to achieve profitability. Any condition that
would deny, limit or delay its ability to manage and support existing accounts,
as well as market to new customers in the future will constrain iTrackr’s
ability to grow. There can be no assurance that iTrackr will be able to
successfully expand its business in its highly competitive environment, and if
iTrackr fails to do so, its business could be harmed.
Expansion
of iTrackr’s business will also strain its existing management resources and
operational, financial and management information systems to the point that they
may no longer be adequate to support its operations, requiring iTrackr to make
significant expenditures in these areas. iTrackr will need to develop further
financial, operational and management reporting systems and procedures to
accommodate future growth and reporting requirements under Section 404 of the
Sarbanes Oxley Act of 2002 (including pursuant to other applicable securities
laws). There can be no assurance that iTrackr will be able to develop such
additional systems or procedures to accommodate its future expansion on a timely
basis, and the failure to do so could harm its business.
If
we are not competitive in the market for online sales, marketing and customer
service solutions, or online consumer services our business could be
harmed.
The
market for online sales, marketing and customer service technology is intensely
competitive and characterized by aggressive marketing, evolving industry
standards, rapid technology developments and frequent new product introductions.
Established or new entities may enter the market in the near future, including
those that provide solutions for real-time interaction online, or online
consumer services related to real-time advice.
3
We
compete directly with companies focused on technology that facilitates real-time
sales, conversion of online shoppers to buyers, email management, searchable
knowledgebase applications, and customer service interaction. These markets
remain fairly saturated with small companies that compete on price and features.
We face significant competition from online interaction solution providers,
including SaaS providers such as LivePerson, Art Technology Group, Instant
Service, RightNow Technologies and TouchCommerce. We face potential competition
from Web analytics and online marketing service providers, such as Omniture. The
most significant barriers to entry in this market are knowledge of:
|
·
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Online
consumer purchasing habits;
|
|
·
|
Methodologies
to efficiently engage customers and
consumers;
|
|
·
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Metrics
proving return on investment; and
|
|
·
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Technology
innovation opportunities.
|
Furthermore,
many of our competitors offer a broader range of customer relationship
management products and services than we currently offer. We may be
disadvantaged and our business may be harmed if companies doing business online
choose real-time sales, marketing and customer service solutions from such
providers.
We also
face potential competition from larger enterprise software companies such as
Oracle and SAP. In addition, established technology companies such as Microsoft,
Yahoo and Google may leverage their existing relationships and capabilities to
offer real-time sales, marketing and customer service applications or consumer
services similar to our consumer offerings.
Finally,
we compete with clients and potential clients that choose to provide a real-time
sales, marketing and customer service solution in-house as well as, to a lesser
extent, traditional offline customer service solutions, such as telephone call
centers.
We
believe that competition will increase as our current competitors increase the
sophistication of their offerings and as new participants enter the market. As
compared to our company, some of our larger current and potential competitors
have:
|
·
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Greater
brand recognition;
|
|
·
|
More
diversified lines of products and services;
and
|
|
·
|
Significantly
greater financial, marketing and research and development
resources.
|
Additionally,
some competitors may enter into strategic or commercial relationships with
larger, more established and better-financed companies. These competitors may be
able to:
|
·
|
Undertake
to make more extensive marketing
campaigns;
|
|
·
|
Adopt
more aggressive pricing policies
and
|
|
·
|
Make
more attractive offers to business or individuals to induce them to use
their products or services.
|
Any
change in the general market acceptance of the real-time sales, marketing and
customer service solution business model or in online, real-time consumer advice
services may harm our competitive position. Such changes may allow our
competitors additional time to improve their service or product offerings, and
would also provide time for new competitors to develop real-time sales,
marketing, customer service and Web analytics applications or competitive
consumer service offerings and solicit prospective clients within our target
markets. Increased competition could result in pricing pressures, reduced
operating margins and loss of market share.
4
We
are dependent on technology systems and third-party content that are beyond our
control.
The
success of our services depends in part on our clients’ online services as well
as the Internet connections of visitors to websites, both of which are outside
of our control. As a result, it may be difficult to identify the source of
problems if they occur. In the past, we have experienced problems related to
connectivity which has resulted in slower than normal response times to Internet
user chat requests and messages and interruptions in service. Our services rely
both on the Internet and on our connectivity vendors for data transmission.
Therefore, even when connectivity problems are not caused by our services, our
clients or Internet users may attribute the problem to us. This could diminish
our brand and harm our business, divert the attention of our technical personnel
from our product development efforts or cause significant client relations
problems.
In
addition, we rely in part on third-party service providers and other third
parties for Internet connectivity and network infrastructure hosting, security
and maintenance. These providers may experience problems that result in slower
than normal response times and/or interruptions in service. If we are unable to
continue utilizing the third-party services that support our Web hosting and
infrastructure or if our services experience interruptions or delays due to
third party providers, our business could be harmed.
Our
business service also depends on third parties for hardware and software and our
consumer services depend on third parties for content, which products and
content could contain defects or inaccurate information. Problems arising from
our use of such hardware or software or third party content could require us to
incur significant costs or divert the attention of our technical or other
personnel from our product development efforts or to manage issues related to
content. To the extent any such problems require us to replace such hardware or
software, we may not be able to do so on acceptable terms, if at
all.
Our
services are subject to payment-related risks.
For
certain payment methods, including credit and debit cards, we pay interchange
and other fees, which may increase over time and raise our operating costs and
lower our profit margins. We rely on third parties to provide payment processing
services, including the processing of credit cards, debit cards and it could
disrupt our business if these companies become unwilling or unable to provide
these services to us. We are also subject to payment card association operating
rules, certification requirements and rules governing electronic funds
transfers, which could change or be reinterpreted to make it difficult or
impossible for us to comply. If we fail to comply with these rules or
requirements, we may be subject to fines and higher transaction fees and lose
our ability to accept credit and debit card payments from our customers or
facilitate other types of online payments, and our business and operating
results could be adversely affected.
Through
our consumer-facing platform, we facilitate online transactions between
individual service providers who provide online advice and information to
consumers. In connection with these services, we accept payments using a variety
of methods, such as credit card, debit card and PayPal. These payments are
subject to “chargebacks” when consumers dispute payments they have made to us.
Chargebacks can occur whether or not services were properly provided.
Susceptibility to chargebacks puts a portion of our revenue at risk. We take
measures to manage our risk relative to chargebacks and to recoup properly
charged fees, however, if we are unable to successfully manage this risk our
business and operating results could be adversely affected. As we offer new
payment options to our users, we may be subject to additional regulations,
compliance requirements, and fraud.
We are
also subject to a number of other laws and regulations relating to money
laundering, international money transfers, privacy and information security and
electronic fund transfers. If we were found to be in violation of applicable
laws or regulations, we could be subject to civil and criminal penalties or
forced to cease our payments services business.
We
may be liable if third parties misappropriate personal information belonging to
our clients’ Internet users.
We
maintain dialogue transcripts of the text-based chats and email interactions
between our clients and Internet users and store on our server’s information
supplied voluntarily by these Internet users in surveys. We provide this
information to our clients to allow them to perform Internet user analyses and
monitor the effectiveness of our services. Some of the information we collect
may include personal information, such as contact and demographic information.
If third parties were able to penetrate our network security or otherwise
misappropriate personal information relating to our clients’ Internet users or
the text of customer service inquiries, we could be subject to liability. We
could be subject to negligence claims or claims for misuse of personal
information. These claims could result in litigation, which could have a
material adverse effect on our business, results of operations and financial
condition. We may incur significant costs to protect against the threat of
security breaches or to alleviate problems caused by such breaches.
5
The need
to physically secure and securely transmit confidential information online has
been a significant barrier to electronic commerce and online communications. Any
well-publicized compromise of security could deter people from using online
services such as the ones we offer, or from using them to conduct transactions,
which involve transmitting confidential information. Because our success depends
on the general acceptance of our services and electronic commerce, we may incur
significant costs to protect against the threat of security breaches or to
alleviate problems caused by these breaches.
Our
products and services may infringe upon intellectual property rights of third
parties and any infringement could require us to incur substantial costs and may
distract our management.
We are
subject to the risk of claims alleging infringement of third-party proprietary
rights. Substantial litigation regarding intellectual property rights exists in
the software industry. In the ordinary course of our business, our services may
be increasingly subject to third-party infringement claims as the number of
competitors in our industry segment grows and the functionality of services in
different industry segments overlaps. Some of our competitors in the market for
real-time sales, marketing and customer service solutions or other third parties
may have filed or may intend to file patent applications covering aspects of
their technology. Any claims alleging infringement of third-party intellectual
property rights could require us to spend significant amounts in litigation
(even if the claim is invalid), distract management from other tasks of
operating our business, pay substantial damage awards, prevent us from selling
our products, delay delivery of the iTrackr services, develop non-infringing
software, technology, business processes, systems or other intellectual property
(none of which might be successful), or limit our ability to use the
intellectual property that is the subject of any of these claims, unless we
enter into license agreements with the third parties (which may be costly,
unavailable on commercially reasonable terms, or not available at all).
Therefore, such claims could have a material adverse effect on our business,
results of operations and financial condition.
Technological
or other defects could disrupt or negatively impact our services, which could
harm our business and reputation.
We face
risks related to the technological capabilities of our services. We expect the
number of interactions between our clients’ operators and Internet users over
our system to increase significantly as we expand our client base. Our network
hardware and software may not be able to accommodate this additional volume.
Additionally, we must continually upgrade our software to improve the features
and functionality of our services in order to be competitive in our markets. If
future versions of our software contain undetected errors, our business could be
harmed. If third-party content is flawed, our business could be harmed. As a
result of major software upgrades at iTrackr, our client sites have, from time
to time, experienced slower than normal response times and interruptions in
service. If we experience system failures or degraded response times, our
reputation and brand could be harmed. We may also experience technical problems
in the process of installing and initiating the iTrackr services on new Web
hosting services. These problems, if not remedied, could harm our
business.
Our
services also depend on complex software which may contain defects, particularly
when we introduce new versions onto our servers. We may not discover software
defects that affect our new or current services or enhancements until after they
are deployed. It is possible that, despite testing by us, defects may occur in
the software. These defects could result in:
|
·
|
Damage
to our reputation;
|
|
·
|
Lost
sales;
|
|
·
|
Delays
or loss of market acceptance of our products;
and
|
|
·
|
Unexpected
expenses and diversion of resources to remedy
errors.
|
6
Our
promotion and marketing of our websites may not result in generation of
significant revenue which may cause our business to fail.
We
believe that successful marketing, development and promotion of our websites are
crucial to our success in attracting business. If our marketing and promotion is
not successful in developing strong public recognition of our websites, then we
may not be able to earn significant revenues and our business may
fail.
Unauthorized
disclosure of sensitive or confidential client and customer data, whether
through breach of our computer systems or otherwise, could expose us to
protracted and costly litigation and cause us to lose clients which may result
in our going out of business and for you to lose your investment.
We may be
required to collect and store sensitive data in connection with our services,
including names, addresses, social security numbers, credit card account
numbers, checking and savings account numbers and payment history records, such
as account closures and returned checks. If any person, including any of our
employees, penetrates our network security or otherwise misappropriates
sensitive data, we could be subject to liability for breaching contractual
confidentiality provisions and/or privacy laws, which would devastate our
business, and may result in the loss of your investment.
Competition
in the social networking, online marketing and e-commerce industry is intense
and our competitors have greater financial resources and development
capabilities than we have, and we may not have the resources necessary to
successfully compete with them.
Our
business plan involves providing consumers with online real-time product and
inventory information, retailers with access to targeted consumer demand for
their products and marketing firms with targeted content for their campaigns.
These business areas are highly competitive. There are numerous companies that
compete in these markets, most of whom have greater financial resources and more
expertise in this business than we do. Our ability to develop our business will
depend on our ability to successfully market our services in this highly
competitive environment. We cannot guarantee that we will be able to do so
successfully.
Our
services may become obsolete and unmarketable if we are unable to respond
adequately to rapidly changing technology and customer demands.
Our
services may quickly become obsolete and unmarketable. Our future success will
depend on our ability to adapt to technological advances, anticipate customer
demands, develop new products and enhance our current products on a timely and
cost-effective basis. We may be unsuccessful in responding to technological
developments and changing customer needs. In addition, our applications and
services offerings may become obsolete due to the adoption of new technologies
or standards.
We may
experience technical or other difficulties that could delay or prevent the
development, introduction or marketing of new products or enhanced versions of
existing products. Also, we may not be able to adapt new or enhanced services to
emerging industry standards, and our new products may not be favorably received
by our target market.
The
loss of our executive officers or directors, could adversely affect our
business.
Our
success depends largely upon the efforts, abilities, and decision-making of our
executive officers and directors. The loss of any of these individual would have
an adverse effect on our business prospects. We do not currently maintain
“key-man” life insurance and there is no contract in place assuring the services
our executive officers and directors for any length of time. In the event that
we should lose our sole officer or directors and we are unable to find suitable
replacements, we may not be able to develop our business.
Risks
Related to Our Common Stock
There
will be a substantial number of shares of iTrackr’s common stock available for
sale in the future that may be dilutive to its current stockholders and may
cause a decrease in the market price of its common stock.
7
As of
March 30, 2010, the Company had 19,827,331 shares of
common stock outstanding, 45,000,000 shares of common stock available for future
issuance under its 2007 Long-Term Stock Incentive Plan and warrants and options
to purchase 7,505,000 shares outstanding. The 19,628,557 shares of common stock
outstanding and underlying certain options and warrants registered pursuant to
this Registration Statement will be freely tradable once this Registration
Statement is declared effective by the Securities and Exchange Commission
without restriction or further registration under the Securities Act, unless the
shares are purchased by “affiliates” as that term is defined in Rule 144 under
the Securities Act. Any shares purchased by an affiliate may not be resold
except pursuant to an effective registration statement or an applicable
exemption from registration, including an exemption under Rule 144 of the
Securities Act. These restricted securities may be sold in the public market
only if they are registered or if they qualify for an exemption from
registration under Rule 144 or Rule 701 under the Securities Act.
Future
sales or issuances of the Company’s common stock or securities convertible into
common stock, the perception such sales or issuances may occur or the
availability for sale in the public market of substantial amounts of our common
stock could adversely affect the prevailing market price of our common stock and
could impair our ability to raise capital through future sales of equity
securities at a time and price that we deem appropriate.
iTrackr’s
shares of common stock may become subject to the SEC’s penny stock rules and
broker-dealers may experience difficulty in completing customer transactions and
trading activity in its securities may be adversely affected.
If at any
time iTrackr has net tangible assets of $5.0 million or less and its ordinary
shares have a market price per share of less than $5.00, transactions in its
ordinary shares may be subject to the “penny stock” rules promulgated under the
Securities Exchange Act of 1934. Under these rules, broker-dealers who recommend
such securities to persons other than institutional accredited investors
must:
|
·
|
Make
a special written suitability determination for the
purchaser;
|
|
·
|
Receive
the purchaser’s written agreement to a transaction prior to
sale;
|
|
·
|
Provide
the purchaser with risk disclosure documents that identify certain risks
associated with investing in “penny stocks” and that describe the market
for these “penny stocks” as well as a purchaser’s legal remedies;
and
|
|
·
|
Obtain
a signed and dated acknowledgement from the purchaser demonstrating that
the purchaser has actually received the required risk disclosure document
before a transaction in a “penny stock” can be
completed.
|
If iTrackr’s
shares of common stock become subject to these rules, broker-dealers may find it
difficult to effectuate customer transactions and trading activity in its
securities may be adversely affected. As a result, the market price of the
securities may be depressed, and you may find it more difficult to sell the
securities.
iTrackr
may be unable to receive a listing of its securities on NASDAQ or another
national securities exchange, and this may make it more difficult for its
stockholders to sell their securities.
We intend
that shares of iTrackr’s common stock will be traded in the over-the-counter
market and quoted on the OTCBB. The Company’s common stock and units are not
currently eligible for inclusion in The NASDAQ Stock Market. If the Company is
unable to receive a listing or approval of trading of securities on NASDAQ or
another national securities exchange, then it may be more difficult for
stockholders to sell their securities.
Risks
Related to this Offering
One
stockholder owns a majority of our common stock and may act, or prevent certain
types of corporate actions, to the detriment of other stockholders.
John
Rizzo owns 5,250,000 common shares and holds options to acquire 2,000,000
options at an average exercise price of $0.325 per share until July 1,
2017, with $389,500 in debt owed to him by iTrackr Systems, Inc. as of March 31,
2010 which has been assumed by the company pursuant to the terms and conditions
of the Merger Agreement. Accordingly, Mr. Rizzo beneficially owns
approximately 11.5% of our issued and outstanding common stock. Accordingly,
Mr. Rizzo may exercise significant influence over all matters requiring
stockholder approval, including the election of a majority of the directors and
the determination of significant corporate actions. This concentration could
also have the effect of delaying or preventing a change in control that could
otherwise be beneficial to our stockholders.
8
If
we issue additional shares of common stock in the future this may result in
dilution to our existing stockholders.
On
October 26, 2009, we simultaneously completed a 4-1 reverse split of our
common stock and amended our articles of incorporation to authorize the issuance
of 110,000,000 shares of stock consisting of 100,000,000 shares of common stock
and 10,000,000 shares of preferred stock. Our board of directors has the
authority to issue additional shares of common stock up to the authorized
capital stated in the articles of incorporation. Our board of directors may
choose to issue some or all of such shares to provide additional financing in
the future. The issuance of any such shares may result in a reduction of the
book value or market price of the outstanding shares of our common stock. It
will also cause a reduction in the proportionate ownership and voting power of
all other stockholders.
There
is currently no market for trading our common stock, and when such a market does
develop, the trading price of our common stock may be volatile, with the result
that an investor may not be able to sell any shares acquired at a price equal to
or greater than the price paid by the investor.
Our
common shares are currently not quoted for trading. We intend to file
registration statement with the Securities and Exchange Commission and have our
common shares quoted on the OTC Bulletin Board. Companies quoted on the OTC
Bulletin Board have traditionally experienced extreme price and volume
fluctuations. In addition, our stock price may be adversely affected by factors
that are unrelated or disproportionate to our operating performance. Market
fluctuations, as well as general economic, political and market conditions such
as recessions, interest rates or international currency fluctuations may
adversely affect the market price of our common stock. In addition, to date,
there has been no trading volume for our shares on the over-the-counter markets.
As a result of this potential volatility and potential lack of a trading market,
an investor may not be able to sell any of our common stock that they acquire
that a price equal or greater than the price paid by the investor.
The
trading price of iTrackr’s common stock is likely to be volatile, and you might
not be able to sell your shares at or above the public offering
price.
The
trading price of iTrackr’s common stock is likely to be subject to wide
fluctuations. Factors, in addition to those outlined elsewhere in this
prospectus, that may affect the trading price of the Company’s common stock
include:
|
·
|
Actual
or anticipated variations in the Company’s operating
results;
|
|
·
|
Announcements
of technological innovations, new products or product enhancements,
strategic alliances or significant agreements by the Company or its
competitors;
|
|
·
|
Changes
in recommendations by any securities analysts that elect to follow the
Company’s common stock;
|
|
·
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The
financial projections the Company may provide to the public, any changes
in these projections or its failure to meet these
projections;
|
|
·
|
The
loss of a key customer;
|
|
·
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The
loss of a key supplier;
|
|
·
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The
loss of key personnel;
|
|
·
|
Lawsuits
filed against the Company;
|
9
|
·
|
Changes
in operating performance and stock market valuations of other companies
that sell similar products and
services;
|
|
·
|
Price
and volume fluctuations in the overall stock
market;
|
|
·
|
Market
conditions in our industry, the industries of our customers and the
economy as a whole; and
|
|
·
|
Other
events or factors, including those resulting from war, incidents of
terrorism or responses to these
events.
|
If
securities analysts do not publish research or reports about iTrackr’s business
or if they downgrade its stock, the price of its stock could
decline.
The
research and reports that industry or financial analysts publish about iTrackr
or its business will likely have an effect on the trading price of its common
stock. If an industry analyst decides not to cover the Company, or if an
industry analyst decides to cease covering the Company at some point in the
future, the Company could lose visibility in the market, which in turn could
cause its stock price to decline. If an industry analyst downgrades iTrackr’s
stock, its stock price would likely decline rapidly in response.
The
concentration of iTrackr’s capital stock ownership with insiders will likely
limit your ability to influence corporate matters.
iTrackr’s
insiders, (its executive officers, directors, current five percent or greater
stockholders and affiliated entities) together beneficially own approximately
43.4% of our outstanding common stock. As a result, these
stockholders, acting together, will have significant influence over all matters
that require approval by the Company’s stockholders, including the election of
directors and approval of significant corporate transactions. Corporate action
might be taken even if other stockholders, including those who purchased shares
in this offering, oppose them. This concentration of ownership might also have
the effect of delaying or preventing a change of control that other stockholders
may view as beneficial.
The
Company does not expect to pay any cash dividends for the foreseeable
future.
The
Company does not anticipate that it will pay any cash dividends to holders of
its common stock in the foreseeable future. Accordingly, investors must rely on
sales of their common stock after price appreciation, which may never occur, as
the only way to realize any future gains on their investment. Investors seeking
cash dividends in the foreseeable future should not purchase the Company’s
common stock.
INFORMATION
REGARDING FORWARD-LOOKING STATEMENTS
This Form
S-1 contains forward-looking statements relating to future events and the future
performance of the Company, including, without limitation, statements regarding
the Company’s expectations, beliefs, intentions or future strategies that are
signified by the words “expects,” “anticipates,” “intents,” “believes,” or
similar language. You should read statements that contain these words carefully
because they:
|
·
|
Discuss
future expectations;
|
|
·
|
Contain information
which could impact future results of operations or financial condition;
or
|
|
·
|
State
other “forward-looking”
information.
|
We
believe it is important to communicate our expectations to the iTrackr
stockholders. However, there may be events in the future that we are not able to
accurately predict or over which we have no control and which could cause our
actual results to differ materially from the information contained in the
forward-looking statements contained in this document. The risk factors and
cautionary language discussed in this Registration Statement and in our Annual
Report on Form 10-K provide examples of risks, uncertainties and events that may
cause actual results to differ materially from the expectations described by
iTrackr in its forward-looking statements, including among other
things:
10
(1)
|
Our
inability to generate sufficient net revenue in the
future;
|
(2)
|
Our
inability to fund our operations and capital
expenditures;
|
(3)
|
The
loss of key personnel;
|
(4)
|
Our
inability to effectively manage our
growth;
|
(5)
|
Our
inability to generate sufficient cash flows to meet our debt service
obligations;
|
(6)
|
Competitive
conditions in the chat and online support
industry;
|
(7)
|
Extensive
government regulation;
|
(8)
|
Changing
economic conditions; and
|
(9)
|
Our
failure to attract and retain qualified
personnel.
|
You are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this document.
All
forward-looking statements included herein attributable to iTrackr or any person
acting on iTrackr’s behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to in this section. Except to the
extent required by applicable laws and regulations, iTrackr undertakes no
obligations to update these forward-looking statements to reflect events or
circumstances after the date of this document or to reflect the occurrence of
unanticipated events.
You
should be aware that the occurrence of the events described in the “Risk
Factors” section and elsewhere in this Registration Statement could have a
material adverse effect on iTrackr.
MARKET
AND INDUSTRY DATA
This
prospectus includes market and industry data and forecasts that we have
developed from independent consultant reports, publicly available information,
various industry publications, other published industry sources and our internal
data and estimates. Independent consultant reports, industry publications and
other published industry sources generally indicate that the information
contained therein was obtained from sources believed to be
reliable.
Our
internal data and estimates are based upon information obtained from our
investors, trade and business organizations and other contacts in the markets in
which we operate and our management’s understanding of industry conditions.
Although we believe that such information is reliable, we have not had this
information verified by any independent sources.
USE
OF PROCEEDS
The
Company will not receive any proceeds from the sale or other disposition of the
shares of common stock covered by this prospectus. The maximum proceeds the
Company could receive upon the exercise of all the warrants with respect to
which the underlying shares of common stock have been registered on this
Registration Statement is $770,374.80, which the Company anticipates
using as general working capital.
DIVIDEND
POLICY
The
Company has never declared or paid cash dividends on our common stock. The
Company currently expects to retain all future earnings for use in the operation
and expansion of our business and does not anticipate paying cash dividends in
the foreseeable future. The declaration and payment of any dividends in the
future will be determined by our board of directors, in its discretion, and will
depend on a number of factors, including our earnings, capital requirements and
overall financial condition.
11
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis of the results of operations and financial
condition of the Company on a consolidated basis for the years ended
December 31, 2009 and 2008 and should be read in conjunction with iTrackr’s
consolidated financial statements, and the notes to those consolidated financial
statements that are included elsewhere in this Prospectus. Our discussion
includes forward-looking statements based upon current expectations that involve
risks and uncertainties, such as our plans, objectives, expectations and
intentions. Actual results and the timing of events could differ materially from
those anticipated in these forward-looking statements as a result of a number of
factors, including those set forth under the Risk Factors, Cautionary Notice
Regarding Forward-Looking Statements and Business sections in this Prospectus.
We use words such as “anticipate,” “estimate,” “project,” “continuing,”
“ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and
similar expression to identify forward-looking statements.
Recent Events
On
February 1, 2010, Must Haves, Inc. amended its articles of incorporation with
the State of Florida, changing its name to iTrackr Systems, Inc.
On
December 10, 2009, Must Haves, Inc., iTrackr Acquisition, Inc. (“Merger
Sub”) and iTrackr, Inc., a Florida corporation (“iTrackr”), entered into an
Agreement and Plan of Merger (the “Agreement”), which closed January 12, 2010.
On the Closing Date, iTrackr was merged with and into Merger Sub, which is the
surviving corporation and became a wholly-owned subsidiary of the
Registrant.
At the
closing of the Merger, subject to and pursuant to the terms and conditions of
the Agreement, each outstanding share of Purchaser common stock was converted
into one share of common stock of the Registrant. Upon consummation of the
Merger, the shareholders of the Purchaser received an aggregate of 17,875,695
shares of Registrant common stock and thus owned 93.5% of Must Have’s common
stock. Must Haves also assumed 6,555,000 options and warrants of iTrackr, which
are exercisable at prices from $0.01 to $0.40.
In
addition, pursuant to the Plan of Merger Agreement, Stella Gostfrand submitted
her resignation as an officer and director of the Company, and Michael Uhl, Dave
Baesler and John Rizzo were appointed to serve as members of the board of
directors of the Company, all of which will be effective following the
expiration of the ten day period following the mailing of the information
statement required by Rule 14f-1 under the Exchange Act. Upon the
consummation of the Reverse Merger, Ramesh Anand was appointed to serve as Chief
Operating of the Company, and Mr. Rizzo was appointed to serve as Chief
Executive Officer and Chief Financial Officer of the Company.
Overview
iTrackr
Systems, Inc. (“iTrackr”, the “Company”, “we”, “us” or “our”) was formed in May
2006 to develop, market and commercialize a product and inventory search
application through a social networking site designed to leverage the best of
Internet and Mobile technologies. We have taken the best of several burgeoning
markets, including eCommerce, social networking and mobile content, and
developed what we believe is a powerful platform that drives value to consumers,
retailers and advertising and marketing firms.
iTrackr
Systems intends to introduce and commercialize Internet and Mobile social
merchandizing technology platforms to retailers and consumers. “Social
merchandizing” applies the variety of traditional marketing practices to promote
products and services to a community of individuals via social networking
technologies. iTrackr is similar to MySpace and Facebook; however, our members’
interests are not in diary or event blogging, but in the timely location of
products and services which can be acquired and consumed on a local
level.
iTrackr
Systems’ technology enables consumers to search and track merchandise, letting
the consumer know which retail locations in a local zip code are stocking the
queried merchandise, as well as the comparative prices. In addition, if the item
is not in stock, the consumer can request that iTrackr Systems notify them via
mobile text message or email when the item is delivered to a local retailer and
where that retailer is located.
12
In 2009,
iTrackr purchased online customers support software technology from Chatstat for
approximately $95,000. iTrackr has subsequently
launched its customer support chat software (“ChatTrackr”) which facilitates
real-time customer support and expert advice, and paid
transactions.
iTrackr
generates revenues primarily through the licensing of its ChatTrackr to two
customers, Respond Q and Saveology. These customers use our application service
provider (“ASP”) system, outsourcing our chat applications for a monthly
fee-per-agent, or license fee and in certain cases, an annual enterprise
fee.
In
addition, we offer customers a hosted ChatTrackr solution, enabling them to
download our software on their website, where agents download a fee-based
desktop application, while we manage the service on our network for an
additional fee. Examples of websites we manage include www.buycomcast.com and
www.buytimewarner.com. We also bill customers for maintenance and upgrades to
our service.
Our plans
to grow our customer support business is to position ChatTrackr as a sales tool
for online retailers, increasing fees through customer additions, traffic and
through the number of agents using ChatTrackr. We intend to expand our product
search business by offering this service to existing ChatTrackr customers as a
means of driving further traffic to their own websites and transactional volume.
Our target markets include all ecommerce businesses, financial services,
healthcare and automotive.
Our
primary sources of operating funds have been historically through the issuance
of debt and equity. For the year ended December 31, 2009, we raised $333,312 in
debt. To finance our growth strategy, we may continue to actively
pursue additional funds through equity financing, including the sale of
additional shares of common and preferred stock, asset sales, accelerated
payments of maintenance and management fees, debt financing, or a combination
thereof.
At
December 31, 2009, iTrackr Systems had assets of $108,364. For the fiscal
quarter ended December 31, 2009 the Company had revenue of $5,826, and net
losses of $192,889. iTrackr has incurred losses since inception and may not be
able to generate sufficient net revenue from its business in the future to
achieve or sustain profitability. At December 31, 2009, the Company had
approximately $3,223of unrestricted cash on hand and assuming there is no change
in sales and expense trends experienced since the fourth quarter of fiscal 2009,
the Company believes that its cash on hand is insufficient to continue
operations. The Company currently needs approximately $130,000 to
$160,000 per quarter to maintain and expand our sales and
operations. Thus, the Company will need approximately $520,000 to
$640,000 to continue through December 31, 2010.
Impact
of Inflation
General
inflation in the economy has driven the operating expenses of many businesses
higher, and, accordingly we have experienced increased salaries and higher
prices for supplies, goods and services. We continuously seek methods of
reducing costs and streamlining operations while maximizing efficiency through
improved internal operating procedures and controls. While we are subject to
inflation as described above, our management believes that inflation currently
does not have a material effect on our operating results. However, inflation may
become a factor in the future.
Critical
Accounting Estimates
The
preparation of financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States requires us to
make judgments, assumptions and estimates that affect the amounts reported. Note
A of Notes to Financial Statements describes the significant accounting policies
used in the preparation of the financial statements. Certain of these
significant accounting policies are considered to be critical accounting
policies, as defined below.
13
A
critical accounting policy is defined as one that is both material to the
presentation of our financial statements and requires management to make
difficult, subjective or complex judgments that could have a material effect on
our financial condition and results of operations. Specifically, critical
accounting estimates have the following attributes:
·
|
We
are required to make assumptions about matters that are highly uncertain
at the time of the estimate; and
|
·
|
Different
estimates we could reasonably have used, or changes in the estimate that
are reasonably likely to occur, would have a material effect on our
financial condition or results of
operations.
|
Estimates
and assumptions about future events and their effects cannot be determined with
certainty. We base our estimates on historical experience and on various other
assumptions believed to be applicable and reasonable under the circumstances.
These estimates may change as new events occur, as additional information is
obtained and as our operating environment changes. These changes have
historically been minor and have been included in the consolidated financial
statements as soon as they became known. Based on a critical assessment of our
accounting policies and the underlying judgments and uncertainties affecting the
application of those policies, management believes that our financial statements
are fairly stated in accordance with accounting principles generally accepted in
the United States, and present a meaningful presentation of our financial
condition and results of operations.
In
preparing our financial statements to conform to accounting principles generally
accepted in the United States, we make estimates and assumptions that affect the
amounts reported in our financial statements and accompanying notes. These
estimates include useful lives for fixed assets for depreciation calculations
and assumptions for valuing options and warrants. Actual results could differ
from these estimates.
Long-lived
Assets
Long-lived
assets, comprised of equipment, and identifiable intangible assets, are
evaluated for impairment whenever events or changes in circumstances indicate
that the carrying value may not be recoverable. Factors that may cause an
impairment review include significant changes in technology that make current
computer-related assets that we use in our operations obsolete or less useful
and significant changes in the way we use these assets in our operations. When
evaluating long-lived assets for potential impairment, we first compare the
carrying value of the asset to the asset’s estimated future cash flows
(undiscounted and without interest charges). If the estimated future cash flows
are less than the carrying value of the asset, we calculate an impairment loss.
The impairment loss calculation compares the carrying value of the asset to the
asset’s estimated fair value, which may be based on estimated future cash flows
(discounted and with interest charges). We recognize an impairment loss if the
amount of the asset’s carrying value exceeds the asset’s estimated fair value.
If we recognize an impairment loss, the adjusted carrying amount of the asset
becomes its new cost basis. The new cost basis will be depreciated (amortized)
over the remaining useful life of that asset. Using the impairment evaluation
methodology described herein, there have been no long-lived asset impairment
charges for each of the last two years.
Our
impairment loss calculations contain uncertainties because they require
management to make assumptions and to apply judgment to estimate future cash
flows and asset fair values, including forecasting useful lives of the assets
and selecting the discount rate that reflects the risk inherent in future cash
flows.
We have
not made any material changes in our impairment loss assessment methodology
during the past two fiscal years. We do not believe there is a reasonable
likelihood that there will be a material change in the estimates or assumptions
we use to calculate long-lived asset impairment losses. However, if actual
results are not consistent with our estimates and assumptions used in estimating
future cash flows and asset fair values, we may be exposed to losses that could
be material.
Income
Taxes
Provisions
for income taxes are based on taxes payable or refundable for the current period
and deferred taxes on temporary differences between the amount of taxable income
and pretax financial income and between the tax bases of assets and liabilities
and their reported amounts in the financial statements. Deferred tax assets and
liabilities are included in the financial statements at currently enacted income
tax rates applicable to the period in which the deferred tax assets and
liabilities are expected to be realized or settled.
14
When
accounting for Uncertainty in Income Taxes, first, the tax position is evaluated
to determine the likelihood that it will be sustained upon external examination.
If the tax position is deemed “more-likely-than-not” to be sustained, the tax
position is then assessed to determine the amount of benefit to recognize in the
financial statements. The amount of the benefit that may be recognized is the
largest amount that has a greater than 50 percent likelihood of being
realized upon ultimate settlement. As changes in tax laws or rates are enacted,
deferred tax assets and liabilities are adjusted through the provision for
income taxes. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. The Company underwent
a change of control for income tax purposes on October 8, 2003 according to
Section 381 of the Internal Revenue Code. The Company’s utilization of U.S.
Federal net operating losses will be limited in accordance to Section 381
rules. As changes in tax laws or rates are enacted, deferred tax assets and
liabilities are adjusted through the provision for income taxes. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized.
RESULTS
OF OPERATIONS
The
following table sets forth information from our statements of operations for the
fiscal years ended December 31, 2009 and 2008.
Years
Ended December 31, 2009 and 2008
Revenues
for the year ended December 31, 2009 were $7,493 representing a 70% increase
from revenues of $4,419 for the year ended December 31, 2008. The
increase in revenue is primarily due to the purchase of ChatStat and resulting
sales of live chat software which began in our fourth quarter of
2009.
Total
operating expenses for the year ended December 31, 2009 were $610,973 or 52%
lower compared to $1,274,718 for the year ended December 31,
2008. The $663,745 decrease in operating expenses is the result of
cost cutting measures and was primarily due to a $483,523 decrease in personnel
and professional fees and a $175,267 decrease in stock compensation
expense.
Total
other income and expense was expense of $253,462 for the year ended December 31,
2009 compared to $58,574 for the year ended December 31, 2008. The
$194,888, increase was due to an increase of $31,888 in interest expense as our
debt balance in 2009 increased compared to 2008, $25,000 accrued for the
settlement of a legal claim by a former consultant and $138,000 write-off of a
worthless investment.
Our net loss was $856,942
for the year ended December 31, 2009, compared to a loss of $1,328,873 for the
year ended December 31, 2008. The 471,931 or 36% improvement in 2009
compared to 2008 was primarily due to our cost cutting measures which reduced
operating expenses $663,745 offset by increases in other expenses of
$194,888.
Liquidity
and Capital Resources
From
inception to December 31, 2009, we have incurred an accumulated deficit of
$3,024,954. This loss has been incurred through a combination of
professional fees and expenses supporting our plans to develop our website and
brand our services as well as continued operating losses. Since
inception, we have financed our operations primarily through debt and equity
financing. During the year ended December 31, 2009 we had a net
decrease in cash of $179,921. Total cash resources as of December 31,
2009 was $3,223 compared with $183,144 at December 31, 2008.
15
Our
available working capital and capital requirements will depend upon numerous
factors, including the sale of live chat services, the timing and cost of
expanding into new markets, the cost of developing competitive technologies, the
resources that we devote to developing new products and commercializing
capabilities, the status of our competitors, our ability to establish
collaborative arrangements with other organizations, and our ability to attract
and retain key employees.
Net cash
used by operating activities was $414,379 for the period ended December 31,
2009 as compared to $794,550 for the period ended December 31,
2008.
Net cash
used by investing activities was $98,854 for the period ended December 31,
2009 as compared to $5,485 for the period ended December 31,
2008.
Net cash
provided by financing activities was $333,312 for the period ended
December 31, 2009 as compared to $883,000 for the year ended
December 31, 2008.
Cash
Requirements and Need for Additional Funds
We
believe that approximately $520,000 to $640,000 will be required to cover our
operating expenses for the next 12 months. In addition to covering our operating
expenses, we may require additional cash resources due to changing business
conditions or other future developments, including any acquisitions we may
decide to pursue. We may, if necessary, conduct a private placement
or public offering of our stock to raise capital.
Off-Balance
Sheet Arrangements
We have
no material off-balance sheet transactions.
Controls
and Procedures.
Evaluation
of Disclosure Controls and Procedures
As of
December 31, 2009, under the direction of the Chief Executive Officer and Chief
Financial Officer, the Company evaluated the effectiveness of the design and
operation of our disclosure controls and procedures, as defined in Rule 13a —
15(e) under the Securities Exchange Act of 1934, as amended. Based on the
evaluation, it was concluded that the Company’s disclosure controls and
procedures are effective at a reasonable assurance level and are designed to
ensure that the information required to be disclosed in SEC reports is recorded,
processed, summarized and reported within the time period specified by the SEC’s
rules and forms, and is accumulated and communicated to management, including
the Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.
Limitations
on the Effectiveness of Controls and Other Matters
Management
is responsible for establishing and maintaining adequate internal control over
financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange
Act of 1934, as amended). Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls may be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control.
The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions; over time, a control may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.
16
Notwithstanding
the foregoing limitations on the effectiveness of controls, the Company has
nonetheless reached the conclusions set forth above on the Company’s disclosure
controls and procedures and its internal control over financial
reporting.
The
Company assessed the effectiveness of the Company’s internal control over
financial reporting as of December 31, 2009. In making this
assessment, management used the criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.
Based on
the assessment, management believes that, as of December 31, 2009, the Company’s
internal control over financial reporting was effective.
BUSINESS
Overview
iTrackr
was formed in May 2006 to develop, market and commercialize a product and
inventory search application through a social networking site designed to
leverage the best of Internet and Mobile technologies. We have taken the best of
several burgeoning markets, including eCommerce, social networking and mobile
content, and developed what we believe is a powerful platform that drives value
to consumers, retailers and advertising and marketing firms.
iTrackr
intends to introduce Internet and Mobile social merchandizing technology
platforms. Social merchandizing applies the variety of traditional marketing
practices to promote products and services to a community of individuals via
social networking technologies. iTrackr is similar to MySpace and Facebook;
however, our members’ interests are not in diary or event blogging, but in the
timely location of products and services which can be acquired and consumed on a
local level.
iTrackr
enables consumers to search and track merchandise, letting the consumer know
which retail locations in a local zip code are stocking the queried merchandise,
as well as the comparative prices. In addition, if the item is not in stock, the
consumer can request that iTrackr notify them via mobile text message or email
when the item is delivered to a local retailer and where that retailer is
located.
In 2009,
iTrackr purchased online customers support software technology from Chatstat for
approximately $95,000. iTrackr has launched its customer support chat software
which facilitates real-time customer support and expert advice, and paid
transactions.
Products
and Services
The
iTrackr community brand has created one of the first mobile shopping communities
which is fully integrated with the online and mobile world. Our community
bridges cyberspace and the mobile space with the real world for the benefit of
our users, retailers and merchants. iTrackr is recognized nationally for
locating hard to find products and major media organizations such as U.S. News
and World Report, The Wall Street Journal and CNET have consulted with us for
reference retail statistics.
Our
current product line consists of our online Chat customer support application,
“TrackiT!”, “PriceiT!”, Groups, Calendar and status update messaging for mobile
and Internet.
Customer
Support and Chat Software
Bridging
the gap between visitor traffic and successful business outcomes, our business
solutions deliver measurable return on investment by enabling clients
to:
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Increase
conversion rates and reduce abandonment by selectively engaging website
visitors;
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Accelerate
the sales cycle, drive repeat business and increase average order
values;
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Increase
customer satisfaction, retention and loyalty while reducing service
costs;
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Harness
the knowledge of subject-matter experts by allowing consumers to engage
with major online brands ;
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Refine
and improve performance by understanding which initiatives deliver the
highest rate; and
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Lower
operating costs in the call center by deflecting costly phone and email
interactions.
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TrackiT,
PriceiT and iTrackr Community Applications
These
products are based on a “pull/push” model where the consumers tell us what
products they are interested in via the Retail “TrackiT!” button and iTrackr
pulls the information from the retailers’ inventory and pushes it to the
consumer. The consumer establishes their messaging preferences of site only,
mobile text messaging and/or email. The main product is the “TrackiT!” function
which allows consumers to search local stores’ inventory for products like the
Wii Console, Guitar Hero video game as well as a host of other
products.
Our
products are focused on creating value by and to the consumer, the retailer and
the marketing firm. The success of our business is predicated on our ability to
effectively achieve and maximize value on each of these fronts.
Our
business and technology was created first and foremost with the individual
consumer, and the consumer’s “interests” in mind. More than ever, consumers are
challenged with issues of time and convenience in fulfilling their purchases.
This factor has been one of the primary catalysts for the growth of online
shopping which addresses both of these constraints directly. But the fact is,
that online commerce remains less than 10% of total retail, and is forecast to
only reach about 13.4% of total retail by 2011. Tracking and utilizing the
expressed interests of our users allows us to maintain our relevance to the
consumer and to provide information that keeps them engaged with our
Community.
The vast
majority of consumers are committed to fulfilling their shopping purchases at
brick-and-mortar locations. This creates another significant inconvenience, or
“pain”, for the consumer – namely, the need to find the product they are looking
for in stock and in their area now. We believe that the best solution, or
resolution, for the consumer’s need is to help them mitigate and eliminate
altogether the hassle of locating stores that have the products they want in
stock and to provide them with an opportunity to secure that in-stock product
with an immediate purchase. We leverage the power and ubiquitous nature of the
Internet and mobile marketplace to provide this intelligence to the consumer in
an on-demand, real-time capability. After all, while less than 10% of consumers
will execute a purchase online, almost 90% of them are researching online. We
simplify the process in a turnkey fashion and with immediate
resolution.
The value
proposition that we offer to the retailer is equally compelling. We drive
purchases to the retailer. Our presence and content will greatly influence where
our users fulfill their transactions. Our powerful e-commerce driven, social
networking platform cost-effectively pushes consumers that are ready to purchase
to retail locations. Retailer’s can market incentives and promotions on a local
and even store-by-store basis to our consumers. That is the essence of social
merchandising. iTrackr can provide layers of intelligence to retailers that can
be parsed all-the-way down to the zip-code layer. The implications to the
retailer range well beyond target marketing and extend directly to inventory
management, fulfillment and settlement in the consumer supply
chain.
Substantiating
“return-on-investment remains the biggest challenge for marketing firms catering
to online advertisers. Much of the problem online advertiser’s face is related
to the measurement tools currently available and the data which is ultimately
produced from those tools. Additionally, it is also difficult to determine the
quality of placement and the impact of advertising amongst the online audience
at a particular destination. The vast majority of advertising dollars being
spent is concentrated on a surprisingly few online destinations.
The
primary advantage that we offer marketing firms is the assurance that the ads
and promotional campaigns launched within the iTrackr Community are both highly
targeted and are being sought by the confirmed consumers that are at our site
first and foremost for retail interests. This is a significant advantage and a
key differentiator from other platforms. We believe that marketing firms can
more effectively demonstrate ROI to their clients on our platform, and we can
provide them with the statistics to prove it.
18
We are
working with our commercial partners to provide inventory and service tracking
functions within the branded image of their existing online presence. This is
the fundamental building block of social merchandising. From these services, our
Retail partners will extend product and service fulfillment messaging with
derivative sales offerings, associated mobile advertising and mobile couponing.
iTrackr subscribers will benefit from brand affinity offerings through our
Retailers’ partners.
Transaction
Fulfillment
Consumers
can complete the process of searching for products and services by securing them
with a “BuyiT!” purchase when they locate what they want. Goods and services can
be secured when they become available, and the consumer will know that their
products will be waiting for them when they go to pick them up.
Group
Messaging
Consumers
can communicate or forward received messages to any of their groups, regardless
of which devices they are using, where each member receives messages according
to their individual profiles and permissions that they have established.
Retailers can leverage this group messaging functionality to push special offers
and incentives to relevant groups, notifying them of brick-and-mortar locations
where they can locate products and take advantage of special
offers.
MyiTrackr
Dashboard
When a
community member signs in, their home page is also their personal dashboard.
Whether from the web or from the mobile device, the MyiTrackr Personal Dashboard
is the interface to the world of iTrackr services. From a user’s personal
dashboard they can personalize and configure their view of the iTrackr
community. From here they can set up their communications settings, their group
affiliations and their personal preferences. Community members can research
subscriber submitted opinions of products and services, or they may wish to
submit reviews of their own. The MyiTrackr Personal Dashboard is the member’s
one-stop for personalization of the iTrackr Community experience.
iTrackr
Trackit Reports
iTrackr’s
TrackiT Reports provide commercial subscribers with invaluable data provided by
the iTrackr consumer. We have unique insight into the purchasing trends of
groups of consumers by product. When a community member stops tracking a
product, we glean specific information about the retail experience, and while we
never release specific user information, we can aggregate very specific
information about consumer behavior. As our membership grows many consumer
trends can be noted and quantified. iTrackr TrackiT Reports are the only place
where that data can be found.
Business
Strategy
iTrackr
Technologies has built a community-driven website at www.itrackr.com where
consumers can create user-generated content focused on feedback and
recommendations about popular products. What is truly unique about our website
is that the users all have something in common; they are confirmed consumers.
They have found www.itrackr.com
because they are looking for one item or another in their local shopping area
for immediate purchase. Since our initial launch, in December 2006, we increased
our membership 170,000 subscribers solely through viral, word-of-mouth
marketing.
In
addition to our web presence we are working with retailers to extend iTrackr’s
fulfillment tracking applications to their branded web sites. Our mobile suite
of applications are also extensible with our commercial partners’ look and feel,
giving them an iTrackr enabled mobile presence under their existing corporate
brand. We will augment our offering with transaction settlement capabilities to
complement our existing capabilities and provide our partners with a complete
fulfillment solution.
19
Our
initial objective is to reach critical mass as quickly as possible in order to
establish the iTrackr Community as viable and attractive to marketing firms and
online and mobile advertisers. We will achieve critical mass when revenue from
our Community presence approaches our current cost of operations. We intend to
leverage our suite of applications over wired and mobile devices in order to
achieve the broadest possible uptake and the greatest potential market
penetration.
We have
employed a “freemium” model to maximize consumer uptake for our social shopping
tools. In other words, we offer product tracking and notification, as well as
the consumer social network capabilities to our users and members without a
charge. We believe this will provide us with the most efficient path to
establishing critical mass and validation of our offering.
We
believe that our user base will be driven by the content that we propagate to
our iTrackr database, the number of consumers that will employ mobile data
applications, and more generally mirror the broader online consumer demographic.
Our strategy is to populate our database initially with the most sought after,
or the “hottest” consumer products, demand for which is generated by the
community members themselves. This category of products is, by nature, more
difficult to locate in-store due to the fact that demand is higher. These will
be the products which will highlight the value of our offering to the consumer,
and create the largest viral “buzz” amongst all consumers. Around the holidays,
these hot items are typically new releases of consumer electronics, games and
communications devices, but can be any consumer good or service for which supply
is constrained regionally or nationally.
Over
time, other factors will contribute to the products available for tracking on
our network, including consumer user-generation of product tracking requests as
well as our development of partnerships and affiliation with retail and
marketing firms.
With more
than a quarter of online consumers submitting a rating or review of a product or
service contributing to a discussion board, an increasing number of brands are
beginning to use user generated content to engage with customers, while social
networking sites that employ UCGP are demonstrating growth in site traffic and
membership numbers.
We have
developed the iTrackr platform to scale on a distributed basis, where consumers
have the capability to add products for tracking, as well as for reviews and
commentary to propagate within our community. We are seeking to maximize the
relevance of the tracking services, while increasing the likelihood of longer
and more frequent site visits. This increases the attractiveness of our site as
a merchandising destination for online advertisers and marketing
firms.
Our plan
for 2010 is to grow by promoting our mobile networking tools and retail search
capabilities to community and affinity groups that will benefit the most from
mobile social networking. These groups include retailers, students, affinity
groups and mobile device manufacturers. By soliciting participation from retail
sponsors, we will provide free services to our target communities.
Viral
Promotion Strategy
iTrackr
has been lauded on websites and in the media with no direct marketing
expenditures or outlays on our behalf. For example, U.S. News & World
Report mentioned the iTrackr service on December 6, 2007, within the
context of “Tracking the Elusive Wii”. Almost immediately after we made our
application available on the world wide web, mention of our service and positive
reviews appeared on Google searches for the term iTrackr. We will continue to
promote our community virally, and will expand our blog presence for the
foreseeable future.
Consumer
Reach Strategy
Today
most consumers utilizing iTrackr do so for products that can be found and
purchased at their local store. Our new product offerings will allow consumers
to form private communities and to exchange group messages or discuss things
within groups of their making. By offering these features, we extend the
consumers ability to seek fulfillment for services as well as goods. These
services include event ticketing such as movie tickets, concerts or sporting
events, and they will also include packages combining events with merchandise
and entertainment. iTrackr’s messaging and community products will offer
consumer’s the ability to organize the events in a one step process including
the purchase of the service via the Internet. This can occur from any Internet
or mobile device.
20
Retailer
Promotion Strategy
We intend
to solicit commercial participation from big box consumer electronics and
pharmaceutical retailers, but our service is not limited to any particular set
of retail categories. Consider the following examples:
Pharmaceutical Retailer: we
provide the retailer with the ability to notify customers via text message or
email that their prescription has been filled and is available for pickup. With
these highly-qualified messages, we can extend the retailers the ability to
offer special coupons or exclusive promotional opportunities. By combining our
service with an exclusive marketing opportunity, we will drive derivative sales
from the subsequent store visit by the consumer.
Electronic Retailer: our
utilities give retailers the ability to notify their customers that a product at
a particular location has become available, and iTrackr will facilitate the
transaction. In addition, the retailer can drive additional sales by offering
additional incentives or bundles when the customer visits the store to purchase
the originally tracked item. We have identified several major retailers with
whom we have engaged or intend to engage. These include Best Buy, Target, Radio
Shack, Circuit City and Costco. Additionally, other retail areas will be pursued
as commercial adoption grows. These secondary retailers include book stores such
as Barnes & Noble and manufacturing retailers such as
Apple.
Mobile
Supply Chain Distribution
Making
iTrackr an integral part of the mobile technology supply chain is one of our
ultimate, long-term goals. Strategically placing the iTrackr Community button on
mobile devices gives us one of the strongest opportunities to extend our
community brand. Placement on the deck of PDA’s and cell phones will give us a
true advantage in the marketplace. Developing relationships with manufacturers
and service providers will allow us to pursue this goal, and having service
providers as commercial partners will only further strengthen our offerings to
potential subscribers. Even one partner in this arena greatly expands our reach
and brand presence to a broad consumer group. Those consumers will drive new
communities to the iTrackr offering and further expand mobile social networking
in today’s wireless world.
Our
Industry
Chat
and Online Customer Support
Despite
the current state of the U.S. economy, online sales are still strong. In a
February 2009 forecast, Forrester Research, Inc. projected that online sales
will increase by 11% in 2009, reaching $156 billion by year’s end, and that
affluent shoppers (defined as consumers with household incomes of at least
$75,000 per year), who account for more than half of online retail spending,
will continue to shift a significant portion of their purchases to the Web
channel.
We
believe that the online channel presents expansion opportunities for many
industries, and that the increased e-commerce revenue that results from this
expansion may outweigh the decrease that stems from consumers who will curtail
their overall spending in 2009. To survive in this competitive environment,
e-businesses must differentiate their service, quality and overall experience to
gain customer loyalty.
Forrester
also forecasts online banking adoption will continue its upward trajectory.
According to Forrester’s figures, by 2011 the number of U.S. consumers who bank
online will grow by 55%, representing 76% of online households.
Online
advertising continues to grow, with search engine-based marketing leading the
way. We believe the shift from television, print, radio and other traditional
media may accelerate in a recessionary environment largely because Web-based
media is more measurable, interactive, targeted and relevant. eMarketer, in an
article published in December 2008, predicts that search engine-based marketing
will grow 15% to $12 billion in 2009, while overall online advertising will grow
9% to $26 billion. This compares to the total U.S. advertising market for 2009,
which Barclays Capital Media predicts will decline by 10% to $251
billion.
21
The
unrivaled convenience, accessibility and selection of the Web have established
the channel as a mass consumer medium. Because the Internet is a ubiquitous
influence in our day-to-day lives, consumer expectations and demands continue to
rise.
By
supplying online engagement tools that facilitate real-time assistance and
personalized advice, iTrackr enables businesses and individual service providers
to connect with their target audience, as well as provide personalized customer
assistance to high-value customers. Creating more relevant, compelling and
personalized online experiences, our platform helps e-business organizations
meet the needs of demanding consumers while reinforcing their brand
promise.
Social
Networking
Social
technologies continue to grow substantially in 2009. Forrester Research reports
that now more than four in five US online adults use social media at least once
a month, and half participate in social networks like Facebook, which estimates
to have 300 million active users, of whom half log in on any given day, and
of which more than 65 million users access through mobile
devices.
By the
year 2013, 43% of global mobile internet users (607.5 million people worldwide)
will be accessing social networks from their mobile devices, according to
eMarketer, which characterizes mobile and social as still-emerging channels that
are each helping drive the adoption of the other. In the US, mobile social
networkers will total 56.2 million by 2013, and will account for nearly
half (45%) of the mobile internet user population.
Social
networking has dramatically reshaped the Internet landscape and is now
generating more than $1 billion annually. Industry giants such as Microsoft and
Google continue to court these social networking sites with the intention toward
establishing the mechanism for monetizing advertising content.
Mobile
data services (e.g. text messaging, ringtones, wallpaper) have become a hundred
billion dollar business worldwide. ABI Research estimates that between 2008 and
2014, the total market for mobile messaging will grow at a CAGR of nearly 8
percent, increasing from $132 billion in 2008 to $208 billion by
2014.
According
to a recent CTIA survey, text messaging continues to be enormously popular, with
more than one trillion text messages carried on carriers’ networks in
2008—breaking down to more than 3.5 billion messages per day. That’s almost
triple the number from 2007, when 363 billion text messages were
transmitted. Wireless subscribers are also sending more pictures and other
multi-media messages with their mobile devices, with 15 billion MMS messages
reported for 2008, up from 6 billion the year before.
Government
Regulation
There are
an increasing number of laws and regulations pertaining to the Internet and
e-commerce over the Internet. Other laws or regulations may be adopted with
respect to online content regulation, user privacy, pricing, restrictions on
email solicitations, taxation and quality of products and services. Any new
legislation or regulation, or the application or interpretation of existing
laws, may decrease the growth in the use of the Internet, which could in turn
decrease the demand for our service, increase our cost of doing business or
otherwise have a material adverse effect on our prospects and
revenues.
Competition
Chat
and Online Customer Support
The
markets for online engagement technology and online consumer services are
intensely competitive and characterized by aggressive marketing, evolving
industry standards, rapid technology developments, and frequent new product
introductions.
Our
business solutions compete directly with companies focused on technology that
facilitate real-time sales, email management, searchable knowledgebase
applications and customer service interaction. These markets remain fairly
saturated with small companies that compete on price and features. iTrackr faces
competition from online interaction solution providers, including
software-as-a-service (SaaS) providers such as LivePerson, Art Technology Group,
Instant Service, RightNow Technologies and TouchCommerce. We face potential
competition from Web analytics and online marketing service providers, such as
Omniture. The most significant barriers to entry in this market are knowledge
of:
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Online
consumer purchasing habits;
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Methodologies
to correctly engage customers;
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Metrics
proving return on investment; and
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Technology
innovation opportunities.
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iTrackr
also faces potential competition from larger enterprise software companies such
as Oracle and SAP. In addition, established technology and/or consumer-oriented
companies such as Microsoft, Yahoo and Google may leverage their existing
relationships and capabilities to offer online engagement solutions that
facilitate real-time assistance and live advice.
Finally,
iTrackr competes with in-house online engagement solutions, as well as, to a
lesser extent, traditional offline customer service solutions, such as telephone
call centers.
iTrackr
believes that competition will increase as our current competitors increase the
sophistication of their offerings and as new participants enter the market.
Compared to iTrackr, some of our larger current and potential competitors
have:
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Stronger
brand recognition;
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A
wider range of products and services;
and
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Greater
financial, marketing and research and development
resources.
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Additionally,
some competitors may enter into strategic or commercial relationships with
larger, more established and better-financed companies, enabling them
to:
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Undertake
more extensive marketing campaigns;
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Adopt
more aggressive pricing policies;
and
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Make
more attractive offers to businesses to induce them to use their products
or services.
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Social
Networking and Online Retail Search
While our
business concept is unique, our revenue streams come from intensely competitive
markets. Our users can find, buy, sell and pay for similar items and services
through a variety of competing channels. These include, but are not limited to,
online and offline retailers, distributors, liquidators, import and export
companies, catalog and mail-order companies, classifieds, directories, search
engines, products of search engines, virtually all online and offline commerce
participants (consumer-to-consumer, business-to-consumer and
business-to-business), online and offline shopping channels and networks. As our
product offerings continue to broaden into new categories of items and new
commerce formats, we expect our competition to continue to broaden to include
other online and offline channels for those new offerings.
Whether
it is driving product sales to traditional businesses or providing targeted
marketing opportunities for derivative sales to a retailer’s consumer, iTrackr
is in the business of social merchandizing. Other social networking ventures,
such as MySpace and Facebook have seen tremendous growth over the last four
years in terms of the user community. Facebook has garnered 200 million
users worldwide and My Space reportedly has more than 100 million users.
These numbers are impressive for building social networking destinations, but
the business behind these offerings still relies on revenue primarily derived
from online advertising. Facebook has reported to investors that it could
generate revenues as high as $500 million in 2009, after generating between $280
and $300 million in 2008. iTrackr competes with these, and other larger and more
established social networking sites for users, but we believe we are well
positioned to excel at per subscriber revenue generation given our multi-channel
approach to revenue generation. The major difference between iTrackr and sites
like Facebook or MySpace is that they offer blogs and pictures, and we focus on
consumers and merchandising.
23
Other
competitors include social shopping sites. Hearst Corporation acquired Kaboodle
for an estimated $40 million. Kaboodle is one of the new social shopping sites
started in the last few years. They had managed to grow their site to
2.2 million unique visitors by June 2007, prior to being purchased. Several
social shopping sites focus on a specific community segment. Stylehive is vying
to become a destination for women’s fashion. Crowdstorm is focusing exclusively
on online shopping. All of these sites are looking to establish a niche
community with retail extensions. Very few offerings have direct queries of
existing retailers, and none have in-stock checking or sell through capabilities
with existing retailers. iTrackr does complete point-of-sale transactions, and
provides sell through capabilities to our commercial partners.
A key
differentiator of our offering is our focus on mobile social networking and
merchandizing. Most mobile offerings only tie into existing sites like MySpace.
An example of this is the mobile offering from Earthlink and SK Telecom called
Helio. This is a premium service requiring a specific device and running as much
as $135 per month. While Helio is going after the premium content consumer, the
remainder of the mobile marketplace is unserved. iTrackr will change that with
our mobile community. A wide variety of mobile devices work with our community
utilities, and the service does not come with a premium price tag.
We are a
commerce facilitator. With other eCommerce sites, when you buy a product, you
have to wait for fulfillment which often takes weeks. Our service is designed
for consumers that want products today. Our consumers want to know where they
can find a product, if it is available and what is the best price for the
product. This is our service offering, and this is what both differentiates us
from eCommerce stores and what enables us to serve as a partner to brick and
mortar retailers.
Another
key differentiator of our service from others, is that we proactively notify
consumers when products or services that they are looking for become available
and from where. We are not a retailer, so we do not compete directly with other
retailers. Rather, we support them. iTrackr identifies groups of people who are
looking for a product or service, and we provide opportunities for our
commercial partners to fulfill their need. We identify further opportunities for
retailers to take advantage of derivative sales opportunities when the right mix
of consumer interest, product availability and pending purchase come
together.
Research
and Development Activities
We are a
technology company, and approximately 45% of our costs are related to research
and development. We anticipate that research and development costs will continue
to be a material component of our overall business expenditures for the
foreseeable future.
Patents
and Trademarks
We do not
own, either legally or beneficially, any patents or trademarks.
Some of
our products are also designed to include software or other intellectual
property licensed from third parties. While it may be necessary in
the future to seek or renew licenses relating to various aspects of our products
and business methods, based on past experience and industry practice we believe
that such licenses generally could be obtained on commercially reasonable
terms. However, there is no guarantee that such licenses could be
obtained at all. Because of technological changes in the portable
electronics industry, current extensive patent coverage and the rapid rate of
issuance of new patents, it is possible certain components of our products may
unknowingly infringe existing patents or intellectual property rights of
others.
Employees
At March
31, 2010 we had 2 full-time employees. There are no collective bargaining
contracts covering any of our employees. We believe our relationship
with our employees is satisfactory.
24
Facilities
The
following table summarizes the location of real properties leased by us. We
entered into a lease agreement with Regus in February 2009, where the initial
term was for a three month period through April 2009. According to the terms of
the lease agreement, the lease extends automatically for successive periods
equal to the initial term but no less than 3 months (or such other renewal term
that has been agreed between Regus and us) until brought to an end by us or
Regus.
Our lease
is for a property located at 433 Plaza Road, Ste 275, Boca Raton Florida for a
fee of $800 per month.
We
believe our facilities are currently suitable and adequate for our current
needs.
MANAGEMENT
Upon the
closing of the merger, the following individuals were named to our board of
directors and executive management:
Name
|
Age
|
Position
|
Term
|
|||
John
Rizzo
|
48
|
Chairman
of the Board and Chief Executive Officer
|
January
12, 2010 thru Present
|
|||
Ramesh
Anand
|
46
|
Chief
Operating Officer
|
January
12, 2009 thru Present
|
|||
Dave
Baesler
|
63
|
Director
|
January
12, 2009 thru Present
|
|||
Michael
Uhl
|
47
|
Director
|
January
12, 2009 thru
Present
|
Ramesh Anand has served as
iTrackr’s interim CEO since January, 2010. Mr. Anand currently also serves
as VP of Global Sales and Marketing for Advanced Contact Solutions, since April,
2009. Prior to that, Mr. Anand served as Head of Sales, North America for
HTMT Global Solutions, Ltd for the period of 2006 through 2008, and as Head of
Sales of Hero ITES from 2005 through 2006. He has also served as VP Sales and
Business Development at IBM Daksh Business Process Services, Director of Global
Outsourcing of Ocwen Financial Corporation, and Founded Global E-Connect.
Mr. Anand has a Master of Management Studies from Birla Institute of
Technology and Science.
Michael Uhl was first elected
to the Board of Directors in March, 2007. Mr. Uhl is regional VP of
HelmsBriscoe. He previously served as Executive VP of Sales and Marketing at
Caesar’s Entertainment, wherein he directed convention and travel industry sales
for Bally’s Paris, Flamingo, Caesar’s Palace and the Las Vegas Hilton.
Mr. Uhl has also held Director of Sales positions with Walt Disney World
Swan & Dolphin and New York Hilton & Towers. Mr. Uhl
holds a BBA from Hofstra University.
David Baesler was first
elected to the Board of Directors in November, 2007. Mr. Baesler is VP of
Sales for the Wireless Division of Kyocera Sanyo. In addition to Kyocera Sanyo,
Mr. Baesler has held executive positions at several leading consumer
electronics companies, including Executive VP of Brother International; Group VP
of Toshiba North America’s Consumer Products Division; Senior VP of Pioneer
Corporation’s Video Division; and VP of Sales for Pioneer Electronics.
Mr. Baesler served as an officer in the US Army and holds a degree in
mathematics and economics from North Dakota State University.
John Rizzo is the founder of
iTrackr. Mr. Rizzo has more than a decade experience in the capital markets
as well as maintaining key roles with start-up and early stage businesses. He
has been integral in the completion of several successful transactions,
including sale of a business to MasterCard and in Siebel Systems’ 1996 Initial
Public Offering.
Except as
noted above, the above persons do not hold any other directorships in any
company with a class of securities registered pursuant to Section 12 of the
Exchange Act or subject to the requirements of Section 15(d) of the Exchange
Act.
25
The
Board of Directors and Committees
Board
Composition
iTrackr
did not pay any director compensation during the fiscal year ended
December 31, 2009. The Company may begin to compensate its directors at
some time in the future.
Section
16(a) Beneficial Ownership Reporting Compliance
Section 16(a)
of the Exchange Act requires the Company’s directors and officers, and persons
who beneficially own more than 10% of a registered class of the Company’s equity
securities, to file reports of beneficial ownership and changes in beneficial
ownership of the Company’s securities with the SEC on Forms 3, 4 and 5.
Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms
they file. To the Company’s knowledge, all Section 16(a) filing
requirements applicable to its officers, directors and beneficial owners holding
greater than ten percent of the Company’s Common Stock have been complied with
during the period ended December 31, 2009.
Code
of Business Conduct and Ethics
Our board
of directors has adopted a code of ethics, which applies to all our directors,
officers and employees. Our code of ethics is intended to comply with the
requirements of Item 406 of Regulation S-K. A copy of our code of
ethics will be posted on our corporate website at
www.shenyangkeji.com. We will provide our code of ethics in print
without charge to any stockholder who makes a written request
to: Secretary, iTrackr Systems, Inc., 475 Plaza Real, Suite 275, Boca
Raton, FL 33432. Any waivers of the application and any amendments to our code
of ethics must be made by our board of directors. Any waivers of, and any
amendments to, our code of ethics will be disclosed promptly on our corporate
website.
Executive
Compensation
COMPENSATION
DISCUSSION AND ANALYSIS
The
primary goals of iTrackr’s board of directors with respect to executive
compensation are to attract and retain the most talented and dedicated
executives possible, to tie annual and long-term cash and stock incentives to
achievement of specified performance objectives, and to align executives’
incentives with stockholder value creation.
To
achieve these goals, the Board of Directors recommends executive compensation
packages to that are generally based on a mix of salary, discretionary bonus and
equity awards. Although the Board of Directors has not adopted any formal
guidelines for allocating total compensation between equity compensation and
cash compensation, the Company intends to implement and maintain compensation
plans that tie a substantial portion of its executives’ overall compensation to
achievement of corporate goals and value-creating milestones such as the
development of the Company’s products, the establishment and maintenance of key
strategic relationships, reaching sales and marketing targets and the growth of
its customer base as well as its financial and operational performance, as
measured by metrics such as revenues and profitability.
The Board
of Directors performs reviews based on surveys of executive compensation paid by
peer companies in the customer support and Internet services industry, as well
as reviews other industries of similar age and size, as it sees fit, in
connection with the establishment of cash and equity compensation and related
policies.
Elements
of Compensation
The Board
of Directors evaluates individual executive performance with a goal of setting
compensation at levels the committee believes are comparable with executives in
other companies of similar size and stage of development operating in the
industry and are competitive and further the Company’s objectives of motivating
achievement of its short- and long-term financial performance goals and
strategic objectives, rewarding superior performance and aligning the interests
of its executives and shareholders. The compensation received by the Company’s
executive officers consists of the following elements:
26
|
·
|
Base
salary;
|
|
·
|
Discretionary
annual bonus;
|
|
·
|
Equity-based
long-term incentives, including stock appreciation rights and
performance-based restricted stock;
and
|
|
·
|
Options.
|
Base
Salary
General
Considerations
Base
salaries for the Company’s executives are established based on the scope of
their responsibilities and individual experience, taking into account
competitive market compensation paid by other companies for similar positions
within the fractional aircraft industry. Base salaries are reviewed annually,
and adjusted from time to time to realign salaries with market levels after
taking into account individual responsibilities, performance and
experience.
Annual
Incentive Compensation
Discretionary
Annual Bonus
In
addition to base salaries, the Board of Directors has the authority to award
discretionary annual bonuses to the Company’s executive officers. The annual
incentive bonuses are intended to compensate officers for achieving corporate
goals and for achieving what the committee believes to be value-creating
milestones.
Summary
Compensation Table for Fiscal Years 2009 and 2008
The
following table provides certain information for the fiscal years ended
December 31, 2009 and 2008 concerning compensation earned for services
rendered in all capacities by our named executive officers during the fiscal
years ended December 31, 2009 and 2008.
Name and Principal
Position (a)
|
Year
(b)
|
Salary
($) (c)
|
Bonus
($) (d)
|
Stock Awards
($) (e)
|
Option Awards
($) (f)
|
Non-Equity
Incentive Plan
Compensation
($) (g)
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($) (h)
|
All Other
Compensation
($) (i)
|
Total
($) (j)
|
|||||||||||||||||||||||||
John
Rizzo,
|
||||||||||||||||||||||||||||||||||
Chairman
and
|
2009
|
250,000
|
(2)
|
0
|
0
|
0
|
0
|
0
|
36,000
|
(3)
|
286,000
|
|||||||||||||||||||||||
CEO
|
2008
|
0
|
0
|
250,000
|
61,200
|
0
|
0
|
0
|
311,200
|
|||||||||||||||||||||||||
Stella
Gostfrand,
Former
Sole
|
||||||||||||||||||||||||||||||||||
Officer
and
|
2009
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||
Director
(1)
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1)
|
Stella Gostfrand submitted her
resignation as an officer and director, effective following the expiration
of the ten day period following the mailing of the information statement
required by Rule 14f-1 under the Exchange
Act.
|
(2)
|
Salary was accrued in 2008 and
2009.
|
(3)
|
Accrued reimbursement of unpaid
health insurance and
rent.
|
27
Outstanding
Equity Awards at 2009 Fiscal Year End
In June
2007 the Board of Directors of the Company adopted the 2007 Long-Term Equity
Incentive Plan. The purpose of this Plan is to attract and retain directors,
officers and other employees of iTrackr, Inc. and its Subsidiaries and to
provide to such persons incentives and rewards for performance.
The
Company may issue each of the following under this Plan: Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award. The Plan was ratified at the 2007
shareholder’s meeting (the "Effective Date"). No Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award shall be granted pursuant to the Plan ten years after
the Effective Date. The total number of shares available under the
Plan is Fifteen Million (15,000,000). No Plan participant will be
granted the right, in the aggregate, for more than Two Million
(2,000,000) Common Shares during any calendar year.
Employment
Agreements
The
information provided below, including the share numbers and dollar amounts, is
after giving effect to the Reverse Merger and the change in control which will
become effective following the expiration of the ten day period following the
mailing of the information statement required by Rule 14f-1 under the
Exchange Act.
Ramesh
Anand
Under the
terms of Mr. Anand’s contract, entered into in January, 2010, in lieu of
cash payment for compensation, he received an option to purchase Two Hundred and
Fifty Thousand (250,000) fully vested shares of the Company’s common stock
at an exercise price of $0.25 and a life of five years. Mr. Anand is
entitled to four (4) weeks of paid vacation in each twelve (12) month
period during Executive’s employment hereunder which shall accrue on a monthly
basis during Executives employment hereunder. At the discretion of the Board and
in accordance with Company policy, Mr. Anand is eligible to participate in
benefits under any employee benefit plan or arrangement made available by the
Company now or in the future to its executives and its employees. As Chief
Operating Officer, Mr. Anand’s performance shall be reviewed by the Board
on a periodic basis (not less than once each fiscal year) and the Board may, in
its sole discretion, award such bonuses to Mr. Anand as shall be
appropriate or desirable based on Mr. Anand’s performance.
John
Rizzo
Under the
terms of Mr. Rizzo’s contract, entered into in January, 2007, which held an
initial term of 3 years, and has been extended by the Company’s board of
Directors for an additional year, Mr. Rizzo is to be paid a base annual
salary at the rate of $250,000.00 dollars per year. Mr. Rizzo is entitled
to Twelve (12) weeks vacation during each year of employment. And his
family shall be eligible to participate in the Company’s paid health plan.
However, if Mr. Rizzo so chooses, he can maintain his own family health
plan and the Company will subsidize that plan in the amount of Net $1,000.00 per
month.
Director
Compensation
The
Company did not and does not currently have an established policy to provide
compensation to members of its board of directors for their services in that
capacity. The Company intends to develop such a policy in the near
future.
28
Equity
Compensation Plan Information
Number of securities
to be issued upon
exercise of outstanding
options, warrants and
rights
|
Weighted – average
exercise price of
outstanding options,
warrants and rights
|
Number of securities
remaining available
for future issuances
under equity
compensation plans
(excluding securities
reflected in column (a))
|
||||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity
Compensation Plans Approved by Security Holders
|
-0-
|
n/a
|
-0-
|
|||||||||
Equity
Compensation Plans Not Approved by Security Holders (1)
|
-0-
|
n/a
|
45,250,000
|
(1)
|
Includes shares issuable under
the 2007 Long-Term Incentive Plan (45,000,000), as described below, and
shares issuable under the Company’s employment agreement with Ramesh Anand
(250,000).
|
Securities
Authorized for Issuance Under Equity Compensation Plans
Long-Term
Compensation- 2007 Long-Term Incentive Plan (“the Plan”)
The
purpose of the Plan is to further and promote the interests of iTrackr, its
subsidiaries and its stockholders by enabling iTrackr and its subsidiaries to
attract, retain and motivate employees, non-employee directors and consultants
or those who will become employees, non-employee directors or consultants, and
to align the interests of those individuals and iTrackr’s
stockholders.
Notwithstanding
anything elsewhere in the Plan to the contrary, but subject as well to the other
limitations contained in this Section 3 and subject to adjustment as
provided in Section 13 of the Plan:
|
(i)
|
The aggregate number of Common
Shares actually issued or transferred by the Company upon the exercise of
Nonqualified Stock Options or Incentive Stock Options (after taking into
account forfeitures and cancellations) shall not exceed Fifteen Million
(15,000,000) Common
Shares.
|
|
(ii)
|
The aggregate number of Common
Shares issued as Restricted Stock and Restricted Stock Units (after taking
into account any forfeitures and cancellations) shall not exceed Fifteen
Million (15,000,000) Common
Shares.
|
|
(iii)
|
The aggregate number of Common
Shares issued as Performance Shares and Performance Units and other awards
under Section 10 of this Plan (after taking into account any
forfeitures and cancellations) shall not exceed Fifteen Million
(15,000,000) Common
Shares.
|
Compensation
Committee Interlocks and Insider Participation
The
Company does not have a separate compensation committee. During the fiscal year
ended December 31, 2009, the sole officer and director of the Company,
Stella Gostfrand was individually responsible for deliberations of the board
concerning executive compensation.
29
SELLING
STOCKHOLDERS
The
following table sets forth information with respect to the Selling Stockholders
including the number of shares of common stock and warrants beneficially owned
by each Selling Stockholder. The table identifies the number of shares of common
stock converted from debt, with respect to shares and options issued in
connection with services rendered that may be sold or disposed of under this
prospectus. When the Company refers to the “Selling Stockholders” in this
prospectus, it means those persons listed in the table below, as well as the
pledgees, donees, transferees or other successors-in-interest who later hold any
of the Selling Stockholders’ interests. The information is based on information
that has been provided to the Company by or on behalf of the Selling
Stockholders. The information provided below assumes all of the shares covered
hereby are sold or otherwise disposed of by the Selling Stockholders pursuant to
this prospectus. However, the Company does not know whether the
Selling Stockholders will in fact sell or otherwise dispose of the shares of
common stock listed next to their names below. In addition, the Selling
Stockholders may have sold, transferred or otherwise disposed of, or may sell,
transfer or otherwise dispose of, at any time and from time to time, the shares
of common stock in transactions exempt from the registration requirements of the
Securities Act, after the date on which they provided the information set forth
on the table below. Information concerning the Selling Stockholders may change
from time to time, and any changed information will be set forth if and when
required in prospectus supplements or other appropriate forms permitted to be
used by the SEC.
For the
purposes of the following table, the number of shares of the Company’s common
stock beneficially owned has been determined in accordance with Rule 13d-3 under
the Securities Exchange Act of 1934 as of March 30, 2010, and such information
is not necessarily indicative of beneficial ownership for any other purpose.
Under Rule 13d-3, beneficial ownership includes any shares as to which a Selling
Stockholder has sole or shared voting power or investment power and also any
shares which that Selling Stockholder has the right to acquire within 60 days of
the date of this prospectus through the exercise of any stock option, restricted
stock unit, warrant or other rights.
Name
of Selling Shareholder
|
Number
of Shares
Beneficially
Owned
Prior
to Offering
|
#
of Shares
offered
|
#
of Shares
beneficially
owned
after
Offering
|
%
of common
stock
beneficially
owned
after the
Offering
|
||||||||||||
Jarem
Archer(1)
|
1,000,000 | 325,000 | 675,000 | 3.4 | % | |||||||||||
John
Rizzo(2)
|
7,250,000 | 4,750,000 | 2,500,000 | 11.5 | % | |||||||||||
John
Rizzo Cust FBO Olivia Nicole Rizzo UTMA/FL(2)
|
100,000 | 100,000 | 0 | 0.0 | % | |||||||||||
John
Rizzo Cust FBO Mia Rachel Rizzo UTMA/FL(2)
|
100,000 | 100,000 | 0 | 0.0 | % | |||||||||||
Madeline
Alison Lentini(3)
|
100,000 | 100,000 | 0 | 0.0 | % | |||||||||||
Jinny
Kathleen Porto(4)
|
155,000 | 100,000 | 55,000 | 0.3 | % | |||||||||||
Landmark
Inc. (5)
|
104,279 | 104,279 | 0 | 0.0 | % | |||||||||||
Mark
Moran (6)
|
1,061,760 | 1,061,760 | 0 | 0.0 | % | |||||||||||
Jan
Moran(7)
|
1,061,760 | 1,061,760 | 0 | 0.0 | % | |||||||||||
William
Archer(8)
|
1,061,760 | 1,061,760 | 0 | 0.0 | % | |||||||||||
Offshore
Financial Products LTD(9)
|
200,000 | 200,000 | 0 | 0.0 | % |
30
Name
of Selling Shareholder
|
Number
of Shares
Beneficially
Owned
Prior
to Offering
|
#
of Shares
Offered
|
#
of Shares
Beneficially
Owned
After
Offering
|
%
of Common
Stock
Beneficially
Owned
After
Offering
|
||||||||||||
Redrock
Strategies LTD(10)
|
2,765,685 | 2,765,685 | 0 | 0.0 | % | |||||||||||
Beatrice
Ann Rizzo(11)
|
585,169 | 585,169 | 0 | 0.0 | % | |||||||||||
Aleandro
Sintas(12)
|
100,000 | 10,000 | 90,000 | 0.5 | % | |||||||||||
Justin
Van Winkle(13)
|
100,000 | 10,000 | 90,000 | 0.5 | % | |||||||||||
Christopher
M Smith TTEE FBO Christopher M Smith Revoc Liv Tr DTD
3/27/1998(14)
|
200,000 | 20,000 | 180,000 | 0.9 | % | |||||||||||
Mark
MacDougall(15)
|
100,000 | 10,000 | 90,000 | 0.5 | % | |||||||||||
Azcap
Fund, Inc. by Helen Azzara (16)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Bernard
J. Bannon(17)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Jeffrey
Beirl(18)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Ira
Blatt(19)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Todd
Bushnell(20)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Paul
J. Cammarata(21)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Michael
J. Chaney(22)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Edward
Deicke(23)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
James
Flynn(24)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Peter
Garabedian(25)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Michael
Giamalvo (26)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Salvatore
Giamalvo (27)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Leonard
Giarraputo(28)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
David
Gostfrand(29)
|
1,250 | 313 | 937 | 0.0 | % | |||||||||||
Maury
Gostfrand(30)
|
1,250 | 313 | 937 | 0.0 | % | |||||||||||
Rose
Gostfrand(31)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Richard
Greene(32)
|
1,250 | 313 | 937. | 0.0 | % | |||||||||||
Gayle
M. Hill(33)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Richard
Hull(34)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Robert
M. Jacobs(35)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Keith
E. Jacob Associates Inc. Pension Plan U/A Dtd 12/19/72(36)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Loren
Killion(37)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
John
Kuhle (38)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Craig
Kulman(39)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Steven
Kunevich (40)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Marcello
Lattucia (41)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Laurence
E. White Trust U/A Dtd 1-20-07(42)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Paul
J. Lohbeck(43)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Tracy
McLuckie(44)
|
2,500 | 625 | 1,875 | 0.0 | % |
31
Name
of Selling Shareholder
|
Number
of Shares
Beneficially
Owned
Prior
to Offering
|
#
of Shares
Offered
|
#
of Shares
Beneficially
Owned
After
Offering
|
%
of Common
Stock
Beneficially
Owned
After the
Offering
|
||||||||||||
Terry
Moore(45)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Simon
M. Mundlak(46)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Kevin
Murray(47)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Frank
Nargentino(48)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Stanley
W. Pierce (49)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Julie
B. Pronesti(50)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Thomas
M. Pronesti(51)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Robert
Samenka(52)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
David
Sasso(53)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Matthew
Semicola(54)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Alan
Sims(54)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Daniel
Steinlauf(56)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Harvey
Sussman(57)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Thomas
M. Ponesti Irrevocable Trust Agreement FBO Blaise D. Pronesti Julie
Ponesti Trustee(58)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Amir
Uziel(59)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Edward
Wells (60)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Richard
M. Wexler(61)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
William
J. Whitener(62)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Zachariah
P. Zachariah(63)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Dennis
Zapp(64)
|
2,500 | 625 | 1,875 | 0.0 | % | |||||||||||
Stella
Gostfrand(65)
|
1,022,388 | 408,955 | 613,433 | 3.1 | % | |||||||||||
Rocky
Stein (66)
|
125,000 | 31,250 | 93,750 | 0.5 | % | |||||||||||
Charles
Perlman (67)
|
18,750 | 4,688 | 14,063 | 0.1 | % | |||||||||||
Jamie
Mayersohn (68)
|
18,750 | 4,688 | 14,063 | 0.1 | % | |||||||||||
Mark
Falcone (69)
|
240,000 | 240,000 | 0 | 0.0 | % | |||||||||||
Alan
L. Frank (70)
|
108,000 | 108,000 | 0 | 0.0 | % | |||||||||||
Alexander
J. Palamarchuk (71)
|
12,000 | 12,000 | 0 | 0.0 | % | |||||||||||
Maplehurst
Investment Group(72)
|
35,714 | 35,714 | 0 | 0.0 | % | |||||||||||
American
Capital Ventures Inc. (73)
|
55,714 | 55,714 | 0 | 0.0 | % | |||||||||||
Jason
Lyons(74)
|
28,571 | 28,571 | 0 | 0.0 | % | |||||||||||
Mitchell
S. Knapp(75)
|
1,000,000 | (100) | 1,000,000 | 0 | 0.0 | % | ||||||||||
0.0 | % | |||||||||||||||
Michael
Nielsen(76)
|
82,165 | 16,433 | 65,732 | 0.3 | % | |||||||||||
Shirley
Harnick(77)
|
116,693 | 23,339 | 93,354 | 0.5 | % | |||||||||||
Patricia
Scarpella(78)
|
175,019 | 35,004 | 140,015 | 0.7 | % | |||||||||||
Dr.
Michael Gelbar(79)
|
233,332 | 46,666 | 186,666 | 0.9 | % | |||||||||||
Sam
Maywood(80)
|
11,562 | 2,312 | 9,250 | 0.0 | % |
32
Name
of Selling Shareholder
|
Number
of Shares
Beneficially
Owned
Prior
to Offering
|
#
of Shares
Offered
|
#
of Shares
Beneficially
Owned
After
Offering
|
%
of Common
Stock
Beneficially
Owned
After
Offering
|
||||||||||||
Dawn
Maywood(81)
|
11,562 | 2,312 | 9,250 | 0.0 | % | |||||||||||
Charle
A. Bonafede(82)
|
11,366 | 2,273 | 9,093 | 0.0 | % | |||||||||||
Dominic
& Judy Aprile(83)
|
57,758 | 11,552 | 46,206 | 0.2 | % | |||||||||||
Winston
Family Trust(84)
|
69,261 | 13,852 | 55,409 | 0.3 | % | |||||||||||
Robert
Klinek & Susan Pack(85)
|
114,277 | 22,855 | 91,422 | 0.5 | % | |||||||||||
Borg
Trust(86)
|
111,688 | 22,338 | 89,350 | 0.5 | % | |||||||||||
Robert
Gleckman(87)
|
221,649 | 44,330 | 177,319 | 0.9 | % | |||||||||||
Ted
Cooper(88)
|
1,118,603 | 223,721 | 894,882 | 4.5 | % | |||||||||||
Maureen
Marant(89)
|
50,000 | 25,000 | 45,000 | 0.2 | % | |||||||||||
Todd
Pitcher(90)
|
50,000 | 25,000 | 45,000 | 0.2 | % | |||||||||||
Justin
Frere(91)
|
50,000 | 25,000 | 45,000 | 0.2 | % | |||||||||||
Steve
Danzo(92)
|
14,025 | 1,403 | 12,623 | 0.1 | % | |||||||||||
Mark
Whitney (93)
|
375,000 | (101) | 37,500 | 337,500 | 1.7 | % | ||||||||||
Michael
Uhl (94)
|
375,000 | (102) | 75,000 | 187,500 | 0.9 | % | ||||||||||
Vicksburg
(95)
|
2,000,000 | (103) | 2,000,000 | - | 0.0 | % | ||||||||||
Dave
Baesler (96)
|
450,000 | (104) | 45,000 | 225,000 | 1.1 | % | ||||||||||
Ramesh
Anand (97)
|
250,000 | (105) | 50,000 | - | 0.0 | % | ||||||||||
Delivery
Technologies Solutions, Inc. (98)
|
1,386,322 | 1,386,322 | - | 0.0 | % | |||||||||||
Astia
LLD (99)
|
1,000,000 | (106) | 1,000,000 | - | 0.0 | % | ||||||||||
Chris
Maggiore
|
166,666 | 166,666 | 0.0 | % | ||||||||||||
TOTAL
|
27,164,332 | 19,628,557 | 7,269,941 |
|
(1)
|
The
business address of Mr. Archer is 6298 NW 14th
Court Sunrise FL 3313.
|
|
(2)
|
The
business address of Mr. Rizzo is 20423 State Rd 7, Boca Raton, FL 33498.
Through his control of John Rizzo Custodian for Olivia Nicole Rizzo Unif
Tran Min Act FL and John Rizzo Custodian for Mia Rachel Rizzo Unif Tran
Min Act FL, Mr. Rizzo has voting and investment control over the portfolio
securities.
|
|
(3)
|
The
business address of Ms. Lentini is 17 Grandview St. Huntington, NY
11743.
|
|
(4)
|
The
business address of Ms. Porto is 14 Village Drive, Huntington, NY
11743.
|
|
(5)
|
The
business address of Landmark Inc. is 17904 Key Vista, Boca Raton, FL
33496.
|
|
(6)
|
The
business address of Mark Moran is 810 NW 127th
Ave. Coral Springs, FL 33071.
|
|
(7)
|
The
business address of Jan Moran is 810 NW 127th
Ave. Coral Springs, FL 33071.
|
|
(8)
|
The
business address of William Archer is 810 NW 127th
Ave. Coral Springs FL 33071.
|
|
(9)
|
The
business address of Offshore Financial Products LTD. 810 NW 127th
Ave. Coral Springs, FL 33071.
|
|
(10)
|
The
business address of Redrock Strategies LTD is No. 6, Floor 3, Quomar
Trading Building, Road Town, Tortola, British Virgin
Islands.
|
|
(11)
|
The
business address of Beatrice Anne Rizzo is 50 East Road Apt. 9F Delray
Beach, FL 33483.
|
|
(12)
|
The
business address of Alejandro Sintas is 1225 SW 94 Ave. Miami, FL
33174.
|
|
(13)
|
The
business address of Justin Van Winkle is 95 Grover Place, Cameron, NC
28326.
|
|
(14)
|
The
business address of Christopher M Smith TTEE Christopher M Smith Revocable
Living Trust DTD Mar 27 1998 is 410 N. Ocean Blvd. Delray Beach, FL
33483.
|
33
|
(15)
|
The
business address of Mark MacDougall is 17185 Herring Rd. Colorado Springs,
CO 80908.
|
|
(16)
|
The
business address of Azcap Fund, Inc. is 223 Wall Street, Suite 290 New
York, NY 11743.
|
|
(17)
|
The
business address of Bernard J. Brannon is 132 Bley Parkway
Port Washington, WI
53074.
|
|
(18)
|
The
business address of Jeffrey Beirl is 1410 12th
Avenue West, Ashland WI, 54806.
|
|
(19)
|
The
business address of Ira Blatt is 494 H. Street, Arcata CA
95521.
|
|
(20)
|
The
business address of Todd Bushnell is 1724 Ridgeview Road, Lancaster, PA
17603.
|
|
(21)
|
The
business address of Paul J. Cammarata is 6 Fairway Road, N. Reading MA
01864.
|
|
(22)
|
The
business address of Michael J. Chaney is 538 Englewood Drive, Vicksburg,
MS 39180.
|
|
(23)
|
The
business address of Edward Deicke is 40 Shortridge Drive, Mineola, NY
11501.
|
|
(24)
|
The
business address of James Flynn is 301 S. Spring Street, Beaver Dam, WI,
53916.
|
|
(25)
|
The
business address of Peter Garabedian is 208 Austin Street, Worcester, MA
01609.
|
|
(26)
|
The
business address of Michael Giamvalvo is 119 Northgate Circle, Melville NY
11747.
|
|
(27)
|
The
business address of Salvatore Giamvalvo is 1868 Zena Court, Merrick,
NY.
|
|
(28)
|
The
business address of Leonard Giarraputo is 3 The Preserve Woodbury NY,
11797.
|
|
(29)
|
The
business address of David Gostfrand is 255 Evernia Street #611 West Palm
Beach, FL 33401.
|
|
(30)
|
The
business address of Maury Gostfrand is 245 E. 63rd
Street Apt. 505 New York, NY 20021.
|
|
(31)
|
The
business address of Rose Gostfrand is 2030 So. Ocean Drive #1609
Hallandale FL 33004.
|
|
(32)
|
The
business address of Richard Greene is 1 Brentwood Road, Tewkesbury, MA
01876.
|
|
(33)
|
The
business address of Gayle M. Hill is 150 Mt. Shasta Lane, Alpharetta, GA
30022.
|
|
(34)
|
The
business address of Richard Hull is 4775 Collins Avenue #1107, Miami
Beach, FL 33140.
|
|
(35)
|
The
business address of Robert M. Jacobs is 25 Shore Drive, Great Neck, NY
11024.
|
|
(36)
|
The
business address of Keith E. Jacob Associates, Inc. Pension Plan U/A Dtd
12/19/72.
|
|
(37)
|
The
business address of Loren Killion is 1019 E. 48th
Street, Kearney, Nebraska 68847.
|
|
(38)
|
The
business address of John Kuhle is 1210 S. Percival, Hazelgreen WI
53811.
|
|
(39)
|
The
business address of Craig Kulman is 9332 Carlyle Avenue, Surfside FL
33154.
|
|
(40)
|
The
business address of Steven Kunevich is 46 Pine Avenue, Randolph, MA
02368.
|
|
(41)
|
The
business address of Marcello Lattucia is 3 Corwin Court, Dix Hills, NY
11746.
|
|
(42)
|
The
business address of Laurence E. White Trust U/A Dtd 1-20-97 is 5560 Camino
Real Lane, Vero Beach, FL 32967.
|
|
(43)
|
The
business address of Paul J. Lohbeck is 838 Greentree Road, Lawrenceburg,
IN. 47025.
|
|
(44)
|
The
business address of Tracy McLuckie is 10 Ashford Lane, Huntington, FL
33019.
|
|
(45)
|
The
business address of Terry Moore is 240 McWarter Drive, Roselle, IL
60172.
|
|
(46)
|
The
business address of Simon M. Mundiak is 928 Captiva Drive, Hollywood, FL
33019.
|
|
(47)
|
The
business address of Kevin Murray is 14 Laurel Blvd., Collingwood Ontario,
L9Y 5A8, Canada.
|
|
(48)
|
The
business address of Frank Nargentino is 25 Clearwater Drive, Plainview NY
11803.
|
|
(49)
|
The
business address of Stanley W. Pierce is 3008 Willow Lane Drive,
Montgomery, AL 36109.
|
|
(50)
|
The
business address of July B. Pronesti is 1462 Commmodore Way, Hollywood, FL
33019.
|
|
(51)
|
The
business address of Thomas M. Pronesti is 1462 Commodore Way, Hollywood,
FL 33019.
|
|
(52)
|
The
business address of Robert Samenka is 11103 Dyer Road, Union City, PA
16438.
|
|
(53)
|
The
business address of David Sasso is 1040 Seminole Drive #962, Fort
Lauderdale, FL 33304.
|
|
(54)
|
The
business address of Matthew Senicola is 2270 Wynne Lane, Bellmore, NY
11710.
|
|
(55)
|
The
business address of Alan Sims is 2343 Palladio Avenue, Owensboro, KY
42301.
|
|
(56)
|
The
business address of Daniel Steinlauf is 1062 SW 156th
Avenue, Pembroke Pines, FL 33027.
|
|
(57)
|
The
business address of Harvey Sussman is 5643 Wellington Drive, Palm Harbor,
FL 34685.
|
|
(58)
|
The
business address of Thomas M. Pronesti Irrevocable Trust Agreement FBO
Blaise D. Pronesti is 1462 Commodore Way, Hollywood Florida
33019.
|
|
(59)
|
The
business address of Amir Uziel is 9 Hakormim Street, Rishon Lezion,
Israel, 75499.
|
|
(60)
|
The
business address of Edward Wells is 509 Nassau Avenue, Freeport, NY
11520.
|
|
(61)
|
The
business address of Richard M Wexler is 225 E. Street #2G New York, NY
11016.
|
|
(62)
|
The
business address of William J. Whitener is 852 Presidio Drive, Costa Mesa,
CA 92626.
|
|
(63)
|
The
business address of Zachariah P. Zachariah is 4725 N. Federal Highway,
Fort Lauderdale, FL 33308.
|
|
(64)
|
The
business address of Dennis Zapp is 57 Laurel Court, Shamone, NJ,
08088.
|
|
(65)
|
The
business address of Stella Gostfrand is 1507 Presidential Way, North Miami
Beach, FL 33179.
|
|
(66)
|
The
business address of Rocky Stein is 6520 Allison Road Miami, Beach, FL
33141.
|
|
(67)
|
The
business address of Charles Pearlman is 200 South Park Road, Suite 150,
Hollywood, FL 33021.
|
|
(68)
|
The
business address of Jamie Mayersohn is 1314 Camellia Lane, Weston, FL
33326.
|
34
|
(69)
|
The
business address of Marc Falcone is 2537 St. Victoria Drive,
Gilbertsville, PA 19524.
|
|
(70)
|
The
business address of Alan L. Frank is 526 Long Lane, Huntingdon Valley, PA
19006.
|
|
(71)
|
The
business address of Alexander J. Parlamachuck is 103-107 Church Street,
Philadelphia PA 19106.
|
|
(72)
|
The
business address of Maplehurst Investment Group LLC is 1015 Shore Lane,
Miami Beach, FL 33141.
|
|
(73)
|
The
business address of American Capital Ventures, Inc. is 2875 NE 191st
St., Suite 904, Aventura, FL 33180.
|
|
(74)
|
The
business address of Jason Lyons is 7239 San Salvadore Drive, Boca Raton,
FL 33433.
|
|
(75)
|
The
business address of Mitchell S. Knapp is 947 Huron Road, Franklin Lakes,
New Jersey 07417.
|
|
(76)
|
The
business address of Michael Nielsen is 511 Sonata Ct. Winter Springs, FL
32078.
|
|
(77)
|
The
business address of Shirley Harnick is 400 East 70th
St. #2604 New York, NY 00021.
|
|
(78)
|
The
business address of Patricia Scarpella is 36 Berry Hill Rd. Oyster Bay
Cove, NY 11771.
|
|
(79)
|
The
business address of Dr. Michael Gelbar is 71 North Lake Dr., Stanford, CT,
06903.
|
|
(80)
|
The
business address of Sam Maywood is 6105 Avenida Cresta, La Jolla CA
92037.
|
|
(81)
|
The
business address of Dawn Maywood is 6105 Avenida Cresta, La
Jolla CA 92037.
|
|
(82)
|
The
business address of Charlie A Bonafede is 26A Huntington NY
11743.
|
|
(83)
|
The
business address of Dominic and Judy Aprile is 36 Milan Road, Woodbridge,
CT 06525.
|
|
(84)
|
The
business address of Winston Family Trust is 6105 Avenida Cresta, La Jolla,
CA 90237.
|
|
(85)
|
The
business address of Robert Klinek & Susan Pack is P.O. Box 157 15515
Las Planderas, Rancho Santa Fe, CA
92127.
|
|
(86)
|
The
business address of Borg Trust is 7960 Endrada Lazjma San Diego,
92127.
|
|
(87)
|
The
business address of Robert Gleckman is 18440 St. Maritz Tarzana, CA
91356.
|
|
(88)
|
The
business address of Ted Cooper is P.O. Box
320956.
|
|
(89)
|
The
business address of Maureen Maurant is 2001 SE 19th
St., Lauderdale by the Sea, FL
33062.
|
|
(90)
|
The
business address of Todd Pitcher is 735 Leeward Ave. San Marcos, CA
92078.
|
|
(91)
|
The
business address of Justin Frere is 1525 10th
St. Los Osos, CA 93402.
|
|
(92)
|
The
business address of Steve Danzo is 9912 North Lydia Ave. Kansas City, MO.
64155.
|
|
(93)
|
The
business address of Mark Whitney is 55 Quail Run Rd., Henderson, NV
89014.
|
|
(94)
|
The
business address of Michael Uhl is 301 Great Cable Drive, Las Vegas, NV
89123.
|
|
(95)
|
Unless
otherwise stated, the mailing address for Vicksburg is the Company’s
corporate address at 475 Plaza Real, Suite 275 Boca Raton,
Fl.
|
|
(96)
|
The
business address of Dave Baesler is 500 Morris Avenue Suite 301,
Springfield, NJ, 07801.
|
|
(97)
|
The
business address of Ramesh Anand is 16301 Via Venetia East, Delray Beach,
FL 33484
|
|
(98)
|
The
business address of Delivery Technologies Solutions, Inc. is 433 Plaza
Real Ste 277 Boca Raton FL 33442.
|
|
(99)
|
The
business address of Astia LLD is STR. Raiko Daskalov 53,
Plovdiv.
|
|
(100)
|
Includes
1,000,000 shares issuable upon exercise of warrants at an exercise price
of $0.40 per share.
|
|
(101)
|
Includes
375,000 shares issuable upon exercise of options, 187,500 at an exercise
price of $0.05 per share, and 187,500 at an exercise price of $0.10per
share which were issued in connection with services rendered to the
Company..
|
|
(102)
|
Includes
375,000 shares issuable upon exercise of options, 187,500 at an exercise
price of $0.05 per share, and 187,500 at an exercise price of $0.10 per
share which were issued in connection with services rendered to the
Company.
|
|
(103)
|
Includes
2,000,000 shares issuable upon exercise of options at an exercise price of
$0.10 per share.
|
|
(104)
|
Includes
450,000 shares issuable upon exercise of options at an exercise price of
$0.10 per share.
|
|
(105)
|
Includes
250,000 shares issuable upon exercise of options at an exercise price of
$0.25 per share.
|
|
(106)
|
Includes
1,000,000 shares issuable upon exercise of warrants at an exercise price
of $0.10 per share.
|
35
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information, as of March 30, 2010, with
respect to the beneficial ownership of the outstanding common stock by
(i) any holder of more than five percent, (ii) each of the Company’s
executive officers and directors, and (iii) the Company’s directors and
executive officers as a group.
Name and address of the beneficial owner(1)
|
Number of Shares Beneficially Owned(2)
|
Percent of
common stock
|
||||||
Ramesh
Anand (3)
16301
Via Venetia East
Delray
Beach, FL 33484
|
250,000
|
1.34
|
%
|
|||||
Red
Rock Strategies, Ltd.
No.
6, Floor 3
Quomar
Trading Building
Road
Town, BVI
|
2,765,685
|
15.07
|
%
|
|||||
New
Link Ltd Corp.
810
NW 127th
Ave
Coral
Springs FL 33071
|
3,185,280
|
17.35
|
%
|
|||||
John
Rizzo (4)
17597
Circle Pond Ct.
Boca
Raton FL 33496
|
7,250,000
|
39.50
|
%
|
|||||
Michael
Uhl (5)
301
Great Gable Drive
Las
Vegas, NV 89123
|
375,000
|
2.00
|
%
|
|||||
David
Baesler (6)
500
Morris Avenue Suite 301
Springfield,
NJ 07081
|
450,000
|
2.39
|
%
|
|||||
Directors
and officers as a group
|
8,325,000
|
43.40
|
%
|
1)
|
Beneficial Ownership is
determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with respect
to securities. Each of the beneficial owners listed above has direct
ownership of and sole voting power and investment power with respect to
the shares of Company common stock and except as indicated the address of
each beneficial owner is 433 Plaza Real, Suite 275, Boca Raton FL
33432.
|
(2)
|
Shares of common stock
beneficially owned and the respective percentages of beneficial ownership
of common stock assumes the exercise of all options, warrants and other
securities convertible into common stock beneficially owned by such person
or entity currently exercisable or exercisable within 60 days of February
15, 2010. Shares issuable pursuant to the exercise of stock options and
warrants exercisable within 60 days are deemed outstanding and held by the
holder of such options or warrants for computing the percentage of
outstanding common stock beneficially owned by such person, but are not
deemed outstanding for computing the percentage of outstanding common
stock beneficially owned by any other
person.
|
(3)
|
Including 250,000 shares of
common stock underlying the
Warrants.
|
(4)
|
Including 2,000,000 shares of
common stock underlying the
Warrants.
|
(5)
|
Including 375,000 shares of
common stock underlying the
Warrants.
|
(6)
|
Including 450,000 shares of
common stock underlying the
Warrants.
|
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires iTrackr’s executive
officers and directors, and persons who beneficially own more than ten percent
of its common stock to file initial reports of ownership and reports of changes
in ownership with the SEC. Executive officers, directors and beneficial owners
of more than ten percent of the Company’s common stock are required by the SEC
to furnish the Company with copies of all Section 16(a) forms they
file.
36
Based
upon a review of the forms furnished to iTrackr and written representations from
its executive officers and directors, the Company believes that during fiscal
2009 all Section 16(a) filing requirements applicable to its executive officers,
directors and beneficial owners of more than ten percent of its common stock
were complied with.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Related
Party Transactions Policy
The
Company has adopted a Code of Conduct and Professional Ethics, applicable to its
directors, officers and employees, including its Chief Executive Officer, Chief
Financial Officer and all of its other executives pursuant to which all
directors, officers and employees must promptly disclose to us, any material
transaction or relationship that reasonably could be expected to give rise to an
actual or apparent conflict of interest with iTrackr, Inc. In approving or
rejecting the proposed agreement, the Board of Directors shall consider the
relevant facts and circumstances available and deemed relevant to the audit
committee, including, but not limited to the risks, costs and benefits to the
Company, the terms of the transaction, the availability of other sources for
comparable services or products, and, if applicable, the impact on a director’s
independence. The audit committee shall approve only those agreements that, in
light of known circumstances, are in, or are not inconsistent with, the
Company’s best interests, as the Board of Directors determines in the good faith
exercise of its discretion.
Merger
On
January 12, 2010, we completed a merger with a subsidiary of Must
Haves. On the Closing Date, iTrackr was merged with and into iTrackr
Acquisition, Inc., which is the surviving corporation and became a wholly-owned
subsidiary of Must Haves.
At the
closing of the Merger, subject to and pursuant to the terms and conditions of
the Agreement, each outstanding share of iTrackr common stock was converted into
one share of common stock of the Must Haves. Upon consummation of the Merger,
the shareholders of the iTrackr received an aggregate of 17,875,695 shares of
Must Haves common stock and thus owned 93.5% of the Must Have’s common stock.
Must Haves also assumed 6,555,000 options and warrants of iTrackr, which are
exercisable at prices from $0.01 to $0.40.
In
addition, pursuant to the Plan of Merger Agreement, Stella Gostfrand submitted
her resignation as an officer and director of the Company, and Michael Uhl, Dave
Baesler and John Rizzo were appointed to serve as members of the board of
directors of the Company. Upon the consummation of the Reverse Merger, Ramesh
Anand was appointed to serve as Chief Operating Officer.
Other
During
the year ended December 31, 2009, the Company received $150,750 from
Bluewater Advisors, a company owned by John Rizzo, CEO, in exchange for
convertible promissory notes. During 2008, the Company repaid $40,750 of these
notes. During most of 2008 and 2009 the Company made no salary payments or
medical insurance reimbursements to Mr. Rizzo resulting in a liability of
$389,500 to Mr. Rizzo as of December 31, 2009.
Director
and Officer Indemnification
The Company has entered into agreements
to indemnify its directors and executive officers to the fullest extent
permitted under Florida law. In addition, the Company’s certificate of
incorporation to be in effect upon the completion of this offering contains
provisions limiting the liability of its directors and its bylaws contain
provisions requiring the Company to indemnify its officers and directors. See
“Description of Capital Stock—Limitation of
Liability.”
37
DESCRIPTION
OF CAPITAL STOCK
The
Company is authorized to issue up to 110,000,000 shares of common stock, no par
value. As of March 31, 2010, there are 19,827,331 shares of
common stock issued and outstanding that are held by approximately 93
stockholders of record.
Common
Stock
The
holders of common stock are entitled to one vote per share on each matter
submitted to a vote of stockholders. In the event of liquidation, holders of
common stock are entitled to share ratably in the distribution of the remaining
assets, if any, after payment of liabilities. Holders of common stock have no
cumulative voting rights and holders of a majority of the outstanding shares
have the ability to elect all of the directors. Holders of common stock have no
preemptive rights or other rights to subscribe for shares and are entitled to
such dividends as may be declared by the board of directors out of funds legally
available for dividends.
Preferred
Stock
The
Company is authorized to issue up to 10,000,000 shares of preferred stock, no
par value. As of the date of this report, there are no preferred shares issued
and outstanding. Our board of directors has the authority, without action by our
stockholders, to issue all or any portion of the authorized but unissued
preferred stock in one or more classes, and to determine the voting rights,
designations, preferences, limitations, restrictions and relative rights of any
class or series.
Stock
Transfer Agent
The
Transfer Agent and Registrar for the shares of the Company’s common stock is
Manhattan Transfer Registrar, 57 Eastwood Road, Miller Place NY
11764.
SHARES
ELIGIBLE FOR FUTURE SALE
The sale
of a substantial amount of iTrackr’s common stock in the public market after
this offering could adversely affect the prevailing market price of its common
stock. As of March 30, 2010, the Company had 19,827,331 shares of the
common stock outstanding, 15,000,000 shares of common stock available for future
issuance under its 2007 Long-Term Stock Incentive Plan and warrants/options to
purchase 7,505,000 shares outstanding. The 19,461,891 shares of common stock,
and shares of common stock underlying the warrants and options registered
pursuant to this Registration Statement will be freely tradable once this
Registration Statement is declared effective by the Securities and Exchange
Commission without restriction or further registration under the Securities Act,
unless the shares are purchased by “affiliates” as that term is defined in Rule
144 under the Securities Act. Any shares purchased by an affiliate may not be
resold except pursuant to an effective registration statement or an applicable
exemption from registration, including an exemption under Rule 144 of the
Securities Act. These restricted securities may be sold in the public market
only if they are registered or if they qualify for an exemption from
registration under Rule 144 or Rule 701 under the Securities Act. These rules
are summarized below.
Rule
144
In
general, under Rule 144 as currently in effect, a person who has beneficially
owned shares of the Company’s common stock for at least six months from the
later of the date those shares of common stock were acquired from the Company or
from an affiliate of ours would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of:
|
●
|
One
percent of the number of shares of common stock then outstanding;
or
|
|
●
|
The
average weekly trading volume of the common stock on Nasdaq during the
four calendar weeks preceding the filing of a notice on Form 144 with
respect to the sale of any shares of common
stock.
|
|
●
|
Sales
of shares of common stock under Rule 144 may also be subject to manner of
sale provisions and notice requirements and will be subject to the
availability of current public information about
us.
|
38
Under
Rule 701 of the Securities Act, each of the Company’s employees, consultants or
advisors who purchased shares from us in connection with a compensatory stock
plan or other written agreement is eligible to resell those shares in reliance
on Rule 144, but without compliance with some of the restrictions, including the
holding period, contained in Rule 144.
No
precise prediction can be made as to the effect, if any, that market sales of
shares or the availability of shares for sale will have on the market price of
the Company’s common stock prevailing from time to time. The Company is unable
to estimate the number of its shares that may be sold in the public market
pursuant to Rule 144 or Rule 701 because this will depend on the market price of
its common stock, the personal circumstances of the sellers and other factors.
Nevertheless, sales of significant amounts of the Company’s common stock in the
public market could adversely affect the market price of its common
stock.
PLAN
OF DISTRIBUTION
The
Selling Stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a Selling Stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These dispositions may be at fixed prices,
at prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.
The
Selling Stockholders may use any one or more of the following methods when
disposing of shares or interests therein:
|
-
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
-
|
block
trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
-
|
purchases
by a broker-dealer as principal and sale by the broker-dealer for its
account;
|
|
-
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
-
|
privately
negotiated transactions;
|
|
-
|
short
sales effected after the date the registration statement of which this
Prospectus is a part is declared effective by the
SEC;
|
|
-
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
|
-
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number of such
shares at a stipulated price per share;
and
|
|
-
|
a
combination of any such methods of
sale.
|
The
Selling Stockholders may, from time to time, pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock, from time to time, under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of Selling
Stockholders to include the pledgee, transferee or other successors in interest
as Selling Stockholders under this prospectus. The Selling
Stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this
prospectus.
39
In
connection with the sale of our common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The
Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
aggregate proceeds to the Selling Stockholders from the sale of the common stock
offered by them will be the purchase price of the common stock less discounts or
commissions, if any. Each of the Selling Stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this
offering.
The
Selling Stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.
The
Selling Stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be
"underwriters" within the meaning of Section 2(11) of the Securities
Act. Any discounts, commissions, concessions or profit they earn on
any sale of the shares may be underwriting discounts and commissions under the
Securities Act. Selling Stockholders who are "underwriters" within
the meaning of Section 2(11) of the Securities Act will be subject to the
prospectus delivery requirements of the Securities Act.
To the
extent required, the shares of our common stock to be sold, the names of the
Selling Stockholders, the respective purchase prices and public offering prices,
the names of any agents, dealer or underwriter, any applicable commissions or
discounts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this
prospectus.
In order
to comply with the securities laws of some states, if applicable, the common
stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers. In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.
We have
advised the Selling Stockholders that the anti-manipulation rules of Regulation
M under the Exchange Act may apply to sales of shares in the market and to the
activities of the Selling Stockholders and their affiliates. In
addition, to the extent applicable we will make copies of this prospectus (as it
may be supplemented or amended from time to time) available to the Selling
Stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The Selling Stockholders may indemnify any
broker-dealer that participates in transactions involving the sale of the shares
against certain liabilities, including liabilities arising under the Securities
Act.
We have
agreed to indemnify the Selling Stockholders against liabilities, including
liabilities under the Securities Act and state securities laws, relating to the
registration of the shares offered by this prospectus.
We have
agreed with the Selling Stockholders to keep the registration statement of which
this prospectus constitutes a part effective until the earlier of (1) such time
as all of the shares covered by this prospectus have been disposed of pursuant
to and in accordance with the registration statement or (2) the date on which
the shares may be sold without restriction pursuant to Rule 144 of the
Securities Act.
40
LEGAL
MATTERS
The
validity of the common stock offered in this prospectus will be passed upon for
the Company by Roetzel & Andress, LPA, 350 East Las Olas Boulevard, Suite
1150, Fort Lauderdale, FL 33301, telephone: 954-759-2741. Roetzel
& Andress does not own any shares of common stock of the
Company.
EXPERTS
The
consolidated financial statements of iTrackr and its subsidiaries as of the
twelve months ended December 31, 2009 and December 31, 2008 and the related
consolidated statements of operations, changes in stockholders’ deficit and cash
flows for each of the years then ended included herein, have been audited by
Traci J. Anderson, CPA, an independent registered public accounting firm, as
stated in their report dated March 12, 2010, which is included herein, and such
consolidated financial statements have been so included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
WHERE
YOU CAN FIND MORE INFORMATION
iTrackr
Systems, Inc. is a public company and files annual, quarterly and special
reports, proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any document the Company files at the SEC’s
Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
You can request copies of these documents by writing to the SEC and paying a fee
for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information
about the operation of the public reference room. Our SEC filings are also
available to the public at the SEC’s web site at
“http://www.sec.gov.”
This
prospectus is only part of a Registration Statement on Form S-1 that the Company
has filed with the SEC under the Securities Act of 1933 and therefore omits
certain information contained in the Registration Statement. The Company has
also filed exhibits and schedules with the Registration Statement that are
excluded from this prospectus, and you should refer to the applicable exhibit or
schedule for a complete description of any statement referring to any contract
or other document. You may:
|
●
|
Inspect
a copy of the Registration Statement, including the exhibits and
schedules, without charge at the public reference
room,
|
|
●
|
Obtain
a copy from the SEC upon payment of the fees prescribed by the SEC,
or
|
|
●
|
Obtain
a copy from the SEC web site.
|
41
iTrackr,
Inc.
Financial
Statements and Footnotes
For the
Years Ended
December
31, 2009 and 2008
42
TABLE OF
CONTENTS
Page
|
|||
Report
of Independent Registered Public Accountant
|
F-1
|
||
Balance
Sheets as of December 31, 2009 and December 31, 2008
|
F-2
|
||
Statements
of Operations for the Years Ended December 31, 2009 and 2008 and the
Period May 10, 2006 (Date of Inception) to December 31,
2009
|
F-3
|
||
Statements
of Stockholders Equity for the Years Ended December 31, 2009 and 2008 and
the Period May 10, 2006 (Inception) to December 31, 2009
|
F-4
|
||
Statements
of Cash Flows for the Years Ended December 31, 2009 and 2008 and the
Period May 10, 2006 (Date of Inception) to December 31,
2009
|
F-5
|
||
Notes
to Financial Statements
|
F-6-15
|
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders
iTrackr,
Inc.
I have
audited the accompanying balance sheets of iTrackr, Inc. (“The Company”) as of
December 31, 2009 and 2008, and the related statements of income, stockholders’
deficit, and cash flows for the years ended December 31, 2009 and
2008. These financial statements are the responsibility of the
company’s management. My responsibility is to express an opinion on these
financial statements based on my audits.
I
conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. My audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, I express no such opinion. 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. I believe that my
audits provide a reasonable basis for my opinion.
In my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of iTrackr, Inc. as of December 31,
2009 and 2008, and the results of its operations and its cash flows for the
years ended December 31, 2009 and 2008 in conformity with accounting principles
generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. The Company has suffered recurring
losses and has yet to generate an internal cash flow that raises substantial
doubt about its ability to continue as a going concern. Management’s
plans in regard to these matters are described in Note A. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Traci
J. Anderson
Traci J.
Anderson, CPA
Huntersville,
NC
March 12,
2010
F-1
iTrackr,
Inc.
(A
Development Stage Company)
Balance
Sheet
December 31,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash
|
$ | 3,223 | $ | 183,144 | ||||
Accounts
receivable
|
5,786 | - | ||||||
Prepaid
expenses
|
- | - | ||||||
Total
Current Assets
|
9,009 | 183,144 | ||||||
Fixed
assets (Note B)
|
206,211 | 107,357 | ||||||
Accumulated
depreciation
|
(106,856 | ) | (73,347 | ) | ||||
Net
fixed assets
|
99,355 | 34,010 | ||||||
Other
assets (Note C)
|
- | 138,000 | ||||||
Total
Assets
|
$ | 108,364 | $ | 355,154 | ||||
Liabilities and Stockholder's
Equity
|
||||||||
Current Liabilities
|
||||||||
Accounts
payable & accrued expenses (Note D)
|
$ | 524,777 | $ | 356,755 | ||||
Accrued
interest payable
|
102 | 60,419 | ||||||
Convertible
promissory notes (Note E)
|
25,000 | 1,033,000 | ||||||
Promissory
notes - related party (Note E)
|
151,312 | 110,000 | ||||||
Total
Current Liabilities
|
701,191 | 1,560,174 | ||||||
Total
Liabilities
|
701,191 | 1,560,174 | ||||||
Stockholder's Equity (Deficit)(Note
F)
|
||||||||
Common
stock, par value $.001, 110,000,000 shares authorized; issued and
outstanding 13,990,413 at December 31, 2009 and 2008.
|
13,991 | 13,991 | ||||||
Common
stock payable
|
1,451,979 | 7,013 | ||||||
Additional
paid-in capital
|
966,157 | 941,988 | ||||||
Deficit
accumulated during the development stage
|
(3,024,954 | ) | (2,168,012 | ) | ||||
Total
Stockholder's Equity (deficit)
|
(592,827 | ) | (1,205,020 | ) | ||||
Total
Liabilities and Stockholder's Equity (Deficit)
|
$ | 108,364 | $ | 355,154 |
SEE NOTES
TO FINANCIAL STATEMENTS
F-2
iTrackr,
Inc.
(A
Development Stage Company)
Statements
of Operation
For the
Years Ended December 31, 2009 and 2008 and the Period May 10, 2006 (Inception)
to December 31, 2009
May 10, 2006
|
||||||||||||
Year Ended December 31,
|
(Inception) to
|
|||||||||||
2009
|
2008
|
December 31, 2009
|
||||||||||
Revenue
|
$ | 7,493 | $ | 4,419 | $ | 29,330 | ||||||
Operating Expenses
|
||||||||||||
Personnel
|
390,984 | 573,910 | 1,326,796 | |||||||||
Professional
fees
|
84,345 | 384,942 | 817,266 | |||||||||
Stock
compensation
|
31,669 | 206,936 | 603,357 | |||||||||
Travel
and entertainment
|
- | 9,514 | 39,547 | |||||||||
Facilities
|
- | 17,550 | 30,238 | |||||||||
Communications
|
9,089 | 4,779 | 19,102 | |||||||||
Marketing
|
4,796 | 19,523 | 49,865 | |||||||||
Website
|
41,286 | 18,186 | 126,495 | |||||||||
Depreciation
|
33,508 | 34,947 | 106,856 | |||||||||
General
|
15,296 | 4,431 | 29,278 | |||||||||
Total
operating expenses
|
610,973 | 1,274,718 | 3,148,800 | |||||||||
Loss
from operations
|
(603,480 | ) | (1,270,299 | ) | (3,119,470 | ) | ||||||
Other Income and (Expense)
|
||||||||||||
Interest
expense
|
(90,462 | ) | (58,574 | ) | (176,217 | ) | ||||||
Other
expense
|
(163,000 | ) | - | (173,000 | ) | |||||||
Other
income
|
- | - | 443,733 | |||||||||
Total
other income and (expense)
|
(253,462 | ) | (58,574 | ) | 94,516 | |||||||
NET
LOSS
|
(856,942 | ) | (1,328,873 | ) | (3,024,954 | ) | ||||||
Net
loss per common share basic and diluted
|
$ | (0.059 | ) | $ | (0.095 | ) | ||||||
Weighted
average common shares outstanding basic and diluted
|
14,632,513 | 13,934,023 | ||||||||||
The
average shares listed below were not included in the computation of
diluted losses per share because to do so would have been
antidilutive for the periods presented:
|
||||||||||||
Warrants
|
1,050,000 | 741,233 | ||||||||||
Stock
options
|
5,255,000 | 6,509,795 | ||||||||||
Convertible
promissory notes
|
3,242 | 1,305,843 |
SEE
NOTES TO FINANCIAL STATEMENTS
F-3
iTrackr,
Inc.
(A
Development Stage Company)
Statement
of Stockholder's Equity
For the
Years Ended December 31, 2009 and 2008 and the Period May 10, 2006 (Inception)
to December 31, 2009
Deficit
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
Common Stock
|
Additional
|
during the
|
Total
|
|||||||||||||||||||||
Number of
|
Paid-in
|
Developmental
|
Stockholders'
|
|||||||||||||||||||||
Shares
|
Amount
|
Payable
|
Capital
|
Stage
|
Equity
|
|||||||||||||||||||
BALANCES
December 31, 2007
|
$ | 13,790,413 | $ | 13,791 | $ | - | $ | 742,265 | $ | (839,139 | ) | $ | (83,083 | ) | ||||||||||
Stock
issued for services
|
200,000 | 200 | 7,013 | 99,800 | 107,013 | |||||||||||||||||||
Stock
options expense
|
77,423 | 77,423 | ||||||||||||||||||||||
Warrants
issued for services
|
22,500 | 22,500 | ||||||||||||||||||||||
Net
loss
|
$ | (1,328,873 | ) | (1,328,873 | ) | |||||||||||||||||||
BALANCES
December 31, 2008
|
13,990,413 | $ | 13,991 | $ | 7,013 | $ | 941,988 | $ | (2,168,012 | ) | $ | (1,205,020 | ) | |||||||||||
Stock
to be issued for conversion of debt
|
1,437,466 | 1,437,466 | ||||||||||||||||||||||
Stock
issued for services
|
7,500 | 7,500 | ||||||||||||||||||||||
Stock
options expense
|
24,169 | 24,169 | ||||||||||||||||||||||
Net
loss
|
$ | (856,942 | ) | (856,942 | ) | |||||||||||||||||||
BALANCES
December 31, 2009
|
13,990,413 | $ | 13,991 | $ | 1,451,979 | $ | 966,157 | $ | (3,024,954 | ) | $ | (592,827 | ) |
SEE
NOTES TO FINANCIAL STATEMENTS
F-4
iTrackr,
Inc.
(A
Development Stage Company)
Statements
of Cash Flows
For the
Years Ended December 31, 2009 and 2008 and the Period May 10, 2006 (Inception)
to December 31, 2009
May 10, 2006
|
||||||||||||
(Inception) to
|
||||||||||||
Year
Ended December 31,
|
December 31,
|
|||||||||||
2009
|
2008
|
2009
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
Earnings <loss>
|
$ | (856,942 | ) | $ | (1,328,873 | ) | $ | (3,024,954 | ) | |||
Adjustments
to reconcile net loss to net cash used by operating
activities:
|
||||||||||||
Depreciation
|
33,508 | 34,947 | 106,855 | |||||||||
Asset
impairment
|
138,000 | - | 138,000 | |||||||||
Compensation
expense on fair market value of options issued
|
24,169 | 77,423 | 178,844 | |||||||||
Compensation
expense on fair value of warrants issued
|
- | 22,500 | 22,500 | |||||||||
Common
stock issued for services
|
7,500 | 107,013 | 402,013 | |||||||||
Common
stock issued for accrued interest
|
137,467 | - | 162,771 | |||||||||
Changes
in operating accounts:
|
||||||||||||
Accounts
receivable
|
(5,786 | ) | - | (5,786 | ) | |||||||
Prepaid
expenses
|
- | 50,000 | - | |||||||||
Other
assets
|
- | (137,250 | ) | (138,000 | ) | |||||||
Accounts
payable and accrued expenses
|
107,705 | 379,690 | 524,879 | |||||||||
CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
|
(414,379 | ) | (794,550 | ) | (1,632,878 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Acquisition
of furniture and equipment
|
(98,854 | ) | (5,485 | ) | (206,211 | ) | ||||||
CASH
PROVIDED (USED) BY INVESTING ACTIVITIES
|
(98,854 | ) | (5,485 | ) | (206,211 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Repayment
of promissory notes
|
- | (45,000 | ) | (45,000 | ) | |||||||
Repayment
of related party notes
|
- | (40,750 | ) | (40,750 | ) | |||||||
Proceeds
from promissory notes
|
292,000 | 968,750 | 1,886,750 | |||||||||
Proceeds
from related party notes
|
41,312 | - | 41,312 | |||||||||
CASH
PROVIDED (USED) BY FINANCING ACTIVITIES
|
333,312 | 883,000 | 1,842,312 | |||||||||
NET
INCREASE (DECREASE) IN CASH
|
(179,921 | ) | 82,965 | 3,223 | ||||||||
CASH,
beginning of period
|
183,144 | 100,179 | - | |||||||||
CASH,
end of period
|
$ | 3,223 | $ | 183,144 | $ | 3,223 | ||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION CASH PAID DURING THE YEAR
FOR:
|
||||||||||||
Taxes
paid
|
$ | - | $ | - | $ | - | ||||||
Interest
paid
|
$ | - | $ | - | $ | - | ||||||
NON-CASH
OPERATING ACTIVITIES:
|
||||||||||||
Value
of Common Stock issued in exchange for services
|
$ | 7,500 | $ | 107,013 | $ | 402,013 | ||||||
Value
of Common Stock issued for accrued interest
|
$ | 137,467 | $ | - | $ | 162,771 | ||||||
Value
of Common Stock issued for debt principle
|
$ | 1,300,000 | $ | - | $ | 1,666,000 |
SEE
NOTES TO FINANCIAL STATEMENTS
F-5
iTrackr,
Inc.
(A
Development Stage Company)
Notes
to Unaudited Financial Statements
For
the Years Ended December 31, 2009 and 2008
Note A-Organization and
Summary Of Significant Accounting Policies
Organization
iTrackr,
Inc. (the “Company”) was formed on May 10, 2006 to develop, market and
commercialize a product and inventory search application through a social
networking site designed to leverage the best of Internet and Mobile
technologies. We have taken the best of several burgeoning markets,
including eCommerce, social networking and mobile content, and developed what we
believe is a powerful platform that drives value to consumers, retailers and
advertising and marketing firms.
iTrackr
intends to introduce Internet and Mobile social merchandizing technology
platforms. Social merchandizing applies the variety of traditional marketing
practices to promote products and services to a community of individuals via
social networking technologies. iTrackr is similar to MySpace and
Facebook; however, our members’ interests are not in diary or event blogging,
but in the timely location of products and services which can be acquired and
consumed on a local level.
iTrackr
enables consumers to search and track merchandise, letting the consumer know
which retail locations in a local zip code are stocking the queried merchandise,
as well as the comparative prices. In addition, if the item is not in stock, the
consumer can request that iTrackr notify them via mobile text message or email
when the item is delivered to a local retailer and where that retailer is
located.
In 2009,
iTrackr purchased online customers support software technology from Chatstat for
approximately $95,000. iTrackr has launched its customer support chat
software which facilitates real-time customer support and expert advice, and
paid transactions.
Going
Concern
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America, which
contemplate continuation of the Company as a going concern. Since inception, the
Company has been engaged primarily in product development. In the
course of funding development activities, the Company has sustained operating
losses since inception and has an accumulated deficit of $3,024,954 and
$2,168,012 at December 31, 2009 and 2008, respectively. In addition,
the Company has negative working capital of $667,182 and $1,377,030 at December
31, 2009 and 2008, respectively.
The
Company has and will continue to use significant capital to commercialize its
products. These factors raise substantial doubt about the ability of
the Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds not provided by
operations through loans or through additional sales of their common
stock. There is no assurance that the Company will be successful in
raising this additional capital or in achieving profitable
operations. The 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
Accounting
estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Cash and cash
equivalents
For
purposes of the statement of cash flows, the Company considers all highly liquid
debt instruments purchased with an original maturity of three months or less to
be cash equivalents. Cash and cash equivalents may at times exceed
federally insured limits. To minimize this risk, the Company places
its cash and cash equivalents with high credit quality
institutions.
F-6
iTrackr,
Inc.
(A
Development Stage Company)
Notes
to Unaudited Financial Statements
For
the Years Ended December 31, 2009 and 2008
Note A-Organization and
Summary Of Significant Accounting Policies
Accounts
Receivable
Accounts
receivable are reported at the customers' outstanding balances. The
Company does not have a history of significant bad debt and has not recorded any
allowance for doubtful accounts. Interest is not accrued on overdue
accounts receivable. The Company evaluates receivables on a regular
basis for potential reserve.
Inventories
Inventories
are valued at the lower of cost or market. Cost is determined on a first-in,
first-out method. Management performs periodic assessments to
determine the existence of obsolete, slow moving and non-salable inventories,
and records necessary provisions to reduce such inventories to net realizable
value.
Property and
equipment
Property
and equipment are stated at cost. Major renewals and improvements are
charged to the asset accounts while replacements, maintenance and repairs, which
do not improve or extend the lives of the respective assets, are
expensed. At the time property and equipment are retired or otherwise
disposed of, the asset and related accumulated depreciation accounts are
relieved of the applicable amounts. Gains or losses from retirements
or sales are credited or charged to income.
Depreciation
of property and equipment is provided on the straight-line method over the
estimated useful lives of the assets. Accelerated methods of
depreciation of property and equipment are used for income tax
purposes.
Revenue recognition
policy
Revenue
for our services is recognized when all of the following criteria are satisfied:
(i) persuasive evidence of an arrangement exists; (ii) the price is
fixed or determinable; (iii) collectibility is reasonably assured; and
(iv) services have been performed.
Deferred
Revenue: Revenue is deferred for any undelivered elements and is recognized upon
product delivery or when the service has been performed.
Cost of
sales
Cost of
sales includes costs related to fulfillment, customer service, commissions,
service personnel, telecommunications and data center costs.
Sales and marketing
costs
Sales and
marketing expenses include advertising expenses, seminar expenses, commissions
and personnel expenses for sales and marketing. Marketing and
advertising costs to promote the Company's products and services are expensed in
the period incurred. For the years ended December 31, 2009 and 2008,
the Company incurred approximately $4,796 and $19,523, respectively in marketing
and advertising expense.
Earnings (Loss) per common
share
The
Company reports both basic and diluted earnings (loss) per
share. Basic loss per share is calculated using the weighted average
number of common shares outstanding in the period. Diluted loss per
share includes potentially dilutive securities such as outstanding options and
warrants, using the “treasury stock” method and convertible securities using the
“if-converted” method.
Income
Taxes
The
Company accounts for income taxes under the asset and liability method, which
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements. Under this method, deferred tax assets and liabilities
are determined based on differences between financial statements and tax basis
of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse. The effect of a change
in tax rates on deferred tax assets and liabilities is recognized in income in
the period that includes the enactment date.
F-7
iTrackr,
Inc.
|
(A
Development Stage Company)
|
Notes
to Unaudited Financial Statements
|
For the Years Ended December 31, 2009 and
2008
|
Note A-Organization and
Summary Of Significant Accounting Policies
Income Taxes
(Continued)
The
Company records net deferred tax assets to the extent the Company believes these
assets will more likely than not be realized. In making such
determination, the Company considers all available positive and negative
evidence, including future reversals of existing taxable temporary differences,
projected future taxable income, tax planning strategies and recent financial
operations. A valuation allowance is established against deferred tax
assets that do not meet the criteria for recognition. In the event
the Company were to determine that it would be able to realize deferred income
tax assets in the future in excess of their net recorded amount, we would make
an adjustment to the valuation allowance which would reduce the provision for
income taxes.
The
Company follows the accounting guidance which provides that a tax benefit from
an uncertain tax position may be recognized when it is more likely than not that
the position will be sustained upon examination, including resolutions of any
related appeals or litigation processes, based on the technical
merits. Income tax provisions must meet a more-likely-than-not
recognition threshold at the effective date to be recognized initially and in
subsequent periods. Also included is guidance on measurement,
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition.
Impairment of Long-Lived
Assets
Accounting
for the Impairment or Disposal of Long-Lived Assets requires that long-lived
assets be reviewed for impairment whenever events or changes in circumstances
indicate that the historical cost-carrying value of an asset may not be
recovered. The Company assesses recoverability of the carrying value
of an asset by estimating the fair value of the asset. If the fair
value is less than the carrying value of the asset, an impairment loss is
recorded equal to the difference between the asset's carrying value and fair
value. The Company has never recognized an impairment
charge.
Stock-Based
Compensation
The
Company accounts for all compensation related to stock, options or warrants
using a fair value based method whereby compensation cost is measured at the
grant date based on the value of the award and is recognized over the service
period, which is usually the vesting period. Stock issued for
compensation is valued using the market price of the stock on the date of the
related agreement. We use the Black-Scholes pricing model to
calculate the fair value of options and warrants issued to both employees and
non-employees. In calculating this fair value, there are certain
assumptions that we use consisting of the expected life of the option, risk-free
interest rate, dividend yield, volatility and forfeiture rate. The
use of a different estimate for any one of these components could have a
material impact on the amount of calculated compensation expense.
Recent Accounting
Pronouncements
On July
1, 2009, the FASB officially launched the FASB ASC 105 - Generally Accepted
Accounting Principles, which established the FASB Accounting Standards
Codification (“the Codification”), as the single official source of
authoritative, nongovernmental, U.S. GAAP, in addition to guidance issued by the
Securities and Exchange Commission. The Codification is designed to
simplify U.S. GAAP into a single, topically ordered structure. All
guidance contained in the Codification carries an equal level of
authority. The Codification is effective for interim and annual
periods ending after September 15, 2009. Accordingly, the Company
refers to the Codification in respect of the appropriate accounting standards
throughout this document as “FASB ASC”. Implementation of the
Codification did not have any impact on the Company’s consolidated financial
statements.
On June
30, 2009, the FASB issued Accounting Standard Update (ASU) No. 2009-01 (Topic
105) – Generally Accepted Accounting Principles – amendments based on –
Statement of Financial Accounting Standards No. 168 –The FASB Accounting and
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles. Beginning with this Statement the FASB will no longer
issue new standards in the form of Statements, FASB Staff Positions, or Emerging
Issues Task Force Abstracts. Instead, it will issue Accounting
Standard Updates. This ASU includes FASB Statement No. 168 in its
entirety. While ASU’s will not be considered authoritative in their
own right, they will serve to update the Codification, provide the bases for
conclusions and changes in the Codification, and provide background information
about the guidance. The Codification modifies the GAAP hierarchy to
include only two levels of GAAP: authoritative and
nonauthoritative. ASU No. 2009-01 is effective for financial
statements issued for the interim and annual periods ending after September 15,
2009, and the Company does not expect any significant financial impact upon
adoption.
F-8
iTrackr,
Inc.
|
(A
Development Stage Company)
|
Notes
to Unaudited Financial Statements
|
For the Years Ended December 31, 2009 and
2008
|
Note A-Organization and
Summary Of Significant Accounting Policies
Recent Accounting
Pronouncements (Continued)
In August
2009, the FASB issued ASU No. 2009-05 – Fair Value Measurements and Disclosures
(Topic 820) – Measuring Liabilities at Fair Value. This ASU clarifies
the fair market value measurement of liabilities. In circumstances
where a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using one or
more of the following techniques: a technique that uses quoted price of the
identical or a similar liability or liabilities when traded as an asset or
assets, or another valuation technique that is consistent with the principles of
Topic 820 such as an income or market approach. ASU No. 2009-05 was
effective upon issuance and it did not result in any significant financial
impact on the Company upon adoption.
In
September 2009, the FASB issued ASU No. 2009-12 – Fair Value Measurements and
Disclosures (Topic 820) – Investments in Certain Entities That Calculate Net
Asset Value per Share (or its equivalent). This ASU permits use of a
practical expedient, with appropriate disclosures, when measuring the fair value
of an alternative investment that does not have a readily determinable fair
value. ASU No. 2009-12 is effective for interim and annual periods
ending after December 15, 2009, with early application
permitted. Since the Company does not currently have any such
investments, it does not anticipate any impact on its financial statements upon
adoption.
In May
2009, the FASB issued FASB ASC 855, “Subsequent Events.” This
Statement addresses accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or available to be
issued. FASB ASC 855 requires disclosure of the date through which an
entity has evaluated subsequent events and the basis for that date, the date
issued or date available to be issued. The Company adopted this
Statement in the second quarter of 2009. As a result the date through
which the Company has evaluated subsequent events and the basis for that date
have been disclosed in Note K, Subsequent Events.
In April
2009, the FASB issued an update to FASB ASC 820, “Fair Value Measurements and
Disclosures,” related to providing guidance on when the volume and level of
activity for the asset or liability have significantly decreased and identifying
transactions that are not orderly. The update clarifies the
methodology to be used to determine fair value when there is no active market or
where the price inputs being used represent distressed sales. The
update also reaffirms the objective of fair value measurement, as stated in FASB
ASC 820, which is to reflect how much an asset would be sold in and orderly
transaction, and the need to use judgment to determine if a formerly active
market has become inactive, as well as to determine fair values when markets
have become inactive. The Company adopted this Statement in the
second quarter of 2009 without significant financial impact.
In April
2009, the FASB ASC 320, “Investments – Debt and Equity,” amends current
other-than-temporary guidance for debt securities through increased consistency
in the timing of impairment recognition and enhanced disclosures related to
credit and noncredit components impaired debt securities that are not expected
to be sold. Also, the Statement increases disclosures for both debt
and equity securities regarding expected cash flows, securities with unrealized
losses, and credit losses. The Company adopted this Statement in the
second quarter of 2009 without significant impact to our financial
statements.
In April
2009, the FASB issued an update to FASB ASC 825, “Financial Instruments,” to
require interim disclosures about the fair value of financial
instruments.” This update enhances consistency in financial reporting
by increasing the frequency of fair value disclosures of those assets and
liabilities falling within the scope of FASB ASC 825. The Company adopted this
update in the second quarter of 2009 without significant impact to the financial
statements.
F-9
iTrackr,
Inc.
|
(A
Development Stage Company)
|
Notes
to Unaudited Financial Statements
|
For the Years Ended December 31, 2009 and
2008
|
Note A-Organization and
Summary Of Significant Accounting Policies
Recent Accounting
Pronouncements (Continued)
In April
2009, the FASB issued an update to FASB ASC 805, “Business Combinations,” that
clarifies and amends FASB ASC 805, as it applies to all assets acquired and
liabilities assumed in a business combination that arise from
contingencies. This update addresses initial recognition and
measurement issues, subsequent measurement and accounting, and disclosures
regarding these assets and liabilities arising from contingencies in a business
combination. The Company adopted this Statement in the second quarter
of 2009 without significant impact to the financial statements.
In
November 2008, EITF issued new guidance under FASB ASC 350, “Intangibles –
Goodwill and Other on accounting for defensive intangible
assets.” The new guidance applies to all acquired intangible assets
in which the acquirer does not intend to actively use the asset but intends to
hold (lock up) the asset to prevent its competitors from obtaining or using the
asset (a defensive asset). This guidance was adopted by the Company
in January 2009 without impact to the financial statements.
In May
2008, the FASB issued an update to FASB ASC 470, “Debt,” with respect to
accounting for convertible debt instruments that may be settled in cash upon
conversion including partial cash settlement. This update applies to
convertible debt instruments that, by their stated terms, may be settled in cash
(or other assets) upon conversion, including partial cash settlement, unless the
embedded conversion option is required to be separately accounted for as a
derivative under FASB ASC 815, “Derivatives and
Hedging.” Additionally, this update specifies that issuers of such
instruments should separately account for the liability and equity components in
a manner that will reflect the entity’s nonconvertible debt borrowing rate when
interest cost recognized in subsequent periods. The update is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. The Company does not
currently have any debt instruments for which this update would
apply. This update was adopted in January 2009 without significant
financial impact.
In
December 2007, the FASB issued an update to FASB ASC 805, “Business
Combinations” which establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any noncontrolling interest in the acquiree,
and the goodwill acquired. SFAS 141R also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination. SFAS 141R is effective for the Company with respect to business
combinations for which the acquisition date is on or after January 1,
2009. The Company adopted this SFAS in the first quarter of
2009.
In
December 2007, the FASB issued an update to FASB ASC 810, “Consolidation,” which
establishes accounting and reporting standards for ownership interests in
subsidiaries held by parties other than the parent, the amount of consolidated
net income attributable to the parent and to the noncontrolling interest,
changes in a parent’s ownership interest, and the valuation of retained
noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160
also establishes disclosure requirements that clearly identify and distinguish
between the interests of the parent and the interests of noncontrolling
owners. This update is effective for the Company as of
January 1, 2009. The Company adopted this update in January 2009
without significant impact on the consolidated financial position, results of
operations, and disclosures.
F-10
iTrackr,
Inc.
|
(A
Development Stage Company)
|
Notes
to Unaudited Financial Statements
|
For the Years Ended December 31, 2009 and
2008
|
NOTE B – PROPERTY AND
EQUIPMENT
Property
and equipment consisted of the following:
December
31,
|
||||||||
2009
|
2008
|
|||||||
Computers
and office equipment
|
$ | 127,237 | $ | 78,974 | ||||
Software
|
78,974 | 28,383 | ||||||
Total
PP&E
|
206,211 | 107,357 | ||||||
Accumulated
depreciation
|
(106,856 | ) | (73,347 | ) | ||||
Fixed
assets, net
|
$ | 99,355 | $ | 34,010 |
During
the year ended December 31, 2008, the Company purchased $5,485 of computer
equipment.
During
the year Ended December 31, 2009, the Company purchased $98,854 of software. On
November 16, 2009, the Company and ChatStat Technologies Incorporated
(“ChatStat”) entered into an agreement whereby the Company acquired a copy of
the source code and documentation to the ChatStat “Live Chat Software” and owns
the copy “separately, globally and mutually until the end of
time”. In exchange for the software ownership, the Company agreed to
forgive $34,861 of debt owing the Company by ChatStat and to pay ChatStat
$60,000 in 6 equal monthly installments beginning November 20,
2009.
Depreciation
expense for the years ended December 31, 2009 and 2008 was $33,509 and $34,947,
respectively. Depreciation expense from May 10, 2006 (Inception) to
December 31, 2008 was $106,856.
NOTE C – OTHER
ASSETS
On
December 22, 2008, for $138,000, the Company purchased approximately 79% of the
then issued and outstanding common stock, or 33,400,000 shares of Inflot
Holdings, Inc. a Pink Sheet listed public company. Inflot had no
assets or liabilities as of the date of purchase. The purpose of the
stock purchase was to gain control of a shell company for the purpose of reverse
merging with the Company. During the year ended December 31, 2009,
Inflot executed a 1,000:1 reverse split and subsequently issued 7.5 million
shares thereby significantly diluting the value of the Company’s investment
which was written off during the third quarter of 2009.
NOTE D – ACCOUNTS PAYABLE
AND ACCRUED EXPENSES
Accounts
payable and accrued expenses at December 31, 2009 consisted of $389,500 of
accrued payroll, $25,000 of accrued legal settlements, $15,126 of professional
services, and $85,658 of trade payables.
Accounts
payable and accrued expenses at December 31, 2008 consisted of $310,189 of
accrued payroll, and $46,566 of trade payables.
NOTE E –
NOTES
Promissory
Notes
Promissory
notes at December 31, 2009 are as follows:
Note
payable convertible into common stock at a conversion price of $.35 upon
default, bears
|
||||
interest
at 9% per year, matures March 14, 2010
|
$ | 12,500 | ||
Note
payable convertible into common stock at a conversion price of $.35 upon
default, bears
|
||||
interest
at 9% per year, matures March 15, 2010
|
12,500 | |||
Total
|
$ | 25,000 |
F-11
iTrackr,
Inc.
|
(A
Development Stage Company)
|
Notes
to Unaudited Financial Statements
|
For the Years Ended December 31, 2009 and
2008
|
NOTE E – NOTES
(Continued)
Promissory Notes
(Continued)
During
the year ended December 31, 2008, the Company received $818,000 of convertible
promissory notes and repaid $45,000.
During
the year ended December 31, 2009, the Company received $292,000 of convertible
promissory notes from third parties. The Company converted $1,300,000
of principle and $137,467 of accrued interest into 3,721,257 shares of
restricted common stock.
Promissory Notes - Related
Party
Note
payable convertible into common (conversion price of 50% below the
previous 10
|
||||
day
average closing price) upon default, bears interest at 9% per year,
matures
|
||||
December
31, 2010
|
$ | 151,312 |
During
the year ended December 31, 2008, the Company received $150,750 from Bluewater
Advisors a company owned my John Rizzo, CEO. $40,750 was
repaid.
During
the year ended December 31, 2009, the Company received $25,000 from Bluewater
Advisors and issued a new note for $151,312 or $135,000 of principle and $16,312
of accrued interest.
Accrued
Interest
During
the years ended December 31, 2009 and 2008 and the period May 10, 2006
(Inception) to December 31, 2009, the Company incurred $90,462, $58,574 and
$176,217, respectively, of interest expense related to convertible promissory
notes and related party promissory notes below.
As of
December 31, 2009, accrued interest payable and the principle of our notes are
$102 and $176,312, respectively.
NOTE F – STOCKHOLDERS
EQUITY
Preferred
Stock
The
Company has authorized 10,000,000 shares preferred stock available for
issuance. No shares of preferred stock have been issued as of
December 31, 2009.
Stock Issued for Debt
Repayment
During
the year ended December 31, 2008, the Company did not issue any stock for debt
repayment.
During
the year ended December 31, 2009, the Company converted $1,300,000 of principle
and $137,467 of accrued interest into 3,721,257 shares of restricted common
stock. As of December 31, 2009 the stock had not been issued and is
recorded in the equity portion of our balance sheet as common stock
payable.
Stock Issued for
Services
During
the year ended December 31, 2008, the Company issued 214,025 shares in exchange
for services valued at $107,013.
During
the year ended December 31, 2009, the Company issued 150,000 shares in exchange
for services valued at $7,500. As of December 31, 2009 the stock had
not been issued and is recorded in the equity portion of our balance sheet as
common stock payable.
Stock Options (See footnote
I)
During
the year ended December 31, 2008, the Company granted 2 million Common Stock
options with an exercise price of $0.50 and canceled 1 million due to
termination.
F-12
iTrackr,
Inc.
|
(A
Development Stage Company)
|
Notes
to Unaudited Financial Statements
|
For the Years Ended December 31, 2009 and
2008
|
NOTE F – STOCKHOLDERS EQUITY
(Continued)
Stock Options (See footnote
I) (Continued)
During
the year ended December 31, 2009, the Company canceled 1 million options due to
termination.
NOTE G -
COMMITMENTS
The
Company has no commitments as of December 31, 2009.
NOTE H –
WARRANTS
At
December 31, 2009, the Company had 800,000 Warrants outstanding entitling the
holder thereof the right to purchase one share of common stock for each warrant
held as follows:
Exercise
|
|||||||||
Issuance |
Number
of
|
Price
Per
|
Expiration
|
||||||
Date |
Warrants
|
Warrant
|
Date
|
||||||
03/25/08 | 400,000 | $ | 0.10 |
12/31/10
|
|||||
03/25/08 | 400,000 | $ | 0.10 |
12/31/10
|
|||||
Total
|
800,000 |
During
the year ended December 31, 2008, the Company issued 1,050,000 warrants to
outside individuals. The warrants issued on March 25, 2008 were fully
vested on the date of grant. No compensation expense was recognized
for these warrants as the strike price and the spot price were both $0.10 on the
date of grant. The 250,000 warrant grant had a three month vesting
period and fair value was calculated using the Black-Scholes Option Pricing
Model with the following inputs: volatility of 214.65% based on the Dow Jones
Internet Composite Index, risk free interest rate of 3.99%, spot price of $0.10,
and exercise price of $0.01 resulting in $22,500 of expense during the year
ended December 31, 2008.
During
the year ended December 31, 2009, the Company canceled 250,000 warrants issued
to Marc Falcone as a result of the settlement agreement dated February 16, 2010
(See Note K, Subsequent Events). No warrants were issued or exercised
in 2009.
NOTE I – 2007 LONG-TERM
EQUITY INCENTIVE PLAN
In June
2007 the Board of Directors of the Company adopted the 2007 Long-Term Equity
Incentive Plan. The purpose of this Plan is to attract and retain directors,
officers and other employees of iTrackr, Inc. and its Subsidiaries and to
provide to such persons incentives and rewards for performance.
The
Company may issue each of the following under this Plan: Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award. The Plan was ratified at the 2007
shareholder’s meeting (the "Effective Date"). No Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award shall be granted pursuant to the Plan ten years after
the Effective Date. The total number of shares available under the
Plan is Fifteen Million (15,000,000). No Plan participant will be
granted the right, in the aggregate, for more than Two Million
(2,000,000) Common Shares during any calendar year.
F-13
iTrackr,
Inc.
|
(A
Development Stage Company)
|
Notes
to Unaudited Financial Statements
|
For the Years Ended December 31, 2009 and
2008
|
NOTE I – 2007 LONG-TERM
EQUITY INCENTIVE PLAN (Continued)
Stock
Options
During
the year ended December 31, 2008, the Company granted 2 million Common Stock
options with an exercise price of $0.50. Of these grants, 1 million
were canceled due to termination of the people to whom they were granted and
their failure to exercise according to the terms of the option
grant. Expense related to these grants was based on their fair value
as calculated using the Black-Scholes Option Pricing Model with the following
inputs: volatility of 214.65% based on the Dow Jones Internet Composite Index,
risk free interest rate of 3.49%, spot price of $0.50, and exercise price of
$0.50.
During
the year ended December 31, 2009 1 million options were canceled due termination
of the people to whom they were granted and their failure to exercise according
to the terms of the option grant.
The
following table summarizes the Company's stock option activity for the year
ended December 31, 2009:
2009
|
||||||||
Weighted
Average
|
||||||||
Shares
|
Exercise
Price
|
|||||||
Outstanding
at beginning of year
|
6,255,000 | $ | 0.23 | |||||
Granted
|
- | - | ||||||
Forfeited
|
(1,000,000 | ) | 0.50 | |||||
Exercised
|
- | - | ||||||
Outstanding
at end of quarter
|
5,255,000 | $ | 0.18 | |||||
Options
exerciseable at December 31, 2009
|
5,255,000 |
The
following table summarizes information about the Company's stock options
outstanding at December 31, 2009:
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||||||
Number
|
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||
Range
of
|
Outstanding
|
Average
|
Average
|
Average
|
|||||||||||||||||
Exercise
|
At
December 31,
|
Contractural
|
Exercise
|
Number
|
Exercise
|
||||||||||||||||
Prices
|
2009
|
Life
(years)
|
Price
|
Outstanding
|
Price
|
||||||||||||||||
$ |
0.40
|
1,000,000 | - | $ | 0.40 | 1,000,000 | $ | 0.08 | |||||||||||||
0.25
|
1,000,000 | - | 0.25 | 1,000,000 | 0.05 | ||||||||||||||||
0.10
|
2,375,000 | - | 0.10 | 2,375,000 | 0.05 | ||||||||||||||||
0.05
|
880,000 | - | 0.05 | 880,000 | 0.01 | ||||||||||||||||
Total | 5,255,000 | - | $ | 0.18 | 5,255,000 | $ | 0.18 |
The
Company measures the fair market value of stock options granted using the
Black-Scholes Option Pricing Model on the date of grant and recognizes related
compensation expense ratably over the options vesting period for all future
grants.
During
the year ended December 31, 2009 and 2008, the Company recognized $24,169 and
$77,423, respectively, of compensation expense related to stock
options. From inception to date, the Company has recognized $178,844
of compensation expense related to stock options.
F-14
iTrackr,
Inc.
|
(A
Development Stage Company)
|
Notes
to Unaudited Financial Statements
|
For the Years Ended December 31, 2009 and
2008
|
NOTE J – LEGAL
PROCEEDINGS
As of
December 31, 2009, the Company was party to a lawsuit brought by Marc
Falcone. In this action, Mr. Falcone asserted numerous claims against
certain defendants arising out of his former service to iTrackr, Inc. as a
contracted consultant. The Company asserted numerous defenses and
affirmative defenses, including, but not limited to, the fact that Falcone
failed to fulfill his obligations under the agreement. On February
16, 2010, the Company and Mr. Falcone executed a settlement agreement without
either side admitting fault. The terms of the settlement agreement
call for the payment of $25,000 and the issuance of 360,000 shares of common
stock in exchange for a full release of all claims. The Company has
accrued $25,000 as of December 31, 2009 and canceled the 250,000 warrants with
exercise price f $.01 as a result of this liability.
NOTE K – SUBSEQUENT
EVENTS
On
December 10, 2009, Must Haves, Inc., iTrackr Acquisition, Inc. and iTrackr,
Inc. entered into an Agreement and Plan of Merger which closed January 12,
2010. On the Closing Date, iTrackr was merged with and into iTrackr
Acquisition, Inc. which is the surviving corporation and became a wholly-owned
subsidiary of Must Haves, Inc. In accordance with the merger
agreement, iTrackr’s stockholder’s received restricted common stock at the rate
of 1:1 share for each of their 17,875,695 shares issued and outstanding in
exchange for 100 percent of the outstanding capital stock of
iTrackr. In total 19,169,333 shares are outstanding following the
closing of the merger.
The
Merger is being accounted for as a “reverse merger”. iTrackr is
deemed to be the acquirer in the reverse merger. Consequently, the assets
and liabilities and retained deficit of iTrackr prior to the Merger will be
reflected in the financial statements.
In
January 2010, in conjunction with two promissory notes totaling $25,000 that
were issued on December 14th and
15th
(See Note E), and $7,000 loaned to the Company in January 2010, the Company
issued 96,000 warrants to purchase an equal amount of shares of common
stock. The warrants have an exercise price of $.75 and expire five
years from the date of issue. The Company did not record expense
related to these warrants as their strike price significantly exceeds the
current fair value of the Company’s common stock.
On
February 16, 2010, the Company, without admitting fault, entered into a
settlement agreement to settle a dispute with Marc Falcone over unpaid salary
and stock (See Note J, Legal Proceedings).
F-15
19,628,557
Shares of Common Stock
ITRACKR
SYSTEMS, INC.
Prospectus
No
dealer, salesperson or any person is authorized to give any information or make
any representations in connection with this offering other than those contained
in this prospectus and, if given or made, the information or representations
must not be relied upon as having been authorized by us. This prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
security other than the securities offered by the prospectus, or an offer to
sell or a solicitation of an offer to buy any securities by anyone in any
jurisdiction in which the offer or solicitation is not authorized or is
unlawful.
Dealer
Prospectus Delivery Obligation
Until
[ ],
all dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealers’ obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
The
date of this Prospectus is ________, 2010
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution
The
following table sets forth the Company’s estimates (other than the SEC
registration fee) of the expenses in connection with the sale and distribution
of the securities being registered, all of which will be paid by the
Company.
Item
|
Amount
|
|||
SEC
Registration Fee
|
$ | 2,000 | ||
Legal
Fees and Expenses
|
$ | 20,000 | ||
Accounting
Fees and Expenses
|
$ | 15,000 | ||
Printing
Fees and Expenses
|
$ | 5,000 | ||
Miscellaneous
Fees and Expenses
|
$ | 1,000 | ||
Total
|
$ | 43,000 |
Item
14. Indemnification of Directors and Officers
The
Company’s bylaws provide for the indemnification of its directors, officers,
employees and agents to the fullest extent permitted by the laws of the State of
Florida. Section 607.0850 of the Florida Statutes
permits a corporation to indemnify any of its directors, officers, employees or
agents against expenses actually and reasonably incurred by such person in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil criminal, administrative or investigative (except for an action by
or in right of the corporation) by reason of the fact that such person is or was
a director, officer, employee or agent of the corporation; provided, that it is
determined that such person acted in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
II-1
Section 607.0850 of the Florida Statutes
requires that the determination that indemnification is proper in a specific
case must be made by: (1) the stockholders, (2) the board of directors
by majority vote of a quorum consisting of directors who were not parties to the
action, suit or proceeding, or (3) independent legal counsel in a written
opinion, if a majority vote of a quorum consisting of disinterested directors is
not possible, or if such opinion is requested, by a quorum consisting of
disinterested directors.
The
bylaws provide that we will indemnify our directors and officers and may
indemnify our employees and agents to the fullest extent permitted by law
against liabilities and expenses incurred in connection with litigation in which
they may be involved because of their offices with the Company. However, nothing
in the Company’s charter or bylaws protects or indemnifies a director, officer,
employee or agent against any liability to which he or she would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her
office.
Any
amendment to or repeal of the Company’s bylaws will not adversely affect any
right or protection of any of the Company’s directors or officers for, or with
respect to, any acts or omissions of such director or officer occurring prior to
such amendment.
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 or otherwise, the Company has been advised 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.
Item
15. Recent Sales of Unregistered Securities.
|
·
|
On March 15, 2010, the Company
received $50,000 in exchange for the issuance of 166,666 shares of common
stock and the issuance of a one year warrant for the right to purchase
166,666 shares of the Company’s common stock at an exercise price of $0.30
per share.
|
|
·
|
On February 16, 2010, the Company
converted $42,466.48 of shareholder loans to 119,999 shares of common
stock.
|
|
·
|
On February 5, 2010, the Company
sold a warrant to an accredited investor for $50,000. Under the terms of
the warrant, the investor has the right to purchase up to 1,000,000 shares
of the Company’s common stock at an exercise price of $0.40 per
share.
|
|
·
|
During December, 2009, the
Company converted $29,944 of shareholder loans to 59,888 shares of common
stock.
|
|
·
|
On October 31, 2009, Inflot
Holdings Corp. converted $270,000 of convertible debt principle and
interest into 1,386,322 shares of common
stock.
|
|
·
|
On October 31, 2009, Ted
Cooper converted $559,302 of convertible debt principle and interest into
1,118,603 shares of common
stock.
|
|
·
|
On October 31, 2009, Robert
Gleckman converted $110,825 of convertible debt principle and interest
into 221,649 shares of common
stock.
|
|
·
|
On October 31, 2009, The
Borg Trust converted $55,844 of convertible debt principle and interest
into 111,688 shares of common
stock
|
|
·
|
On October 31, 2009, Robert
Klinek & Susan Pack converted $57,139 of convertible debt
principle and interest into 114,277 shares of common
stock.
|
|
·
|
On October 31, 2009, The
Winston Family Trust converted $34,631 of convertible debt principle and
interest into 69,261 shares of common
stock.
|
|
·
|
On October 31, 2009,
Dominick & Judy Aprile converted $28,879 of convertible debt
principle and interest into 57,758 shares of common
stock.
|
|
·
|
On October 31, 2009, Charlie
Bonafede converted $5,683 of convertible debt principle and interest into
11,366 shares of common
stock.
|
II-2
|
·
|
On October 31, 2009, Dawn
Maywood converted $5,781 of convertible debt principle and interest into
11,562 shares of common
stock.
|
|
·
|
On October 31, 2009, Sam
Maywood converted $5,781 of convertible debt principle and interest into
11,562 shares of common
stock.
|
|
·
|
On October 31, 2009,
Dr. Michael Gelbar converted $116,666 of convertible debt principle
and interest into 233,332 shares of common
stock.
|
|
·
|
On October 31, 2009,
Patricia Scarpella converted $87,510 of convertible debt principle and
interest into 175,019 shares of common
stock.
|
|
·
|
On October 31, 2009, Shirley
Harnick converted $58,347 of convertible debt principle and interest into
116,693 shares of common
stock.
|
|
·
|
On October 31, 2009, Michael
Nielsen converted $41,083 of convertible debt principle and interest into
82,165 shares of common
stock.
|
|
·
|
On May 5, 2008, Mark
MacDougal received 100,000 shares of common stock as a bonus valued at
$50,000.
|
|
·
|
On May 5, 2008, Justin Van
Winkle received 100,000 shares of common stock as a bonus valued at
$50,000.
|
|
·
|
On February 20, 2008, Steve
Danzo earned 14,025 shares of common stock in exchange for services valued
at $7,013.
|
|
·
|
On August 21, 2007, Red Rock
Strategies Ltd. converted $55,313.70 of convertible debt principle and
interest into 2,765,685 shares of common
stock.
|
|
·
|
On August 21, 2007, New Link
Ltd. Corp converted $211,403.29 of convertible debt principle and interest
into 3,385,280 shares of common
stock.
|
|
·
|
On August 21, 2007,
Landmark, Inc. converted $26,069.86 of convertible debt principle and
interest into 104,279 shares of common
stock.
|
|
·
|
On August 21, 2007, Beatrice
Anne Rizzo converted $98,516.85 of convertible debt principle and interest
into 985,169 shares of common
stock.
|
|
·
|
On July 1, 2007, Jarem
Archer received 750,000 shares of common stock in lieu of salary valued at
$37,500.
|
|
·
|
On July 1, 2007, John Rizzo
received 5,000,000 shares of common stock in lieu of salary valued at
$250,000.
|
|
·
|
On October 26, 2006, The
John Rizzo Family Trust received 250,000 shares of founder’s common stock
at no value; Jarem Archer received 250,000 shares of founder’s common
stock at no value; the Christopher Smith Family Trust received 200,000
shares of founder’s common stock at no value; and Alejandro Sintas
received 100,000 shares of founder’s common stock at no
value.
|
None
of the securities issued in the foregoing transactions were registered under the
Securities Act of 1933, as amended (the “Act”), and all were issued pursuant to
an exemption from registration under Section 4(2) of the Act. The
foregoing securities may not be offered or sold in the United States unless
registered under the Act, or pursuant to an exemption from
registration.
Item
16. Exhibits
The
Exhibits listed on the Exhibit Index of this Registration Statement are filed
herewith or are incorporated herein by reference to other
filings.
Item
17. Undertakings
The
undersigned Registrant hereby undertakes:
(a)
|
1.
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
|
i.
|
To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
|
II-3
|
ii.
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20.0% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement.
|
|
iii.
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
|
Provided
however, that:
|
A.
|
Paragraphs
(a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration
statement is on Form S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in reports filed
with or furnished to the Commission by the registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement;
and
|
|
B.
|
Paragraphs
(a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the
registration statement is on Form S-3 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs
is contained in reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed
pursuant to Rule 424(b) that is part of the registration
statement.
|
2. That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3. To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
4. That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
|
i.
|
If
the registrant is subject to Rule 430C, each prospectus filed pursuant to
Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of
and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of contract
of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to
such date of first use.
|
|
(b)
|
The
undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
|
II-4
|
(c)
|
Insofar
as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of
the Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such
issue.
|
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant certifies that
it has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Boca Raton, Florida on
the 22nd day of
April, 2010.
iTrackr,
Inc.
|
|
By:
|
/s/
John Rizzo
|
John
Rizzo
|
|
Chief
Executive Officer
|
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
Name
|
Title
|
Date
|
||
/s/ John Rizzo
|
Chairman,
Chief Executive Officer and
|
|||
John
Rizzo
|
Principal
Financial Officer
|
April
22, 2010
|
||
/s/ Dave Baesler
|
Director
|
April
22, 2010
|
||
Dave
Baesler
|
||||
|
||||
/s/ Michael Uhl
|
Director
|
April
22, 2010
|
||
Michael
Uhl
|
II-5
EXHIBIT
INDEX
Number
|
Description
|
|
3.1
|
Amended
and Restated Articles of Incorporation of Must Haves, Inc. Previously
filed as Exhibit Number 3.2 with Form 10-SB12G Registration Statement,
September 14, 2007, Commission File No. 000-52810; incorporated herein by
reference.
|
|
3.2
|
Amendments
to Articles of Incorporation filed with Form 10-Q on November 24, 2009,
incorporated herein by reference.
|
|
3.3
|
Amendments
to Articles of Incorporation filed with Florida Secretary of State on
March 9, 2010.
|
|
3.4
|
Bylaws
of Must Haves, Inc. Previously filed as Exhibit Number 3.3 with Form
10-SB12G Registration Statement on September 14, 2007, Commission File
No. 000-52810; incorporated herein by
reference
|
|
4
|
Form
of Share Certificate
|
|
5
|
Legal
Opinion
|
|
10.1
|
Agreement
and Plan of Merger. Previously filed as Exhibit 2.1 with Form 8-K on
December 16, 2009, Commission File No. 000-21810; incorporated herein by
reference.
|
|
10.2
|
Form
of 2010 Employment Agreement entered into with John Rizzo (incorporated by
reference from Exhibit 10.1 to the Current Report on Form 8-K filed with
the Securities and Exchange Commission on January 19,
2010).
|
|
10.3
|
Form
of 2010 Employment Agreement entered into with Ramesh Anand (incorporated
by reference from Exhibit 10.3 to the Current Report on Form 8-K filed
with the Securities and Exchange Commission on January 19,
2010).
|
|
10.4
|
Form
of Stock Option Plan (incorporated by reference from Exhibit 10.7 to the
current Report on Form 8-K filed with the Securities and Exchange
Commission on January 19, 2010).
|
|
14
|
Code
of Ethics. Previously filed as Exhibit 14.1 with Form 10-K, on March 31,
2008, incorporated herein by reference.
|
|
23
|
Consent
of Auditor
|
|
Legal
Consent
|
II-6