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EX-31.1 - EXHIBIT 31.1 - VISION DYNAMICS Corp | ex311.htm |
EX-32.1 - EXHIBIT 32.1 - VISION DYNAMICS Corp | ex321.htm |
U.
S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
First
Amended
FORM
10-K
[X]
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
fiscal year ended December 31,
2007
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from ___________ to
_____________
|
Commission
File No. 000-52982
___________________________
VISITRADE,
INC.
(Name of
small business issuer in its charter)
Nevada
|
74-3197968
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
2038
Corte Del Nogal, Suite 110
Carlsbad,
California 92011
________________________________________________________________________
(Address
of principal executive offices, including zip
code)
|
Registrant’s
telephone number, including area
code: (760) 804-8844
Securities
registered pursuant to Section 12(b) of the
Act: None
Securities registered pursuant to Section 12(g) of the
Act: $.001 par value common
stock
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes S No
£
Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. £
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes 0 No
T
The
issuer’s revenues for the most recent fiscal year were $0
The aggregate market value of
the voting and non-voting common equity held by non-affiliates of the registrant
was approximately $16,701 based upon the closing price of our common
stock which was $0.0027 as last reported on June 7, 2010. Shares of
common stock held by each officer and director and by each person or group who
owns 10% or more of the outstanding common stock amounting to 22,373,635 shares
have been excluded in that such persons or groups may be deemed to be
affiliates. This determination of affiliate status is not necessarily
a conclusive determination for other purposes.
As of
June 7, 2010, there were 28,559,371 shares of our common stock were issued and
outstanding.
Documents
Incorporated by
Reference: None
Transitional
Small Business Disclosure Format (Check
one): Yes
£ No
S
Preliminary
Note:
This
First Amended Form 10-K for the period ending December 31, 2007 is being filed
in response to comments issued by the SEC in a letter dated November 13,
2008.
As further described in our filings, in
early April of 2010, Mark L. Baum, Esq. resigned from his positions as
President, Chief Executive Officer, Chief Financial Officer, Secretary and
Director of the Visitrade, Inc. (the “Company”). Concurrent with Mr. Baum’s
resignation, Mr. Ford Sinclair was appointed to fill the positions of President,
Chief Executive Officer, Chief Financial Officer, Secretary and sole Director.
Immediately following this appointment, Mr. Sinclair worked with the Company in
preparing and filing all delinquent filings under the Securities Exchange Act of
1934 with the United States Securities and Exchange Commission. As such, Mr.
Sinclair has retroactively executed all such filings, including this Second
Amended Form 10.
1
Visitrade,
Inc.
Annual
Report on Form 10-KSB
Table
of Contents
Part
I
|
Page
|
|
Item
1. Description of Business
|
1 | |
Item
2. Description of Properties
|
5 | |
Item
3. Legal Proceedings
|
5 | |
Item
4. Submission of Matters to a Vote of Security Holders
|
5 | |
Part
II
|
||
Item
5. Market for Registrant's Common Equity and Related Stockholder
Matters
|
6 | |
Item
6. Management's Discussion and Analysis of Financial Condition
and
Results
of Operations
|
7 | |
Item
7. Financial Statements
|
10 | |
Item
8. Changes in and Disagreements with Accountants on Accounting
and
Financial
Disclosure
|
||
Item
8A. Controls and Procedures
|
21 | |
Item
8B. Other Information
|
22 | |
Part
III
|
||
Item
9. Directors, Executive Officers, Promoters and Control Persons;
Compliance
with
Section 16(b) of the Exchange Act
|
22 | |
Item
10. Executive Compensation
|
23 | |
Item
11. Security Ownership of Certain Beneficial Owners and
Management
|
24 | |
Item
12. Certain Relationships and Related Transactions
|
24 | |
Item
13. Exhibits and Reports on Form 8-K
|
24 | |
Item
14. Principal Accountant Fees and Services
|
25 | |
Signatures
|
26 |
2
PART
I
Item
1. Description of Business
Organization
a. Corporate
History.
We were
originally incorporated in the State of Nevada on March 2, 1998, as USI
Communications, Inc. We provided engineering, rental and program services to the
broadcast industry, video production, and manufacture of mobile and fixed video
equipment. We conducted operations from facilities located in North Carolina and
ceased operation in August 2000.
In July
of 2002 we purchased the rights to a water irrigation system and filed a
Certificate of Amendment to our Articles of Incorporation effectively changing
our corporate name to Square Shooter, Inc. As Square Shooter, Inc., we designed,
developed and marketed this water irrigation system designed to conserve water
consumption by dispensing water from sprinkler systems in a square shaped
pattern, thusly reducing overspray onto unwanted areas and focusing water
delivery to necessary areas. Despite continued efforts to market our innovative
water irrigation system, we again ceased operations in late 2004.
In
November of 2006, we entered into an asset purchase agreement with VisiTrade,
L.L.C., a Nevada limited liability company, where, in exchange for 19,852,723
shares of our common stock, we purchased certain software that acted as a
trading platform for financial market participants. In connection with the asset
purchase agreement, we filed an Articles of Merger with the Nevada Secretary of
State effectively changing our name to VisiTrade, Inc. We believed that this
software had the potential to develop a cost effective alternative trading
system that could provide a 24-hour trading platform and facilitate bringing
together purchasers and sellers of securities while performing the functions
commonly performed by larger securities exchanges. Again, despite continued
efforts to market this alternative trading system, we ceased operations in early
2007.
Our
current management was not part of the previous management teams associated with
our previous business endeavors. After researching the company’s records and
relevant market conditions during the historical time periods of these previous
endeavors, current management believes the past businesses failed due to: (i)
demand for the company’s products and services; (ii) loss of key personnel with
specialized skills applicable to previous business models; (ii) increased costs
associated with rapid changes and technological advances; and (iv) changes in
general market conditions.
In
October of 2007, we resumed operations in planning and organizing ourselves as
an online retailer of aftermarket Triumph motorcycle parts and
accessories.
b. Current Business
Operations.
Under our
proposed business plan we will operate as an online retailer of aftermarket
Triumph motorcycle parts and accessories. We plan to market our products
primarily through our internet website www.sportbike-customs.com. We own the
domain name www.sportbike-customs.com but have not completed our website. The
website is currently a link to www.british–customs.com, one of our proposed
marketing partners. Our corporate headquarters are located at 2038
Corte del Nogal, Suite 110, Carlsbad, California 92011. Our telephone number at
our corporate head office is 760-804-8844.
With
Triumph motorcycles growing in popularity over the past decade, we believe there
has been an unfilled demand for Triumph parts and accessories. Our retail sales
operation will aim to fulfill that demand through the online sales of
aftermarket Triumph motorcycle parts and accessories.
3
Our
proposed business operations will be composed initially of online retail sales
of aftermarket Triumph parts and accessories. Consumers looking for Triumph
parts and accessories have traditionally been forced to either hunt down parts
and accessories from the scattered network of small Triumph retailers or
purchase from large general parts distributors that may lack the familiarity
with the Triumph brand. We have found that many of these existing online Triumph
parts and accessory dealers do not maintain a large enough or diverse enough
parts inventory to satisfy a “one stop shop” for Triumph parts and accessories
Our aim is to provide a centralized, experienced and knowledgeable retail outlet
for everything Triumph. Consumers will be able to locate and purchase a wide
variety of Triumph parts and accessories in one location rather than being
forced to hunt down individual parts from scattered retailers. Under our
proposed business model, we plan to develop strategic marketing and sales
relationships with smaller online Triumph parts and accessory dealers. By
aggregating the inventories of these smaller retailers into a “one stop shop” of
Triumph parts and accessories, we feel we will be able to offer Triumph
consumers a more convenient and cost effective way to purchase Triumph parts and
accessories,
Our
proposed retail website will allow consumers to browse Triumph parts and
accessories as easily as if they were standing in a retail outlet. Consumers
using the website will be able to either browse through categorized pages on
Triumph parts and accessories or refine their shopping experience using detailed
search engines designed to put the consumer in contact with the parts they need
quickly and efficiently. Each item will be displayed on our website with a
detailed picture, description and pricing information to assist the consumer in
finding and purchasing their desired products.
Through
our website, we believe we will provide a number of benefits to our consumers
and suppliers including:
§
|
Ready Access to Products on a Secure Site.
Our customers will be able to access and purchase our products
24 hours a day from the convenience of their computer. We will not
sell any personal information about our customer base to third parties and
all online sales transaction will be
secured.
|
§
|
Value Pricing. Once organized, our
multiple sourcing networks will locate and obtain Triumph parts and
accessories allowing our users to compare prices. Our sales teams will
cost-effectively match customer demand with supply on a just-in-time
basis, employing our planned rapid fulfillment
process.
|
§
|
Positive Customer Experience. Our
internal sales and customer service representatives will be available by
e-mail and telephone to respond to questions and provide guidance
regarding product availability, order status and product use and
functionality.
|
§
|
Reliable and Efficient Distribution
Channel. Once our network of parts distributors is firmly
established, we will be able to provide a low-risk, high-volume channel
through which our suppliers may sell
merchandise.
|
§
|
Protection of Brand Integrity. We will
maintain the integrity of our suppliers’ brands by responding to customer
inquiries regarding their products in a professional manner, by ensuring
that we sell only quality goods on our website and by selling only factory
sealed goods in original form together with all accessories still
intact.
|
§
|
Optimize inventory management through the use of
technology. Our merchandise buyers will be supported by software
that provides updated sales information. This technology will enable us to
make informed decisions and quickly change prices in an effort to maximize
sales volume, gross profits and return on inventory
capital.
|
§
|
Maintain low customer acquisition costs. We
believe that by utilizing targeted online campaigns, including direct
e-mail campaigns, we will be able to keep our per customer acquisition
costs relatively low.
|
Our
initial goal and current focus is the completion of our website. This is the
backbone of our proposed operations platform and the stepping stone for future
business activities. We have had substantial difficulties in the completion of
our website. As disclosed in our First Amended Form 10 filed with the SEC on
October 15, 2008, we expected to have completed our website and had it
operational by late 2008/early 2009. Such completion date has been delayed
substantially due initially to technical difficulties with our web design and
development, and currently due to lack of adequate capital to fund such
development due to current market conditions. Our website completion has been
delayed substantially and we currently hope to complete the initial beta version
of our software platform by the middle of the third quarter of 2010. Based upon
the current status of our software platform and negotiations with our software
designers, we currently estimate we will require approximately $45,000 in
software design and development costs to complete the final beta version of our
website. We currently do not have such funds available. While we are currently
searching for additional capital infusion sources, we have also considered
offering an equity interest as compensation for the completion of such services
if such equity compensation can be offered on terms which the Company finds
reasonable. Once the beta version and testing of such version is complete, we
may incur additional costs associated with revising and editing such platform.
We have no way of knowing what such additional costs will amount to until we are
able to test the final beta version of the platform.
Concurrently
with our efforts to develop and complete our website, we have begun negotiations
to develop strategic marketing and sales relationships with other Triumph parts
and accessory dealers in order to aggregate the inventories of these smaller
retailers into our “one stop shop” of Triumph parts and accessories. Although we
have begun these negotiations, this goal is secondary to the completion of our
website. We expect to begin finalizing these sales and marketing relationships
with in the first few months of the completion of our website. We do
not expect to incur material costs or expenses associated with the initial
negotiations of these relationships, nor in the eventual finalization of such
relationships.
Following
the finalization of our website and development of sales and marketing
relationships with Triumph parts and accessory dealers and suppliers, we will
need to hire additional sales and support staff to assist in the day to day
operations. Initially, our plan is to hire one customer support employee and two
sales employees to assist in these operations. We estimate payroll expenses
associated with hiring a customer support agent to be approximately $35,000
annually. We do not expect to incur fixed costs with the hiring of sales staff
as we intend to base sales staff compensation strictly on a commission based
model. In addition, we may consider offering our support staff compensation in
the form of an equity interest in the Company, although the details of such
equity compensation program have not been determined.
4
As of the
date of this report, we have earned no revenues and have not finalized any
agreements with any parts distributors. We had begun initial negotiations with
Triumph parts and accessory dealers; however, due to our setbacks in the
development of our software platform, such negotiations have been put on
hold. We do not expect to begin earning revenues until after the
completion of our website. We do not believe we will be able to satisfy our near
future cash requirements as we further develop our website and expand our sales
network as described above. Before we are able to complete our website and begin
to develop our sales and marketing relationships, we believe we will need to
finance our operations through proceeds from the issuance of equity securities
and loans. Although we have pursued several possible opportunities in connection
with such financings, we have not been able to obtain necessary financings on
terms we believe are beneficial to the Company. When we are able to secure such
funds, they will be used as working capital to fund the completion of our
website, the build-out of our sales network and for internal
operations.
Once our website has been completed and
we begin to generate revenues, in order to increase sales we plan to increase
our brand awareness through advertising. We plan to utilize newspaper, trade
magazine, trade show, online, and word of mouth advertising
outlets.
Further
out, we plan to possibly expand our operations into parts manufacturing. Many
Triumph parts, especially for older model Triumphs, are scarce. The aim of our
website is to offer our customers a central location to find these Triumph parts
and accessories. Initially we hope to offer the customer a wide range of parts
and accessories from existing manufacturers to choose from. In addition to
retailing other manufacturer's parts, we hope to begin manufacturing our own
line of Triumph parts and accessories. By initially building the reputability of
our name through our retail sales website, we hope to transfer that same
customer base and satisfaction with our retail business to our manufacturing
business. These manufacturing goals are long term goals and we have taken no
affirmative steps towards attaining these goals.
Our
expectations are based on certain assumptions concerning the anticipated costs
associated with our expected projects. These assumptions concern future events
and circumstances that we believe to be significant to our operations and upon
which our working capital requirements will depend. Some assumptions
will invariably not materialize and some unanticipated events and circumstances
may occur subsequent to the date of this report. The timing and
amount of our capital requirements will depend on a number of factors, including
the speed with which we complete our website, our ability to establish
relationships with Triumph parts and accessory dealers and the eventual demand
for our products and services. As described herein, we will seek funding for our
capital requirements from the sale of our securities and loans, however, it is
possible that we will be unable to obtain sufficient additional capital through
these avenues.
We intend
to retain any future earnings to retire any future debt, finance the expansion
of our business and any necessary capital expenditures, and for general
corporate purposes.
Personnel
We currently do not have any full time
employees. We intend to hire full time employees and additional
independent contract labor on an as needed basis when our website is
complete.
Item
2. Description of Properties
At
present, we do not own any property. Our executive offices currently
consist of shared leased office space located at 2038 Corte Del Nogal, Suite
110, Carlsbad, CA 92011 and our phone number is 760-804-8844. The
Company subleases approximately 3,000 square feet of office and administrative
space, as well as the use of, among other things, internet, postage, copy
machines, electricity, furniture, fixtures etc. at a rate of $2,000 per
month.
Item
3. Legal Proceedings
None.
Item
4. Submission of Matters to a Vote of Security Holders
None.
5
PART
II
Item
5: Market for Registrant's Common Equity and Related Stockholder
Matters
(a)
Market Information.
The
common stock of the Company, $.001 par value, is currently traded over the
counter and is listed on the Pink Sheets under the symbol "VTDI" The
availability of historical trading prices of our common stock is limited, with
periods of little or no trading activity. The following table sets forth the
available approximate range of high and low closing prices for the common stock
of the Company during the periods indicated. The quotations presented reflect
inter-dealer prices, without retail markup, markdown, or commissions, and may
not necessarily represent actual transactions in the common stock.
2007
|
Low
|
High
|
First
Quarter
|
$.11
|
.95
|
Second
Quarter
|
.08
|
.30
|
Third
Quarter
|
.05
|
.25
|
Fourth
Quarter
|
.04
|
.06
|
On June
7, 2010 the closing quotation for our common stock was $0.0027 per share. As
reflected by the high and low prices on the foregoing table, the trading price
of the common stock of the Company can be volatile with dramatic changes over
short periods. The trading price may reflect imbalances in the supply and demand
for shares of the Company, market reaction to perceived changes in the industry
in which the Company sells products and services, general economic conditions,
and other factors. Investors are cautioned that the trading price of the common
stock can change dramatically based on changing market perceptions that may be
unrelated to the Company and its activities.
(b) Approximate number of equity
security holders.
The
approximate number of record holders of the Company's common stock as of June 7,
2010 was 48, which does not include shareholders whose stock is held
through securities position listings.
(c)
Dividends.
The
Company did not declare or pay any cash dividends on its common stock during the
past two fiscal years.
(d)
Securities authorized for issuance under equity compensation plans.
We
currently do not have any stock option or other equity compensation
plans.
(e)
Recent sales of unregistered securities.
During
the year ending 2005, we issued a total of 2,250,000 common shares of common
stock to officers of the Company as compensation for their services. These
shares were valued at $0.10 per share.
In
December of 2005, we issued a total of 2,038,461 common shares to consultants of
the Company as compensation for their services for the year ending 2005. These
shares were valued at $0.10 per share.
During
the year ending 2006, we issued a total of 2,601,852 common shares to officers
of the Company as compensation for their services. These shares were valued at
$0.10 per share.
On
November 2, 2006, we approved of a 5 to 1 reverse split. The financial
statements included herein have been retroactively restated to reflect this
reverse split.
On
November 7, 2006, we retired 224 shares of common stock due to the 5 to 1
reverse split. These shares were valued at $0.10 per share.
In
December of 2006, we issued 19,852,723 shares in connection with an Asset
Purchase Agreement between the Company and Visitrade, LLC. These shares were
valued at $0.10 per share.
During
the year ending 2007, we issued a total of 518,518 common shares to officers of
the Company as compensation for their services. These shares were valued at
$0.10 per share.
6
In
January of 2007, we issued 1,000,000 common shares to consultants of the Company
as compensation for their services. These shares were valued at $0.95 per
share.
In
January of 2007, we issued 40,000 common shares to consultants of the Company as
compensation for their services. These shares were valued at $0.55 per
share.
In
February of 2007, we issued 2,050,000 common shares to consultants of the
Company as compensation for their services. These shares were valued at $0.17
per share.
In April
of 2007, we issued 75,000 common shares to consultants of the Company as
compensation for their services. These shares were valued at $0.08 per
share.
In May of
2007, we issued 40,000 common shares to consultants of the Company as
compensation for their services. These shares were valued at $0.26 per
share.
In June
of 2007, we issued 350,000 common shares to consultants of the Company as
compensation for their services. These shares were valued at $0.18 per
share.
In July
of 2007, we cancelled 660,000 common shares that were previously issued in
error.
In August
of 2008, we cancelled 188,344 common shares that were previously issued in
error.
All of
the issuances of securities described above were deemed to be exempt from
registration in reliance on Section 4(2) of the Securities Act of 1933 as
transactions by an issuer not involving a public offering. We made the
determination that each investor had enough knowledge and experience in finance
and business matters to evaluate the risks and merits of the investment.
There was no general solicitation or general advertising used to market
the securities. We provided each investor with disclosure of all aspects
of our business, including providing the investor with press releases, access to
our auditors, and other financial, business, and corporate information. A legend
was placed on the stock certificates stating that the securities have not been
registered under the Securities Act and cannot be sold or otherwise transferred
without an effective registration or an exemption therefrom.
(f)
Purchases of equity securities by the small business issuer and affiliated
purchasers.
During
the year ended December 31, 2007, neither the Company nor any of its affiliates
purchased any equity securities of the Company or on behalf of the
Company.
Item
6. Management's Discussion and Analysis of Financial Condition and Results of
Operations
The
following discussion and analysis should be read in conjunction with our audited
consolidated financial statements and related notes included in this
report. This report contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. The
statements contained in this report that are not historic in nature,
particularly those that utilize terminology such as “may,” “will,” “should,”
“expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable
terminology are forward-looking statements based on current expectations and
assumptions.
The
forward-looking events discussed in this report, the documents to which we refer
you and other statements made from time to time by us or our representatives,
may not occur, and actual events and results may differ materially and are
subject to risks, uncertainties and assumptions about us. For these
statements, we claim the protection of the “bespeaks caution”
doctrine. All forward-looking statements in this document are based
on information currently available to us as of the date of this report, and we
assume no obligation to update any forward-looking
statements. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results to
differ materially from any future results, performance or achievements expressed
or implied by such forward-looking statements.
Critical Accounting
Policies.
Our
critical and significant accounting policies, including the assumptions and
judgments underlying them, are disclosed in the Notes to the Financial
Statements. These policies have been consistently applied in all
material respects and address such matters as revenue recognition and
depreciation methods. The preparation of the financial statements in
conformity with generally accepted accounting principles 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 reported period. Actual results
could differ from those estimates. The accounting treatment of a
particular transaction is specifically dictated by accounting principles,
generally accepted in the United States of America, with no need for
management’s judgment in their application. There are also areas in
which management’s judgment in selecting any viable alternative would not
produce a materially different result. See our audited financial
statements and notes thereto which contain accounting policies and other
disclosures required by accounting principles, generally accepted in the United
States of America.
7
Results
of Operations
Revenues
Year
Ended
December 31
|
|||
2007
|
2006
|
||
Total
Sales
|
$0
|
$0
|
We had no
revenues for the year ended December 31, 2007 or for the year ended December 31,
2006.
Net Profit
(Loss).
Year
Ended
December 31
|
|||
2007
|
2006
|
||
Net
Profit (Loss)
|
($2,303,168)
|
($0)
|
For the
year ended December 31, 2007, we sustained net losses of $2,303,168 as compared
with net losses of $0 for the year ended December 31, 2006.
Liquidity
and Capital Resources
At
December 31, 2007, the Company had assets of $0. There were liabilities of
$12,000 comprised of $4,000 in accrued expenses and $8,000 in monies due to
related parties. Current assets of $0 and current liabilities of $12,000,
resulted in a working capital deficiency of $12,000.
The
accompanying condensed consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. Because of recurring
operating losses and the excess of current liabilities over current assets,
there is substantial doubt about the Company's ability to continue as a going
concern. The Company's continuation as a going concern is dependent on attaining
profitable operations through business acquisitions, restructuring its financial
arrangements, and obtaining additional outside financing as needed.
We intend
to retain any future earnings to retire any existing debt, finance the expansion
of our business and any necessary capital expenditures, and for general
corporate purposes.
Forward-Looking
Statements
The
Company, from time to time, may publish forward-looking statements relating to
such matters as anticipated financial performance, business prospects,
technological development, new products, research and development activities and
similar matters. The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. In order to comply with the terms of
the safe harbor, the Company notes that a variety of factors could cause the
Company's actual results and experience to differ materially from the
anticipated results or other expectations expressed in any of the Company's
forward-looking statements. The risks and uncertainties that may affect the
operations, performance, development and results of the Company's business
include, but are not limited to, the following: (a) the failure to obtain
additional borrowed and/or equity capital on favorable terms for acquisitions
and expansion; (b) adverse changes in federal and state laws, or other matters
affecting the Company's business; (c) the demand for the Company's products and
services; and (d) other risks detailed in the Company's Securities and Exchange
Commission filings.
8
This Form
10-K contains and incorporates by reference certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act with respect to results of operations and businesses of the
Company. All statements, other than statements of historical facts, included in
this Form 10-K, including those regarding market trends, the Company's financial
position, business strategy, projected costs, and plans and objectives of
management for future operations, are forward-looking statements. In general,
such statements are identified by the use of forward-looking words or phrases
including, but not limited to, "intended, will, should, may, expect, anticipate,
estimates, projects" or the negative thereof or variations thereon or similar
terminology.
Forward-looking
statements are based on the Company's current expectations. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, there can be no assurance that such expectations will prove to be
correct. Because forward-looking statements involve risk and uncertainty, the
Company's actual results could differ materially. Important factors that could
cause actual results to differ materially from the Company's expectations are
disclosed hereunder and elsewhere in this Form 10-K. These forward-looking
statements represent the Company's judgment as of the date of this Form 10-K.
All subsequent written and oral forward-looking statements attributable to the
Company are expressly qualified in their entirety by the Cautionary Statements.
The Company disclaims, however, any intent or obligation to update its
forward-looking statements.
9
Item
7. Financial Statements
CONTENTS
Report
of Independent Registered Public Accounting Firm
|
Balance
Sheet
|
Statements
of Operations
|
Statements
of Stockholders' Equity (Deficit)
|
Statements
of Cash Flows
|
Notes
to Financial Statements
|
10
Pollard-Kelley
Auditing Services, Inc.……………………………………………………………
Auditing
Services
4500
Rockside Road, Suite 450 Independence OH 44131
330-836-2558
Report
of Independent Certified Public Accountants
Board of
Directors
Visitrade,
Inc.
We have
audited the accompanying balance sheets of Visitrade, Inc. as of December 31,
2007 and 2006 and the related statements of income, changes in stockholders’
equity, and cash flows for each of the two years in the period ended December
31, 2007. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We
conduct our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
As
discussed in notes to the financial statements the Company has not generated
significant revenues or profits to date. This factor among others
raises substantial doubt the Company will be able to continue as a going
concern. The Company’s continuation as a going concern depends upon
its ability to generate sufficient cash flow to conduct its operations and its
ability to obtain additional sources of capital and financing. The
accompanying consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty. Management’s
plans concerning this matter are also discussed in notes to the financial
statements.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company at December 31, 2007
and 2006, and the results of its operations and it cash flows for each of the
two years in the period ended December 31, 2007 in conformity with U.S.
generally accepted accounting standards.
Pollard-Kelley
Auditing Services, Inc.
/S/
Pollard-Kelley Auditing Services, Inc.
January
5, 2009
Independence,
Ohio
11
VISITRADE,
INC.
|
|||
BALANCE
SHEETS
|
|||
ASSETS
|
|||
December
31,
|
December
31,
|
||
2007
|
2006
|
||
Current
Assets
|
|||
Cash
and cash equivalents
|
$ -
|
$ -
|
|
Total
Current Assets
|
-
|
-
|
|
TOTAL
ASSETS
|
$ -
|
$ -
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|||
Current
Liabilities
|
|||
Accounts
payable and accrued expenses
|
$ 4,000
|
$ -
|
|
Due
to related party
|
8,000
|
31,916
|
|
Total
Current Liabilities
|
12,000
|
31,916
|
|
TOTAL
LIABILITIES
|
12,000
|
31,916
|
|
Commitments
and Contingencies
|
|||
STOCKHOLDERS'
DEFICIT
|
|||
Common
stock, $.001 par value; 45,000,000 shares
|
|||
authorized;
28,747,715, 24,815,679 shares issued and outstanding
|
28,748
|
24,816
|
|
Preferred
stock, $.001 par value; 5,000,000 shares
|
|||
authorized;
5,000,000 and 5,000,000 shares issued and outstanding
|
5,000
|
5,000
|
|
Additional
paid-in capital
|
2,257,421
|
(61,731)
|
|
Accumulated
deficit
|
(2,303,169)
|
(1)
|
|
Total
stockholders' deficit
|
(12,000)
|
(31,916)
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ -
|
$ -
|
|
The
accompanying notes are an integral part of these financial
statements.
|
12
VISTRADE,
INC.
|
|||
STATEMENTS
OF OPERATIONS
|
|||
From
Inception
|
|||
For
the Years Ended
|
April
4, 2004
|
||
December
31,
|
December
31,
|
through
|
|
2007
|
2006
|
December
31,
|
|
2007
|
|||
Revenue
|
$ -
|
$ -
|
$ -
|
Selling,
general and administrative expenses
|
12,000
|
-
|
12,001
|
Loss
from operations
|
(12,000)
|
-
|
(12,001)
|
Other
Income:
|
|||
Gain
from extinguished debt
|
31,916
|
-
|
31,916
|
Total
income from continuing operations
|
19,916
|
-
|
19,915
|
Discontinued
Operations:
|
|||
Loss
from discontinued trading platform operations
|
(2,323,084)
|
-
|
(2,323,084)
|
Provision
for income taxes
|
-
|
-
|
-
|
Net
income (loss)
|
$ (2,303,168)
|
$ -
|
$ (2,303,169)
|
Loss
per common share:
|
|||
Continuing
operations
|
$ 0.00
|
$ -
|
$ 0.00
|
Discontinued
operations
|
$ (0.08)
|
$ -
|
$ (0.10)
|
Loss
per share-basic and diluted
|
$ (0.08)
|
$ -
|
$ (0.10)
|
Weighted
average shares outstanding
|
28,616,137
|
20,736,540
|
22,414,088
|
The
accompanying notes are an integral part of these financial
statements.
|
13
VISITRADE,
INC.
|
|||||||
STATEMENTS
OF STOCKHOLDERS' DEFICIT
|
|||||||
From
April 4, 2004 date of inception, through December 31,
2007
|
|||||||
Common
Stock
|
Preferred
Stock
|
Additional
|
Accumulated
|
Total
Stockholders'
|
|||
Shares
|
Amount
|
Shares
|
Amount
|
Paid
-In Capital
|
Deficit
|
Deficit
|
|
Issuance
of founder shares
|
19,852,723
|
$19,853
|
-
|
$-
|
$(19,852)
|
$-
|
$1
|
Net
Income for year ended December 31, 2004
|
(1)
|
(1)
|
|||||
Balance
at December 31, 2004
|
19,852,723
|
19,853
|
-
|
-
|
(19,852)
|
(1)
|
-
|
Net
Income for year ended December 31, 2005
|
-
|
-
|
|||||
Balance
at December 31, 2005
|
19,852,723
|
19,853
|
-
|
-
|
(19,852)
|
(1)
|
-
|
Stock
issued in reverse merger
|
4,963,180
|
4,963
|
5,000,000
|
5,000
|
(41,879)
|
-
|
(31,916)
|
Cancellation
of fractional shares
|
(224)
|
-
|
-
|
-
|
-
|
-
|
-
|
Net
loss for the year ended December 31, 2006
|
-
|
-
|
|||||
Balance
at December 31, 2006
|
24,815,679
|
24,816
|
5,000,000
|
5,000
|
(61,731)
|
(1)
|
(31,916)
|
Stock
issued for services
|
4,592,036
|
4,592
|
-
|
-
|
2,380,492
|
-
|
2,385,084
|
Cancellation
of shares issued for services
|
(660,000)
|
(660)
|
-
|
-
|
(61,340)
|
-
|
(62,000)
|
Net
loss for the year ended December 31, 2007
|
-
|
-
|
-
|
-
|
-
|
(2,303,168)
|
(2,303,168)
|
Balance
at December 31, 2007
|
28,747,715
|
$28,748
|
5,000,000
|
$5,000
|
$2,257,421
|
$(2,303,169)
|
$(12,000)
|
The
accompanying notes are an integral part of these financial
statements.
|
14
VISITRADE,
INC.
|
||||
STATEMENTS
OF CASH FLOWS
|
||||
For
the period
|
||||
April
4, 2004
|
||||
For
the years ended
|
through
|
|||
December
31,
|
December
31,
|
December
31,
|
||
2007
|
2006
|
2007
|
||
NET
CASH FROM OPERATING ACTIVITIES:
|
||||
Net
loss
|
$ (2,303,168)
|
$ -
|
$ (2,303,169)
|
|
Adjustments
to reconcile net loss to net cash
|
||||
provided
by operating activities:
|
||||
Stock
Issued for services
|
2,323,084
|
-
|
2,323,084
|
|
Changes
in assets and liabilities, net of effects from
acquisitions
|
||||
Increase
(decrease) in accrued expenses
|
4,000
|
-
|
4,000
|
|
Increase
(decrease) in due to related party
|
(23,916)
|
-
|
(23,916)
|
|
Net
cash provided by operating activities
|
-
|
-
|
(1)
|
|
NET
CASH FROM FINANCING ACTIVITIES:
|
||||
Proceeds
from issuance of common stock
|
-
|
-
|
1
|
|
Net
cash provided by financing activities
|
-
|
-
|
1
|
|
Net
increase in cash and cash equivalents
|
-
|
-
|
-
|
|
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
-
|
-
|
-
|
|
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$ -
|
$ -
|
$ -
|
|
Interest
expense
|
$ -
|
$ -
|
$ -
|
|
Income
taxes
|
-
|
-
|
-
|
|
SUPPLEMENTAL
NON-CASH INVESTING AND
|
||||
FINANCING
ACTIVITIES:
|
||||
Liabilities
assumed during reverse merger
|
$ 31,916
|
$ -
|
$ 31,916
|
|
Stock
issued in exchange of services rendered
|
2,323,084
|
-
|
2,323,084
|
|
Extinguished
accrued debt
|
4,000
|
-
|
4,000
|
|
The
accompanying notes are an integral part of these financial
statements.
|
||||
15
VISITRADE,
INC.
Notes
to the Financial Statements
for
the years ended December 31, 2007 and 2006
NOTE
1 ORGANIZATION
USI
Communications, Inc. (the “Company”) was incorporated on March 2, 1998 in the
state of Nevada. The company provided engineering, rental and program services
to the broadcast industry, video production, and manufacture of mobile and fixed
video equipment. The Company conducted operations from facilities located in
North Carolina and ceased operation in August 2000. On July 9, 2002, the Company
filed a Certificate of Amendment to their Articles of Incorporation effectively
changing their corporate name to Square Shooter, Inc. As Shooter, Inc., the
Company designed, developed and marketed a water irrigation system designed to
conserve water consumption. On November 1, 2006, the Company entered into an
asset purchase agreement with VisiTrade, LLC, a Nevada limited liability
company, where the Company purchased certain software that acted as a trading
platform for financial market participants. Visitrade, LLC was formed
on April 4, 2004 and prior to such asset purchase agreement had no business
operations. The Company filed a Certificate of Amendment to their
Articles of Incorporation effectively changing their corporate name to
VisiTrade, Inc. The Company ceased operations as VisiTrade, Inc. in
early 2007. In October of 2007, the Company resumed operations as an online
retailer of aftermarket Triumph motorcycle parts, accessories and
apparel.
|
NOTE
2 SUMMARY OF ACCOUNTING
POLICIES
|
Principles
of Consolidation
The
consolidated balance sheet include the accounts of Visitrade, Inc. and its’
wholly owned subsidiaries, thereby reflecting the transactions related to the
November 1, 2006 effective date of the asset purchase agreement. The
consolidated statements of operations include the operations of the predecessor
entity, Visitrade, LLC since November 1, 2006, the effective date of the
acquisition of the Visitrade, LLC business. All significant
intercompany accounts and transactions have been eliminated in
consolidation.
Accounting
Method
The
financial statements are prepared using the accrual method of accounting.
The Company has elected a December 31 year-end.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities 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
Cash
equivalents include short-term, highly liquid investments with maturities of
three months or less at the time of acquisition.
Provision
for Income Taxes
The
Company accounts for income taxes according to the provisions of US
GAAP. Recognition of deferred tax assets and liabilities reflect the
expected future tax consequences of temporary differences between the financial
statement and tax basis of assets and liabilities. US GAAP requires a company to
determine whether it is more likely than not that the tax position will be
sustained, will be sustained upon examination based upon the technical merits of
the position. If the more-likely-than-not threshold is met, a company
must measure the tax position to determine the amount to recognize in the
financial statements. As a result of the implementation of US GAAP,
the Company performed a review of its material tax positions in accordance with
recognition and measurement standards.
The
components of income tax expense are as follows:
for
the year ended
|
for
the year ended
|
|
December
31,
|
December
31,
|
|
2007
|
2006
|
|
Federal
taxes
|
-
|
-
|
State
taxes
|
-
|
-
|
Benefit
of utilization of operating loss carryforward
|
(783,077)
|
-
|
Taxes
|
-
|
-
|
Change
in Valuation Allowance
|
783,077
|
-
|
Income
Tax Expense
|
-
|
-
|
As
of December 31, 2007, we had a net operating loss (NOL) carryforward of $
2,303,168. These NOL carryforwards begin to expire in the year
2024.
|
16
Deferred
tax assets and the valuation account are as follows at:
December
31,
|
December
31,
|
|
2007
|
2006
|
|
NOL
Carryforward
|
(783,077)
|
(0)
|
Valuation
Allowance
|
783,077
|
0
|
Net
deferred tax assets
|
-
|
-
|
Basic
Net Loss per Share of Common Stock
In
accordance with US GAAP, basic net loss per common share is based on the
weighted average number of shares outstanding during the periods presented.
Diluted earnings per share are computed using weighted average number of
common shares plus dilutive common share equivalents outstanding during the
period. There are no convertible instruments or stock options that are
convertible into common stock.
for
the year ended
|
for
the year ended
|
|
December
31,
|
December
31,
|
|
2007
|
2006
|
|
Numerator
– (loss)
|
(2,303,168)
|
-
|
Denominator
– weighted avg.
|
||
number
of shares outstanding
|
28,616,137
|
20,736,540
|
Loss
per share – basic and diluted
|
$ (0.08)
|
$ -
|
Recent
Accounting Pronouncements
In June
2009, the Financial Accounting Standards Board (“FASB”) issued Accounting
Standards Update No. 2009-01, “Generally Accepted Accounting Principles”
(ASC Topic 105) which establishes the FASB Accounting Standards Codification
(“the Codification” or “ASC”) as the official single source of authoritative
U.S. generally accepted accounting principles. All existing accounting standards
are superseded. All other accounting guidance not included in the Codification
will be considered non-authoritative. The Codification also includes all
relevant Securities and Exchange Commission guidance organized using the same
topical structure in separate sections within the Codification. Following the
Codification, the FASB will not issue new standards in the form of Statements,
FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will
issue Accounting Standards Updates (“ASU”) which will serve to update the
Codification, provide background information about the guidance and provide the
basis for conclusions on the changes to the Codification. The Codification is
not intended to change GAAP, but it will change the way GAAP is organized and
presented. The Codification is effective for the Company’s third quarter
financial statements and the principal impact on the financial statements is
limited to disclosures as all future references to authoritative accounting
literature will be referenced in accordance with the Codification. In order to
ease the transition to the Codification, the Company is providing the
Codification cross-reference alongside the references to the standards issued
and adopted prior to the adoption of the Codification.
In August
2009, the Financial Accounting Standards Board (“FASB”) issued Accounting
Standards Update (“ASU”) No. 2009-05, “Measuring Liabilities at Fair
Value” (“ASU 2009-05”). The amendments in this ASU apply to all entities
that measure liabilities at fair value and provides clarification that in
circumstances in which a quoted price in an active market for the identical
liability is not available, an entity is required to measure fair value using
one or more techniques laid out in this ASU. The guidance provided in this ASU
is effective for the first reporting period (including interim periods)
beginning after issuance. The Company does not expect the adoption of this ASU
to have a material impact on its consolidated financial statements.
17
In
September 2009, the FASB issued ASU No. 2009-13 “Revenue recognition –
Multiple deliverable revenue arrangements”. The ASU provides amendments to the
criteria in “Revenue recognition – multiple element arrangements” for separating
consideration in multiple element arrangements. The amendments in this ASU
establish a selling price hierarchy for determining the selling price of a
deliverable. Further, the term fair value in the revenue
guidance will be replaced with selling price to clarify that
the allocation of revenue is based on entity-specific assumptions rather than
assumptions of a market place participant. The amendments in this ASU will be
effective prospectively for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010. Early
adoption is permitted. The Company is currently evaluating this
ASU.
Financial
Instruments
In
determining fair value, the Company uses various valuation approaches within the
US GAAP fair value measurement framework. Fair value measurements are determined
based on the assumptions that market participants would use in pricing an asset
or liability. US GAAP establishes a hierarchy for inputs used in
measuring fair value that maximizes the use of observable inputs and minimizes
the use of unobservable inputs by requiring that the most observable inputs be
used when available. US GAAP defines levels within the hierarchy based on the
reliability of inputs as follows:
·
|
Level
1 - Quoted prices in active markets for identical assets or
liabilities.
|
·
|
Level
2 - Inputs, other than the quoted prices in active markets, that are
observable either directly or
indirectly.
|
·
|
Level
3 - Unobservable inputs based on the Company’s
assumptions.
|
US GAAP
requires the use of observable market data if such data is available without
undue cost and effort. The Company’s adoption of US GAAP did not
result in any changes to the accounting for its financial assets and
liabilities.
The
recorded amounts of financial instruments, including cash equivalents accounts
payable and accrued expenses, and long-term debt approximate their market values
as of and December 31, 2007 and 2006.
Property
and Equipment
Property
and equipment are stated at cost. Expenditures for maintenance, repairs and
renewals are charged to expense, whereas major additions are capitalized. The
cost and accumulated depreciation of assets retired, sold or otherwise disposed
of are eliminated from the accounts and resulting gains or losses, if any, are
reflected through the statement of income.
Depreciation
is computed using the straight-line method over the estimated useful lives of 7
years. There was no depreciation expense for the years ended December
31, 2007 and 2006.
The
company ceased operations related to the trading platform system in early
2007.
Accounts
Receivable
We must
make judgments about the collectability of our accounts receivable to be able to
present them at their net realizable value on the balance sheet. We analyze the
aging of our customer accounts and review historical bad debt problems. From
this analysis, we record an estimated allowance for receivables that we believe
will ultimately become uncollectible. As of December 31, 2007, we had no
allowance for bad debts since we deemed that 100% of the amount in Accounts
Receivable is collectible.
Concentration
of Risk
Financial
instruments which potentially subject the Company to concentrations of credit
risk are cash and marketable securities. The Company places its cash with
financial institutions deemed by management to be of high credit quality. The
amount on deposit in any one institution that exceeds federally insured limits
is subject to credit risk. All of the Company’s investment in marketable
securities are considered “available-for-sale” and are carried at their fair
value, with unrealized gains and losses (net of income taxes) that are temporary
in nature recorded in accumulated other comprehensive income (loss) in the
accompanying balance sheets. The fair values of the Company’s investments in
marketable securities are determined based on market quotations.
18
Segment
Reporting
Based on
the Company's integration and management strategies, the Company operated in a
single business segment for the years ended December 31, 2007 and
2006.
NOTE
3 GOING CONCERN
The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. Because of the recurring operating losses, no
revenues and the excess of current liabilities over current assets, there is
substantial doubt about the Company’s ability to continue as a going concern.
The Company’s continuation as a going concern is dependent on attaining
profitable operations, and obtaining additional outside financing. The
Company has funded losses from operations primarily from the issuance of
debt. The Company believes that the issuance of equity and debt will
continue to fund operating losses in the short-term until the Company can
generate revenues sufficient to fund its operations.
NOTE
4 DISCONTINUED OPERATIONS
Due to a
significant lack of revenues and cash flow, management made the decision to
discontinue operations related to the trading platform system during the year of
2007. In accordance with, US GAAP no proceeds were recognized from
the sale of assets, due to no assets being sold. The Company incurred
a loss of $2,303,168 from the discontinued operations for the year ended
December 31, 2007. The discontinuation of operations will impact
future cash flows, as the company will no longer rely on any cash inflow from
revenues. Management’s plans to generate future cash flow will come
from continued operations of our online retailer website and raising additional
capital through either debt or equity instruments. There are no
significant past, present or expected upcoming cash uses as a result of the
discontinuation of operations.
NOTE
5 REVERSE ACQUISITION
On
November 1, 2006, the Company entered into an asset purchase agreement with
VisiTrade, LLC, a Nevada limited liability company, where the Company purchased
certain software that acted as a trading platform for financial market
participants. Pursuant to the asset purchase agreement the company
acquire 100% ownership of Visitrade, LLC. The assets and business
that were acquired by the company as a result of the share exchange were
comprised primarily of certain software rights that acted as a trading platform
for financial market participants.
This
transaction was accounted for as a reverse acquisition. As a result, all
financial information prior to November 1, 2006 is that of VisiTrade,
LLC. Following the merger, a reverse merger adjustment was made to
reflect Visitrade, Inc.’s. capital structure. All of the assets and
liabilities acquired in the reverse acquisition were recorded at
cost.
The
following is a condensed balance sheet disclosing the values of the Visitrade,
Inc. assets and liabilities acquired.
Assets
Total
Assets
|
$ -
|
|
Liabilities
and Stockholders’ Deficit
|
||
Total
Liabilities
|
$ 31,916
|
|
Stockholders’
Deficit
|
(31,916)
|
|
Total
Liabilities and Stockholders’ Deficit
|
$ -
|
The
following represents the approximate pro-forma effect assuming the acquisition
with the companies had occurred on January 1, the beginning of the Company’s
fiscal year, including proforma adjustments for depreciation and interest
expense.
for
the year ended
|
|
December
31,
|
|
2006
|
|
Net
Loss
|
$ (299,348)
|
Earnings
per share
|
$ (0.01)
|
19
NOTE
6 RELATED PARTY TRANSACTIONS
For the
years ended December 31, 2007 and 2006 there was $8,000, and $0 owed to the
Noctua Fund Manager, LLC, respectively and no payments have been made to Noctua
Fund Manager, LLC. Mark L. Baum, Esq., Visitrade’s former CEO, is a
managing member of Noctua Fund Manager, LLC.
For the
year ended December 31, 2006, the Company assumed $31,916 in related party debt,
which were monies provided by officers of the company to cover certain general
and administrative expenses of the Company. In July 2007, the
officers gave up their rights to the amount due to
them.
NOTE
7 ISSUANCE OF SHARES FOR SERVICES – STOCK
OPTIONS
In
accordance with US GAAP, the Company has expensed all share-based
payment transactions to employees and non-employees at fair value in or over the
period that the award was earned and performance complete. Fair value
was measured by the stock value upon the date the counterparty’s performance was
complete since there were no performance commitments.
NOTE
8 COMMON STOCK
During
the year ended December 31, 2006, the Company issued 4,963,180 common shares as
part of the reverse merger and recapitalization with Square Shooter, Inc. in
exchange for 100% of the membership interest in VisiTrade, LLC.
Effective
November 2, 2006, the Company affected a one (1) for five (5) reverse stock
split of the authorized, issued and outstanding common stock. These financial
statements have been retroactively restated to reflect this change. There were
224 fractional shares that were canceled due to the reverse stock
split.
During
the year ended December 31, 2007, the Company issued 4,592,036 shares for
services rendered to the Company valued between $0.95 and $0.08 per share. Value
was based on the trading value of the stock on the date of issue.
NOTE
9 PREFERRED STOCK
During
the year ended December 31, 2006 the Company issued 5,000,000 shares of
preferred stock. These shares vote at a ratio of ten-to-one (10-1) with common
shares. The shares are not convertible to common shares.
20
Item
8. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
None.
Item
8A. Controls and Procedures
(A) Evaluation of disclosure
controls and procedures
We
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this Annual
Report on Form 10-K. Disclosure controls and procedures are designed to ensure
that information required to be disclosed in our reports filed under the
Exchange Act, such as this Annual Report on Form 10-K is recorded, processed,
summarized and reported within the time periods specified by the SEC. Disclosure
controls are also designed to ensure that such information is accumulated and
communicated to our management, including the CEO and CFO, as appropriate, to
allow timely decisions regarding required
disclosure.
The
Company’s management is responsible for establishing and maintaining effective
internal control over financial reporting (as defined in Rule 13a-15(f) of
the Securities Exchange Act). Management assessed the effectiveness of the
Company’s internal control over financial reporting as of December 31,
2007. In making this assessment, management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”). Based on that assessment, management believes that, as of
December 31, 2007, the Company’s internal control over financial reporting
was ineffective based on the COSO criteria, due to the following material
weakness listed below. This annual report does not include an attestation report
of our registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to
attestation by the our registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to
provide only management's report in this annual report.
In
addition, due to the untimely filing of management’s assessment of internal
controls over financial reporting in the original Form 10-K for the
year ending December 31, 2007, the Company believes their disclosure control
procedures are ineffective as well. The Company plans to remedy this issue by
completing their assessment of internal controls over financial reporting in a
timely manner in their subsequent Form 10-K filings going forward.
Material
Weaknesses Identified
In
connection with the preparation of our financial statements for the year ended
December 31, 2007, certain significant deficiencies in internal control became
evident to management that, in the aggregate, represents material weaknesses,
including:
During
the year ended December 31, 2007, the company internally performed all aspects
of our financial reporting process, including, but not limited to, access to the
underlying accounting records and systems, the ability to post and record
journal entries and responsibility for the preparation of the financial
statements. Due to the fact these duties were performed oftentimes by the
same people, a lack of review was created over the financial reporting process
that might result in a failure to detect errors in spreadsheets, calculations,
or assumptions used to compile the financial statements and related disclosures
as filed with the SEC. These control deficiencies could result in a
material misstatement to our interim or annual financial statements that would
not be prevented or detected.
Because
of the inactivity of the Company and lack of operations during the years ended
December 31, 2001, 2002, 2003 and portions of the year ended December 31, 2004,
the Company did not maintain formal financial books and records. The financial
books and records of the Company for these periods were subsequently compiled
from documents and records obtained from various sources, including the former
officers of the Company. During the latter part of 2004 and to the present, the
Company has implemented a full accounting system, and continues to implement
procedures and controls to ensure that information required to be disclosed by
the Company in reports that the Company files or submits under the Securities
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC.
Plan
for Remediation of Material Weaknesses
We intend
to take appropriate and reasonable steps to make the necessary improvements to
remediate these deficiencies and we intend to consider the results of our
remediation efforts and related testing as part of our year-end 2008 assessment
of the effectiveness of our internal control over financial
reporting.
21
(B) Changes in internal
controls
During
the period covered by this report, there were no changes in the Company's
internal control over financial reporting that occurred during the last fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Item
8B. Other Information.
None
PART
III
Item
9. Directors, Executive Officers, Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act
Directors and Executive
Officers.
The
following table sets forth, as of the date of this report, the name, age and
position of our sole director, executive officers and other significant
employees:
Officers
and Directors
NAME
|
AGE
|
SINCE
|
POSITION
|
Ford
Sinclair
|
43
|
2010
|
Chief
Executive Officer, Principal Financial Officer, Secretary and Sole
Director
|
The
backgrounds of our directors, executive officers and significant employees are
as follows:
Ford
Sinclair, Chief Executive Officer, Principal Financial Officer, Secretary and
Sole Director.
Mr.
Sinclair is our Chief Executive Officer, Principal Financial Officer, Secretary
and our sole Director and has been since April of 2010. Mr. Sinclair is not a
full time employee and has other outside commitments. Mr. Sinclair
brings an impressive background of success to the Company, specializing in
business development, mergers and acquisitions, and new market development for a
variety of companies. In 2000 through to 2004, Mr. Sinclair has been directly
responsible for completing successful acquisitions of Global Golf Holdings.
Since 2004, Mr. Sinclair has been the President and CEO for Banis Business
Development Group, a management and consulting firm. Mr. Sinclair currently also
serves as Director for Ice House Data Centers, Inc. Mr. Sinclair does not
beneficially own any Company securities. Mr. Sinclair devotes approximately
10-20 hours per week to the Company’s business and management.
Audit
Committee.
We do not have an audit
committee. We do not have a financial expert serving on our board of
directors
Code
of Ethics
We have
adopted a Code of Ethics and Business Conduct on December 31, 2007 authorizing
the establishment of a committee to ensure that our disclosure controls and
procedures remain effective. Our Code also defines the standard of conduct
expected by our officers, directors and employees.
Section
16(a) Beneficial Ownership Reporting Compliance
Section 16(a)
of the Securities Exchange Act of 1934, as amended, requires our directors,
executive officers, and stockholders holding more than 10% of our outstanding
common stock, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in beneficial ownership of our
common stock. Executive officers, directors and greater-than-10%
stockholders are required by SEC regulations to furnish us with copies of all
Section 16(a) reports they file. To our knowledge, based solely
on review of the copies of such reports furnished to us for the year ended
December 31, 2007, no Section 16(a) reports required to be filed by our
executive officers, directors and greater-than-10% stockholders were filed on a
timely basis.
22
Item
10. Executive Compensation
The
following table summarizes all of the annual compensation paid to all of the
company’s named executive officers for the years ended December 31, 2009,
2008, 2007 and 2006:
Name
and Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards (Shares)
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
|
Nonqualified
Deferred Compensation Earnings
|
All
Other Compensation
|
Total
(Shares)
|
Ford
Sinclair.(1)
|
2009
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Chief
Executive Officer,
|
|||||||||
Principal
Financial Officer,
|
2008
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
and
Secretary
|
|||||||||
2007
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
|
2006
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
|
Mark
L. Baum, Esq.(2)
|
2009
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Former
Chief Executive
|
|||||||||
Officer,
Principal Financial
|
2008
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Officer
and Secretary
|
|||||||||
2007
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
|
2006
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
|
Michael
West(3)
|
2007
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Former
President and
|
|||||||||
Chief
Executive Officer
|
2006
|
-0-
|
-0-
|
1,041,667
|
-0-
|
-0-
|
-0-
|
-0-
|
1,041,667
|
C.
Anthony Ferracone(4)
|
2007
|
-0-
|
-0-
|
259,259
|
-0-
|
-0-
|
-0-
|
-0-
|
259,259
|
Former
Secretary and
|
|||||||||
Treasurer
|
2006
|
-0-
|
-0-
|
1,300,926
|
-0-
|
-0-
|
-0-
|
-0-
|
1,300,926
|
Lawrence
Bolton(5)
|
2007
|
-0-
|
-0-
|
259,259
|
-0-
|
-0-
|
-0-
|
-0-
|
259,259
|
Former
President and
|
|||||||||
Chief
Executive Officer
|
2006
|
-0-
|
-0-
|
259,259
|
-0-
|
-0-
|
-0-
|
-0-
|
259,259
|
(1)
|
On
April 1, 2010, Mr. Ford Sinclair was appointed as our Chief Executive
Officer, Secretary, Treasurer and sole Director. Mr. Sinclair currently
receives no employment compensation for holding these
positions.
|
|
(2)
|
Mr.
Mark L. Baum, Esq. held the positions of Chief Executive
Officer, Secretary, Treasurer and sole Director from July 7, 2007 until
his resignation on April 1, 2010.
|
(3)
|
Mr.
Michael West held the positions of President and Chief Executive Officer
January 1, 2006 until his resignation on October 2,
2006.
|
(4)
|
Mr.
C. Anthony Ferracone held the positions of Secretary and Treasurer January
1, 2006 until his resignation on July 6,
2007.
|
(5)
|
Mr.
Lawrence Bolton held the positions of President and Chief Executive
Officer October 2, 2006 until his resignation on July 6,
2007.
|
Option
Exercise In Last Fiscal Year And Fiscal Year End Option Values
Our
executive officers were not issued any options which could have been exercised
during the fiscal years ended December 31, 2006 or 2007.
Directors'
Compensation
Our
directors have not received any compensation for the year ended
December 31, 2007. All Directors during the fiscal year ended December 31,
2007 have been listed in the Executive Compensation table above. All directors
may receive reimbursement for reasonable out-of-pocket expenses in attending
board of directors meetings.
23
Compensation
Committee
We have
not formed an independent compensation committee.
Item
11. Security Ownership of Certain Beneficial Owners and Management.
The
following table sets forth certain information regarding the beneficial
ownership of the 28,747,704 issued and outstanding shares of our common stock as
of the date of this registration statement by the following
persons:
1.
|
Each
person who is known to be the beneficial owner five percent (5%) or more
of our issued and outstanding shares of common
stock;
|
2.
|
Each
of our Directors and executive Officers;
and
|
3.
|
All
of our Directors and Officers as a
group
|
Title,
Class and Percentage of Securities Beneficially Owned
|
|||||
Name
and Address
|
Common
|
Series
A Preferred
|
|||
Noctua
Fund, LP(1)
|
22,373,635
|
77.8%
|
5,000,000
|
100%
|
|
Ford
Sinclair (2)
|
0
|
0%
|
0
|
0%
|
|
All
Directors and Officers as a Group(3)
|
0
|
0%
|
0
|
0%
|
|
Total
|
22,373,635
|
77.8%
|
5,000,000
|
100%
|
|
(1)
|
The
address for Noctua Fund, L.P. is c/o Noctua Fund Manager, LLC, 2038 Corte
Del Nogal, Suite 110, Carlsbad, CA 92011. Noctua Fund
Manager, LLC is an entity equally beneficially owned and controlled by
Mark L. Baum and James B. Panther II through entities owned or controlled
by them. Such persons are non-voting minority limited partners
in the Noctua Fund, L.P.
itself.
|
|
(2)
|
The
address is 2038 Corte del Nogal, Suite 110, Carlsbad, California
92008.
|
|
(3)
|
Our
sole Director and Officer is Ford
Sinclair.
|
Beneficial
ownership is determined in accordance with the rules and regulations of the
SEC. The number of shares and the percentage beneficially owned by
each individual listed above include shares that are subject to options held by
that individual that are immediately exercisable or exercisable within 60 days
from the date of this registration statement and the number of shares and the
percentage beneficially owned by all officers and directors as a group includes
shares subject to options held by all officers and directors as a group that are
immediately exercisable or exercisable within 60 days from the date of this
registration statement
Item
12. Certain Relationships and Related Transactions.
None.
Item
13. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.
a. Exhibits
Exhibit
#
|
Title
|
3.1
|
Articles
of Incorporation. (Attached as an exhibit to our Form 10-SB filed with the
SEC on December 17, 2007 and incorporated herein by
reference).
|
3.2
|
Certificate
of Amendment to Articles of Incorporation dated July 7, 2003 (Attached as
an exhibit to our Form 10-SB filed with the SEC on December 17, 2007 and
incorporated herein by reference).
|
3.2
|
Bylaws
(Attached as an exhibit to our Form 10-SB filed with the SEC on December
17, 2007 and incorporated herein by reference).
|
14.1
|
Code
of Ethics. (Attached as an exhibit to our Form 10-KSB filed with the SEC
on October 15, 2008 and incorporated herein by
reference).
|
31.1
|
Certification
of the Principal Executive Officer and Principal Financial Officer
pursuant to Section 302
of
the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification
of the Principal Executive Officer and Principal Financial
Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
|
24
Item
14. Principal
Accountant Fees and Services
Audit
Fees
For the
years ended December 31, 2007 and December 31, 2006, Pollard-Kelley Auditing
Services, Inc., the Company’s principal accountants, billed the Company $2,000
each year end respectively, for fees for the audit of the Company’s annual
financial statements and review of financial statements included in the
Company’s Forms 10-QSB.
Audit-Related
Fees
For the
years ended December 31, 2007 and December 31, 2006, Pollard-Kelley Auditing
Services, Inc. did not provide the Company with any assurances or related
services reasonably related to the performance of the audit or review of the
Company’s financial statements and are not reported above under "Audit
Fees."
Tax Fees
For the
years ended December 31, 2007 and December 31, 2006, Pollard-Kelley Auditing
Services, Inc. did not bill for professional services for tax compliance, tax
advice, and tax planning.
All Other
Fees
For the
years ended December 31, 2007 and December 31, 2006, Pollard-Kelley Auditing
Services, Inc. did not bill the Company for fees associated with the preparation
and filing of the Company’s filings, the creation of pro forma financial
statements and other related matters.
Audit Committee Pre-Approval
Policies
The
Company currently does not have an audit committee. The Company’
Board of Directors currently approves in advance all audit and non-audit related
services performed by the Company’s principal accountants.
25
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
VISITRADE,
INC.
Date:
June 15,
2010 /s/
Ford F. Sinclair
By: Ford F. Sinclair
Its: Chief Executive Officer and
Principal Financial Officer
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Date:
June 15,
2010 /s/
Ford F. Sinclair
By: Ford
F. Sinclair
Its:
Director
26