Attached files
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q/A
Amendment No. 1
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
For Quarterly period Ended: June 30, 2010; or
----- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
This Amendment No. 1 on Form 10-Q/A hereby amends the registrant's quarterly
report on Form 10-Q, which the registrant filed with the Securities and Exchange
Commission initially on August 10, 2010.
For the transition period _________ to __________
Commission File Number: 0-25631
-----------------------
ALPHATRADE.COM
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 98-0211652
------------------------------ ------------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
SUITE 116 - 930 West 1st Street, North Vancouver, B.C. V7P3N4 Canada
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(604)986-9866
-------------------------
(Issuer's telephone number)
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 a registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No
--- ---
State the number of shares outstanding of the issuer's common equity:
$0.001 par value, as of July 31, 2010, is 4,053,756,023.
Transitional Small Business Disclosure Format. Yes No X
--- ---
1
Report on Form 10-Q/A
For the Quarter Ended June 30, 2010
Explanatory Note:
This Amendment No. 1 on Form 10-Q/A hereby amends the registrant's quarterly
report on Form 10-Q, which the registrant filed with the Securities and Exchange
Commission initially on August 10, 2010. This amendment is being filed in order
to clarify the Company's accounting for its settlement of a $3.2 million death
benefit payable to its former CEO, and to correct an error relating to
management's assessment of the Company's internal controls over financial
reporting.
INDEX
Page
----
Part I. Financial Information
Item 1. Financial Statements.................................. 3
Balance Sheets.......................................3-4
Statements of Operations ............................5-6
Statement of Stockholders' Equity (Deficit)........... 7
Statements of Cash Flows.............................. 8
Notes to the Financial Statements ..................9-13
Item 2. Management's Discussion and Analysis
or Plan of Operation ............................14-15
Item 3. Controls and Procedures ...........................15-16
Part II. Other Information
Item 1. Legal Proceedings ................................... 17
Item 2. Changes in Securities ............................... 17
Item 3. Defaults Upon Senior Securities ..................... 17
Item 4. Submission of Matters to a Vote of Security Holders . 17
Item 5. Other Information ................................... 17
Item 6. Exhibits and Reports on Form 8-K .................... 17
Signatures........................................... 18
Certifications
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ALPHATRADE.COM
Balance Sheets
ASSETS
June 30, December 31,
2010 2009
----------- ----------
(Unaudited) (Audited)
CURRENT ASSETS
Cash $ 61,692 $ 63,897
Accounts receivable, net -- --
Marketable securities-available for sale 309,178 552,714
Marketable securities-available for sale related party 1,360 1,256
Prepaid expenses 10,063 1,885
---------- ----------
Total Current Assets 382,293 619,752
---------- ----------
PROPERTY AND EQUIPMENT, net 175,982
28,913
---------- ----------
TOTAL ASSETS $ 558,275 $ 648,665
========== ==========
The accompanying notes are an integral part of these financial statements.
3
ALPHATARADE.COM
Balance Sheets
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
June 30, December 31,
2010 2009
------------ ------------
CURRENT LIABILITIES (Unaudited) (Audited)
Accounts payable and accrued expenses $ 1,124,674 $ 1,162,451
Related party payables 5,067,452 5,756,567
Deferred revenues 296,881 524,383
Capital lease obligation - Current portion 17,205
------------ ------------
Total Current Liabilities 6,506,212 7,443,401
------------ ------------
LONG TERM LIABILITIES
Capital lease obligation 127,207
------------ ------------
Total Long Term Liabilities 127,207
------------ ------------
TOTAL LIABILITIES 6,633,419 7,443,401
------------ ------------
STOCKHOLDERS' (DEFICIT)
Preferred shares: $0.001 par value,
10,000,000 shares authorized:
2,000,000 Class A and
2,000,000 Class B shares issues
and outstanding 4,000 4,000
Common shares: $0.001 par value,
300,000,000 shares authorized:
53,756,023 and 53,756,023
shares issued and outstanding,
respectively 53,756 53,756
Stock subscription payable 45,080 45,080
Additional paid-in capital 35,263,273 34,606,348
Accumulated other comprehensive income (221,551) (159,098)
Accumulated deficit (41,219,702) (41,344,822)
------------ ------------
Total Stockholders' (Deficit) (6,075,144) (6,794,736)
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' (DEFICIT) $ 558,275 $ 648,665
============ ============
The accompanying notes are an integral part of these financial statements.
4
ALPHATRADE.COM
Statements of Operations and Other Comprehensive Income (Loss)
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
--------------------------- --------------------------
2010 2009 2010 2009
----------- ----------- ----------- -----------
REVENUES
Subscription revenue $ 585,325 $ 609,328 $ 1,126,224 $ 1,262,186
Advertising revenue 89,544 473,453 352,545 1,519,299
Other revenue 94,345 67,151 182,841 119,593
----------- ----------- ----------- -----------
Total Revenues 769,214 1,149,932 1,661,610 2,901,078
----------- ----------- ----------- -----------
COST OF SALES
Financial content 289,223 397,070 739,759 798,933
Other cost of sales -- 906 -- 1,108
----------- ----------- ----------- -----------
Total Cost of Sales 289,223 397,976 739,759 800,041
----------- ----------- ----------- -----------
GROSS PROFIT 479,991 751,956 921,851 2,101,037
----------- ----------- ----------- -----------
OPERATING EXPENSES
Management expense -- 120,000 -- 240,000
Bad debt expense (1,453) 1,000 (1,349) 1,031,477
Professional fees 120,994 85,541 208,742 175,880
Research and development 67,742 68,795 154,376 133,844
Marketing expense 72,351 113,251 120,584 164,209
General and administrative 118,045 203,822 236,706 331,759
----------- ----------- ----------- -----------
Total Operating Expenses 377,679 592,409 719,059 2,077,169
----------- ----------- ----------- -----------
INCOME (LOSS) FROM OPERATIONS 102,312 159,547 202,792 23,868
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Realized gains (losses) on sale of
marketable securities (27,678) (249,305) (53,352) (319,830)
Gain (Loss) on forgiveness of debt -- (240,000) -- (240,000)
Interest expense (12,206) (105,912) (24,320) (209,887)
----------- ----------- ----------- -----------
Total Other Income (Expense) (39,884) (595,217) (77,672) (769,717)
----------- ----------- ----------- -----------
NET INCOME (LOSS) BEFORE INCOME TAXES 62,428 (435,670) 125,120 (745,849)
INCOME TAX EXPENSE -- -- -- --
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 62,428 $ (435,670) $ 125,120 (745,849)
=========== =========== =========== ===========
The accompanying notes are a integral part of these financials statements.
5
ALPHATRADE.COM
Statements of Operations and Other Comprehensive Income (Loss)
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
--------------------------- --------------------------
2010 2009 2010 2009
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 62,428 $ (435,670) $ 125,120 $ (745,849)
=========== =========== ============ ============
OTHER COMPREHENSIVE INCOME (LOSS) $ 10,405 $ (66,779) $ (62,453) $ (1,264,751)
----------- ----------- ------------ ------------
TOTAL COMPREHENSIVE INCOME (LOSS) $ 72,833 $ (502,449) $ 62,667 $ (2,010,600)
=========== =========== ============ ============
BASIC EARNINGS (LOSS) PER SHARE $ 0.00 $ (0.01) $ 0.00 $ (0.01)
=========== =========== ============ ============
FULLY DILUTED EARNINGS (LOSS) PER SHARE $ 0.00 $ (0.01) $ 0.00 $ (0.01)
=========== =========== ============ ============
BASIC WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 53,756,023 54,476,023 53,756,023 54,337,561
=========== =========== ============ ============
FULLY DILUTED WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 83,756,023 54,476,023 83,756,023 54,337,561
=========== =========== ============ ============
The accompanying notes are a integral part of these financials statements.
6
ALPHATRADE.COM
Statements of Stockholders' (Deficit)
(Unaudited)
Additional Sto Other
Preferred Stock Common Stock Sub- Compre- Total
---------------- --------------------- Paid-In scription hensive Accumulated Stockholders'
Shares Amount Shares Amount Capital Payable Income Deficit (Deficit)
--------- ------ ----------- -------- ----------- ------- --------- ------------ -----------
Balance, December 31, 2008 4,000,000 4,000 54,076,023 54,076 33,921,184 45,080 (40,543) (36,793,464) (2,809,667)
Common stock issued for services
at $0.02 per share -- -- 400,000 400 7,600 -- -- -- 8,000
Common stock canceled -- -- (720,000) (720) 720 -- -- -- --
Contributed interest -- -- -- -- 676,844 -- -- -- 676,844
Net loss for the year
ended December 31, 2009 -- -- -- -- -- -- (118,555) (4,551,358) (4,669,913)
--------- ------ ----------- -------- ----------- ------- --------- ------------ -----------
Balance, December 31, 2009 4,000,000 4,000 53,756,023 53,756 34,606,348 45,080 (159,098) (41,344,822) (6,794,736)
Contributed capital from related
parties -- -- -- -- 656,925 -- -- -- 656,925
Net income for the six months
ended June 30, 2010 -- -- -- -- -- -- (62,453) 125,120 62,667
--------- ------ ----------- -------- ----------- ------- --------- ------------ -----------
Balance, June 30, 2010 4,000,000 $4,000 53,756,023 $ 53,756 $35,263,273 $45,080 $(221,551) $(41,219,702) $(6,075,144)
========= ====== =========== ======== =========== ======= ========= ============ ===========
The accompanying notes are a integral part of these financials statements.
7
ALPHATRADE.COM
Statements of Cash Flows
(Unaudited)
For the Six Months
Ended
June 30,
-----------------------
2010 2009
CASH FLOWS FROM --------- -----------
OPERATING ACTIVITIES
Net income (loss) $ 125,120 $ (745,849)
Adjustments to reconcile net income (loss) to
net cash used by operating activities:
Depreciation expense 7,552 9,585
Loss on sale of investments 53,352 411,483
(Gain) Loss on settlement of debt -- 240,000
Transfer of investments to settle debt -- 500,000
Increase of investments from non-cash
receipt of advertising revenues (3,000) (869,057)
Common stock issued for services -- 8,000
Changes in operating assets and liabilities:
Changes in accounts receivable -- 1,152,457
Changes in prepaid expenses (8,178) 1,000
Changes in deferred revenues (227,502) (5,278)
Changes in related party payables (32,190) 426,502
Changes in accounts payable and accrued
expenses (37,777) (1,156,527)
--------- -----------
Net Cash Used in Operating Activities (122,623) (27,684)
--------- -----------
CASH FLOWS FROM
INVESTING ACTIVITIES
Sale of securities 130,627 66,131
Purchase of fixed assets (10,209) --
--------- -----------
Net Cash Provided by Investing Activities 120,418 66,131
--------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES -- --
--------- -----------
NET INCREASE (DECREASE) IN CASH (2,205) 38,447
CASH AT BEGINNING OF PERIOD 63,897 55,650
--------- -----------
CASH AT END OF PERIOD $ 61,692 $ 94,097
========= ===========
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ -- $ 73,279
Income Taxes $ -- $ --
NON CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for services $ -- $ 8,000
Equipment purchased under capital lease
obligation $(144,412) $ --
Contributed capital from forgiveness of
related party debt $ 656,925 $ --
The accompanying notes are an integral part of these financial statements.
8
ALPHATRADE.COM
Notes to Financial Statements
June 30, 2010 and December 31, 2009
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows at June 30, 2010 and 2009, and for all
periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is
suggested that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's December
31, 2009 audited financial statements. The results of operations for the periods
ended June 30, 2010 and 2009 are not necessarily indicative of the operating
results for the full year.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles in the United States of America applicable to a
going concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company is
unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other
things, additional capital resources. Management's plan is to obtain such
resources for the Company by obtaining capital from management and significant
shareholders sufficient to meet its minimal operating expenses and seeking
equity and/or debt financing. However management cannot provide any assurances
that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 - RELATED PARTY TRANSACTIONS
In June 2010, the Company entered into the Settlement Agreement and Release in
Full of All Claims with two related parties. Pursuant to the agreements, a total
of $656,925 related to the prior years' management fee were released.
9
ALPHATRADE.COM
Notes to Financial Statements
June 30, 2010 and December 31, 2009
NOTE 3 - RELATED PARTY TRANSACTIONS (CONTINUED)
Related parties payables consisted of the following:
June 30, December 31,
2010 2009
---------- ----------
Officer bonuses $ -- $ 78,000
Officer accrued wages -- 581,119
Cash advances 1,867,452 1,897,448
Officer death benefit liability 3,200,000 3,200,000
---------- ----------
$5,067,452 $5,756,567
========== ==========
The Company entered into Promissory Notes with the recipients of the officer
death benefit wherein interest accrued at the rate of three percent (3%) per
annum until paid. On July 6, 2010 the recipients of the death benefit were
issued shares in full and final satisfaction of all amounts due to them.
NOTE 4 - OUTSTANDING COMMON STOCK OPTIONS AND STOCK PURCHASE WARRANTS
In according with Accounting Standards Codification ("ASC") Topic 718 (FAS123R),
the Company estimates the fair value of each stock award at the grant date by
using the Black-Scholes option pricing model. There were no grants during the
quarter ended June 30, 2010.
The general terms of awards such as vesting requirements (usually 1 to 2 years),
term of options granted (usually 10 years), and number of shares authorized for
grants of options or other equity instruments are determined by the Board of
Directors. A summary of the status of the Company's stock options and warrants
as of June 30, 2010 and changes during the periods ended December 31, 2009 and
June 30, 2010 is presented below:
Weighted Weighted
Options Average Average
and Exercise Grant Date
Warrants Price Fair Value
------------ --------- ----------
Outstanding, December 31, 2009 47,105,000 $ 0.30 $ 0.30
Exercisable, December 31, 2009 32,625,000 $ 0.30 $ 0.30
------------ --------- ----------
Granted - - -
Expired - - -
Exercised - - -
------------ --------- ----------
Outstanding, June 30, 2010 47,105,000 $ 0.30 $ 0.30
============ ========= ==========
Exercisable, June 30, 2010 32,625,000 $ 0.30 $ 0.30
============ ========= ==========
10
ALPHATRADE.COM
Notes to Financial Statements
June 30, 2010 and December 31, 2009
NOTE 5 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
Recent Accounting Pronouncements
--------------------------------
The Company has evaluated recent accounting pronouncements and their adoption
has not had or is not expected to have a material impact on the Company's
financial position, or statements.
NOTE 6 - MARKETABLE SECURITIES
FASB ASC 820, Fair Value Measurements and Disclosures establishes three levels
of inputs that may be used to measure fair value: quoted prices in active
markets for identical assets or liabilities (referred to as Level 1), observable
inputs other than Level 1 that are observable for the asset or liability either
directly or indirectly (referred to as Level 2), and unobservable inputs to the
valuation methodology that are significant to the measurement of fair value of
assets or liabilities (referred to as Level 3).
The Company has investments in marketable equity securities. Management
determines the appropriate classification of the securities at the time they are
acquired and evaluates the appropriateness of such classifications at each
balance sheet date. The classification of those securities and the related
accounting polices are as follows:
Available-for-sale securities consist of marketable equity securities not
classified as trading or held-to-maturity. Available-for-sale securities are
stated at fair value, and unrealized holding gains and losses, which continuous
less than 12 months, are reported in Accumulated Other Comprehensive Income of
stockholders' equity. The Company determines the cost of securities sold by
specific identification method. The following is a summary of the Company's
investment in available-for-sale securities as of June 30, 2010, consistent with
the fair value hierarchy provisions of ASC 820:
Fair Value Measurement
at Reporting Date Using
Fair Level Level Level
Market Value 1 2 3
------------ -------- -------- --------
Assets:
Available-for-sale $ 310,538 $310,538 - -
Securities
------------ -------- -------- --------
Total Assets $ 310,538 $310,538 - -
============ ======== ======== ========
11
ALPHATRADE.COM
Notes to Financial Statements
June 30, 2010 and December 31, 2009
NOTE 6 - MARKETABLE SECURITIES (CONTINUED)
Level 1: Quoted prices in active markets for identical assets
Level 2: Significant other observable inputs
Level 3: Significant unobservable inputs
Amortized Gross Gross Fair
Cost Unrealized Unrealized Market
Basis Gains Loss Value
--------- ---------- ---------- ---------
Available-for-sale
Securities $ 532,089 $ 113,718 $ (335,269) $ 310,538
Included in marketable securities there are shares of common stock with a fair
value of $191,119, which is subject to the Rule 144 hold restriction.
For the 3 months and 6 months ended June 30, 2010, there were $27,678 and
$53,352 realized losses resulting from the sales of marketable securities.
NOTE 7 - CAPITAL LEASE
The Company entered into a lease for computer equipment in June 2010. The term
of the lease is for 3 years. Total gross amount of assets recorded under the
capital lease as of June 30, 2010 is $144,412.
The following is a schedule by years of future minimum lease payment under
capital lease as of June 30, 2010.
Year ending December 31: Amount
--------
2010 $ 23,828
2011 57,186
2012 57,186
2013 33,363
--------
Total minimum lease payments 171,563
Less: Amount representing interest (27,151)
--------
Present value of net minimum lease payments $144,412
========
NOTE 8 - COMMON STOCK
The Articles of Incorporation were amended on June 1, 2010, to increase the
authorized number of shares of the Company's $.001 par value common stock from
300,000,000 to 5,000,000,000.
12
ALPHATRADE.COM, INC
Notes to Financial Statements
June 30, 2010 and December 31, 2009
NOTE 9 - CONTIGENCY
On May 21, 2009, the Company entered into a Release and Settlement Agreement
with PBR (the "PBR Settlement Agreement"), pursuant to which the Company and PBR
agreed to settle all disputes and claims arising from and relating to the
Company's sponsorship agreement with the PBR. Pursuant to the PBR Settlement
Agreement, the Company agreed to make payments to PBR, for each of its 2009,
2010 and 2011 fiscal years, equal to the lesser of $100,000 or 30% of the
Company's net profit for each fiscal year. With considering of the business
performance projection and going concern, there is no liability related to this
contingency event included in the current period financial results.
NOTE 10 - SUBSEQUENT EVENTS
On July 6, 2010, the Company negotiated and issued 4,000,000,000 shars of its
common stock in order to satisfy a related party debt in the amount of
$3,200,000, pertaining to a death benefit payable to the estate of the Company's
former chief executive officer. The death benefit amount of $3,200,000 was
negotiated by the Company and the former officer, prior to her death. The issued
shares were valued at $0.0034 per share ($13,600,000 in the aggregate), the
market rate on the date of issuance. This transaction resulted in the Company
experiencing a loss on extinguishment of debt in the amount of $10,400,000.
Management has evaluated subsequent events as of August 9, 2010 and determined
that there are no additional subsequent events to report.
13
Item 2. Management's Discussion and Analysis of Financial Condition or Plan of
Operations
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Form 10-Q/A.
Forward-looking and Cautionary Statements
This report contains certain forward-looking statements. These statements relate
to future events or our future financial performance and involve known and
unknown risks and uncertainties. These factors may cause our company's, or our
industry's actual results, levels of activity, performance or achievements to be
materially different from those expressed or implied by the forward-looking
statements. In some cases, you can identify forward-looking statements by
terminology such as "may," "will" "should," "expects," "intends," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," "continue," or
the negative of these terms or other comparable terminology.
Results of Operations.
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009
--------------------------------------------------------
During the three and six months ended June 30, 2010, total revenues were
$769,214 and $1,661,610, respectively. This is a decline of 33% and 43% over the
three and six months ended June 30, 2009, which had revenues of $1,149,932 and
$2,901,078, respectively.
Subscription revenue for the three and six month period ended June 30 were
$585,325 and $1,126,324 in 2010 and $609,238 and $1,262,186 in 2009. The
decrease in our subscriber revenue is a result of the financial market downturn.
We are hopeful that as the financial markets strengthen that our subscription
revenues will increase.
Advertising revenues for the three and six month period ended June 30 were
$89,544 and $352,545 in 2010 and $473,453 and $1,519,299 in 2009. The decrease
in our advertising revenues is mainly due to the whole economic and financial
market downturn as companies are not investing in advertising as well as the
loss of our key marketing officer.
Other revenues for the three and six month period ended June 30 were $94,345 and
$182,841 in 2010 and $67,151 and $119,593 in 2009. This dramatic increase of 40%
for the quarter and 53% for our first six months of 2010 is the result of the
growth in our web site development and E-Trax departments.
In addition, we had $296,881 in deferred revenue to be realized in subsequent
quarters. This deferred revenue is derived from our extended advertising, E-Trax
and subscription contracts and will be realized in the subsequent quarters based
on the terms of the contracts and the service being provided.
We believe the market conditions at present will encourage people to save money
in every way possible. The cost effective products AlphaTrade offers in both the
E-Gate and E-Trax should help us grow the client base for all of our products.
Our cost of sales for our financial products is directly related to the price of
our financial feeds and content. Some of these costs are fixed monthly fees and
14
others are based on the number of users or subscribers.
For the three and six months ended June 30, 2010, our cost of sales were 38% and
45% of revenues compared to 35% and 28% of revenues for the same periods in
2009.
During the three and six month period ended June 30, our operating expenses
decreased to $377,679 and $719,059 in 2010 from $592,409 and $2,077,169 in 2009.
The decrease is primarily due to 1) a reduction in management fees incurred in
2010, 2) a $1,030,477 write-down of non-cash trade receivables in 2009, 3) lower
spending and savings on marketing, professional and general fees and
administration expenses. During the three and six months ended June 30, 2010 we
incurred $72,351 and $120,584 in marketing fees compared to $113,251 and
$164,209 in 2009.
The Company recognized Other Expenses totaling $39,884 and $77,672 for the three
and six months ended June 30, 2010, respectively, compared to $435,670 and
$769,717 during the comparable periods of 2009. The decrease was the result of
less realized losses on sales of marketable securities, lower interest expenses
in 2010 and $240,000 loss on forgiveness of debt incurred in 2009. The interest
rate on the Company's debt was reduced in the second half of 2009.
We realized a net income of $62,248 and $125,120 for the three and six months
ended June 30, 2010 compared to a net loss of ($435,670) and ($745,849) for the
same periods ended June 30, 2009. We anticipate this trend to continue and look
forward to a profitable year for fiscal 2010.
Liquidity and Capital Resources.
We have consistently been financed through loans from related parties and from
raising capital through private equity offerings. We used ($123,623) and
($27,864) of net cash in our operating activities in the six months ended June
30, 2010 and 2009, respectively. We expect that in the next twelve months the
cash generated by our operations will be adequate to cover our operating
expenses.
There was $120,418 net cash provided by investing activities for the same
periods in 2010 and $66,131 net cash was provided from the sale of marketable
securities in 2009. $130,627 was received from the sales of marketable
securities in 2010.
During the first six months ended June 30, 2010, we incurred $-0- in financing
activities compared to $-0- for the same period in 2009.
Given the right circumstances, we would entertain a secondary financing if it
would ensure our growth could be greatly fast-tracked otherwise we will focus on
building our business via revenue growth. Currently, we do not have any
definitive plans for a secondary financing.
Item 3. Controls and Procedures
As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of management,
including our chief executive officer and principal financial officer, of the
effectiveness of the design and operation of our disclosure controls and
15
procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934. Based upon that evaluation, our chief executive officer
and principal financial officer concluded that our disclosure controls and
procedures on June 30, 2010 are not effective to ensure the material information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act to be recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and are designed to ensure that
information required to be disclosed by us in these reports is accumulated and
communicated to our management, as appropriate to allow timely decisions
regarding required disclosures. There has been no change in our internal
controls or in other factors which could significantly affect internal controls
subsequent to the date we carried out our evaluation.
16
PART II - OTHER INFORMATION.
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 31.1 Certification of C.E.O. Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Exhibit 31.2 Certification of Principal Accounting Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Certification of C.E.O. Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
Exhibit 32.2 Certification of Principal Accounting Officer Pursuant
to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
(b) Report on Form 8-K
None
17
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ALPHATRADE.COM
Date: January 13, 2011 / s / Gordon J. Muir
----------------------------
Chief Executive Officer
Date: January 13, 2011 / s / Katharine Johnston
----------------------------
Principal Accounting Officer
18
