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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D. C. 20549  


FORM 10-Q


x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2011


OR


o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _____________ to ___________________


Commission file number: 000-52390


Advanced Voice Recognition Systems, Inc.


(Exact name of registrant as specified in its charter)  


Nevada

98-0511932

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)


7659 E. Wood Drive

Scottsdale, Arizona  85260

(Address of principal executive offices)


(480) 704-4183

(Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 x      No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


Yeso      No x [Files not required.]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o       Accelerated filer o      


Non-accelerated filer o       Smaller reporting company x      

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes o       No x

 

As of August 8, 2011, 192,642,865 shares of Advanced Voice Recognition Systems, Inc. common stock, $.001 par value, were outstanding.















































































































































































































































































































































































Advanced Voice Recognition Systems, Inc.


Table of Contents

 

 PART I - FINANCIAL INFORMATION

 

 

 

Page

Item 1.

 

Financial Statements

 

 

 

 

 

 

 

Condensed Balance Sheets as of  June 30, 2011 (Unaudited) and December 31, 2010

1

 

 

 

 

 

 

Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2011 and 2010 and from Inception through June 30, 2011

2

 

 

 

 

 

 

Unaudited Condensed Statement of Stockholders’ Deficit as for the six months ended June 30, 2011

4

 

 

 

 

 

 

Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2011 and 2010 and from Inception through June 30, 2011

5

 

 

 

 

 

 

Notes to Unaudited Condensed Financial Statements

7

 

 

 

 

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

13

 

 

 

 

Item 4T.

 

Controls and Procedures

14

 

 

 

 

 PART II - OTHER INFORMATION

 

 

 

 

 Item 6.  

 

Exhibits

16

 

 

 

 

 SIGNATURES

 

 

18



ii




Part I. Financial Information

 

Item 1. Financial Statements

Advanced Voice Recognition Systems, Inc.

Condensed Balance Sheets

Development Stage Company


 

 

 

JUNE 30,

 

 

DECEMBER 31,

 

 

 

 

 

2011

 

 

2010

 

 

 

 

 

(Unaudited)

 

 

(Derived from audited

 

 

 

 

 

 

 

 

financial statements)

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash

 

$

175,613  

 

$

128,560  

 

 

Prepaid Expenses (Note 7)

 

 

130,000  

 

 

130,000  

 

 

Total Current Assets

 

 

305,613  

 

 

258,560  

 

 

 

 

 

 

 

 

 

 

 

Fixed Assets (Note 3)

 

 

 

 

 

 

 

 

Computer software and equipment, net

 

 

2,334  

 

 

1,621  

 

 

Total Fixed Assets

 

 

2,334  

 

 

1,621  

 

 

 

 

 

 

 

 

 

 

 

Intangible Assets (Note 3)

 

 

 

 

 

 

 

 

Patent, net

 

 

65,885  

 

 

67,052  

 

 

Deferred costs

 

 

25,436  

 

 

1,611  

 

 

Total Intangible Assets

 

 

91,321  

 

 

68,663  

 

 

Total Assets

 

$

399,268  

 

$

328,844  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

405,816  

 

$

543,961  

 

 

Accrued liabilities

 

 

18,749  

 

 

7,847  

 

 

Accrued interest to related party (Note 4)

 

 

314  

 

 

1,583  

 

 

Indebtedness to related parties (Note 4)

 

 

13,800  

 

 

123,113  

 

 

Total Current Liabilities

 

 

438,679  

 

 

676,504  

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit (Note 1)

 

 

 

 

 

 

 

 

Common stock, $.001 par value; 547,500,000 shares authorized

 

 

 

 

 

 

 

 

192,642,865 and 186,392,865 issued and outstanding respectively

 

$

192,643  

 

$

186,393  

 

 

Additional paid-in capital

 

 

6,947,852  

 

 

6,380,566  

 

 

Deficit accumulated during development stage

 

 

(7,179,906)

 

 

(6,914,619)

 

 

Total Stockholders' Deficit

 

 

(39,411)

 

 

(347,660)

 

 

Total Liabilities and Stockholders' Deficit

 

$

399,268  

 

$

328,844  

 

 

 

 

 

 

 

 

 

 

 


The accompanying notes are an integral part of these financial statements.




1




Advanced Voice Recognition Systems, Inc.

(A Development Stage Company)

Condensed Statements of Operations

(Unaudited)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MARCH 15, 1994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(INCEPTION)

 

 

 

 

FOR THE THREE MONTHS ENDED

 

 

FOR THE SIX MONTHS ENDED

 

 

THROUGH

 

 

 

 

JUNE 30,

 

 

JUNE 30,

 

 

JUNE 30,

 

 

 

 

2011

 

 

2010

 

 

2011

 

 

2010

 

 

2011

 

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

—    

 

$

—    

 

$

—    

 

$

—    

 

$

1,241,924  

 

Cost of goods sold

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

379,378  

 

Gross profit

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

862,546  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

1,189,531  

 

Contributed services (Note 4)

 

 

15,384  

 

 

58,457  

 

 

61,536  

 

 

123,071  

 

 

2,317,982  

 

General and administrative:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation

 

 

43,578  

 

 

5,991  

 

 

61,110  

 

 

5,991  

 

 

672,283  

 

Stock Based Compensation

 

 

—    

 

 

—    

 

 

—    

 

 

63,000  

 

 

150,500  

 

Professional fees

 

 

47,156  

 

 

191,437  

 

 

119,875  

 

 

222,745  

 

 

1,415,261  

 

Office

 

 

4,485  

 

 

6,422  

 

 

9,365  

 

 

11,600  

 

 

288,652  

 

 Rent

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

157,356  

 

Travel

 

 

491  

 

 

7,940  

 

 

5,548  

 

 

9,224  

 

 

153,725  

 

Advertising

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

81,090  

 

Bad debt expense

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

67,217  

 

Other

 

 

3,641  

 

 

2,808  

 

 

6,639  

 

 

5,816  

 

 

404,371  

 

Impairment of Deferred Costs

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

1,068,860  

 

Total operating expenses

 

 

114,735  

 

 

273,056  

 

 

264,073  

 

 

441,447  

 

 

7,966,828  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(114,735)

 

 

(273,056)

 

 

(264,073)

 

 

(441,447)

 

 

(7,104,282)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income and (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

5,062  

 

Interest expense

 

 

(314)

 

 

(2,945)

 

 

(1,214)

 

 

(6,068)

 

 

(67,183)

 

Loss on sale of assets

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

(13,503)

 

Net other expense

 

 

(314)

 

 

(2,945)

 

 

(1,214)

 

 

(6,068)

 

 

(75,624)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(115,049)

 

 

(276,001)

 

 

(265,287)

 

 

(447,515)

 

 

(7,179,906)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes (Note 5)

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

—    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(115,049)

 

$

(276,001)

 

$

(265,287)

 

$

(447,515)

 

$

(7,179,906)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

192,271,986  

 

 

170,288,897  

 

 

189,928,777  

 

 

168,111,119  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The accompanying notes are an integral part of these financial statements



3




Advanced Voice Recognition Systems, Inc.

Condensed Statement of Stockholders’ Deficit

Development Stage Company

(Unaudited)


 

 

 

 

 

 

 

 

 

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

During

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Development

 

 

 

 

 

 

 Shares

 

 Amount

 

 

 Capital

 

 

 Stage

 

 

 Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2010

 

 

      186,392,865

$

       186,393

 

$

        6,380,566

 

$

         (6,914,619)

 

$

        (347,660)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 9, 2011 4,375,000 shares of common stock issued for stock purchase agreement

 

 

4,375,000

 

4,375

 

 

345,625

 

 

                         -

 

 

350,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from shareholder to retain common shares under Stock Exchange agreement (Note 1)

 

 

                         -

 

                   -

 

 

12,000

 

 

                         -

 

 

12,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April 19, 2011 1,875,000 shares of common stock issued for stock purchase agreement

 

 

1,875,000

 

1,875

 

 

148,125

 

 

                         -

 

 

150,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contributed services (Note 4)

 

 

                         -

 

                   -

 

 

61,536

 

 

                         -

 

 

61,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

                         -

 

                   -

 

 

                      -

 

 

(265,287)

 

 

(265,287)

Balance at June 30, 2011

 

 

      192,642,865

$

       192,643

 

$

        6,947,852

 

$

         (7,179,906)

 

$

          (39,411)


The accompanying notes are an integral part of these financial statements.




4




Advanced Voice Recognition Systems, Inc.

Condensed Statements of Cash Flows

Development Stage Company

(Unaudited)



 

 

 

 

 

 

 

 

 

MARCH 15, 1994

 

 

 

 

 

 

 

 

 

(INCEPTION)

 

 

 

FOR THE SIX MONTHS ENDED

 

 

THROUGH

 

 

 

JUNE 30,

 

 

JUNE 30,

 

 

 

2011

 

 

2010

 

 

2011

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

Net loss

 

$

(265,287)

 

$

(447,515)

 

$

(7,179,906)

Adjustments to reconcile net loss to net

 

 

 

 

 

 

 

 

 

Cash (used in) operating activities:

 

 

 

 

 

 

 

 

 

Amortization

 

 

5,524  

 

 

5,226  

 

 

63,665  

Contributed services

 

 

61,536  

 

 

123,071  

 

 

2,317,982  

Expenses paid in exchange for shareholder      debt

 

 

—    

 

 

—    

 

 

34,047  

Disposal of Fixed Asset Loss

 

 

495  

 

 

—    

 

 

495  

Stock-based compensation expense

 

 

—    

 

 

63,000  

 

 

150,500  

Changes in operating assets:

 

 

 

 

 

 

 

 

 

Prepaid Expenses

 

 

—    

 

 

(112,000)

 

 

(130,000)

Changes in operating liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

(127,242)

 

 

449,627  

 

 

424,565  

Accrued interest related party

 

 

(1,269)

 

 

(4,517)

 

 

314  

Net cash used in operating activities

 

 

(326,243)

 

 

76,892  

 

 

(4,318,338)

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

Purchases of computer equipment and software

 

 

(2,200)

 

 

—    

 

 

(7,490)

Payments for patents

 

 

(3,365)

 

 

—    

 

 

(124,889)

Payments for deferred costs

 

 

(23,824)

 

 

(431,855)

 

 

(25,436)

Net cash (used in) investing activities

 

 

(29,389)

 

 

(431,855)

 

 

(157,815)

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

 

512,000  

 

 

456,333  

 

 

4,672,013  

Payments on advances from shareholder

 

 

—    

 

 

—    

 

 

(34,047)

Payments on promissory note from shareholder

 

 

(109,313)

 

 

(40,230)

 

 

(297,544)

Proceeds from promissory notes and advances

 

 

—    

 

 

—    

 

 

80,000  

from shareholder

 

 

—    

 

 

—    

 

 

231,344  

Net cash provided by financing activities

 

 

402,687  

 

 

416,103  

 

 

4,651,766  

 

 

 

 

 

 

 

 

 

 

Net change in cash

 

 

47,055  

 

 

61,140  

 

 

175,613  

 

 

 

 

 

 

 

 

 

 

Cash at beginning of period

 

 

128,560  

 

 

2,961  

 

 

—    

 

 

 

 

 

 

 

 

 

 

CASH AT END OF PERIOD

 

$

175,613  

 

$

64,101  

 

$

175,613  

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

 

Interest

 

$

2,467  

 

$

6,068  

 

$

25,470  

Income taxes

 

$

—    

 

$

—    

 

$

—    


The accompanying notes are an integral part of these financial statements.




6




Advanced Voice Recognition Systems, Inc.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements

 

Note 1.     Nature of Operations

 

The operations of Advanced Voice Recognition Systems, Inc. (“AVRS” or the “Company”) www.avrsys.com  commenced in 1994 with a predecessor entity called NCC, Inc. NCC, Inc. was incorporated on March 15, 1994 in the State of Ohio. NCC, Inc. operated as a software and hardware development company that marketed voice recognition and transcription products for commercial applications.


In May 2000, WG Investments, LLC acquired the assets of NCC, Inc. and subsequently changed its name to NCC, LLC. NCC, LLC (also a predecessor to AVRS) continued the operations of NCC, Inc. until approximately December 31, 2001, when shifts in the industry’s markets caused NCC, LLC to suspend its operations.


AVRS was incorporated in the State of Colorado on July 7, 2005. In September 2005, the members of NCC, LLC transferred all of their membership interests in NCC, LLC to AVRS in exchange for 93,333,333 shares (post-recapitalization) of AVRS common stock. In December 2005, the Board of Directors approved a 1.5-to-1 stock split issuing 46,666,667 common shares (post-recapitalization), which increased the number of common shares outstanding to 140,000,000 shares (post-capitalization). Following the incorporation of AVRS, the Company initiated a new business plan and intends to continue its operations in the voice recognition and transcription industry.


AVRS is a software development company specializing in speech recognition technologies. AVRS has successfully obtained patent protection of its proprietary technology (refer to Note 3, Intangible Assets). The Company plans to focus its technologies for the medical profession because of the profession’s present extensive use of dictation and its need for multiple applications of speech recognition technology in the generation of reports, documents and medical bills. Additionally the Company plans to focus on server based dictation and transcription, visual voicemail and the voicemail to text market.


The Company is a development stage enterprise in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises” now referred to as ACS 915 “Development Stage Entities”. The Company has been in the development stage since inception.


Stock Exchange Agreement

 

On April 28, 2008, the Company entered into a Stock Exchange Agreement (“the Agreement”) with Samoyed Energy Corp., a Nevada corporation (“Samoyed”), which resulted in a reverse acquisition.  The Agreement provided for the reorganization of AVRS with Samoyed. In connection with the Agreement, Samoyed acquired all of the issued and outstanding common shares of AVRS in exchange for 140,000,000 shares of Samoyed’s common stock.  On May 19, 2008 at the closing of the Agreement, the former shareholders of AVRS owned approximately 85% of the outstanding common stock of Samoyed, resulting in a change in control.

 

For accounting purposes, this acquisition has been treated as a reverse acquisition and recapitalization of AVRS, with Samoyed the legal surviving entity. Since Samoyed had, prior to the recapitalization, minimal assets and limited operations, the recapitalization has been accounted for as the sale of 24,700,008 shares of AVRS common stock for the net liabilities of Samoyed. Therefore, the historical financial information prior to the date of the recapitalization is the financial information of AVRS. Costs of the transaction have been charged to the period in which they are incurred.

 

In connection with the Agreement a shareholder of Samoyed holding an aggregate of 3,500,000 shares of Samoyed’s common stock agreed to pay to Samoyed an amount equal to $1,750,000 within 90 days of the closing of the Agreement, or in the alternative, tender to Samoyed for cancellation two shares of Samoyed’s common stock for every $1 not paid. In 2009 the shareholder made three payments which totaled $52,430.  On March 31, 2010 the Company and the shareholder agreed to modify the agreement such that the shareholder is required to deliver to the Company an aggregate of $216,144 on or before June 1, 2010, or in the alternative, tender to Company for cancellation 14.29 shares of Company’s common stock for every $1 not paid.  The Company and the shareholder amended the agreement and the amount remaining to be received at June 30, 2011 is $50,812.


Stock Purchase Agreements


The Company entered into a Stock Purchase Agreement dated March 10, 2010 with two persons each of whom agreed to purchase 5,000,000 restricted shares of the common stock of AVRS for $250,000, payable in five installments on or before June 15, 2010.  As of June 30, 2011, the shareholders made payments totaling $400,000 purchasing 8,000,000 shares of common stock.


The Company entered into Stock Purchase Agreements dated May 4, 2010 with two shareholders each of whom agreed to purchase 5,000,000 restricted shares of the common stock of AVRS for $400,000, payable in seven installments on or before November 15, 2010.  As of March 31, 2010 the shareholders made payments totaling $20,000 which purchased 250,000 shares of common stock combined. On March 1, 2011 the Company and one purchaser of the stock purchase agreement dated May 4, 2010 signed a mutual termination agreement.  The



7




balance of $390,000 representing 4,875,000 shares of Common Stock was cancelled.


During the twelve months ended December 31, 2010, the Company entered into Stock Purchase Agreements for the private sale to eight persons or entities of an aggregate of 12,742,857 shares of the common stock for aggregate proceeds of $1,000,000.  One of the purchasers was the Company’s Chairman of the Board who purchased 600,000 shares for $50,000.  All of the proceeds were paid during the 12 months ended December 31, 2010.


The Company entered into a Stock Purchase Agreement dated December 22, 2010 with one person who agreed to purchase 2,500,000 restricted shares of the common stock of AVRS for $200,000, payable in three installments on or before March 4, 2011.  On April 19, 2011 the purchaser paid $150,000 for 1,875,000 restricted shares of the Company’s common stock.  The Company agreed to an extension to July 31, 2011 on the $50,000 balance due.  The $50,000 was unpaid at June 30, 2011.


The Company entered into a Stock Purchase Agreement dated March 9, 2011 with one person who agreed to purchase 4,375,000 restricted shares of the common stock of AVRS for $350,000.  Payment was made in full on March 10, 2011.


Agreement and Plan of Merger


On March 25, 2009, the Company entered into an Agreement and Plan of Merger (“Agreement and Plan of Merger”) with its wholly-owned subsidiary, NCC, LLC, a Colorado limited liability company, whereby NCC, LLC merged with and into the Company pursuant to Section 92A.180 of the Nevada Business Corporations Act. Upon consummation of the Agreement and Plan of Merger: (i) NCC, LLC ceased to exist; (ii) the Company’s membership interests in NCC, LLC automatically were canceled or retired and ceased to exist, without any consideration delivered in exchange thereof; (iii) the title to all estate, property rights privileges, powers and franchise assets and/or other rights owned by NCC, LLC became vested in the Company without reversion or impairment; and (iv) all liabilities of any kind of NCC, LLC became vested in the Company.


Stock Based Compensation

On March 18, 2009, the Company issued 350,000 restricted shares of the Company’s common stock, par value $.001 per share to Equiti-Trend Advisors LLC as deferred compensation in exchange for public relations services for a period of six months.  Shares were valued at $.25 per share on the date as of March 18, 2009 for a total stock compensation of $87,500.  On December 8, 2009, the Company issued 350,000 restricted shares of the Company’s common stock, par value $.001 per share to OTC Navigation as deferred compensation in exchange for public relations services for a period of three months.  Shares were valued at $.18 per share on the date of issue, December 8, 2009.  Deferred compensation of $63,000 has been recorded.  The $63,000 of compensation deferred at 12/31/09 was expensed in 2010.  Services began January 6, 2010 and were completed April 5, 2010.

 

Note 2.     Significant Accounting Policies


Unaudited Financial Information


The accompanying financial information as of June 30, 2011 and for the three and six months ended June 30, 2011 and 2010, and the period from March 15, 1994 (inception) through June 30, 2011, is unaudited.  In the opinion of management, all normal and recurring adjustments which are necessary to provide a fair presentation of the Company’s financial position at June 30, 2011 and its operating results for the three and six months ended June 30, 2011 and 2010 and the period from March 15, 1994 (inception) through June 30, 2011, have been made.  Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2010.  The results of operations for the three and six months ended June 30, 2011 is not necessarily an indication of operating results to be expected for the year.


Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company is a development stage enterprise with losses since inception and a net capital deficit. These factors, among others, may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.


The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. During the years ended December 31, 2010 and 2009, the Company’s president loaned or advanced the Company funds for working capital on an “as needed” basis. There is no assurance that these loans or advances will continue in the future.   During the twelve months ended December 31, 2010, the Company received an aggregate of $ 1,420,000 from the sale of shares in private offerings of its common stock.  During the six months



8




ended June 30, 2011 the Company received $500,000 from the sale of shares in private offerings of its common stock.


Cash and Cash Equivalents


The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents. The Company had cash at June 30, 2011 of $175,613, and $128,560 cash at December 31, 2010.  No amounts resulted from cash equivalents.


Fixed Assets


Fixed assets are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, ranging from three to five years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.


Fixed assets consist of the following:


 

June 30,

2011

 

December 31,

2010

 

 

 

 

Computer equipment

 

 

$

2,950

 

$

1,650

 

Computer software

 

3,640

 

 

3,640

 

 

 

 

 

 

 

 

 

 

6,590

 

 

5,290

 

   Less Accumulated depreciation

 

(4,256)

 

(3,669)

 

 

 

 

 

 

 

 

 

$

2,334

 

$

1,621

 

 

 

 

 

 


Assets disposed of during the six months ending June 30, 2011 include a laptop costing $900 and having accumulated depreciation of $405.  A loss of $495 was taken.  The laptop was scrapped.  Depreciation expense totaled $992 for the six months ended June 30, 2011 and $3,669 at December 31, 2010.


Income Taxes


Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the recorded book basis and the tax basis of assets and liabilities for financial and income tax reporting. Deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income and tax credits that are available to offset future federal income taxes.  The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flow.  Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740.  The Company did not record a cumulative effect adjustment related to the adoption of ASC 740.


Patents, Deferred Costs and Amortization


Patents consist of costs incurred to acquire issued patents. Amortization commences once a patent is granted. Costs incurred to acquire patents that have not been issued are reported as deferred costs. If a patent application is denied or expires, the costs incurred are charged to operations in the year the application is denied or expires. The Company amortizes its patents over an estimated useful life of twenty years. The carrying value of the first patent is $63,247 with $49,542 amortized and a balance at June 30, 2011 of $13,705. The carrying balance of the second patent is $58,277 with $9,384 amortized and a balance at June 30, 2011 of $ $48,893. On May 24, 2011 the third patent was issued.  The carrying value is $3,365 with $78 amortized and a balance at June 30, 2011 of $3,287.  The weighted average arrives at a period of 13.67 years based on a period of 16.1 years for patent #1 and 12.4 years for patent #2, and 10.5 years for patent #3 weighted for the total amount capitalized on each patent.   Amortization expense totaled $4,532 and $4,454 for the six months ended, June 30, 2011 and 2010, respectively. Estimated aggregate amortization expense for each of the next five years is as follows:


Year ending December 31,

 

 

 

                2011

  

$

4,611

  

                2012

  

  

9,221

  

                2013

  

  

9,221

  

                2014

  

  

8,170

  

                2015

  

  

5,005

  

Thereafter

  

  

29,657

  

 

 

  

  

  

$

65,885

  

 

 

  


Impairment and Disposal of Long-Lived Assets


The Company evaluates the carrying value of its long-lived assets under the provisions of Statement of Financial Accounting Standard (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” now referred to as ASC 360-10 Property, Plant, and Equipment – “Impairment or Disposal of Long Lived Assets” subsections” . ASC 306-10 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted future cash flows estimated to be generated by those assets are less than the assets’ carrying amount. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying value or fair value, less costs to sell.  Impairment recorded for each of the six months ended June 30, 2011 and 2010 was $-0-.  See Note 3.


Loss per Common Share

The Company reports net loss per share using a dual presentation of basic and diluted loss per share. Basic net loss per share excludes the impact of common stock equivalents. Diluted net loss per share utilizes the average market price per share when applying the treasury stock

method in determining common stock equivalents. At June 30, 2011 and 2010, there were no variances between the basic and diluted loss per share as there were no potentially dilutive securities outstanding.


Note 3.     Intangible and Fixed Assets


Intangible Assets


On November 13, 1995 the Company filed a patent application with the U.S. Patent and Trademark Office, which was granted on September 28, 1999 as patent #5,960,447, “Word Tagging and Editing system for Speech Recognition”. In accordance with 35 USC 154, the term for the above referenced patent shall be for a period beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed in the United States. The above referenced U.S. Patent will expire on November 13, 2015.


The Company monitors the anticipated outcome of legal actions, and if it determines that the success of the defense of a patent is probable, and so long as the Company believes that the future economic benefit of the patent will be increased, the Company capitalizes external legal costs incurred in the defense of the patent. Upon successful defense of litigation, the amounts previously capitalized are amortized over the remaining life of the patent.


On July 7, 2009, Patent No.: US 7,558,730 titled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” was issued by the United States Patent and Trademark Office.  In accordance with 35 USC 154, the patent shall be for a term beginning on July 7, 2009 and ending 20 years from the application date of November 27, 2001.  The patent will expire on November 27, 2021.  The deferred fees were capitalized during the quarter ended September 30, 2009 and the Company began amortization.


On March 9, 2010 the United States Patent and Trademark Office declared interference between the Company as Senior Party and Allvoice Developments, US LLC as Junior Party.  Interference is a proceeding conducted by the USPTO in instances where two or more parties claim patent rights to the same technology. The U.S. patent system awards patents to the first party to invent a particular technology.  In an interference, the primary purpose of the USPTO is to determine which party invented the technology first, and to award the patent to that party.  The Patent Office presumes that the parties made their inventions in the order of the filing dates accorded to their patent applications – the party with the earliest filing date is referred to as the “senior party,” while those with later filing dates are “junior parties.”  If the parties survive the preliminary patentability phase, then the burden of proof to establish priority resides with the junior party.  The Company understands that Allvoice, as the junior party, will bear the burden of proof in establishing priority, and thus will have to show that its inventors invented the technology covered by the interfering subject matter ahead of the Company’s inventors in order to retain its patent.  On March 12, 2010 the Company retained legal counsel for representation in the interference proceedings.  The Company was a party to the patent interference proceedings during 2010.  AVRS has the potential to obtain a new patent as a result of this interference.  However, by year-end, the interference had not been completed and AVRS had no way to assess its chances of obtaining the new patent, or what the possible value of the new patent might be.  As a result, in the 4th quarter of 2010, AVRS impaired 100% of the deferred costs associated with the interference, resulting in a $1,068,860 impairment loss.  On January 13, 2011 oral arguments took place before a three judge panel on all issues raised in the interference. No ruling has been received.




10




On May 24, 2011 Patent No. US 7,949,534 was issued by the United States Patent and Trademark Office. In accordance with 35 USC 154, the patent shall be for a term beginning May 24, 2011 and ending 20 years from the application date of the parent application (US Patent No. #7,558,730) of November 27, 2001.  The patent will expire on November 27, 2021.  The deferred fees were capitalized during the quarter ended June 30, 2011 and the Company began amortization.


Note 4.     Related Party Transactions


Contributed Services


During the years from 2000 through 2010 the Company’s officers and employees contributed management services and administrative services. The fair value of those services was recorded in the accompanying financial statements based on the prevailing rates for such services, with a corresponding credit to Additional paid-in capital. Contributed services recorded in the accompanying financial statements consisted of the following:


Year ended December 31,

 

 

2000

 

$

520,000

2001

 

 

720,500

2002

 

 

50,767

2003

 

 

18,749

2004

 

 

58,651

2005

 

 

158,648

2006

 

 

70,189

2007

 

 

83,652

2008

 

 

121,077

2009

 

 

238,837

2010

 

 

215,376

 

 

$

2,256,446

Six months ended June 30,

 

 

 

2011

 

 

61,536

 

 

$

2,317,982


Indebtedness to Related Parties


During the years from 2000 through 2010, certain officers advanced the Company working capital to maintain the Company’s operations. As of June 30, 2011 and December 31, 2010, the Company owed the officers $13,800 and $123,113, respectively. The majority of the balance is owed to the Company’s president and totaled $8,000 and $117,313, respectively, at June 30, 2011 and December 31, 2010.


Of the amount owed to the Company’s president, $225,544 was converted into a promissory note in May 2008. As of March 7, 2011 the Company repaid the note in full.


During 2009, the Company’s president advanced the Company working capital of $80,000 which was converted into a second promissory note in October 2009. The note carries a 4 percent annual interest rate and matures on April 9, 2010. On April 9, 2010 the Company issued an allonge to the promissory note that extended the maturity date to April 15, 2011.  On June 6, 2011 the Company issued a second allonge to the promissory note that extended the maturity date to April 15, 2012.   At June 30, 2011 the principal balance on this note was $8,000.   Interest expense related to the note of $314 was accrued at June 30, 2011.


Note 5.     Income Taxes


A reconciliation of the U.S. statutory federal income tax rate to the effective rate is as follows:


 

June 30,

 

2011

  

2010

U.S. federal statutory graduated rate

  

  

30.70%

  

33.84%

State income tax rate, net of federal benefit

  

  

0.00%

  

0.00%

Contributed services

  

  

-7.17%

  

-9.31%

Costs capitalized under Section 195

  

  

-23.53%

  

-24.53%

 

 

  

 

                                   Effective rate

  

  

0.00%

  

0.00%

 

 

  

 




11




The Company is considered a start-up company for income tax purposes. As of June 30, 2011, the Company had not commenced its trade operations, so all costs were capitalized under Section 195. Accordingly, the Company had no net operating loss carry forwards at June 30, 2011.


Note 6 .    Concentration of Risk


Beginning December 31, 2010, through December 31, 2012, all noninterest-bearing transaction accounts are fully insured, regardless of the balance of the account, at all FDIC-insured institutions.  On June 30, 2011, the Company had cash balances at one FDIC insured financial institution of $175,613 in non-interest bearing accounts, which amount does not exceed the related federal deposit insurance.


Note 7.     Prepaid Expenses


On March 12, 2010, the Company paid a $65,000 retainer to a law firm in connection with the patentability phase of the interference proceedings that is to be applied to the final billing.


On April 6, 2010 the Company paid a second $65,000 retainer to a law firm for representation in anticipation of discovery request in connection with a lawsuit between Allvoice Developments, US, LLC and Microsoft Corporation. The retainer is to be applied to the final billing.  Microsoft has filed invalidity contentions relying in part on the Company’s first patent.


Note 8

Stockholder Deficit


On December 8, 2009, the Company issued 350,000 restricted shares of the Company’s common stock to OTC Navigation as deferred compensation in exchange for public relations services for a period of three months.  Shares were valued at $.18 per share on the date of issue, December 8, 2009.  Services were completed April 6, 2010.  Deferred compensation of $63,000 was expensed during the first quarter of 2010.


Note 9.     Subsequent Events


None


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations


The statements contained in this Quarterly Report that are not historical are “forward-looking statements”, which can be identified by use of terms such as “may”, “could”, “should”, “expect”, “plan”, “project”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “pursue”, “target” or “continue”, the negative of such terms or other comparable terminology, although some forward-looking statements may be expressed differently.

The forward-looking statements contained in this 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this 10-Q are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to various factors listed in this Quarterly Report. All forward-looking statements speak only as of the date of this 10-Q. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

Overview

We are a software development company headquartered in Scottsdale, Arizona, with an office in Mitchell, South Dakota. We specialize in creating interface and application solutions for speech recognition technologies. Our speech recognition software and related firmware was first introduced in 1994 at an industry trade show.  We currently have limited capital resources.  We are not currently engaged in marketing any products.  Our principal assets are our patents.  Our business strategy will be to attempt to interest other companies in entering into license agreements or other strategic relationships and to support and defend our patents through infringement and interference proceedings, as appropriate.


Results of Operations

We completed a stock exchange on May 19, 2008 and changed our business model. We have not generated any revenue since inception and do not have any cash generating product or licensing sales. We are a development stage enterprise that has incurred losses since inception.


At June 30, 2011, we had current assets of $305,613, and current liabilities of $438,679, as compared to $258,560 current assets and $676,504 in current liabilities at December 31, 2010. Our increase in current assets is attributable to our equity funding agreements. Our decrease in current liabilities primarily is due to a decrease in Accounts Payable during 2011 relating to the completion of the interference



12




proceedings in the USPTO.


We had a net loss of $115,049 and $276,001 for the three months ended June 30, 2011 and 2010 respectively, as compared to a net loss of $265,287 and $447,515 for the six months ended June 30, 2011 and 2010 respectively. The decrease in net loss is attributable to decreased professional fees incurred in the six months ended June 30, 2011 in connection with the interference proceedings in the USPTO.


Liquidity and Capital Resources

For the six months ended June 30, 2011, we used $326,243 of cash in operating activities and $29,389 of cash in investing activities, and we received $500,000 of cash from the sale of our common stock. As a result, for the six months ended June 30, 2011, we recognized a $47,055 net increase in cash on hand. For the six months ended June 30, 2010, $76,892 cash was provided by operating activities and $431,855 cash in investing activities, and received $416,103 of cash provided by financing activities, resulting in a $61,140 increase in cash on hand for the year.


Historically, our president has loaned or advanced to us funds for working capital on an “as needed” basis. There is no assurance that these loans or advances will continue in the future. Because of our history of losses, net capital deficit and lack of assurance of additional financing, the audit report on our financial statements contains a “going concern” opinion regarding doubt about our ability to continue as a going concern.


In an attempt to address our financing needs, we have made sales of our common stock in private transactions.


The Company entered into a Stock Purchase Agreement dated March 10, 2010 with two persons each of whom agreed to purchase 5,000,000 restricted shares of the common stock of AVRS for $250,000, payable in five installments on or before June 15, 2010.  As of June 30, 2011, the shareholders made payments totaling $400,000 purchasing 8,000,000 shares of common stock.


The Company entered into Stock Purchase Agreements dated May 4, 2010 with two shareholders each of whom agreed to purchase 5,000,000 restricted shares of the common stock of AVRS for $400,000 payable in seven installments on or before November 15, 2010.  As of March 31, 2011 the shareholders made payments totaling $20,000 which purchases 250,000 shares of common stock combined. On March 1, 2011 the Company and one purchaser of the stock purchase agreement dated May 4, 2010 signed a mutual termination agreement.  The balance of $390,000 representing 4,875,000 shares of Common Stock was cancelled.


The Company entered into a Stock Purchase Agreement dated December 22, 2010 with one person who agreed to purchase 2,500,000 restricted shares of the common stock of AVRS for $200,000, payable in three installments on or before March 4, 2011.  On April 19, 2011 the purchaser paid $150,000 for 1,875,000 restricted shares of the Company’s common stock.  The Company agreed to a July 31, 2011 extension.  The $50,000 balance remains unpaid at June 30, 2011.


The Company entered into a Stock Purchase Agreement dated March 9, 2011 with one person who agreed to purchase 4,375,000 restricted shares of the common stock of AVRS for $350,000.  Payment was made in full on March 10, 2011.


If we continue to pursue interference proceedings, or initiate or defend infringement actions, we would expect to incur substantial costs and legal fees that ultimately may not be recoverable.


We will require additional debt or equity financing or a combination of both in order to carry out our business plan. We incurred substantial legal fees and costs in connection with the interference proceeding with Allvoice, and we will likely continue to incur expenses in defending our patents and pursuing license agreements.  We plan to raise additional funds through future sales of our securities, until such time as our revenues are sufficient to meet our cost structure, and ultimately achieve profitable operations. There is no assurance we will be successful in raising additional capital or achieving profitable operations. Our board of directors may attempt to use non-cash consideration to satisfy obligations that may consist of restricted shares of our common stock. These actions would result in dilution of the ownership interests of existing shareholders and may further dilute our common stock book value.


To obtain sufficient funds to meet our future needs for capital, we will from time to time, evaluate opportunities to raise financing through sales of our securities. However, future equity or debt financing may not be available to us at all, or if available, may not be on terms acceptable to us. We do not intend to pay dividends to shareholders in the foreseeable future.


U.S. Patent #5,960,447 includes 42 claims that we believe cover an extremely broad base of features applicable to existing Automatic Speech Recognition products and markets. We intend to use our patent protection to our advantage by licensing or otherwise. If our licensing and other efforts prove successful, our liquidity may increase.


U.S. Patent #7,558,730 expands an extremely broad base of features in speech recognition and transcription across heterogeneous protocols.  Costs totaling $58,277 have been capitalized, and amortization began in the third quarter 2009.


U.S. Patent #7,949,534 is a continuation of U.S. Patent #7,558,730.  Costs totaling $3,365 have been capitalized, and amortization began in the second quarter of 2011.



13




 

In order for our operations to continue, we will need to generate revenues from our intended operations sufficient to meet our anticipated cost structure. We may encounter difficulties in establishing these operations due to our inability to successfully prosecute any patent enforcement actions or our inability to effectively execute our business plan.


If we do not raise additional capital, or we are unable to obtain additional financing, or begin to generate revenues from our intended operations, we may have to scale back or postpone the development and marketing of our products or the enforcement of our patent rights until such financing is available.



Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements.


Item 4.   Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


Our management, with the participation of our chief executive officer, who also is our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) and pursuant to Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of June 30, 2011. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Form 10-Q, is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms, and that such information is accumulated and is communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our chief executive officer, who also is our chief financial officer, concluded that our disclosure controls and procedures are designed at a reasonable assurance level and were fully effective as of June 30, 2011 in providing reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated  to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting.

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

There were no changes in our internal controls over financial reporting that occurred during the period covered by this Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




14




PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS


As discussed in Note 3 to the Financial Statements in Part I of this 10-Q Report, the Company is involved in a material interference proceeding conducted by the USPTO.  Oral argument before a three judge panel on all issues raised occurred on January 13, 2011.


 

ITEM 6. EXHIBITS.

INDEX

Exhibit

Description


2.1

Stock Exchange Agreement dated April 14, 2008, between Samoyed Energy Corp. and Certain Shareholders of Advanced Voice Recognition Systems, Inc.(1)

2.2

Agreement and Plan of Merger between Samoyed Energy Corp. and Advanced Voice Recognition Systems, Inc.(2)

2.3

Agreement and Plan of Merger between Advanced Voice Recognition Systems, Inc. and NCC, LLC(1)(2)

3.1

Articles of Incorporation(3)

3.2

Certificate of Change to Articles of Incorporation(4)

3.3

Bylaws(3)

10.1

Letter of Intent dated January 1, 2008 between Samoyed Energy Corp. and Advanced Voice Recognition Systems, Inc.(5)

10.2

Termination Agreement dated January 22, 2008 between Samoyed Energy Corp. and 313866 Alberta Ltd.(6)

10.3

Extension of Letter of Intent dated March 28, 2008 between Samoyed Energy Corp. and Advanced Voice Recognition Systems, Inc.(7)

10.4

Purchase and Sale Agreement dated May 15, 2008 between Samoyed Energy Corp. and Stone Canyon Resources, Inc.(8)

10.5

Promissory Note dated May 13, 2008 made by Advanced Voice Recognitions, Inc. to Walter Geldenhuys(9)

10.6

Form of Lock-Up Agreement(9)

10.7

Purchase Agreement dated September 24, 2008 between Advanced Voice Recognition Systems, Inc. and Lion Share Capital LLC(10)

10.8

Letter Agreement dated September 29, 2008 between Advanced Voice Recognition Systems, Inc. and Lambert Lavallee(10)

10.9

Letter Agreement dated January 13, 2009 between Advanced Voice Recognition Systems, Inc. and Lambert Lavallee(11)

10.10

Letter Agreement dated March 18, 2009 between Advanced Voice Recognition Systems, Inc. and Equiti-trend Advisors, LLC (12)

10.11

Letter Agreement dated May 26, 2009 between Advanced Voice Recognition Systems, Inc. and Lambert Lavallee (13)

10.12

Allonge to Promissory Note dated July 6, 2009 between Advanced Voice Recognition Systems, Inc. and Walter Geldenhuys (14)

  

10.13

Promissory Note dated October 9, 2009 between Advanced Voice Recognition Systems, Inc. and Walter Geldenhuys (16)

  

10.14

Second Allonge to Promissory Note dated November 13, 2009 between Advanced Voice Recognition Systems, Inc. and Walter Geldenhuys (17)

  

10.15

Letter Agreement dated November 18, 2009 between Advanced Voice Recognition Systems, Inc. and Lambert Lavallee (18)

  

  

10.16

Letter Agreement dated December 9, 2009 between Advanced Voice Recognition Systems, Inc. and OTC Navigation (19)

  

  

10.17

Strict Foreclosure dated January 11, 2010 between Advanced Voice Recognition Systems, Inc and Lion Share Capital (20)

10.18

Purchase Agreement dated March 10, 2010 between Advanced Voice Recognition Systems, Inc. and Investors. (21)

10.19

Letter Agreement dated March 31, 2010 between Advanced Voice Recognition Systems, Inc. and Lambert Lavallee (22)

10.20

Second Allonge to Promissory Note dated April 9, 2010 between Advanced Voice Recognition Systems, Inc and Walter Geldenhuys (23)

10.21

Third Allonge to Promissory Note dated April 9, 2010 between Advanced Voice Recognition Systems, Inc. and Walter Geldenhuys (24)

10.22

Purchase Agreement dated May 4, 2010 between Advanced Voice Recognition Systems, Inc. and Investors. (25)

10.23

Purchase Agreement dated July 26, 2010 between Advanced Voice Recognition Systems, Inc. and an Investor. (26)

10.24

Purchase Agreement dated August 28, 2010 between Advanced Voice Recognition Systems, Inc. and an Investor. (27)

10.25

Purchase Agreement dated September 2, 2010 between Advanced Voice Recognition Systems, Inc. and an Investor. (28)

10.26

Purchase Agreement dated September 3, 2010 between Advanced Voice Recognition Systems, Inc. and an Investor. (29)

10.27

Purchase Agreement dated September 24, 2010 between Advanced Voice Recognition Systems, Inc. and an Investor. (30)

10.28

Purchase Agreement dated October 19, 2010 between Advanced Voice Recognition Systems, Inc. and an Investor. (31)

10.29

Purchase Agreement dated October 20, 2010 between Advanced Voice Recognition Systems, Inc. and an Investor. (32)

10.30

Purchase Agreement dated October 27, 2010 between Advanced Voice Recognition Systems, Inc. and an Investor. (33)

10.31

Purchase Agreement dated November 4, 2010 between Advanced Voice Recognition Systems, Inc. and three Investors. (34)

10.32

Purchase Agreement dated December 22, 2010 between Advanced Voice Recognition Systems, Inc. and an Investor. (35)

10.33

Termination Agreement dated March 1, 2011 between Advanced Voice Recognition Systems, Inc. and an Investor. (36)

10.34

Purchase Agreement dated March 9, 2011 between Advanced Voice Recognition Systems, Inc. and an Investor. (37)

 

 

10.35

Second Allonge to Promissory Note dated June 6, 2011 between Advanced Voice Recognition Systems, Inc. and Walter Geldenhuys (38)

 

 

 

 

 

 

14.1

Code of Ethics(15)

21.1

Subsidiaries of the Registrant(15)

31.1

Section 302 Certification - Principal Executive Officer(20)

31.2

Section 302 Certification - Principal Financial Officer(20)

32.1

Certification Pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(20)


(1)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 1, 2008.

(2)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 10, 2008.

(3)     Incorporated by reference from the Company’s Registration Statement on Form SB-2 filed on October 31, 2005.

(4)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 18, 2007.

(5)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 4, 2008.

(6)     Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on February 14, 2008.

(7)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 31, 2008.

(8)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 21, 2008.

(9)     Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.

(10)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on October 1, 2008.

(11)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 20, 2009.

(12)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 23, 2009

(13)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 1, 2009

(14)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 14, 2009

(15)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 30, 2009

(16)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on October 15, 2009

(17)    Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on November 13, 2009

(18)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on November 23, 2009

(19)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 13, 2009

(20)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 15, 2010

(21)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 16, 2010 

(22)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 6, 2010 

(23)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 12, 2010 

(24)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 12, 2010 

(25)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 10, 2010 

(26)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 30, 2010 

(27)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on September 2, 2010 

(28)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on September 9, 2010 

(29)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on September 10, 2010 

(30)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on September 27, 2010 

(31)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on October 25, 2010 

(32)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on October 26, 2010 

(33)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on November 1, 2010 

(34)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on November 9, 2010 

(35)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 28, 2010 

(36)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 7, 2011 

(37)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 15, 2011 

(38)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 10, 2011 



16





SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 

 

 

 

 

 

 

 

 ADVANCED VOICE RECOGNITION SYSTEMS, INC.

Dated August 8, 2011

By:

/s/ Walter Geldenhuys

 

 

Walter Geldenhuys

 

 

President, Chief Executive Officer, and Chief Financial Officer

(Principal Executive Officer)

 

 

 

Dated August 8, 2011

By:

/s/ Diane Jakowchuk

 

 

Diane Jakowchuk

 

 

Secretary, Treasurer and Principal Accounting Officer

(Principal Accounting Officer)

 

 

 

 

 

 

 

 

 

 

 

 






17