![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
KS International Holdings Corporation (CE) | USOTC:KSIH | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0002 | 0.00 | 01:00:00 |
KACHING KACHING, INC.
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
333-132107
|
58-2667713
|
||
(State or other jurisdiction
of incorporation)
|
(Commission
File Number)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
o |
Accelerated filer
|
o |
Non-accelerated filer
(Do not check if a smaller reporting company)
|
o |
Smaller reporting company
|
þ |
Page
|
|||||
PART I
|
FINANCIAL INFORMATION
|
||||
Item 1.
|
Financial Statements
|
||||
Condensed Balance Sheet at September 30, 2010 and December 31, 2009 (Unaudited)
|
3 | ||||
Condensed Statements of Operations for the Three and Nine month periods
ended September 30, 2010 (Unaudited)
|
4 | ||||
Condensed Statements of Cash Flows for the Nine month period ended
September 30, 2010 (Unaudited)
|
5-6 | ||||
|
Statements of Stockholders’ Deficit
|
7 | |||
Notes to Condensed Financial Statements (Unaudited)
|
8-24 | ||||
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
23 | |||
Item 3.
|
Quantitative and Qualitative Information About Market Risk
|
28 | |||
Item 4.
|
Controls and Procedures
|
28 | |||
PART II
|
OTHER INFORMATION
|
||||
Item 1.
|
Legal Proceedings
|
29 | |||
Item 1A.
|
Risk Factors
|
29 | |||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
32 | |||
Item 3.
|
Defaults upon Senior Securities
|
32 | |||
Item 4.
|
RESERVED
|
32 | |||
Item 5.
|
Other Information
|
32 | |||
Item 6.
|
Exhibits
|
33 | |||
SIGNATURES
|
34 |
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current assets :
|
||||||||
Cash
|
$ | 68 | $ | - | ||||
Other current assets
|
116,077 | 25,356 | ||||||
Total current assets
|
$ | 116,145 | $ | 25,356 | ||||
Property, plant and equipment
|
$ | 534,088 | $ | 179,045 | ||||
Less: Accumulated depreciation and amortization
|
(75,767 | ) | (5,415 | ) | ||||
Property, plant and equipment - net
|
458,321 | 173,630 | ||||||
Other assets
|
37,517 | 11,136 | ||||||
Total assets
|
$ | 611,983 | $ | 210,122 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current liabilities :
|
||||||||
Accounts payable - trade
|
$ | 403,814 | $ | 83,610 | ||||
Accrued Payroll
|
238,511 | - | ||||||
Other current liabilities
|
373,200 | 207,049 | ||||||
Short term debt:
|
||||||||
Notes payable - short term - net
|
685 | |||||||
Derivative liability
|
836,405 | - | ||||||
Total current liabilities
|
$ | 1,852,615 | $ | 290,659 | ||||
Long term debt :
|
||||||||
Long term debt - notes payable - net
|
$ | 402,732 | $ | - | ||||
Derivative liability
|
3,789,087 | - | ||||||
Total long term debt
|
$ | 4,191,819 | $ | - | ||||
Total liabilities
|
$ | 6,044,434 | $ | 290,659 | ||||
Stockholders' Deficit:
|
||||||||
Common Stock, $0.0001 par value, 500,000,000 and 75,000,000 shares authorized and 51,207,380 and 20,794,314 outstanding as of September 30, 2010 and December 31, 2009 respectively.
|
$ | 5,121 | $ | 2,079 | ||||
Preferred Stock, $0.0001 par value, 25,000,000 authorized and 0 outstanding as of September 30, 2010.
|
- | - | ||||||
Additional paid in capital
|
874,273 | 98,696 | ||||||
Accumulated deficit
|
(6,311,845 | ) | (181,312 | ) | ||||
Total stockholders' deficit
|
$ | (5,432,451 | ) | $ | (80,537 | ) | ||
Total Liabilities and Stockholders' Deficit
|
$ | 611,983 | $ | 210,122 |
For the
|
For the
|
|||||||
three month
|
nine month
|
|||||||
period ended
|
period ended
|
|||||||
September 30, 2010
|
September 30, 2010
|
|||||||
Revenues
|
$ | 356,983 | $ | 634,893 | ||||
Operating expenses
|
||||||||
Cost of products sold
|
17,913 | 17,913 | ||||||
Commissions - licenses
|
309,884 | 462,005 | ||||||
Commissions - product
|
577 | 577 | ||||||
Selling, general and administrative
|
1,257,924 | 2,310,191 | ||||||
Professional fees
|
12,900 | 166,573 | ||||||
Depreciation and amortization
|
39,107 | 71,773 | ||||||
Loss on disposition of assets
|
- | 21,618 | ||||||
Total operating expenses
|
$ | 1,638,305 | $ | 3,050,650 | ||||
Loss from operations
|
$ | (1,281,322 | ) | $ | (2,415,757 | ) | ||
Non-operating (expense)
|
||||||||
Interest expense
|
(135,071 | ) | (222,098 | ) | ||||
Income/(expense) related to derivative
|
(3,285,357 | ) | (3,236,053 | ) | ||||
Total non-operating expense
|
$ | (3,420,428 | ) | $ | (3,458,151 | ) | ||
Loss from operations before income taxes
|
$ | (4,701,750 | ) | $ | (5,873,908 | ) | ||
Provision for income tax
|
- | - | ||||||
Net loss
|
$ | (4,701,750 | ) | $ | (5,873,908 | ) | ||
Net loss available to common stockholders
|
$ | (4,701,750 | ) | $ | (5,873,908 | ) | ||
Basic and diluted net loss per common share
|
$ | (0.09 | ) | $ | (0.16 | ) | ||
Weighted average shares of capital outstanding - basic
|
51,131,036 | 36,866,870 |
KaChing KaChing, Inc.
|
||||
CONDENSED STATEMENT OF OPERATIONS
|
||||
For the Three and Nine month periods ended September 30, 2009
|
||||
(inception of Company was September 17, 2009)
|
For the period
|
For the period
|
|||||||
September 17, 2009
|
September 17, 2009
|
|||||||
(inception) through
|
(inception) through
|
|||||||
September 30, 2009
|
September 30, 2009
|
|||||||
Revenues
|
$ | - | $ | - | ||||
Operating expenses
|
||||||||
Cost of products sold
|
- | - | ||||||
Selling, general and administrative
|
1,124 | 1,124 | ||||||
Professional fees
|
5,000 | 5,000 | ||||||
Depreciation and amortization
|
- | - | ||||||
Total operating expenses
|
$ | 6,124 | $ | 6,124 | ||||
Loss from operations
|
$ | (6,124 | ) | $ | (6,124 | ) | ||
Non-operating (expense)
|
||||||||
Interest expense
|
- | - | ||||||
(Loss) on disposition of assets
|
- | - | ||||||
Total non-operating expense
|
$ | - | $ | - | ||||
Loss from operations before income taxes
|
$ | (6,124 | ) | $ | (6,124 | ) | ||
Provision for income tax
|
- | - | ||||||
Net loss
|
$ | (6,124 | ) | $ | (6,124 | ) | ||
Net loss available to common stockholders
|
$ | (6,124 | ) | $ | (6,124 | ) | ||
Basic and diluted net loss per common share
|
$ | - | $ | - | ||||
Weighted average shares of capital outstanding - basic
|
20,794,314 | 20,794,314 |
KaChing KaChing, Inc.
|
||||
CONDENSED STATEMENT OF CASH FLOWS
|
||||
For the Nine month period ended September 30, 2010 and 2009.
|
||||
(inception of Company was September 17, 2009)
|
For the
nine month
|
For the period
September 17, 2009
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES :
|
September 30, 2009
|
September 30, 2009
|
||||||
Net (loss)
|
$ | (5,873,908 | ) | $ | (6,124 | ) | ||
Adjustments to reconcile net income / (loss) to net
|
||||||||
Cash provided by (used for) operating activities :
|
||||||||
Depreciation, and amortization
|
71,773 | - | ||||||
Non-cash interest
|
150,739 | - | ||||||
Change in derivative liability
|
3,236,053 | - | ||||||
Loss on disposition of assets
|
21,617 | - | ||||||
Stock based compensation
|
611,473 | |||||||
Issuance of warrants for compensation
|
141,397 | |||||||
Changes in components of working capital :
|
||||||||
(Decrease) in other assets
|
(29,970 | ) | ||||||
Increase in accounts payable
|
320,207 | - | ||||||
Increase in other current liabilities
|
410,598 | - | ||||||
Increase in other liabilities
|
1,241 | 61,657 | ||||||
(Increase) in other assets
|
(117,103 | ) | 2,813 | |||||
Net cash provided (used) by operating activities
|
$ | (1,025,913 | ) | $ | 28,376 | |||
CASH FLOWS FROM INVESTING ACTIVITIES :
|
||||||||
Capital expenditures
|
$ | (378,081 | ) | $ | - | |||
Net cash provided by (used in) investing activities
|
$ | (378,081 | ) | $ | - | |||
CASH FLOWS FROM FINANCING ACTIVITIES :
|
||||||||
Repayments net of advances from Affiliates
|
$ | (5,938 | ) | |||||
Issuance of common stock
|
25,000 | $ | - | |||||
Increase (decrease) in short term debt
|
385,000 | |||||||
Increase (decrease) in long term debt
|
1,000,000 | - | ||||||
Net cash provided by (used in) financing activities
|
$ | 1,404,062 | $ | - | ||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
$ | 68 | $ | 28,376 | ||||
Cash and cash equivalents, beginning of period
|
- | - | ||||||
Cash and cash equivalents, end of period
|
$ | 68 | $ | 28,376 | ||||
Interest paid
|
$ | 23,741 | $ | - | ||||
Taxes paid
|
$ | - | $ | - |
Common stock
|
Additional
|
Total
|
||||||||||||||||||||||||||
Preferred Stock
|
Par Value $0.0001
|
Paid-In
|
Accumulated
|
Stockholders'
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||
Balance 12/31/09
|
- | - | 20,794,314 | $ | 2,079 | $ | 98,696 | $ | (181,312 | ) | $ | (80,537 | ) | |||||||||||||||
Warrants issued for services
|
259,805 | 259,805 | ||||||||||||||||||||||||||
Acquisition of the net liabilities of Duke Mining, Inc.
|
7,500,047 | 750 | - | (256,625 | ) | (255,875 | ) | |||||||||||||||||||||
Warrants exercised
|
21,443,019 | 2,145 | (1,992 | ) | 153 | |||||||||||||||||||||||
Stock issued in relation to Debt
|
236,667 | 24 | 24,976 | 25,000 | ||||||||||||||||||||||||
Stock and options for compensation
|
1,133,333 | 113 | 121,402 | 121,515 | ||||||||||||||||||||||||
Stock based compensation
|
100,000 | 10 | 229,990 | 230,000 | ||||||||||||||||||||||||
Warrants issued for services
|
141,396 | 141,396 | ||||||||||||||||||||||||||
NET LOSS
|
(5,873,908 | ) | (5,873,908 | ) | ||||||||||||||||||||||||
BALANCE 9/30/10
|
51,207,380 | $ | 5,121 | $ | 874,273 | $ | (6,311,845 | ) | $ | (5,432,451 | ) | |||||||||||||||||
1.
|
Description of Business
|
●
|
KaChing KaChing, Inc. (“KaChing or the “Company”) is a Delaware corporation that was previously known as Duke Mining Company, Inc. (“Duke Delaware”). On April 22, 2010, Duke Delaware entered into an Agreement and Plan of Merger (the “Reorganization Agreement”), with KaChing KaChing, Inc., a Nevada corporation (“KaChing Nevada”), pursuant to which KaChing Nevada agreed to merge with and into Duke Delaware (the “Merger”), with Duke Delaware being the surviving corporation. In connection with the Merger, Duke Delaware changed its name to “Kaching Kaching, Inc.” (which company is herein referred to as “KaChing,” “we” or the “Company”). The Merger was effected on April 22, 2010. KaChing KaChing is an e-commerce solution that operates a recently introduced web site (www.KaChingKaChing.com) through which it provides individual Web Store Owners with the ability to create, manage and earn money from product sales generated from their individual online web stores. Kaching Kaching leverages social shopping trends by allowing customers to contribute reviews and ratings on each product sold in the store. These reviews are aggregated across Kaching Kaching storefronts. Store Owners subscribe to a monthly license and can sell products from their site and earn commissions.
Although Duke Mining acquired Kaching Nevada in the Merger, for accounting purposes, the Merger was accounted for as a reverse merger/recapitalization since the stockholders of Kaching Nevada acquired a majority of the issued and outstanding shares of this Company’s common stock. Accordingly, the financial statements contained in this report, and the description of our results of operations and financial condition, reflect (i) the operations of Kaching Nevada alone prior to the Merger, and (ii) the combined results of this company and Kaching Nevada and Duke Mining since the Merger.
|
●
|
The Company currently maintains its corporate office in Henderson, Nevada.
The condensed financial statements and the notes thereto for the periods ended September 30, 2010 included herein have been prepared by management and are unaudited. Such condensed financial statements reflect, in the opinion of management, all adjustments necessary to present fairly the financial position and results of operations as of and for the periods indicated and in order to make the financial statements not misleading. All such adjustments are of a normal recurring nature except for the recapitalization of the Company with and into KaChing Delaware as more fully disclosed in Note 9 and the bifurcation of embedded derivatives within the secured convertible notes and warrants as described in Note 9. These interim results are not necessarily indicative of the results for any subsequent period or for the fiscal year ending December 31, 2010.
Certain information and footnote disclosures normally included in the condensed financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the fiscal year ended December 31, 2009 in the Form 8-K, filed with the SEC on April 27, 2010 and the Form 8-K/A, filed with the SEC on May 13, 2010.
|
2.
|
Summary of Significant Accounting Policies
|
●
|
Management is responsible for the fair presentation of the Company’s financial statements, prepared in accordance with U.S. generally accepted accounting principles (GAAP).
|
●
|
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used in the determination of depreciation and amortization, the valuation for non-cash issuances of common stock, and the website, income taxes and contingencies, among others.
|
●
|
The Company classifies as cash and cash equivalents amounts on deposit in the banks and cash temporarily in various instruments with original maturities of three months or less at the time of purchase. The Company’s cash management system is integrated within two separate banking institutions.
|
●
|
Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value except as noted below. The carrying value of the current assets and liabilities approximate fair value due to their relatively short maturities. At September 30, 2010 the carrying value of the secured convertible notes differ from their fair values by the amount of unamortized discount of $1,237,458.
|
|
In January 2010, the Financial Accounting Standards Board (FASB) issued additional disclosure requirements for fair value measurements. The guidance requires previous fair value hierarchy disclosures to be further disaggregated by class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. In addition, significant transfers between Levels 1 and 2 of the fair value hierarchy are required to be disclosed. These additional requirements became effective January 1, 2010 for quarterly and annual reporting. These amendments did not have an impact on the consolidated financial results as this guidance relates only to additional disclosures. In addition, the fair value disclosure amendments also require more detailed disclosures of the changes in Level 3 instruments. These changes will be effective January 1, 2011 and are not expected to have an impact on the consolidated financial results as this guidance only relates to additional disclosures.
The Company applies the fair value hierarchy as established by US GAAP. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure the fair value as follows.
|
o
|
Level 1 – quoted prices in active markets for identical assets or liabilities.
|
o
|
Level 2 – other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
|
o
|
Level 3 – significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.
|
●
|
The Company has not generated any taxable income, and, therefore, no provision for income taxes has been provided.
|
●
|
Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with FASB Topic 740, "Accounting for Income Taxes", which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not.
|
●
|
A valuation allowance has been recorded to fully offset the deferred tax asset as the Company believes it is more likely than not that the assets will not be utilized.
|
●
|
The Company’s effective tax rate differs from the statutory rates associated with taxing jurisdictions because of permanent and temporary timing differences as well as a valuation allowance.
|
●
|
The Company generates its revenue from monthly recurring licensing fees from Web Store Owners in which the amount of the first month license fee is larger than the amount of the subsequent monthly fee, and the sale of products by Web Store Owners. The store license allows Web Store Owners to access and present on their individual website a retail store that currently can offer almost two million name brand products. These items range from books, digital cameras, kitchen and bath items and office supplies.
|
●
|
All sources of revenue will be recorded pursuant to FASB Topic 605 Revenue Recognition, when persuasive evidence of arrangement exists, delivery of services has occurred, the fee is fixed or determinable and collectability is reasonably assured.
|
o
|
Monthly licensing fees are recognized in the month usage occurs for those deliverables that are renewed on a month to month basis. All services are performed in that month providing accessibility and availability on a stand-alone basis. The services are:
|
§
|
Accessibility and availability of customizable web storefront
|
§
|
Accessibility and availability of product catalog
|
§
|
Fulfillment operations from the product catalog
|
§
|
Sales of product from individual storefronts
|
§
|
Ability for web storefront owners to generate commissions from (a) signing up to our service both new paying web store owners and new non-paying web store owners and (b) from selling product from the catalog to end-users on their web storefront
|
o
|
Revenue from product sales are recognized upon shipment of products at the gross sales amount as the Company has determined based on the factors below that it acts as a Principal, not an agent:
|
§
|
The Company is responsible for vendor selection,
|
§
|
The Company determines offered product specifications
|
§
|
The Company takes title to the product
|
§
|
The Company assumes credit risk for the product,
|
o
|
Sales discounts and allowances are recorded at the time product sales are recognized and are offset against sales revenue. Shipping and handling charges are included in revenue at the time of shipment with the corresponding charges incurred included in cost of sales at time of shipment.
|
o
|
All licensing fees are required to be paid to the Company at the beginning of the month, products sales are collected at time of shipment. The Company has a three day cancellation policy for licensing fees during which time the fees will be refunded in full. Product sales come with a limited warranty.
|
●
|
The Company accounts for stock based compensation in accordance with FASB Topic 718, “Share Based Payment”.
|
●
|
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during the year, the Company may exceed the federally insured limits. To mitigate this risk, the Company places its cash deposits only with high credit quality institutions. Management believes the risk of loss is minimal. At September 30, 2010 the Company did not have any uninsured cash deposits.
|
●
|
The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be 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 amount or fair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable.
|
●
|
In the second quarter of 2010 the Company exited the development stage.
|
●
|
The Company currently plans to offer employees vacation benefits and a healthcare plan. There were 16 employees at September 30, 2010, two of which are executive officers.
|
●
|
Property and computer equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to income as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized. The initial cost of the website has been capitalized. Once the site is considered operating, future costs to maintain the site will be expensed as incurred. The cost and accumulated depreciation and amortization related to assets sold or retired are removed from the accounts and any gain or loss is credited or charged to income in the period of disposal.
|
●
|
The Company accounts for web site costs in accordance with FASB Topic 350 “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use and FASB Topic 350 “Accounting for Web Site Development Costs”. As a result, costs associated with the web site application and infrastructure development stage are capitalized. Amortization of costs commenced once the web site was ready for its intended use.
|
●
|
For financial reporting purposes, depreciation and amortization is provided on the straight-line method over the estimated useful lives of depreciable assets. Financial reporting provisions for depreciation and amortization are generally based on the following annual rates and estimated useful lives:
|
Type of Asset
|
Rates
|
Years
|
|||
Computer and equipment
|
20% -50
|
%
|
2 – 5 years
|
||
Website Development Costs
|
20
|
%
|
5 years
|
||
Leasehold improvements (or life of lease where applicable)
|
20% - 50
|
%
|
2 – 5 years
|
3.
|
Going Concern
|
●
|
The Company's financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business is new and has no history and nominal sales, no certainty of continuation can be stated.
|
●
|
Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time in the raising of capital from additional debt and equity financing. However, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations.
|
●
|
These factors, and our lack of ability to meet our obligations from current operations, and the need to raise additional capital to accomplish our objectives, create a substantial doubt about our ability to continue as a going concern.
|
4.
|
Property, Website And Computer Equipment
|
●
|
Property and equipment at September 30, 2010 and December 31, 2009 consisted of the following:
|
September 30, 2010
|
December 31, 2009
|
|||||||
Office and computer equipment
|
64,137 | $ | 87,175 | |||||
Web site and software
|
469,951 | 91,870 | ||||||
Total property, Web site and computer equipment
|
534,088 | $ | 179,045 | |||||
Less: accumulated depreciation and amortization
|
(75,767 | ) | (5,415 | ) | ||||
$ | 458,321 | $ | 173,630 |
●
|
In the second quarter, the Company exited office space it had been subleasing from Beyond Commerce and moved into new office space. The Company recorded a disposition charge for certain improvements to the former space with acquisition costs of $23,038, net of accumulated depreciation of $1,421.
|
5.
|
Other Current Assets
|
●
|
Other current assets consist of the following at September 30, 2010 and December 31, 2009.
|
September 30, 2010
|
December 31, 2009
|
|||||||
Credit Card receipts in transit
|
$ | 27,724 | $ | 19,743 | ||||
Employee Advances
|
- | 5,613 | ||||||
Prepaid expenses
|
36,760 | - | ||||||
Deferred customer acquisition costs (see Note 7)
|
51,593 | - | ||||||
TOTAL
|
$ | 116,077 | $ | 25,356 |
6.
|
Other Assets
|
September 30, 2010
|
December 31, 2009
|
|||||||
Credit Card precessor retention
|
$ | 23,276 | $ | 11,136 | ||||
Security and other deposits
|
14,241 | - | ||||||
TOTAL
|
$ | 37,517 | $ | 11,136 |
●
|
Other assets consist of the following at September 30, 2010 and December 31, 2009.
|
7.
|
Other Current Liabilities
|
●
|
Other current liabilities consist of the following at September 30, 2010 and December 31, 2009.
|
September 30, 2010
|
December 31, 2009
|
|||||||
Licenses fees – Beyond Commerce, Inc.
|
$ | - | $ | 12,292 | ||||
Accrued commissions
|
68,645 | 7,272 | ||||||
Accrued expenses
|
15,586 | - | ||||||
Accrued interest
|
35,676 | - | ||||||
Advances from Affiliate - Beyond Commerce, Inc.
|
150,718 | 187,485 | ||||||
Advances from Affiliate - ABV3
|
50,983 | |||||||
TOTAL
|
$ | 321,607 | $ | 207,049 |
|
In accordance with it’s revenue recognition policy, the Company is deferring revenue generated by its web storefront owners who enter into its “Store Owner” (“SO”) and “Super Store Owner” (“SSO”)Brand Builder plans. The Company is currently deferring that revenue over a 90 day period, which has resulted in the Company including $51,593 as deferred revenue, which will be amortized to revenue over the following quarter. In connection with the deferral of revenue, the Company has deferred certain commissions paid to people in its Brand Builder plan who referred in the new SO and SSO customers. The Company is deferring those customer acquisition costs over the same period (see Note 5). During the start up period of the Brand Builder plan, the Company offered a special promotion on its commission payouts, such that during the period ended September 30, 2010, the Company paid a commission equal to 100% of the revenue generated by the signing up of the new SO & SSO customers. This promotion will end in the period ended December 31, 2010.
|
8.
|
Short Term Debt – Notes Payable
|
as of |
Maturity
|
Conversion
|
Interest
|
||||||||
9/30/2010 |
Date
|
Date
|
rate
|
||||||||
Harborview Master Fund, L.P.
|
(a)
|
$ |
100,000
|
11/9/2010
|
secured
|
10%
|
|||||
Harborview Master Fund, L.P.
|
(b)
|
25,000
|
11/16/2010
|
secured
|
10%
|
||||||
Harborview Master Fund, L.P.
|
(c)
|
150,000
|
12/8/2010
|
secured
|
10%
|
||||||
sub-total
|
$ |
275,000
|
|||||||||
Brio Capital
|
(d)
|
$ |
100,000
|
2/12/2011
|
secured
|
12%
|
|||||
Templeton
|
(e)
|
10,000
|
3/14/2011
|
secured
|
12%
|
||||||
Notes Payable
|
385,000
|
||||||||||
Less: Discount
|
(384,315)
|
||||||||||
Total Notes Payable
|
$ |
685
|
●
|
(a) On August 10, 2010, we issued secured convertible notes in the aggregate principal amount of $100,000 and five-year warrants to purchase an aggregate of 100,000 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $100,000 in a Private Placement exempt from registration with the Securities and Exchange Commission
|
●
|
(b) On August 16, 2010, we issued secured convertible notes in the aggregate principal amount of $25,000 and five-year warrants to purchase an aggregate of 25,000 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $25,000 in a Private Placement exempt from registration with the Securities and Exchange Commission
|
●
|
(c) On August 18, 2010, we issued secured convertible notes in the aggregate principal amount of $100,000 and five-year warrants to purchase an aggregate of 100,000 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $100,000 in a Private Placement exempt from registration with the Securities and Exchange Commission. In addition, the Company issued 50,000 shares of common stock to the lender for services rendered.
|
●
|
(d) On September 8, 2010, we issued secured convertible notes in the aggregate principal amount of $150,000 and five-year warrants to purchase an aggregate of 150,000 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $150,000 in a Private Placement exempt from registration with the Securities and Exchange Commission
|
●
|
(e) On September 22, 2010, we issued secured convertible notes in the aggregate principal amount of $10,000 and three-year warrants to purchase an aggregate of 3,333 shares of common stock at an initial exercise price of $1.50 per share in exchange for aggregate cash proceeds of $10,000 in a Private Placement exempt from registration with the Securities and Exchange Commission
|
●
|
The above referenced notes contain essentially the same terms and conditions as the notes described in Note 9.
|
9.
|
Long Term Debt – Notes Payable
|
as of
|
Maturity
|
Interest
|
|||||||||
9/30/2010
|
Date
|
rate
|
|||||||||
Harborview Master Fund, L.P.
|
$ | 500,000 |
10/23/2011
|
secured
|
10 | % | |||||
Monarch Capital Fund, Ltd.
|
500,000 |
10/23/2011
|
secured
|
10 | % | ||||||
sub-total
|
$ | 1,000,000 | |||||||||
Harborview Master Fund, L.P.
|
213,375 |
10/23/2011
|
secured
|
10 | % | ||||||
Krieger & Prager, LLP
|
42,500 |
10/23/2011
|
secured
|
10 | % | ||||||
Notes Payable
|
$ | 1,255,875 | |||||||||
Less: Discount
|
(853,143 | ) | |||||||||
Total Notes Payable
|
$ | 402,732 |
●
|
On April 23, 2010, we issued secured convertible notes in the aggregate principal amount of $1,255,875 and five-year warrants to purchase an aggregate of 3,333,333 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $1,000,000 and the exchange of existing notes payable acquired in the Merger with principal amount of $255,875 in a Private Placement exempt from registration with the Securities and Exchange Commission. Purchasers that invested in the Private Placement through the exchange of prior obligations did not receive any Investor Warrants under the Securities Purchase Agreement. These Notes are due October 23, 2011, and are convertible, in whole or in part, at each holder’s option, into shares of our common stock at an initial conversion price of $0.30 per share. We may prepay 100%, but not less than 100%, of the Notes upon at least 20 days, but no more than 30 days, prior written notice. Should we, at any time while the Notes or the warrants are outstanding, sell or grant any option to purchase or sell or grant any right to re-price, or otherwise dispose of or issue any common stock or common stock equivalents entitling any party to acquire shares of our common stock at a price per share less than the then existing conversion price of the Notes or exercise price of the warrants, the conversion price of the Notes and the exercise price of the warrants shall be reduced to equal that lower price (See Note 9). We are prohibited from effecting the conversion of the Notes to the extent that as a result of such conversion the holder of the Notes would beneficially owns more than 4.99% in the aggregate of the issued and outstanding shares of our common stock immediately after giving effect to the issuance of shares of our common stock upon the conversion. The Notes provide for interest on the aggregate unconverted and then outstanding principal amount at a rate of 10% interest per annum, payable quarterly in cash or common stock, at our option. If interest is paid in common stock, however, the shares shall be valued at the lower of (i) the conversion price then in effect or (ii) 90% of the average closing bid price for the 10 day period prior to the interest payment date. The Notes are senior indebtedness and the holders of the Notes have a security interest in substantially all of our assets. In connection with the Notes Payable, each of our executive officers, directors and certain beneficial holders of more than 10% of our common stock entered into lock-up agreements pursuant to which they agreed not to sell or otherwise transfer any of their shares of common stock until April 23, 2011, subject to certain limited exemptions.
In accordance with a registration rights agreement we entered into in connection with the Private Placement, we agreed to file a registration statement with the SEC to register the re-sale of the shares underlying the Notes and the Warrants within 90 days of issuance. The filing of the registration statement was made within the terms of the Note. However, the registration rights agreement also imposes a cash payment penalty of 1% per month on the investment amount of the respective Note, or $12,558.75, for failure to have the registration statement declared effective within 180 days of the date of the issuance of the respective Notes. Failure to have the registration statement declared effective by Securities and Exchange Commission within the foregoing time period will force the Company to incur the cash payment penalty each month until rectified. There is no maximum cash payment penalty amount that will limit this potential liability. As of September 30, 2010, the registration statement had not been declared effective. However, the 180 day period had not expired. Accordingly the Company has not provided for any reserve on its financial statements for this penalty at this time. See, Note 15, “Subsequent Events.
|
10.
|
Capital Stock Activity
|
●
|
In 2009 the Board of Directors amended the Company’s Articles of Incorporation to allow for the issuance of two (2) classes of stock designated as Preferred Stock and Common Stock. We are authorized to issue 500,000,000 shares of common stock, par value $0.0001 per share, and 25,000,000 shares of preferred stock, par value $0.0001 per share. As of September 30, 2010, there were 51,207,380 shares of our common stock, and no shares of our preferred stock, issued and outstanding. As of September 30, 2010 our authorized capital stock consisted of 500,000,000 shares of common stock, par value $.0001 per share.
Holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law, the holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors.
Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.
|
●
|
In anticipation of, and prior to, the Merger, Duke Delaware’s board of directors and stockholders approved a 1-for-8.4627 forward stock split (the “Stock Split”). Pursuant to the Stock Split, every one (1) share of issued and outstanding common stock was reclassified into 8.4627 whole post-split shares of common stock. In addition, following the Stock Split, the Merger and the Warrant Exercise, Harborview Master Fund, L.P. (“Harborview”) consented to the cancellation of an aggregate of 74,588,190 shares of common stock then held by Harborview (the “Stock Cancellation”)
|
●
|
On April 22, 2010, Duke Mining Company, Inc., a Delaware corporation (“Duke Delaware”) entered into an Agreement and Plan of Merger (the “Reorganization Agreement”), with KaChing KaChing, Inc., a Nevada corporation (“KaChing Nevada”), which provided that KaChing Nevada would merge with and into Duke Delaware (the “Merger”), with Duke Delaware being the surviving corporation and changing its name to “Kaching Kaching, Inc.” (“KaChing,” “we” or the “Company”). The Merger was effective on April 22, 2010, when a certificate of merger was filed in the State of Delaware and an articles of merger was filed in the State of Nevada. In connection with the Merger, each share of KaChing Nevada’s common stock issued and outstanding immediately prior to the closing of the Merger was converted into the right to receive 2.0794314 shares of Duke Delaware’s common stock (the “Exchange Ratio”), and each warrant to purchase KaChing Nevada’s common stock was converted on the same basis into a warrant to purchase KaChing’s common stock. An aggregate of 20,794,314 shares of Duke Delaware’s common stock were issued to the holders of KaChing’s common stock in connection with the Merger and an aggregate of 21,705,686 shares of Duke Delaware’s common stock were reserved for issuance under KaChing Nevada’s outstanding warrants. These warrant shares were subsequently adjusted to 21,443,019 shares of common stock based on sundry cancellations and reissues of stock. Immediately following consummation of the Merger, the holders of the former KaChing Nevada warrants exercised such warrants in full and were issued an aggregate of 21,443,019 shares of common stock of Duke Delaware for contribution of services rendered to the Company (the “Warrant Exercise”).
In February 2010, the Company was advanced $25,000 in cash from one accredited investor and subsequent to the Merger issued those investor 236,667 shares of common stock.
In conjunction with the Merger described above, we entered into employment agreements with certain officers of the Company. Those employment agreements included the issuance of 1,133,333 shares of our common stock. The Company valued these shares at $0.30 per share.
Dividends
The Company has never declared or paid any dividends.
Warrants
The following is a summary of the Company’s outstanding common stock purchase warrants:
|
Exercise
|
Outstanding
|
Issued in
|
Transferred/
|
Outstanding
|
||||||||||||||
Price
|
December 31, 2009
|
2010
|
Exercised
|
September 30, 2010
|
||||||||||||||
$ | 0.001 | - | 21,443,019 | 21,443,019 | - | |||||||||||||
$ | 0.30 | - | 3,708,333 | - | 3,708,333 | |||||||||||||
$ | 0.75 | - | 3,333 | - | 3,333 | |||||||||||||
Total
|
- | 25,154,685 | 21,443,019 | 3,711,666 |
|
Upon incorporation of the Company, it was the intent of the Company to issue warrants to certain employees and consultants of the Company for their assistance with starting up and working with the new company. We authorized for issuance at the Company’s first board of directors meeting in February 2010 warrants to acquire 21,443,019 shares of our common stock with an exercise price of $0.001 per share and a term of 5 years. All of the warrants vested immediately.
Because we set the exercise price of the warrants at our common stock’s par value, we valued those warrants as if we had issued common stock. We calculated the fair value of our common stock at $0.0259 per share as of the February 2010 issuance. At the time of issuance of the warrants, KaChing Nevada was a wholly owned subsidiary of Beyond Commerce, Inc. and had no publicly traded stock of its own in which to readily determine the stock’s fair value. We thus estimated the fair value of KaChing Nevada common stock based off of the enterprise value of Beyond Commerce, Inc., whose common stock was then publicly traded.
2009 Stock Option Plan
-
On April 13, 2009, we adopted an equity incentive plan, the 2009 Equity Incentive Plan (the “Equity Plan”), pursuant to which we are authorized to grant options, restricted stock and stock appreciation rights to purchase up to 3,500,000 shares of common stock to our employees, officers, directors, consultants and advisors. The Equity Plan provides for awards of incentive stock options, non-statutory stock options, and rights to acquire restricted stock. Incentive stock options granted under the Equity Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “
Code
”). Non-statutory stock options granted under the Equity Plan are not intended to qualify as incentive stock options under the Code.
On July 16, 2010, the Board of Directors authorized an increase to the number of shares of common stock reserved under the plan by 6,000,000 to a total of 9,500,000 shares of common stock issuable under the Equity Plan.
As of September 30, 2010, there were 8,366,667 shares of our common stock reserved for issuance pursuant to awards to be granted under our Equity Plan. As of the same date, there were no awards outstanding under the Equity Plan.
Convertible Securities
On April 23, 2010, we issued secured convertible notes in the aggregate principal amount of $1,255,875 in exchange for aggregate cash proceeds of $1,000,000 and five-year warrants to purchase an aggregate of 3,333,333 shares of common stock at an initial exercise price of $0.30 per share and the agreement of certain creditors of Duke Delaware agreeing to convert prior obligations of Duke Delaware into Notes (the “Private Placement”). Purchasers that invested in the Private Placement through the conversion of prior obligations did not receive any Investor Warrants under the Securities Purchase Agreement. These Notes are due October 23, 2011, and are convertible, in whole or in part, at each holder’s option, into shares of our common stock at an initial conversion price of $0.30 per share. As such, 4,186,250 shares of common stock are issuable under the conversion feature of the notes.
During the three month period ended September 30, 2010 we issued secured convertible notes in the aggregate principal amount of $385,000 in exchange for aggregate cash proceeds of $385,000 and five-year warrants to purchase an aggregate of 375,000 shares of common stock at an initial exercise price of $0.30 per share and 3 year warrants to purchase an aggregate 3,333 shares of common stock at an initial exercise price of $1.50. These Notes are due between November 9, 2010 and March 14, 2011, and are convertible, in whole or in part, at each holder’s option, into 375,000 shares of our common stock at an initial conversion price of $0.30 per share and 10,000 shares of our common stock at an initial conversion price of $0.75. As such, 385,000 shares of common stock are issuable under the conversion feature of the notes (see Note 8).
The Company has certain convertible notes and warrants with conversion features and/or exercise features that can reset the conversion and/or exercise price based on future equity transactions. The Company valued the warrants and conversion feature of this note and bifurcated them from the host contract as a derivative by recognizing an additional liability for the fair value assigned to those derivative features of approximately $1,004,439 at inception of the agreements. At September 30, 2010 the value of the derivative was approximately $4,625,492. The change in the derivative was reported in the statement of operations for the nine month period ended September 30, 2010. The company recorded discounts on the notes of approximately $1,389,439 related to the value of the warrants, derivative liability to be amortized over the term of the notes at effective rates ranging between 112% and 4088%. The portion of derivative liability that is classified as short term pertains to the short term debt. The remaining long term portion relates to long term debt and warrants.
The Company used a modified binomial pricing model to value the conversion feature and warrants. The modification to the binomial model incorporated variables to (a) account for the probability of future equity issuances below the current base conversion price of the secured convertible notes and the exercise price of the warrants (b) minimum expected time when the Company might issue such additional securities and (c) absolute minimum expected issuance value. These modifications resulted in a multi-layered lattice model.
|
Inception
(April 22, 2010)
|
Inception
(Various Q3, 2010)
|
September 30,
2010
|
|||
Fair value of the common stock
|
$0.30
|
$0.75
|
$0.75
|
||
Volatility
|
70%
|
70%
|
70%
|
||
Risk free rate (secured conv note/warrant)
|
0.80%/2.60%
|
0.20%/1.4%
|
0.20%
|
||
Term (secured conv note/warrant)
|
1.5 years/ 5 years
|
(Average) 0.25 years/5 years
|
(Average) 0.45 years/ 4.81 years
|
||
Probability range of future issuances below base
|
0% through 100%
|
0% through 100%
|
0% through 100%
|
||
Range of future minimum issuance price
|
$0.30 to $0.0001
|
$0.30 to $0.0001
|
$0.30 to $0.0001
|
||
11.
|
Commitments and Contingencies
|
●
|
The Company leases certain office space, under operating leases which generally require the Company to pay taxes, insurance and maintenance expenses related to the leased property. On April 26, 2010, the Company entered into a one year lease for approximately 4,000 square feet in Henderson, Nevada which houses its corporate office. The monthly rental for this lease is approximately $6,500.
|
12.
|
Significant Customers and Suppliers
|
●
|
The Company expects to derive a significant portion of its revenue from e-commerce based suppliers. This is a very competitive market with many suppliers for the products the Company offers. The Company believes that it can replace any one product line with another supplier without any disruptions in activity.
|
13.
|
Segment Reporting
|
●
|
The Company considers itself to be operating in one business segment, the internet sales, e-commerce business. This activity will represent essentially all of the significant revenue generated by the Company.
|
14.
|
Related Parties
|
●
|
Mr. Rhett J. McNulty, the son of Robert J. McNulty Chairman of KaChing KaChing, Inc., is the managing partner of Linlithgow Holdings, LLC. Linlithgow Holdings, LLC currently owns 19.9 % of this Company and is a family trust of the McNulty family. Mr. McNulty, our Chief Executive Officer has no voting control over the holdings of Linlithgow Holdings and disclaims beneficial ownership of the shares owned by Linlithgow Holdings.
|
●
|
Beyond Commerce, Inc. (BYOC) currently owns approximately 20.65% of this Company. Mr. McNulty, Mr. Noffke and Mr. White are currently officers of this Company and also officers of Beyond Commerce, Inc., and Mr. Williams is also a director of both this Company and Beyond Commerce, Inc. On October 21, 2009, the Company entered into Master License Agreement (“License Agreement”) with Beyond Commerce, Inc. (“BYOC”) pursuant to which we retained BYOC to provide certain back-end and order processing services that we provide to our Web Store Owners on the KaChing website.
Pursuant to the License Agreement, the Company is required to pay to BYOC five percent (5%) of the aggregate gross sales from all Web Stores during the prior month in which BYOC provided such back-end and order processing services. Commencing with the first anniversary of the License Agreement, the percentage of the aggregate gross sales payable to BYOC will be increased to seven percent (7%). The License Agreement has a term of five years.
We currently are operating under an informal, temporary modification of the terms of the Master License Agreement. During the past few months, BYOC has permitted its employees who were providing services to us under that Master License Agreement to work directly for us and to be paid by us. Since BYOC has not been paying these employees, we have agreed with BYOC to suspend the monthly fee that we are required to pay BYOC. We anticipate that this informal, temporary arrangement will continue through the end of the current calendar year, at which time we may opt to extend term of this informal arrangement or renegotiate the terms of the Master License Agreement with BYOC. Prior to the suspension of the Master License Agreement the Company paid $0 and $14,266 for the three and nine month periods ended September 30, 2010 under the Agreement.
|
15.
|
Subsequent Events
|
●
|
On October 1, 2010, we issued 104,657 shares of our common stock in payment of $31,398 in interest accrued for the quarter ended September 30, 2010 pursuant to the Convertible Secured Notes dated April 23, 2010 (see note 9).
|
●
|
On October 4, 2010, we issued a secured convertible note in the aggregate principal amount of $100,000 and five-year warrants to purchase an aggregate of 100,000 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $100,000 to one existing stockholder of the Company in a Private Placement exempt from registration with the Securities and Exchange Commission.
|
●
|
On October 7, 2010, we issued 50,000 shares of our common stock for compensation related to consulting services.
|
●
|
On October 18, 2010, we issued a secured convertible note in the aggregate principal amount of $100,000 and five-year warrants to purchase an aggregate of 100,000 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $100,000 to one existing stockholder of the Company in a Private Placement exempt from registration with the Securities and Exchange Commission.
|
●
|
On October 27, 2010, we issued a secured convertible note in the aggregate principal amount of $50,000 and five-year warrants to purchase an aggregate of 83,334 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $50,000 to one existing stockholder of the Company in a Private Placement exempt from registration with the Securities and Exchange Commission.
|
●
|
On October 27, 2010, we issued 200,000 shares of our common stock for compensation related to consulting services.
|
●
|
On November 1, 2010, we issued a secured convertible note in the aggregate principal amount of $50,000 and five-year warrants to purchase an aggregate of 83,333 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $50,000 to one existing stockholder of the Company in a Private Placement exempt from registration with the Securities and Exchange Commission.
|
●
|
On November 3, 2010, we issued a secured convertible note in the aggregate principal amount of $50,000 and five-year warrants to purchase an aggregate of 83,333 shares of common stock at an initial exercise price of $0.30 per share in exchange for aggregate cash proceeds of $50,000 in a Private Placement exempt from registration with the Securities and Exchange Commission.
|
●
|
Certain convertible notes of the Company entered into on April 22, 2010 required the filing and effectiveness of a registration statement no later than six months after that date. Should the registration statement not be declared effective the Company would be subject to penalties of 1% per month of the principal amount of the note ($12,559 per month). In November the Company was granted a three month extension on the effective date requirement. The Company believes it will meet the requirement within the extension period.
|
●
|
On November 8, 2010 the $100k Convertible Note due on November 9, 2010 was amended in that the maturity date of the note was extended to January 27, 2011.
|
●
|
On November 15, 2010 three notes totaling $225,000 with maturity dates ranging from November 11, 2010 to December 8, 2010 were amended in that the maturity dates of said notes is now January 27, 2011.
|
●
|
On November 15, 2010 the Company entered into an Asset Purchase Agreement (the “Agreement”) with ShopToEarth, Inc., a Nevada corporation (“STE”) and a direct sales affiliate e-commerce online retailer. Under the Agreement, the Company agreed to issue 2,231,295 shares of its common stock (1,231,295 to be distributed immediately and 1,000,000 to be held in escrow for release in equal installments beginning on the 7
th
month anniversary of the Agreement and continuing until the 12th month anniversary upon the completion of certain goals) for certain selected assets, which includes intellectual property, trademarks, marketing materials, and sales representatives relating to STE’s business. The Company is assuming a nominal amount of liabilities, limited to what is specially defined in the Agreement.
Certain disclosures regarding the value of assets acquired and liabilities assumed, including any goodwill are not yet determinable as the initial accounting has not been completed yet. Additionally the initial accounting related to historical revenues and expenses is not yet complete.
|
16.
|
Net Loss per Share of Common Stock
|
●
|
The Company has adopted FASB Topic 260, "Earnings per Share," which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Basic net loss per common share is based upon the weighted average number of common shares outstanding during the period. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. However, shares associated with convertible debt, stock options and stock warrants are not included because the inclusion would be anti-dilutive (i.e. reduce the net loss per common share).
|
●
|
The table below excludes 5,469,583 shares issuable upon the conversion of convertible notes, 3,821,666 shares issuable upon conversion of warrants and 8,366,667 shares issuable upon exercise of vested options issuable under the Equity Plan as they would be anti-dilutive.
|
Three Months
|
Nine Months
|
|||||||
Ended
|
Ended
|
|||||||
September 30, 2010
|
September 30, 2010
|
|||||||
Numerator - basic and diluted loss per share net loss
|
$ | (4,701,750 | ) | $ | (5,873,908 | ) | ||
Net loss available to common stockholders
|
$ | (4,701,750 | ) | $ | (5,873,908 | ) | ||
Denominator - basic and diluted loss per share - weighted average common shares outstanding
|
51,131,036 | 36,866,870 | ||||||
Basic and diluted earnings per share
|
$ | (0.09 | ) | $ | (0.16 | ) |
Three month period ended
|
Nine month period ended
|
|||||||
September 30,
2010
|
September 30,
2010
|
|||||||
Commissions - licenses
|
$ | 309,884 | $ | 462,005 | ||||
Commissions - product
|
577 | 577 | ||||||
Purchases - product
|
17,913 | 17,913 | ||||||
Total
|
$ | 328,374 | $ | 480,495 |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. CONTROLS AND PROCEDURES |
ITEM 5. OTHER INFORMATION |
●
|
our ability to raise capital, as needed, to fund the implementation of our business plan;
|
●
|
our ability to execute our business strategy as contemplated;
|
●
|
the ability of our brand and products and services to achieve market acceptance;
|
●
|
our ability to attract and retain qualified personnel;
|
●
|
our ability to accurately address our target marketplace; and
|
●
|
our ability to accurately predict and respond to rapid technological changes in our industry.
|
Exhibit Number
|
Description
|
|
31.1 |
Certification of the Chairman of the Board and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
|
|
31.2 |
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
|
|
32.1 |
Certification pursuant to Section 906 of the Sarbanes-Oxley Act
|
|
32.2 |
Certification pursuant to Section 906 of the Sarbanes-Oxley Act
|
|
By:
|
/s/ Robert J. McNulty | |
Robert J. McNulty, Chief Executive Officer | |||
(Principal Executive Officer) |
|
By:
|
/s/ Mark V. Noffke | |
Mark V. Noffke, Chief Financial Officer | |||
(Principal Financial Officer) |
1 Year KS (CE) Chart |
1 Month KS (CE) Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions