Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the
fiscal year ended June 30, 2008
¨
TRANSITION REPORT UNDER SECTION 13 OR SECTION 15(d) OF THE EXCHANGE
ACT
For
the
transition period from _____ to _____
Commission
file number 000-51968
|
(Exact
Name of Small Business Issuer in Its Charter)
|
|
Delaware
|
1177
High Ridge Road, Stamford, CT 06905
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20-4378866
|
(State
or other jurisdiction of
incorporation
or organization)
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(Address
of principal executive offices)
(zip
code)
|
(IRS
Employer
Identification
No.)
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Issuer's
telephone number: (203) 321-1285
Securities
registered under Section 12(b) of the Exchange Act
NONE
Securities
registered pursuant to Section 12(g) of the Exchange Act:
Common
Stock, $.0001 par value
(Title
of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined
in
Rule 405 of the Securities Act. Yes o
No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes x No o
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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference Part III of this Form 10-K
or
any amendment to this Form 10-K.
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
the 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 (Do not check if a smaller reporting company)
|
o
|
|
Smaller
reporting company
|
x
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes x
No
o
APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange
Act
of 1934 subsequent to the distribution of securities under a plan confirmed
by a
court. Yes o No o
(APPLICABLE
ONLY TO CORPORATE REGISTRANTS)
Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date.
Number
of
shares of the registrant’s common stock outstanding as of June 30, 2008 was
16,761,597.
DOCUMENTS
INCORPORATED BY REFERENCE
List
hereunder the following documents if incorporated by reference and the Part
of
the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b)
or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
None
TABLE
OF CONTENTS
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Page
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PART
I
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Cautionary
Note Regarding Forward-Looking Statements
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4
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ITEM
1.
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Business
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5
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ITEM
1A.
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Risk
Factors
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7
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ITEM
1B.
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Unresolved
Staff Comments
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10
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ITEM
2.
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Properties
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10
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ITEM
3.
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Legal
Proceedings
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10
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ITEM
4.
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Submission
of Matters to a Vote of Security Holders
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10
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PART
II
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ITEM
5.
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Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
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10
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ITEM
6.
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Selected
Financial Data
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11
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ITEM
7.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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11
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ITEM
7A.
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Quantitative
and Qualitative Disclosures About Market Risk
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17
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ITEM
8.
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Financial
Statements and Supplementary Data
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18
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ITEM
9.
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Changes
In and Disagreements with Accountant on Accounting and Financial
Disclosure
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27
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ITEM
9A.
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Controls
and Procedures
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27
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ITEM
9B.
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Other
Information
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28
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PART
III
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ITEM
10.
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Directors,
Executive Officers and Corporate Governance
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28
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ITEM
11.
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Executive
Compensation
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29
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ITEM
12.
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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30
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ITEM
13.
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Certain
Relationships and Related Transactions and Director
Independence
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31
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ITEM
14
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Principal
Accountant Fees and Services
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PART
IV
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ITEM
15.
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Exhibits,
Financial Statement Schedules.
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31
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SIGNATURES
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36
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This
Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements can be
identified by the use of forward-looking terminology, including the words
“believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,”
“will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in
each case, their negative or other variations or comparable terminology. Such
statements include, but are not limited to, any statements relating to our
ability to consummate any acquisition or other business combination and any
other statements that are not statements of current or historical facts. These
statements are based on management’s current expectations, but actual results
may differ materially due to various factors, including, but not limited to,
our:
· being
a
development stage company with very limited operating history;
· dependence
on key personnel;
· personnel
allocating their time to other businesses and potentially having conflicts
of
interest
with our business;
· potentially
being unable to obtain additional financing to complete an initial
transaction;
· limited
pool of prospective business opportunities;
· securities’
ownership being concentrated; and
· potential
change in control if we sell the Company or acquire a businesses for
stock;
By
their
nature, forward-looking statements involve risks and uncertainties because
they
relate to events and depend on circumstances that may or may not occur in the
future. We caution you that forward-looking statements are not guarantees of
future performance and that our actual results of operations, financial
condition and liquidity, and developments in the industry in which we operate
may differ materially from those made in or suggested by the forward-looking
statements contained in this Annual Report on Form 10-K. In addition, even
if
our results of operations, financial condition and liquidity, and developments
in the industry in which we operate are consistent with the forward-looking
statements contained in this Annual Report on Form 10-K, those results or
developments may not be indicative of results or developments in subsequent
periods.
These
forward-looking statements are subject to numerous risks, uncertainties and
assumptions about us described in our filings with the Securities and Exchange
Commission. The forward-looking events we discuss in this Annual Report on
Form
10-K speak only as of the date of such statement and might not occur in light
of
these risks, uncertainties and assumptions. Except as required by applicable
law, we undertake no obligation and disclaim any obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Unless
otherwise provided in this Annual Report on Form 10-K., references to “Aprecia,”
“the Company,” “the Registrant,” “we,” “us” and “our” refer to Aprecia,
Inc.
ITEM
1. BUSINESS
Company
Overview
We
were
incorporated in the State of Delaware in December 2005. On March 6, 2006, we
entered into an Asset Purchase Agreement (the “APA”)
with
Isidore Sobkowski. Pursuant to the APA, we acquired certain assets from Mr.
Sobkowski relating to software based on open source induction technology
designed to enable the automatic discovery of patterns and the automatic
creation of rules for raw data (the “Assets”).
In
consideration of the purchase and sale of the Assets, we issued to Mr. Sobkowski
9,700,000 shares of our common stock.
Simultaneously,
with the consummation of our acquisition of the Assets pursuant to the APA,
Mr.
Sobkowski was appointed to the position of Chief Executive Officer and Interim
Chief Financial Officer.
Our
goal
was to become a leading edge provider of applied artificial intelligence
solutions for thoroughbred and lottery applications. We developed MonitorPlus,
an analysis tool designed to help the thoroughbred racing and lottery industry
by providing alerts when potential wagering fraud or money laundering is
detected.
We
intended to generate revenue through (i) the licensing of our technology to
parties engaged in the regulation of the thoroughbred racing industry, and
(ii)
the licensing of our technology to third parties which were expected to develop
and sell specifically tailored software solutions for customers based on our
technology. However, we were unable to enter into any meaningful agreement
for
the sale or license of our technology and as a result our operations were not
profitable. We had planned to introduce MonitorPlus to the thoroughbred industry
as an entry point into the marketplace, and then planned to develop
complementary products based on MonitorPlus. However, we were unable to do
either.
Our
success was largely dependent on the market acceptance of MonitorPlus, efficient
utilization of our infrastructure, successful ongoing development of advanced
process technologies and generation of sufficient return on research and
development investments. However, we were unable to satisfy these objectives,
and as a result, we substantially curtailed our operations.
Following
a reassessment of our business goals and objectives, our Board of Directors
concluded that shareholder value would be better enhanced by either a sale
of
the Company or an acquisition of a business enterprise rather than the
continuation of our efforts to commercialize the MonitorPlus products.
Consequently, in fiscal 2008 our management was authorized to develop a business
strategy to either sell the Company or acquire a business enterprise. In
addition, our management was directed to explore financing alternatives
available to us in the event we were to effect an acquisition of a business
enterprise. We have not yet been able to consummate either objective, nor can
we
give any assurance that we will be successful in our efforts to sell the
Company, acquire another business enterprise which will prove profitable, or
obtain additional financing to fund our operations in the event we were to
do
so.
Current
Status of the MonitorPlus Technology
MonitorPlus
was built to enhance cyber security in the thoroughbred industry by allowing
security scenarios to be applied to wagering activity and then issuing alerts
for suspect activity; such as for fraud detection and anti-money laundering.
MonitorPlus receives wagering information from external sources such as a
database of historical wagers and then evaluates such information. Once a
fraudulent wagering scenario has been created and a source of wagering data
has
been attached, MonitorPlus is able to analyze wagering activity data and produce
alerts. MonitorPlus is based on proven open source induction technology.
MonitorPlus is comprised of two main functional components: a scenario builder
and a scenario execution engine. In addition to wager activity analysis,
MonitorPlus allows analysts to create “what-if” scenarios. For what-if
scenarios, analysts are able to specify a test set of security rules (a “test
scenario”) and view test alerts.
The
MonitorPlus application was designed as an industry specific application of
open
source induction technology for fraud detection in the thoroughbred industry.
Proprietary design for user screens and user interaction were under construction
but never completed. The underlying algorithm for induction is open source.
The
Company never applied for patent protection and has no intention of doing
do.
We
currently do not intend to undertake any further research, development or
marketing efforts with respect to the Monitor Plus technology or products based
on such technology.
Limited
Operations and Revenues
We
have
not generated revenues from planned principal operations and we are considered
a
development stage company with limited operations. For the fiscal year ended
June 30, 2008, we incurred a net loss of $339,242 and for the period December
15, 2005 (inception) to June 30, 2008, we incurred a net loss of $1,312,332.
We
anticipate that we will have to rely on external financing for all of our
capital requirements. Future losses will continue unless we successfully
implement our business plan or sell the Company. Currently, we are dependent
upon external financing to fund our operations. We have no assurance that any
third party will lend us funds given our current financial condition. If such
funds are not available, we will discontinue entirely our operations unless
we
can sell the Company. If we incur any problems in any of these scenarios, we
will experience significant liquidity and cash flow problems and will have
to
cease operations unless we can sell the Company or acquire a business enterprise
in connection with which we are able to secure necessary financing.
Competition
As
stated
above our current objective is to either sell the Company or acquire a business
enterprise in connection with which we can obtain the necessary financing to
sustain renewed business activities. In identifying, evaluating and selecting
a
target business, we may encounter intense competition from other entities having
a business objective similar to ours. Additionally, we may be subject to
competition from other companies looking to expand their operations through
the
acquisition of a business enterprise. Many of these entities are well
established and have extensive experience identifying and effecting business
combinations directly or through affiliates. Many of these competitors possess
greater technical, human and other resources than us and our financial resources
will be relatively limited when contrasted with those of many of these
competitors. While we believe there are numerous potential businesses
enterprises we could acquire our ability to compete in acquiring certain sizable
target businesses will be limited by our available financial resources. This
inherent competitive limitation gives others an advantage in pursuing the
acquisition of business enterprises.
Risk
Management
We
believed that risk mitigation is a proactive function that preserves asset
value
if properly executed. Accordingly, we had established policies, procedures
and
risk limits to balance the risk/reward relationship of physical and financial
assets, and we took a disciplined approach to the execution of these policies
to
assist in achieving value preservation. Nonetheless, we were unable to preserve
the value of our assets and there is substantial doubt as to our ability to
continue as a going concern.
Employees
As
of
June 30, 2008, we had no full-time employees and one part-time employee, our
President, CEO and Interim CFO, Isidore Sobkowski. No employees are presently
represented by any labor unions. Our relations with Mr. Sobkowski are
good.
Available
Information
We
are
subject to the information requirements of the Exchange Act. Therefore, we
file
periodic reports, proxy statements and other information with the United States
Securities and Exchange Commission (the “SEC”).
Such
reports, proxy statements and other information may be obtained by visiting
the
Public Reference Room of the SEC at 100 F Street, NW, Washington, DC 20549.
You
may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information statements
and
other information regarding issuers that file electronically.
ITEM
1A. RISK
FACTORS
Investing
in our common stock involves a high degree of risk. Before investing in our
common stock you should carefully consider the following risks, together with
the financial and other information contained in this prospectus. If any of
the
following risks actually occurs, our business, prospects, financial condition
and results of operations could be adversely affected. In that case, the trading
price of our common stock would likely decline and you may lose all or a part
of
your investment.
There
Is Substantial Doubt As To Our Ability To Continue As A Going Concern
We
have
incurred a net loss of $1,312,332 for the period from December 15, 2005
(inception) to June 30, 2008, and have no revenues. As
of
June 30, 2008, we had $6,149 in cash and equivalents. This balance is
insufficient to satisfy our cash requirements for the remainder of 2008.
Accordingly, we will have to obtain short-term financing from third parties
to
continue to sustain our limited operations. However, there is no assurance
that
we will be able to do so; if we are unsuccessful in obtaining such funding
we
will need to further curtail operations or cease operations entirely.
As
of the
date of this Report, our focus is the sale of the Company or the potential
acquisition of a business enterprise. However, we can offer no assurance that
such effort will be success, of if we do indeed sell the Company, what the
terms
of such sale would be. Absent the successful sale of the Company, Management
believes that we would have to cease operations, liquidate the Company and/or
file for bankruptcy, all of which would have a material adverse effect on the
Company, its business, operations, finances and common stock.
We
Lost Money For The Fiscal Year Ended June 30, 2008 And Since Inception, And
We
Expect Losses to Continue In The Fiscal Year Ending June 30,
2009.
For
the
fiscal year ended June 30, 2008, we incurred a net loss of $339,242 and for
the
period December 15, 2005 (inception) to June 30, 2008, we incurred a net loss
of
$1,312,332. We also expect to incur losses in the fiscal year ending June 30,
2009. We anticipate that we will have to rely on external financing for all
of
our capital requirements. Future losses will continue unless we successfully
implement our business plan or sell the Company. Currently, we are dependent
upon external financing to fund our operations. We have no assurance that any
third party will lend us funds given our current financial condition. If such
funds are not available, we will discontinue entirely our operations unless
we
can sell the Company. If we incur any problems in any of these scenarios, we
will experience significant liquidity and cash flow problems and will have
to
cease operations unless we can sell the Company.
We
Rely On Our CEO And Will Be Harmed If He Leaves.
Our
ability to continue as a going concern until we are able to sell the Company
or
acquire a business enterprise is largely dependent on the efforts of Isidore
Sobkowski, our Chief Executive Officer and Interim Chief Financial Officer.
We
do not have an employment agreement with Mr. Sobkowski. If he becomes unable
or
unwilling to continue in that role, our prospects for a successful sale or
acquisition will be adversely affected.
There
Currently Is No Public Trading Market For Our Common
Stock.
From
inception, there has been no public trading market for our common stock and
there can be no assurance that an active trading market for our common stock
will ever develop. This could adversely affect shareholders’ ability to sell the
Company’s common stock in short time periods, or possibly at all. In addition,
we believe that factors such as quarterly fluctuations in our financial results
and changes in the overall economy or the condition of the financial markets,
could cause the price of our common stock to fluctuate
substantially.
Our
Net Operating Loss Carryforwards May Be Limited.
Utilization
of the tax benefits of these carry-forwards are subject to limitations imposed
by Section 382 of the Internal Revenue Code. The determination of the
limitations is complex and requires significant judgment and analysis of past
transactions. Accordingly, some portion or all of our carry-forwards may not
be
available to offset any future taxable income.
Our
Common Stock Is Deemed To Be “Penny Stock”, Which May Make It More Difficult For
Investors To Sell Their Shares Due To Suitability
Requirements.
Although
shares of our common stock have never traded in the public markets and we can
offer no assurances that it ever will, our common stock is nonetheless deemed
to
be “penny stock” as that term is defined in Rule 3a51-1 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). Penny stocks
are stock:
· With
a
price of less than $5.00 per share;
· That
are
not traded on a “recognized” national exchange;
· Whose
prices are not quoted on a NASDAQ automated quotation system (NASDAQ-listed
stock must still have a price of not less than $5.00 per share); or
· Stock
in
issuers with net tangible assets less than $2,000,000 (if the issuer has been
in
continuous operation for at least three years) or $5,000,000 (if in continuous
operation for less than three years), or with average revenues of less than
$6,000,000 for the last three years.
Broker-dealers
dealing in penny stocks are required to provide potential investors with a
document disclosing the risks of penny stocks. Moreover, broker-dealers are
required to determine whether an investment in a penny stock is a suitable
investment for a prospective investor. these requirements may reduce the
potential market for the Company’s common stock by reducing the number of
potential investors. This may make it more difficult for investors in the
Company’s common stock to sell shares to third parties or to otherwise dispose
of them. This could cause our stock price to decline.
Shareholders
should be aware that, according to the SEC, the market for penny stocks has
suffered in recent years from patterns of fraud and abuse. Such patterns include
(i) control of the market for the security by one or a few broker-dealers that
are often related to the promoter or issuer; (ii) manipulation of prices through
prearranged matching of purchases and sales and false and misleading press
releases; (iii) “boiler room” practices involving high-pressure sales tactics
and unrealistic price projections by inexperienced sales persons; (iv) excessive
and undisclosed bid-ask differentials and markups by selling broker-dealers;
and
(v) the wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired consequent investor
losses.
Our
Management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
Management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our
securities.
Failure
To Maintain Effective Internal Controls In Accordance With Section 404 Of
The Sarbanes-Oxley Act Of 2002 Could Have A Material Adverse Effect On Our
Stock
Price Should A Trading Market Develop.
Section 404
of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of
the
SEC require annual management assessments of the effectiveness of our internal
control over financial reporting and a report by our independent registered
public accounting firm attesting to and reporting on these
assessments. If we fail to adequately maintain compliance with, or
maintain the adequacy of, our internal control over financial reporting, as
such
standards are modified, supplemented or amended from time to time, we may not
be
able to ensure that we can conclude on an ongoing basis that we have effective
internal control over financial reporting in accordance with Section 404 of
the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the
SEC. If we cannot favorably assess, or our independent registered
public accounting firm is unable to provide an unqualified attestation report
on
our assessment of the effectiveness of our internal control over financial
reporting, investor confidence in the reliability of our financial reports
may
be adversely affected, which could have a material adverse effect on our stock
price.
Anti-Takeover
Provisions Could Make A Third-Party Acquisition Of Us Difficult Which May
Adversely Affect The Market Price And The Voting And Other Rights Of The Holders
Of Our Common Stock.
Certain
provisions of the Delaware General Corporation Law may delay, discourage or
prevent a change in control. The provisions may discourage bids for our common
stock at a premium over the market price. Furthermore, the authorized but
unissued shares of our common stock are available for future issuance by us
without our stockholders' approval. These additional shares may be utilized
for
a variety of corporate purposes including but not limited to future public
or
direct offerings to raise additional capital, corporate acquisitions and
employee incentive plans. The issuance of such shares may also be used to deter
a potential takeover of us that may otherwise be beneficial to our stockholders.
A takeover may be beneficial to stockholders because, among other reasons,
a
potential suitor may offer stockholders a premium for their shares above the
then market price.
Future
Sales By Our Stockholders May Adversely Affect Our Stock Price And Our Ability
To Raise Funds In Future Equity Offerings.
Should
a
public trading market for our common stock develop, sales of our common stock
in
the public market, by our existing shareholders can be expected to lower the
market price of our common stock. Sales may also make it more difficult for
us
to sell equity securities or equity-related securities in the future at a time
and price that our management deems acceptable or at all.
ITEM
1B. UNRESOLVED
STAFF COMMENTS
Not
applicable.
ITEM
2. PROPERTIES
In
order
to reduce operating costs, we are structured as a “virtual” company. As such, we
do not currently own or rent any real estate property.
ITEM
3. LEGAL
PROCEEDINGS
To
the
knowledge of our management, there is no litigation currently pending or
contemplated against us or any of our officers or directors in their capacity
as
such.
ITEM
4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
No
matters were submitted to a vote of stockholders during the quarter ended June
30, 2008.
PART
II
ITEM
5. MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
The
Untied States Securities and Exchange Commission (the “SEC”)
declared our first and only registration statement on Form SB-2 effective on
January 29, 2007; subsequently, the then National Association of Securities
Dealers, Inc. approved our Form 15c2-11 and granted us the stock symbol
“ACIA.OB” on Feb 9, 2007. While there were originally three market makers for
our common stock at such time, no public trading market for our common stock
ever developed and one does not exist at the time of this Report, nor can we
offer any assurance that such a market will ever exist.
As
of
June 30, 2008, there were 55 holders of record of our common stock.
Dividends
We
have
never paid any dividends to our equity holders. We have intended to retain
our
earnings, if any were ever generated, to support the development of the business
and therefore did not anticipate paying cash dividends. Payment of future
dividends, if any, will be at the discretion of our board of directors after
taking into account various factors, including current financial condition,
operating results and current and anticipated cash needs.
Securities
Authorized for Issuance Under Equity Compensation
Plans
As
of
June 30, 2008, we have not adopted an equity compensation plan under which
our
common stock is authorized for issuance.
Currently,
there are no compensation plans in effect under which our equity securities
are
authorized for issuance that were adopted without the approval of security
holders.
Repurchases
of Equity Securities
During
the quarter ended June 30, 2008, we did not repurchase any shares as part of
any
publicly announced plans or programs or otherwise.
ITEM 6. |
SELECTED
FINANCIAL DATA
|
We
are a
smaller reporting company as defined in Regulation S-K; as such pursuant to
Regulation S-K we are not required to make disclosures under this
Item.
ITEM 7. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINCNAICAL CONDITION
AND
RESULTS OF OPERATIONS.
|
Results
of Operations
Overview
The
following Management’s Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with our financial
statements and the related notes thereto which are included in this annual
report and the Company’s audited financial statements and notes thereto included
elsewhere in this Report.
Revenues
We
have
not generated revenues from planned principal operations and we are considered
a
development stage company.
Our
goal
was to become a leading edge provider of applied artificial intelligence
solutions for thoroughbred and lottery applications. We developed MonitorPlus,
an analysis tool designed to help the thoroughbred racing and lottery industry
by providing alerts when potential wagering fraud or money laundering is
detected.
We
intended to generate revenue through (i) the licensing of our technology to
parties engaged in the regulation of the thoroughbred racing industry, and
(ii)
the licensing of our technology to third parties which were expected to develop
and sell specifically tailored software solutions for customers based on our
technology. However, we were unable to enter into any meaningful agreement
for
the sale or license of our technology and as a result our operations were not
profitable. We had planned to introduce MonitorPlus to the thoroughbred industry
as an entry point into the marketplace, and then planned to develop
complementary products based on MonitorPlus. However, we were unable to do
either.
Our
success was largely dependent on the market acceptance of MonitorPlus, efficient
utilization of our infrastructure, successful ongoing development of advanced
process technologies and generation of sufficient return on research and
development investments. However, we were unable to satisfy these objectives,
and as a result, we substantially curtailed our operations.
Following
a reassessment of our business goals and objectives, our Board of Directors
concluded that shareholder value would be better enhanced by either a sale
of
the Company or an acquisition of a business enterprise rather than the
continuation of our efforts to commercialize the MonitorPlus products.
Consequently, in 2007 our management was authorized to develop a business
strategy to either sell the Company or acquire a business enterprise. In
addition, our management was directed to explore financing alternatives
available to us in the effect we were to effect an acquisition of a business
enterprise. We have not yet been able to consummate either objective, nor can
we
give any assurance that we will be successful in our efforts to sell the
Company, acquire another business enterprise which will prove profitable, or
obtain additional financing to fund our operations in the event we were to
do
so.
Costs
and Expenses
Costs
and
expenses were $111,900 for the year ended June 30, 2008 compared to $468,440
for
the year ended June 30, 2007, and consisted primarily of officer’s compensation,
software development and administrative expenses. The decrease was primarily
due
to our cessation of research, development and marketing activities with respect
to the MonitorPlus technology and products based on the technology. Costs and
expenses for the period December 15, 2005 (inception) to June 30, 2008 were
$752,718.
Going
Concern
The
Company incurred net losses of $339,242 for the year ended June 30, 2008 and
$1,312,332 for the period December 15, 2005 (inception) to June 30, 2008. In
addition, the Company has a working capital deficiency of $1,021,216 and a
stockholders’ deficiency of $1,020,262 at June 30, 2008. These factors raise
substantial doubt about the Company’s ability to continue as a going
concern.
There
can
be no assurance that sufficient funds required for us to sustain operations
will
be generated from operations or that funds will be available from external
sources such as debt or equity financings or other potential sources. The lack
of additional capital resulting from the inability to generate cash flow from
operations or to raise capital from external sources would force the Company
to
substantially curtail or cease operations and would, therefore, have a material
adverse effect on its business. Furthermore, there can be no assurance that
any
such required funds, if available, will be available on attractive terms or
that
they will not have a significant dilutive effect on the Company's existing
stockholders.
The
accompanying financial statements do not include any adjustments related to
the
recoverability or classification of asset-carrying amounts or the amounts and
classification of liabilities that may result should we be unable to continue
as
a going concern.
We
are
attempting to address our lack of liquidity by raising additional funds, either
in the form of debt or equity or some combination thereof, but since June 30,
2007 we have not been able to raise funds through the sale of equity securities.
There can be no assurances that we will be able to raise the additional funds
we
may require.
Our
Management continues to meet operating deficits primarily through short-term
borrowings and is attempting to utilize other debt and dilutive and non-dilutive
equity financing alternatives to sustain operations. Whether such financing
will
be available as needed and the ultimate form of such financing is uncertain
and
the effects of this uncertainty could ultimately lead to
bankruptcy.
Financing
Activities
Common
Stock
In
March
2006, the Company sold 4,510,000 shares of common stock valued at $451 to the
founders of the Company.
In
March
2006, the Company issued 9,700,000 shares of common stock valued at $970 for
software development costs.
In
March
2006, the Company sold 2,083,000 shares of common stock to a private investor
for $50,000, and paid cash commissions of $5,000.
In
October 2006, the Company completed a private placement of 468,264 shares of
its
common stock for gross proceeds of $56,190.
Debt
Financings
In
March
2006, we entered into a Securities Purchase Agreement dated as of March 10,
2006, with four investors relating to the issuance and sale, in a private
placement exempt from the registration requirements of the Securities Act of
1933, as amended (the “1933 Act”), of 7% Convertible Debentures in the principal
amount of $500,000 (the “Debentures”). Accrued
interest on the convertible debentures as of June 30, 2008 was $80,694.
The
Debentures are collateralized by all of the now owned and hereafter acquired
rights, title and interest of the Company’s assets. The debentures mature 24
months from the closing. The Debentures are convertible at the option of the
holder into our common stock at the rate of $0.12 per share. Expenses incurred
in connection with the private offering of the debentures were $185,000. Such
expenses are carried as deferred finance costs and were amortized over the
term
of the debt.
In
May
2007 the Company sold $187,000 principal of 7% secured promissory notes (the
“Notes”) and 500,000 Class A Common Stock purchase warrants (the “Warrants”)
(collectively, the “Securities”) for an aggregate purchase price of $170,000.
The Notes were due September 2007 and are secured by the Company’s assets. The
Warrants have an exercise price of $.18 per share and a term of five years.
In
connection with the sale of the Securities, the Company issued as broker’s fees:
(i) 83,111 common stock purchase warrants ($.18 exercise price, five year term)
and (ii) a promissory note in the amount of $14,963. In addition, the Company
incurred legal fees of approximately $30,500 in connection with the sale of
the
Securities. These costs are amortized over the life of the related debt. The
Company is currently accruing interest at the default rate of 18% per annum.
Total accrued interest as of June 30, 2008 is $40,180.
In
November 2007, and February 2008 a stockholder loaned the Company a total of
$64,000. The loan bears interest at 6% per annum and is due November 2008.
Interest accrued and owed on this loan amounted to $863.
Access
to
capital markets has historically been important to us. Depending on market
conditions, we may issue registered or unregistered securities to raise capital
to fund a portion of our operations. However, as of the date of this Report,
we
are attempting to sell the Company but can offer no assurances that we will
be
successful, or, if we are successful, what the terms of such sale will
be.
Contractual
Obligations
The
Debentures matured on March 10, 2008 and are currently in default. The
Debentures are convertible at the option of the holder into the Company’s common
stock at the rate of $.12 per share. Expenses incurred in connection with the
private offering of the debentures were $185,000. Such expenses are carried
as
deferred finance costs and were amortized over the term of the
debt.
Since
a
registration statement covering the underlying common stock was not filed within
90 days, the Company is required to pay liquidated damages of 2% of the
principal amount of $500,000 per month plus interest at the rate of 18% if
the
Company fails to pay the liquidated damages within seven days. Accordingly,
the
Company accrued $106,667 in liquidated damages (until registration statement
was
filed and $30,850 interest on the liquidated damages as of June 30,
2008.
Liquidity
and Capital Resources
As
of June 30, 2008, we had $6,149 in cash and equivalents. This balance is
insufficient to satisfy our cash requirements for the remainder of 2008 and
as
such we will have to obtain short-term financing from third parties. However,
there is no assurance that such funding will be available is in sufficient
amount, if at all, to fund the Company as a going concern; if we are unable
to
obtain such financing in a very short period of time, must continue our efforts
to sell the Company or cease operations. Our inability to achieve these
objectives will have a material adverse effect on our operations and finances.
If we issue additional equity and/or debt securities to meet our future capital
requirements, the terms of any future equity financings may be dilutive to
our
stockholders and the terms of any debt financings may contain restrictive
covenants negatively affecting our stockholders. As of the date of this Report,
we have no plans to issue additional equity and/or debt securities and instead
we are attempting to sell the Company. However, we can offer no assurances
that
we will be successful, or, if we are successful, what the terms of such sale
will be.
Off-
Balance Sheet Arrangements
We
do not
have any off balance sheet arrangements that are reasonably likely to have
a
current or future effect on our financial condition, revenues, results of
operations, liquidity or capital expenditures.
Inflation
and Seasonality
The
effect of inflation on our revenue and operating results was not significant.
Our business is not seasonal.
Critical
Accounting Estimates
The
preparation of financial statements and related disclosures in conformity with
generally accepted accounting principles in the United States of America
(“GAAP”) requires our Management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues, expenses and related
disclosures. Estimates and judgments are based on historical experience,
forecasted future events and various other assumptions that the Company believes
to be reasonable under the circumstances. Estimates and judgments may vary
under
different assumptions or conditions. We evaluate our estimates and judgments
on
an ongoing basis. Management believes the accounting policies below are critical
in the portrayal of our financial condition and results of operations and
require management’s most difficult, subjective or complex
judgments.
Contingencies
The
Company is subject to the possibility of losses from various contingencies.
Considerable judgment is necessary to estimate the probability and amount of
any
loss from such contingencies. An accrual is made when it is probable that a
liability has been incurred or an asset been impaired and the amount of loss
can
re reasonably estimated. The Company accrues a liability and charges operations
for the estimated costs of adjudication or settlement of asserted and unasserted
claims existing as of the balance sheet date.
Income
Taxes
The
Company is required to estimate its provision for income taxes and amounts
ultimately payable or recoverable in numerous tax jurisdictions around the
world. Estimates involve interpretations of regulations and are inherently
complex. Resolution of income tax treatments in individual jurisdictions may
not
be known for many years after completion of any fiscal year. The Company is
also
required to evaluate the realizability of its deferred tax assets on an ongoing
basis in accordance with GAAP, which requires the assessment of the Company’s
performance and other relevant factors when determining the need for a valuation
allowance with respect to these deferred tax assets. Realization of deferred
tax
assets is dependent on the Company’s ability to generate future taxable
income.
Research
and Development
Costs
related to the conceptual formulation and design of products and processes
are
expensed as research and development when incurred. Determining when product
development is complete requires judgment by the Company. The Company deems
development of a product complete once the product has been thoroughly reviewed
and tested for performance and reliability.
Stock-based
Compensation
Under
the
provisions of SFAS No. 123(R), stock-based compensation cost is estimated at
the
grant date based on the fair-value of the award and recognized as expense
ratably over the requisite service period of the award. Determining the
appropriate fair-value model and calculating the fair value of stock-based
awards at the grant date requires considerable judgment, including estimating
stock price volatility, expected option life and forfeiture rates. The Company
develops its estimates based on historical data and market information which
can
change significantly over time. A small change in the estimates used can result
in a relatively large change in the estimated valuation.
The
Company will use the Black-Scholes option valuation model to value employee
stock awards. The Company will estimate stock price volatility based on an
average of its historical volatility and the implied volatility derived from
traded options on the Company’s stock. Estimated option life and forfeiture rate
assumptions will be derived from historical data. For stock based compensation
awards with graded vesting that were granted after 2005, the Company will
recognize compensation expense using the straight-line method.
Recent
Accounting Pronouncements
In
February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
159, “The Fair Value Option for Financial Assets and Financial Liabilities -
Including an amendment of FASB Statement No. 115.” Under SFAS No. 159, the
Company may elect to measure many financial instruments and certain other items
at fair value on an instrument by instrument basis subject to certain
restrictions. The Company has adopted SFAS No. 159 at the beginning of 2008.
The
adoption of SFAS No. 159 did not impact the Company’s results of operation and
financial condition.
In
September 2006, the SEC staff issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements.” The Company is required to
adopt SAB No. 108 by the end of 2007. The adoption of SAB No. 108 did not impact
of the Company’s results of operation and financial condition.
Also
in
September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements
No. 87, 88, 106 and 132(R).” Under SFAS No. 158, the Company is required to
initially recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of 2007. The adoption
of
SFAS No. 158 did not impact of the Company’s results of operation and financial
condition.
Also
in
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurement.” SFAS No.
157 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 applies under other accounting pronouncements
that require or permit fair value measurements. The Company is required to
adopt
SFAS No. 157 effective at the beginning of 2009.
In
June
2006, the FASB issued Interpretation No. 48 (“FIN 48”), “Accounting for
Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109.” FIN
48 contains a two step approach to recognizing and measuring uncertain tax
positions accounted for in accordance with SFAS No. 109. The first step is
to
evaluate the tax position for recognition by determining if the weight of
available evidence indicated it is more likely than not that the position will
be sustained on audit, including resolution of related appeals or litigation
processes, if any. The second step is to measure the tax benefit as the largest
amount which is more than 50% likely of being realized upon ultimate settlement.
The Company is required to adopt FIN 48 effective at the beginning of 2008.
The
adoption of FIN 48 did not impact of the Company’s results of operation and
financial condition.
In
May
2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections.”
SFAS No. 154 changes the requirements for the accounting for and reporting
of a
change in accounting principle. The Company adopted SFAS No. 154 at the
beginning of 2007. The adoption of SFAS No. 154 did not impact the Company’s
results of operation and financial condition.
On
February 16, 2006, the FASB issued SFAS 155, “Accounting for Certain Hybrid
Instruments,” which amends SFAS 133, “Accounting for Derivative Instruments and
Hedging Activities,” and SFAS 140, “Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities.” SFAS 155 allows financial
instruments that have embedded derivatives to be accounted for as a whole
(eliminating the need to bifurcate the derivative from its host) if the holder
elects to account for the whole instrument on a fair value basis. SFAS 155
also
clarifies and amends certain other provisions of SFAS 133 and SFAS 140. This
statement is effective for all financial instruments acquired or issued in
fiscal years beginning after September 15, 2006. We do not expect its
adoption of this new standard to have a material impact on our financial
position, results of operations or cash flows.
SFAS
156.
On March 31, 2006 the FASB issued its Statement of Financial Accounting
Standards 156 to amend FASB Statement No. 140 “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities.” FAS 156
requires an entity to recognize a servicing asset or servicing liability on
its
statement of financial position each time it undertakes an obligation to service
a financial asset. FAS 156’s required effective date of adoption is for the
first fiscal year beginning after September 15, 2006. We do not expect adoption
of this standard will have a material impact on our financial position,
operations or cash flows.
ITEM
7A. QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Market
risk is the sensitivity of income to changes in interest rates, foreign exchange
rates, commodity prices, equity prices, and other market-driven rates or prices.
Our current business and, accordingly, the risks associated with foreign
exchange rates, commodity prices, and equity prices are not significant. We
have
not engaged in any hedging activities with respect to the market risk to which
we are exposed. Our only material market risk exposure relates to fluctuations
in interest rates. Given our limited risk in our exposure to money market funds,
we do not view the interest rate risk to be significant
ITEM
8. |
FINANCIAL
STATEMENTS AND SUPPLEMENTARY
DATA
|
INDEX
TO FINANCIAL STATEMENTS
AND
FINANCIAL STATEMENT SCHEDULES
|
|
Page
|
|
|
|
Report
dated November 10, 2008 of Michael F. Albanese, C.P.A.
|
|
18
|
|
|
|
Report
dated November 15, 2007 of Wolinetz, Lafazan & Company,
P.C.
|
|
19
|
|
|
|
Balance
Sheets as of June 30, 2008.
|
|
20
|
|
|
|
Statements
of Operations for the years ended June 30, 2008 and June 30, 2007
and from
inception December 15, 2005 to June 30, 2008
|
|
21
|
|
|
|
Statements
of Stockholders Deficiency from inception December 15, 2005 to
June 30,
2008
|
|
22
|
|
|
|
Statements
of Cash Flows for the years ended June 30, 2008 and 2007 and from
inception December 15, 2005 to June 30, 2008
|
|
23
|
|
|
|
Notes
to Financial Statements
|
|
24-26
|
REPORT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANT
To
the
Board of Directors and Stockholders of
Aprecia,
Inc.
I
have
audited the accompanying balance sheet of Aprecia, Inc. (a development stage
company) as of June 30, 2008 and the related statements of operations,
stockholders’ deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I did
not audit the statements of operations, stockholders’ deficit and cash flows for
the year ended June 30, 2007 of Aprecia, Inc. (a development stage company).
Those statements were audited by other auditors whose report dated November
15,
2007 has been included, and my opinion, insofar as it relates to the statements
of operations, stockholders’ deficit and cash flows for the year ended June 30,
2007 of Aprecia, Inc. (a development stage company), is based solely on the
report of the other auditors.
I
conducted my audit in accordance with standards of the Public Company Accounting
Oversight Board (United States). Those standards require that I plan and
perform
an audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis,
evidence supporting the amounts and disclosures in the financial statements.
An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for
my opinion.
In
my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Aprecia,
Inc. (a development stage company) as of June 30, 2008 and the results of
their
operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company’s significant net losses raise substantial doubt about
its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
The
Company is not required to have, nor was I engaged to perform, an audit of
its
internal control over financial reporting. My audit included consideration
of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of
expressing an opinion on the Company’s internal control over financial
reporting. Accordingly, I express no such opinion.
/s/
Michael F. Albanese, C.P.A.
Parsippany,
New Jersey
November
10, 2008
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board
of
Directors and Stockholders
Aprecia,
Inc.
We
have
audited the accompanying statements of operations, stockholders’ deficiency and
cash flows of Aprecia, Inc. (a Development Stage Company) ("the Company")
for
the year ended June 30, 2007, and the period December 15, 2005 (inception)
to
June 30, 2007. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required
to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control
over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. Also, an audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the results of its operations and its cash flows for the
year
ended June 30, 2007, and the period December 15, 2005 (inception) to June
30,
2007 in conformity with accounting principles generally accepted in the United
States of America.
The
accompanying financial statements have been prepared assuming the Company
will
continue as a going concern. As discussed in Note 2 to the financial statements,
the Company has incurred operating losses since inception, has had no revenues
and has not commenced planned principal operations. These factors raise
substantial doubt about the Company’s ability to continue as a going concern.
Management’s plans regarding those matters are also described in Note 2. The
financial statements do not include any adjustments that might result from
the
outcome of this uncertainty.
WOLINETZ,
LAFAZAN & COMPANY, P.C.
Rockville
Centre, New York
November
15, 2007
APRECIA,
INC.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEET
|
|
June
30, 2008
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$
|
6,149
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
6,149
|
|
|
|
|
|
|
Property
and Equipment, Net
|
|
|
954
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
7,103
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
|
7%
Convertible Debentures
|
|
$
|
500,000
|
|
Convertible
Notes Payable, Net of Unamortized Discount of $-0- and
$37,654
|
|
|
201,960
|
|
Loan
Payable - Related Party
|
|
|
64,000
|
|
Accrued
Expenses
|
|
|
2,150
|
|
Accrued
Liquidated Damages
|
|
|
106,667
|
|
Accrued
Interest
|
|
|
152,588
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
1,027,365
|
|
|
|
|
|
|
Commitments
and Contingencies
|
|
|
-
|
|
|
|
|
|
|
Stockholders’
Deficiency:
|
|
|
|
|
|
|
|
|
|
Preferred
Stock, $.0001 par value; 10,000,000 shares authorized, none issued
and
outstanding
|
|
|
-
|
|
Common
Stock, $.0001 par value; 250,000,000 shares authorized, 16,761,597
issued
and outstanding
|
|
|
1,676
|
|
Additional
Paid-In Capital
|
|
|
290,394
|
|
Deferred
Finance Costs, Net
|
|
|
-
|
|
Deficit
Accumulated During the Development Stage
|
|
|
(1,312,332
|
)
|
|
|
|
|
|
Total
Stockholders’ Deficiency
|
|
|
(1,020,262
|
)
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Deficiency
|
|
$
|
7,103
|
|
The
accompanying notes are an integral part of these financial
statements.
APRECIA,
INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF OPERATIONS
|
|
|
|
|
|
For the Period
|
|
|
|
|
|
|
|
December 15, 2005
|
|
|
|
|
|
|
|
(Inception)
|
|
|
|
June 30, 2008
|
|
June 30, 2007
|
|
To June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
$
|
-
|
|
$ |
-
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs
and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer’s
Compensation
|
|
$
|
46,573
|
|
$
|
180,000
|
|
$
|
286,573
|
|
Software
Development
|
|
|
14,000
|
|
|
167,415
|
|
|
228,985
|
|
Other
General and Administrative Expenses
|
|
|
51,327
|
|
|
139,025
|
|
|
237,160
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Costs and Expenses
|
|
|
111,900
|
|
|
486,440
|
|
|
752,718
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from Operations
|
|
|
(111,900
|
) |
|
(486,440
|
) |
|
(752,718
|
) |
|
|
|
|
|
|
|
|
|
|
|
Other
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Amortization
of Deferred Finance Costs
|
|
|
(99,837
|
)
|
|
(112,012
|
)
|
|
(240,113
|
)
|
Amortization
of Deferred Debt Discount
|
|
|
(37,654
|
)
|
|
(22,592
|
)
|
|
(60,246
|
)
|
Interest
Expense
|
|
|
(89,851
|
)
|
|
(51,942
|
)
|
|
(152,588
|
) |
Liquidated
Damages
|
|
|
-
|
|
|
(90,000
|
)
|
|
(106,667
|
)
|
Total
Other Expenses
|
|
|
(227,342
|
)
|
|
(
276,546
|
)
|
|
(559,614
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(339,242
|
)
|
$
|
(762,986
|
)
|
$
|
(1,312,332
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares
|
|
|
|
|
|
|
|
|
|
|
Outstanding –
Basic and Diluted
|
|
|
16,761,597
|
|
|
16,603,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss per Common Share – Basic and Diluted
|
|
|
(.02
|
)
|
|
(.05
|
)
|
|
|
|
The
accompanying notes are an integral part of these financial
statements
APRECIA,
INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF STOCKHOLDERS’ DEFICIENCY
FOR
THE
PERIOD DECEMBER 15, 2005 (INCEPTION) TO JUNE 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
Deferred
|
|
During the
|
|
|
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Paid-In
|
|
Finance
|
|
Development
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Costs
|
|
Stage
|
|
Total
|
|
Common Stock sold to Founders
|
|
|
-
|
|
$
|
-
|
|
|
4,510,000
|
|
$
|
451
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock Issued for Software
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development –
at Par Value
|
|
|
-
|
|
|
-
|
|
|
9,700,000
|
|
|
970
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock Issued to a Private
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor –
at $.024 Per Share
|
|
|
-
|
|
|
-
|
|
|
2,083,333
|
|
|
208
|
|
|
49,792
|
|
|
-
|
|
|
-
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions
on Sale of Common Stock
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(5,000
|
)
|
|
-
|
|
|
-
|
|
|
(5,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the Period
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(210,104
|
)
|
|
(210,104
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance –
June 30, 2006
|
|
|
-
|
|
|
-
|
|
|
16,293,333
|
|
|
1,629
|
|
|
44,792
|
|
|
-
|
|
|
(210,104
|
)
|
|
(163,683
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock Issued Pursuant to a Private Placement at $.12 Per
Share
|
|
|
-
|
|
|
-
|
|
|
468,264
|
|
|
47
|
|
|
56,143
|
|
|
-
|
|
|
-
|
|
|
56,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock Warrants Issued as Deferred Finance Costs on Note
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable –
83,111 at $.116 Per Warrant
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
9,641
|
|
|
(9,641
|
)
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Discount on Loan Payable
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
43,246
|
|
|
-
|
|
|
-
|
|
|
43,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of Deferred Finance Costs
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
-
|
|
|
3,615
|
|
|
-
|
|
|
3,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the Year Ended June 30, 2007
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(762,986
|
)
|
|
(762,986
|
) |
Balance
June 30, 2007
|
|
|
-
|
|
|
-
|
|
|
16,761,597
|
|
|
1,676
|
|
|
153,822
|
|
|
(6,026
|
)
|
|
(973,090
|
)
|
|
(823,618
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of Deferred Finance Costs
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
-
|
|
|
6,026
|
|
|
-
|
|
|
6,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Forgiven by CEO
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
-
|
|
|
136,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the Year Ended June 30, 2008
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(339,242
|
)
|
|
(339,242
|
)
|
|
|
|
- |
|
$ |
-
|
|
|
16,761,597
|
|
$
|
1,676
|
|
$
|
290,394
|
|
|
-
|
|
$
|
(1,312,332
|
)
|
$
|
(1,020,262
|
)
|
APRECIA,
INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CASH FLOWS
|
|
|
|
|
|
For
the Period
|
|
|
|
For
the Fiscal Year
|
|
For
the Fiscal Year
|
|
December
15,
|
|
|
|
Ended
|
|
Ended
|
|
(Inception)
|
|
|
|
June
30, 2008
|
|
June
30, 2007
|
|
June
30, 2008
|
|
Cash
Flows from Operating Activities
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(339,242
|
)
|
$
|
(762,986
|
)
|
$
|
(1,312,332
|
)
|
Adjustments
to Reconcile Net Loss to Net Cash
|
|
|
|
|
|
|
|
|
|
|
(Used)
in Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
Amortization
of Debt Discount
|
|
|
37,654
|
|
|
22,592
|
|
|
60,246
|
|
Amortization
of Deferred Finance Costs
|
|
|
99,837
|
|
|
112,012
|
|
|
240,113
|
|
Depreciation
Expense
|
|
|
954
|
|
|
954
|
|
|
1,908
|
|
Common
Stock Issued for Software Development
|
|
|
-
|
|
|
-
|
|
|
970
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in Assets and Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease) in Accrued Expenses
|
|
|
(7,529
|
)
|
|
117,770
|
|
|
138,723
|
|
Increase
in Accrued Interest
|
|
|
89,851
|
|
|
62,737
|
|
|
152,588
|
|
Increase
in Liquidating Damages
|
|
|
-
|
|
|
90,000
|
|
|
106,667
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used) in Operating Activities
|
|
|
(118,475
|
)
|
|
(356,921
|
)
|
|
(611,117
|
)
|
Cash
Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
Purchase
of Equipment
|
|
|
-
|
|
|
(2,862
|
)
|
|
(2,862
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used) in Investing Activities
|
|
|
-
|
|
|
(2,862
|
)
|
|
(2,862
|
)
|
Cash
Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from Issuance of Convertible Debentures
|
|
|
-
|
|
|
-
|
|
|
500,000
|
|
Decrease
in Stock Subscription Receivable
|
|
|
-
|
|
|
451
|
|
|
451
|
|
Net
Proceeds from Issuance of Notes Payable
|
|
|
-
|
|
|
170,000
|
|
|
170,000
|
|
Proceeds
of Loan Payable - Related Party
|
|
|
64,000
|
|
|
-
|
|
|
64,000
|
|
Payments
of Finance Costs
|
|
|
-
|
|
|
(30,513
|
)
|
|
(215,513
|
)
|
Proceeds
from Issuance of Common Stock
|
|
|
-
|
|
|
56,190
|
|
|
106,190
|
|
Expense
on Sale of Common Stock
|
|
|
-
|
|
|
-
|
|
|
(5,000
|
)
|
Net
Cash Provided by Financial Activities
|
|
|
64,000
|
|
|
196,128
|
|
|
620,128
|
|
Increase
(Decrease) in Cash
|
|
|
(54,475
|
)
|
|
(163,655
|
)
|
|
6,149
|
|
Cash
- Beginning of Period
|
|
|
60,624
|
|
|
224,279
|
|
|
-
|
|
Cash
- End of Period
|
|
$
|
6,149
|
|
$
|
60,624
|
|
$
|
6,149
|
|
Supplemental
Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
Cash
Paid for Interest
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Cash
Paid for Income Taxes
|
|
|
250
|
|
|
250
|
|
|
500
|
|
Supplemental
Non-Cash Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
Subscription
Receivable on Sale of Common Stock
|
|
|
-
|
|
|
-
|
|
|
451
|
|
Common
Stock Warrants Issued as Deferred Finance Costs
|
|
|
-
|
|
|
9,641
|
|
|
9,641
|
|
Debt
Discount Attributable to Common Stock Warrants
|
|
|
|
|
|
|
|
|
|
|
on
Notes Payable
|
|
|
-
|
|
|
43,246
|
|
|
43,246
|
|
Note
Payable Issued as Payment of Deferred Finance Costs
|
|
|
-
|
|
|
14,960
|
|
|
14,960
|
|
Exchange
Related Party Debt to Contributed Capital
|
|
|
136,572
|
|
|
-
|
|
|
136,572
|
|
The
accompanying notes are an integral part of these financial
statements
APRECIA,
INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO
FINANCIAL STATEMENTS
Note
1
- Summary
of Significant Accounting Policies
Organization
Aprecia,
Inc. (the Company, was incorporated on December 15, 2005 under the laws of
the
State of Delaware. The Company has selected June 30 as its fiscal year
end.
The
Company has not yet generated revenues from planned principal operations
and is
considered a development stage company as defined in Statement of Financial
Accounting Standards (‘SFAS’) No. 7. The Company originally had planned on
becoming involved in the business of identifying money laundering in various
sporting venues. It has since dropped such plans and is now seeking other
business opportunities but has not yet identified any such opportunity. There
is
no assurance, however, that the Company will achieve its objectives or
goals.
Cash
and Cash Equivalents
The
Company considers all highly-liquid investments purchased with a maturity
of
three months or less to be cash equivalents.
Revenue
Recognition
The
Company utilizes the accrual method of accounting.
Advertising
Costs
Advertising
costs will be charged to operations when incurred. The Company did not incur
any
advertising costs during the year ended June 30, 2008 or for the period December
15, 2005 (inception) through June 30, 2008.
Income
Taxes
The
Company accounts for income taxes using the asset and liability method described
in SFAS No. 109, “Accounting For Income Taxes”, the objective of which is to
establish deferred tax assets and liabilities for the temporary difference
between the financial reporting and the tax bases of the Company’s assets and
liabilities at enacted tax rates expected to be in effect when such amounts
are
realized or settled. A valuation allowance related to deferred tax assets
is
recorded when it is more likely than not that some portion or all of the
deferred tax assets will not be realized.
Loss
Per Share
The
computation of loss per share is based on the number weighted average of
common
shares outstanding during the period presented. Diluted loss per common share
is
the same as basic loss per common share as the effect of potentially dilutive
securities (convertible debentures - 4,166,667 shares and common stock warrants
- 583,111 at June 30, 2008 and June 30, respectively) are
anti-dilutive.
APRECIA,
INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO
FINANCIAL STATEMENTS
Note
1
- Summary
of Significant Accounting Policies
(Continued)
Accounting
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management
to
make estimates and assumptions that affect the reported amounts of assets
and
liabilities, the disclosures of contingent assets and liabilities at the
date of
the financial statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from those
estimated.
Fair
Value of Financial Instruments
The
carrying value of cash, notes payable and accrued liabilities approximates
fair
value because of the immediate or short-term maturity of these financial
instruments.
Software
Development
Software
development costs are charged to expense as incurred. The Company incurred
software development costs of $14,000 during the year ended June 30, 2008,
and
$228,985 for the period December 15, 2005 (inception) through June 30,
2008.
Reclassifications
Certain
items in these financial statements have been reclassified to conform to
the
current period presentation.
Recently
Enacted Accounting Standards
SAB
108
In
September 2006, the SEC staff issued Staff Accounting Bulletin No. 108,
Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements (“SAB 108”). SAB 108 was
issued in order to eliminate the diversity in practice surrounding how public
companies quantify financial statement misstatements. SAB 108 requires that
registrants quantify errors using both a balance sheet and income statement
approach and results in a misstated amount that, when all relevant quantitative
and qualitative factors are considered, is material. The Company has considered
the SAB 108 to be not material.
SFAS
157
In
September 2006, the FASB issued Statement of Financial Accounting Standards
No.
157, Fair Value Measurements (“SFAS 157”). SFAS 157 provides a common definition
of fair value and establishes a framework to make the measurement of fair
value
in generally accepted accounting principles more consistent with comparable.
SFAS 157 also requires expanded disclosures to provide information about
the
extent to which fair value is used to measure assets and liabilities, the
methods and assumptions used to measure fair value, and the effect of fair
value
measures on earnings. SFAS 157 is effective for the Company’s year ended 2008,
although early adoption is permitted. The adoption of SFAS 157 did not impact
the Company’s results of operation and financial condition.
NOTE
2 -
Going
Concern
The
Company incurred net losses of $339,242 for the year ended June 30, 2008 and
$1,312,332 for the period December 15, 2005 (inception) to June 30, 2008. In
addition, the Company has a working capital deficiency of $1,021,216 and a
stockholders’ deficiency of $1,020,262 at June 30, 2008. These factors raise
substantial doubt about the Company’s ability to continue as a going
concern.
The
Company is attempting to address its lack of liquidity by raising additional
funds, either in the form of debt or equity or some combination thereof. In
addition, the Company is seeking other business opportunities but has not yet
identified any such opportunity. There can be no assurances that the Company
will be able to raise the additional funds it requires.
APRECIA,
INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO
FINANCIAL STATEMENTS
NOTE
3 -
Convertible
Debentures
The
Company entered into a Securities Purchase Agreement dated as of March 10,
2006,
with four investors relating to the issuance and sale, in a private placement
exempt from the registration requirements of the Securities Act of 1933, as
amended (the “1933 Act”), of 7% Convertible Debentures in the principal amount
of $500,000. Accrued interest on the convertible debentures as of June 30,
2008
was $80,694. The debentures are collateralized by all of the now owned and
hereafter acquired rights, title and interest of the Company’s
assets.
The
debentures matured on March 10, 2008 and are currently in default. The
debentures are convertible at the option of the holder into the Company’s common
stock at the rate of $.12 per share. Expenses incurred in connection with the
private offering of the debentures were $185,000. Such expenses are carried
as
deferred finance costs and were amortized over the term of the
debt.
Since
a
registration statement covering the underlying common stock was not filed within
90 days, the Company is required to pay liquidated damages of 2% of the
principal amount of $500,000 per month plus interest at the rate of 18% if
the
Company fails to pay the liquidated damages within seven days. Accordingly,
the
Company has accrued $106,667 in liquidated damages and $30,850 interest on
the
liquidated damages as of June 30, 2008.
NOTE
4 -
Notes
Payable
In
May
2007 the Company sold $187,000 principal of 7% secured promissory notes (the
“Notes”) and 500,000 Class A Common Stock purchase warrants (the “Warrants”)
(collectively, the “Securities”) for an aggregate purchase price of $170,000.
The Notes were due September 2007 and are secured by the Company’s assets. The
Warrants have an exercise price of $.18 per share and a term of five years.
In
connection with the sale of the Securities, the Company issued as broker’s fees:
(i) 83,111 common stock purchase warrants ($.18 exercise price, five year term)
and (ii) a promissory note in the amount of $14,963. In addition, the Company
incurred legal fees of approximately $30,500 in connection with the sale of
the
Securities. These costs were amortized over the life of the related debt.
The debentures are collateralized by all of the now owned and hereafter acquired
rights, title and interest of the Company’s assets. The Company is currently
accruing interest at the default rate of 18% per annum. Total accrued interest
as of June 30, 2008 is $40,180.
NOTE
5 -
Loan
Payable – Related Party
During
the twelve months ended June 30, 2008 a stockholder loaned the Company a total
of $64,000. The loan bears interest at 6% per annum and is due November 2008.
Interest accrued and owed on this loan amounted to $863.
NOTE
6 -
Common
Stock
In
March
2006, the Company sold 4,510,000 shares of common stock valued at $451 to the
founders of the Company.
In
March
2006, the Company issued 9,700,000 shares of common stock valued at $970 for
software development costs.
In
March
2006, the Company sold 2,083,000 shares of common stock to a private investor
for $50,000, and paid cash commissions of $5,000.
In
October 2006, the Company completed a private placement of 468,264 shares of
its
common stock for gross proceeds of $56,190.
NOTE
7
- Preferred
Stock
The
Company’s Board of Directors may, without further action by the Company’s
stockholders, from time to time, direct the issuance of any authorized but
unissued or unreserved shares of Preferred Stock in series and at the time
of
issuance, determine the rights, preferences and limitations of each series.
The
holders of the Preferred Stock may be entitled to receive a preference payment
in the event of any liquidation, dissolution or winding-up of the Company before
any payment is made to the holders of the Common Stock. Furthermore, the Board
of Directors could issue Preferred Stock with voting and other rights that
could
adversely affect the voting power of the holders of the Common
Stock.
NOTE
8 -
Related
Party Transactions
In
September 2007 the Company agreed to provide its CEO with a full release from
all non-complete and non-solicitation clauses in their agreements, either
written and oral, and either explicit and implied, in exchange for full
settlement of any outstanding debts owed to the CEO that are unpaid.
Accordingly, $136,572 (the amount of indebtedness) was credited to additional
paid-in capital in connection with such release. In addition, the Company
granted the CEO a non-exclusive, worldwide, royalty-free right and license
to
use the Monitor Plus software source code, and all derivative works thereof,
in
return for agreement to render reasonable assistance in the winding down of
the
Company’s original business plans.
NOTE
9
- Commitments
and Contingencies
Legal Proceedings
From
time
to time, the Company is named in legal actions in the normal course of business.
In the opinion of management, the outcome of these matters, if any, will not
have a material impact on the financial condition or results of operations
of
the Company.
NOTE
10
- Income
Taxes
At
June
30, 2008, the Company had net operating loss carry-forwards for federal tax
purposes of approximately $1,295,000 which are available to offset future
taxable income, if any, through 2026. Under Federal Tax Law IRC Section 382,
certain significant changes may restrict the utilization of these loss
carry-forwards.
At
June
30, 2008 the Company had deferred tax asset of approximately $440,469
representing the benefit of its net operating carry-forwards. The Company has
not recognized the tax benefit because realization of the tax benefit is
uncertain and thus a valuation allowance has been fully provided against the
deferred tax asset. The difference between the federal Statutory Rate of 34%
and
the Company’s effective tax rate of 0% is due to an increase in the valuation of
allowance of approximately $440,469.
ITEM
9. CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
On
September 24, 2008, the Company changed its independent registered public
accounting firm from Wolinetz, Lafazan & Company, CPA's, P.C. (“Wolinetz”)
to
Michael
F. Albanese, CPA (“Albanese”) as
our
new independent accountants to audit our financial statements for the fiscal
year ending June 30, 2008. This change was made solely in an effort to reduce
our overall cost given our limited resources.
The
report of Wolinetz on the financial statements for the fiscal year ended June
30, 2007 did not contain any adverse opinion or disclaimer of opinion or was
qualified or modified as to uncertainty, audit scope or accounting principles,
except for the following:
“…the
Company has incurred operating losses since inception, has had no revenues
and
has not commenced planned principal operations. These factors raise substantial
doubt about the Company’s ability to continue as a going concern. Management’s
plans regarding those matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome
of
this uncertainty.”
ITEM
9A. CONTROLS
AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
An
evaluation was carried out under the supervision and with the participation
of
the Company’s management, including its principal executive officer and
principal financial officer (one person), of the effectiveness of the design
and
operation of the Company’s disclosure controls and procedures (as defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period
covered by this Report. Based upon that evaluation, the principal executive
officer and principal financial officer (one person) concluded that those
disclosure controls and procedures were effective to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission’s rules and forms and that such
information is accumulated and communicated to the Company’s management,
including the principal executive officer and principal financial officer (one
person), as appropriate, to allow timely decision regarding
disclosure.
During
the period covered by this Report, there were no changes in the Company’s
internal control over financial reporting that have materially affected, or
are
reasonably likely to materially affect, the Company’s internal control over
financial reporting. There were no significant deficiencies or material
weaknesses, and therefore there were no corrective actions taken.
Management’s
Report on Internal Control Over Financial
Reporting
We
are
responsible for establishing and maintaining adequate internal control over
financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the
Exchange Act). Under the supervision and with the participation of our
management, including our principal executive officer and chief financial
officer, we conducted an evaluation of the effectiveness of our internal control
over financial reporting based on the framework in
Internal Controls — Integrated Framework
issued
by the Committee of Sponsoring Organizations of the Treadway Commission, and
the
related guidance provided in
Internal Control Over Financial Reporting — Guidance for Smaller Public
Companies
also
issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
Our
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the preparation and fair presentation of
financial statements for external purposes in accordance with generally accepted
accounting principles. Internal control over financial reporting includes those
policies and procedures that (i) pertain to the maintenance of records that
in
reasonable detail accurately and fairly reflect the transactions and
dispositions of our assets; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of our
management and directors; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial
statements.
Because
of its inherent limitations, internal control over financial reporting may
not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Based
on
our evaluation under the framework in
Internal Controls — Integrated Framework,
our
management concluded that our internal control over financial reporting was
effective as of June 30, 2008.
This
annual report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting. Our internal control over financial reporting was not subject to
attestation by our independent registered public accounting firm pursuant to
temporary rules of the SEC that permit us to provide only management’s report in
this annual report.
ITEM
9B.
OTHER INFORMATION
None.
PART
III
ITEM
10. DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
and Executive Officers
The
following persons are our executive officers and directors and hold the offices
set forth opposite their names.
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Isidore
Sobkowski
|
|
52
|
|
President,
Chief Executive Officer, Interim Chief Financial Officer and
Director
|
|
|
|
|
|
Solomon
Lax
|
|
49
|
|
Director
|
Directors
and Executive Biographies
Isidore
Sobkowski.
Mr.
Sobkowski was the lead cyber security consultant at the National Thoroughbred
Racing Association. An expert in the areas of artificial intelligence,
predictive software and cyber security, Mr. Sobkowski served on the Board of
Directors and as a Member of the Audit Committee of Astea International from
June 2000 through January 2004. He also serves as founder, President and Chief
Executive Officer of Self Service Technologies. Previously, he led a number
of
successful technology companies, including Professional Help Desk (“PHD”). Upon
PHD’s acquisition by Computer Associates, Mr. Sobkowski was employed as a
Division Vice President at Computer Associates. A published author and
international speaker, Mr. Sobkowski received Bachelors and Masters of Science
degrees in Computer Science from The City University of New York as well as
a
professional certification in Artificial Intelligence from New York
University.
Solomon
Lax.
Since
1998, Mr. Lax has been a partner in CS Capital Partners LLC, an early stage
venture capital firm. Since 2000 through 2006, Mr. Lax served as a member of
the
Board of Directors of Home Décor Products, an internet retailer. Since 2006, Mr.
Lax has served as Chief Executive Officer of Grace American Capital, LLC, a
specialty finance company. Mr. Lax has also been a principal in Cato Capital
LLC, a registered broker dealer, since 2006.
Board
of Directors
Our
Board
of Directors (“Board”)
are
elected by the vote of a majority in interest of the holders of our voting
stock
and hold office until the expiration of the term for which he or she was elected
and until a successor has been elected and qualified.
A
majority of the authorized number of directors constitutes a quorum of the
Board
for the transaction of business. Both of the directors must be present at the
meeting to constitute a quorum. However, any action required or permitted to
be
taken by the Board may be taken without a meeting if all members of the Board
individually or collectively consent in writing to the action.
Directors
may receive compensation for their services and reimbursement for their expenses
as shall be determined from time to time by resolution of the Board. Each of
our
directors currently receives no compensation for their service on our
Board.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires that a company’s directors and certain of its
officers file reports of ownership and changes of ownership of such company’s
common stock with the SEC. Based solely on copies of such reports provided
to
us, we believe that all directors and officers filed on a timely basis all
such
reports required of them with respect to stock ownership and changes in
ownership during fiscal year ended June 30, 2008.
Code
of Ethics
Our
Board
has not adopted a code of ethics that applies to all of our directors, employees
and officers, including our principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing
similar functions.
Committees
Since
inception, we have never had any audit committee or any other committee of
the
Board.
ITEM
11. EXECUTIVE
COMPENSATION
The
following table summarizes the compensation paid to our Chief Executive Officer
for services rendered in all capacities to us during the years ended June
30,
2008, 2007 and 2006. There were no other compensated executive officers during
the years ended June 30, 2008, 2007 and 2006.
|
|
Long-Term Compensation
|
|
|
|
Annual Compensation
|
|
|
|
Awards
|
|
|
|
|
|
Name and Principal
Position
|
|
Year
|
|
Salary ($)
|
|
Bonus
($)
|
|
Restricted
Stock
Awards ($)
|
|
Securities
Underlying
Options/SARs
(#)
|
|
Non-Equity
Incentive Plan
Compensation
|
|
Non-Qualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation
($)
|
|
Total
Compensation
($)
|
|
Isidore
Sobkowski
|
|
|
2008 |
|
|
46,573 |
(1) |
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
2007
|
|
|
180,000
|
(1)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
91,995
|
|
|
|
|
2006
|
|
|
60,000
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
60,000
|
|
(1)
Of
this amount, $90,000 was paid in cash and the remainder represents accrued
salary, which was ultimately contributed to paid-in capital on September 30,
2007.
As
of
June 30, 2008, we have not entered into any employment agreements with Mr.
Sobkowski or any other individual. Mr.
Sobkowski is not currently receiving any compensation from the Company in
exchange for his services; however, he is reimbursed for out of pocket expenses
he incurs in providing services to the Company
Outstanding
Equity Awards at June 20, 2008
During
2008, Mr. Sobkowski was not granted any options or other equity from the
Company.
ITEM
12. |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER
MATTERS
|
Set
forth
below is the ownership, as of June 30, 2008, of the number of shares and
percentage of our common stock beneficially owned by: (i) each of our directors,
(ii) each of our executive officers listed in the above summary compensation
table, (iii) all of our directors and executive officers as a group, and (iv)
all person or entities known to beneficially own more than 5% of our outstanding
common stock.
Title of Class
|
|
Name of Beneficial Owner
|
|
Amount and Nature
of
Beneficial Owner
|
|
Percent of Class
|
|
Common
Stock
|
|
Isidore
Sobkowski |
|
|
9,700,000
|
|
|
57.9
|
%
|
Common
Stock
|
|
Solomon
Lax |
|
|
2,200,000
|
|
|
13.1
|
%
|
Common
Stock
|
|
Michael
Hartstein |
|
|
960,000
|
|
|
5.7
|
%
|
Common
Stock
|
|
Eroom
Systems, Inc. |
|
|
2,083,333
|
|
|
12.4
|
%
|
Common
Stock
|
|
All
executive officers and directors as a group |
|
|
11,900,000
|
|
|
71.0
|
%
|
* Indicates
beneficial ownership of less than 1.0% of securities outstanding.
(1) Unless
otherwise indicated, the address of each beneficial owner is c/o Aprecia, Inc.,
1177 High Ridge Rd., Stamford, CT 06905.
(2) Applicable
percentage ownership is based on 16,761,597 shares of common stock outstanding
as of June 30, 2008, together with securities exercisable or convertible into
shares of common stock within 60 days of June 30, 2008 for each stockholder.
Beneficial ownership is determined in accordance with the rules of the SEC
and
generally includes voting or investment power with respect to securities. Shares
of common stock that are currently exercisable or exercisable within 60 days
of
June 30, 2008, which are deemed to be beneficially owned by the person holding
such securities for the purpose of computing the percentage of ownership of
such
person, but are not treated as outstanding for the purpose of computing the
percentage ownership of any other person.
Related
Transactions
In
March
2006, the Company sold 4,510,000 shares of common stock valued at $451 to the
founders of the Company.
On
March
6, 2006, we entered into the APA with Isidore Sobkowski, our Chief Executive
Officer. Pursuant to the APA, we acquired certain assets from Mr. Sobkowski
relating to software based on open source induction technology designed to
enable the automatic discovery of patterns and the automatic creation of rules
for raw data. In consideration of the purchase and sale of the Assets, we issued
to Mr. Sobkowski 9,700,000 shares of our common stock.
On
March
6, 2006, Isidore Sobkowski (our sole executive officer and a director), Solomon
Lax (a director) and a shareholder of our company, which collectively hold
approximately 76% of our outstanding shares of common stock, entered into a
Shareholder Voting Agreement. Each of the parties agreed to vote their shares
for one director proposed by Mr. Sobkowski, one director proposed by Mr. Lax
and
one director jointly proposed by Mr. Sobkowski and Mr. Lax. Further, each party
to the Shareholder Voting Agreement may only sell an amount of shares equal
to
1% of the total outstanding per quarter unless the other two parties consent
to
a sale in excess of 1% of the total outstanding assuming such sale is legally
valid.
In
September 2007 the Company agreed to provide Mr. Isidore Sobkowski, its Chief
Executive Officer and Interim Chief Financial Officer with a full release from
all non-complete and non-solicitation clauses in their agreements, either
written and oral, and either explicit and implied, in exchange for full
settlement of any outstanding debts owed to Mr. Isidore Sobkowski that are
unpaid. Accordingly, $135,000 (the amount of indebtedness) was credited to
additional paid-in capital in connection with such release. In addition, the
Company granted Mr. Isidore Sobkowski a non-exclusive, worldwide, royalty-free
right and license to use the Monitor Plus software source code, and all
derivative works thereof, in return for agreement to render reasonable
assistance in the winding down of the Company’s original business
plans.
Director
Independence
We
do not
have any independent directors.
ITEM
14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES.
Audit
Fees
Audit
fees include fees for audit or review services in accordance with generally
accepted auditing standards and fees for services that generally only our
auditors provide, such as statutory audits and review of documents filed with
the SEC.
The
aggregate fees, rounded to the nearest thousand dollars, billed by Wolinetz,
independent registered public accountant, for consolidated auditing services
to
us for the years ended June 30, 2008 and June 30, 2007 were $6,000 and $24,000,
respectively.
The
aggregate fees, rounded to the nearest thousand dollars, billed by Albanese,
independent registered public accountant, for consolidated auditing services
to
us for respect to the year ended June 30, 2008 were $7,500.
Audit
Related Fees
Audit-related
fees include fees for assurance and related services that are traditionally
performed by our auditors. These services include due diligence on acquisition
targets and consultation in connection with financial and accounting standards.
The
aggregate fees, rounded to the nearest thousand dollars, paid to, or accrued
for
Wolinetz, our then independent registered public accountant, for audit-related
services to us for the years ended June 30, 2008 and June 30, 2007 were
$0.
The
aggregate fees, rounded to the nearest thousand dollars, paid to, or accrued
for
Albanese, our independent registered public accountant, for audit-related
services to us for the years ended June 30, 2008 were $0.
Tax
Fees
Tax
fees
include fees for services that are performed by professional tax staff other
than in connection with the audit. These services include tax compliance
services, tax planning and tax advice. The aggregate fees, rounded to the
nearest thousand dollars, paid to, or accrued for Wolinetz, independent
registered public accountant, for tax services to us for the year ended June
30,
2008 and June 30, 2007 were $0.
Tax
fees
include fees for services that are performed by professional tax staff other
than in connection with the audit. These services include tax compliance
services, tax planning and tax advice. The aggregate fees, rounded to the
nearest thousand dollars, paid to, or accrued for Albanese, independent
registered public accountant, for tax services to us for the year ended June
30,
2008 were $0.
All
Other Fees
During
the year ended June 30, 2008 and June 30, 2007 the aggregate fees, rounded
to
the nearest thousand dollars, paid to, or accrued for Wolinetz, independent
registered public accountant, for all other services were $0.
During
the year ended June 30, 2008 the aggregate fees, rounded to the nearest thousand
dollars, paid to, or accrued for Albanese, independent registered public
accountant, for all other services were $0.
PART
IV
ITEM
15. EXHIBITS
AND REPORTS ON FORM 8-K
a. Exhibits
pursuant to Regulation S-K:
DESIGNATION
OF EXHIBIT AS
SET FORTH IN
ITEM 601 OF
REGULATION
S-K
|
|
DESCRIPTION
|
|
LOCATION
|
|
|
|
|
|
3.1
|
|
Articles of Incorporation
|
|
Incorporated
by Reference to the Registration Statement on Form SB-2 filed on
November
13, 2006 (File No. 333-138625).
|
|
|
|
|
|
3.2
|
|
Bylaws
|
|
Incorporated
by Reference to the Registration Statement on Form SB-2 filed on
November
13, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.1
|
|
Securities
Purchase Agreement dated March 10, 2006 by and between the Company
and
Alpha Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna
Enterprises Corp., and CMS Capital
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.2
|
|
7%
Convertible Debenture dated March 10, 2006 issued to Alpha Capital
Aktiengesellschaft
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No.
333-138625).
|
4.3
|
|
Registration
Rights Agreement dated March 10, 2006 by and between the Company
and Alpha
Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna Enterprises
Corp., and CMS Capital
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.4
|
|
Security
Agreement dated March 10, 2006 by and between the Company and Alpha
Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna Enterprises
Corp., and CMS Capital and Michael Hartstein, as collateral
agent
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No.
333-138625).
|
4.5
|
|
Collateral
Agent Agreement dated March 10, 2006 by and between the Company and
Alpha
Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna Enterprises
Corp., and CMS Capital and Michael Hartstein, as collateral
agent
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.6
|
|
7%
Convertible Debenture dated March 10, 2006
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.7
|
|
7%
Convertible Debenture dated March 10, 2006
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.8
|
|
7%
Convertible Debenture dated March 10, 2006
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
10.1
|
|
Asset
Purchase Agreement by and between Isidore Sobkowski and the Company
dated
March 6, 2006
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
10.2
|
|
Voting
Agreement by and between Michael Hartstein, Solomon Lax and Isidore
Sobkowski
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
10.3
|
|
Subscription
Agreement by and among the Company, Alpha Capital Anstalt, and Harborview
Master Fund L.P.
|
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|
|
|
|
|
10.4
|
|
Form
of Warrant issued by the Company to each of Alpha Capital Anstalt,
and
Harborview Master Fund L.P.
|
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|
|
|
|
|
10.5
|
|
Form
of Secured Note issued by the Company to each of Alpha Capital Anstalt
and
Harborview Master Fund L.P.
|
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|
|
|
|
|
10.6
|
|
Consent
Agreement by and among the Company, Alpha Capital Anstalt, and Harborview
Master Fund L.P.
|
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|
|
|
|
|
31.1
|
|
Certification
of President and Chief Executive Officer (one person) pursuant to
Rule
13a-14(a)/15d-14(a) of the Exchange Act
|
|
Provided
Herewith
|
32.1
|
|
Certification
of President and Chief Executive Officer (one person) pursuant to
18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
Provided
Herewith
|
b. Reports
on Form 8-K:
None
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
APRECIA,
INC.
|
|
|
|
November
12, 2008
|
By:
|
/s/
Isidore Sobkowski
|
|
Isidore
Sobkowski,
President,
Chief Executive Officer
and
Interim Chief Financial Officer
(Principal
Accounting Officer)
|
In
accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the registrant in and the capacities and on
the
dates indicated.
November
12, 2008
|
By:
|
/s/
Isidore Sobkowski
|
|
|
President,
Chief Executive Officer,
Interim
Chief Financial Officer and Director
(Principal
Accounting Officer)
|
|
|
|
|
|
|
November
12, 2008
|
By:
|
/s/
Solomon Lax
|
|
|
Director
|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the
fiscal year ended June 30, 2008
Commission
file number 000-51968
Index
to Exhibits
DESIGNATION
OF EXHIBIT AS
SET FORTH IN
ITEM 601 OF
REGULATION
S-K
|
|
DESCRIPTION
|
|
LOCATION
|
|
|
|
|
|
3.1
|
|
Articles of Incorporation
|
|
Incorporated
by Reference to the Registration Statement on Form SB-2 filed on
November
13, 2006 (File No. 333-138625).
|
|
|
|
|
|
3.2
|
|
Bylaws
|
|
Incorporated
by Reference to the Registration Statement on Form SB-2 filed on
November
13, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.1
|
|
Securities
Purchase Agreement dated March 10, 2006 by and between the Company
and
Alpha Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna
Enterprises Corp., and CMS Capital
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.2
|
|
7%
Convertible Debenture dated March 10, 2006 issued to Alpha Capital
Aktiengesellschaft
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No.
333-138625).
|
4.3
|
|
Registration
Rights Agreement dated March 10, 2006 by and between the Company
and Alpha
Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna Enterprises
Corp., and CMS Capital
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No.
333-138625).
|
4.4
|
|
Security
Agreement dated March 10, 2006 by and between the Company and Alpha
Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna Enterprises
Corp., and CMS Capital and Michael Hartstein, as collateral
agent
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.5
|
|
Collateral
Agent Agreement dated March 10, 2006 by and between the Company and
Alpha
Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna Enterprises
Corp., and CMS Capital and Michael Hartstein, as collateral
agent
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.6
|
|
7%
Convertible Debenture dated March 10, 2006
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.7
|
|
7%
Convertible Debenture dated March 10, 2006
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
4.8
|
|
7%
Convertible Debenture dated March 10, 2006
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
10.1
|
|
Asset
Purchase Agreement by and between Isidore Sobkowski and the Company
dated
March 6, 2006
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
10.2
|
|
Voting
Agreement by and between Michael Hartstein, Solomon Lax and Isidore
Sobkowski
|
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|
|
|
|
|
10.3
|
|
Subscription
Agreement by and among the Company, Alpha Capital Anstalt, and Harborview
Master Fund L.P.
|
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|
|
|
|
|
10.4
|
|
Form
of Warrant issued by the Company to each of Alpha Capital Anstalt,
and
Harborview Master Fund L.P.
|
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|
|
|
|
|
10.5
|
|
Form
of Secured Note issued by the Company to each of Alpha Capital Anstalt
and
Harborview Master Fund L.P.
|
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
10.6
|
|
Consent
Agreement by and among the Company, Alpha Capital Anstalt, and Harborview
Master Fund L.P.
|
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|
|
|
|
|
31.1
|
|
Certification
of President and Chief Executive Officer (one person) pursuant to
Rule
13a-14(a)/15d-14(a) of the Exchange Act
|
|
Provided
Herewith
|
32.1
|
|
Certification
of President and Chief Executive Officer (one person) pursuant to
18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
Provided
Herewith
|