Bitech Technologies Corp - Quarter Report: 2009 March (Form 10-Q)
EXCHANGE
COMMISSION
Washington,
D.C. 20549
FORM
10-Q
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the
Quarter Ended March 31, 2009
Versa Card,
Inc.
(Formerly
“Intrepid Global Imaging 3D, Inc.”)
(Exact
name of small business issuer as specified in its charter)
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DELAWARE
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98-0187705
|
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
|
incorporation
or organization)
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Identification
No.)
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5225
Katy Freeway
Suite
600
Houston,
Texas 77007
(Address
of principal executive office) (Postal Code)
(713) 816-7303
(Registrant’s
telephone number)
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes x No o
Indicate
by check mark whether the registrant 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 o Smaller Reporting
Company x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act. Yes o No x
The
number of issued and outstanding of the registrant's common stock, $0.001 par
value (the only class of voting stock), as of May 8, 2009 was
16,317,682.
VERSA
CARD, INC.
FORM
10-Q
TABLE OF
CONTENTS
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PART
I
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FINANCIAL INFORMATION |
F-1
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||
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Item
1.
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Financial
Statements
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F-1
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||
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Consolidated
Balance Sheets as of March 31, 2009 and December 31, 2008
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F-1
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|||
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Consolidated
Statements of Operations for the three months ended March 31, 2009 and
2008
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F-2
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|||
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Consolidated
Statements of Cash Flows for the three months ended March 31, 2009 and
2008
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F-3
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|||
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Notes
to Financial Statements
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F-4
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|||
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Item
2.
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations
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3
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||
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Item
3.
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Quantitative
and Qualitative Disclosures about Market Risk
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3
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||
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Item
4T.
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Controls
and Procedures
|
3
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PART
II
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OTHER
INFORMATION
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|||
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Item
1.
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Legal
Proceedings
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|||
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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|||
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Item
3.
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Defaults
Upon Senior Securities
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|||
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Item
4.
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Submission
of Matters to a Vote of Security Holders.
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|||
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Item
6.
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Exhibits
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|||
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Signatures
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2
ITEM
1. FINANCIAL STATEMENTS
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VERSA
CARDS, INC. ( Formerly "Intrepid Global Imaging 3D. Inc."
)
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||||||||
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(A
Development Stage Company)
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||||||||
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CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
March
31,
|
December
31,
|
|||||||
|
ASSETS
|
2009
|
2008
|
||||||
|
CURRENT
ASSETS:
|
(Unaudited)
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(Audited)
|
||||||
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Cash
and cash equivalents
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$ | - | $ | - | ||||
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Total
current assets
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- | - | ||||||
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Intangible
assets
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230,697 | - | ||||||
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TOTAL
ASSETS
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$ | 230,697 | $ | - | ||||
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LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||||||
|
CURRENT
LIABILITIES
|
||||||||
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Accounts
payable and accrued liabilities
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$ | 667,708 | $ | 601,660 | ||||
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Notes
payable
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10,676 | 10,676 | ||||||
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Due
to related party
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52,523 | - | ||||||
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Due
to former related parties
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56,016 | 56,016 | ||||||
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Total
current liabilities
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786,923 | 668,352 | ||||||
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COMMITMENTS
AND CONTINGENCIES
|
||||||||
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STOCKHOLDERS'
DEFICIT
|
||||||||
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Common
stock: $0.001 par value, 50,000,000 shares
|
||||||||
|
authorized;
16,317,682 and 13,317,682 shares issued and outstanding
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||||||||
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at
March 31, 2009 and December 31, 2008, respectively
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16,318 | 13,318 | ||||||
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Additional
paid-in capital
|
14,318,502 | 13,552,502 | ||||||
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Stock
subscription
|
50,000 | 50,000 | ||||||
|
Accumulated
deficit
|
(8,143,573 | ) | (8,143,573 | ) | ||||
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Accumulated
deficit during development stage
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(6,797,473 | ) | (6,140,599 | ) | ||||
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Total
stockholders’ deficit
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(556,226 | ) | (668,352 | ) | ||||
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TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | 230,697 | $ | - | ||||
See notes
to consolidated financial statements.
F-1
|
VERSA
CARDS, INC. ( Formerly "Intrepid Global Imaging 3D. Inc."
)
|
||||||||||||
|
(A
Development Stage Company)
|
||||||||||||
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CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
||||||||||||
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Period January
1,
|
||||||||||||
|
2005
(Date of
|
||||||||||||
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Three
Months Ended
|
Inception)
Through
|
|||||||||||
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March
31,
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March
31, 2009
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|||||||||||
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2009
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2008
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|||||||||||
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REVENUE
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$ | - | $ | - | $ | - | ||||||
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EXPENSES:
|
||||||||||||
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Website
planning costs
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- | - | 144,406 | |||||||||
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Impairment
of website development costs
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- | - | 477,275 | |||||||||
|
General
and administrative expenses
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656,874 | 93,212 | 6,444,507 | |||||||||
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Total
costs and expenses
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656,874 | 93,212 | 7,066,188 | |||||||||
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NET
LOSS FROM CONTINUED OPERATIONS
|
(656,874 | ) | (93,212 | ) | (7,066,188 | ) | ||||||
|
WRITE
DOWN OF ACCOUNTS PAYABLE
|
- | - | 293,715 | |||||||||
|
LOSS
FROM DISCONTINUED OPERATIONS
|
- | - | (25,000 | ) | ||||||||
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NET
LOSS
|
$ | (656,874 | ) | $ | (93,212 | ) | $ | 7,066,188 | ||||
|
NET
LOSS PER SHARE:
|
||||||||||||
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Basic
and Diluted
|
$ | (0.05 | ) | $ | (0.00 | ) | ||||||
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WEIGHTED-AVERAGE
SHARES:
|
||||||||||||
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Basic
and Diluted
|
14,384,349 | 24,768,011 | ||||||||||
See notes
to consolidated financial statements.
F-2
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VERSA
CARDS, INC. ( Formerly "Intrepid Global Imaging 3D. Inc."
)
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||||||||||||
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(A
Development Stage Company)
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||||||||||||
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CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
||||||||||||
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Period January
1,
|
||||||||||||
|
2005
(Date of
|
||||||||||||
|
Three
Months Ended
|
Inception)
Through
|
|||||||||||
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March
31,
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March
31,
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|||||||||||
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2009
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2008
|
2009
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||||||||||
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CASH
FLOWS FROM OPERATING ACTIVITIES:
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||||||||||||
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Net
loss
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$ | (656,874 | ) | $ | (93,212 | ) | (6,797,473 | ) | ||||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
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Accrued
interest
|
- | 153 | 1,110 | |||||||||
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Impairment
of license agreement
|
- | - | 25,000 | |||||||||
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Impairment
of website development cost
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- | - | 477,275 | |||||||||
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Issuance
of common stock for transactions not consumated
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- | - | 5,692 | |||||||||
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Issuance
of common stock for services
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538,303 | 43,084 | 1,638,417 | |||||||||
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Issuance
of common stock for bonuses
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- | - | 4,045,124 | |||||||||
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Write
off of receivable from related party
|
- | - | - | |||||||||
|
Write
off of prepaids expenses
|
- | - | - | |||||||||
|
Write
down of accounts payable
|
- | - | (293,715 | ) | ||||||||
|
Changes
in assets and liabilities:
|
||||||||||||
|
Accounts
payable and accrued liabilities
|
66,048 | 40,000 | 449,591 | |||||||||
|
Due
to former related parties
|
- | - | (10,851 | ) | ||||||||
|
Net
cash used in operating activities
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(52,523 | ) | (9,975 | ) | (459,830 | ) | ||||||
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CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
|
Website
development cost
|
- | - | (11,801 | ) | ||||||||
|
Net
cash used in investing activities
|
- | - | (11,801 | ) | ||||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
|
Payment
on notes payable
|
- | - | (52,362 | ) | ||||||||
|
Proceeds
from notes payable
|
- | - | 19,067 | |||||||||
|
Payment
on loans payable
|
- | - | (28,387 | ) | ||||||||
|
Proceeds
from subscription payable
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- | - | 50,000 | |||||||||
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Proceeds
from advances payable
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- | - | 27,855 | |||||||||
|
Proceeds
from related party
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52,523 | - | 52,523 | |||||||||
|
Proceeds
from sales of common stock and warrants
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- | - | 396,515 | |||||||||
|
Net
cash provided by financing activities
|
52,523 | - | 465,211 | |||||||||
|
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
- | (9,975 | ) | (6,420 | ) | |||||||
|
BEGINNING
OF PERIOD
|
- | 10,198 | 6,420 | |||||||||
|
END
OF PERIOD
|
$ | - | $ | 223 | $ | - | ||||||
|
Supplementary
disclosure of cash flow information:
|
||||||||||||
|
Cash
paid for interest
|
$ | - | $ | - | $ | - | ||||||
|
Cash
paid for taxes
|
$ | - | $ | - | $ | - | ||||||
|
Non-cash
investing and financing activities:
|
||||||||||||
|
Acquisition
of Intangible assets
|
$ | (230,697 | ) | $ | - | $ | (230,697 | ) | ||||
|
Issuance
of common stock in acquisition of a business
|
$ | 230,697 | $ | - | $ | 230,697 | ||||||
See notes
to consolidated financial statements.
F-3
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE
1. DESCRIPTION OF BUSINESS
Versa
Card, Inc., formerly known as Intrepid Global Imaging 3D, Inc., MangaPets, Inc.
and Newmark Ventures, Inc. (the “Company”), is a development stage company which
was incorporated in Delaware on March 4, 1998 to acquire interests in various
business operations and assist in their development.
Since
inception, the Company had engaged in and contemplated several ventures and
acquisitions, many of which were not consummated. During the fourth quarter of
2007 and into the fourth quarter of 2008, the Company focused on consummating a
transaction with a smartcard / e-purse company, First Versatile Smartcard
Solutions Corporation (“FVS”), and put on hold the development of its web portal
for the Company’s MangaPets business. In November 2007 the Company entered into
an agreement to merge with FVS, and subsequently in April 2008, the transaction
was restructured as a stock purchase agreement. Based on
various factors, the acquisition of FVS did not meet the expectations of the
Company or FVS, and on December 30, 2008 the Company entered into a Mutual
Release and Settlement Agreement to effectively rescind the transactions
effected by the FVS acquisition agreements.
In
February 2009, the Company launched its new business concept, Spine Pain
Management Inc. (“SPMI”). The Company plans to deliver turnkey
solutions to spine surgeons and plaintiff attorneys for necessary and
appropriate treatment of musculo-skeletal spine injuries. With SPMI's new
business plan, the Company will be reevaluating MangaPet's business of
developing a web portal containing games, merchandizing, and other entertainment
activities to determine the viability of that business concept. No formal
timeline has been established for this reevaluation.
On
February 28, 2009, the Company acquired One Source Plaintiff Funding, Inc. ("One
Source"), a corporation organized under the laws of the State of Florida,
pursuant to a Stock Exchange Agreement between the Company, One Source, and the
shareholders of One Source, Brian Koslow and David Waltzer. Pursuant to the
Exchange Agreement, the Company acquired all of the outstanding capital stock of
One Source in exchange for 900,000 shares of the Company’s common stock (the
“Purchase Shares”) with a fair value of $230,697. The Exchange Agreement also
provides that if, at any time prior to the six month anniversary of the Exchange
Agreement, the closing stock price of the Company on the OTCBB is less than $.15
per share for fifteen (15) consecutive trading days, Mr. Koslow and Mr. Waltzer
have the right to rescind the Company’s acquisition of One Source, and the
Company will cancel the Purchase Shares. One Source owns a web site and
proprietary methodologies used in the business of "lawsuit
funding". The Company will use the One Source web site and
proprietary methodologies as one component of its business strategy to invest in
plaintiff personal injury lawsuits.
The
financial statements are presented on the basis that the Company is a going
concern, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business over a reasonable length of time.
At March 31, 2009, the Company had no assets and a working capital deficiency of
$556,226 and a stockholders’ deficit of $556,226. Further, the Company had a net
loss of $656,874 for the quarter ended March 31, 2009 and has incurred operating
losses since its inception. These factors raise substantial doubt about the
Company’s ability to continue as a going concern.
The
Company’s continued existence is dependent upon its ability to successfully
execute its business plan. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of liabilities that may result from the outcome of this
uncertainty.
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The
unaudited financial statements as of March 31, 2009 and for the three months
ended March 31, 2009 and 2008 have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial
information and with instructions to Form 10-Q. In the opinion of management,
the unaudited financial statements have been prepared on the same basis as the
annual financial statements and reflect all adjustments, which include only
normal recurring adjustments, necessary to present fairly the financial position
as of March 31, 2009 and the results of operations and cash flows for the
periods ended March 31, 2009 and 2008. The financial data and other information
disclosed in these notes to the interim financial statements related to these
periods are unaudited. The results for the three months ended March 31, 2009 is
not necessarily indicative of the results to be expected for any subsequent
quarter of the entire year ending December 31, 2009. The balance sheet at
December 31, 2008 has been derived from the audited financial statements at that
date.
F-4
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to the Securities and
Exchange Commission’s rules and regulations. These unaudited financial
statements should be read in conjunction with the audited financial statements
and notes thereto for the year ended December 31, 2008, as included in our
report on Form 10-K.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.
Reclassification
Certain
amounts in the prior year consolidated financial statements have been
reclassified for comparative purposes to conform to the presentation in the
current year consolidated financial statements.
NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS
In April
2009, the Financial Accounting Standard Board (“FASB”) issued three Final Staff
Positions on Financial Accounting Standards (“FAS”) to provide additional
guidance and disclosures regarding fair value measurements and impairments of
securities. These three FSPs are effective for interim and annual periods ending
after June 15, 2009.
FSP FAS
157-4, “Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly”, provides guidance for estimating fair value when the
volume and level of activity for an asset or liability have significantly
decreased. The Company does not expect that FSP FAS 157-4 will have a material
impact on the Company’s consolidated financial statements.
FSP FAS
115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary
Impairments”, amends the other-than-temporary impairment guidance for debt
securities to make the guidance more operational and to improve the presentation
and disclosure of other-than-temporary impairments on debt and equity securities
in financial statements. The Company does not expect that FSP FAS 115-2 and FAS
124-2 will have a material impact on the Company’s consolidated financial
statements.
FSP FAS
107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial
Instruments”, requires disclosure about fair value of financial instruments for
interim reporting periods of publicly traded companies as well as in annual
financial statements. The Company will review the requirements of FSP FAS 107-1
and comply with its requirements.
On
January 12, 2009, the FASB issued FSP 99-20-1, “Amendments to the
Impairment Guidance of EITF Issue No. 99-20”. FASB FSP 99-20-1 amends the
impairment guidance in EITF No. 99-20, “Recognition of Interest Income and
Impairment on Purchased Beneficial Interests and Beneficial Interests that
Continue to be Held by a Transferor in Securitized Financial Assets”. The intent
of the FSP is to reduce complexity and achieve more consistent determinations as
to whether other-than-temporary impairments of available for sale or held to
maturity debt securities have occurred. The FSP is effective for interim and
annual reporting periods ending after December 15, 2008. The adoption of this
FSP did not have an impact on the Company’s consolidated financial
statements.
F-5
Employers’
Disclosures about Postretirement Benefit Plan Assets
In
December 2008, the FASB issued FSP FAS No. 132(R)-1, “Employers’ Disclosures
about Postretirement Benefit Plan Assets.” This FSP amends FASB
Statement No. 132(R) (“SFAS No. 132(R)”), “Employers’ Disclosures about Pensions
and Other Postretirement Benefits,” to provide guidance on an employer’s
disclosures about plan assets of a defined benefit pension or other
postretirement plan. FSP FAS No. 132(R)-1 also includes a technical
amendment to SFAS No. 132(R) that requires a nonpublic entity to disclose net
periodic benefit cost for each annual period for which a statement of income is
presented. The required disclosures about plan assets are effective
for fiscal years ending after December 15, 2009. The technical
amendment was effective upon issuance of FSP FAS No. 132(R)-1. The
adoption of the technical amendment of FSP FAS No. 132(R)-1 had no impact on its
consolidated financial position and results of operations.
Effective
Date of FASB Interpretation No. 48 for Certain Nonpublic
Enterprises
In
December 2008, the FASB issued FSP No. 48-3, “Effective Date of FASB
Interpretation No. 48 for Certain Nonpublic Enterprises.” FSP FIN No.
48-3 defers the effective date of FIN No. 48, “Accounting for Uncertainty in
Income Taxes,” for certain nonpublic enterprises as defined in SFAS No. 109,
“Accounting for Income Taxes.” However, nonpublic consolidated
entities of public enterprises that apply U.S. generally accepted accounting
principles (GAAP) are not eligible for the deferral. FSP FIN No. 48-3
was effective upon issuance. The impact of adoption was not material
to the Company’s consolidated financial condition or results of
operations.
Disclosures
by Public Entities (Enterprises) about Transfers of Financial Assets and
Interests in Variable Interest Entities
In
December 2008, the FASB issued FSP FAS No. 140-4, “Disclosures by Public
Entities (Enterprises) about Transfers of Financial Assets and Interests in
Variable Interest Entities.” This FSP amends SFAS No. 140,
“Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities,” to require public entities to provide additional disclosures
about transfers of financials assets. FSP FAS No. 140-4 also amends
FIN No. 46(R)-8, “Consolidation of Variable Interest Entities,” to require
public enterprises, including sponsors that have a variable interest entity, to
provide additional disclosures about their involvement with a variable interest
entity. FSP FAS No. 140-4 also requires certain additional
disclosures, in regards to variable interest entities, to provide greater
transparency to financial statement users. FSP FAS No. 140-4 is
effective for the first reporting period (interim or annual) ending after
December 15, 2008, with early application encouraged. The adoption of
FSP FAS No. 140-4 had no impact on its consolidated financial position and
results of operations.
Determination
of the Useful Life of Intangible Assets
In April
2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of
Intangible Assets,” which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets under FASB 142 “Goodwill and Other Intangible Assets”.
The intent of this FSP is to improve the consistency between the useful life of
a recognized intangible asset under SFAS No.142 and the period of the expected
cash flows used to measure the fair value of the asset under SFAS No. 141
(revised 2007) “Business Combinations” and other U.S. generally accepted
accounting principles. FSP FAS No. 142-3 is effective for the first reporting
period (interim or annual) ending after December 15, 2008, with early
application encouraged. The adoption of FSP FAS No. 142-3 had no impact on its
consolidated financial position and results of operations
Disclosure
about Derivative Instruments and Hedging Activities
In March
2008, the FASB issued SFAS No. 161, “Disclosure about Derivative Instruments and
Hedging Activities,” an amendment of FASB Statement No. 133, (SFAS No. 161).
This statement requires that objectives for using derivative instruments be
disclosed in terms of underlying risk and accounting designation. The Company
was required to adopt SFAS No. 161 on January 1, 2009. The adoption of SFAS No.
161 had no impact on the Company’s consolidated financial
statements.
F-6
NOTE
4 - SUBSEQUENT EVENTS
In April
2009, the Company reached a settlement in the case of Martin Nathan, a former
attorney for the Company, who filed suit against the Company. In his
petition, Mr. Nathan asserted that he performed certain legal services for the
Company and was never compensated. On November 14, 2007, the Company
failed to appear for a preliminary hearing held before the 295th Judicial
District Court of Harris County, and the Court entered an interlocutory default
judgment against the Company. On January 16, 2008, the Court entered
a final judgment against the Company, finding the Company liable for Mr.
Nathan’s damages, for a total amount of $90,456. Subsequently,
the Company filed a motion for new trial. In April 2009, the parties
settled this matter, and the Company agreed to issue Mr. Nathan 80,000 shares of
restricted common stock valued at $90,456.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis should be read in conjunction with our
Financial Statements and Notes thereto appearing elsewhere in this
document.
Certain
statements contained in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this report are
forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future
financial performance. In some cases, forward-looking statements can
be identified by terminology such as "may," "will",
"should", "expect", "anticipate", "intend", "plan", "believe",
"estimate", "potential", or "continue", the negative of these terms or other
comparable terminology. These statements involve a number of
risks and uncertainties. Actual events or results may differ
materially from any forward-looking statement as a result of various factors,
including those described above and in the Company’s last Form 10-KSB for 2007
and Form 10-K for 2008 under "Risk Factors". We have no obligation to
release publicly the result of any revisions to any of our "forward-looking
statements" to reflect events or circumstances that occur after the date of this
Report or to reflect the occurrence of other unanticipated events.
Management
Overview
Since
inception, the Company had engaged in and contemplated several ventures and
acquisitions, many of which were not consummated. In April 2005, the Company
began focusing on the development of the “MangaPets” interactive web portal and
acquiring other ventures in the technology sector. The Company entered into a
Portal Development Agreement in July 2005, with Sygenics Interactive Inc.
(“Sygenics”), a developer of advanced information management technology, located
in Montreal, Quebec, Canada, and an authorized licensee of Sygenics Inc. The
agreement provided for the design, development and deployment of an online
virtual pet portal/website. However, in 2006, prior to Sygenics’
completion of the first stage of the portal, a dispute arose between the Company
and Sygenics that resulted in work being halted. Since that time, the
Company has attempted to develop the web portal or form another strategic
relationship with a different developer to complete development of the web
portal.
During
the fourth quarter of 2007 through the fourth quarter of 2008, the Company
focused on consummating a transaction with a smartcard/e-purse company, First
Versatile Smartcard Solutions Corporation (“FVS”). Through FVS, the
Company planned to provide a transnational electronic payment or e-purse system
using a third generation smart card technology and central clearing house that
can be used, inter
alia, to pay for purchases, bills, and other transactions related to mass
transit systems, convenience stores, fast-food outlets, telecommunications, gas,
electricity, water and other utilities, healthcare institutions, gas stations,
drugstores, supermarkets, ATMs, banks, credit cards, cell phones, vending
machines, toll roads, parking, and other commercial
establishments. The transaction with FVS, however, was ultimately
rescinded.
In
February 2009, the Company launched its new business of delivering turnkey
solutions to spine surgeons and plaintiff attorneys for necessary and
appropriate treatment for musculo-skeletal spine injuries. In
connection with this business plan, in February 2009, the Company acquired One
Source Plaintiff Funding, Inc. (“One Source”), a Florida corporation that owns a
web site and proprietary methodologies used in the business of “lawsuit
funding”. The Company plans to use the One Source web site and
proprietary methodologies as one component of its business strategy to invest in
plaintiff personal injury lawsuits.
F-7
Spine
Pain Management, Inc. (SPMI)
Following
the exit from the smart card business at the end of December 2008, through SPMI,
the Company began initial work to launch its new business of delivering turnkey
solutions to spine surgeons and plaintiff attorneys for necessary and
appropriate treatment for musculo-skeletal spine injuries resulting from
automobile and work-related accidents. A goal of the Company is to
become a leader in providing care management services to spine surgeons and
plaintiff attorneys to facilitate proper treatment of their injured
clients. By pre-funding diagnostic testing and non-invasive and
surgical care, patients are not unnecessarily delayed or prevented from needed
treatment. By providing early treatment, the Company believes that
health conditions can be prevented from escalating and injured victims can be
quickly placed on the road to recovery. The Company believes its
patient advocacy will be rewarding to patients who obtain needed relief from
painful conditions, and moreover, provides spine surgeons and attorneys a
solution to offset the cost of care prior to settlement. The
acquisition of One Source is one part of this new business initiative. The
Company intends to pro-actively support personal injury attorneys and injured
victims by:
|
·
|
Directly
investing in appropriate personal injury cases to pay for necessary and
appropriate treatment for musculo-skeletal injuries resulting from
accidents and certain other expenses of injured victims;
and
|
|
·
|
Providing
a care management program that advocates for the injured victims by moving
treatment forward to conclusion without the delay and hindrance of the
legal process.
|
The
Company intends to continue to develop or acquire businesses that will focus on
the management of musculo-skeletal injuries, including pain management, medical
imaging, and surgical evaluation. With SPMI's new business plan, the
Company will be reevaluating MangaPet's business of developing a web portal
containing games, merchandizing, and other entertainment activities to determine
the viability of that business concept. No formal timeline has been
established for this reevaluation.
The
Company does not have sufficient capital to operate over the next fiscal year
without a substantial infusion of operating capital. It will be necessary for
the Company to either borrow funds to operate or generate operating funds
through the sale of equity in the Company or its subsidiaries. There can be no
assurance that the Company will be able to generate sufficient income from
either borrowing, the sale of equity, or a combination thereof to allow it to
operate its business during the coming year. Unless the Company is successful in
raising additional operating capital, it will not have sufficient funds to
operate during the balance of the fiscal year.
The
Company recorded no revenues from operations for the three months ended March
31, 2009 and 2008.
During
the three month period ended March 31, 2009, the Company’s operations were
limited to identifying acquisition ventures relating to the Company’s SPMI
business, entering into the One Source acquisition agreement, initial planning
of the Company’s SPMI business and satisfying continuous public disclosure
requirements.
For the
period from January 1, 2005 (date upon which the Company re-entered the
development stage) to March 31, 2009, the Company recorded cumulative operating
losses of $6,797,473. The majority of the Company’s operating losses are
attributable to general and administrative expenses of $6,444,507 and costs in
connection with the website planning costs of $144,406 and impairment of the web
portal of $477,275.
The
Company is in the development stage and, since inception, has experienced
significant changes in liquidity, capital resources and shareholders’ equity.
The Company had no asset as of March 31, 2009 and December 31, 2008. Net
stockholders’ deficiency in the Company was $556,226 at March 31,
2009.
F-8
Net cash
used in operating activities for the three month period ended March 31, 2009 was
$52,523 as compared to cash used in operating activities of $9,975 for the three
month period ended March 31, 2008. The increase of cash flow used in operating
activities was due in large part to a net loss for the period of $656,874,
off-set by costs of issuing common stock for services of $538,303 and an
increase in accounts payable and accrued liabilities of $66,048. There were no
cash flows from or used in investing activities for the three month period ended
March 31, 2009 and 2008. Net cash provided by financing activities of $52,523
for the three months period ended March 31, 2009 were related to proceeds from
related party. There were no cash flows provided by financing activities for the
three month period ended March 31, 2008.
The
Company’s current assets are not sufficient to conduct its plan of operation
over the next twelve months. The Company will have to seek debt or equity
financing to fund operating expenses associated with its SPMI business plan.
However, the Company has no current commitments or arrangements with respect to
funding or immediate sources of funding. Further, no assurances can be given
that funding would be available or available to the Company on acceptable terms.
Accordingly, the Company’s inability to obtain funding would have a material
adverse effect on its plan of operation.
Critical
Accounting Policies
In the
notes to the audited consolidated financial statements for the year ended
December 31, 2008 and in our annual report on Form 10-K filed with the
Securities and Exchange Commission, the Company discusses those accounting
policies that are considered to be critical in determining the results of
operations and its financial position. We believe that the accounting principles
it uses conform to accounting principles generally accepted in the United States
of America.
Forward
Looking Statements and Factors That May Affect Future Results and Financial
Condition
The
statements contained in sections titled “Plan of Operation”, with the exception
of historical facts, are forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, which reflect our current
expectations and beliefs regarding our future results of operations,
performance, and achievements. These statements are subject to
risks and uncertainties and are based upon assumptions and beliefs that may or
may not materialize. These forward looking statements include, but are not
limited to, statements concerning:
|
1
|
Our
ability to successfully implement our business
strategies;
|
|
|
2
|
The
success or failure of our the business opportunities that we are
pursuing;
|
|
|
3
|
Our
anticipated financial performance;
|
|
|
4
|
The
sufficiency of existing capital resources;
|
|
|
5
|
Our
ability to raise additional capital to fund cash requirements for future
operations;
|
|
|
6
|
Uncertainties
related to the Company’s future business prospects;
|
|
|
7
|
The
ability of the Company to generate revenues to fund future
operations;
|
|
|
8
|
Changes
in the laws and government regulations applicable to
us;
|
|
|
9
|
The
volatility of the stock market; and
|
|
|
10
|
General
economic conditions.
|
We wish
to caution readers that the Company’s operating results are subject to various
risks and uncertainties that could cause our actual results to differ materially
from those discussed or anticipated. We also wish to advise readers not to place
any undue reliance on the forward looking statements contained in this report,
which reflect our beliefs and expectations only as of the date of this report.
We assume no obligation to update or revise these forward looking statements to
reflect new events or circumstances or any changes in our beliefs or
expectations, other than is required by law.
Not
Applicable.
F-9
ITEM
4T. CONTROLS AND PROCEDURES
Our
principal executive officer and principal financial officer (the “Certifying
Officer”) is responsible for establishing and maintaining disclosure controls
and procedures for our Company. Such officer has concluded (based upon his
evaluation of these controls and procedures as of the end of the period covered
by this report) that our disclosure controls and procedures are effective to
ensure that information required to be disclosed by us in this report is
accumulated and communicated to management, including our principal executive
and principal financial officer as appropriate, to allow timely decisions
regarding required disclosure.
The
Certifying Officer has also indicated that there were no changes in our internal
controls over financial reporting or other factors that could significantly
affect such controls during the period covered by this report, and there were no
corrective actions with regard to significant deficiencies and material
weaknesses.
Our
management, including the Certifying Officer, does not expect that our
disclosure controls or our internal controls will prevent all error and all
fraud. A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control
system are met. In addition, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within a company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people or by management
override of the control. The design of any systems of controls also is based in
part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions. Because of these inherent limitations in
a cost-effective control system, misstatements due to error or fraud may occur
and not be detected.
F-10
PART
II OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
In March
2008, Kent Caraquero, Leslie Lounsbury, Riverside Manitoba, Inc. and Tyeee
Capital Consultants, Inc. filed suit against the Company, Richard Specht, Rene
Hamouth, Hamouth Family Trust, William R. Dunavant, and William R. Dunavant
Family Holdings, Inc. The suit was filed in The United States District Court,
Middle District of Florida and requests damages in an unspecified amount and
injunctive relief for various breaches of contract and securities
violations. A default judgment was entered against the
defendants on July 20, 2008. The default judgment was set aside and
the case reopened on November 7, 2008. The Company will continue its
efforts to settle the claims that pertain to the Company; however, there is no
assurance that the matter can be settled on terms favorable to the
Company.
In May
2007, Martin Nathan, a former attorney for the Company, filed suit against the
Company. In his petition, Mr. Nathan asserted that he performed
certain legal services for the Company and was never compensated. On
November 14, 2007, the Company failed to appear for a preliminary hearing held
before the 295th
Judicial District Court of Harris County, and the Court entered an interlocutory
default judgment against the Company. On January 16, 2008, the Court
entered a final judgment against the Company, for a total amount of
$90,456. Subsequently, the Company filed a motion for new
trial. In April 2009, the parties settled this matter, and the
Company agreed to issue Mr. Nathan 80,000 shares of restricted common stock
valued at $90,456.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
In
February 2009, the Company issued an aggregate of 900,000 restricted shares of
its common stock in connection with the Company’s acquisition of One Source
Plaintiff Funding, Inc. (“One Source”), in consideration for all the issued and
outstanding shares of One Source. We claim an exemption from
registration afforded by Section 4(2) of the Securities Act of 1933 since the
foregoing issuance did not involve a public offering, the recipients took the
shares for investment and not resale and we took appropriate measures to
restrict transfer.
In
February 2009, the Company issued an aggregate of 2,000,000 restricted shares of
its common stock to five individuals, including the Company’s current executive
officers, in connection with the individuals’ entry into employment agreements,
and in consideration for services to be rendered for the Company. We
claim an exemption from registration afforded by Section 4(2) of the Securities
Act of 1933 since the foregoing issuance did not involve a public offering, the
recipients took the shares for investment and not resale and we took appropriate
measures to restrict transfer. No underwriters or agents were
involved in the foregoing issuances and we paid no underwriting discounts or
commissions.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
None.
3
ITEM
5. EXHIBITS
INDEX
TO EXHIBITS
|
Exhibit
No.
|
Description
|
|
|
3(i)(a)
|
Articles
of Incorporation dated March 4, 1998. (Incorporated by reference from Form
10SB filed with the SEC on January 5, 2000.) *
|
|
|
3(i)(b)
|
Amended
Articles of Incorporation dated April 23,1998. (Incorporated by reference
from Form 10SB filed with the SEC on January 5, 2000.)
*
|
|
|
3(i)(c)
|
Amended
Articles of Incorporation dated January 4, 2002. (Incorporated by
reference from Form 10KSB filed with the SEC on May 21, 2003.)
*
|
|
|
3(i)(d)
|
Amended
Articles of Incorporation dated December 19, 2003. (Incorporated by
reference from Form 10KSB filed with the SEC on May 20, 2004.)
*
|
|
|
3(i)(e)
|
Amended
Articles of Incorporation dated November 4, 2004. (Incorporated by
reference from Form 10KSB filed with the SEC on April 15,2005)
*
|
|
|
3(i)(f)
|
Amended
Articles of Incorporation dated September 7,2005. (Incorporated by
reference from Form 10QSB filed with the SEC on November 16, 2005)
*
|
|
|
3(ii)
|
By-Laws
dated April 23, 1998. (Incorporated by reference from Form 10SB filed with
the SEC on January 5, 2000.) *
|
|
|
10(i)
|
The
2003 Benefit Plan of Delta Capital Technologies, Inc. dated August 20,
2003 (Incorporated by reference from Form S-8 filed with the SEC on August
26, 2003) *
|
|
|
10(ii)
|
Employee
Agreement dated April 30, 2004 between the Company and Kent Carasquero.
(Incorporated by reference from Form 10KSB filed with the SEC on May 20,
2004 *
|
|
|
10(iii)
|
Employee
Agreement dated April 30, 2004 between the Company and Martin Tutschek.
(Incorporated by reference from Form 10KSB filed with the SEC on May 20,
2004) *
|
|
|
10(iv)
|
Employee
Agreement dated October 1, 2004 between the Company and Roderick Shand
(Incorporated by reference from Form 10KSB filed with the SEC on April 15,
2005) *
|
|
|
10(v)
|
Employee
Agreement dated October 1, 2004 between the Company and Mr. Paul Bains
(Incorporated by reference from Form 10KSB filed with the SEC on April 15,
2005) *
|
|
|
10(vi)
|
Consulting
Agreement dated October 1, 2004 between the Company and Kent Carasquero.
(Incorporated by reference from Form 10KSB filed with the SEC on April 15,
2005) *
|
|
|
10(vii)
|
Portal
Development Agreement dated July 15, 2005 between the Company and Sygenics
Interactive Inc. (Incorporated by reference from Form 8-K filed with the
SEC on August 9, 2005) *
|
|
|
10(viii)
|
Debt
Settlement Agreement dated August 3, 2005 between the Company and Rajesh
Vadavia and Sygenics Interactive, Inc. (Incorporated by reference from
Form 10KSB filed with the SEC on April 17, 2006) *
|
|
|
10(ix)
|
Debt
Settlement Agreement dated September 30, 2005 between the Company and
Leslie Lounsbury. (Incorporated by reference from Form 10QSB
filed with the SEC on November 16, 2005) *
|
|
|
10(x)
|
Debt
Settlement Agreement dated November 9, 2005 between the Company and
Roderick Shand. (Incorporated by reference from Form 10KSB filed on April
17, 2006) *
|
|
|
10(xi)
|
Debt
Settlement Agreement dated November 9, 2005 between the Company and Paul
Bains. (Incorporated by reference from Form 10KSB filed on April 17, 2006)
*
|
|
|
10(xii)
|
Agreement
and Plan of Merger between MangaPets Inc. and Intrepid World
Communications Corporation dated January 29, 2007.(Incorporated by
reference from Form 8k filed on January 29,2007) *
|
|
|
10(xiii)
|
Merger
Agreement dated November 21, 2007 between the Company and First Versatile
Smartcard Solutions Corporation (Incorporated by reference from Form 8-K
filed on April 22, 2008) *
|
|
|
10(xiv)
|
Stock
Purchase Agreement dated April 28, 2008 between the Company, First
Versatile Smartcard Solutions Corporation and MacKay Group,
Ltd. (Incorporated by reference from Form 10-K filed on April 15,
2009)*
|
|
|
10(xv)
|
Mutual
Release and Settlement Agreement dated December 30, 2008 between the
Company, James MacKay, MacKay Group, Ltd., Celebrity Foods, Inc. and
Michael Cimino. (Incorporated by reference from Form 10-K filed on April
15, 2009)*
|
|
|
10(xvi)
|
Employment
Agreement dated February 21, 2009 between the Company and William Donovan,
M.D. (Incorporated by reference from Form 10-K filed on April 15,
2009)*
|
|
|
10(xvii)
|
Employment
Agreement dated February 25, 2009 between the Company and John Talamas
(Incorporated by reference from Form 10-K filed on April 15,
2009)*
|
|
|
10(xviii)
|
Employment
Agreement dated February 21, 2009 between the Company and Brian Koslow
(Incorporated by reference from Form 10-K filed on April 15,
2009)*
|
|
|
31
|
Certification
Pursuant to Rule 13a-14(A)/15d-14(A) of the Securities Act of 1934 as
amended, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of
2003.
|
|
|
32
|
Certification
Pursuant to 18 U.S.C. Section 1350, Section 906 of the Sarbanes-Oxley Act
of 2002.
|
*
Incorporated by reference from previous filings of the Company
4
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Versa
Card, Inc.
By /s/
William Donovan,
M.D. Dated:
May 15, 2009
William
Donovan, M.D.
President
and Chief Executive Officer
5