U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
AcuRx, Inc.
_____________________________________________________
(Exact name of registrant as specified in its charter)
Delaware |
| 20-1209378 |
(State or other jurisdiction of |
| (I.R.S. Employer |
incorporation or organization) |
| Identification No.) |
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1608 West 2225 South. |
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Woods Cross, UT |
| 84047 |
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (801) 295-3400
Facsimile number: (760) 454-1643
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Exchange Act:
Title of each class |
| Name of Exchange on which to be so |
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| registered each class is to be registered |
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Common Stock, $.001 |
| N/A |
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. (Check one):
Large accelerated filer £ |
| Accelerated filer £ |
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Non-accelerated filer £ |
| Smaller reporting company S |
EXPLANATORY NOTE
We are filing this General Form for Registration of Securities on Form 10 to register our common stock, par value $0.001 per share (the “Common Stock”), pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Once this registration statement is deemed effective, we will be subject to the requirements of Regulation 13A under the Exchange Act, which will require us to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and we will be required to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act.
Unless otherwise noted, references in this registration statement to the “Company,” “we,” “our” or “us” means AcuRx, Inc. Our principal place of business is located at 1608 West 2225 South, Woods Cross, Utah 84047. Our telephone number is (801) 295-3400.
FORWARD LOOKING STATEMENTS
There are statements in this registration statement that are not historical facts. These “forward-looking statements” can be identified by use of terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire Registration Statement carefully, especially the risks discussed under the section entitled “Risk Factors.” Although management believes that the assumptions underlying the forward looking statements included in this Registration Statement are reasonable, they do not guarantee our future perfo rmance, and actual results could differ from those contemplated by these forward looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Registration Statement will in fact transpire. You are c autioned to not place undue reliance on these forward-looking statements, which speak only as of their dates. We do not undertake any obligation to update or revise any forward-looking statements.
Item 1. Description of Business.
Our Company
References in this Form 10 to "we," "us," "our," the Company or "AcuRx" refer to AcuRx, Inc. On May 11, 2004, the Company was incorporated in the State of Delaware as AcuRx, Inc.
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The Company was originally founded to operate as a retail pharmacy that focused on the dispensation of pain management pharmaceuticals. The Company abandoned this concept once it determined that the business involved too much risk and capital investment. The Company has recently acquired the rights to intellectual property for which it is seeking a patent.
Business of Issuer
In August 2006, the Company's board of directors elected to acquire the rights to intellectual property from one of its directors. The Company has provided and will continue to provide the funds to finance the filing of the patent application.
The patent application provides for a computer software capability that determines the personality type of a user and reconfigures applications, interfaces, and other information technology so as to improve the capabilities, performance, and/or productivity of a user as they relate to the information technology being used.
The Company hopes to license the patented technology to software developers who develop personal productivity applications for business and to businesses and other entities that have large pools of employees, such as reservations agents, customer service representatives, sales associates, and the like, all of whose capabilities, performance, and/or productivity are directly related to their relationship with an otherwise standard information technology system.
The Company has invested approximately $74,000 towards the patent application and expects to invest more in defense of the patent application.
Competition
There are alternative methods for achieving what our intellectual technology provides, but these methods, we believe, are not as useful and user friendly as our intellectual property.
We believe that if our patent is granted, we will be able to effectively compete with other companies by utilizing the protection that a patent will afford us. We believe that other software companies will want to license our technology to improve their own products.
Customer Profile
At this time, the Company hopes to license the patent to potential software developers, who want to improve their human machine user interface. Management believes that the patent will have wide applicability to user interfaces and will improve end user interaction across a wide range of software programs.
Going Concern Uncertainty
Our Company currently has a working capital deficit and our auditors have expressed substantial doubt about our ability to continue as a going concern.
Liquidity and Financing
Our common stock financing consists of a private placement offering that resulted in sale of 1,000,000 shares of our common stock. The purchase price was $0.10. The total number of Common Stock shares issued and outstanding is 6,000,000 shares.
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The Company anticipates that it will need to raise an additional $25,000 in the form of loans or equity to complete the patent application. Further financing is likely to be needed to market and license the patent, if the patent is ultimately granted.
Marketing and Advertising
We intend to conserve our cash and focus on the patent application at this time. We have not fully explored any marketing or advertising plans and do not intend to do so unless a patent has been granted.
Government Approval of Principal Products or Services
We are not aware of any other permits required to conduct our business.
Effect of Existing or Probable Government Regulations
We do not anticipate any effects on our business from existing or probable governmental regulation.
Patents, Trademarks, Royalties, etc.
The Company is in the process of applying for a patent for certain intellectual property that has been acquired from a Daniel Drummond, a current officer and director. The patent has not yet been granted, and there is no guarantee that the application will be successful. The Company plans to continue its defense of the patent until it is ultimately rejected or accepted.
Item 1A. Risk Factors.
Investing in our stock is very risky, and you should be able to bear a complete loss of your investment. Please read the following risk factors closely.
We are a new business that has applied for, but has not been granted a patent for intellectual property pertaining to the software technology sector, thus making an investment in our common stock risky. If we are refused a patent, the Company's assets might be rendered effectively worthless, possibly resulting in a complete loss of your investment.
We may not be able to successfully market or license our intellectual property. If we are granted a patent for our software technology and are unable to successfully market and license our patent, then we will not be successful as a business and your investment could be completely lost.
Our primary asset, our intellectual property, will be hard to evaluate and makes it difficult to fully evaluate an investment in our common stock. It will be very difficult for you to evaluate an investment in our business since our intellectual property patent application has not yet been accepted and therefore has not been publicly disclosed and will not be published unless it is accepted by the United States Patent and Trademark Office. Without this information, it may be difficult to attract further investment, which might result in the failure of the Company to execute its business plan.
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Success of operations will depend on the availability of capital. Realization of the business' perceived potential will require significant capital. If the Company is not able to raise the funds to provide this capital, or to otherwise locate the required capital for the business, the company may never attain profitability.
Our operating history is limited to developing intellectual property and applying for a patent application. As a young company, we are especially vulnerable to any problems, delays, expenses and difficulties we may encounter while implementing our business plan. You will bear the risk of complete loss of your investment if we are not successful.
Our independent auditor has expressed doubts about our ability to continue as a going concern. If we are unable to implement our business plan and obtain a patent, we will be unable to move beyond the development stage. We are a development stage company as defined in Financial Accounting Standards Board Statement No. 7. We have not commenced any significant sales operations to date and have been limited to applying for a patent, which ultimately may not be granted. These factors raise substantial doubt about our ability to continue as a going concern.
If we cannot absorb the costs associated with being a public company your investment may be jeopardized. In order to maintain our status as a public company, we must comply with the Securities and Exchange Commission's periodic reporting requirements. The periodic reports require legal and accounting expertise that is often costly. If we cannot maintain our public company status and keep our periodic reports current, you may not be able to liquidate your shares. Costs associated with being a public company are much higher than those of a private company. AcuRx, a new start-up in early development, has chosen public registration before the business has developed a predictable cash flow. There are present registration expenses and future legal and accounting expenses, future reporting requirements to the SEC, future exchange listing requirements, and future investor relation costs that must be borne by a public company but not by a private company. These costs can be a burdensome expense and could adversely affect our financial survival. Sarbanes-Oxley Act of 2002 disclosure requirements are time consuming and burdensome. The onerous regulatory costs, reporting requirements, and management details, which must be met when registering and maintaining a public company, may make the economic viability of AcuRx very doubtful.
If our intellectual property is perceived as being obsolete or out of date by our prospective customers, then our ability to license our technology will be seriously diminished. New technologies are being developed constantly. The patent application process may be delayed or a new better technology might be developed during this time, making our technology less valuable or worthless.
Our stock will become subject to the Penny Stock rules, which impose significant restrictions on the Broker-Dealers and may affect the resale of our stock. Our stock will become subject to Penny Stock trading rules, and investors will experience resale restrictions and a lack of liquidity. A penny stock is generally a stock that:
- is not listed on a national securities exchange or NASDAQ;
- is listed in "pink sheets" or on the NASD OTC Bulletin Board;
- has a price per share of less than $5.00; and
- is issued by a company with net tangible assets less than $5 million.
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The penny stock trading rules impose additional duties and responsibilities upon broker-dealers and salespersons effecting purchase and sale transactions in common stock and other equity securities, including:
- determination of the purchaser's investment suitability;
- delivery of certain information and disclosures to the purchaser; and
- receipt of a specific purchase agreement from the purchaser prior to effecting the purchase transaction.
Due to the Penny Stock rules, many broker-dealers will not effect transactions in penny stocks except on an unsolicited basis. When our common stock becomes subject to the penny stock trading rules,
- such rules may materially limit or restrict the ability to resell our common stock, and
- the liquidity typically associated with other publicly traded equity securities may not exist.
It is possible that a liquid market for our stock will never develop and you will not be able to sell your stock. There is no assurance a market will be made in our stock. If no market exists, you will not be able to sell your shares publicly, making your investment of little or no value.
Our officers and directors are our sole employees and are limited in the time they can devote to our operations. If management is unable to devote such time as is adequate to the successful implementation of our business plan, then we will not succeed in our operations. Our officers and directors currently maintain outside employment that is full time, which limits the amount of time they can devote to our operations. Further, regulatory requirements of a public company will require management attention to the details of public company governance and compliance that will take time away from AcuRx's daily operations. Our officers and directors are critical to our success. We do not intend to purchase Key Man Insurance for our officers and directors.
Item 2. Financial Information.
Not required by smaller reporting company.
Item 3. Description of Property.
The Company maintains a 120 square foot office at 1608 West 2225 South, Woods Cross, Utah, which is provided at no cost by a shareholder of the Company.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information regarding the beneficial ownership of our common stock as of December 31, 2007 for: (a) each person known by us to own beneficially more than 5% of our of common stock; (b) each of our directors; (c) each of our executive officers; and (d) all directors and executive officers as a group.
The percentage of beneficial ownership for the following table is based on 6,000,000 shares of common stock outstanding.
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Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days of the date of this registration statement are deemed to be beneficially owned by the person holding such options 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.
Beneficial Shareholder | Address | Shares | Percent |
Daniel Drummond* | 1608 W 2225 S Wood Cross, UT 84087 | 2,000,000 | 33.3% |
Alex Ferries* | 1608 W 2225 S Wood Cross, UT 84087 | 2,000,000 | 33.3% |
Robert Blackburn* | 1608 W 2225 S Wood Cross, UT 84087 | 1,000,000 | 16.7% |
Officers and Directors |
| 5,000,000 | 73.3% |
* Denotes an Officer and Director of the Company
Change in Control
No arrangements currently exist that may result in a change in control of AcuRx, Inc.
Item 5. Directors and Executive Officers, Promoters and Control Persons.
Person | Age | Position | Appointment dates |
Daniel Drummond | 57 | President, Director | 5/2004 - 5/2010 |
Alex Ferries | 34 | Secretary/Treasurer, Director | 5/2004 - 5/2010 |
Robert Blackburn | 55 | Vice President, Director | 5/2004 - 5/2010 |
Daniel Drummond, the Company's President and a Director, has served since May 2004. He has been a Managing Director at Tryant, LLC since February 2004. From March 2001 to October 2001, he was President of Wieland Precision Machine in Lake Elsinore , California . From October 2001 to December 2002, he was CEO of Wieland Warison, Inc. From April 2003 to January 2004, he was an independent consultant, working for Jeff Jenson, and consulting on the operations and development for a retail pharmacy, which never materialized. He is also Treasurer and Director of Wren, Inc., President and Director of Prestige Capital Corporation, and President and Director of UAGH, Inc., all publicly reporting companies.
Alex Ferries has served as the Company's Secretary and Treasurer and a Director since May 2004. He worked for Tryant, LLC since February 2004. From July 2003 to January 2004, he worked part-time as an independent consultant, evaluating the merits of a potential retail pharmacy chain, which never materialized. He was not actively employed from June 2002 to July 2003. Mr. Ferries is President and Director of Wrap-N-Roll USA, Inc., and Secretary and Director of UAGH, Inc.
Robert Blackburn has served as the Company's Vice President and a Director since May 2004. He has served as Interim Pharmacy Director since 2005 at Advocate Rx, a division of Amerisource Bergen, Inc. Prior to that Mr. Blackburn was Director of Pharmacy Services for University Community Medical Center in San Diego, California.
None of the officers and directors was subject to the following in the preceding five years:
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(1) Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
(2) Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and
(4) Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Audit Committee
The Company does not presently have an audit committee or an audit committee financial expert on its Board of Directors. The Company has not generated revenue from its operations nor had the financial ability to attract the requisite Board expertise.
Item 6. Executive Compensation.
SUMMARY COMPENSATION TABLE
Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($) | Option awards ($) | Nonequity incentive plan Compensation ($) | Nonqualified Deferred compensation ($) | All other Compensation ($) | Total ($) |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
Daniel Drummond | 2007 | - | - | - | - | - | - | - | - |
President | 2006 | - | - | - | - | - | - | - | - |
| 2005 | - | - | - | - | - | - | - | - |
Robert Blackburn | 2007 | - | - | - | - | - | - | - | - |
Vice President | 2006 | - | - | - | - | - | - | - | - |
| 2005 | - | - | - | - | - | - | - | - |
Alex Ferries | 2007 | - | - | - | - | - | - | - | - |
Secretary | 2006 | - | - | - | - | - | - | - | - |
| 2005 | - | - | - | - | - | - | - | - |
On May 11, 2004, the Company issued 2,000,000 shares to Daniel Drummond, 2,000,000 shares to Alexander Ferries and 1,000,000 shares to Robert Blackburn as consideration for services related to the founding and establishment of the company. The directors and officers are deemed to be "accredited investors," as that term is defined in Regulation D of the Securities Act. The offer, sale and issuance of such securities were deemed to be exempt from registration under the Securities Act in reliance upon Rule 506 of Regulation D.
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Directors' Compensation
We have not had and do not have any formal or informal arrangements or agreements to compensate our directors for services they provide as directors of our company.
Employment Contracts and Officers' Compensation
We do not have employment agreements with any of our officers. Any future compensation to be paid to these individuals will be determined by our Board of Directors, and employment agreements will be executed.
Stock Option Plan and Other Long-term Incentive Plan
We currently do not have an existing or proposed stock option plan or long term incentive plan.
Item 7. Certain Relationships and Related Transactions.
On August 20, 2006, the Company agreed to acquire intellectual property in the form of two patent applications from Daniel Drummond, an officer and director of the Company. Pursuant to this agreement, the Company is obligated to issue 50,000,000 shares of common stock of the Company if the patent applications are accepted by the United States Patent and Trademark office.
Item 8. Legal Proceedings.
There is no litigation pending or threatened by or against the Company.
Item 9. Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters.
Market Information
At this time, there is no public market for our common equity.
Options
There are no options outstanding on our common stock, nor is there any employee stock option plans in effect.
Warrants
There are no warrants outstanding on our common stock or preferred stock.
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Shareholders
As of September 30, 2008 there were 55 shareholders of record.
Dividends
We have never declared or paid cash dividends on our common or preferred stock.
We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. If we do pay dividends in the future, we must pay dividends to holders of Preferred Stock before distributions can be made to our current common stockholders.
Shares Available For Sale under Rule 144
There are currently 5,000,000 shares of our common stock that are considered restricted securities under Rule 144 of the Securities Act of 1933, or the Securities Act. In general, under Rule 144 as currently in effect, beginning 90 days after the effective date of this Form 10, a person who has beneficially owned shares of our common stock for at least one year, including the holding period of any prior owner other than one of our affiliates, would be entitled to sell within any three-month period the number of restricted shares that does not exceed the greater of: (i) 1% of the number of shares of our common stock then outstanding; or (ii) the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with the Securities Exchange Commission with respect to the sale. Sales of restricted shares under Rule 144 are also subject to requirements regarding the manner of sale, notice, and the a vailability of current public information about the Company. Rule 144 also provides that affiliates that sell shares of common stock that are not restricted shares must nonetheless comply with the same restrictions applicable to restricted shares, other than the holding period requirement.
Under Rule 144(k) as in effect as of the date hereof, a stockholder who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate of us, may sell those shares without complying with the manner of sale, notice, public information or volume limitation provisions of Rule 144.
Item 10. Recent Sales of Unregistered Securities.
On May 11, 2004, the Company issued 2,000,000 shares to Daniel Drummond, 2,000,000 shares to Alexander Ferries and 1,000,000 shares to Robert Blackburn as consideration for services related to the founding and establishment of the company. The directors and officers are deemed to be "accredited investors," as that term is defined in Regulation D of the Securities Act. The offer, sale and issuance of such securities were deemed to be exempt from registration under the Securities Act in reliance upon Rule 506 of Regulation D.
On July 10, 2004 we issued 1,000,000 shares of Common Stock in a private placement offering pursuant to Rule 506 at $0.10 per share to 53 outside investors for an aggregate purchase price of $100,000. All of the investors were "accredited investors," as that term is defined in Regulation D of the Securities Act of 1933. The offer, sale and issuance of such securities were deemed to be exempt from registration under the Securities Act in reliance upon Rule 506 of Regulation D.
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Item 11. Description of Securities.
The following is a summary description of our capital stock and certain provisions of our certificate of incorporation and by-laws, copies of which have been filed as exhibits to this Form 10. The following discussion is qualified in its entirety by reference to such exhibits.
General
We are authorized to issue 100,000,000 shares of common stock, $.001 par value, and 10,000,000 shares of preferred stock, $.001 par value.
Common Stock
There were 6,000,000 shares of common stock outstanding as of December 31, 2007. The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders. The holders of common stock are entitled to any dividends that may be declared by the Board of Directors out of funds legally available therefore subject to the prior rights of holders of any outstanding shares of preferred stock and any contractual restrictions we have against the payment of dividends on common stock. In the event of our liquidation or dissolution, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive or other subscription rights and no right to convert their common stock into any other securities.
Preferred Stock
The Company's Amended and Restated Certificate of Incorporation authorizes 10,000,000 shares of Preferred Stock, $.001 par value per share. No Preferred Stock is issued or outstanding at this time.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of the Company's board of directors. The Company presently intends to retain all earnings, if any, for use in its business operations and accordingly, the board of directors does not anticipate declaring any dividends prior to a business combination.
TRANSFER AGENT
Interwest Transfer Co., Inc., 1981 East 4800 South, Suite 100, Salt Lake City, UT 84117, is the Company’s transfer agent.
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Item 12. Indemnification of Directors and Officers.
We were incorporated under the laws of the State of Delaware. Section 145 of the DGCL ("Delaware General Corporation Law"), generally provides that a Delaware corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person is or was an officer, director, employee or agent of the corporation, or is or was serving at the request of the corporation as an officer, director, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, provided that the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may also indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation's best interest s, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses which the officer or director has actually and reasonably incurred.
Our amended and restated certificate of incorporation and bylaws provide for the indemnification of our directors and executive officers to the fullest extent permitted under the DGCL and other applicable laws. In addition, our amended and restated certificate of incorporation provides that the liability of our directors for monetary damages shall be eliminated to the fullest extent under applicable laws.
There is currently no pending litigation or proceeding involving any of our directors or executive officers for which indemnification is being sought. We are not currently aware of any threatened litigation that may result in claims for indemnification against us by any of our directors or executive officers.
Item 13. Financial Statements and Supplementary Data.
See Financial Statements beginning on Page F-1.
Item 14. Changes in and Disagreements with Accountants.
None.
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Item 15. Financial Statements and Exhibits.
(a) Audited financial statements for the years ended December 31, 2007 and 2006 and unaudited financial statements for the six months ended June 30, 2008.
(b)
Exhibits
Exhibit |
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Number | Title of Document | Location |
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3(i) | Certificate of Incorporation | Attached |
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3(ii) | Bylaws | Attached |
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
AcuRx, Inc.
(Registrant)
Date: October 7, 2008 | By: /s/ Daniel Drummond |
| (Signature) |
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| Daniel Drummond |
| President and Chief Executive |
| Director |
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| By: /s/ Alex Ferries |
| (Signature) |
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| Alex Ferries |
| Secretary and Chief Financial Officer |
| Director |
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Item 15. Financial Statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
AcuRx, Inc.
We have audited the accompanying balance sheets of AcuRx, Inc. [a development stage company] as of December 31, 2007 and 2006, and the related statements of operations, stockholders' equity, and cash flows for the years ended December 31, 2007 and 2006, and for the period from inception through December 31, 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 has determined that it 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles use d 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 financial position of AcuRx ,Inc., as of December 31, 2007 and 2006, and the results of their operations and their cash flows for the years ended December 31, 2007 and 2006, and for the period from inception through December 31, 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 3 to the financial statements, the Company has accumulated losses, limited financial resources, and is still developing its planned principal operations. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Mantyla McReynolds LLC
Salt Lake City, Utah
September 25, 2008
F-1
AcuRx, Inc.
[A Development Stage Company]
Balance Sheets
December 31, 2007 and 2006
Assets |
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| Year Ended | ||
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| 2007 |
| 2006 |
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Current Assets |
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Cash and cash equivalents | $ | 32 | $ | 132 |
Total Current Assets |
| 32 |
| 132 |
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Technology Patent |
| 68,376 |
| 58,151 |
Total Assets | $ | 68,408 | $ | 58,283 |
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Liabilities and Stockholders' Equity |
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Liabilities |
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Current Liabilities |
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Accounts Payable | $ | 10,792 | $ | - |
Note Payable - Related party |
| 5,642 |
| - |
Taxes Payable |
| 622 |
| 622 |
Total Current Liabilities |
| 17,056 |
| 622 |
Total Liabilities |
| 17,056 |
| 622 |
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Stockholders' Equity – Note 4 |
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|
|
Preferred Stock - 10,000,000 shares authorized, |
|
|
|
|
having a par value of $.001 per share; |
|
|
|
|
no shares outstanding |
| - |
| - |
Capital Stock - 100,000,000 shares authorized |
|
|
|
|
having a par value of $.001 per share; |
|
|
|
|
6,000,000 shares issued and outstanding |
| 6,000 |
| 6,000 |
Additional paid-in capital |
| 99,000 |
| 99,000 |
Other Comprehensive Income - Note 5 |
| - |
| - |
Deficit accumulated during the development stage |
| (53,648) |
| (47,339) |
Total Stockholders' Equity |
| 51,352 |
| 57,661 |
Total Liabilities and Stockholders' Equity | $ | 68,408 | $ | 58,283 |
See accompanying notes to financial statements
F-2
AcuRx, Inc.
[A Development Stage Company]
Statements of Operations
For the Years Ended December 31, 2007 and 2006, and
for the Period from Inception [May 11, 2004] through December 31, 2007
|
|
|
|
|
| For the Period |
|
|
|
|
|
| from Inception |
|
|
|
|
|
| [May 11, 2004] |
|
|
|
|
|
| through |
|
| 2007 |
| 2006 |
| Dec. 31, 2007 |
Revenues | $ | - | $ | - | $ | - |
Cost of Goods Sold |
| - |
| - |
| - |
Gross Profit |
| - |
| - |
| - |
|
|
|
|
|
|
|
General and Administration Expenses |
| 6,309 |
| 1,673 |
| 61,330 |
|
|
|
|
|
|
|
Operating Income/(Loss) |
| (6,309) |
| (1,673) |
| (61,330) |
|
|
|
|
|
|
|
Other Income and Expense: |
|
|
|
|
|
|
Gain/(Loss) on Sale of Marketable Securities |
| - |
| (7,283) |
| 5,543 |
Interest Income |
| - |
| - |
| 2,139 |
Total Other Income and Expense |
| - |
| (7,283) |
| 7,682 |
|
|
|
|
|
|
|
Loss before income taxes |
| (6,309) |
| (8,956) |
| (53,648) |
|
|
|
|
|
|
|
Provision for income taxes |
| - |
| - |
| - |
|
|
|
|
|
|
|
Net Income (Loss) | $ | (6,309) | $ | (8,956) | $ | (53,648) |
|
|
|
|
|
|
|
Net Loss per Share - Basic and Diluted | $ | (0.01) | $ | (0.01) |
|
|
Weighted average number |
|
|
|
|
|
|
of common shares outstanding - Basic and Diluted |
| 6,000,000 |
| 6,000,000 |
|
|
See accompanying notes to financial statements
F-3
AcuRx, Inc.
[A Development Stage Company]
Statement of Stockholders' Equity
For the Period from Inception [May 11, 2004] through December 31, 2007
| Preferred Stock | Common Stock |
| Other |
|
| ||
| Shares | Par | Shares | Par | Paid in | Comprehensive | Retained | Stockholders' |
| Issued | Amount | Issued | Amount | Capital | Income | Deficit | Equity |
Balance, | - | $ - | - | $ - | $ - |
| $ - | $ - |
May 11, 2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/27/04 – Issued |
|
|
|
|
|
|
|
|
stock for services |
|
|
|
|
|
|
|
|
rendered, at |
|
|
|
|
|
|
|
|
$.001 per share |
|
| 5,000,000 | 5,000 |
|
|
| 5,000 |
|
|
|
|
|
|
|
|
|
8/2/04 - Issued |
|
|
|
|
|
|
|
|
stock for |
|
|
|
|
|
|
|
|
cash at |
|
|
|
|
|
|
|
|
$.10 per share |
|
| 997,500 | 998 | 98,752 |
|
| 99,750 |
|
|
|
|
|
|
|
|
|
8/6/04 - Issued |
|
|
|
|
|
|
|
|
stock for cash |
|
|
|
|
|
|
|
|
at $.10 per share |
|
| 2,500 | 2 | 248 |
|
| 250 |
|
|
|
|
|
|
|
|
|
Net loss for |
|
|
|
|
|
|
|
|
the period ended |
|
|
|
|
|
|
|
|
December 31, 2004 |
|
|
|
|
|
| (12,920) | (12,920) |
|
|
|
|
|
|
|
|
|
Balance, |
|
|
|
|
|
|
|
|
December 31, 2004 | - | - | 6,000,000 | 6,000 | 99,000 |
| (12,920) | 92,080 |
|
|
|
|
|
|
|
|
|
Net loss for |
|
|
|
|
|
|
|
|
the period ended |
|
|
|
|
|
|
|
|
December 31, 2005 |
|
|
|
|
|
| (25,463) | (25,463) |
|
|
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
|
|
Gain/(Loss) on |
|
|
|
|
|
|
|
|
Marketable Securities |
|
|
|
|
| 32,086 |
| 32,086 |
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
| 6,623 |
F-4
Balance, |
|
|
|
|
|
|
|
|
December 31, 2005 | - | - | 6,000,000 | 6,000 | 99,000 | 32,086 | (38,383) | 98,703 |
|
|
|
|
|
|
|
|
|
Net loss for |
|
|
|
|
|
|
|
|
the period ended |
|
|
|
|
|
|
|
|
December 31, 2006 |
|
|
|
|
|
| (8,956) | (8,956) |
|
|
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
|
|
Gain/(Loss) on |
|
|
|
|
|
|
|
|
Marketable Securities |
|
|
|
|
| (32,086) |
| (32,086) |
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
Comprehensive Loss |
|
|
|
|
|
|
| (41,042) |
|
|
|
|
|
|
|
|
|
Balance, |
|
|
|
|
|
|
|
|
December 31, 2006 | - | - | 6,000,000 | 6,000 | 99,000 | - | (47,339) | 57,661 |
|
|
|
|
|
|
|
|
|
Net Loss for |
|
|
|
|
|
|
|
|
the Period ended |
|
|
|
|
|
|
|
|
December 31, 2007 |
|
|
|
|
|
| (6,309) | (6,309) |
|
|
|
|
|
|
|
|
|
Balance, |
|
|
|
|
|
|
|
|
December 31, 2007 | - | $ - | 6,000,000 | $6,000 | $99,000 | $ - | $(53,648) | $51,352 |
See accompanying notes to financial statements
F-5
AcuRx, Inc.
[A Development Stage Company]
Statements of Cash Flows
For the Years Ended December 31, 2007 and 2006, and
for the Period from Inception [May 11, 2004] through December 31, 2007
|
|
|
|
|
| From |
|
|
|
|
|
| Inception |
|
|
|
|
|
| [May 11, 2004] |
|
|
|
|
|
| through |
|
|
|
|
|
| December 31, |
|
| 2007 |
| 2006 |
| 2007 |
Cash Flows From Operating Activities |
|
|
|
|
|
|
Net Income/(Loss) from operations | $ | (6,309) | $ | (8,956) | $ | (53,648) |
Adjustments to reconcile income (loss) |
|
|
|
|
|
|
from operations to net cash |
|
|
|
|
|
|
provided by operating activities: |
|
|
|
|
|
|
(Gain)/Loss on Sale of Securities |
| - |
| 7,283 |
| (5,543) |
Increase/(decrease) in accounts payable |
| 5,597 |
| - |
| 5,597 |
Common Stock issued for services rendered |
| - |
| - |
| 5,000 |
Note payable – related party |
| 612 |
| - |
| 612 |
Taxes Payable |
| - |
| - |
| 622 |
Net Cash From Operating Activities |
| (100) |
| (1,673) |
| (47,360) |
|
|
|
|
|
|
|
Cash Flows From Investing Activities |
|
|
|
|
|
|
Proceeds from Sale of Marketable Securities |
| - |
| 36,568 |
| 54,744 |
Note Receivable-Cash Paid |
| - |
| - |
| (95,000) |
Note Receivable-Cash Received |
| - |
| - |
| 30,000 |
Patent Application |
| - |
| (42,352) |
| (42,352) |
(Increase)/Decrease in Receivable for Securities Sold |
| - |
| 6,900 |
| - |
|
|
|
|
|
|
|
Net Cash From Investing Activities |
| - |
| 1,116 |
| (52,608) |
|
|
|
|
|
|
|
Cash Flows From Financing Activities |
|
|
|
|
|
|
Proceeds from stock issuance |
| - |
| - |
| 100,000 |
Net Cash From Financing Activities |
| - |
| - |
| 100,000 |
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash |
| (100) |
| (557) |
| 32 |
|
|
|
|
|
|
|
Beginning Cash Balance |
| 132 |
| 689 |
| - |
|
|
|
|
|
|
|
Ending Cash Balance | $ | 32 | $ | 132 | $ | 32 |
|
|
|
|
|
|
|
Supplemental Disclosures |
|
|
|
|
|
|
Interest paid | $ | - | $ | - | $ | - |
Income taxes paid | $ | - | $ | - | $ | - |
|
|
|
|
|
|
|
Non-Cash Transactions |
|
|
|
|
|
|
Accepted Marketable Securities in Exchange for Note Receivable | $ | - | $ | - | $ | 50,000 |
Accepted Patent Investment Costs in Exchange for Note receivable | $ | - | $ | 15,000 | $ | 15,000 |
Patent Costs Paid by Related Party | $ | 10,225 | $ | - | $ | 10,225 |
See accompanying notes to financial statements
F-6
AcuRx, Inc.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2007
NOTE 1 – ORGANIZATION
AcuRx, Inc., (the "Company") was incorporated under the laws of the State of Delaware on May 11, 2004. The Company was organized to open a pharmacy chain in Southern California. However, shortly after its inception, the Company decided to abandon this pursuit. The Company is currently exploring other business opportunities.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using accounting principles generally accepted in the United States.
b. Provision for Taxes
The Company accounts for income taxes using the asset and liability method. Under this method, income taxes are provided for amounts currently payable and for amounts deferred as tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Deferred income taxes are measured using the enacted tax rates that are assumed will be in effect when the differences reverse.
In June 2006, the FASB issued Interpretation No. 48 "Accounting for Uncertainty in Income Taxes, and Interpretation of FASB Statement No. 109" (FIN 48). We adopted FIN 48 on January 1, 2007. Under FIN 48, tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in our tax returns that do not meet these recognition and measurement standards.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
d. Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
F-7
e. Basic Loss Per Common Share
Basic loss per common share has been calculated based on the weighted average number of shares outstanding. In accordance with Financial Accounting Standards No. 128, "Earnings Per Share," basic loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share is computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period using the treasury stock method. During periods of net losses dilutive shares are not included, due to anti-dilutive results. There were no dilutive shares at December 31, 2007 and 2006.
f. Impact of New Accounting Standards
In September 2006, the FASB issued "Fair Value Measurements" (SFAS No. 157). SFAS No. 157 establishes a common definition of fair value to be applied to US GAAP guidance that requires the use of fair value, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. No impact occurred when this standard became effective for the Company.
In December 2007, the FASB issued SFAS 160, "Noncontrolling interests in Consolidated Financial Statements - an amendment of ARB No. 51". This Statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is effective for fiscal years beginning on or after December 15, 2008. Early adoption is not permitted. Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company's financial statements.
In February 2007, the FASB issued SFAS 159, "The Fair Value Option for Financial Assets and Financial Liabilities." SFAS 159 creates a fair value option allowing an entity to irrevocably elect fair value as the initial and subsequent measurement attribute for certain financial assets and financial liabilities, with changes in fair value recognized in earnings as they occur. SFAS 159 also requires an entity to report those financial assets and financial liabilities measured at fair value in a manner that separates those reported fair values from the carrying amounts of assets and liabilities measured using another measurement attribute on the face of the statement of financial position. Lastly, SFAS 159 requires an entity to provide information that would allow users to understand the effect on earnings of changes in the fair value on those instruments selected for the fair value election. SFAS 159 is effective for fiscal years beginning after November 15, 2007 with early adoption permitted. No impact occurred when this standard became effective for the Company.
F-8
In December 2007, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 141(R), “Business Combinations.” SFAS No. 141(R) changes the accounting for and reporting of business combination transactions in the following way: Recognition with certain exceptions, of 100% of the fair values of assets acquired, liabilities assumed, and non controlling interests of acquired businesses; measurement of all acquirer shares issued in consideration for a business combination at fair value on the acquisition date; recognition of contingent consideration arrangements at their acquisition date fair values, with subsequent changes in fair value generally reflected in earnings; recognition of pre-acquisition gain and loss contingencies at their acquisition date fair value; capitalization of in-process research and development (IPR&D) assets acquired at acquisition date fair value; recognition of acquisition-related transaction costs as expense when incurred; recognition of acquisition-related restructuring cost accruals in acquisition accounting only if the criteria in Statement No. 146 are met as of the acquisition date; and recognition of changes in the acquirer’s income tax valuation allowance resulting from the business combination separately from the business combination as adjustments to income tax expense. SFAS No. 141(R) is effective for the first annual reporting period beginning on or after December 15, 2008 with earlier adoption prohibited. The adoption of SFAS No. 141(R) will affect valuation of business acquisitions made in 2009 and forward. We do not anticipate a material impact upon adoption.
In March 2008, the FSAB issued FASS No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. We do not anticipate a material impact upon adoption.
g. Revenue Recognition
The Company recognizes revenues in accordance with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, "Revenue Recognition." SAB 104 clarifies application of U. S. generally accepted accounting principles to revenue transactions. Revenue is recognized when sales close and the products are delivered to the customer. The Company records an account receivable for revenue earned but net yet collected. For revenue received in advance of services, the Company records a current liability classified as either deferred revenue or customer deposits.
h. Property
Property and equipment are stated at cost. Depreciation is provided using the straightline and the declining balance methods over the lesser of the useful lives of the related assets or the remaining lease term on leasehold improvements. Expenditures for maintenance and repairs are charged to expense as incurred.
Intangibles - The Company adopted the rules set forth in SFAS No. 142, "Goodwill and Other Intangible Assets," to account for its intangible assets acquired under the licensing agreement with third parties. The intangible assets acquired are initially recorded at their fair value. The intangibles with finite useful lives are amortized over their lives. Intangible assets with indefinite useful lives are not amortized and are examined at least annually to determine whether events and circumstances continue to support an indefinite useful life. All intangible assets are reviewed annually for impairment. If the fair value of an intangible is determined to be below its carrying amount, the intangible is written down to its fair value. No impairments have been recognized during the years ended December 31, 2007 and 2006.
F-9
i. Marketable Securities
At December 31, 2005, marketable securities consisted of 108,400 shares of Logistical Support, Inc. common stock (traded on the OTCBB). This investment was classified as available-for-sale as the Company planned to sell this investment to fund its working capital as needed. This investment was reported at fair value with unrealized gains and losses included in unrealized gain on marketable securities (Other Comprehensive Income). The fair value is determined by using the securities quoted market price as obtained from stock exchanges on which the security trades. Realized gains and losses are recognized upon sale. There were no marketable securities held as of December 31, 2007.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has limited financial resources and its operations during the period ended December 31, 2007 were unprofitable. These factors raise substantial doubt about its ability to continue as a going concern. Management plans to rely on loans from its current officers and directors to fund its ongoing obligations.
NOTE 4 - STOCKHOLDERS' EQUITY
Preferred Stock
The Preferred Stock may be issued from time to time in one or more series. The board of directors of the Company is authorized to provide for the issue of all or any of the remaining unissued and undesignated shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the State of Incorporation. To date, the Company has not issued any shares of preferred stock.
Common Stock
On May 27, 2004, the Company issued 5,000,000 shares to its officers for services rendered, valued at $.001 per share, or $5,000. During the period ended December 31, 2004, the Company also raised $100,000 from the issuance of 1,000,000 common shares, which were sold at $0.10 per share.
F-10
NOTE 5 - OTHER COMPREHENSIVE INCOME
Other Comprehensive Income consisted of an unrealized gain on investment in the amount of $32,086 during 2005. This amount was reversed as a loss as the investment was subsequently liquidated at a lesser value in 2006.
NOTE 6 - INCOME TAXES
No provision has been made in the financial statements for income taxes because the Company has accumulated losses from operations since inception. Any deferred tax benefit arising from the operating loss carried forward is offset entirely by a valuation allowance since it is not currently estimable when and if the Company will have taxable income to take advantage of the losses. The valuation allowance has increased by $1,261 from $9,468 as of December 31, 2007.
Deferred Tax Asset | Balance | Tax | Rate |
Federal loss carryforward (expires through 2027) | $ 53,648 | $ 8,047 | 15% |
State loss carryforward (expires through 2022) | $ 53,648 | $ 2,682 | 5% |
Valuation allowance |
| (10,729) |
|
Deferred tax asset |
| $ - |
|
Reported income tax expense is reconciled to the amount computed on the basis of income before income taxes at the statutory rate as follows:
| For the years | ended December 31, |
| 2007 | 2006 |
Statutory Benefit (Expense) | (20%) | (20%) |
Increase in Valuation Allowance | 20% | 20% |
Reported provision for Income Taxes | $ - | $ - |
Upon the adoption of FIN 48, we had no liabilities for unrecognized tax benefits and, as such, the adoption had no impact on our financial statements, and we have recorded no additional interest or penalties. The adoption of FIN 48 did not impact our effective tax rates.
Our policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits within income tax expense. For the year ended December 31, 2007, we did not recognize any interest or penalties in our Statement of Operations, nor did we have any interest or penalties accrued in our Balance Sheet at December 31, 2007 relating to unrecognized benefits.
The tax years 2004-2007 remain open to examination for federal income tax purposes and by the other major taxing jurisdictions to which we are subject.
F-11
NOTE 7 - RELATED PARTY TRANSACTIONS
On November 16, 2004, the Company loaned a related party $50,000. The note receivable bears interest at 8% per annum and is payable on demand. A shareholder of the Company is the managing director and owner of the related party. On December 6, 2004, the Company's Board of Directors resolved to accept full payment of this note in consideration for 125,000 restricted shares of the common stock of Logistical Support, Inc., a Utah Company. On the resolution date, the stock's trading value on an over-the-counter bulletin board was $1.80. However, as the shares are restricted and the stock's trading history is low in volume, the Company determined the most readily ascertainable value of the stock to be the face value of the note. Therefore, no gain was recorded on the transaction and no fair value adjustment was made as of December 31, 2004.
On December 22, 2004, the Company loaned a related party $30,000 and received a note receivable, bearing interest at 8% per annum and payable on demand. A shareholder of the Company is the managing director and owner of the related party. Interest income was recorded as of December 31, 2004 for $58. This note was repaid on March 14, 2005. $408 in interest was paid.
On May 2, 2005, the Company loaned a related party $15,000 and received a note receivable, bearing interest at 8% per annum and payable on demand. A shareholder of the Company is the managing director and owner of the note issuer. On April 14, 2006, Tryant, LLC the note issuer, repaid $1,660 of principal by paying certain expenses related to a patent application.
During the year ended December 31, 2005, the Company paid to Rudie Bivens, a consultant of the Company, $33,000. Mr. Bivens was a director of Tryant, LLC, prior to this engagement. There were no payments due to Mr. Bivens after December 31, 2005.
On August 20, 2006, AcuRx, Inc. agreed to pay Tryant, LLC total consideration of $19,000 to cover prior legal expenses incurred on behalf of a Patent application. The form of compensation was as follows: AcuRx, Inc retired a note receivable from Tryant, LLC in the amount of $13,000 and also paid Tryant, LLC $6,000 in cash. The accrued interest due from the loan of approximately $1,000 was retired and recognized as part of the Patent Application asset. The Company also agreed to issue 50,000,000 of its Common Stock to Daniel Drummond if the patent application is accepted by the US Patent and Trademark Office.
As of December 31, 2007, the Company has received $5,642 in advances from Tryant, LLC. These advances are payable on demand and bear simple interest at 8%. Mr. Drummond is a managing director of Tryant, LLC.
NOTE 8 – PATENT
The Company has applied for a patent. It has incurred $68,376 towards the application process. The Company will not amortize the capitalized patent costs until the patent has been issued.
F-12
Unaudited financial statements for the six months ended June 30, 2008.
AcuRx, Inc.
[A Development Stage Company]
Balance Sheets
Assets |
|
|
|
|
|
| June 30, |
| December 31, |
|
| 2008 |
| 2007 |
|
| (unaudited) |
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents | $ | 32 | $ | 32 |
Total Current Assets |
| 32 |
| 32 |
|
|
|
|
|
Technology Patent |
| 73,693 |
| 68,376 |
|
|
|
|
|
Total Assets | $ | 73,725 | $ | 68,408 |
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts Payable | $ | 17,137 | $ | 10,792 |
Related Party Notes Payable and Advances |
| 17,191 |
| 5,642 |
Accrued Interest-Related Party |
| 432 |
| - |
Taxes Payable |
| 622 |
| 622 |
Total Current Liabilities |
| 35,382 |
| 17,056 |
Total Liabilities | $ | 35,382 | $ | 17,056 |
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
Preferred Stock - 10,000,000 shares authorized, |
|
|
|
|
having a par value of $.001 per share; |
|
|
|
|
no shares outstanding |
|
|
|
|
Capital Stock - 100,000,000 shares authorized |
|
|
|
|
having a par value of $.001 per share; |
|
|
|
|
6,000,000 shares issued and outstanding |
| 6,000 |
| 6,000 |
Additional paid-in capital |
| 99,000 |
| 99,000 |
Other Comprehensive Income |
| - |
| - |
Deficit accumulated during the development stage |
| (66,657) |
| (53,648) |
Total Stockholders' Equity |
| 38,343 |
| 51,352 |
Total Liabilities and Stockholders' Equity | $ | 73,725 | $ | 68,408 |
See accompanying notes to financial statements
F-13
AcuRx, Inc.
[A Development Stage Company]
Statements of Operations
For the Six-Month Periods Ended June 30, 2008 and 2007, and
for the Period from Inception [May 11, 2004] through June 30, 2008
|
|
|
|
|
| For the Period |
|
|
|
|
|
| from Inception |
|
|
|
|
|
| [May 11, 2004] |
|
|
|
|
|
| through |
|
| 2008 |
| 2007 |
| June 30, 2008 |
Revenues | $ | - | $ | - | $ | - |
Cost of Goods Sold |
| - |
| - |
| - |
Gross Profit |
| - |
| - |
| - |
|
|
|
|
|
|
|
General and Administration Expenses |
| 12,577 |
| 537 |
| 73,907 |
|
|
|
|
|
|
|
Operating Income/(Loss) |
| (12,577) |
| (537) |
| (73,907) |
|
|
|
|
|
|
|
Other Income and Expense: |
|
|
|
|
|
|
Gain/(Loss) on Sale of Marketable Securities |
| - |
| - |
| 5,543 |
Interest Income |
| - |
| - |
| 2,139 |
Interest Expense |
| (432) |
| - |
| (432) |
Total Other Income and Expense |
| - |
| - |
| 7,250 |
|
|
|
|
|
|
|
Loss before income taxes |
| (13,009) |
| (537) |
| (66,657) |
|
|
|
|
|
|
|
Provision for income taxes |
| - |
| - |
| - |
|
|
|
|
|
|
|
Net Income (Loss) | $ | (13,009) | $ | (537) | $ | (66,657) |
|
|
|
|
|
|
|
Net Loss per Share - Basic and Diluted | $ | (0.01) | $ | (0.01) |
|
|
Weighted average number |
|
|
|
|
|
|
of common shares outstanding - Basic and Diluted |
| 6,000,000 |
| 6,000,000 |
|
|
Unaudited - See accompanying notes to financial statements
F-14
AcuRx, Inc.
[A Development Stage Company]
Statements of Cash Flows
For the Six-Month Periods Ended June 30, 2008 and 2007, and
for the Period from Inception [May 11, 2004] through June 30, 2008
|
|
|
|
|
| From |
|
|
|
|
|
| Inception |
|
|
|
|
|
| [May 11, 2004] |
|
|
|
|
|
| through |
|
|
|
|
|
| June 30, |
|
| 2008 |
| 2007 |
| 2008 |
Cash Flows From Operating Activities |
|
|
|
|
|
|
Net Income/(Loss) from operations | $ | (13,009) | $ | (537) | $ | (66,657) |
Adjustments to reconcile income (loss) |
|
|
|
|
|
|
from operations to net |
|
|
|
|
|
|
cash provided by operating activities: |
|
|
|
|
|
|
(Gain)/Loss on Sale of Securities |
| - |
| - |
| (5,543) |
Increase/(decrease) in accounts payable |
| 6,345 |
| 66 |
| 11,942 |
Increase/(decrease) in accrued interest |
| 432 |
| - |
| 432 |
Common Stock issued for services rendered |
| - |
| - |
| 5,000 |
Taxes Payable |
| - |
| - |
| 622 |
Note payable – related party |
| 6,232 |
| 371 |
| 6,844 |
Net Cash From Operating Activities |
| - |
| (100) |
| (47,360) |
|
|
|
|
|
|
|
Cash Flows From Investing Activities |
|
|
|
|
|
|
Proceeds from Sale of Marketable Securities |
| - |
| - |
| 54,744 |
Note Receivable-Cash Paid |
| - |
| - |
| (95,000) |
Note Receivable-Cash Received |
| - |
| - |
| 30,000 |
Patent Application |
| - |
| - |
| (42,352) |
(Increase)/Decrease in Receivable for Securities Sold |
| - |
| - |
| - |
|
|
|
|
|
|
|
Net Cash From Investing Activities |
| - |
| - |
| (52,608) |
|
|
|
|
|
|
|
Cash Flows From Financing Activities |
|
|
|
|
|
|
Proceeds from stock issuance |
| - |
| - |
| 100,000 |
Net Cash From Financing Activities |
| - |
| - |
| 100,000 |
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash |
| - |
| (100) |
| 32 |
|
|
|
|
|
|
|
Beginning Cash Balance |
| 32 |
| 132 |
| - |
|
|
|
|
|
|
|
Ending Cash Balance | $ | 32 | $ | 32 | $ | 32 |
|
|
|
|
|
|
|
Supplemental Disclosures |
|
|
|
|
|
|
Interest paid | $ | - | $ | - | $ | - |
Income taxes paid | $ | - | $ | - | $ | - |
|
|
|
|
|
|
|
Non-Cash Transactions |
|
|
|
|
|
|
Accepted Marketable Securities in Exchange for Note Receivable | $ | - | $ | - | $ | 50,000 |
Accepted Patent Investment Costs in Exchange for Note receivable | $ | - | $ | - | $ | 15,000 |
Patent Costs Paid by Related Party | $ | 5,317 | $ | 4,506 | $ | 15,542 |
Unaudited - See accompanying notes to financial statements
F-15
AcuRx, Inc.
[A Development Stage Company]
Notes to the Financial Statements
June 30, 2008
NOTE 1 – PRESENTATION
The accompanying condensed financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the interim financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for a fair statement of the results for the period. Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s audited financial statements for the year ended December 31, 2007 included herewith. The operating results for the periods presented are not necessarily indicative of the operating results for the full year.
NOTE 2 - PATENT
The Company has applied for a patent. It has incurred $73,693 towards the application process. The Company will not amortize the capitalized patent costs until the patent has been issued.
NOTE 3 - RELATED PARTY PAYABLE
As of June 30, 2008, the Company has received $17,191 in advances and notes payable from Tryant, LLC. These advances and notes are payable on demand and bear simple interest at 8%. Mr. Drummond is a managing director of Tryant, LLC. As of June 30, 2008, there was accrued interest of $432.
F-16
