UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2012
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 333-173569
Technologies Scan Corp.
(Exact name of registrant as specified in its charter)
| | 99-0363559 |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
331 Labelle, St-Jerome, Quebec, Canada | J7Z 5L2 |
| (Address of principal executive offices) | (Zip Code) |
(855) 492-5245 |
(Registrant’s Telephone Number, Including Area Code) |
| Securities registered under Section 12(b) of the Act: | |
Title of each class registered: | Name of each exchange on which registered: |
None | None |
| Securities registered under Section 12(g) of the Act: | |
Title of each class registered: | |
| None | |
Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes x No
Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes x No
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. x Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated file, 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 (Do not check if a smaller reporting company) | 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). x Yes o No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. As of September 30, 2011, approximately $117,450.
As of June 11, 2012, there were 114,150,000 shares of the issuer’s $.001 par value common stock issued and outstanding.
Documents incorporated by reference. There are no annual reports to security holders, proxy information statements, or any prospectus filed pursuant to Rule 424 of the Securities Act of 1933 incorporated herein by reference.
TABLE OF CONTENTS
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| | PART I | | |
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| | PART II | | |
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| | PART III | | |
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| | PART IV | | |
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PART I
Forward-Looking Information
This Annual Report of Technologies Scan Corp. on Form 10-K contains forward-looking statements, particularly those identified with the words, “anticipates,” “believes,” “expects,” “plans,” “intends,” “objectives,” and similar expressions. These statements reflect management’s best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under “Management’s Discussion and Analysis and Plan of Operations,” generally, and specifically therein under the captions “Liquidity and Capital Resources” as well as elsewhere in this Annual Report on Form 10-K. Actual events or results may differ materially from those discussed herein. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those 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. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.
Our Background. We were incorporated as Pharmascan Corp. in the State of Nevada on March 31, 2009. On September 21, 2010, we filed a Certificate of Amendment to our Articles of Incorporation and changed our name to Technologies Scan Corp.
Our Business. We are a development stage company whose plan of operation is selling touch screen computer products to pharmacies. We have developed full software and databases for pharmacy products by gathering relevant information from the pharmacy industry and preparing the information for programming by our software consultants. We intend to use this expertise to develop customized software and database programs for specific retail pharmacies. We believe the Infoscan, one of our programs, provides pharmacy product information in a unique and innovative way, through a touch screen and barcode reader. The Infoscan can be tailored to any pharmacy’s product offerings. The Infoscan guides customers in purchasing over the counter natural products and private label products in what we believe is an efficient manner that would allow pharmacy employees to perform other tasks.
Our Infoscan products will be used at pharmacies to assist customers with their purchases. In addition to selling Infoscan products, we intend to provide services such as location and installation advice, personalized programming onto the Infoscan, and employee training to use the product. Our Infoscan products include a database for products, barcodes reader and equipment including computer screens, optic readers, master cards, hard discs and adapted support.
We hope to generate product revenues predominantly from sales of our Infoscan programs to potential clients in the retail pharmacy industry.
Our Products.
Infoscan. We believe the Infoscan is a unique provider of information on natural products through a touch screen and barcode reader, which has been tailored to products offered in any pharmacy. The touch screen includes a bar code reader for items offered at a business, such as a pharmacy, and informs clients about their purchases. We believe the Infoscan program provides the following benefits:
| · | guides pharmacy customers with their purchases by providing information on the items that they scan into the Infoscan; |
| · | promotes the sale of the pharmacy’s products, |
| · | prompts pharmacy customers to buy new products, and |
| · | continually updates itself with information about the pharmacy products from the internet. |
The Infoscan contains two programs, the Versican program and the Infotouch program.
Veriscan Program. The Veriscan Program is a computerized database for the products that our potential clients customers sell. The Veriscan Program contains information on approximately 15,000 over the counter products. The program also has data to inform the potential customer on various types of illnesses and health conditions. This program also includes an optic barcode reader.
Infotouch Program. The Infotouch Program provides information and videos and provides internet access for continuous updates. The Infotouch Program also divides a potential customer’s products by section and contains a products catalog on the products that the client carries.
Equipment. We will sell equipment products that are related to the Infoscan and are manufactured by third party manufacturers. Products that we will sell include the following: LCD tactile screen, omnidirectional optic reader, integrated master card reader, hard disc, and adapted support.
Product-Related Services. As a complement to our product sales, we will offer our potential client services including technical support and maintenance services.
Development of the Infoscan device, along with its two programs, is complete. Upon entering into joint development agreements with potential clients, we plan to develop customized devices. The timeline for completion of these customized devices will depend on client demand and is thus uncertain. Although the costs for creating customized devices are uncertain, these costs will not be paid by us because we plan to enter in joint development agreements, in which the client will pay for any development costs.
Sales and Marketing. We primarily will sell our products through our officers. Our marketing initiatives will include:
| · | utilizing our management’s contacts with pharmacies and distributors; |
| · | establish relationships with pharmacy professionals who can refer clients to us; |
| · | attend industry tradeshows; and |
| · | initiate direct contact with potential clients. |
To date, we had informal discussions and negotiations with potential clients for the sale of our products and services. Our management has held meetings with potential clients including pharmacies such as Familiprix, Proxim and Uniprix and distributors such as Neptune Biotech. However, as of the date of this report, we have not entered into any formal agreement, arrangement or understanding with any of those potential clients for the purchase and sale of our products or services.
Growth Strategy. We plan to grow our operations by utilizing any revenues that we generate to expand our operations. We will seek to increase our sales efforts by increasing the number of events we attend, seeking referrals through our clients, developing business leads provided by our officers, and expanding the capability of our website by registering it with selected search engines to ensure our site comes up in search results in user searches for related products. Our strategy is also to provide client service and high-quality merchandise, which we believe will achieve a high level of client satisfaction and contribute to the development of our brand image and goodwill.
Suppliers. We have developed ongoing supply relationship with BlueStar Canada, a touch screen device distributor. As of date of this report, we do not have any formal agreements with BlueStar Canada or any other suppliers. However, we have an open account with BlueStar Canada for supplying touch screens, which will allow us to order products from them on a purchase order basis as needed. Our suppliers are not required to supply us with any minimum quantities and we cannot guaranty that our suppliers will supply the quantities of products we may need to meet our potential customers’ orders in a timely manner.
We anticipate that we will be able to develop relationships with additional suppliers so that we will have alternative suppliers in the event that our current suppliers do not desire or are unable to supply a sufficient amount of products to meet our potential clients’ requirements. The inability to fill client orders could cause delays, client cancellations, disruptions or reductions in product shipments which could damage relationships with current or prospective clients and increase costs or prices. A disruption in or termination of our supply relationship with any of our significant suppliers or our inability to develop relationships with new suppliers, if required, would cause delays, disruptions or reductions in product sales, which could damage relationships with our clients or increase our costs or the prices of our products.
Our Website. We own the web domains www.info-scan.ca and www.techno-scan.com. However, we do not currently have a website for our company. We hope to develop a website, which will provide a description of our business together with our contact information including our address, telephone number and e-mail address. We also believe that we can use our website to facilitate sales of our products.
Our Competition. Although there is substantial competition for the computer screens and the computer products that supplement the Infoscan product, we do not believe that we currently face significant competition for the computer program that we sell. However, many of our competitors who are in the computer software and programming industry could likely develop a similar product, which would place us in substantial competition with them. Since many of these computer software and programming companies have substantially greater financial, technical, managerial, marketing and other resources than we do, they may develop a similar competing product that could threaten us and they may compete more effectively than we can and they could also have better access to marketing their products to our potential clients.
Government Regulation. We are also subject to Canadian, U.S. federal laws and state laws and regulations generally applied to businesses. We believe that we are in conformity with all applicable laws in the State of Nevada, Canada and the United States.
Our Research and Development. We are not currently conducting any research or development activities other than updating and maintaining our database and website, which we expect the total cost to be approximately $80,000. We do not anticipate conducting any additional research or development activities in the near future. We do not currently own any equipment. Our management believes that we do not require the services of independent contractors to operate at our current level of activity. However, if our level of operations increases beyond the level that our current staff can provide, then we may need to hire additional employees or independent contractors as well as purchase or lease additional equipment.
Intellectual Property. We do not presently own any copyrights, patents, trademarks, licenses, concessions or royalties, and we may rely on certain proprietary technologies, trade secrets, and know-how that are not patentable.
We also currently own the web domains www.info-scan.ca and www.techno-scan.com. Under current domain name registration practices, no one else can obtain an identical domain name, but someone might obtain a similar name, or the identical name with a different suffix, such as “.org,” or with a country designation. The regulation of domain names in the United States and in foreign countries is subject to change, and we could be unable to prevent third parties from acquiring domain names that infringe or otherwise decrease the value of our domain names.
Insurance. We currently do not maintain any insurance.
Employees. As of July 16, 2012, we have no employees other than our two officers, Gilbert Pomerleau and Ghislaine St-Hilaire. We do not currently have formal employment agreements with our officers. We anticipate that we will retain independent contractors as consultants to support our expansion and business development. We are not a party to any employment agreements.
Facilities. Our executive, administrative and operating offices are located at 331 Labelle, St-Jerome, Quebec, Canada, J7Z 5L2. The lease calls for monthly payments of approximately US$1,887. We believe that our facilities are adequate for our needs and that additional suitable space will be available on acceptable terms as required.
Legal Proceedings. There are no legal actions pending against us nor are any legal actions contemplated by us at this time.
An investment in our securities involves a high degree of risk. You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities. If any of the following risks actually occurs, our business, financial condition, and/or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should only purchase our securities if you can afford to suffer the loss of your entire investment.
Risks Related to our Business:
We have a limited operating history upon which an evaluation of our prospects can be made.
We were incorporated in March 2009. Our lack of operating history makes an evaluation of our business and prospects very difficult. Our prospects must be considered speculative, considering the risks, expenses, and difficulties frequently encountered in the establishment of a new business. We cannot be certain that our business will be successful or that we will generate significant revenues.
Because we are a development stage company, we have no revenues to sustain our operations.
We are a development stage company that is currently developing our business. To date, we have not generated revenues. The success of our business operations will depend upon our ability to obtain customers and provide quality products to those customers. We are not able to predict whether we will be able to develop our business and generate revenues. If we are not able to complete the successful development of our business plan, generate revenues and attain sustainable operations, then our business will fail.
We have incurred a net loss since inception and expect to incur net losses for the foreseeable future.
As of March 31, 2012, our net loss since inception was $366,070. We expect to incur operating and capital expenditures for the next year and, as a result, we expect significant net losses in the future. We will need to generate significant revenues to develop our business and expand our operations. We may not be able to generate sufficient revenues to achieve profitable operations.
We will need to raise additional capital to market our products and expand our operations. Our failure to raise additional capital will significantly affect our ability to fund our proposed activities.
We are currently not engaged in any sophisticated marketing program to market our products because we lack capital and revenues to justify the expenditure. In addition, our available funds will not fund our activities for the next twelve months. If we fail to raise additional funds, investors may lose their entire cash investment.
We have limited marketing and sales capabilities.
Our future success depends, to a great extent, on our ability to successfully market our products. We currently have limited sales and marketing capabilities. Consequently, we will need to identify and successfully target particular market segments in which we believe we will have the most success. These efforts will require a substantial, but unknown, amount of effort and resources. We cannot assure you that any marketing and sales efforts undertaken by us will be successful or will result in any significant sales.
We may face substantial competition from more established software companies and similar products.
If any competitors who are in the computer software and programming industry develop a similar product, we will be in direct competition with them. Since many of these computer software and programming companies have substantially greater financial, technical, managerial, marketing and other resources than we do, they may develop a similar competing product that could threaten us as they may compete more effectively than we can and they could also have better access to marketing their products to our potential clients. In addition, mobile applications may serve as a competitor to our products as end user’s may prefer to use their own mobile device as opposed to our Infoscan product.
Our ability to raise additional capital through the sale of our stock may be harmed by competing resales of our common stock by the selling shareholders in our registration statement that was declared effective by the SEC.
The price of our common stock could fall if the selling shareholders sell substantial amounts of our common stock. These sales would make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate, because the selling shareholders may offer to sell their shares of common stock to potential investors for less than we do. Moreover, potential investors may not be interested in purchasing shares of our common stock if the selling shareholders are selling their shares of common stock.
Our officers are engaged in other activities that could conflict with our interests. Therefore, our two officers may not devote sufficient time to our affairs, which may affect our ability to conduct marketing activities and generate revenues.
Ghislaine St-Hilaire devotes approximately 50% of her time to the company. Gilbert Pomerleau devotes approximately 25% of his time to the company. In addition, Ghislaine St-Hilaire and Gilbert Pomerleau have existing responsibilities and have additional responsibilities to provide management and services to other entities. As a result, conflicts of interest between us and the other activities of those entities may occur from time to time, in that our two officers shall have conflicts of interest in allocating time, services, and functions between the other business ventures in which they may be or become involved and our affairs. In the event that a specific conflict arises between our management and their other business, our management intends to use their business judgment to allocate time appropriately.
We depend on the efforts and abilities of our officers.
We currently have only two officers, Ghislaine St-Hilaire and Gilbert Pomerleau, who are also our only employees. Outside demands on our officers’ time may prevent each of them from devoting sufficient time to our operations. In addition, the demands on each of these individuals’ time will increase because of our status as a public company. Ms. St-Hilaire and Mr. Pomerleau both have limited experience in managing a public company, which may impact our ability to meet our financial and business objectives as potential investors may not want to invest in a company whose management has limited public company experience. The interruption of the services of our management could significantly hinder our operations, profits and future development, if suitable replacements are not promptly obtained. We do not currently have any executive compensation agreements. We cannot guaranty that our management will remain with us.
Our management ranks are thin, and losing or failing to add key personnel could affect our ability to successfully grow our business.
Our future performance depends substantially on the continued service of our management. In particular, our success depends upon the continued efforts of our management personnel, including our President, Ghislaine St-Hilaire and our Treasurer, Secretary and Chief Financial Officer, Gilbert Pomerleau. We cannot guarantee that either Ms. St-Hilaire or Mr. Pomerleau will remain with us.
Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in Canada based upon U.S. laws, including the federal securities laws or other foreign laws, against us or our management.
Most of our current operations are conducted in Canada. Moreover, all of our directors and officers are nationals and residents of Canada. All or substantially all of the assets of these persons are located outside the United States. As a result, it may not be possible to effect service of process within the United States or elsewhere outside Canada upon these persons. In addition, uncertainty exists as to whether the courts of Canada would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in Canada against us or such persons predicated upon the securities laws of the United States or any state thereof.
The costs to meet our reporting requirements as a public company subject to the Securities Exchange Act of 1934 will be substantial and may result in us having insufficient funds to operate our business.
We will incur ongoing expenses associated with professional fees for accounting and legal expenses associated with being a public company. We estimate that these costs will range up to $50,000 per year for the next few years. Those fees will be higher if our business volume and activity increases. Those obligations will reduce and possibly eliminate our ability and resources to fund our operations and may prevent us from meeting our normal business obligations.
Our auditors have questioned our ability to continue operations as a “going concern.” Investors may lose all of their investment if we are unable to continue operations and generate revenues.
We hope to obtain significant revenues from future product sales. In the absence of significant sales and profits, we may seek to raise additional funds to meet our working capital needs, principally through the additional sales of our securities. However, we cannot guarantee that we will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to us. As a result, substantial doubt exists about our ability to continue as a going concern.
We are subject to the Section 15(d) reporting requirements under the Securities Exchange Act of 1934 which does not require a company to file all the same reports and information as a fully reporting company pursuant to Section 12.
We are subject to the Section 15(d) reporting requirements according to the Securities Exchange Act of 1934, or Exchange Act. As a filer subject to Section 15(d) of the Exchange Act:
| · | we are not required to prepare proxy or information statements; |
| · | we will be subject to only limited portions of the tender offer rules; |
| · | our officers, directors, and more than ten (10%) percent shareholders are not required to file beneficial ownership reports about their holdings in our company; |
| · | our officers, directors, and more than ten (10%) percent shareholders are not subject to the short-swing profit recovery provisions of the Exchange Act; and |
| · | more than five percent (5%) holders of classes of your equity securities will not be required to report information about their ownership positions in the securities. |
If we have less than 300 holders of record at our next fiscal year end and at the conclusion of the offering, our reporting obligations under Section 15(d) of the Exchange Act will be suspended.
We are required to file the necessary reports in the fiscal year that the registration statement is declared effective. After that fiscal year and provided we have less than 300 holders of record, our filing obligation under Section 15(d) will be suspended. Specifically, if our Section 15(d) filing obligation is suspended, we will not be required to file annual reports on Form 10-K for the fiscal years subsequent to suspension, quarterly reports on Form 10-Q, and current reports on Form 8-K. If those reports are not filed by us, the investors will have reduced visibility as to the company and our financial condition, which may negatively impact our shareholders’ ability to evaluate our prospects.
Management lacks any formal training or experience in consumer electronics, computers, and pharmacy products.
Our management lacks any experience in researching and developing technology. Our management has no direct training or experience in these areas and, as a result, may not be fully aware of all of the specific requirements related to working within this industry. In addition, our management lacks formal training or experience in the pharmacy industry. Our management’s decisions and choices may not take into account standard managerial approaches technology and pharmacy companies commonly use. Consequently, our operations, earnings, and ultimate financial success could suffer irreparable harm due to management’s lack of experience in these industries.
Risks Related to our Common Stock
Our officers and directors own approximately 65.7% of our outstanding shares of common stock, allowing these shareholders to control matters requiring approval of our shareholders.
Our officers and directors beneficially own, in the aggregate, approximately 65.7% of our outstanding shares of common stock. Such concentrated control of the company may negatively affect the price of our common stock. In addition, our officers and directors can control matters requiring approval by our security holders, including the election of directors.
Investors should not look to dividends as a source of income.
In the interest of reinvesting initial profits back into our business, we do not intend to pay cash dividends in the foreseeable future. Consequently, any economic return will initially be derived, if at all, from appreciation in the fair market value of our stock, and not as a result of dividend payments.
Because we may be subject to the “penny stock” rules, the level of trading activity in our stock may be reduced - which may make it difficult for investors to sell their shares.
Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks, like shares of our common stock, generally are equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on NASDAQ. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares.
We lack a public market for shares of our common stock, which may make it difficult for investors to sell their shares.
There is no public market for shares of our common stock. We cannot guaranty that an active public market will develop or be sustained. Therefore, investors may not be able to find purchasers for their shares of our common stock. Should there develop a significant market for our shares, the market price for those shares may be significantly affected by such factors as our financial results and introduction of new products and services. Factors such as announcements of new services by us or our competitors and quarter-to-quarter variations in our results of operations, as well as market conditions in our sector may have a significant impact on the market price of our shares. Further, the stock market has experienced extreme volatility that has particularly affected the market prices of stock of many companies and that often has been unrelated or disproportionate to the operating performance of those companies.
Our shares may not become eligible to be traded electronically which could result in brokerage firms being unwilling to trade them.
Our shares of common stock are eligible to be quoted on the OTCBB and OTCQB. However, our shares are not eligible with Depository Trust Company (DTC) to trade electronically. Because we are not DTC eligible, our shares cannot be electronically transferred between brokerage accounts, the practical effect of which means that our shares will not trade much, if at all, on the OTCBB or OTCQB. In order for our shares to trade on the OTCBB or OTCQB, our shares would need to be traded manually between broker dealers and their accounts, which is time consuming, costly and cumbersome. We cannot guaranty that our shares will ever become DTC eligible or, if in the event we apply for DTC eligibility, how long it will take to become eligible.
As a shell company, sales of our common stock in reliance on Rule 144 of the Securities Act are subject to the requirements of Rule 144(i).
Rule 144 under the Securities Act, which generally permits the resale, subject to various terms and conditions, of restricted securities after they have been held for six months will not immediately apply to our common stock because we are designated as a “shell company” under SEC regulations. Pursuant to Rule 144(i), securities issued by a current or former shell company that otherwise meet the holding period and other requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after the date on which the issuer filed current “Form 10 information” (as defined in Rule 144(i)) with the SEC reflecting that it ceased being a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, the issuer has satisfied certain reporting requirements under the Exchange Act. Because we are currently a shell company, the reporting requirements of Rule 144(i) will apply, and restrictive legends on certificates for shares of our common stock cannot be removed except in connection with an actual sale that is subject to an effective registration statement under, or an applicable exemption from the registration requirements of, the Securities Act.
None.
Property held by us. As of July 16, 2012, we do not own any interests in real estate.
Our Facilities. Our executive, administrative and operating offices are located at 331 Labelle, St-Jerome, Quebec, Canada, J7Z 5L2. On July 5, 2010, we entered into a lease agreement that calls for monthly payments of approximately $1,887 USD. The lease expires on October 31, 2013. We believe that our facilities are adequate for our needs and that additional suitable space will be available on acceptable terms as required.
We are not currently a party to any legal proceedings.
PART II
Market Information. Our common stock is listed for quotation on the Over-the-Counter Bulletin Board and OTCQB under the symbol “TENP.” To date there has been no active trading market, and no trades of shares of our common stock have occurred.
Holders. The approximate number of stockholders of record at June 11, 2012 was 38. The number of stockholders of record does not include beneficial owners of our common stock, whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.
Dividend Policy. We have never declared or paid a cash dividend on our capital stock. We do not expect to pay cash dividends on our common stock in the foreseeable future. We currently intend to retain our earnings, if any, for use in our business. Any dividends declared in the future will be at the discretion of our Board of Directors.
Securities Authorized For Issuance Under Equity Compensation Plans. As of March 31, 2012, we had no compensation plans under which our equity securities were authorized for issuance.
Recent sales of unregistered securities. No sales of unregistered securities by us occurred during the year ended March 31, 2012.
Purchases of Equity Securities. None.
Use of Proceeds of Registered Securities. Our initial public offering of common stock was made pursuant to a registration statement on Form S-1 (File No. 333-173569), which the SEC declared effective on November 8, 2011. In the registration statement, we registered 39,150,000 shares of our issued and outstanding common stock to be offered by certain existing, unaffiliated shareholders.
Penny Stock Regulation. Shares of our common stock will probably be subject to rules adopted the SEC that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in those securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the SEC, which contains the following:
| · | a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; |
| · | a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of securities’ laws; |
| · | a brief, clear, narrative description of a dealer market, including “bid” and “ask” prices for penny stocks and the significance of the spread between the “bid” and “ask” price; |
| · | a toll-free telephone number for inquiries on disciplinary actions; |
| · | definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks; and |
| · | such other information and is in such form (including language, type, size and format), as the SEC shall require by rule or regulation. |
Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:
| · | the bid and offer quotations for the penny stock; |
| · | the compensation of the broker-dealer and its salesperson in the transaction; |
| · | the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and |
| · | monthly account statements showing the market value of each penny stock held in the customer’s account. |
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Holders of shares of our common stock may have difficulty selling those shares because our common stock will probably be subject to the penny stock rules.
Not applicable.
Critical Accounting Policy and Estimates. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources. In addition, our accounting policies are described at relevant sections in this discussion and analysis and in the notes to the financial statements included in this Annual Report on Form 10-K for the year ended March 31, 2012.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements for the year ended March 31, 2012, together with notes thereto as included in this Annual Report on Form 10-K.
For the year ended March 31, 2012, as compared to the year ended March 31, 2011
Results of Operations.
Revenues. We had no revenues for the years ended March 31, 2012 and 2011.
Operating Expenses. Our operating expenses decreased from $262,781 for the year ended March 31, 2011 to $102,403 for the year ended March 31, 2012. The overall decrease between the comparable periods is primarily due to a decrease in research and development, which decreased from $157,300 for the year ended March 31, 2011 to $0 for the year ended March 31, 2012.
Other Expense. We had a foreign exchange loss of $659 for the year ended March 31, 2011 compared to a loss of $227 for the year ended March 31, 2012. This decrease is a result of paying vendors in Canadian dollars.
Net Loss. Our net loss decreased $160,810 from a net loss of $263,440 for the year ended March 31, 2011 to a net loss of $ $102,630 for the year ended March 31, 2012. Our net loss decreased due to a decrease in our professional fees, general and administrative and research and development expenses for the year ended March 31, 2012.
Liquidity and Capital Resources. On April 1, 2010, we issued 77,000,000 shares of common stock to our two founders and a consultant in exchange for services valued at $77,000, or $0.001 per share. During the period from April 1, 2010 through March 31, 2012, we sold 34,650,000 shares of common stock in exchange for $103,950, or $0.003 per share. These proceeds are being used to pay for the development of our products, overhead expenses and working capital. In addition, we were advanced $103,042 from our director and shareholders since inception. The advances are non-interest bearing and payable on demand. We also received an advance of $15,000 from a third party during our fiscal year ended March 31, 2012. The advance is non-interest bearing and payable on demand.
As of March 31, 2012, we had liabilities of $178,971 of which $60,929 were represented by accounts payable and accrued expenses, $103,042 of advances payable to our shareholders, and $15,000 due to an unrelated third party.
During 2012, we expect to incur significant costs associated with updating and maintaining our database and website. We expect that the costs of updating and maintaining our database and website will be approximately $80,000 and will continue to impact our liquidity. We will need to obtain funds to pay those expenses.
During 2012, we expect to incur significant accounting costs associated with the audit and review of our financial statements. We expect that the legal and accounting costs of being a public company will be approximately $50,000 per year and will continue to impact our liquidity. We will need to obtain funds to pay those expenses.
Other than expenses for updating and maintaining our database and website and the anticipated increases in legal and accounting costs due to the reporting requirements of being a reporting company, we are not aware of any other known trends, events or uncertainties, which may affect our future liquidity.
As of March 31, 2012, we had a cash balance of $225. We have no currently planned material commitments for capital expenditures; however, we will need operating capital to continue our current business plans and we presently have no source of capital. Although we are considering various debt or equity financings, there can be no assurance that any financing will be available to us on terms acceptable to us or at the time that we would require such financing, or at all. Failure to obtain any such financing will result in our inability to effectuate our business plan. The notes to our financial statements at March 31, 2012 disclose uncertainty as to our ability to continue as a going concern.
We are not currently conducting any research and development activities. We do not anticipate conducting such activities in the near future. We do not anticipate that we will purchase or sell any significant equipment. In the event that we generate significant revenues and expand our operations, then we may need to hire additional employees or independent contractors as well as purchase or lease additional equipment.
Not applicable.
The financial statements required by Item 8 are presented in the following order:
