SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 10-Q/A
(Amendment No. 1)
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
For Quarterly period Ended: March 31, 2008; or
----- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
For the transition period to
--------- ----------
Commission File Number: 0-25631
-----------------------
ALPHATRADE.COM
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 98-0211652
------------------------------ ------------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
SUITE 116C - 930 West 1st Street, North Vancouver, B.C. V7P3N4 Canada
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(604 ) 986-9866
-------------------------
(Issuer's telephone number)
Indicate by check mark whether the issuer (1) filed all reports required
to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12
months (or for such shorter period that a registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No
--- ---
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer", "accelerated filer",
and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company |X|
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|
State the number of shares outstanding of the issuer's common equity:
$0.001 par value, as of March 31, 2008, was 50,250,523.
1
EXPLANATORY NOTE:
This Amendment No. 1 on Form 10-Q/A hereby amends the registrant's
quarterly report on Form 10-QSB for the period ended March 31, 2008, which the
registrant filed with the Securities and Exchange Commission on May 20, 2008.
This amendment is being filed in order to restate the registrant's financial
statements for the period ended March 31, 2008 in order to correct certain
errors in its revenue recognition related to one of its advertising contracts.
Report on Form 10-Q/A
For the Quarter Ended March 31, 2008
INDEX
Page
----
Part I. Financial Information
Item 1. Financial Statements (unaudited)...................... 3
Balance Sheets.......................................4-5
Statements of Operations ............................6-7
Statement of Stockholders' Equity (Deficit)........... 8
Statements of Cash Flows............................9-10
Notes to the Financial Statements .................11-14
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operation ... 15
Item 3 Quantitative and Qualitative Disclosures About
Market Risk ......................................... 16
Item 4. Controls and Procedures ............................. 16
Part II. Other Information
Item 1. Legal Proceedings ................................... 17
Item 1A. Risk Factors ................................... 18
Item 2. Unregistered Sales of Equity Securities
And Use of Proceeds ................................. 18
Item 3. Defaults Upon Senior Securities ..................... 18
Item 4. Submission of Matters to a Vote of Security Holders . 18
Item 5. Other Information ................................... 18
Item 6. Exhibits............................................. 18
Signatures........................................... 20
Certifications.....................................21-26
2
PART I - FINANCIAL INFORMATION
3
ALPHATRADE.COM
Balance Sheets
ASSETS
------
March 31, December 31,
2008 2007
-------------- --------------
(unaudited)
CURRENT ASSETS (restated)
Cash $ 35,281 $ 153,760
Accounts receivable 930 28,047
Marketable securities-available for sale 482,713 658,858
Marketable securities-available for sale
related party 7,324 5,232
Prepaid expenses 14,900 750
------------- -------------
Total Current Assets 541,148 846,647
------------- -------------
PROPERTY AND EQUIPMENT, net 40,334 45,633
------------- -------------
OTHER ASSETS
Investments, at cost 300,000 300,000
------------- -------------
TOTAL ASSETS $ 881,482 $ 1,192,280
============= =============
The accompanying notes are an integral part of these financial statements.
4
ALPHATARADE.COM
Balance Sheets
(restated)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
March 31, December 31,
2008 2007
-------------- --------------
(unaudited)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 2,159,821 $ 2,404,822
Bank overdraft 65,918 -
Related party payables 2,435,650 2,190,414
Deferred revenues 749,137 1,130,178
------------- -------------
Total Current Liabilities 5,410,526 5,725,414
------------- -------------
TOTAL LIABILITIES 5,410,526 5,725,414
------------- -------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred shares: $0.001 par value,
10,000,000 shares authorized: 2,000,000
Class A and 2,000,000 Class B shares
issues and outstanding 4,000 4,000
Common shares: $0.001 par value, 100,000,000
shares authorized: 50,280,523 and 48,589,773
shares issues and outstanding, respectively 50,281 48,590
Stock subscription payable 45,080 28,500
Additional paid-in capital 33,072,117 32,719,057
Accumulated other comprehensive income (1,875,883) (1,647,531)
Accumulated deficit (35,824,639) (35,685,750)
------------- -------------
Total Stockholders' Equity (Deficit) (4,529,044) (4,533,134)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 881,482 $ 1,192,280
============= =============
The accompanying notes are an integral part of these financial statements.
5
ALPHATRADE.COM
Statements of Operations
(unaudited)
(restated)
For the Three Months Ended
March 31,
-----------------------------
2008 2007
-------------- --------------
REVENUES
Subscription revenue $ 771,928 $ 772,661
Advertising revenue 808,055 398,367
Other revenue 37,401 20,179
------------- -------------
Total Revenues 1,617,384 1,191,207
------------- -------------
COST OF SALES
Financial content 483,403 452,294
Other cost of sales 1,100 1,486
------------- -------------
Total Cost of Sales 484,503 453,780
------------- -------------
GROSS PROFIT 1,132,881 737,427
------------- -------------
OPERATING EXPENSES
Management expense 120,000 120,000
Professional fees 438,492 457,825
Research and development 147,478 87,751
Marketing expense 134,697 891,497
General and administrative 256,885 180,797
------------- -------------
Total Operating Expenses 1,097,552 1,737,870
------------- -------------
INCOME (LOSS) FROM OPERATIONS 35,329 (1,000,443)
------------- ------------
OTHER INCOME (EXPENSE)
Gain (Loss) on sale of assets (85,738) -
Interest expense (88,480) -
------------- ------------
Total Other Income (Expense) (174,218) -
------------- ------------
NET LOSS BEFORE INCOME TAXES (138,889) (1,000,443)
------------- ------------
INCOME TAX EXPENSE - -
------------- ------------
The accompanying notes are an integral part of these financials statements.
6
ALPHATRADE.COM
Statements of Operations
(unaudited)
(restated)
(continued)
For the Three Months Ended
March 31,
-----------------------------
2008 2007
-------------- --------------
NET LOSS $ (138,889) $ (1,000,443)
============= ============
OTHER COMPREHENSIVE INCOME (LOSS) $ (228,352) $ (9,482)
============= ============
TOTAL COMPREHENSIVE INCOME (LOSS) $ (367,241) $ (1,009,925)
============= ============
BASIC EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.03)
============= ============
COMPREHENSIVE BASIC EARNINGS (LOSS) PER SHARE $ (0.01) $ (0.03)
============= ============
FULLY DILUTED INCOME (LOSS) PER SHARE $ (0.00) $ (0.03)
============= ============
COMPREHENSIVE FULLY DILUTED INCOME (LOSS)
PER SHARE $ (0.01) $ (0.03)
============= ============
BASIC WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 49,601,306 37,502,527
============= ============
FULLY DILUTED WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 49,601,306 37,502,527
============= ============
The accompanying notes are an integral part of these financials statements.
7
ALPHATRADE.COM
Statements of Stockholders' Equity
(restated)
Preferred Stock Common Stock Additional Stock Other Total
---------------- ------------------ Paid-In Subscription Comprehensive Accumulated Stockholder's
Shares Amount Shares Amount Capital Receivable Income Deficit Equity
--------- ------ ---------- ------- ----------- ---------- ------------- ------------- -------------
Balance,
December 31, 2006 4,000,000 $4,000 40,425,027 $40,425 $30,853,661 $ (30,000) $ (717,860) $ (31,111,747) $ (961,521)
Common stock issued
for cash at $0.18
per share - - 2,287,500 2,288 454,212 28,500 - - 485,000
Common stock issued
for services at $0.20
per share - - 5,877,246 5,877 1,052,066 - - - 1,057,943
Value of stock purchase
warrants granted - - - - 207,728 - - - 207,728
Value of stock options
issued under the 2007
stock option plan - - - - 131,540 - - - 131,540
Contributed capital - - - - 19,850 - - - 19,850
Amortization of
prepaid expense - - - - - 30,000 - - 30,000
Net income for the
year ended December
31, 2007 - - - - - - (929,671) (4,574,003) (5,503,674)
--------- ------ ---------- ------- ----------- --------- ------------- ------------- ------------
Balance,
December 31, 2007 4,000,000 4,000 48,589,773 48,590 32,719,057 28,500 (1,647,531) (35,685,750) (4,533,134)
Common stock issued
for cash at $0.20
per share - - 725,000 725 144,275 16,580 - - 161,580
Common stock issued
for services at
$0.20 per share - - 965,750 966 194,552 - - - 195,518
Value of stock
purchase warrants
granted - - - - 14,233 - - - 14,233
Net loss for the
three months ended
March 31, 2008 - - - - - - (228,352) (138,889) (367,241)
--------- ------ ---------- ------- ----------- --------- -------------- ------------ ------------
Balance,
March 31, 2008
(unaudited) 4,000,000 $4,000 50,280,523 $50,281 $33,072,117 $ 45,080 $ (1,875,883)$(35,824,639) $ (4,529,044)
========= ====== ========== ======= =========== ========= ============== ============ ============
The accompanying notes are an integral part of these financials statements.
8
ALPHATRADE.COM
Statements of Cash Flows
(unaudited)
(restated)
For the Three Months Ended
March 31,
--------------------------
2008 2007
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (138,889) $ (1,000,443)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation expense 5,299 3,336
Value of options granted 14,233 10,128
Loss on sale of assets 85,738 -
Amortization of services prepaid by common stock - 13,125
Investments received as payment for accounts
receivable (232,697) (146,250)
Common stock issued for services 195,518 232,365
Changes in operating assets and liabilities:
Proceeds from bank overdraft 65,918 -
Changes in accounts receivable 46,165 56,510
Changes in prepaid expenses (14,150) (10,241)
Changes in deferred revenues (381,041) 83,740
Changes in related party payables 245,236 422,494
Changes in accounts payable and accrued expenses (245,001) 209,182
----------- ------------
Net Cash Provided by Operating Activities (353,671) (126,054)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of securities 73,612 -
Purchase of fixed assets - (1,023)
----------- ------------
Net Cash Used by Investing Activities 73,612 (1,023)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock subscriptions payable 16,580 -
Common stock issued for cash 145,000 -
Contributed capital - 19,850
----------- -----------
Net Cash Provided by Financing Activities 161,580 19,850
----------- -----------
NET DECREASE IN CASH (118,479) (107,227)
CASH AT BEGINNING OF PERIOD 153,760 147,323
----------- -----------
CASH AT END OF PERIOD $ 35,281 $ 40,096
=========== ===========
The accompanying notes are an integral part of these financial statements.
9
ALPHATRADE.COM
Statements of Cash Flows
(unaudited)
(restated)
(continued)
For the Three Months Ended
March 31,
--------------------------
2008 2007
------------ -------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ 24,286 $ -
Income Taxes $ - $ -
NON CASH FINANCING ACTIVITIES:
Common stock issued for services and
contributions $ 195,518 $ 232,365
Value of stock options granted $ 14,233 $ 10,128
The accompanying notes are an integral part of these financial statements.
10
ALPHATRADE.COM
Notes to the Financial Statements
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly
the financial position, results of operations and cash flows at March
31, 2008 and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America 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 December 31, 2007 audited financial
statements. The results of operations for the periods ended March 31,
2008 and 2007 are not necessarily indicative of the operating results
for the full years.
NOTE 2 - OUTSTANDING COMMON STOCK OPTIONS AND STOCK PURCHASE WARRANTS
The Company uses the instruments identified as stock options and common
stock warrants somewhat interchangeably. Both forms of equity
instruments have been granted as compensation to the Company's officers
and directors.
Under FASB Statement 123R, the Company estimates the fair value of each
stock award at the grant date by using the Black-Scholes option pricing
model. The following weighted average assumptions used for grants in
the periods ended December 31, 2007 and March 31, 2008: dividend yield
of zero percent for all years; expected volatility of 55.50% and
62.01%; risk-free interest rates of 5.03% and 3.25% and expected lives
of 1.0 and 1.0, respectively.
The general terms of awards such as vesting requirements(usually 1 to 2
years), term of options granted (usually 10 years), and number of
shares authorized for grants of options or other equity instruments are
determined by the Board of Directors. A summary of the status of the
Company's stock options and warrants as of December 31, 2007 and
changes during the periods ended December 31, 2007and March 31, 2008 is
presented below:
Weighted Weighted
Options Average Average
and Exercise Grant Date
Warrants Price Fair Value
-----------------------------------
Outstanding, December 31, 2006 39,822,997 $ 0.38 $ 0.38
Granted 13,618,000 0.25 0.25
Expired (1,130,000) 0.72 0.72
Exercised (740,650) 0.76 0.76
----------------------------------
Outstanding, December 31, 2007 51,570,347 $ 0.36 $ 0.36
----------------------------------
Exercisable, December 31, 2007 35,925,350 $ 0.40 $ 0.40
----------------------------------
11
ALPHATRADE.COM
Notes to the Financial Statements
NOTE 2 - OUTSTANDING COMMON STOCK OPTIONS AND STOCK PURCHASE WARRANTS(Continued)
Weighted Weighted
Options Average Average
and Exercise Grant Date
Warrants Price Fair Value
-----------------------------------
Outstanding, December 31, 2007 51,570,347 $ 0.36 $ 0.36
Granted 2,160,000 0.41 0.41
Expired (200,000) 0.15 0.15
Exercised (298,650) 0.25 0.25
Outstanding, March 31, 2008 53,231,697 $ 0.36 $ 0.40
Exercisable, March 31, 2008 37,885,350 $ 0.40 $ 0.40
NOTE 3 - RESTATED FINANCIAL STATEMENTS
The Company has restated its financial statements as of and for the
period ended March 31, 2008 to reflect the reversal of $2,240,421 of
advertising revenues because management concluded that the
collectability of the subject fees was not reasonably assured.. The
following summarized financial statements compare the financial
statements before and after the restatement.
CURRENT ASSETS (original) (restated)
Cash $ 35,281 $ 35,281
Accounts receivable 2,241,351 930
Marketable securities-available
for sale 482,713 482,713
Marketable securities-available
for sale related party 7,324 7,324
Prepaid expenses 14,900 14,900
------------ -------------
Total Current Assets 2,781,569 541,148
------------ -------------
PROPERTY AND EQUIPMENT, net 40,334 40,334
------------ -------------
OTHER ASSETS
Investments, at cost 300,000 300,000
------------ -------------
TOTAL ASSETS $ 3,121,903 $ 881,482
============ =============
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 2,159,821 $ 2,159,821
Bank overdraft 65,918 65,918
Related party payables 2,435,650 2,435,650
Deferred revenues 251,696 749,137
------------ -------------
Total Current Liabilities 4,913,085 5,410,526
------------ -------------
TOTAL LIABILITIES 4,913,085 5,410,526
------------ -------------
12
ALPHATRADE.COM
Notes to the Financial Statements
STOCKHOLDERS' EQUITY
Preferred shares: $0.001 par value,
10,000,000 shares authorized: 2,000,000
Class A and 2,000,000 Class B shares
issues and outstanding 4,000 4,000
Common shares: $0.001 par value,
100,000,000 shares authorized:
50,280,523 shares issues and
outstanding 50,281 50,281
Stock subscription payable 45,080 45,080
Additional paid-in capital 33,072,117 33,072,117
Accumulated other comprehensive income (1,875,883) (1,875,883)
Accumulated deficit (33,086,777) (35,824,639)
------------ -------------
Total Stockholders' Equity (1,791,182) (4,529,044)
------------ -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 3,121,903 $ 881,482
============ =============
REVENUES
Subscription revenue $ 771,928 $ 771,928
Advertising revenue 2,660,317 808,055
Other revenue 37,401 37,401
------------ -------------
Total Revenues
3,469,646 1,617,384
------------ -------------
COST OF SALES
Financial content 483,403 483,403
Other cost of sales 1,100 1,100
------------ -------------
Total Cost of Sales 484,503 484,503
------------ -------------
GROSS PROFIT 2,985,143 1,132,881
------------ -------------
OPERATING EXPENSES
Management expense 120,000 120,000
Professional fees 438,492 438,492
Research and development 147,478 147,478
Marketing expense 134,697 134,697
General and administrative 256,885 256,885
------------ -------------
Total Operating Expenses 1,097,552 1,097,552
------------ -------------
INCOME (LOSS) FROM OPERATIONS 1,887,591 35,329
------------ -------------
OTHER INCOME (EXPENSE)
Gain (Loss) on sale of assets (85,738) (85,738)
Interest expense (88,480) (88,480)
------------ -------------
Total Other Income (Expense) (174,218) (174,218)
------------ -------------
NET INCOME (LOSS) BEFORE INCOME TAXES 1,713,373 (138,889)
13
ALPHATRADE.COM
Notes to the Financial Statements
INCOME TAX EXPENSE - -
------------ -------------
NET INCOME (LOSS) $ 1,713,373 $ (138,889)
============ =============
OTHER COMPREHENSIVE INCOME (LOSS) $ (228,352) $ (228,352)
------------ -------------
TOTAL COMPREHENSIVE INCOME (LOSS) $ 1,485,021 $ (367,241)
============ =============
BASIC EARNINGS (LOSS) PER SHARE $ 0.03 $ (0.00)
============ =============
COMPREHENSIVE BASIC EARNINGS (LOSS) PER SHARE $ 0.03 $ (0.01)
============ =============
FULLY DILUTED INCOME (LOSS) PER SHARE $ 0.03 $ (0.00)
============ =============
COMPREHENSIVE FULLY DILUTED INCOME (LOSS)
PER SHARE $ 0.03 $ (0.01)
============ =============
BASIC WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 49,601,306 49,601,306
============= =============
FULLY DILUTED WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 49,601,306 49,601,306
============= =============
14
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Form 10-Q.
Forward-looking and Cautionary Statements
This report contains certain forward-looking statements. These statements relate
to future events or our future financial performance and involve known and
unknown risks and uncertainties. These factors may cause our company's, or our
industry's actual results, levels of activity, performance or achievements to be
materially different from those expressed or implied by the forward-looking
statements. In some cases, you can identify forward-looking statements by
terminology such as "may," "will" "should," "expects," "intends," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," "continue," or
the negative of these terms or other comparable terminology.
These statements are only predictions. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
Restated Financial Statements
The Company has restated its financial statements as of and for the period ended
March 31, 2008 to reflect the reversal of $1,852,262 of advertising revenues
because management concluded that the collectability of the subject fees was not
reasonably assured.
Results of Operations.
During the three months ended March 31, 2008, revenue increased significantly
over the same period of 2007. Revenue for the first quarter in 2008 was
$1,617,384, which is a 36% increase over first quarter 2007 revenue of
$1,191,207. Advertising revenues in the first quarter grew from $398,367 in 2007
to $808,055 in 2008. Our advertising model is unique in the industry because we
have a high traffic website and our audience is comprised of a specific
demographic. We are building a client base of companies that are seeking brand
awareness in combination with building their shareholder base. Our advertising
client base is increasing because we have created relationships with investor
and public relations firms who refer us new business.
We are focused on building alliances with other financial websites and
non-competing businesses to drive more traffic to our website which in turn
creates greater exposure for our advertising clients.
Our cost of sales for our financial products is directly related to the price of
our financial feeds and content. Some of these costs are fixed monthly fees and
others are based on the number of users or subscribers. As our subscribers
increase, our ability to charge more for our advertising products increases. For
the first quarter of 2008 our cost of sales was 30% of revenues compared to 38%
in 2007. As our advertising revenues increase, this percentage may become more
and more favorable in terms of profitable operations.
We incurred a net loss of $138,889 for the three months ended March 31, 2008
compared to a loss of $1,000,443 for the three months ended March 31, 2007. This
15
is a decrease of $861,554. During 2008 we terminated most of our sports
partnerships because the cost was excessive for the results we achieved from a
financial perspective; however, a few of the partnerships did drive more traffic
to our website. In 2008 we paid $891,497 to a couple of major league baseball
teams, automobile racing teams, and the PBR, and other marketing consultants. In
combination with the amount we spent in 2007 and to date this year, these
expenses have translated into a substantial increase in Alphatrade's brand
awareness which enabled us to capitalize on that awareness to build our
advertising growth. During 2008 we paid only $134,697 in marketing fees.
Included in professional fees for 2008 are shares of common stock to investor
relations consultants valued at $195,518 compared to $232,365 in 2007 and stock
options to our employees valued at $14,233 compared to $10,128 in 2007. For the
most part, the investor relations consultants were instrumental in bringing new
advertising business to the company. We realized related party compensation
expense of $120,000 for both 2008 and 2007. Our operating expenses decreased
from $1,737,870 in 2007 to $1,097,552 for 2008 because we did not renew our
sports partnerships.
Historically, many of our expenses are paid in shares of our common stock. The
expenses are recorded at the fair value of the shares issued. Excluding these
non cash expenses the income (loss) for the three months ended March 31, 2008
and 2007 would have been $70,862 and ($757,959), respectively. The loss in 2007
is almost entirely due to the payments to our sports partnerships which are
providing some residual benefits from the greater exposure we received and from
the contacts we made with these associations.
Liquidity and Capital Resources.
We have consistently been financed through loans from related parties and from
raising capital through private equity offerings. We used $353,671 and $126,054
of cash in our operating activities in the first three months of 2008 and 2007,
respectively. For the three months ended March 31, 2008 and 2007 we received
cash totaling $161,580 and $19,850 from the issuance of our common stock and
contributed capital. We expect that in the next twelve months the cash generated
by our operations will be adequate to cover our operating expenses.
Given the right circumstances, we would entertain a secondary financing if it
would ensure our growth could be greatly fast-tracked otherwise we will focus on
building our business via revenue growth. Currently, we do not have any
definitive plans for a secondary financing.
We currently have no material commitments for major capital expenditures.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
N/A
Item 4. Controls and Procedures
As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of management,
including our chief executive officer and principal financial officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
16
Exchange Act of 1934. Based upon that evaluation, our chief executive officer
and principal financial officer concluded that our disclosure controls and
procedures are not effective to cause the material information required to be
disclosed by us in the reports that we file or submit under the Exchange Act to
be recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. Management determined that due to the
lack of personnel with adequate knowledge, experience and training of United
States Generally Accepted Accounting Principles, the Company's disclosure
controls and procedures were not effective as of March 31, 2008. There have been
no significant changes in our internal controls or in other factors which could
significantly affect internal controls subsequent to the date we carried out our
evaluation.
PART II - OTHER INFORMATION.
Item 1. Legal Proceedings.
AlphaTrade.com is the Defendant in litigation pending in the Supreme Court of
British Columbia, Canada. This action was filed on December 23, 2003 and is
between Zacks Investment Services, Inc. as Plaintiff and AlphaTrade.com as
Defendant. The case number is 5036907.
The Plaintiff alleges that it is owed the sum of $279,664 pursuant to a
licensing Agreement executed by the Plaintiff and the Defendant in 1999.
Alphatrade is aggressively defending itself against this claim.
During the year ending December 31, 2002, a company filed an action against
AlphaTrade in the Supreme Court of British Columbia, Canada claiming unspecified
damages. AlphaTrade filed a Statement of Defense in August, 2002. There has been
no further developments in this action. AlphaTrade plans to vigorously defend
itself.
Arena Media Networks LLC v. AlphaTrade.com
Supreme Court of the State of New York, County of New York, Index No. 603406/06
- -------------------------------------------------------------------------------
Plaintiff Arena Media Networks LLC ("Arena") commenced this action on or about
October 15, 2007 by the filing of a Summons and Complaint. In the Complaint,
Arena asserts causes of action for breach of contract, account stated and unjust
enrichment against the Company arising from the Company's alleged failure to pay
sums purportedly due Arena pursuant to an agreement in which Arena agreed to
place advertising for the Company.
The Company answered the Complaint on February 1, 2008. In its Answer, the
Company denies the material allegations of the Complaint and asserts numerous
affirmative defenses. This action is presently in the discovery stage. The
Company intends to vigorously defend this action.
Professional Bull Riders, Inc. v. AlphaTrade.com,
United Stated District Court, District of Colorado, Case No. 08-cv-01017 (MSK)
Plaintiff Professional Bull Riders, Inc. ("PBR") commenced this action against
the Company on or about April 15, 2008 in the District Court of Pueblo County,
Colorado, Case No. 2008CV527. The Company removed this action to the United
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States District Court for the District of Colorado on May 15, 2008. In its
Complaint, PBR alleges two causes of action arising from the alleged breach of a
Sponsorship Agreement, as amended, and the alleged breach of a settlement
agreement, and seeks damages of over $1,500,000.
The Company is required to answer or move with respect to the Complaint on or
before May 22, 2008. The Company denies the material allegations of the
Complaint and intends to vigorously defend this action.
We are subject to potential liability under contractual and other matters and
various claims and legal actions which may be asserted. These matters arise in
the ordinary course and conduct of our business. While the outcome of the
potential claims and legal actions against us cannot be forecast with certainty,
we believe that such matters should not result in any liability which would have
a material adverse effect on our business.
Item 1A. Risk Factors
N/A
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following unregistered securities have been issued since January 1st, 2008:
Valued
Date No. of Shares Title At Reason
Jan./2008 400,000 Common $0.20 For cash
Jan./2008 440,750 Common $0.20 For services
Feb./2008 300,000 Common $0.20 For cash
Feb./2008 480,000 Common $0.20 For services
March/2008 45,000 Common $0.20 For services
March/2008 25,000 Common $0.20 For cash
The above noted shares were issued in private, isolated transactions without
registration under the Securities Act. The shares were issued in reliance on the
exemption provided by Rule 506 and/or Section 4(2) of the Securities Act as a
transaction by an issuer not involving a public offering to Consultants or to
companies owned or controlled by Consultants or Officers of AlphaTrade.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
(a) Exhibits
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Exhibit 31.1 Certification of C.E.O. Pursuant to Section 302 of
the Sarbanses-Oxley Act of 2002.
Exhibit 31.2 Certification of Principal Accounting Officer
Pursuant to Section 302 of the Sarbanses-Oxley Act of
2002.
Exhibit 32.1 Certification of C.E.O. Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
Exhibit 32.2 Certification of Principal Accounting Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
(b) Report on Form 8-K
None
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SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ALPHATRADE.COM
Date: March 19, 2009 /s/ Penny Perfect
----------------------------
President / Director
Date: March 19, 2009 /s/ Katharine Johnston
----------------------------
Principal Accounting Officer
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