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U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended June 30, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 333-59114
TIME LENDING, CALIFORNIA, INC.
(Name of small business issuer in its charter)
NEVADA 33-0730042
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1580 N. Batavia Street, Suite #2, Orange, California 92867
- ---------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (including area code): (714) 288-5901
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Exchange Act:
None
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(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes |_| No |X|
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes |_| No |X|
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
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 the 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. |_|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer or a smaller reporting company.
See definition of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated file |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller reporting company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Securities Exchange Act of 1934). Yes |_| No |X|
The registrant's revenues for its most recent fiscal year were $646,932.
The aggregate market value of the voting common equity held by non-affiliates of
the registrant computed by reference to the closing sale price of the common
stock at $0.10 per share as of September 15, 2009 was $333,212.
The number of shares outstanding of the registrant's only class of common stock,
$0.001 par value per share, was 24,398,040 as of September 15, 2009. The
registrant has no outstanding non-voting common equity.
DOCUMENTS INCORPORATED BY REFERENCE
None
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Note: The year ended June 30, 2008 and June 30, 2009 were audited for this
report by our auditors Ronald R. Chadwick, P.C.Certified Public Accountant as
required. This requirement led to the delay in filing this report.
TABLE OF CONTENTS
PART 1
Item 1. Description of Business 3
Item 2. Description of Property 5
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of Security Holders 5
PART II
Item 5. Market for Common Equity, Related Stockholder Matters and
Small Business Issuer Purchases of Equity Securities 6
Item 6. Selected Financial Data 6
Item 7 Management's Discussion and Analysis or Plan of Operation 7
Item 7A Quantitative And Qualitative Disclosures About Market Risk 9
Item 8. Financial Statements 10
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 22
Item 9A. Controls and Procedures 22
Item 9B. Other Information 22
PART III
Item 10. Directors, Executive Officers, Promoters, Control Persons
And Corporate Governance 23
Item 11. Executive Compensation 24
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 25
Item 13. Certain Relationships and Related Transactions, and Director
Independence 26
Item 14. Principal Accountant Fees and Services 26
Item 15. Exhibits 27
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
General
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We, Time Associates, Inc. ("we", "Time Associates" or the "Company"),
are engaged through our two divisions in the telemarketing for the insurance
agencies and direct mailing for mortgage companies.
Time Associate's direct mail marketing division is a full service
direct mail marketing service which prints and mails mortgage solicitations to
potential home borrowers on behalf of mortgage companies to generate mortgage
leads to help them increase their mortgage business.
Time Associate's telemarketing division is a full service telemarketing
service which schedules appointments for generating expiration dates and
appointments for insurance agencies to bid on commercial policies for insurance
producers to build their business.
Our principal executive offices are located at 1580 N. Batavia Street,
Suite #2, Orange, California 92867 and our phone number is (714)288-5901.
Organization
- ------------
Our Company was organized under the laws of the state of California on
November 5, 1996 as Renet Services, Inc. The name was changed to Time Lending,
California, Inc. on August 4, 1998 and we reincorporated in the state of Nevada
in December, 2000 by merging with Time Lending, California, Inc., a Nevada
corporation. Time Lending, California, Inc. was formerly the wholly-owned
subsidiary of Time Financial Services, Inc., a Nevada public company. A share
exchange agreement was signed between Time Financial Services, Inc. and
Interruption Television, Inc., a company which has a high growth potential as a
supplier of television content to the television markets of Asia, pursuant to
which the share exchange transaction was completed on July 20, 2000. As a part
of that transaction, Time Lending California, Inc. was sold to the management
(Messrs. Pope and La Puma) and all Time Financial Services, Inc. shares held by
Time Lending, California, Inc. were cancelled. Time Lending was the wholly owned
subsidiary of Time Financial. Time Lending was the operating company with all
income and operations occurring within Time Lending for Time Financial. On March
16, 2009 the Company name was changed to Time Associates, Inc. The trading
symbol was changed to "TIAS."
Mr. Pope was President and a Director and Mr. La Puma was the CFO and a
Director of Time Financial up to July 20, 2000 when they resigned. They held the
same positions in Time Lending and remain so in Time Associates.
SUBSIDIARIES OF TIME ASSSOCIATES
Time Associates owns 50% of three subsidiaries. The remaining shares
are owned equally by Mike Pope and Philip La Puma.
Time Management Inc. is our 50% owned subsidiary; incorporated on July
27, 2000 and located in Orange, California. Time Management is a real estate
management company with Mike Pope as a broker. It currently manages no
properties.
Tenth Street Inc. was incorporated in Nevada March 23, 1997 by Michael
Pope and was inactive until it was acquired by Time Lending and activated as a
subsidiary on December 20, 2000. The shares of common stock of Tenth Street,
Inc. were issued to us in consideration for payment of incorporation expenses.
Time Lending owns 50% of Tenth Street. Tenth Street is set up as the list
management company. Tenth Street plans to grow its data sales brokering business
as the Tenth Street has a minor role in the resale of data purchased from
address list companies. When there is revenue and expenses, it is included in
the direct mail segment and represents less than 1% of the total.
Time Marketing Associates Inc. was incorporated in Nevada on July 27,
2000. It is a 50% owned subsidiary of Time Lending. Its business is addressing
via computer printers, a mailing piece for mortgage lenders and brokers. Time
Marketing operates under the DBA of Signature Marketing. Through Signature
Marketing, we prepare and mail direct mail pieces for mortgage companies to
borrowers. The Time Marketing subsidiary offers direct mail product alternatives
to the primary two part snap out mailer of Time Lending under the its dba
Signature Marketing. Additionally, Time Marketing does the telemarketing for
insurance Agencies. This company provides marketing data and appointments for
insurance Clients.
3
Business Overview
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Time Associates is a marketing company, which offers different products
and services for each business.
Time Associates' direct marketing (d.b.a.: Signature Marketing) is a
full service direct mail, and telemarketing service which prints and mails
mortgage solicitations to potential home borrowers on behalf of mortgage
companies to generate mortgage leads to help them increase their mortgage
business and telemarkets for commercial insurance agencies.
We do not have any agreements with mortgage companies to provide them
with direct mail marketing. Typically, a mortgage service company would order a
mailing and pay for it upon the order. The direct mail segment generates
revenues on a per mailing or per job basis. Each mailing is paid in advance and
includes printing of the mailing piece, imprinting an address and taking the
batch to the post office for mailing. All mailings are made out of the Orange,
California post office and may be sent to any state. Additional revenues are
generated through the sale of address list obtained from national list
companies. The direct mail division consults with mortgage companies to
determine how much mail they need to send and what loan programs to offer, as
well as what geographical and demographic areas will provide the best results.
Time Associates' experienced management strives to maintain a low
overhead which allows it to be very cost competitive and always in the market.
Time Associates is able to keep fixed expenses and administrative expenses low,
because of shared use facilities including rent, equipment leases and use of
part time production employees available as needed.
REGULATION
We will be subject to regulation by numerous federal and state
governmental authorities. In California we are regulated by the California
Department of Real Estate (DRE) and have been issued a corporate brokers license
with Michael Pope as the broker-officer. The only approval required in the State
of California to become a mortgage broker is the issuance of a real estate
brokers license. The DRE controls all mortgage advertising in California. Each
state has their own rule of mortgage advertising. The Federal Housing and Urban
Development Agency (H.U.D.) controls all required disclosure for mortgage
advertising. While still licensed, the Company no longer brokers loans.
There is no government approval required for the direct mail business.
The list companies who provide addresses to us must conform to consumer
disclosure regulations and provide the ability for consumers to be dropped from
mailing lists. The list companies also will review mailing pieces before selling
addresses when credit information is sold to make sure that if a credit
disclosure is required that it is present.
4
COMPETITION
The competition in each segment is as always strong, yet, we are able
to remain competitive in price and service. Management with its combined fifty
years of real estate and mortgage experience is able to respond quickly to
market shifts and provide excellent service in all areas. There is no dependence
on a single customer or product/service line. The Company is dependent on the
mortgage and real estate markets, which are now in significant decline from the
last two years. Mortgage interest rates are around 5% and should increase to
about 6.5% by year end. We believe that year 2009 will be a down mortgage
refinance year. Our opinion is based upon the Mortgage Banking Association
publishes statistics and forecasts of mortgage originations on a national basis
on their web site www.mbaa.org. The MBA charts show originations declining for
the remainder of the year and through 2009. In our opinion, in this type of
market, the major problem is competition for a smaller market. Many brokers have
gone out of business with the drop in real estate values and the lack of sub
prime lenders.
The mortgage brokerage industry is a large fragmented industry with
thousands of mortgage brokers nationally. This is similar to the real estate
market where no one broker has an advantage over another in any given regional
market. That is why advertising is important in generating sales and why direct
mail is effective in generating loan business. Because of losses, most brokers
have limited fund with which to advertise.
The direct mail business of Time Associates concentrates on providing
mailings for small to medium sized mortgage broker of which there are many
thousands across the country. There are many direct mailers that can service
this market, but we are one of a few that consistently advertise in the mortgage
trade magazines that cater to this market nationally. Our client base reaches to
most states in the country and will grow through continued advertising that we
currently do. We also maintain competitive prices and good service, but the
market has shrunk and the direct mail business will be down for this next year.
The brokering of real estate loans is highly competitive. There are
over 73,000 brokers nationally with over 14,000 brokers in California alone. The
use of its own direct mail marketing experience enables Time to compete for
loans by targeting potential borrowers. The Time Associates also faces
competition when attempting to acquire real estate, including competition from
individuals, other investors and brokers. The real estate industry tends to be
highly competitive and fragmented. Successful competitors rely on advertising to
generate business. This is the area of Time's expertise. The marketing segment
is very competitive with hundreds of companies nationally that offer brokers
leads for loans. Time Associates uses its experience in marketing to generate
its own leads and networks with data suppliers to obtain referrals of mortgage
brokers who need to advertise to compete. The Management segment does not
compete for outside business and is dependent on the real estate purchased by
Time Associates.
Item 1 A Risk Factors
Not required for small businesses.
Item 1 B Unresolved Staff Comments.
None.
ITEM 2. DESCRIPTION OF PROPERTIES.
Our facility in Orange, California is 2300 square feet of office and
production Space which includes the workplace for the computers and printers
used for addressing and mailing the direct mail pieces. We maintain our
executive and administrative offices in the Orange, California facility. We
moved to this facility in December 2005. It provides increased space at a lower
rent. Our lease payments in fiscal 2008 were $27,975. Our lease payments in
fiscal 2009 were $28,814. The facility in Orange, California is leased though
December 2009.
We believe that our existing facilities are adequate to meet our
current needs and that suitable additional or alternative space will be
available after January 2010. We have no assurance that future terms would be as
favorable as our current terms.
The Company has not invested in any real property at this time nor does
the Company intend to do so. The Company has no formal policy with respect to
investments in real estate or investments with persons primarily engaged in real
estate activities.
ITEM 3. LEGAL PROCEEDINGS
We are not a party to any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS.
During the year ended June 30, 2009, the name change was submitted to a
vote of our common stockholders. The name change was approved by a written
majority of shareholders and was effective March 16, 2009.
5
PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
PUBLIC MARKET
Our common stock trades on NASD's over-the-counter market, the Bulletin
Board under the symbol "TIAS". Our common stock has been trading sporadically
since August, 2004. As of September 15, 2009 there were 85 holders of our common
stock. The closing price of our common stock as of September 15, 2009 was $0.10
per share. As of May 20, 2005, we effected a 4-for-1 forward stock split of our
common stock. All shares and per share amounts in the accompanying financial
statements of the Company have been retroactively adjusted to give the effects
of the forward stock split.
DIVIDENDS
The Company does not expect to pay any dividends at this time. The
payment of dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements, and general financial condition. The
payment of any dividends will be within the discretion of the Company's Board of
Directors and may be subject to restrictions under the terms of any debt or
other financing arrangements that the Company may enter into in the future. The
Company presently intends to retain all earnings, if any, for use in the
Company's business operations and accordingly, the Board does not anticipate
declaring any dividends in the foreseeable future.
RECENT SALES OF UNREGISTERED SECURITIES
None
ITEM 6: SELECTED FINANCIAL DATA
BALANCE SHEET
Year ended June 30,2008 is restated. See financials.
Fiscal Year Ended
June 30, 2007 June 30, 2008 June 30, 2009
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Total Assets $ 521,770 $ 304,796 $ 205,229
Total Liabilities 509,197 315,007 224,087
Stockholders Equity (Deficit) (7,220)* (10,555) (20,234)
*Restated for Minority Interest
RESULTS OF OPERATIONS
Year ended June 30,2008 is restated. See financials.
Fiscal Year Ended
June 30, 2007 June 30, 2008 June 30, 2009
------------ ------------ ------------
Total Revenues $ 1,036,361 $ 356,197 $ 646,932
Total Expenses $ 1,077,643 $ 467,194 $ 656,611
Net Income(Loss) $ (41,282) $ (88,635) $ (9,679)
Weighted Average Stock Outstanding 22,793,584 23,936,915 24,398,040
Earnings (Loss)per Share before Tax $ (*) $ (*) $ (*)
- -----------
*Less than $.01
6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended, (the "Exchange Act)". We intend that those forward-looking
statements be subject to the safe harbors created by those sections. These
forward-looking statements generally include the plans and objectives of
management for future operations, including plans and objectives relating to our
future economic performance, and can generally be identified by the use of the
words "believe," "intend," "plan," "expect," "forecast," "project," "may,"
"should," "could," "seek," "pro forma," "goal," "estimates," "continues,"
"anticipate" and similar words. The forward-looking statements and associated
risks may include, relate to, or be qualified by other important factors,
including, without limitation:
o our ability to achieve and maintain profitability and obtain
additional working capital, if required;
o our ability to successfully implement our business plans;
o our ability to attract and retain strategic partners and
alliances;
o our ability to hire and retain qualified personnel;
o the risks of uncertainty of real estate and mortgage markets;
o risks associated with existing and future governmental regulation
to which we are subject; and
o uncertainties relating to economic conditions in the markets in
which we currently operate and in which we intend to operate in
the future.
These forward-looking statements necessarily depend upon assumptions
and estimates that may prove to be incorrect. Although we believe that the
assumptions and estimates reflected in the forward-looking statements are
reasonable, we cannot guarantee that we will achieve our plans, intentions or
expectations. The forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to differ in
significant ways from any future results expressed or implied by the
forward-looking statements. We do not undertake to update, revise or correct any
forward-looking statements.
7
Results of Operations
Company Overview
- ----------------
Time Associates' Signature Marketing Division does direct mail for
mortgage companies. This business has slowed significantly from prior years
because of the melt down of financial markets. Signature has turned to a new
market, telemarketing for commercial insurance agencies. This insurance
marketing was initiated January 2008 and the results below reflect a startup of
18 months. The Signature Marketing web site is www.signaturemktg.net.
Time Associates' Fiscal Year Ended June 30, 2009 compared to Fiscal Year Ended
June 30, 2008 - Audited.
- -------------------------------------------------------------------------------
The year ended June 30, 2008 was re-audited for this report. This discussion
compares Re-audited figures. Income. Total income increased from $380,845 for
the fiscal year ended June 30, 2008 to $646,932 for the fiscal year ended June
30, 2009 an increase of $266,087 or 70%. This increase was due to the growth in
revenue in our Insurance telemarketing segment and a slight increase in direct
mail sales.
Expenses. Expenses increased from $469,480 for the fiscal year ended June 30,
2008 to 646,932 for the fiscal year ended June 30, 2009 up $178,452 representing
a 38.0% increase. This increase in expenses was due to increase operating
expenses due to increased direct mail production and increased postage expenses.
Net profit (loss) before tax. The net (loss) for the fiscal year ended June 30,
2009 was($9,679) a decrease of ($28,795) from the ($88,635) net loss for the
fiscal year ended June 30, 2008. The reason for the decrease was due to
increased revenue.
Marketing Segment. The marketing segment is the preparation and mailing of
direct mail advertising for the mortgage industry and tele-marketing for
commercial insurance agencies.
Direct Mail Marketing Income increased $63,812 from $287,838 to $$351,650.
Income for the telemarketing increased $277,784 from $54,845 to $332,629 for the
fiscal year ended June 30, 2009.
Expenses for the marketing segment. Expenses increased $256,076 to $692,357 for
the fiscal year ended June 30, 2009 compared to $370,414 for the fiscal year
ended June 30, 2009.
This increase was due to Insurance Tele-Marketing growth and increased postage
costs.
8
Profit (Loss) for the marketing segment. Profit (Loss) contribution from the
marketing segment was ($5,134) )for the fiscal year ended June 30, 2008 compared
to the ($3.607) for the fiscal year ended June 30, 2009.
Lending segment. This segment is the origination and brokering of real estate
Loans and other real estate activities. This requires a real estate brokers
license in California. Time Lending is so licensed with Michael F. Pope as the
broker officer. Income for the lending segment was $27,292 for the fiscal year
ended June 30, 2008.There was no income for this segment for the fiscal year
ended June 30, 2009. This was due to dropping this segment in 2008 due to the
mortgage market decline.
Expenses for the lending segment were $66,246 for the fiscal year ended June 30,
2008.
The lending segment had a loss of ($40,718) for the fiscal year ended June 30,
2008.
Management segment. This segment is the revenue and expenses associated with
residential properties purchased and maintained for sale, and real estate broker
activities excluding real estate loans. There was no income in this segment for
the fiscal year ended June 30, 2008or 2009.
This segment no longer be reported.
LIQUIDITY AND CAPITAL RESOURCES
We had cash of $170,300 at June 30, 2009. We have funded our expenses from
operations.
All of our capital requirements will have to come from operations. There are no
significant capital expenditure required for the next 12 months.
We do not have any identified capital resources. Moreover, we do not have any
arrangements with investment banking firms or institutional lenders.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
9
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
TIME ASSOCIATES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
JUNE 30, 2009 AND 2008
10
RONALD R. CHADWICK, P.C.
Certified Public Accountant
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
Telephone (303)306-1967
Fax (303)306-1944
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Time Associates, Inc.
Orange, California
I have audited the accompanying consolidated balance sheets of Time Associates,
Inc. as of June 30, 2009 and 2008, and the related consolidated statements of
operations, stockholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Time
Associates, Inc. as of June 30, 2009 and 2008, and the consolidated results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
As discussed in Note 8 to the financial statements, management determined in the
current year that certain expense recordings in 2008 should have been made.
Accordingly, the 2008 financial statements have been restated.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 7 to the
financial statements the Company has suffered recurring losses from operations
and has a working capital deficit that 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 7. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Aurora, Colorado /s/ Ronald R. Chadwick, P.C.
November 6, 2009 RONALD R. CHADWICK, P.C.
11
TIME ASSOCIATES, INC.
Consolidated Balance Sheets
June 30,
2009 2008
--------- ---------
ASSETS:
- -------
CURRENT ASSETS:
Cash and cash equivalents $ 170,300 $ 273,242
Accounts Receivable 21,184 10,161
--------- ---------
TOTAL CURRENT ASSETS 191,484 283,403
--------- ---------
PROPERTY AND EQUIPMENT:
Net of accumulated depreciation 13,745 21,393
--------- ---------
TOTAL FIXED ASSETS 13,745 21,393
--------- ---------
TOTAL ASSETS $ 205,229 $ 304,796
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $ 24,587 $ 16,506
Related party payables 129,469 249,560
Accounts payable - credit line 19,120 21,434
Notes Payable - related party 50,000 25,000
Accrued expenses 911 172
Capital Lease Obligations 2,335
--------- ---------
TOTAL CURRENT LIABILITIES 224,087 315,007
--------- ---------
TOTAL LIABILITIES 224,087 315,007
--------- ---------
MINORITY INTEREST 1,376 344
--------- ---------
STOCKHOLDERS' EQUITY/(DEFICIT):
Preferred stock, $.001 par value; 20,000,000 shares
authorized, none issued and outstanding -- --
Common stock, $.001 par value; 200,000,000 shares
authorized, 24,398,040 issued and outstanding June 30,2008 24,398 24,398
and 2009. Additional Paid-in Capital 195,957 195,957
Retained earnings (deficit) (240,589) (230,910)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY/(DEFICIT) (20,234) (10,555)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 205,229 $ 304,796
========= =========
The accompanying notes are an integral part of these financial statements.
12
TIME ASSOCIATES, INC.
Consolidated Statements of Operations
For the Years Ended June 30,
2009 2008
------------- -------------
REVENUE:
Marketing income $ 683,629 $ 342,684
Loan Origination fees 0 10,440
Real Estate sales commissions 0 16,852
Refunds and discounts (36,697) (13,779)
------------- -------------
TOTAL REVENUE 646,932 356,197
------------- -------------
COSTS AND EXPENSES:
Loan officer commissions 0 515
Operating costs & marketing expenses 579,597 407,379
General and administrative 76,840 78,749
Minority Income (1,032) (19,449)
------------- -------------
TOTAL OPERATING EXPENSES 655,405 467,194
------------- -------------
OTHER INCOME (EXPENSE):
Interest Income 2,936 24,648
Interest Expense (4,142) (2,286)
------------- -------------
TOTAL OTHER INCOME(EXPENSES) (1,206) 22,362
------------- -------------
NET INCOME (LOSS) $ (9,679) $ (88,635)
============= =============
BASIC PROFIT (LOSS) PER SHARE $ (*) $ (*)
============= =============
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 24,398,040 23,936,915
============= =============
*Less than $.01
The accompanying notes are an integral part of these financial statements.
13
TIME LENDING, CALIFORNIA, INC.
Consolidated Statements of Cash Flows
For the Years Ended June 30,
2009 2008
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (9,679) $ (88,635)
Adjustments to reconcile net loss to net cash used
in operating activities
Depreciation and amortization 7,648 7,440
Issuance of stock for compensation -- 85,300
Changes in assets and liabilities:
(Increase)in Accounts receivable (11,023) (10,161)
(Decrease) in Accounts payable (111,271) (218,737)
Minority Interest 1,032 (19,449)
----------- -----------
Net cash provided (used) by operating activities (123,293) (244,242)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash (provided) used by investing activities -- --
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital lease obligation (2,335) (4,499)
Notes Payable - borrowings 25,000 25,000
Notes Payable - payments (2,314) (4,043)
----------- -----------
Net cash provided by financing activities 20,351 16,458
----------- -----------
Net Increase in Cash and Cash Equivalent (102,942) (227,784)
Cash and Cash Equivalents at Beginning of Year 273,242 501,026
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 170,300 $ 273,242
=========== ===========
SUPPLEMENTAL DISCLOSURE Cash paid during the year for:
Interest $ 1,845 $ 1,791
=========== ===========
Income Taxes $ -- $ --
=========== ===========
The accompanying notes are an integral part of these financial statements.
14
TIME ASSOCIATES, INC.
Consolidated Statements of Stockholders' Equity (Deficit)
Common Stock Additional Retained Total
---------------------------- Paid-in Earnings Stockholders'
Shares Amount Capital (Deficit) Equity
----------- ----------- ----------- ----------- -----------
Balance - June 30, 2007 22,817,040 $ 22,817 $ 132,031 $ (142,275) $ 12,573
Minority interest adjustment (19,793) (19,793)
----------- ----------- ----------- ----------- -----------
Re-stated Balance - June 30, 2007 22,817,040 $ 22,817 $ 112,238 $ (142,275) $ (7,220)
Issuance of stock for services 1,581,000 1,581 83,719 85,300
Net Loss for Year (88,645) (88,645)
----------- ----------- ----------- ----------- -----------
Balance June 30, 2008 24,398,040 24,398 195,957 (230,910) $ (10,555)
Net Loss for Year (9,679) (9,679)
----------- ----------- ----------- ----------- -----------
Balance June 30, 2009 24,398,040 24,398 195,957 (240,589) $ (20,234)
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
15
TIME ASSOCIATES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009 and 2008
NOTE 1 - ORGANIZATION AND PRESENTATION:
------------------------------
Time Associates, Inc. (the "Company")was originally incorporated in November
1996 in California under the name Time Lending, California, Inc. In December
2000 the Company was redomiciled through a merger as a Nevada corporation. In
March 2009 the Company changed its name from Time Lending, California, Inc. to
Time Associates, Inc. The Company is in the business of providing direct
marketing and mortgage lending services.
PRINCIPLES OF CONSOLIDATION
- ---------------------------
The accompanying consolidated financial statements include the accounts of Time
Associates, Inc. and its subsidiaries. The subsidiaries, Time Management, Inc.,
Time Marketing Associates, Inc., and Tenth Street, Inc. are owned 50% by Time
Associates, Inc. and 50% by officers and shareholders of Time Associates, Inc.
The subsidiaries have been consolidated at 50% ownership due to the level of
control held by the parent through common officers and shareholders. All
intercompany accounts and transactions have been eliminated in consolidation.
MINORITY INTEREST
- -----------------
The Company's subsidiaries have 50% shareholders, accounted for by the Company
as minority interests. Should any allocation of proportionate net losses to the
minority interests result in a negative capital balance to the minority
interests, subsequent losses and gains are charged 100% to the Company until
such time as the minority interests' capital accounts reach a positive balance.
REVENUE RECOGNITION
- -------------------
Marketing Income is from direct mail marketing projects and is recorded when the
project is completed and shipped. Prices are agreed between the Company and its
customer at the time of the order. Shipment is usually within 3-5 days from
ordering. Telemarketing fees are recognized when received.
Loan Fees are primarily mortgage origination fees for loans processed by the
Company for its clients and various mortgage lenders. Revenue is recorded at the
time of mortgage closing.
Real Estate Sales of income is fees for Company receiving fees as a Real Estate
Agent and are recorded at the time the sale is closed.
CASH AND CASH EQUIVALENTS
- -------------------------
The Company considers all highly liquid debt instruments, purchased with an
original maturity of three months or less, to be cash equivalents.
ACCOUNTS RECEIVABLE
- -------------------
The Company reviews accounts receivable periodically for collectability and
establishes an allowance for doubtful accounts and records bad debt expense when
deemed necessary. At June 30, 2009 and 2008 the Company had no balance in its
allowance for doubtful accounts.
16
TIME ASSOCIATES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009 and 2008
NOTE 1 - ORGANIZATION AND PRESENTATION (CONT):
-------------------------------------
PROPERTY AND EQUIPMENT
- ----------------------
Property and equipment is stated at cost. The cost of ordinary maintenance and
repairs is charged to operations while renewals and replacements are
capitalized. Depreciation is computed on the straight-line method over the
following estimated useful lives:
Equipment - Printer & Bursters 5 years
Depreciation expense for 2009 and 2008 was $7,648 and $7,440.
USE OF ESTIMATES
- -----------------
The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States, 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 revenue and expenses during
the reporting period. Actual results could differ from those estimates.
PRODUCTS AND SERVICES, GEOGRAPHIC AREAS AND MAJOR CUSTOMERS
- -----------------------------------------------------------
The Company earns revenue primarily from the sale of direct marketing services,
but does not separate sales of different marketing services into operating
segments. All sales each year were domestic and to external customers.
NET EARNING (LOSS) PER SHARE
- ----------------------------
Basic loss per share information is on the basis of the weighted average number
of common shares outstanding. For all periods, all of the Company's common stock
equivalents were excluded from the calculation of dilutive loss per common share
because they were none dilutive, due to the Company's net losses.
STOCK BASED COMPENSATION
- ------------------------
The Company has adopted for footnote disclosure purposes SFAS No. 123(R), which
requires That companies disclose the cost of stock-based employee compensation
at the grant date based on the value of the award (the fair market value method)
and disclose this cost over the service period. The value of the stock-based
award is determined using a pricing model whereby compensation cost is the
excess of the fair value of the award as determined by the model at grant date
or other measurement date over the amount an employee must pay to acquire the
stock. Awards through June 30, 2009 have been fair value.
ACCOUNTING FOR IMPAIRMENTS IN LONG-LIVED ASSETS
- -----------------------------------------------
Long-lived assets and identifiable intangibles are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amounts
of assets may not be recoverable. Management periodically evaluates the carrying
value and the economic useful life of its long-lived assets based on the
Company's operating performance and the expected future undiscounted cash flows
and will adjust the carrying amount of assets which may not be recoverable.
17
TIME ASSOCIATES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009 and 2008
NOTE 1 - ORGANIZATION AND PRESENTATION (CONT):
-------------------------------------
FAIR VALUE OF FINANCIAL INSTRUMENTS
- ------------------------------------
The carrying value of the Company's financial instruments, as reported in the
Accompanying balance sheets, approximates fair value.
NOTE 2 - PROPERTY AND EQUIPMENT:
-----------------------
Property and equipment consisted of the following at June 30, 2009:
Equipment - Printers and Bursters $ 41,776
---------
Less: Accumulated depreciation (28,031)
---------
$ 13,745
=========
Property and equipment consisted of the following at June 30, 2008:
Equipment - Printers and Bursters $ 41,776
---------
Less: Accumulated depreciation (20,383)
---------
$ 21,393
=========
NOTE 3 - FEDERAL INCOME TAXES
---------------------
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards Number 109 ("SFAS9"). "Accounting for Income
Taxes", which requires A change from the deferred method to the asset and
liability method of accounting for income taxes. Under the asset and liability
method, deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates applicable to
future years to differences between financial statements carrying amounts and
the tax basis of existing assets and liability.
At June 30, 2009 and 2008 the Company had net operating loss carryforwards of
approximately $240,000 and $230,000 which begin to expire in 2021. The deferred
tax asset of $48,000 and $46,000 created by the net operating losses has been
offset by a 100% valuation allowance. The change in the valuation allowance in
2009 and 2008 was $2,000 and $18,000.
NOTE 4 - LEASES
------
The Company leases office space under an operating lease which expires in
December 2009 with payments of $2,400 per month. The Company also carries
various office equipment leases which expire from December 2010 through February
2011 and carry payments of approximately $1,480 per month plus costs. Lease
expense under all operating leases for 2009 and 2008 was approximately $56,000
and $52,000. Future minimum required payments under all operating leases are as
follows for fiscal year end June 30: 2010 $32,356, 2011 $10,248, Total $42,604.
The Company in January 2007 entered into a capital lease for office equipment.
The lease required payments of $395 per month for 24 months, or $9,480 total,
and contained a bargain purchase option. The Company capitalized the equipment
underlying the lease at its present value $9,000 using an imputed discount rate
of 5%. Interest expense under the lease in fiscal year 2008 was $240, with
remaining imputed interest payable at June 30, 2008 of $37. Interest expense in
fiscal year 2009 was $37, with the lease being paid off in December 2008.
18
TIME ASSOCIATES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009 and 2008
NOTE 5 - NOTES PAYABLE
-------------
The Company at June 30, 2009 and 2008 had notes payable outstanding to an
officer $25,000 and $50,000, unsecured and due on demand, with one note for
$25,000 bearing no interest and one for $25,000 bearing interest at 4%
adjustable. Interest expense under the notes in 2009 and 2008 was $783 and $0,
with accrued Interest payable at June 30, 2009 of $783.
The Company carries a revolving line of credit with a bank, bearing interest at
variable rates and requiring minimum monthly payments, with an outstanding
balance at June 30, 2009 and 2008 of $19,120 and $21,434. Interest expense under
the credit line in 2009 and 2008 was approximately $1,800 and $1,960.
NOTE 6 - RELATED PARTY TRANSACTIONS
--------------------------
The Company at June 30, 2009 and 2008 owed officers $129,469 and $249,560 for
commissions and working capital advances.
NOTE 7 - GOING CONCERN
-------------
The Company has suffered recurring losses from operations and has a working
capital deficit. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The Company may raise additional capital
through the sale of its equity securities, through offerings of debt securities,
or through borrowings from financial institutions. By doing so, the Company
hopes through increased marketing efforts to generate greater revenues from
sales of its direct marketing services. Management believes that actions
presently being taken to obtain additional funding provide the opportunity for
the Company to continue as a going concern.
19
TIME ASSOCIATES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009 and 2008
NOTE 8. RESTATEMENT
The Company changed auditors after filing its 10K SB for the year ended June 30,
2008. The SEC ruled that for any subsequent filing requiring audited 2008
statements that the financial statements must be re-audited. This resulted in
the following changes to the June 30, 2008 financial statements:
Year 2008 (Fiscal year ended June 30, 2008) Prior to Adjustment After
Adjustment Amount Adjustment
------------- ------------- -------------
Cash & cash equivalents $ 268,141 $ 5,101 $ 273,242
Fixed Assets - Net 15,935 5,458 21,393
Accounts Payable 286,037 1,463 287,500
Capital lease obligations 0 2,335 2,335
Additional Paid in capital 144,683 51,274 195,957
Retained earnings(deficit) (185,883) (45,027) (230,910)
Minority interest -subsidiary 0 344 344
RE Commissions Income 15,088 1,764 16,852
General & administrative expenses 8,928 72,451 81,379
Interest income 24,461 187 24,648
Net income (43,608) (45,027) (88,635)
Amor. & depreciation - cash flow 4,800 2,640 7,440
Notes payable - cash flow 25,000 (4,043) 20,957
Accounts payable - cash flow 197,424 68,814 266,238
Accrued expenses cash flow (25,357) 25,357 0
Capital lease obligation - cash flow 0 4,499 4,499
Minority interest in sub. - cash flow 0 19,449 19,449
Compensatory stock issuances - cash flow 14,233 71,067 85,300
Cash at end of year - cash flow 268,141 5,101 273,242
20
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of management,
including our Chief Executive Officer and our Chief Financial Officer, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rule 13a-15(e) promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act"). Such disclosure controls
and procedures are designed to provide reasonable assurance that information,
which is required to be disclosed in our reports filed pursuant to the Exchange
Act, is recorded, processed, accumulated, and communicated to management within
the time periods specified in the SEC's rules and forms. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures were effective as of the
end of the period covered by this annual report.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. Under the supervision and with the
participation of our management, which consists of our Chief Executive Officer
and our Chief Financial Officer, we conducted an evaluation of the effectiveness
of internal control over financial reporting based on criteria established in
the framework in INTERNAL CONTROL - INTEGRATED FRAMEWORK issued by the Committee
of Sponsoring Organizations of the Treadway Commission ("COSO"), as supplemented
by the COSO publication INTERNAL CONTROL OVER FINANCIAL REPORTING - GUIDANCE FOR
SMALLER PUBLIC COMPANIES. Based on their evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our internal control over financial
reporting was effective as of June 30, 2009, based on these criteria.
Management is aware that there is a lack of segregation of duties at
the Company due to the fact that there are only two people dealing with
financial and accounting matters. However, at this time, management has decided
that considering the experience and abilities of the employees involved and the
low quantity of transactions processed, the risks associated with such lack of
segregation are low and the potential benefits of adding employees to clearly
segregate duties do not justify the substantial expenses associated with such
increases. Management will periodically reevaluate this situation.
Notwithstanding the above regarding the lack of segregation of duties,
management, including our Chief Executive Officer and Chief Financial Officer,
believes that the consolidated financial statements included in this annual
report present fairly, in all material respects, our financial condition,
results of operations and cash flows for the periods presented.
This annual report does not include an attestation report of our
registered independent auditors regarding internal control over financial
reporting. Management's report was not subject to attestation by our registered
independent auditors pursuant to temporary rules of the SEC that permit us to
provide only management's report in this annual report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During the quarter ended June 30, 2009, there were no changes in our
internal controls that have materially affected or are reasonably likely to have
materially affected our internal control over financial reporting.
Our management, including the Chief Executive Officer and Chief
Financial Officer, does not expect that our disclosure controls and procedures
or our internal control over financial reporting will prevent all errors and all
fraud. A control system, no matter how well designed and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control
system are met. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the company have been detected.
ITEM 9B. OTHER INFORMATION.
On March 16, 2009 Time Lending California, Inc. was renamed Time
Associates, Inc. with the approval of the Board of Directors and written consent
of a majority of share holders
On October 15, 2008, the Board of Directors of Time Lending,
California, Inc. (the "Registrant") accepted the resignation of Jasper + Hall PC
as its auditors. The Board of Directors of the Registrant accepted approved the
appointment of Ronald R. Chadwick, P.C. Certified Public Accountant 2851 South
Parker Road, Suite 720 Aurora, Colorado 80014 as its new auditors. The
Registrant does not have an audit committee other than the members of the Board
of Directors.
During the Registrant's fiscal years 2007-2008, and during the interim
period there have been no past disagreements between the Registrant and Jasper +
Hall PC, on any matter of accounting principles or practices, financial
statement disclosure or auditing, scope or procedure.
The audit reports provided by the Registrant's auditors, Jasper + Hall
PC, for the fiscal years ended June 30, 2008 did not contain any adverse opinion
or disclaimer of opinion nor was any report modified as to uncertainty, audit
scope or accounting principles.
During the two most recent fiscal years and through the date hereof,
neither the Registrant nor any one on behalf of the Registrant has consulted
with Ronald R. Chadwick, P.C regarding the application of accounting principles
to a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Registrant's financial statements, or any
other matters or reportable events required to be disclosed under Items 304 (a)
(2) (i) and (ii) of Regulation S-B.
21
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; AND
CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The present directors and executive officers of the Company, their ages,
positions held in the Company and duration of service are as follows:
Name Age Position Since
- ---- --- -------- -----
Michael F. Pope 60 Director March 1996
President August 1996
Philip C. La Puma 70 Director March 1996
Secretary August 1996
Treasurer August 1996
Victoria A. Pope 61 Director January 1997
The term of office of each director and executive officer ends at, or
immediately after, the next annual meeting of shareholders of the Company.
Except as otherwise indicated, no organization by which any director of officer
has been previously employed is an affiliate, parent, or subsidiary of the
Company.
Business Experience
- -------------------
The following is a brief account of the business experience during at least the
past five years of each director and executive officer, including the principal
occupation and employment during that period, and the name and principal
business of the organization in which such occupation and employment were
carried out.
Michael F. Pope, age 60, has been Director of the Company since March 1996, and
President since August 1996. Mr. Pope was one of the founders of Renet Financial
Corporation in 1988. He has a Bachelor of Arts degree in Economics from
California State University, Long Beach. He holds a real estate brokers license
in the State of California.
Philip C. La Puma, age 70, has been Director of the Company since March 1996 and
Secretary/Treasurer since August 1996. Mr. La Puma holds a Bachelors of Science
degree in Industrial Engineering from Stanford University and an MBA in General
Management from the University of Southern California. He also co-founded Renet.
He is a Registered Professional Engineer in the State of California.
Victoria Pope, age 61, has been a Director of the Company since January 1997.
She has been active in the mortgage industry the past ten years working in
various loan production positions from processing through administration at
Renet Financial Corporation. She is the spouse of Michael F. Pope and they have
two adult children. Mrs. Pope has many years of mortgage management experience.
LIMITATION ON DIRECTORS' LIABILITIES
Our certificate of incorporation limits, to the maximum extent permitted under
Nevada law, the personal liability of directors and officers for monetary
damages for breach of their fiduciary duties as directors and officers, except
in circumstances involving wrongful acts, such as a breach of the director's
duty of loyalty or acts of omission which involve intentional misconduct or a
knowing violation of law.
Nevada Law permits us to indemnify officers, directors or employees against
expenses, including attorney's fees, judgments, fines and amounts paid in
settlement in connection with legal proceedings if the officer, director or
employee acted in good faith and in a manner he reasonably believed to be in or
not opposed to our best interest, and, with respect to any criminal act or
proceeding, he had no reasonable cause to believe his conduct was unlawful.
Indemnification is not permitted as to any matter as to which the person is
adjudged to be liable unless, and only to the extent that, the court in which
such action or suit was brought upon application that, despite the adjudication
of liability, but in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper. Individuals who successfully defend this type of action are entitled to
indemnification against expenses reasonably incurred in connection therewith.
Our by-laws require us to indemnify directors and officers against, to the
fullest extent permitted by law, liabilities which they may incur under the
circumstances described in the preceding paragraph.
The Company is not subject to the requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended.
22
CODE OF BUSINESS CONDUCT AND ETHICS
Our code of business conduct and ethics, as approved by our board of directors,
can be obtained from the Company by writing a request to our Time Lending,
California Inc. 1580 N. Batavia Street #2, Orange, CA 92867.
We intend to satisfy the disclosure requirement under Item 10 of Form 8-K
relating to amendments to or waivers from provisions of the code that relate to
one or more of the items set forth in Item 406(b) of Regulation S-B, by
describing on our Internet Website, within five business days following the date
of a waiver or a substantive amendment, the date of the waiver or amendment, the
nature of the amendment or waiver, and the name of the person to whom the waiver
was granted.
Information on our Internet website is not, and shall not be deemed to be, a
part of this report or incorporated into any other filings we make with the
Securities and Exchange Commission.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-term
compensation for services rendered during the last three fiscal years to our
company in all capacities as an employee by our Chief Executive Officer and our
other executive officers whose aggregate cash compensation exceeded $100,000
(collectively, the "named executive officers") during fiscal 2008 shown below.
Name & Annual Compensation Long Term
Principal Position Period Salary Bonus Options
- ------------------ ------ ------ ----- -------
Michael F. Pope 6/30/2009 $60,000 0 0
Director 6/30/2008 $60,000 0 0
President 6/30/2007 $60,000* 0 0
Philip C. La Puma 6/30/2009 $60,000 0 0
Director 6/30/2008 $60,000 0 0
Sec.-Treasurer 6/30/2007 $60,000* 0 0
* In fiscal year 2005, the Company adopted its 2005 Equity Compensation Plan
(the "Plan") which was registered on the registration statement on Form S-8. The
Company registered 400,000 shares of its common stock. Pursuant to the Plan, the
Company issued 193,500 shares of its common stock to each of Messrs. Pope and
LaPuma for their respective services to the Company, valued at $7,740 for each
person.
23
CASH COMPENSATION SECURITY GRANTS
Number of
Annual Number of Securities
Retainer Meeting Consulting Shares (#) Underlying
NAME Fees ($) Fees ($) Fees/Other Fees ($)(1) Options/SAR
- ---- -------- -------- ---------- ---------- -----------
Michael F. Pope 0.00 0.00 0.00 0.00 0.00
Philip C. La Puma 0.00 0.00 0.00 0.00 0.00
Victoria A. Pope 0.00 0.00 0.00 0.00 0.00
COMPENSATION OF DIRECTORS
The Company reimburses each Director for reasonable expenses (such as travel and
out-of-pocket expenses) in attending meetings of the Board of Directors.
Directors are not separately compensated for their services as Directors.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are no employment agreements with the Company's key employees at this
time.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth the beneficial ownership of our common stock by
all stockholders that hold 5% or more of the outstanding shares of our common
stock, each director and executive officer. Each stockholder named has sole
voting and investment power with respect to his or its shares. This table does
not include options not exercisable within 60 days of the date of this
prospectus. As of June 30, 2008, there were 22,817,040 shares of common stock
issued and outstanding.
Beneficial Ownership Percentage
of Common Stock (1) of Ownership
-------------------- ------------
Michael F. Pope 9,730,500 42.6%
907 E. Wilson Ave
Orange, CA 92867
Philip C. La Puma 9,730,500 42.6%
1786 N. Pheasant St
Anaheim, CA 92867
(1) Beneficial ownership is determined in accordance with rules and
regulations of the Securities and Exchange Commission. In computing the
number of shares beneficially owned by a person and the percentage
ownership of that person, shares of common stock subject to options or
warrants held by that person that are currently exercisable or
exercisable within 60 days after June 30, 2008 are deemed outstanding,
but are not deemed outstanding for computing the percentage of any
other person.
24
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Other than disclosed in the Financial Statements, there were no transactions for
the fiscal year ended June 30, 2009, nor are there any current proposed
transactions, or series of the same, to which the Company is a party, in which
the amount exceeds $60,000 and in which, to the knowledge of the Company, any
director, executive officers, nominee, five percent shareholders of any member
of the immediate family of the foregoing person, have or will have a direct or
indirect material interest.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table presents fees for professional audit services rendered by
Ronald R. Chadwick, P.C.
Certified Public Accountant
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
for two years ended June 30, 2009.
2009
---------
Audit Fees: (1) $ 11,000
Audit-Related Fees (2) --
Tax Fees: (3) --
All Other Fees: (4) --
---------
Total $ 11,000
=========
(1) Audit Fees: Fees for professional services performed by Ronald R. Chadwick,
P.C.. for the audit of our annual financial statements and review of financial
statements included in our 10-Q filings, and services that are normally provided
in connection with statutory and regulatory filings or engagement, such as the
filing of Form S-8.
(2) Audit-Related Fees:. Ronald R. Chadwick, P.C.. did not provide any
audit-related services.
(3) Tax Fees: Ronald R. Chadwick, P.C.. did not provide any professional
services with respect to tax compliance, such as preparation and filing of
original and amended returns for us and our consolidated subsidiaries, refund
claims, payment planning, tax audit assistance and tax work stemming from
"Audit-Related" items.
(4) All Other Fees: Ronald R. Chadwick, P.C. did not provide other permissible
work for us that does not meet the above category descriptions.
PRE-APPROVAL POLICY
Our Board of Directors is responsible for approving all Audit, Audit-Related,
Tax and Other Non-Audit Services. The Board of Directors approves all auditing
services and permitted non-audit services, including all fees and terms to be
performed for us by our independent auditor at the beginning of the fiscal year.
Non-audit services are reviewed and pre-approved by project at the beginning of
the fiscal year. Any additional non-audit services contemplated by the company
after the beginning of the fiscal year are submitted to the Audit Committee
chairman for pre-approval prior to engaging the independent auditor for such
services. Such interim pre-approvals are reviewed with the full Audit Committee
at its next meeting for ratification.
25
ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit No. Description of Document
- ----------- -----------------------
2.1 Agreement and Plan of Merger of Time Lending, California, Inc.*
3.1 Articles of Incorporation of Time Lending, California, Inc.*
3.2 Articles of Incorporation of Tenth Street, Inc.*
3.3 Articles of Incorporation of Time Marketing Associates, Inc.*
3.4 Articles of Incorporation of Time Management, Inc.*
3.5 Articles and Certificate of Merger of Registrant*
3.6 Bylaws of Registrant*
3.7 Amendment to the Articles of Incorporation dated August 2, 2005
3.8 Certificate of Designation
10.2 Lease Agreement*
10.3 Guaranty of Michael Pope*
10.4 Guaranty of Thomas Van Wagoner*
10.5 Demand Promissory Note (Michael Pope)*
10.6 Demand Promissory Note (Philip La Puma)*
10.7 Asset Sale and Purchase Agreement*
10.8 Share Exchange Agreement between Time Financial Services, Inc.
and Interruption Television, Inc.*
10.9 Voting Agreement (Tenth Street, Inc.)*
10.10 Voting Agreement (Time Management, Inc.)*
10.11 Voting Agreement (Time Marketing Associates, Inc.)*
10.12 Broker Agreement*
10.13 Letter of Intent with Nationwide Security Mortgage*
22. Subsidiaries of Registrant*
- --------------
* Previously filed with the Commission.
26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: November 10, 2009 TIME LENDING, CALIFORNIA, INC.
By: /s/ Michael F. Pope
-------------------------------------
Michael F. Pope
President
By: /s/ Philip C. La Puma
-------------------------------------
Philip C. La Puma
Treasurer (Chief Financial Officer)
and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Michael F. Pope President and Director November 10, 2009,
Michael F. Pope (PRINCIPAL EXECUTIVE OFFICER)
/s/ Philip C. La Puma Treasurer (PRINCIPAL FINANCIAL November 10, 2009
OFFICER AND PRINCIPAL ACCOUNTING
OFFICER), Secretary and Director
27