SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended: April 30, 2008
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________________ to __________________
Commission File Number 333-143750
BARRICODE, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Nevada 20-4662814
______________________________ ___________________
State or other jurisdiction of (IRS Employer
incorporation or organization Identification No.)
112 North Curry Street Carson City, Nevada 89703
__________________________________________ __________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (775) 284-3769
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
________________
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined by Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers in response 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, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)
Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
rule 12b-2 of the Exchange Act). Yes [X] No [ ]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and ask price of such common equity, as of the
latest business day of the registrant's most recently completed second fiscal
quarter: As of April 30, 2008, the aggregate value of voting and no-voting
common equity held by non-affiliates was $12,375.
2
TABLE OF CONTENTS
Page
Number
PART I
Item 1. Business 4
Item 1A. Risk Factors 5
Item 1B Unresolved Staff Comments 5
Item 2 Properties 5
Item 3 Legal Proceedings 5
Item 4 Submission of Matters to a Vote of Security Holders 5
PART II
Item 5 Market Price for the Registrant's Common Equity, Related 6
Stockholder Matters and Issuer Purchases of Equity Securities
Item 6 Selected Financial Data 6
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operation 6
Item 7A Quantitative and Qualitative Disclosure about Market Risk 7
Item 8 Financial Statements and Supplementary Data 7
Item 9 Changes an Disagreements With Accountants on Accounting and
Financial Disclosure 18
Item 9A Controls and Procedures 18
Item 9A(T) Controls and Procedures 19
Item 9B Other Information 19
PART III
Item 10 Directors and Executive Officers, Promoters and Control
Persons 19
Item 11 Executive Compensation 20
Item 12 Security Ownership of Certain Beneficial Owners and Management 21
Item 13 Certain Relationships and Related Transactions and Director
Independence 21
Item 14 Principal Accounting Fees and Services 21
PART IV
Item 15 Exhibits and Financial Statement Schedules 22
3
PART I
Item 1. Business
Overview
Barricode, Inc. (" the Company," "we," "us," "it" and "our" refer to Barricode,
Inc.) was incorporated in the State of Nevada as a for-profit company on April
3, 2006. Barricode is a development-stage company organized to enter into the
computer security software industry specializing in the packaging, sales,
distribution and support of user-friendly open-source network security software.
Our low cost security software products and services will add value to
open-source code supplied by independent third party providers.
The Company has not been involved in any bankruptcy, receivership or similar
proceedings since its incorporation nor has it been involved in any
reclassification, merger or consolidation. We have no plans to change our
business activities.
General
The Company goal is to become a major supplier and supporter of easy-to-use
open-source network security software that works seamlessly in the background to
protect computers and networks. Our "set it and forget it" approach frees the
user to concentrate on work that makes them more productive while the security
of their systems is monitored automatically without the user being required to
actively monitor the process.
Barricode plans to provide three network security products. The first will be
ChainMail, an easy to use freeware document protection (encryption) application.
ChainMail will allow users to encrypt outgoing email messages and decrypt
incoming messages. The second product is ChainMail Pro, a retail version of
ChainMail that will have more features and functionality than the freeware
version. The third is Impasse, a network intrusion detection application which
monitors networks and detects activity that indicates the presence of an
intruder on the network.
Plan of Operation
The company is attempting to raise capital and start the procurement of our
security software systems. If we are unable to complete any phase of our systems
development or marketing efforts because we don't have enough money, we will
cease our development and or marketing operations until we raise sufficient
funding. Attempting to raise capital after failing in any phase of our software
procurement plan would be difficult. As such, if we cannot secure additional
proceeds we will have to cease operations. If we have to have to reduce or cease
our business activities due to lack of funding we have no plans to engage in any
other business or enterprise.
We require capital to launch our business plans which consists of the following
steps;
(1) To obtain open-source e-mail encryption and network intrusion software
applications that we can customize to provide initial freeware
security applications to a wide variety of computer users. The
estimated cost to customize these applications is $7,000.
(2) To obtain a license from a gateway provider to support our e-commerce
transactions software required to distribute and receive payment for
our proposed software products. We expect this license to cost $7,000.
The company's primary revenue stream will be derived from subscribers
who will pay a recurring monthly fee to obtain security threat updates
and computer protection software enhancements. We expect the majority
of subscribers will pay for the material by using a credit card. A
small percentage of the subscribers, less than two percent (2%), are
expected to pay using a money order sent via the post office.
(3) To develop and operate a website which will feature the current
products and news of our future products. Product documentation
including user's manuals, product registration and other supporting
documentation will also be delivered electronically from our web site
in Adobe PDF format. Website development and content is anticipated to
cost $6,000
4
(4) The final stage will be to procure client functionality modules in
order to augment the network intrusion systems with automatic periodic
updates of resident threat signatures and website integration at an
estimated cost of $8,000.
We also plan to initiate our marketing initiative out of which we expect to
attract a large number of customers (personal and institutional computer network
users) for our security systems. The marketing plan, which includes advertising
in trade journals and attendance at industry trade shows, is estimated to cost
$15,000.
We will compete directly with larger companies like Symantec, Cisco, Checkpoint,
ISS, IBM and Microsoft as well as other smaller companies that produce security
software. We feel that with our focus on ease-of-use and seamless background
operation there is a considerable opportunity for us in this market. The
features of Barricode proposed network security products that will make them
stand out from the competition are primarily ease-of-use and seamless background
functionality. Others in the market are able to provide products that have
similar functionality. However, our competitors' products are often difficult to
use and require that the user have an understanding of security issues and an
above average level of technical proficiency with computers. The ease of use of
our proposed network security applications will distinguish it from competing
products in the market.
Barricode has no employees and management does not plan to hire employees at
this time. Our sole officer and director will be responsible for the initial
product development. Once we have our product available to the market over the
Internet, we will hire an independent consultant to build our website. We also
intend to hire sales representatives initially on a commission only basis to
keep administrative overhead to a minimum.
We do not expect to purchase or sell a plant or significant equipment in the
next twelve months.
Item 1A. Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
Item 1B. Unresolved Staff Comments
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
Item 2. Properties
We do not own any real estate or other properties and hae not entered into any
long term lease or rental agreements for property. We currently rents shared
office space on a monthly basis, located at Suite112 North Curry Street, Carson
City, Nevada, 89703 and our telephone number is (775) 284-3769 and the fax is
(775) 546-6150. Management believes that its present office facilities are
sufficient to accommodate our business requirements up to and until such a time
that we begin operations.
Item 3. Legal Proceedings
We are not a party to any material legal proceedings and to our knowledge no
such proceedings are threatened or contemplated by any party.
No director, officer, or affiliate of the issuer and no owner of record or
beneficiary of more than 5% of the securities of the issuer, or any security
holder is a party adverse to the small business issuer or has a material
interest adverse to the small business issuer.
Item 4. Submission of Matters to a Vote of Security Holders
None
5
PART II
Item 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchase of Equity Securities
The Company's common shares are not currently listed on any exchange nor are its
common shares quoted on any public medium. There can be no assurance that our
common stock will ever be listed or quoted in the future or ever have a market
develop for its common stock.
As of April 30, 2008, the Company had thirty-four (34) active shareholders of
record. The Company has not paid cash dividends and has no outstanding options.
Item 6. Selected Financial Data
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and
related notes included elsewhere in this report.
This report contains forward looking statements relating to our current view of
future economic performance, the plans and objectives of management for future
operations, projections of revenue mix and other financial items that are based
on the beliefs of, as well as assumptions made by and information currently
known to, our management. The words "expects, intends, believes, anticipates,
may, could, should" and similar expressions and variations thereof are intended
to identify forward-looking statements. The cautionary statements set forth in
this section are intended to emphasize that actual results may differ materially
from those contained in any forward looking statement.
Our auditor's report on our April 30, 2008 financial statements expresses an
opinion that substantial doubt exists as to whether we can continue as an
ongoing business. Since our sole officer and director may be unwilling or unable
to loan or advance us additional capital, we believe that if we do not raise
additional capital over the next 12 months, we may be required to suspend or
cease the implementation of our business plans. See "April 30, 2008 Audited
Financial Statements - Auditors Report."
As the company has been issued an opinion by its auditors that substantial doubt
exists as to whether the company can continue as a going concern, it may be
difficult for the company to attract investors.
At the present time, we have not been able to raise sufficient additional cash
to support and enhance this product development. If we are unable to raise the
cash needed to support our operations, we will either suspend development and
marketing activities until we do raise the cash, or cease operations entirely.
Other than as described in this paragraph, we have no other financing plans.
We anticipate that our current cash and cash equivalents and cash generated from
operations, if any, will be insufficient to satisfy our liquidity requirements
for at least the next 12 months. We will require additional funds prior to such
time and the Company will seek to obtain theses funds by selling additional
capital through private equity placements, debt or other sources of financing.
If we are unable to obtain sufficient additional financing, we may be required
to reduce the scope of our business plan, which could harm our business,
financial condition and operating results. Additional funding to meet our
requirements may not be available on favourable terms, if at all.
6
Over the next twelve months, the Company intends to launch it's three main
products; the first is ChainMail is an easy to use document protection
(encryption) application that we plan to provide as freeware. The second product
is ChainMail Pro is a retail version of ChainMail that will have more features
and functionality than the freeware version. Impasse, our third product, is our
planned network intrusion detection application that will monitor network
activity and detect activity that indicates the presence of an intruder.
There is no historical financial information about us upon which to base an
evaluation of our performance. We are a development stage company and have not
generated any revenues from activities. We cannot guarantee that we will be
successful in our business activities. Our business is subject to risks inherent
to a new business enterprise including limited capital resources, possible
delays in the development of our products and possible cost overruns due to cost
increases.
We did not earn any revenues during the fiscal years ending April 30, 2008 or
April 30, 2007. During the fiscal year ending April 30, 2008 we incurred
operating expenses of $18,783 comprising of professional fees in the amount of
$14,400 and office and administrative expenses of $ 4,383. Since inception the
Company has incurred operating expenses of $ 28,753.
Off Balance Sheet Arrangements.
As of the date of this report, the current funds available to the Company will
not be sufficient to continue operations. The cost to establish the Company and
begin operations is estimated to be approximately $43,000 over the next twelve
months and the cost of maintaining our reporting status is estimated to be
$12,000 over this same period. Our officer and director, Mr. Delaney has
undertaken to provide the Company with initial operating capital to sustain our
business as the expenses are incurred in the form of a non-secured loan.
However, there is no contract in place or written agreement securing this
agreement. Management believes that if the Company cannot raise sufficient
revenues or maintain its reporting status with the SEC it will have to cease all
efforts directed towards the Company. As such, any investment previously made
would be lost in its entirety.
Other than the above described situation the Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company's financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
Item 8. Financial Statements and Supplementary Data
7
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
APRIL 30, 2008
(AUDITED)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENT
8
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
We have audited the accompanying balance sheets of Barricode, Inc. (A
Development Stage Company) as of April 30, 2008 and 2007, and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
years then ended and cumulative from inception on April 3, 2006 to April 30,
2008. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Barricode, Inc. (A Development
Stage Company) as of April 30, 2008 and 2007, and the related statements of
operations, stockholders' equity (deficit) and cash flows for the years then
ended and cumulative from inception on April 3, 2006 to April 30, 2008, in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the initial development stage and has
incurred losses since inception totalling $28,753. These factors raise
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/S/ MOORE & ASSOCIATES, CHARTERED
Moore & Associates Chartered
Las Vegas, Nevada
June 18, 2008
2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NV 89146
(702) 253-7499 FAX (702) 253-7501
9
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(AUDITED)
April 30, 2008 April 30, 2007
=======================================================================================================================
ASSETS
CURRENT ASSETS
Cash $ 8,729 $ 26,112
Prepaid Expense - -
_______________________________________________________________________________________________________________________
Total Current Assets 8,729 26,112
_______________________________________________________________________________________________________________________
TOTAL ASSETS $ 8,729 $ 26,112
=======================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Due to related party (Note 5) $ 1,279 $ 1,279
Accrual of Expenses 8,828 7,428
_______________________________________________________________________________________________________________________
Total Current Liabilities 10,107 8,707
_______________________________________________________________________________________________________________________
TOTAL LIABILITIES $ 10,107 $ 8,707
STOCKHOLDERS' EQUITY (DEFICIT)
Capital stock (Note 4)
Authorized
75,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
17,475,000 shares of common stock at April 30, 2008 and April 30, 2007 17,475 17,475
Additional paid-in capital 9,900 9,900
Share subscription receivable - -
Deficit accumulated during the development stage (28,753) (9,970)
_______________________________________________________________________________________________________________________
Total Stockholders' Equity (Deficit) (1,378) 17,405
_______________________________________________________________________________________________________________________
Total liabilities & Stockholders' Equity (Deficit) $ 8,729 $ 26,112
=======================================================================================================================
The accompanying notes are an integral part of these financial statements.
10
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(AUDITED)
Cumulative from
Twelve months Twelve months inception
ended ended (April 3, 2006) to
April 30, 2008 April 30, 2007 April 30, 2008
==========================================================================================================
REVENUE $ - $ - $ -
EXPENSES
Office and general $ 4,383 $ 691 $ 6,353
Professional fees 14,400 8,000 22,400
__________________________________________________________________________________________________________
LOSS BEFORE INCOME TAXES $ (18,783) $ (8,691) $ (28,753)
PROVISION FOR INCOME TAXES $ - $ - $ -
__________________________________________________________________________________________________________
NET LOSS $ (18,783) $ (8,691) $ (28,753)
==========================================================================================================
BASIC AND DILUTED LOSS PER COMMON SHARE $ 0.00 $ 0.00
==========================================================================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
- - BASIC AND DILUTED 17,093,580 15,778,125
==========================================================================================================
The accompanying notes are an integral part of these financial statements.
11
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (APRIL 3, 2006) TO APRIL 30, 2008
(AUDITED)
Deficit
Common Stock Accumulated
________________________ Additional During the
Number of Paid-in Development Subscription
shares Amount Capital Stage Receivable Total
===================================================================================================================================
Balance, April 3,2006 - $ - $ - $ - $ - $ -
Common stock issued at $0.001 per share 15,000,000 15,000 - - (15,000) -
on April 26, 2006
Net loss for year ended April 30, 2006 - - - (1,279) (1,279)
___________________________________________________________________________________________________________________________________
Balance, April 30, 2006 15,000,000 15,000 (1,279) (15,000) (1,279)
Proceeds received from share - - - - 15,000 15,000
subscriptions receivable
Common stock issued at $0.005 per share
(May 1, 2006 to April 30, 2007) 2,475,000 2,475 9,900 - - 12,375
___________________________________________________________________________________________________________________________________
Net loss for year ended April 30, 2007 - - - (8,691) - (8,691)
___________________________________________________________________________________________________________________________________
Balance, April 30, 2007 17,475,000 $ 17,475 $ 9,900 $ (9,970) $ - $ 17,405
Net loss for period ended April 30, 2008 - - - (18,783) - (18,783)
___________________________________________________________________________________________________________________________________
Balance, April 30, 2008 17,475,000 $ 17,475 $ 9,900 $ (28,753) $ - $ (1,378)
===================================================================================================================================
The accompanying notes are an integral part of these financial statements.
12
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(AUDITED)
Cumulative results
of operations
Twelve months Twelve months from inception
Ended Ended (April 3, 2006) to
April 30, 2008 April 30, 2007 April 30, 2008
__________________________________________________________________________________________________________________________
OPERATING ACTIVITIES
Net loss $ (18,783) $ (8,691) $ (28,753)
Changes in operating assets and liabilities
Prepaid Expense - - -
Accrual of Expenses 1,400 7,428 8,828
__________________________________________________________________________________________________________________________
NET CASH FROM OPERATING ACTIVITIES (17,373) (1,263) (19,925)
FINANCING ACTIVITIES
Proceeds from sale of common stock - 27,375 27,375
Amounts due to related party - - 1,279
NET CASH FROM FINANCING ACTIVITIES - 27,375 28,654
NET INCREASE (DECREASE) IN CASH (17,383) 26,112 8,729
__________________________________________________________________________________________________________________________
CASH, BEGINNING 26,112 - -
CASH, ENDING $ 8,729 $ 26,112 $ 8,729
Supplemental cash flow information:
Cash paid for:
Interest $ - $ - $ -
Income Taxes $ - $ - $ -
==========================================================================================================================
NON-CASH ACTIVITIES
Stock issued for services $ - $ - $ -
Stock issued for accounts payable $ - $ - $ -
Stock issued for notes payable $ - $ - $ -
Stock issued for convertible debentures and interest $ - $ - $ -
Convertible debentures issued for services $ - $ - $ -
Warrants issued $ - $ - $ -
Stock issued for penalty on default of convertible debenture $ - $ - $ -
Note payable issued for finance charges $ - $ - $ -
Forgiveness of not payable and accrued interest $ - $ - $ -
Stock issued for investment. $ - $ - $ -
==========================================================================================================================
The accompanying notes are an integral part of these financial statements.
13
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
(AUDITED)
APRIL 30, 2008
================================================================================
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
________________________________________________________________________________
Barricode, Inc. (the "Company") is in the initial development stage and has
incurred losses since inception totaling $28,753 The Company was incorporated on
April 3, 2006 in the State of Nevada. The fiscal year end of the Company is
April 30. The Company was organized to enter into the Computer Network Security
Software industry with two planned proprietary technologies, ChainMail Pro, a
document and email encryption software and Impasse which is a computer network
intrusion monitor.
The ability of the Company to continue as a going concern is dependent on
raising capital to fund its business plan and ultimately to attain profitable
operations. Accordingly, these factors raise substantial doubt as to the
Company's ability to continue as a going concern. The Company is funding its
initial operations by way of issuing Founders' shares and entering into a
private placement offering for 2,550,000 shares at $0.005 per share. As of April
30, 2008, the Company had issued 15,000,000 Founders shares at $0.001 per share
for proceeds of $15,000, and 2,475,000 shares at $0.005 per share for proceeds
of $12,375, which have been received by the Company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
________________________________________________________________________________
BASIS OF PRESENTATION
These financial statements are presented in United States dollars and have been
prepared in accordance with accounting principles generally accepted in the
United States.
SEGMENTED REPORTING
SFAS Number 131, "Disclosure About Segments of an Enterprise and Related
Information", changed the way public companies report information about segments
of their business in their quarterly reports issued to shareholders. It also
requires entity-wide disclosures about the products and services the entity
provides, the material countries in which it holds assets and reports revenues
and its major customers.
For the period ended April 30, 2008 all operations took place in Ontario,
Canada.
COMPREHENSIVE LOSS
SFAS No. 130, "Reporting Comprehensive Income," establishes standards for the
reporting and display of comprehensive loss and its components in the financial
statements. As at April 30, 2007 and April 30, 2008 the Company has no items
that represent a comprehensive loss and, therefore, has not included a schedule
of comprehensive loss in the financial statements.
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Accordingly,
actual results could differ from those estimates.
FINANCIAL INSTRUMENTS
All significant financial assets, financial liabilities and equity instruments
of the Company are either recognized or disclosed in the financial statements
together with other information relevant for making a reasonable assessment of
future cash flows, interest rate risk and credit risk. Where practical the fair
values of financial assets and financial liabilities have been determined and
disclosed; otherwise only available information pertinent to fair value has been
disclosed.
14
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
(AUDITED)
APRIL 30, 2008
================================================================================
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________
LOSS PER COMMON SHARE
Basic earnings (loss) per share includes no dilution and is computed by dividing
income (loss) available to common stockholders by the weighted average number of
common shares outstanding for the period. Dilutive earnings (loss) per share
reflect the potential dilution of securities that could share in the earnings of
the Company. Because the Company does not have any potential dilutive
securities, the accompanying presentation is only on the basic loss per share.
INCOME TAXES
The Company follows the liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances and tax loss carry-forwards. Deferred tax assets and liabilities are
measured using enacted or substantially enacted tax rates expected to apply to
the taxable income in the years in which those differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the date
of enactment or substantive enactment.
STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation issued to employees based on
SFAS No. 123R "Share Based Payment". SFAS No. 123R is a revision of SFAS No. 123
"Accounting for Stock-Based Compensation", and supersedes APB Opinion No. 25,
"Accounting for Stock Issued to Employees" and its related implementation
guidance. SFAS 123R establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments for goods or services. It also
addresses transactions in which an entity incurs liabilities in exchange for
goods or services that are based on the fair value of the entity's equity
instruments or that may be settled by the issuance of those equity instruments.
SFAS 123R focuses primarily on accounting for transactions in which an entity
obtains employee services in share-based payment transactions. SFAS 123R does
not change the accounting guidance for share-based payment transactions with
parties other than employees provided in SFAS 123 as originally issued and
Emerging Issues Task Force Issue No. 96-18, "Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services".
SFAS 123R does not address the accounting for employee share ownership plans,
which are subject to AICPA Statement of Position 93-6, "Employers' Accounting
for Employee Stock Ownership Plans".
SFAS 123R requires an entity to measure the cost of employee services received
in exchange for an award of equity instruments based on the grant-date fair
value of the award (with limited exceptions). That cost will be recognized over
the period during which an employee is required to provide service in exchange
for the award - the requisite service period (usually the vesting period). SFAS
123R requires that the compensation cost relating to share-based payment
transactions be recognized in financial statements. That cost will be measured
based on the fair value of the equity or liability instruments issued. The scope
of SFAS 123R includes a wide range of share-based compensation arrangements
including share options, restricted share plans, performance-based awards, share
appreciation rights, and employee share purchase plans.
As at April 30, 2008 the Company had not adopted a stock option plan nor had it
granted any stock options. Accordingly no stock-based compensation has been
recorded to date.
15
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
APRIL 30, 2008
================================================================================
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". This Statement permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS 155 establishes framework for measuring fair value and
expands disclosures about fair value measurements. The changes to current
practice resulting from the application of this statement relate to the
definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. The statement is effective
for fiscal years beginning after November 15, 2007 and periods with those fiscal
years.
The Financial Accounting Standards Board has issued SFAS No. 155 "ACCOUNTING FOR
CERTAIN HYBRID FINANCIAL INSTRUMENTS AN AMENDMENT OF FASB STATEMENTS NO. 133 AND
140" and No. 156 "ACCOUNTING FOR SERVICING OF FINANCIAL ASSETS - AN AMENDMENT OF
FASB STATEMENT NO. 140", but they will not have a material effect in the
COMPANYS' RESULTS OF OPERATIONS OR FINANCIAL POSITION.
The adoption of these new pronouncements is not expected to have a material
effect on the Company's financial position or results of operations
NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS
________________________________________________________________________________
In accordance with the requirements of SFAS No. 107, the Company has determined
the estimated fair value of financial instruments using available market
information and appropriate valuation methodologies. The fair value of financial
instruments classified as current assets or liabilities approximate their
carrying value due to the short-term maturity of the instruments.
NOTE 4 - CAPITAL STOCK
________________________________________________________________________________
The Company's capitalization is 75,000,000 common shares with a par value of
$0.001 per share. No preferred shares have been authorized or issued.
As of April 30, 2008, the sole Director had purchased 15,000,000 shares of the
common stock in the Company at $0.001 per share with proceeds to the Company
totalling $15,000.
PRIVATE PLACEMENT
On April 26, 2006, the Company authorized a private placement offering of up to
2,550,000 shares of common stock at a price of $0.005 per share. The total
amount to be raised in this financing is $12,750. As of April 30, 2008, the
Company had issued 2,475,000 shares at $0.005 per share and received $12,375
from the sale of its private placement stock.
16
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
(AUDITED)
APRIL 30, 2008
================================================================================
NOTE 5 - RELATED PARTY TRANSACTIONS
________________________________________________________________________________
As of April 30, 2008, the Company received advances from a Director in the
amount of $1,279 to pay for incorporation costs. The amounts due to the related
party are unsecured and non-interest bearing with no set terms of repayment.
NOTE 6 - INCOME TAXES
________________________________________________________________________________
As of April 30, 2008, the Company had net operating loss carry forwards of
approximately $28,793 that may be available to reduce future years' taxable
income and will expire commencing in 2026. Availability of loss usage is subject
to change of ownership limitations under Internal Revenue Code 382. Future tax
benefits which may arise as a result of these losses have not been recognized in
these financial statements, as their realization is determined not likely to
occur and, accordingly, the Company has recorded a full valuation allowance for
the deferred tax asset relating to these tax loss carryforwards.
NOTE 7-EVENTS
________________________________________________________________________________
The SB-2filed with the Securities and Exchange Commission became effective as at
November 2, 2007.
17
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Our auditors are the firm of Moore and Associates, operating from their offices
in Las Vegas, NV. There have not been any changes in or disagreements with our
accountants on accounting, financial disclosure or any other matter.
Item 9A.Controls and Procedures
The management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting, as required by
Sarbanes-Oxley (SOX) Section 404 A. The Company's internal control over
financial reporting is a process designed under the supervision of the Company's
Chief Executive Officer and Chief Financial Officer to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of the Company's financial statements for external purposes in accordance with
U.S. generally accepted accounting principles.
As of April 30, 2008, management assessed the effectiveness of the Company's
internal control over financial reporting based on the criteria for effective
internal control over financial reporting established in SEC guidance on
conducting such assessments. Based on that evaluation, they concluded that,
during the period covered by this report, such internal controls and procedures
were not effective to detect the inappropriate application of US GAAP rules as
more fully described below. This was due to deficiencies that existed in the
design or operation of our internal control over financial reporting that
adversely affected our internal controls and that may be considered to be
material weaknesses.
The matters involving internal controls and procedures that the Company's
management considered to be material weaknesses under the standards of the
Public Company Accounting Oversight Board were: (1) lack of a functioning audit
committee and lack of a majority of outside directors on the Company's board of
directors, resulting in ineffective oversight in the establishment and
monitoring of required internal controls and procedures; (2) inadequate
segregation of duties consistent with control objectives; (3) insufficient
written policies and procedures for accounting and financial reporting with
respect to the requirements and application of US GAAP and SEC disclosure
requirements; and (4) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by the Company's Chief Financial Officer in connection with the audit of our
financial statements as of April 31, 2008 and communicated the matters to our
management.
Management believes that the material weaknesses set forth in items (2), (3) and
(4) above did not have an affect on the Company's financial results. However,
management believes that the lack of a functioning audit committee and lack of a
majority of outside directors on the Company's board of directors, resulting in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures can result in the Company's determination to its
financial statements for the future years.
We are committed to improving our financial organization. As part of this
commitment, we will create a position to segregate duties consistent with
control objectives and will increase our personnel resources and technical
accounting expertise within the accounting function when funds are available to
the Company: i) Appointing one or more outside directors to our board of
directors who shall be appointed to the audit committee of the Company resulting
in a fully functioning audit committee who will undertake the oversight in the
establishment and monitoring of required internal controls and procedures; and
ii) Preparing and implementing sufficient written policies and checklists which
will set forth procedures for accounting and financial reporting with respect to
the requirements and application of US GAAP and SEC disclosure requirements.
18
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on the Company's Board. In addition, management believes that preparing and
implementing sufficient written policies and checklists will remedy the
following material weaknesses (i) insufficient written policies and procedures
for accounting and financial reporting with respect to the requirements and
application of US GAAP and SEC disclosure requirements; and (ii) ineffective
controls over period end financial close and reporting processes. Further,
management believes that the hiring of additional personnel who have the
technical expertise and knowledge will result proper segregation of duties and
provide more checks and balances within the department. Additional personnel
will also provide the cross training needed to support the Company if personnel
turn over issues within the department occur. This coupled with the appointment
of additional outside directors will greatly decrease any control and procedure
issues the company may encounter in the future.
We will continue to monitor and evaluate the effectiveness of our internal
controls and procedures and our internal controls over financial reporting on an
ongoing basis and are committed to taking further action and implementing
additional enhancements or improvements, as necessary and as funds allow.
Item 9A(T)
This annual report does not include an attestation report of the company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this annual report.
There have been no changes in our internal control over financial reporting
identified in connection with the evaluation required by paragraph (d) of Rules
13a-15 or 15d-15 under the Exchange Act that occurred during the small business
issuer's last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None
PART III
Item 10. Directors, Executive Officers, and Corporate Governance.
Identification of Directors and Executive Officers
Name Age Term Served Title
Tom Delaney 55 Since inception President, Secretary Treasurer,
Principal Executive Officer
Principal Financial Officer
and sole member of the Board of
Directors
There are no other persons nominated or chosen to become directors or executive
officers, nor do we have any employees other than above mentioned officer and
director.
19
Our directors hold office until the next annual meeting of shareholders and the
election and qualification of their successors. Directors receive no
compensation for serving on the board of directors other than the reimbursement
of reasonable expenses incurred in attending meetings. Officers are appointed by
the board of directors and serve at the discretion of the board.
Officer and Director Background:
TOM DELANEY, PRESIDENT, CEO, DIRECTOR, SECRETARY/TREASURER
Thomas E. Delaney, President
Tom Delaney was the Regional manager for Biway Stores (Dylex Corporation) for
seventeen years. In 1996 he joined a small import/export closeout as the
Canadian buyer for merchandise closeouts.
In 2001, Mr. Delaney and a partner opened Secure Product Management, Inc. The
company sells closeout merchandise to discount store across Canada and has a
sales force of eleven people.
From April, 2006 to present Mr. Delaney has been the founder and President of
Barricode, Inc.
Mr. Delaney is not a director of any other reporting company.
Significant Employees
The Company does not, at present, have any employees other than the current
officer and director. We have not entered into any employment agreements, as we
currently do not have any employees other than the current officer and director.
Family Relations
There are no family relationships among the Directors and Officers of Barricode,
Inc.
Involvement in Legal Proceedings
No executive Officer or Director of the Company has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding that is currently pending.
No executive Officer or Director of the Company is the subject of any pending
legal proceedings.
No Executive Officer or Director of the Company is involved in any bankruptcy
petition by or against any business in which they are a general partner or
executive officer at this time or within two years of any involvement as a
general partner, executive officer, or Director of any business.
Item 11. Executive Compensation.
Our current executive officer and director has not and does not receive any
compensation and has not received any restricted shares awards, options or any
other payouts. As such, we have not included a Summary Compensation Table.
20
There are no current employment agreements between the Company and its executive
officer or director. Our executive officer and director has agreed to work
without remuneration until such time as we receive revenues that are
sufficiently necessary to provide proper salaries to the officer and compensate
the director for participation. Our executive officer and director has the
responsibility of determining the timing of remuneration programs for key
personnel based upon such factors as positive cash flow, shares sales, product
sales, estimated cash expenditures, accounts receivable, accounts payable, notes
payable, and a cash balances. At this time, management cannot accurately
estimate when sufficient revenues will occur to implement this compensation, or
the exact amount of compensation.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the corporation in the event of retirement
at normal retirement date pursuant to any presently existing plan provided or
contributed to by Company.
Item 12. Security Ownership of Certain Beneficial Owners and Management Related
Stockholder Matters.
The following table sets forth certain information with respect to the
beneficial ownership of our common shares as it relates to our named director
and executive officer, and each person known to the Company to be the beneficial
owner of more than five percent (5%) of said securities, and all of our
directors and executive officers as a group:
Name and Position Shares Percent Security
_________________________________________________________________
Tom Delaney
President and Director 15,000,000 85.8% Common
Officers and Directors as
a Group (1) 15,000,000 85.8% Common
The address for Tom Delaney is 839 Central Parkway West, Suite 200, Mississauga,
Ontario L5C 2V9.
The above referenced common shares were paid for and issued in April, 2006, for
consideration of $0.001 per share total consideration of $15,000.
Item 13. Certain Relationships and Related Transactions and Director
Independence
Currently, there are no contemplated transactions that the Company may enter
into with our officers, directors or affiliates. If any such transactions are
contemplated we will file such disclosure in a timely manner with the Commission
on the proper form making such transaction available for the public to view.
The Company has no formal written employment agreement or other contracts with
our current officer and there is no assurance that the services to be provided
by him will be available for any specific length of time in the future. Mr.
Delaney anticipates devoting at a minimum of ten to fifteen percent of his
available time to the Company's affairs. The amounts of compensation and other
terms of any full time employment arrangements would be determined, if and when,
such arrangements become necessary.
Item 14. Principal Accountant Fees and Services.
During the fiscal year ended April 30, 2008 we incurred approximately $3,500 in
fees to our principal independent accountants for professional services rendered
in connection with the audit of financial statements for the fiscal year ended
April 30, 2008. For review of our financial statements for the quarters ended
July 31, 2007, October 31, 2007 and January 31, 2008 we incurred approximately
$4,500 in fees to our principal independent accountants for professional
services.
21
During the fiscal year ended April 30, 2008, we did not incur any other fees for
professional services rendered by our principal independent accountants for all
other non-audit services which may include, but not limited to, tax related
services, actuarial services or valuation services.
PART IV
Item 15. Exhibits.
The following exhibits are incorporated into this Form 10-K Annual Report:
Exhibit No. Description
3.1 Articles of Incorporation [1]
3.2 By-Laws of Barricode, Inc. [2]
23.1 Consent of Moore & Associates, Chartered
31.1 Certification of Chief Executive Officer Pursuant to
Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
31.2 Certification of Chief Financial Officer Pursuant to
Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934*
32.1 Certification of Chief Executive Officer under Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Chief Financial Officer under Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
[1] Incorporated by reference from the Company's SB-2 filed with the Commission
on June 8, 2007.
[2] Incorporated by reference from the Company's SB-2 filed with the Commission
on June 8, 2007.
* Included in Exhibit 31.1
** Included in Exhibit 32.1
22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BARRICODE, INC.
BY: /s/ TOM DELANEY
_________________________________________________
Tom Delaney
President, Secretary Treasurer,
Principal Executive Officer,
Principal Financial Officer and Sole Director
Dated: June 27, 2008
23