UNITED STATES
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 March 31, 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 333-151212
E-DISPATCH INC.
(Exact name of registrant as specified in its charter)
Nevada 74-3232809
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 Bellevue Way, Suite 400, Bellevue, WA 98004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (425) 646-2391
Securities registered under Section 12(b) of the Act:
None N/A
Title of each class Name of each exchange on which registered
Securities registered under Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of class)
Indicate by checkmark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by checkmark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Act. Yes [ ] No [X]
Indicate by checkmark whether the registrant has (1) 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 checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if Smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the 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 asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter: N/A - no common stock traded during period
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ] N/A
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. 1,840,000 shares of common
stock as of July 2, 2009.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) of the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980). Not Applicable
AVAILABLE INFORMATION
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and all amendments to those reports that we file with the Securities
and Exchange Commission, or SEC, are available at the SEC's public reference
room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain
information on the operation of the public reference room by calling the SEC at
1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains
reports, proxy and information statements and other information regarding
reporting companies.
TABLE OF CONTENTS
Page
----
Part I
Item 1. Business 3
Item 1A. Risk Factors 11
Item 2. Properties 15
Item 3. Legal Proceedings 15
Item 4. Submission of Matters to a Vote of Securities Holders 15
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 15
Item 6. Selected Financial Data 15
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 16
Item 8. Financial Statements 19
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 31
Item 9A. Controls and Procedures 31
Item 9B. Other Information 31
Part III
Item 10. Directors, Executive Officers and Corporate Governance 33
Item 11. Executive Compensation 34
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 35
Item 13. Certain Relationships and Related Transactions, and Director
Independence 37
Item 14. Principal Accounting Fees and Services 37
Part IV
Item 15. Exhibits 37
Signatures 38
2
PART I
FORWARD LOOKING STATEMENTS.
This annual report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "should", "expects",
"plans", "anticipates", "believes", "estimates", "predicts", "potential" or
"continue" or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
"Risk Factors" and the risks set out below, any of which may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. These
risks include, by way of example and not in limitation:
* the uncertainty that we will not be able to successfully identify and
evaluate a suitable business opportunity;
* risks related to the large number of established and well-financed
entities that are actively seeking suitable business opportunities;
* risks related to the failure to successfully management or achieve
growth of a new business opportunity; and
* other risks and uncertainties related to our business strategy.
This list is not an exhaustive list of the factors that may affect any of our
forward-looking statements. These and other factors should be considered
carefully and readers should not place undue reliance on our forward-looking
statements.
Forward looking statements are made based on management's beliefs, estimates and
opinions on the date the statements are made and we undertake no obligation to
update forward-looking statements if these beliefs, estimates and opinions or
other circumstances should change. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Except as
required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform
these statements to actual results.
Our financial statements are stated in United States dollars and are prepared in
accordance with United States generally accepted accounting principles.
In this annual report, unless otherwise specified, all dollar amounts are
expressed in United States dollars and all references to "common stock" refer to
the common shares in our capital stock.
As used in this annual report, the terms "we", "us", "our" and "E-Dispatch" mean
E-Dispatch Inc., unless otherwise indicated.
ITEM 1. BUSINESS
OVERVIEW OF THE COMPANY
We are a development stage company that was incorporated on July 31, 2007 in the
state of Nevada. We have commenced only limited operations, primarily focused on
developing our cell phone-based taxi dispatch system and organizational matters
in connection with this offering. We have never declared bankruptcy, have never
been in receivership, and have never been involved in any legal action or
proceedings. We have not made any significant purchase or sale of assets, nor
has the Company been involved in any mergers, acquisitions or consolidations. We
3
are not a blank check registrant as that term is defined in Rule 419(a)(2) of
Regulation C of the Securities Act of 1933, because we have a specific business
plan and purpose. Neither the Company, nor its officers, Directors, promoters or
affiliates, has had preliminary contact or discussions with, nor do we have any
present plans, proposals, arrangements or understandings with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger.
We have not generated any revenue to date and we do not expect to generate any
revenues during the first 12 months following this offering. We have reserved a
domain name.
The taxi dispatch system that we are planning to develop will be a software
product that resides on a personal computer to be used by a system operator. The
taxi dispatch system will work with software that installs and runs on GSM
mobile phones or PDA's using SMS/GPRS protocol.
We intend for our taxi dispatch system to allow the taxi dispatcher/system
operator to receive customer phone calls and to enter requests for taxis into
the system, which will then create and send text messages to taxis in service
advising them of waiting customers. Dispatch details, including location,
customer name, and time of request, will be available in the text message in a
standardized format for quick review. Each of the taxi company's taxi drivers
will receive the text message on his cell phone or PDA simultaneously, thus
providing each taxi driver with the opportunity to respond to the request for a
taxi. To accept the customer order, a taxi driver would enter a confirmation
code on his cell phone. The first taxi driver to respond will be awarded the
customer order. The system will then broadcast a second text message noting that
this customer has been allocated. If none of the taxi drivers enters a
confirmation code accepting the order, then the "new customer request for a
taxi" will stay on the system until the order is accepted and the fare is
allocated.
Our system will enable taxi drivers to use their cell phones to keep in touch
with the dispatcher/system operator, thus saving on the cost of installing
expensive hardware systems in each vehicle. Our taxi dispatch system will also
provide taxi drivers with messaging services similar to MSN Messenger. When a
taxi is available, the driver will be able to log on to the taxi dispatch system
using his cell phone. When the taxi driver is busy, in transit with a customer,
or unavailable for a period of time, he will be able to inform the dispatcher of
his unavailability through his cell phone. When a customer has completed his
journey, the driver will be able to log the time, location, and amount received
into the system. A taxi driver will be able to perform all of these functions by
using his cell phone's existing mobile data capabilities. To ensure accurate
record keeping, our taxi dispatch system will generate log entries for each day,
and generate cross-posting of transactions to the taxi company's general ledger
for accounting purposes.
For the small business operator, the cost of purchasing a taxi dispatch system
and installing fixed or portable monitors in each taxi cab is expensive. Our
taxi dispatch system, by combining the use of cell phones already owned by taxi
drivers with a low-cost computer server and a low-cost personal computer system
to be operated by the taxi dispatcher, will enable taxi companies to acquire an
affordable taxi dispatch system.
THE MARKET OPPORTUNITY
The cell phone has become a primary means of communication, especially in places
that lack the wired telecommunications infrastructure of countries like the
U.S., Canada, and Western Europe. According to the December 2006 issue of
Evolution Shift, written by David Houle, there are over 210 million active cell
phone accounts in the U.S., which has a population of about 300 million people.
In 1990 a mere 1,888,000 cell phones were sold, while in the year 2000,
52,600,000 cell phone units were sold. Houle suggests that the same growth model
is underway in developing and third world countries, citing 6 million new
subscribers a month in India and over 5 million new subscribers a month in
China. This explosive growth is having a transformational impact on the way
people communicate today.
http://www.evolutionshift.com/blog/2006/12/08/cell-phones-are-transformative/
Use of the internet is the second transformational trend that has affected the
manner in which information is shared today. The World Wide Web provides a
low-cost platform for the development and delivery of services. Leveraging both
of these emerging technologies will be a key component of our business. We
believe that the convergence of widespread cell phone use with low-cost internet
4
based communication systems will enable our taxi dispatch system to meet the
needs of taxi companies looking for a low-cost taxi dispatch system. In
particular, we believe that our proposed taxi dispatch system could be used cost
effectively in the Philippines and in other underdeveloped countries around the
world.
We plan to initially focus our business in the Philippines and then to expand
internationally.
OUR COMPETITION
A number of companies offer taxi dispatch products. While some of these products
will directly compete with our proposed taxi dispatch system, these products are
sophisticated systems that target the high-end of the market, and, in
particular, taxi companies located in developed countries. These competitors
include:
1. DESCO http://desco-soft.com/
This company was formerly known as Coastal Computer Corporation and has been in
business for 26 years. dESCO sells a GSM-based dispatch system. They offer a
computer software system for the service industry that is generic in nature and
allows for customization by the client buying the software. dESCO's product, ESC
Service Manager, is dispatch software for small and large service companies,
including taxi businesses. The company claims to have 15,000 customers for all
its product offerings.
2. ERAYTEC INTERNATIONAL INC. http://www.eraytech.com/ This Taiwan based company
has developed a vehicle tracking and GPS tracking system they call the
AVTS-3000. Formed in 2001, Eraytec International has annual sales between $1
million and $2.5 million according to published online report found at
http://www.alibaba.com /catalog/12029677/GPS_Tracking_And_Dispatch_System.html.
According to the company, the AVTS-3000 features GPS, GSM, GPRS functions on a
LCD graphic monitor with 16 special functions keys for communication between the
system operator and the drivers. Eraytec's system uses a call center and a
combination of voice and text messaging to communicate with the taxi drivers in
the field. Each taxi cab driver must have one of the company's graphic LCD
monitors installed in his vehicle in order to communicate with the dispatch
system operator. Eraytec is currently working with customers in Taiwan,
Indonesia, and India.
3. DIGITAL DISPATCH INC. http://www.digital-dispatch.com/
Digital Dispatch is a Canadian company that has been in business for 20 years.
They sell wireless mobile data products and wireless devices, and claim to have
75,000 wireless mobile data devices in use and nearly 200 wireless data systems
installed on 4 continents. Their taxi dispatch product offering requires the
installation of a wireless mobile data device in each taxi cab, which product
the company sells in conjunction with the company's dispatch software for use by
the system operator.
NOMADIT http://www.nomad-it.com/
NomadIT is an independent software development company based in Dublin, Ireland.
They have a product available called the Nomad Taxi Dispatch System utilizing
GPRS and GSM. Each taxi needs a PDA and GPS unit to connect to the system
operator's personal computer.
MOBISOFT www.mobisoft.fi/
This company, based in Tampere, Finland, has developed a product they call
TaxiBook, a system with automatic booking and dispatch features. The system
seeks a suitable vehicle for each booking in real time. TaxiBook was designed to
work with the national cell phone network that covers the entire country of
Finland. Each taxi must install a terminal, either a fixed model or a portable
one, for communications with the system operator.
Based on our market research, we have not identified any other company that
currently offers exactly the same service that we plan to develop. Each one of
the companies listed above requires that each taxi cab have either a portable or
a fixed terminal installed in the taxi cab to communicate with the system
operator. Our system will not have that requirement and thus will offer
substantial cost savings in comparison.
5
OUR SOFTWARE PRODUCT
The taxi dispatch system that we are planning to develop will consist of server
software, call center software for dispatch, and a software program that is
downloadable to the taxi drivers' cell phones. The system will work with
software that installs and runs on the GSM mobile phone or PDA's using SMS/GPRS
protocol. Taxi drivers will be able to download our proprietary messaging
service software directly to their cell phones. Once installed, the messaging
service will allow a taxi driver to be in communication with the taxi
dispatcher/system operator without having to install any hardware in the taxi
cab.
Our product will be web-based, with product delivery and system updates done
over the internet. We plan to sell the product to small taxi companies using the
World Wide Web as our primary sales and marketing tool.
HOW THE SYSTEM WORKS
The main dispatch system will reside on a server in a data center or at the taxi
company's administrative office. A software program will be installed on the
personal computer of each taxi dispatcher to allow access to the main dispatch
site. A system operator will be trained to input the data into the taxi dispatch
system. Each customer call will be logged on to the system and start the
dispatch process. The dispatcher/system operator will enter the pick-up-address
information and destination into pre-defined fields that are highlighted on his
computer monitor. Once the new request for a taxi is completed, the computer
system will prepare a SMS (Short Message Service) that will be sent to all taxi
drivers operating in the area at the time. The broadcast message will be
available only to cell phone users who are part of the network. Taxi drivers
will receive the message on their cell phones and decide whether to accept the
customer request for a taxi. Each taxi driver will be able to respond with his
personal identification code if he chooses to accept the new request for a taxi.
All responses will be sent through the taxi drivers' cell phones. The SMS server
will receive the short text messages from the taxi drivers, arrange them in the
sequence of time in which they arrived, and assign the customer request for a
taxi to the first driver who responded to the outgoing request message. The
system will then send a confirmation message to the driver assigned to handle
the customer request for a taxi. The taxi driver who receives the confirmation
message will then proceed to the location for the waiting customer. When the
taxi ride is completed, the taxi driver will send a SMS to acknowledge
completion of the task and he will enter the amount of the fare. The financial
data will be directed to the daily accounting file for record keeping purposes.
PRODUCT DESIGN AND DEVELOPMENT
For a detailed description of the planned product design and development
process, see "Taxi Dispatch System Development."
EARLY STAGE DEVELOPMENT
While we are in the software and web site development phase of operations, we
plan to establish an information-only web site about the Company. Our
information-only web site will offer general information about the Company, and
its products and services.
The Directors of the Company plan to outsource the software and web site
development to an offshore company in order to save money and to expedite the
development process. Web hosting will also be contracted out.
Within the second quarter of this year we plan to have the system design
completed and the technical specification done as well. When we enter into
agreements with software and web site development companies, we plan to have
each one sign a Non-Disclosure Agreement that will include an acknowledgement
that all intellectual property rights remain with e-Dispatch Inc.
6
MARKETING & SALES STRATEGY
Our marketing strategy will be multi-faceted and designed to gain maximum
exposure in the shortest amount of time. In the Philippines, where we intend to
first market our product, we will focus our marketing efforts on developing our
contacts in small towns throughout the country. We hope to achieve extensive
coverage by working in conjunction with the economic development offices
situated in provinces and regions throughout the Philippines. They have an
existing infrastructure designed to assist small businesses in a variety of
ways, including marketing helpful products and services to them. Discussions
that we have had with our local contacts in the Philippines suggest that this
may be an effective way to spread the word about our new service to other small
businesses. These offices have an interest in helping small businesses network
with interested parties. The Philippines Center for Economic Development -
http://www.pced.gov.ph/ - has many contacts that may be helpful to our business.
The main effort of our marketing strategy will be directed at online advertising
using well established programs. For example, the Google internet search page
(http://google.com) can provide such services for internet based companies like
ours.
We plan to start by using Google Adwords to advertise our business. This program
offers a graduated advertising approach that will allow us to control the
frequency of the advertisements. The program provides the number of times the
advertisements appear and updates on how much we are spending, and grants us the
flexibility to increase or eliminate our advertising campaign at any time. The
last feature is most appealing because it means that we do not have to enter
into a long term contract, thus reducing our long term risk.
(https://adwords.google.com/). The Google advertising campaign will be monitored
on a month to month basis to track results and related costs.
We plan to begin our marketing plan in month six of the first year of business.
SEARCH ENGINE MARKETING
In addition, we plan to install meta-tags on each of the pages of our web site.
Meta-tags are code words that reside in the hidden infrastructure of a web page
and help to highlight a web page when someone is using a search engine to find
information. For example, by including words such as "TAXI DISPATCH GPS", our
web page will appear higher on the search page results of search engines like
Google, Yahoo, AltaVista, Dogpile, and others. This approach is commonly
referred to as search engine optimization. By achieving a higher ranking in the
search page results we hope to increase the number of web visitors who come to
see our web page and decide to do business with us. We intend to undertake a
quarterly review to monitor the effectiveness of our search engine optimization
program.
MULTI-LINGUAL NEWSLETTER
The Company's Directors are fluently bilingual in Filipino and English. We hope
to take advantage of this ability by publishing a quarterly newsletter available
from our web site in both languages. We hope that this type of marketing will
help establish a strong connection with taxi cab companies and other potential
business partners throughout the Philippines.
Our personal contacts in the Philippines have already created interest in our
business idea. Once our taxi dispatch service is available, we anticipate being
able to attract and retain a sustainable client base. Unlike other products that
are a single purchase only, our taxi dispatch system will include ongoing
revenue earned from monthly support fees for system operator support, and
monthly license fees for every taxi driver using the system (See the "Pricing
Model" section below). This means that the business has the potential to
continue generating revenues even after our taxi dispatch system has been
installed in the field.
CUSTOMER SUPPORT
An online System Operators Training Course will be included with each system
sold to taxi companies. A similar online Taxi Drivers Customer Support program
will be available to taxi drivers. Customer Support for our taxi company
customers will be included as part of the monthly System Support Contract Fee.
Our web site will offer continuous updates to all customers at no cost.
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All training courses will be conducted online using existing technology and
online web conferencing products from companies such as Glance.com
http://www.glance.com/. The Glance system allows the person doing the training
to control the desktop computer screen of web site visitors who log onto the
Glance network. By combining the online conference with a digital phone call
over the internet we can be in direct contact with customers in a timely and
effective manner.
TAXI DISPATCH SYSTEM DEVELOPMENT
We plan to develop and deploy our taxi dispatch system. We intend to outsource
both our web site development and our product software development in order to
minimize the costs involved and to expedite the development process. Our
development plan is described below in a section by section layout in order to
identify the development stages and the estimated time to complete each stage.
Our system will take advantage of current internet and cellular technology as
well as the increased functionality of today's cell phones, devices that are
already owned by many taxi drivers for their personal use. During the next
twelve months we expect that our Directors will contribute personally to the
success of the business by spending at least 20 to 25 hours per week on our
business.
DESIGN AND DEVELOPMENT OF OUR WEB SITE:
The information only website is complete. We plan to expand our website by
including demos and downloads on this website. This is planned to be completed
by the end of the second quarter.
WEB HOSTING: We have hired a web hosting company.
SELECTION OF THE SOFTWARE DESIGNER: Product design will begin after the
selection of the software designer. Our plan is to use an offshore company or
individual in order to keep our costs down. Our market research indicates that
there are a suitable number of experienced companies available that can do the
work within our budget. Selection of the independent contractor will be based on
such contractor's past experience with similar development projects. We have
conducted preliminary discussions with prospective software development firms.
We intend to conclude these discussions and select a software developer by the
end of the third quarter of 2010.
SPECIFICATIONS AND HIGH-LEVEL DESIGN: We expect to complete specifications for
the product and high level design within two months after the selection of the
software contractor. The work on the specifications and high-level design will
be in a collaborative manner between the Directors and the software contractor.
INFRASTRUCTURE DEVELOPMENT: This will include the purchase of two computers that
will be used as servers. One server will be used for product development, and
the other server for the online deployment of the taxi dispatch service on the
internet. We estimate that installation of the operating system, development
tools, and database will take two weeks to complete. This work will be handled
by the software contractor. In order to keep our costs as low as possible, we
will be using open source software such as Linux as an operating system, mySQL
as a database, and C and PhP as programming languages, all of which are
available as open source products on the internet at no cost.
DATABASE CONFIGURATION AND DESIGN: During the development phase, we will work on
a database design that features a scalable software application. The software
contractor will be responsible for this task while our management will be
directly involved in the ongoing supervision of the work, and benchmarking and
testing of the database. We estimate that this will take one month to complete
and this work will begin after the set-up of the development server. Security
procedures and a daily backup process will be used from the start of the high
level design work and carried forward to all aspects of the development process.
MAIN DISPATCH SERVER: This will be the heart of the product. The Main Dispatch
Server will handle all of the message processing, and the message relay among
the taxi drivers' cell phones, the main database, and the system operator. The
Main Dispatch Server will track all of the transactional information and will
8
have reporting capabilities. Managers will be able to run sales reports on a
daily, weekly, monthly, quarterly, and annual basis. Managers will be able to
review the performance of each taxi driver, including monies received from
customers.
SMS GATEWAY: A sophisticated communications system will be built around the
industry standard SMS communications protocol. The SMS Gateway will be able to
read SMS messages and place them in a queue. These messages will be transmitted
to and from the cell phones of the taxi drivers, as well as to and from the Main
Dispatch Server. We will be using the cell phone company's SMS communications
protocol to send and receive messages.
DESKTOP APPLICATIONS FOR SYSTEMS OPERATOR: The desktop applications will reside
on the dispatcher's personal computer. It will have a section to record incoming
requests for a taxi, to broadcast taxi requests in sequential order, and to
track jobs allocated and those still waiting assignment, as well as completed
jobs.
SOFTWARE FOR CELL PHONES OR PDA'S USING SMS OR GPRS PROTOCOL: This software will
be downloadable by the taxi drivers directly to their cell phones or other
mobile phone devices. The software will be available for download from our web
server, and will provide all the functionality of our taxi dispatch system.
TAXI DRIVER'S MODULE: This will be the area of our web site dedicated to taxi
drivers. It will feature general background information, How-To-Download
instructions, a Help section, a Frequently Asked Questions section, and a system
upgrades area.
SYSTEM OPERATOR'S TRAINING & SUPPORT MODULE: Our product will include an online
dispatcher/system operator training module. The product development process will
include producing an online Training & Support Manual for customers.
DEMONSTRATION CAPABILITY: We plan to develop an online demonstration of our taxi
dispatch service that will be available on our web site. The demonstration will
feature a live demonstration at pre-arranged times with our staff. Using
temporary passwords we will be able to duplicate a live scenario for a system
operator and taxi drivers in the field.
The following chart provides an overview of our budgeted expenditures by
significant area of activity over the next 12 months:
Expenditures US Dollar Amount
------------ ----------------
Web Site/Software Development 8,000
Marketing 3,500
Sales/ Technical Support Assistant 1,500
Web-hosting 1,200
Office Rent 2,400
Office Equipment 1,000
Offices Expenses 1,000
Telephone 1,000
Miscellaneous 400
Legal and Accounting 7,500
Transfer Agent 2,500
-------
TOTAL EXPENSES $30,000
=======
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SOURCES AND AVAILABILITY OF PRODUCTS AND SUPPLIES
There are no constraints on the sources or availability of products and supplies
related to our business. We will be producing our own product, and the
distribution of our system will be over the internet.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
Our business plan and the nature of our system do not hinge on one or a few
major customers; however, if we obtain one or more large corporate accounts,
then we may end up being dependent on one or a few major customers.
PATENT, TRADEMARK, LICENSE & FRANCHISE RESTRICTIONS AND CONTRACTUAL OBLIGATIONS
& CONCESSIONS
We have not entered into any franchise agreements or other contracts that have
given, or could give rise to, obligations or concessions. We are planning to
develop a software product and intend to protect our software product with
copyright and trade secrecy laws. Beyond our trade name, we do not hold any
other intellectual property.
EXISTING OR PROBABLE GOVERNMENT REGULATIONS
There are no existing government regulations, nor are we aware of any
regulations being contemplated that would adversely affect our ability to
operate.
Due to the increasing popularity and use of the internet, it is possible that a
number of laws and regulations may be adopted with respect to the internet
generally, covering issues such as user privacy, pricing, and characteristics
and quality of products and services. Similarly, the growth and development of
the market for internet commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those companies conducting
business over the internet. The adoption of any such laws or regulations may
decrease the growth of commerce over the internet, increase our cost of doing
business, or otherwise have a harmful effect on our business.
To date, governmental regulations have not materially restricted the use or
expansion of the internet. However, the legal and regulatory environment that
pertains to the Internet is uncertain and may change. New laws may cover issues
that include:
* Sales and other taxes;
* User privacy;
* Pricing controls;
* Characteristics and quality of products and services;
* Consumer protection;
* Libel and defamation;
* Copyright, trademark and patent infringement; and
* Other claims based on the nature and content of internet materials.
These new laws may have an impact on our ability to market our services in
accordance with our business plan.
RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS
We have not incurred any costs to date and have plans to undertake certain
research and development activities during the first year of operation. For a
detailed description see "Taxi Dispatch System Development."
EMPLOYEES
We have commenced only limited operations; therefore, we have no employees. Our
officers and Directors provide service to us on an as-needed basis. When we
commence full operations, we will need to hire full-time management and
10
administrative support staff. We do plan to hire a sales representative in or
around September 2010 to assist in promoting the marketing of our service.
ITEM 1A. RISK FACTORS
Much of the information included in this annual report includes or is based upon
estimates, projections or other "forward looking statements". Such forward
looking statements include any projections or estimates made by us and our
management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.
Such estimates, projections or other "forward looking statements" involve
various risks and uncertainties as outlined below. We caution the reader that
important factors in some cases have affected, and in the future could
materially affect, actual results and cause actual results to differ materially
from the results expressed in any such estimates, projections or other "forward
looking statements".
RISKS RELATING TO OUR LACK OF OPERATING HISTORY
1. WE HAVE A GOING CONCERN OPINION FROM OUR AUDITORS, INDICATING THE
POSSIBILITY THAT WE MAY NOT BE ABLE TO CONTINUE TO OPERATE.
The Company has incurred net losses of $(52,081) for the period from July 31,
2007, (date of inception) through March 31, 2009. We anticipate generating
losses for the next 12 months. We do not anticipate generating revenues prior to
the end of 2009. Therefore, we may be unable to continue operations in the
future as a going concern. No adjustment has been made in the accompanying
financial statements to the amounts and classification of assets and liabilities
which could result should we be unable to continue as a going concern. In
addition, our independent auditors included an explanatory paragraph in their
report on the accompanying financial statements regarding concerns about our
ability to continue as a going concern.
As a result, we may not be able to obtain additional necessary funding. There
can be no assurance that we will ever achieve any revenues or profitability. The
revenue and income potential of our proposed business and operations are
unproven, and the lack of operating history makes it difficult to evaluate the
future prospects of our business. If we cannot continue as a viable entity, our
stockholders may lose some or all of their investment in the Company.
2. WE ARE A DEVELOPMENT STAGE COMPANY AND MAY NEVER BE ABLE TO EXECUTE OUR
BUSINESS PLAN.
We were incorporated on July 31, 2007. We currently have no products, customers,
or revenues. Although we have begun initial planning for the development of our
Taxi Dispatch System, we may not be able to execute our business plan with the
funds that we have raised and we may require additional financing in order to
establish profitable operations. Such financing, if required, may not be
forthcoming. Even if additional financing is available, it may not be available
on terms we find favorable. Failure to secure the needed additional financing
will have a very serious effect on our company's ability to survive. At this
time, there are no anticipated additional sources of funds in place.
3. OUR BUSINESS PLAN MAY BE UNSUCCESSFUL.
The success of our business plan is dependent on our developing our Taxi
Dispatch System. Our ability to develop this system is unproven, and the lack of
operating history makes it difficult to validate our business plan. In addition,
the success of our business plan is dependent upon the acceptance of our system
by taxi company operators. Should the target market not be as responsive as we
anticipate, we will not have in place alternate services or products that we can
offer to ensure our continuation as a going concern.
4. WE HAVE NO OPERATING HISTORY AND HAVE MAINTAINED LOSSES SINCE INCEPTION,
WHICH WE EXPECT WILL CONTINUE IN THE FUTURE.
11
Management believes that the prior investment of $50,000 by our current
stockholders will not be sufficient to commence and continue our planned
activities for approximately 12 months after the offering. We also expect to
continue to incur operating losses in future periods. These losses will occur
because we do not yet have any revenues to offset the expenses associated with
the development of our planed taxi dispatch services. We cannot guarantee that
we will ever be successful in generating revenues in the future. We recognize
that if we are unable to generate revenues, we will not be able to earn profits
or continue operations.
There is no history upon which to base any assumption as to the likelihood that
we will prove successful, and we can provide investors with no assurance that we
will generate any operating revenues or ever achieve profitable operations. If
we are unsuccessful in addressing these risks, our business will most likely
fail.
RISKS RELATING TO OUR BUSINESS
5. OUR EXECUTIVE OFFICERS AND DIRECTORS HAVE SIGNIFICANT VOTING POWER AND MAY
TAKE ACTIONS THAT MAY BE DIFFERENT THAN ACTIONS SOUGHT BY OUR OTHER
STOCKHOLDERS.
Our officers and Directors hold 55.6% of the outstanding shares of our common
stock.
These stockholders will be able to exercise significant influence over all
matters requiring stockholder approval. This influence over our affairs might be
adverse to the interest of our other stockholders. In addition, this
concentration of ownership could delay or prevent a change in control and might
have an adverse effect on the market price of our common stock.
6. SINCE OUR OFFICERS AND DIRECTORS MAY WORK OR CONSULT FOR OTHER COMPANIES,
THEIR OTHER ACTIVITIES COULD SLOW DOWN OUR OPERATIONS.
Our officers and Directors are not required to work exclusively for us and do
not devote all of their time to our operations. Presently, our officers and
Directors allocate only a portion of their time to the operation our business.
Since our officers and Directors are currently employed full-time elsewhere,
they are able to commit to us only up to 20-25 hours a week. Therefore, it is
possible that their pursuit of other activities may slow our operations and
reduce our financial results because of the slow-down in operations.
7. OUR OFFICERS AND DIRECTORS ARE LOCATED IN THE PHILIPPINES.
Since all of our officers and Directors are located in the Philippines, any
attempts to enforce liabilities upon such individuals under the U.S. securities
and bankruptcy laws may be difficult.
RISKS RELATING TO OUR STRATEGY AND INDUSTRY
8. DISPATCH SYSTEMS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE.
Our business is in an emerging market that is characterized by rapid changes in
customer requirements, frequent introductions of new and enhanced products and
services, and continuing and rapid technological advancement. To compete
successfully in the taxi dispatch market, we must continue to design, develop
and sell new and enhanced services that provide increasingly higher levels of
performance and reliability at lower cost. These new and enhanced services must
take advantage of technological advancements and changes, and respond to new
customer requirements. Our success in designing, developing, and selling such
services will depend on a variety of factors, including:
* Identifying and responding to market demand for new services;
* The scalability of our equipment platforms to efficiently deliver our
services;
* Keeping abreast of technological changes;
12
* Timely developing and implementing new product/service offerings and
features;
* Maintaining quality of performance;
* Providing cost-effective service and support; and
* Promoting our services and expanding our market share.
If we are unable, due to resource constraints or technological or other reasons,
to develop and introduce new or enhanced services in a timely manner, if such
new or enhanced services do not achieve sufficient market acceptance, or if such
new service introductions decrease demand for existing services, our operating
results would decline and our business would not grow.
9. WE ARE A SMALL COMPANY WITH LIMITED RESOURCES COMPARED TO SOME OF OUR
CURRENT AND POTENTIAL COMPETITORS AND WE MAY NOT BE ABLE TO COMPETE
EFFECTIVELY AND INCREASE MARKET SHARE. ALSO, INTENSE COMPETITION IN THE
MARKETS IN WHICH WE COMPETE COULD PREVENT US FROM INCREASING OR SUSTAINING
OUR REVENUE AND PREVENT US FROM ACHIEVING PROFITABILITY.
Most of our current and potential competitors have longer operating histories,
significantly greater resources and name recognition, and a larger base of
customers than we have. As a result, these competitors have greater credibility
with our potential customers. They also may be able to adopt more aggressive
pricing policies and devote greater resources to the development, promotion, and
sale of their products and services than we can to ours.
10. WE NEED TO RETAIN KEY PERSONNEL TO SUPPORT OUR SERVICES AND ONGOING
OPERATIONS.
The development of our system and the marketing of our services will continue to
place a significant strain on our limited personnel, management, and other
resources. Our future success depends upon the continued services of our
executive officers and other needed key employees and contractors who have
critical industry experience and relationships that we rely on to implement our
business plan. The loss of the services of any of our officers or the lack of
availability of other skilled personnel would negatively impact our ability to
develop our system products and sell our services, which could adversely affect
our financial results and impair our growth.
11. BECAUSE MRS. SUAVA AND MR. MACUTAY HAVE NO EXPERIENCE IN RUNNING A COMPANY
THAT SELLS TAXI DISPATCH SYSTEMS, THEY MAY NOT BE ABLE TO SUCCESSFULLY
OPERATE SUCH A BUSINESS WHICH COULD CAUSE YOU TO LOSE YOUR INVESTMENT.
We are a start-up company and we intend to market and sell our Taxi Dispatch
System. Mrs. Suava and Mr. Macutay, our current officers, have effective control
over all decisions regarding both policy and operations of our company with no
oversight from other management. Our success is contingent upon these
individuals' ability to make appropriate business decisions in these areas. It
is possible that their lack of relevant operational experience could prevent us
from becoming a profitable business and an investor from obtaining a return on
his investment in us.
12. IF WE ARE UNABLE TO ATTRACT AND RETAIN THE INTEREST OF TAXI COMPANY
OPERATORS, WE WILL NOT BE SUCCESSFUL.
We will rely significantly on our ability to attract and retain the interest of
taxi company operators. We will need to continually evaluate and build our
system to keep pace with the needs of both taxi drivers and the operators of the
taxi companies. We may be unable to identify or obtain the participation of a
sufficient number of taxi companies that are interested in licensing our system,
which may decrease the potential for the growth of our business. We cannot
assure that we will be successful in signing up taxi operators to our system.
The cost of attracting these operators may be higher than we anticipate, and, as
a result, our profitability could be minimal. Similarly, if we are unable to
attract and retain the interest of taxi operators, our ability to offer our
system may decline and, which may result in failure of our system to be
commercially viable.
13. OUR SUCCESS DEPENDS ON INDEPENDENT CONTRACTORS TO DEVELOP OUR SYSTEM.
13
We intend to rely on third party independent contractors for software
development, database design, web site interface, web hosting, and for other
development functions. These third party developers may not dedicate sufficient
resources or give sufficient priority to developing our required resources.
There is no history upon which to base any assumption as to the likelihood that
we will prove successful in selecting qualified software development
contractors, and we can provide investors with no assurance that our web site
and associated databases and administrative software will be developed according
to the specifications that we require. If we are unsuccessful in addressing
these risks, our business will most likely fail.
14. WE MAY LOSE CUSTOMERS IF WE EXPERIENCE SYSTEM FAILURES THAT SIGNIFICANTLY
DISRUPT THE AVAILABILITY AND QUALITY OF THE SERVICES THAT WE PROVIDE.
The operation of our system will depend on our ability to avoid and mitigate any
interruptions in service or reduced capacity for customers. Interruptions in
service or performance problems, for whatever reason, could undermine confidence
in our service and cause us to lose customers or make it more difficult to
attract new ones. In addition, because our system may be critical to the
businesses of our customers, any significant interruption in service could
result in lost profits or other losses to our customers.
15. IF A THIRD PARTY ASSERTS THAT WE INFRINGE ITS PROPRIETARY RIGHTS, WE COULD
BE REQUIRED TO REDESIGN OUR SOFTWARE, PAY SIGNIFICANT ROYALTIES, OR ENTER
INTO LICENSE AGREEMENTS.
Although presently we are not aware of any such claims, a third party may assert
that our technology or third party technologies that we license violate its
intellectual property rights. As the number of software products in our markets
increases and the functionality of these software products further overlap, we
believe that infringement claims will become more common. Any claims against us,
regardless of their merit, could:
* Be expensive and time-consuming to defend;
* Result in negative publicity;
* Force us to stop selling our services that rely on the challenged
intellectual property;
* Require us to redesign our software products;
* Divert management's attention and our other resources; or
* Require us to enter into royalty or licensing agreements in order to
obtain the right to use necessary technologies, which may not be
available on terms acceptable to us, if at all.
We believe that any successful challenge to our use of a trademark or domain
name could substantially diminish our ability to conduct business in a
particular market or jurisdiction and thus could decrease our revenues and/or
result in losses to our business.
16. OUR PRODUCT WILL EMPLOY PROPRIETARY TECHNOLOGY, WHICH WILL BE DIFFICULT TO
PROTECT.
Our success and ability to compete are dependent to a significant degree on our
proprietary technology. We intend to rely on a combination of patent, trade
secret, copyright and trademark laws, together with non-disclosure agreements
and technological measures to establish and protect proprietary rights in our
proposed product. We cannot assure you that these efforts will provide
meaningful protection for our technology because:
* some foreign countries may not protect our proprietary rights as fully
as do the laws of the United States;
* if a competitor were to infringe on our proprietary rights, enforcing
our rights may be time consuming and costly, diverting management's
attention and our resources;
* measures like entering into non-disclosure and non-competition
agreements afford only limited protection;
* unauthorized and/or unidentifiable parties may attempt to copy aspects
of our products and develop similar software or to obtain and use
information that we regard as proprietary; and
* our competitors may be able to design around our intellectual property
rights or independently develop products that are substantially
equivalent or superior to our products.
14
17. THE DEMAND FOR OUR PROPOSED SOLUTION DEPENDS IN LARGE PART ON CONTINUED USE
OF TAXIS AS A MEANS OF TRANSPORTATION IN THE PHILIPPINES. A DECLINE IN
DEMAND, OR A DECREASE OR DELAY IN SPENDING BY TAXI DISPATCHERS AND TAXI
OPERATORS, COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF
OPERATIONS.
We cannot assure you of the rate, or the extent to which, the taxi dispatch
market will grow, if at all. Demand for our Taxi Dispatch System will depend on
the magnitude and timing of capital spending by taxi operators. In the event of
a downturn in the use of taxis in the Philippines, taxi operators may be
required to reduce their capital expenditures, cancel or delay new developments,
or take a cautious approach to acquiring new equipment and technologies, which
could have a negative impact on our business.
ITEM 2. PROPERTIES
EXECUTIVE OFFICES
We do not own any real property. We currently maintain our corporate office at
800 Bellevue Way, Suite 400, Bellevue, Washington, 98004. We pay monthly rent of
$150 to our landlord for use of this space. This space is sufficient until we
commence full operations.
ITEM 3. LEGAL PROCEEDINGS
We know of no material, active, or pending legal proceeding against our company,
nor are we involved as a plaintiff in any material proceeding or pending
litigation there such claim or action involves damages for more than 10% of our
current assets. There are no proceedings in which any of our company's
directors, officers, or affiliates, or any registered or beneficial
shareholders, is an adverse party or has a material interest adverse to our
company's interest.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of our security holders during the fourth
quarter of fiscal 2009.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
MARKET FOR SECURITIES
As at the date of this document, the Company has received its trading symbol
("EDCH") but is yet to develop a market for its securities.
HOLDERS OF OUR COMMON STOCK
On July 2, 2009 the shareholders' list of our common stock showed 42 registered
shareholder and 1,800,000 shares outstanding.
DIVIDEND POLICY
We have not paid any cash dividends on our common stock and have no present
intention of paying any dividends on the shares of our common stock. Our future
dividend policy will be determined from time to time by our board of directors.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
15
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The following discussion should be read in conjunction with our audited
financial statements and the related notes that appear elsewhere in this annual
report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include those discussed below and
elsewhere in this annual report.
Our consolidated financial statements are stated in United States dollars and
are prepared in accordance with United States generally accepted accounting
principles.
APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
OVERVIEW
We are a development stage company with limited operations and no revenues from
our business operations. Our auditors have issued a going concern opinion. This
means that our auditors believe there is substantial doubt as to whether we can
continue as an ongoing business for the next twelve months. We do not anticipate
that we will generate revenues until we have completed development and
deployment of our taxi dispatch system. Accordingly, we must raise cash from
sources other than our operations in order to implement our marketing plan.
In our management's opinion, there is a market need for a low-cost taxi dispatch
system. Our cell phone-based taxi dispatch system will be predicated on a
software product that will reside on a personal computer to be used by the taxi
dispatcher/system operator. We intend for our taxi dispatch system to allow the
taxi dispatcher/system operator to receive customer phone calls and to enter
requests for taxis into the system, which will then create and send interactive
text messages to taxis that are in service advising them of the waiting
customers
We believe that our current funding will allow us to begin our product
development, develop our web site, market our product, and remain in business
for twelve months. We hope to begin to generate revenues by the end of calendar
2009. If we are unable to generate revenues for any reason, or if we are unable
to make a reasonable profit after 2009 we may have to suspend or cease
operations. At the present time, we have not made any arrangements to raise
additional cash. If we need additional funds, we may seek to obtain such funds
through a second public offering, private placement of securities, or loans.
Other than as described in this paragraph, we have no other financing plans at
this time.
ACTIVITIES TO DATE
Management has completed background research on the market for a taxi dispatch
service like the one we propose, both in the Philippines and elsewhere. We have
created an information-only web site located at http://www.e-dispatchinc.com,
and a second web site called http://www.e-dispatch.net. Our information-only web
site provides general information about the company and our intended products
and services. This site will be updated as our software and services are
developed. Our website is hosted by an internet service company at a cost of
$100 a month over a three year period on a month-to-month basis with no
cancellation penalties.
16
PLAN OF OPERATION
Our plan of operation is to develop and deploy our taxi dispatch system. We
intend to outsource both our web site development and our product software
development in order to minimize the costs involved and to expedite the
development process. Our intended plan is described below in a
section-by-section layout in order to identify the development stages and the
estimated time to complete each stage.
Our system will take advantage of current internet and cellular technology as
well as the increased functionality of today's cell phones, devices that are
already owned by many taxi drivers for their personal use. During the next
twelve months we expect that our Directors will contribute personally to the
success of the business by spending at least 20 to 25 hours per week on our
business.
OFF BALANCE SHEET TRANSACTIONS
We have had no off balance sheet transactions.
SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment for the next twelve
months.
RESULTS OF OPERATIONS
REVENUES
We had no revenues for the period from July 31, 2007 (date of inception),
through March 31, 2009.
EXPENSES
Our expenses for the twelve month period ended March 31, 2009 and 2008, were
$35,083 and $16,998. During the period from July 31, 2007 (date of inception),
through March 31, 2009, we incurred expenses of $52,081. These expenses were
comprised primarily of general and administrative, and legal and accounting
expenses, as well as banking fees.
NET INCOME (LOSS)
Our net loss for the twelve-month period ended March 31, 2009 and 2008 was
$35,083 and $16,998. During the period from July 31, 2007 (date of inception),
through March 31, 2009, we incurred a net loss of $52,081. This loss consisted
primarily of incorporation costs, legal and accounting fees, consulting fees,
website hosting costs, and administrative expenses. Since inception, we have
sold 1,800,000 shares of common stock.
PURCHASE OR SALE OF EQUIPMENT
We do not expect to purchase or sell any plant or significant equipment.
LIQUIDITY AND CAPITAL RESOURCES
Our balance sheet as of March 31, 2009 reflects assets of $8,655 in the form of
cash and cash equivalents and prepaid expenses. Since inception, we have sold
1,800,000 shares of common stock with gross proceeds of $50,000. However, cash
resources provided from our capital formation activities have, from inception,
been insufficient to provide the working capital necessary to operate our
Company.
We anticipate generating losses in the near term, and therefore, may be unable
to continue operations in the future. If we require additional capital, we would
have to issue debt or equity or enter into a strategic arrangement with a third
party. There can be no assurance that additional capital will be available to
17
us. We currently have no agreements, arrangements, or understandings with any
person to obtain funds through bank loans, lines of credit, or any other
sources.
GOING CONCERN CONSIDERATION
Our registered independent auditors included an explanatory paragraph in their
report on the accompanying financial statements regarding concerns about our
ability to continue as a going concern. Our financial statements contain
additional note disclosures describing the circumstances that lead to this
disclosure by our registered independent auditors.
Due to this doubt about our ability to continue as a going concern, management
is open to new business opportunities which may prove more profitable to the
shareholders of E-Dispatch Inc. Historically, we have been able to raise a
limited amount of capital through private placements of our equity stock, but we
are uncertain about our continued ability to raise funds privately. Further, we
believe that our company may have difficulties raising capital until we locate a
prospective business opportunity through which we can pursue our plan of
operation. If we are unable to secure adequate capital to continue our
acquisition efforts, our business may fail and our stockholders may lose some or
all of their investment.
Should our original business plan fail, we anticipate that the selection of a
business opportunity in which to participate will be complex and without
certainty of success. Management believes that there are numerous firms in
various industries seeking the perceived benefits of being a publicly registered
corporation. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. We can provide no assurance that we will be
able to locate compatible business opportunities.
18
ITEM 8. FINANCIAL STATEMENTS
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
E-Dispatch, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of E-Dispatch, Inc. (A
Development Stage Company) as of March 31, 2009 and 2008, and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
year ended March 31, 2009, and the periods from inception on July 31, 2007 to
March 31, 2008 and 2009. 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 conduct 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 E-Dispatch, Inc. (A Development
Stage Company) as of March 31, 2009 and 2008, and the related statements of
operations, stockholders' equity and cash flows for the year ended March 31,
2009, and the periods from inception on July 31, 2007 through March 31, 2008 and
2009, 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 2 to the
financial statements, the Company has an accumulated deficit of $52,081, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 2. 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 19, 2009
6490 West Desert Inn Rd, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
19
E-Dispatch Inc.
(A Development Stage Company)
Balance Sheets
March 31, 2009 and 2008
March 31, March 31,
2009 2008
-------- --------
Assets
Cash $ 7,681 $ 39,850
Prepaid expenses 974 --
-------- --------
Total Current Assets 8,655 39,850
-------- --------
Total Assets $ 8,655 $ 39,850
======== ========
Liabilities
Accounts payable and accrued liabilities $ 9,063 $ 5,500
Due to related party 1,673 1,348
-------- --------
Total Current Liabilities 10,736 6,848
-------- --------
Total Liabilities 10,736 6,848
-------- --------
Stockholders' Equity (Deficit)
Common stock authorized -
100,000,000 common shares with a par value of $0.001
Common shares issued and outstanding -
1,800,000 common shares 1,800 1,800
Additional paid in capital 48,200 48,200
Deficit accumulated during the development stage (52,081) (16,998)
-------- --------
Total Stockholders' Equity (Deficit) (2,081) 33,002
-------- --------
Total Liabilities and Stockholders' Equity (Deficit) $ 8,655 $ 39,850
======== ========
The accompanying notes are an integral part of these financial statements
20
E-Dispatch Inc.
(A Development Stage Company)
Statements of Operations
Period from Period from
Inception Inception
Year Ended (July 31, 2007) to (July 31, 2007) to
March 31, March 31, March 31,
2009 2008 2009
---------- ---------- ----------
Revenue $ -- $ -- $ --
---------- ---------- ----------
Expenses
Legal and accounting 26,562 13,000 39,562
Web design -- 2,500 2,500
General and administrative 8,521 1,498 10,019
---------- ---------- ----------
Total expenses 35,083 16,998 52,081
Provision for income taxes -- -- --
---------- ---------- ----------
Net (Loss) $ (35,083) $ (16,998) $ (52,081)
========== ========== ==========
Basic and diluted (loss) per share $ (0.02) $ (0.01)
========== ==========
Weighted average number of common
shares outstanding 1,800,000 1,197,403
========== ==========
The accompanying notes are an integral part of these financial statements
21
E-Dispatch Inc.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
For the period from Inception (July 31, 2007) to March 31, 2009
Accumulated
Deficit
Additional During
Common Stock Paid in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Balance, July 31, 2007 (date of inception) -- $ -- $ -- $ -- $ --
Shares issued to founder on July 31, 2007 @
$0.01 per share (par value $0.001 per share) 1,000,000 1,000 9,000 -- 10,000
Private placement on November 23, 2007 @
$0.05 per share (par value $0.001 per share) 800,000 800 39,200 -- 40,000
Net (loss) for the period from inception on
July 31, 2007 to March 31, 2008 -- -- -- (16,998) (16,998)
--------- ------ ------- -------- --------
Balance, March 31, 2008 1,800,000 1,800 48,200 (16,998) 33,002
========= ====== ======= ======== ========
Net (loss) for the year-ended March 31, 2009 -- -- -- (35,083) (35,083)
--------- ------ ------- -------- --------
Balance, March 31, 2009 1,800,000 $1,800 $48,200 $(52,081) $ (2,081)
========= ====== ======= ======== ========
The accompanying notes are an integral part of these financial statements
22
E-Dispatch Inc.
(A Development Stage Company)
Statements of Cash Flows
Period from Period from
Inception Inception
Year Ended (July 31, 2007) to (July 31, 2007) to
March 31, March 31, March 31,
2009 2008 2009
-------- -------- --------
Operating Activities:
Net (Loss) $(35,083) $(16,998) $(52,081)
(Increase) in prepaid expenses (974) -- (974)
Increase in accounts payable and accrued liabilities 3,563 5,500 9,063
-------- -------- --------
Cash from (used in) operating activities (32,494) (11,498) (43,992)
-------- -------- --------
Financing Activities:
Increase in due to stockholder 325 1,348 1,673
Proceeds from sale of stock -- 50,000 50,000
-------- -------- --------
Cash from financing activities 325 51,348 51,673
-------- -------- --------
Increase (Decrease) in cash (32,169) 39,850 7,681
Cash, opening 39,850 -- --
-------- -------- --------
Cash, closing $ 7,681 $ 39,850 $ 7,681
======== ======== ========
Supplemental Disclosures of Cash Flow Information:
Cash paid for:
Interest $ -- $ -- $ --
Income taxes $ -- $ -- $ --
The accompanying notes are an integral part of these financial statements
23
E-Dispatch Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
NOTE 1 - NATURE OF OPERATIONS
E-Dispatch Inc. ("the Company"), incorporated in the state of Nevada on July 31,
2007, is a company with business activities in cell phone based taxi dispatch
systems.
The company has limited operations and in accordance with SFAS#7 is considered
to be in the development stage.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about the Company's ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from this uncertainty.
The Company's activities to date have been supported by equity financing. It has
sustained losses in all previous reporting periods with an inception to date
loss of $52,081 as of March 31, 2009. Management continues to seek funding from
its shareholders and other qualified investors to pursue its business plan. In
the alternative, the Company may be amenable to a sale, merger or other
acquisition in the event such transaction is deemed by management to be in the
best interests of the shareholders.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING BASIS
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
FINANCIAL INSTRUMENT
The Company's financial instrument consists of amount due to stockholder.
The amount due to stockholder is non interest-bearing. It is management's
opinion that the Company is not exposed to significant interest, currency or
credit risks arising from its other financial instruments and that their fair
values approximate their carrying values except where separately disclosed.
PROPERTY
The Company does not own any property. Our office space is leased to us on a
month to month basis for approximately $150 per month.
24
E-Dispatch Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of 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 revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
ADVERTISING
The Company expenses advertising costs as incurred. The Company has had no
advertising activity since inception.
LOSS PER SHARE
Basic loss per share is calculated using the weighted average number of common
shares outstanding and the treasury stock method is used to calculate diluted
earnings per share. For the years presented, this calculation proved to be
anti-dilutive.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
INCOME TAXES
The Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, "Accounting for Income Taxes." SFAS No. 109 requires the use
of an asset and liability approach in accounting for income taxes.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. No
provision for income taxes is included in the statement due to its immaterial
amount, net of the allowance account, based on the likelihood of the Company to
utilize the loss carry-forward.
NET INCOME PER COMMON SHARE
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. The Company has not issued any potentially dilutive common
shares.
25
E-Dispatch Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
NOTE 4 - DUE TO STOCKHOLDER
The amount owing to stockholder is unsecured, non-interest bearing and has no
specific terms of repayment.
NOTE 5 - CAPITAL STOCK
Common Shares - Authorized
The company has 100,000,000 common shares authorized at a par value of $0.001
per share.
Common Shares - Issued and Outstanding
During the year ended March 31, 2008, the company issued 1,800,000 common shares
for total proceeds of $50,000.
As at March 31, 2009, the Company had 1,800,000 common shares issued and
outstanding.
As at March 31, 2009, the Company has no warrants or options outstanding.
NOTE 6 - INCOME TAXES
The Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, ACCOUNTING FOR INCOME TAXES. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect currently.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Accordingly, a
valuation allowance equal to the deferred tax asset has been recorded. The total
deferred tax asset is $11,458, which is calculated by multiplying a 22%
estimated tax rate by the cumulative NOL of $52,081.
The company has non-capital losses of $52,081.
NOTE 7 - RELATED PARTY TRANSACTIONS
As at March 31, 2009, there is a balance owing to a stockholder of the Company
in the amount of $1,673.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
26
E-Dispatch Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
NOTE 8 - CONCENTRATIONS OF RISKS
Cash Balances -
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). This government corporation insured balances up to
$100,000 through October 13, 2008. As of October 14, 2008 all non-interest
bearing transaction deposit accounts at an FDIC-insured institution, including
all personal and business checking deposit accounts that do not earn interest,
are fully insured for the entire amount in the deposit account. This unlimited
insurance coverage is temporary and will remain in effect for participating
institutions until December 31, 2009.
All other deposit accounts at FDIC-insured institutions are insured up to at
least $250,000 per depositor until December 31, 2009. On January 1, 2010, FDIC
deposit insurance for all deposit accounts, except for certain retirement
accounts, will return to at least $100,000 per depositor. Insurance coverage for
certain retirement accounts, which include all IRA deposit accounts, will remain
at $250,000 per depositor.
NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS
Below is a listing of the most recent accounting standards and their effect on
the Company.
In April 2009, the FASB issued FSP No. FAS 157-4, "Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly" ("FSP FAS 157-4").
FSP FAS 157-4 provides guidance on estimating fair value when market activity
has decreased and on identifying transactions that are not orderly.
Additionally, entities are required to disclose in interim and annual periods
the inputs and valuation techniques used to measure fair value. This FSP is
effective for interim and annual periods ending after June 15, 2009. The Company
does not expect the adoption of FSP FAS 157-4 will have a material impact on its
financial condition or results of operation.
In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8,
"Disclosures by Public Entities (Enterprises) about Transfers of Financial
Assets and Interests in Variable Interest Entities." This disclosure-only FSP
improves the transparency of transfers of financial assets and an enterprise's
involvement with variable interest entities, including qualifying
special-purpose entities. This FSP is effective for the first reporting period
(interim or annual) ending after December 15, 2008, with earlier application
encouraged. The Company adopted this FSP effective January 1, 2009. The adoption
of the FSP had no impact on the Company's results of operations, financial
condition or cash flows.
In December 2008, the FASB issued FSP No. FAS 132(R)-1, "Employers' Disclosures
about Postretirement Benefit Plan Assets" ("FSP FAS 132(R)-1"). FSP FAS 132(R)-1
requires additional fair value disclosures about employers' pension and
postretirement benefit plan assets consistent with guidance contained in SFAS
157. Specifically, employers will be required to disclose information about how
investment allocation decisions are made, the fair value of each major category
of plan assets and information about the inputs and valuation techniques used to
develop the fair value measurements of plan assets. This FSP is effective for
fiscal years ending after December 15, 2009. The Company does not expect the
adoption of FSP FAS 132(R)-1 will have a material impact on its financial
condition or results of operation.
27
E-Dispatch Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
In October 2008, the FASB issued FSP No. FAS 157-3, "Determining the Fair Value
of a Financial Asset When the Market for That Asset is Not Active," ("FSP FAS
157-3"), which clarifies application of SFAS 157 in a market that is not active.
FSP FAS 157-3 was effective upon issuance, including prior periods for which
financial statements have not been issued. The adoption of FSP FAS 157-3 had no
impact on the Company's results of operations, financial condition or cash
flows.
In September 2008, the FASB issued exposure drafts that eliminate qualifying
special purpose entities from the guidance of SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,"
and FASB Interpretation 46 (revised December 2003), "Consolidation of Variable
Interest Entities - an interpretation of ARB No. 51," as well as other
modifications. While the proposed revised pronouncements have not been finalized
and the proposals are subject to further public comment, the Company anticipates
the changes will not have a significant impact on the Company's financial
statements. The changes would be effective March 1, 2010, on a prospective
basis.
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, DETERMINING
WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE
PARTICIPATING SECURITIES, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether
instruments granted in share-based payment transactions are participating
securities prior to vesting, and therefore need to be included in the
computation of earnings per share under the two-class method as described in
FASB Statement of Financial Accounting Standards No. 128, "Earnings per Share."
FSP EITF 03-6-1 is effective for financial statements issued for fiscal years
beginning on or after December 15, 2008 and earlier adoption is prohibited. We
are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF
03-6-1 would have material effect on our consolidated financial position and
results of operations if adopted.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
163, "Accounting for Financial Guarantee Insurance Contracts-and interpretation
of FASB Statement No. 60". SFAS No. 163 clarifies how Statement 60 applies to
financial guarantee insurance contracts, including the recognition and
measurement of premium revenue and claims liabilities. This statement also
requires expanded disclosures about financial guarantee insurance contracts.
SFAS No. 163 is effective for fiscal years beginning on or after December 15,
2008, and interim periods within those years. SFAS No. 163 has no effect on the
Company's financial position, statements of operations, or cash flows at this
time.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS No. 162
sets forth the level of authority to a given accounting pronouncement or
document by category. Where there might be conflicting guidance between two
categories, the more authoritative category will prevail. SFAS No. 162 will
become effective 60 days after the SEC approves the PCAOB's amendments to AU
Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on
the Company's financial position, statements of operations, or cash flows at
this time.
28
E-Dispatch Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110
regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB
107), in developing an estimate of expected term of "plain vanilla" share
options in accordance with SFAS No. 123 (R), Share-Based Payment. In particular,
the staff indicated in SAB 107 that it will accept a company's election to use
the simplified method, regardless of whether the company has sufficient
information to make more refined estimates of expected term. At the time SAB 107
was issued, the staff believed that more detailed external information about
employee exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily available to
companies. Therefore, the staff stated in SAB 107 that it would not expect a
company to use the simplified method for share option grants after December 31,
2007. The staff understands that such detailed information about employee
exercise behavior may not be widely available by December 31, 2007. Accordingly,
the staff will continue to accept, under certain circumstances, the use of the
simplified method beyond December 31, 2007. The Company currently uses the
simplified method for "plain vanilla" share options and warrants, and will
assess the impact of SAB 110 for fiscal year 2009. It is not believed that this
will have an impact on the Company's consolidated financial position, results of
operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements--an amendment of ARB No. 51. This statement
amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting noncontrolling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This statement improves
comparability by eliminating that diversity. This statement is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008 (that is, January 1, 2009, for entities with calendar
year-ends). Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007). The Company
will adopt this Statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company's consolidated financial position, results of
operations or cash flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations'. This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in Statement 141. This
Statement establishes principles and requirements for how the acquirer: (a)
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; (b) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and (c) determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. This statement
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. An entity may not apply it before that date. The
effective date of this statement is the same as that of the related FASB
Statement No. 160, Noncontrolling Interests in Consolidated Financial
Statements. The Company will adopt this statement beginning March 1, 2009. It is
not believed that this will have an impact on the Company's consolidated
financial position, results of operations or cash flows.
29
E-Dispatch Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS
No. 161, Disclosures about Derivative Instruments and Hedging Activities--an
amendment of FASB Statement No. 133. This standard requires companies to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The Company has not yet
adopted the provisions of SFAS No. 161, but does not expect it to have a
material impact on its consolidated financial position, results of operations or
cash flows.
In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities--Including an Amendment of FASB Statement No.
115. This standard permits an entity to choose to measure many financial
instruments and certain other items at fair value. This option is available to
all entities. Most of the provisions in FAS 159 are elective; however, an
amendment to FAS 115 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not report
net income. SFAS No. 159 is effective as of the beginning of an entity's first
fiscal year that begins after November 15, 2007. Early adoption is permitted as
of the beginning of the previous fiscal year provided that the entity makes that
choice in the first 120 days of that fiscal year and also elects to apply the
provisions of SFAS No. 157 Fair Value Measurements. The Company will adopt SFAS
No. 159 beginning March 1, 2008 and is currently evaluating the potential impact
the adoption of this pronouncement will have on its consolidated financial
statements.
30
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
- Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the company;
- Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with accounting principles generally accepted in the United States of
America and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and
directors of the company; and
- Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
As of March 31, 2009 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and 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
controls 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 our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our 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; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Chief Executive Officer in connection with the audit of our financial
statements as of March 31, 2009.
31
Management believes that the material weaknesses set forth in items (2) and (3)
above did not have an effect on our financial results. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.
This annual report does not include an attestation report of the Corporation's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the
Corporation's registered public accounting firm pursuant to temporary rules of
the SEC that permit the Corporation to provide only the management's report in
this annual report.
MANAGEMENT'S REMEDIATION INITIATIVES
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
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 us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
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 our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2009. Additionally, we plan to test our updated
controls and remediate our deficiencies by December 31, 2009.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
32
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
EXECUTIVE OFFICER AND DIRECTORS
Our officers and directors and their ages and positions are as follows:
Name Age Position
---- --- --------
Roderick C. Macutay 37 President, Treasurer, and Director
Tina Suava 48 Secretary and Director
MR. RODERICK C. MACUTAY
Mr. Roderick C. Macutay has been our President, Treasurer and a Director since
we were incorporated on July 31, 2007.
Since April 2007, Mr. Macuaty has been employed at MAXX Marketing Inc. in Pasig
City, Philippines as a Creative Artist. He is responsible for working on
creative ideas and graphics for premium items such as toys/collectibles for
Jollibee, Kellogs, Nestle, Unile and other corporate accounts. From February
2003 to April 2007, Mr. Macutay worked as a Senior Illustrator at C&E Publishing
Inc. in Quezon City, Philippines, where he was the senior illustrator for
textbooks, creating top quality illustration artwork used for covers, spot
illustrations, diagrams, CD covers, materials for book fairs and other
promotional materials. From March 2003 to September 2003, Mr. Macutay worked as
a Colorist / Illustrator for 123 Marketing Inc. in Quezon City, where his duties
included creating illustrations for stickers, children's promotional materials
and later coloring them using poster color and watercolor. Since 2000, Mr.
Macutay has also worked for M.C. Dacanay Architectural Design Office as a
freelance Architectural Renderer. Mr. Macutay is responsible for the company's
architectural presentations; coloring perspectives using acrylics and
watercolors as mediums; and he was the key designer and rendered the statues for
the Diplog Monument Project in Diplog City. From October to December 2001, Mr.
Macutay worked as a Decorative Artist/Muralist for the Meridian Development
Group. He worked on wall murals and decorative art for the kitchens, powder
rooms, master bedrooms and hallways of several condominium units. From 1998 to
2002, Mr. Macutay worked as a Background Artist for the Philippine Animation
Studios Inc. and for FIL-Cartoons Inc. His duties included preparation of
colored backdrops for the animated shows. From 1995 to 1998, he worked as an
Architectural Renderer for Tuanquin Designs and Illustrations in Quezon City.
Mr. Macutay is a graduate of the University of Santo Tomas with a Bachelor of
Fine Arts in Painting.
TINA SUAVA
Ms. Suava has been a Director since we were incorporated on July 31, 2007 and
has served as Secretary of the Company since December 17, 2007. Mrs. Suava has
over 15 years computer systems experience in technical project management,
product launches, tech support, and direct customer sales. Mrs. Suava has worked
for IBM in the Philippines since the Spring of 2000, and her current position is
Project Manager. In this role, she consults with local businesses and leads
project teams in major system conversions, and assists executive level
management in defining project boundaries and in formulating budgetary
guidelines and estimates. From June 1995 to Spring 2000, Mrs. Suava worked for
Intel Philippines as an Account Manager, where she served as onsite manager for
the support of internal and external clients, providing e-Commerce product
solutions for business-to-business online auction and e-Procurement software.
Mrs. Suava first joined Intel Philippines in June of 1992 as a Senior Customer
Service Representative, and in January 1994 she was promoted to Sales &
Marketing Account Manager.
33
AUDIT COMMITTEE
We do not have an audit committee at this time.
CODE OF ETHICS
We currently do not have a Code of Ethics.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors, executive officers, and stockholders holding more than 10% of our
outstanding common stock, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in beneficial ownership of
our common stock. Executive officers, directors and greater-than-10%
stockholders are required by SEC regulations to furnish us with copies of all
Section 16(a) reports they file. To our knowledge, based solely on review of the
copies of such reports furnished to us for the period ended March 31, 2009, no
Section 16(a) reports required to be filed by our executive officers, directors
and greater-than-10% stockholders were not filed on a timely basis.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid to the Chief Executive
Officer and to all other executive officers for services rendered during the
fiscal year ended March 31, 2009.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
----------------------------- -------------------------------------
Awards Pay-outs
----------------------- --------
Securities Restricted
Underlying Shares or
Options/ Restricted
Name and Principal SARs Share LTIP
Position Year(1) Salary Bonus Other Granted Units Pay-outs All Other
-------- ------- ------ ----- ----- ------- ----- -------- ---------
Mr. Roderick 2007 Nil Nil Nil Nil Nil Nil Nil
Macutay 2008 Nil Nil Nil Nil Nil Nil Nil
President, 2009 Nil Nil Nil Nil Nil Nil Nil
Treasurer and
Director
Mrs. Tina Suava 2007 Nil Nil Nil Nil Nil Nil Nil
Secretary and 2008 Nil Nil Nil Nil Nil Nil Nil
Director 2009 Nil Nil Nil Nil Nil Nil Nil
34
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards Stock Awards
----------------------------------------------------------------- -------------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options Options Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable(#) Unexercisable(#) Options(#) Price($) Date Vested(#) Vested($) Vested(#) Vested(#)
- ---- -------------- ---------------- ---------- ----- ---- --------- --------- --------- ---------
Mr. Roderick -- -- -- -- -- -- -- -- --
Macutay
Mrs. Tina -- -- -- -- -- -- -- -- --
Suava
OPTION GRANTS AND EXERCISES
There were no option grants or exercises by any of the executive officers named
in the Summary Compensation Table above.
EMPLOYMENT AGREEMENTS
We have not entered into employment and/or consultant agreements with our
Directors and officers.
COMPENSATION OF DIRECTORS
All directors receive reimbursement for reasonable out-of-pocket expenses in
attending board of directors meetings and for promoting our business. From time
to time we may engage certain members of the board of directors to perform
services on our behalf. In such cases, we compensate the members for their
services at rates no more favorable than could be obtained from unaffiliated
parties. Our directors have not received any compensation for the fiscal year
ended March 31, 2009.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The table below sets forth the number and percentage of shares of our common
stock owned as of July 2, 2009, by the following persons: (i) stockholders known
to us who own 5% or more of our outstanding shares, (ii) each of our Directors,
and (iii) our officers and Directors as a group. Unless otherwise indicated,
each of the stockholders has sole voting and investment power with respect to
the shares beneficially owned.
35
Name and Address Amount and Nature Percentage
Title of Class of Beneficial Owner(2) of Beneficial Ownership of Class(1)
- -------------- ---------------------- ----------------------- -----------
Common Stock Mr. Macutay 500,000 27.8%
Common Stock Mrs. Suava 500,000 27.8%
All Officers as
a Group 1,000,000 55.6%
- ----------
(1) Based on 1,800,000 shares of our common stock outstanding.
CHANGES IN CONTROL
There are no existing arrangements that may result in a change in control of the
Company.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table sets forth information regarding our equity compensation
plans.
Number of Number of securities
securities to be issued Weighted-average remaining available for future
upon exercise of exercise price of issuance under equity
outstanding options, outstanding options, compensation plans (excluding
warrants and rights warrants and rights securities reflected in column (a))
Plan category (a) (b) (c)
- ------------- ------------------- ------------------- -----------------------------------
Equity -- -- --
compensation plans
approved by security
holders
Equity -- -- --
compensation plans not
approved by security
holders
Total -- -- --
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Other than the transactions discussed below, we have not entered into any
transaction nor are there any proposed transactions in which any of our
Directors, executive officers, stockholders or any member of the immediate
family of any of the foregoing had or is to have a direct or indirect material
interest.
As of March 31, 2009, there is a balance owing to one of our stockholders in the
amount of $1,673. This balance is unsecured, non-interest bearing and has no
specific terms of repayment.
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
For the year ended March 31, 2009, Moore and Associates, Chartered billed us for
$3,500 in audit fees.
REVIEW FEES
Moore and Associates, Chartered, billed us $4,500 for reviews of our quarterly
financial statements in 2008 and are not reported under Audit Fees above.
TAX AND ALL OTHER FEES
We did not pay any fees to Moore and Associates, Chartered for tax compliance,
tax advice, tax planning or other work during our fiscal year ended March 31,
2009
PRE-APPROVAL POLICIES AND PROCEDURES
We have implemented pre-approval policies and procedures related to the
provision of audit and non-audit services. Under these procedures, our board of
directors pre-approves all services to be provided by Moore and Associates,
Chartered and the estimated fees related to these services.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Exhibit Description
- ------- -----------
3.1 Articles of Incorporation of Registrant *
3.2 Bylaws of Registrant *
4.1 Specimen Common Stock Certificate*
5.1 Opinion of SRK Law Offices regarding the legality of the
securities being registered *
23.1 Consent of Moore & Associates, Chartered *
23.2 Consent of Legal Counsel (incorporated in Exhibit 5.1) *
24.1 Power of Attorney (contained on the signature page of this
registration statement *)
31.1 Certification of Roderick Macutay *
32.1 Certification of Roderick Macutay *
- ----------
* Attached as an exhibit to our Registration Statement on Form S-1 originally
filed with the SEC on July 16, 2008, and incorporated herein by reference.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
E-DISPATCH INC.
By: /s/ Roderick Macutay
----------------------------------
Roderick Macutay
President, Treasurer, and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated.
Signatures Title Date
---------- ----- ----
/s/ Roderick Macutay President, Treasurer, Secretary, July 2, 2009
- --------------------------- and Director
Roderick Macutay
38