UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 2
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to ______________
Commission File Number 001-33933
EXPLORE ANYWHERE HOLDING CORP.
(Exact name of registrant as specified in its charter)
Nevada 88-0319470
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6150 West 200 So., #3, Wabash, Indiana 469992
(Address of principal executive offices) (Zip Code)
877.539.5644
(Registrant's telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
None None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 Par Value
(Title of class
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15 (d) of the Exchange Act Yes [ ] No [X]
Indicate by check mark if the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Website, if any, every Interactive Date File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.229.405 of
this chapter) during the preceding 12 months (or such shorter period that the
registrant was required to submit and post such files). Yes [ ] No [X]
Indicate by check mark if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B is not contained in this form, and will
not be contained, to the best of the Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
the definitions of "large accelerated filer" and "smaller reporting company" in
Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Net revenues for our most recent fiscal year: $0.
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 fiscal quarter
(June 30, 2010): $0.15. b) The number of outstanding shares, not including
shares held by affiliates (officers, directors and 10% shareholders) as of June
30, 2010 is 875,000. This number of outstanding shares by non-affiliates does
not reflect the effect of the 15:1 forward split that the Issuer effected on
November 10, 2010.
Number of common voting shares issued and outstanding as of March 31 2011:
31,923,750 shares of common stock
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe them
and identify 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, 1990)
Transitional Small Business Disclosure Format (Check Yes [X] No[ ]
TABLE OF CONTENTS
PART I
Item 1. Business 3
Item 1A. Risk Factors 5
Item 1B. Unresolved Staff Comments 10
Item 2. Properties 10
Item 3. Legal Proceedings 10
Item 4. (Removed and Reserved) 10
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities 10
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 13
Item 8. Financial Statements and Supplementary Data 13
Item 9. Change in and Disagreements with Accountants on Accounting
and Financial Disclosure 13
Item 9A. Controls And Procedures 13
Item 9B. Other Information 13
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 14
Item 11. Executive Compensation 16
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 16
Item 13. Certain Relationships and Related Transactions, and Director
Independence 17
Item 14. Principal Accountant Fees and Services 17
PART IV
Item 15. Exhibits and Financial Statement Schedules 17
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
FORWARD-LOOKING STATEMENTS
This section of this annual report includes a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like: believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements, which apply only
as of the date of this report. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.
As used in this quarterly report, the terms "we", "us", "our", "our company"
means Explore Anywhere Holding Corp., unless otherwise indicated.
GENERAL OVERVIEW
Our company's name is Explore Anywhere Holding Corp. The company was
incorporated on April 3, 1996 in the State of Nevada as Jubilee Trading Corp. On
March 3, 2002, we filed Articles of Amendment to the company's Articles of
Incorporation with the Nevada Secretary of State to change its name from Jubilee
Trading Corp. to PorFavor Corp. On November 10, 2010, we changed the company's
name to Explore Anywhere Holding Corp.
Since inception until March 2010, we operated as a broker of structural wood
materials. In March 2010, our former CEO/President, Mr. Boyd Appelgate started
to suffer from ill-health and our operations underwent a slow and consistent
demise. We therefore decided to change our business focus and look for other
opportunities and discontinue the sale of structural wood materials. We
identified a target company in the area of computer monitoring software, known
as ExploreAnywhere, Inc. We closed on the acquisition of ExploreAnywhere on
February 4, 2011.
ExploreAnywhere is in the business of selling computer monitoring software,
specializing in offering computer monitoring solutions for parents, corporations
and educational facilities. Our company's business is more fully described
below.
BUSINESS DEVELOPMENT
Explore was incorporated in the State of New Hampshire in 2002. In November
2007, Explore was reincorporated as a Nevada corporation. Explore has not been
in bankruptcy or receivership at any time. Other than as described below,
Explore has not had any material reclassification, merger, consolidation, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
On December 20, 2010, Explore and its shareholders entered into a Share Exchange
Agreement with the Company, whereby the Company acquired all of the issued and
outstanding shares of Explore from its shareholders in exchange for 2,613,750
shares of the Company's common stock (the "Share Exchange"). On February 4,
2011, the Company, Explore and Explore's shareholders closed the Share Exchange
and Explore is now a w holly-owned subsidiary of the Company. The Company is
presently continuing the development of the technology and software initiated by
Explore.
BUSINESS
PRINCIPAL PRODUCTS
Explore is in the business of selling computer monitoring software and hardware
products. One of its products has been designed and developed by the company.
With regard to its remaining products, Explore acts as either an affiliated
re-seller or rebrands products from outside suppliers.
Explore currently sells one computer software monitoring product ("Spybuddy") of
which its management designed and developed in conjunction with an outside
contract software engineer. The product "Spybuddy" has historically represented
the majority of its sales, efforts remain ongoing to continue to support and
develop this product. Explore acts as an affiliate re-seller of two similar
products "Mobile Spy" and "Sniper Spy." At present these products are offered
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for sale on Explore's website, however there are no long term plans to promote
or further develop these products. These products have not and do not represent
a significant percentage of past or current company revenue. We may discontinue
the sale of these products at any time in order to dedicate website space to
support company owned product lines. Furthermore, the company has historically
and currently offers a hardware keylogger. This product is re-branded by the
company as "Keylogger HRD 2010," the company does not design or manufacture this
product. The company sources the product from a third party. The company does
not currently maintain inventory of this product, and long term decisions
regarding future development of this product line have yet to be determined.
Explore sells its products through its website and through various third party
affiliate channels. The company does not presently sell within any physical
retail stores. Explore, Inc. has a goal to continue development of the existing
"Spybuddy" product line and to develop further company owned products for
application within the monitoring software market.
DISTRIBUTION METHODS
Explore sells its software products in a digital download format. It conducts
sales from its website, exploreanywhere.com, and also through a limited network
of online affiliate websites through Plimus.com and Regnow.com (affiliate
processors). Affiliates sell these products on their own individual websites,
the payments are collected by Plimus and Regnow, who then pay ExploreAnywhere
Inc. minus a commission.
COMPETITIVE BUSINESS CONDITIONS
The computer monitoring industry continues to show consistent and substantial
growth. Explore operates in this market and believes it will be able to expand
into the worldwide marketplace. The market consists of multiple opportunities
including Corporate Professional and IT Department employee monitoring, small
business employee monitoring, parental control/child monitoring, educational
organizations, and numerous other avenues which Explore plans to develop during
expansion. The computer monitoring market is made up of many companies.
SpectorSoft, Corp., founded in 1998, is an example of one of the largest
competitors within the computer monitoring industry. According to Inc.com's
"Inc.5000 list", latest available data illustrates that SpectorSoft experienced
revenues of $13 million in 2006 with revenues growing to $16.8 million in 2009.
Explore will use multiple strategies in its attempt to gain a competitive edge.
Mainly, as a public entity, Explore's increased funding potential may open
opportunities for aggressive marketing campaigns, and the ability to offer an
ever expanding and innovative product line.
Furthermore, Explore's Internet visibility remains somewhat viable; in spite of
the current lack in advertising funds Explore's website still receives
approximately 2,500 unique Internet visitors per month. This evidences that
Explore, despite limited financial resources, has maintained limited but viable
Internet visibility. Explore is determined to further this Internet visibility
and believes that with sufficient funding our internet visibility, presence and
customer base may significantly increase.
- EMPLOYEE MONITORING
As corporations, regardless of what industry, continually become more
"connected" through Internet and networking technologies their exposure to the
risks of employee inefficient time use, leakage of trade secrets (purposeful or
inadvertent), or the violation of laws will likely only increase. Today, many
corporations in response to the above risks take steps not only to block
Internet content, but to also monitor employee Internet activities. A recent
article on Computerworld.com EMPLOYEE MONITORING: WHEN IT IS ASKED TO SPY
suggests that monitoring activities carried out by corporate IT managers may
represent 20% of the IT manager's time.
Explore's management believes that Explore's products may be an effective aid
for corporate IT managers in monitoring employee Internet activity.
- PARENTAL CONTROL AND CHILD MONITORING
Parents must continually question "What are kids really up to on the computer?"
Explore's management believes that Explore has the ability, experience and tools
necessary to aide parents in monitoring their children's Internet activities.
The Internet today poses many challenges for today's concerned parent:
Online child sexual predators are an unfortunate and persistent issue. The
tragic occurrence of their exploits has been widely publicized by the media,
especially television programs such as DATELINE NBC, have brought awareness of
these dangers to many American households.
4
Furthermore, in addition to the dangers posed by adults on the Internet, parents
today face the growing threat of "cyberbullying" whereby other children extend
face-to-face bullying to e-mail, Internet chat rooms, and social networking
websites. Current research by the Cyber Bullying Research Center (www.
cyberbullying.us) indicates that 15-35% of teenagers have experienced some form
of "cyberbullying." Explore will seek exposure through various media venues in
order to demonstrate that its products may be an effective aid for parents in
monitoring their children's Internet activities. A recommendation for the
utilization of Explore's monitoring software to help protect kids online,
through either a paid product feature or notable mention might draw significant
attention to the merit of Explore products. Additional market opportunities may
arise if partnerships can be established with Internet and "child safety"
orientated organizations such as, for example, Parent Teacher Association, Polly
Klass Foundation, The Innocent Images National Initiative (IINI), Cyberbullying
Research Center, Perverted Justice, National Crime Prevention Council and
National Center for Missing and Exploited Children. Explore will seek to partner
with these listed corporations and organizations as well as continuing to search
for additional market partnerships that may aide the growth of Explore.
Explore does not expect that any government regulations will have an effect on
its business. Explore estimates it will expend $20,000 - $30,000 on research and
development during the next 12 months.
There are no costs or effects on Explore with regards to compliance with any
environmental laws.
Explore currently has 2 full-time employees and 2 part-time employees.
ITEM 1A. RISK FACTORS
Any investment in our common stock involves a high degree of risk. Investors
should carefully consider the risks described below and all of the information
contained in this Current Report on Form 10-K before deciding whether to
purchase our common stock. Our business, financial condition or results of
operations could be materially adversely affected by these risks if any of them
actually occur. Our shares of common stock are not currently listed on any
national securities exchange. Our shares are quoted on the OTCMarkets.com, which
is a quotation system. Some of these factors have affected our financial
condition and operating results in the past or are currently affecting us. This
Current Report on Form 10-K also contains forward-looking statements that
involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including the risks described below and elsewhere in this Current
Report on Form 10-K.
RISKS RELATED TO OUR BUSINESS
WE NEED ADDITIONAL WORKING CAPITAL AND WITHOUT ADEQUATE CAPITAL, WE MAY NOT BE
ABLE TO FULFILL OUR BUSINESS PLAN.
We need additional working capital to fund our growth. However, we may not be
able to access the capital we need on terms acceptable to us. If we can access
financing, it may involve issuing debt or equity securities that are senior to
our outstanding shares. Any issuance of convertible debt or equity securities
may dilute the value of our current shares outstanding. If we issue debt
securities or take loans from private investors, we may have to agree to certain
covenants as a condition of those loans that restrict the manner in which we run
our Company. In addition, if we cannot raise additional capital, it is likely
that our potential growth will be restricted and we will be forced to scale back
or curtail the implementation of our business plan. If we do not raise the
additional capital, the value of your investment may decrease or become
worthless.
WE DEPEND ON THE EXPERIENCE OF OUR EXISTING MANAGEMENT TEAM AND THE LOSS OF
EITHER OUR CHAIRMAN OF THE BOARD OR CHIEF FINANCIAL OFFICER WOULD AFFECT OUR
ABILITY TO IMPLEMENT OUR BUSINESS PLAN.
Our performance is substantially dependent on the performance of Bryan Hammond,
our President and Chairman of the Board, and Khris Thetsy, our acting Chief
Financial Officer. Both executives are knowledgeable about our Company and
business plan. The loss of the services of either of these key employees would
require us to expend significant time and resources to seek an adequate
replacement. We would also have to invest in training and educating such
replacement about our business. We have limited resources and it may be
difficult for us to offer compensation that would allow us to attract
well-qualified executive officers. If the replacement has less experience than
our existing executive officers or does not understand our business as well, we
may not implement our business plan successfully. Without the expertise of Bryan
Hammond and Khris Thetsy or immediate and qualified successors, we may be forced
to curtail operations or close the business entirely.
5
IF WE ARE UNABLE TO RETAIN OR MOTIVATE KEY PERSONNEL OR HIRE QUALIFIED
PERSONNEL, WE MAY NOT BE ABLE TO GROW OUR BUSINESS EFFECTIVELY.
Our performance is largely dependent on the talents and efforts of
highly-skilled individuals. Our future success depends on our continuing ability
to identify, hire, develop, motivate and retain highly-skilled personnel for all
areas of our organization, as well as to identify, contract with, motivate and
retain contract personnel on an outsourced basis for special projects.
Competition in our industry for qualified employees and contractors is intense.
Our continued ability to compete effectively depends on our ability to attract
new employees and to retain and motivate our existing employees and to retain
contract personnel. As we become a more mature company, we may find our
recruiting efforts more challenging. If we do not succeed in attracting
excellent personnel or retaining or motivating existing personnel, we may
struggle to grow our business.
OUR ABILITY TO OFFER OUR PRODUCTS AND SERVICES MAY BE AFFECTED BY A VARIETY OF
UNITED STATES AND FOREIGN LAWS.
The laws relating to the liability of providers of online services for
activities of their users are currently unsettled both in the United States and
abroad. Claims have been threatened and filed under both United States and
foreign law for defamation, libel, invasion of privacy and other data protection
claims, tort, unlawful activity, copyright or trademark infringement, or other
theories based on the nature and content of the materials searched and the ads
posted or the content generated by our users. It is also possible we could be
held liable for misinformation provided over the web when that information
appears in our web search results. If one of these complaints results in
liability to us, it could be potentially costly, encourage similar lawsuits,
distract management and harm our reputation and possibly our business. Whether
or not existing laws regulating or requiring licenses for certain businesses of
our advertisers (including, for example, distribution of pharmaceuticals, adult
content, financial services, alcohol or firearms), are applicable to us may be
unclear. Existing or new legislation could expose us to substantial liability,
restrict our ability to deliver services to our users, limit our ability to grow
and cause us to incur significant expenses in order to comply with such laws and
regulations.
OUR COMPUTER MONITORING SOFTWARE AND HARDWARE MAY NOT BE ACCEPTED BY THE MARKET.
Our success depends on the acceptance of our products in the marketplace. Market
acceptance will depend upon several factors, including (i) the desire of
consumers and corporations for the ability to monitor activities on their
computers and (ii) our ability to market to those individuals and corporations
who wish to monitor the use of their computers. A number of factors may inhibit
acceptance of our products, including (i) the existence of competing products,
(ii) our inability to convince consumers that they need to pay for the products
and services we offer, (iii) our inability to convince corporations that they
need to pay for the products and services we offer or (iv) failure of
individuals and corporations to use our products. If our products are not
accepted by the market, we may have to curtail our business operations, which
could have a material negative effect on operating results and result in a lower
stock price.
THERE IS SIGNIFICANT COMPETITION IN OUR MARKET, WHICH COULD MAKE IT DIFFICULT TO
ATTRACT CUSTOMERS, CAUSE US TO REDUCE PRICES AND RESULT IN REDUCED GROSS MARGINS
OR LOSS OF MARKET SHARE.
The market for our products and services is highly competitive, dynamic and
subject to frequent technological changes. We expect the intensity of
competition and the pace of change to either remain the same or increase in the
future. A number of companies offer products that provide the same or greater
the functionality of our products. We may not be able to maintain our
competitive position against current or potential competitors, especially those
with significantly greater financial, marketing, service, support, technical and
other resources. Competitors with greater resources may be able to undertake
more extensive marketing campaigns, adopt more aggressive pricing policies and
make more attractive offers to potential employees, distributors, resellers or
other strategic partners. We expect additional competition from other
established and emerging companies as the market for our products continues to
develop.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY AGAINST CURRENT AND FUTURE
COMPETITORS.
We will compete, in our current and proposed businesses, with other companies,
some of which have far greater marketing and financial resources and experience
than we do. We cannot guarantee that we will be able to penetrate this market
and be able to compete at a profit. In addition to established competitors,
other companies can easily enter our market and compete with us. Effective
competition could result in price reductions, reduced margins or have other
negative implications, any of which could adversely affect our business and
chances for success. Competition is likely to increase significantly as new
companies enter the market and current competitors expand their services. Many
of these potential competitors are likely to enjoy substantial competitive
advantages, including: larger technical staffs, greater name recognition, larger
customer bases and substantially greater financial, marketing, technical and
other resources. To be competitive, we must respond promptly and effectively to
the challenges of technological change, evolving standards and competitors'
innovations by continuing to enhance our services and sales and marketing
channels. Any pricing pressures, reduced margins or loss of market share
resulting from increased competition or our failure to compete effectively,
could seriously damage our business and chances for success.
6
WE MAY NOT BE ABLE TO MANAGE OUR GROWTH EFFECTIVELY.
We must continually implement and improve our products and services, operations,
operating procedures and quality controls on a timely basis, as well as expand,
train, motivate and manage our work force in order to accommodate anticipated
growth and compete effectively in our market segment. Successful implementation
of our strategy also requires that we establish and manage a competent,
dedicated work force and employ additional key employees in corporate
management, product design, client service and sales. We can give no assurance
that our personnel, systems, procedures and controls will be adequate to support
our existing and future operations. If we fail to implement and improve these
operations, there could be a material, adverse effect on our business, operating
results and financial condition.
IF WE DO NOT CONTINUALLY INTRODUCE NEW PRODUCTS OR ENHANCE OUR CURRENT PRODUCTS,
THEY MAY BECOME OBSOLETE AND WE MAY NOT BE ABLE TO COMPETE WITH OTHER COMPANIES.
Internet technology, software applications and related infrastructure are
rapidly evolving. Our ability to compete depends on our ability to develop new
technologies and products as well as our ability to improve the performance and
reliability of our current products and services. We may not be able to keep
pace with technological advances and our products may become obsolete. In
addition, our competitors may develop related or similar products and bring them
to market before we do, or do so more successfully, or develop technologies and
products more effective than any that we have developed or are developing. If
that happens, our business, prospects, results of operations and financial
condition may be materially adversely affected.
WE DO NOT OWN PATENTS ON OUR PRODUCTS AND IF OTHER COMPANIES COPY OUR PRODUCTS,
OUR REVENUES MAY DECLINE.
We do not own patents on the products we have developed and we do not currently
intend to file for patent protection on those products. Therefore, another
company could recreate the products we manufacture and could compete against us,
which could adversely affect our revenues.
IF WE DO NOT SUCCEED IN OUR EXPANSION STRATEGY, WE MAY NOT ACHIEVE THE RESULTS
WE PROJECT.
Our business strategy is designed to expand the sales of our products and
services. Our ability to implement our plans will depend primarily on the
ability to attract customers and the availability of qualified and cost
effective sales personnel. There are no firm agreements for employment of
additional marketing personnel, and we can give you no assurance that any of our
expansion plans will be successful or that we will be able to establish
additional favorable relationships for the marketing and sales of our products
and services. We also cannot be certain when, if ever, we will be able to hire
the appropriate marketing personnel and establish additional merchandising
relationships.
ECONOMIC CONDITIONS COULD MATERIALLY ADVERSELY AFFECT OUR BUSINESS.
Our operations and performance depend to some degree on economic conditions and
their impact on levels of consumer spending, which have recently deteriorated
significantly in many countries and regions, including the regions in which we
operate, and may remain depressed for the foreseeable future. For example, some
of the factors that could influence the levels of consumer spending include
continuing increases in fuel and other energy costs, conditions in the
residential real estate and mortgage markets, labor and healthcare costs, access
to credit, consumer confidence and other macroeconomic factors affecting
consumer spending behavior. These and other economic factors could have a
material adverse effect on demand for our products and on our financial
condition and operating results.
OUR AUDITORS' REPORT FOR THE YEAR ENDED DECEMBER 31, 2010 INCLUDES A "GOING
CONCERN" EXPLANATORY PARAGRAPH.
As of December 31, 2010 and 2009, we had an accumulated deficit of $822,330 and
$806,714, respectively. As a result of recurring losses from operations and the
significant amount of accumulated deficit as of December 31, 2010, our auditors'
report for year ended December 31, 2010 includes an explanatory paragraph that
expresses substantial doubt about our ability to continue as a "going concern."
We require additional capital in order to conduct our operations for any
reasonable length of time. In the event that we are unable to raise such funds,
we may be required to delay, reduce or severely curtail our operations or
otherwise impede our on-going business efforts, which could have a material
adverse effect on our business, operating results, financial condition and
long-term prospects.
RISKS RELATED TO OUR CAPITAL STRUCTURE
THERE IS NO CURRENT, ESTABLISHED TRADING MARKET FOR OUR COMMON STOCK, AND THERE
IS NO ASSURANCE OF AN ESTABLISHED TRADING MARKET, WHICH WOULD ADVERSELY AFFECT
THE ABILITY OF OUR INVESTORS TO SELL THEIR SECURITIES IN THE PUBLIC MARKET.
7
Our common stock is not currently listed for trading on any national securities
exchange; our stock is quoted on OTCMarkets.com, is an inter-dealer,
over-the-counter market that provides significantly less liquidity than the
Nasdaq Global Market and NYSE Amex. Quotes for stocks included on the
OTCMarkets.com are not listed in the financial sections of newspapers as are
those for the NYSE Amex and The NASDAQ Stock Market. Therefore, prices for
securities traded solely on the OTC Markets may be difficult to obtain and
holders of common stock may be unable to resell their securities at or near
their original offering price or at any price. In addition, even if a market
does develop for our securities, it is likely that it will be illiquid and
sporadic. You may find it very difficult to sell your stock.
THE MARKET PRICE AND TRADING VOLUME OF SHARES OF OUR COMMON STOCK MAY BE
VOLATILE.
When and if an established market develops for our securities, the market price
of our common stock could fluctuate significantly for many reasons, including
for reasons unrelated to our specific performance, such as reports by industry
analysts, investor perceptions, or negative announcements by customers,
competitors or suppliers regarding their own performance, as well as general
economic and industry conditions. For example, to the extent that other large
companies within our industry experience declines in their share price, our
share price may decline as well. In addition, when the market price of a
company's shares drops significantly, shareholders could institute securities
class action lawsuits against the company. A lawsuit against us could cause us
to incur substantial costs and could divert the time and attention of our
management and other resources.
SHARES ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR
COMMON STOCK, AS THE FUTURE SALE OF A SUBSTANTIAL AMOUNT OF OUTSTANDING STOCK IN
THE PUBLIC MARKETPLACE COULD REDUCE THE PRICE OF OUR COMMON STOCK.
Additionally, the former shareholders of Explore may be eligible to sell all or
some of our shares of common stock by means of ordinary brokerage transactions
in the open market pursuant to Rule 144, promulgated under the Securities Act
("Rule 144"), subject to certain limitations. Under Rule 144, an affiliate
stockholder who has satisfied the required holding period may, under certain
circumstances, sell within any three-month period a number of securities which
does not exceed the greater of 1% of the then outstanding shares of common stock
or the average weekly trading volume of the class during the four calendar weeks
prior to such sale. As of March 1, 2011, 1% of our issued and outstanding shares
of common stock was equal to approximately 319,238 shares. Non-affiliate
stockholders are not subject to volume limitations. Any substantial sale of
common stock pursuant to any resale prospectus or Rule 144 may have an adverse
effect on the market price of our common stock by creating an excessive supply.
IF WE FAIL TO MAINTAIN EFFECTIVE INTERNAL CONTROLS OVER FINANCIAL REPORTING, THE
PRICE OF OUR COMMON STOCK MAY BE ADVERSELY AFFECTED.
We are required to establish and maintain appropriate internal controls over
financial reporting. Failure to establish those controls, or any failure of
those controls once established, could adversely impact our public disclosures
regarding our business, financial condition or results of operations. Any
failure of these controls could also prevent us from maintaining accurate
accounting records and discovering accounting errors and financial frauds. Rules
adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002
require annual assessment of our internal control over financial reporting. The
standards that must be met for management to assess the internal control over
financial reporting as effective complex, and require significant documentation,
testing and possible remediation to meet the detailed standards. We may
encounter problems or delays in completing activities necessary to make an
assessment of our internal control over financial reporting. If we cannot assess
our internal control over financial reporting as effective, investor confidence
and share value may be negatively impacted.
In addition, management's assessment of internal controls over financial
reporting may identify weaknesses and conditions that need to be addressed in
our internal controls over financial reporting or other matters that may raise
concerns for investors. Any actual or perceived weaknesses and conditions that
need to be addressed in our internal control over financial reporting,
disclosure of management's assessment of our internal controls over financial
reporting, or disclosure of our public accounting firm's attestation to or
report on management's assessment of our internal controls over financial
reporting may have an adverse impact on the price of our common stock.
WE MAY NOT BE ABLE TO ACHIEVE THE BENEFITS WE EXPECT TO RESULT FROM THE SHARE
EXCHANGE.
On February 4, 2011, we closed the Share Exchange with the Company and the
former shareholders of Explore, pursuant to which the Company acquired 100% of
the issued and outstanding securities of Explore in exchange for shares of the
Company's common stock. As a result, Explore became a 100%-owned subsidiary of
the Company, and the Company's sole business operations became that of Explore.
8
We may not realize the benefits that we hoped to receive as a result of the
Share Exchange, which include:
* access to the capital markets of the United States;
* the increased market liquidity expected to result from exchanging
stock in a private company for securities of a public company that may
eventually be traded;
* the ability to use registered securities to make acquisition of assets
or businesses;
* increased visibility in the financial community;
* enhanced access to the capital markets;
* improved transparency of operations; and
* perceived credibility and enhanced corporate image of being a publicly
traded company.
There can be no assurance that any of the anticipated benefits of the Share
Exchange will be realized with respect to our new business operations. In
addition, the attention and effort devoted to achieving the benefits of the
Share Exchange and attending to the obligations of being a public company, such
as reporting requirements and securities regulations, could significantly divert
management's attention from other important issues, which could materially and
adversely affect our operating results or stock price in the future.
COMPLIANCE WITH CHANGING REGULATION OF CORPORATE GOVERNANCE AND PUBLIC
DISCLOSURE WILL RESULT IN ADDITIONAL EXPENSES.
Changing laws, regulations and standards relating to corporate governance and
public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC
regulations, have created uncertainty for public companies and significantly
increased the costs and risks associated with accessing the public markets and
public reporting. For example, on January 30, 2009, the SEC adopted rules
requiring companies to provide their financial statements in interactive data
format using the eXtensible Business Reporting Language, or XBRL. We will have
to comply with these rules by June 15, 2011. Our management team will need to
invest significant management time and financial resources to comply with both
existing and evolving standards for public companies, which will lead to
increased general and administrative expenses and a diversion of management time
and attention from revenue generating activities to compliance activities.
OUR COMMON STOCK IS CONSIDERED A "PENNY STOCK," AND THEREBY IS SUBJECT TO
ADDITIONAL SALE AND TRADING REGULATIONS THAT MAY MAKE IT MORE DIFFICULT TO SELL.
Our common stock, which is quoted for trading on the OTCMarkets.com, is
considered to be a "penny stock" because of the following reasons: (i) it trades
at a price less than $5.00 per share; (ii) it is NOT traded on a "recognized"
national exchange; (iii) it is NOT quoted on the Nasdaq Capital Market, or even
if so, has a price less than $5.00 per share; or (iv) is issued by a company
that has been in business less than three years with net tangible assets less
than $5 million.
The principal result or effect of being designated a "penny stock" is that
securities broker-dealers participating in sales of our common stock will be
subject to the "penny stock" regulations set forth in Rules 15-2 through 15g-9
promulgated under the Exchange Act. For example, Rule 15g-2 requires
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document at least two business days before
effecting any transaction in a penny stock for the investor's account. Moreover,
Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any
investor for transactions in such stocks before selling any penny stock to that
investor. This procedure requires the broker-dealer to (i) obtain from the
investor information concerning his or her financial situation, investment
experience and investment objectives; (ii) reasonably determine, based on that
information, that transactions in penny stocks are suitable for the investor and
that the investor has sufficient knowledge and experience as to be reasonably
capable of evaluating the risks of penny stock transactions; (iii) provide the
investor with a written statement setting forth the basis on which the
broker-dealer made the determination in (ii) above; and (iv) receive a signed
and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult and time consuming for holders of our common stock to resell their
shares to third parties or to otherwise dispose of them in the market or
otherwise.
WE DO NOT FORESEE PAYING CASH DIVIDENDS IN THE FORESEEABLE FUTURE AND, AS A
RESULT, OUR INVESTORS' SOLE SOURCE OF GAIN, IF ANY, WILL DEPEND ON CAPITAL
APPRECIATION, IF ANY.
We do not plan to declare or pay any cash dividends on our shares of common
stock in the foreseeable future and currently intend to retain any future
earnings for funding growth. As a result, investors should not rely on an
investment in our securities if they require the investment to produce dividend
income. Capital appreciation, if any, of our shares may be investors' sole
9
source of gain for the foreseeable future. Moreover, investors may not be able
to resell their shares of our common stock at or above the price they paid for
them.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. DESCRIPTION OF PROPERTIES
Explore does not own any property or real estate. Explore uses for its office
space a residence owned by a family member of William Corso, one of our
executive officers and board members. Explore uses this residence without any
accrual of rental fees or other charges.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may be involved in litigation relating to claims arising
out of our operations in the normal course of business. As of the filing date of
this Form 8-K, there were no pending or threatened lawsuits that could
reasonably be expected to have a material effect on the results of our
operations. There are no proceedings in which any of our directors, officers or
affiliates, or any registered or beneficial shareholder, is an adverse party or
has a material interest adverse to our interest.
ITEM 4. REMOVED AND RESERVED
N/A.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(A) MARKET INFORMATION
Our common stock, par value $0.001 per share, is approved for quotation on the
OTCMarkets.com under trading symbol ("PFVR"). There is no established market for
our stock. No quotes for a bid price for our stock existed prior to December 10,
2009. Therefore, no information for the first three (3) quarters of 2009 is
provided below.
Fiscal Year Ended December 31, 2010,
Quarter Ended March 31, 2010 June 30, 2010 Sept. 30, 2010 December 31, 2010
------------- -------------- ------------- -------------- -----------------
High $0.11 $0.21 $7.00 $12.00
Low $0.05 $0.11 $0.14 $0.19
Fiscal Year Ended December 31, 2009
Quarter Ended March 31, 2009 April 30, 2009 June 30, 2009 December 31, 2009
------------- -------------- -------------- ------------- -----------------
High N/A N/A N/A $0.05
Low N/A N/A N/A $0.05
The market price of our common stock is subject
to significant fluctuations in response to variations in our quarterly operating
results, general trends in the market, and other factors, over many of which we
have little or no control. In addition, broad market fluctuations, as well as
general economic, business and political conditions, may adversely affect the
market for our common stock, regardless of our actual or projected performance.
(B) HOLDERS
As of the date of this Current Report, 31,923,750 shares of common stock are
issued and outstanding. There are approximately 29 shareholders of record of our
common stock.
10
TRANSFER AGENT AND REGISTRAR
The Transfer Agent for our common stock is Action Stock Transfer Corp., with an
address at 7069 S. Highland, Suite 300, Salt Lake City, Utah 84121. Action
Stock's telephone number is (801) 274-1088.
PENNY STOCK REGULATIONS
The SEC has adopted regulations which generally define "penny stock" to be an
equity security that has a market price of less than $5.00 per share. Our Common
Stock, when and if a trading market develops, may fall within the definition of
penny stock and be subject to rules that impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000, or annual incomes exceeding $200,000 individually, or
$300,000, together with their spouse).
For transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have received
the purchaser's prior written consent to the transaction. Additionally, for any
transaction, other than exempt transactions, involving a penny stock, the rules
require the delivery, prior to the transaction, of a risk disclosure document
mandated by the Commission relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, current quotations for the securities and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealers presumed control over the market. Finally, monthly
statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks.
Consequently, the "penny stock" rules may restrict the ability of broker-dealers
to sell our Common Stock and may affect the ability of investors to sell their
Common Stock in the secondary market.
(C) DIVIDEND POLICY
Any future determination as to the declaration and payment of dividends on
shares of our common stock will be made at the discretion of our board of
directors out of funds legally available for such purpose. We are under no
contractual obligations or restrictions to declare or pay dividends on our
shares of common stock. In addition, we currently have no plans to pay such
dividends. However, even if we wish to pay dividends, we may be restricted from
distributing dividends to our holders of shares of our common stock in the
future if at the time we are unable to obtain sufficient dividend distributions
from and of ExploreAnywhere, Inc. Our board of directors currently intends to
retain all earnings for use in the business for the foreseeable future. See
"Risk Factors."
(D) SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
None.
RECENT SALES OF UNREGISTERED SECURITIES
On February 4, 2011, the Company issued 2,613,750 shares of the Company's common
stock to the former shareholders of ExploreAnywhere Inc. in exchange for all of
the shareholders' issued and outstanding shares of Explore. These shares of
Common Stock were not registered under the Securities Act. These securities
qualified for exemption under Section 4(2) of the Securities Act since the
issuance of securities by us did not involve a public offering. The offering was
not a "public offering" as defined in Section 4(2) due to the insubstantial
number of persons involved in the deal (13), the size of the offering, manner of
the offering and number of securities offered.
We did not undertake an offering in which we sold a high number of securities to
a high number of investors. In addition, the new shareholders had the necessary
investment intent as required by Section 4(2) since it agreed to and received
share certificates bearing a legend stating that such securities are restricted
pursuant to Rule 144 of the Securities Act. This restriction ensures that these
securities would not be immediately redistributed into the market and therefore
not be part of a "public offering." Based on an analysis of the above factors,
we have met the requirements to qualify for exemption under Section 4(2) of the
Securities Act for Share Exchange transaction.
11
USE OF PROCEEDS FROM SALE OF REGISTERED SECURITIES
Not applicable.
STOCK PURCHASE WARRANTS
None.
STOCK PURCHASE OPTIONS
None.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2010, we had a working capital deficit of $(14,122) (December
31, 2009: $71,797). At December 31, 2010, we had no assets. This compared to our
assets as of December 31, 2009, consisting of cash of $1,494.
At December 31, 2010, our total current liabilities decreased to $14,122
($73,291 as at December 31, 2009). We recognized no revenue for the year ended
December 31, 2010 (December 31, 2009: $271,839).
RESULT OF OPERATIONS
For the year ended December 31, 2010, operating expenses were $15,616 ($84,731
for the year end December 31, 2009). Operating expenses for the year end
December 31, 2010, consisted of general and administration costs.
We earned other income (expenses) in the form of forgiveness of shareholder's
loan in the amount of $73,291for the year ended December 31, 2010 (December 31,
2009: $281,575). We had nil in interest expenses for the year December 31, 2010
(December 31, 2009: $1,612).
From inception to December 31, 2010, we have incurred an accumulated deficit of
$(467,464) (December 31, 2009: $525,139).
As of March 18, 2011, our cash balance is approximately $20,000. We do not have
any lending arrangements in place with banking or financial institutions and we
do not anticipate that we will be able to secure these funding arrangements in
the near future. We may attempt to sell additional equity shares or issue debt
to support our operations. Any sale of additional equity securities will result
in dilution to our stockholders. There can be no assurance that additional
financing will be available to us or, if available to us, on acceptable terms.
We believe our market risk exposures arise primarily from exposures to
fluctuations in interest rates. We do not use derivative financial instruments
to manage risks or for speculative or trading purposes.
PLAN OF OPERATION FOR THE NEXT TWELVE (12) MONTHS
Our ability to continue operations will be dependent upon the successful
completion of additional long-term or permanent equity financing, the support of
creditors and shareholders, and, ultimately, the achievement of profitable
operations. There can be no assurances that we will be successful, which would
in turn significantly affect our ability to be successful in our new business
plan. If not, we will likely be required to reduce operations or liquidate
assets. We will continue to evaluate our projected expenditures relative to our
available cash and to seek additional means of financing in order to satisfy our
working capital and other cash requirements.
OFF BALANCE SHEET ARRANGEMENTS.
None.
12
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this Item begin on Page F-1 of this Form
10-K, and include (1) Report of Independent Registered Public Accounting Firm;
(2) Balance Sheets; (3) Statements of Operations, Statements of Cash Flows,
Statement of Stockholders' Deficit; and (4) Notes to Financial Statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the U.S.
Securities and Exchange Commission rules and forms, and that such information is
accumulated and communicated to our management as appropriate, to allow timely
decisions regarding required disclosure.
Pursuant to Rule 131-15(b) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), we carried out an evaluation, with the participation of
our management, including the President and the Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on management's evaluation as of the end of the period covered
by this Annual Report, our principal executive officer and chief financial
officer have concluded that our disclosure controls and procedures (as defined
in Rules 13a-15(e) under the Exchange Act were effective as of the end of the
period covered by this annual report.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act). Our internal control over financial reporting is a process
designed 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.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives. Furthermore, smaller reporting companies face
additional limitations. Smaller reporting companies employ fewer individuals and
find it difficult to properly segregate duties. Smaller reporting companies tend
to utilize general accounting software packages that lack a rigorous set of
software controls.
Our management, with the participation of the President and Chief Financial
Officer, evaluated the effectiveness of the Company's internal control over
financial reporting as of December 31, 2010. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control --
Integrated Framework. Based on that evaluation, our management concluded that,
as of December 31, 2010, our internal control over financial reporting was
effective.
This Annual Report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to the rules of the Securities and
Exchange Commission that permanently exempt smaller reporting companies from
such requirement.
CHANGES IN INTERNAL CONTROLS
There have been no changes in our internal control over financial reporting
identified in connection with the evaluation described above that occurred
during our last fiscal quarter that has materially affected, or is reasonable
likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None
13
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERNANCE, COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
DIRECTORS AND EXECUTIVE OFFICER
The following persons are our executive officers and directors as of March 1,
2011 and hold the positions set forth opposite their respective names.
Name Age Position
---- --- --------
Oliver Nelson 27 Chief Executive Officer
Bryan Hammond 26 President and Chairman of the Boar
Kris Thetsey 38 Chief Financial Officer
William Corso 27 Secretary Treasurer and Director
Our directors hold office until the earlier of their death, resignation or
removal by stockholders or until their successors have been qualified. Our
officers are elected annually by, and serve at the pleasure of, our board of
directors. We feel our officers and directors should serve in such capacity in
light of our business structure because: they all have a degree or professional
diploma or they have management knowledge, they have previous experience in the
industry and are able to adapt to changes within the industry, and they are able
to work resourcefully to strategize for the Company.
BIOGRAPHIES
MR. OLIVER NELSON - CHIEF EXECUTIVE OFFICER
Mr. Nelson is an advertising and marketing professional with a diverse
background that includes experience in both the b2b and b2c realms. He has
managed national marketing projects for private and public organizations ranging
from traditional direct mail efforts to modern search marketing pay per click
campaigns. From April 2010 to the present, Mr. Nelson has been a marketing
analyst for Yodle, a digital advertising agency. In that position, Mr. Nelson
has been responsible for deploying and executing new accounts while monitoring
and improving existing accounts. From August 2006 through August 2009, Mr.
Nelson was a Senior Coordinator - Marketing for College Coach, a division of
Bright Horizons Family Solutions LLC, in Watertown, Massachusetts. In that
position, Mr. Nelson was responsible for executing marketing campaigns including
all e-marketing PPC search, affiliate, and SEO initiatives. From August 2008 to
June 2009, Mr. Nelson served as a consultant to ExploreAnywhere, Inc., which is
now the Company's wholly-owned subsidiary, to provide advice on all aspects the
comany's business operations. From September 2005 to October 2007, Mr. Nelson
served as Chief Marketing Officer for Search Rate Technologies LLC, a start-up
search engine software company located in Boston, Massachusetts. Mr. Nelson
graduated from the Boston College Carroll School of Management in 2006 with a
Bachelors of Science Degree in marketing. Mr. Nelson has a significant
entrepreneurial background and has served several start-up organizations in
various capacities. In addition, Mr. Nelson is a commissioned officer graduate
of the United States Army Intelligence School and is a member of the MI Corps of
the United States Army. In this role, he has acquired direct experience
deploying and operating computer surveillance software.
MR. BRYAN HAMMOND - PRESIDENT AND CHAIRMAN OF THE BOARD
In 2001, Mr. Hammond turned his attention toward developing and innovating
technologies that protected children from the increasing dangers of the Internet
by founding Explore Software in 2002. Mr. Hammond attended the University of New
Hampshire Whittemore School of Business and Economics studying Business
Administration, but left after one year of study to continue his management of
14
Explore full time as CEO. In August of 2009 Mr. Hammond stepped down as the CEO
of Explore, but remains as the President and Chairman of the Board. Mr. Hammond
serves as Explore's leader for development strategy. Mr. Hammond is also founder
and CEO of Hammond Industries, a web development and Internet marketing company
that specializes in international and domestic traffic monetization.
MR. KHRIS THETSY - ACTING CHIEF FINANCIAL OFFICER
Mr. Thetsy is currently the Acting Chief Financial Officer for Explore, Inc. He
was hired as the Interim CFO in January of 2010. Mr. Thetsy has more than nine
years of experience as a Chief Financial Officer for startup to midsize
companies, and managed growth for both private and publicly traded companies in
a variety of industries. Mr. Thetsy has extensive experience in financial
strategic planning & analysis, restructuring & turnaround, mergers &
acquisitions, compliancy, internal controls, capital investment, and corporate
development technology for manufacturing and service companies. Mr. Thetsy
attended National University and received his undergraduate degree in
Accounting. Mr. Thetsy also founded iCFO (an Interim CFO Service), served as
Board of Director for the San Diego Investment Conference (SDIC), and is
currently member of "The CFO Roundtable".
MR. WILLIAM CORSO - SECRETARY/TREASURER, MEMBER OF THE BOARD OF DIRECTORS Mr.
Corso is currently the Vice President of Durni Companies LLC, a real estate and
Internet investment holding company founded in December 2006. Mr. Corso works to
maximize revenue from direct navigation traffic from domain name portfolios by
means of pay-per-click advertising. Mr. Corso received his Bachelors of Science
in Business Administration with a concentration in Finance, magna cum laude,
from Northeastern University College of Business Administration in May 2007. Mr.
Corso has served as a director on the Board of Explore, Inc. since November
2007. SIGNIFICANT EMPLOYEES
None.
FAMILY RELATIONSHIPS
None.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
None.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT.
Based solely upon a review of Forms 3 and 4 furnished to the company under Rule
16a-3(e) of the Securities Exchange Act during its most recent fiscal year and
Forms 5 furnished to the company with respect to its most recent fiscal year and
any written representations received by the company from persons required to
file such forms, the following persons - either officers, directors or
beneficial owners of more than ten percent of any class of equity of the company
registered pursuant to Section 12 of the Securities Exchange Act - failed to
file on a timely basis reports required by Section 16(a) of the Securities
Exchange Act during the most recent fiscal year or prior fiscal years:
# of Late # of Transactions # of Failures to File
Name Reports Not Timely Reported a Required Report
---- ------- ------------------- -----------------
Oliver Nelson - CEO, 0 0 0
Bryan Hammond - President, Chairman
of the Board 2 1 0
Khris Thetsy - CFO 0 0 1
William Corso - Secretary, Treasurer 2 1 0
William Gerlib - Former President 1 0 0
CODE OF ETHICS
We have not yet prepared a written code of ethics and employment standards. We
have only recently commenced operations. We expect to implement a Code of Ethics
during the current fiscal year.
15
CORPORATE GOVERNANCE; AUDIT COMMITTEE FINANCIAL EXPERT
We currently do not have an audit committee financial expert or an independent
audit committee expert due to the fact that our Board of Directors currently
does not have an independent audit committee. Our Board of Directors currently
does not have any independent members, and thus, does not have the ability to
create a proper independent audit committee.
ITEM 11. EXECUTIVE COMPENSATION
Except as provided below, Explore's executive's currently do not draw any
salary. Our Chief Financial Officer, Mr. Khris Thetsy was paid fees in the
amount of $6,000 and there was an additional $2,122.50 in fees that were earned
but not paid. All amounts earned by Mr. Thetsy are payable to his consulting
company, iCFO Consulting
COMPENSATION COMMITTEE
We have not formed an independent compensation committee.
DIRECTOR COMPENSATION
No compensation has been to date by Explore to any non-employee directors.
EMPLOYMENT AGREEMENTS
We do not have written employment agreements.
AUDIT COMMITTEE
Presently, our Board of Directors is performing the duties that would normally
be performed by an audit committee. We intend to form a separate audit
committee, and plan to seek potential independent directors. In connection with
our search, we plan to appoint an individual qualified as an audit committee
financial expert.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The following table sets forth certain information
as of the closing date of the Exchange, March 8, 2011, regarding the beneficial
ownership of our common stock, by (i) each person or entity who, to our
knowledge, beneficially owns more than 5% of our common stock; (ii) each
executive officer and named officer; (iii) each director; and (iv) all of our
officers and directors as a group. Unless otherwise indicated in the footnotes
to the following table, each of the stockholders named in the table has sole
voting and investment power with respect to the shares of our common stock
beneficially owned. Except as otherwise indicated, the address of each of the
stockholders listed below is: c/o Explore Anywhere Holding Corp., 6150 West 200
South, #3, Wabash, Indiana. The percentages stated in the following table are
based upon 31,923,750 shares issued and outstanding.
Number of Shares Percentage
Beneficially Beneficially
Name of Beneficial Owner Owned(1) Owned(1)
------------------------ -------- --------
Oliver Nelson - 500,000 1.5%
Chief Executive Officer
Bryan Hammond - 2,500,000 7.8%
President/Chairman of the Board
Khris Thetsey - -0- -0-
Chief Financial Officer
William Corso - 11,500,000 36.0%
Secretary/Treasurer and Director
All officers and directors 14,500,000 45.4%
as a group (3 individuals)
----------
(1) Shares of common stock beneficially owned and the respective percentages of
beneficial ownership of common stock assumes the exercise of all options,
warrants and other securities convertible into common stock beneficially
owned by such person or entity currently exercisable or exercisable within
60 days of March 8, 2011. Shares issuable pursuant to the exercise of stock
options and warrants exercisable within 60 days are deemed outstanding and
held by the holder of such options or warrants for computing the percentage
of outstanding common stock beneficially owned by such person, but are not
deemed outstanding for computing the percentage of outstanding common stock
beneficially owned by any other person.
16
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Explore has not entered into any related party transactions during its last
fiscal year that would be required to be reported pursuant to Item 404(d) of
Regulation S-K.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
The aggregate fees billed by our auditor, Sam Kan & Company, during the years
ended December 31, 2010 and 2009, for professional services rendered for the
audit of our annual financial statements and for the reviews of the financial
statements included in our Quarterly Reports on Form 10-Q during the fiscal year
ended December 31, 2010, was $8,000 and $8,000, respectively.
AUDIT RELATED FEES
We incurred no fees to our auditors for audit related fees during the fiscal
years ended December 31, 2010 and 2009.
TAX FEES
We incurred no fees to our auditors for tax compliance, tax advice or tax
compliance services during the fiscal years ended December 31, 2010 and 2009.
ALL OTHER FEES
We did not incur any other fees billed by auditors for services rendered to us
other than the services covered in "Audit Fees" for the fiscal years ended
December 31, 2010 and 2009.
The Board of Directors has considered whether the provision of non-audit
services is compatible with maintaining the principal accountant's independence.
Since there is no audit committee, there are no audit committee pre-approval
policies and procedures.
PART IV
ITEM 15. EXHIBITS
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation*
3.2 By-laws*
31.1 Section 302 Certification - President
31.2 Section 302 Certification - CFO
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 - President.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 - CFO
----------
* Incorporated by reference to our registration statement on Form SB-2, file
number 333-148732, filed on January 17, 2008.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 21st day of June
2011.
EXPLORE ANYWHERE HOLDING CORP.
Date: October 17, 2011 By: /s/ Bryan Hammond
------------------------------------------------
Name: Bryan Hammond
Title: Chairman of the Board/President,
Principal Executive Officer
Date: October 17, 2011 By: /s/ Khris Thetsy
------------------------------------------------
Name: Khris Thetsy
Title: Chief Financial Officer, Principal Financial
Officer and Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By: /s/ Bryan Hammond
-----------------------------------------------------------------------------
Name and Title: Bryan Hammond, Chairman of the Board and President, Principal
Executive Officer
Date: October 17, 2011
By: /s/ Oliver Nelson
-----------------------------------------------------------------------------
Name and Title: Oliver Nelson, Chief Executive Officer, Principal Financial
Officer and Principal Accounting Officer
Date: October 17, 2011
By: /s/ William Corso
-----------------------------------------------------------------------------
Name and Title: William Corso, Secretary/Treasurer and Member of the Board
of Directors
Date: October 17, 2011
18
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
F-1
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
Page(s)
-------
Index F-2
Report of Independent Registered Public Accounting Firm F-3
Balance Sheets F-4
Statement of Operations F-5
Statement of Changes in Stockholders' Equity (Deficit) F-6
Statements of Cash Flows F-7
Notes to the Financial Statements F-8
F-2
Sam Kan & Company
1151 Harbor Bay Pkwy., Suite 101
Alameda, CA 94502
Phone: 510.517.7874
Fax: 866.848.1224
http://www.skancpa.com
Report of Independent Registered Public Accounting Firm
To the Board of Directors of
Explore Anywhere Holding Corporation
(Formerly Known As Porfavor Corporation)
A Development Stage Company
We have audited the accompanying balance sheets of Explore Anywhere Holding
Corporation (Formerly Known As Porfavor Corporation) (the Company), as of
December 31, 2010 and 2009, and the related statements of operations, changes in
stockholders' equity (deficit), and cash flows for the two years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. 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 positions of the Company as of December 31,
2010 and 2009, and the results of its operations and cash flows for the two
years then ended in conformity with U.S. generally accepted accounting
principles.
As discussed in Note H to the financial statements, the Company changed the
manner in which it accounts for the debt extinguishment in connection to the
sale of shares from Boyd V. Applegate to Fernando Garcia as of December 31, 2010
and December 31, 2009.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company has suffered losses and has experienced
negative cash flows from operations, which raises substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to those matters are also described in Note B to the financial statements. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Sam Kan & Company
-----------------------------------
Sam Kan & Company,
April 25, 2011
Alameda, California
F-3
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
BALANCE SHEET
December 31, December 31,
2010 2009
---------- ----------
(restated) (restated)
ASSETS
Current Assets
Cash $ -- $ 1,494
---------- ----------
Total Current Assets -- 1,494
Non Current Assets
Plant, Property, and Equipment, Net -- --
---------- ----------
Total Non Current Assets -- --
Total Assets $ -- $ 1,494
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Currnet Liabilities
Accounts Payable $ 2,022 $ --
Note Payable 72,791
Loan from Shareholder 12,100 500
---------- ----------
Total Current Liabilities 14,122 73,291
Total Liabilities 14,122 73,291
Stockholders' Equity (deficit)
Common stock, $.001 par value; 300,000,000 shares authorized,
262,500,000 shares issued and outstanding $ 262,500 $ 262,500
Additional Paid In Capital 545,708 472,417
Accumulated Deficits (822,330 (806,714)
---------- ----------
Total Stockholders' Deficit (14,122) (71,797)
---------- ----------
Total Liabilities and Stockholders' Deficit $ -- $ 1,494
========== ==========
F-4
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
STATEMENT OF OPERATIONS
Cumulative Since
Reentering
Development Stage
For The Year Ended December 31, 1/1/2010 -
2010 2009 12/31/2010
------------ ------------ ------------
(Restated) (Restated)
Income
Revenues $ -- $ 271,839 $ --
------------ ------------ ------------
Total Income -- 271,839 --
Cost of good sold -- 230,068 --
------------ ------------ ------------
Gross Margin -- 41,771 --
------------ ------------ ------------
Operating Expenses
General and administrative 15,616 50,839 15,616
Selling expense -- 33,892 --
------------ ------------ ------------
Total operating expenses 15,616 84,731 15,616
Total operating income / (loss) (15,616 (42,960) (15,616)
Other income (expense)
Interest expense -- (1,612 --
------------ ------------ ------------
Total other income / (loss) -- (1,612) --
------------ ------------ ------------
Net income / (loss) (15,616 (44,572) (15,616)
============ ============ ============
Net Income (Loss) Per Share $ (0.00 $ (0.00) $ (0.00)
============ ============ ============
Weighted Average Number of Shares Outstanding 262,500,000 262,500,000 262,500,000
============ ============ ============
F-5
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock Additional
-------------------- Paid In Accumulated
Shares Amount Capital Deficit Total
------ ------ ------- ------- -----
BALANCE, DECEMBER 31, 2007 262,500,000 $ 262,500 $ 190,842 $ (771,243) $(317,901)
Net income for the year ended December 31, 2008 9,101 9,101
----------- --------- --------- ---------- ---------
BALANCE, DECEMBER 31, 2008 262,500,000 262,500 190,842 (762,142) (308,800)
Debt extinguishment in connection to the
sale of shares 281,575 281,575
Net loss for the year ended December 31, 2009 (44,572) (44,572)
----------- --------- --------- ---------- ---------
BALANCE, DECEMBER 31, 2009 (RESTATED) 262,500,000 262,500 472,417 (806,714) (71,797)
Debt extinguishment in connection to the
sale of shares 73,291 73,291
Net loss for the year ended December 31, 2010 (15,616) (15,616)
----------- --------- --------- ---------- ---------
BALANCE, DECEMBER 31, 2010 (RESTATED) 262,500,000 $ 262,500 $ 545,708 $ (822,330) $ (14,122)
=========== ========= ========= ========== =========
F-6
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
STATEMENTS OF CASH FLOWS
Cumulative Since
Reentering
Development Stage
For The Year Ended December 31, 1/1/2010 -
2010 2009 12/31/2010
---------- ---------- ----------
(Restated) (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (15,616) $ (44,572) $ (15,616)
Adjustments to reconcile net income to net
cash used by operating activities:
Allowance for bad debts -- 4,075 --
Depreciation -- 1,760 --
Disposal of equipment for loan repayment -- 4,059 --
Chages in operating aseets and liabilities:
Account receivables -- 1,300 --
Account payable 2,022 -- 2,022
Note payable -- 72,791 --
---------- ---------- ----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (13,594) 39,413 (13,594)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH (USED) BY INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Advance from shareholder 12,100 -- 12,100
Loan repayment to shareholder -- (74,850) --
---------- ---------- ----------
NET CASH (USED) BY FINANCING ACTIVITIES 12,100 (74,850) 12,100
Net Increase (Decrease) in Cash (1,494) (35,437) (1,494)
CASH AT BEGINNING OF PERIOD 1,494 36,931 1,494
---------- ---------- ----------
CASH AT END OF PERIOD $ -- $ 1,494 $ --
========== ========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash Paid for Interest $ -- $ 1,612 $ --
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Disposal of equipment for loan repayment $ -- $ 4,059 $ --
Forgiven of liabilities in connection with the transfer
of common stocks $ 73,291 $ 281,575 $ 73,291
F-7
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION, NATURE OF BUSINESS, AND TRADE NAME
Explore Anywhere Holding Corporation, Formerly Known As Porfavor Corporation,
("Company") was incorporated in the State of Nevada on April 3, 1996 as Jubilee
Trading, Inc. On August 4, 1996 Alfonzo Hernandez Sr. and 27 individuals
purchased 25,000 shares at no par value of the corporation (100%) for payment of
$5,000 ($0.20 per share) in order to open and operate a Mexican seafood
restaurant named "La Perla" in Los Angeles, California. The restaurant plans did
not materialize and the Company lay dormant.
On March 3, 2002, the name of the corporation was changed to Porfavor Corp. and
our articles of incorporation were changed to increase the Directors to three
and to increase the authorized shares from 25,000 shares of common stock at no
par value to 50,000,000 shares of common stock at $0.001 par value.
After a forward split of 35:1 to the Company's common stocks, management planned
to open and operate a Sports Bar and restaurant in Los Angeles, California. This
plan did not materialize and the Company lay dormant.
On October 5, 2007, the Company made an acquisition of CBA Builders, a Nevada
corporation by exchanging common stock and obtained 100% of CBA Builders' (DBA
Trussco Sales) common stock. The Company also elected Boyd V. Applegate as the
CEO, President, Director and Christine M. Applegate as the CFO, Secretary,
Treasurer and Director of the Company on this date.
On October 10, 2007, Boyd V. Applegate, as an individual signs a stock exchange
agreement exchanging his 50,000 shares of CBA Builders for 16,625,000 shares
representing 95% of the issued and outstanding shares of the Company. CBA
Builders was incorporated in the State of Nevada on October 10, 1987. CBA
Builders was established as a construction company for the purposes of designing
and manufacturing structural wood materials.
On April 13, 2009, the president of the Company, Boyd V. Applegate, signed a
letter of intent to sell his shares to Jose F. Garcia 16,625,000 shares of the
Common Stock (95% of the issued and outstanding shares) in the Company in
exchange for $70,000 in cash. The sale of 16,625,000 shares was effective on
January 1, 2010 and on the same day the board approved the Company to re-enter
to developmental stage.
On January 1, 2010, Boyd V. Applegate acknowledged that he has received 50,000
shares of common stock of CBA Builders, 100% ownership of CBA Builders, from
Jose F. Garcia. CBA Builders has then been spin-off and separated from Explore
Anywhere Holding Company as Boyd V. Applegate now owned 100% of CBA Builders and
waived the liability of Explore Anywhere Holding Company in the amount of
$72,791. After the sale, the Company discontinued their operation and re-entered
to a developmental stage company.
On April 23, 2010, the board has approved a forward split of 10:1 resulting in
increasing the common stock issued and outstanding from 17,500,000 shares to
175,000,000. The accompanying consolidated financial statements were adjusted to
reflect the effects of the recapitalization.
F-8
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
On April, 27, 2010, the board has approved an amendment to increase the
Company's authorized common stock to 200,000,000 shares with par value of
$0.001. On November 10, 2010, the Company had an additional forward split of
1.5:1 resulting in an increase of the common stocks from 200,000,000 shares to
300,000,000 shares authorized and 262,500,000 shares issued and outstanding.
On November 10, 2010, the Company changed its name from Porfavor Corporation to
Explore Anywhere Holding Corporation.
BASIS OF PRESENTATION
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reported period. Actual results could differ
from those estimates. Management further acknowledges that it is solely
responsible for adopting sound accounting practices, establishing and
maintaining a system of internal accounting control and preventing and detecting
fraud. The Company's system of internal accounting control is designed to
assure, among other items, that (1) recorded transactions are valid; (2) all
valid transactions are recorded and (3) transactions are recorded in the period
in a timely manner to produce financial statements which present fairly the
financial condition, results of operations and cash flows of the company for the
respective periods being presented.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Expenditures for maintenance and
repairs are charged against operations. Renewals and betterments that materially
extend the life of the assets are capitalized. When assets are retired or
otherwise disposed of, the cost and related accumulated depreciation are removed
from the accounts, and any resulting gain or loss is reflected in income for the
period.
Depreciation is computed for financial statement purposes on a straight-line
basis over estimated useful lives of the related assets. The estimated useful
lives of depreciable assets are:
Estimated
Useful Lives
------------
Office Equipment 5 - 10 years
Furniture 5 - 7 years
Shop tools 5 - 7 years
Vehicles 5 - 10 years
For federal income tax purposes, depreciation is computed under the modified
accelerated cost recovery system. For book purposes, depreciation is computed
under the straight-line method.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all
short-term debt securities purchased with maturity of three months or less to be
cash equivalents.
F-9
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
ACCOUNTS RECEIVABLE
The Company maintains an allowance for doubtful accounts for estimated losses
resulting from the inability of the Company's customers to make payments. The
Company periodically reviews these allowances, including an analysis of the
customers' payment history and information regarding the customers'
creditworthiness. There is no accounts receivable as of December 31, 2010 and
December 31, 2009.
INVENTORY
Inventories are computed using the lower of cost or market, which approximates
actual cost on a first-in-first-out basis. The Company writes down its inventory
value for estimated obsolescence equal to the difference between the cost of
inventory and the estimated market value based upon assumptions about future
demand and market conditions. These factors are impacted by market and economic
conditions, technology changes, new product introductions and changes in
strategic direction and require estimates that may include uncertain elements.
Actual demand may differ from forecasted demand, and such differences may have a
material effect on recorded inventory values. There was no inventory as of
December 31, 2010 and December 31, 2009
REVENUE RECOGNITION
The Company recognizes revenue when persuasive evidence of an arrangement
exists, delivery has occurred, the price is fixed or determinable, and
collectability is reasonably assured. Revenues are recognized from product
sales, net of discounts and rebates if any. After the sale on January 1, 2010,
the Company discontinued their operation and re-entered to a developmental stage
company. The Company is in the process of acquiring ExploreAnywhere, Inc by
exchanges of its common stock. The revenue recognition policy will then be
adjusted accordingly.
COST OF GOODS SOLD
Job costs include all direct materials, and labor costs and those indirect costs
related to production. Selling, general and administrative costs are charged to
expense as incurred. No depreciation is allocated to cost of goods since the use
of the fixed assets cannot be differentiated between office use and the
construction process and the amount is immaterial to the financial statements.
After the sale on January 1, 2010, the Company discontinued their operation and
re-entered to a developmental stage company. The Company is in the process of
acquiring ExploreAnywhere, Inc by exchanges of its common stock. The policy on
cost of goods sold will then be adjusted accordingly.
ADVERTISING
Advertising expenses are recorded as general and administrative expenses. There
was no advertising expense for the three months ended December 31, 2010 and
2009.
USE OF ESTIMATES
The preparation of financial statements in accounting principles generally
accepted in the United States of America 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
reporting period. A change in managements' estimates or assumptions could have a
material impact on the Company's financial condition and results of operations
during the period in which such changes occurred. Actual results could differ
from those estimates. The Company's financial statements reflect all adjustments
that management believes are necessary for the fair presentation of their
financial condition and results of operations for the periods presented.
F-10
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
CAPITAL STOCK
On April 23, 2010, the board has approved a forward split of 10:1 resulting in
an increase of the common stocks issued and outstanding from 17,500,000 shares
to 175,000,000. The accompanying financial statements were adjusted to reflect
the effects of the recapitalization. On April, 27, 2010, the board has approved
an amendment to increase the Company's authorized common stock to 200,000,000
shares with par value of $0.001. On November 10, 2010, the Company had an
additional forward split of 1.5:1 resulting in an increase of the common stocks
from 200,000,000 shares to 300,000,000 shares authorized and 262,500,000 shares
issued and outstanding. In light of the abovementioned changes in equity, the
audited reports for the year ended December 31, 2009 has been retroactively
adjusted to reflect the changes.
INCOME TAXES
The Company recognizes the tax effects of transactions in the year in which such
transactions enter into the determination of net income, regardless of when
reported for tax purposes.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In February 2010, the FASB issued guidance to remove the requirement for an
entity that files financial statements with the SEC to disclose a date through
which subsequent events have been evaluated. The adoption of this guidance
during our current fiscal quarter did not have any impact on our Consolidated
Financial Statements.
In January 2010, the FASB issued ASU 2010-06, "Fair Value Measurements and
Disclosures (ASC 820): Improving Disclosures about Fair Value Measurements."
This update will require (1) an entity to disclose separately the amounts of
significant transfers in and out of Levels 1 and 2 fair value measurements and
to describe the reasons for the transfers; and (2) information about purchases,
sales, issuances and settlements to be presented separately (i.e. present the
activity on a gross basis rather than net) in the reconciliation for fair value
measurements using significant unobservable inputs (Level 3 inputs). This
guidance clarifies existing disclosure requirements for the level of
disaggregation used for classes of assets and liabilities measured at fair value
and require disclosures about the valuation techniques and inputs used to
measure fair value for both recurring and nonrecurring fair value measurements
using Level 2 and Level 3 inputs. The new disclosures and clarifications of
existing disclosure are effective for fiscal years beginning after December 15,
2009, except for the disclosure requirements for related to the purchases,
sales, issuances and settlements in the roll forward activity of Level 3 fair
value measurements. Those disclosure requirements are effective for fiscal years
ending after December 31, 2010. The Company is still assessing the impact on
this guidance and does not believe the adoption of this guidance will have a
material impact to its financial statements. Management does not believe that
other recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force), the American Institute of Certified Public
Accountants or the SEC have a material impact on the Company's present or future
financial statements.
On July 1, 2009, Financial Accounting Standards Board ("FASB") Accounting
Standards Codification(TM) ("ASC") became the sole source of authoritative
Generally Accepted Accounting Principles ("GAAP") literature recognized by the
Financial Accounting Standards Board for financial statements issued for interim
and annual periods ending after September 15, 2009. Rules and interpretive
releases of the Security Exchange Commission ("SEC") under authority of federal
securities laws are also sources of authoritative GAAP for SEC registrants.
Except for applicable SEC rules and regulations and a limited number of
grandfathered standards, all other sources of GAAP for nongovernmental entities
were superseded by the issuance of ASC. ASC did not change GAAP, but rather
combined the sources of GAAP and the framework for selecting among those sources
into a single source. Accordingly, the adoption of ASC had no impact on the
financial results of the Company.
F-11
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
In June 2009, the FASB issued ASU 2009-17, Consolidation (ASC 810) "Improvements
to Financial Reporting by Enterprises Involved with Variable Interest Entities,"
which eliminates the quantitative approach previously required for determining
the primary beneficiary of a variable interest entity and requires ongoing
qualitative reassessments of whether an enterprise is the primary beneficiary of
a variable interest entity. This new standard also requires additional
disclosures about an enterprise's involvement in variable interest entities. The
Company adopted this pronouncement on January 1, 2010 but there was no
significant impact on its financial statements.
In June 2009, the FASB issued ASC 105, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles". ASC
105 establishes the FASB Accounting Standards Codification ("Codification"), as
the single source of authoritative accounting and reporting standards in the
United States for all non-government entities, with the exception of the
Securities and Exchange Commission and its staff. It does not include any new
guidance or interpretations of US GAAP, but merely eliminates the existing
hierarchy and codifies the previously issued standards and pronouncements into
specific topic areas. The Codification was adopted on July 1, 2009 for the
Company's financial statements for the year ended December 31, 2009.
In June 2009, the FASB issued FAS 140/166, "Accounting for Transfers of
Financial Assets," an amendment of FAS 140, which now resides with ASC 860,
"Transfers and Servicing." ASC 860 is intended to improve the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets: the effects of a transfer on its financial position, financial
performance, and cash flows: and a transferor's continuing involvement, if any,
in transferred financial assets. This statement must be applied as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009. The Company does not expect the adoption of ASC 860 to
have an impact on the Company's results of operations, financial condition or
cash flows.
In May 2009, the FASB issued ASC 855, "Subsequent Events". ASC 855 establishes
general standards of accounting for and disclosure of events that occur after
the balance sheet date but before financial statements are issued or are
available to be issued. ASC 855, which includes a new required disclosure of the
date through which an entity has evaluated subsequent events, was effective for
interim or annual periods ending after June 15, 2009. The Company adopted this
standard as of June 30, 2009; however, the adoption of ASC 855 had no impact to
the Company's consolidated financial statements.
In April 2009, the FASB issued an update to ASC 820, "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",
which provides guidance on determining fair value when there is no active market
or where the price inputs being used represent distressed sales. This update to
ASC 820 was effective for interim and annual periods ending after June 15, 2009
and was adopted by the Company in the second quarter of 2009. The adoption did
not have a material impact on the Company's consolidated financial statements.
F-12
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
NOTE B - GOING CONCERN
The Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. Ninety-five percent (95%) of the
shares were sold to Jose F. Garcia on January 1, 2010. On the same day, the
board approved to cease all the trading activities and re-enter to a
developmental stage company.
Management expected to seek potential merger or acquisition targets and other
business opportunities from all known sources. In March 2010, the Company signed
a letter of intent with a private company called Explorer Anywhere for a
potential reverse merger.
NOTE C - EARNING PER COMMON SHARE
Net loss per share is calculated in accordance with ASC 260, previously known as
SFAS No. 128, "Earnings Per Share." There are no potentially dilutive securities
or derivative instruments outstanding as of December 31, 2010 and 2009.
NOTE D - INCOME TAXES
The Company accounts for income taxes using the liability method; under which
deferred tax liabilities and assets are determined based on the difference
between the financial statement carrying amounts and the tax basis of assets and
liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effect of changes in
tax laws and rates on the date of enactment.
Due to the inherent uncertainty in forecasts and future events and operating
results, the Company has provided for a valuation allowance in an amount equal
to gross deferred tax assets resulting in no net deferred tax assets or
liabilities for the years audited.
Net deferred tax assets consist of the following components from Reentering
Development Stage on January 1, 2010 to December 31, 2010:
2010
--------
Deferred tax assets NOL Carryover $158,938
Valuations Allowance 158,938
--------
Net Deferred Tax Asset $ 0
========
The income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rate of 34% to pretax income from
continuing operations for the years ended December 31, 2010 due to the
following:
* On December 31, 2010, the Company had an operating loss carry forward
of $467,464 that can be used as an offset against future taxable
income. No tax benefit has been reported in the December 31, 2010
financial statements since the potential tax benefit is offset by a
valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry-forwards for Federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur, net operating
loss carry forwards may be limited as to use in the future.
F-13
EXPLORE ANYWHERE HOLDING CORPORATION
(FORMERLY KNOWN AS PORFAVOR CORPORATION)
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND DECEMBER 31, 2009
NOTE E - RELATED PARTY TRANSACTIONS
Boyd Applegate advanced the money to working capital throughout years of
operations. These non-interest bearing advances were due on demand.
The advance from shareholder at December 31, 2009 before the adjustment was
$235,634. Since the board approved to cease the business operation, the
president and major shareholder took all the property and equipment with the net
value of $4,059 for loan repayment. This reduced the advance from shareholder to
$281,575 with the line of credit of $50,000 to the bank. On December 31, 2009,
the president sold all of his shares to Jose F. Garcia who personally assumed
the whole amount of the loan from shareholder of $281,575, so that the Company
did not owe anything to the former president, Boyd Applegate, at December 31,
2009. As part of the sale, Boyd V. Applegate waived all the debt of $281,575.
Accordingly, the loan forgiven was recorded as increase of
Additional-Paid-In-Capital at December 31, 2009.
NOTE F - NOTES PAYABLE
On January 1, 2010, Boyd V. Applegate waived non-interest bearing advances in an
amount of $72,791 as part of the sale; as such, there was no outstanding note
payable as of December 31, 2010. Accordingly, the loan forgiven was recorded as
increase of Additional-Paid-In-Capital at December 31, 2010.
NOTE G - RE-ENTERING DEVELOPMENT STAGE
On January 1, 2010, the board approved to cease all business activities, and the
Company then re-entered to development stage in order to search for
opportunities in merger and acquisition with potential investors. The whole
operation of the Company has been classified as discontinued operations, and its
results of operations reflected under the statement of operations in the
financial statements.
NOTE H - Restatement
The Company's balance sheets at December 31, 2010 and 2009, the statement of
operations, statements of change in stockholders' equity and statements of cash
flows for the years then ended have been restated to reflect the debt
extinguishment in connection to the sale of shares from Boyd V. Applegate to
Fernando Garcia. This resulted in the increase of Additional-Paid-In-Capital
while these transactions were recorded incorrectly as other income originally.
The effects of the restatement are as follows:
Originally
2010 Reported Restated Change
---- -------- -------- ------
BALANCE SHEETS AT DECEMBER 31, 2010
Additional Paid In Capital 190,842 545,708 354,866
Accumulated Deficits (467,464) (822,330) (354,866)
STATEMENT OF OPERATION FOR THE YEAR ENDED DECEMBER 31, 2010
Other income 73,291 -- (73,291)
Net Income / (loss) 57,675 (15,616) (73,291)
Weighted average number of shares outstanding --
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Additional Paid In Capital 190,842 547,708 356,866
Accumulated Deficits (467,464) (822,330) (354,866)
STATEMENTS OF CASH FLOW FOR THE YEAR ENDED DECEMBER 31, 2010
Loan forgiven by shareholder 73,291 -- (73,291)
F-14
Originally
2009 Reported Restated Change
---- -------- -------- ------
BALANCE SHEETS AT DECEMBER 31, 2009
Additional Paid In Capital 190,842 472,417 281,575
Accumulated Deficits (525,139) (806,714) (281,575)
STATEMENTS OF OPERATION FOR THE YEAR ENDED DECEMBER 31, 2009
Other income (281,575) -- 281,575
Net Income / (loss) 237,003 (44,572) (281,575)
Net Income / (loss) per share -- -- --
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Additional Paid In Capital 190,842 472,417 281,575
Accumulated Deficits (523,139) (806,714) (283,575)
STATEMENTS OF CASH FLOW FOR THE YEAR ENDED DECEMBER 31, 2009
Loan forgiven by shareholder (281,575) -- 281,575
NOTE I - SUBSEQUENT EVENTS
On February 1, 2011, the Board of Directors (the "Board") of the Company
received the resignations of Mr. William Gerlib acting as the Company's Interim
CEO and as a member of the Board of Directors.
On February 4, 2011, the Board elected Mr. Bryan Hammond who was appointed as
the Company's President. Prior to his appointment as President of the Company,
Mr. Hammond has been serving as a member of the Company's Board of Directors.
Effective February 9, 2011, the Board elected Mr. Oliver Nelson as CEO of the
Company.
On December 20, 2010, the Company entered into a Share Exchange Agreement with
Explore Anywhere Inc., ("Explore") a private Nevada corporation and Explore's
shareholders, whereby the Company issued an aggregate of 2,613,750 shares of
common stock in exchange for all of the issued and outstanding shares of
Explore. In connection to this transaction, the largest shareholder and other
shareholders of the Company cancelled a totaled of 233,190,000 shares of the
Company's common stock and the rest of his shares of 15,185,000 were given to
the management of Explore. At the result of these transactions, the original
major shareholder remained 1,000,000 shares and lost the controllership of the
Company. On the other hand, the shareholders and management of Explore now own
more than 50% of the shares of the Company after these transactions.
On February 4, 2011, the Company completed this transaction and Explore became a
wholly-owned subsidiary of the Company. The Company intends to file Explore's
last two (2) fiscal years of audited financial statements and pro forma
financial statement showing the effects of the acquisition and other information
regarding Explore on a Form 8-K. Upon such filing, the Company will no longer be
considered a "shell company" as that term is defined under Rule 405.
On February 4, 2011, the Company issued 2,613,750 shares of its common stock
pursuant to the Agreement, as described above. On that date, the Company's
largest shareholder cancelled a total of 233,190,000 shares of the Company's
common stock. The cancellation of such shares reduced the Company's total issued
and outstanding shares, after giving effect to the issuance of shares in
connection with the acquisition of Explore described above to 31,923,750 shares.
F-15