UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 22, 2009
Trycera Financial, Inc.
(Exact Name of Registrant as Specified in its Charter)
Nevada 000-30872 33-0910363
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number Identification No.)
1656 Reunion Avenue, Suite 250, South Jordan, UT 84095
(Address of Principal Executive Offices) (Zip Code)
2 San Joaquin Plaza, Suite 240, Newport Beach, CA 92660
(Former Address) (Zip Code)
Registrant's telephone number, including area code: (801) 446-8802
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
Item 5.01 Changes in Control of Registrant
(a) Change of Control Transaction
On January 22, 2009, Ronald N. Vance accepted appointment as a director
and as the President, Chief Executive Officer, Secretary, and Treasurer of
Trycera Financial, Inc. (the "Company"). Effective January 22, 2009, Alan S.
Knitowski resigned as a director and as Chairman of the Company, and Luan
Dang resigned as a director. Mr. Vance became the sole officer and director
of the Company. Messrs Knitowski and Dang also granted Mr. Vance proxies to
vote the shares beneficially owned by them and by certain affiliated or
associated entities and individuals. Mr. Vance also holds a proxy to vote
shares held by Matthew Kerper. As a result, Mr. Vance holds proxies to vote
4,250,585 shares and directly owns 85,000 shares, which in the aggregate
represent 4,335,585 shares beneficially owned by Mr. Vance and which further
represents approximately 44.7% of the voting control of the Company. As a
result of this transaction, Mr. Vance has assumed control of the Company from
Messrs Knitowski and Dang.
Mr. Vance agreed to assume control of the Company to assist in the
settlement of outstanding liabilities and to seek a new operating business.
Prior to this change of control the Company essentially ceased its business
operations and may be deemed a shell company as defined in Rule 405
promulgated by the Securities and Exchange Commission (the "SEC") under the
Securities Act by virtue of its nominal operations. As a condition to the
change of control, former management agreed to provide proxies to vote the
stock beneficially owned by them or their related entities and associated
parties. They also agreed to settle certain debt owed by the Company to them
and their affiliated entities, including all outstanding 10% Senior Secured
Promissory Notes, and to cancel any outstanding common stock purchase options
held by them. They further agreed to cancel any outstanding contracts or
agreements between them, or entities controlled by them, and the Company.
Also, they agreed, if requested as a condition of the acquisition of a new
operating business, that they would cancel any warrants held by them or any
related entity. Finally, Mr. Dang agreed to act as an advisor to the Board
to review any proposed acquisition transaction. Mr. Vance agreed, subject to
his fiduciary duty as a director, not to finalize any such acquisition
transaction if in the good faith opinion of Mr. Dang, the transaction would
not be in the best interests of the Company.
Messrs Knitowski and Dang have furnished to Mr. Vance proxies to vote
3,258,500 shares of the outstanding common stock of the Company. In
addition, Matthew Kerper, a former director and President of the Company,
granted Mr. Vance a proxy to vote the 992,085 shares owned by him. Each
proxy is irrevocable and will expire either on December 31, 2009, the date
Mr. Vance resigns as a director, or the date upon which Mr. Vance ceases to
control the Company, whichever shall first occur. Sale or transfer of the
shares is conditioned upon the purchaser or transferee agreeing in writing to
be bound by the terms of the proxy. Mr. Vance, acting as proxy, may vote
the shares at any meeting of the shareholders or may execute any written
consent evidencing action by the shareholders. The proxies are not limited
in the matters upon which the shares may be voted.
On or about January 2, 2007, the Company entered into an agreement with
Curo Capital, LLC ("Curo Capital"), an entity controlled jointly by
Mr. Knitowski and Mr. Dang, (the "Curo Capital Agreement") whereby the Company
agreed to pay $1,000 per month towards the Company's office lease activities
associated with the office of the Chairman. Pursuant to the terms of the
Curo Capital Agreement, the Company owed approximately $12,000 to Curo
Capital as of January 22, 2009. Also, on or about January 3, 2006, the
Company entered into an agreement with Ecewa Capital Group, LLC ("Ecewa
Capital"), an entity controlled by Mr. Knitowski (the "Ecewa Capital
Agreement") whereby Ecewa Capital provided certain consulting services to the
Company. Pursuant to the terms of the Ecewa Capital Agreement, the Company
owed approximately $60,000 to Ecewa Capital at January 22, 2009. In a
settlement agreement dated January 22, 2009, Curo Capital agreed to settle
all amounts owed to it under the Curo Capital Agreement for $4,000, and Ecewa
Capital agreed to settle all amounts owed to it under the Ecewa Capital
Agreement for $20,000. Payment of the settlement amounts is due prior to
December 31, 2009, or upon closing of a corporate transaction, whichever
shall first occur. If the Company fails to pay the settlement amounts, Curo
Capital and Ecewa will have the option to rescind the settlement agreement.
The Curo Capital Agreement and the Ecewa Capital Agreement were also
cancelled effective December 31, 2008.
The Company had previously agreed to reimburse Mr. Dang for the cost of
health insurance during the period he served as a director of the Company.
At the time of his resignation on January 22, 2009, the Company owed
approximately $14,950.83 to Mr. Dang for these health insurance costs (the
"Health Insurance Payable"). On or about May 14, 2008, Sagoso Capital
("Sagoso"), a company controlled by Mr. Dang, loaned $5,000 to the Company
and the company issued a 10% Senior Promissory Note representing the loan
(the "Sagoso Note") which was due and payable upon a change of control of the
Company. On or about December 29, 2008, Sagoso Capital acquired the 10%
Senior Promissory Notes issued by the Company to Ecewa Capital in the
principal amount of $67,500 (the "Ecewa Notes"). In a settlement agreement
dated January 22, 2009, Mr. Dang agreed to settle all amounts owed to him for
the Health Insurance Payable for $5,000, and Sagoso agreed to settle all
amounts owed to it under the Sagoso Note and the Ecewa Notes for $38,994.18.
Payment of the settlement amounts is due prior to December 31, 2009, or upon
closing of a corporate transaction, whichever shall first occur. If the
Company fails to pay the settlement amounts, Mr. Dang and Sagoso will have
the option to rescind the settlement agreement.
On or about May 14, 2008, Hang Dang loaned $5,000 to the Company and the
company issued a 10% Senior Promissory Note representing the loan (the
"Note") which was due and payable upon a change of control of the Company.
In a settlement agreement dated January 22, 2009, Ms. Dang agreed to settle
all amounts owed to her for the Note for $2,661.82. Payment of the
settlement amount is due prior to December 31, 2009, or upon closing of a
corporate transaction, whichever shall first occur. If the Company fails to
pay the settlement amounts, Ms. Dang will have the option to rescind the
settlement agreement.
2
In connection with the change of control, Mr. Knitowski cancelled
106,250 common stock purchase options held by him and Mr. Dang cancelled
200,000 common stock purchase options held by him. These options
represented all of the options held by these parties.
Upon the change of control, Mr. Dang was appointed as an advisor to the
Board to review and make recommendations to the Board on any proposed
transaction whereby any third party would assume control of the Company by
means of a reverse acquisition transaction. The Board agreed to furnish to
Mr. Dang for review on a confidential basis any such proposed transaction.
Mr. Dang agreed to serve at no cost to the Company as an advisor to the Board
until the Company acquires a new business or until the resignation of
Mr. Vance as a director, whichever occurs first.
Mr. Vance's law firm had represented the Company since its inception in
2000 through November 2009. Prior to their resignations, Messrs Knitowski
and Dang, as the sole directors, approved a new engagement agreement with
Mr. Vance's law firm. Under the agreement the Company will pay Mr. Vance's firm
an hourly fee for services performed by him or his legal assistants in
connection with the settlement of the outstanding debts, review of any
potential reverse acquisition transaction, and ongoing reporting obligations
with the SEC. The engagement agreement may be terminated by the Company at
any time.
Because the Company may have been a shell company at the time of the
change of control, pursuant to paragraph (a)(8) of this Item 5.01 the Company
hereby provides the following information that would be required if the
Company were filing a general form of registration of securities on Form 10
under the Exchange Act, with such information reflecting the Company and its
securities upon consummation of the change of control transaction:
Forward Looking Statements
The statements contained in this report that are not historical facts
are forward-looking statements that represent management's beliefs and
assumptions based on currently available information. Forward-looking
statements include the information concerning the Company's ability to settle
outstanding liabilities, management's search for an operating company,
possible or assumed future operations, business strategies, need for
financing, competitive position, potential growth opportunities, ability to
retain and recruit personnel, the effects of competition and the effects of
future legislation or regulations. Forward-looking statements include all
statements that are not historical facts and can be identified by the use of
forward-looking terminology such as the words "believes," "intends," "may,"
"will," "should," "anticipates," "expects," "could," "plans," or comparable
terminology or by discussions of strategy or trends. Although management
believes that the expectations reflected in such forward-looking statements
are reasonable, the Company cannot give any assurances that these
expectations will prove to be correct. Such statements by their nature
involve risks and uncertainties that could significantly affect expected
results, and actual future results could differ materially from those
described in such forward-looking statements. Among the factors that could
cause actual future results to differ materially are the risks and
uncertainties discussed in this report. While it is not possible to identify
all factors, management anticipates that the Company will face many risks and
uncertainties including, but not limited to, the ability to settle
outstanding debts, the ability to fund such settlements, the likelihood of
locating a suitable business enterprise, national economic and political
conditions, and acceptance of the Company's products or services after
acquisition of a new business venture. Should one or more of these risks
materialize (or the consequences of such a development worsen), or should the
underlying assumptions prove incorrect, actual results could differ
materially from those expected. The Company disclaims any intention or
obligation to update publicly or revise such statements whether as a result
of new information, future events or otherwise.
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Item 1. Business.
Since 2004 the Company had been in the business of developing, deploying
and marketing semi-custom and customized branded prepaid and prepaid card
solutions. Because of certain events, the Company began winding down its
principal business operations and commenced a search for a new business
venture. The Company has no material assets and significant liabilities.
Former management was unsuccessful in securing a new business venture for the
Company and on January 22, 2009, transferred control of the Company to
Mr. Vance to seek for and, if possible, locate a suitable operating business
venture willing to take control of the Company. The Company has not entered
into any agreements or arrangements with any existing operating company or
any other person affiliated with an existing company.
Management intends to retain the services of Bryan Kenyan, a former
director and Chief Operating Officer of the Company, to assist in the
settlement of the outstanding debts and liabilities. Management also
proposes to retain the services of Stephen Murphy, a former accountant for
the Company, to assist in the organization and preparation of the financial
records of the Company and the evaluation of the financial condition of a
target company.
The Company will attempt to reach settlement agreements with its
principal creditors on an individual basis. In the event the Company is
unsuccessful in this endeavor, it is unlikely that it would be able to enter
into a new business venture and likely that the Company would be dissolved.
In addition, if the aggregate amount of the settlement agreements and other
outstanding liabilities of the Company exceed the value willing to be paid by
a target company, it is unlikely that the Company would succeed in its plan
to obtain a new business venture and would ultimately be dissolved. It is
anticipated that any proposed target company would require a reverse split of
the outstanding shares of common stock of the Company. Management is unable
to predict the amount of such a reverse stock split.
Selection of a Business
The Company anticipates that businesses for possible acquisition will be
referred by various sources, including its sole officer and director, former
management, shareholders, professional advisors, securities broker-dealers,
venture capitalists, members of the financial community, and others who may
present unsolicited proposals. The Company will not engage in any general
solicitation or advertising for a business opportunity and will rely on
personal contacts of its sole officer and director, as well as indirect
associations between him and other business and professional people. By
relying on "word of mouth," the Company may be limited in the number of
potential acquisitions it can identify. While it is not presently
anticipated that the Company will engage unaffiliated professional firms
specializing in business acquisitions or reorganizations, such firms may be
retained if management deems it in the best interest of the Company.
Compensation to a finder or business acquisition firm may take various
forms, including a one-time cash payment, payments based on a percentage of
revenues or product sales volume, payments involving issuance of securities
(including those of the Company), or any combination of these or other
compensation arrangements. Consequently, the Company is currently unable to
predict the cost of utilizing such services.
The Company will not restrict its search to any particular business,
industry, or geographical location, and management may evaluate and enter
into any type of business in any location. The Company may participate in a
newly organized business venture or a more established company entering a new
phase of growth or in need of additional capital to overcome existing
financial problems. Participation in a new business venture entails greater
risks since in many instances management of such a venture will not have
proved its ability, the eventual market of such venture's product or services
will likely not be established, and the profitability of the venture will be
unproved and cannot be predicted accurately. If the Company participates in
a more established firm with existing financial problems, it may be subjected
to risk because the financial resources of the Company may not be adequate to
eliminate or reverse the circumstances leading to such financial problems.
4
In seeking a business venture, the decision of management will not be
controlled by an attempt to take advantage of any anticipated or perceived
appeal of a specific industry, management group, product, or industry, but
will be based on the business objective of seeking long-term capital
appreciation in the real value of the Company.
The analysis of new businesses will be undertaken by or under the
supervision of the sole officer and director, subject to the review and
recommendation of Mr. Dang as an advisor to the Board. In analyzing
prospective businesses, management will consider, to the extent applicable,
the following: the available technical, financial, and managerial resources,
working capital and other prospects for the future, the nature of present and
expected competition, the quality and experience of management services which
may be available and the depth of that management, the potential for further
research, development, or exploration, the potential for growth and
expansion, the potential for profit, the perceived public recognition or
acceptance of products, services, or trade or service marks, name
identification and other relevant factors.
The decision to participate in a specific business may be based on
management's analysis of the quality of the other firm's management and
personnel, the anticipated acceptability of new products or marketing
concepts, the merit of technological changes, and other factors which are
difficult, if not impossible, to analyze through any objective criteria. It
is anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future because of the
requirement to substantially shift marketing approaches, expand
significantly, change product emphasis, change or substantially augment
management, and other factors.
The Company will analyze all available factors and make a determination
based on a composite of available facts, without reliance on any single
factor. The period within which the Company may participate in a business
cannot be predicted and will depend on circumstances beyond the Company's
control, including the availability of businesses, the time required for the
Company to complete its investigation and analysis of prospective businesses,
the time required to prepare appropriate documents and agreements providing
for the Company's participation, and other circumstances.
Acquisition of a Business
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, or other
reorganization with another corporation or entity; joint venture; license;
purchase and sale of assets; or purchase and sale of stock, the exact nature
of which cannot now be predicted. The structure of the particular business
acquisition will be approved by the Board of Directors and may not require
the approval of the Company's shareholders. Notwithstanding the above, the
Company does not intend to participate in a business through the purchase of
minority stock positions. Upon the consummation of a transaction, it is
likely that the present management and shareholders of the Company will not
be in control of the Company. In addition, it is anticipated that the
current sole officer and director would resign in favor of new management
designated by the target company without a vote of the Company's
stockholders.
In the event the Company enters into an acquisition transaction with
another entity, the Company will be required to report the transaction in a
Current Report on Form 8-K within four business days following the execution
of the agreement, and any amendment thereto, and within four business days
following the closing of the transaction. In addition, the Company will be
required to file within four business days a Current Report on Form 8-K which
includes the information that would be required if the Company were filing a
general form for registration of securities on Form 10 reflecting the Company
and its securities upon consummation of the transaction, including
information on the new business and management of the Company after closing.
In addition, audited financial statements of the acquired business would
likely be due within four business days following the closing of the
acquisition.
In connection with the Company's acquisition of a business, the present
shareholders of the Company may, as a negotiated element of the acquisition,
sell a portion or all of the Company's Common Stock held by them at a
significant premium over their original investment in the Company. It is not
unusual for affiliates of the entity participating in the reorganization to
negotiate to purchase shares held by the present shareholders in order to
reduce the number of "restricted securities" held by persons no longer
affiliated with the Company and thereby reduce the
5
potential adverse impact on the public market in the Company's Common Stock
that could result from substantial sales of such shares after the
restrictions no longer apply. As a result of such sales, affiliates of the
entity participating in the business reorganization with the Company would
acquire a higher percentage of equity ownership in the Company. Public
investors will not receive any portion of the premium that may be paid in the
foregoing circumstances. Furthermore, the Company's shareholders may not be
afforded an opportunity to approve or consent to any particular stock buy-out
transaction. Current management does not anticipate negotiating the sale of
his stock as a condition of any proposed reverse acquisition transaction.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance on exemptions from registration under applicable
federal and state securities laws. Securities, including shares of the
Company's Common Stock, issued by the Company in such a transaction would be
"restricted securities" as defined in Rule 144 promulgated by the Securities
and Exchange Commission. If the Company is deemed to be a shell company
prior to any reverse acquisition, these restricted securities could not be
resold under Rule 144 until the following conditions were met: the Company
ceased to be a shell company; it remained subject to the Exchange Act
reporting obligations; it had filed all required Exchange Act reports during
the preceding 12 months; and at least one year had elapsed from the time the
Company filed "Form 10 information" reflecting the fact that it had ceased to
be a shell company. In some circumstances, however, as a negotiated element
of the transaction, the Company may agree to register such securities either
at the time the transaction is consummated, under certain conditions, or at
specified times thereafter. Although the terms of such registration rights
and the number of securities, if any, which may be registered cannot be
predicted, it may be expected that registration of securities by the Company
in these circumstances would entail substantial expense to the Company. The
issuance of substantial additional securities and their potential sale into
any trading market that may develop in the Company's securities may have a
depressive effect on such market.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the
business transaction will find it desirable to structure the acquisition as a
so-called "tax-free" event under sections 351 or 368(a) of the Internal
Revenue Code of 1986, (the "Code"). In order to obtain tax-free treatment
under section 351 of the Code, it would be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain less
than 20% of the issued and outstanding shares of the surviving entity.
Section 368(a)(1) of the Code provides for tax-free treatment of certain
business reorganizations between corporate entities where one corporation is
merged with or acquires the securities or assets of another corporation.
Generally, the Company will be the acquiring corporation in such a business
reorganization, and the tax-free status of the transaction will not depend on
the issuance of any specific amount of the Company's voting securities. It
is not uncommon, however, that as a negotiated element of a transaction
completed in reliance on section 368, the acquiring corporation issue
securities in such an amount that the shareholders of the acquired
corporation will hold 50% or more of the voting stock of the surviving
entity. Consequently, there is a substantial possibility that the
shareholders of the Company immediately prior to the transaction would retain
substantially less than 50% of the issued and outstanding shares of the
surviving entity. It is anticipated that the current shareholders of the
Company would likely retain less than 5% control of the Company after a
reverse acquisition.
Therefore, regardless of the form of the business acquisition, it may be
anticipated that stockholders immediately prior to the transaction will
experience a significant reduction in their percentage of ownership in the
Company.
Notwithstanding the fact that the Company is technically the acquiring
entity in the foregoing circumstances, generally accepted accounting
principles will ordinarily require that such transaction be accounted for as
if the Company had been acquired by the other entity owning the business and,
therefore, will not permit a write-up in the carrying value of the assets of
the other company.
The manner in which the Company participates in a business will depend
on the nature of the business, the respective needs and desires of the
Company and other parties, the management of the business, and the relative
negotiating strength of the Company and such other management.
6
The Company will participate in a business only after the negotiation
and execution of appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require
specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to such
closing, will outline the manner of bearing costs if the transaction is not
closed, will set forth remedies on default, and will include miscellaneous
other terms.
Operation of Business After Acquisition
The Company's operation following its acquisition of a business will be
dependent on the nature of the business and the interest acquired. It is
unlikely that current shareholders would be in control of the Company or that
present management would be in control of the Company following the
acquisition. It may be expected that the business will present various
risks, which cannot be predicted at the present time.
Governmental Regulation
It is impossible to predict the government regulation, if any, to which
the Company may be subject until it has acquired an interest in a business.
The use of assets and/or conduct of businesses that the Company may acquire
could subject it to environmental, public health and safety, land use, trade,
or other governmental regulations and state or local taxation. In selecting
a business in which to acquire an interest, management will endeavor to
ascertain, to the extent of the limited resources of the Company, the effects
of such government regulation on the prospective business of the Company. In
certain circumstances, however, such as the acquisition of an interest in a
new or start-up business activity, it may not be possible to predict with any
degree of accuracy the impact of government regulation. The inability to
ascertain the effect of government regulation on a prospective business
activity will make the acquisition of an interest in such business a higher
risk.
Competition
The Company will be involved in intense competition with other business
entities, many of which will have a competitive edge over the Company by
virtue of their stronger financial resources and prior experience in
business. There is no assurance that the Company will be successful in
obtaining suitable investments.
Employees
The Company currently has no employees. Ronald N. Vance, the Company's
President, will devote such time to the affairs of the Company as he deems
appropriate. Management of the Company expects to use consultants,
attorneys, and accountants as necessary, and does not anticipate a need to
engage any full- time employees so long as it is seeking and evaluating
businesses. The future need for employees and their availability will be
addressed in connection with a decision whether or not to acquire or
participate in a specific business industry.
Item 1A. Risk Factors.
As a smaller reporting company, the Company has elected not to provide
the information required by Item 1A of Form 10.
Item 2. Financial Information.
For information in response to this item, see Item 2 of the Company's
quarterly report on Form 10-Q for the quarter ended September 30, 2008, and
Item 6 of the Company's annual report on Form 10-KSB for the year ended
December 31, 2007.
7
The Company has no cash with which to pay its current obligations.
Mr. Vance will be compensated for his time dedicated to the business of the
Company only if it locates and acquires a suitable operating entity. No one
has agreed to provide the cash necessary to prepare and file the Company's
periodic reports with the SEC. In the event the Company is unsuccessful in
closing a transaction with an operating company prior to the filing deadline
of its annual report on Form 10-K due by March 31, 2009, it may not be able
to complete a reverse acquisition transaction, in which case it would likely
be dissolved. In the alternative, if management is able to secure funding to
pay the costs associated with such filing, the Company may have a longer
period to select a suitable target company. Such funding may include loans
to the company or the sale of common or preferred stock of the Company.
Selected Financial Data
As a smaller reporting company, the Company has elected not to provide
the information required by Item 301 of Regulation S-K.
Quantitative and Qualitative Disclosure about Market Risk
As a smaller reporting company, the Company has elected not to provide
the information required by Item 305 of Regulation S-K.
Item 3. Properties.
The President furnishes office space for the Company at no cost. This
space is shared with the offices of the law practice of the President. The
Company does not presently anticipate the need to lease commercial office
space or facilities. The Company may lease commercial office facilities in
the future at such time as operations have developed to the point where the
facilities are needed, but has no commitments or arrangements for any
facilities. There is no assurance regarding the future availability of
commercial office facilities or terms on which the Company may be able to
lease facilities in the future, nor any assurance regarding the length of
time the present arrangement may continue.
Item 4. Security Ownership of certain Beneficial Owners and Management.
The following table sets forth certain information furnished by current
management and others, concerning the ownership of our common stock as of
January 22, 2009, of (i) each person who is known to us to be the beneficial
owner of more than 5 percent of our common stock, without regard to any
limitations on conversion or exercise of convertible securities or warrants;
(ii) all directors and executive officers; and (iii) our directors and
executive officers as a group:
Amount and Nature
Name and Address of Beneficial
of Beneficial Owner Ownership (1) Percentage of Class (2)
Ronald N. Vance
1656 Reunion Ave.
Suite 250
South Jordan, UT 84095 4,335,585(3) 44.7%
Executive Officers and
Directors as a Group
(1 Person) 4,335,585 44.7%
Alan S. Knitowski
2560 E. Chapman Ave
Suite 404
Orange, CA. 92689 729,802(4) 7.5%
Luan Dang
2560 E. Chapman Ave
Suite 404
Orange, CA. 92689 3,789,500(5) 36.3%
8
Bryan Kenyon
2560 E. Chapman Ave
Suite 404
Orange, CA. 92689 715,080(6) 7.4%
Matthew S. Kerper
P.O. Box 3599
Coppell, TX 75019 992,085 10.3%
_____
(1) Beneficial Ownership is determined in accordance with the rules of
the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Shares of
common stock subject to options, warrants, or other conversion
privileges currently exercisable or convertible, or exercisable or
convertible within 60 days of January 22, 2009, are deemed
outstanding for computing the percentage of the person holding such
option or warrant but are not deemed outstanding for computing the
percentage of any other person.
(2) Percentage based on 9,679,302 shares of common stock outstanding as
of January 22, 2009.
(3) Includes 4,250,585 shares for which Mr. Vance holds proxies. Of
these proxy shares, 67,500 are beneficially owned by Alan S.
Knitowski, 2,430,000 are beneficially owned by Luan Dang, and
992,085 are beneficially owned by Matthew S. Kerper.
(4) Consists of 67,500 shares owned by Mr. Knitowski's IRA, 140,000
shares and 70,000 warrants owned by Curo Capital, LLC, an entity
controlled jointly by Mr. Knitowski and Mr. Dang, and 452,302
shares owned by Trymetris Capital Fund I, LLC, an entity managed by
Curo Capital, LLC.
(5) Includes 1,710,000 shares owned by Sagoso Capital, LLC, an entity
controlled by Mr. Dang, 140,000 shares and 70,000 warrants owned by
Curo Capital, LLC, an entity controlled jointly by Mr. Dang and
Mr. Knitowski, 85,000 shares owned by a trust for the children of
Mr. Knitowski for which Mr. Dang is trustee, and 452,302 shares owned
by Trymetris Capital Fund I, LLC, an entity managed by Curo
Capital, LLC. Also includes 697,500 shares issuable upon exercise
of warrants.
(6) Includes 190,000 shares owned by a family trust and 80 shares owned
with his wife.
Item 5. Directors and Executive Officers
Mr. Vance is the sole officer and director of the Company. Information
about Mr. Vance is set forth below in Item 5.02 of this report.
Directors are elected for a term of one year and until their successors
are elected and qualified. Annual meetings of the stockholders, for the
selection of directors to succeed those whose terms expire, are to be held at
such time each year as designated by the Board of Directors. The Board of
Directors has not selected a date for the next annual meeting of
shareholders. Officers are elected by the Board of Directors, which is
required to consider that subject at its first meeting after every annual
meeting of stockholders. Each officer holds his office until his successor
is elected and qualified or until his earlier resignation or removal.
The Board of Directors does not have a standing nominating committee or
committee performing similar functions. The Board of Directors also does not
currently have a policy for the qualification, identification, evaluation or
consideration of director candidates. The Board of Directors does not believe
that a defined policy with regard to the qualification, identification,
evaluation or consideration of candidates recommended by stockholders is
necessary at this time due to the lack of operations and the fact that the
Company has not received any stockholder recommendations in the past.
Director nominees will be considered solely by the current sole director.
The Board of Directors performs the duties that would normally be
performed by an audit committee. Given the Company's lack of operations
prior to any merger, the Board of Directors believes that its current member
has sufficient knowledge and experience necessary to fulfill the duties and
obligations of the audit committee for the Company. The Board of Directors
has determined that the Company does not have an audit committee financial
expert, due to lack of funds.
9
Item 6. Executive Compensation.
For information of executive compensation in response to this item for
fiscal years ended December 31, 2007 and 2006, see item 10 of the Company's
2006 annual report on Form 10-KSB and the amended 2007 annual report on Form
10-KSB/A. Executive compensation for the year ended December 31, 2008, will
be provided either in the Company's 2008 annual report on Form 10-K or
incorporated by reference to the Company's proxy statement to be filed with
the SEC with respect to the Company's 2008 annual meeting of shareholders.
All compensation arrangements with executive officers and directors who
served during 2008 have expired or been terminated.
For information about the Company's 2004 Stock Option/Stock Issuance
Plan, see Item 10 of the amended 2007 annual report on Form 10-KSB/A.
Item 7. Certain Relationships and Related Transactions, and Director
Independence.
For information in response to this item, see Item 12 of the Company's
amended 2007 annual report on Form 10-KSB/A.
In connection with the change of control described in Item 5.01 above,
all outstanding 10% Senior Secured Promissory Notes, including notes issued
to Messrs Knitowski and Dang, former directors of the Company, were
cancelled.
Also in connection with the change of control described in Item 5.01
above, the consulting agreement with Ecewa Capital Group, LLC and the rental
agreement with Curo Capital, LLC, entities controlled by Mr. Knitowski, were
cancelled.
Mr. Vance's law firm served as legal counsel for the Company since its
inception in 2000 until November 14, 2008, at which time Mr. Vance terminated
the representation of the Company. At the time of the termination, the
Company owed Mr. Vance's firm $23,762 for past services, none of which has
been paid. Mr. Vance also served as Secretary for the Company from May 2004
until November 14, 2008. Mr. Vance currently owns 85,000 shares of the
Company's common stock which he received for past services. In addition, on
January 22, 2009, the Company entered into an engagement agreement with
Mr. Vance's law firm which is described above in Item 5.01.
In connection with the change of control at January 22, 2009, and as
reported above in Item 5.01 above, Messrs. Knitowski and Dang provided to
Mr. Vance irrevocable proxies to vote 3,258,500 shares.
The Company's securities are not listed on a national securities
exchange or in an inter-dealer quotation system which has requirements that
directors be independent. As a result, the Company has adopted the
independence standards of the American Stock Exchange to determine the
independence of our directors and those directors serving on our committees.
These standards provide that a person will be considered an independent
director if he or she is not an officer of the company and is, in the view of
the Company's Board of Directors, free of any relationship that would
interfere with the exercise of independent judgment. The Board of Directors
has determined that the Company's sole director, Mr. Vance, would not meet
this standard and therefore, would not be considered to be independent.
Item 8. Legal Proceedings.
For information in response to this item, see Item 3 of the Company's
2007 annual report on Form 10-KSB and Item 1 of Part II of the Company's
quarterly reports on Form 10-Q for the quarters ended March 31, 2008,
June 30, 2008, and September 30, 2008.
Judgement was granted on January 27, 2009, to Transfers4Less in the amount
of $40,000 in the arbitration hearing held on January 15, 2009.
10
The Company continues to receive demands for payments from creditors and
has been served with a complaint in one such matter. The Company has no
funds to defend these actions or to pay the creditors. Management
anticipates that if the Company is unable to settle these claims, the Company
will be dissolved.
Item 9. Market Price of and Dividends on the Registrant's Common
Equity and Related Shareholder Matters.
The common stock of the Company is quoted on the OTC Electronic Bulletin
Board. Only a limited number of shares have traded since the commencement of
trading in September 2006. The common stock is currently traded with the
trading symbol of "TRYF". The table below sets forth for the periods
indicated the high and low sales prices as reported by various private
services on the Internet and the Pink Sheets. These quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission, and may
not necessarily represent actual transactions.
Quarter High Low
FISCAL YEAR ENDED
DECEMBER 31, 2007
First $ 1.70 $ 1.25
Second $ 1.07 $ 0.55
Third $ 1.01 $ 0.36
Fourth $ 0.36 $ 0.13
FISCAL YEAR ENDED
DECEMBER 31, 2008
First $ 0.13 $ 0.12
Second $ 0.07 $ 0.07
Third $ 0.07 $ 0.07
Fourth $ 0.05 $ 0.05
As of January 22, 2009, there were 9,679,302 shares of common stock
outstanding and 116 holders of record of the Company's common stock. The
number of record holders was determined from the records of the Company's
transfer agent and does not include beneficial owners of common stock whose
shares are held in the names of various security brokers, dealers, and
registered clearing agencies. The Company has appointed Interwest Transfer
Company, Inc., 1981 East 4800 South, Suite 100, Salt Lake City, UT 84117, to
act as the transfer agent of the Company's common stock.
At January 22, 2009, management believes that all of the previously
outstanding options to purchase shares of common stock had either expired or
been cancelled. Except for outstanding warrants, which carry piggyback
registration rights, there are no other outstanding instruments exercisable
or convertible into common shares. The following table sets forth the
outstanding warrants as of January 22, 2009:
Number of Warrants Current Exercise Price Expiration Date
237,500 $1.25 12/31/2012
50,000 $1.25 3/31/2013
167,750 $1.125 6/30/2013
75,000 $1.125 10/31/2013
170,000 $1.00 2/28/2014
550,000 $0.31 12/31/2014
----------
1,250,250
11
The Company has not paid, nor declared, any dividends since its
inception and does not intend to declare any such dividends in the
foreseeable future. The Company's ability to pay dividends is subject to
limitations imposed by Delaware law. Under Delaware law, dividends may be
paid to the extent that a corporation's assets exceed its liabilities and it
is able to pay its debts as they become due in the usual course of business.
The following table sets forth as of the most recent fiscal year ended
December 31, 2008, certain information with respect to compensation plans
(including individual compensation arrangements) under which our common stock
is authorized for issuance:
Number of securities
remaining available
for future issuance
Number of securities under equity
to be issued upon Weighted-average compensation plans
exercise of exercise price of (excluding securities
outstanding options, outstanding options, reflected in column
warrants and rights warrants and rights (a) and (b))
(a) (b) (c)
Equity compensation plans
approved by security holders 1,508,750 $ 0.98 7,647,250(1)
Equity compensation plans not
approved by security holders -0- -0- -0-
---------- ----------
Total 1,508,750 7,647,250
========== ==========
_____
(1) Under our Stock Option/Stock Issuance Plan we are authorized to
issue up to 10,000,000 as options or stock grants. Through
December 31, 2008, we had issued 844,000 shares as stock grants.
No stock grants were made after December 31, 2008. As of
January 22, 2009, all outstanding options had expired or been
cancelled.
Item 10. Recent Sales of Unregistered Securities.
For information in response to this item, see Item 5 of the Company's
2005 10-KSB; Item 5 of Part II of the 10-QSB for the quarter ended March 31,
2006; Item 2 of Part II of the 10-QSB for the quarter ended June 30, 2006;
Item 2 of Part II of the 10-QSB for the quarter ended September 30, 2006;
Item 5 of the Company's 2006 10-KSB; Item 2 of Part II of the 10-QSB for the
quarter ended September 30, 2007; Item 5 of the Company's 2007 10-KSB; and
Item 2 of the 10-QSB for the quarter ended June 30, 2008.
Item 11. Description of Registrant's Securities
For information in response to this item, see Item 8.01 of the Company's
report on Form 8-K filed with the SEC on January 24, 2007.
Item 12. Indemnification of Directors and Officers
For information in response to this item, see Item 6 of the Company's
registration statement on Form S-8 filed with the SEC on February 9, 2007
(SEC File No. 333-140585).
Item 13. Financial Statements and Supplementary Data.
For information in response to this item, see Item 7 of the Company's
2007 10-KSB and Item 1 of Part I of the Company's 10-Q for the quarter ended
September 30, 2008.
Item 14. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
No information is reportable pursuant to this item.
12
Item 15. Financial Statements and Exhibits.
No information is reportable pursuant to this item.
(b) Information Required by Item 403(c) of Regulation S-K
Management anticipates that a change of control will occur when a new
business venture is acquired. The Company's business plan is to seek and, if
possible, acquire an operating entity through a reverse acquisition
transaction with the operating entity. By its nature, a reverse acquisition
generally entails a change in management and principal shareholders of the
surviving entity. While management cannot predict the specific nature of
the form of the reverse acquisition, it is anticipated that at the closing of
the process, the current sole officer and director would resign in favor of
persons designated by the operating company and that the shareholders of the
operating entity would receive a controlling number of shares in the Company,
thus effecting a change in control of the Company.
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers
On January 22, 2009, Messrs Knitowski and Dang resigned as directors and
Mr. Knitowski resigned as Chairman. At the time of his resignation,
Mr. Knitowski was acting as the Company's principal executive and principal
financial officer. At the time of these resignations, Mr. Vance was
appointed a director of the Company. He was also appointed as President,
Chief Executive Officer, Secretary and Treasurer, and will be the Company's
principal executive and principal financial officer. The Company no longer
has any committees of the Board of Directors. Set forth below is certain
information about Mr. Vance:
Director
Name Age Positions Since Employment Background
Ronald N. Vance 56 Director, President, 2009 Since 1984 Mr.Vance has been
Chief Executive Officer, self-employed as an attorney
Secretary and Treasurer practicing in the State of Utah
The arrangement by which Mr. Vance accepted appointment as a director of
the Company is set forth above in response to Item 5.01. The compensatory
arrangement with Mr. Vance is likewise described in Item 5.01 above.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Trycera Financial, Inc.
Date: January 28, 2009 By /s/ Ronald N. Vance
Ronald N. Vance, President
13