UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 2010
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________ to________________
Commission file number 333-150775
ADTOMIZE INC.
(Exact name of registrant as specified in its charter)
Nevada 41-2247537
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8th Floor - 200 South Virginia Street, Reno, NV 89501
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (775) 583-1801
Securities registered under Section 12(b) of the Act:
None N/A
Title of each class Name of each exchange on which registered
Securities registered under Section 12(g) of the Act:
Common Stock, $0.0001 par value
(Title of class)
Indicate by checkmark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by checkmark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Act. Yes [ ] No [X]
Indicate by checkmark whether the registrant has (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if Smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [X] No [ ]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter: N/A - no common stock traded during period
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ] N/A
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. 1,840,000 shares of common
stock as of June 18, 2010.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) of the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980). Not Applicable
AVAILABLE INFORMATION
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and all amendments to those reports that we file with the Securities
and Exchange Commission, or SEC, are available at the SEC's public reference
room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain
information on the operation of the public reference room by calling the SEC at
1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains
reports, proxy and information statements and other information regarding
reporting companies.
TABLE OF CONTENTS
Page
----
Part I
Item 1. Business 4
Item 1A. Risk Factors 10
Item 2. Properties 14
Item 3. Legal Proceedings 14
Item 4. Submission of Matters to a Vote of Securities Holders 14
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 15
Item 6. Selected Financial Data 15
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 15
Item 8. Financial Statements 19
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 30
Item 9A. Controls and Procedures 30
Item 9B. Other Information 31
Part III
Item 10. Directors, Executive Officers and Corporate Governance 32
Item 11. Executive Compensation 33
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 34
Item 13. Certain Relationships and Related Transactions, and Director
Independence 34
Item 14. Principal Accounting Fees and Services 35
Part IV
Item 15. Exhibits 35
Signatures 36
2
PART I
FORWARD LOOKING STATEMENTS.
This annual report contains forward-looking statements. These statements relate
to future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled "Risk Factors" and the risks set out below, any of which may cause our
or our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These risks include, by way of example and not in
limitation:
* the uncertainty that we will not be able to successfully identify and
evaluate a suitable business opportunity;
* risks related to the large number of established and well-financed
entities that are actively seeking suitable business opportunities;
* risks related to the failure to successfully management or achieve
growth of a new business opportunity; and
* other risks and uncertainties related to our business strategy.
This list is not an exhaustive list of the factors that may affect any of our
forward-looking statements. These and other factors should be considered
carefully and readers should not place undue reliance on our forward-looking
statements.
Forward looking statements are made based on management's beliefs, estimates and
opinions on the date the statements are made and we undertake no obligation to
update forward-looking statements if these beliefs, estimates and opinions or
other circumstances should change. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Except as
required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform
these statements to actual results.
The safe harbors of forward-looking statements provided by Section 21E of the
exchange Act are unavailable to issuers of penny stock. As we issued securities
at a price below $5.00 per share, our shares are considered penny stock and such
safe harbors set forth under the Private Securities Litigation Reform Act of
1995 are unavailable to us.
Our financial statements are stated in United States dollars and are prepared in
accordance with United States generally accepted accounting principles.
In this annual report, unless otherwise specified, all dollar amounts are
expressed in United States dollars and all references to "common stock" refer to
the common shares in our capital stock.
As used in this annual report, the terms "we", "us", "our" and "Adtomize" mean
Adtomize Inc., unless otherwise indicated.
3
ITEM 1. BUSINESS
OVERVIEW
We are a development stage company that was incorporated on July 31, 2007 in the
state of Nevada. We have commenced only limited operations, primarily focused on
organizational matters. We have never declared bankruptcy, have never been in
receivership, and have never been involved in any legal action or proceedings.
We have not made any significant purchase or sale of assets, nor has the Company
been involved in any mergers, acquisitions or consolidations. We are not a blank
check registrant as that term is defined in Rule 419(a)(2) of Regulation C of
the Securities Act of 1933, because we have a specific business plan and
purpose. Neither the Company nor its officers, Directors, promoters or
affiliates, has had preliminary contact or discussions with, nor do we have any
present plans, proposals, arrangements or understandings with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger.
We have not generated any revenue to date and we do not expect to generate
revenues during the first 12 months of our operations. Our Directors have
reserved a domain name for us and have also acquired web and email hosting. We
have not commenced operations other than certain preliminary surveys conducted
by our officers. We do not currently have sufficient capital to operate our
business, and, we may require additional funding in the future to sustain our
operations. There is no assurance that we will have revenue in the future or
that we will be able to secure the necessary funding to develop our business.
We are engaged in the development of an online advertising brokerage service to
facilitate the sale of advertising space on the internet. The Company is in the
process of developing a Global Advertising Gateway system to facilitate the
buying and selling of internet advertising space by matching websites interested
in selling advertising space with websites interested in purchasing advertising
space. As a web-based company, sales and marketing will be driven through the
web site.
Our offices are currently located at 8th Floor - 200 South Virginia Street,
Reno, NV, 89501. Our telephone number is (775) 583-1801. We do not currently
have a website; however we have reserved a domain name.
THE MARKET OPPORTUNITY
Since the mid-1990's, the internet has enjoyed tremendous growth. From the
number of web sites, to the growth of the number of users, to the volume of
business activity conducted on and through web sites every day.
The internet is continuing to grow steadily year over year. According to
Internet World Stats, a website that tracks internet statistics
(http://www.internetworldstats.com/emarketing.htm), the popularity of the
internet has grown from 16 million users or 0.4% of the global population in
December of 1995 to a projected 1.215 billion users or 18.5% of the global
population in September of 2007.
In conjunction with that growth, online advertising has evolved as well and in
recent years has matured into a significant part of the total advertising
market.
According to advertising firms, the ad world has been turned upside down by the
rate of change and innovations delivered via the internet. Internet Outsider, an
online resource for the advertising industry (www.internetoutsider.com),
reported that in the second quarter of 2007, U.S. advertising revenue at four
leading online media firms grew by $1.3 billion compared to the prior year.
Conversely, fifteen other traditional brick and mortar advertising companies
that sell ads saw their revenue drop approximately $280 million for the same
time period. Interactive Advertising Bureau (www.iab.net) found Internet
advertising revenues topping out close to $5 billion for the first quarter of
2007, a 26 percent increase over the first-quarter of 2006.
There are currently two primary means of advertising on the internet. An
advertiser may either advertise via a search engine web site (such as Google or
Yahoo) where the display of the advertiser's ad is triggered by the particular
search terms utilized by the user of the search engine, or an advertiser may
advertise directly on particular web sites that the advertiser believes are
visited by its target market.
4
Search engine web companies have developed extensive online advertising
methodologies that are unique for their respective web user communities. These
search engine companies provide advertisers with advertising space on users'
search-results web pages that match certain keywords provided by the
advertisers. Advertisers pay only for those internet visitors that actually
click on their advertisements. The ads are typically positioned in a stacked
column on the right-hand side of the search results web page.
Many web sites have a high traffic flow of web visitors, while others do not but
are interested in increasing the number of visitors to their sites. We plan to
focus our efforts on those web-sites that are interested in selling advertising
space and on those web-sites that are interested in advertising their sites. We
plan to offer online advertising brokerage services to match the web-site that
are interested in advertising themselves with the web sites that are interested
in selling advertising space.
We plan to organize an online database of the high traffic web sites and market
them to potential advertisers through a proprietary web site.
We intend to market our advertising brokerage service by way of an online
campaign aimed at the owners of under-achieving, low-traffic web sites, whom we
consider the potential buyers of our service. These owners want more web traffic
that in turn will lead to increased revenue. We plan to offer them a method of
achieving this objective. By visiting our web site, low-traffic websites will be
able to buy web advertising in the form of standardized banners on high traffic
web sites. A buyer may choose to promote its web site on one or a group of web
sites that have high traffic volume. The buyer can control the number of
banners, as well as the length of time the advertising banners appear, and
thereby control how much it spends on its marketing campaign. Our customer will
have its banner ad appear on the high volume web site, and thus be able to
benefit from an increased number of clicks/views originating from the high
traffic web site. For example, the buyer will be able to buy a designated number
of clicks/views and pay for them using the PayPal system. We intend to develop a
price schedule indicating the cost per thousand of clicks/views from the high
volume web sites.
OUR COMPETITION
Online advertising is designed to increase the traffic flow to an advertiser's
web site. Our competition includes both search engine advertising programs as
well as other online advertising brokerage companies.
SEARCH ENGINE ADVERTISING
Search engine advertising enables a buyer signs up for a CPC (cost-per-click)
advertisement and pay based on the number of web site clicks to the buyer's web
site from the online advertisement located on the search engine's designated web
pages. Many internet search engines offer this type of advertising program,
including Google, which is one of the most popular web sites on the internet.
Google.com Adwords (http://www.google.ca/intl/en/ads/) is a program for
advertisers who are looking for a highly controlled cost-per-click advertising
system. An advertiser only pays for the number of times that people click on its
ads.
Google AdSense (https://www.google.com/adsense/login/en_US/) is promoted
alongside Google Adwords as a marketing initiative aimed at web site publishers.
The Google AdSense program matches advertisements to publisher's content and
pays web site publishers for the Google ads that appear on their web site.
Yahoo.com Search Marketing (http://searchmarketing.yahoo.com/srch/index.php/)
recently rolled out a revised marketing program called Sponsored Search. Similar
to Google's AdSense, the Yahoo Sponsored Search allows the advertiser to create
ads that appear in the search results within Yahoo.
AltaVista.com (http://www.altavista.com/web/avbusiness), another popular search
engine, uses the Yahoo Search Marketing program instead of developing its own
program.
Other search engine web sites, such as Dog Pile.com (http://www.dogpile.com/)
rely on Google and Yahoo to develop the infrastructure for online advertising.
5
ONLINE BROKERAGE SERVICES COMPANIES
There are several companies that have set up online advertising brokerage web
sites, each with some variations to help differentiate it from the others.
PAYPOPUP.com (http://www.paypopup.com/): This company is a four year old online
advertising network that is made up of thousands of specialized websites that
offers customers a wide range of unique and targeted web site traffic. They
offer pop-under, layer, and banner ads for customers.
Bpath (http://www.bidvertiser.com): Bpath, an online company that has been in
business since 2003, offers pay-per-click advertising, called BidVertiser, on
web sites selected by the customer. A customer can chose which web site it wants
to advertise on from an online database organized by topic, such as business,
games, health & fitness, news, and other categories. Once the customer has
selected the web sites by topic, it can refine the marketing campaign even
further by designating specific geographic areas where the ads will appear. The
next step in the process is unique to this company - the buyer submits its own
Pay-per-Click bids for the advertising space. Advertising space is awarded to
the highest bidder. According to Bpath, this bidding process enables web site
owners to overcome the disadvantages of automated systems, where neither party
has any control of the quality of the ads, the pricing, or the timing of the
placement of those ads. The bid price is variable, depending on a range of
market factors including popularity of the web sites and the quality of the web
site. An advertiser can place an ad directly on one of Bpath's listed web sites
of its choice and pay only for the number of times that a web site visitor
actually clicks-through to the advertiser's web site. The company offers a range
of standard online advertising units, including banner ads, inline ads, button
ads, and skyscraper ads.
YesUp Ecommerce Solutions Inc. (http://www.yesadvertising.com/): This company
uses an online innovation called Contextual Advertising Technology by Clicksor
(http://www.clicksor.com/) to maximize the advertiser's internet advertising
dollars. They achieve this by displaying the customer's advertisements on
relevant web pages and pay per click search engines, then layering in a matching
process of customer selected keywords, and then channeling the advertisements to
affiliate web sites and search engines. In this manner, the company claims to be
able to deliver highly targeted and effective results. The company uses an
auction model (Cost Per Visit - CPV, Cost Per Click - CPC, Pay Per Click - PPC,
and Cost Per Thousand Impressions - CPM metrics), where customer bid for
placement ranking. This company is a profit-sharing advertising network.
Wpromote Inc. (http://www.wpromote.com/): In business since 1999, Wpromote
claims to be the #1 ranked internet search marketing firm in the USA. The
company has three areas of business, Search Engine Optimization, Pay Per Click
Advertising, and Performance Marketing. The Pay Per Click Advertising program is
built around the use of search engine marketing for advertising campaigns. The
cost-per-click models described above are used by Wpromote Inc. as well.
Redirected Visitors.com (http://www.redirectedvisitors.com/): This company is an
online business that utilizes internet web sites that are no longer active. They
buy abandoned web site domain names, put a category label on each acquisition,
and add these to their inventory. Abandoned web sites continue to attract web
visitors as result of prior marketing efforts. It is these present-day web
visitors who are re-directed to the advertisers' sites.
AdEngage.com (http://www.adengage.com/): This company is an alternative internet
advertising web business that was founded by a former webmaster who was not
content with the service he was receiving from other online advertising
companies. This firm offers customers a selection of advertising packages
starting with weekly ads, weekly ad packages, and targeted CPC advertisements.
Opening for business in 2004, AdEngage.com touts an online network of more than
2,500 web sites and displays over 10 billion ads each month.
OUR SOFTWARE PRODUCT AND SERVICE MODEL
The online advertising brokerage business that we are planning to develop will
consist of proprietary server software, a comprehensive online database, a Buy
Online Advertising module, and a publisher's module for web site owners. Our
services will be internet-based. We plan to sell advertising space to
low-traffic web site owners who want to increase the volume of traffic coming to
their web sites. We plan on building an inventory of high-traffic web sites
interested in accepting online advertisements on their sites.
6
PRODUCT DESIGN AND DEVELOPMENT
The product design will be done in several steps as outlined below.
SOFTWARE DESIGNER SELECTION
Product design will begin after the selection of a software designer. Our plan
is to use an offshore company in order to keep our costs down. Our network of
contact and supplementary research suggest to us that there are a suitable
number of candidates available with related experience to do the work and stay
within our budget. A Non-Disclosure Agreement will be signed before any outside
contractor begins work on our web site. This document will include an
acknowledgement that all property rights will remain with the Company.
SPECIFICATIONS AND HIGH-LEVEL DESIGN
We expect to complete specifications for the product and high level design two
(2) months after the selection of a software design contractor. Completion of
product specifications and high-level design will be done by our directors in
collaboration with the software design contractor.
INFRASTRUCTURE ACQUISITION AND DEVELOPMENT
This step involves the acquisition of two computers that will be used as
servers. One server will be dedicated for product development and the other
server for the online deployment of the web site, the advertising database, the
advertising buyer's module and the web site publisher's module and related
content. We estimate that installation of the operating system, development
tools and database will take two weeks to complete. This work will be handled by
the software design contractor. Cost control is important at this stage and we
plan to keep our costs down by using open source software such as Linux for our
operating system, mySQL as a database, and PhP as programming languages, all of
which are available as open source products at no cost.
ONLINE DATABASE - CONFIGURATION AND DESIGN
During the development phase we will be working on a database design that
features a scalable software application. The software design contractor will be
responsible for this task. Our management will supervise this step in the
development cycle, benchmarking, and testing of the database along the way. We
forecast that this work will take one month to complete and will begin after the
set-up of the development server. Security procedures, including a daily backup,
will be used from the start of the high level design work and carried forward to
all stages of software development.
An inventory of available web sites willing to accept advertising will reside on
a server in a data center selected by our Company directors. This content will
be made available in an easy-to-use format, organized by topic. Labels being
considered for the topics include Business, Cell Phones, Health & Fitness, Job
Postings, Medical, Tourism & Travel and Seniors. Over the first two years we
plan to monitor which topics are of most interest to our prospective advertisers
and adjust our topics and inventory to meet their needs and requests.
ADVERTISER'S MODULE
This is the area of our web site that will be dedicated to prospective customers
looking to buy advertising space. This area will feature a brief introduction
and description of our services, a section to Create an Advertising Account, our
online database organized by topic headings of web sites to choose from, an
Advertising Format area where the buyer can select either a Text Ad to appear in
Button format or a Banner Ad, and a Help section. A Shopping Cart feature will
be added to the Advertiser's Module so that the prospective customer purchasing
advertising space can easily make his selections and arrange for online payment
through the PayPal system.
7
When a prospective advertiser visits our web site, he will be able to review the
topics, select one at a time, and drill down for more information on what web
sites are available. If he decides to work with us, he will have to complete an
ONLINE REGISTRATION FORM including contact information, his web site address,
and the landing page for click-through ads on its web site, which in many cases
will be the same as the home page of the web site. Once the registration form is
completed, the advertiser will be able to proceed. As the advertiser makes its
selections, a Shopping Cart will appear on the screen, and the advertiser will
add his selections to the shopping cart, minimize as directed, and move to the
next topic. Once his choice of web sites has been completed, he will be offered
a checklist of advertising units, ranging from button style to banner. A Text
Box will be available to enter the content for the Button Style ads. For banner
ads, we will provide the prospective advertiser with two choices of banner ads
and request that the advertiser upload images in gif, jpeg, or Flash file
formats. Once the prospective advertiser has completed making its choices, the
Shopping Cart will produce a Grand Total and request payment by credit card. We
plan to use the PayPal system to process payments. Each request will be reviewed
by our team. In the early stages, the reviewer will be one of our Company
Directors. We plan for advertisements that are to appear with text only to be
posted to the target location web site the same day. By the end of year two, we
plan to be able to speed up the placement process to a completion within an hour
of signing up and arranging for payment. Correspondence will be conducted by
email to keep our costs down.
PUBLISHER'S MODULE
We plan for the Publisher's Module to be dedicated to owners of web sites who
are willing to list their sites with us. Primary contact is most likely to be
through webmasters who run the web sites. The term publisher is acknowledged
throughout the internet as an appropriate designation for those companies that
develop a web site and add content to it for the benefit of people surfing the
net looking for information. We plan for our site to feature an invitation to
web publishers to receive payment for allowing their web sites to be utilized
though our service as digital billboards for other web sites. This area will
include a page to encourage webmasters and owners to join our Affiliate Network
Group. In this area, we will offer details about how the system will operate, as
well as instructions for setting up an Affiliate Registration Page to collect
their contact information and to make them familiar with how they will get paid.
After the publisher has registered and created an account, it will be able to
review advertising details, monthly reports summaries, money owed, and payments
made.
ADMINISTRATIVE MODULE
We plan for this area of the web site to be for internal use only. In the early
stages, our Directors will handle the administrative functions, such as the
approval and review of all applications from publishers and prospective
customers. They will also be able to suspend accounts, add credit, authorize
payments and generate reports.
INFORMATION ONLY WEB-SITE
We plan to establish a preliminary information-only web site about the Company
once we have received funding. The preliminary web site will offer general
information about the Company, and our planned products and services. We hope to
complete an information-only web site in the first two weeks of operations after
receipt of funding and it will remain active until the e-commerce web site is
available for launch.
DEMONSTRATION SECTION
We plan to have an online demonstration section on our web site for both
prospective customers who are interested in buying advertising space, and for
web site publishers, who will list their sites with us. The demonstration
section will include the range of web sites by topic area with statistics on
most popular, recent marketing trends, and testimonials once we have clients.
Prospective customers will also be able to view the different choices they have
between text box ads and banner ads, with the size specifications illustrated by
several examples.
8
We intend to complete the full web site and the initial software development
within the first twelve months after receipt of funding.. We plan to retain the
services of a software developer on a consulting basis for the first two or
three years of our operation to work on system upgrades. Our web application
will reside at http://adtomize.com.
MARKETING & SALES STRATEGY
Our marketing strategy will be multi-faceted. One part will focus on promoting
the site through online ads; a second will be email broadcasts to lists that we
will acquire from list brokers; and a third will be attending high profile
internet conferences where we can meet webmasters and publishers face-to-face
while we pitch our services.
ONLINE ADVERTISING
The bulk of our advertising and promotional activities will be centered on an
online advertising campaign using Google Adwords
http://www.google.ca/intl/en/ads/. We have selected Google because of its
success and popularity for web users when they want to find something using an
internet search. The Google Adwords program will allow us to customize the text
of the advertisement, the frequency of the advertisement's appearance, and the
length of the contract. For our purposes, we believe that this will give us the
maximum amount of flexibility and allow us to closely monitor the costs of the
marketing campaign.
Two types of ads will be used. The first type will target web site owners who
want to buy ads on high-traffic web sites. This group will be our customers. The
second type of advertisement will target webmasters and publishers that have
space available on their web sites and are willing to accept advertising. These
web sites will become our inventory.
EMAIL ADVERTISING CAMPAIGN
We anticipate that an information style email advertising campaign may help to
enhance our online advertising campaign and bring us into direct contact with
both publishers and potential customers. In this regard, we are considering
acquiring email lists, something that can be done on an incremental basis so as
not to incur a large expense before determining whether an email campaign works
and meets our expectations.
We are also considering two other marketing tactics. First, we are considering
publishing a monthly online newsletter about trends in the industry that we
would distribute at no charge to interested parties. The purpose of publishing
an online newsletter would be to increase brand name recognition. Second, we are
considering writing articles that could be published in our online newsletter,
or that may be submitted by us to niche market trade journals. We may be able to
gain further brand name exposure by writing articles and submitting them to
targeted hard copy publications on topics such as "How to increase your sales
using online advertising".,.
INDUSTRY TRADE SHOWS
Attending industry trade shows will be the third level of our marketing
campaign. We hope that being out in front of the online community will provide
an excellent opportunity to make face-to-face contacts and to begin to develop
relationships with both prospective customers and suppliers, the publishers of
web sites. High volume trade shows would give us both direct contact
opportunities during the trade shows as well as providing us with a list of
attendees whom we may contact to work with after the conferences.
Once our own web site is up and running and the first group of customers have
signed up, we will begin to review the possible industry trade shows that we
could attend. No financial commitments to this marketing approach will be taken
until the middle of year two of operations at the earliest.
SEARCH ENGINE OPTIMIZATION
An in-house marketing strategy that we plan to employ is to install meta-tags on
every one of the pages to our web site. Meta-tags are code words that reside in
the hidden infrastructure of a web page and help to highlight a web page when
someone is using a search engine to find information. For example, by including
the words "ONLINE ADVERTISING" in our web page, our web page will appear higher
9
on the search page results of search engines like Google, Yahoo, AltaVista,
Dogpile and others. This approach is commonly referred to as search engine
optimization. By achieving a higher ranking in the search page results, we hope
to increase the number of web visitors that come to see our web page and decide
to do business with us.
We plan to perform a quarterly review to monitor the effectiveness of our entire
marketing plan.
SALES REVENUE MODEL
Sales revenue will come from companies, organizations, and individuals who are
interested in buying online advertising. We will receive a percentage of the
advertising dollars spent by these advertisers on purchasing advertising space
on our publishers' web sites. We plan to use the industry standard
cost-per-click method of tracking the number of web site visitors that see an
advertisement on one of our publisher's web sites and click through to our
customer's web site. As the online broker, we plan to collect a 33% commission
on each completed advertising transaction.
A tiered pricing structure will be published in the advertisers section of our
web site. Prior to the official launch of our web site, our Directors will
conduct a review of the going rates for online advertising and then develop our
own pricing schedule. We will charge our customers' credit cards through the
PayPal system for their orders. The customer will have the option to end the
advertising contract period at any time.
SERVICES FOR WEB PUBLISHERS
As a virtual online business, we will have the flexibility of customizing the
number of delivery units at a small incremental cost to our business. Our focus
will be on signing up Web Publishers at no charge to them. Building a diverse
and substantial inventory of web sites that are willing to offer digital
advertising space on their web sites will be a key factor in our success.
With the growing number of web sites and the popularity of online advertising,
we hope to take advantage of these concurrent trends as we launch our business.
During the coming year of our operations we expect to earn limited sales
revenue.
EMPLOYEES
We have commenced only limited operations; therefore, we have no employees. Our
officers and Directors provide services to us on an as-needed basis. When we
commence full operations, we will need to hire full-time management and
administrative support staff.
ITEM 1A. RISK FACTORS
Much of the information included in this annual report includes or is based upon
estimates, projections or other "forward looking statements". Such forward
looking statements include any projections or estimates made by us and our
management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.
Such estimates, projections or other "forward looking statements" involve
various risks and uncertainties as outlined below. We caution the reader that
important factors in some cases have affected, and in the future could
materially affect actual results and cause actual results to differ materially
from the results expressed in any such estimates, projections or other "forward
looking statements".
RISKS RELATING TO OUR LACK OF OPERATING HISTORY
RISK FACTORS
1. WE HAVE A GOING CONCERN OPINION FROM OUR AUDITORS, INDICATING THE
POSSIBILITY THAT WE MAY NOT BE ABLE TO CONTINUE TO OPERATE.
10
The Company has incurred net losses of $(74,044) for the period from July 31,
2007, (date of inception) through March 31, 2010. We anticipate generating
losses for the next 12 months. Therefore, we may be unable to continue
operations in the future as a going concern. No adjustment has been made in the
accompanying financial statements to the amounts and classification of assets
and liabilities which could result should we be unable to continue as a going
concern. In addition, our independent auditors included an explanatory paragraph
in their report on the accompanying financial statements regarding concerns
about our ability to continue as a going concern.
As a result, we may not be able to obtain additional necessary funding. There
can be no assurance that we will ever achieve any revenues or profitability. The
revenue and income potential of our proposed business and operations are
unproven, and the lack of operating history makes it difficult to evaluate the
future prospects of our business. If we cannot continue as a viable entity, our
stockholders may lose some or all of their investment in the Company.
2. WE ARE A DEVELOPMENT STAGE COMPANY AND MAY NEVER BE ABLE TO EXECUTE OUR
BUSINESS PLAN.
We were incorporated on July 31, 2007 in the state of Nevada. We currently have
no products, customers, or revenues. Although we have begun initial planning for
the development of our Global Advertising Gateway system and our online
advertising services, we may not be able to execute our business plan unless and
until we are successful in raising additional funds. We anticipate that we will
require more than the $50,000 that has been invested by our current stockholders
to commence operations, and to remain operational during the next twelve months.
We may require additional financing in order to establish profitable operations.
Such financing, if required, may not be forthcoming. Even if additional
financing is available, it may not be available on terms we find favorable.
Failure to secure the needed additional financing will have a very serious
effect on our company's ability to survive. At this time, there are no
anticipated additional sources of funds in place.
3. OUR BUSINESS PLAN MAY BE UNSUCCESSFUL.
The success of our business plan is dependent on our developing our Global
Advertising Gateway system to facilitate the buying and selling of internet
advertising space. Our ability to develop this system is unproven, and the lack
of operating history makes it difficult to validate our business plan. As a
web-based company, sales and marketing will be driven through our web site. In
addition, the success of our business plan is dependent upon the market
acceptance of our system. Should this system be too narrowly focused or should
the target market not be as responsive as we anticipate, we will not have in
place alternate services or products that we can offer to ensure our
continuation as a going concern.
4. WE HAVE NO OPERATING HISTORY AND HAVE MAINTAINED LOSSES SINCE INCEPTION,
WHICH WE EXPECT WILL CONTINUE IN THE FUTURE.
Management believes that the prior investment of $50,000 by our current
stockholders will not be sufficient to commence operations and to continue our
planned activities. We also expect to continue to incur operating losses in
future periods. These losses will occur because we do not yet have any revenues
to offset the expenses associated with the development of our Global Advertising
Gateway system and the marketing and sale of our online advertising services. We
cannot guarantee that we will ever be successful in generating revenues in the
future. We recognize that if we are unable to generate revenues, we will not be
able to earn profits or continue operations.
There is no history upon which to base any assumption as to the likelihood that
we will prove successful, and we can provide investors with no assurance that we
will generate any operating revenues or ever achieve profitable operations. If
we are unsuccessful in addressing these risks, our business will most likely
fail.
5. OUR EXECUTIVE OFFICERS AND DIRECTORS HAVE SIGNIFICANT VOTING POWER AND MAY
TAKE ACTIONS THAT MAY BE DIFFERENT THAN ACTIONS SOUGHT BY OUR OTHER
STOCKHOLDERS.
Our officers and Directors hold 54.2% of the outstanding shares of our common
stock.
11
These stockholders will be able to exercise significant influence over all
matters requiring stockholder approval. This influence over our affairs might be
adverse to the interest of our other stockholders. In addition, this
concentration of ownership could delay or prevent a change in control and might
have an adverse effect on the market price of our common stock.
6. SINCE OUR OFFICER AND DIRECTORS MAY WORK OR CONSULT FOR OTHER COMPANIES,
THEIR OTHER ACTIVITIES COULD SLOW DOWN OUR OPERATIONS.
Our officers and Directors are not required to work exclusively for us and do
not devote all of their time to our operations. Presently, our officers and
Directors allocate only a portion of their time to the operation our business.
Since our officers and Directors are currently employed full-time elsewhere,
they are able to commit to us only up to 25-30 hours a week. Therefore, it is
possible that their pursuit of other activities may slow our operations and
reduce our financial results because of the slow-down in operations.
7. OUR OFFICERS AND DIRECTORS ARE LOCATED IN THE PHILIPPINES.
Since all of our officers and Directors are located in the Philippines, any
attempts to enforce liabilities upon such individuals under the U.S. securities
and bankruptcy laws may be difficult.
RISKS RELATING TO OUR STRATEGY AND INDUSTRY
8. ONLINE ADVERTISING SYSTEMS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE.
Our business is in an emerging market that is characterized by rapid changes in
customer requirements, frequent introductions of new and enhanced products and
services, and continuing and rapid technological advancement. To compete
successfully in the internet advertising market, we must continue to design,
develop and sell new and enhanced services that provide increasingly higher
levels of performance and reliability at lower cost. These new and enhanced
services must take advantage of technological advancements and changes, and
respond to new customer requirements. Our success in designing, developing, and
selling such services will depend on a variety of factors, including:
* Identifying and responding to market demand for new advertising
services;
* The scalability of our equipment platforms to efficiently deliver our
services;
* Keeping abreast of technological changes;
* Timely developing and implementing new product/service offerings and
features;
* Maintaining quality of performance;
* Providing cost-effective service and support; and
* Promoting our services and expanding our market share.
If we are unable, due to resource constraints or technological or other reasons,
to develop and introduce new or enhanced services in a timely manner, if such
new or enhanced services do not achieve sufficient market acceptance, or if such
new service introductions decrease demand for existing services, our operating
results would decline and our business would not grow.
9. WE ARE A SMALL COMPANY WITH LIMITED RESOURCES COMPARED TO SOME OF OUR
CURRENT AND POTENTIAL COMPETITORS AND WE MAY NOT BE ABLE TO COMPETE
EFFECTIVELY AND INCREASE MARKET SHARE. ALSO, INTENSE COMPETITION IN THE
MARKETS IN WHICH WE COMPETE COULD PREVENT US FROM INCREASING OR SUSTAINING
OUR REVENUE AND PREVENT US FROM ACHIEVING PROFITABILITY.
Most of our current and potential competitors have longer operating histories,
significantly greater resources and name recognition, and a larger base of
customers than we have. As a result, these competitors have greater credibility
with our potential customers. They also may be able to adopt more aggressive
pricing policies and devote greater resources to the development, promotion, and
sale of their products and services than we can to ours.
10. WE NEED TO RETAIN KEY PERSONNEL TO SUPPORT OUR SERVICES AND ONGOING
OPERATIONS.
12
The development of our Global Advertising Gateway system and the marketing of
our services will continue to place a significant strain on our limited
personnel, management, and other resources. Our future success depends upon the
continued services of our executive officers and other needed key employees and
contractors who have critical industry experience and relationships that we rely
on to implement our business plan. The loss of the services of any of our
officers or the lack of availability of other skilled personnel would negatively
impact our ability to develop our system products and sell our services, which
could adversely affect our financial results and impair our growth.
11. BECAUSE MESSRS, MANALO AND LOPEZ HAVE NO EXPERIENCE IN RUNNING A COMPANY
THAT SELLS OUR ONLINE ADVERTISING SERVICES, THEY MAY NOT BE ABLE TO
SUCCESSFULLY OPERATE SUCH A BUSINESS WHICH COULD CAUSE YOU TO LOSE YOUR
INVESTMENT.
We are a start-up company and we intend to market and sell our Global
Advertising Gateway system. Messrs., Manalo and Lopez, our current officers,
have has effective control over all decisions regarding both policy and
operations of our company with no oversight from other management. Our success
is contingent upon these this individual's ability to make appropriate business
decisions in these areas. It is possible that this lack of relevant operational
experience could prevent us from becoming a profitable business and an investor
from obtaining a return on his investment in us.
12. IF WE ARE UNABLE TO ATTRACT AND RETAIN THE INTEREST OF WEBSITES INTERESTED
IN SELLING ADVERTISING SPACE AND OF WEBSITES INTERESTED IN ADVERTISING
THEMSELVES TO USE OUR SERVICE, WE WILL NOT BE SUCCESSFUL.
We will rely significantly on our ability to attract and retain the interest of
websites looking to sell advertising space, as well as the interest of websites
looking to advertise their sites. We will need to continually evaluate and build
our network of websites to keep pace with the needs of both the sellers and
purchasers of advertising space and to remain competitive in our business. We
may be unable to identify or obtain the participation of a sufficient number of
websites that are interested in selling advertising space to satisfy the needs
of those websites who are interested in advertising their sites, which may
decrease the potential for the growth of our business. We cannot assure that we
will be successful in signing up websites to our service or in brokering the
sale of advertising space. The cost of attracting websites to utilize our
service may be higher than we anticipate, and, as a result, our profitability
could be minimal. Similarly, if we are unable to attract and retain the interest
of websites looking to sell advertising space, our ability to offer our service
to websites looking to advertise their sites may decline and, as a result, the
websites looking to advertise may not utilize our service, which may result in a
loss of websites interested in selling advertising space.
13. OUR SUCCESS DEPENDS ON INDEPENDENT CONTRACTORS TO DEVELOP OUR SERVICES.
We intend to rely on third party independent contractors for software
development, database design, website interface, web hosting, and for other
development functions. These third party developers may not dedicate sufficient
resources or give sufficient priority to developing our required resources.
There is no history upon which to base any assumption as to the likelihood that
we will prove successful in selecting qualified software development
contractors, and we can provide investors with no assurance that our website and
associated databases and administrative software will be developed according to
the specifications that we require. If we are unsuccessful in addressing these
risks, our business will most likely fail.
14. FUTURE REGULATION OF THE INTERNET COULD RESTRICT OUR BUSINESS, PREVENT US
FROM OFFERING SERVICES, AND/OR INCREASE OUR COST OF DOING BUSINESS.
The laws, regulations or rulings that specifically address access to or commerce
on the internet are subject to change. We are unable to predict the impact, if
any, that future legislation, judicial precedents, or regulations concerning the
internet may have on our business, financial condition, and results of
operations. Regulation may be targeted towards, among other things, assessing
access or settlement charges, imposing taxes related to internet communications,
restricting content, imposing tariffs or regulations based on encryption
concerns or the characteristics and quality of products and services, any of
which could restrict our business or increase our cost of doing business. The
increasing growth of the internet and popularity of broadband video products and
services heighten the risk that governments or other legislative bodies will
13
seek to regulate internet services, which could have a material adverse effect
on our business, financial condition, and operating results.
15. WE MAY LOSE CUSTOMERS IF WE EXPERIENCE SYSTEM FAILURES THAT SIGNIFICANTLY
DISRUPT THE AVAILABILITY AND QUALITY OF THE SERVICES THAT WE PROVIDE.
The operation of our services will depend on our ability to avoid and mitigate
any interruptions in service or reduced capacity for customers. Interruptions in
service or performance problems, for whatever reason, could undermine confidence
in our service and cause us to lose customers or make it more difficult to
attract new ones. In addition, because our service may be critical to the
businesses of our customers, any significant interruption in service could
result in lost profits or other losses to our customers.
16. OUR SUCCESS WILL DEPEND ON OUR ABILITY TO HANDLE A LARGE NUMBER OF
SIMULTANEOUS REQUESTS FOR ADVERTISING, WHICH OUR NETWORK MAY NOT BE ABLE TO
ACCOMMODATE.
We expect the volume of simultaneous requests to increase significantly as our
customer base grows. Our network hardware and software may need to be upgraded
or expanded to accommodate this additional volume. If we fail to maintain an
appropriate level of operating performance, or if our service is disrupted, our
reputation would be harmed and we could lose customers or have difficulties in
attracting new ones.
17. IF A THIRD PARTY ASSERTS THAT WE INFRINGE UPON ITS PROPRIETARY RIGHTS, WE
COULD BE REQUIRED TO REDESIGN OUR SOFTWARE, PAY SIGNIFICANT ROYALTIES, OR
ENTER INTO LICENSE AGREEMENTS.
Although presently we are not aware of any such claims, a third party may assert
that our technology or third party technologies that we license violate its
intellectual property rights. As the number of software products in our markets
increases and the functionality of these software products further overlap, we
believe that infringement claims will become more common. Any claims against us,
regardless of their merit, could:
* Be expensive and time-consuming to defend;
* Result in negative publicity;
* Force us to stop selling our services that rely on the challenged
intellectual property;
* Require us to redesign our software products;
* Divert management's attention and our other resources; or
* Require us to enter into royalty or licensing agreements in order to
obtain the right to use necessary technologies, which may not be
available on terms acceptable to us, if at all.
We believe that any successful challenge to our use of a trademark or domain
name could substantially diminish our ability to conduct business in a
particular market or jurisdiction and thus could decrease our revenues and/or
result in losses to our business.
ITEM 2. PROPERTIES
EXECUTIVE OFFICES
We do not own any real property. We currently maintain our corporate office at
8th Floor - 200 South Virginia Street, Reno, NV, 89501. We pay monthly rent of
$150 for use of this space. This space is sufficient until we commence full
operations.
ITEM 3. LEGAL PROCEEDINGS
We know of no material, active, or pending legal proceeding against our company,
nor are we involved as a plaintiff in any material proceeding or pending
litigation there such claim or action involves damages for more than 10% of our
current assets. There are no proceedings in which any of our company's
directors, officers, or affiliates, or any registered or beneficial
shareholders, is an adverse party or has a material interest adverse to our
company's interest.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of our security holders during the fourth
quarter of fiscal 2010.
14
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
MARKET FOR SECURITIES
As at the date of this document, the Company has received its trading symbol
("ADMZ") but has not developed a market for its securities.
HOLDERS OF OUR COMMON STOCK
On June 18, 2010 the shareholders' list of our common stock showed 44 registered
shareholder and 1,840,000 shares outstanding.
DIVIDEND POLICY
We have not paid any cash dividends on our common stock and have no present
intention of paying any dividends on the shares of our common stock. Our future
dividend policy will be determined from time to time by our board of directors.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The following discussion should be read in conjunction with our audited
financial statements and the related notes that appear elsewhere in this annual
report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include those discussed below and
elsewhere in this annual report.
Our audited consolidated financial statements are stated in United States
dollars and are prepared in accordance with United States generally accepted
accounting principles.
APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
OVERVIEW
We are a development stage company with limited operations and no revenues from
our business operations. Our registered independent auditors have issued a going
concern opinion. This means that our registered independent auditors believe
there is substantial doubt that we can continue as an on-going business for the
next 12 months. We do not anticipate that we will generate significant revenues
until we can develop our website and execute our business plan as further
described above and in the section entitled "Our Business."
By the end of 2010, we plan to develop and deploy on our web site our Global
Advertising Gateway system, a software product that will facilitate the buying
and selling of internet advertising space by matching websites interested in
selling advertising space with websites interested in purchasing advertising
15
space. We then intend to organize an online database of high traffic web sites
and market them to potential advertisers through our proprietary web site.
We also intend, by the end of 2010, to market our advertising brokerage service
by way of an online campaign aimed at the owners of under-achieving, low-traffic
web sites, whom we consider the potential buyers of our service. Our working
assumption is that these owners will be interested in increasing web traffic
that in turn may generate revenues. We plan to offer them a method of achieving
this objective. By visiting our web site, low-traffic websites will be able to
buy web advertising in the form of standardized banners on high traffic web
sites.
PLAN OF OPERATION
We plan to develop an online database and the brokerage service described above,
and to market our advertising brokerage service.
EXPENDITURES
The following chart provides an overview of our budgeted expenditures by
significant area of activity over the next 12 months:
Consulting/Software Development 4,000
Advertising 8,000
Support Staff 3,000
Web-hosting 1,200
Office Rent 1,500
Office Equipment 1,000
Corporate Collateral 600
Telephone 1,200
Miscellaneous 500
Legal and Accounting 6,500
Transfer Agent 2,500
------
EXPENSES 30,000
======
SOURCES AND AVAILABILITY OF PRODUCTS AND SUPPLIES
There are no constraints on the sources or availability of products and supplies
related to our business. We will be producing our own product, and the
distribution of our services will be over the internet.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
Our business plan and the nature of our service offering does not hinge on one
or a few major customers; however, if we obtain one or more large corporate
accounts, then we may end up being dependent on one or a few major customers.
PATENT, TRADEMARK, LICENSE & FRANCHISE RESTRICTIONS AND CONTRACTUAL OBLIGATIONS
& CONCESSIONS
We have not entered into any franchise agreements or other contracts that have
given, or could give rise to, obligations or concessions. We are planning to
develop a software product and intend to protect our software product with
copyright and trade secrecy laws. Beyond our trade name, we do not hold any
other intellectual property.
16
EXISTING OR PROBABLE GOVERNMENT REGULATIONS
There are no existing government regulations, nor are we aware of any
regulations being contemplated that would adversely affect our ability to
operate.
Due to the increasing popularity and use of the internet, it is possible that a
number of laws and regulations may be adopted with respect to the internet
generally, covering issues such as user privacy, pricing, and characteristics
and quality of products and services. Similarly, the growth and development of
the market for internet commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those companies conducting
business over the internet. The adoption of any such laws or regulations may
decrease the growth of commerce over the internet, increase our cost of doing
business, or otherwise have a harmful effect on our business.
To date, governmental regulations have not materially restricted the use or
expansion of the internet. However, the legal and regulatory environment that
pertains to the Internet is uncertain and may change. New laws may cover issues
that include:
* Sales and other taxes;
* User privacy;
* Pricing controls;
* Characteristics and quality of products and services;
* Consumer protection;
* Libel and defamation;
* Copyright, trademark and patent infringement; and
* Other claims based on the nature and content of internet materials.
These new laws may have an impact on our ability to market our services in
accordance with our business plan.
OFF BALANCE SHEET TRANSACTIONS
We have had no off balance sheet transactions.
SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment for the next twelve
months.
RESULTS OF OPERATIONS
REVENUES
We had no revenues for the period from July 31, 2007 (date of inception),
through March 31, 2010.
EXPENSES
Our expenses for the twelve month period ended March 31, 2010 and 2009, were
$18,805 and $41,059. During the period from July 31, 2007 (date of inception),
through March 31, 2010, we incurred expenses of $74,044. These expenses were
comprised primarily of general and administrative, and legal and accounting
expenses, as well as banking fees.
17
NET INCOME (LOSS)
Our net loss for the twelve-month period ended March 31, 2010 and 2009 was
$18,805 and $41,059. During the period from July 31, 2007 (date of inception),
through March 31, 2010, we incurred a net loss of $74,044. This loss consisted
primarily of incorporation costs, legal and accounting fees, consulting fees,
website hosting costs, and administrative expenses. Since inception, we have
sold 1,840,000 shares of common stock.
PURCHASE OR SALE OF EQUIPMENT
We do not expect to purchase or sell any plant or significant equipment.
LIQUIDITY AND CAPITAL RESOURCES
Our balance sheet as of March 31, 2010 reflects assets of $187 in the form of
cash and cash equivalents. Since inception, we have sold 1,840,000 shares of
common stock with gross proceeds of $50,000. However, cash resources provided
from our capital formation activities have, from inception, been insufficient to
provide the working capital necessary to operate our Company.
We anticipate generating losses in the near term, and therefore, may be unable
to continue operations in the future. If we require additional capital, we would
have to issue debt or equity or enter into a strategic arrangement with a third
party. There can be no assurance that additional capital will be available to
us. We currently have no agreements, arrangements, or understandings with any
person to obtain funds through bank loans, lines of credit, or any other
sources.
GOING CONCERN CONSIDERATION
Our registered independent auditors included an explanatory paragraph in their
report on the accompanying financial statements regarding concerns about our
ability to continue as a going concern. Our financial statements contain
additional note disclosures describing the circumstances that lead to this
disclosure by our registered independent auditors.
Due to this doubt about our ability to continue as a going concern, management
is open to new business opportunities which may prove more profitable to the
shareholders of Adtomize Inc. Historically, we have been able to raise a limited
amount of capital through private placements of our equity stock, but we are
uncertain about our continued ability to raise funds privately. Further, we
believe that our company may have difficulties raising capital until we locate a
prospective business opportunity through which we can pursue our plan of
operation. If we are unable to secure adequate capital to continue our
acquisition efforts, our business may fail and our stockholders may lose some or
all of their investment.
Should our original business plan fail, we anticipate that the selection of a
business opportunity in which to participate will be complex and without
certainty of success. Management believes that there are numerous firms in
various industries seeking the perceived benefits of being a publicly registered
corporation. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. We can provide no assurance that we will be
able to locate compatible business opportunities.
18
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
MARCH 31, 2010 AND 2009
Report of Independent Registered Public Accounting Firm 20
Balance Sheet as of March 31, 2010 and 2009 21
Statements of Operations for the years ended March 31, 2010
and 2009 and for the period from July 31, 2007 (Date of Inception)
to March 31, 2010 22
Statement of Stockholders' Deficit as of March 31, 2010 23
Statements of Cash Flows for the years ended March 31, 2010
and 2009 and for the period from July 31, 2007 (Date of Inception)
to March 31, 2010 24
Notes to the Financial Statements 25
19
Silberstein Ungar, PLLC CPAs and Business Advisors
--------------------------------------------------------------------------------
Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
www.sucpas.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Adtomize, Inc.
Reno, Nevada
We have audited the accompanying balance sheets of Adtomize, Inc. (the
"Company") as of March 31, 2010 and 2009, and the related statements of
operations, stockholders' deficit, and cash flows for the periods then ended and
for the period from July 31, 2007 (Date of Inception) through March 31, 2010.
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 audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Adtomize, Inc. as of March 31,
2010 and 2009 and the results of its operations and its cash flows for the
periods then ended and for the period from July 31, 2007 (Date of Inception)
through March 31, 2010 in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has negative working capital, has received no
revenue from sales of products or services, and has incurred losses from
operations. These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans with regard to these matters are
described in Note 2. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Silberstein Ungar, PLLC
-------------------------------------
Bingham Farms, Michigan
June 7, 2010
20
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
MARCH 31, 2010 AND 2009
March 31, March 31,
2010 2009
-------- --------
ASSETS
Current Assets
Cash and cash equivalents $ 187 $ 4,612
Prepaid expenses -- 2,500
-------- --------
Total Assets $ 187 $ 7,112
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
Current Liabilities
Accounts payable and accrued expenses $ 12,426 $ 10,406
Due to related party 11,805 1,945
-------- --------
Total Liabilities 24,231 12,351
-------- --------
Stockholders' Deficit
Common stock, par value $0.0001; 100,000,000 share authorized,
1,840,000 shares issued and outstanding 184 184
Additional paid in capital 49,816 49,816
Deficit accumulated during the development stage (74,044) (55,239)
-------- --------
Total Stockholders' Deficit (24,044) (5,239)
-------- --------
Total Liabilities and Stockholders' Deficit $ 187 $ 7,112
======== ========
The accompanying notes are an integral part of these financial statements
21
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31, 2010 AND 2009
FOR THE PERIOD FROM JULY 31, 2007 (INCEPTION) TO MARCH 31, 2010
Period from
July 31, 2007
Year ended Year ended (Inception) to
March 31, March 31, March 31,
2010 2009 2010
---------- ---------- ----------
REVENUE $ -- $ -- $ --
---------- ---------- ----------
OPERATING EXPENSES
Legal and accounting 9,390 25,500 46,890
Transfer Agent and filing fees 5,900 10,548 16,948
General and administrative 3,515 5,011 10,206
---------- ---------- ----------
TOTAL OPERATING EXPENSES 18,805 41,059 74,044
---------- ---------- ----------
NET LOSS PRIOR TO INCOME TAXES (18,805) (41,059) (74,044)
PROVISION FOR INCOME TAXES -- -- --
---------- ---------- ----------
NET LOSS $ (18,805) $ (41,059) $ (74,044)
========== ========== ==========
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.01) $ (0.02)
========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 1,840,000 1,840,000
========== ==========
The accompanying notes are an integral part of these financial statements
22
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE PERIOD FROM JULY 31, 2007 (INCEPTION) TO MARCH 31, 2010
Deficit
Accumulated
Additional During the
Common Stock Paid in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Balance, July 31, 2007 (date of inception) -- $ -- $ -- $ -- $ --
Shares issued to founders at $0.008 per
share 1,000,000 100 7,900 -- 8,000
Shares issued for cash at $0.05 per share 840,000 84 41,916 -- 42,000
Net loss for the period ended March 31, 2008 -- -- -- (14,180) (14,180)
--------- ------ -------- --------- ---------
Balance, March 31, 2008 1,840,000 184 49,816 (14,180) 35,820
Net loss for the year ended March 31, 2009 -- -- -- (41,059) (41,059)
--------- ------ -------- --------- ---------
Balance, March 31, 2009 1,840,000 184 49,816 (55,239) (5,239)
Net loss for the year ended March 31, 2010 -- -- -- (18,805) (18,805)
--------- ------ -------- --------- ---------
Balance, March 31, 2010 1,840,000 $ 184 $ 49,816 $ (74,044) $ (24,044)
========= ====== ======== ========= =========
The accompanying notes are an integral part of these financial statements
23
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED MARCH 31, 2010 AND 2009
FOR THE PERIOD FROM JULY 31, 2007 (INCEPTION) TO MARCH 31, 2010
Period from
July 31, 2007
Year ended Year ended (Inception) to
March 31, March 31, March 31,
2010 2009 2010
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $(18,805) $(41,059) $(74,044)
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses 2,500 (2,500) 0
Increase in accounts payable and accrued expenses 2,020 7,768 12,426
-------- -------- --------
CASH USED IN OPERATING ACTIVITIES (14,285) (35,791) (61,618)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in due to stockholder 9,860 354 11,805
Proceeds from sale of stock -- -- 50,000
-------- -------- --------
CASH PROVIDED BY FINANCING ACTIVITIES 9,860 354 61,805
-------- -------- --------
INCREASE (DECREASE) IN CASH (4,425) (35,437) 187
Cash, beginning balance 4,612 40,049 --
-------- -------- --------
Cash, ending balance $ 187 $ 4,612 $ 187
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ -- $ -- $ --
======== ======== ========
Cash paid for income taxes $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these financial statements
24
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2010 AND 2009
NOTE 1 - NATURE OF OPERATIONS
Adtomize, Inc. ("the Company"), incorporated in the state of Nevada on July 31,
2007, is a company with business activities in developing and offering a system
to facilitate the buying and selling of internet advertising banners on high
traffic websites.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about the Company's ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from this uncertainty.
The Company's activities to date have been supported by equity financing and
loans from a stockholder. It has sustained losses in all previous reporting
periods with an inception to date loss of $74,044 as of March 31, 2010.
Management continues to seek funding from its shareholders and other qualified
investors to pursue its business plan. In the alternative, the Company may be
amenable to a sale, merger or other acquisition in the event such transaction is
deemed by management to be in the best interests of the shareholders.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
Accounting Basis
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
Financial Instrument
The Company's financial instrument consists of cash, prepaid expenses, accounts
payable and accrued expenses and amount due to stockholder.
The amount due to stockholder is non interest-bearing. It is management's
opinion that the Company is not exposed to significant interest, currency or
credit risks arising from its other financial instruments and that their fair
values approximate their carrying values except where separately disclosed.
Property
The Company does not own any property. Our office space is leased to us on a
month to month basis for approximately $200 per month.
Advertising
The Company expenses advertising costs as incurred. The Company has had no
advertising activity since inception.
25
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2010 AND 2009
NOTE 3 - SIGNFICANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
Loss Per Share
Basic loss per share is calculated using the weighted average number of common
shares outstanding and the treasury stock method is used to calculate diluted
earnings per share. For the years presented, this calculation proved to be
anti-dilutive.
Dividends
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
Income Taxes
The Company provides for income taxes using an asset and liability approach.
Deferred tax assets and liabilities are recorded based on the differences
between the financial statement and tax bases of assets and liabilities and the
tax rates in effect when these differences are expected to reverse. The
Company's predecessor operated as entity exempt from Federal and State income
taxes.
Deferred tax assets by a valuation allowance if, based on the weight of
available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.
Net Income Per Common Share
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. The Company has not issued any potentially dilutive common
shares.
Recent Accounting Pronouncements
In May 2009, the FASB issued SFAS 165 (ASC 855-10) entitled "Subsequent Events".
Companies are now required to disclose the date through which subsequent events
have been evaluated by management. Public entities (as defined) must conduct the
evaluation as of the date the financial statements are issued, and provide
disclosure that such date was used for this evaluation. SFAS 165 (ASC 855-10)
provides that financial statements are considered "issued" when they are widely
distributed for general use and reliance in a form and format that complies with
GAAP. SFAS 165 (ASC 855-10) is effective for interim and annual periods ending
after June 15, 2009 and must be applied prospectively.
26
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2010 AND 2009
NOTE 3 - SIGNFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements (continued)
In June 2009, the FASB issued SFAS 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles.
("SFAS 168" pr ASC 105-10) SFAS 168 (ASC 105-10) establishes the Codification as
the sole source of authoritative accounting principles recognized by the FASB to
be applied by all nongovernmental entities in the preparation of financial
statements in conformity with GAAP. SFAS 168 (ASC 105-10) was prospectively
effective for financial statements issued for fiscal years ending on or after
September 15, 2009 and interim periods within those fiscal years. The adoption
of SFAS 168 (ASC 105-10) on July 1, 2009 did not impact the Company's results of
operations or financial condition. The Codification did not change GAAP,
however, it did change the way GAAP is organized and presented.
As a result, these changes impact how companies reference GAAP in their
financial statements and in their significant accounting policies. The Company
implemented the Codification in this Report by providing references to the
Codification topics alongside references to the corresponding standards.
With the exception of the pronouncements noted above, no other accounting
standards or interpretations issued or recently adopted are expected to have a
material impact on the Company's financial position, operations or cash flows.
NOTE 4 - PREPAID EXPENSES
During the year ended March 31, 2009, the Company prepaid a one year contract to
Island Stock Transfer for $10,000. The contract is being amortized quarterly and
the balance as of March 31, 2009 was $2,500. The remaining $2,500 was expensed
during the year ended March 31, 2010.
NOTE 5 - ACCRUED EXPENSES AND LIABILITIES
Accrued expenses and liabilities consisted of the following as of March 31:
2010 2009
-------- --------
Accrued accounting fees $ 11,500 $ 8,000
Accrued rent 406 270
Accrued legal fees -- 1,000
Accrued filing fees 520 1,136
-------- --------
Total Accrued Expenses $ 12,426 $ 10,406
======== ========
27
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2010 AND 2009
NOTE 6 - DUE TO RELATED PARTY
The amount owing to stockholder is unsecured, non-interest bearing and has no
specific terms of repayment. As of March 31, 2010 and 2009 there was $11,805 and
$1,945 due, respectively.
NOTE 7 - CAPITAL STOCK
The company has 100,000,000 common shares authorized at a par value of $0.0001
per share.
During the period ended March 31, 2008, the Company issued 1,000,000 common
shares at $0.008 per share to founders for total proceeds of $8,000.
Additionally, the Company issued 840,000 shares at $0.05 per share during the
period ended March 31, 2008 for total proceeds of $42,000
As of March 31, 2010, the Company had 1,840,000 common shares issued and
outstanding.
As of March 31, 2010, the Company has no warrants or options outstanding.
NOTE 8 - INCOME TAXES
The provision for Federal income tax consists of the following:
March 31, March 31,
2010 2009
-------- --------
Refundable Federal income tax attributable to:
Current Operations $ 6,394 $ 13,960
Less: valuation allowance (6,394) (13,960)
-------- --------
Net provision for Federal income taxes $ -- $ --
======== ========
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
March 31, March 31,
2010 2009
-------- --------
Deferred tax asset attributable to:
Net operating loss carryover $ 25,175 $ 18,781
Less: valuation allowance (25,175) (18,781)
-------- --------
Net deferred tax asset $ -- $ --
======== ========
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards of $74,044 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 future years.
28
ADTOMIZE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2010 AND 2009
NOTE 9 - RELATED PARTY TRANSACTIONS
As at March 31, 2010 and 2009, there are balances owing to a stockholder of the
Company in the amount of $11,805 and $1,945, respectively. The terms of this
loan are discussed in Note 6.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
NOTE 10 - CONCENTRATION OF RISKS
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). This government corporation insured balances up to
$100,000 through October 13, 2008. As of October 14, 2008 all
non-interest-bearing transaction deposit accounts at an FDIC-insured
institution, including all personal and business checking deposit accounts that
do not earn interest, are fully insured for the entire amount in the deposit
account. This unlimited insurance coverage is temporary and will remain in
effect for participating institutions until December 31, 2009.
All other deposit accounts at FDIC-insured institutions are insured up to at
least $250,000 per depositor until December 31, 2009. On January 1, 2010, FDIC
deposit insurance for all deposit accounts, except for certain retirement
accounts, returned to at least $100,000 per depositor. Insurance coverage for
certain retirement accounts, which include all IRA deposit accounts, will remain
at $250,000 per depositor.
NOTE 11 - SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to March 31, 2010 and has
determined that it does not have any material subsequent events to disclose in
these financial statements.
29
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
- Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the company;
- Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with accounting principles generally accepted in the United States of
America and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and
directors of the company; and
- Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
As of March 31, 2010 our principal executive officer and principal financial
officer assessed the effectiveness of our internal control over financial
reporting based on the criteria for effective internal control over financial
reporting established in Internal Control--Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and
SEC guidance on conducting such assessments. Based on that evaluation, he
concluded that, during the period covered by this report, such internal controls
and procedures were not effective to detect the inappropriate application of US
GAAP rules as more fully described below. This was due to deficiencies that
existed in the design or operation of our internal controls over financial
reporting that adversely affected our internal controls and that may be
considered to be material weaknesses.
The matters involving internal controls and procedures that our principal
executive officer and principal financial officer considered to be material
weaknesses under the standards of the Public Company Accounting Oversight Board
were: (1) lack of a functioning audit committee due to a lack of a majority of
independent members and a lack of a majority of outside directors on our board
of directors, resulting in ineffective oversight in the establishment and
monitoring of required internal controls and procedures; (2) inadequate
segregation of duties consistent with control objectives; and (3) ineffective
controls over period end financial disclosure and reporting processes. The
30
aforementioned material weaknesses were identified by our principal executive
officer and principal financial officer in connection with the audit of our
financial statements as of March 31, 2010.
Our principal executive officer and principal financial officer believes that
the material weaknesses set forth in items (2) and (3) above did not have an
effect on our financial results. However, our principal executive officer and
principal financial officer believes that the lack of a functioning audit
committee and the lack of a majority of outside directors on our board of
directors results in ineffective oversight in the establishment and monitoring
of required internal controls and procedures, which could result in a material
misstatement in our financial statements in future periods.
This annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the SEC that
permit the Company to provide only the management's report in this annual
report.
MANAGEMENT'S REMEDIATION INITIATIVES
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2010. Additionally, we plan to test our updated
controls and remediate our deficiencies by December 31, 2010.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
31
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our officers and directors and their ages and positions are as follows:
Name Age Position
---- --- --------
Lester G. Manalo 30 President, Treasurer, and Director
Ronald A. T. Lopez 29 Secretary and Director
MR. LESTER G. MANALO
Mr. Lester G. Manalo has been our President, Treasurer and a Director since we
were incorporated on July 31, 2007.
Mr. Manalo earned his Bachelor of Science in Computer Science at University of
the City of Manila in Manila, Philippines in 1999.
Since July 2003, Mr. Manalo has been employed as an Information Technology
Specialist / Supervisor for William Gothong & Aboitiz Supercommerce Inc. in
Manila, Philippines. Mr. Manalo has experience performing project management
work on networks and systems, and creating related documentation, including work
with advanced products from Oracle.
From September 2001 to January 2003, Mr. Manalo was employed as an IT Specialist
at Transnational E-Business Solutions Inc. in the Philippines. This company
provided contact center services, application development, computer based
training development, remote data processing, web development and technical
support services.
From June 2000 through September 2001, Mr. Manalo worked for an affiliate of
Transnational Diversified Group Inc. as an IT Specialist. Prior to working with
Transnational, Mr. Manalo was employed as a Technical Advisor for Infocom
Technologies Inc., a local internet services provider, where he was responsible
for telephonic customer support.
MR. RONALD A.T. LOPEZ
Mr. Lopez has been our Secretary and a Director since our inception on July 31,
2007. Since 2006, Mr. Lopez has been employed as a Sales/Application Engineer at
Instrumentation & Control Specialist, Inc. in the Philippines. From August 2002
through October 2005, Mr. Lopez worked at Urban Rural Balance, Inc. in the
Philippines as a Researcher/Statistician on research projects for the Pasig
River Rehabilitation Commission and the External Monitoring of the Resettlement
Action Plan. Mr. Lopez was in charge of the data review and data collection of
surveys for the monitoring and annual evaluation of the project. He received his
Bachelors of Science degree from Newport University in Istanbul in Computer
Science Engineering in 2003, and has extensive certifications in Cisco networks
as well as in-depth knowledge of various programming languages such as Visual
Basic, .Net, ASP and PHP.
COMMITTEES OF THE BOARD OF DIRECTORS
To date, our board of directors has not established a nominating and governance
committee, a compensation committee, nor an audit committee.
AUDIT COMMITTEE
We do not have an audit committee at this time.
32
CODE OF ETHICS
We currently do not have a Code of Ethics.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors, executive officers, and stockholders holding more than 10% of our
outstanding common stock, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in beneficial ownership of
our common stock. Executive officers, directors and greater-than-10%
stockholders are required by SEC regulations to furnish us with copies of all
Section 16(a) reports they file. To our knowledge, based solely on review of the
copies of such reports furnished to us for the period ended March 31, 2010, no
Section 16(a) reports required to be filed by our executive officers, directors
and greater-than-10% stockholders were not filed on a timely basis.
ITEM 11. EXECUTIVE COMPENSATION
The particulars of compensation paid to the following persons during the fiscal
period ended March 31, 2010 are set out in the summary compensation table below:
* our Chief Executive Officer (Principal Executive Officer);
* our Chief Financial Officer (Principal Financial Officer);
* each of our three most highly compensated executive officers, other
than the Principal Executive Officer and the Principal Financial
Officer, who were serving as executive officers at the end of the
fiscal year ended March 31, 2010; and
* up to two additional individuals for whom disclosure would have been
provided under the item above but for the fact that the individual was
not serving as our executive officer at the end of the fiscal year
ended March 31, 2010;
(collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
Fiscal Non-Equity Nonqualified
Name and Year Incentive Deferred
Principal Ended Stock Option Plan Compensation All Other
Position March 31, Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- --------- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Lester 2010 0 0 0 0 0 0 0 0
Manalo (1) 2009 0 0 0 0 0 0 0 0
Ronald 2010 0 0 0 0 0 0 0 0
A. T. 2009 0 0 0 0 0 0 0 0
Lopez (2)
NOTES:
(1) Mr. Manalo has been our President, Treasurer, Chief Executive Officer and
Chief Financial Officer (Principal Executive and Financial Officer), and a
Director since we were incorporated on July 31, 2007.
(2) Mr. Lopez has been our Secretary and Director since we were incorporated on
July 31, 2007.
33
OPTION GRANTS AND EXERCISES
There were no option grants or exercises by any of the executive officers named
in the Summary Compensation Table above.
EMPLOYMENT AGREEMENTS
We have not entered into employment and/or consultant agreements with our
Directors and officers.
COMPENSATION OF DIRECTORS
All directors receive reimbursement for reasonable out-of-pocket expenses in
attending board of directors meetings and for promoting our business. From time
to time we may engage certain members of the board of directors to perform
services on our behalf. In such cases, we compensate the members for their
services at rates no more favorable than could be obtained from unaffiliated
parties. Our directors have not received any compensation for the fiscal year
ended March 31, 2010.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The table below sets forth the number and percentage of shares of our common
stock owned as of June 18, 2010, by the following persons: (i) stockholders
known to us who own 5% or more of our outstanding shares, (ii) each of our
Directors, and (iii) our officers and Directors as a group. Unless otherwise
indicated, each of the stockholders has sole voting and investment power with
respect to the shares beneficially owned.
Name and Address Amount and Nature Percentage
Title of Class of Beneficial Owner(2) of Beneficial Ownership of Class(1)
-------------- ---------------------- ----------------------- -----------
Common Stock Mr. Manalo 500,000 27.1%
Common Stock Mr. Lopez 500,000 27.1%
All Officers
as a Group 1,000,000 54.2%
----------
(1) Based on 1,840,000 shares of our common stock outstanding.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Other than the transactions discussed below, we have not entered into any
transaction nor are there any proposed transactions in which any of our
Directors, executive officers, stockholders or any member of the immediate
family of any of the foregoing had or is to have a direct or indirect material
interest.
During the fiscal period covered by this Report and as of March 31, 2010, there
is a balance owed to Mr. Lester Manalo, our principal executive and financial
officer, in the amount of $11,805. This balance is unsecured, non-interest
bearing and has no specific terms of repayment.
34
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
For the year ended March 31, 2010, Silberstein Ungar, PLLC billed us for $4,500
in audit fees.
REVIEW FEES
Silberstein Ungar, PLLC, billed us $3,000 for reviews of our quarterly financial
statements in 2010 and are not reported under Audit Fees above.
TAX AND ALL OTHER FEES
We did not pay any fees to Silberstein Ungar, PLLC for tax compliance, tax
advice, tax planning or other work during our fiscal year ended March 31, 2010.
PRE-APPROVAL POLICIES AND PROCEDURES
We have implemented pre-approval policies and procedures related to the
provision of audit and non-audit services. Under these procedures, our board of
directors pre-approves all services to be provided by Silberstein Ungar, PLLC
and the estimated fees related to these services.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Exhibit Description
------- -----------
3.1 Articles of Incorporation of Registrant (Attached as an exhibit to
our Registration Statement on Form S-1 originally filed with the
SEC on May 9, 2008, and incorporated herein by reference.)
3.2 Bylaws of Registrant (Attached as an exhibit to our Registration
Statement on Form S-1 originally filed with the SEC on May 9,
2008, and incorporated herein by reference.)
4.1 Specimen Common Stock Certificate. (Attached as an exhibit to our
Registration Statement on Form S-1 originally filed with the SEC
on May 9, 2008, and incorporated herein by reference.)
31.1 Certification of Lester G. Manalo
32.1 Certification of Lester G. Manalo
35
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ADTOMIZE INC.
June 18, 2010 By: /s/ Lester G. Manalo
-------------------------------------------------
Lester G. Manalo
President, Treasurer, and Director
(Principal Executive and Principal Financial and
Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated.
Signatures Title Date
---------- ----- ----
/s/ Lester G. Manalo President, Treasurer, and Director June 18, 2010
--------------------------- (Principal Executive and Principal Financial
Lester G. Manalo and Accounting Officer)
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