Attached files
| file | filename |
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| EX-14.1 - EXHIBIT 14.1 - CLICKER INC. | ex141.htm |
| EX-31.2 - EXHIBIT 31.2 - CLICKER INC. | ex312.htm |
| EX-31.1 - EXHIBIT 31.1 - CLICKER INC. | ex311.htm |
| EX-32.1 - EXHIBIT 32.1 - CLICKER INC. | ex321.htm |
| EX-10.1 - EXHIBIT 10.1 - CLICKER INC. | ex101.htm |
| EX-23.1 - EXHIBIT 23.1 - CLICKER INC. | ex231.htm |
| EX-32.2 - EXHIBIT 32.2 - CLICKER INC. | ex322.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
Fiscal Year Ended August 31,
2009
Commission
File Number 000-32923
CLICKER
INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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33-0198542
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(State
or other jurisdiction of incorporation or organization)
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(IRS
Employer Identification No.)
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18952
MacArthur Blvd, Suite 210, Irvine, California
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92612
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(949)
486-3990
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(Address
of principal executive office)
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(Postal
Code)
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(Issuer's
telephone number)
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Securities
registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
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Title
of each class
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Name
of each exchange on which registered
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Common
Stock, $0.001 par value
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Over-the-Counter
Bulletin Board
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined by
Rule 405 of the Securities Act. Yes o
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 o
No x
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x
No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes x No
o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of the registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
(Do
not check if a smaller reporting company)
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Smaller
reporting company x
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o
No x
The
aggregate market value of the voting common equity held by non-affiliates as of
February 29, 2009, based on the closing sales price of the Common Stock as
quoted on the Over-the-Counter Bulletin Board was $1,850,888. For purposes of
this computation, all officers, directors, and five percent (5%) beneficial
owners of the registrant are deemed to be affiliates. Such determination should
not be deemed an admission that such directors, officers, or five percent (5%)
beneficial owners are, in fact, affiliates of the registrant.
As of
December 8, 2009, there were 99,649,082 shares of registrant’s common stock
outstanding.
1
CLICKER
INC.
TABLE
OF CONTENTS
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Page
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PART I
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Item
1. Description of Business
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3
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Item
1A. Risk Factors
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7
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Item
1B. Unresolved Staff Comments
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Item
2. Properties
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12
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Item
3. Legal Proceedings
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13
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Item
4. Submission of Matters to Vote of Security Holders
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13
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PART II
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Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
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13
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Item
6. Selected Financial Data
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14
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Item
7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
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14
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Item
7A. Quantitative and Qualitative Disclosures about Market
Risk
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22
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Item
8. Financial Statements and Supplementary Data
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22
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Item
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
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22
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Item
9A(T). Controls and Procedures
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22
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Item 9B. Other Information
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23
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PART III
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Item
10. Directors, Executive Officers and Corporate
Governance
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23
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Item
11. Executive Compensation
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26
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Item
12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
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28
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Item
13. Certain Relationships and Related Transactions; and Director
Independence
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29
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Item
14. Principal Accountant Fees and Services
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30
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PART IV
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Item
15. Exhibits; Financial Statement Schedules
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31
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Signatures
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32
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2
PART
I
Item
1. Description of Business
This
Annual Report on Form 10-K includes the accounts of Clicker Inc. (FMG) and its
wholly and majority-owned subsidiaries, WallStreet Direct, Inc. (“WallStreet”),
Digital WallStreet, Inc. (“Digital WallStreet”), Financial Filings Corp,
(“Financial Filings”), My WallStreet, Inc. (“My WallStreet”) and The Wealth Expo
Inc. (“The Wealth Expo”), collectively “we”, us” or the "Company".
This
Annual Report on Form 10-K (including the section regarding Management's
Discussion and Analysis of Financial Condition and Results of Operations)
contains forward-looking statements regarding our business, financial condition,
results of operations and prospects. Words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions or
variations of such words are intended to identify forward-looking statements,
but are not deemed to represent an all-inclusive means of identifying
forward-looking statements as denoted in this Annual Report on Form
10-K. Additionally, statements concerning future matters are
forward-looking statements.
Although
forward-looking statements in this Annual Report on Form 10-K reflect the good
faith judgment of our Management, such statements can only be based on facts and
factors currently known by us. Consequently, forward-looking statements are
inherently subject to risks and uncertainties and actual results and outcomes
may differ materially from the results and outcomes discussed in or anticipated
by the forward-looking statements. Factors that could cause or contribute to
such differences in results and outcomes include, without limitation, those
specifically addressed under the heading "Risks Related to Our Business" below,
as well as those discussed elsewhere in this Annual Report on Form 10-K. Readers
are urged not to place undue reliance on these forward-looking statements, which
speak only as of the date of this Annual Report on Form 10-K. We file reports
with the Securities and Exchange Commission ("SEC"). You can read and copy any
materials we file with the SEC at the SEC's Public Reference Room at 100 F
Street, NE, Washington, DC 20549. You can obtain additional
information about the operation of the Public Reference Room by calling the SEC
at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov)
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC, including
us.
We
undertake no obligation to revise or update any forward-looking statements in
order to reflect any event or circumstance that may arise after the date of this
Annual Report on Form 10-K. Readers are urged to carefully review and consider
the various disclosures made throughout the entirety of this annual Report,
which attempt to advise interested parties of the risks and factors that may
affect our business, financial condition, results of operations and
prospects.
OVERVIEW
We are
web publishers and internet brand builders focused on developing stand alone
Brands and properties that incorporate social networking and reward properties
that leverage content, commerce and advertising for the next generation global
internet user. Clicker intends to build these properties and position
them for sale to companies who desire to take the brands and proof of concept to
next level of development.
Web
Properties
Forwant.com
3
ForWant.com
is a free classified advertisements site with millions of ads posted by
users. The website allows users to post advertisements for and search
a variety of specialized categories including, housing, merchandises, services,
personal ads and employment listings in specialized communities in the United
States and Canada, as well as other countries such as United Kingdom, India and
Ireland. The website also has paid premium content and
sections. The property has had approximately 700,000 visitors in the last 9
months and has available millions of listings throughout its network. The
property is now incorporated under ForWant Inc and ready to begin operations as
a standalone entity. Competitors for the property are Craigslist, kijiji (an
eBay company), Hotjobs (yahoo), and Monster.
Cashclicker.com
and C2we.com
Cashclicker.com
is an e-reward site that will reward registered users on everyday consumption of
content, commerce and search. C2we.com is the social network site that is
affiliated with Cashclicker.com. Both sites are currently in development and
expected to launch in the second quarter of 2010. The model for this property is
to provide a rewards program that incorporates Social Networking whereby users
are paid to review offers, websites and fill out surveys. The platform for that
is through a website with an added search component. Plans call for the revenue
model for this property to be largely advertising driven model incorporating CPA
(cost per action), CPM (cost per thousand), CPC (cost per click) type ad
solutions. Plans also call for a premium membership whereby members can have
added benefits.
Sippinit.com
Sippinit.com
(www.sippinit.com) is
an online pop, entertainment and gossip property that will incorporate social
networking with entertainment gossip. The property is in development and
expected to launch in second quarter 2010. Plans call for the property to be
entertainment and gossip site that pulls entertainment feeds while users will be
able to comment and gossip on the events. The platform will also call for users
to be able to create a social networking pulse about a story or an event. The
property will be advertising driven gathering to the entertainment ad market
that will largely be in the event arenas. Users can promote its events through
social network and anticipated to be paid on a cost per post type model.
Additionally, plans call for conversational marketing to be also
implemented.
4
ItsMyLocal.com
ItsMyLocal.com
is a reward property incorporates local search and rewards with local peer to
peer social networking and rewards. This site is expected to launch in the
second quarter of 2010. The site is in the concept stage. The strategic plan for
the brand is to provide a social network and rewards to local search whereby
users of local participating patrons can receive coupons from their local
vendors. Plans call for these patrons to become members and rate the established
while offering coupons or special offers to their friends within the network.
Competitors included Local.com and yelp.com.
Sportsgulp.net
Sportsgulp.net
is a social networking website and gossip channel for sports enthusiasts. The
property is in development and expected to launch in third quarter 2010. Plans
call for the property to pull conventional sports feeds while allowing users a
more interactive social networking component whereby the sports community could
be more interactive with each other by incorporating social networking
tools.
Wallst.net
and Mywallst.net
Wallst.net
& Mywallst.net- A financial social community provides an open forum for
likeminded investors to share and collaborate and mentor. The site offers
message boards, quotes as well as in depth video interviews which have aired on
both internet and/or television. Through its wholly owned subsidiary, Wallstreet
Direct Inc, these properties have been the cornerstone and main focus for the
company. And while the property is in itself been very successful having been
the staple of revenue for the company over the years, the industry as a whole
has suffered greatly and the company focus will be more development of the other
brands .
Financial
Filings Corp.
Financial
Filings Corp. was launched in March 2006 and provides news distribution and
electronic document conversion services to public companies. for filing to the
EDGAR website of the Securities and Exchange Commission (“SEC”).
5
CORPORATE
HISTORY
We were
incorporated in Nevada in 1984 as Southern Development Company, Inc. In December
1994, we merged with Integrated Communications Access Network, Inc. In March
1996, we were renamed Southern Development Company, Inc., and in September 1998,
we changed our name to EssxSport Corp. From September 1998 until August 31,
2004, we were primarily engaged in the manufacture and distribution of athletic
equipment, primarily for pole vaulting and other track and field activities.
Effective August 31, 2004, we sold, transferred, and delivered all of our assets
relating to our pole vault and sports business to our former President and
director, and subsequently changed our name to Giant Jr. Investments
Corp.
On June
30, 2004, we filed with the SEC to become a business development company ("BDC")
under the 1940 Act and on September 1, 2004, we began our BDC operations. On
June 1, 2005, we terminated our BDC status and on August 1, 2005, our
shareholders approved an amendment to the Articles of Incorporation changing our
name to “Financial Media Group, Inc.”
On
January 6, 2006, we acquired 100% of the equity of WallStreet in exchange for
19,998,707 shares or 82% of the issued and outstanding shares of our common
stock at the time of the acquisition. In connection with the reverse
merger, we changed our fiscal year end to August 31.
On
January 15, 2005, WallStreet acquired 100% of the assets and outstanding shares
of Digital WallStreet in exchange for two promissory notes of $1,500,000 each,
carrying interest at 6% per annum, due and payable on January 31, 2007 and
January 31, 2010. On December 11, 2006, the payment due date of the promissory
note due January 31, 2007 was extended to January 31, 2010. WallStreet is a full
service financial media company focused on developing tools and applications
that enable the retail investors to collaborate directly with publicly traded
companies. WallStreet provides internet based media and advertising services
through its network of Web sites.
On
February 10, 2006, we established Financial Filings as a wholly-owned
subsidiary. Financial Filings is a provider of news wire and compliance services
to small and mid-sized publicly traded companies worldwide. Customer
acquisitions are initially facilitated by WallStreet which provides media and
advertising services to hundreds of publicly traded companies, many of which are
seeking Financial Filings’ services, including the preparation review of
registration statements, electronic filings for SEC documents (EDGAR),
preparation of proxy materials, and news distribution.
On June
13, 2006, we established a wholly owned subsidiary, My WallStreet, Inc. and
launched in January 2007, http://my.wallst.net is an online community for
investors. The website offers free membership and provides social networking
applications including messaging, blogs, message boards, video and audio
uploads, and personal profile pages. In addition, members of MyWallSt can
participate in the “Rookie Challenge,” a proprietary virtual stock trading
simulator that allows members to compete against each other for a weekly cash
prize. Members can also communicate with another, rate individual stocks, post
comments on individual stocks, and compile their own Watchlist of stocks, which
can be viewed and commented on by other members of the online community. Unlike
other social network services, MyWallSt members have one interest in common:
they want to become better investors. MyWallSt also provides a venue for
investors to interact with public company executives, many of which have
profiles on the website.
In
January 2007, we acquired the trade name “The Wealth Expo” and formed a
wholly-owned subsidiary The Wealth Expo Inc. on June 12, 2007. The Wealth Expo
is designed to provide a broad range of information on investing techniques, and
tools to investors through workshops and exhibits held throughout the United
States. Exhibitors at the Wealth Expo include public and private companies,
franchises, financial newsletter publishers, investor education providers, and
real estate companies. The Wealth Expo provides us several new revenue streams
through exhibition sales, speaking presentation sales, collateral material
sales, and advertising sales. Since its inception, The Wealth Expo has attracted
hundreds of exhibitors and thousands of attendees from around the
world.
As a
result of a downturn in the economy and the outlook for financial services, we
decided in 2009 to switch our corporate focus towards building websites to build
up new brand identities. In connection with this shift, we changed
our name to CLICKER Inc. on May 12, 2009.
6
BUSINESS
STRATEGY
We are
attempting to build internet brands from the conceptual level to launch. Our
strategy is to focus on the development of “big idea” type web properties. The
strategy is to then develop these ideas from proof of concept to a developed
website and then position the property to be sold to a larger managing principle
and/or partner or continue to own and operate the entity.
The
development of these internet websites have four main stages of development
:
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Stage One :
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The
idea and concept stage of a potentially good idea. At this stage a budget
and timeline for the property is developed. The size of the market and our
plan for integration or exit is established. Additionally the business
model is introduced at this level.
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Stage Two :
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The
development of the property is laid out. Site layout and design is
established. Logic and user flow and finally site architecture and design
are established.
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Stage Three:
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The
site is launched and the operational model is implemented in beta form. We
begin to scale some web traffic and begin to test the model. The site is
officially launched in the beta stage and can be in a few different
versions
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Stage
Four:
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Full
operation stage and the property should now have gone though a couple
stages of beta with the model pretty much established. The property is
established for operation as a subsidiary while positioning for sale or
executive control.
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Competition
Generally,
competitive factors within the internet and web development market include the
range and depth of financial tools and dimensions of email offerings, the
quality of web site content, and the reliability of reference information
provided. We are aware of several companies which are much larger and have
greater name recognition, that provide some level of presence and awareness in
similar delivery formats.
Employees
As of
December 1, 2009, we employed nine full-time employees consisting of two
management, three sales and client management personnel, three technology
employees, and one administrative person.
Item
1A. Risk Factors
WE
HAVE A HISTORY OF LOSSES WHICH MAY CONTINUE, WHICH MAY NEGATIVELY IMPACT OUR
ABILITY TO ACHIEVE OUR BUSINESS OBJECTIVES.
We
incurred net losses of $3,284,713 and $2,864,462 for the years ended August 31,
2009 and 2008, respectively. We cannot assure you that we can achieve or sustain
profitability on a quarterly or annual basis in the future. Our operations are
subject to the risks and competition inherent in the establishment of a business
enterprise. There can be no assurance that future operations will be profitable.
Revenues and profits, if any, will depend upon various factors, including
whether we will be able to continue expansion of our revenue. We may not achieve
our business objectives and the failure to achieve such goals would have an
adverse impact on us. These losses are largely associated with the operation of
our Financial related properties.
OUR
INDEPENDENT AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO
CONTINUE AS A GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE
FINANCING.
In their
report dated December 15, 2009, our
independent auditors stated that our financial statements for the year ended
August 31, 2009 were prepared assuming that we would continue as a going
concern. Our ability to continue as a going concern is an issue raised as a
result of recurring losses from operations. We continue to experience net
operating losses. Our ability to continue as a going concern is subject to our
ability to generate a profit and/or obtain necessary funding from outside
sources, including obtaining additional funding from the sale of our securities,
increasing sales or obtaining loans and grants from various financial
institutions where possible. Our continued net operating losses increase the
difficulty in meeting such goals and there can be no assurances that such
methods will prove successful.
7
WE
HAVE A LIMITED OPERATING HISTORY AND IF WE ARE NOT SUCCESSFUL IN CONTINUING TO
GROW OUR BUSINESS, THEN WE MAY HAVE TO SCALE BACK OR EVEN CEASE OUR ONGOING
BUSINESS OPERATIONS.
Our
company has a limited operating history. Our operations will be subject to all
the risks inherent in the establishment of a developing enterprise and the
uncertainties arising from the absence of a significant operating history. We
have received a limited amount of revenues from operations and have limited
assets. We have yet to generate positive earnings and there can be no assurance
that we will ever operate profitably. If our
business plan is not successful, and we are not able to operate profitably,
investors may lose some or all of their investment in our company.
OUR
FAILURE TO MANAGE GROWTH EFFECTIVELY COULD IMPAIR OUR BUSINESS.
Our
business strategy envisions a period of rapid growth that may put a strain on
its administrative, operational resources and funding requirements. Our ability
to effectively manage growth will require them to continue to expand the
capabilities of its operational and management systems and to attract, train,
manage and retain qualified editors, technicians, salespersons and other
personnel. There can be no assurance that we will be able to do so, particularly
if losses continue and we are unable to obtain sufficient financing. If the
Company is unable to successfully manage growth, its business, prospects,
financial condition, and results of operations could be adversely
affected.
WE
OPERATE WITHIN A HIGHLY COMPETITIVE AND COMPLEX MARKET THAT IS DIRECTLY OR
INDIRECTLY AFFECTED BY MARKET RISKS AND REGULATIONS, WHICH COULD HAVE AN ADVERSE
EFFECT ON OUR BUSINESS.
Website
development and branding is an extremely competitive and fragmented industry.
The industry can be significantly affected by many factors, including changes in
local, regional, and national economic conditions, changes in consumer
preferences, brand name recognition, marketing and the development of new and
competing internet web publishers and media companies. We expect that existing
businesses that compete with us and have greater financial resources than us
will be able to undertake more extensive marketing campaigns and more aggressive
advertising sales policies than us, thereby generating more attention to their
companies and websites. These competitive pressures could have a material
adverse effect on our business, prospects, financial condition, and results of
operations.
OUR
DEPENDENCE ON THE CONTINUED GROWTH IN THE USE OF THE WEB, PARTICULARLY IN OUR
INDUSTRIES, COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
Our
business depends on consumers continuing to increase their use of the web for
obtaining news and financial information, social networking, classified ads,
reward type offers as well as for conducting commercial transactions. The rapid
growth and use of the Internet is a relatively recent phenomenon. As a result
this acceptance and use may not continue to develop at historical rates. Web
usage may be inhibited for a number of reasons, such as - Inadequate network
infrastructure; security concerns; inconsistent quality of service; and
availability of cost-effective, high-speed service.
If web
usage grows, the Internet infrastructure may not be able to support the demands
placed on it by this growth or its performance and reliability may decline. In
addition, web sites have experienced interruptions in their service as a result
of outages and other delays occurring throughout the Internet network
infrastructure. If these outages or delays frequently occur in the future, web
usage, as well as usage of our web site, could grow more slowly or decline,
which could adversely affect our results of operations.
8
IF
WE ARE UNABLE TO ESTALISH AND MAINTAIN STRATEGIC RELATIONSHIPS WITH OTHER WEB
SITES TO ATTRACT USERS, ADVERTISERS AND CONTENT, OUR BUSINESS COULD BE ADVERSELY
AFFECTED.
We depend
on establishing and maintaining distribution relationships with high-traffic web
sites for a significant portion of our traffic. There is intense competition for
placements on these sites, and we may not be able to enter into such
relationships on commercially reasonable terms or at all. Even if we enter into
distribution relationships with these web sites, they themselves may not attract
significant numbers of users. Therefore, our web site may not receive additional
users from these relationships. Moreover, we may have to pay significant fees to
establish these relationships.
Occasionally
we enter into agreements with advertisers, content providers or other high
traffic web sites that require us to exclusively feature these parties in
certain sections of our web site. Existing and future exclusivity arrangements
may prevent us from entering into other content agreements, advertising or
sponsorship arrangements, or other strategic relationships. Many companies we
may pursue for a strategic relationship also offer competing services. As a
result, these competitors may be reluctant to enter into strategic relationships
with us. Our business could be adversely affected if we do not establish and
maintain additional strategic relationships on commercially reasonable terms or
if any of our strategic relationships do not result in increased use of our web
site.
DIFFICULTY
ACCOMMODATING INCREASES IN THE NUMBER OF USERS OF OUR SERVICES AND INTERNET
SERVICE PROBLEMS OUTSIDE OF OUR CONTROL ULTIMATELY COULD RESULT IN THE REDUCTION
OF USERS OF OUR WEB PROPERTIES.
In the
past, our Web site has experienced significant increases in traffic when there
is noteworthy business or financial news stories. In addition, the number of our
users has continued to increase over time as we are seeking to further increases
in our user base. Therefore, our Web site must accommodate a high volume of
traffic and deliver frequently updated information. Our Web site has in the
past, and may in the future experience slower response times or other problems
for a variety of reasons.
Our web
site could experience disruptions or interruptions in service due to the failure
or delay in the transmission or receipt of this information. In addition, our
users depend on Internet service providers, online service providers and other
web site operators for access to our Web site. Each of them has experienced
significant outages in the past, and could experience outages, delays and other
difficulties due to system failures unrelated to our systems. These types of
occurrences could cause users to perceive our Web site as not functioning
properly, and therefore cause them to use other methods to obtain their business
and financial news and other information.
IF
WE DO NOT DEVELOP NEW AND ENHANCED SERVICES AND FEATURES FOR OUR WEB PROPERTIES,
WE MAY NOT BE ABLE TO ATTRACT AND RETAIN A SUFFICIENT NUMBER OF
USERS.
We
believe that our Web site will be more attractive to advertisers if we develop a
larger audience comprised of demographically favorable users. Accordingly, we
intend to introduce additional or enhanced services in the future in order to
retain its current users and attract new users. If we introduce a service that
is not favorably received, the current users may not continue using our service
as frequently. New users could also choose a competitive service over
ours.
We may
also experience difficulties that could delay or prevent us from introducing new
services. Furthermore, these services may contain errors that are discovered
after the services are introduced. We may need to significantly modify the
design of these services on its Web site to correct these errors. Our business
could be adversely affected if it experiences difficulties in introducing new
services or if users do not accept these new services.
9
THERE
IS INTENSE COMPETITION FOR OUR WEB-BASED BUSINESSES AND FINANCIAL CONTENT AND WE
MAY NOT BE ABLE TO COMPETE SUCCESSFULLY.
Many web
sites compete for consumers' and advertisers' attention and spending,
particularly in the business and financial information and news area. We expect
this competition to continue to increase. We compete for advertisers, users, and
content providers and e commerce customers with many types of companies,
including:
|
·
|
Publishers
and distributors of traditional media (television, radio and print), such
as The Wall Street Journal, CNN and CNBC;
|
|
·
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General
purpose consumer online services such as Craigslist, Kijiji (an Ebay
company );
|
|
·
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Online
services or web sites targeted to business, finance and investing needs,
such as Monster and Yahoo’s Hot jobs; and
|
|
·
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Affiliate
and Multi-level Marketing and other companies, such as
Herbalife and Amway, Infoseek, Lycos, and
Yahoo!
|
Increased
competition could result in price reductions, reduced margins, or loss of market
share, any of which would adversely affect our business.
THE
DIMINUTION OR LOSS, MISAAPROPRIATION OR LEGAL CLAIMS ON THE BRAND NAME
"WALLST.NET" “FORWANT”, “CASHCLICKER”, “ITSMYLOCAL” AND OUR OTHER DEVELOPING
PROPERTIES WOULD HAVE A MATERIAL ADVERSE AFFECT ON OUR BUSINESS.
We are
highly dependent on our brand names for the success of our venture. We believe
the diminution or loss, misappropriation of our existing proprietary rights or
claims of infringement or legal actions related to intellectual property of
these brand names, or any other negative market or industry perception arising
from these, would have a material adverse effect on our business.
We
currently rely on contractual rights, copyrights, trademarks, and trade secrets
to protect our intellectual property rights. We do not hold any patents. We
cannot assure you that our means of protecting our proprietary rights will be
adequate or that our competitors will not independently develop comparable or
superior technologies or obtain unauthorized access to our proprietary
technologies.
We hold
the Internet domain names “www.forwant.com”, “www.cashclicker.com”,
“www.itsmylocal.com”, “www.sippinit.com”, www.sportsgulp.net” and
“www.wallst.net”. Under current domain name registration practices, no one else
can obtain an identical domain name, but someone might obtain a similar name, or
the identical name with a different suffix, such as ".org,” or with a country
designation. The regulation of domain names in the United States and in foreign
countries is subject to change, and we could be unable to prevent third parties
from acquiring domain names that infringe or otherwise decrease the value of our
domain names.
WE
COULD FACE LIABILITY FOR THE INFORMATION DISPLAYED ON OUR WEB PROPERTIES, WHICH
COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
We may be
subjected to claims for defamation, negligence, and copyright or trademark
infringement or based on other theories relating to the information we publish
on our web site. These types of claims have been brought, sometimes
successfully, against online services as well as other print publications in the
past. We could also be subjected to claims based upon the content that is
accessible from its Web site through links to other web sites. Defending such
claims could be costly and could distract management from concentrating on other
aspects of our business, which could adversely affect our financial condition
and results of operations.
A
SIGNIFICANT PORTION OF OUR PREVIOUS REVENUE AND EARNINGS CONSISTED OF SECURITIES
THAT ARE NOT FREELY TRANSFERABLE, WHICH COULD HAVE AN ADVERSE AFFECT ON OUR
FINANCIAL CONDITION.
In
connection with our services as a former financial services-centered company, we
accepted the major, and sometimes the entire, portion of our fee for our
services in the form of shares of our clients’ common stock which were
“restricted securities” as that term is defined in Rule 144 under the Securities
Act and are not freely transferable without registration or an exemption from
registration. We accepted this as a form of payment because our clients were
usually “small-cap” publicly held companies that did not otherwise have the cash
to pay for the services that we provided. The market for these
securities is sometimes volatile and at other times there may only be a limited
trading volume. Therefore, we may be unable to sell or distribute such
securities at the times we would like if at all, which could adversely affect
our financial condition.
10
A
SIGNIFICANT PORTION OF OUR ASSETS CONSISTS OF STOCK ISSUED BY SMALL, UNPROVEN
ISSUERS, WHICH STOCK MAY PROVE TO BE OF LIMITED OR NO VALUE.
In
connection with our services as a former financial services-centered company,
many of our clients were primarily “small-cap” public companies and are subject
to all of the risks of small businesses. They frequently depend on the
management talents and efforts of one person or a small group of persons for
their success, and the death, disability or resignation of one or more of these
persons could have a material adverse impact on our clients and their ability to
grow. In addition, small businesses often have narrower product lines and
smaller market shares than their competition. Such companies may also experience
substantial variations in operating results. These companies may be more
vulnerable to customer preferences, market conditions or economic downturns.
Because of these factors, most of which are beyond our control, we cannot assure
you that the securities we received will have any value when we are able to
dispose of them.
VALUATION
OF OUR MARKETABLE SECURITIES MAY BE SUBJECT TO MATERIAL IMPAIRMENTS WHICH REDUCE
THEIR VALUE AND AFFECT OUR FINANCIAL STATEMENTS.
Marketable
securities are classified as trading securities, which are carried at their fair
value based upon quoted market prices of those securities at the end of each of
our quarters. Accordingly, net realized and unrealized gains and losses on
trading securities are included in net income. The marketable securities that we
hold are traded on the Pink Sheets and the OTCBB. The market price for these
securities is subject to wide fluctuations from period to period, which may
cause fluctuations in our net income.
IF
WE ARE UNABLE TO RETAIN THE SERVICES OF MR. AIMERS OR IF WE ARE UNABLE TO
SUCCESSFULLY RECRUIT SKILLED PERSONNEL, WE MAY NOT BE ABLE TO CONTINUE OUR
OPERATIONS.
Our
success depends to a significant extent upon the continued services of Mr.
Albert Aimers, our Chief Executive Officer and Chairman of the Board of
Directors. We do not maintain key-man insurance on the life of Mr. Aimers. In
addition, in order to successfully implement and manage our business plan, we
will be dependent upon, among other things, successfully recruiting qualified
skilled personnel. Competition for qualified individuals is intense. There can
be no assurance that we will be able to find, attract and retain existing
employees or that we will be able to find, attract and retain qualified
personnel on acceptable terms.
Our
future success also depends on the continuing ability to retain and attract
highly qualified technical, editorial, and managerial personnel. We anticipate
that the number of employees will increase in the next 12 months. We have
experienced difficulty from time to time in attracting the personnel necessary
to support the growth of our business, and there can be no assurance that we
will not experience similar difficulty in the future. The inability to attract
and retain the technical and managerial personnel necessary to support the
growth of our business could have a material adverse effect upon our business,
results of operations and financial condition.
Risks Relating to Our Common
Stock:
IF
WE FAIL TO REMAIN CURRENT IN OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED
FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS TO
SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN
THE SECONDARY MARKET.
Companies
trading on the OTC Bulletin Board, such as us, must be reporting issuers under
Section 12 of the Securities Exchange Act of 1934, as amended, and must be
current in their reports under Section 13, in order to maintain price quotation
privileges on the OTC Bulletin Board. If we fail to remain current on our
reporting requirements, we could be removed from the OTC Bulletin Board. As a
result, the market liquidity for our securities could be severely adversely
affected by limiting the ability of broker-dealers to sell our securities and
the ability of stockholders to sell their securities in the secondary
market.
11
OUR
COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE TRADING
MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK
CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:
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·
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that
a broker or dealer approve a person's account for transactions in penny
stocks; and
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the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
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In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
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·
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obtain
financial information and investment experience objectives of the person;
and
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·
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make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
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The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
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sets
forth the basis on which the broker or dealer made the suitability
determination; and
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that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
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Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our common stock and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
Item
2. Properties
Corporate
Offices
Our
corporate offices consist of 2,359 sq. feet of office space in Irvine,
California. We have a one-year lease expiring on December 17, 2009 at a monthly
rental of $3,774. The lease arrangement expires on December 17, 2009
at which time the lease is expected to be converted to a month to month
arrangement. We believe that our existing facilities are suitable and
adequate to meet our current business requirements for the next six
months.
Intellectual Property, Proprietary
Rights and Domain Names
We own
the domain names “www.forwant.com”, “www.cashclicker.com”, “www.itsmylocal.com”,
“www.sippinit.com”, www.sportsgulp.net” and “www.wallst.net”, and
“www.financialfilings.com” as well as the phone number 1-800-4WALLST. We believe
our ownership of these domain names gives us adequate protection over them and
we intend to keep them in our possession.
12
Other
intellectual property is protected through a combination of trademark law, trade
secret protection, and confidentiality agreements with our employees, customers,
independent contractors, agents, and vendors. We pursue the registration of our
domain names, trademarks, and service market in the United States. Effective
trademark, service mark, copyright, and trade secret protection may not be
available in every country in which we provide services and products are made
available online. We create some of our own content and obtain the balance of
our content from third parties. It is possible that it could become subject to
infringement actions based upon the content obtained by third parties. In
addition, others may use this content and we may be subject to claims from our
licensors. We currently have no patents or patents pending and do not anticipate
that patents will become a significant part of our intellectual property in the
future. We have entered into confidentiality agreements with our employees and
independent consultants and have instituted procedures to control access to and
distribution of our technology, documentation and other proprietary information
and the proprietary information of others from who we licenses content. The
steps we take to protect our proprietary rights may not be adequate and third
parties may infringe or misappropriate the trademarks, service marks, and
similar proprietary rights. In addition, other parties may assert claims of
infringement of intellectual property or alter proprietary rights against us.
The legal status of intellectual property on the Internet is currently subject
to various uncertainties as legal precedents have not been set and are still to
be determined in many areas of Internet law.
Item
3. Legal Proceedings
Except as
disclosed below, there are no legal proceedings to which we are a party or to
which any of our property is subject, and to the best of our knowledge, no such
actions against us is contemplated or threatened.
PR Newswire Association, Inc. vs.
Financial Filings Corporation, Digital Wall Street, Inc. and WallStreet Direct,
Inc., Superior Court of New Jersey, Hudson County, Civil Division #5, Docket No.
L-878-09. On February 12, 2009, PR Newswire filed litigation
against us and our subsidiaries to pay $74,194.60 for services provided by PR
Newswire.
Adon Networks, Inc. vs. Wall Street
Direct, Inc., Superior Court of Arizona in and for the County of Maricopa County
Civil Action #CV2009-00035. On February 4, 2009, Adon Networks
filed a action to collect $41,966 in amounts due for services provided to Wall
Street Direct. The amount has not yet been paid and our subsidiary is in
negotiations for settlement
Renaissance Hotel Management
Company, LLC vs. Financial Media Group, Inc., Cook County Court, Illinois, First
Municipal District, Case No. 08M110495. On January 22, 2008, litigation
claiming $20,250 from us was commenced under the above-entitled action. On
September 10, 2008, a judgment was entered against us in the amount of
$14,371.87 and said amount remains unpaid and the company is in negotiations to
settle the amount
CBS Outdoors, Inc. vs. Financial
Media Group, Inc., New York City Civil Court Index No. CV-003947-08/NY.
On March 27, 2008, a Stipulation of Settlement was entered between CBS
Outdoors and us for a sum of $16,800. A default judgment in the amount of
$17,794.85 was entered against us on October 16, 2008.
Dow Jones & Company, Inc. DBA
Dow Jones Marketwatch as successor in interest to Marketwatch, Inc. vs.
Financial Media Group, Inc. Et. Al., Superior Court of California, County of
Orange, Case No. 30-2208 00112726. On September 30, 2008, Dow Jones filed
a complaint for a breach of contract against us for failing to pay $42,000 in
licensing fees for using Marketwatch’s financial information and analytical
tools relating to securities pursuant to the terms as required by the License
and Service Agreement. On March 4, 2009, a judgment for $48,162.40 was awarded
in favor of Dow Jones, and said amount remains unpaid. The company plans to
dispute and overturn judgement as services were rendered to our
subsidiary.
Elite Financial Communications
Group, LLC vs. Financial Media Group, Inc., Superior Court of California, County
of Orange, Case No. 30-20090012358.On May 22, 2009, Elite Financial
Communications Group, LLC filed a complaint for a breach of contract against us
for failing to pay for Investor Relations Services. On October 1, 2009, a
judgment for $61,293 was awarded in favor of Elite Financial Communications, and
the amount remains unpaid.
The
amount and judgment are going into dispute as the company plans to to overturn
judgment and file a cross-complaint planned for unsupplied
services
None.
PART
II
Item 5. Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our
common stock is traded on the Over-the-Counter Bulletin Board under the symbol
CLKZ. Prior to July 8, 2009, our common stock was traded on the
Over-the-Counter Bulletin Board under the symbol FNGP. The following table sets
forth, for the period indicated, the range of high and low closing prices
reported by the Over-the-Counter Bulletin Board. Such quotations represent
prices between dealers and may not include markups, markdowns, or commissions
and may not necessarily represent actual transactions.
13
|
Fiscal Year Ending August 31,
2008
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High
Bid
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Low
Bid
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||||||
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Quarter
Ending November 30, 2007
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$ | 0.510 | $ | 0.300 | ||||
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Quarter
Ending February 29, 2008
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$ | 0.480 | $ | 0.180 | ||||
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Quarter
Ending May 31, 2008
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$ | 0.700 | $ | 0.150 | ||||
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Quarter
Ending August 31, 2008
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$ | 0.890 | $ | 0.620 | ||||
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Fiscal Year Ending August 31,
2009
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High
Bid
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Low
Bid
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||||||
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Quarter
Ending November 30, 2007
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0.65000 | 0.06000 | ||||||
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Quarter
Ending February 29, 2009
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0.16000 | 0.01000 | ||||||
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Quarter
Ending May 31, 2009
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0.04000 | 0.00280 | ||||||
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Quarter
Ending August 31, 2009
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0.01800 | 0.00200 | ||||||
Holders
On
December 8, 2009 the closing "bid" price for our common stock on the
Over-the-Counter Bulletin Board was $0.007 per share. On December 8, 2009, there
were 973 shareholders of record of our common stock.
Dividends
We have
never paid any cash dividends on our capital stock and do not anticipate paying
any cash dividends on our common stock in the foreseeable
future. We intend to retain future earnings to fund ongoing
operations and future capital requirements of our business. Any future
determination to pay cash dividends will be at the discretion of the Board and
will be dependent upon our financial condition, results of operations, capital
requirements and such other factors as the Board deems relevant.
Recent
Sales of Unregistered Securities
Unless
otherwise noted, the issuances noted below are all considered exempt from
registration by reason of Section 4(2) of the Securities Act of 1933, as
amended.
Regulation
S provides generally that any offer or sale that occurs outside of the United
States is exempt from the registration requirements of the Securities Act,
provided that certain conditions are met. Regulation S has two safe harbors. One
safe harbor applies to offers and sales by issuers, securities professionals
involved in the distribution process pursuant to contract, their respective
affiliates, and persons acting on behalf of any of the foregoing, and the other
applies to re-sales by persons other than the issuer, securities professionals
involved in the distribution process pursuant to contract, their respective
affiliates (except certain officers and directors), and persons acting on behalf
of any of the forgoing. An offer, sale or re-sale of securities that satisfied
all conditions of the applicable safe harbor is deemed to be outside the United
States as required by Regulation S. The distribution compliance period for
shares sold in reliance on Regulation S is one year.
We
complied with the requirements of Regulation S by having no directed selling
efforts made in the United States, by selling only to an offeree who was outside
the United States at the time of the offering, and ensuring that the entity to
whom the stock was issued was a non-U.S. person with an address in a foreign
country.
During
the three months ended November 30, 2008, the Company sold 820,605 shares of
restricted common stock to investors pursuant to an exemption from registration
under Regulation S and Private Placement Memorandum dated June 12, 2008. The
shares were sold to investors at a price ranging from $0.03 to $0.50 per share
for total proceeds of $299,418 after issuing expenses.
During
the three months ended February 28, 2009, the Company sold 34,928 shares of
restricted common stock to an investor pursuant to an exemption from
registration under Regulation S. The shares were sold to the investor at a price
of $0.09 per share for total proceeds of $3,046 after issuing
expenses.
During
the three months ended May 31, 2009, the Company issued 1,833,327 shares of
common stock valued at $15,000 to its directors for their services.
During
the three months ended August 31, 2009, the Company issued 4,452,375 shares of
common stock valued at $15,000 to its directors for their
services.
Not
required under Regulation S-K for “smaller reporting companies.”
Item
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations
This
Management's Discussion and Analysis of Financial Condition and Results of
Operations includes a number of forward-looking statements that reflect
Management's current views with respect to future events and financial
performance. You can identify these statements by forward-looking words such as
“may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or
similar words. Those statements include statements regarding the
intent, belief or current expectations of us and members of its management team
as well as the assumptions on which such statements are based. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risk and uncertainties, and that
actual results may differ materially from those contemplated by such
forward-looking statements.
Readers
are urged to carefully review and consider the various disclosures made by us in
this report and in our other reports filed with the Securities and Exchange
Commission. Important factors currently known to
Management could cause actual results to
differ materially from those in
forward-looking statements. We undertake no obligation to
update or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes in the future operating results
over time. We believe that our assumptions are based upon reasonable data
derived from and known about our business and operations. No
assurances are made that actual results of operations or the results of our
future activities will not differ materially from its
assumptions. Factors that could cause differences include, but are
not limited to, expected market demand for our services, fluctuations in pricing
for materials, and competition.
14
Overview
On May
12, 2009, we changed our name from Financial Media Group, Inc. to Clicker,
Inc. (the “Company,” "We," or "Clicker"). We are a web publisher
brand builder focused on developing stand alone brands that incorporate social
networking and reward properties that leverage content, commerce and advertising
for the next generation global internet users.
Results
of Operations
Our
consolidated results of operations for the twelve months ended August 31, 2009
and 2008 include our wholly-owned subsidiaries WallStreet, Financial Filings,
Corp., My WallStreet, Inc., and The Wealth Expo Inc.
We
reported net losses of $3,284,713 and 2,864,462 for the years ended August
31, 2009 and 2008, respectively. The increase in loss was principally
attributable to the significant reduction in sales due to current economic
downturn.
Revenues
Revenues
for the twelve months ended August 31, 2009 were $1,337,310 compared to
$7,795,924 for the same period in 2008. Revenues decreased by $6,458,614 (83%)
during the year ended August 31, 2009 due to a significant reduction in
advertisements on our website. The reduction in our business was
primarily due to current economic conditions and a downturn in financial
markets which caused our clients to spend significantly less money on internet
advertising.
Operating
Expenses
Selling,
general, and administrative expenses (S,G&A) for the twelve month ended
August 31, 2009 were $2,527,993 compared to $6,088,190 for the same period in
2008. S,G&A expenses decreased by $3,560,197 (58%) during the twelve month
period ended August 31, 2009 as compared to the same period in 2008, primarily
due to a reduction in headcount, savings resulting from the closure of our New
York City office, and our general effort to reduce administrative, sales and
marketing, personnel and legal costs.
Impairment
of marketable securities for the twelve months period ended August 31, 2009 was
$1,582,395 compared to $4,119,303 for the same period ended in
2008. Impairment expense was recorded because the market value of
certain securities we received as compensation for our services declined in
excess of 50% of their market value. When the fair value of a security declines
below its original cost, we consider all available evidence to evaluate whether
the decline is other-than-temporary. Among other things, we consider the
duration and extent of the decline and economic factors influencing the markets.
If a decline in fair value is judged to be other-than-temporary, the cost basis
of the individual security is written off to fair value as a new cost basis and
the amount of the write-down is included in earnings (that is, accounted for as
a realized loss). The new cost basis is not to be changed for subsequent
recoveries in fair value.
In order
to secure our position with respect to impairments of marketable securities, we
revised our standard contractual terms for agreements with clients. If during
the term of the agreement, the share price of the securities declines by more
than 10%, the client is to issue additional securities to us in order to make up
the deficiency. Implementation of this new policy further helped us reduce our
impairment expense during the year ended August 31, 2009.
15
Depreciation
expense for the twelve months ended August 31, 2009 was $45,438 compared to
$49,753 for the same period in 2008.
Interest
expense for the twelve months period ended August 31, 2009 was $112,306 compared
to $72,973 for the same period in 2008 On July 20, 2008, the Company executed an
unsecured, non-interest bearing promissory note of $550,000 to a third party due
January 20, 2009, (the “BG Capital Note”). BG Capital Note originated as a
result of conversion of consulting expenses payable to a third party into a
promissory note. The promissory note required an annual interest rate
of 18% if not paid on the January 20, 2009 due date. The Company is in default
on the payment of the promissory note and has recorded interest expense in
connection with the note of 14,000 during the year ended August 31,
2009
Realized
loss on sale of marketable securities for the twelve months ended August 31,
2009 was $606,038 compared to $325,377 for the same period in 2008. We sold
non-performing marketable securities held in our possession and realized losses
on their sale to better manage our portfolio. Unrealized gain at August 31, 2009
was $ 752,322 compared to an unrealized loss of $63,880 for the same period in
2008. Unrealized gain and loss resulted from the increase and decrease in market
value of the marketable securities held at August 31, 2009 and August 31, 2008,
respectively.
Other
income for the twelve months ended August 31, 2009 was $258,690 compared to zero
for the same period of 2008, respectively. As noted above, we
revised our standard contractual terms for agreements with clients such that, if
the share price of the securities provided by clients declines by more than 10%,
the client is to issue additional securities to us in order to make up the
deficiency. Other income during the twelve months ended August 31, 2009
represents the value of additional marketable securities provided by customers
under our contractual terms, when the original securities were deemed to be
impaired.
Liquidity
and Capital Resources
As of
August 31, 2009, we had $32,380 in cash and cash equivalents and $280,566
in investments in marketable securities.
Our
current liabilities exceeded our current assets by $3,527,020 at August 31, 2009
and net cash used in operating activities for the twelve months ended August 31,
2009 was $1,230,620. These factors and our ability to meet our debt obligations
from current operations, and the need to raise additional capital to accomplish
our objectives raises doubt about our ability to continue as a going
concern.
We expect
significant capital expenditures during the next 12 months, contingent upon
raising capital. These anticipated expenditures are for software
development, assets additions, administrative overheads and working capital
requirements. We have sufficient funds to conduct our operations for a few
months, but not for 12 months or more. We anticipate that we will
need an additional investment to fund our anticipated operations for the next 12
months, depending on revenues from operations. We have no contracts
or commitments for additional funds and there can be no assurance that financing
will be available in amounts or on terms acceptable to us, if at
all.
We
presently do not have any available credit, bank financing or other external
sources of liquidity. Due to our historical operating losses, our operations
have not been a source of liquidity. We will need to obtain additional capital
in order to expand operations and become profitable. In order to obtain capital,
we may need to sell additional shares of our common stock or borrow funds from
private lenders. There can be no assurance that we will be successful in
obtaining additional funding.
To the
extent that we raise additional capital through the sale of equity or
convertible debt securities, the issuance of such securities may result in
dilution to existing stockholders. If additional funds are raised through the
issuance of debt securities, these securities may have rights, preferences and
privileges senior to holders of common stock and the terms of such debt could
impose restrictions on our operations. Regardless of whether our cash assets
prove to be inadequate to meet our operational needs, we may seek to compensate
providers of services by issuance of stock in lieu of cash, which may also
result in dilution to existing shareholders. Even if we are able to raise the
funds required, it is possible that we could incur unexpected costs and
expenses, fail to collect significant amounts owed to us, or experience
unexpected cash requirements that would force us to seek alternative
financing.
16
Whereas
we have been successful in the past in raising capital, no assurance can be
given that these sources of financing will continue to be available to us and/or
that demand for our equity/debt instruments will be sufficient to meet our
capital needs, or that financing will be available on terms favorable to us. If
funding is insufficient at any time in the future, we may not be able to take
advantage of business opportunities or respond to competitive pressures, or may
be required to reduce the scope of our planned service development and marketing
efforts, any of which could have a negative impact on our business and operating
results. In addition, insufficient funding may have a material adverse effect on
our financial condition, which could require us to:
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curtail
operations significantly;
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sell
significant assets;
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seek
arrangements with strategic partners or other parties that may require the
company to relinquish significant rights to products, technologies or
markets; or
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explore
other strategic alternatives including a merger or sale of our
company.
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We have
been able to meet our obligations through liquidation of our “Market Securities”
portfolio; however, we have missed opportunities to maximize our value, due to
the untimely demands for cash not matching with the highest market value. The
components of the current liabilities specifically the “Deferred Revenue”
classification, reflects a more informative view. As we enter into contracts for
services with our customers, contractually the revenue is earned upon execution
of the agreement. We are in compliance with Generally Accepted Accounting
Principles (“GAAP”) and amortize this revenue stream over the life of the
contract, resulting in a non-cash reduction of this liability.
17
Operating
Activities
In
addition to our net losses, the key drivers of cash used in operating activities
were revenues collected in the form of marketable securities and non cash
impairments and losses incurred in connection with marketable
securities. These drivers were slightly offset by the effect of an
increase in current liabilities as a result of our efforts to conserve
liquidity. The reduction in deferred revenues was consistent with the
general decline in revenue generating activities during the year. The
deferred revenue balance as of August 31, 2009 is expected to be recognized over
the next 12 months. Options for services represents stock
based compensation of $242,173 for the year ended August 31, 2009 as well as
shares of the Company’s common stock, valued at $150,818, given to vendors in
exchange for services.
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For
the Year Ended
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|
August
31, 2009
|
August 31, 2008 | |||||||
|
(in
thousands)
|
||||||||
|
Key
Drivers of Cash Used in Operations
|
||||||||
|
Net
loss
|
$ | (3,255 | ) | $ | (2,864 | ) | ||
|
Non-cash
derivative liability in connection with notes payable
|
117 | - | ||||||
|
Non-cash
activities in marketable securities
|
||||||||
|
Revenues
in form of marketable securities
|
(1,067 | ) | (6,613 | ) | ||||
|
Impairment
of marketable securities
|
1,582 | 4,119 | ||||||
|
Loss
on sale of marketable securities
|
608 | 325 | ||||||
| 1,123 | (2,169 | ) | ||||||
|
Increase
(decrease) in current liabilities:
|
||||||||
|
Accounts
payable, accrued expenses and other liabilities
|
756 | 646 | ||||||
|
Deferred
revenue
|
(404 | ) | 340 | |||||
| 352 | 986 | |||||||
|
Issuance
of options, warrants and shares of common stock for
services
|
214 | |||||||
|
Net
other cash activities
|
39 | 183 | ||||||
|
Net
cash used in operating activities
|
$ | (1,231 | ) | $ | (3,650 | ) | ||
Investing
Activities
Net cash
provided by investing activities for the twelve month periods ended August 31,
2009 and 2008 was $659,291 and $1,444,246, respectively, consisting primarily of
proceeds from the liquidation of the marketable securities which we obtain from
our clients in exchange for our services.
Financing
Activities
Net cash
provided by financing activities for the twelve months ended August 31, 2009 and
2008 was $530,397 and $2,107,465, respectively, representing cash received from
the sale of the Company’s common stock. Cash from financing activities, for the
twelve months ended August 31, 2008, was partially offset by the payment of a
note payable to an officer of $7,500.
As a
result of the above activities, we experienced a net decrease in cash of $40,932
for the twelve months ended August 31, 2009. Our ability to continue as a going
concern is still dependent on our success in obtaining additional financing from
investors through the sale of our securities.
18
Application
of Critical Accounting Policies
Marketable
Securities and Impairments
Our
investments in securities are classified as available-for-sale and, as such, are
carried at fair value based on quoted market prices. Securities classified as
available-for-sale may be sold in response to changes in interest rates,
liquidity needs, and for other purposes.
Unrealized
holding gains and losses for available-for-sale securities are excluded from
earnings and reported as a separate component of stockholder’s equity. Realized
and unrealized gains and losses for securities classified as available-for-sale
are included in the statement of operations and comprehensive gain,
respectively.
We
review, on a quarterly basis or more frequently if warranted by circumstances,
the carrying value of the marketable securities we receive from our customers
for providing services. We record impairment expense each quarter when the
market value of the securities received show a consistent decline over 90 to 180
days, and the carrying amount of the marketable securities exceeds its fair
value by 50% or more, and is deemed not recoverable. As such, we record on a
quarterly basis in our financial statements the impairment loss for the
difference between the carrying amount of the marketable securities and their
fair value.
At the
end of each quarter, we evaluate the marketable securities that show a
consistent decline in market value than the cost over a period of 90 to 180 days
for any possible impairment. We evaluate various factors relating to the
securities one of which is the length of the time and the extent to which the
market value has been less than cost. Our accounting policy is consistent with
SFAS 115 and SAB Topic 5M, whereby we record impairment expense each quarter
when the market value of the securities show a consistent decline over 90 to 180
days, and the cost of the marketable securities exceeds its fair value by a
material amount (50% or more), and is deemed not recoverable. In those instances
where impairment charges have been taken, the cost of the marketable securities
on a quarterly basis is brought down to the market value of securities in our
financial statements. The marketable securities are written down to zero only if
the marketable securities are either de-listed or not traded. However, after an
impairment for certain securities is recorded in a period, further impairment is
recorded if the fair value of the securities in future period falls
substantially (more than 50%) below the cost (after impairment adjustment) and
if the decline in market value is consistent for a period of time. Accordingly,
after the first impairment, we may record an unrealized loss for some period
till we are convinced that there is further impairment in the marketable
securities.
Revenue
Recognition
We
recorded revenues on the basis of services provided to our client for a fixed
determinable fee pursuant to a contractual agreement. In lieu of providing
services, we received from our clients cash and/or securities, as compensation
for providing such services.
Our
primary source of revenue was generated from providing Internet based media and
advertising services and a full array of customized investor awareness programs
to small and medium sized companies through its financial websites
www.wallst.net and my.wallst.net. The services included audio and video
production of senior management interviews, text and display advertising, press
releases, e-mail marketing, and promotion across our network of web sites. These
services were provided by our subsidiaries WallStreet Direct, Inc. and Digital
WallStreet, Inc. Revenues from Internet based media and advertising services
were recognized and recorded when the performance of such services completed. We
adhere to the guidelines established under Staff Accounting Bulletin 104
whereby, we executed a contractual agreement with the client for a fixed fee to
perform services, delivery of services had occurred when we performed the
contracted services, and collectibility of the fees had occurred when we
received cash and/or marketable securities in satisfaction for services
provided.
We
provided news wire and compliance services to small and medium size publicly
traded companies including preparation of registration statements, electronic
filings and reporting of SEC documents (EDGAR), preparation of proxy materials
and news distribution. Such services were provided by our subsidiary Financial
Filings Corp. Revenues were recognized and recorded when the performances of
such services completed. We adhere to the guidelines established under Staff
Accounting Bulletin 104 whereby, we executed a contractual agreement with the
client for a fixed fee to perform services, delivery of services had occurred
when we completed the performed the contracted services, and collectibility of
the fees had occurred when we received cash and/or marketable securities in
satisfaction of services provided.
19
We
provided a broad range of information on investing techniques and education
tools to investors through workshops and exhibits. Our subsidiary, The Wealth
Expo, provided us revenue streams through exhibition sales, speaking
presentation sales, collateral material sales and advertising sales. Revenues
from Wealth Expo services were recognized and recorded when the performance of
such services completed. We adhere to the guidelines established under Staff
Accounting Bulletin 104 whereby, we executed a contractual agreement with the
client for a fixed fee to perform services, delivery of services had occurred
when we completed the performed the contracted services, and collectability of
the fees had occurred when we received cash and/or marketable securities in
satisfaction of services provided.
Payments
received in advance of services provided, were recorded as deferred
revenue.
Stock-Based
Compensation
We
adopted SFAS No. 123 (Revised 2004), Share Based Payment (“SFAS
No. 123R”), under the modified-prospective transition method on January 1, 2006.
SFAS No. 123R requires companies to measure and recognize the cost of
employee services received in exchange for an award of equity instruments based
on the grant-date fair value. Share-based compensation recognized under the
modified-prospective transition method of SFAS No. 123R includes share-based
compensation based on the grant-date fair value determined in accordance with
the original provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, for all share-based payments granted prior to and not yet
vested as of January 1, 2006 and share-based compensation based on the
grant-date fair-value determined in accordance with SFAS No. 123R for all
share-based payments granted after January 1, 2006. SFAS No. 123R
eliminates the ability to account for the award of these instruments under the
intrinsic value method prescribed by Accounting Principles Board (“APB”) Opinion
No. 25, Accounting for Stock
Issued to Employees, and allowed under the original provisions of SFAS
No. 123. Prior to the adoption of SFAS No. 123R, the Company accounted for our
stock option plans using the intrinsic value method in accordance with the
provisions of APB Opinion No. 25 and related interpretations.
Issuance
of Shares for Service
We
account for the issuance of equity instruments to acquire goods and services
based on the fair value of the goods and services or the fair value of the
equity instrument at the time of issuance, whichever is more reliably
measurable.
Recent
Accounting Pronouncements
In June
2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments
granted in share-based payment transactions are participating securities prior
to vesting, and therefore need to be included in the computation of earnings per
share under the two-class method as described in FASB Statement of Financial
Accounting Standards No. 128, "Earnings per Share." FSP EITF 03-6-1 is effective
for financial statements issued for fiscal years beginning on or after December
15, 2008 and earlier adoption is prohibited. We are not required to adopt FSP
EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have material
effect on our consolidated financial position and results of operations if
adopted.
In
September 2008, the FASB issued exposure drafts that eliminate qualifying
special purpose entities from the guidance of SFAS No. 140 (ASC 860),
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities," and FASB Interpretation 46 (revised December 2003),
"Consolidation of Variable Interest Entities - an interpretation of ARB No. 51,"
as well as other modifications. While the proposed revised pronouncements have
not been finalized and the proposals are subject to further public comment, the
Company anticipates the changes will not have a significant impact on the
Company's financial statements. The changes would be effective March 1, 2010, on
a prospective basis.
20
In
December 2008, the FASB issued FSP No. FAS 140-4 (ASC 860) and FIN 46(R)-8,
"Disclosures by Public Entities (Enterprises) about Transfers of Financial
Assets and Interests in Variable Interest Entities." This disclosure-only FSP
improves the transparency of transfers of financial assets and an enterprise's
involvement with variable interest entities, including qualifying
special-purpose entities. This FSP is effective for the first reporting period
(interim or annual) ending after December 15, 2008, with earlier application
encouraged. The Company adopted this FSP effective January 1, 2009. The adoption
of the FSP had no impact on the Company's results of operations, financial
condition or cash flows.
In
October 2008, the FASB issued FSP No. FAS 157-3 (ASC 820), "Determining the Fair
Value of a Financial Asset When the Market for That Asset is Not Active," ("FSP
FAS 157-3"), which clarifies application of SFAS 157 in a market that is not
active. FSP FAS 157-3 was effective upon issuance, including prior periods for
which financial statements have not been issued. The adoption of FSP FAS 157-3
had no impact on the Company's results of operations, financial condition or
cash flows.
In April
2009, the FASB issued FSP No. FAS 157-4 (ASC 820), "Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly" ("FSP FAS 157-4").
FSP FAS 157-4 provides guidance on estimating fair value when market activity
has decreased and on identifying transactions that are not orderly.
Additionally, entities are required to disclose in interim and annual periods
the inputs and valuation techniques used to measure fair value. This FSP is
effective for interim and annual periods ending after June 15, 2009. The Company
does not expect the adoption of FSP FAS 157-4 will have a material impact on its
financial condition or results of operation.
In April
2009, the FASB issued FSP No. FAS 141(R)-1 (ASC 805), Accounting for Assets
Acquired and Liabilities Assumed in a Business Combination That Arise from
Contingencies, to address some of the application issues under SFAS 141(R). The
FSP deals with the initial recognition and measurement of an asset acquired or a
liability assumed in a business combination that arises from a contingency
provided the asset or liability's fair value on the date of acquisition can be
determined. When the fair value can-not be determined, the FSP requires using
the guidance under SFAS No. 5, Accounting for Contingencies, and FASB
Interpretation (FIN) No. 14, Reasonable Estimation of the Amount of a Loss. This
FSP was effective for assets or liabilities arising from contingencies in
business combinations for which the acquisition date is on or after January 1,
2009. The adoption of this FSP has not had a material impact on our financial
position, results of operations, or cash flows during the year ended August 31,
2009.
In June
2009, the FASB issued an accounting standard establishing the FASB Accounting
Standards Codification (Codification) as the source of authoritative,
nongovernmental U.S. GAAP superseding existing FASB, American Institute of
Certified Public Accountants (AICPA), Emerging Issues Task Force (EITF) and
related literature. Following this action, the FASB will not issue new standards
in the form of Statements, FASB Staff Positions or EITF Abstracts. Instead, the
FASB will issue Accounting Standards Updates. Two levels of U.S. GAAP will
exist: authoritative and non-auth
oritative. Codification is not
intended to change U.S. GAAP or guidance issued by the SEC. Clicker Inc.
adopted the Codification effective July 1, 2009.
In June
2009, the FASB issued ASC 105 (previously SFAS No. 168, “The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles—a replacement of FASB Statement No. 162” which will become the source
of authoritative accounting principles generally accepted in the United States
recognized by the FASB to be applied to nongovernmental entities. The
Codification is effective in the third quarter of 2009, and accordingly, the
Quarterly Report on Form 10-Q for the quarter ending September 30, 2009 and all
subsequent public filings will reference the Codification as the sole source of
authoritative literature. The Company does not believe that this will have a
material effect on its consolidated financial statements.
In June
2009, the FASB issued amended standards for determining whether to consolidate a
variable interest entity. These amended standards eliminate a mandatory
quantitative approach to determine whether a variable interest gives the entity
a controlling financial interest in a variable interest entity in favor of a
qualitatively focused analysis, and require an ongoing reassessment of whether
an entity is the primary beneficiary. These amended standards are effective for
us beginning in the first quarter of fiscal year 2010 and we are currently
evaluating the impact that adoption will have on our consolidated financial
statements.
21
In August
2009, the FASB issued Accounting Standards Update ("ASU") 2009-05,which amends
ASC Topic 820, MEASURING LIABILITIES AT FAIR VALUE, which provides additional
guidance on the measurement of liabilities at fair value. These amended
standards clarify that in circumstances in which a quoted price in an active
market for the identical liability is not available, we are required to use the
quoted price of the identical liability when traded as an asset, quoted prices
for similar liabilities, or quoted prices for similar liabilities when traded as
assets. If these quoted prices are not available, we are required to use another
valuation technique, such as an income approach or a market approach. These
amended standards are effective for us beginning in the fourth quarter of fiscal
year 2009 and are not expected to have a significant impact on our consolidated
financial statements.
Off
Balance Sheet Arrangements
None.
Not
required under Regulation S-K for “smaller reporting companies.”
Item
8. Financial Statements and Supplementary Data
Financial
statements are filed and included elsewhere herein as a part of this Annual
Report on Form 10-K.
None.
Item
9A(T). Controls and Procedures
Evaluation of
disclosure controls and procedures. We maintain "disclosure controls and
procedures," as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to
ensure that information required to be disclosed by us in reports that we file
or submit under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in Securities and Exchange Commission
rules and forms, and that such information is accumulated and communicated to
our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating our disclosure controls and procedures,
management recognized that disclosure controls and procedures, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the disclosure controls and procedures are met.
Additionally, in designing disclosure controls and procedures, our management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible disclosure controls and procedures. The design of any
disclosure controls and procedures also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions.
As of August 31, 2009, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective in ensuring that
information required to be disclosed by us in our periodic reports is recorded,
processed, summarized and reported, within the time periods specified for each
report and that such information is accumulated and communicated to our
management, including our principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
Management’s
Annual Report on Internal Control Over Financial Reporting. Management is
responsible for establishing and maintaining an adequate system of internal
control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act. Internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance with
GAAP.
22
Our
internal control over financial reporting includes those policies and procedures
that:
|
•
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect our transactions and dispositions of our
assets;
|
|
|
•
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and that
receipts and expenditures are being made only in accordance with
authorizations of our management and directors;
and
|
|
•
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on the financial
statements.
|
Management
has conducted, with the participation of our Chief Executive Officer and our
Chief Financial Officer, an assessment, including testing of the effectiveness
of our internal control over financial reporting as of April 30, 2009.
Management’s assessment of internal control over financial reporting was based
on the framework in Internal
Control over Financial Reporting – Guidance for Smaller Public
Companies issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, Management concluded that our
system of internal control over financial reporting was effective as of August
31, 2009.
The
effectiveness of our internal control over financial reporting as of August 31,
2009 has not been audited by Kabani & Company, Inc., an independent
registered public accounting firm. Management’s report was not subject to
attestation by the Company’s registered public accounting firm pursuant to
temporary rules of the Securities and Exchange Commission that permit the
Company to provide only management’s report in this annual report.
Changes in
Internal Control Over Financial Reporting. There were no changes in our
internal control over financial reporting identified in connection with the
evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
Item
9B. Other Information
None.
PART
III
Item 10. Directors, Executive
Officers, Promoters and Control Persons; Compliance with Section 16(a) of the
Exchange Act
Our
directors and executive officers and their ages as of the date hereof are as
follows:
|
NAME
|
AGE
|
POSITIONS
HELD
|
||
|
Albert
Aimers
|
47
|
Chairman
of the Board, Chief Executive Officer and Chief Financial
Officer
|
||
|
Tyson
Le
|
28
|
Secretary
|
||
|
Tom
Hemingway
|
51
|
Director
|
Albert
Aimers, Chief Executive Officer, Chief Financial Officer and Chairman of the
Board of Directors
Albert
Aimers was elected Chairman of the Board and Chief Executive Officer in January
2006 and Chief Financial Officer in September 2009. From 2003-2006, Mr. Aimers
was President and CEO of Digital WallStreet, Inc. and the founder of Wallst.net
and Financial Publishing company. From 1999-2003, Mr. Aimers was Chairman and
one of the founders of iLive Inc (LIVE), a streaming media company. Mr. Aimers
has been in the financial industry for over 15 years specializing in such areas
as Merchant and Investment Banking, Mergers and Acquisitions, Investor Awareness
and Investor Relations and Financial and Media Relations and Strategic Investor.
Mr. Aimers was a former Board member of Envoy Communications (ECGI-NASDAQ). Mr.
Aimers attended University of Guelph Ont (B.Sc) and also Wilfred Lauier
University (Business) BBA.
23
Tyson
Le, Secretary
Tyson Le
was appointed as Secretary in January 2006. Mr. Le joined us in March 2005 in
the position of Controller. From March 2004 to December 2004, Mr. Le worked for
United Parcel Service and designed back-end documentation to aid in supply chain
management. From June 2002 to February 2004, Mr. Le worked for iNet Corporation
in office administration. Mr. Le received his education at Orange Coast College
in Costa Mesa, California.
Tom
Hemingway, Director
Tom
Hemingway became a director in November 2004. Mr. Hemingway is currently the
Chairman and CEO of Redwood Investment Group, a position he has held since its
inception. Since December 2006, Mr. Hemingway has been a Director of NextPhase
Wireless, a next-generation connectivity company that specializes in delivering
integrated Internet, voice and data communication solutions to its customers.
Between December 2006 and June 2009, Mr. Hemingway was the Chief Operating
Officer of NextPhase Wireless. Since June 2009, Mr. Hemingway has been the CEO
and CFO of NextPhase Wireless. Between 2004 and 2006, Mr. Hemingway
was the Chief Executive Officer and Chairman of Oxford Media Corp., a developer
of electronic digital distribution technology. Mr. Hemingway has also served as
CEO and Chairman of Esynch Corporation (1998 to 2003), a publicly traded
company, and Chairman and CEO of Intermark Corporation (1995 to 1998), a
software developer and publisher in the entertainment markets. Prior, Mr.
Hemingway was President and CEO of Omni Advanced Technologies and Intellinet
Information Systems. In addition, Mr. Hemingway has been a consultant to several
NASDAQ and privately held companies, including Smart House /LV, Great American
Coffee Company (GACC), Redwood Investment Group, CBC, Pure Bioscience, and Smart
OnLine. He has a Bachelor’s Degree from the State University of New
York.
No family
relationships exist between any of our executive officers or
directors.
BOARD
MEETINGS AND COMMITTEES
During
the year ended August 31, 2009, the Board of Directors held four board meetings
to conduct business. The Board also approved certain actions by unanimous
written consent.
Audit
Committee
In
January 2006, the Board of Directors formed an Audit Committee. Currently Tom
Hemmingway, an independent director, serves as the sole member of the Audit
Committee. We are formulating and developing a formal written Audit Committee
charter, however, the Audit Committee's responsibilities include: (i) reviewing
the independence, qualifications, services, fees, and performance of the
independent auditors, (ii) appointing, replacing and discharging the independent
auditors, (iii) pre-approving the professional services provided by the
independent auditors, (iv) reviewing the scope of the annual audit and reports
and recommendations submitted by the independent auditors, and (v) reviewing our
financial reporting and accounting policies, including any significant changes,
with management and the independent auditors. Mr. Hemingway has been identified
by the Board as the Audit Committee financial expert.
The Audit
Committee reviewed and discussed our audited financial statements as of and for
the year ended August 31, 2009 with the Board of Directors. The Audit Committee
reviewed and discussed with representatives of Kabani & Company, Inc., our
independent registered public accounting firm, the matters required to be
discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol.
1. AU §380). The Audit Committee has also received and reviewed the written
disclosures and the letter from Kabani & Company, Inc. required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees, as amended by the Independence Standards Board, and has
discussed with Kabani & Company, Inc. their independence. Based on the
review and discussions referred to in this paragraph, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in our Annual Report on Form 10–K for filing with the SEC.
24
Compensation
and Stock Option Committee
In
January 2006, the Board of Directors formed a Compensation and Stock Option
Committee. Currently, Tom Hemingway and Albert Aimers serve as its members. The
Compensation and Stock Option Committee is formulating and developing a written
charter for its members describing their functions and responsibilities, and
procedures for the consideration and determination of executive and director
compensation. This committee currently recommends to the Board of Directors
policies under which compensation will be paid or awarded to our directors,
officers and certain other personnel. Among other things, the committee
recommends to the Board of Directors the amount of compensation to be paid or
awarded to our directors, officers and other personnel, including salary,
bonuses, stock option grants, other cash or stock awards under any of our
incentive compensation and stock option plans as in effect from time to time,
retirement and other compensation.
Nominating
Committee
We do not
currently have a Nominating Committee. Our entire Board of Directors acts as the
Nominating Committee and evaluates and recommends nominees for membership on our
Board of Directors and its committees. Our Board of Directors
is responsible for (1) reviewing suggestions of candidates for director
made by directors and others; (2) identifying individuals qualified to become
Board members, and recommending the director nominees for the next annual
meeting of stockholders; (3) recommending director nominees for each committee
of the Board; (4) recommending corporate governance principles; and (5)
overseeing the annual evaluation of the Board and management. There is no
difference in the manner in which a nominee is evaluated based on whether the
nominee is recommended by a stockholder or otherwise.
The Board
of Directors determines the required selection criteria and qualifications of
director nominees based upon our needs at the time nominees are considered. In
general, directors should possess the highest personal and professional ethics,
integrity and values, and be committed to representing the long-term interests
of our stockholders. In addition to the foregoing considerations, the Board of
Directors will consider criteria such as strength of character and leadership
skills; general business acumen and experience; broad knowledge of the industry;
age; number of other board seats; and willingness to commit the necessary time
to ensure an active board whose members work well together and possess the
collective knowledge and expertise required by the Board. The Board of Directors
considers these same criteria for candidates regardless of whether the candidate
was identified by the Board of Directors, by stockholders, or any other
source.
The Board
of Directors considers qualified candidates for possible nomination that are
submitted by our stockholders. Stockholders wishing to make such a submission
may do so by sending the following information to the Board of Directors c/o
Chief Executive Officer at the address indicated on the Notice of Annual Meeting
of Stockholders. Any recommendations submitted to the Chief Executive Officer
should be in writing and should include whatever supporting material the
stockholder considers appropriate in support of that recommendation, but must
include the information that would be required under the rules of the SEC in a
proxy statement soliciting proxies for the election of such candidate and a
signed consent of the candidate to serve as a director of the Company, if
elected. As permitted by SEC rules, stockholders who wish to submit a proposal
or nominate a person as a candidate for election to our Board of Directors at an
annual meeting must follow certain procedures. These procedures require that
timely, written notice of such proposal or nomination be received by our Chief
Executive Officer at our principal executive offices prior to the first
anniversary of the preceding year’s annual meeting.
The Board
of Directors conducts a process of making a preliminary assessment of each
proposed nominee based upon the resume and biographical information provided, an
indication of the candidate’s willingness to serve and other background
information, business experience, and leadership skills, all to the extent
available and deemed relevant by the Board of Directors. This information is
evaluated against the criteria set forth above and the Company’s specific needs
at that time. Based upon a preliminary assessment of the candidate(s), those who
appear best suited to meet our needs may be invited to participate in a series
of interviews, which are used as a further means of evaluating potential
candidates. On the basis of information learned during this process, the Board
of Directors determines which candidate(s) to recommend to the Board to
submit for election at the next stockholder meeting. The Board of Directors uses
the same process for evaluating all candidates, regardless of the original
source of the nomination.
25
Our goal
is to seek to achieve a balance of knowledge and experience on our Board. To
this end, we seek nominees with the highest professional and personal ethics and
values, an understanding of our business and industry, diversity of business
experience and expertise, a high level of education, broad-based business
acumen, and the ability to think strategically. Although we use the criteria
listed above as well as other criteria to evaluate potential nominees, we do not
have a stated minimum criteria for nominees. The Board does not use different
standards to evaluate nominees depending on whether they are proposed by our
directors and management or by our stockholders. To date, we have not paid any
third parties to assist us in finding director nominees.
Code
of Ethics
We have
adopted a Code of Ethics that are designed to deter wrongdoing and to promote
honest and ethical conduct, full, fair, accurate, timely and understandable
disclosure in our SEC reports and other public communications. The Code of
Ethics promotes compliance with applicable governmental laws, rules and
regulations.
COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors, executive officers and holders of more than 10% of our common stock
to file with the SEC reports regarding their ownership and changes in ownership
of our securities. We believe that, during fiscal 2009, our directors, executive
officers and 10% stockholders complied with all Section 16(a) filing
requirements.
Item
11. Executive Compensation
The
following tables set forth certain information regarding our CEO and each of our
most highly-compensated executive officers whose total annual salary and bonus
for the fiscal years ending August 31, 2009 and 2008 exceeded
$100,000.
SUMMARY
COMPENSATION TABLE
|
Name
and Principal Position
|
Year
Ended August 31,
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($)
|
Option
Awards ($)
|
Non-Equity
Incentive Plan Compensation
|
Nonqualified
Deferred Compensation Earnings $
|
All
Other Compensation $
|
Total ($)
|
||||||||||||||||||||||||||||||||
|
Albert
Aimers
|
2009
|
$ | 295,000 | $ | - | $ | 20,000 | (1 | ) | $ | 20,250 | $ | - | $ | - | $ | 73,750 | (2 | ) | $ | 368,750 | ||||||||||||||||||||
|
President
and CEO
|
2008
|
$ | 295,000 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 77,083 | (2 | )(3) | $ | 372,083 | ||||||||||||||||||||||
|
Manu
Ohri
|
2009
|
$ | 140,156 | $ | - | $ | 20,000 | (1 | ) | $ | 20,250 | $ | - | $ | - | $ | 21,717 | (4 | ) | $ | 209,249 | ||||||||||||||||||||
|
Chief
Financial Officer
|
2008
|
$ | 165,000 | $ | - | $ | - | $ | 40,916 | $ | - | $ | - | $ | 3,333 | (3 | ) | $ | 209,249 | ||||||||||||||||||||||
|
(1)
|
The
Board of Directors approved the quarterly compensation of our directors
with $5,000 worth of restricted common shares valued at the closing market
price of the common shares on first day of each month of each fiscal
quarter. The quarterly compensation to the Board members became effective
July 1, 2008.
|
|
(2)
|
Includes
$73,750 being our contribution towards pension plan.
|
|
(3)
|
Includes
$3,333 earned as director fees for attending Board meetings during the
period July 1, 2008 to August 31, 2008.
|
|
(4)
|
Represents
reimbursement for medical insurance and other
expenses.
|
26
Employment
Agreements with Executive Officers
Albert
Aimers
Effective
December 14, 2009, the Company entered into a new two year employment agreement
with Albert Aimers, Chief Executive Officer. Mr. Aimers is to receive
a base salary of $325,000 per year with scheduled increases of 10% each year
under the agreement. In addition to bonus eligibility, medical
insurance and other employee benefits, the Company will designate a class of
Series A preferred stock which is to be non-convertible and which will be
entitled to cast such number of votes equal to 51% of all votes cast at a
meeting of all common shareholders.
Directors’
Compensation Policy
The Board
of Directors approved the quarterly compensation of our directors with $5,000
worth of restricted common shares valued at the closing market price of the
common shares on first day of each month of each fiscal quarter. The quarterly
compensation to the Board members became effective July 1, 2008. We will also
reimburse the Board members for their actual expenses in attending the Board
meetings. The Board members did not receive any compensation during the year
ended August 31, 2009.
Option/SAR
Grants as of August 31, 2009
|
Name
and Position
|
Number
of Units
|
|||
|
Albert
Aimers, Chief Executive Officer
|
1,350,000 | |||
|
Manu
Ohri, Chief Financial Officer (1)
|
1,350,000 | |||
|
Tyson
Le, Secretary
|
550,000 | |||
|
Executives
as a Group
|
3,250,000 | |||
|
(1)
|
Mr.
Ohri resigned on August 28, 2009.
|
27
Outstanding
Equity Awards at August 31, 2009
|
Option
Awards
|
Stock
Awards
|
||||||||||||||||||||||||||||||||
|
Equity
|
|||||||||||||||||||||||||||||||||
|
Incentive
|
|||||||||||||||||||||||||||||||||
|
Equity
|
Plan
|
||||||||||||||||||||||||||||||||
|
Incentive
|
Awards:
|
||||||||||||||||||||||||||||||||
|
Plan
|
Market
|
||||||||||||||||||||||||||||||||
|
Awards:
|
or
|
||||||||||||||||||||||||||||||||
|
|
Equity
|
Number
|
Market
|
Number
|
Payout
|
||||||||||||||||||||||||||||
|
Incentive
|
of
|
Value
of
|
of
|
Value
of
|
|||||||||||||||||||||||||||||
|
Number
|
Plan
|
Shares
|
Shares
|
Unearned
|
Unearned
|
||||||||||||||||||||||||||||
|
Number
|
of
|
Awards:
|
or
Units
|
or
Units
|
Shares,
|
Shares,
|
|||||||||||||||||||||||||||
|
of
|
Securities
|
Number
|
of
|
of
|
Units
or
|
Units
or
|
|||||||||||||||||||||||||||
|
Securities
|
Underlying
|
of
|
Stock
|
Stock
|
Other
|
Other
|
|||||||||||||||||||||||||||
|
Underlying
|
Unexercised
|
Securities |
Underlying
|
That
Have
|
That
Have
|
Rights
|
Rights
|
||||||||||||||||||||||||||
|
Unexercised
|
Options
|
Unexercised
|
Option
|
have
|
have
|
that
|
that
|
||||||||||||||||||||||||||
|
Options
|
(#) |
Unearned
|
Exercise
|
Option
|
Not
|
Not
|
Have
Not
|
Have
Not
|
|||||||||||||||||||||||||
| (#) |
Unexer-
|
Options
|
Price
|
Expiration
|
Vested
|
Vested
|
Vested
|
Vested
|
|||||||||||||||||||||||||
|
Name
|
Exercisable
|
cisable
|
(#) |
($)
|
Date
|
(#) |
($)
|
(#) |
($)
|
||||||||||||||||||||||||
|
Albert
Aimers
|
675,000 | 675,000 | - | $ | 0.015 |
12/20/2017
|
- | - | - | - | |||||||||||||||||||||||
|
Tyson
Le
|
200,000 | - | - | $ | 0.300 |
12/20/2017
|
- | - | - | - | |||||||||||||||||||||||
|
Tyson
Le
|
275,000 | 275,000 | - | $ | 0.015 |
12/20/2017
|
- | - | - | - | |||||||||||||||||||||||
|
TOTAL
|
1,150,000 | 950,000 | |||||||||||||||||||||||||||||||
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
The
following table sets forth certain information regarding beneficial ownership of
our common stock as of December 9, 2009.
|
-
|
by
each person who is known by us to beneficially own more than 5% of our
common stock;
|
|
-
|
by
each of our officers and directors; and
|
|
-
|
by
all of our officers and directors as a
group.
|
|
Name
|
Number
of
Shares Beneficially
Owned
(1)
|
Percentage
of
Outstanding
Shares (2)
|
|||||||
|
Albert
Aimers, Chairman and CEO
|
32,326,032 | (3)(4) | 32.44 | % | |||||
|
Tyson
Le, Secretary
|
612,500 | (5) | * | ||||||
|
Tom
Hemingway, Director
|
2,324,782 | 2.33 | % | ||||||
|
Officers
and Directors as a Group (5 individuals)
|
35,263,314 | (6) | 35.39 | % | |||||
* Less
than 1%.
|
(1)
|
Beneficial
Ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. Shares of common stock subject to options or
warrants currently exercisable or convertible, or exercisable or
convertible within 60 days of December 9, 2009 are deemed outstanding for
computing the percentage of the person holding such option or warrant but
are not deemed outstanding for computing the percentage of any other
person.
|
|
(2)
|
|
|
(3)
|
Shares
are owned by AMC Capital Group, Inc., a corporation of which Mr. Aimers is
an officer, director and shareholder.
|
|
(4)
|
Includes
1,012,500 shares issuable upon presently exercisable
options.
|
|
(5)
|
Represents
shares issuable upon presently exercisable options.
|
|
(6)
|
Includes
1,625,000 shares issuable upon presently exercisable
options.
|
28
EQUITY
COMPENSATION PLAN INFORMATION
The
following table sets forth information about the shares of our common stock that
may be issued upon the exercise of options granted to employees under the 2007
Non-Qualified Stock Option Plan and the 2009 Non-Qualified Stock Option Plan,
which were approved by the Board of Directors, and the 2007 Equity Incentive
Plan approved by the Board of Directors and shareholders.
|
|
(a)
|
(b)
|
(c)
|
|||||||||
|
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans excluding securities reflected in column (a)
(1)
|
|||||||||
|
Equity
compensation plan approved by security holders (1)
|
2,235,000 | $ | 0.23 | 765,000 | ||||||||
|
Equity
compensation plan approved by security holders (2)
|
2,375,000 | $ | 0.30 | 4,625,000 | ||||||||
|
Equity
compensation plan approved by security holders
(3)
|
- | - | 2,000,000 | |||||||||
|
Total
|
4,610,000 | $ | - | 7,390,000 | ||||||||
|
(1)
|
We
established a non-qualified stock option plan pursuant to which options to
acquire a maximum of 3,000,000 shares of our common stock were reserved
for grant (the “2007 Non-Qualified Plan”). As of August 31,
2009, included above in the 2007 Non-Qualified Plan are 635,000 shares
issuable upon exercise of options granted to employees and directors, and
1,600,000 options granted to outside consultants for services rendered to
our company.
|
|
(2)
|
We
established an equity compensation plan pursuant to which options to
acquire a maximum of 7,000,000 shares of our common stock were reserved
for grant (the “2007 Equity Plan”). As of August 31, 2009,
included above in the 2007 Equity Plan are 2,375,000 shares issuable upon
exercise of options granted to employees and
directors.
|
|
(3)
|
We
established a nonqualified stock option plan pursuant to which options to
acquire a maximum of 2,000,000 shares of our common stock were reserved
for grant (the “2009 Non-Qualified Plan”). As of August 31, 2009, no
options under the 2009 Non-Qualified Plan were issued or
outstanding.
|
There
have been no transactions, or proposed transactions, which have materially
affected or will materially affect us in which any director, executive officer
or beneficial holder of more than 5% of the outstanding common stock, or any of
their respective relatives, spouses, associates or affiliates, has had or will
have any direct or material indirect interest. We have no policy regarding
entering into transactions with affiliated parties.
29
Item
14. Principal Accounting Fees and Services
Audit
Fees
The
aggregate fees billed by our previous auditors, for professional services
rendered for the audit of our annual financial statements during the years ended
August 31, 2009 and 2008, and for the reviews of the financial statements
included in our Quarterly Reports on Form 10-QSB during the fiscal years, were
$48,000 and $48,000, respectively.
Audit-Related
Fees
Our
independent registered public accounting firm did not bill us during the years
ended August 31, 2009 and 2008 for audit related services.
Tax
Fees
Our
independent registered public accounting firm did not bill us for tax related
work during the fiscal years ended August 31, 2009 and 2008.
All
Other Fees
Our
independent registered public accounting firm did not bill us during fiscal
years ended August 31, 2009 or 2008 for other services.
The Board
of Directors and Audit Committee have considered whether the provision of
non-audit services is compatible with maintaining the principal accountant's
independence. The Audit Committee requires that prior to the
engagement of our principal accountant to audit our financial statements or to
perform other Audit Related or Non-Audit Related services, the engagement be
reviewed to consider the scope of services to be rendered and the expected fees
to be charged by the principal accountant in connection with rendering such
services.
30
PART
IV
Item
15. Exhibits and Financial Statement Schedules
Exhibit
Index
|
3.1
|
Certificate
of Incorporation, filed as an exhibit to the Registration Statement on
Form 10SB-12G, filed with the Securities Exchange Commission on June 25,
2001 and incorporated herein by reference.
|
|
3.2
|
Certificate of Amendment, filed
with the Nevada Secretary of State on May 21, 2004, filed as an exhibit to the
annual report on Form 10-K, filed with the Securities Exchange Commission
on December 12, 2008 and incorporated herein by
reference.
|
|
3.3
|
Certificate of Amendment, filed
with the Nevada Secretary of State on November 30, 2004, filed as an exhibit to the
annual report on Form 10-K, filed with the Securities Exchange Commission
on December 12, 2008 and incorporated herein by
reference.
|
|
3.4
|
Certificate of Amendment, filed
with the Nevada Secretary of State on September 9, 2005, filed as an exhibit to the
annual report on Form 10-K, filed with the Securities Exchange Commission
on December 12, 2008 and incorporated herein by
reference.
|
|
3.5
|
Bylaws,
filed as an exhibit to the Registration Statement on Form 10SB-12G, filed
with the Securities Exchange Commission on June 25, 2001 and incorporated
herein by reference.
|
|
3.6
|
Plan
and Agreement of Reorganization, filed as an exhibit to the Current Report
on Form 8-K, filed with the Securities Exchange Commission on September
23, 2005 and incorporated herein by
reference.
|
|
3.7
|
Amendments
to Plan and Agreement of Reorganization, filed as an exhibit to the
Current Report on Form 8-K, filed with the Securities Exchange Commission
on January 12, 2006 and incorporated herein by
reference.
|
|
10.1
|
Employment Agreement, dated as of
December 14, 2009, by and between CLICKER Inc. and Albert
Aimers
|
|
14.1
|
Code of Ethics, filed as an exhibit to the
annual report on Form 10-K, filed with the Securities Exchange Commission
on December 12, 2008 and incorporated herein by
reference.
|
|
21.1
|
List of Subsidiaries of the
Registrant, filed as an exhibit to the
annual report on Form 10-K, filed with the Securities Exchange Commission
on December 12, 2008 and incorporated herein by
reference.
|
|
23.1
|
Consent
of Kabani & Company, Inc., Independent Registered Public Accounting
Firm
|
|
31.1
|
Certification of Chief Executive
Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the
Securities and Exchange Act of 1934, as
amended
|
|
31.2
|
Certification of Chief Financial
Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the
Securities and Exchange Act of 1934, as
amended
|
|
32.1
|
Certifications
of Chief Executive Officer and Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
31
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
| CLICKER INC. | |||
|
Date: December
15, 2009
|
By:
|
/s/ ALBERT AIMERS | |
|
Albert
Aimers
|
|||
|
Chief
Executive Officer (Principal Executive Officer)
and
Chief Financial Officer (Principal Accounting Officer)
|
|||
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
|
Name
|
Position
|
Date
|
||
|
/s/ ALBERT AIMERS
Albert
Aimers
|
Chairman
of the Board
|
December
15, 2009
|
||
|
TOM HEMINGWAY
Tom
Hemingway
|
Director
|
December
15, 2009
|
32
CLICKER
INC.
AND
SUBSIDIARIES
TABLE
OF CONTENTS
|
Page
|
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
34
|
|
CONSOLIDATED
BALANCE SHEETS AS OF AUGUST 31, 2009 and 2008
|
35
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR
THE YEARS ENDED AUGUST 31, 2009 and 2008
|
36
|
|
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR
THE YEARS ENDED AUGUST 31, 2009 and 2008
|
37
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR
THE YEARS ENDED AUGUST 31, 2009 and 2008
|
38
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
39 –
55
|
33
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors of
Clicker
Inc. (Formerly, Financial Media Group, Inc.)
We have
audited the accompanying consolidated balance sheet of Clicker Inc. (Formerly,
Financial Media Group, Inc.) and Subsidiaries as of August 31, 2009 and 2008,
and the related consolidated statements of operations, changes in stockholders’
deficit and cash flows for the years ended August 31, 2009 and 2008. These
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Clicker Inc. and
Subsidiaries as of August 31, 2009 and 2008 and the results of its operations,
changes in stockholders’ deficit and cash flows for the years ended August 31,
2009 and 2008 in conformity with accounting principles generally accepted in the
United States of America.
The
Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has accumulated deficit of $15,821,252 as of August 31,
2009 and has incurred net loss of $3,284,713 for the year ended August 31, 2009.
These factors as discussed in notes to the financial statements raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in the Note 14
to the consolidated financial statements. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
|
/s/
KABANI & COMPANY, INC.
|
|
CERTIFIED
PUBLIC ACCOUNTANTS
|
|
Los
Angeles, California
|
|
December
10, 2009
|
34
CLICKER
INC.
(Formerly,
Financial Media Group)
CONSOLIDATED
BALANCE SHEETS
|
ASSETS
|
||||||||
|
August
31, 2009
|
August
31, 2008
|
|||||||
|
CURRENT
ASSETS:
|
||||||||
|
Cash
& cash equivalents
|
$ | 32,380 | $ | 73,312 | ||||
|
Accounts
receivable, net
|
27,172 | 53,718 | ||||||
|
Marketable
securities
|
280,566 | 2,217,852 | ||||||
|
Other
current assets
|
4,152.00 | 1,793 | ||||||
|
Total
current assets
|
344,270 | 2,346,675 | ||||||
|
Property
& Equipment, net
|
37,128 | 82,566 | ||||||
|
Deposits
|
0 | 34,671 | ||||||
|
Total
assets
|
$ | 381,398 | $ | 2,463,912 | ||||
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||||||
|
CURRENT
LIABILITIES:
|
||||||||
|
Accounts
payable
|
$ | 1,093,436 | $ | 613,929 | ||||
|
Accrued
expenses
|
819,398 | 806,638 | ||||||
|
Deferred
revenue
|
20,800 | 424,832 | ||||||
|
Derivative
liability
|
116,752 | - | ||||||
|
Loan
payable to third party
|
1,048,662 | 820,729 | ||||||
|
Note
payable
|
760,000 | 650,000 | ||||||
|
Convertible
note payable, net
|
13,043 | 650,000 | ||||||
|
Total
current liabilities
|
3,872,091 | 3,966,128 | ||||||
|
Commitment
& contingencies
|
- | - | ||||||
|
STOCKHOLDERS'
DEFICIT:
|
||||||||
|
Common
stock, $0.001 par value, 300,000,000 shares authorized,
|
||||||||
| 84,687,548 and 65,726,835 shares issued and outstanding at |
|
|||||||
|
August
31, 2009 and August 31, 2008, respectively
|
84,687 | 65,727 | ||||||
|
Paid
in capital
|
12,155,958 | 11,339,465 | ||||||
|
Unrealized
gain on marketable securities
|
89,913 | 279,130 | ||||||
|
Accumulated
deficit
|
(15,821,251 | ) | (12,536,538 | ) | ||||
|
Total
stockholders' deficit
|
(3,490,693 | ) | (852,216 | ) | ||||
|
Total
liabilities and stockholders' deficit
|
$ | 381,398 | $ | 3,113,912 | ||||
The
accompanying notes are an integral part of these audited consolidated financial
statements.
35
CLICKER
INC.
(Formerly,
Financial Media Group)
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
For
the year ended
|
||||||||
|
August
31, 2009
|
August
31, 2008
|
|||||||
|
Revenues
|
||||||||
|
Revenues
in the form of cash
|
$ | 270,328 | $ | 1,182,745 | ||||
|
Revenues
in the form of marketable securities
|
1,066,982 | 6,613,179 | ||||||
|
Net
revenues
|
1,337,310 | 7,795,924 | ||||||
|
Operating
expenses
|
||||||||
|
Selling,
general & administrative
|
2,527,992 | 6,088,190 | ||||||
|
Depreciation
|
45,439 | 49,753 | ||||||
|
Impairments
|
1,582,395 | 4,119,303 | ||||||
|
Total
operating expenses
|
4,155,826 | 10,257,246 | ||||||
|
Loss
from operations
|
(2,818,516 | ) | (2,461,322 | ) | ||||
|
Non-Operating
Income (Expense):
|
||||||||
|
Interest
expense
|
(112,306 | ) | (72,963 | ) | ||||
|
Interest
income
|
54 | - | ||||||
|
Loss
on sale of marketable securities
|
(607,835 | ) | (325,377 | ) | ||||
|
Other
income
|
258,690 | - | ||||||
|
Total
non-operating expense
|
(461,397 | ) | (398,340 | ) | ||||
|
Loss
before income taxes
|
(3,279,913 | ) | (2,859,662 | ) | ||||
|
Provision
for income tax
|
4,800 | 4,800 | ||||||
|
Net
loss
|
(3,284,713 | ) | (2,864,462 | ) | ||||
|
Other
comprehensive gain (loss):
|
||||||||
|
Unrealized
gain (loss) on marketable securities
|
(1,175,640 | ) | (63,880 | ) | ||||
|
Reclassification
adjustment
|
986,424 | 88,089 | ||||||
|
Comprehensive
loss
|
$ | (3,473,929 | ) | $ | (2,840,253 | ) | ||
|
Basic
and diluted net loss per share
|
$ | (0.04 | ) | $ | (0.05 | ) | ||
|
Weighted
average shares of common stock outstanding
|
||||||||
|
-
Basic and Diluted
|
74,206,192 | 52,472,307 | ||||||
The
accompanying notes are an integral part of these audited consolidated financial
statements.
36
CLICKER
INC.
(Formerly,
Financial Media Group)
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR
THE YEARS ENDED AUGUST 31, 2009 AND 2008
|
Common
Stock
|
Additional
|
Unrealized
|
Accumulated
|
Stockholders'
|
||||||||||||||||||||
|
Shares
|
Par
Value
|
Paid
in Capital
|
Gain
(Loss)
|
Deficit
|
Deficit
|
|||||||||||||||||||
|
Balance,
August 31, 2007
|
33,082,566 | $ | 33,083 | $ | 5,872,385 | $ | 254,921 | $ | (9,672,076 | ) | $ | (3,511,687 | ) | |||||||||||
|
Common
stock issued for cash
|
17,404,269 | 17,584 | 2,209,835 | - | - | 2,227,419 | ||||||||||||||||||
|
Options
issued for services
|
- | - | 200,217 | - | - | 200,217 | ||||||||||||||||||
|
Warrants
issued for services
|
- | - | 13,675 | - | - | 13,675 | ||||||||||||||||||
|
Conversion
of note payable to common stock
|
15,000,000 | 15,000 | 2,985,000 | - | - | 3,000,000 | ||||||||||||||||||
|
Shares
issued for services
|
240,000 | 60 | 58,353 | - | - | 58,413 | ||||||||||||||||||
|
Reclassification
adjustment
|
- | - | - | 88,089 | - | 88,089 | ||||||||||||||||||
|
Unrealized
loss on marketable securities
|
- | - | - | (63,880 | ) | - | (63,880 | ) | ||||||||||||||||
|
Net
loss
|
- | - | - | - | (2,864,462 | ) | (2,864,462 | ) | ||||||||||||||||
|
Balance,
August 31, 2008
|
65,726,835 | $ | 65,727 | $ | 11,339,465 | $ | 279,130 | $ | (12,536,538 | ) | $ | (852,216 | ) | |||||||||||
|
Common
stock issued for cash
|
855,533 | 855 | 301,609 | - | - | 302,464 | ||||||||||||||||||
|
Options
issued for services
|
- | - | 242,173 | - | - | 242,173 | ||||||||||||||||||
|
Conversion
of note payable to common stock
|
10,639,998 | 10,640 | 129,358 | - | - | 139,998 | ||||||||||||||||||
|
Shares
issued to vendors for services
|
673,249 | 673 | 41,812 | - | - | 42,485 | ||||||||||||||||||
|
Shares
issued to directors and employees for services
|
6,791,933 | 6,792 | 101,541 | - | - | 108,333 | ||||||||||||||||||
|
Reclassification
adjustment
|
- | - | - | (941,539 | ) | - | (941,539 | ) | ||||||||||||||||
|
Unrealized
loss on marketable securities
|
- | - | - | 752,322 | - | 752,322 | ||||||||||||||||||
|
Net
loss
|
- | - | - | - | (3,284,713 | ) | (3,284,713 | ) | ||||||||||||||||
|
Balance,
August 31, 2009
|
84,687,548 | $ | 84,687 | $ | 12,155,958 | $ | 89,913 | $ | (15,821,251 | ) | $ | (3,490,693 | ) | |||||||||||
The
accompanying notes are an integral part of these audited consolidated financial
statements.
37
CLICKER
INC.
(Formerly,
Financial Media Group)
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
For
the Year Ended
|
||||||||
|
August
31, 2009
|
August
31, 2008
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net
loss
|
$ | (3,284,713 | ) | $ | (2,864,462 | ) | ||
|
Adjustments
to reconcile net loss to net cash
|
||||||||
|
used
in operating activities:
|
||||||||
|
Bad
debts
|
14,348 | 387,220 | ||||||
|
Depreciation
and amortization
|
45,438 | 49,753 | ||||||
|
Revenues
in form of marketable securities
|
(1,066,982 | ) | (6,613,179 | ) | ||||
|
Impairment
of marketable securities
|
1,582,395 | 4,119,303 | ||||||
|
Loss
on sale of marketable securities
|
607,835 | 325,377 | ||||||
|
Issuance
of options and warrants for services
|
242,173 | 213,892 | ||||||
|
Issuance
of shares for services
|
150,818 | 58,413 | ||||||
|
Derivative
liability incurred in connection with debt
|
116,752 | |||||||
|
(Increase)
decrease in current assets:
|
||||||||
|
Receivables
|
12,198 | (370,754 | ) | |||||
|
Other
current assets and deposits
|
(2,359 | ) | 57,468 | |||||
|
Increase
(decrease) in current liabilities:
|
||||||||
|
Accounts
payable
|
479,506 | 287,387 | ||||||
|
Accrued
expenses and other liabilities
|
276,003
|
358,911 | ||||||
|
Deferred
revenue
|
(404,032 | ) | 340,258 | |||||
|
Net
cash used in operating activities
|
(1,230,620 | ) | (3,650,413 | ) | ||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Liquidation
of deposits
|
34,671 | - | ||||||
|
Acquisition
of property & equipment
|
- | (53,583 | ) | |||||
|
Cash
received from sale marketable securities
|
624,620 | 1,497,829 | ||||||
|
Net
cash provided by investing activities
|
659,291 | 1,444,246 | ||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Payment
of note payable to officer
|
227,933 | (7,500 | ) | |||||
|
Cash
received from sale of common stock
|
302,464 | 2,114,965 | ||||||
|
Net
cash provided by financing activities
|
530,397 | 2,107,465 | ||||||
|
NET
DECREASE IN CASH & CASH EQUIVALENTS
|
(40,932 | ) | (98,701 | ) | ||||
|
CASH
& CASH EQUIVALENTS, BEGINNING BALANCE
|
73,312 | 172,013 | ||||||
|
CASH
& CASH EQUIVALENTS, ENDING BALANCE
|
$ | 32,380 | $ | 73,312 | ||||
|
Supplemental
disclosure of non-cash financing activities:
|
||||||||
|
Conversion
of Accrued Executive Salaries to Notes Payable
|
$ | 170,000 | $ | - | ||||
|
|
||||||||
|
Conversion
of Accrued Executive Salaries to Common Stock
|
$ | 139,998 | $ | - | ||||
The
accompanying notes are an integral part of these audited consolidated financial
statements
38
CLICKER
INC.
(Formerly,
Financial Media Group)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 NATURE OF BUSINESS AND BASIS
OF PRESENTATION
Clicker
Inc. (the “Company,” "We," or "Clicker"), a corporation incorporated in the
State of Nevada, is a web publisher brand builder focused on developing stand
alone brands that incorporate social networking and reward properties that
leverage content, commerce and advertising for the next generation global
internet users. On May 12, 2009, Financial Media Group, Inc (“FMG”) merged with
Clicker into a single corporation and ceased its existence and the surviving
corporation was named Clicker, Inc.
WallStreet
Direct, Inc. (“WallStreet”), a wholly-owned subsidiary of Clicker was
incorporated in the State of Nevada on January 5, 2005 as a financial holding
company specializing as a provider of financial news, tools and content for the
global investment community. On January 15, 2005, WallStreet acquired 100% of
the assets and outstanding shares of Digital WallStreet, Inc. which was 100%
owned by the majority shareholder (86%) of the Company, in exchange for two
promissory notes of $1,500,000 each, carrying interest at 6% per annum, due and
payable on January 31, 2007 and January 31, 2010. As this merger is between
entities under the common control, the issuance of the promissory notes to the
majority shareholder has been recorded as a distribution to the majority
shareholder. The merger has been accounted for on historical cost basis. The
company provides Internet based media and advertising services through its
network of financial websites. The company provides full array of customized
investor awareness programs such senior management interviews, text and display
advertising, press releases, conferences and seminars, and email
marketing.
Digital
WallStreet, Inc. was incorporated in Nevada on June 12, 2002, and commenced its
operations during the first quarter of 2003. WallStreet is a full service
financial media company focused on applications that enable investors to
collaborate directly with publicly traded companies. The company provides
internet media and advertising services through its network of financial
websites.
On
January 6, 2006, Clicker acquired 100% of the equity in WallStreet pursuant to
an Agreement and Plan of Reorganization dated September 19, 2005 by and between
WallStreet and the Company. Clicker, formerly known as Financial Media Group,
Inc., and prior to that known as Giant Jr. Investments Corp., was incorporated
in Nevada in 1984 as Business Development Company, Inc. Pursuant to the
acquisition of WallStreet, WallStreet became the wholly-owned subsidiary of
Clicker, Inc. The former shareholders of WallStreet received 19,998,707 shares
or 82% of the issued and outstanding shares of the Company’s common stock in
exchange for all the issued and outstanding shares of WallStreet.
The
acquisition of WallStreet is accounted for as a reverse acquisition under the
purchase method of accounting since the shareholders of WallStreet obtained
control of the consolidated entity. Accordingly, the reorganization of the
two companies is recorded as a recapitalization of WallStreet, with WallStreet
being treated as the continuing operating entity. The historical financial
statements presented herein will be those of WallStreet. The continuing entity
retained August 31 as its fiscal year end.
On
February 10, 2006, Financial Media Group, Inc. established a 100% wholly owned
subsidiary Financial Filings Corp. This business unit focuses on providing
edgarization and newswire services to small and mid-sized public companies.
These compliance services provide formatting of pertinent SEC filings and
distribution of news in more than 30 languages to media outlets in more than 135
countries. On June 13, 2006, Financial Media Group, Inc. established
a wholly-owned subsidiary My WallStreet, Inc. and launched in January 2007,
http://my.wallst.net, an online community for investors. The website offers free
membership and provides social networking applications including messaging,
blogs, message boards, video and audio uploads, and personal profile pages. In
addition, members of MyWallSt can participate in the “Rookie Challenge,” a
proprietary virtual stock trading simulator that allows members to compete
against each other for a weekly cash prize. Members can also communicate with
another, rate individual stocks, post comments on individual stocks, and compile
their own Watch list of stocks, which can be viewed and commented on by other
members of the online community. Unlike other social network services including
MySpace and face Book, MyWallSt members have one interest in common: they want
to become better investors. MyWallSt also provides a venue for investors to
interact with public company executives, many of whom have active profiles on
the website.
39
In
January 2007, the Company acquired the trade name “The Wealth Expo” and formed a
wholly owned subsidiary The Wealth Expo Inc. on June 12, 2007. The Wealth Expo
provides a broad range of information on investing techniques, and tools to
investors through workshops and exhibits held throughout the United
States.
In May
2008, the Company launched WallStTV and offer free access to its original video
programming including the 3-Minute Press Show, Sweet Picks, the Analyst’s
Review, and WallSt.net News Magazine (“WSNM”). WSNM half-hour program is run
weekly and distributed through television via the Fox Business
Network.
In
February 2009, the Company launched Forwant.com, a free online classified
website that enables users to search for a variety of items and specializes in
the categories of Jobs, Housing, For Sale, Personals and Services
internationally. The property also has paid premium component.
NOTE
2 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Principles
of Consolidation
The
consolidated financial statements include the accounts of the Company, its
wholly-owned subsidiaries WallStreet Direct, Inc., Digital Wall Street, Inc.,
Financial Filings, Corp., My WallStreet, Inc. and Wealth Expo Inc. All
significant inter-company accounts and transactions have been
eliminated.
Use
of Estimates
In
preparation of financial statements in conformity with generally accepted
accounting principles management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reported period. Actual results could differ
from those estimates.
Cash
and Cash Equivalents
The
Company considers all liquid investments with a maturity of three months or less
from the date of purchase that are readily convertible into cash to be cash
equivalents.
Accounts
Receivable
The
Company maintains reserves for potential credit losses on accounts receivable.
Management reviews the composition of accounts receivable and analyzes
historical bad debts, customer concentrations, customer credit worthiness,
current economic trends and changes in customer payment patterns to evaluate the
adequacy of these reserves. Reserves are recorded primarily on a specific
identification basis. Allowance for doubtful debts amounted to $201,872 as of
August 31, 2009 and 2008, respectively.
Marketable
Securities
The
Company’s investments in securities are classified as available-for-sale and, as
such, are carried at fair value based on quoted market prices. Securities
classified as available-for-sale may be sold in response to changes in interest
rates, liquidity needs, and for other purposes.
Unrealized
holding gains and losses for available-for-sale securities are excluded from
earnings and reported as a separate component of stockholder’s equity. Realized
and unrealized gains and losses for securities classified as available-for-sale
are included in the statement of operations and comprehensive gain,
respectively.
40
The
Company adopted the provisions of SFAS 157 (ASC 820). for financial assets and
liabilities effective January 1, 2008. SFAS 157 clarifies the
definition of fair value as an exit price representing the amount that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. As such, fair value is a
market-based measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As a basis
for considering such assumptions, SFAS 157 establishes a three-tier value
hierarchy, which prioritizes, in descending order, the inputs used in measuring
fair value as follows:
Level 1 —
Observable inputs such as quoted prices in active markets
Level 2 —
Inputs other than the quoted prices in active markets that are observable either
directly or indirectly
Level 3 —
Unobservable inputs in which there is little or no market data, which require us
to develop our own assumptions.
This
hierarchy requires the Company to use observable market data, when available,
and to minimize the use of unobservable inputs when determining fair value. On a
recurring basis, the Company measures certain financial assets and liabilities
at fair value, including its marketable securities. The Company’s
financial assets represent available for sale securities which are traded in
active markets. Accordingly, all of the financial assets are
classified within level one under SFAS 157 (ASC 820).
Property and
Equipment
Property
and equipment are carried at cost less accumulated depreciation. Depreciation is
provided using the straight-line method over the estimated useful life of the
assets from three to five years. Expenditures for maintenance and repairs are
charged to expense as incurred.
Revenue
Recognition Policy
The
Company’s primary source of revenue is generated from providing Internet based
media and advertising services and a full array of customized investor awareness
programs to small and medium sized companies through its financial websites
www.wallst.net
and my.wallst.net. The
services include audio and video production of senior management interviews,
newsletters and editorials, small cap companies’ conferences and seminars,
e-mail mailings and forums, media and advertising. These services are provided
by the Company’s subsidiaries WallStreet Direct, Inc. and Digital WallStreet,
Inc. Revenues from Internet based media and advertising services are recognized
and recorded when the performance of such services are completed. The Company
adheres to the guidelines established under Staff Accounting Bulletin 104
whereby, the Company executes a contractual agreement with the client for a
fixed fee to perform services, delivery of services has occurred when the
Company performed the contracted services, and collectibility of the fees has
occurred when the Company receives cash and/or marketable securities in
satisfaction for services provided.
The
Company provides news wire and compliance services to small and medium size
publicly traded companies including preparation of registration statements,
electronic filings and reporting of SEC documents (EDGAR), preparation of proxy
materials and news distribution. Such services are provided by the Company’s
subsidiary Financial Filings Corp. Revenues are recognized and recorded when the
performances of such services are completed. The Company adheres to the
guidelines established under Staff Accounting Bulletin 104 whereby, the Company
executes a contractual agreement with the client for a fixed fee to perform
services, delivery of services has occurred when the Company completed the
performed the contracted services, and collectibility of the fees has occurred
when the Company receives cash and/or marketable securities in satisfaction of
services provided.
The
Company provides a broad range of information on investing techniques and
education tools to investors through workshops and exhibits. The Company’s
subsidiary Wealth Expo provides revenue streams for the Company through
exhibition sales, speaking presentation sales, collateral material sales and
advertising sales. Revenues from Wealth Expo services is recognized and recorded
when the performance of such services are completed. The Company adheres to the
guidelines established under Staff Accounting Bulletin 104 whereby, the Company
executes a contractual agreement with the client for a fixed fee to perform
services, delivery of services has occurred when the Company completed the
performed the contracted services, and collectibility of the fees has occurred
when the Company receives cash and/or marketable securities in satisfaction of
services provided.
The
Company records revenues on the basis of services provided to its clients for a
fixed determinable fee pursuant to a contractual agreement. In lieu of providing
services, the Company receives from its clients cash and/or securities, as
compensation for providing such services. Payments received in advance of
services provided, are recorded as deferred revenue.
41
Fair
Value of Financial Instruments
Statement
of financial accounting standard No. 107 (ASC 825) Disclosures about fair value
of financial instruments, requires that the Company disclose estimated fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for assets and liabilities qualifying, as financial
instruments are a reasonable estimate of fair value.
Advertising
and Marketing Costs
The
Company expenses costs of advertising and marketing as incurred. Advertising and
marketing expense for the years ended August 31, 2009 and 2008 amounted to
$56,854 and $743,713, respectively.
Income
Taxes
The
Company accounts for income taxes under the Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 109 (ASC 740) "Accounting for
Income Taxes" ('Statement 109"). Under Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
Basic
and Diluted Net Loss Per Share
Net loss
per share is calculated in accordance with the Statement of financial accounting
standards No. 128 (SFAS No. 128) (ASC 260), “Earnings per share. Basic net loss
per share is based upon the weighted average number of common shares
outstanding. Diluted net loss per share is based on the assumption that all
dilutive convertible shares and stock options were converted or exercised.
Dilution is computed by applying the treasury stock method. Under this method,
options and warrants are assumed to be exercised at the beginning of the period
(or at the time of issuance, if later), and as if funds obtained thereby were
used to purchase common stock at the average market price during the
period.
Weighted
average number of shares used to compute basic and diluted loss per share is the
same since the effect of dilutive securities is anti-dilutive. The following
number of potential shares of common stock has been excluded from the
computation of diluted net loss per share for the year ended August 31, 2009 and
2008, respectively as effect is anti-dilutive.
|
August
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Stock
options
|
4,285,000 | 4,610,000 | ||||||
|
Stock
warrants
|
2,280,000 | 409,667 | ||||||
| 6,565,000 | 5,019,667 | |||||||
Concentration
of Credit Risk
Financial
instruments which potentially subject the Company to concentrations of credit
risk are cash, accounts receivable and marketable securities. The Company places
its cash with financial institutions deemed by management to be of high credit
quality. The amount on deposit in any one institution that exceeds federally
insured limits is subject to credit risk. All of the Company’s investment in
marketable securities are considered “available-for-sale” and are carried at
their fair value, with unrealized gains and losses (net of income taxes) that
are temporary in nature recorded in accumulated other comprehensive income
(loss) in the accompanying balance sheets. The fair values of the Company’s
investments in marketable sureties are determined based on market quotations.
Exposure to losses on receivables is principally dependent on each customer's
financial condition. The Company monitors its exposure for credit losses and
maintains allowances for anticipated losses, as required.
42
Reporting
Segments
Statement
of financial accounting standards No. 131 (ASC 250), Disclosures about segments
of an enterprise and related information (SFAS No. 131), which superseded
statement of financial accounting standards No. 14, Financial reporting for
segments of a business enterprise, establishes standards for the way that public
enterprises report information about operating segments in annual financial
statements and requires reporting of selected information about operating
segments in interim financial statements regarding products and services,
geographic areas and major customers. SFAS No. 131 defines operating segments as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performances.
The
Company offers a broad range of services to its clients and its primary source
of revenue is generated from providing Internet based media and advertising
services and a full array of customized investor awareness programs to small and
medium sized companies through its financial websites http://www.wallst.net,
http://my.wallst.net, and http://tv.wallst.net. The Company also provides news
wire and compliance services including preparation of registration statements,
electronic filings and reporting of SEC documents (EDGAR), preparation of proxy
materials and news distribution to the same types of clients whom the Company
provides Internet based media and advertising services. The Company started to
offer a broad range of information on investing techniques and education tools
to investors through workshops, exhibition sales, speaking presentation sales,
collateral material sales and advertising sales.
For the
year ended August 31, 2009, the revenue generated, assets and net loss from the
two sources, i.e. news wire and compliance services, and investing techniques
and education tools services, is less than 10% of the total revenue, total
assets and total net loss, respectively. Hence, SFAS 131 has no effect on the
Company's financial statements as substantially all of the Company's operations
are conducted in one primary industry segment i.e. providing Internet based
media and advertising services and a full array of customized investor awareness
programs to small and medium sized companies.
Stock-Based
Compensation
The
Company adopted SFAS No. 123 (Revised 2004), Share Based Payment (“SFAS
No. 123R”) (ASC 718), under the modified-prospective transition method on
January 1, 2006. SFAS No. 123R requires companies to measure and recognize
the cost of employee services received in exchange for an award of equity
instruments based on the grant-date fair value.
Issuance
of Shares for Services
The
Company accounts for the issuance of equity instruments to acquire goods and
services based on the fair value of the goods and services or the fair value of
the equity instrument at the time of issuance, whichever is more reliably
measurable.
Comprehensive
Income
Statement
of financial accounting standards No. 130 (ASC 220), Reporting comprehensive
income (SFAS No. 130), establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity, except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in
financial statements that are displayed with the same prominence as other
financial statements. The unrealized gain and loss as of August 31, 2009 and
2008 was $1,175,640 and $63,880 respectively, and the net comprehensive gain for
the year ended August 31, 2009 was $189,216 net comprehensive gain for the year
ended August 31, 2008 was $24,209.
43
Recent
Accounting Pronouncements
In June
2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments
granted in share-based payment transactions are participating securities prior
to vesting, and therefore need to be included in the computation of earnings per
share under the two-class method as described in FASB Statement of Financial
Accounting Standards No. 128 (ASC260), "Earnings per Share." FSP EITF 03-6-1 is
effective for financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. We are not required to
adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have
material effect on our consolidated financial position and results of operations
if adopted.
In
September 2008, the FASB issued exposure drafts that eliminate qualifying
special purpose entities from the guidance of SFAS No. 140 (ASC 860),
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities," and FASB Interpretation 46 (revised December 2003),
"Consolidation of Variable Interest Entities - an interpretation of ARB No. 51,"
as well as other modifications. While the proposed revised pronouncements have
not been finalized and the proposals are subject to further public comment, the
Company anticipates the changes will not have a significant impact on the
Company's financial statements. The changes would be effective March 1, 2010, on
a prospective basis.
In
October 2008, the FASB issued FSP No. FAS 157-3 (ASC 820) "Determining the Fair
Value of a Financial Asset When the Market for That Asset is Not Active," ("FSP
FAS 157-3"), which clarifies application of SFAS 157 in a market that is not
active. FSP FAS 157-3 was effective upon issuance, including prior periods for
which financial statements have not been issued. The adoption of FSP FAS 157-3
had no impact on the Company's results of operations, financial condition or
cash flows.
In April
2009, the FASB issued FSP No. FAS 157-4 (ASC 820), "Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly" ("FSP FAS 157-4").
FSP FAS 157-4 provides guidance on estimating fair value when market activity
has decreased and on identifying transactions that are not orderly.
Additionally, entities are required to disclose in interim and annual periods
the inputs and valuation techniques used to measure fair value. This FSP is
effective for interim and annual periods ending after June 15, 2009. The Company
does not expect the adoption of FSP FAS 157-4 will have a material impact on its
financial condition or results of operation.
In April
2009, the FASB issued FSP No. FAS 141(R)-1 (ASC 805), Accounting for Assets
Acquired and Liabilities Assumed in a Business Combination That Arise from
Contingencies, to address some of the application issues under SFAS 141(R). The
FSP deals with the initial recognition and measurement of an asset acquired or a
liability assumed in a business combination that arises from a contingency
provided the asset or liability's fair value on the date of acquisition can be
determined. When the fair value can-not be determined, the FSP requires using
the guidance under SFAS No. 5, Accounting for Contingencies, and FASB
Interpretation (FIN) No. 14, Reasonable Estimation of the Amount of a Loss. This
FSP was effective for assets or liabilities arising from contingencies in
business combinations for which the acquisition date is on or after January 1,
2009. The adoption of this FSP has not had a material impact on our financial
position, results of operations, or cash flows during the year ended August 31,
2009.
In June
2009, the FASB issued an accounting standard establishing the FASB Accounting
Standards Codification (Codification) as the source of authoritative,
nongovernmental U.S. GAAP superseding existing FASB, American Institute of
Certified Public Accountants (AICPA), Emerging Issues Task Force (EITF) and
related literature. Following this action, the FASB will not issue new standards
in the form of Statements, FASB Staff Positions or EITF Abstracts. Instead, the
FASB will issue Accounting Standards Updates. Two levels of U.S. GAAP will
exist: authoritative and non-authoritative. Codification is not intended to
change U.S. GAAP or guidance issued by the SEC. Clicker Inc. adopted the
Codification effective July 1, 2009.
In June
2009, the FASB issued ASC 105 (previously SFAS No. 168, “The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles—a replacement of FASB Statement No. 162” which will become the source
of authoritative accounting principles generally accepted in the United States
recognized by the FASB to be applied to nongovernmental entities. The
Codification is effective in the third quarter of 2009, and accordingly, the
Quarterly Report on Form 10-Q for the quarter ending September 30, 2009 and all
subsequent public filings will reference the Codification as the sole source of
authoritative literature. The Company does not believe that this will have a
material effect on its consolidated financial statements.
44
In June
2009, the FASB issued amended standards for determining whether to consolidate a
variable interest entity. These amended standards eliminate a mandatory
quantitative approach to determine whether a variable interest gives the entity
a controlling financial interest in a variable interest entity in favor of a
qualitatively focused analysis, and require an ongoing reassessment of whether
an entity is the primary beneficiary. These amended standards are effective for
us beginning in the first quarter of fiscal year 2010 and we are currently
evaluating the impact that adoption will have on our consolidated financial
statements.
In August
2009, the FASB issued Accounting Standards Update ("ASU") 2009-05,which amends
ASC Topic 820, MEASURING LIABILITIES AT FAIR VALUE, which provides additional
guidance on the measurement of liabilities at fair value. These amended
standards clarify that in circumstances in which a quoted price in an active
market for the identical liability is not available, we are required to use the
quoted price of the identical liability when traded as an asset, quoted prices
for similar liabilities, or quoted prices for similar liabilities when traded as
assets. If these quoted prices are not available, we are required to use another
valuation technique, such as an income approach or a market approach. These
amended standards are effective for us beginning in the fourth quarter of fiscal
year 2009 and are not expected to have a significant impact on our consolidated
financial statements.
Supplemental
Disclosure of Cash Flows
The
Company prepares its statements of cash flows using the indirect method as
defined under the Financial Accounting Standard No. 95 (ASC 230). The Company
paid $0 for interest and $0 for income taxes during the year ended August 31,
2009. The Company paid $2,100 for interest and $0 for income taxes during the
year ended August 31, 2008.
NOTE
3 MARKETABLE
SECURITIES
The
Company receives cash and/or securities of client companies as payment in full
for services rendered. The numbers of shares the Company receives for services
is based on contract amount, and the number of shares is determined based on the
bid price at the time of signing the agreement. The securities received from
clients are classified as available-for-sale and, as such, are carried at fair
value based on the quoted market prices. The securities comprised of shares of
common stock of third party customers and securities purchased. Securities
classified as available-for-sale may be sold in response to changes in interest
rates, liquidity needs, and for other purposes. The Company does not currently
have any held-to-maturity or trading securities.
45
Marketable
securities classified as available for sale consisted of the following as of
August 31, 2009:
|
Equity
Securities Name and Symbol
|
Number
of shares held at August 31, 2009
|
Cost
|
Market
Value at August 31, 2009
|
Accumulated
Unrealized Gain
|
Accumulated
Unrealized Loss
|
Traded
on Pink Sheets (PK) or Bulletin Board (BB)
|
|||||||||||||||
|
Sunrise
Consulting Group (SNRS.pk)
|
515,000,000 | $ | 51,500 | $ | 51,500 | $ | - | $ | - |
PK
|
|||||||||||
|
FIMA,
Inc fima
|
357,000 | 14,994 | 10,674 | (4,320 | ) |
PK
|
|||||||||||||||
|
GENCO
Corp GNCC
|
294,118 | 17,647 | 8,824 | (8,823 | ) |
PK
|
|||||||||||||||
|
GeneThera
Inc (GTHR)
|
261,000 | 14,355 | 23,229 |
PK
|
|||||||||||||||||
|
OneScreen
Inc (VidShadow Inc) OSCN
|
14,705 | 44,115 | 73,562 | 29,411 |
PK
|
||||||||||||||||
|
Made
in America Entertainment, Inc. (MAEI)
|
312,578 | 250,000 | - |
PK
|
|||||||||||||||||
|
VOIP
PAL.com, Inc. VPLM
|
2,500,000 | 15,000 | 25,000 | 10,000 | |||||||||||||||||
|
Others
- Less than $10,000 cost
|
89,659,900 | 36,040 | 87,777 | 66,773 | (3,127 | ) | |||||||||||||||
| $ | 443,651 | $ | 280,566 | $ | 106,184 | $ | (16,270 | ) | |||||||||||||
46
Marketable
securities classified as available for sale consisted of the following as of
August 31, 2008:
|
Equity
Securities Name and Symbol
|
Number
of shares held at August 31, 2008
|
Cost
|
Market
Value at August 31, 2008
|
Accumulated
Unrealized Gain
|
Accumulated
Unrealized Loss
|
Traded
on Pink Sheets (PK) or Bulletin Board (BB)
|
|||||||||||||||
|
Axial
Vector Engine Corp. (AXVC)
|
410,958 | $ | 127,397 | $ | 127,397 | - | - |
PK
|
|||||||||||||
|
Bio-Clean
International, Inc. (BCLE)
|
100,000 | 4,000 | 4,000 | - | - |
PK
|
|||||||||||||||
|
CanAm
Uranium Corp (CAUI)
|
1,180,000 | 11,800 | 8,850 | - | (2,950 | ) |
BB
|
||||||||||||||
|
China
YouTV Corp
|
1,400,000 | 42,000 | 42,000 | - | - |
BB
|
|||||||||||||||
|
Exousia
Advanced mat (EXOU)
|
401,538 | 261,000 | 244,938 | - | (16,062 | ) |
BB
|
||||||||||||||
|
FIMA,
Inc (FIMA)
|
357,000 | 14,994 | 14,994 | - | - |
PK
|
|||||||||||||||
|
GENCO
Corp (GNCC)
|
294,118 | 17,647 | 38,235 | 20,588 | - |
PK
|
|||||||||||||||
|
Global
8 Technologies, Inc. (GBLE)
|
331,180 | 131,860 | 69,548 | - | (62,313 | ) |
PK
|
||||||||||||||
|
Ifinix
Corp. (INIX)
|
34,500,000 | 315,000 | 483,000 | 168,000 |
PK
|
||||||||||||||||
|
International
Food Products Group, Inc. (IFDG)
|
4,000,000 | 22,000 | 22,000 | - |
PK
|
||||||||||||||||
|
Nexplore
Corp. (NXPC)
|
200,000 | 108,000 | 108,000 | - |
PK
|
||||||||||||||||
|
NutriPure
Beverages, Inc. (NUBV)
|
250,033,333 | 10,000 | 25,003 | 15,003 |
PK
|
||||||||||||||||
|
PRG
Group, Inc. (PRGJ)
|
454,000 | 13,620 | 13,620 | - | - |
PK
|
|||||||||||||||
|
PSM
Holdings, Inc. (PSMH)
|
157,895 | 142,106 | 86,842 | - | (55,263 | ) |
PK
|
||||||||||||||
|
Raven
Moon Entertainment (RAEM)
|
2,500,624,843 | 250,000 | 250,062 | 62 |
BB
|
||||||||||||||||
|
Sebastian
River Holdings, Inc. (SBRH)
|
75,000 | 100,000 | 67,500 | - | (32,500 | ) |
PK
|
||||||||||||||
|
Signature
Devices, Inc. (SDVI)
|
3,880,000 | 39,352 | 69,840 | 30,488 |
PK
|
||||||||||||||||
|
Sunrise
Consulting Group (SNRS)
|
1,015,000,000 | 101,500 | 101,500 | - |
PK
|
||||||||||||||||
|
VidShadow
Inc. (VSHD)
|
147,052 | 132,800 | 169,110 | - | 36,310 |
PK
|
|||||||||||||||
|
VOIP
PAL.com, Inc. (VPLM)
|
2,500,000 | 15,000 | 25,000 | 10,000 |
PK
|
||||||||||||||||
|
WayPoint
Biomedical Holdings, Inc. (WYPH)
|
715,000 | 10,725 | 7,150 | - | (3,575 | ) |
PK
|
||||||||||||||
|
XTend
Medical Corp. (XMDC)
|
12,375,000 | 7,425 | 7,425 | - |
PK
|
||||||||||||||||
|
Others
- Less than $10,000 cost
|
59,469,863 | 48,720 | 231,838 | 180,573 | (9,232 | ) | |||||||||||||||
| $ | 1,926,946 | $ | 2,217,852 | $ | 424,714 | $ | (145,585 | ) | |||||||||||||
As of
August 31, 2009, the Company evaluated its marketable securities holdings by
valuing the securities according to the quoted price of the securities on the
stock exchange.
It is the
Company’s policy to assess its marketable securities for impairment on a
quarterly basis, or more frequently if warranted by circumstances. The Company
recognized an impairment loss on the marketable securities of $1,582,395 for the
year ended August 31, 2009 compared to $4,119,303 for the year ended August 31,
2008.
47
The
Company reviews, on a quarterly basis or more frequently if warranted by
circumstances, the carrying value of the marketable securities it receives from
its customers for providing services. The Company records impairment expense
each quarter when the market value of the securities received show a consistent
decline over 90 to 180 days, and the carrying amount of the marketable
securities exceeds its fair value by 50% or more, and is deemed not recoverable.
As such, the Company records on a quarterly basis in its financial statements
the impairment loss for the difference between the carrying amount of the
marketable securities and their fair value.
To
safeguard the Company with impairments of marketable securities, the Company has
revised its contractual terms on its agreements with its clients which provides
that, in the event during the term of the agreement, the share bid price
declines by more than ten per cent (10%) of the share bid price on the date of
execution of the agreement, the Client would agree to issue additional shares of
their common stock to the Company in order to make up the deficiency caused by
the reduction in the value of their stock.
Unrealized
holding gains and losses for available-for-sale securities are excluded from
earnings and reported as a separate component of stockholder’s equity. Realized
gains and losses for securities classified as available-for-sale are reported in
the statement of operations and comprehensive gain.
The
Company sold marketable securities during the years ended August 31, 2009 and
2008 and recorded realized losses of $607,835 and $325,377,
respectively.
NOTE
4 PROPERTY AND
EQUIPMENT
Property
and equipment consist of the following:
|
August
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Office
and computer equipment
|
$ | 191,653 | $ | 191,652 | ||||
|
Less
accumulated depreciation
|
(154,525 | ) | (109,086 | ) | ||||
| $ | 37,128 | $ | 82,566 | |||||
Depreciation
expense for the years ended August 31, 2009 and 2008 was $45,438 and $49,753,
respectively.
NOTE
5 OTHER ASSETS AND
DEPOSITS
Other
assets consist of the following:
|
August
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Prepaid
expenses
|
$ | - | $ | 1,793 | ||||
|
Rent
deposit
|
4,152 | 34,671 | ||||||
|
Total
|
4,152 | 36,464 | ||||||
|
Less:
current portion
|
(4,152 | ) | (1,793 | ) | ||||
|
Long
term other assets - deposits
|
$ | - | $ | 34,671 | ||||
NOTE
6 DEFERRED
REVENUES
The
Company receives marketable securities and cash for services to be provided in
future periods. The Company recognizes revenue on a pro-rata basis over the term
of the agreement. The Company recorded $20,800 and $424,832 in deferred revenues
at August 31, 2009 and 2008, respectively. The deferred revenue
balance as of August 31,2009 is expected to be recognized over the next 12
months.
48
NOTE
7 ACCRUED
EXPENSES
Accrued
expenses consist of the following:
|
August
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Accrued
consulting fees
|
$ | 161,837 | $ | 98,649 | ||||
|
Accrued
interest
|
72,709 | 36,457 | ||||||
|
Accrued
salaries and payroll taxes
|
539,852 | 376,038 | ||||||
|
Advances
from third parties
|
- | 295,495 | ||||||
|
Other
|
45,000 | - | ||||||
| $ | 819,398 | $ | 806,639 | |||||
NOTE
8 DUE TO
OFFICERS
Due to
officers consist of the following:
|
August
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Accrued
officer’s compensation
|
$ | 796,140 | $ | 539,974 | ||||
|
Accrued
consulting fees
|
4,149 | 32,382 | ||||||
|
Accrued
interest
|
248,373 | 248,373 | ||||||
| $ | 1,048,662 | $ | 820,729 | |||||
The
Company recorded an expense of $368,750 and $372,083 for the years ended August
31, 2009 and 2008 for compensation to the Chief Executive Officer of the
Company.
NOTE
9 NOTE
PAYABLE
In August
2004, the Company executed a promissory note of $100,000 from a third party,
unsecured, interest at 9% per annum and due on demand. On January 23, 2009, the
Company agreed to convert the promissory note of $100,000 and accrued interest
of $39,998 by issuance of 10,639,998 shares of common stock valued at $139,998
as payment in full and final settlement of the promissory note including
interest.
On July
20, 2008, the Company executed an unsecured, non-interest bearing promissory
note of $550,000 to a third party due January 20, 2009, (the “BG Capital Note”).
The BG Capital Note originated as a result of conversion of consulting expenses
payable to a third party into a promissory note. The promissory note
required an annual
interest rate of
18% if not paid on the January 20, 2009 due date. The Company is in default on
the payment of the promissory note and has recorded interest expense in
connection with the note of $57,750 during the year ended August 31,
2009.
On March
1, 2009, the Company executed a promissory note of $140,000 to a third party,
unsecured, non-interest bearing and due on September 1, 2009.
On June
9, 2009, the Company issued a $70,000 non-interest bearing note to Mr. Gary
Cortell of Cortell Communications Inc., as settlement of an invoice for past
services rendered to the Company. The promissory note requires an
annual interest rate of 8% if not paid on the December 9, 2009 due
date
Effective
August 22, 2009 Clicker or (the Company) issued a six month 10% $100,000
unsecured promissory note (the Note) to Mr. Manu Ohri, the Company’s former
Chief Financial Officer (Mr. Ohri). Interest on the Note matures on
February 22, 2010. If the Company does not repay the amounts due at
maturity, the note will continue to accrue interest at 10%.
49
NOTE
10 CONVERTIBLE
NOTE
On August
11, 2009, the “Company” entered into an Exchange Agreement with Lotus Funding
Group, LLC (“Lotus”), pursuant to which Lotus exchanged a $100,000 promissory
note for a $100,000 convertible debenture (the “Debenture”). The
Debenture does not accrue interest and matures on December 31,
2009. Until September 10, 2009, Lotus has the right to convert all or
a portion of the principal into shares of common stock of the Company at a
conversion price equal to fifty percent (50%) of the average of the closing
bid price of the Company’s common stock (“Common Stock”) during the five (5)
trading days immediately preceding the conversion date as quoted by Bloomberg,
LP (the “Conversion Price”). Any shares received upon conversion may
not be sold prior to September 11, 2009.
The
Company followed the guidance of SFAS 133, paragraph 6 to ascertain if the
embedded beneficial conversion features were derivatives at the date of
issuance. The embedded beneficial conversion features had one or more underlings
and one or more notional amounts, required no initial investment, and required
or permitted net settlement. Therefore, the embedded beneficial conversion
features were determined to be within the scope and definition of a derivative
at the date of issuance. Next, the Company followed the guidance of SFAS 133,
paragraph 12, to determine if the embedded beneficial conversion features should
be separated from the accrued expense. The Company determined that: the economic
characteristics of the embedded beneficial conversion features are not clearly
and closely related to the accrued expense, the embedded beneficial conversion
feature and accrued expense are not remeasured at fair value at each balance
sheet date and a separate contract with the same terms would be a derivative
pursuant to SFAS 133, paragraphs 6-11. Therefore, the embedded beneficial
conversion features were separated from the accrued expense to determine the
classification and valuation.
The fair
value of note was $100,000 at the date of issuance calculated using
the Black Sholes model with the following assumptions: risk free rate of return
of .00% to 1.02%; volatility of 301.82% dividend yield of 0% and an expected
term of 4.5 months.
The
Company then applied EITF 00-19, paragraph 9, which states that all contracts
classified as liabilities are to be measured at fair value at each balance sheet
date, with changes in fair value reported in earnings and disclosed in the
financial statements as long as the contracts remain classified as
liabilities.
The fair
value of the note was determined to be $116,752 as of September 30, 2007, which
was calculated using the Black Sholes model with the following assumptions: risk
free rate of return of .00% to 1.02%; volatility of 324.19%; dividend yield of
0%; and an expected term of 4 months.
As of
August 31, 2009, the convertible note payable amounted to $13,043 as net with
$86,957 unamortized discount.
NOTE
11 COMMITMENTS
Operating
Lease
The
Company leases its corporate office facilities in California from a third party
under an operating lease that expires on December 17, 2009 at which time the
lease is expected to be converted to a month to month
arrangement. Monthly rental on the facility is $3,774.
Contingencies
From time
to time, the Company may be involved in various claims, lawsuits, and disputes
with third parties, actions involving allegations of discrimination or breach of
contract actions incidental to the normal operations of the business. Company is
not currently involved in any litigation which it believes could have a material
adverse effect on its financial position or results of operations.
50
NOTE
12
INCOME
TAXES
Income
tax for the years ended August 31, 2009 and 2008 is summarized as
follows:
|
August
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Current:
|
||||||||
|
Federal
|
$ | - | $ | - | ||||
|
State
|
4,800 | 4,800 | ||||||
|
Deferred taxes
|
- | - | ||||||
|
Income
tax expense (benefit)
|
$ | 4,800 | $ | 4,800 | ||||
The
following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Consolidated
Statements of Operations:
|
August
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Tax
expense (credit) at statutory rate-federal
|
(34 | %) | (34 | %) | ||||
|
State
tax expense net of federal tax
|
(6 | %) | (6 | %) | ||||
|
Valuation
allowance
|
40 | % | 40 | % | ||||
|
Net
deferred tax assets
|
$ | - | $ | - | ||||
The tax
effects of temporary differences that gave rise to significant portions of
deferred tax assets and liabilities at August 31, 2009 and 2008 are as
follows:
|
August
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Deferred
tax assets:
|
||||||||
|
Net
operating loss carry forward
|
$ | 1,658,489 | $ | 1,184,163 | ||||
|
Total
gross deferred tax assets
|
1,658,489 | 1,184,163 | ||||||
|
Less
valuation allowance
|
(1,658,489 | ) | (1,184,163 | ) | ||||
|
Net
deferred tax assets
|
$ | - | $ | - | ||||
At August
31, 2009, the Company had net operating loss carry forwards of $15,821,252 for
U.S. federal income tax purposes available to offset future taxable income
expiring on various dates through 2029. The Company has recorded a 100%
valuation allowance on the deferred tax assets due to the uncertainty of its
realization.
The
Company’s Digital Wallstreet Inc. subsidiary is delinquent in the payment of
federal employment taxes. As of August 31, 2009 amounts due to the
Internal Revenue Service (IRS) and the Employment Development Department of the
State of California (EDD) were $96,604 and $169,423,
respectively. The amounts are included in the Company’s balance of
accrued expenses. The Company is currently negotiating with the IRS
and the EDD to develop plans for the orderly payment of delinquent
balances.
NOTE
13 EQUITY
TRANSACTIONS
Common
Stock
On June
28, 2007, the Company entered into a Stock Purchase Agreement with an investor
for private placement of shares under Regulation S as promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
During the year ended August 31, 2009, the Company sold 335,533 shares of common
stock to the investors and received cash proceeds of $42,464. As of August 31,
2009, the Company has sold 15,483,322 shares of its common stock under
Regulation S to the investors and received cash proceeds of $1,466,228 which
amounted to approximately 34% of the total proceeds from such sale of its
shares. These shares were sold at a price equal to the previous day's last bid
price as traded on the Over the Counter Bulletin Board.
51
On June
12, 2008, the Company initiated a Private Placement Memorandum offering to sell
250 units for a total cash consideration of $5,000,000. Each Unit consisted of
40,000 shares of Common Stock, par value $0.001 per share and 40,000 Class A
Common Stock Purchase Warrants, 40,000 Class B Common Stock Purchase Warrants
and 40,000 Class C Common Stock Purchase Warrants. The offering entitles the
registered investor redeemable Class A Warrants, redeemable Class B Warrants and
redeemable Class C Warrants to purchase, at any time until the 9-month, 12-month
and 18-month anniversary of the date of purchase of shares, at an exercise price
of $0.75, $1.50 and $3.00, respectively, subject to adjustment. The Class A,
Class B and Class C Warrants (collectively, the “Warrants”) are redeemable by
the Company, at a redemption price of $0.05 per share, upon at least 30 days’
prior written notice, commencing on the effective date of a registration
statement registering the common stock underlying the Warrants (the “Warrant
Shares”) for resale or 12 months after the date of issuance of the Warrant,
whichever is earlier, if the market price per share of the common stock for any
five consecutive trading days prior to a notice of redemption shall exceed $1.50
per share for Class A Warrants, $3.00 per share for the Class B Warrants and
$5.00 per share for Class C Warrants. During the Year ended December 31, 2009,
the Company sold 13 units to investors for a cash consideration of $260,000. As
of August 31, 2009, the Company sold 44 units to investors and raised $880,000
pursuant to the June 12, 2008 Private Placement. Pursuant to the terms of
financing, the 44 units sold consisted of an aggregate of 1,760,000 shares of
common stock and 5,280,000 warrants exercisable into 5,280,000 shares of common
stock. The fair market value of 1,760,000 Class A warrants, 1,760,000 Class B
warrants and 1,760,000 Class C warrants was $643,568, $541,990 and $544,238
respectively, calculated using the Black-Scholes option pricing model using the
assumptions of risk free interest rate of 3.5%, volatility of 160%, term ranging
from nine months to 18 months, and dividend yield of 0%.
During
the year ended August 31, 2009, the Company issued 673,249 shares to consultants
valued at $42,485 in full settlement of their services, 10,639,998 shares to a
third party in settlement of a promissory note and accrued interest valued at
$139,998, 71,500 shares to an employee valued at $25,000 in full settlement of
his services, and 6,720,058 shares to directors valued at $83,333 for their
services. The shares were valued at their fair value on the date of
issuance.
Outstanding
Warrants:
Following
is a summary of the various classes of warrants outstanding at August 31,
2009:
|
Description
of Warrants
|
Exercise
Price
|
Expiration
Date
|
Warrants
Outstanding at August 31, 2008
|
Warrants
Issued during the period
|
Warrants
Exercised during the period
|
Warrants
Expired during the period
|
Warrants
Outstanding at August 31, 2009
|
||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
Class
E Warrant
|
$ | 3.75 |
1/25/2009
|
165,000 | - | - | (165,000 | ) | - | ||||||||||||||||
|
Class
A2 Warrant
|
$ | 3.50 |
9/1/2008
|
244,667 | - | - | (244,667 | ) | - | ||||||||||||||||
|
Class
A Warrant
|
$ | 0.75 |
3/16/2009
– 7/28/2009
|
- | 1,760,000 | - | (1,760,000 | ) | - | ||||||||||||||||
|
Class
B Warrant
|
$ | 1.50 |
10/28/2009
|
- | 1,760,000 | - | (1,240,000 | ) | 520,000 | ||||||||||||||||
|
Class
C Warrant
|
$ | 3.00 |
12/16/2009
– 4/28/2010
|
- | 1,760,000 | - | - | 1,760,000 | |||||||||||||||||
| 409,667 | 5,280,000 | - | (3,409,667 | ) | 2,280,000 | ||||||||||||||||||||
52
The
number and weighted average exercise prices of warrants granted by the Company
are as follows:
|
Number
of Warrants
|
Weighted
Average Exercise Price
|
Aggregate
Intrinsic Value
|
||||||||||
|
Outstanding
- August 31, 2008
|
409,667 | $ | 3.60 | $ | - | |||||||
|
Issued
during the period
|
5,280,000 | $ | 1.75 | - | ||||||||
|
Expired
|
(3,409,667 | ) | $ | 1.45 | - | |||||||
|
Outstanding
- August 31, 2009
|
2,280,000 | $ | 2.66 | $ | - | |||||||
Following
is a summary of the status of warrants outstanding at August 31,
2009:
|
Range
of Exercise Prices
|
Total
Warrants Outstanding
|
Weighted
Average Remaining Life (Years)
|
Weighted
Average Exercise Price
|
Warrants
Exercisable
|
Weighted
average Exercise Price of Exercisable Warrants
|
|||||||||||||||||
| $ | 0.75 - $3.00 | 2,280,000 | 0.37 | $ | 2.66 | 2,280,000 | $ | 2.66 | ||||||||||||||
Outstanding Stock
Options:
2007 Non-Qualified Stock
Option Plan (“2007 Non-Qualified Plan”):
On
January 5, 2007, the Company adopted the 2007 Non-Qualified Plan and reserved a
maximum of 3,000,000 shares of common stock as Options to grant to employees,
non-employee directors, consultants and advisors. The stock subject to Options
granted under the Non-Qualified Plan shall be shares of the Company’s Common
Stock, par value $0.001 per share. The 2007 Non-Qualified Plan shall terminate
within ten (10) years from the date of adoption by the Board of Directors or
sooner, and no Options shall be granted after termination of the plan. The
Options have been granted to certain employees and consultants to purchase
Common Shares at prices equal to fair market value on the date of
grant.
As of
August 31, 2009, there are no stock options outstanding under the 2007
Non-Qualified Plan. Activity under the 2007 Non-Qualified Plan during
2009 was as follows
|
Options
Outstanding
|
Weighted
Average Exercise Price
|
Aggregate
Intrinsic Value
|
||||||||||
|
Outstanding
August 31, 2008
|
2,235,000 | $ | 0.230 | $ | - | |||||||
|
Expired/forfeited
|
(2,235,000 | ) | $ | 0.230 | ||||||||
|
Outstanding
August 31, 2009
|
- | $ | - | |||||||||
2008 Non-Qualified Stock
Option Plan (“2009 Non-Qualified Plan”):
On July
2, 2008, the Company adopted the 2009 Non-Qualified Plan and the Board of
Directors approved the reservation of 2,000,000 shares of the Company’s
authorized but unissued common stock for issuance under the plan. As of August
31, 2009, no options have been granted under the 2008 Non-Qualified
Plan.
2007 Equity Incentive Plan
(“2007 Equity Plan”):
On
February 6, 2007, the Company adopted the 2007 Equity Plan which was approved by
the shareholders on April 11, 2007, and reserved 3,000,000 shares of the
Company’s authorized common stock as Options to grant to employees, directors
and officers. On August 28, 2009, the shareholders approved reserving an
additional 4,000,000 common shares for issuance under the 2007 Equity Plan for a
total of 7,000,000 common shares. The stock subject to Options granted under the
2007 Equity Plan shall be the Common Shares of the Company’s common stock, par
value $0.001 per share. The 2007 Equity Plan shall become effective and shall
remain in effect until all Common Shares subject to the 2007 Equity Plan have
been purchased or acquired according to the terms of the 2007 Equity Plan or the
2007 Equity Plan is terminated by the Board or January 4, 2017, whichever is
earlier. No stock Options shall be granted after termination of the plan. The
Options have been granted to certain employees to purchase Common Shares at
prices equal to fair market value on the date of grant.
53
The
number and weighted average exercise prices of options granted by the Company at
August 31, 2009 are as follows:
|
Options
Outstanding
|
Weighted
Average Exercise Price
|
Aggregate
Intrinsic Value
|
||||||||||
|
Outstanding
August 31, 2008
|
2,375,000 | 0.300 | - | |||||||||
|
Granted
|
5,534,000 | 0.015 | - | |||||||||
|
Exercised
|
- | - | - | |||||||||
|
Expired/forfeited
|
(3,084,000 | ) | 0.118 | - | ||||||||
|
Outstanding
August 31, 2009
|
4,825,000 | 0.088 | - | |||||||||
Following
is a summary of the status of stock options outstanding at August 31,
2009:
|
Range
of Exercise Prices
|
Total
Options Outstanding
|
Weighted
Average Remaining Life (Years)
|
Total
Weighted Average Exercise Price
|
Options
Exercisable
|
Weighted
Average Exercise Price
|
|||||||||||||||||
| $ | 0.015- $0.300 | 4,825,000 | 7.69 | $ | 0.084 | 1,605,465 | $ | 0.115 | ||||||||||||||
The
Company granted 5,534,000 stock options to employees to purchase common shares
of the Company at an exercise price of $0.015 per share with the fair value of
the options valued at $371,464 calculated using the Black-Scholes option pricing
model using the assumptions of risk free interest rate of 3.75%, volatility of
264%, ten (10) years term, and dividend yield of 0%.
NOTE 14
GOING
CONCERN
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. This basis of accounting contemplates the recovery
of the Company's assets and the satisfaction of its liabilities in the normal
course of business. The Company had accumulated deficit of $15,821,252 as of
August 31, 2009 and has incurred net loss of $3,284,713 or the year ended August
31, 2009. In view of the matters described in the preceding paragraph,
recoverability of a major portion of the recorded asset amounts shown in the
accompanying balance sheet is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to raise
additional capital, obtain financing and to succeed in its future operations.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
Management
has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. Management devoted considerable effort
during the period ended August 31, 2009 towards (i) obtaining additional equity
financing, (ii) evaluation of its distribution and marketing methods, and (iii)
further streamlining and reducing costs.
54
NOTE
15 SUBSEQUENT
EVENTS
Between
September 11, 2009 and October 11, 2009, Lotus is obligated to convert, $10,000
each day of outstanding principal into Common Stock at the Conversion Price and
to use reasonable efforts to sell such shares of Common Stock upon
receipt. Lotus’ right and obligation to convert the Debenture and
receive Common Stock is restricted such that Lotus’ beneficial ownership shall
not exceed 4.99% of the then issued and outstanding shares of the Company’s
Common Stock. From September 9, 2009 to November 19, 2009 Lotus
exercised its rights under the convertible note and converted $17,493 of the
Lotus Note into 9.170.836 shares of the Company’s common stock.
Under the
terms of the Lotus note, the Conversion Price is 20% of the average of the
closing bid price of the Company’s common stock (“Common Stock”) during the five
trading days immediately preceding the conversion date as quoted by Bloomberg,
LP.
On
October 9, 2009, the Company issued a one year $50,000 unsecured promissory note
to the Painted Post Group (the Painted Post Note). The Painted Post
Note results from the assignment by BG Capital of its rights in $50,000 of the
notes issued by Clicker Inc. Accordingly, the note payable balance to
BG Capital is reduced by $50,000. However, the terms of the Painted
Post Note were separately negotiated between Clicker and the Painted
Post. The Painted Post Note bears no interest. Any time
before the Company settles the note in cash, the note is convertible, at the
discretion of the Note Holder, into shares of the Company’s common stock at
discounted rate of 50% of the average closing bid price of the Company’s common
stock during the five trading days preceding the conversion date. On
November 6, 2009, the Painted Pos
t Group
exercised its rights under the convertible note and converted $3,400 of the
Painted Post Note into 790,698 shares of the Company’s common
stock.
On
November 17, 2009, CLICKER, Inc. (the “Company”) entered consulting agreement
with Steven Angel and issued 5,000,000 shares of its common stock to the
consultant for the services to be rendered in the next twelve
months.
On
November 18, 2009, CLICKER Inc. (the “Company”) entered into a Securities
Purchase Agreement (the “Purchase Agreement”) with SBCH Charitable Foundation,
an accredited investor (the “Investor”), providing for the sale by the Company
to the Investor of a 10% convertible debenture in the principal amount of
$120,000 (the “Debenture”).
The
Debenture matures on the first anniversary of the date of issuance (the
“Maturity Date”) and bears interest at the annual rate of 10%. The
Company is not required to make any payments until the Maturity
Date.
The
Investor may convert, at any time, the outstanding principal and accrued
interest on the Debenture into shares of the Company’s common stock (“Common
Stock”) at a conversion price per share equal to the lesser of (i) forty
percent (40%) of the average of the closing bid price of the Common Stock
during the five (5) trading days immediately preceding the Conversion Date as
quoted by Bloomberg, LP or (ii) $0.00192.
The
Investor has agreed to restrict its ability to convert the Debenture and receive
shares of the Company’s common stock such that the number of shares of common
stock held by the Investor in the aggregate and its affiliates after such
conversion or exercise does not exceed 4.99% of the then issued and outstanding
shares of the Company’s common stock.
Effective
December 14, 2009, the Company entered into a new two year employment agreement
with Albert Aimers, Chief Executive Officer. Mr. Aimers is to receive
a base salary of $325,000 per year with scheduled increases of 10% each year
under the agreement. In addition to bonus eligibility, medical
insurance and other employee benefits, the Company will designate a class of
Series A preferred stock which is to be non-convertible and which will be
entitled to cast such number of votes equal to 51% of all votes cast at a
meeting of all common shareholders.
55