UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): December 20,
2010
CommerceTel
Corporation
(Exact name of registrant as specified
in its charter)
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Nevada
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000-53851
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26-3439095
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(State or Other
Jurisdiction
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(Commission
File
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(I.R.S.
Employer
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of
Incorporation)
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Number)
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Identification
Number)
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8929 Aero
Drive, Suite E
San Diego, CA
92123
(Address of principal executive
offices) (zip code)
(866)622-4261
(Registrant’s telephone number,
including area code)
4600 Lamont Street #4-327
San
Diego,
CA 92109-3535
(Former name or former address, if
changed since last report)
Copies to:
Louis A. Brilleman,
Esq.
1140 Avenue of the Americas, 9th Floor
New York, New York 10036
Phone: (212)
584-7805
Fax: (646) 380-6899
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction
A.2. below):
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o
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Written communications pursuant to
Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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On December 20, 2010, Standard and Poor’s Corporation Records published pro forma financial
information for CommerceTel
Corporation (the
“Company”). The pro forma financial statements reflect the
effect of the November 2, 2010 acquisition of CommerceTel Corp. by the
Company. The transaction was accounted for as a recapitalization with
CommerceTel Corp. considered the accounting acquirer.
A copy of the pro forma financial
statements is attached hereto.
Item 9.01 Financial Statements and
Exhibits.
Not applicable.
(b) Pro forma financial
information.
Attached.
None.
-2-
Pursuant to the requirements of the
Securities and Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.
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COMMERCETEL
CORPORATION
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January 6,
2011
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By:
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/s/ Dennis
Becker
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Chief
Executive Officer
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-3-
Pro
Forma Combined Financial Statement
On
November 2, 2010, the Company completed the transactions contemplated under the
Exchange Agreement. The Share Exchange resulted in a change in
control of the Company with the Shareholders owning in the aggregate 10,000,000
shares of common stock of the Company out of a total of 17,700,000 issued and
outstanding shares after giving effect to the Share Exchange. In
connection with the Share Exchange, subject to the Company’s compliance with the
provisions of Rule 14f under the Securities Exchange Act of 1934, as amended,
Shane Ellis, the sole director and officer of the Company prior to the Share
Exchange, resigned his position as an officer immediately, and as a director
effective on the date (the “Compliance Date”) the Company complies with the
filing and mailing requirements under Section 14(f) of the Securities Exchange
Act of 1934, as amended. Shareholder’s nominees were elected
directors of the Company, effective as of the Compliance Date, and appointed as
its executive officers, effective immediately.
The
following presents our unaudited pro forma financial information as of September
30, 2010 and for the year ended September 30, 2010. The unaudited pro forma
financial information is for informational purposes only and does not purport to
present what our results would actually have been had these transactions
actually occurred on the dates presented or to project our results of operations
or financial position for any future period.
For
accounting purposes, the Share Exchange was treated as a recapitalization of
CommerceTel. CommerceTel is the accounting acquirer and the results
of its operations will be the results of the Company’s operations going
forward.
-4-
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CommerceTel
Corporation (Formerly Ares Corporation)
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Unaudited
Pro Forma Consolidated Balance Sheet
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CommerceTel,
Inc 12/31/2009
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Ares
Corporation 09/30/2010
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Notes
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Pro
Forma Adjustments
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Pro
Forma Combined
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|||||||||||||||
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Assets:
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|||||||||||||||||||
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Current
Assets:
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|||||||||||||||||||
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Cash
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$ | 11,003 | $ | 7,786 |
d
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1,000,000 | $ | 1,018,789 | |||||||||||
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Accounts
receivable
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49,241 | - | - | $ | 49,241 | ||||||||||||||
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Other
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6,664 | 10,054 |
b
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(10,000 | ) | 6,718 | |||||||||||||
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Total
current assets
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$ | 66,908 | $ | 17,840 | $ | 990,000 | $ | 1,074,748 | |||||||||||
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Equipment,
net
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7,957 | - | - | 7,957 | |||||||||||||||
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Other
Assets
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46,317 | - | - | 46,317 | |||||||||||||||
| $ | 121,182 | $ | 17,840 | $ | 990,000 | $ | 1,129,022 | ||||||||||||
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Liabilities
and Stockholders Defficit
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Current
Liabilities:
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Accounts
payable and accrued expenses
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$ | 989,370 | $ | 650 |
c
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(777,590 | ) | $ | 212,430 | ||||||||||
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Other
current liabilities
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3,262 | - | - | 3,262 | |||||||||||||||
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Accrued
and deferred personnel compensation
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196,819 | - | - | 196,819 | |||||||||||||||
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Notes
payable and accrued interest
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712,189 | - |
b,c,d
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404,408 | 1,116,597 | ||||||||||||||
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Deferred
revenues and customer deposits
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127,704 | - | 127,704 | ||||||||||||||||
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Total
current liabilites
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2,029,344 | 650 | (373,182 | ) | 1,656,812 | ||||||||||||||
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Equity
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Preferred
stock
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- | - | - | - | |||||||||||||||
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Common
stock
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10,000 | 12,000 |
a
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(4,300 | ) | 17,700 | |||||||||||||
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Additional
paid-in capital
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5,026,508 | 63,000 |
a,c
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1,367,482 | 6,456,990 | ||||||||||||||
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Accumulated
earning/deficit
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(6,944,670 | ) | (57,810 | ) | - | (7,002,480 | ) | ||||||||||||
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Total
stockholders' equity
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(1,908,162 | ) | 17,190 | 1,363,182 | (527,790 | ) | |||||||||||||
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Total
Liabilities and Stockholders' Equity
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$ | 121,182 | $ | 17,840 | $ | 990,000 | 1,129,022 | ||||||||||||
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See Notes to Unauidted Pro Forma
Consolidated Financial Statements
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-5-
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CommerceTel
Corporation (Formerly Ares Corporation)
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Unaudited
Pro Forma Consolidated Statements of Operations
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CommerceTel
Inc Dec 31, 2009
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Ares
Corporation Sept 30, 2010
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Notes
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Pro
Forma Adjustments
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Pro
Forma Combined
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Revenues
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$ | 940,094 | $ | - | $ | - | $ | 940,094 | |||||||||
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Cost
of Revenues
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547,496 | - | - | 547,496 | |||||||||||||
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Income
(Loss) from operations
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392,598 | 0 | 0 | 392,598 | |||||||||||||
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Operting
expenses
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General
and admnistrative expenses
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62,951 | 3,877 | - | 66,828 | |||||||||||||
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Equipment
and facility related
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145,730 | - | 145,730 | ||||||||||||||
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Insurance,
legal, and accounting
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153,762 | 153,762 | |||||||||||||||
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Depreciation
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22,156 | 22,156 | |||||||||||||||
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Other
expenses
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115,568 | 8,000 | - | 123,568 | |||||||||||||
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Professional/Consulting
fees
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1,207,661 | 14,691 | - | 1,222,352 | |||||||||||||
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Total
operating expenses
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1,707,828 | 26,569 | 0 | 1,734,397 | |||||||||||||
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Operating
loss
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(1,315,230 | ) | (26,569 | ) | 0 | (1,341,799 | ) | ||||||||||
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Other
expenses
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Interest
expense
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(87,397 | ) | - | - | (87,397 | ) | |||||||||||
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Loss
on issuance of common stock below market price
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- | - | - | - | |||||||||||||
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Loss
on conversion of debt to common stock
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- | - | - | - | |||||||||||||
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Equity
in losses on investment
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- | - | - | - | |||||||||||||
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Total
other expenses
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(87,397 | ) | 0 | 0 | (87,397 | ) | |||||||||||
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Loss
before provision for income taxes
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(1,402,627 | ) | (26,569 | ) | 0 | (1,429,196 | ) | ||||||||||
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Provision
for income taxes
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- | - | - | - | |||||||||||||
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Net
loss
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$ | (1,402,627 | ) | $ | (26,569 | ) | $ | - | $ | (1,429,196 | ) | ||||||
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Net
loss per common share - basic and diluted
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$ | (0.14 | ) | $ | (0.00 | ) | $ | - | $ | (0.08 | ) | ||||||
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Weighted
average number of shares outstanding - basic and diluted
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10,000,000 | 12,000,000 |
a
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0 | 17,700,000 | ||||||||||||
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See Notes to Unauidted Pro Forma
Consolidated Financial Statements
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-6-
Pro Forma
Adjustments
Pursuant to the Exchange Agreement, the
Shareholder transferred to the Company all of the issued and outstanding shares
of common stock of CommerceTel. In consideration for the transfer of
the shares of CommerceTel, the Company issued an aggregate of 10,000,000 shares
of common stock of the Company to the Shareholders. As a result of
the Exchange Agreement, (i) CommerceTel became a wholly-owned subsidiary of the
Company and (ii) the Company succeeded to the business of CommerceTel as its
sole business.
For accounting purposes, the Share
Exchange was treated as a recapitalization of
CommerceTel. CommerceTel is the accounting acquirer and the results
of its operations will be the results of the Company’s operations going
forward.
(a) This
adjustment reflects the share exchange between our company
and CommerceTel, Inc. The resulting total 17,700,000
shares of common stock with par value of $.001 as of November 2,
2010. We issued in aggregate of 10,000,000 shares of our common stock following
the exchange transaction, pursuant to the terms and conditions set forth in the
agreement. Additionally, 4,300,000 shares in the Company were cancelled upon
completion of the reverse merger.
(b) This adjustment reflects a cancellation
of a $10,000 Note Payable due from CommerecTel, Inc to Ares Corporation as an
advance to fund transaction costs anticipated to be associated with the business
combination disclosed in Form 8K dated November 8,
2010.
(c) This adjustment reflects conversion of
debt to equity ahead of the business combination disclosed in Form 8K dated
November 8, 2010, reducing accrued liabilities and short term notes
payable.
(d) This adjustment reflects the bridge
financing disclosed in Form 8K dated November 8, 2010. On November
2, 2010, the Company issued to a number of accredited investors a
series of its 10% Senior Secured Convertible Bridge Note (the “Notes”) in
the aggregate principal amount of $1,00,000 (the “Financing”). The
Notes accrue interest at the rate of 10% per annum. The entire
principal amount evidenced by the Notes (the “Principal Amount”) plus all
accrued and unpaid interest is due on the earlier of (i) the date the Company
completes a financing transaction for the offer and sale of shares of common
stock (including securities convertible into or exercisable for its common
stock), in an aggregate amount of no less than 125% of the principal amounts
evidenced by the Notes (a “Qualifying Financing”), and (ii) November 3,
2011.
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