Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For fiscal year ended June 30, 2012
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 333-176715
SPECIALIZER INC, INC.
(Exact name of registrant as specified in its Charter)
Nevada 90-0617781
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
548 Market #15099
San Francisco, California 94104
(Address of principal executive offices) (Zip Code)
(888) 857-0714
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] 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 [ ]
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 (ss. 232.405
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter. Not available
As of August 31, 2012 there were 19,346,000 shares of common stock issued and
outstanding.
SPECIALIZER, INC.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains forward-looking statements which relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "should", "expects",
"plans", "anticipates", "believes", "estimates", "predicts", "potential" or
"continue" or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
"Risk Factors," that may cause our or our industry's actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
INTRODUCTION
Unless otherwise specified or required by context, as used in this Annual
Report, the terms "we," "our," "us" and the "Company" refer collectively to
Specializer, Inc. The term "fiscal year" refers to our fiscal year ending June
30. Unless otherwise indicated, the term "common stock" refers to shares of our
common stock.
Our financial statements are stated in United States Dollars (US$) and are
prepared in accordance with United States generally accepted accounting
principles (U.S. GAAP).
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TABLE OF CONTENTS
PART I
ITEM 1. Business 4
ITEM 1A. Risk Factors 7
ITEM 1B. Unresolved Staff Comments 14
ITEM 2. Properties 14
ITEM 3. Legal Proceedings 14
ITEM 4. Mine Safety Disclosures 14
Part II
ITEM 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 14
ITEM 6. Selected Financial Data 15
ITEM 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 15
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 18
ITEM 8. Financial Statements and Supplementary Data 19
ITEM 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure 28
ITEM 9A. Controls and Procedures 28
ITEM 9B. Other Information 29
PART III
ITEM 10. Directors, Executive Officers, and Corporate Governance 29
ITEM 11. Executive Compensation 31
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 32
ITEM 13. Certain Relationships and Related Transactions, and Director
Independence 33
ITEM 14. Principal Accounting Fees and Services 33
PART IV
ITEM 15. Exhibits, Financial Statement Schedules 34
Signatures 35
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PART I
ITEM 1. BUSINESS
BACKGROUND AND BUSINESS OVERVIEW
On October 4, 2010, the Company was incorporated under the laws of the State of
Nevada. We are engaged in the business of creating mobile business software
applications, or "apps," for smart phones and mobile devices for professionals
who work in jobs that require a high degree of mobility.
Simone Bar-Tal has served as our President, and Liby Weinstock has served as our
Secretary and Treasurer, from October 4, 2010, until the current date. Our board
of directors is comprised of two persons: Simone Bar-Tal and Liby Weinstock.
We are authorized to issue 100,000,000 shares of common stock, par value $0.001
per share, and 50,000,000 shares of preferred stock, par value $0.001 per share.
Pursuant to a Subscription Agreement dated October 4, 2010, we offered and sold
10,000,000 shares of our common stock to Liby Weinstock, our Secretary,
Treasurer and a Director, at a purchase price of $0.001 per share, for aggregate
proceeds of $10,000. Pursuant to a Subscription Agreement dated January 18,
2011, we offered and sold 2,500,000 shares of our common stock to Simone Bar-Tal
our President and a Director, at a purchase price of $0.001 per share, for
aggregate proceeds of $2,500. Pursuant to a Subscription Agreement dated January
18, 2011, we offered and sold 2,500,000 shares of our common stock to Liby
Weinstock our Secretary, Treasurer and a Director, at a purchase price of $0.001
per share, for aggregate proceeds of $2,500. Pursuant to a Subscription
Agreement dated May 16, 2011, we offered and sold 100,000 shares of our common
stock to Liby Weinstock our Secretary, Treasurer and a Director, at a purchase
price of $0.001 per share, for aggregate proceeds of $100. From June 2012
through August 2012, we offered and sold 4,246,000 shares of common stock for
gross proceeds of $42,460. These shares were issued in August 2012.
PRINCIPAL PRODUCTS AND SERVICES
Our business will be to create mobile business apps for professionals who work
in jobs that require a high degree of mobility. "Apps," short for
"applications," are small software programs built for use on a smartphone or
mobile device. Usually sold at a lower price compared to boxed software, apps
also take up less hard drive space and do not require extensive hardware
capabilities to run. They have relatively specialized functions, such as
delivering the news, gaming and entertainment, barcode scanning, and GPS
navigation. Apps for mobile devices are available for download through
distribution platforms such as app stores.
We are in the development stage of developing and commercializing mobile
business apps for freelancers and small businesses. Our goal is to create apps
targeted at the mobile professional workforce. Our first app, to be named
"SpecialApp," will help these professionals, whose jobs require a high degree of
travel and whose work entails dealing with a differentiated client base, to
record their hours, manage their invoices, and keep track of their stock. Once
developed, SpecialApp will eliminate the need to manually log time spent
commuting, working at the site, and adding up the cost of materials. Convenience
and affordability will be our main selling appoints. We plan to develop
SpecialApp for the Apple's iPhone phones, in the future if resources we allow us
we will develop an app for Android based mobile phones.
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SpecialApp will manage user expenses and will work with existing GPS tracking
systems built into users' smartphones. Once activated, SpecialApp will run in
the background and automatically track the user's time spent on the road and
time spent at the work site. At the work site, the app will gather the client's
contact and billing information through GPS. Upon sensing the user move away
from the work site, SpecialApp will automatically generate an invoice and bill
the client for services rendered. SpecialApp will store all data on the user's
mobile device, and will allow for that data to be exported as a spreadsheet or
text file. Additionally, SpecialApp will be able to manage the user's client
address book and let the user set different hourly rates for each client.
By way of example, at the beginning of the work day the user will activate
SpecialApp on his smartphone. SpecialApp will run in the background and work
with the GPS built into the user's smartphone to track his drive to client A.
Five minutes after arriving at a work site of a client ("Client A"), SpecialApp
will sense that the user has stopped. It will then gather client A's work site
information via GPS and will run it against the user's address book. If it
matches, the information will be pulled from the client address book, and if it
does not match, a pop-up screen will appear and the user will be asked to add a
new client to its client address book. After finishing his assignments at Client
A's work site, the user will input into SpecialApp the cost of materials to be
included in Client A's invoice and then will send the invoice to client A. Upon
sensing the user again in motion, if the user forgot to send the invoice,
SpecialApp will generate a pop-up reminder to invoice Client A. Because Client A
has negotiated with the user for a lower rate, the user will be able to change
his pre-set hourly rate - information that SpecialApp will save in its database
for future dealings with Client A.
Upon the completion of SpecialApp, we hope to expand our mobile app selection
for small businesses and offer an array of applications to increase the
efficiency and bolster the productivity of mobile professionals.
At this stage in our development, there can be no assurance that we will be
successful in generating revenues from our app or that freelance professionals
will be receptive to our application.
REVENUE MODEL
We plan to generate revenue from the following sources:
SALE OF SPECIALAPP
We plan to sell SpecialApp on the App Store site, for $6.99. Apple claims 30% of
the revenue from the sale of each app, leaving us with 70% or $4.89.
IN-APP ADS
One of the major benefits of advertising on an app is that advertisers can take
advantage of the users' geographic and demographic information and target their
ads appropriately. We plan to use Admob by Google as a way to insert
advertisements into our app. AdMob is one of the world's largest mobile
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advertising networks, and offers the ability for app developers to earn revenue
by publishing ads in their software. Revenue is generated according to the PPC
(Pay Per Click) model, where advertisers pay the hosting service a flat rate
each time the ad is clicked.
THE MARKET OPPORTUNITY
According to statistics made available by the International Data Corporation
(IDC) in their December 2010 article, "Worldwide and U.S. Mobile Applications,
Storefronts, and Developer 2010-2014 Forecast and Year-End 2010 Vendor Shares:
The "Appification" of Everything":
* Application developers have produced more than 300,000 mobile apps
injust over three years.
* The market for mobile applications will continue to accelerate; the
number of downloaded apps is expected to increase from 10.9 billion
worldwide in 2010 to 76.9 billion in 2014. In addition to booming
adoption of smartphones around the world, new connected device
categories including media tablets, eReaders, portable media players,
consumer electronics, TVs, automobiles, and eventually even PCs will
all contribute to the enormous growth of mobile apps
* Worldwide mobile apps revenues will experience similar growth,
surpassing $35 billion in 2014.
FREELANCE MARKET
* There are currently 42.6 million contingent workers (31% of the total
workforce) in the United States (Government Accountability Office,
2006). This includes self-employed independent contractors, temps, and
part-time employees.
* The chart below shows the growth in hours worked by contract and
freelance employees (Odesk.com)
Our target market is the mobile professional worker who expends much time and
energy on accounting for their hours. SpecialApp will provide an all-in-one
option that will consolidate time tracking, client invoicing, and material
costs.
Our management believes that if we properly execute our business plan, our app
will provide a service that, though already performed by multiple apps, is not
yet available in a single program.
COMPETITION AND COMPETITIVE STRATEGY
Competition within the mobile app industry is intense. We believe there is no
one app on the market that allows freelancers and contract workers to
concurrently track, invoice, and manage their stock. Apps exist that perform
these tasks separately, but in our management's opinion, putting all these
functions into one app will further ease the workload of the mobile
professional.
Many of our competitors have longer operating histories, greater financial,
sales, marketing and technological resources and longer established client
relationships than we do. However, we believe that SpecialApp's all-in-one
bundle and relatively low price point of $6.99 (flat rate) will differentiate us
from the competitors listed below:
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Freshbooks (www.freshbooks.com) - Freshbooks is a program that allows
freelancers to send, receive, and manage invoices online. Freshbooks' paid
service starts at $20/month and goes up to $40/month. It does not support
automatic GPS tracking for hours spent on the road, or addressbook creation
functions.
Cashboard (www.getcashboard.com) - Cashboard is a program that allows
freelancers to send pdf invoices, estimates, and receipts online. Cashboard's
paid plan starts at $10 per month - each active client costs 25 cents to add to
the program. It does not support automatic GPS tracking for hours spent on the
road, or addressbook creation functions.
Harvest (www.getharvest.com) - Harvest is a timetracking and invoicing program
for freelancers. Harvest's plans start at $12 and go up to $90 per month. It
does not support automatic GPS tracking for hours spent on the road, or Address
Book creation functions.
EMPLOYEES
We currently have no employees, not including Simone Bar-Tal and Liby Weinstock,
our sole officers and directors.
ITEM 1A. RISK FACTORS
RISK FACTORS
An investment in our common stock involves a number of very significant risks.
You should carefully consider the following known material risks and
uncertainties in addition to other information in this Annual Report in
evaluating our company and its business before purchasing shares of our
company's common stock. You could lose all or part of your investment due to any
of these risks.
RISKS RELATING TO OUR BUSINESS
WE HAVE NO OPERATING HISTORY AND HAVE MAINTAINED LOSSES SINCE INCEPTION, WHICH
WE EXPECT TO CONTINUE INTO THE FUTURE.
We were incorporated on October 4, 2010 and have very limited operations. We
have not realized any revenues to date. Our proposed SpecialApp product is under
early development and is not ready for commercial sale. We have no operating
history at all upon which an evaluation of our future success or failure can be
made. Our net loss from inception to June 30, 2012 is $15,647. Based upon our
plans, we expect to incur significant operating losses in future periods. This
will happen because there are substantial costs and expenses associated with the
development, marketing and distribution of our product. We may fail to generate
revenues in the future. If we cannot attract a significant number of users of
our SpecialApp, we will not be able to generate any significant revenues or
income. Failure to generate revenues will cause us to go out of business because
we will not have the money to pay our ongoing expenses.
In particular, additional capital may be required in the event that:
- the actual expenditures required to be made are at or above the higher
range of our estimated expenditures;
- we incur unexpected costs in completing the development of our product
or encounter any unexpected difficulties;
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- we incur delays and additional expenses related to the development of
our product or a commercial market for our product;
- we are unable to create a substantial market for our products; or
- we incur any significant unanticipated expenses.
The occurrence of any of the aforementioned events could adversely affect our
ability to meet our business plans and achieve a profitable level of operations.
Because we have not generated any revenue from our business, and we are at least
24- 30 months (from the date hereof) away from being in a position to generate
revenues, we will need to raise significant, additional funds for the future
development of our business and to respond to unanticipated requirements or
expenses.
Our ability to successfully develop our product and to eventually produce and
use it to generate operating revenues also depends on our ability to obtain the
necessary financing to implement our business plan. Given that we have no
operating history, no revenues and only losses to date, we may not be able to
achieve this goal, and we may go out of business. We may need to issue
additional equity securities in the future to raise the necessary funds. We do
not currently have any arrangements for additional financing and we can provide
no assurance to investors we will be able to find such financing if further
funding is required. Obtaining additional financing would be subject to a number
of factors, including investor acceptance of our planned software application
and our business model. The issuance of additional equity securities by us would
result in a significant dilution in the equity interests of our current
stockholders. Obtaining loans will increase our liabilities and future cash
commitments, and there can be no assurance that we will even have sufficient
funds to repay our future indebtedness or that we will not default on our future
debts if we are able to even obtain loans.
There can be no assurance that capital will continue to be available if
necessary to meet future funding needs or, if the capital is available, that it
will be on terms acceptable to us. If we are unable to obtain financing in the
amounts and on terms deemed acceptable to us, we may be forced to scale back or
cease operations, which might result in the loss of some or all of your
investment in our common stock.
OUR BUSINESS MODEL MAY NOT BE SUFFICIENT TO ENSURE OUR SUCCESS IN OUR INTENDED
MARKET.
Our survival is currently dependent upon the success of our efforts to gain
market acceptance of one application that will ultimately represent a very small
segment in our targeted industry when it is completed. Should our target market
not be as responsive to our SpecialApp as we anticipate, we may not have in
place alternate products or services that we can offer to ensure our survival.
While many new products such as the one that we are planning are regularly
introduced, only a relatively small number of successful applications account
for a significant portion of net revenue in our industry. Our product may not be
a successful application or competitors may develop applications that imitate or
compete with our successful application, and take our targeted revenue stream
away from us or reduce our ability to command profitable revenue streams for our
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SpecialApp. Successful products developed by our competitors may take a larger
share of our target market than we anticipate, which could cause our software
application revenue streams to fall below our expectations. If our competitors
develop more successful products or offer competitive products at lower price,
our revenue, margins, and profitability will decline.
PRODUCT DEVELOPMENT SCHEDULES ARE LONG AND FREQUENTLY UNPREDICTABLE, AND WE MAY
EXPERIENCE DELAYS IN INTRODUCING OUR PRODUCT, WHICH MAY ADVERSELY AFFECT OUR
REVENUES.
The development cycle for products such as that we are planning is long. We
currently believe that the total cycle for commercialization (meaning the
development of the product to the point at which it may be purchased by
consumers) of the SpecialApp will in excess of 12 months from the date that
funding has been received and accepted, which occurred in August 2012. In
addition, the creative process inherent in application development makes the
length of the development cycle difficult to predict. As a result we may
experience delays in introducing our product. If an unanticipated delay affects
the release of our application, we may not achieve anticipated revenues.
Revenues will also be adversely affected if market interest in the subject
matter of our application declines from what we believe it is at present. A
delay in introducing a new software application could also require us to spend
more development resources to complete the application, which would increase our
costs and lower our margins, or cause us to experience losses.
Rapid technology changes in our industry require us to anticipate, sometimes
years in advance, which technologies we must implement and take advantage of in
order to make our products and services competitive in the market. Therefore, we
must start our product development with a range of technical development goals
that we hope to be able to achieve. We may not be able to achieve these goals,
or our competition may be able to achieve them more quickly and effectively than
we can. In either case, our products and services may be technologically
inferior to our competitors', less appealing to consumers, or both. If we cannot
achieve our technology goals within the original development schedule of our
products and services, then we may delay their release until these technology
goals can be achieved, which may delay or reduce revenue and increase our
development expenses. Alternatively, we may increase the resources employed in
research and development in an attempt to accelerate our development of new
technologies, either to preserve our product or service launch schedule or to
keep up with our competition, which would increase our development expenses. Any
such failure to adapt to, and appropriately allocate resources among, emerging
technologies would harm our competitive position, reduce our market share and
significantly increase the time we take to bring our product to market.
We are planning to use third parties to develop our application. We will have
less control over third parties because we cannot control their personnel,
schedule or resources. It will be more difficult to detect design faults and
software errors. Any such fault or error could cause delays in delivering our
product or require design modifications delays or defects would likely have a
more detrimental impact on our business than if we were a more established
company. Any of these factors could cause an application not to meet our quality
standards or expectations, or not to be completed on time or at all. If this
happens, we could lose anticipated revenues, or our entire investment in our
software application.
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We have not completed development of our application and we have no revenues
from the sale or use of our application. The success of our proposed business
will depend on the completion and the acceptance of our application by the
general public. Achieving such acceptance will require significant marketing
investment. Our application, once developed and tested, may not be accepted by
our users at sufficient levels to support our operations and build our business.
If our application is not accepted at sufficient levels, our business will fail.
We have not applied for any trademark, patent or other intellectual property
registration with any governmental agency for our name or for our software
product. At present we are planning to enter into non-disclosure agreements with
employees to protect our technology. Despite our precautions taken to protect
our proposed software programs, unauthorized parties may attempt in the future
to reverse engineer, copy or obtain and use our software application. If they
are successful we could lose our technology or they could develop similar
programs, which could create more competition for us and even cause our proposed
business operations to fail.
Currently, we have only two employees, Simone Bar-Tal and Liby Weinstock, who
are also our officers and directors. We depend entirely on Mr. Bar-Tal and Ms.
Weinstock, for all of our operations. The loss of either Mr. Bar-Tal or Ms.
Weinstock will have a substantial negative effect on our company and may cause
our business to fail. Mr. Bar-Tal and Ms. Weinstock have not been compensated
for their services since our incorporation, and it is highly unlikely that they
will receive any compensation unless and until we generate substantial revenues.
There is intense competition for skilled personnel and there can be no assurance
that we will be able to attract and retain qualified personnel on acceptable
terms. The loss of Mr. Bar-Tal or Ms. Weinstock services could prevent us from
completing the development of our product and developing revenues. In the event
of the loss of services of such personnel, no assurance can be given that we
will be able to obtain the services of adequate replacement personnel. We do not
have any employment agreements or maintain key person life insurance policies on
our officers and directors. We do not anticipate entering into employment
agreements with him or acquiring key man insurance in the foreseeable future.
We have not completed the development of our product and have yet to generate
revenues. Our two officers and directors have no prior online application
marketing or selling industry experience. While we have plans for marketing and
sales, there can be no assurance that such efforts will be successful. There can
be no assurance that our proposed application will gain wide acceptance in its
target market or that we will be able to effectively market our product.
WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AGAINST OUR COMPETITORS.
We believe that the main competitive factors in the software application
industry include: product features and ease of use; brand name recognition;
quality of products; ease of use; price; marketing support; and quality of
customer service. The barriers to entry in the software application industry, in
which we are planning to operate, are also much lower than more traditional
software products because there are no publishing agreements with or royalties
to be paid to the hardware manufacturers.
Many companies worldwide are dedicated to developing and marketing software
applications for mobile devices. We expect more companies to enter this
industry. Our competitors vary in size from small companies with limited
resources to very large corporations with significantly greater financial,
marketing, and product development resources than we have. Our software
application, when completed, will be in competition with these companies, such
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as freshbooks(www.freshbooks.com), Cashboard (www.getcashboard.com) and Harvest
(www.getharvest.com). We are to be considered as one of the smallest with no
commercial products at present.
Because software applications are rapidly evolving, our current or future
competitors may compete more successfully as the industry matures. In
particular, any of our competitors may offer products and services that have
significant performance, price, creativity and/or other advantages over our
software application and technology. These products and services may
significantly affect the demand for our services. If we are unable to compete
successfully, we could lose sales and market share. We also could experience
difficulty hiring and retaining qualified software developers and other
employees. Any of these consequences would significantly harm our business,
results of operations and financial condition. There can be no assurance that we
will be able to effectively compete with our competitors or that their present
and future offerings would render our product obsolete or noncompetitive. This
intense competition may have a material adverse effect on our results of
operations and financial condition and prevent us from achieving profitable
revenue levels from our product.
BECAUSE OFFICERS AND DIRECTORS HAVE OTHER BUSINESS INTERESTS, THEY MAY NOT BE
ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Simone Bar-Tal, our President and a Director, currently devotes approximately 15
hours per week providing management services to us. While he presently possesses
adequate time to attend to our interest, it is possible that the demands on him
from other obligations could increase, with the result that he would no longer
be able to devote sufficient time to the management of our business. The loss of
Mr. Bar-Tal to our company could negatively impact our business development.
Liby Weinstock, our Secretary, Treasurer and a Director, currently devotes 15
hours per week providing management services to us. While she presently
possesses adequate time to attend to our interest, it is possible that the
demands on her from other obligations could increase, with the result that she
would no longer be able to devote sufficient time to the management of our
business. The loss of Ms. Weinstock to our company could negatively impact our
business development.
OUR INDEPENDENT AUDITORS' REPORT STATES THAT THERE IS A SUBSTANTIAL DOUBT THAT
WE WILL BE ABLE TO CONTINUE AS A GOING CONCERN.
Our independent auditors, Weinberg & Baer LLC, state in their audit report,
dated September 1, 2012 and included herein, that we are a development stage
company, have no established source of revenue and are dependent on our ability
to raise capital from shareholders or other sources to sustain operations. As a
result, there is a substantial doubt that we will be able to continue as a going
concern.
Liby Weinstock, our Secretary, Treasurer and a Director, currently owns 65% of
Specializer's issued and outstanding shares of common stock, and Simone Bar-Tal,
currently owns 13% of Specializer's issued and outstanding shares of common
stock.. Such control may be risky to the investor because our company's
operations are dependent on a very few people who could lack ability, or
interest in pursuing our operations. In such event, our business may fail and
you may lose your entire investment. Moreover, investors are not able to effect
a change in the company's board of directors, business or management.
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WE ARE NEW TO THE PERIODIC REPORTING REQUIREMENTS OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED, WHICH REQUIRES US TO INCUR AUDIT FEES AND LEGAL FEES IN
CONNECTION WITH THE PREPARATION OF SUCH REPORTS. THESE ADDITIONAL COSTS WILL
NEGATIVELY AFFECT OUR ABILITY TO EARN A PROFIT.
We are required to file periodic reports with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended, and the
rules and regulations there under. In order to comply with such requirements,
our independent registered auditors have to review our financial statements on a
quarterly basis and audit our financial statements on an annual basis. Moreover,
our legal counsel has to review and assist in the preparation of such reports.
The costs charged by these professionals for such services may vary
significantly. Factors such as the number and type of transactions that we
engage in and the complexity of our reports cannot accurately be determined at
this time and may have a major negative affect on the cost and amount of time to
be spent by our auditors and attorneys. However, the incurrence of such costs
will obviously be an expense to our operations and thus have a negative effect
on our ability to meet our overhead requirements and earn a profit.
THE LACK OF PUBLIC COMPANY EXPERIENCE OF OUR MANAGEMENT TEAM COULD ADVERSELY
IMPACT OUR ABILITY TO COMPLY WITH THE REPORTING REQUIREMENTS OF U.S. SECURITIES
LAWS.
Both Simone Bar-Tal and Liby Weinstock lacks public company experience, which
could impair our ability to comply with legal and regulatory requirements such
as those imposed by Sarbanes-Oxley Act of 2002. Neither of them has ever been
responsible for managing a publicly traded company. Such responsibilities
include complying with federal securities laws and making required disclosures
on a timely basis. Any such deficiencies, weaknesses or lack of compliance could
have a materially adverse effect on our ability to comply with the reporting
requirements of the Securities Exchange Act of 1934, as amended, which is
necessary to maintain our public company status. If we were to fail to fulfill
those obligations, our ability to continue as a U.S. public company would be in
jeopardy in which event you could lose your entire investment in our company.
There is presently no public trading market for our common stock, we have not
applied for a trading symbol or quotation, and it is unlikely that an active
public trading market can be established or sustained in the foreseeable future.
We intend to seek out a market maker to apply to have our common stock quoted on
the OTC Bulletin Board. However, there can be no assurance that Specializer's
shares will be quoted on the OTC Bulletin Board. Until there is an established
trading market, holders of our common stock may find it difficult to sell their
stock or to obtain accurate quotations for the price of the common stock. If a
market for our common stock does develop, our stock price may be volatile.
BROKER-DEALERS MAY BE DISCOURAGED FROM EFFECTING TRANSACTIONS IN OUR SHARES OF
COMMON STOCK BECAUSE THEY ARE CONSIDERED PENNY STOCKS AND ARE SUBJECT TO THE
PENNY STOCK RULES.
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934
impose sales practice and disclosure requirements on NASD broker-dealers who
make a market in "penny stocks." A penny stock generally includes any non-Nasdaq
equity security that has a market price of less than $5.00 per share. Our shares
currently are not traded on Nasdaq nor on any other exchange nor are they quoted
on the OTC/Bulletin Board or "OTC/BB." We hope to find a broker-dealer to act as
12
a market maker for our stock and file on our behalf with the NASD an application
on Form 15c(2)(11) for approval for our shares to be quoted on the OTC/BB. If we
are successful in finding such a market maker and successful in applying for
quotation on the OTC/BB, it is very likely that our stock will be considered a
"penny stock". In that case, purchases and sales of our shares will be generally
facilitated by NASD broker-dealers who act as market makers for our shares. The
additional sales practice and disclosure requirements imposed upon
broker-dealers may discourage broker-dealers from effecting transactions in our
shares, which could severely limit the market liquidity of the shares and impede
the sale of our shares in the secondary market.
Under the penny stock regulations, a broker-dealer selling penny stock to anyone
other than an established customer or "accredited investor" (generally, an
individual with net worth in excess of $1,000,000 or an annual income exceeding
$200,000, or $300,000 together with his or her spouse) must make a special
suitability determination for the purchaser and must receive the purchaser's
written consent to the transaction prior to sale, unless the broker-dealer or
the transaction is otherwise exempt.
In addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule prepared
by the Commission relating to the penny stock market, unless the broker-dealer
or the transaction is otherwise exempt. A broker-dealer is also required to
disclose commissions payable to the broker-dealer and the registered
representative and current quotations for the securities. Finally, a
broker-dealer is required to send monthly statements disclosing recent price
information with respect to the penny stock held in a customer's account and
information with respect to the limited market in penny stocks.
INVESTORS THAT NEED TO RELY ON DIVIDEND INCOME OR LIQUIDITY SHOULD NOT PURCHASE
SHARES OF OUR COMMON STOCK.
We have not declared or paid any dividends on our common stock since our
inception, and we do not anticipate paying any such dividends for the
foreseeable future. Investors that need to rely on dividend income should not
invest in our common stock, as any income would only come from any rise in the
market price of our common stock, which is uncertain and unpredictable.
Investors that require liquidity should also not invest in our common stock.
There is no established trading market and should one develop, it will likely be
volatile and subject to minimal trading volumes.
We are authorized to issue up to 100,000,000 shares of common stock and
50,000,000 shares of preferred stock. As of August 31, 2012, there are
19,346,000 issued and outstanding common shares. Our board of directors has the
authority to cause us to issue additional shares of common stock without consent
of any of our stockholders. Consequently, the stockholders may experience more
dilution in their ownership of our Company in the future, which could have an
adverse effect on the trading market for our common shares.
ALL OF OUR ASSETS AND OUR OFFICERS AND DIRECTORS ARE LOCATED OUTSIDE OF THE USA.
THIS MAY CAUSE ANY ATTEMPTS TO ENFORCE LIABILITIES UNDER THE U.S. SECURITIES AND
BANKRUPTCY LAWS TO BE VERY DIFFICULT.
13
Currently, all of our assets are either located or controlled in Israel. Simone
Bar-Tal and Liby Weinstock also resides in Israel. This is likely to remain so
for at least the next 12 months. Therefore, any investor that attempts to
enforce against the company or against Mr. Bar-Tal and Ms. Weinstock liabilities
that accrue under U.S. securities laws or bankruptcy laws will face the
difficulty of complying with local laws in these countries, with regards to
enforcement of foreign judgments. This could make it impracticable or uneconomic
to enforce such liabilities.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our executive offices are located at 548 Market St #15099, San Francisco,
California 94104. The office is a location at which the Company receives mail,
has office services and can hold meetings. The Company pays approximately $44
per month for such office services and believes that such office services are
adequate for the Company's office space needs for the foreseeable future. Our
officers, Simone Bar-Tal and Liby Weinstock, work on Company business from their
respective residences in Israel.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in
which any director, officer or affiliate of the Company, any owner of record or
beneficially of more than 5% of any class of voting securities of the Company,
or security holder is a party adverse to the Company or has a material interest
adverse to the Company.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
We intend to have our common stock be quoted on the OTC Bulletin Board. If our
securities are not quoted on the OTC Bulletin Board, a security holder may find
it more difficult to dispose of, or to obtain accurate quotations as to the
market value of our securities. The OTC Bulletin Board differs from national and
regional stock exchanges in that: (i) it is not situated in a single location
but operates through communication of bids, offers and confirmations between
broker-dealers, and (ii) securities admitted to quotation are offered by one or
more Broker-dealers rather than the "specialist" common to stock exchanges.
To qualify for quotation on the OTC Bulletin Board, an equity security must have
one registered broker-dealer, known as the market maker, willing to list bid or
sale quotations and to sponsor the company listing. We do not yet have an
agreement with a registered broker-dealer, as the market maker, willing to list
bid or sale quotations and to sponsor the Company listing. If the Company meets
the qualifications for trading securities on the OTC Bulletin Board our
14
securities will trade on the OTC Bulletin Board until a future time, if at all,
that we apply and qualify for admission to quotation on the NASDAQ Capital
Market. We may not now and it may never qualify for quotation on the OTC
Bulletin Board or be accepted for listing of our securities on the NASDAQ
Capital Market.
TRANSFER AGENT
We have not retained a transfer agent to serve as transfer agent for shares of
our common stock. Until we engage such a transfer agent, we will be responsible
for all record-keeping and administrative functions in connection with the
shares of our common stock.
HOLDERS
As of August 31, 2012, there were 34 holders of the Company's 19,346,000 shares
of common stock issued and outstanding.
DIVIDEND POLICY
We have not declared or paid dividends on our common stock since our formation,
and we do not anticipate paying dividends in the foreseeable future. Declaration
or payment of dividends, if any, in the future, will be at the discretion of our
Board of Directors and will depend on our then current financial condition,
results of operations, capital requirements and other factors deemed relevant by
the Board of Directors. There are no contractual restrictions on our ability to
declare or pay dividends. See the Risk Factor entitled "investors that need to
rely on dividend income or liquidity should not purchase shares of our common
stock."
SECURITIES AUTHORIZED UNDER EQUITY COMPENSATION PLANS
We have no equity compensation or stock option plans. We may in the future adopt
a stock option plan as our developmental activities progress.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements contained in this Annual Report, including statements
regarding the anticipated development and expansion of our business, our intent,
belief or current expectations, primarily with respect to the future operating
performance of the Company and the products we expect to offer and other
statements contained herein regarding matters that are not historical facts, are
"forward-looking" statements. Future filings with the Securities and Exchange
Commission, future press releases and future oral or written statements made by
us or with our approval, which are not statements of historical fact, may
contain forward-looking statements, because such statements include risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements.
15
All forward-looking statements speak only as of the date on which they are made.
We undertake no obligation to update such statements to reflect events that
occur or circumstances that exist after the date on which they are made.
FORWARD-LOOKING STATEMENTS
Certain statements made in this report may constitute "forward-looking
statements on our current expectations and projections about future events".
These forward-looking statements involve known or unknown risks, uncertainties
and other factors that may cause the actual results, performance, or
achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking
statements. In some cases you can identify forward-looking statements by
terminology such as "may," "should," "potential," "continue," "expects,"
"anticipates," "intends," "plans," "believes," "estimates," and similar
expressions. These statements are based on our current beliefs, expectations,
and assumptions and are subject to a number of risks and uncertainties. Although
we believe that the expectations reflected-in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. These forward-looking statements are made as of the date of
this report, and we assume no obligation to update these forward-looking
statements whether as a result of new information, future events, or otherwise,
other than as required by law. In light of these assumptions, risks, and
uncertainties, the forward-looking events discussed in this report might not
occur and actual results and events may vary significantly from those discussed
in the forward-looking statements.
You should read the following plan of operation together with our audited
financial statements and related notes appearing elsewhere in this Annual
Report. This plan of operation contains forward-looking statements that involve
risks, uncertainties, and assumptions. The actual results may differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including, but not limited to, those presented under "Risk
Factors" or elsewhere in this Annual Report.
PLAN OF OPERATIONS
We are in the development stage of developing and commercializing mobile
business apps for freelancers and small size businesses. Our goal is to create
apps targeted at the mobile professional workforce. Our first app, to be named
"SpecialApp," will help these professionals, whose jobs require a high degree of
travel and whose work entails dealing with a differentiated client base, to
record their hours, manage their invoices, and keep track of their stock. Once
developed, SpecialApp will eliminate the need to manually log time spent
commuting, working at the site, and adding up the cost of materials. Convenience
and affordability will be our main selling appoints.
Our goal is to help freelancers and small sized businesses whose jobs require a
high degree of travel to record their hours, manage their invoices, and keep
track of their stock. We plan to generate revenues from the sale of our
SpecialApp and from in-app advertisements.
Our goals over the next 12 months are to:
* Complete the development SpecialApp.
* Commercialize SpecialApp for the iPhone;
* Initiate our marketing campaign and our sales strategy.
16
Our current business objectives are:
* To become a recognized brand of mobile business apps.
* To execute our marketing plan and to create interest in SpecialApp;
ACTIVITIES TO DATE
We were incorporated in Nevada on October 4, 2010. We are a development stage
company that only recently commenced with its business operations and we
currently have no revenue and no significant assets. Our executive offices are
located at 548 Market St #15099, San Francisco, California 94104. The office is
a location at which the Company receives mail, has office services and can hold
meetings. Our officers, Simone Bar-Tal and Liby Weinstock, work on Company
business from their respective residences in Israel.
We have accomplished the following:
1. Prepared the software requirements specification - which is a detailed
description of the functions to be preformed by SpecialApp;
2. Defined a set of use cases that described all the interactions the
user will have with SpecialApp; and
3. Designed a brand logo for our business.
MILESTONES
Below is a brief description of our planned activities during the next 12
months.
* Engage and begin the development of SpecialApp by a software developer
according to our software requirements specification;
* Correct any detected discovered defects;
* Submission of SpecialApp to the App Store;
* Promote SpecialApp to freelancers and small sized businesses.
* Support multi-user.
RESULTS OF OPERATIONS
YEAR ENDED JUNE 30, 2012 COMPARED TO THE PERIOD FROM OCTOBER 4, 2010 (INCEPTION)
THROUGH JUNE 30, 2011
Lack of Revenues: We have limited operational history. From our inception on
October 4, 2010 to June 30, 2012 we did not generate any revenues. We anticipate
that we will incur substantial losses for the foreseeable future and our ability
to generate any revenues in the next 12 months continues to be uncertain.
Professional Fees: During the year ended June 30, 2012, the Company incurred
$14,343 of professional fees consisting entirely of auditing, accounting and
filing fees associated with the Company's filing of a registration statement on
Form S-1 and period reports with the SEC. We incurred no such costs during the
period from October 4, 2010 (inception) through June 30, 2011.
17
Other General and Administrative Expenses: During the year ended June 30, 2012,
the Company incurred other general and administrative expenses of $1,292
consisting of $623 of business licensing fees, $464 of mail forwarding costs,
$179 of bank charges, and $26 of telephone expenses. Expenses for the period
from October 4, 2010 through June 30, 2011 consisted solely of bank charges of
$12.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2012, we had $5,797 in cash and accounts payable of $11,340. In
July and August 2012, we received $36,960 from the sale of 3,696,000 shares of
common stock, in addition to the $5,440 received for the sale of 550,000 shares
of common stock in June 2012.
We believe our current cash and working capital balance is sufficient to cover
our expenses for the next 12 months, which is a limited operations scenario to
maintain our corporate existence.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
18
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
TABLE OF CONTENTS
Financial Statements
Independent Auditor's Report 20
Balance Sheets 21
Statement of Operations 22
Statement of Stockholders' Equity 23
Statement of Cashflows 24
Notes to Financial Statements 25
19
REPORT OF REGISTERED INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
of Specializer Inc.:
We have audited the accompanying balance sheets of Specializer Inc. (a Nevada
corporation in the development stage) as of June 30, 2012 and 2011, and the
related statements of operations, stockholders' equity, and cash flows for the
years ended June 30, 2012 and 2011, and from inception (October 4, 2010) through
June 30, 2012. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Specializer Inc.. as of June
30, 2012 and 2011, and the results of its operations and its cash flows for the
years ended June 30, 2012 and 2011, and from inception (October 4, 2010) through
June 30, 2012, in conformity with accounting principles generally accepted in
the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company is in the development stage, and has not
established any source of revenue to cover its operating costs. As such, it has
incurred an operating loss since inception. Further, as of as June 30, 2012, the
cash resources of the Company were insufficient to meet its planned business
objectives. These and other factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plan regarding these
matters is also described in Note 6 to the financial statements. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Respectfully submitted,
/s/ Weinberg & Baer LLC
-------------------------------------
Baltimore, Maryland
September 1, 2012
20
SPECIALIZER, INC
(A Development Stage Company)
Balance Sheets
June 30, 2012 June 30, 2011
------------- -------------
ASSETS
CURRENT ASSETS:
Cash $ 5,797 $ 15,088
Deferred offering costs 9,084 --
-------- --------
TOTAL CURRENT ASSETS 14,881 15,088
-------- --------
TOTAL ASSETS $ 14,881 $ 15,088
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 11,340 $ --
-------- --------
TOTAL CURRENT LIABILITIES 11,340 --
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, 50,000,000 shares authorized,
par value $0.001, no share issued or outstanding -- --
Common Stock, 100,000,000 shares authorized,
par value $0.001, 15,100,000 shares issued and outstanding 15,100 15,100
Common stock subscribed not issued 4,088 --
Deficit accumulated during the development stage (15,647) (12)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 3,541 15,088
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 14,881 $ 15,088
======== ========
The Accompanying Notes are an Integral Part of These Financial Statements.
21
SPECIALIZER, INC.
(A Development Stage Company)
Statements of Operations
Period from Period from
October 4, 2010 October 4, 2010
(Inception) (Inception)
Year Ended Through Through
June 30, 2012 June 30, 2011 June 30, 2012
------------- ------------- -------------
REVENUE $ -- $ -- $ --
------------ ------------ ------------
EXPENSES 15,635 12 15,647
------------ ------------ ------------
Income before income taxes (15,635) (12) (15,647)
Provision for income taxes -- -- --
------------ ------------ ------------
NET LOSS $ (15,635) $ (12) $ (15,647)
============ ============ ============
Basic and Diluted:
Loss per common share a a a
------------ ------------ ------------
Weighted Average Number of common shares 15,101,803 4,802,602 10,738,835
============ ============ ============
----------
a = Less than ($0.01) per share
The Accompanying Notes are an Integral Part of These Financial Statements.
22
SPECIALIZER, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
Common Deficit
Common Stock Stock Accumulated
----------------------- Subscribed During the Total
Number of Not Development Stockholders'
Shares Amount Issued Stage Equity
------ ------ ------ ----- ------
OCTOBER 4, 2010 (INCEPTION) -- $ -- $ -- $ -- $ --
Common stock issued to
officers directors for
cash ($0.001 per share) 15,100,000 15,100 -- -- 15,100
Net loss -- -- -- (12) (12)
---------- ---------- ---------- ---------- ----------
BALANCE JUNE 30, 2011 15,100,000 15,100 -- (12) 15,088
Common stock subscribed
($0.01 per share) -- -- 5,440 -- 5,440
Offering costs -- -- (1,352) -- (1,352)
Net loss -- -- -- (15,635) (15,635)
---------- ---------- ---------- ---------- ----------
BALANCE JUNE 30, 2012 15,100,000 $ 15,100 $ 4,088 $ (15,647) $ 3,541
========== ========== ========== ========== ==========
The Accompanying Notes are an Integral Part of These Financial Statements.
23
SPECIALIZER, INC.
(A Development Stage Company)
Statements of Cashflows
Period from Period from
October 4, 2010 October 4, 2010
(Inception) (Inception)
Year Ended Through Through
June 30, 2012 June 30, 2011 June 30, 2012
------------- ------------- -------------
OPERATING ACTIVITIES:
Net loss $(15,635) $ (12) $(15,647)
Adjustments To Reconcile Net Loss To Net
Cash Used By Operating Activities
Increase in accounts payable 6,180 -- 6,180
-------- -------- --------
NET CASH USED BY OPERATING ACTIVITIES (9,455) (12) (9,467)
-------- -------- --------
INVESTING ACTIVITIES:
NET CASH USED BY INVESTING ACTIVITIES -- -- --
-------- -------- --------
FINANCING ACTIVITIES:
Proceeds from sale of common stock 5,440 15,100 20,540
Payment of offering costs (5,276) -- (5,276)
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 164 15,100 15,264
-------- -------- --------
Net Increase (Decrease) in Cash (9,291) 15,088 5,797
Cash, Beginning of Period 15,088 -- --
-------- -------- --------
CASH, END OF PERIOD $ 5,797 $ 15,088 $ 5,797
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION
CASH PAID DURING THE PERIOD FOR:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
SCHEDULE OF NONCASH FINANCING ACTIVITIES
Offering costs include in acoutns payable $ 5,160 $ -- $ 5,160
======== ======== ========
The Accompanying Notes are an Integral Part of These Financial Statements.
24
SPECIALIZER, INC.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2012
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Specializer, Inc. ("the Company") was incorporated under the laws of the state
of Nevada on October 4, 2010. The Company has limited operations, is considered
a development stage company and has not yet realized any revenues from its
planned operations.
The Company will create mobile business apps for professionals who work in jobs
that require a high degree of mobility. "Apps," short for "applications," are
small software programs built for use on a smartphone or mobile device. Usually
sold at a lower price compared to boxed software, apps also take up less hard
drive space and do not require extensive hardware capabilities to run. They have
relatively specialized functions, such as delivering the news, gaming and
entertainment, barcode scanning, and GPS navigation. Apps for mobile devices are
available for download through distribution platforms such as app stores.
The Company's goal is to create an app targeted at the mobile professional
workforce. Our app, to be named "SpecialApp," will help these professionals,
whose jobs require a high degree of travel and whose work entails dealing with a
differentiated client base, to record their hours, manage their invoices, and
keep track of their stock. Once developed, SpecialApp will eliminate the need to
manually log time spent commuting, working on-site, and adding up the cost of
materials. Convenience and affordability will be our main selling points.
As a development stage enterprise, the Company discloses the retained earnings
or deficit accumulated during the development stage and the cumulative
statements of operations and cash flows from inception to the current balance
sheet date.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
BASIS OF ACCOUNTING
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a June 30 fiscal year end.
EARNINGS PER SHARE
The basic earnings (loss) per share is calculated by dividing our net income
available to common shareholders by the number of common shares during the year.
The diluted earnings (loss) per share is calculated by dividing our net income
(loss) available to common shareholders by the diluted weighted average number
of shares outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted as of the
first of the year for any potentially dilutive debt or equity. The Company has
not issued any potentially dilutive debt or equity securities.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturity of three
months or less when purchased to be cash equivalents.
25
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of the Company's financial instruments, consisting of
accounts payable approximate their fair value due to the short-term maturity of
such instruments. Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or credit risks arising
from these financial statements.
INCOME TAXES
A deferred tax asset or liability is recorded for all temporary differences
between financial and tax reporting and net operating loss carry forwards.
Deferred tax expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
The Company's practice is to recognize interest accrued related to unrecognized
tax benefits in interest expense and penalties in operating expenses. As of June
30, 2012, the Company had no accrued interest or penalties.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The Company has not identified any recently issued accounting pronouncements
that are expected to have a material impact on the Company's financial
statements.
NOTE 3. INCOME TAXES
The Company uses the liability method , where deferred tax assets and
liabilities are determined based on the expected future tax consequences of
temporary differences between the carrying amounts of assets and liabilities for
financial and income tax reporting purposes. As of June 30, 2012, the Company
has not generated any taxable income and, therefore, has no tax liability. The
Company's deferred tax assets are fully reserved as of June 30, 2012.
NOTE 4. STOCKHOLDER'S EQUITY
AUTHORIZED
The Company is authorized to issue 100,000,000 shares of $0.001 par value common
stock and 50,000,000 shares of preferred stock, par value $0.001. All common
stock shares have equal voting rights, are non-assessable and have one vote per
share. Voting rights are not cumulative and, therefore, the holders of more than
50% of the common stock could, if they choose to do so, elect all of the
directors of the Company.
ISSUED AND OUTSTANDING
On October 4, 2010, the Company issued 10,000,000 common shares to an officer
and director for cash consideration of $0.001 per share, for net proceeds of
$10,000.
On January 18, 2011, the Company issued 5,000,000 common shares to its officers
and directors for cash consideration of $0.001 per share, for proceeds of
$5,000.
On May 16, 2011, the Company issued 100,000 common shares to an officer and
director for cash consideration of $0.001per share, for net proceeds of $100.
In June 2012, the company received subscriptions for 560,000 shares of common
stock for gross proceeds of $5,600. These shares were issued in August 2012.
26
In July and August 2012, the company received subscriptions for 3,696,000 shares
of common stock for gross proceeds of 36,960. These shares were issued in August
2012.
NOTE 5. RELATED PARTY TRANSACTIONS
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
On October 4, 2010, the Company issued 10,000,000 common shares to an officer
and director for cash consideration of $0.001 per share, for net proceeds of
$10,000.
On January 18, 2011, the Company issued 5,000,000 common shares to its officers
and directors for cash consideration of $0.001 per share, for net proceeds of
$5,000.
On May 16, 2011, the Company issued 100,000 common shares to an officer and
director for cash consideration of $0.001per share, for net proceeds of $100.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. Through June 30, 2012, the Company has
not generated any revenue or incurred any costs to implement it business plan.
This condition raises substantial doubt about the Company's ability to continue
as a going concern. The Company's continuation as a going concern is dependent
on its ability to obtain financing to implement its business plans. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Management has raised additional funds through the sale of common stock and
believe these funds will provide sufficient capital for the next twelve months.
NOTE 7. ADVERTISING COSTS
The Company's policy regarding advertising is to expense advertising when
incurred. The Company had not incurred any advertising expense as of June 30,
2012
NOTE 8. SUBSEQUENT EVENTS
In July and August 2012, the company received subscriptions for 3,696,000 shares
of common stock for gross proceeds of 36,960. These shares were issued in August
2012.
27
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Weinberg & Baer LLC, is our registered independent public accounting firm. There
have not been any changes in or disagreements with accountants on accounting and
financial disclosure or any other matter.
ITEM 9A(T). CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As required by Rule 13a-15/15d-15 under the Securities and Exchange Act of
1934,as amended (the "Exchange Act"), as of June 30, 2012, we have carried out
an evaluation of the effectiveness of the design and operation of our Company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of our Company's management, our
President (Principal Executive Officer) and Treasurer (Principal Accounting
Officer). Based upon the results of that evaluation, our management has
concluded that, as of June 30, 2012, our Company's disclosure controls and
procedures were effective and provide reasonable assurance that material
information related to our Company required to be disclosed in the reports that
we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms, and
that such information is accumulated and communicated to management to allow
timely decisions on required disclosure.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act. Our internal control system is designed to provide
reasonable assurance to our management and board of directors regarding the
reliability of financial reporting and the preparation of financial statements
for external reporting purposes in accordance with generally accepted accounting
principles. 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 the transactions and dispositions of the
assets of the Company;
* Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles in the United States of
America, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and
directors of the Company; and
* Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company's
assets that could have a material effect on the financial statements.
Management assessed the effectiveness of our internal control over financial
reporting as of June 30, 2012. In making this assessment, we used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in INTERNAL CONTROL -- INTEGRATED FRAMEWORK.
28
Our management concluded that, as of June 30, 2012, our internal control over
financial reporting was effective based on the criteria in INTERNAL CONTROL --
INTEGRATED FRAMEWORK issued by the COSO.
This annual report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's independent registered public accounting firm pursuant to rules of the
SEC 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 described above during the quarter
ended June 30, 2012 that has materially affected or is reasonably likely to
materially affect our internal controls over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Directors and Officers currently serving our Company is as follows:
Name (1) Age Positions and Officers
-------- --- ----------------------
Simone Bar-Tal 32 President and Director
Liby Weinstock 28 Secretary, Treasurer and Director
----------
(1) Unless otherwise noted, the address of each person or entity listed is c/o
Specializer Inc., 548 Market St #15099, San Francisco, California 94104.
The directors named above will serve until the next annual meeting of the
stockholders or until his respective resignation or removal from office.
Thereafter, directors are anticipated to be elected for one-year terms at the
annual stockholders' meeting. Officers will hold their positions at the
discretion of the Board of Directors, absent any employment agreement, of which
none currently exists or is contemplated.
SIMONE BAR-TAL, AGE 32
Simone Bar-Tal is a co-founder of Specializer Inc. with Liby Weinstock and has
served as our President and a Director since October 4, 2010. Form November 2009
until the present time, Mr. Bar-Tal has been employed as a promotional team
leader at Ai.am.as.tk. Ltd., a real estate investment company. From November
2007 until November 2008, Mr. Bar-Tal worked as a sound designer, audio editor
29
and composer at SuicideChain studios, located in Tel Aviv, Israel. From January
2005 until April 2007, Mr. Bar-Tal worked as a sound designer and audio editor
at Sound-gram Post Production of London, United Kingdom. Mr. Bar-Tal's
entrepreneurial desires to our conclusion that he should be serving as a member
of our Board of Directors in light of our business and structure.
LIBY WEINSTOCK, AGE 28
Liby Weinstock is a co-founder of Specializer Inc. with Simone Bar-Tal and has
served as our Secretary, Treasurer and a Director since October 4, 2010. From
January 2010 until the present time, Ms. Weinstock has worked as a computer
instructor for the Understand Your Computer project, established by the Ministry
of Finance of Israel. Under this program, she teaches children and adults to
operate a computer and use software applications. From March 2009 until January
2010, Ms. Weinstock worked as a self-employed graphic artist, where she used
graphic design software to logo design, flyers, business cards and private
business signs. From March 2006 until March 2007, Ms. Weinstock was employed as
a chief mentor at DSNR, a call center located in Israel, in which position she
managed a staff of five employees in telephone sales. From October 2009 until
the present time, Ms. Weinstock has been a student studying Humanities and
Social Sciences at The Open University, Israel. From July 2008 until October
2009, she studied Graphics at Mentor, located in Israel, and obtained her
Certificate of Graphic Operations in 2009. Ms. Weinstock's experience and
education related to computer software led to our conclusion that she should be
serving as a member of our Board of Directors in light of our business and
structure.
DIRECTOR INDEPENDENCE
Our board of directors is currently composed of two members, neither of whom
qualifies as an independent director in accordance with the published listing
requirements of the NASDAQ Global Market (the Company has no plans to list on
the NASDAQ Global Market). The NASDAQ independence definition includes a series
of objective tests, such as that the director is not, and has not been for at
least three years, one of our employees and that neither the director, nor any
of his family members has engaged in various types of business dealings with us.
In addition, our board of directors has not made a subjective determination as
to our directors that no relationships exist which, in the opinion of our board
of directors, would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director, though such subjective
determination is required by the NASDAQ rules. Had our board of directors made
these determinations, our board of directors would have reviewed and discussed
information provided by our director and us with regard to our director's
business and personal activities and relationships as they may relate to us and
our management.
SIGNIFICANT EMPLOYEES AND CONSULTANTS
Our two officers and directors, Simone Bar-Tal and Liby Weinstock, are our only
employees.
POTENTIAL CONFLICTS OF INTEREST
Since we do not have an audit or compensation committee comprised of independent
directors, the functions that would have been performed by such committees are
performed by our Board of Directors. The Board of Directors has not established
30
an audit committee and does not have an audit committee financial expert, nor
has the Board established a nominating committee. The Board is of the opinion
that such committees are not necessary since the Company is an early development
stage company and has only two directors, and to date, such two directors have
been performing the functions of such committees. Thus, there is a potential
conflict of interest in that our directors have the authority to determine
issues concerning management compensation, nominations, and audit issues that
may affect management decisions.
Other than as described above, we are not aware of any other conflicts of
interest of our executive officers and directors.
BOARD'S ROLE IN RISK OVERSIGHT
The Board assesses on an ongoing basis the risks faced by the Company. These
risks include financial, technological, competitive, and operational risks. The
Board dedicates time at each of its meetings to review and consider the relevant
risks faced by the Company at that time. In addition, since the Company does not
have an Audit Committee, the Board is also responsible for the assessment and
oversight of the Company's financial risk exposures.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
We are not aware of any material legal proceedings that have occurred within the
past ten years concerning any Director or control person which involved a
criminal conviction, a pending criminal proceeding, a pending or concluded
administrative or civil proceeding limiting one's participation in the
securities or banking industries, or a finding of securities or commodities law
violations.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below summarizes all compensation awarded to, earned by, or paid to
our officers for all services rendered in all capacities to us for the year
ended June 30, 2012 and for the period from October 4, 2010 (inception) through
June 30, 2011:
Name and Non-Equity Nonqualified
Principal Stock Option Incentive Plan Deferred All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Compensation($) Compensation($) Total($)
-------- ---- --------- -------- --------- --------- --------------- --------------- --------------- --------
Simone 2012 0 0 0 0 0 0 0 0
Bar-Tal (1) 2011 0 0 0 0 0 0 0 0
Liby 2012 0 0 0 0 0 0 0 0
Weinstock (2) 2011 0 0 0 0 0 0 0 0
----------
(1) President and Director since October 4, 2010.
(2) Secretary, Treasurer and Director since October 4, 2010.
None of our directors have received monetary compensation since our inception to
the date of this Annual Report. We currently do not pay any compensation to our
director serving on our board of directors.
31
STOCK OPTION GRANTS
We have not granted any stock options to our executive officer since our
inception. Upon the further development of our business, we will likely grant
options to directors and officers consistent with industry standards for
development stage companies.
EMPLOYMENT AGREEMENTS
The Company is not a party to any employment agreement and has no compensation
agreement with either of its two officers and directors, Simone Bar-Tal and Liby
Weinstock.
DIRECTOR COMPENSATION
The following table sets forth director compensation for the year ended June 30,
2012 and for the period from October 4, 2010 (inception) through June 30, 2011:
Fees Nonqualified
Earned Non-Equity Deferred
Paid in Stock Option Incentive Plan Compensation All Other
Name Cash($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Total($)
---- ------- --------- --------- --------------- ----------- --------------- --------
Simone 0 0 0 0 0 0 0
Bar-Tal
Liby 0 0 0 0 0 0 0
Weinstock
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of August 31, 2012, the number of shares of common
stock of our Company that are beneficially owned by (i) each person or entity
known to our Company to be the beneficial owner of more than 5% of the
outstanding common stock; (ii) each officer and director of our Company; and
(iii) all officers and directors as a group. Information relating to beneficial
ownership of common stock by our principal stockholders and management is based
upon information furnished by each person using "beneficial ownership" concepts
under the rules of the Securities and Exchange Commission. Under these rules, a
person is deemed to be a beneficial owner of a security if that person has or
shares voting power, which includes the power to vote or direct the voting of
the security, or investment power, which includes the power to vote or direct
the voting of the security. The person is also deemed to be a beneficial owner
of any security of which that person has a right to acquire beneficial ownership
within 60 days. Under the Securities and Exchange Commission rules, more than
one person may be deemed to be a beneficial owner of the same securities, and a
person may be deemed to be a beneficial owner of securities as to which he or
she may not have any pecuniary beneficial interest. Except as noted below, each
person has sole voting and investment power.
The percentages below are calculated based on 19,346,000 shares of our common
stock issued and outstanding as of August 31, 2012. We do not have any
outstanding warrants, options or other securities exercisable for or convertible
into shares of our common stock.
32
Name and Address of Number of Shares Percent of
Title of Class Beneficial Owner(1) Owned Beneficially Class Owned
-------------- ---------------- ------------------ -----------
Common Stock: Liby Weinstock 12,600,000 65.1%
Common Stock: Simone Bar-Tal 2,500,000 12.9%
All executive officers
and directors as a group 15,100,000 78.1%
----------
(1) Unless otherwise noted, the address of each person or entity listed is c/o
Specializer Inc., 548 Market St #15099, San Francisco, California 94104.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to a Subscription Agreement dated October 4, 2010, we offered and sold
10,000,000 shares of our common stock to Liby Weinstock, our Secretary,
Treasurer and a Director, at a purchase price of $0.001 per share, for aggregate
proceeds of $10,000. Pursuant to a Subscription Agreement dated January 18,
2011, we offered and sold 2,500,000 shares of our common stock to Simone Bar-Tal
our President and a Director, at a purchase price of $0.001 per share, for
aggregate proceeds of $2,500. Pursuant to a Subscription Agreement dated January
18, 2011, we offered and sold 2,500,000 shares of our common stock to Liby
Weinstock our Secretary, Treasurer and a Director, at a purchase price of $0.001
per share, for aggregate proceeds of $2,500. Pursuant to a Subscription
Agreement dated May 16, 2011, we offered and sold 100,000 shares of our common
stock to Liby Weinstock our Secretary, Treasurer and a Director, at a purchase
price of $0.001 per share, for aggregate proceeds of $100.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
AUDIT FEES
The aggregate fees billed during the fiscal years ended June 30, 2012 and for
the period from October 4, 2010 (inception) through June 30, 2011 for
professional services rendered by Weinberg & Baer LLC, with respect to the
audits of our 2012 and 2011 financial statements, as well as their quarterly
reviews of our interim financial statements and services normally provided by
the independent accountant in connection with statutory and regulatory filings
or engagements for these fiscal periods, were as follows:
2012 2011
-------- --------
Audit Fees and Audit Related Fees $ 7,900 $ 2,500
Tax Fees -- --
All Other Fees -- --
-------- --------
TOTAL $ 7,900 $ 2,500
======== ========
In the above table, "audit fees" are fees billed by our Company's external
auditor for services provided in auditing our Company's annual financial
statements for the subject year. "Audit-related fees" are fees not included in
audit fees that are billed by the auditor for assurance and related services
that are reasonably related to the performance of the audit review of our
company's financial statements. "Tax fees" are fees billed by the auditor for
professional services rendered for tax compliance, tax advice and tax planning.
33
"All other fees" are fees billed by the auditor for products and services not
included in the foregoing categories.
PRE APPROVAL POLICIES AND PROCEDURES
We do not have a separately designated Audit Committee. The Board of Directors
pre-approves all services provided by our independent auditors. All of the above
services and fees were reviewed and approved by the Board of Directors either
before or after the respective services were rendered.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Exhibit
Number Description
------ -----------
31.1 Certification of CEO Pursuant to 18 U.S.C. ss. 1350, Section 302
31.2 Certification of CFO Pursuant to 18 U.S.C. ss. 1350, Section 302
32.1 Certification Pursuant to 18 U.S.C. ss.1350, Section 906
101 Interactive data files pursuant to Rule 405 of Regulation S-T.
34
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPECIALIZER INC.
(Registrant)
Date: September 27, 2012 By: /s/ Simone Bar-Tel
----------------------------------------------
Name: Simone Bar-Tel
Title: President
(Principal Executive Officer and Principal
Financial and Accounting Officer)
3
