UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Fiscal Year Ended December 31, 2012

 

OR

 

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

STAKOOL, INC.

(Exact name of registrant as specified in its charter)

 

Commission file number: 00-24723

 

STAKOOL, INC.

(Name of small business issuer in its charter)

 

Nevada		00-24723		88-0393257
(State or other jurisdiction of		(Commission File Number)		(I.R.S. Employer
incorporation or organization)				Identification Number)

 

1111 Alderman Drive, Suite 210

Alpharetta, Georgia 30005

(Address of Principal Executive Offices)

 

(770) 521-9826

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.00001 par value

 

 Indicate by check mark whether 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 [  ] No [X]

 

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 (§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 in response 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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (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 Act). Yes [  ] No [X]

 

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of June 29, 2012, was 97,264,167. As of April 8, 2013 the registrant had 2,047,666,666 shares of its common stock, par value $0.00001; 0 shares of its Preferred A Series stock, par value $0.00001; 1 share of its Preferred B Series stock, par value $0.00001; and 308,180 shares of its Preferred C Series stock, par value $0.00001 outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

  

TABLE OF CONTENTS

 

			Page No.
PART I
Item 1.		Business.	4
Item 1A.		Risk Factors.	6
Item 1B.		Unresolved Staff Comments.	14
Item 2.		Properties.	14
Item 3.		Legal Proceedings.	15
Item 4.		Mine Safety Disclosures.	15
PART II
Item 5.		Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	15
Item 6.		Selected Financial Data.	15
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operation.	16
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.	20
Item 9A.		Controls And Procedures.	20
Item 9B.		Other Information.	20
PART III
Item 10.		Directors, Executive Officers and Corporate Governance.	21
Item 11.		Executive Compensation.	22
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	23
Item 13.		Certain Relationships and Related Transactions, and Director Independence.	23
Item 14.		Principal Accounting Fees and Services.	24
PART IV
Item 15.		Exhibits, Financial Statements Schedules.	25
SIGNATURES			26

 

 

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

 

The following cautionary statements identify important factors that could cause our actual results to differ materially from those projected in forward-looking statements made in this amended. Annual Report on Form 10-K (this “Report”) and in other reports and documents published by us from time to time. Any statements about our beliefs, plans, objectives, expectations, assumptions, future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “believes,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intend,” “plan,” “projection,” “outlook” and the like, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, as we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of our Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned to carefully read all “Risk Factors” set forth under Item 1A and not to place undue reliance on any forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments, except as required by the Exchange Act. New factors emerge from time to time, and it is not possible for us to predict which will arise or to assess with any precision the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

Unless otherwise provided in this Report, references to “Stakool, “the “Company,” the “Registrant,” the “Issuer,” “we,” “us,” and “our” refer to Stakool, Inc.

 

 

PART I

 

Item 1. Business

 

Overview

 

History of Stakool, Inc.

 

Stakool, Inc. was incorporated in the State of Delaware under the name, PLR, Inc. in 1993, and went through a series of name changes and reorganizations. In November 1997, PLR, Inc. changed its name to Integrated Carbonics Corp. and moved its domicile to the State of Nevada. On July 23, 1999, Integrated Carbonics Corp. changed its name to Urbana.ca, Inc. (“URBA”). On April 11, 2003, URBA changed its name to PSPP Holdings, Inc. On August 11, 2008, PSPP Holdings, Inc. changed its name to Cynosure Holdings, Inc. by filing a Certificate of Amendment to Articles of Incorporation with the State of Nevada. On August 21, 2008, the Company changed its name to Hybid Hospitality, Inc. by filing a Certificate of Amendment to the Articles of Incorporation.

 

On June 16, 2011, Stakool entered into a Letter of Intent of Sale and Purchase with Anthus Life Corp., a privately held Nevada corporation (“Anthus Life”).

 

On July 20, 2011, Stakool and Anthus Life executed an Agreement of Sale and Purchase where by Anthus Life received 77,588,470 shares of 79,388,470 issued and outstanding shares of Stakool common stock, as well as 10,000,000 Preferred Shares of Stakool in exchange for scheduled payments, totaling $350,000 and 1,300,000 shares of Stakool common stock the “Agreement of Sale and Purchase”). The parties amended the Agreement of Purchase and Sale as of January 19, 2012, providing, among other things, for the issuance of an additional 2,650,000 shares of Stakool common stock to certain parties. All stock has been issued under the Agreement of Sale and Purchase and, as of December 31, 2012, $355,000 has been paid.

 

Anthus Life was incorporated in the State of Nevada on June 4, 2009, with its principal place of business in Jacksonville Florida. Anthus Life was founded on the belief that everyone has the power to make healthy lifestyle choices. The motivating mission of Anthus Life was to:

 

●		Source or manufacture and distribute innovative products made with all certified natural and/or organic ingredients;
●		Conduct continual research and development of high performance “green” products;
●		Grow by engaging strategic partners who have proven distribution;
●		Sustain above-average annual top-line growth with a gross profit of 35% plus;
●		Instill a corporate culture that empowers our fellow workers with dedication and enthusiastic team spirit;
●		Apply sensitive and respectful practices to promote sustainable social relationships and responsible corporate governance; and
●		Maintain strong business growth through profitable and complementary acquisitions.

 

Stakool strives to become a leading supplier of natural and organic products by fulfilling the highest standards for quality, consistency, sustainability, product assortments, value-added support services and integrity in our business and personal relationships. Through trust and our commitment to quality we will build a loyal consumer following throughout North America.

 

Current Products, Potential Product Categories and Extension

 

Anthus Life has formally launched eight natural healthy snack bars in 2010; the Company will be looking to introduce additional USDA Organic Certified health bars among other complementary products during 2013.

 

Nutritional and dietary criteria that we adheres to are based on review and approval by accredited scientific food agencies and standards as set by government organizations. The Company will take acute consideration to effectively produce and package the best tasting product that is “good and better” for the consumer.

 

Intellectual Property

 

The company has no registered patents; however, all of its products are formulated utilizing its own proprietary formulations.

 

 

Production, Sources of Raw Materials and the Names of Principal Suppliers

 

An experienced core management team has reviewed, studied and analyzed the natural and/or organic product market. We will establish a procurement program and will work with outside professionals to build our business, create brands through eco friendly packaging and distinctive labeling, and develop key distribution relationships.

 

Marketing Strategy

 

The strategy is to have our brand name strongly associated on all of our distributed products and to focus on finding and developing the best USDA certified natural and/or organic food product options for North America. In fact, during 2013, the Company plans to introduce additional USDA Certified Organic health bars among other complementary products. For 2013, our R&D team is diligently working to develop additional product line extensions to include several products for the natural and organic food market as well as for the health and wellness market.

 

We have secured a manufacturer with the requisite governmental approval, having completed the package design and is distributing the initial product offering. We are excited about the opportunity to bring healthy, great tasting, and natural and/or organic food products at affordable prices to the mass North American market.

 

Our initial product launch included 8 Health Bars that have no refined sugar, no artificial flavors, low sodium, no genetically modified products, no preservatives, no trans fat, no gluten, no cholesterol, no dairy products, and no wheat.

 

We are continuing to target the following consumers: (i) those who are already knowledgeable on the benefits of natural and/or organic foods; presenting a viable opportunity for them to taste, switch, and become loyal, to our product; (ii) parents of young children wanting a healthy snack alternative and linking the need of healthy benefits and well-being, value in the price, and volume and quality; (iii) organizations in need of fundraising programs; and (iv) companies in search for new product line under their brand to add to their revenue stream.

 

We believe that once the consumer tastes our product line, he or she will become a loyal consumer and will seek out our product because of the health benefits, value in price, quality of the product and the good taste of the product, thus becoming a returning and loyal consumer.

 

Market indicators over the past 5 years show that the natural and/or organic product market is expanding fast, and it is only a matter of time before it enters into mainstream retailing. Even though most supermarkets sell natural and/or organic products it is our belief that consumers cannot identify with just one brand when shopping for natural and/or organic. The offerings are confusing and because they are mixed in with regular products they often become line extensions of existing products. We believe that the consumer market is ready to identify with a brand dedicated to quality, reasonably priced, great tasting organic packaged products for both children and adults.

 

According to the Organic Trade Association, organic product sales have grown at about a 20% annual rate since 1990. Organic Trade Association (OTA) is a membership-based business association that concentrates on the organic business community in North America and is located in Greenfield, MA. A March 9, 2006 article published by “Reuters Food Summit” (an internet service of the Reuters Foundation), indicates major signs showing that the natural and/or organic foods are gathering speed and that mainstream acceptance is forcing big box stores, such as Wal-Mart Inc., to double its offering of organic products in its stores.

 

Further research shows consumers of various states, such as Washington and Oregon, for example, conscious of buying green and organic. Recent market research by Mambo Sprouts Marketing released in 2008, explained that consumers in Washington and Oregon see buying ‘green’ as a priority. More than nine in ten consumers (92%) reported buying the same (54%) or more (38%) environmentally friendly products compared to six months ago.

 

Employees

 

At the present time, the company has no employees other than its officer and director, who devotes his full time to the Company. We intend to add staff as needed, as we expand operations or change our business plan.

 

 

Item 1A. Risk Factors

 

Our business is subject to numerous risks. We caution you that the following important factors, among others, could cause our actual results to differ materially from those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors and oral statements. Any or all of our forward-looking statements in this and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in the discussion below will be important in determining future results. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially from those anticipated in forward-looking statements. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosure we make in our reports filed with the SEC.

 

An investment in our Company involves a substantial risk of loss. You should carefully consider the risks described below, before you make any investment decision regarding our Company. Additional risks and uncertainties, including those generally affecting the market in which we operate or that we currently deem immaterial, may also impair our business. If any such risks actually materialize, our business, financial condition and operating results could be adversely affected. In such case, the trading price of our common stock could decline.

 

The following risk factors are not exhaustive and the risks discussed herein do not purport to be inclusive of all possible risks but are intended only as examples of possible investment risks. To facilitate understanding of the various business risks applicable to our Company and the strategic alliance companies through which we intend to operate our business during the foreseeable future, the risk factors discussed herein address our Company together with the risks applicable to our operations that we intend to conduct with our strategic alliance partners.

 

RISK FACTORS RELATING TO STAKOOL, INC. AND ITS BUSINESS

 

THE COMPANY IS SUBJECT TO THE RISKS INHERENT IN A NEWLY-CREATED BUSINESS.

 

The Company is subject to substantially all the risks inherent in a newly-created business. As a result of its small size and capitalization and limited operating history, the Company is particularly susceptible to adverse effects of changing economic conditions and consumer tastes, competition, and other contingencies or events beyond the control of the Company. It may be more difficult for the Company to prepare for and respond to these types of risks and the risks described elsewhere in this Form 10-K than for a company with an established business and operating cash flow. If the Company is not able to manage these risks successfully, the Company’s operations could be negatively impacted. Due to changing circumstances, the Company may be forced to change dramatically, or even terminate, its planned operations.

 

  

INVESTORS MAY LOSE THEIR ENTIRE INVESTMENT IF STAKOOL FAILS TO IMPLEMENT ITS BUSINESS PLAN.

 

The Company expects to face substantial risks, uncertainties, expenses, and difficulties because it is a development-stage company. Anthus Life was formed in Nevada on June 4, 2009. The Company has no demonstrable operations record of substance upon which you can evaluate the company’s business and prospects. The Company’s prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development. The company cannot guarantee that it will be successful in accomplishing its objectives.

 

As of the date of this prospectus the Company has had only limited start-up operations and has generated minimal revenues. Considering these facts, independent auditors have reservation about the company’s ability to continue as a going concern in the independent auditors’ report to the financial statements filed with our Form 10-K. In addition, the company’s lack of operating capital could negatively affect the value of its common shares and could result in the loss of your entire investment.

 

WE RELY ON KEY PERSONNEL AND IF THEY LEAVE US, OUR BUSINESS PLAN AND RESULTS OF OPERATIONS COULD BE ADVERSELY AFFECTED.

 

We rely heavily on our President and Chief Executive Officer, Joseph C. Canouse for our success. His experience and input create the foundation for our business and he is responsible for the directorship and control over our activities. Moving forward, should we lose the services of Mr. Canouse, for any reason, we will incur costs associated with recruiting a replacement and delay in our operations. If we are unable to replace Mr. Canouse with another suitably trained individual, we may be forced to scale back or curtail our business plan. As a result of this, your investment in us could be devalued.

 

WE HAVE NOT AND DO NOT ANTICIPATE PAYING ANY CASH DIVIDEND ON OUR COMMON STOCK AND BECAUSE OF THIS OUR SECURITIES COULD FACE DEVALUATION IN THE MARKET.

 

We have paid no cash dividends on our Common Stock to date and it is not anticipated that any cash dividends will be paid to holders of our Common Stock in the foreseeable future. While our dividend policy will be based on the operating results and capital needs of our business operations, it is anticipated that any earnings will be retained to finance our business operations and future expansion.

 

CHANGES IN CONSUMER PREFERENCES AND DISCRETIONARY SPENDING MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR REVENUE, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Shifts in consumer preferences away from our products, our inability to develop new products that appeal to consumers, or changes in our product mix that eliminate items popular with some consumers could harm our business. Also, our success depends to a significant extent on discretionary consumer spending, which is influenced by general economic conditions and the availability of discretionary income. Accordingly, we may experience declines in revenue during economic downturns or during periods of uncertainty. Any material decline in the amount of discretionary spending could have a material adverse effect on our sales, results of operations, business and financial condition.

 

FLUCTUATIONS IN VARIOUS COMMODITY, PACKAGING AND SUPPLY COSTS, COULD ADVERSELY AFFECT OUR OPERATING RESULTS.

 

The prices of the main ingredients in our offerings can be highly volatile. Supplies and prices of the various products that we use to prepare our products can be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics and economics in the producing countries. An increase in pricing of any major ingredients that we use in our products could have a significant adverse effect on our profitability In addition; higher diesel prices have, in some cases, resulted in the imposition of surcharges on the delivery of commodities to distributors. Additionally, higher diesel and gasoline prices may affect our supply costs and may affect our sales going forward. To help mitigate the risks of volatile commodity prices and to allow greater predictability in pricing, we hope to enter into fixed price or to-be-fixed priced purchase commitments. We cannot assure you that these activities will be successful or that they will not result in our paying substantially more than would have been required absent such activities. We do not presently have any multi-year pricing agreements (with fixed processing costs), and none with guaranteed volume commitments.

 

 

We may not be able to prevent others from using our intellectual property, and may be subject to claims by third parties that we infringe on their intellectual property.

 

Our products are created using proprietary formulations; however, we have no registered patents. Preventing and policing the unauthorized use of our intellectual property is often difficult and any steps we take may not, in every case, prevent the infringement by unauthorized third parties. Further, there can be no assurance that our efforts to enforce our rights and protect our intellectual property will be successful. We may need to resort to litigation to enforce our intellectual property rights, which may result in substantial costs and diversion of resources and management attention.

 

Further, although management does not believe that our products infringe on the intellectual rights of others, there is no assurance that we will not be the target of infringement or other claims. Such claims, even if not true, could result in significant legal and other costs and may be a distraction to our management or interrupt our business.

 

LITIGATION AND PUBLICITY CONCERNING PRODUCT QUALITY, HEALTH AND OTHER ISSUES, WHICH CAN RESULT IN LIABILITIES AND ALSO CAUSE CONSUMERS TO AVOID OUR PRODUCTS, WHICH COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS, BUSINESS AND FINANCIAL CONDITION.

 

Beverage and food service businesses can be adversely affected by litigation and complaints from consumers or government authorities resulting from food and beverage quality, illness, injury or other health concerns or operating issues stemming from one retail location or a limited number of retail locations. Adverse publicity about these allegations may negatively affect us, regardless of whether the allegations are true, by discouraging consumers from buying our products. We could also incur significant liabilities, if a lawsuit or claim results in a decision against us, or litigation costs, regardless of the result.

 

BEVERAGE AND FOOD SAFETY CONCERNS AND INSTANCES OF FOOD-BORNE ILLNESSES COULD HARM OUR CONSUMERS, RESULT IN NEGATIVE PUBLICITY AND CAUSE THE TEMPORARY CLOSURE OF SOME CONSUMERS’ STORES AND, IN SOME CASES, COULD ADVERSELY AFFECT THE PRICE AND AVAILABILITY OF FRUITS, ANY OF WHICH COULD HARM OUR BRAND REPUTATION, RESULT IN A DECLINE IN SALES OR AN INCREASE IN COSTS.

 

We consider food and beverage safety a top priority and will dedicate substantial resources towards ensuring that consumers enjoy high-quality, safe and wholesome products. However, we cannot guarantee that controls and training will be fully effective in preventing all food-borne illnesses. Furthermore, reliance on third-party suppliers and distributors increases the risk that food-borne illness incidents (such as E. coli, Hepatitis A, Salmonella or Listeria) could occur outside of our control and at multiple locations.

 

Instances of food-borne illnesses, whether real or perceived, and whether at our consumers’ stores or those of our competitors, could harm consumers and otherwise result in negative publicity about us or the products we serve, which could adversely affect sales. If there is an incident involving consumers’ C-stores and other approved channels serving contaminated products, consumers may be harmed, our sales may decrease and our brand name may be impaired. If consumers become ill from food-borne illnesses, we could be forced to temporarily suspend some operations. If we react to negative publicity by changing our products or other key aspects of the ALC experience, we may lose consumers who do not accept those changes, and may not be able to attract enough new consumers to produce the revenue needed to make our operations profitable. In addition, we may have different or additional competitors for our intended consumers as a result of making any such changes and may not be able to compete successfully against those competitors. Food safety concerns and instances of food-borne illnesses and injuries caused by food contamination have in the past, and could in the future, adversely affect the price and availability of affected ingredients and cause consumers to shift their preferences, particularly if we choose to pass any higher ingredient costs along to consumers. As a result, our costs may increase and our sales may decline. A decrease in consumer traffic as a result of these health concerns or negative publicity, or as a result of a change in our products or smoothie experience or a temporary suspension of any of our consumer operations, could materially harm our business.

 

THE FOOD SERVICE INDUSTRY HAS INHERENT OPERATIONAL RISKS THAT MAY NOT BE ADEQUATELY COVERED BY INSURANCE.

 

We can give no assurance that we will be adequately insured against all risks or that our insurers will pay a particular claim. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our operations. We may also be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we may receive indemnity insurance coverage for tort liability. Our insurance policies may also contain deductibles, limitations and exclusions which, although we may believe are standard in the food service industry, may nevertheless increase our costs.

 

 

THE PLANNED INCREASE IN THE NUMBER OF STORES WHERE ARE OUR PRODUCTS WILL BE AVAILABLE MAY MAKE FUTURE RESULTS UNPREDICTABLE.

 

Our future results depend on various factors, including successful selection of new markets, market acceptance of Anthus Life’s “ALC Experience”, consumer recognition of the quality of our products and willingness to pay our prices (which reflect our often higher ingredient costs,) the quality and performance of our equipment and general economic conditions. In addition, as with the experience of other retail food and beverage concepts who have tried to expand nationally, we may find that the Anthus Life concept has limited or no appeal to consumers in new markets or we may experience a decline in the popularity of the ALC Experience. Newly opened stores may not succeed, future markets may not be successful and average store revenue may not meet expectations.

 

OUR FAILURE TO MANAGE OUR GROWTH EFFECTIVELY COULD HARM OUR BUSINESS AND OPERATING RESULTS.

 

Our plans call for a significant increase in the number of consumers. Product supply, financial and management controls and information systems may be inadequate to support our expansion. Managing our growth effectively will require us to continue to enhance these systems, procedures, and controls and to hire, train and retain management and staff. We may not respond quickly enough to the changing demands that our expansion will impose on our management, employees and existing infrastructure. We also place a lot of importance on our culture, which we believe will be an important contributor to our success. As we grow, however, we may have difficulty maintaining our culture or adapting it sufficiently to meet the needs of our operations. Our failure to manage our growth effectively could harm our business and operating results.

 

OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY AND COULD FALL BELOW THE EXPECTATIONS OF INVESTORS DUE TO VARIOUS FACTORS.

 

Our quarterly operating results may fluctuate significantly because of various factors, including:

 

1.		The impact of inclement weather, natural disasters and other calamities, such as earthquakes and/or hurricanes, which could cause a delay in getting our products to our consumers;
2.		unseasonably cold or wet weather conditions could cause a delay in getting our products to our consumers;
3.		profitability of our operations where our products are sold, especially in new markets;
4.		changes in comparable store sales and consumer visits, including the introduction of new product items;
5.		variations in general economic conditions, including those relating to changes in diesel and gasoline prices;
6.		negative publicity about the ingredients we use or the occurrence of food-borne illnesses or other problems at stores where our products are available;
7.		changes in consumer preferences and discretionary spending;
8.		increases in infrastructure costs; and
9.		fluctuation in supply prices.

 

Because of these factors, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year. Average consumers’ store revenue or comparable store revenue in any particular future period may decrease. In the future, our operating results may fall below the expectations of investors. In that event, the value of our Common Stock or other securities would likely decrease.

 

OUR CONSUMERS AND SUPPLIERS COULD TAKE ACTIONS THAT HARM OUR REPUTATION AND REDUCE OUR PROFITS.

 

Consumers and suppliers are separate entities and are not our employees. Further, we do not exercise control over the day-to-day operations of our consumers and suppliers. Any operational shortcomings of our consumers and suppliers are likely to be attributed to our system-wide operations and could adversely affect our reputation and have a direct negative impact on our profits.

 

 

OUR REVENUE IS SUBJECT TO VOLATILITY BASED ON WEATHER AND VARIES BY SEASON.

 

Seasonal factors could also cause our revenue to fluctuate from quarter to quarter. Our revenue may be lower during the winter months and the holiday season and during periods of inclement weather and higher during the spring, summer and fall months. Our revenue will likely also vary from quarter to quarter as a result of the number of trading days, that is, the number of days in a quarter when stores are open.

 

WE COULD FACE LIABILITY FROM OUR CONSUMERS, SUPPLIERS OR GOVERNMENT.

 

A consumer, supplier or government agency may bring legal action against us based on the consumer/ supplier relationships. Various state and federal laws govern our relationship with consumers and suppliers. If we fail to comply with these laws, we could be liable for damages to consumers or suppliers and fines or other penalties. Expensive litigation with our consumers/suppliers or government agencies may adversely affect both our profits and our important relations with our consumer/suppliers.

 

 

WE MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL ON ACCEPTABLE TERMS.

 

Developing our business may require significant capital in the future. To meet our capital needs, we expect to rely on our cash flow from operations and potentially, third-party financing. Third-party financing may not, however, be available on terms favorable to us, or at all. Our ability to obtain additional funding will be subject to various factors, including market conditions, our operating performance, lender sentiment and our ability to incur additional debt in compliance with other contractual restrictions, such as financial covenants under our credit facility. These factors may make the timing, amount, terms and conditions of additional financings unattractive. Our inability to raise capital could impede our growth.

 

LITIGATION COULD ADVERSELY AFFECT US BY DISTRACTING MANAGEMENT, INCREASING OUR EXPENSES OR SUBJECTING US TO MATERIAL MONEY DAMAGES AND OTHER REMEDIES.

 

Our consumers could file complaints or lawsuits against us alleging that we are responsible for some illness or injury their consumers suffered at or after a visit to their stores, or that we have problems with food quality or operations. We are also subject to a variety of other claims arising in the ordinary course of our business, including personal injury claims, contract claims and claims alleging violations of federal and state law regarding workplace and employment matters, discrimination and similar matters, and we could become subject to class action or other lawsuits related to these or different matters in the future. Regardless of whether any claims against us are valid, or whether we are ultimately held liable, claims may be expensive to defend and may divert time and money away from our operations and hurt our performance. A judgment significantly in excess of our insurance coverage for any claims could materially and adversely affect our financial condition or results of operations. Any adverse publicity resulting from these allegations may also materially and adversely affect our reputation or prospects, which in turn could adversely affect our results. The food and beverage services industry has been subject to a growing number of claims based on the nutritional content of food products they sell and disclosure and advertising practices.

 

WE MAY ALSO INCUR COSTS RESULTING FROM OTHER SECURITY RISKS WE MAY FACE IN CONNECTION WITH OUR ELECTRONIC PROCESSING AND TRANSMISSION OF CONFIDENTIAL CONSUMER INFORMATION.

 

We rely on commercially available software and other technologies to provide security for processing and transmission of consumer credit card data. Our systems could be compromised in the future, which could result in the misappropriation of consumer information or the disruption of systems. Either of those consequences could have a material adverse effect on our reputation and business or subject it to additional liabilities.

 

 

WE ARE EXPOSED TO INCREASED COSTS AND RISKS ASSOCIATED WITH COMPLIANCE WITH CHANGING LAWS, REGULATIONS AND STANDARDS IN GENERAL, AND SPECIFICALLY WITH INCREASED AND NEW REGULATION OF CORPORATE GOVERNANCE AND DISCLOSURE STANDARDS.

 

We expect to spend an increased amount of management time and external resources to comply with existing and changing laws, regulations and standards in general, and specifically relating to corporate governance. In particular, Section 404 of the Sarbanes-Oxley Act of 2002 requires management to annually review and evaluate all of our internal control systems, and file attestations of the effectiveness of these systems by our management and by our independent auditors. This process may require us to hire additional personnel and use outside advisory services and result in additional accounting and legal expenses. If in the future our chief executive officer, chief financial officer or independent auditors determine that our controls over financial reporting are not effective as defined under Section 404, investor perceptions may be adversely affected and could cause a decline in the value of our stock. If our independent auditors are unable to provide an unqualified attestation of management’s assessment of our internal control over financial reporting, or disclaim an ability to issue an attestation, it could result in a loss of investor confidence in our financial reports, adversely affect our stock value and our ability to access the capital markets or borrow money. Failure to comply with other existing and changing laws, regulations and standards could also adversely affect the Company.

 

THE REPORT OF OUR INDEPENDENT AUDITORS INDICATES UNCERTAINTY CONCERNING OUR ABILITY TO CONTINUE AS A GOING CONCERN AND THIS MAY IMPAIR OUR ABILITY TO RAISE CAPITAL TO FUND OUR BUSINESS PLAN.

 

Our independent auditors have raised substantial doubt about our ability to continue as a going concern. We cannot assure you that this will not impair our ability to raise capital on attractive terms. Additionally, we cannot assure you that we will ever achieve significant revenues and therefore remain a going concern.

 

COMPETITORS WITH MORE RESOURCES MAY FORCE US OUT OF BUSINESS.

 

We will compete with many well-established companies, food and beverage service, C-stores and other approved channels and otherwise, on the basis of taste, quality and price of product offered, consumer service, atmosphere, location and overall guest experience. Aggressive pricing by our competitors or the entrance of new competitors into our markets could reduce our revenue and profit margins.

 

STAKOOL MAY NOT BE ABLE TO ATTAIN PROFITABILITY WITHOUT ADDITIONAL FUNDING, WHICH MAY BE UNAVAILABLE.

 

The Company has limited capital resources. To date, the Company has funded its operations from limited funding and has not generated sufficient cash from operations to be profitable or to maintain sufficient inventory. Unless the Company begins to generate sufficient revenues to finance operations as a going concern, the Company may experience liquidity and solvency problems. Such liquidity and solvency problems may force the Company to cease operations if additional financing is not available.

 

THE COST TO MEET OUR REPORTING AND OTHER REQUIREMENTS AS A PUBLIC COMPANY SUBJECT TO THE EXCHANGE ACT OF 1934 WILL BE SUBSTANTIAL AND MAY RESULT IN US HAVING INSUFFICIENT FUNDS TO EXPAND OUR BUSINESS OR EVEN MEET ROUTINE BUSINESS OBLIGATIONS.

 

Subject to the reporting requirements of the Exchange Act of 1934, we will incur ongoing expenses associated with professional fees for accounting, legal, and a host of other expenses for annual reports and proxy statements. We estimate that these costs could range up to $50,000 per year in the next few years and will be higher if our business volume and activity increases.

 

WE MAY HAVE DIFFICULTY IN ATTRACTING AND RETAINING MANAGEMENT AND OUTSIDE INDEPENDENT MEMBERS TO OUR BOARD OF DIRECTORS AS A RESULT OF THEIR CONCERNS RELATING TO THEIR INCREASED PERSONAL EXPOSURE TO LAWSUITS AND STOCKHOLDER CLAIMS BY VIRTUE OF HOLDING THESE POSITIONS IN A PUBLICLY-HELD COMPANY.

 

The directors and management of publicly-traded corporations are increasingly concerned with the extent of their personal exposure to lawsuits and stockholder claims, as well as governmental and creditor claims which may be made against them, particularly in view of recent changes in securities laws imposing additional duties, obligations and liabilities on management and directors. Due to these perceived risks, directors and management are also becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a timely basis the costs incurred in defending such claims. We currently do not carry directors’ and officers’ liability insurance. Directors’ and officers’ liability insurance has recently become much more expensive and difficult to obtain. If we are unable to provide directors’ and officers’ liability insurance at affordable rates or at all, it may become increasingly more difficult to attract and retain qualified outside directors to serve on our board of directors.

 

  

We may lose potential independent board members and management candidates to other companies that have greater directors’ and officers’ liability insurance to insure them from liability or to companies that have revenues or have received greater funding to date which can offer more lucrative compensation packages. The fees of directors are also rising in response to their increased duties, obligations and liabilities as well as increased exposure to such risks. As a company with a limited operating history and limited resources, we will have a more difficult time attracting and retaining management and outside independent directors than a more established company due to these enhanced duties, obligations and liabilities.

 

WE MAY NOT ACHIEVE RESULTS SIMILAR TO THE FINANCIAL PROJECTIONS.

 

Projections and estimated financial results are based on estimates and assumptions that are inherently uncertain and, though considered reasonable by us, are subject to significant business, economic, and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond our control. Accordingly, there can be no assurance that the projected results will be realized or that actual results will not be significantly lower than projected. Neither we nor any other person or entity assumes any responsibility for the accuracy or validity of the projections.

 

OUR DIRECTORS HAVE THE RIGHT TO AUTHORIZE THE ISSUANCE OF ADDITIONAL SHARES OF OUR PREFERRED STOCK.

 

Our directors, within the limitations and restrictions contained in our articles of incorporation and without further action by our stockholders, have the authority to issue shares of preferred stock from time to time in one or more series and to fix the number of shares and the relative rights, conversion rights, voting rights, and terms of redemption, liquidation preferences and any other preferences, special rights and qualifications of any such series. Any issuance of shares of preferred stock could adversely affect the rights of holders of our common stock.

 

IF THERE IS A MARKET FOR OUR SECURITIES IN THE FUTURE, OUR STOCK PRICE MAY BE VOLATILE AND ILLIQUID.

 

We can make no assurance that there will be a public market for our common Stock in the future. If there is a market for our Common Stock in the future, we anticipate that such market may be illiquid and might be subject to wide fluctuations in response to several factors, including, but not limited to the following factors:

 

(1)		actual or anticipated variations in our results of operations;
(2)		our ability or inability to generate new revenue;
(3)		our ability to anticipate and effectively adapt to a developing market;
(4)		our ability to attract, retain and motivate qualified personnel;
(5)		consumer satisfaction and loyalty;
(6)		increased competition; and
(7)		conditions and trends in the market for organic and natural products.

 

SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK INTO THE PUBLIC MARKET BY SELLING SHAREHOLDERS MAY CAUSE A REDUCTION IN THE PRICE OF OUR STOCK AND PURCHASERS WHO ACQUIRE SHARES FROM THE SELLING SHAREHOLDERS MAY LOSE SOME OR ALL OF THEIR INVESTMENTS.

 

If a market for our shares develops, sales of a substantial number of shares of our Common Stock in the public market could cause a reduction in the price of our Common Stock. If selling Shareholders resell a substantial portion of the issued and outstanding shares of our Common Stock it could have an adverse effect on the price of our Common Stock. As a result of any such decreases in the price of our Common Stock, purchasers who acquire shares from Selling Shareholders may lose some or all of their investment.

 

OUR EXISTING SHAREHOLDERS WILL EXPERIENCE DILUTION.

 

We will need to raise additional funds, and these funds may not be available on favorable terms, or at all. Furthermore, if we issue equity or debt securities to raise additional funds, our existing shareholders will experience dilution, and the new equity or debt securities may have rights, preference, and privileges senior to those of our existing shareholders. If we cannot raise funds on acceptable terms, we may not be able to develop or enhance our products, execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated consumer requirements.

 

  

There is no assurance that we will be profitable, and we may not be able to successfully develop, manage or market our products and services. We may not be able to attract or retain qualified executives and technological personnel and our products and services may become obsolete. Government regulation may hinder our business. Additional dilution in outstanding stock ownership will be incurred due to the issuance of more shares, stock options, or the exercise of stock options, and other risks inherent in our business.

 

Currently, there is a limited public market for our securities, and there can be no assurances that any public market will ever develop and, even if developed, it is likely to be subject to significant price fluctuations.

 

We have a trading symbol for our common stock, namely ’STKO’. However, our stock has been thinly traded, if at all. Consequently, there can be no assurances as to whether:

 

●		any market for our shares will develop;
●		the prices at which our common stock will trade; or
●		the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these risk factors, investor perception of our Company and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.

 

We are subject to the penny stock rules which will make our securities more difficult to sell.

 

We are subject to the SEC’s “penny stock” rules because our securities sell below $5.00 per share. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation.

 

Furthermore, the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for our securities. As long as our securities are subject to the penny stock rules, the holders of such securities will find it more difficult to sell their securities.

 

We are not likely to pay cash dividends in the foreseeable future.

 

We currently intend to retain any future earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any cash dividends in the foreseeable future, but will review this policy as circumstances dictate.

 

  

SHARES ELIGIBLE FOR FUTURE SALE BY OUR CURRENT STOCKHOLDERS MAY ADVERSELY AFFECT OUR STOCK PRICE.

 

The sale of a significant number of shares of common stock at any particular time could be difficult to achieve at the market prices prevailing immediately before such shares are offered. In addition, sales of substantial amounts of common stock, including shares issued upon the exercise of outstanding options and warrants, under Securities and Exchange Commission Rule 144 or otherwise could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital at that time through the sale of our securities.

 

NEED FOR ANY GOVERNMENTAL APPROVAL OF PRINCIPAL PRODUCTS.

 

Companies have been the target of class action lawsuits and other proceedings alleging, among other things, violations of federal and state workplace and employment laws. Proceedings of this nature, if successful, could result in our payment of substantial damages.

 

Our results of operations may be adversely affected by legal or governmental proceedings brought by or on behalf of employees or consumers. In recent years, a number of companies, including juice companies, have been subject to lawsuits, including class action lawsuits, alleging violations of federal and state law. A number of these lawsuits have resulted in the payment of substantial awards by the defendants. Although we are not currently a party to any material class action lawsuits, we could incur substantial damages and expenses resulting from lawsuits, which would increase the cost of operating the business and decrease the cash available for other uses.

 

GOVERNMENT AND INDUSTRY REGULATION.

 

We are subject to various federal, state and local regulations. Our products are subject to state and local regulation by health, sanitation, food and workplace safety and other agencies. We may experience material difficulties or failures in obtaining the necessary licenses or approvals for new products which could delay planned execution of our business plan. We are subject to the U.S. Americans with Disabilities Act and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas. We may in the future have to modify office and warehouse space, for example by adding access ramps or redesigning certain architectural fixtures, to provide service to or make reasonable accommodations for disabled persons. The expenses associated with these modifications could be material. Our operations are also subject to the U.S. Fair Labor Standards Act, which governs such matters as minimum wages, overtime and other working conditions, along with the U.S. Americans with Disabilities Act, family leave mandates and a variety of similar laws enacted by the states that govern these and other employment law matters. In addition, federal proposals to introduce a system of mandated health insurance and flexible work time and other similar initiatives could, if implemented, adversely affect our operations. In recent years, there has been an increased legislative, regulatory and consumer focus on nutrition and advertising practices in the food industry. As a result, we may in the future become subject to initiatives in the area of nutrition disclosure or advertising, such as requirements to provide information about the nutritional content of our products, which could increase our expenses.

 

Item 1B. Unresolved Staff Comments

 

Not applicable

 

Item 2. Properties

 

On September 29, 2010, the Company signed a lease for office space in Jacksonville, Florida. The lease commenced on November 1, 2010 and is for a term of three years and one month. The monthly rent is $1,073.33 with annual increases. The lease required a security deposit of $1,700.

 

		December 31, 2012				December 31, 2011
Furniture and fixtures		$	1,192			$	1,192
Office equipment			649				649
Total property and equipment			1,841				1,841
Less: Accumulated depreciation			(1,013	)			(530	)
Property and equipment, net		$	828			$	1,311

 

Item 3. Legal Proceedings

 

We are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

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

 

(a) Market Information

Our common stock was initially quoted on OTCBB under the symbol STKO. The following table sets forth for the indicated periods the high and low sales prices per share for our common stock on the OTCQB.

 

Fiscal Year 2012 Quarters Ended:		High				Low
March 31, 2012		$	0.0120				0.0110
June 30, 2012			0.0023				0.0023
September 30, 2012			0.0018				0.0008
December 31, 2012			0.0001				0.0001
Fiscal Year 2011 Quarters Ended:			High				Low
March 31, 2011		$	0.02			$	0.02
June 30, 2011			0.02				0.02
September 30, 2011			0.02				0.02
December 31, 2011			0.03				0.02

 

(b) Holders

 

As of April 8, 2013, there were approximately 272 stockholders of record of our common stock, and the closing price of our common stock was $0.0002 per share as reported by OTCQB.

 

(c) Dividends

 

Since our inception, we have not declared nor paid any cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future. Our current policy is to retain any earnings in order to finance our operations. Our Board of Directors will determine future declarations and payments of dividends, if any, in light of the then-current conditions it deems relevant and in accordance with applicable corporate law.

 

(d) Securities Authorized for Issuance Under Equity Compensation Plans

 

As of the date hereof, we have not adopted an equity compensation plan and have not granted any stock options.

 

Item 6. Selected Financial Data

 

Not applicable.

 

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Result of Operations

 

Forward-Looking Statements

 

We make forward-looking statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report based on the beliefs and assumptions of our management and on information currently available to us. Forward-looking statements include information about our possible or assumed future results of operations which follow under the headings “Business and Overview,” “Liquidity and Capital Resources,” and other statements throughout this report preceded by, followed by or that include the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions.

 

Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in these forward-looking statements, including the risks and uncertainties described below and other factors we describe from time to time in our periodic filings with the U.S. Securities and Exchange Commission (the “SEC”). We therefore caution you not to rely unduly on any forward-looking statements. The forward-looking statements in this report speak only as of the date of this report, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

 

Plan Of Operations

 

The Company strives to become a leading supplier of natural and organic products by maintaining the highest standards for quality, consistency, sustainability, product assortments, value-added support services and integrity in our business and personal relationships. Through trust and our commitment to quality we will build a loyal consumer following throughout North America.

 

An experienced core management team is in place and has reviewed, studied and analyzed the natural and/or organic product market. The Company plans to establish a procurement program and will work with outside professionals to build its business, create brands through eco-friendly packaging and distinctive labeling, and develop key distribution relationships.

 

The strategy is to have Anthus Life’s brand name strongly associated on all their distributed products and to focus on finding and developing the best USDA certified natural and/or organic food product options for North America. During 2013, the Company plans to continue to introduce additional USDA Certified Organic health product, positively impacting sales going forward. Also, for 2013, the Company’s R&D team will be diligently working to develop additional product line extensions to include but not limited to energy drinks, additional health food items, snacks, cookies, as well as the potential integration of advanced technologies such as nutraceuticals, etc.

 

In June 2009, Anthus Life secured a contract manufacturer with the requisite governmental approval, having completed the package design and is distributing the initial product offering. During the first half of 2012, the Company engaged efforts to entirely redesign the packaging (wrapper and display boxes) of its Natural plus Energy product line. The Company is excited about the opportunity to bring healthy, great tasting, and natural and/or organic food products at affordable prices to North American consumer market.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

This Annual report on Form 10-K and other reports filed by Stakool, Inc. (“we,” “us,” “our,” or the “Company”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements (collectively the “Filings”) and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

 

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

 

Results of Operations for the years ended December 31, 2012 and 2011

 

Revenues

 

Total Revenue. Total revenues for the years ended December 31, 2012 and 2011 were $17,435 and $16,710, respectively. Total revenues were the result of our product sales. Total cost of goods sold was $36,491 and $24,120 for the years ended December 31, 2012 and 2011, respectively. Gross Loss was $19,056 and $7,410 for the years ended December 31, 2012 and 2011, respectively.

 

Expenses

 

Operating expenses: Total operating expenses for the years ended December 31, 2012 and 2011 were $3,934,440 and $1,310,231. Operating expenses consisted of professional fees of $454,201, stock-based compensation for common and preferred stock of $3,062,015, rent of $16,445 and selling, general and administrative expenses of $401,779. The changes in operating expenses were primarily the results of stock-based compensation and consulting fees.

 

Other income (expenses): Other income (expenses) for the years ended December 31, 2012 and 2011 were $1,431,487 and $7,100, respectively. Other income (expenses) consisted of forgiveness of debt of $3,750, interest expense of $8,344, amortization of debt discount of $30,013, loss on debt settlement of $320,688, loss on note settlement of $106,242, loss on stock issuance of $262,500 and loyalty expense of $707,450. The change in other income (expense) was primarily due to stock issued for less than market value, loss due to the settlement of debt and preferred stock issued to investors as a loyalty gift.

 

Liquidity & Capital Resources

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

 

The Company sustained a loss of $5,384,983 for the year ended December 31, 2012 and $1,324,741 for the year ended December 31, 2011. Because of the absence of positive cash flows from operations, the Company requires additional funding for continuing the development and marketing of products. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

We are presently unable to meet our obligations as they come due. At December 31, 2012 we had minimal assets and a working capital deficit of $664,983. Our working capital deficit is due to the results of operations.

 

Net cash used in operating activities for the year ended December 31, 2012 and 2011 was ($179,022) and ($291,064), respectively. Net cash used in operating activities includes our net loss, accounts payable, depreciation, prepaid expenses, accrued interest, inventories and stock-based compensation.

 

Net cash provided by investing activities for the year ended December 31, 2012 and 2011 was $-0- and $34,493, respectively. Net cash provided by investing activities for the year ended December 31, 2011 included the purchase of property and equipment and the repayment to us of a note receivable.

 

Net cash provided by financing activities for the year ended December 31, 2012 and 2011 was $163,800 and $184,700, respectively. Net cash provided by financing activities for the year ended December 31, 2012 includes the proceeds from stock sales of $13,000 and the issuance of convertible notes payable of $150,800.

 

We anticipate that our future liquidity requirements will arise from the need to fund our growth from operations, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. In addition, our Plan of Operation for the next twelve months is to raise capital to continue to expand our operations. We are presently engaged in capital raising activities through one or more private offering of our company’s securities. See “Note 8– Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

 

We do not hold any derivative instruments and do not engage in any hedging activities.

 

 

Item 8. Financial Statements and Supplementary Data

 

The financial statements and supplementary data required by this item are set forth at the end of this Annual Report on Form 10-K beginning on page F-1.

  

STAKOOL, INC.

TABLE OF CONTENTS

DECEMBER 31, 2012

 

		Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets as of December 31, 2012 and 2011		F-2
Consolidated Statements of Operations for the years ended December 31, 2012 and 2011		F-3
Consolidated Statement of Stockholders’ Equity (Deficit) as of December 31, 2012		F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2011		F-5
Notes to Consolidated Financial Statements		F-6 – F-13

 

 

Silberstein Ungar, PLLC CPAs and Business Advisors

 

Phone (248) 203-0080

Fax (248) 281-0940

30600 Telegraph Road, Suite 2175

Bingham Farms, MI 48025-4586

www.sucpas.com

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Boards of Directors

Stakool, Inc.

Alpharetta, Georgia

 

We have audited the accompanying consolidated balance sheets of Stakool, Inc., as of December 31, 2012 and 2011, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit 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 audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Stakool, Inc., as of December 31, 2012 and 2011 and the results of its operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying consolidated financial statements have been prepared assuming that the Stakool, Inc. will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has negative working capital, has received limited revenue from sales of products or services, and has incurred losses from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are described in Note 8. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Silberstein Ungar, PLLC
Silberstein Ungar, PLLC
Bingham Farms, Michigan
April 14, 2013

 

 

STAKOOL, INC.

CONSOLIDATED BALANCE SHEETS

 

		December 31, 2012				December 31, 2011
Assets
Current assets:
Cash		$	338			$	15,560
Accounts receivable			—				3,211
Prepaid expenses			—				334,263
Inventories			—				21,925
Total current assets			338				374,959
Property and equipment, net			828				1,311
Other assets:
Deposits			1,700				1,700
Total assets		$	2,866			$	377,970
Liabilities and Stockholders’ Equity (Deficit)
Liabilities
Current liabilities:
Accounts payable		$	259,395			$	14,710
Due for acquisition			—				220,000
Customer deposit			144				—
Stock payable			295,318				—
Notes payable			—				35,000
Loan payable			6,000				6,000
Convertible notes payable, net of debt discount			102,013				10,000
Accrued interest			2,451				10,299
Total current liabilities			665,321				296,009
Total liabilities			665,321				296,009
Stockholders’ equity (deficit)
Common stock, 4,000,000,000 shares authorized, 3,375,231,494, par value $0.00001 and 43,311,767, par value $0.001 shares issued and outstanding as of December 31, 2012 and 2011, respectively			33,008				43,312
Preferred stock A, 100,000,000 shares authorized, 0, par value $0.00001 and 10,000,000,par value $0.001 shares issued and outstanding as of December 31, 2012 and 2011, respectively			—				10,000
Preferred stock B, 10 shares authorized, $0.00001 par value, 1 and 0 shares issued and outstanding as of December 31, 2012 and 2011, respectively			—				—
Preferred stock C, 30,000,000 shares authorized, $0.00001 par value, 341,180 and 0 shares issued and outstanding as of December 31, 2012 and 2011, respectively			3				—
Additional paid-in capital			6,296,248				1,556,450
Treasury stock			208				56,638
Deferred compensation			(22,500	)			—
Accumulated deficit			(6,969,422	)			(1,584,439	)
Total stockholders’ equity (deficit)			(662,455	)			81,961
Total liabilities and stockholders’ equity (deficit)		$	2,866			$	377,970

 

The accompanying notes are an integral part of these financial statements.

 

  

STAKOOL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

		Year Ended				Year Ended
		December 31, 2012				December 31, 2011
Revenues		$	17,435			$	16,710
Cost of goods sold			36,491				24,120
Gross loss			(19,056	)			(7,410	)
Operating expenses
Professional fees			454,201				160,952
Stock based compensation			3,062,015				1,013,937
Rent			16,445				16,475
Selling, general & administrative			401,779				118,867
Total operating expenses			3,934,440				1,310,231
Loss from operations			(3,953,496	)			(1,317,641	)
Other income (expenses)
Forgiveness of debt			3,750				—
Interest expense			(8,344	)			(7,100	)
Amortization of debt discount			(30,013	)			—
Loss on debt settlement			(320,688	)			—
Loss on note settlement			(106,242	)			—
Loss on stock issuance			(262,500	)			—
Loyalty expense			(707,450	)			—
Total other income (expenses)			(1,431,487	)			(7,100	)
Loss before provision for income taxes			(5,384,983	)			(1,324,741	)
Provision for income taxes			—				—
Net (loss)		$	(5,384,983	)		$	(1,324,741	)
Loss per common shares basic and diluted		$	(0.01	)		$	(0.08	)
Basic and diluted weighted average number of common shares outstanding			864,334,607				17,172,526

 

The accompanying notes are an integral part of these financial statements.

 

  

STAKOOL, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

 

		Common Stock								Preferred Stock A								Preferred Stock B								Preferred Stock C								Additional																Total
		Shares				Par Value				Shares				Par Value				Shares				Par Value				Shares				Par Value				paid-in Capital				Treasury Stock				Deferred Compensation				Accumulated Deficit				Stockholders’ Equity
Balance at January 1, 2011			3,784,500			$	3,785				—			$	—				—			$	—				—			$	—			$	368,815			$	—			$	—			$	(259,698	)		$	112,902
Shares issued for cash at $0.10 per share			3,290,000				3,289				—				—				—				—				—				—				325,711				—				—				—				329,000
Equity issuance cost			—				—				—				—				—				—				—				—				(30,200	)			—				—				—				(30,200	)
Effects of reverse merge			79,425,737				79,426				10,000,000				10,000				—				—				—				—				(439,426	)			—				—				—				(350,000	)
Stock returned to treasury			(56,638,470	)			(56,638	)			—				—				—				—				—				—				—				56,638				—				—				—
Stock issued for services			4,450,000				4,450				—				—				—				—				—				—				440,550				—				—				—				445,000
Stock issued for services to a related party			9,000,000				9,000				—				—				—				—				—				—				891,000				—				—				—				900,000
Net loss			—				—				—				—				—				—				—				—				—				—				—				(1,324,741	)			(1,324,741	)
Balance at December 31, 2011			43,311,767				43,312				10,000,000				10,000				—				—				—				—				1,556,450				56,638				—				(1,584,439	)			81,961
Common stock issued for services			1,650,000				1,650				—				—				—				—				—				—				106,650				—				—				—				108,300
Common stock issued for services			2,650,000				2,650				—				—				—				—				—				—				47,965				—				—				—				50,615
Correction of outstanding shares			1,950,000				1,950				—				—				—				—				—				—				(1,950	)			—				—				—				—
Stock issued for debt conversion			17,422,000				17,422				—				—				—				—				—				—				29,688				—				—				—				47,110
Stock issued for note payable sweetener			100,000				100				—				—				—				—				—				—				1,900				—				—				—				2,000
Cancellation of previously issued stock			—				—				—				—				—				—				—				—				35,879				(35,879	)			—				—				—
Stock issued against stock payable			9,715,000				9,715				—				—				—				—				—				—				34,003				—				—				—				43,718
Adjustment for new par value of $0.00001			—				(76,775	)			—				(9,900	)			—				—				—				—				107,226				(20,551	)			—				—				—
Common stock issued for services			2,000,000				20				—				—				—				—				—				—				5,580				—				—				—				5,600
Preferred C stock issued for services			—				—				—				—				—				—				18,000				—				45,000				—				(22,500	)			—				22,500
Common stock issued to director for control			2,000,000,000				20,000				—				—				—				—				—				—				2,580,000				—				—				—				2,600,000
Preferred C stock issued for services			—				—				—				—				—				—				35,000				—				87,500				—				—				—				87,500
Preferred C stock issued for cash at $2.50 per share			—				—				—				—				—				—				5,200				—				13,000				—				—				—				13,000
Preferred B Stock issued to an officer and director for control			—				—				—				—				1				—				—				—				—				—				—				—				—
Stock issued for debt conversion			393,932,727				3,939				—				—				—				—				—				—				42,393				—				—				—				46,332
Common stock issued for services			375,000,000				3,750				—				—				—				—				—				—				446,250				—				—				—				450,000
Correction of outstanding shares			1,500,000				15				—				—				—				—				—				—				(15	)			—				—				—				—
Stock issued against stock payable			526,000,000				5,260				—				—				—				—				—				—				46,640				—				—				—				51,900
Loss on issuance of stock against stock payable			—				—				—				—				—				—				—				—				262,500				—				—				—				262,500
Loss on stock issued for convertible note			—				—				—				—				—				—				—				—				106,242				—				—				—				106,242
Retired Preferred Series A stock			—				—				(10,000,000	)			(100	)			—				—				—				—				100				—				—				—				—
Intrinsic value of beneficial conversion feature of convertible note			—				—				—				—				—				—				—				—				35,800				—				—				—				35,800
Preferred C stock issued to prior stockholders as a loyalty gift			—				—				—				—				—				—				282,980				3				707,447				—				—				—				707,450
Net loss for the year ended December 31, 2012			—				—				—				—				—				—				—				—				—				—				—				(5,384,983	)			(5,384,983	)
Balance at December 31, 2012			3,375,231,494			$	33,008				—			$	—				1			$	—				341,180			$	3			$	6,296,248			$	208			$	(22,500	)		$	(6,969,422	)		$	(662,455	)

  

The accompanying notes are an integral part of these financial statements.

 

  

STAKOOL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Year ended				Year ended
		December 31, 2012				December 31, 2011
Cash flows from operating activities:
Net loss for the year		$	(5,384,983	)		$	(1,324,741	)
Adjustments to reconcile net loss to net cash used in operating activities
Forgiveness of debt			(3,750	)			—
Depreciation expense			483				458
Amortization of debt discount			30,013				—
Issuance of Preferred C stock for loyalty			707,450				—
Issuance of Common and Preferred C stock for services			3,062,015				1,013,937
Loss on stock issuance			262,500				—
Loss on debt settlement			320,688				—
Loss on note conversion			106,242				—
Change in assets and liabilities:
Accounts and other receivables			3,211				(3,211	)
Prepaid expense			334,263				2,766
Inventories			21,925				2,781
Accounts payable			309,601				9,846
Customer deposits			144				—
Stock payable			47,831				—
Accrued interest			3,345				7,100
Net cash used in operating activities			(179,022	)			(291,064	)
Cash flows from investing activities:
Purchase of property and equipment			—				(507	)
Payments received on note receivable – related party			—				35,000
Net cash provided by investing activities			—				34,493
Cash flows from financing activities:
Proceeds from loans payable			—				6,000
Proceeds from convertible notes payable			150,800				10,000
Payments made on due to director loan			—				(100	)
Payments on due for acquisition			—				(130,000	)
Equity issuance cost			—				(30,200	)
Proceeds from sale of Common stock			—				329,000
Proceeds from sale of Preferred C stock			13,000				—
Net cash provided by financing activities			163,800				184,700
Decrease in cash and cash equivalents			(15,222	)			(71,871	)
Cash and cash equivalent, beginning of period			15,560				87,431
Cash and cash equivalents, end of period		$	338			$	15,560
Supplemental cash flow information:
Cash paid for Income taxes		$	—			$	—
Cash paid for Interest		$	—			$	—
Supplemental non-cash investing and financing activities:
Issuance of stock payable for debt settlement		$	284,917			$	—
Stock issued against stock payable		$	37,430			$	—
Stock issued for accrued interest		$	11,193			$	—
Stock issued to settle note payable		$	31,250			$	—
Stock issued against convertible debt		$	53,000			$	—
Initial valuation of debt discount		$	35,800			$	—
Note payable recorded in connection with acquisition		$	—			$	350,000
Issuance of stock for deferred compensation		$	22,500			$	—
Prepaid expense recorded from stock issued for services		$	—			$	331,063

 

The accompanying notes are an integral part of these financial statements.

 

  

STAKOOL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 1 – NATURE OF BUSINESS

 

ORGANIZATION

 

Stakool, Inc. f/k/a Mod Hospitality, Inc. (“the Company” or “Stakool”) was incorporated in the State of Delaware in 1993. In 1997, the Company changed its Corporate Charter to the State of Nevada. On July 22, 2011, Stakool entered into an agreement of Purchase and Sale with Anthus Life Corp. (“Anthus”) where Anthus acquired 74,834,313 of the issued and outstanding shares of Stakool. Anthus operates as a wholly owned subsidiary of Stakool.

 

Anthus Life Corp. was incorporated in Nevada on June 4, 2009. Anthus is a developer and manufacturer of natural and organic food products packaged for consumer consumption. The company has one product line in the natural food category currently, and will deploy several additional product lines fostering rapid growth in retail accounts, consumer exposure and revenue.

 

The company is headquartered in Jacksonville, FL.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

ACCOUNTING BASIS

 

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP accounting”). The Company has adopted a December 31 fiscal year end.

 

PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the financial statements of the Stakool, Inc. and its wholly-owned subsidiary Anthus Life Corp. All significant inter-company balances and transactions within the Company and subsidiary have been eliminated upon consolidation.

 

CASH AND CASH EQUIVALENTS

 

Stakool considers all highly liquid investments with maturities of three months or less to be cash equivalents. At December 31, 2012 and 2011, the Company had $338 and $15,560 of cash, respectively.

 

CASH FLOWS REPORTING

 

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The Company’s financial instruments are carried at the approximate fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

USE OF ESTIMATES

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

  

STAKOOL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

FAIR VALUE MEASUREMENTS

 

The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

●		Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities
●		Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
●		Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2012. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

DEFERRED INCOME TAXES AND VALUATION ALLOWANCE

 

The Company accounts for income taxes under FASB ASC 740 “Income Taxes.” Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

 

INVENTORIES

 

Inventories consist of natural and organic food products, wrappers and boxes, and are stated at the lower of cost or market. Cost is determined on the average cost method. Inventories are reviewed and reconciled quarterly. As of December 31, 2012, all inventories were written off due to spoilage.

 

ACCOUNTS RECEIVABLE

 

The Company’s receivables consist of billings to customers for products invoiced and shipped. The Company charges off receivables if they determine that the amount is no longer collectible. The allowance for bad debts is determined based on management’s estimate of uncollectible receivables. The allowance for doubtful accounts on receivables was $0 as of December 31, 2012. Bad debt expense related to customer receivables for the year ended December 31, 2012 was $462.

 

PROPERTY AND EQUIPMENT

 

The capital assets are being depreciated over their estimated useful lives, three to seven years using the straight-line method of depreciation for book purposes.

 

  

STAKOOL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

NET INCOME (LOSS) PER COMMON SHARE

 

Net income (loss) per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.

 

Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at December 31, 2012 and 2011. As of December 31, 2012 and 2011, the Company had no dilutive potential common shares.

 

REVENUE RECOGNITION

 

The Company derives revenue from the sale of its products. The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

 

SHARE-BASED EXPENSE

 

ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

 

Share-based expense for the years ended December 31, 2012 and 2011 totaled $3,062,015 and $1,013,937, respectively.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company’s present or future financial statements.

 

NOTE 3 – PROPERTY AND EQUIPMENT

 

Property and equipment is recorded at cost. The Company depreciates the equipment using the straight-line method over the useful lives of the equipment. The useful lives are estimated to be between 3 and 7 years. Depreciation expense was $483 and $458 for the years ended December 31, 2012 and 2011, respectively. Property and equipment consisted of the following at December 31, 2012 and December 31, 2011:

 

		2012				2011
Furniture and fixtures		$	1,192			$	1,192
Office equipment			649				649
Less: Accumulated depreciation			(1,013	)			(530	)
Property and equipment, net		$	828			$	1,311

 

  

STAKOOL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 4 – DUE FOR ACQUISITION

 

On July 22, 2011, Stakool entered into an agreement of Purchase and Sale with Anthus where Anthus acquired all the shares of Stakool.

 

The Company recorded a liability in association with the agreement of purchase and sale in the amount of $350,000. The terms of the agreement required a $100,000 payment at closing with additional payments due over the next six months. The Company paid $30,000 of the remaining $250,000 during the year ended December 31, 2011. The payment terms were amended to require monthly payments between $15,000 and $30,000 from February 2012 through October 2012. As part of the amended terms, an additional $5,000 was added to the balance as interest. The balance for the amount due for acquisition was $220,000 as of December 31, 2011. An additional $5,000 of interest was also due at December 31, 2011. The entire balance was settled in 2012. See Note 5.

 

NOTE 5 – STOCK PAYABLE

 

On April 26, 2012, The Company entered into an agreement with Ironridge Global to settle $284,917.22 in accounts payable (which includes the balance of the Note Payable for the acquisition of Stakool by Anthus Life Corp., outstanding legal fees, filing fees, packaging costs and certain manufacturing costs), in exchange for unregistered shares of common stock. Pursuant to an order approving stipulation for settlement of claims between Ironridge and the Company, Ironridge is entitled to receive 1 million common shares plus that number of shares with an aggregate value equal to $332,748, divided by 70% of the following: the volume weighted average price of the issuer’s common stock over that number of consecutive trading days following the date of receipt required for the aggregate trading volume to exceed $1.75 million, not to exceed the arithmetic average of the individual daily volume weighted average prices of any five trading days during such period.

 

Ironridge is prohibited from receiving any shares of common stock that would cause it to be deemed to beneficially own more than 9.99% of the Company’s total outstanding shares at any one time. Ironridge received an initial issuance of 9,715,000 shares, and may be required to return or be entitled to receive shares, based on the calculation summarized in the prior paragraph. For purposes of calculating the percent of class, the initial issuance to Ironridge was based upon a total of 87,549,167 shares of common stock outstanding immediately prior to the issuance of shares to Ironridge, such that 9,715,000 shares issued would represent approximately 9.99% of the outstanding common stock after such issuance. Ironridge received an additional 526,000,000 shares during the year ended December 31, 2012 and the remaining balance of the stock payable was $295,318 as of December 31, 2012.

 

In connection with the transaction, Ironridge agreed not to hold any short position in the issuer’s common stock, and not to engage in or affect, directly or indirectly, any short sale until at least 180 days after the end of the calculation period.

 

NOTE 6 – NOTES AND CONVERTIBLE NOTES PAYABLE

 

The Company issued a promissory note for $35,000 during the period ended December 31, 2009. The note bears 6% interest, is unsecured and due on demand. Interest expense was $2,100 and $2,100 for the years ended December 31, 2011 and 2010, respectively. Total accrued interest on this loan was $5,299 as of December 31, 2011. The note and all accrued interest were converted to shares of common stock during the first quarter of 2012.

 

The Company issued two notes payable in the amount of $5,000 each in February 2011. The notes are unsecured, non-interest bearing and due on demand. The notes can be converted to common stock at the note holders’ discretion at $0.001 per share. The notes totaled $10,000 as of December 31, 2011. The notes were converted in full to 10,000,000 shares of common stock during the first quarter of 2012.

 

On October 4, 2012, a portion of a note payable and related accrued interest were assigned to an unrelated party. The entire principal and accrued interest amount of $33,333 were converted to shares of common stock per the terms of the amended convertible note payable. A loss on the conversion of the note to stock of $106,242 was recorded in other expenses.

 

The Company borrowed $6,000 in December 2011. The loan is unsecured, non-interest bearing and due on demand. The balance of this loan was $6,000 as of December 31, 2012 and 2011, respectively.

 

  

STAKOOL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 6 – NOTES AND CONVERTIBLE NOTES PAYABLE (CONTINUED)

 

Convertible notes payable consist of the following at December 31, 2012 and 2011:

 

Convertible		2012				2011
On March 1, 2012, the Company executed a note payable for proceeds of $35,800. The note bears 0% interest, is unsecured and due on demand.		$	22,800			$	-
On October 5, 2012, the Company executed a convertible promissory note for proceeds of $32,500. The note bears 8% interest and is secured by common stock of the Company. The loan matures on July 10, 2013. Any principal balance remaining after the due date is subject to an increased interest rate of 22% APR. The principal and interest can be convertible into shares of the Company’s common stock at a 45% discount to the market price.			32,500				-
On August 15, 2012, the Company executed a convertible promissory note to Asher Enterprises, Inc. for proceeds of $32,500. The note bears a 8% interest and is secured by common stock of the Company. The loan matures on May 17, 2013. Any principal balance remaining after the due date is subject to a increased interest rate of 22% APR. The principal and interest can be convertible into shares of the Company’s common stock at a 45% discount to the market price.			32,500				-
On January 16, 2012, the Company issued a convertible promissory note to a shareholder for proceeds of $50,000. The note bears 10% interest and is secured by common stock of the Company. The loan matures on January 16, 2013. Beginning 30 days before the maturity date of January 16, 2013, the note and any accrued interest is convertible into shares of the Company’s common stock at $0.05 per share. Additionally, the Company issued 100,000 shares of common stock in connection with the note. The value of the shares of common stock will be recorded as additional interest amortized over the life of the loan. On October 4, 2012, $30,000 of principal and $3,333 of accrued interest were assigned to an unrelated party.			20,000				-
Debt Discount			(5,787	)			-
Total notes payable		$	102,013			$	-
Less current maturities		$	102,013			$	-

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

During the year ended December 31, 2012, the Company issued 2,000,000,000 shares of common stock and 1 share of convertible preferred B stock to an officer and director that has been classified as stock based compensation during the year ended December 31, 2012. The Company also recorded consulting expense paid to this director of $50,000 and $65,600 for consulting services during the years ended December 31, 2012 and 2011, respectively.

 

During the year ended December 31, 2012, the Company issued 35,000 shares of convertible preferred C stock for services rendered to related parties.

  

  

STAKOOL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 8 – STOCKHOLDERS’ EQUITY (DEFICIT)

 

The Company filed an amendment to its Articles of Incorporation with the state of Nevada on July 23, 2012 to change the designation of its capital and preferred stock, as follows. The authorized common stock of the Company consist of 4,000,000,000 shares with a par value $0.00001. The Company also has 100,000,000 shares of par value $0.00001 Preferred A stock authorized, 10 shares of par value $0.00001 Preferred B stock authorized, and 30,000,000 par value $0.00001 par value Preferred C stock authorized. The Company adjusted the par value and additional paid in capital accounts on its balance sheet at September 30, 2012 for common and Preferred A stocks.

 

During the year ended December 31, 2012, the Company issued 1,950,000 shares of restricted common stock to initial private placement investors in Anthus Life per terms of their subscription agreements.

 

During the year ended December 31, 2012, the Company issued 3,650,000 shares of common stock and 9,000 shares of Convertible Preferred C stock to consultants for services. The Company also issued 9,000 shares of Convertible Preferred C stock to a consultant for deferred services.

 

During the year ended December 31, 2012, he Company issued 2,650,000 shares of common stock to the former management per the acquisition agreement.

 

During the year ended December 31, 2012 the Company issued 2,000,000,000 shares of common stock, 35,000 shares of Convertible Preferred C stock and 1 share of Convertible Preferred B stock to related parties that has been classified as stock based compensation during the year ended December 31, 2012.

 

On January 10, 2012, the Company retired 35,878,570 shares of common stock held in treasury at December 31, 2011.

 

During the year ended December 31, 2012, the Company converted five convertible notes payable from non-related parties along with the accrued interest for a total of $93,443 into 411,354,727 shares of its common stock. The Company also issued 100,000 shares of common stock for $2,000 to a non-related party.

 

During the year ended December 31, 2012, the Company issued 5,200 shares of preferred C stock for $13,000 in cash.

 

On April 26, 2012, the Company entered into an agreement with Ironridge Global to settle $284,917 in accounts payable (which includes the balance of the Note Payable for the acquisition of Stakool by Anthus Life Corp., outstanding legal fees, filing fees, packaging costs and certain manufacturing costs), in exchange for unregistered shares of common stock. Ironridge received an initial issuance of 9,715,000 shares of the Company’s common stock. During the year ended December 31, 2012 the Company issued an additional 526,000,000 shares of unrestricted common stock to Ironridge.

 

On September 14, 2012, the Company filed a Form S-8 with the Securities and Exchange Commission. The Form S-8 registered 400,000,000 shares of its common stock in connection with the Company’s 2012 Incentive Stock Plan.

 

During the month of October 2012, the Company issued 282,980 shares of the Company’s Convertible Preferred C stock. The stock was issued as an addendum to the subscription agreements associated with the open private placement investments made by various investors between fiscal year 2009 and 2011.

 

On October 5, 2012 the Company issued 375,000,000 shares of its common stock without restriction to various consultants for services. The Company registered the common stock with the Securities and Exchange Commission on Form S-8 on September 14, 2012.

 

During the year ended December 31, 2012, the Company issued 1,5000,000 shares of restricted common stock to initial private placement investors in Anthus Life per terms of their subscription agreements.

 

During the year ended December 31, 2012 the Company retired 10,000,000 shares of its Preferred A stock, which accounted for all of the issued and outstanding Preferred A Stock.

 

  

STAKOOL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 9 – INCOME TAXES

 

As of December 31, 2012, the Company had net operating loss carry forwards of $6,969,423 that may be available to reduce future years’ taxable income through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

 

The provision for Federal income tax consists of the following for the years ended December 31, 2012 and 2011:

 

		2012				2011
Federal income tax benefit attributable to:
Current operations		$	1,830,894			$	405,412
Less: valuation allowance			(1,830,894	)			(405,412	)
Net provision for Federal income taxes		$	0			$	0

 

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of December 31, 2012 and 2011:

 

			2012			2011
Deferred tax asset attributable to:
Net operating loss carryover		$	2,369,603			$	538,709
Less: valuation allowance			(2,369,603	)			(538,709	)
Net deferred tax asset		$	0			$	0

 

NOTE 10 – GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating cost and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 11 – SUBSEQUENT EVENTS

 

On January 4, 2013 the Company issued 2,000 Preferred C Series shares in consideration for a $5,000 investment received from a third party.

 

On January 28, 2013 and March 15, 2013, the Company issued 155,698,106 and 70,000,000 shares of its common stock, respectively, without restriction, for outsourced professional services.  The Company registered the common stock with the Securities and Exchange Commission on Form S-8 on September 14, 2012, with additional shares, registered under Form S-8 filed on January 23, 2013.

 

On February 6, 2013, the Company signed a convertible note with Asher Enterprises for $10,500 in proceeds. This note carries an annual percentage rate of 8% with a maturity date of November 11, 2013.

 

On February 8, 2013, through majority vote of the Board of Directors, the Board removed Elsa Desousa. The Board unanimously agreed that the services of Ms. Desousa were no longer required. The removal of Ms. Desousa also canceled the 25,000 Preferred C Series share that were initially issued to her on September 24, 2012.

 

On February 8, 2013, the Company terminated three consulting agreements with Richard Desousa, Kenneth Radcliffe and Ana Pastorfide. The services performed by these individuals did not satisfactorily benefit the Company’s strategic direction, and as a result, management deemed it no longer necessary to maintain these agreements.

 

On March 13, 2013, the Company delivered three Senior Secured Convertible Promissory Notes, in the respective principal amounts of $34,500, $35,000 and $40,000, for outsourced professional services.  All of such notes provide for interest at the rate of 12% per annum, are payable on demand, and provide for conversion at the 5-day average closing bid price multiplied by 3.

 

  

STAKOOL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

 

NOTE 11 – SUBSEQUENT EVENTS (CONTINUED)

 

On February 8, 2013 the Company terminated a consulting agreement it had with 701877 Canada, Inc. for lack of performance, the consultant was originally issued 10,000 Preferred C Series shares on August 20, 2012, and these shares have been cancelled with this termination.

 

On February 20, 2013, the Company signed a convertible note with Asher Enterprises for $27,500 in proceeds. However, as of the date of this filing, this note has not yet been funded. The terms, once funded, state that the note carries and annual percentage rate of 8% with a maturity date of November 22, 2013.

 

On February 21, 2013 and March 9, 2013, Peter Hellwig returned 500,000,000 shares and 400,000,000 shares respectively of his 2 billion restricted common shares to treasury.

 

On March 9, 2013 the Company issued 300,000,000 shares of common its common stock to Ironridge Global in continued satisfaction of the 3(a)(10) Order for Approval of Stipulation for Settlement of Claims entered into between the Company and Ironridge Global on April 27, 2012.

 

On March 14, 2013 Asher Enterprises exercised its conversion rights on its note dated August 15, 2012 converting $8,200 of the $32,500 principle balance into 136,666,666 shares at $0.00006, leaving a remaining balance on the note of $24,300.

 

On March 15, 2013, the Board of Directors voted on the approval of a Change of Control in the management of the Company going forward. As a result, the, then current, Board of directors consisting of Peter Hellwig, Christian Breda and Kenji Katayama resigned their respective positions, and approved the appointment of Joseph C. Canouse as the sole Director and President and CEO of Stakool, Inc. and all of it operations.

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2012 to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements.

 

 

Item 9. Changes in and Disagreements with Accountants and Financial Disclosure

 

There were no significant changes in our internal controls over financial reporting that occurred subsequent to our evaluation of our internal control over financial reporting for the period ended December 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9A. Controls and Procedures

 

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

Our management, with the participation of our Chief Executive Officer has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), in connection with the preparation of this Annual Report on Form 10-K, as of December 31, 2012.

 

Based on the review described above, our Chief Executive Officer determined that our disclosure controls and procedures were not effective as of the end of the period covered by this report.

 

(b) MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

 

Our Management is responsible for establishing and maintaining adequate internal control over financial reporting under the supervision of the President and Chief Executive Officer and the Chief Financial Officer. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 

Management evaluated the design and operation of our internal control over financial reporting as of December 31, 2012, based on the framework and criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and has concluded that such internal control over financial reporting were not effective.

 

An evaluation was performed, under the supervision of, and with the participation of, our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-(e) to the Securities and Exchange Act of 1934). Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were not adequate and effective, as of December 31, 2012, to ensure that information required to be disclosed by us in the reports that it files or submits under the Securities Exchange Act of 1934, is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

We do not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the system are met and cannot detect all deviations. Because of the inherent limitations in all control systems, no evaluation of control can provide absolute assurance that all control issues and instances of fraud or deviations, if any, within the Company have been detected.

 

This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this report.

 

Item 9B. Other Information

 

Not applicable.

 

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance

  

Information Regarding the Officers and Directors of Stakool, Inc.

 

Our bylaws provide that our board of directors shall consist of at least one member and will be determined by resolution of our board of directors. The number of members of our board of directors is currently one.

 

The following table lists our directors and provides their respective ages and titles as of December 31, 2012.

 

Name		Age		Position
Peter Hellwig(1)		46		Director, President/CEO
Kenji Katayama(1)		55		Secretary/Director
Christian Breda(1)		29		Director
Elsa Desousa (2)		56		Director
Joseph C. Canouse(1)		49		Director, President/CEO

 

(1)		Effective March 15, 2013, Peter Hellwig, Kenji Katayama, and Christian Breda resigned as directors and from all officer positions then currently held; as of such date Joseph C. Canouse was appointed as Director, President and Chief Executive Officer.
(2)		Effective February 8, 2013, Elsa Desousa, was removed from the Board of Directors.

 

Joseph C. Canouse, age 49, Chief Executive Officer, Director Mr. Joseph C. Canouse, age 49, combines over twenty plus years of experience in finance, consulting and public company restructuring. Previously, he had been involved in financing public and private companies where his firms raised over one billion dollars, primarily in the firm he founded in 1995, J.P. Carey. From 2011 through present, Mr. Canouse has been the Chief Executive Officer for Quasar Aerospace Industries, Inc., an aviation-related company. From 2011 to present he has held the same position for Expert Group, Inc., a company that transitioned from financial services to becoming involved in bottling natural spring water. He has an undergraduate degree from Stetson University where he graduated in 1986.

 

Family Relationships

 

There are no family relationships among our directors, executive officers, or persons nominated or chosen by the Company to become directors or executive officers.

 

Committees of the Board of Directors

 

The Company does not currently have any committees.

 

  

Compliance with Section 16(a) of the Exchange Act

 

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).

 

Based solely on our review of certain reports filed with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, the reports required to be filed with respect to transactions in our common stock during the fiscal year ended December 31, 2012, were timely, except for Form 10-K for the year ended December 31, 2011, which was filed on April 24, 2012, and Form 10-Q for the period ended March 31, 2012, which was filed on May 29, 2012.

 

Code of Ethics

 

We have not yet adopted a code of ethics because we wanted to complete our constitution of the Board prior to adopting such code of ethics to allow the entire Board to review and approve a code of ethics.

 

Legal Proceedings

 

There are no material proceedings to which any director or officer, or any associate of any such director or officer, is a party that is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries. No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years. No director or executive officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years. No director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities during the past ten years. No director or officer has been found by a court to have violated a federal or state securities or commodities law during the past ten years.

 

Item 11. Executive Compensation.

 

The following table sets forth compensation for each of the past three fiscal years with respect to each person who served as Chief Executive Officer of the Company and each of the four most highly-compensated executive officers of the Company who earned a total annual salary and bonuses that exceeded $100,000 in any of the two preceding fiscal years.

 

SUMMARY COMPENSATION TABLE
Name and Principal Position (a)		Year (b)				Salary ($) (c)				Bonus ($) (d)				Stock Awards ($) (e)				Option Awards ($) (f)				Non-Equity Incentive Plan Compensation ($) (g)				Nonqualified Deferred Earnings Compensation ($) (h)				All Other Compensation ($) (i)				Total ($) (j)
Peter Hellwig,			2012			$	50,000				0				2,600,000				0				0				0				0			$	2,650,000
President (1)			2011			$	65,600				0				0				0				0				0				0			$	65,600
			2010			$	0				0				0				0				0				0				0			$	0
Joseph C.			2012				-				-				-				-				-				-				-				-
Canouse (1)			2011				-				-				-				-				-				-				-				-
			2010				-				-				-				-				-				-				-				-

 

(1)

Effective March 15, 2013, Peter Hellwig resigned as President and Chief Executive Officer and Joseph C. Canouse was appointed President and Chief Executive Officer.

 

 

Compensation of Directors

 

Any Director who also becomes our employee will receive no extra compensation for their service on our Board of Directors. Directors may be compensated for out-of-pocket expenses associated with attending Board of Directors’ meetings.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The following table sets forth information concerning the beneficial ownership of shares of our common stock with respect to stockholders who were known by us to be beneficial owners of more than 5% of our common stock as of December 31, 2012, and our officers and directors, individually and as a group. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such shares of common stock.

 

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (“SEC”) and generally includes voting or investment power with respect to securities. In accordance with the SEC rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees, if applicable. Subject to community property laws, where applicable, the persons or entities named below have sole voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them.

 

Title of Class		Name of Beneficial Owner			Number of Shares				Percent of Class
Common		Joseph C. Canouse, Chief Executive Officer, President, and Director (1)			1,100,000,000				34.8	%

  

(1)

Effective March 15, 2013, Peter Hellwig resigned as President, Chief Executive Officer and Director and Joseph C. Canouse was appointed as President, Chief Executive Officer and Director.  In connection with such resignation and appointment, Mr. Hellwig assigned 1,100,000,000 shares of common stock to Mr. Canouse.

 

Item 13. Certain Relationships and Related Transactions and Director Independence

 

Certain consultants used by the Company may be paid in stock in lieu of cash, or in combination of stock and cash. The following consultants have been compensated with stock for services rendered: Sharon D. Mitchell (250,000 shares - legal services), Edward Avilies (700,000 shares – business and corporate development services), Shannon Miller Lifestyle (700,000 shares – advertising and promotion), Ludlow Capital, Inc. (investor/media relations – 2,000,000 shares), Brian Kistler (documentation support – 75,000,000 shares), Robin Hunt (documentation and financial reporting support – 75,000,000 shares), Ana Pastorfide (business development support – 75,000,000 shares), Richard Desousa (business development - 75,000,000 shares), Kenneth Radcliffe (business development – 75,000,000 shares)

 

  

We did not utilize promoters with regard to raising money through our private placement memorandum. Each investor was contacted directly by Peter Hellwig. Each investor was either a friend, family or a close business associate of the aforementioned.

 

Item 14. Principal Accountant Fees and Services

 

The following table presents the aggregate fees billed by for services provided during our 2011 and 2012 fiscal years.

 

		2012				2011
Audit Fees		$	19,000			$	8,000
Audit Related Fees		$	0			$	0
Tax Fees		$	1,200			$	1,200
Totals		$	20,200			$	9,200

 

Audit Fees. The fees identified under this caption were for professional services rendered by Silberstein Ungar, PLLC for fiscal years 2011 and 2012 in connection with the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q. The amounts also include fees for services that are normally provided by the independent public registered accounting firm in connection with statutory and regulatory filings and engagements for the years identified.

 

Audit-Related Fees. The fees identified under this caption were for assurance and related services that were related to the performance of the audit or review of our financial statements and were not reported under the caption “Audit Fees.” Audit-related fees consisted primarily of fees paid for Securities and Exchange Commission reporting matters and consents related to our uniform franchise offering circulars.

 

Tax Fees. Tax fees consist principally of assistance related to tax compliance and reporting.

 

Approval Policy. Our audit committee approves in advance all services provided by our independent registered public accounting firm. All engagements of our independent registered public accounting firm in fiscal years 2011and 2012 were pre-approved by Board of Directors.

 

  

PART IV

 

Item 15. Exhibits, Financial Statements, Schedules

 

3.1		Articles of Incorporation, as amended, incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 18, 2000.
3.2		Bylaws, incorporated by reference to the Company’ Registration Statement on Form 10/A filed with the Securities and Exchange Commission on December 17, 1998
3.3		Certificate of Designation, incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on August 31, 2012.
3.4		Certificate of Correction, incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on August 31, 2012.
4.1		Amendment to Amended Payment Schedule, incorporated by reference to the Company’s Form 8-K/A filed with the Securities and Exchange Commission on May 15, 2012.
31.1		Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)) *
31.2		Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))*
32.1		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

 

  

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  

	STAKOOL, INC.
Date: April 16, 2013	By:	/s/ Joseph C. Canouse
	Name:	Joseph C. Canouse
	Title:	Chief Executive Officer
		(Principal Executive Officer)
		(Principal Financial Officer)
		(Principal Accounting Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature		Title		Date
/s/ Joseph C. Canouse		Chief Executive Officer, Principal Executive		April 16, 2013
Joseph C. Canouse		Officer, Principal Financial Officer, Principal
		Accounting Officer, Sole Director