Anoteros, Inc. - FORM 10-K

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EX-32.01 - EXHIBIT 32.01 - Anoteros, Inc.	ex3201.htm
EXCEL - IDEA: XBRL DOCUMENT - Anoteros, Inc.	Financial_Report.xls
EX-31.02 - EXHIBIT 31.02 - Anoteros, Inc.	ex3102.htm
EX-31.01 - EXHIBIT 31.01 - Anoteros, Inc.	ex3101.htm

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

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

	For the transition period from ________ to ______

ANOTEROS, INC.

(Exact name of registrant as specified in its charter)


Nevada	000-52561	88-0368849
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification Number)
	6601 Center Drive West, Suite 500 Los Angeles, CA 90045 (Address of principal executive offices)
	(310) 997-2482
	(Registrant’s Telephone Number)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o 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 o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 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 o No o (not required)

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer o

Non-Accelerated Filer o	Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2012 was approximately $3,315,459 based upon the price $0.10 at which the common stock was last sold as of the last business day of the most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws.

As of April 19, 2013, there were 47,375,913 shares of the registrant’s $0.001 par value common stock issued and outstanding.

Documents incorporated by reference: None

Table of Contents

		Page
	PART I

Item 1	Business	2
Item 1A	Risk Factors	4
Item 1B	Unresolved Staff Comments	4
Item 2	Properties	4
Item 3	Legal Proceedings	4
Item 4	Mine Safety Disclosures	4

	PART II

Item 5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	5
Item 6	Selected Financial Data	6
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	6
Item 7A	Quantitative and Qualitative Disclosures about Market Risk	9
Item 8	Financial Statements and Supplementary Data	10
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	26
Item 9A	Controls and Procedures	26
Item 9B	Other Information	28

	PART III

Item 10	Directors and Executive Officers and Corporate Governance	28
Item 11	Executive Compensation	30
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
Item 13	Certain Relationships and Related Transactions	32
Item 14	Principal Accountant Fees and Services	33

	PART IV

Item 15	Exhibits	33

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FORWARD-LOOKING STATEMENTS

·	The availability and adequacy of our cash flow to meet our requirements;
·	Economic, competitive, demographic, business and other conditions in our local and regional markets;

·	Changes or developments in laws, regulations or taxes in our industry;
·	Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;

·	Competition in our industry;
·	The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;

·	Changes in our business strategy, capital improvements or development plans;
·	The availability of additional capital to support capital improvements and development; and

·	Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC.

This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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Use of Term

Except as otherwise indicated by the context, references in this report to “Company”, “ANOS”, “we”, “us” and “our” are references to Anoteros, Inc. All references to “USD” or United States Dollars refer to the legal currency of the United States of America.

PART I

ITEM 1. BUSINESS

Anoteros Inc. (the “Company”) was incorporated on September 25, 1996 under the laws of the State of Nevada, as Out of Bounds Sports Co. and initially entered the sportswear market, manufacturing and marketing tee shirts, golf shorts and hats with the “OB Golf” and “OB Sports” logo.

Thereafter, the Company turned its focus to the children’s education and entertainment arena utilizing the gorilla charter “Doolittle” depicted in various sporting activities and worked on various story lines and character treatments. We completed the final story line and draft of Book 1 – The Story of Doolittle, an Exceptional Young Gorilla in May 2000. The story line and preliminary draft of Book 2 – The Adventures of Dynamic Doolittle – Episode 1 “The Problem with Paulie Python” was completed in October 2000 and, the story line and preliminary draft of Book 3 - Doolittle’s Very, Very Bad Day was completed in May 2001.

On February 19, 2002, the Company formed Doolittle Edutainment Corp., a Nevada corporation (“Doolittle Edutainment”) as a wholly owned subsidiary, for the purpose of holding the intellectual property and other assets relating to the Company’s Doolittle books and product line.

On April 29, 2011, the Company closed an Agreement and Plan of Merger (the “Merger Agreement”) with COA Holdings, Inc., a Nevada corporation (“COAH”), Antero Payment Solutions, Inc., a Nevada corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and certain Major Shareholders of COAH (the “Major Shareholders”) whereby the Company acquired COAH through the merger of COAH with and into Merger Sub (the “Merger”) with Merger Sub being the surviving corporation, and the business of COAH continuing through Merger Sub, under the name Antero Payment Solutions, Inc., as a wholly-owned subsidiary of the Company.

On September 14, 2011, the Company and George Chachas (“Mr. Chachas”) entered into an Assignment and Assumption Agreement (the “Assignment and Assumption Agreement”), whereby, Mr. Chachas exercised a previously granted option (the “Option”) to acquire Doolittle Edutainment Corp. Mr. Chachas originally acquired the Option pursuant to the terms and conditions the Merger Agreement. Mr. Chachas delivered Notice of Exercise of Assignee’s Option to the Company on September 12, 2011. Accordingly, Mr. Chachas acquired all of the capital stock of Doolittle Edutainment as well as all assets and intellectual property owned by Doolittle Edutainment and any and all liabilities associated with Doolittle Edutainment.

Accordingly, we now operate through our wholly-owned subsidiary, Antero Payment Solutions, Inc.

Antero Payment Solutions, Inc.

Antero is a global provider of information management and electronic commerce systems for the financial services industry. Antero has developed a wide range of e-commerce platforms to ensure secure electronic payments for checking, debit card, prepaid card and mobile payment applications, providing merchants with opportunities for lower cost structures and the potential to increase their client bases. Antero performs the issuing and processing tasks of bank processors, while offering a complete suite of customer support services. By owning and servicing our own branded products, we help to create additional value for clients by educating their teams in better ways to increase penetration of their markets through our online and retail networks.

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We partner with banks, card associations and networks to issue debit cards, prepaid cards, virtual cards, mobile applications, mobile wallets, ACH services and provide other gateway processing. Our products can serve all consumer markets, but are especially effective for the unbanked, under-banked and convenience type users, such as person-to-person (P2P) payments, bill pay and remote deposit capture. We have developed strong alliances with numerous financial institutions and networks.

Over time, we have expanded our business from standard card platforms to an industry expert and specialist on customized financial transaction systems to include ACH, Mobile Wallets and Virtual Card programs. As a financial services partner, Antero builds, enhances and/or supports our customer’s critical applications via the right products and services. In terms of products, our affiliated companies have a long history of partnering with world-class manufacturers that are committed to producing quality products and leading the global financial services market through continued research and development.

We intend to offer a suite of products such as P2P, Virtual Card programs and Mobile Wallets, and by doing so we hope Antero will create multiple points of interchange; fee based and “on us” types (Antero internal transactions, usually at a reduced fee compared with institutional transaction). This array of products not only provides consumers with an innovative new secure shopping experience, but also brings a new standard in authorization and settlement, which may significantly lower the cost of transactions for merchants. With the benefit of lower fees and fewer chargebacks, we can offer alternative payment platforms as a valuable add-on feature for any retail or e-commerce merchant. Our new technology allows customers to manage transactions through their favorite retailer, self-service stations or their mobile device.

Mobile payments are quickly becoming a large segment of the payment market, and the Antero network is at the forefront of this hybrid technology. Financial institutions can provide customers with aggressive incentive-based programs such as rewards, points, and/or instant discounts while becoming mobile device aware, giving merchants many reasons to participate.

Antero has a strong commitment to working closely with multiple marketing partners and financial institutions on the development of mutually beneficial pricing models. The goal is to support strong and aggressive growth and acceptance in the marketplace; a strategy that enhances the success of both partners with profitable market development and execution.

Divisions of Antero Payment Solutions

·	Antero SVS - is at the forefront of the Stored Value Solutions (SVS) trend, providing robust development, processing and administration of Mobile, Virtual and Prepaid programs.

·	Antero ACH - offers a comprehensive check authorization system, utilizing artificial intelligence modeling, neural networks and other advanced technology to deliver unprecedented accuracy and simplicity.

·	Antero Access - is our own strategy for managing Antero’s interactions with customers, clients and sales prospects. It uses new technology to organize, automate and synchronize business.

Brands Marketed By Antero Payment Solutions

Antero Card - The Antero Market Ready solution is a turnkey program for companies looking to enter the prepaid space. It allows Antero clients to start selling and distributing a prepaid debit card quickly, effectively and at significantly lower costs than with traditional programs. In addition, Antero clients can earn revenue every time the card is used by one of their customers.

Card of America – A marketing channel of Antero the general spend payroll card that delivers significant cost savings and value to employers and their employees. More than a simple payroll or debit card, our product

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offers the flexibility of direct payments into multiple accounts per cardholder in a secure online environment. Card of America options are customized to the needs of each company's structure and employee culture. Cardholders gain access to a wide range of financial services, including overdraft protection, bill pay, funds transfers, with or without a direct banking relationship, at a lower cost and with greater convenience than comparable systems. The Card of America prepaid card was developed on the Antero SVS platform and integrated to the Antero network giving the card access to numerous distribution channels and loading capabilities.

Competition

The major competitor to Antero systems is Austin-based NetSpend Corporation (NASDAQ: NTSP); 52-wk range: $11.82-$6.89. NetSpend is a card-based alternative financial services company established in 1999. It helps unbanked and under-banked consumers manage their finances and become “self-banked” or use alternative banking methods. The company was an early entrant in the prepaid debit card field. With partners, they offer proprietary processing platform, card fulfillment, customer service and risk management capabilities in non-traditional banking-type systems. NetSpend products are FDIC-insured and issued by federally regulated financial institutions.

WHERE YOU CAN GET ADDITIONAL INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549. You can obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our offices are currently located at 6601 Center Drive West, Suite 500, Los Angeles, CA 90045 and our telephone number is (310) 997-2482. We pay approximately $1,275 per month rent, pursuant to an annual contract. The space is utilized for general office purposes and it is our belief that the space we currently occupy is adequate for our immediate needs. Additional space may be required as we expand our operations. We do not foresee any significant difficulties in obtaining any required additional space. We do not own any real property.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 4. MINE SAFETY DISCLOSURES

None.

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PART II

ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Stock

The Company has been quoted on the OTC Bulletin Board (“OTCBB”) since September 8, 2010, under the symbol “ANOS.OB.” Because we are quoted on the OTC Bulletin Board, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

The following table sets forth the high and low bid prices for our Common Stock per quarter as reported by the OTCBB for the periods indicated, based on our fiscal year end December 31. These prices represent quotations between dealers without adjustment for retail mark-up, mark down or commission and may not represent actual transactions.

Fiscal Quarter 2012	High		Low
First Quarter (January 1, 2010 – March 31, 2010)	$	0.25	$	0.11
Second Quarter (April 1, 2010 – June 30, 2010)	$	0.13	$	0.05
Third Quarter (July 1, 2010 – September 30, 2010)	$	0.10	$	0.02
Fourth Quarter (October 1, 2010 – December 31, 2010	$	0.10	$	0.015

Fiscal Quarter 2011	High		Low
First Quarter (January 1, 2011 – March 31, 2011)	$	0.30	$	0.15
Second Quarter (April 1, 2011 – June 30, 2011)	$	5.25	$	.81
Third Quarter (July 1, 2011 – September 30, 2011)	$	1.15	$	0.50
Fourth Quarter (October 1, 2011 – December 31, 2011)	$	0.61	$	0.16

Record Holders

As of April 19, 2013, there were 47,375,913 shares of the registrant’s $0.001 par value Common Stock issued and outstanding and were owned by 281 holders of record, based on information provided by our transfer agent.

Recent Sales of Unregistered Securities

None.

Re-Purchase of Equity Securities

None.

Dividends

We have not paid any cash dividends on our Common Stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our Common Stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on our Common Stock will be paid in the future.

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Securities Authorized for Issuance Under Equity Compensation Plans

None.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

RESULTS OF OPERATIONS

Working Capital


	December 31, 2012 $			December 31, 2011 $
Current Assets		26			37,500
Current Liabilities		1,134,777			1,157,015
Working Capital (Deficit)		(1,134,751	)		(1,119,515	)

Cash Flows


	Year ended December 31, 2012 $			Year Ended December 31, 2011 $
Cash Flows from Used in Operating Activities		(72,211	)		(437,640	)
Cash Flows Provided by Financing Activities		72,237			437,622
Net Increase (decrease) in Cash During Period		26			(18	)

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RESULTS OF OPERATIONS

Effective April 29, 2011, the Company entered into an Agreement and Plan of Merger with COA Holding, Inc. (“COAH”), a Nevada corporation, whereby the Company acquired COAH through the merger of its newly formed subsidiary, Antero Payment Solutions, Inc. Antero Payment Solutions, Inc. was the surviving corporation and a wholly owned subsidiary of the Company. As a result of the merger, COAH will continue its current line of business as a wholly owned subsidiary of the Company and will conduct its future operations under the name Antero Payment Solutions, Inc.

Upon completion of the transaction, the former COAH shareholders owned approximately 48,361,737 restricted shares of the Company’s common stock, representing 93% of the outstanding common stock of the Company. As a result, the acquisition has been recorded as a reverse merger with COAH being treated as the accounting acquirer and the Company as the legal acquirer (accounting acquiree). As such, the activities and results of operations for both COAH and the Company have been combined as of the acquisition date. The comparative figures to be mentioned below include only the operations of COAH.

Year ended December 31, 2012 compared to the year ended December 31, 2011

For the year ended December 31, 2012, the Company had revenue of $2,090 compared with revenue of $46,841 for the comparable period in 2011. The decrease in revenue is due to a cease in operations while the Company was restructured. As the Company enters into new distribution agreements, revenue is expected to increase.

Cost of sales for the year ended December 31, 2012 was $-0- compared to $237,918 for the comparable period in 2011. The Company has incurred expenses in 2011 associated with resuming its operations. As revenues resume, the Company expected margins to be comparable to historical trends.

Operating expenses for the year ended December 31, 2012 totaled $530,196 compared to $7,889,797 for the comparable period in 2011. This increase resulted primarily from the Company’s concerted efforts to resume operations in 2011, which resulted in significant and unusually large in legal and professional expenses. These 2011 legal and professional fees relate primarily to common stock issued for legal and professional services which were valued at $7,150,558.

Other income (expenses) for the year ended December 31, 2012 and 2011 were $(99,694) and $(1,583,664) respectively. The Company recorded interest expense of $50,340 and $52,070 during 2012 and 2011, respectively. Additionally, the Company recognized a default judgment penalty of $49,354 in the current year. The Company also realized a loss on the conversion of debt of $1,641,199 in 2011, along with a gain on settlement of debt of $49,125 and a gain on the spin-off of a subsidiary of $60,480.

The Company incurred a net loss of $627,800 during the year ended December 31, 2012 compared to $9,664,538 for the comparable period in 2011. As noted above, this decreased net loss resulted primarily from the Company’s concerted efforts to resume operations in 2011, which resulted in a significant decrease professional expenses incurred during the current period, which, along with the loss on conversion of debts, are the primary factors in the Company’s decreased net loss during the 2012. During the year-ended period in 2012, the Company issued stock valued at $111,608 for services rendered. During 2011, the Company issued stock valued at $7,150,558 for services rendered, as well as stock valued at $3,190,368 issued in settlement of debts.

Basic net loss per share was $(0.01) for the year ended December 31, 2012, compared to a basic net loss per share of $(0.19) from the comparable period of 2011.

Liquidity and Capital Resources

As of December 31, 2012, the Company had a negative working capital of $1,134,751 compared to a negative working capital of $1,119,515 at December 31, 2011. The change in working capital resulted primarily from the receipt of $71,500 in cash via borrowings on related-party notes.

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During the year ended December 31, 2012, the Company experienced negative cash flow of $72,211 from operating activities. The Company met its cash requirements during this period primarily through its debt and equity financing activities, realizing a cash inflow from financing activities in the amount of $72,237.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that there is substantial doubt that we will be able to continue as a going concern without further financing.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Off-Balance Sheet Arrangements

We have no significant 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 are material to stockholders.

Contractual Obligations

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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In February 2010, the FASB issued ASU 2010-10 (“ASU No. 2010-10”), “Consolidation (Topic 810): Amendments for Certain Investment Funds.” The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU No. 2010-10 did not have a material effect on the financial position, results of operations or cash flows of the Company.

In February 2010, the FASB issued ASU 2010-09 (“ASU No. 2010-09”), “Subsequent Events (ASC Topic 855): Amendments to Certain Recognition and Disclosure Requirements.” ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The Company’s adoption of provisions of ASU No. 2010-09 did not have a material effect on the financial position, results of operations or cash flows of the Company.

In January 2010, the FASB issued ASU 2010-06 (“ASU No. 2010-06”), “Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The Company’s adoption of provisions of ASU No. 2010-06 did not have a material effect on the financial position, results of operations or cash flows of the Company.

In January 2010, the FASB issued an amendment to ASC Topic 505, “Equity”, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The Company’s adoption of the amendment to ASC Topic 505 did not have a material effect on the financial position, results of operations or cash flows of the Company.

In January 2010, the FASB issued an amendment to ASC Topic 820, “Fair Value Measurements and Disclosure”, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures, which are effective for fiscal years beginning after December 15, 2010. The Company’s adoption of the amendment to ASC Topic 820 did not have a material effect on the financial position, results of operations or cash flows of the Company.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Anoteros, Inc. and Subsidiaries

December 31, 2012

	Index

Report of Independent Registered Public Accounting Firm	11

Consolidated Balance Sheets	13

Consolidated Statements of Operations	14

Consolidated Statement of Stockholders’ Deficit	15

Consolidated Statements of Cash Flows	16

Notes to the Consolidated Financial Statements	18

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Anoteros, Inc.

We have audited the accompanying consolidated balance sheets of Anoteros, Inc. (“the Company”) as of December 31, 2012 and the related consolidated statements of operations, stockholders’ deficit and cash flows for the year 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 audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Anoteros, Inc. as of December 31, 2012, and the results of their operations and cash flows for the year 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 Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has not yet established an ongoing source of revenue sufficient to cover its operating costs which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Sadler, Gibb & Associates, LLC

Salt Lake City, UT

April 19, 2013

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Anoteros, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Anoteros, Inc. and Subsidiaries (the “Company”) as of December 31, 2011 and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2011. The consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

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

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has a deficit book value and a negative cash flow from operations that have placed substantial doubt as to whether the Company can continue as a going concern. The ability of the Company to continue as a going concern is dependent on developing operations, increasing revenues and obtaining new capital. Management’s plan in regard to these matters is also described in Note 2 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Lake & Associates, CPA’S LLC Lake & Associates, CPA’s LLC Schaumburg, Illinois April 13, 2012

1905 Wright Boulevard

Schaumburg, IL 60193

Phone: 847.524.0800

Fax: 847.524.1655

Table of Contents

ANOTEROS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets



ASSETS

	December 31,			December 31,
	2012			2011

CURRENT ASSETS
Cash	$	26		$	-
Accounts Receivable		-			37,500

Total Current Assets		26			37,500

TOTAL ASSETS	$	26		$	37,500

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	581,676		$	543,473
Accounts payable and accrued expenses
related party		66,200			41,686
Judgement payable		161,044			89,500
Accrued interest		131,630			108,273
Bank overdraft		850			113
Notes payable - related party		20,500			209,500
Notes payable		82,877			74,470
Convertible debentures		90,000			90,000

Total Current Liabilities		1,134,777			1,157,015

TOTAL LIABILITIES		1,134,777			1,157,015

STOCKHOLDERS' DEFICIT
Preferred stock; 25,000,000 shares authorized,
$0.001 par value, no shares issued
and outstanding		-			-
Common stock; 100,000,000 shares authorized,
at $0.001 par value, 47,375,913 and 53,810,624
shares issued and outstanding, respectively		47,375			53,810
Additional paid-in capital		22,463,825			21,844,826
Accumulated deficit		(23,645,951	)		(23,018,151	)

Total Stockholders' Deficit		(1,134,751	)		(1,119,515	)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY DEFICIT	$	26		$	37,500



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

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ANOTEROS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations


	For the Years Ended
	December 31,
	2012			2011

REVENUES	$	2,090			$	46,841
COST OF SALES		-				237,918
GROSS PROFIT (LOSS)		2,090				(191,077	)

OPERATING EXPENSES

Professional fees		71,877				7,469,300
Bad debt expense		37,500				-
General and administrative expenses		420,819				420,497

Total Operating Expenses		530,196				7,889,797

OPERATING LOSS		(528,106	)			(8,080,874	)

OTHER INCOME (EXPENSE)

Interest expense		(50,340	)			(52,070	)
Default judgment penalty		(49,354	)			-
Gain on settlement of debt		-				49,125
Gain on spin-off of subsidiary		-				60,480
Loss on conversion of debt		-				(1,641,199	)

Total Other Income (Expense)		(99,694	)			(1,583,664	)

LOSS BEFORE INCOME TAXES		(627,800	)			(9,664,538	)

PROVISION FOR INCOME TAXES		-				-

NET LOSS	$	(627,800	)		$	(9,664,538	)

BASIC LOSS PER SHARE	$	(0.01	)		$	(0.19	)

WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING:
BASIC AND DILUTED		48,088,527				49,704,943

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

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ANOTEROS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Deficit



							Additional						Total
	Common Stock						Paid-in			Accumulated			Stockholders'
	Shares			Amount			Capital			Deficit			Deficit

Balance, December 31, 2010		37,113,092		$	37,113		$	11,446,524		$	(13,353,613	)	$	(1,869,976	)

Common stock issued for services		7,778,230			7,778			7,142,780			-			7,150,558

Common stock issued in
settlement of debt		3,470,415			3,470			3,186,898			-			3,190,368

Recapitalization		3,448,887			3,449			(264,064	)		-			(260,615	)

Common stock sold for cash		2,000,000			2,000			198,000			-			200,000

Fair value of employee stock options		-			-			134,688			-			134,688

Net loss for the year
ended December 31, 2011		-			-			-			(9,664,538	)		(9,664,538	)

Balance, December 31, 2011		53,810,624			53,810			21,844,826			(23,018,151	)		(1,119,515	)

Common stock issued for
services		739,128			739			110,869			-			111,608

Common stock issued for debt		6,000,000			6,000			263,999			-			269,999

Settlement of related-party debt		-			-			61,323			-			61,323

Common shares cancelled		(13,173,839	)		(13,174	)		13,174

Fair value of employee stock options		-			-			169,634			-			169,634

Net loss for the year
ended December 31, 2012		-			-			-			(627,800	)		(627,800	)

Balance, December 31, 2012		47,375,913		$	47,375		$	22,463,825		$	(23,645,951	)	$	(1,134,751	)

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

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ANOTEROS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows

	For the Years Ended
	December 31,
	2012			2011
OPERATING ACTIVITIES
Net loss	$	(627,800	)	$	(9,664,538	)
Adjustments to reconcile net loss to net cash
used by operating activities:
Common stock issued for services		111,608			7,150,558
Fair value of employee stock options		169,634			134,688
Expenses paid on behalf of company by related parties		8,407			-
Loss gain on conversion of debt		-			(49,125	)
Loss (gain) on conversion of debt		-			1,641,199
Gain on spin-off of subsidiary					(60,480	)
Loss on settlement of debt		9,500			-
Bad debt expense		37,500			-
Changes in operating assets and liabilities
Accounts receivable		-			(37,500	)
Accrued interest		23,710			49,591
Accounts payable and accrued expenses		38,202			441,315
Judgment payable		71,544			-
Related party accounts payable and accrued expenses		85,484			(43,348	)

Net Cash Used in Operating Activities		(72,211	)		(437,640	)


INVESTING ACTIVITIES		-			-


FINANCING ACTIVITIES
Cash acquired in acquistion of subsidiary		-			168
Common stock sold for cash		-			200,000
Stock offering costs paid		-			-
Bank overdraft		737			113
Proceeds from related party payables		-			426,221
Repayments of related party payables		-			(176,380	)
Proceeds from notes payable - related party		71,500			-
Repayments of notes payable		-			(12,500	)

Net Cash Provided by Financing Activities		72,237			437,622

NET INCREASE (DECREASE) IN CASH		26			(18	)
CASH AT BEGINNING OF PERIOD		-			18

CASH AT END OF PERIOD	$	26		$	-

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

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ANOTEROS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)

	For the Years Ended
	December 31,
	2012		2011


SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION

CASH PAID FOR:
Interest	$	-	$	2,126
Income Taxes		-		-

NON CASH FINANCING ACTIVITIES:
Common stock issued to settle notes payable	$	270,000	$	3,190,368
Common stock issued for distributorship rights	$	-	$	260,615
Settlement of related-party payable	$	61,323	$	-

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

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ANOTEROS, INC. AND SUBIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2012 and December 31, 2011

NOTE 1 – NATURE OF OPERATIONS

COA Holdings, Inc. (“the Company”) was incorporated in the state of Nevada on June 27, 2008. The Company began operations as Allow Card of America, Inc (“ACOA”), which is incorporated in the state of Delaware on August 19, 2003. As ACOA grew, additional wholly owned subsidiaries were formed (“the Group”). COA was formed to act as the parent company to the group of companies. Accordingly, the financial statements are presented as a recapitalization of the Group, with the historical financial statements of the Group presented as those of the Company.

Effective April 29, 2011, the Company, entered into an Agreement and Plan of Merger with Anoteros, Inc. (“Anoteros”), a Nevada corporation, whereby Anoteros acquired the Company through the merger of its newly formed subsidiary, Antero Payment Solutions, Inc. Antero Payment Solutions, Inc. was the surviving corporation and a wholly-owned subsidiary of Anoteros. Upon completion of the transaction, the former Company shareholders owned approximately 48,361,737 restricted shares of the Company’s common stock, representing 93% of the outstanding common stock of the combined entity. As a result, the acquisition has been recorded as a reverse merger with the Company being treated as the accounting acquirer and Anoteros as the legal acquirer (accounting acquiree). Accordingly, the historical financial statements of the Company are presented as those of the combined entity.

The Company has developed software for prepaid cards that functions between the Company, the credit card processor, and the banks. The Company provides data capture, card issuance, reporting, fraud, compliance, and consulting for the prepaid card industry.

NOTE 2 – GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles 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 costs and allow it to continue as a going concern. During the year ended December 31, 2012 the Company realized a net loss of $627,800 and has incurred an accumulated deficit of $23,645,951. 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 is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. 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 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of these financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to valuation allowances on accounts receivable, valuation and amortization policies on property and equipment, and valuation allowances on deferred income tax losses. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable

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ANOTEROS, INC. AND SUBIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2012 and December 31, 2011

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use of Estimates (Continued)

under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company’s fiscal year-end is December 31.

Principles of Consolidation

The consolidated financial statements include the accounts of Anoteros, Inc. and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of December 31, 2012 and 2011 the Company had $-26 and $-0- of cash, respectively. The Company had no cash equivalents.

Concentration of Credit Risk

Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company had approximately $0 of cash balances in excess of federally insured limits at December 31, 2012 and 2011, respectively.

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based upon historical write-off experience and current economic conditions. The adequacy of its allowance for doubtful accounts is reviewed on a regular basis. Receivable balances past due over 120 days, which exceed a specified dollar amount, are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts totaled $37,500 and $-0- as of December 31, 2012 and 2011, respectively.

Fair Value of Financial Instruments

The Company adopted the standard issued by the FASB, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the balance sheets for cash, accounts receivable, loans payable, and accounts payable and accrued expenses, approximate their fair market value based on the short-term maturity of these instruments.

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ANOTEROS, INC. AND SUBIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2012 and December 31, 2011

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value of Financial Instruments (Continued)

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2012, on a non-recurring basis:

Description	Level 1		Level 2		Level 3			Total
Notes Payable	$	-	$	-	$	(164,470	)	$	(164,470	)
Total	$	-	$	-	$	(164,470	)	$	(164,470	)

The standard issued by the FASB concerning the fair value option for financial assets and liabilities, became effective for the Company on January 1, 2008. The standard establishes a fair value option that permits entities to choose to measure eligible financial instruments and certain other items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value options have been elected in earnings at each subsequent reporting date. For the years ended December 31, 2012 and 2011, there were no applicable items on which the fair value option was elected.

Revenue Recognition

The Company applies the provisions of ASC 605, "Revenue Recognition in Financial Statements", which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. ASC 605 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue related to goods and services provided when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.

Stock-Based Compensation

The Company follows the provisions of ASC 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The Company uses the Black-Scholes pricing model for determining the fair value of stock based compensation. Equity instruments issued to non-employees for goods or services are accounted for at fair value and are amortized over the service period.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

In July, 2006, the FASB issued ASC 740, Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a return. ASC 740 provides guidance on the measurement, recognition, classification and disclosure of tax positions, along with accounting for the related interest and penalties. ASC 740 became effective as of January 1, 2007 and had no impact on the Company’s financial statements. The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

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ANOTEROS, INC. AND SUBIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2012 and December 31, 2011

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basic and Diluted Net Loss per Share

The Company computes net loss per share in accordance with ASC 260 which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. For the years ended December 31, 2012 and 2011, the Company’s 1,645,944 and 2,645,944 warrants and options, respectively, are excluded from the computation of diluted earnings per share as they are anti-dilutive.

Reclassification

Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation.

NOTE 4 – RELATED PARTY TRANSACTIONS

Accounts Payable and Accrued Expenses

During the year ended December 31, 2012 the Company accrued $66,200 in unpaid salary due to its chief financial officer and director.

Credit Line Agreement

On October 7, 2011, the Company executed a Credit Line Agreement (the "Credit Line") with South Bay Capital (the “Lender”), an entity controlled by a significant shareholder. Under the terms of the Credit Line, the Company may borrow, from time to time, up to the principal amount of $370,000 until September 15, 2013 the Maturity Date (“Maturity Date”). The annual interest rate of the Credit Line is 8%. On the election of Lender, the outstanding principal and accrued interest may be repaid either in cash or the Lender shall have the right to convert all or any portion of the outstanding principal amount and accrued interest into fully paid and non-assessable shares of Company’s common stock. The Company issued 6,000,000 shares of common stock to Robert O’Connor pursuant to an indemnity agreement with Mr. O’Conner to settle the debt owed to Mr. O’Conner relating to the Credit Line with South Bay Capital. As of the issuance date of August, 22, 2012 the Company owed $260,500 in principle and $11,143 in accrued interest on the Credit Line. The Company owed $-0- of principle and $-0- of accrued interest on the Credit Line as of December 31, 2012.

Notes Payable – Related Parties

During the year ended December 31, 2012 the Company borrowed an aggregate total of $20,500 from various related parties. These notes are unsecured, accrue no interest, and are due on demand. As of December 31, 2012 the outstanding aggregate balance on these notes was $20,500.

NOTE 5 – NOTES PAYABLE

During the years ended December 31, 2012 and 2011, the Company had outstanding notes payable of $82,877 and $74,470, respectively. The notes bear interest from 10 percent to 12 percent per annum, with one non-interest bearing note, are unsecured and due on demand.

During the year ended December 31, 2011, the Company made principal payments totaling $12,500 and accrued interest of $49,591 on these notes. During the year ended December 31, 2011, the Company converted principle of $830,385 and accrued interest of $493,494 into 3,246,939 shares of common stock valued at $2,984,925 based on the fair value of the stock at time of issuance. The Company accordingly recognized a loss on the conversion of the notes of $1,661,046.

During the year ended December 31, 2012, the Company made no new borrowings on these notes, made no principal payments, and accrued interest of $7,766 on these notes.

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ANOTEROS, INC. AND SUBIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2012 and December 31, 2011

NOTE 6 – MERGER

Effective April 29, 2011, the Company, entered into an Agreement and Plan of Merger with Anoteros, Inc. (“Anoteros”), a Nevada corporation, whereby Anoteros acquired the Company through the merger of its newly formed subsidiary, Antero Payment Solutions, Inc. Antero Payment Solutions, Inc. was the surviving corporation and a wholly-owned subsidiary of the Company. As a result of the merger, the Company will continue its current line of business as a wholly-owned subsidiary of Anoteros and will conduct its future operations under the name Antero Payment Solutions, Inc. Upon completion of the transaction, the former Company shareholders owned approximately 48,361,737 restricted shares of the combined entity’s common stock, representing 93% of the outstanding common stock of the Company. As a result, the acquisition has been recorded as a reverse merger with the Company being treated as the accounting acquirer and Anoteros as the legal acquirer (accounting acquiree).

As a result the Merger Agreement:

each outstanding share of the Company’s common stock was cancelled, extinguished and converted into and become the right to receive their pro rata portion of the Merger Consideration which shall be equal to the number of shares of Company Common Stock held by each Compnay Shareholder multiplied by the Exchange Ratio of 0.739127395 (the “Exchange Ratio”), rounded, if necessary, up to the nearest whole share of restricted Common Stock of the Company. Based on the Exchange Ratio, as a result of the Merger, the Company Shareholders own approximately 48,361,737 restricted shares of the combined entity.

each Compnay Warrant to purchase shares of Company Common Stock, whether vested or unvested, ceased to represent a right to acquire shares of Company Common Stock and were be converted, without any action on the part of such Warrant Holder, into a warrant to purchase shares of restricted the Company’s Common Stock on the same terms and conditions as were applicable under such Company Warrant prior to the Effective Time. The number of shares of Company Common Stock subject to each such Company Warrant is equal to the number of shares of Company Common Stock subject to each such Company Warrant multiplied by the Exchange Ratio, rounded, if necessary, up to the nearest whole share of Company Common Stock, and such Company Warrant shall have an exercise price per share (rounded to the nearest cent) equal to the per share exercise price specified in such Company Warrant divided by the Exchange Ratio;

the number of shares which each Convertible Note is entitled to convert into Company Common Stock, was adjusted such that such Convertible Note represents a right to acquire the number of shares of Company Common Stock equal to the number of shares of Company Common Stock subject to each such Convertible Note multiplied by the Exchange Ratio, rounded, if necessary, up to the nearest whole share of Company Common Stock, and have a conversion price per share (rounded to the nearest cent) equal to the per share conversion price specified in such Convertible Note divided by the Exchange Ratio.

NOTE 7 – COMMON STOCK

Effective April 29, 2011, the Company issued 3,448,887 shares of stock in a recapitalization with COA Holdings, Inc. Immediately following the acquisition, the shareholders of the COA Holdings, Inc. owned approximately 93% of the total shares outstanding of the combined entity.

During the year ended December 31, 2011, the Company issued 3,470,415 shares of common stock to extinguish liabilities and accrued interest totaling $1,549,168. The shares were valued at $3,190,367 based on the estimated fair value of the shares on the dates of issuance. Accordingly, the Company recognized a net loss on conversion of debt of $1,641,199.

During the year ended December 31, 2011, the Company issued 7,778,230 shares of common stock to officers and consultants in exchange for services. The shares were valued based on the estimated fair value of the shares on the dates of issuance. Accordingly, the Company recorded $7,150,558 as professional fees.

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ANOTEROS, INC. AND SUBIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2012 and December 31, 2011

NOTE 7 – COMMON STOCK (Continued)

During the year ended December 31, 2011, the Company issued 2,000,000 shares of common stock for cash proceeds of $200,000.

On January 30, 2012, the Company issued 739,128 shares of common stock to officers for services rendered totaling $111,608.

On August 22, 2012, The Company issued 6,000,000 shares of common stock to Robert O’Conner pursuant to an indemnity agreement with Mr. O’Conner to settle the debt owed to Mr. O’Conner relating to the Credit Line with South Bay Capital. As of the issuance date of August, 22, 2012 the Company owed $260,500 in principal and $9,499 in accrued interest on the Credit Line. The issuance fully satisfied the debt.

On May 8, 2012 the Company cancelled 13,173,839 shares of common stock pursuant to a Settlement Agreement and General Mutual Release with several former officers and directors.

NOTE 8 – SPIN-OFF OF DOOLITTLE SUBSIDIARY

Effective September 14, 2011, the Company entered into an Assignment and Assumption Agreement whereby it agreed to transfer: a) 100% of its ownership of its subsidiary Doolittle Edutainment Corp, and b) all its rights to an intercompany receivable in the amount of $32,185 owed to the Company by Doolittle. In exchange for this transfer, it was agreed that the Company would also assign to Doolittle certain Company liabilities, totaling $98,987. Pursuant to this transaction, the Company recorded a Gain on Spin-off of Subsidiary in the amount of $60,480.

NOTE 9 – INCOME TAXES

The Company’s provision for income taxes was $0 for the years ended December 31, 2012 and 2011 respectively since the Company incurred net operating losses which have a full valuation allowance through December 31, 2012.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a full valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is calculated by multiplying a 39% marginal tax rate by the cumulative Net Operating Loss (“NOL”) of $9,094,802. The total valuation allowance is equal to the total deferred tax asset.

The tax effects of significant items comprising the Company's net deferred taxes as of December 31, 2012 and 2011 were as follows:

	2012			2011
Cumulative NOL	$	9,094,802		$	8,569,110

Deferred Tax assets:
(34% Federal, 5% CA)
Net operating loss carry forwards		8,723,686			8,478,844
Stock-based compensation		(5,886,134	)		(5,842,607	)
Loss on extinguishment of debt		709,421			705,716
Valuation allowance		(3,546,973	)		(3,341,953	)
	$	-		$	-

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ANOTEROS, INC. AND SUBIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2012 and December 31, 2011

NOTE 9 – INCOME TAXES (CONTINUED)

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 39% to pretax income from continuing operations for the years ended December 31, 2012 and 2011 due to the following:

	2012			2011
Income tax benefit at U. S. federal statutory rates:	$	(244,842	)	$	(3,739,170	)
Stock issued for assets and services		43,527			52,528
(Gain) Loss on extinguishment of debt		(3,705	)		19,159
Change in valuation allowance		205,020			3,697,483
	$	-		$	-

The Company adopted the provisions of ASC 740 at the beginning of fiscal year 2008. As a result of this adoption, the Company has not made any adjustments to deferred tax assets or liabilities. The Company did not identify any material uncertain tax positions on returns that have been filed or that will be filed. The Company did not recognize any interest or penalties for unrecognized tax benefits during the years ended December 31, 2012 and 2011, nor were any interest or penalties accrued as of December 31, 2012.

The Company has filed income tax returns in the United States and Arizona. All tax years prior to 2009 are closed by expiration of the statute of limitations. The years ended December 31, 2012, 2011, and 2010 are open for examination.

The Company’s net state and federal operating loss carry forwards of approximately $9,094,802 expire in various years beginning in 2024 and carrying forward through 2034.

NOTE 10 – WARRANTS AND OPTIONS

A summary of the status of the Company’s options and warrants as of December 31, 2012 and changes during the periods ended December 31, 2012 and 2011 is presented below:

Description	Warrant Shares			Exercise Price		Value if Exercised
Outstanding at 12/31/09		1,645,944		$	0.95	$	1,563,647
Granted		-			-		-
Exercised		-			-		-
Cancelled		-			-		-
Expired		-			-		-
Outstanding at 12/31/10		1,645,944		$	0.95	$	1,563,647
Granted		1,000,000		$	3.00	$	3,000,000
Exercised		-			-		-
Cancelled		-			-		-
Expired		-			-		-
Outstanding at 12/31/11		2,645,944		$	1.72	$	4,563,647
Granted		-			-		-
Exercised		-			-		-
Cancelled		(1,000,000	)	$	3.00	$	(3,000,000	)
Expired		-			-		-
Outstanding at 12/31/12		1,645,944		$	0.95	$	1,563,647

The warrants were granted in connection with the common stock offering and debt conversion and were valued using the Black-Scholes Options Pricing Model.

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ANOTEROS, INC. AND SUBIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2012 and December 31, 2011

NOTE 11 – SIGNIFICANT EVENTS

On December 24, 2012, the Company’s President and CEO resigned his position with the Company.

NOTE 12 – SUBSEQUENT EVENTS

In accordance with ASC 855-10 Company management reviewed all material events through the date of this report and there are no additional material subsequent events to report.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On March 12, 2013, Lake & Associates CPA’s LLC (“Lake & Associates”) resigned as the independent registered public accounting firm of the Company. The resignation was accepted by the Board of Directors of the Company (the “Board”).

On March 12, 2013, the Board of Directors approved the appointment of Sadler Gibb & Associates, LLC as the independent registered public accounting firm of the Company.

During the Company’s two most recent fiscal years and the subsequent interim periods preceding Sadler Gibb & Associates, LLC engagement, neither the Company nor anyone on behalf of the Company consulted with Sadler Gibb & Associates, LLC regarding the application of accounting principles to any specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company’s financial statements, and Sadler Gibb & Associates, LLC did not provide any written or oral advice that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue or any matter that was the subject of a “disagreement” or a “reportable event,” as such terms are defined in Item 304(a)(1) of Regulation S-K.

During the two most recent fiscal years and through the date of this report, there were no (1) disagreements with Lake & Associates on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to its satisfaction would have caused Lake & Associates to make reference in its reports on the Company’s financial statements for such years to the subject matter of the disagreement, or (2) “reportable events,” as such term is defined in Item 304(a)(1)(v) of Regulation S-K.

The audit reports of Lake & Associates on the financial statements of the Company, during the periods from June 27, 2008 through March 12, 2013, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except that the reports stated there is substantial doubt about the Company’s ability to continue as a going concern.

The Company has requested that Lake & Associates furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the above statements and, if not, stating the respects in which it does not agree. A copy of such letter, dated March 12, 2013, indicating that it is in agreement with such disclosures is filed as Exhibit 16.1 to this Form 8-K.

On July 11, 2011, Lake & Associates, CPA’s (“Lake”) was engaged as the registered independent public accountant for the Company and HJ Associates & Consultants, LLP (“HJ”) was dismissed as the registered independent public accountant for the Company. The decisions to appoint Lake and dismiss HJ were approved by the Board of Directors of the Company on July 11, 2011.

Other than the disclosure of uncertainty regarding the ability for us to continue as a going concern, which was included in our accountant’s report on the financial statements for the years ended December 31, 2010 and 2009, HJ’s reports on the financial statements of the Company for the years ended December 31, 2010 and 2009 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. For the two most recent fiscal years and any subsequent interim period through HJ's termination on July 11, 2011, HJ disclosed the uncertainty regarding the ability of the Company to continue as a going concern in its accountant’s report on the financial statements.

In connection with the audit and review of the financial statements of the Company through July 11, 2011, there were no disagreements on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with HJ's opinion to the subject matter of the disagreement.

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In connection with the audited financial statements of the Company for the years ended December 31, 2010 and 2009 and interim unaudited financial statements through March 31, 2011, there have been no reportable events with the Company as set forth in Item 304(a)(1)(v) of Regulation S-K.

Prior to July 11, 2011, the Company did not consult with Lake regarding (1) the application of accounting principles to specified transactions, (2) the type of audit opinion that might be rendered on the Company’s financial statements, (3) written or oral advice was provided that would be an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issues, or (4) any matter that was the subject of a disagreement between the Company and its predecessor auditor as described in Item 304(a)(1)(iv) or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.

The Company provided a copy of the foregoing disclosures to HJ prior to filing a Current Report on Form 8-K with the Securities & Exchange Commission (“SEC”) on July 14, 2011 (the “Form 8-K”) and requested that HJ furnish it with a letter addressed to the SEC stating whether or not it agrees with the statements in the Form 8-K. A copy of the letter furnished in response to that request was filed as Exhibit 16.1 to the Form 8-K.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Based on an evaluation as of the date of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, (as defined in Rule 13a-15(f)) promulgated under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2011. In making this assessment, our management, including our Principle Executive Officer and Principle Financial Officer, used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management, including our Principal Executive Officer, has concluded that, as of December 31, 2012, our internal control over financial reporting is not effective based on those criteria.

Changes in Internal Control over Financial Reporting

Our management, including our Principal Executive Officer and Principal Financial Officer, has evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

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The Company is not required by current SEC rules to include, and does not include, an auditor’s attestation report. The Company’s registered public accounting firm has not attested to Management’s reports on the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.

Identification of Directors and Executive Officers

The following table sets forth the names and ages of our current director(s) and executive officer(s):


Name	Age		Position(s) with the Company	Director Since
Michael Lerma		46	CFO, Treasurer, Secretary, & Director	April 29, 2011
Frederick Pettit		76	Director	February 4, 2013
Robert O'Connor		69	Director	April 29, 2011

The board of directors has no nominating, audit or compensation committee at this time.

Term of Office

Each of our officer(s) is elected by the Company’s Board of Directors and their terms of office are at the discretion of the Board. Our officer(s) serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors. Each of our directors is elected by the Company’s Board of Directors and shall hold office until the next annual meeting of stockholders and until his/her successor shall have been duly elected and qualified. At the present time, members of the Board of Directors are not compensated for their services to the Board.

Background and Business Experience

The business experience during the past five years of the persons presently listed above as an Officer or Director of the Company is as follows:

Mr. Michael Lerma – Mr. Michael Lerma – Mr. Lerma has over 20 years’ experience working for a number of Fortune 100 companies across multiple industries such as investment banking, financial services, pharmaceutical, and executive recruiting. Mr. Lerma was employed for over a decade as a senior telecom analyst in the Management Information Systems division at the Wall Street firms Goldman Sachs & Co, TIAA-CREF, Chase Manhattan Bank and Kodak. While at those firms, his responsibilities included: project management, performance improvement and corporate strategy.

From 2003 to 2011, Mr. Lerma expanded his business expertise into management consulting providing services such as business development, executive recruiting, project management, research & analysis, business proposals/presentations, improving efficiency and management sourcing. The Board of Directors appointed Mr. Lerma as th interim Chief Executive Officer and Chief Financial Officer due to his business background and managment experience in the financial sector and his strong managerial skills that the Company believes will be a valuable asset.

Robert H. O'Connor – Mr. O’Connor has been the owner of O'Connor Investment Company for over 30 years. He has developed substantial business experience in the course of originating real estate loans and business loans in California. Mr. O'Connor is an early stage investor in several notable companies, including Mail.com, which is a media company that is currently expanding into India and China. He has been a member of the Board of Directors of National Automation Services, Inc., since 2007. Mr. O'Connor has developed substantial real estate and business projects, and he has achieved successful results with these projects. Mr. O'Connor earned his Law Degree in 1975 at Lincoln University.

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Identification of Significant Employees

We have no significant employees other than Mr. Michael Lerma, our, Chief Financial Officer, Treasurer, Secretary and Director.

Family Relationship

We currently do not have any officers or directors of our Company who are related to each other.

Audit Committee and Audit Committee Financial Expert

The Company does not have an audit committee or an audit committee financial expert (as defined in Item 407 of Regulation S-K) serving on its Board of Directors. All current members of the Board of Directors lack sufficient financial expertise for overseeing financial reporting responsibilities. The Company has not yet employed an audit committee financial expert on its Board due to the inability to attract such a person.

The Company intends to establish an audit committee of the board of directors, which will consist of independent directors. The audit committee’s duties will be to recommend to the Company’s board of directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee will at all times be composed exclusively of directors who are, in the opinion of the Company’s board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.

Code of Ethics

Our Board of Directors has not adopted a Code of Ethics (the “Code”) due to the fact that we presently only have two directors and we are in the development stage of our operations. We anticipate that we will adopt a code of ethics when we increase either the number of our directors and officers or the number of our employees.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(e) during the year ended December 31, 2012, Forms 5 and any amendments thereto furnished to us with respect to the year ended December 31, 2012, and the representations made by the reporting persons to us, we believe that during the year ended December 31, 2012, our executive officers and directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filing requirements.

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ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the compensation paid to our executive officers during the twelve month periods ended December 31, 2012 and 2011:

Summary Compensation Table

Name and Principal Position	Fiscal Year Ended 12/31	Salary ($)				Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Michael Lerma (1) CFO, Treasurer, Secretary, and Director	2012		-0-				-0-		-0-		-0-		-0-		-0-		-0-		-0-
Michael Lerma (1) CFO, Treasurer, Secretary, and Director	2011		-0-				-0-		-0-		-0-		-0-		-0-		-0-		-0-
Michael J. Sinnwell, Jr. (2) Former President, CEO, CFO, Treasurer, Secretary, and Director	2012		-0-				-0-		-0-		-0-		-0-		-0-		-0-		-0-
	2011		-0-				-0-		-0-		-0-		-0-		-0-		-0-		-0-
George Chachas(3) Former President, CEO, CFO, Treasurer, Secretary, and Director	2012		-0-				-0-		-0-		-0-		-0-		-0-		-0-		-0-
	2011	$	20,000	(4	)		-0-		-0-		-0-		-0-		-0-		-0-		-0-
Charles Potter, CEO and President	2012		-0-				-0-		-0-		-0-		-0-		-0-		-0-		-0-
Charles Potter, CEO and President	2011		-0-				-0-		-0-		-0-		-0-		-0-		-0-		-0-

(1)	On December 21, 2011, Mr. Michael Lerma agreed to act as the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director.
(2)	On May 26, 2010, Mr. Michael J. Sinnwell, Jr. agreed to act as the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director. Mr. Sinnwell, Jr. resigned from all positions with the Company on December 21, 2011.

(3)	On December 27, 2006, George G. Chachas agreed to act as the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director. Mr. Chachas resigned from all positions with the Company on April 29, 2011.
(4)	During 2010, George G. Chachas was compensated for his services as an officer of the Company at the rate of $5,000 per quarter.

Narrative Disclosure to Summary Compensation Table

There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.

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Outstanding Equity Awards at Fiscal Year-End

No executive officer or director received any equity awards, or holds exercisable or unexercisable options, as of the year ended December 31, 2012.

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.

Compensation Committee

We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.

Compensation of Directors

Our directors receive shares of our common stock for services performed as Members of the Company’s Board Directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS.

Security Ownership of Management

The following table sets forth certain information concerning the number of shares of our Common Stock owned beneficially as of April 16, 2013, by: (i) each of our directors; (ii) each of our named executive officers; and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.

Name and Address of Beneficial Owner	Title of Class	Amount and Nature of Beneficial Ownership (1) (#)		Percent of Class (2) (%)
Michael Lerma (3) 6601 Center Drive West, Suite 500 Los Angeles, CA 90045	Common		369,564		0.78	%
Robert O’Connor (4) 6601 Center Drive West, Suite 500 Los Angeles, CA 90045	Common		6,431,158		13.57	%
All Officers and Directors as a Group (2 Person)	Common		6,800,722		14.35	%
3JP’s 34328 Vermont Ave. #300 Harbor City, CA 90710	Common		8,498,876		17.94	%

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(1)

The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares, which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.

(2)	Based on 47,375,913 issued and outstanding shares of Common Stock as of April 19, 2013.

(3)	Mr. Michael Lerma is a Director and the Company’s, CFO, Treasurer and Secretary. His beneficial ownership includes 369,546 Common Shares, which have been authorized but not issued as of the date of this report.

(4)	Mr. Robert O’Connor is a member of the Company’s Board of Directors and his beneficial ownership is 6,431,158 that include an additional 369,546 Common Shares, which have been authorized but not issued as of the date of this report.

Changes in Control

There are no present arrangements or pledges of the Company’s securities, which may result in a change in control of the Company.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Related Party Transactions

None of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.

With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:

·	Disclosing such transactions in reports where required;
·	Disclosing in any and all filings with the SEC, where required;

·	Obtaining disinterested directors consent; and,
·	Obtaining shareholder consent where required.

Director Independence

For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of common stock are quoted does not have any director independence requirements. The NASDAQ definition of “Independent Officer” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

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According to the NASDAQ definition, Michael Lerma is not an independent director because he is also an executive officer of the Company.

According to the NASDAQ definition, Robert H. O’Connor is an independent director.

Review, Approval or Ratification of Transactions with Related Persons

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

During 2012, we were billed by our former accountants, Lake & Associates, approximately $20,000 for audit and review fees associated with our 10-K and 10-Q filings.

During 2011, we were billed by our former accountants, Lake & Associates, approximately $17,000 for audit and review fees associated with our 10-K and 10-Q filings.

Tax Fees

During 2012, we were billed by our former accountants, Lake & Associates, approximately $0 for tax work

During 2011, we were billed by our former accountants, Lake & Associates, approximately $0 for tax work.

All Other Fees

During 2012, we were billed by our former accountants, Lake & Associates, approximately $0 for other work.

During 2011, we were billed by our former accountants, Lake & Associates, approximately $0 for other work.

Board of Directors Pre-Approval Process, Policies and Procedures

Our principal auditors have performed their audit procedures in accordance with pre-approved policies and procedures established by our Board of Directors. Our principal auditors have informed our Board of Directors of the scope and nature of each service provided. With respect to the provisions of services other than audit, review, or attest services, our principal accountants brought such services to the attention of our Board of Directors prior to commencing such services.

PART IV

ITEM 15. EXHIBITS.

(a)

Exhibits

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Exhibit
Number	Description of Exhibit	Filing
2.01	Agreement and Plan of Merger by and among the Company, Antero Payment Solutions Inc., and COA Holdings, Inc. dated March 29, 2011	Incorporated by reference to our Form 8-K filed with the SEC on March 30, 2011.
3.01	Articles of Incorporation	Incorporated by reference to our Registration Statement on Form 10SB filed on April 12, 2007.
3.01(a)	Restated Articles of Incorporation	Incorporated by reference to our Registration Statement on Form 10SB filed on April 12, 2007.
3.01(b)	Certificate of Change Pursuant to NRS 78.209	Incorporated by reference to our Form 8-K filed with the SEC on September 18, 2009.
3.02	Bylaws	Incorporated by reference to our Registration Statement on Form 10SB filed on April 12, 2007.
4.01	2007 Long Term Incentive Plan	Incorporated by reference to our Form 10-KSB filed with the SEC on April 29, 2008.
10.01	Literary Agent Agreement by and between Doolittle Edutainment Corp. and Geraldine Blecker dated September 25, 2009	Incorporated by reference to our Form 8-K filed with the SEC on September 29, 2009.
10.02	Lock-Up Agreement by and between COA Holdings, Inc. and Tom Kelley dated April 5, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.03	Lock-Up Agreement by and between COA Holdings, Inc. and Greg Geller dated April 6, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.04	Lock-Up Agreement by and between COA Holdings, Inc. and Tom Smith dated April 7, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.05	Lock-Up Agreement by and between COA Holdings, Inc. and Glenn Geller dated April 7, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.06	Lock-Up Agreement by and between COA Holdings, Inc. and Gaden Griffin dated April 7, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.07	Lock-Up Agreement by and between COA Holdings, Inc. and Marla Beans dated April 12, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.08	Employment Agreement by and between the Company and Michael J. Sinnwell, Jr. dated April 12, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.09	Confidential Information and Invention Assignment Agreement by and among the Company, Antero Payment Solutions, Inc., and Michael J. Sinnwell Jr. dated April 13, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.10	Option Agreement by and among the Company, Doolittle Edutainment Corp. and George Chachas dated April 29, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.11	Employment Agreement by and between Antero Payment Solutions, Inc. and Kevin Vining dated April 29, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.12	Confidential Information and Invention Assignment Agreement by and between Antero Payment Solutions, Inc. and Kevin Vining dated April 29, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011.
10.13	Distribution Agreement by and between Antero Payment Solutions, Inc. and TFG Card Solutions dated July 21, 2011	Incorporated by reference to our Form 8-K filed with the SEC on July 27, 2011.

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10.14	Independent Sales Representative Agreement by and between Antero Payment Solutions, Inc. and Veritec Financial Systems, Inc. dated July 21, 2011	Incorporated by reference to our Form 8-K filed with the SEC on July 27, 2011.
10.15	Joint Venture Agreement by and among Antero Payment Solutions, Inc. and Veritec Financial Systems, Inc. dated August 29, 2011	Incorporated by reference to our Form 8-K filed with the SEC on September 1, 2011.
10.16	Assignment and Assumption Agreement by and among the Company, Doolittle Edutainment Corp. and George Chachas dated September 14, 2011	Incorporated by reference to our Form 8-K filed with the SEC on September 19, 2011.
10.17	Private Labeled Agreement by and between Antero Payment Solutions, Inc. and PayRoll Innovations, LLC dated October 3, 2011	Incorporated by reference to our Form 8-K filed with the SEC on October 5, 2011.
10.18	Credit Line Agreement by and between the Company and South Bay Capital dated October 7, 2011	Incorporated by reference to our Form 8-K filed with the SEC on October 11, 2011.
10.19	Private Labeled Agreement by and between Antero Payment Solutions, Inc. and Consolidated Fleet Management Corp. dated October 20, 2011	Incorporated by reference to our Form 8-K filed with the SEC on October 21, 2011.
16.01	Letter from HJ Associates & Consultants, LLP dated July 14, 2011	Incorporated by reference to our Form 8-K filed with the SEC on July 14, 2011
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
101.INS*	XBRL Instance Document	Filed herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document	Filed herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

SIGNATURES

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

	ANOTEROS, INC.

Dated: April 19, 2013	/s/ Michael Lerma
	By: Michael Lerma
	Its: Chief Financial Officer & Principal Financial Officer (Principal Accounting Officer)

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