Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For fiscal year ended June 30, 2013
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 000-54222
ADVANCED CELLULAR INC.
(Exact name of registrant as specified in its Charter)
Nevada 42-1771506
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5348 Vegas Dr. Las Vegas NV 89108
(Address of principal executive offices) (Zip Code)
(866) 824-2112
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.0001
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter. Not available
As of September 27, 2013 there were 70,000,000 shares of our common stock issued
and outstanding.
ADVANCED CELLULAR, INC.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this Annual Report on Form 10-K that are not
historical facts are "forward-looking statements." Forward-looking statements
may include our statements regarding our goals, beliefs, strategies, objectives,
plan, including product and service developments, future financial conditions,
results or projections or current expectations. Such forward-looking statements
may be identified by, among other things, the use of forward-looking terminology
such as "believes," "estimates," "intends," "plan" "expects," "may," "will,"
"should," "predicts," "anticipates," "continues," or "potential," or the
negative thereof or other variations thereon or comparable terminology, and
similar expressions are intended to identify forward-looking statements. We
remind readers that forward-looking statements are merely predictions and
therefore inherently subject to uncertainties and other factors and involve
known and unknown risks that could cause the actual results, performance, levels
of activity, or our achievements, or industry results, to be materially
different from any future results, performance, levels of activity, or our
achievements, or industry results, expressed or implied by such forward-looking
statements. Such forward-looking statements appear in Item 1 - "Business" and
Item 7 - "Management's Discussion and Analysis of Financial Condition and
Results of Operations," as well as elsewhere in this Annual.
The factors discussed herein and expressed from time to time in our filings with
the Securities and Exchange Commission could cause actual results and
developments to be materially different from those expressed in or implied by
such statements. The forward-looking statements are made only as of the date of
this filing, and we undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
Further information on potential factors that could affect our business is
described under the heading "Risks Related to Our Business, Strategy and
Industry" in "Risk Factors" in Item 1A of this Annual Report on Form 10-K.
INTRODUCTION
Unless otherwise specified or required by context, as used in this Annual
Report, the terms "we," "our," "us" and the "Company" refer collectively to
Advanced Cellular, Inc. The term "fiscal year" refers to our fiscal year ending
June 30. Unless otherwise indicated, the term "common stock" refers to shares of
our common stock.
Our financial statements are stated in United States Dollars (US$) and are
prepared in accordance with United States generally accepted accounting
principles (U.S. GAAP).
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TABLE OF CONTENTS
PART I
ITEM 1. Business 4
ITEM 1A. Risk Factors 6
ITEM 1B. Unresolved Staff Comments 12
ITEM 2. Properties 12
ITEM 3. Legal Proceedings 12
ITEM 4. Mine Safety Disclosures 12
Part II
ITEM 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 13
ITEM 6. Selected Financial Data 13
ITEM 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 13
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 16
ITEM 8. Financial Statements and Supplementary Data 17
ITEM 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure 26
ITEM 9A(T). Controls and Procedures 26
ITEM 9B. Other Information 27
PART III
ITEM 10. Directors, Executive Officers, and Corporate Governance 27
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, and Director
Independence 31
ITEM 14. Principal Accounting Fees and Services 32
PART IV
ITEM 15. Exhibits, Financial Statement Schedules 33
Signatures 34
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PART I
ITEM 1. BUSINESS
BACKGROUND AND BUSINESS OVERVIEW
We are a development stage company that was incorporated under the laws of the
State of Nevada on May 4, 2010. We have never declared bankruptcy, have never
been in receivership, and have never been involved in any legal action or
proceedings. Since becoming incorporated, we have not made any significant
purchase or sale of assets, nor have we been involved in any mergers,
acquisitions or consolidations. We are not a blank check registrant as that term
is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933,
since we have a specific business plan or purpose.
On February 20, 2013, the Company effected a 5 for 1 forward stock split of all
of its issued and outstanding shares of common stock (the "Stock Split"). The
Stock Split increased the number of the Company's issued and outstanding common
stock to 70,000,000.
Our offices are currently located at c/o Easybiz.com Inc. 17-5348 Vegas Dr., Las
Vegas, NV 89108. Our telephone number is 866-824-2112. We have one executive
officer who also serves as our director. Mr. Karlo Guray, our President,
Secretary, Treasurer and Director, resides in the Philippines.
PRINCIPAL PRODUCTS AND SERVICES
We are planning to develop and commercialize a performance management system for
use by cellular operators. Once developed, we expect our product to enable
cellular operators to analyze and optimize their cellular network performance.
Common cellular network equipment records different events during voice calls or
data calls. These call events are being stored in a dedicated database. Each
cellular manufacture has its own unique database structure to store the call
events. Cellular operators have to monitor the call events in order to evaluate
and improve their cellular network performance. Key Performance Indicators
(KPIs) are the significant measurements used to track the cellular network
performance against the cellular operator's objectives. These KPIs are being
calculated to summarize the call events; the major KPIs are pre-specified and
common for every cellular manufacture with respect to the specific technology.
Analyzing the KPIs enables the operator a real-time monitoring, trend
performance tracking and a drill-down into network element level. Our planned
system will present the KPIs in a browser based, parameter driven, dynamic
report generation, flexible report scheduling capabilities and Support a wide
variety of export formats including PDF, HTML, CSV, XLS, RTF, and Image.
Our goal is to help small cellular operators monitor their network and enable
them to improve their network using an off-the-shelf product with a minimum
customization which will lead to minimal cost. We plan to generate revenues from
the sale of our AdvancedPM system to cellular network operators, and plan to
offer support and maintenance service at additional cost.
Once developed, we expect AdvancedPM to provide radio access network status
management, performance analysis and support for the following capabilities:
* Monitor real-time system performance and not only the element status;
* Display the performance trend enabling to identify problems which
missed by the manual process;
* Geographic map display enable analyzing the data over detailed maps,
streets, satellite photo, topographical;
* Export detailed daily reports for engineers and high level of
management;
* Increase engineering efficiency and automatically identifying issues
that impact network quality; and
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* Assess current deployment and decide regarding requirement for new
deployment or expansion.
In order to use our planned system, prospective cellular network operators will
be required to send us cellular network manufacture data sheets with regards to
performance collection and database specification, and then we will need to
integrate the cellular network manufacture database with AdvancedPM.
Once developed, we expect AdvancePM to support multi-user environments through
high speed and secure access across the Intranet or the Internet. The user will
be able to access reports directly without any client application using simple
to access web reports to improve information sharing across the organization.
Reporting capabilities include exporting to a common PC application format such
as Microsoft Excel, PDF or JPG. Reporting and Monitoring includes geographic map
displays that enable analysis of data over detailed street maps, satellite photo
and topographical maps.
We have commenced only limited operations, primarily focused on organizational
matters. Our performance management system is currently in the development stage
and is not ready for commercial sale. We plan on launching an online store that
sells a wide variety of electronics and cellular devices and accessories.
At this stage in our development, there can be no assurance that we will be
successful in generating revenues from our performance management system or that
cellular operators seeking for performance management system will be receptive
to using our service.
To date, we have been unable to raise sufficient funds to implement our
operations, and we do not believe that we currently have sufficient resources to
do so without additional funding. As a result of the current difficult economic
environment and our lack of funding to implement our business plan, our Board of
Directors has begun to analyze strategic alternatives available to our Company
to continue as a going concern. Such alternatives include raising additional
debt or equity financing or consummating a merger or acquisition with a partner
that may involve a change in our business plan.
Although our Board of Directors' preference would be to obtain additional
funding to develop our performance management system, the Board believes that it
must consider all viable strategic alternatives that are in the best interests
of our shareholders. Such strategic alternatives include a merger, acquisition,
share exchange, asset purchase, or similar transaction in which our present
management will no longer be in control of our Company and our business
operations will be replaced by that of our transaction partner. We believe we
would be an attractive candidate for such a business combination due to the
perceived benefits of being a publicly registered company, thereby providing a
transaction partner access to the public marketplace to raise capital.
THE MARKET OPPORTUNITY
According to statistics made available by the International Telecommunication
Union (ITU) in their "The World in 2010" report on their website:
* By the end of 2010, there will be an estimated 5.3 billion mobile
cellular subscriptions worldwide, including 940 million subscriptions
to 3G services.
* Access to mobile networks is now available to 90% of the world
population and 80% of the population living in rural areas.
Our target market is the worldwide small size cellular network operators who
wish to monitor and optimized their network and currently do not have a
performance management system or the ones who wish to replace their current
system. We expect, although no assurance can be given, that our solution will
appeal to small size cellular operators who cannot afford to purchase currently
existing solutions in the market place.
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Our management believes that if we properly execute our business plan, our
solution will enable new and existing operators to monitor and optimize their
network in a significant lower cost.
COMPETITION AND COMPETITIVE STRATEGY
Competition within the cellular network performance management industry is
intense. We believe there is no performance management system designed for small
size cellular network operators. Existing solutions are designed for cellular
network operators who have thousands of cell sites; these networks generate a
massive amount of call events that must to be logged in a large database.
Generating the KPIs from this database requires an expensive database management
tools and an expensive reporting application.
We believe that designing a solution to support a limited database and limited
reporting capabilities will result in lower cost than our competitors. Our
competition is based primarily on the cost of the system. We seek to
differentiate ourselves by providing our customers with an easy to use and
functional system and pre-customized reporting. On an ongoing basis, we intend
to add more service features such as: automatic alerting system and performance
report exporting capabilities.
Many of our competitors have longer operating histories, greater financial,
sales, marketing and technological resources and longer established client
relationships than we do.
Our primary competition comes primarily from several industry participants:
Actix, Inc (www.actix.com) - This company is a world leading developer of
cellular network optimization tools. They offer systems which design for large
scale mobile operators. They also provide tools for status management. They do
not currently offer small scale pre-customized systems for small mobile
operators. We believe their price point is extremely high compared what we are
planning.
TTI Telecom (www.tti-telecom.com) - This Company is a world leading developer of
cellular network status management tools. They also offer performance management
system to large cellular operators. They do not currently offer small scale
pre-customized systems for small mobile operators. We believe their price point
is extremely high compared what we are planning.
QuantumSI (www.quantumsi.com) - This Company is a system integrator and software
developer for several industries including telecommunication. They also offer
performance management system to medium size cellular operators. They do not
currently offer small scale pre-customized systems for small mobile operators.
We believe their price point is higher than what we are planning.
EMPLOYEES
We have no full time or part-time employees. Our sole director/officer, Mr.
Karlo Guray, is expected to devote approximately five hours per week to our
business activities. If and when we develop and market a product, we may need
additional employees for our operations. We do not foresee any significant
changes in the number of employees we will have over the next twelve months.
ITEM 1A. RISK FACTORS
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the following risk factors and other information in this
report before deciding to invest in our Company. If any of the following risks
actually occur, our business, financial condition, results of operations and
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prospects for growth could be seriously harmed. As a result, the trading price
of our common stock could decline and you could lose all or part of your
investment.
RISKS RELATING TO OUR COMPANY
THERE IS UNCERTAINTY REGARDING OUR ABILITY TO CONTINUE AS A GOING CONCERN,
INDICATING THE POSSIBILITY THAT WE MAY BE REQUIRED TO CURTAIL OR DISCONTINUE OUR
OPERATIONS IN THE FUTURE. IF WE DISCONTINUE OUR OPERATIONS, YOU MAY LOSE ALL OF
YOUR INVESTMENT.
We have incurred net losses totaling $83,306 from our inception on May 4, 2010
to June 30, 2013 and have completed only the preliminary stages of our business
plan. We anticipate incurring additional losses before realizing any revenues
and will depend on additional financing in order to meet our continuing
obligations and ultimately, to attain profitability. The financial statements do
not include any adjustments that might result from the uncertainty about our
ability to continue our business. If we are unable to obtain additional
financing from outside sources and eventually produce enough revenues, we may be
forced to sell our assets, or curtail or discontinue our operations. If this
happens, you could lose all or part of your investment.
WE ARE A DEVELOPMENT STAGE COMPANY WITH NO OPERATING HISTORY AND MAY NEVER BE
ABLE TO CARRY OUT OUR BUSINESS PLAN OR ACHIEVE ANY REVENUES OR PROFITABILITY; AT
THIS STAGE OF OUR BUSINESS, EVEN WITH OUR GOOD FAITH EFFORTS, POTENTIAL
INVESTORS HAVE A HIGH PROBABILITY OF LOSING THEIR ENTIRE INVESTMENT.
We are subject to all of the risks inherent in the establishment of a new
business enterprise. We were established on May 4, 2010, we have not generated
any revenues nor have we realized a profit from our operations to date, and
there is little likelihood that we will generate any revenues or realize any
profits in the short term. Any profitability in the future from our business
will be dependent upon the successful development and commercialization of a
performance management system for use by cellular operators. Our product will
enable cellular operators to analyze and optimize their cellular network
performance. At this stage in our development, there can be no assurance that we
will be successful in generating revenues from our performance management system
or that cellular operators seeking for performance management system will be
receptive to using our service. Which itself is subject to numerous
industry-related risk factors as set forth herein. We may not be able to
successfully carry out our business. There can be no assurance that we will ever
achieve any revenues or profitability. Accordingly, our prospects must be
considered in light of the risks, expenses, and difficulties frequently
encountered in establishing a new business in our industry, and the fact that
our Company is a highly speculative venture involving significant financial
risk.
WE EXPECT TO INCUR OPERATING LOSSES IN THE NEXT TWELVE MONTHS BECAUSE WE HAVE NO
PLAN TO GENERATE REVENUES UNLESS AND UNTIL WE SUCCESSFULLY DEVELOP OUR NETWORK
PERFORMANCE MANAGEMENT SYSTEM.
We have never generated revenues. We intend to engage in the development and
commercialization of a network performance management system for use by cellular
operators. We expect to incur operating losses over the next twelve months
because we have no source of revenues unless and until we are successful in
developing and commercialization of a network performance management system. We
cannot guarantee that we will ever be successful in developing and
commercialization of a network performance management system or in generating
revenues in the future. We recognize that if we are unable to generate revenues,
we will not be able to earn profits or continue operations. We can provide
investors with no assurance that we will generate any operating revenues or ever
achieve profitable operations.
WE DO NOT HAVE SUFFICIENT CASH TO FUND OUR OPERATING EXPENSES FOR THE NEXT
TWELVE MONTHS, AND WE WILL REQUIRE ADDITIONAL FUNDS THROUGH THE SALE OF OUR
COMMON STOCK, WHICH REQUIRES FAVORABLE MARKET CONDITIONS AND INTEREST IN OUR
ACTIVITIES BY INVESTORS. WE MAY NOT BE ABLE TO SELL OUR COMMON STOCK AND FUNDING
MAY NOT BE AVAILABLE FOR CONTINUED OPERATIONS.
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Currently, we do not have sufficient cash on hand to fund our administrative
expenses and operating expenses for the next twelve months. Because we do not
expect to have any cash flow from operations within the next twelve months, we
will need to raise additional capital, which may be in the form of loans from
current stockholders and/or from public and private equity offerings. Our
ability to access capital will depend on our success in implementing our
business plan. It will also depend upon the status of the capital markets at the
time such capital is sought. Should sufficient capital not be available, the
implementation of our business plan could be delayed, and, accordingly, the
implementation of our business strategy would be adversely affected. If we are
unable to raise additional funds in the future, we may have to cease all
substantive operations. In such event, investors would likely not obtain a
profitable return on their investment or a return of their investment at all.
WE HAVE NO TRACK RECORD THAT WOULD PROVIDE A BASIS FOR ASSESSING OUR ABILITY TO
CONDUCT SUCCESSFUL BUSINESS ACTIVITIES. WE MAY NOT BE SUCCESSFUL IN CARRYING OUT
OUR BUSINESS OBJECTIVES.
The revenue and income potential of our proposed business and operations are
unproven and the lack of operating history makes it difficult to evaluate the
future prospects of our business. There is nothing at this time on which to base
an assumption that our business operations will prove to be successful or that
we will ever be able to operate profitably. Accordingly, we have no track record
of successful business activities, strategic decision-making by management,
fund-raising ability, and other factors that would allow an investor to assess
the likelihood that we will be successful. There is a substantial risk that we
will not be successful in implementing our business plan, or, if initially
successful, in thereafter generating any operating revenues or in achieving
profitable operations.
AS A DEVELOPMENT STAGE COMPANY, WE MAY EXPERIENCE SUBSTANTIAL COST OVERRUNS IN
DEVELOPING AND COMMERCIALIZING THE NETWORK PERFORMANCE MANAGEMENT SYSTEM AND WE
MAY NOT HAVE SUFFICIENT CAPITAL TO SUCCESSFULLY COMPLETE THE DEVELOPMENT AND
COMMERCIALIZATION OF OUR PRODUCT.
We may experience substantial cost overruns in developing and commercializing
the network performance management system and we may not have sufficient capital
to successfully complete our business plan. We may not be able to market our
product because of industry conditions, general economic conditions, and/or
competition from other manufacturers and distributors. In addition, the
commercial success of any product is often dependent upon factors beyond the
control of the company attempting to market the product, including, but not
limited to, market acceptance of the product, governmental restrictions, and
whether or not third parties promote the products through prominent marketing
channels and/or other methods of promotion. Even if we do succeed in raising the
capital to develop and operate the network performance management system, we
cannot ensure that the cost for this product will be found to be warranted and
reasonable by potential purchasers, and therefore we cannot ensure that the
product, will actually find popularity and acceptance.
WE ARE A SMALL COMPANY WITH LIMITED RESOURCES COMPARED TO SOME OF OUR CURRENT
AND POTENTIAL COMPETITORS AND WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AND
INCREASE MARKET SHARE.
Software for cellular networks is part of an industry that is highly regulated
and competitive, and although we believe our technology offers unique features,
we cannot guarantee that these unique features are enough to effectively capture
a significant enough market share to successfully launch and sustain our
product. Existing solutions are designed for cellular network operators who have
thousands of cell sites; these networks generate a massive amount of call events
that must to be logged in a large database. Generating the KPIs from this
database requires an expensive database management tools and an expensive
reporting application., our current and potential competitors have longer
operating histories, significantly greater resources and name recognition, and a
larger base of customers than we have. As a result, these competitors have
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greater name credibility with our potential customers. Our competitors also may
be able to adopt more aggressive pricing policies and devote greater resources
to the development, promotion, and sale of their products and services than we
can to ours. To be competitive, we must continue to invest significant resources
in sales and marketing, and customer support. We may not have sufficient
resources to make these investments or to develop the technological advances
necessary to be competitive, which in turn could cause our business to suffer
and restrict our profitability potential.
BECAUSE MR. KARLO GURAY HAS OTHER OUTSIDE BUSINESS ACTIVITIES AND WILL ONLY BE
DEVOTING UP TO 20% OF HIS TIME TO OUR OPERATIONS, OUR OPERATIONS MAY BE
SPORADIC, WHICH MAY RESULT IN PERIODIC INTERRUPTIONS OR SUSPENSIONS OF OUR
BUSINESS ACTIVITIES.
Our sole director/officer is only engaged in our business activities on a
part-time basis. This could cause the officer a conflict of interest between the
amount of time devoted to our business activities and the amount of time
required to be devoted to other activities. We intend to increase our business
activities in terms of development, marketing and sales. This increase in
business activities may require that our director/officer engage in our business
activities on a full-time basis or that we hire additional employees; however,
at this time, we do not have sufficient funds to pursue either option.
WE MAY BE SUBJECT TO INTELLECTUAL PROPERTY LITIGATION, SUCH AS PATENT
INFRINGEMENT CLAIMS, WHICH COULD ADVERSELY AFFECT OUR BUSINESS.
Our success will also depend in part on our ability to develop a commercially
viable product without infringing the proprietary rights of others. Although we
have not been notified of any infringement claims, other patents could exist or
could be filed which would prohibit or limit our ability to develop and market
in the future. In the event of an intellectual property dispute, we may be
forced to litigate. Intellectual property litigation would divert management's
attention from developing our product and would force us to incur substantial
costs regardless of whether or not we are successful. An adverse outcome could
subject us to significant liabilities to third parties, and force us to cease
operations.
BECAUSE OUR CURRENT SOLE OFFICER AND DIRECTOR IS NOT A RESIDENT OF THE UNITED
STATES, IT MAY BE DIFFICULT FOR SHAREHOLDERS TO RECOVER AGAINST THEM.
Our sole officer and director is located outside of the United States, in the
Philippines. Were one or more shareholders to bring an action against our
management in the United States and succeed, either through default or on the
merits, and obtain a financial award against an officer or director of the
Company, that shareholder may be required to enforce and collect on his, her or
its judgment in a non-US country, unless the officer or director owned assets
which were located in the United States. Further, shareholder efforts to bring
an action in a non-US country against its citizens for any alleged breach of a
duty in a foreign jurisdiction may be difficult, as prosecution of a claim in a
foreign jurisdiction, and in particular a foreign nation, is fraught with
difficulty and may be effectively, if not financially, unfeasible. Our
operations in the United States are limited to our executive offices which are
being used as a mailing address and secretarial and administrative services
only.
RISKS RELATING TO OUR COMMON STOCK
NASD SALES PRACTICE REQUIREMENTS MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND
SELL OUR STOCK.
In addition to the "penny stock" rules described below, the NASD has adopted
rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
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tax status, investment objectives and other information. Under interpretations
of these rules, the NASD believes that there is a high probability that
speculative low priced securities will not be suitable for at least some
customers. The NASD requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may have the effect
of reducing the level of trading activity in our common stock. As a result,
fewer broker-dealers may be willing to make a market in our common stock,
reducing a stockholder's ability to resell shares of our common stock.
WE MAY IN THE FUTURE ISSUE ADDITIONAL SHARES OF OUR COMMON STOCK WHICH WOULD
REDUCE INVESTORS' OWNERSHIP INTERESTS IN THE COMPANY AND WHICH MAY DILUTE OUR
SHARE VALUE. WE DO NOT NEED STOCKHOLDER APPROVAL TO ISSUE ADDITIONAL SHARES.
Our certificate of incorporation authorizes the issuance of 50,000,000 shares of
preferred stock and 100,000,000 shares of common stock, par value $0.0001 per
share. The future issuance of all or part of our remaining authorized common
stock may result in substantial dilution in the percentage of our common stock
held by our then existing stockholders. We may value any common stock issued in
the future on an arbitrary basis. The issuance of common stock for future
services or acquisitions or other corporate actions may have the effect of
diluting the value of the shares held by our investors, and might have an
adverse effect on any trading market for our common stock.
OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE
TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.
If a trading market does develop for our stock, it is likely we will be subject
to the regulations applicable to "Penny Stock," the regulations of the SEC
promulgated under the Exchange Act that require additional disclosure relating
to the market for penny stocks in connection with trades in any stock defined as
a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9
which establishes the definition of a "penny stock," for the purposes relevant
to us, as any non-NASDAQ equity security that has a market price of less than
$5.00 per share or with an exercise price of less than $5.00 per share, subject
to certain exceptions. For any transaction involving a penny stock, unless
exempt, the rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks; and (ii) the broker or dealer receive
from the investor a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or dealer must:
(i) obtain financial information and investment experience objectives of the
person; and (ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the SEC relating to the penny stock
market, which, in highlight form: (i) sets forth the basis on which the broker
or dealer made the suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to the transaction.
Generally, brokers may be less willing to execute transactions in securities
subject to the "penny stock" rules. This may make it more difficult for
investors to dispose of our common stock and cause a decline in the market value
of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative, current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.
10
These disclosure requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a stock that becomes
subject to the penny stock rules. Consequently, these penny stock rules may
affect the ability of broker-dealers to trade our securities. We believe that
the penny stock rules discourage market investor interest in and limit the
marketability of our common stock.
WE HAVE NOT PAID DIVIDENDS IN THE PAST AND DO NOT EXPECT TO PAY DIVIDENDS IN THE
FUTURE. ANY RETURN ON INVESTMENT MAY BE LIMITED TO THE VALUE OF OUR COMMON
STOCK.
Because we do not intend to pay any cash dividends on our shares of common
stock, our stockholders will not be able to receive a return on their shares
unless they sell them.
We intend to retain any future earnings to finance the development and expansion
of our business. We do not anticipate paying any cash dividends on our common
stock in the foreseeable future. Unless we pay dividends, our stockholders will
not be able to receive a return on their shares unless they sell them at a price
higher than that which they initially paid for such shares.
THERE IS NO ESTABLISHED PUBLIC MARKET FOR OUR STOCK AND A PUBLIC MARKET MAY NOT
BE OBTAINED OR BE LIQUID AND THEREFORE INVESTORS MAY NOT BE ABLE TO SELL THEIR
SHARES.
There is no established public market for our common stock. While we intend to
apply for quotation of our common stock on the Over-The-Counter (OTC) Bulletin
Board system, we have not yet engaged a market maker for the purposes of
submitting such application, and there is no assurance that we will qualify for
quotation on the OTC Bulletin Board. Therefore, purchasers of our common stock
may be unable to sell their shares on any public trading market or elsewhere.
STATE SECURITIES LAWS MAY LIMIT SECONDARY TRADING, WHICH MAY RESTRICT THE STATES
IN WHICH YOU MAY SELL OUR COMMON STOCK.
If you purchase shares of our common stock, you may not be able to resell the
shares in any state unless and until the shares of our common stock are
qualified for secondary trading under the applicable securities laws of such
state or there is confirmation that an exemption, such as listing in certain
recognized securities manuals, is available for secondary trading in such state.
We currently do not intend to register or qualify our stock in any state.
Because the shares of our common stock have not been registered for resale under
the blue sky laws of any state, and we have no current plans to register or
qualify our shares in any state, the holders of such shares and persons who
desire to purchase such shares in any trading market that might develop in the
future should be aware that there may be significant state blue sky restrictions
upon the ability of investors to purchase and sell such shares. In this regard,
each state's statutes and regulations must be reviewed before engaging in any
securities sales activities in a state to determine what is permitted, or not
permitted, in a particular state. Furthermore, even in those states that do not
require registration or qualification for the resale of registered securities,
such states may require the filing of notices or place additional conditions on
the availability of exemptions. Accordingly, since many states continue to
restrict the resale of securities that have not been qualified for resale,
investors should consider any potential secondary market for our securities to
be a limited one.
EFFORTS TO COMPLY WITH RECENTLY ENACTED CHANGES IN SECURITIES LAWS AND
REGULATIONS WILL INCREASE OUR COSTS AND REQUIRE ADDITIONAL MANAGEMENT RESOURCES,
AND WE STILL MAY FAIL TO COMPLY.
As directed by Section 404 of the Sarbanes-Oxley Act of 2002, the SEC has
adopted rules requiring public companies to include a report of management on
their internal controls over financial reporting in their annual reports on Form
10-K. In addition, the public accounting firm auditing a public company's
11
financial statements must attest to and report on management's assessment of the
effectiveness of its internal controls over financial reporting. These
requirements are not presently applicable to us, and we do not expect the
requirement to have the public accounting firm auditing our financial statements
attest to and report on management's assessment of the effectiveness of its
internal controls over financial reporting to be applicable to us in the
foreseeable future. If and when these regulations become applicable to us, and
if we are unable to conclude that we have effective internal controls over
financial reporting or if our independent auditors are unable to provide us with
an unqualified report as to the effectiveness of our internal controls over
financial reporting as required by Section 404 of the Sarbanes-Oxley Act of
2002, investors could lose confidence in the reliability of our financial
statements, which could result in a decrease in the value of our securities. We
have not yet begun a formal process to evaluate our internal controls over
financial reporting. Given the status of our efforts, coupled with the fact that
guidance from regulatory authorities in the area of internal controls continues
to evolve, substantial uncertainty exists regarding our ability to comply by
applicable deadlines.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our Principal executive offices are located at c/o EastBiz.com Inc., 17-5348
Vegas Dr. Las Vegas, NV 89108 USA. This location is a virtual office that we
maintain with EastBiz.com, Inc. which provides us with a mailing address for
communications. This service is provided by EastBiz.com for $99.00 per year,
plus we maintain a reserve that EastBiz.com will use for payment of postage.
This reserve account will be supplemented as needed. We may terminate the lease
arrangement upon 30-days written notice to INC Management. Our executive
officer, Mr. Karlo Guray does not work from this location, but operates from his
residence in the Philippines at no charge to us. We believe that this space is
adequate for our current and immediately foreseeable operating needs. The
development of our planned system and day to day operations are carried from Mr.
Guray's location in the Philippines, and our operations in the United States is
limited to our executive offices which are being used as a mailing address and
secretarial and administrative services only.
We do not have any policies regarding investments in real estate, securities, or
other forms of property.
ITEM 3. LEGAL PROCEEDINGS
We know of no existing or pending legal proceedings against us, nor are we
involved as a plaintiff in any proceeding or pending litigation. There are no
proceedings in which any of our directors, officers or any of their respective
affiliates, or any beneficial stockholder, is an adverse party or has a material
interest adverse to our interest.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
12
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
There is no established public market for our shares of common stock. Our common
stock is presently not traded on any market or securities exchange. We intend in
the future to seek a market maker to apply to have our common stock quoted on
the Over-the-Counter Bulletin Board, but have not done so to date.
HOLDERS
On September 27, 2013, there were 34 holders of record of our common stock.
DIVIDEND POLICY
As of the date of this Annual Report, we have not paid any cash dividends to
stockholders. The declaration of any future cash dividend will be at the
discretion of our Board of Directors and will depend upon our earnings, if any,
our capital requirements and financial position, our general economic and other
pertinent conditions. It is our present intention not to pay any cash dividends
in the foreseeable future, but rather to reinvest earnings, if any, into our
business.
RECENT SALES OF UNREGISTERED SECURITIES
We have not sold or issued any securities during the fiscal year ended June 30,
2013 without registration under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance on exemption(s) from such registration
requirements.
REPURCHASE OF EQUITY SECURITIES
We have no plans, programs or other arrangements in regards to repurchases of
our common stock.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
ITEM 6. SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR AUDITED
FINANCIAL STATEMENTS AND THE RELATED NOTES THAT APPEAR ELSEWHERE IN THIS ANNUAL
REPORT. THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT
REFLECT OUR PLANS, ESTIMATES AND BELIEFS. OUR ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD LOOKING STATEMENTS. FACTORS THAT
COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE THOSE DISCUSSED BELOW AND
ELSEWHERE IN THIS ANNUAL REPORT.
13
FORWARD-LOOKING STATEMENTS
Certain statements made in this report may constitute "forward-looking
statements on our current expectations and projections about future events".
These forward-looking statements involve known or unknown risks, uncertainties
and other factors that may cause the actual results, performance, or
achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking
statements. In some cases you can identify forward-looking statements by
terminology such as "may," "should," "potential," "continue," "expects,"
"anticipates," "intends," "plans," "believes," "estimates," and similar
expressions. These statements are based on our current beliefs, expectations,
and assumptions and are subject to a number of risks and uncertainties. Although
we believe that the expectations reflected-in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. These forward-looking statements are made as of the date of
this report, and we assume no obligation to update these forward-looking
statements whether as a result of new information, future events, or otherwise,
other than as required by law. In light of these assumptions, risks, and
uncertainties, the forward-looking events discussed in this report might not
occur and actual results and events may vary significantly from those discussed
in the forward-looking statements.
You should read the following plan of operation together with our audited
financial statements and related notes appearing elsewhere in this prospectus.
This plan of operation contains forward-looking statements that involve risks,
uncertainties, and assumptions. The actual results may differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including, but not limited to, those presented under "Risk Factors" or
elsewhere in this prospectus.
OVERVIEW
We were incorporated in the State of Nevada on May 4, 2010. We are a development
stage company with the goal of producing a performance management system for use
by small size cellular operators. From our inception to date, we have not
generated any revenues and our operations have been limited to organizational
matters, the development of our business, the creation of our website and
efforts related to development of our products and services.
On February 20, 2013, the Company effected a 5 for 1 forward stock split of all
of its issued and outstanding shares of common stock (the "Stock Split"). The
Stock Split increased the number of the Company's issued and outstanding common
stock to 70,000,000.
Our offices are currently located at c/o Easybiz.com Inc., 17-5348 Vegas Dr.,
Las Vegas, NV 89108. This is a shared office facility, which offers office
space, a mailing address, and secretarial and administrative services. We may
terminate the lease arrangement upon 30-days written notice to INC Management.
Our sole director and executive officer, Mr. Karlo Guray, does not work from
this location, but operates from his residence in the Phlippines at no charge to
us. We plan on contracting all of our software development activities with third
parties for at least the next 12 months so we have no requirement for additional
facilities for these operations.
Once developed, we expect our product to enable cellular operators to analyze
and optimize their cellular network performance. Our product will be an
off-the-shelf product with a minimum customization which will lead to minimal
cost. In our opinion such system is not available for small cellular network
operators, existing solutions are designed for large scale networks hence small
cellular network operators cannot afford it. In addition we believe that they do
not possess the knowledge for specifying the required Key Performance Indicators
in order to build their own system.
Our goals over the next twelve (12) months are to:
14
* Complete the development and commercialize AdvancedPM;
* Perform a market survey to identify the dominant manufactures in the
small sized cellular network operators market.
* Integrate AdvancedPM with leading cellular network manufactures
equipment.
* Initiate our marketing campaign and our sales strategy.
Our current business objectives are:
* To become a recognized brand of performance management system
developer.
* to execute our marketing plan and to create interest in our product;
We have commenced only limited operations, primarily focused on organizational
matters. Our performance management system is currently in the development stage
and is not ready for commercial sale. We plan on launching an online store that
sells a wide variety of electronics and cellular devices and accessories.
At this stage in our development, there can be no assurance that we will be
successful in generating revenues from our performance management system or that
cellular operators seeking for performance management system will be receptive
to using our service.
To date, we have been unable to raise sufficient funds to implement our
operations, and we do not believe that we currently have sufficient resources to
do so without additional funding. As a result of the current difficult economic
environment and our lack of funding to implement our business plan, our Board of
Directors has begun to analyze strategic alternatives available to our Company
to continue as a going concern. Such alternatives include raising additional
debt or equity financing or consummating a merger or acquisition with a partner
that may involve a change in our business plan.
Although our Board of Directors' preference would be to obtain additional
funding to develop our performance management system, the Board believes that it
must consider all viable strategic alternatives that are in the best interests
of our shareholders. Such strategic alternatives include a merger, acquisition,
share exchange, asset purchase, or similar transaction in which our present
management will no longer be in control of our Company and our business
operations will be replaced by that of our transaction partner. We believe we
would be an attractive candidate for such a business combination due to the
perceived benefits of being a publicly registered company, thereby providing a
transaction partner access to the public marketplace to raise capital.
RESULTS OF OPERATIONS
During the period from May 4, 2010 (date of inception) through June 30, 2013, we
have incurred net losses totaling of $83,306. During the fiscal years ended June
30, 2013 and 2012, the Company incurred losses of $27,880 and $32,333,
respectively.
COMPARISON OF THE FISCAL YEARS ENDED JUNE 30, 2013 AND 2012
Financial Reporting: During the fiscal year ended June 30, 2013, the Company
incurred $25,300 of costs related to meeting its obligations of a public
company, including the preparation of financial statements and SEC filings, and
related audit services. During the fiscal year ended June 30, 2012, the Company
incurred $17,950 of costs related to meeting its obligations of a public
company, including the preparation of financial statements and SEC filings, and
related audit services.
Inventory Write-down: During the fiscal year ended June 30, 2012, the Company
wrote down inventory in the amount of $6,783. No such write-down occurred during
the year ended June 30, 2013.
15
Travel Expenses: During the fiscal year ended June 30, 2012, the Company
incurred $5,000 of travel expenses. The Company incurred no such costs during
2013.
Other General and Administrative Expense: During the fiscal year ended June 30,
2013 and 2012, the Company incurred $2,580 and $2,600 of other general
administrative expenses.
REVENUES
We had no revenues for the period from May 4, 2010 (date of inception) through
June 30, 2013. We believe that we will be able to commence the marketing of our
proposed system immediately following the public launch of our completed
product. We expect to begin generating revenues approximately three months
following the public launch of our product.
LIQUIDITY AND CAPITAL RESOURCES
Because we are a development stage company that only recently commenced with
business operations, there is a limited historical basis for liquidity
comparison and analysis.
Through June 30, 2013, we have raised a total of $51,250 from the sale of
70,000,000 shares of our common stock. The Company's former director/officer
advanced a total of $682 for organizational costs, which was repaid full, and
$21,343 for working capital purposes, which remains unpaid as of June 30, 2013.
As of June 30, 2013 we had no cash on hand. Until such time as we are successful
in raising additional capital, assuming we are able to do so, we will utilize
our existing cash to maintain existing operations and meet our SEC filing
obligations.
In the opinion of our management, additional funding is required to meet our
development goals for the next twelve months. We have not yet generated any
revenue from our operations. We will require additional funds to implement our
plans. These funds may be raised through equity financing, debt financing, or
other sources, which may result in the dilution in the equity ownership of our
shares. We will also need more funds if the costs of the development of our
product costs greater than we have budgeted. We will also require additional
financing to sustain our business operations if we are not successful in earning
revenues. Our future is dependent upon our ability to obtain further financing,
the successful development of our website, a successful marketing and promotion
program, attracting and, further in the future, achieving a profitable level of
operations. The issuance of additional equity securities by us could result in a
significant dilution in the equity interests of our current stockholders.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Please see Note 2. Summary of Significant Accounting Policies to the
accompanying financial statements for a discussion of recently issued accounting
pronouncements.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Advanced Cellular, Inc.
(A Development Stage Company)
June 30, 2013 and 2012
Report of Independent Registered Public Accounting Firm 18
Balance Sheets as of June 30, 2013 and 2012 19
Statements of Operations for the Years Ended June 30, 2013 and 2012 and
for the period from May 4, 2010 (Inception) through June 30, 2013 20
Statements of Stockholders' Equity (Deficit) for the Years Ended
June 30, 2013 and 2011 and for the period from May 4, 2010 (Inception)
through June 30, 2013 21
Statements of Cash Flows for the Years Ended June 30, 2013 and 2012 and
for the period from May 4, 2010 (Inception) through June 30, 2013 22
Notes to the Financial Statements 23
17
REPORT OF REGISTERED INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
of Advanced Cellular, Inc.:
We have audited the accompanying balance sheets of Advanced Cellular, Inc. (a
Nevada corporation in the development stage) as of June 30, 2013 and 2012, and
the related statements of operations, stockholders' equity (deficit), and cash
flows for the years ended June 30, 2013 and 2012 and for the period from
inception (May 4, 2010) through June 30, 2013. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Advanced Cellular, Inc. as of
June 30, 2013 and 2012, and the results of its operations and its cash flows for
the years ended June 30, 2013 and 2012 and for the period from inception (May 4,
2010) through June 30, 2013, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company is in the development stage, and has not
established any source of revenue to cover its operating costs. As such, it has
incurred an operating loss since inception. Further, as of as June 30, 2013, the
cash resources of the Company were insufficient to meet its planned business
objectives. These and other factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plan regarding these
matters is also described in Note 6 to the financial statements. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Respectfully submitted,
/s/ Weinberg & Baer LLC
----------------------------------
Weinberg & Baer LLC
Baltimore, Maryland
August 28, 2013
18
ADVANCED CELLULAR, INC.
(A Development Stage Company)
BALANCE SHEETS
June 30, 2013 June 30, 2012
------------- -------------
ASSETS
Current Assets:
Cash $ -- $ 4,707
Prepaid expense -- 1,200
-------- --------
Total current assets -- 5,907
-------- --------
Total assets $ -- $ 5,907
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued liabilities $ 10,713 $ 5,175
Loans payable - director 21,343 4,908
-------- --------
Total current liabilities 32,056 10,083
-------- --------
Total liabilities 32,056 10,083
-------- --------
Stockholder's Deficit:
Preferred stock, 50,000,000 shares authorized,
par value $0.0001, no shares issued and outstanding -- --
Common stock, 100,000,000 shares authorized,
par value $0.0001, 70,000,000 shares issued and outstanding 7,000 7,000
Additional paid in capital 44,250 44,250
Deficit accumulated during the development stage (83,306) (55,426)
-------- --------
Total stockholders' deficit (32,056) (4,176)
-------- --------
Total liabilities and stockholders' deficit $ -- $ 5,907
======== ========
19
ADVANCED CELLULAR, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative
May 4, 2010
Year ended Year ended (Inception) to
June 30, 2013 June 30, 2012 June 30, 2013
------------- ------------- -------------
Revenue $ -- $ -- $ --
------------ ------------ ------------
Expenses:
Organization costs -- -- 662
General and administrative 27,880 32,333 82,644
------------ ------------ ------------
Total expenses 27,880 32,333 83,306
------------ ------------ ------------
Loss before income taxes (27,880) (32,333) (83,306)
Provision for Income Taxes -- -- --
------------ ------------ ------------
Net Loss $ (27,880) $ (32,333) $ (83,306)
============ ============ ============
Basic and Diluted
Loss per Common Share a a
============ ============
Weighted Average number of
Common Shares Outstanding 70,000,000 70,000,000
============ ============
----------
a = Less than ($0.01) per share
20
ADVANCED CELLULAR, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIT)
Deficit
Accumulated
Common Stock Additional Subscribed During the Total
---------------------- Paid in Stock Development Stockholders'
Shares Amount Capital Not Issued Stage Deficit
------ ------ ------- ---------- ----- -------
INCEPTION MAY 4, 2010 -- $ -- $ -- $ -- $ -- $ --
Common stock issued to
directors for cash
($0.002 per share) 50,000,000 5,000 15,000 -- -- 20,000
Net loss for the period -- -- -- -- (662) (662)
---------- ------- -------- -------- --------- ---------
BALANCE JUNE 30, 2010 50,000,000 5,000 15,000 -- (662) 19,338
Net loss for the period -- -- -- -- (1,586) (1,586)
---------- ------- -------- -------- --------- ---------
BALANCE SEPTEMBER 30, 2010 50,000,000 5,000 15,000 -- (2,248) 17,752
Net loss for the period -- -- -- -- (1,090) (1,090)
---------- ------- -------- -------- --------- ---------
BALANCE DECEMBER 31, 2010 50,000,000 5,000 15,000 -- (3,338) 16,662
Net loss for the period -- -- -- -- (7,218) (7,218)
---------- ------- -------- -------- --------- ---------
BALANCE MARCH 31, 2011 50,000,000 5,000 15,000 -- (10,556) 9,444
Common stock subscribed for
cash ($0.01 per share), net
of issuance costs -- -- -- 19,672 -- 19,672
Net loss for the period -- -- -- -- (12,537) (12,537)
---------- ------- -------- -------- --------- ---------
BALANCE JUNE 30, 2011 50,000,000 5,000 15,000 19,672 (23,093) 16,579
Issuance of subscribed stock 10,000,000 1,000 18,672 (19,672) -- --
Common stock issued for cash
($0.01 per share), net of
issuance costs 10,000,000 1,000 10,578 -- -- 11,578
Net loss for the period -- -- -- -- (32,333) (32,333)
---------- ------- -------- -------- --------- ---------
BALANCE JUNE 30, 2012 70,000,000 7,000 44,250 -- (55,426) (4,176)
Net loss for the period -- -- -- -- (27,880) (27,880)
---------- ------- -------- -------- --------- ---------
BALANCE JUNE 30, 2013 70,000,000 $ 7,000 $ 44,250 $ -- $ (83,306) $ (32,056)
========== ======= ======== ======== ========= =========
21
ADVANCED CELLULAR, INC.
(A Development Stage Company)
STATEMENTS OF CASHFLOWS
For the Period
Year ended From May 4, 2010
-------------------------------- (Inception) to
June 30, 2013 June 30, 2012 June 30, 2013
------------- ------------- -------------
OPERATING ACTIVITIES
Net loss $(27,880) $(32,333) $(83,306)
Adjustments To Reconcile Net Loss To Net
Cash Used By Operating Activities
Write-down of inventory -- 6,783 --
(Increase) decrease in prepaid expenses 1,200 (1,200) --
Increase (decrease) in accounts payable 5,538 1,570 10,713
-------- -------- --------
Net cash used by operating activities (21,142) (25,180) (72,593)
-------- -------- --------
INVESTING ACTIVITIES
Net cash used by investing activities -- -- --
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from (repayment of) loans - director 16,435 -- 21,343
Proceeds from the sale of common stock -- 11,578 51,250
-------- -------- --------
Net cash provided by financing activities 16,435 11,578 72,593
-------- -------- --------
Net Increase (Decrease) in Cash (4,707) (13,602) --
Cash, Beginning of Period 4,707 18,309 --
-------- -------- --------
Cash, End of Period $ -- $ 4,707 $ --
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ -- $ -- $ --
======== ======== ========
Income taxes $ -- $ -- $ --
======== ======== ========
22
ADVANCED CELLULAR, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
The Company was incorporated under the laws of the state of Nevada on May 4,
2010. The Company has limited operations, is considered a development stage
company and has not yet realized any revenues from its planned operations.
Subsequent to our incorporation, we have been in the process of establishing
ourselves as a company that will focus its operations on developing and
commercializing a performance management system that will be used by cellular
network operators. We have named our system AdvancedPM.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
DEVELOPMENT STAGE
As a development stage enterprise, the Company discloses the deficit accumulated
during the development stage and the cumulative statements of operations and
cash flows from inception to the current balance sheet date.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
EARNINGS PER SHARE
The basic earnings (loss) per share is calculated by dividing our net income
available to common shareholders by the weighted average number of common shares
during the year. The diluted earnings (loss) per share is calculated by dividing
our net loss attributable to common shareholders by the diluted weighted average
number of shares outstanding during the year. The diluted weighted average
number of shares outstanding is the basic weighted number of shares adjusted for
any potentially dilutive debt or equity.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturity of three
months or less when purchased to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of the Company's financial instruments, consisting of
accounts payable and loans from director approximate their fair value due to the
short-term maturity of such instruments. Unless otherwise noted, it is
management's opinion that the Company is not exposed to significant interest,
currency or credit risks arising from these financial instruments.
23
INCOME TAXES
Deferred tax assets and liabilities are determined based on the differences
between the financial reporting and tax bases of assets and liabilities using
the enacted tax rates and laws that will be in effect when the differences are
expected to reverse. A valuation allowance is established when necessary to
reduce deferred tax assets to the amounts expected to be realized.
The Company accounts for income taxes under the provisions of Financial
Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC")
740, "Accounting for Income Taxes. It prescribes a recognition threshold and
measurement attributes for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return. As a result,
the Company has applied a more-likely-than-not recognition threshold for all tax
uncertainties. The guidance only allows the recognition of those tax benefits
that have a greater than 50% likelihood of being sustained upon examination by
the various taxing authorities. The Company is subject to taxation in the United
States. All of the Company's tax years since inception remain subject to
examination by Federal and state jurisdictions. The Company did not identify any
uncertain tax positions.
The Company classifies penalties and interest related to unrecognized tax
benefits as income tax expense in the Statements of Operations. As of June 30,
2013 and 2012, the Company had no accrued interest or penalties.
NOTE 3. INCOME TAXES
The Company uses the liability method , where deferred tax assets and
liabilities are determined based on the expected future tax consequences of
temporary differences between the carrying amounts of assets and liabilities for
financial and income tax reporting purposes. Since inception through June 30,
2013, the Company has incurred net losses and, therefore, has no tax liability.
The net deferred tax asset generated by the loss carry-forward has been fully
reserved. The cumulative net operating loss carry-forward as of June 30, 2013 is
$83,306 and will expire 20 years from the date the losses were incurred.
As of June 30, 2013 and 2012, deferred tax assets consisted of the following:
2013 2012
-------- --------
Net operating losses (estimated tax rate 34%) $ 28,324 $ 18,845
Less: valuation allowance (28,324) (18,845)
-------- --------
Net deferred tax asset $ -- $ --
======== ========
NOTE 4. STOCKHOLDER'S DEFICIT
AUTHORIZED
The Company is authorized to issue 100,000,000 shares of $0.0001 par value
common stock and 50,000,000 shares of preferred stock, par value $0.0001. All
common stock shares have equal voting rights, are non-assessable and have one
vote per share. Voting rights are not cumulative and, therefore, the holders of
more than 50% of the common stock could, if they choose to do so, elect all of
the directors of the Company.
ISSUED AND OUTSTANDING
On May 4, 2010, the Company issued 50,000,000 shares of common stock to its
director for cash consideration of $20,000.
24
In August 2011, the Company issued 20,000,000 shares of common stock for net
proceeds $31,250.
All amount referenced above consider a 5 new for 1 old stock split dated
February 21, 2013.
NOTE 5. RELATED PARTY TRANSACTIONS
The sole officer and director of the Company is involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
The Company has paid management fees of $3,000 to its former executive officer
during the year ended June 30, 2012. No such amounts were paid during the year
ended June 30, 2013.
To June 30, 2013, Nir Eliayu, the Company's former officer and director advanced
$21,343 to the Company for administrative expenses. These advances are
non-interest bearing and due on demand.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has net losses for the
period from inception (May 4, 2010) to June 30, 2013 of $83,306. This condition
raises substantial doubt about the Company's ability to continue as a going
concern. The Company's continuation as a going concern is dependent on its
ability to meet its obligations, to obtain additional financing as may be
required and ultimately to attain profitability. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Management is planning to raise additional funds through debt or equity
offerings. There is no guarantee that the Company will be successful in these
efforts.
NOTE 7. CONCENTRATIONS OF RISKS
The Company's operations are subject to significant risk and uncertainties
including financial, operational, technological, and regulatory risks including
the potential risk of business failure.
NOTE 8. PROPERTY
The Company does not own or rent any property. We currently maintain our
corporate office at 17- 5348 Vegas Dr., Las Vegas, NV 89108 USA. This location
is a virtual office that we maintain with EastBiz.com, Inc. which provides us
with a mailing address for communications. This service is provided by
EastBiz.com for $99.00 per year, plus we maintain a reserve that Eastbiz.com
will use for payment of postage. This reserve account will be supplemented as
needed. We may terminate the lease arrangement upon 30-days' written notice to
INC Management. Our executive officer, Mr. Karlo Guray does not work from this
location, but operates from his residence in the Philippines at no charge to us.
25
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A(T). CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As required by Rule 13a-15/15d-15 under the Securities and Exchange Act of
1934,as amended (the "Exchange Act"), as of June 30, 2013, we have carried out
an evaluation of the effectiveness of the design and operation of our Company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of our Company's management, our
President (Principal Executive Officer) and Treasurer (Principal Accounting
Officer). Based upon the results of that evaluation, our management has
concluded that, as of June 30, 2013, our Company's disclosure controls and
procedures were effective and provide reasonable assurance that material
information related to our Company required to be disclosed in the reports that
we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms, and
that such information is accumulated and communicated to management to allow
timely decisions on required disclosure.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act. Our internal control system is designed to provide
reasonable assurance to our management and board of directors regarding the
reliability of financial reporting and the preparation of financial statements
for external reporting purposes in accordance with generally accepted accounting
principles. Our internal control over financial reporting includes those
policies and procedures that:
* Pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the
assets of the Company;
* Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles in the United States of
America, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and
directors of the Company; and
* Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company's
assets that could have a material effect on the financial statements.
Management assessed the effectiveness of our internal control over financial
reporting as of June 30, 2013. In making this assessment, we used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in INTERNAL CONTROL -- INTEGRATED FRAMEWORK.
Our management concluded that, as of June 30, 2013, our internal control over
financial reporting was effective based on the criteria in INTERNAL CONTROL --
INTEGRATED FRAMEWORK issued by the COSO.
This annual report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's independent registered public accounting firm pursuant to rules of the
SEC that permit the Company to provide only management's report in this annual
report.
26
LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS
Our management has confidence in its internal controls and procedures. Our
management believes that a control system, no matter how well designed and
operated can provide only reasonable assurance and cannot provide absolute
assurance that the objectives of the internal control system are met, and no
evaluation of internal controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been detected.
Further, the design of an internal control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitation in all internal
control systems, no evaluation of controls can provide absolute assurance that
all control issuers and instances of fraud, if any, within the Company have been
detected.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting
identified in connection with the evaluation described above during the quarter
ended June 30, 2013 that has materially affected or is reasonably likely to
materially affect our internal controls over financial reporting.
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The name, age and position of each of our directors and executive officers are
as follows:
Name Age Position
---- --- --------
Karlo Guray 44 President, Secretary, Treasurer and Director
Our sole director and executive officer holds office until the next annual
meeting of our stockholders or until his successor is duly elected and
qualified. Set forth below is a summary description of the principal occupation
and business experience of our sole director and executive officer for at least
the last five years.
MR. KARLO GURAY - PRESIDENT, SECRETARY, TREASURER AND DIRECTOR
We have one executive officer who also serves as our director. Mr. Karlo Guray,
our President, Secretary, Treasurer and a Director, resides in the Phillipines.
Mr. Guray is currently the Finance Manager for Mabanta Brothers, Inc., in
Manila, Philippines, a position he has held since May 2009. At Mabanta, Mr.
Guray is responsible for evaluating finance applications for small businesses
and for making recommendations to management for loan applications. Prior to
working for Mabanta, Mr Guray was a Lending and Finance Officer for Chua
Financing, in Paranaqe, Philippines, from April 1999 to January 2009. At Chua
Financing, Mr. Guray was responsible for new loan applications, collection
matters and for working with potential small business borrowers. Mr. Guray
received a Bachelor's Degree in commerce from UP Diliman, in Manila,
Philippines, in 1991.
Mr. Guray is not an officer or director of any reporting company that files
annual, quarterly, or periodic reports with the United States Securities and
Exchange Commission.
27
FAMILY RELATIONSHIPS
There are no family relationships between or among any of our directors,
executive officers and incoming directors or executive officers.
COMMITTEES OF THE BOARD
Our Board of Directors held no formal meetings in the prior fiscal year. All
proceedings of the Board of Directors were conducted by resolutions consented to
in writing by the directors and filed with the minutes of the proceedings of the
directors. Such resolutions consented to in writing by the directors entitled to
vote on that resolution at a meeting of the directors are, according to the
Nevada Revised Statutes and the bylaws of our Company, as valid and effective as
if they had been passed at a meeting of the directors duly called and held. We
do not presently have a policy regarding director attendance at meetings.
We do not currently have a standing nominating or compensation committee of the
Board of Directors, or any committee performing similar functions. Our Board of
Directors performs the functions of nominating and compensation committees.
AUDIT COMMITTEE AND FINANCIAL EXPERT
We do not have an audit committee or an audit committee financial expert. Our
corporate financial affairs are simple at this stage of development and each
financial transaction can be viewed by any officer or director at will.
CODE OF ETHICS
We do not currently have a Code of Ethics applicable to our principal executive,
financial and accounting officers.
POTENTIAL CONFLICTS OF INTEREST
Since we do not have an audit or compensation committee comprised of independent
directors, the functions that would have been performed by such committees are
performed by our Board of Directors. Thus, there is a potential conflict of
interest in that our directors have the authority to determine issues concerning
management compensation, in essence their own, and audit issues that may affect
management decisions. We are not aware of any other conflicts of interest with
any of our Executives or Directors.
BOARD'S ROLE IN RISK OVERSIGHT
The Board assesses on an ongoing basis the risks faced by the Company. These
risks include financial, technological, competitive, and operational risks. The
Board dedicates time at each of its meetings to review and consider the relevant
risks faced by the Company at that time. In addition, since the Company does not
have an Audit Committee, the Board is also responsible for the assessment and
oversight of the Company's financial risk exposures.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires our executive officers and
directors, and persons who own more than 10% of our common stock, to file
reports regarding ownership of, and transactions in, our securities with the
Securities and Exchange Commission and to provide us with copies of those
filings.
28
Based solely on our review of the copies of such forms received by us, or
written representations from certain reporting persons, we believe that none of
our officers, directors and greater than 10% percent beneficial owners have
failed to comply with all applicable filing requirements.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
No director, executive officer, significant employee or control person of the
Company has been involved in any legal proceeding listed in Item 401(f) of
Regulation S-K in the past 10 years.
NOMINATIONS TO THE BOARD OF DIRECTORS
Our directors take a critical role in guiding our strategic direction and
oversee the management of the Company. Board candidates are considered based
upon various criteria, such as their broad-based business and professional
skills and experiences, a global business and social perspective, concern for
the long-term interests of the stockholders, diversity, and personal integrity
and judgment.
In addition, directors must have time available to devote to Board activities
and to enhance their knowledge in the growing business. Accordingly, we seek to
attract and retain highly qualified directors who have sufficient time to attend
to their substantial duties and responsibilities to the Company.
In carrying out its responsibilities, the Board will consider candidates
suggested by stockholders. If a stockholder wishes to formally place a
candidate's name in nomination, however, he or she must do so in accordance with
the provisions of the Company's Bylaws. Suggestions for candidates to be
evaluated by the proposed directors must be sent to the Board of Directors, c/o
Advanced Cellular, Inc., 5348 Vegas Dr., Las Vegas NV 89108.
DIRECTOR NOMINATIONS
As of June 30, 2013, we did not effect any material changes to the procedures by
which our shareholders may recommend nominees to our Board of Directors.
BOARD LEADERSHIP STRUCTURE AND ROLE ON RISK OVERSIGHT
Mr. Karlo Guray currently serves as our sole executive officer and director. We
determined this leadership structure was appropriate for us due to our small
size and limited operations and resources. The Board of Directors will continue
to evaluate our leadership structure and modify as appropriate based on the
size, resources and operations of the Company. It is anticipated that the Board
of Directors will establish procedures to determine an appropriate role for the
Board of Directors in the Company's risk oversight function.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No interlocking relationship exists between our board of directors and the board
of directors or compensation committee of any other company, nor has any
interlocking relationship existed in the past.
EMPLOYMENT ARRANGEMENTS
None of our officers, directors, or employees are party to employment agreements
with the Company. The Company has no pension, health, annuity, bonus, insurance
profit sharing or similar benefit plans; however, the Company may adopt such
plans in the future. There are no personal benefits available for directors,
officers or employees of the Company.
29
ITEM 11. EXECUTIVE COMPENSATION
Since our inception, compensation of our executives has been limited to $3,000
paid to our sole officer and director for management fees.
OPTION/SAR GRANTS
We do not currently have a stock option plan. No individual grants of stock
options, whether or not in tandem with stock appreciation rights known as SARs
or freestanding SARs, have been made to any executive officer or any director
since our inception; accordingly, no stock options have been granted or
exercised by any of the officers or directors since we were founded.
LONG-TERM INCENTIVE PLANS AND AWARDS
We do not have any long-term incentive plans that provide compensation intended
to serve as incentive for performance. No individual grants or agreements
regarding future payouts under non-stock price-based plans have been made to any
executive officer or any director or any employee or consultant since our
inception; accordingly, no future payouts under non-stock price-based plans or
agreements have been granted or entered into or exercised by our officer or
director or employees or consultants since we were founded.
COMPENSATION OF DIRECTORS
There are no arrangements pursuant to which our directors are or will be
compensated in the future for any services provided as directors.
RETIREMENT PLANS
We do not offer any annuity, pension, or retirement benefits to be paid to any
of our officers, directors, or employees in the event of retirement. There are
also no compensatory plans or arrangements with respect to any individual named
above which results or will result from the resignation, retirement, or any
other termination of employment with our company, or from a change in the
control of our Company.
COMPENSATION COMMITTEE
We do not have a separate Compensation Committee. Instead, our Board of
Directors reviews and approves executive compensation policies and practices,
reviews salaries and bonuses for other officers, administers our stock option
plans and other benefit plans, if any, and considers other matters.
RISK MANAGEMENT CONSIDERATIONS
We believe that our compensation policies and practices for our employees,
including our executive officers, do not create risks that are reasonably likely
to have a material adverse effect on our Company.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are currently no employment agreements or other contracts or arrangements
with our officers or directors. There are no compensation plans or arrangements,
including payments to be made by us, with respect to our officers or directors
30
that would result from either (a) the resignation, retirement or any other
termination of any of our directors or officers, or (b) a change-in-control.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDERS MATTERS
The following table sets forth certain information concerning the ownership of
the Common Stock by (a) each person who, to the best of our knowledge,
beneficially owned on that date more than 5% of our outstanding common stock,
(b) each of our directors and executive officers, and (c) all current directors
and executive officers as a group. The following table is based upon an
aggregate of 70,000,000 shares of our common stock outstanding as of June 30,
2013.
Title Name and Address of Amount and Nature of Percent of
of Class Beneficial Owner Beneficial Ownership (1) Class (1)(2)
-------- ---------------- ------------------------ ------------
Common Karlo Guray 0 0%
Suite 17 - 5348 Vegas Dr.
Las Vegas, NV 89108
Common Nir Eliyahu 50,000,000 71%
Suite 17 - 5348 Vegas Dr.
Las Vegas NV 89108
----------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC") and generally includes
voting or investment power with respect to securities. In accordance with
SEC rules, shares of common stock issuable upon the exercise of options or
warrants which are currently exercisable or which become exercisable within
60 days following the date of the information in this table are deemed to
be beneficially owned by, and outstanding with respect to, the holder of
such option or warrant. Except as indicated by footnote, and subject to
community property laws where applicable, to our knowledge, each person
listed is believed to have sole voting and investment power with respect to
all shares of common stock owned by such person.
(2) The percent of class is based on the total number of shares outstanding of
70,000,000 as of September 27, 2013.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
TRANSACTIONS WITH RELATED PERSONS
To June 30, 2013, Nir Eliayu, the Company's former officer and director advanced
$21,343 to the Company for administrative expenses. These advances are
non-interest bearing and due on demand.
Other than the transactions mentioned above, 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.
31
REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS
We rely on our Board to review related party transactions on an ongoing basis to
prevent conflicts of interest. Our Board reviews a transaction in light of the
affiliations of the director, officer or employee and the affiliations of such
person's immediate family. Transactions are presented to our Board for approval
before they are entered into or, if this is not possible, for ratification after
the transaction has occurred. If our Board finds that a conflict of interest
exists, then it will determine the appropriate remedial action, if any. Our
Board approves or ratifies a transaction if it determines that the transaction
is consistent with the best interests of the Company.
DIRECTOR INDEPENDENCE
We are not subject to listing requirements of any national securities exchange
or national securities association and, as a result, we are not at this time
required to have our board comprised of a majority of "independent directors."
We do not believe that any of our directors currently meet the definition of
"independent" as promulgated by the rules and regulations of NASDAQ.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
AUDIT FEES
The aggregate fees billed during the fiscal years ended June 30, 2013 and 2012
for professional services rendered by Weinberg & Baer LLC, with respect to the
audits of our 2013 and 2012 financial statements, as well as their quarterly
reviews of our interim financial statements and services normally provided by
the independent accountant in connection with statutory and regulatory filings
or engagements for these fiscal periods, were as follows:
2013 2012
-------- --------
Audit Fees and Audit Related Fees $ 7,900 $ 7,900
Tax
Fees -- --
All Other Fees -- --
-------- --------
TOTAL $ 7,900 $ 7,900
======== ========
In the above table, "audit fees" are fees billed by our Company's external
auditor for services provided in auditing our Company's annual financial
statements for the subject year. "Audit-related fees" are fees not included in
audit fees that are billed by the auditor for assurance and related services
that are reasonably related to the performance of the audit review of our
company's financial statements. "Tax fees" are fees billed by the auditor for
professional services rendered for tax compliance, tax advice and tax planning.
"All other fees" are fees billed by the auditor for products and services not
included in the foregoing categories.
PRE APPROVAL POLICIES AND PROCEDURES
We do not have a separately designated Audit Committee. The Board of Directors
pre-approves all services provided by our independent auditors. All of the above
services and fees were reviewed and approved by the Board of Directors either
before or after the respective services were rendered.
32
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit
Number Description
------ -----------
2.1 Articles of Incorporation (incorporated by reference to our
Registration Statement on Form S-1 filed with the SEC on August 27,
2010).
2.2 Bylaws (incorporated by reference to our Registration Statement on Form
S-1 filed with the SEC on August 27, 2010).
21 The Company has no subsidiaries.
31.1 Certification of CEO Pursuant to 18 U.S.C. ss. 1350, Section 302*
31.2 Certification of CFO Pursuant to 18 U.S.C. ss. 1350, Section 302*
32.1 Certification Pursuant to 18 U.S.C. ss.1350, Section 906*
32.2 Certification Pursuant to 18 U.S.C. ss. 1350, Section 906*
101 Interactive Data File**
----------
* Filed Herewith
** Pursuant to Rule 406T of Regulation S-T, these interactive data files are
deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18
of the Securities Exchange Act of 1934 and otherwise are not subject to
liability.
33
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADVANCED CELLULAR, INC.
Date: September 27, 2013 By: /s/ Karlo Guray
--------------------------------------------
Karlo Guray,
President, Secretary, Treasurer and Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signatures Title(s) Date
---------- -------- ----
/s/ Karlo Guray President, Secretary, Treasurer and September 27, 2013
------------------------- Director (Principal Executive Officer,
Karlo Guray Principal Financial Officer and Principal
Accounting Officer)
3
