Attached files
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EX-32.1 - CERTIFICATION - SPRIZA, INC. | exhibit32-1.htm |
EX-31.2 - CERTIFICATION - SPRIZA, INC. | exhibit31-2.htm |
EX-31.1 - CERTIFICATION - SPRIZA, INC. | exhibit31-1.htm |
EXCEL - IDEA: XBRL DOCUMENT - SPRIZA, INC. | Financial_Report.xls |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2014
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-185669
SPRIZA, INC.
(Exact name of registrant as specified in its charter)
Nevada | 90-08883246 |
(State or other jurisdiction of incorporation of organization) |
(I.R.S. Employer Identification No.) |
111 Penn
Street, El Segundo, CA 90245
(Address of principal executive offices)
650-204-7903
(Registrant’s telephone number)
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 (§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 [ ] NO [ X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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 [ ] NO [X]
As of May 14, 2014, there were 67,618,934 shares of our common stock issued and outstanding.
SPRIZA, INC.
FORM 10-Q
INDEX
FORWARD-LOOKING STATEMENTS
This Report on Form 10-Q contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Reference is made in particular to the description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and other forward-looking statements included in this report. Such statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms, variations of such terms or the negative of such terms. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. Such statements address future events and conditions concerning, among others, capital expenditures, earnings, litigation, regulatory matters, liquidity and capital resources, and accounting matters. Actual results in each case could differ materially from those anticipated in such statements by reason of factors such as future economic conditions, changes in consumer demand, legislative, regulatory and competitive developments in markets in which we operate, results of litigation, and other circumstances affecting anticipated revenues and costs, and the risk factors set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed on March 31, 2014.
The forward-looking statements made in this report on Form 10-Q relate only to events or information as of the date on which the statements are made in this report on Form 10-Q. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this report and the documents that we reference in this report, including documents referenced by incorporation, completely and with the understanding that our actual future results may be materially different from what we anticipate.
Unless otherwise indicated, in this Form 10-Q, references to “we,” “our,” “us,” the “Company,” “Spriza” or the “Registrant” refer to Spriza, Inc., a Nevada corporation.
YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC’s instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2014 are not necessarily indicative of the results that can be expected for the full year.
Spriza, Inc. (A Development Stage Company)
Condensed Balance Sheets
(Unaudited)
March 31, 2014 $ |
December 31, 2013 $ |
|||||
ASSETS | ||||||
Current Assets: | ||||||
Cash | 424,817 | 483,539 | ||||
Cash – restricted | 10,000 | 10,000 | ||||
Total Current Assets | 434,817 | 493,539 | ||||
Property and equipment, net of accumulated depreciation of $5,958 and $4,271, respectively. (Note 4) | 30,011 | 24,638 | ||||
Other assets | ||||||
Intangible assets, net of accumulated amortization of $13,953 and $2,236, respectively. (Note 4) | 299,346 | 284,132 | ||||
Deposits | 2,737 | - | ||||
Total Other Assets | 302,083 | 284,132 | ||||
Total Assets | 766,911 | 802,309 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current Liabilities: | ||||||
Accounts payable and accrued liabilities | 25,477 | 42,334 | ||||
Total Current Liabilities | 25,477 | 42,334 | ||||
Contingencies (Notes 1 and 3) | - | - | ||||
Stockholders’ Equity | ||||||
Preferred Stock, 10,000,000 shares authorized, $0.0001 par value, no shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively. |
- | - | ||||
Common Stock, 190,000,000 shares authorized, $0.0001 par value, 67,618,934 and 65,942,477 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively |
6,762 | 6,594 | ||||
Subscription receivable | (3,878 | ) | - | |||
Additional Paid in Capital | 1,594,491 | 1,257,720 | ||||
Deficit Accumulated During the Development Stage | (855,941 | ) | (504,339 | ) | ||
Total Stockholders’ Equity | 741,434 | 759,975 | ||||
Total Liabilities and Stockholders’ Equity | 766,911 | 802,309 |
(See Notes to Condensed Financial Statements)
1
Spriza, Inc.
(A Development Stage Company)
Condensed Statements of
Operations
(Unaudited)
September 17, 2012 | |||||||||
For the Three Months Ended | (Inception) to | ||||||||
March 31, | March 31, | ||||||||
2014 | 2013 | 2014 | |||||||
$ | $ | $ | |||||||
Revenue | - | - | 7,000 | ||||||
Expenses | |||||||||
Branding and marketing | 25,586 | 7,158 | 63,331 | ||||||
Consulting | 43,833 | 2,000 | 141,421 | ||||||
Consulting – related party | 40,939 | 1,005 | 123,775 | ||||||
Depreciation and amortization | 13,404 | - | 19,911 | ||||||
General and administrative | 13,696 | 411 | 36,017 | ||||||
Professional fees | 73,954 | 22,956 | 163,663 | ||||||
Regulatory fees | 6,383 | 637 | 29,357 | ||||||
Stock based compensation | 113,542 | - | 193,021 | ||||||
Travel | 20,265 | - | 63,527 | ||||||
Total Operating Expenses | (351,602 | ) | (34,167 | ) | (824,023 | ) | |||
Net (Loss) before Other Expense | (351,602 | ) | (34,167 | ) | (827,023 | ) | |||
Other Expense | |||||||||
Interest expense | - | (100 | ) | (8,977 | ) | ||||
Net (Loss) | (351,602 | ) | (34,267 | ) | (836,000 | ) | |||
Net (Loss) Per Share – Basic and Diluted | (0.00 | ) | (0.00 | ) | |||||
Weighted Average Shares Outstanding – Basic and Diluted | 59,624,994 | 41,000,000 |
(See Notes to Condensed Financial Statements)
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Spriza, Inc.
(A Development Stage Company)
Condensed Statements of Cash
Flows
(Unaudited)
September 17, 2012 | |||||||||
For the Three Months Ended | (Inception) to | ||||||||
March 31, | March 31, | ||||||||
2014 | 2013 | 2014 | |||||||
$ | $ | $ | |||||||
Operating Activities | |||||||||
Net (loss) | (351,602 | ) | (34,267 | ) | (855,941 | ) | |||
Adjustments to reconcile net (loss) to net cash (used) by operating activities: | |||||||||
Depreciation and amortization | 13,404 | - | 19,911 | ||||||
Stock-based compensation | 113,541 | - | 193,021 | ||||||
Changes in operating assets and liabilities: | |||||||||
(Increase) in other assets | (2,737 | ) | - | (2,737 | ) | ||||
(Decrease) in accounts payable and accrued | (16,857 | ) | 17,818 | 34,455 | |||||
Net Cash (Used) in Operating Activities | (244,251 | ) | (16,449 | ) | (611,291 | ) | |||
Investing Activities | |||||||||
Purchase of equipment | (7,060 | ) | - | (10,970 | ) | ||||
Additions to intangible assets | (26,931 | ) | - | (313,299 | ) | ||||
Net Cash (Used) in Investing Activities | (33,991 | ) | - | (324,269 | ) | ||||
Financing Activities | |||||||||
Short-term loan proceeds | - | 80,000 | 420,000 | ||||||
Repayment of short-term loans | - | - | (25,000 | ) | |||||
Proceeds from the issuance of common stock | 219,520 | - | 975,377 | ||||||
Net Cash Provided by Financing Activities | 219,520 | 80,000 | 1,370,377 | ||||||
Increase in Cash | (58,722 | ) | 63,551 | 434,817 | |||||
Cash - Beginning of Year | 493,539 | 2,440 | - | ||||||
Cash - End of Year | 434,817 | 65,991 | 434,817 | ||||||
Non-cash Financing and Investing Activities: | |||||||||
Short-term loans and interest settled for shares | - | - | 403,977 | ||||||
Acquisition of assets for common shares | - | - | 25,000 | ||||||
Supplemental Disclosures: | |||||||||
Interest paid | - | - | - | ||||||
Income taxes paid | - | - | - |
(See Notes to Condensed Financial Statements)
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Spriza, Inc.
(A Development Stage Company)
Statement of Stockholders’
Equity
(Unaudited)
Shares # |
Amount $ |
Additional
Paid-in Capital $ |
Subscription
Receivable $ |
Deficit $ |
Total $ |
|||||||
Balance – September 17, 2012 (Inception) | - | - | - | - | - | - | ||||||
Shares issued for cash at $0.0001 per share | 36,000,000 | 3,600 | - | - | - | 3,600 | ||||||
Shares issued for asset acquisition | 5,000,000 | 500 | 24,500 | - | - | 25,000 | ||||||
Net (loss) | - | - | - | - | (19,941 | ) | (19,941 | ) | ||||
Balance – December 31, 2012 | 41,000,000 | 4,100 | 24,500 | - | (19,941 | ) | 8,659 | |||||
Shares issued for cash at $0.005 per share | 20,000,000 | 2,000 | 98,000 | - | - | 100,000 | ||||||
Shares issued for conversion of debt at $0.15 per share | 2,693,183 | 269 | 403,708 | - | - | 403,977 | ||||||
Shares issued for cash at $0.15 per share | 1,500,201 | 150 | 224,880 | - | - | 225,030 | ||||||
Warrants exercised for cash at $0.30 per share | 749,093 | 75 | 224,653 | - | - | 224,728 | ||||||
Current period vesting of stock based compensation | - | - | 79,479 | - | - | 79,479 | ||||||
Common shares subscribed for cash at $0.25 per share | - | - | 202,500 | - | - | 202,500 | ||||||
Net (loss) | - | - | - | - | (484,398 | ) | (484,398 | ) | ||||
Balance – December 31, 2013 | 65,942,477 | 6,594 | 1,257,720 | - | (504,339 | ) | 759,975 | |||||
Shares previously authorized now issued | 810,000 | 81 | (81 | ) | - | - | - | |||||
Shares issued for cash at $0.25 per share | 730,800 | 73 | 182,627 | - | - | 182,700 | ||||||
Warrants exercised for cash at $0.30 per share | 135,657 | 14 | 40,684 | (3,878 | ) | - | 36,820 | |||||
Current period vesting of stock based compensation | - | - | 113,541 | - | - | 113,541 | ||||||
Net (loss) | - | - | - | - | (351,602 | ) | (351,602 | ) | ||||
Balance – March 31, 2014 | 67,618,934 | 6,762 | 1,594,491 | (3,878 | ) | (855,941 | ) | 741,434 |
(See Notes to Condensed Financial Statements)
4
Spriza, Inc.
(A Development Stage Company)
Notes to Condensed Financial Statements
(Unaudited)
1. | Nature of Operations |
On September 17, 2012 we were incorporated as Level20 Inc. in the State of Nevada. On October 25, 2013 we changed our name to Spriza, Inc. |
On October 17, 2012, we entered into an Asset Purchase Agreement with Raptify Marketing Systems Ltd. (“Raptify”), whereby we acquired certain intellectual property and related assets from Raptify in exchange for 5,000,000 shares of our common stock, 3,000,000 shares of which was received by Raptify and 2,000,000 shares of which were received by certain other stakeholders of Raptify (See Note 4). |
Our intellectual property is a fully developed, commercially operational incentive contest marketing system and platform that builds brand awareness and generates qualified targeted leads for any size of business through a patent-pending online contest marketing solution trademarked as “SPRIZA™”. SPRIZA™ taps into the power of shared interests and personal relationships within targeted markets producing traceable and quantifiable results at every stage of the contest. It provides deep, real-time analytics and reporting, through robust tools that measure marketing and advertising budgets for real time return on investment analysis and demographic profiling. SPRIZA™ leverages social media strategies based on business objectives enabling our clients “Branders” to measure results of marketing efforts. The result is a network of subscribers that participate in contest promotions centered and shared around their personal and shared interests. SPRIZA™ produces quantifiable and verifiable participant data results, which can be used for ongoing marketing purposes with targeted demographics. SPRIZA™ data results assess how many consumers responded, whom they shared the contest with, the level of engagement, how many other contest participants were influenced and sales value generated. SPRIZA™ is designed to work with most social media engines including Facebook, Twitter and Pinterest and offers full mobile capability to engage popular mobile applications including iPhone, Android, Blackberry and Windows mobile operating systems. |
2. | Summary of Significant Accounting Policies |
Use of Estimates |
The preparation of financial statements in accordance with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. We regularly evaluate estimates and assumptions related to the useful life and recoverability of long-lived assets, stock-based compensation, and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Cash and Cash EquivalentsCash and cash equivalents include cash on deposit in overnight deposit accounts and investments in money market accounts. |
Property and Equipment |
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Property and equipment are all stated at historical cost less depreciation. Depreciation is computed on a straight-line basis over the useful lives of the assets which are estimated to be five years. |
Long-Lived Assets |
We account for long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. We assess recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. As of March 31, 2014 and December 31, 2013, we have no impaired long-lived assets. |
Intangible Assets |
Intangible assets are comprised primarily of the cost of trademarks and intellectual property. We evaluate our trademarks annually for impairment or earlier if there is an indication of impairment. If there is an indication of impairment of identified intangible assets not subject to amortization, we compare the estimated fair value with the carrying amount of the asset. An impairment loss is recognized to write-down the intangible asset to its fair value if it is less than the carrying amount. The fair value is calculated using the income approach. However, preparation of estimated expected future cash flows is inherently subjective and is based on our best estimate of assumptions concerning expected future conditions. Based on our impairment analysis performed for the three month period ended March 31, 2014 and the year ended December 31, 2013 and the period from September 17, 2012 (Inception) to December 31, 2012, the estimated fair values of trademarks and other intangible assets exceeded their respective carrying values. Amortization is computed on a straight-line basis over the estimated useful lives of the assets which are estimated to be five years. |
Revenue Recognition |
Revenue is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101, Revenue Recognition in Financial Statements, as revised by SAB No. 104. We recognize revenue when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the selling price is fixed or determinable; and collection is reasonably assured. |
Fair Value |
We comply with the provisions of ASC 820,“Fair Value Measurements and Disclosures”(“ASC 820”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements required under other accounting pronouncements. |
Financial Instruments |
We have financial instruments whereby the fair value of the financial instruments could be different from that recorded on a historical basis. Our financial instruments consist of cash, accounts and loans receivables, accounts payable and accrued expenses. The carrying amounts of our financial instruments approximate their fair values as of March 31, 2014 and December 31, 2013 due to their short-term nature. |
Income Taxes |
We follow ASC subtopic 740-10 for recording the provision for income taxes. ASC 740-10 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. |
6
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. |
Stock-based Compensation |
We account for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the statement of operations based on their fair values at the date of grant. |
We account for stock-based payments to non-employees in accordance with ASC 718 and Topic 505-50, “Equity-Based Payments to Non-Employees.” Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. |
We calculate the fair value of option grants and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. We estimate forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, we monitor both stock option and warrant exercises as well as employee termination patterns. |
The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the requisite service period of the award. |
Basic and Diluted Net Income (Loss) Per Share |
Net loss per share is computed in accordance with ASC subtopic 260-10. We present basic loss per share (“EPS”) and diluted EPS on the face of our statements of operations. Basic EPS is computed by dividing reported earnings by the weighted average shares outstanding. Diluted EPS is computed by adding to the weighted average shares the dilutive effect if common stock was issued upon the exercise of stock options and warrants. For the three months ended March 31, 2014 and the year ended December 31, 2013, the denominator in the diluted EPS computation is the same as the denominator for basic EPS due to the anti-dilutive effect of outstanding warrants on our net loss. Total potentially dilutive common share equivalents relating to stock purchase warrants and options granted or issued, as at March 31, 2014 and December 31, 2013 is 4,446,134 and 4,581,791, respectively. |
Recent Pronouncements |
We continually assess any new accounting pronouncements to determine their applicability to us. Where it is determined that a new accounting pronouncement affects our financial reporting, we undertake a study to determine the consequence of the change to our financial statements and assure that there are proper controls in place to ascertain that our financial statements properly reflect the change. |
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3. | Going Concern |
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have begun operations but have not generated significant revenue to date. These conditions give rise to doubt about our ability to continue as a going concern. These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our continuation as a going concern is dependent upon our ability to obtain additional financing and to generate profits and positive cash flow. We will require a cash injection of $1,000,000 over the next twelve months to continue to grow our business. |
4. | Property and Equipment and Intangible Assets |
On October 17, 2012, we entered into an Asset Purchase Agreement with Raptify Marketing Systems Ltd. (“Raptify”), whereby we acquired certain assets from Raptify in exchange for 5,000,000 shares of our common stock, 3,000,000 shares of which were received by Raptify and 2,000,000 shares of which were received by certain other stakeholders of Raptify. The fair value of the assets acquired was $25,000 which was allocated to identifiable assets as follows: intellectual property $1 and computer systems, $24,999. |
On May 15, 2013 we contracted a San Francisco consulting firm with technology development capabilities in the Philippines to complete the redevelopment of our technology platform. On December 1, 2013 we completed SPRIZA™ and on March 18, 2014 unveiled it to the public with real-time contests being run. SPRIZA™ includes: subscriber portal, mobile device support, do-it-yourself platform and tools allowing us to develop a database of concurrent customers and users. During the three month period ended March 31, 2014 we spent $49,961 on completion of this project and have allocated the cost to intellectual property. |
5. | Common Stock |
On February 5, 2014 we issued 992,800 Units at $0.25 per Unit to 9 foreign accredited investors for gross proceeds of $248,200 pursuant to our $0.25 Unit non-brokered private placement. |
On March 10, 2014 we issued 548,000 Units at $0.25 per Unit to 4 foreign accredited investors for further gross proceeds of $137,000 pursuant to our $0.25 Unit non-brokered private placement. This offering closed March 15, 2014. |
On March 25, 2014 we issued 135,657 Units at $0.30 per Unit for gross proceeds of $40,697 pursuant to the exercise of warrants. |
6. | Warrants |
As at March 31, 2014 we had 3,308,634 common share purchase warrants outstanding having an average exercise price of $0.30 per common share and having an average expiration date of 2.50 years. |
7. | Stock-based Compensation |
On October 29, 2013, we granted 4,550,000 stock options to directors, officers and employees to acquire 4,550,000 common shares at $0.15 per share having an option life of five years. A total of 25% vest on April 30, 2014, with a further 25% vesting on each of October 31, 2014, April 30, 2015 and October 31, 2015. During the three months ended March 31, 2014, we recorded stock-based compensation of $113,542 (Q1-2013 - $nil). |
8
The following table summarizes the continuity of our stock options: |
Number of Options |
Weighted Average Exercise Price |
Weighted-Average Remaining Contractual Term (years) |
Aggregate Intrinsic Value |
||
$ | $ | ||||
Outstanding, December 31, 2013 | 4,550,000 | 0.15 | |||
Granted | - | - | |||
Outstanding, March 31, 2014 | 4,550,000 | 0.15 | 4.58 | 2,684,500 | |
Exercisable, March 31, 2014 | 1,137,500 | 0.15 | - | - |
A summary of the changes of the Company’s non-vested stock options is presented below: |
Number of Options |
Weighted Average Grant Date Fair Value |
||
$ | |||
Non-vested at December 31, 2013 | 4,550,000 | 0.10 | |
Granted | - | - | |
Vested | 1,137,500 | - | |
Non-vested at March 31, 2013 | 3,412,500 | 0.10 |
As at March 31, 2014, there was $250,407 of unrecognized compensation cost related to non-vested stock options expected to be recognized over a weighted average period of 1.58 years. |
8. | Related Party Transactions |
The President and Chief Executive Officer of the Company was paid a total of $31,974 during the three months ended March 31, 2014 (2013 - $69,831). The Chief Financial Officer of the Company was paid a total of $4,488 during the three months ended March 31, 2014 (2013 - $Nil). |
9. | Subsequent Events |
We have evaluated all subsequent events through the date these financial statements were issued and determined that there are no subsequent events to record or to disclose except as follows: |
The Company entered into a strategic partnership with Digital Marketing Philippines to serve the Philippine market with its social sharing contest marketing programs, (“SPRIZA™”). Digital Marketing Philippines is an internet marketing company based in Manila, Philippines. Digital Marketing Philippines is a company that helps clients amplify customer engagement to drive increased revenue, discover new, innovative partners - like Spriza - to assist in providing the best services possible to their clients. Digital Marketing Philippines’ main service is to leverage the most effective digital marketing campaign for brands that enables the brand to reach the maximum amount of prospective clients. |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
Overview
On September 17, 2012 we were incorporated as Level20 Inc. in the State of Nevada. On October 25, 2013 we changed our name to Spriza, Inc.
On October 17, 2012, we entered into an Asset Purchase Agreement with Raptify Marketing Systems Ltd. (“Raptify”), whereby we acquired certain assets from Raptify in exchange for 5,000,000 shares of our common stock, 3,000,000 shares of which were received by Raptify and 2,000,000 shares of which were received by certain other stakeholders of Raptify.
Our principal executive offices are located at 111 Penn Street, El Segundo, CA 90245, and our telephone number at this address is (650) 204-7903. Our website is www.spriza.com. Information contained on our website is not a part of this Quarterly Report on Form 10-Q. We completed our initial public offering on June 12, 2013. On November 4, 2013, our common stock was quoted under the symbol “SPRZ” on the OTC BB operated by the Financial Industry Regulatory Authority, Inc. (“FINRA”).
Our Business and Intellectual Property
We own and operate the patent-pending proprietary SPRIZA™ contest marketing platform. We filed the US Patents, filing No. 12753864 and submitted the Canadian filings, No. 2261/P1551CA00. We acquired these assets through an Asset Purchase Agreement and we currently hold patent pending status for both jurisdictions.
Trademarks pertaining to SPRIZA™ and its Star Icon logo as well as our tagline “Win, Laugh, Live” have been applied for in the United States and Canada. Currently all trademarks listed above are in a pending status.
Our intellectual property is a fully developed, commercially operational incentive contest marketing system and platform that builds brand awareness and generates qualified targeted leads for any size of business through a patent-pending online contest marketing solution trademarked as “SPRIZA™”. SPRIZA™ taps into the power of shared interests and personal relationships within targeted markets producing traceable and quantifiable results at every stage of the contest. It provides deep, real-time analytics and reporting, through robust tools that measure marketing and advertising budgets for real time return on investment analysis and demographic profiling. SPRIZA™ leverages social media strategies based on business objectives enabling our clients “Branders” to measure results of marketing efforts. The result is a network of subscribers that participate in contest promotions centered around their personal and shared interests. SPRIZA™ produces quantifiable and verifiable participant data results, which can be used for ongoing marketing purposes with targeted demographics. SPRIZA™ data results assess how many consumers responded, whom they shared the contest with, the level of engagement, how many other contest participants were influenced and sales value generated. SPRIZA™ is designed to work with most social media engines including Facebook, Twitter and Pinterest and offers full mobile capability to engage popular mobile applications including iPhone, Android, Blackberry and Windows mobile operating systems.
We seek patent protection for those inventions and technologies for which we believe such protection is suitable and is likely to provide a competitive advantage to us. Because patent applications in the United States are maintained in secrecy until either the patent application is published or a patent is issued, we may not be aware of third-party patents, patent applications and other intellectual property relevant to our products that may block our use of our intellectual property or may be used in third-party products that compete with our products and processes. In the event a competitor or other party successfully challenges our products, processes, patents or licenses or claims that we have infringed upon their intellectual property, we could incur substantial litigation costs defending against such claims, be required to pay royalties, license fees or other damages or be barred from using the intellectual property at issue, any of which could have a material adverse effect on our business, operating results and financial condition.
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We also rely substantially on trade secrets, proprietary technology, nondisclosure and other contractual agreements, and technical measures to protect our technology, application, design, and manufacturing know-how, and work actively to foster continuing technological innovation to maintain and protect our competitive position. We cannot assure you that steps taken by us to protect our intellectual property and other contractual agreements for our business will be adequate, that our competitors will not independently develop or patent substantially equivalent or superior technologies or be able to design around patents that we may receive, or that our intellectual property will not be misappropriated.
Spriza.com – Contest Portal
Delivery and distribution to the consumer of all contest offerings will be based upon user profile by location, interests and other preferences. Our web site www.spriza.com aggregates all contests, while segmenting distribution based upon the means of client submission and their branding strategy to specifically determine which offerings are available nationally and regionally. Post marketing opportunities will occur within this platform to drive affiliate revenue and secondary sales.
Small/Medium Business Contest Creation Tool
We offer a low cost entry platform targeting small to mid-sized businesses wishing to promote themselves through self-directed contests on a local or regional level. This portal offers a comprehensive toolkit and tutorials to initiate, register and administer a fully-compliant contest or sweepstake, providing basic templates and customization options to uniquely brand their efforts and monitor their results using fundamental reporting tools. This option may not require or include any third-party party intervention but does provide limited access to support and assistance through our administration team.
Advertising Agency Contest Creation Tool
Our enterprise solution is a backend system providing every available tool and customization option to those agencies and marketing firms wishing to offer our products to their corporate clients in a closed loop campaign as a standalone offering or as integration to existing programs and marketing efforts. This option is expected to provide full support and assistance to the agency behind the scenes. We anticipate that utilities and reporting tools will be comprehensive and customizable, allowing for white-labeling to their own client base. We expect that this solution will be best suited to major national brands rolling out a complete North American campaign.
International Licensing & Site Mirrors
For international expansion we anticipate that international licensed affiliates wishing to duplicate our offerings in foreign countries will have the opportunity to acquire exclusive licensing through our international release of mirror programs, enabling them to tailor a solution to their local market’s culture, currency, language and compliance to legal requirements. We have finalized our international licensing model and we are currently identifying licensees for international expansion in Asia, Europe and South America.
Sales and Marketing
Our SPRIZA™ technology is designed to integrate seamlessly within existing social media platforms. We expect to grow our revenues through multiple streams including contest revenue, lead generation, ecommerce conversion and ongoing marketing initiatives.
Traditional marketing efforts to promote contests or corporate promotional giveaways have included direct mail, newspaper, radio, television and some have included online efforts but they have generally not successfully leveraged the viral nature of social media such as Facebook or Twitter. Our patent-pending solution rewards a company with a competition advantage based on its ability to drive viral distribution and participation towards sales and lead generation. There are other online contesting companies such as Strutta and WildfireApp that are more focused on driving interest to social pages. This brand engagement dies at the closing of that promotional offer and usually only incentivizes a limited amount of the participants.
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Our patent-pending method of contest distribution uses incentive based, viral marketing where participants are rewarded for sharing the contest with like-minded family, friends and associates. Participants’ odds improve the more people they invite as do their chances of sharing in that winning experience with that chain of winners. This incentive based marketing creates a new and proprietary way for brands to attract and identify customers, brand influencers and ambassadors to sell goods and services.
The contest subscriber website is www.spriza.com where users will be able to create an account, set personal preferences, link to their social media profiles and consume, share and engage in branded contests throughout North America. This site has three main sections: open contests they are participating in, closed contests they previously participated in and current and available contests that can be searched or screen based on personal preferences. Within each section individuals will be served promotional materials, deals, and advertising relevant to that brand and personal preference. Each section will likely contain short videos on the brand experience, to explain what the brand experience offers if customers win and a video of the winners sharing and consuming the winning brand experience.
We intend to email our www.Spriza.com subscribers contest offers that are targeted by location and personal preferences. Consumers can also access our contests directly through our website and mobile applications. We expect that new subscribers will be driven to Spriza™ through all digital advertising efforts such as paid, search, social, mobile, location, email and, where essential, traditional methods. All contests will initially be seeded throughout our database of subscribers but also promoted through our client’s social media assets and client lists thus driving up our total subscribers.
A typical contest might offer an all-inclusive weekend at a brand name hotel in Las Vegas and a set of brand name golf clubs. Contests would immediately be pushed out and shared by golf lovers and enthusiasts from one personal contact to another. The advantage of our SPRIZA™ platform is that each contestant in the winning referral chain is a winner and in this example goes on the trip and all share the experience together. We anticipate that this experience will be documented and distributed through social media to all the contestants that participated as a further means of advertising for our clients. We believe that seeing winning participants consume the incentive adds further validation and credibility to our SPRIZA™ platform and capabilities and allows our clients to further leverage their media assets. We plan to earn upfront fees from the brands for the campaign, online advertising fees and additional affiliate revenue by promoting “after-campaign” deals and incentives to this group throughout the year.
Regardless if we are running a contest for a national brand throughout North America or a local merchant within a single city, they all must strictly adhere to the rules, regulatory and compliance specified by the government and governing bodies in each jurisdiction. Age, eligibility, terms and conditions, bonding, insurance and many other finite details are part of our core competencies and our commitment when delivering campaigns to our clients. We anticipate SPRIZA™ evolving to include a campaign creation toolbox that allows for dynamic contest creation, where an agency, brand manager or our employee can map out a campaign quickly with proper terms conditions, contracts, approval sign off and a compliance checklist.
Competition
The digital and mobile technology business is highly fragmented and extremely competitive and subject to rapid change. The market for customers is intensely competitive and such competition is expected to continue to increase. We believe that our ability to compete depends upon many factors within and beyond our control, including the timing and market acceptance of new solutions and enhancements to existing businesses developed by us, our competitors, and their advisers. SPRIZA™ is an online contest platform that utilizes digital media and technology to distribute and feature local and national branded promotional campaigns. Many consumers maintain simultaneous relationships with multiple digital brands and products and can easily shift consumption from one provider to another.
Our SPRIZA™ contest platform is both promotional “Promotional Platform” and social “Social Platform”.
Our principal competitors, when comparing “Promotional Platforms” are: Wildfire by Google, Strutta, Prizelogic, HelloWorld (formerly ePrize), and Prizeo. Our SPRIZA™ contest platform differs, in most part, from these competitors by seamlessly integrating our promotion platform and the social experience into a channel that can provide both the brand/cause experience to drive engagement and link that activity directly to online and offline commerce. Through our SPRIZA™ platform, we build a referral network of like-minded consumers who actively participate with the brands they love and it allows us to retarget and entertain our subscribers based on their specific preferences and activity.
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Our principal competitors, when comparing “Social Platforms” are: Pinterest, Twitter, Facebook, WhatsApp and Groupon. Our SPRIZA™ contest platform differs, in most part, from these competitors by establishing a unique referral network that has the means to engage, reward, remarket and incentivize its user base to foster new connections and ongoing commerce activity.
Our competitors are in segments such as the following:
- Websites promoting deal of the day gift certificates;
- Large social media networks with deep distribution; and
- Innovative search websites with local and national advertisers.
In addition, new competitors may be able to launch new businesses at relatively low cost. In addition, either existing or new competitors may develop new technologies, and our existing and potential customers may shift their mass branding campaigns to these new technologies. Therefore, we cannot assure you that we will be able to successfully implement our business strategy in the face of such competition.
Business goals and milestones
We have completed or advanced, over the past few months, the following business goals and milestones:
- we contracted a San Francisco consulting firm with development capabilities in the Philippines to develop SPRIZA™. We have completed this project and launched our site on March 18, 2014. This new version includes: contest portal, contest profiles, contest functionality, contest subscriber ability, subscriber portal, subscriber account setup and profiles, user functionality, and sharing capabilities database architecture, with querying, reporting and analytics. During the quarter ended March 31, 2014 we spent $49,961 on this project and have allocated the cost to intellectual property; we are working on: mobile device support, do-it-yourself platform and tools;
- we have launched our corporate splash page in preparation of our corporate website which has been completed and is available to the public at www.spriza.com;
- we have completed our SPRIZA™ rebranding project including media kit, sales and marketing packages and corporate peripherals;
- we have closed our Apple GoPro promotion, in which the winner was a resident of Calgary, Alberta, who won a MacBook Pro, a GoPro hero3 camera, GoPro accessories and Final Cut Pro editing software. We are currently running the “Get Fameus” Hollywood experience promotion. Upcoming promotions include a Canadian based national insurance company. We are engaged in ongoing sales activity with clients that include a team in the National Hockey League, a film and television production studio, a 3D printing company, an electronic security company and an electronic cigarette company; and
- we are in the final stages of completing a North American wide marketing campaign which will focus on driving the participation of prospective Fortune 500 companies and large corporate sponsorship to the contest platform.
Business strategy
Secure Necessary Funds
As at March 31, 2014 we had $424,817 in available cash and $10,000 in restricted cash pursuant to our merchant service agreement. We will require additional funds during the remainder of fiscal 2014 to continue to aggressively grow our business and execute our 2014 business plan and to make strategic acquisitions.
Drive client growth and revenue through contest campaigns
To drive client growth, we plan to expand the number of ways in which subscribers can discover contests through our marketplace. As revenue is recognized we plan to continue to make investments in our sales force and partnership networks to further client relationships and acquire local expertise. Retention will be focused on providing our clients with a positive campaign experience and offering targeted placement of their contest campaigns to our subscribers, tools to manage these campaigns more effectively and superior customer service. Current efforts are focused on developing a sponsorship campaign that is centered on the 18-25 year old demographic offering four year college tuitions as the contest incentive. We are also in negotiations with Fortune 500 companies to run online contests. The sponsorship fees associated with a contest driven advertising campaign of this size is estimated at $1.5 million with 70% of this amount to be campaign costs, and 30% would be our profit. Additionally, securing contracts directly with brands and established advertising agencies will be necessary to achieve desired growth. We are establishing the go-to-market strategy and digital marketing initiatives essential to engage with prospective clients to secure contracts and achieve this milestone.
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Drive the growth of our subscriber base
We plan to invest significant effort to acquire subscribers through online marketing initiatives. Our goal will be to retain existing and acquire new subscribers by providing preference driven and targeted contests, quality subscriber service and expanding the number of contest offerings through both local and national brands. Activity has commenced on the development and release of our digital marketing strategy to encourage subscriber sign up and generate brand participation.
Expand affiliate and business development partnerships
We intend to establish an online reseller network of commissioned agents and strategic partners. We hope to sign partnership agreements with online companies such as Google, Microsoft, Yahoo! and Facebook. These intended partners could display, promote and distribute our contests to their users in exchange for a share of the revenue generated from our campaigns. We currently have no such agreements or arrangements with Google, Microsoft, Yahoo! or Facebook. We intend to maintain ongoing efforts to expand our business with strategic affiliates and business development partnerships.
Increase our product offering through innovation
We intend to develop new versions and product releases to increase the number of subscribers and clients that transact business through our SPRIZA™ online contest marketing platform. We believe our network of subscribers will be a focal point for companies to promote their brands and showcase all of their contests. Expansion from an online presence into all mobile, tablet and operating systems is an essential step in our development.
Establish our presence in the marketplace as the leading Online Contesting Platform
All efforts will be made to firmly establish us as the leader in the delivery, fulfillment and distribution of brand driven online contests to a subscriber base. In addition to the traditional and digital marketing efforts it is not uncommon for these efforts to be supported by viral sharing and word of mouth marketing that is prevalent with many online subscriber based communities. This behavior is often encouraged through referral or loyalty incentives.
The discussion that follows is derived from our unaudited balance sheets as of March 31, 2014 and December 31, 2013 and the unaudited statements of operations and cash flows for the Quarter ended March 31, 2014 and the period from September 17, 2012 (Inception) to December 31, 2013 and the Period from September 17, 2012 (Inception) to March 31, 2014.
Results of Operations for the three months ended March 31, 2014 and 2013
The net loss for Q1-2014 was $351,602 compared to a net loss of $34,267 for Q1-2013 an increase of $317,435. This increase was due to the development and growth of the Company over the last twelve months as compared to incurring only professional fees to organize our Company and obtain a public listing in 2013.
In Q1-2014 we incurred $351,602 in operating expenses (Q1-2013 - $34,167). During Q1-2014 operating expenses consisted of: $113,542 (Q1-2013 - $Nil) of stock-based compensation due to the vesting of options granted under our 2013 Incentive Award Plan; $84,772 (Q1-2013 - $3,005) in consulting fees and salaries including $31,974 (Q1-2013 - $Nil) paid to our Chief Executive Officer; $4,488 paid to our Chief Financial Officer (Q1-2013 - $Nil); $25,586 (Q1-2013 - $7,158) in branding and marketing; $6,383 (Q1-2013 - $637) in regulatory fees, $73,954 (Q1-2013 - $22,956) in professional fees including legal and accounting fees, $20,265 (Q1-2013 - $Nil) in travel and $13,696 (Q1-2013 - $411) in office expenses. We incurred $1,687 (Q1-2013 - $Nil) in depreciation and amortization of property and equipment and $11,717 in intangible assets (Q1-2013 - $Nil). We expect that operating expenses will increase as we are able to raise capital and further our business operations.
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During Q1-2014 we accrued $Nil of interest payable as all short-term loans plus accrued interest were converted through the issuance of 2,693,183 Units at $0.15 per Unit in 2013. Each unit contained one common share and one common share purchase warrant exercisable at $0.30 for a three year period.
LIQUIDITY AND CAPITAL RESOURCES
As at March 31, 2014, working capital was $409,340. Our available cash on hand was $424,817. At the end of Q1-2013 cash on hand was $65,991 and current liabilities totaled $116,600.
During Q1-2014 our available and restricted cash position decreased by $58,722 to $434,817 (Q1-2013 - $65,991). Subsequent to March 31, 2014, and up to May 15, 2014 we have not received any additional funding.
The following table sets forth the major sources and uses of cash for the three months ended March 31, 2014 and 2013:
2014 $ |
2013 $ |
|||||
Net cash used in operating activities | 244,251 | 16,449 | ||||
Net cash used in investing activities | 33,991 | - | ||||
Net cash provided by financing activities | 219,520 | 80,000 | ||||
Net increase (decrease) in cash | (58,722 | ) | 63,551 |
Cash Used in Operating Activities
During 2014 operating activities used $244,251 in cash (Q1-2013 - $16,449). Use of cash was primarily attributable to funding the net loss of $351,602 offset by a non-cash charge of $13,404 (Q1-2013 - $Nil) for depreciation and amortization and a non-cash charge of $113,542 for stock-based compensation (Q1-2013 - $Nil).
Cash Used in Investing Activities
During Q1-2014 we spent $33,991 (Q1-2013 - $Nil) in investing activities. During Q1-2014 we spent $7,060 in acquisition of equipment and $26,931 in acquisition of intangible assets (Q1-2013 - $Nil).
Cash from Financing Activities
During Q1-2014 financing activities provided $223,397 in cash consisting of:
- $182,700 received pursuant to our $0.25 Unit non-brokered private placement; and
- $40,698 of which $36,820 was received from the exercise of 135,657 warrants at $0.30 per warrant share, with a balance due of $3,878.
Need for Additional Capital
We have $424,817 in unrestricted cash at March 31, 2014 and will require further capital to achieve our 2014 operating plan.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that any accounting policies applicable to our company currently fit this definition.
Recently Issued Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures
Disclosure Controls and ProceduresWe carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2014. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of March 31, 2014, our disclosure controls and procedures were not effective due to the presence of material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of March 31, 2014, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Remediation Plan to Address the Material Weaknesses in Internal Control over Financial ReportingWe plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have appointed a Chief Financial Officer and additional independent board directors in order to remediate the material weaknesses identified above. Additionally we plan to implement the following changes during our fiscal year ending December 31, 2014: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended March 31, 2014 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 1A. Risk Factors
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On February 5, 2014 we issued 992,800 Units at $0.25 per Unit to 9 foreign accredited investors for gross proceeds of $248,200, of which $202,500 was received in December 2013, pursuant to our $0.25 Unit non-brokered private placement. We relied upon Rule 506 of Regulation D and/or Regulation S of the Securities Act as these securities were issued to foreign investors who are “accredited investors,” as such term is defined in Rule 501(a) under the Securities Act in offshore transactions (as defined in Rule 902 under Regulation S of the Securities Act), based upon representation made by such investors.
On March 10, 2014 we issued 548,000 Units at $0.25 per Unit to 4 foreign accredited investors for further gross proceeds of $137,000 pursuant to our $0.25 Unit non-brokered private placement. This offering closed March 15, 2014. We relied upon Rule 506 of Regulation D and/or Regulation S of the Securities Act as these securities were issued to foreign investors who are “accredited investors,” as such term is defined in Rule 501(a) under the Securities Act in offshore transactions (as defined in Rule 902 under Regulation S of the Securities Act), based upon representation made by such investors.
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On March 25, 2014 we issued 135,657 Units at $0.30 per Unit for gross proceeds of $40,697 pursuant to the exercise of warrants by 1 of our previously subscribed foreign accredited investors. We relied upon Rule 506 of Regulation D and/or Regulation S of the Securities Act as these securities were issued to foreign investors who are “accredited investors,” as such term is defined in Rule 501(a) under the Securities Act in offshore transactions (as defined in Rule 902 under Regulation S of the Securities Act), based upon representation made by such investors.
Item 3. Defaults upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information
None
Item 6. Exhibits
Exhibit No. | Description of Exhibit |
2.1 | Asset Purchase Agreement dated October 17, 2012 (1) |
3.1 | Articles of Incorporation (2) |
3.2 | Certificate of Amendment to Articles of Incorporation (3) |
3.3 | Bylaws (2) |
10.1 | 2013 Incentive Award Plan (4) |
31.1 | Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a)/15d-14(a)* |
31.2 | Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a)/15d-14(a)* |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350** |
101 .INS | XBRL Instance Document* |
101 .SCH | XBRL Taxonomy Extension Schema Document* |
101 .CAL | XBRL Taxonomy Calculation Linkbase Document* |
101 .DEF | XBRL Taxonomy Extension Definition Linkbase Document* |
101 .LAB | XBRL Taxonomy Label Linkbase Document* |
101 .PRE | XBRL Taxonomy Presentation Linkbase Document* |
1. | Incorporated herein by reference to the Registration Statement on Form S-1/A filed on February 14, 2013. |
2. | Incorporated herein by reference to the Registration Statement on Form S-1 filed on December 24, 2012. |
3. | Incorporated herein by reference to the Current Report on Form 8-K filed on October 29, 2013. |
4. | Incorporated herein by reference to the Annual Report on Form 10-K filed on March 31, 2014. |
* Filed herewith
**Furnished herewith
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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.
Spriza, Inc. | |
Date: | May 14, 2014 |
By: | /s/ Rob Danard |
Rob Danard | |
Title: | Chief Executive Officer and Director |