Delaware
|
|
87-0419387
|
(State
or other jurisdiction of
|
|
(I.R.S.
Employer
|
incorporation
or organization)
|
|
Identification
No.)
|
10900
Wilshire Boulevard, Suite 500
|
|
|
Los
Angeles, CA
|
|
90024
|
(Address
of principal executive offices)
|
|
(zip
code)
|
PART
I
|
|
Page
|
Item
1.
|
Description
of Business
|
4
|
Item
2.
|
Description
of Property
|
10
|
Item
3.
|
Legal
Proceedings
|
10
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
10
|
|
|
|
PART
II
|
|
|
Item
5.
|
Market
for Common Equity and Related Stockholder Matters
|
10
|
Item
6.
|
Management's
Discussion and Analysis or Plan of Operation
|
11
|
Item
7.
|
Financial
Statements
|
17
|
Item
8.
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
|
17
|
Item
8A.
|
Controls
and Procedures
|
17
|
Item
8B.
|
Other
Information
|
17
|
|
|
|
PART
III
|
|
|
Item
9.
|
Directors
and Executive Officers, Promoters, Control Persons and Corporate
Governance; Compliance with Section 16(a) of the Exchange
Act
|
18
|
Item
10.
|
Executive
Compensation
|
20
|
Item
11.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
21
|
Item
12.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
21
|
Item
13.
|
Exhibits
|
22
|
Item
14
|
Principal
Accountant Fees and Services
|
23
|
|
•
|
increased
competitive pressures from existing competitors and new
entrants;
|
|
•
|
increases
in interest rates or our cost of borrowing or a default under any
material
debt agreements;
|
|
•
|
deterioration
in general or regional economic
conditions;
|
|
•
|
adverse
state or federal legislation or regulation that increases the costs
of
compliance, or adverse findings by a regulator with respect to existing
operations;
|
|
•
|
loss
of customers or sales weakness;
|
|
•
|
inability
to achieve future sales levels or other operating
results;
|
|
•
|
the
unavailability of funds for capital expenditures and/or general working
capital; and
|
|
•
|
operational
inefficiencies in distribution or other
systems.
|
ITEM 1. |
DESCRIPTION
OF
BUSINESS
|
|
•
|
the
available technical, financial and managerial
resources;
|
|
•
|
the
availability of audited financial
statements;
|
|
•
|
working
capital and other financial
requirements;
|
|
•
|
history
of operations, if any;
|
|
•
|
prospects
for the future;
|
|
•
|
nature
of present and expected
competition;
|
|
•
|
the
quality and experience of management services which may be available
and
the depth of that management;
|
|
•
|
the
potential for further research &
development;
|
|
•
|
specific
risk factors not now foreseeable but which then may be anticipated
to
impact our proposed activities;
|
|
•
|
the
potential for growth or expansion;
|
|
•
|
the
potential for profit;
|
|
•
|
the
perceived public recognition or acceptance of products, services,
or
trades;
|
|
•
|
name
identification; and
|
|
•
|
other
relevant factors.
|
ITEM 2. |
DESCRIPTION
OF PROPERTY
|
ITEM
3.
|
LEGAL
PROCEEDINGS
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
ITEM
5.
|
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
|
2006
|
2005
|
||||||||||||
|
High
($)
|
Low
($)
|
High
($)
|
Low
($)
|
|||||||||
1st
Quarter
|
0.07
(3.50*
|
)
|
0.06
(3.00*
|
)
|
0.10
(5.00*
|
)
|
0.045
(2.25*
|
)
|
|||||
2nd
Quarter
|
0.08
(4.00*
|
)
|
0.06
(3.00*
|
)
|
0.10
(5.00*
|
)
|
0.035
(1.75*
|
)
|
|||||
3rd
Quarter
|
0.17
(8.50*
|
)
|
0.07
(3.50*
|
)
|
0.065
(3.25*
|
)
|
0.03
(1.50*
|
)
|
|||||
4th
Quarter
|
0.17
(8.50*
|
)
|
0.01
(0.50*
|
)
|
0.09
(4.50*
|
)
|
0.036
(1.80*
|
)
|
ITEM
6.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
|
|
•
|
If
we are unable to secure future capital, or consummate the Merger,
we will
be unable to continue our
operations.
|
|
•
|
As
a stand-alone company, our business has not been profitable in the
past
and it may not be profitable in the future. We may incur losses on
a
quarterly or annual basis for a number of reasons, some within and
others
outside our control. (See “Potential Fluctuation in Our Quarterly
Performance.”) The growth of our business would require the commitment of
substantial capital resources. If funds are not available from operations,
we will need additional funds. We may seek such additional funding
through
public and private financing, including debt or equity financing.
Adequate
funds for these purposes, whether through financial markets or from
other
sources, may not be available when we need them. Even if funds are
available, the terms under which the funds are available to us may
not be
acceptable to us. Insufficient funds may require us to delay, reduce
or
eliminate some or all of our planned
activities.
|
|
•
|
Deliver
to the customer, and obtain a written receipt for, a disclosure
document;
|
|
•
|
Disclose
certain price information about the
stock;
|
|
•
|
Disclose
the amount of compensation received by the broker-dealer or any associated
person of the broker-dealer;
|
|
•
|
Send
monthly statements to customers with market and price information
about
the penny stock; and
|
|
•
|
In
some circumstances, approve the purchaser’s account under certain
standards and deliver written statements to the customer with information
specified in the rules.
|
ITEM
7.
|
FINANCIAL
STATEMENTS
|
ITEM
8.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL
DISCLOSURE
|
ITEM
8A.
|
CONTROLS
AND
PROCEDURES
|
ITEM
8B.
|
OTHER
INFORMATION
|
ITEM
9.
|
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS
AND CORPORATE GOVERNANCE;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT
|
NAME
|
AGE
|
POSITION
|
||
Silas
Phillips
|
35
|
Chief
Executive Officer, Chief Financial Officer, Secretary &
Director
|
|
(1)
|
Honest
and ethical conduct, including the ethical handling of actual or
apparent
conflicts of interest between personal and professional
relationships;
|
|
(2)
|
Full,
fair, accurate, timely and understandable disclosure in reports and
documents that are filed with, or submitted to, the Commission and
in
other public communications made by an
issuer;
|
|
(3)
|
Compliance
with applicable governmental laws, rules and
regulations;
|
|
(4)
|
The
prompt internal reporting of violations of the code to an appropriate
person or persons identified in the code;
and
|
|
(5)
|
Accountability
for adherence to the code.
|
ITEM
10.
|
EXECUTIVE
COMPENSATION
|
Name and
Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive
Plan Compensation
|
All
Other
Compensation
|
Total
|
|||||||||||||||||
Silas
Phillips
|
2006
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
CEO,
President, CFO,
|
2005
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
Secretary
and Director(1)
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Scott
Absher
|
2006
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
ViceFormer
CEO and
|
2005
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
Director(2)
|
(1) |
Silas
Phillips was appointed our CEO President, CFO, Secretary and sole
Director
of the Registrant on July 18, 2006. Mr. Phillips has not received
any
compensation as an officer or director since being appointed to such
positions.
|
(2) |
Scott
Absher served as CEO and a director from August 26, 2004 until July
18,
2006. Mr. Absher did not receive any compensation as an officer or
director for serving in such
positions.
|
ITEM 11. |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
Name
and Address of Beneficial Owner
|
Number
of
Shares
|
Percentage
|
|||||
Silas
Philip - CEO, CFO, Sole Director
10900
Wilshire Blvd., Suite 500
Los
Angeles, CA 90024
|
4,419
|
*
|
|||||
Scott
Absher
18101
Von Karman Avenue, Suite 330
Irvine,
California 92612
|
45,000
|
5.2
|
%
|
||||
Richardson
& Patel
10900
Wilshire Blvd., Suite 500
Los
Angeles, CA 90024
|
656,103
|
75.5
|
%
|
||||
All
executive officers, directors and beneficial owners as a
group
|
705,522
|
81.20
|
ITEM 12. |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
ITEM 13. |
EXHIBITS
|
(a)
|
Exhibits
|
Exhibit
No.
|
Document
|
|
|
|
|
3(i)
|
Articles
of Incorporation, as amended**
|
|
|
Certificate
of Amendment***
|
|
|
Certificate
of Amendment****
|
|
3(ii)
|
By-laws**
|
|
10.1
|
Stock
Purchase Agreement dated July 18, 2006*****
|
|
23.1
|
Consent
of Spector & Wong LLP, the Company’s Independent Public
Accountants*
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002*
|
|
31.2
|
Certification
Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
of 2002*
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. section 1350, as
adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002*
|
|
32.2
|
Certification
of Principal Financial Officer pursuant to 18 U.S.C. section 1350,
as
adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002*
|
*
|
Filed
herewith.
|
**
|
Incorporated
herein by reference from the Company’s Form 10-SB filed with the
Commission on June 7, 1999.
|
***
|
Incorporated
herein by reference from the Company’s Form 8-K filed with the Commission
on June 8, 2004.
|
****
|
Incorporated
herein by reference from the Company’s Form 8-K filed with the Commission
on August 5, 2004.
|
*****
|
Incorporated
herein by reference from the Company’s Form 8-K filed with the Commission
on July 24, 2006
|
ITEM 14. |
PRINCIPAL
ACCOUNTANT FEES AND
SERVICES
|
STRATIVATION,
INC.
|
||
|
|
|
By: | /s/ Silas Phillips | |
Silas Phillips |
||
Chief
Executive Officer
|
||
Date: February 14, 2007 |
2006
|
2005
|
||||||
ASSETS
|
|||||||
Cash
|
112,390
|
-
|
|||||
Total
Current Asset
|
112,390
|
||||||
TOTAL
ASSETS
|
$
|
112,390
|
$
|
-
|
|||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|||||||
Current
Liabilities
|
|||||||
Accrued Legal
Expenses
|
$
|
321,854
|
$
|
140,611
|
|||
Other
Accrued Expenses
|
7,655
|
65,350
|
|||||
Short-term
loans due to related parties
|
-
|
106,980
|
|||||
Total
Current Liabilities
|
329,509
|
312,941
|
|||||
Stockholders'
Deficit
|
|||||||
Common
Stock, $0.001 par value, 750,000,000 shares authorized, 10,636,000
and
6,835,982 shares issued and outstanding as of 2006 and 2005,
respectively
|
10,636
|
6,836
|
|||||
Paid-in
Capital
|
1,455,748
|
1,153,187
|
|||||
Deferred
Compensation
|
-
|
(225,000
|
)
|
||||
Accumulated
Deficit
|
(1,683,503
|
)
|
(1,247,964
|
)
|
|||
Total
Stockholders' Deficit
|
(217,119
|
)
|
(312,941
|
)
|
|||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$
|
112,390
|
$
|
-
|
For
years ended December 31,
|
2006
|
2005
|
|||||
Operating
Expenses:
|
|||||||
Selling,
General and Administrative Expenses
|
$
|
416,209
|
$
|
28,579
|
|||
Total
Cost and Expenses
|
416,209
|
28,579
|
|||||
Operating
loss
|
(416,209
|
)
|
(28,579
|
)
|
|||
Other
Income(Expenses)
|
|||||||
Forgiveness
of Debt
|
-
|
37,327
|
|||||
Interest
Income
|
-
|
2,000
|
|||||
Interest
Expense
|
(18,530
|
)
|
(30,567
|
)
|
|||
Total
Other Income(Expenses)
|
(18,530
|
)
|
8,760
|
||||
Net
loss before taxes
|
(434,739
|
)
|
(19,819
|
)
|
|||
Provision
for Income Taxes
|
800
|
800
|
|||||
Net
loss
|
$
|
(435,539
|
)
|
$
|
(20,619
|
)
|
|
Net
loss per share-Basic and Diluted
|
$
|
(0.05
|
)
|
NIL
|
|||
Weighted
Average Number of Shares
|
8,735,921
|
6,835,982
|
Common
Stock
|
Paid-in
|
Deferred
|
Accumulated
|
||||||||||||||||
Shares
|
Amount
|
Capital
|
Compensation
|
Deficit
|
Total
|
||||||||||||||
Balance
at December 31, 2004
|
6,835,982
|
$
|
6,836
|
$
|
4,528,187
|
$
|
(3,600,000
|
)
|
$
|
(1,227,345
|
)
|
$
|
(292,322
|
)
|
|||||
Write-down
deferred consulting services
|
(3,375,000
|
)
|
3,375,000
|
||||||||||||||||
Net
loss
|
(20,619
|
)
|
(20,619
|
)
|
|||||||||||||||
Balance
at December 31, 2005
|
6,835,982
|
$
|
6,836
|
$
|
1,153,187
|
$
|
(225,000
|
)
|
$
|
(1,247,964
|
)
|
$
|
(312,941
|
)
|
|||||
Issuance
of stock for cash
|
3,800,000
|
3,800
|
233,869
|
237,669
|
|||||||||||||||
Amortization
of deferred consulting fees
|
|
225,000
|
225,000
|
||||||||||||||||
Forgiveness of Debt by Related Party |
68,692
|
68,692
|
|||||||||||||||||
Rounding | 18 | ||||||||||||||||||
Net
loss
|
(435,539
|
)
|
(435,539
|
)
|
|||||||||||||||
Balance
at December 31, 2006
|
10,636,
000
|
$
|
10,636
|
$
|
1,455,748
|
$
|
-
|
$
|
(1,683,503
|
)
|
$
|
(217,119
|
)
|
For
years ended December 31,
|
2006
|
2005
|
|||||
CASH
FLOW FROM OPERATING ACTIVITIES
|
|||||||
Net
loss
|
$
|
(435,539
|
)
|
$
|
(20,619
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Gain
on sale of trademarks
|
-
|
(2,000
|
)
|
||||
Forgiveness
of Debt
|
-
|
|
(37,327
|
)
|
|||
Amortization
of Deferred Consulting Fees
|
225,000
|
-
|
|||||
Increase
in:
|
|||||||
Accounts
Payable and Accrued Expenses
|
123,548
|
43,102
|
|||||
Net
cash flows used in operating activities
|
(86,991
|
)
|
(16,844
|
)
|
|||
CASH
FLOW FROM INVESTING ACTIVITIES
|
-
|
-
|
|||||
CASH
FLOW FROM FINANCING ACTIVITIES
|
|||||||
Proceeds
from Related Parties' Loan Payable
|
-
|
16,844
|
|||||
Repayments
to Related Related Party Loan Payable
|
(38,288
|
)
|
-
|
||||
Proceeds
from Sale of Stock
|
237,669
|
-
|
|||||
Net
cash flows provided by financing activities
|
199,381
|
16,844
|
|||||
NET
INCREASE IN CASH
|
112,390
|
-
|
|||||
CASH
AT BEGINNING OF YEAR
|
-
|
-
|
|||||
CASH
AT END OF YEAR
|
$
|
112,390
|
$
|
-
|
|||
Supplemental
Disclosure of Cash Flow Information:
|
|||||||
Income
Taxes Paid
|
$
|
800
|
$
|
-
|
|||
Schedule
of noncash investing and financing activities:
|
|||||||
Disposal
of two trademarks to reduce accounts payable
|
$
|
-
|
$
|
2,000
|
|||
Write-down
deferred consulting services
|
$
|
-
|
$
|
3,375,000
|
2006
|
2005
|
||||||
Accrued
Professional Expenses
|
$
|
6,000
|
$
|
47,269
|
|||
Accrued
Interest Expense
|
-
|
13,598
|
|||||
Other
Accrued Expenses
|
1,655
|
4,483
|
|||||
Total
|
$
|
7,655
|
$
|
65,350
|
2006
|
2005
|
||||||
1.)
Payable to a related party, interest accrued at
6%, due on demand
|
$
|
-
|
$
|
14,800
|
|||
2.)
Payable to a related party, interest accrued at 10%, due on
demand
|
-
|
6,737
|
|||||
3.)
Payable to a related party, interest accrued at 10%, due on
demand
|
-
|
71,443
|
|||||
4.)
Payable to a related party, interest accrued at 10%, due on July
2, 2005
1
|
-
|
14,000
|
|||||
Total
|
$
|
-
|
$
|
106,980
|
2006
|
2005
|
||||||
Net
Operating Loss Carryforwards
|
$
|
495,831
|
$
|
293,878
|
|||
Other
temporary difference
|
-
|
-
|
|||||
Valuation
Allowance
|
(495,831
|
)
|
(293,878
|
)
|
|||
Net
deferred tax assets
|
$
|
-
|
$
|
-
|
December
31,
|
|||||||
2006
|
2005
|
||||||
Numerator:
|
|||||||
Net
Loss
|
$
|
(435,539
|
)
|
$
|
(20,619
|
)
|
|
Denominator:
|
|||||||
Weighted
Average Number of Shares
|
8,735,921
|
6,835,982
|
|||||
Net
loss per share-Basic and Diluted
|
$
|
(0.05
|
)
|
NIL
|