(Exact
Name of Small Business Issuer in Its Charter)
|
|||
Delaware
|
1177
High Ridge Road, Stamford, CT 06905
|
20-4378866
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Address
of principal executive offices)
(zip
code)
|
(IRS
Employer
Identification
No.)
|
|
PAGE
|
||
PART
I
|
|||
ITEM
1
|
Description
of Business
|
3
|
|
ITEM
2
|
Description
of Property
|
6
|
|
ITEM
3
|
Legal
Proceedings
|
6
|
|
ITEM
4
|
Submission
of Matters to a Vote of Security Holders
|
6
|
|
PART
II
|
|||
ITEM
5
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and issuer
Purchases of Equity Securities
|
7
|
|
ITEM
6
|
Management’s
Discussion and Analysis and Results of Operations
|
7
|
|
ITEM
7
|
Financial
Statements
|
15
|
|
ITEM
8
|
Changes
In and Disagreements with Accountant on Accounting and Financial
Disclosure
|
16
|
|
ITEM
8A
|
Controls
and Procedures
|
16
|
|
ITEM
8B
|
Other
Information
|
16
|
|
PART
III
|
Submission
of Matters to a Vote of Security Holders
|
||
ITEM
9
|
Directors,
Executive Officers, Promoters, Control Persons and Corporate Governance;
Compliance with Section 16(a) of the Exchange Act
|
17
|
|
ITEM
10
|
Executive
Compensation
|
18
|
|
ITEM
11
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
19
|
|
ITEM
12
|
Certain
Relationships and Related Transactions
|
19
|
|
ITEM
13
|
Exhibits
|
19
|
|
ITEM
14
|
Principal
Accountant Fees and Services
|
21
|
|
SIGNATURES
|
22
|
||
CERTIFICATIONS
|
· |
With
a price of less than $5.00 per
share;
|
· |
That
are not traded on a “recognized” national
exchange;
|
· |
Whose
prices are not quoted on a NASDAQ automated quotation system
(NASDAQ-listed stock must still have a price of not less than $5.00
per
share); or
|
· |
Stock
in issuers with net tangible assets less than $2,000,000 (if the
issuer
has been in continuous operation for at least three years) or $5,000,000
(if in continuous operation for less than three years), or with average
revenues of less than $6,000,000 for the last three
years.
|
Balance
Sheet as of June 30, 2007
|
F-2
|
|
Statements
of Operations for the years ended June 30, 2007 and June 30,
2006
|
F-3
|
|
Statement
of Stockholders' Equity for the year ended June 30,
2007
|
F-4
|
|
Statements
of Cash Flows for the years ended June 30, 2007 and 2006
|
F-5
|
|
Notes
to Financial Statements
|
F-7
|
Current
Assets:
|
||||
Cash
and Cash Equivalents
|
$
|
60,624
|
||
Total
Current Assets
|
60,624
|
|||
Property
and Equipment, Net
|
1,908
|
|||
Deferred
Finance Costs, Net
|
93,812
|
|||
Total
Assets
|
$
|
156,344
|
||
LIABILITIES
AND STOCKHOLDERS’ DEFICIENCY
|
||||
Current
Liabilities:
|
||||
Convertible
Debentures
|
$
|
500,000
|
||
Notes
Payable, Net of Unamortized Discount of $37,654
|
164,306
|
|||
Accrued
Expenses
|
146,252
|
|||
Accrued
Liquidated Damages
|
106,667
|
|||
Accrued
Interest
|
62,737
|
|||
Total
Current Liabilities
|
979,962
|
|||
Commitments
and Contingencies
|
||||
Stockholders’
Deficiency:
|
||||
Preferred
Stock, $.0001 par value; 10,000,000 shares authorized, none issued
and
outstanding
|
-
|
|||
Common
Stock, $.0001 par value; 250,000,000 shares authorized, 16,761,597
issued
and outstanding
|
1,676
|
|||
Additional
Paid-In Capital
|
153,822
|
|||
Deferred
Finance Costs, Net
|
(6,026
|
)
|
||
Deficit
Accumulated During the Development Stage
|
(973,090
|
)
|
||
Total
Stockholders’ Deficiency
|
(823,618
|
)
|
||
Total
Liabilities and Stockholders’ Deficiency
|
$
|
156,344
|
For
the Year Ended June 30, 2007
|
For
the Period December 15, 2005 (Inception) to June 30, 2006
|
For
the Period December 15, 2005 (Inception) to June 30, 2007
|
||||||||
$
|
-
|
$
|
-
|
$
|
-
|
|||||
Costs
and Expenses:
|
||||||||||
Officer’s
Compensation
|
180,000
|
60,000
|
240,000
|
|||||||
Software
Development
|
167,415
|
47,570
|
214,985
|
|||||||
Other
General and Administrative Expenses
|
139,025
|
46,808
|
185,833
|
|||||||
Total
Costs and Expenses
|
486,440
|
154,378
|
640,818
|
|||||||
Loss
from Operations
|
(486,440
|
)
|
(154,378
|
)
|
(640,818
|
)
|
||||
Other
Expenses:
|
||||||||||
Amortization
of Deferred Finance Costs
|
(
112,012
|
)
|
(28,264
|
)
|
(140,276
|
)
|
||||
Amortization
of Deferred Debt Discount
|
(22,592
|
)
|
-
|
(
22,592
|
)
|
|||||
Interest
Expense
|
(51,942
|
)
|
(10,795
|
)
|
(
62,737
|
)
|
||||
Liquidated
Damages
|
(90,000
|
)
|
(16,667
|
)
|
(106,667
|
)
|
||||
Total
Other Expenses
|
(
276,546
|
)
|
(55,726
|
)
|
(332,272
|
)
|
||||
Net
Loss
|
$
|
(
762,986
|
)
|
$
|
(
210,104
|
)
|
$
|
(973,090
|
)
|
|
Weighted
Average Common Shares
|
||||||||||
Outstanding
- Basic and Diluted
|
16,603,798
|
15,978,767
|
||||||||
Net
Loss Per Common Share
|
$
|
(.05
|
)
|
$
|
(.01
|
)
|
Preferred
Stock
|
Common
Stock
|
Additional
Paid-In
|
Deferred
Finance
|
Deficit
Accumulated During the Development
|
|||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Costs
|
Stage
|
Total
|
||||||||||||||||||
Common
Stock Issued to Founders
|
-
|
$
|
-
|
4,510,000
|
$
|
451
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
451
|
|||||||||||
Common
Stock Issued for Software
|
|||||||||||||||||||||||||
Development
- at Par Value
|
-
|
-
|
9,700,000
|
970
|
-
|
-
|
-
|
970
|
|||||||||||||||||
Common
Stock Issued to a Private
|
|||||||||||||||||||||||||
Investor
- at $.024 Per Share
|
-
|
-
|
2,083,333
|
208
|
49,792
|
-
|
50,000
|
||||||||||||||||||
Commissions
on Sale of Common Stock
|
-
|
-
|
-
|
-
|
(5,000
|
)
|
-
|
(5,000
|
)
|
||||||||||||||||
Net
Loss for the Period
|
-
|
-
|
-
|
-
|
-
|
-
|
(210,104
|
)
|
(210,104
|
)
|
|||||||||||||||
Balance
- Julne 30, 2006
|
-
|
-
|
16,293,333
|
1,629
|
44,792
|
-
|
(210,104
|
)
|
(163,683
|
)
|
|||||||||||||||
Common
Stock Issued Pursuant to a
|
|||||||||||||||||||||||||
Private
Placement at $.12 Per Share
|
-
|
-
|
468,264
|
47
|
56,143
|
-
|
-
|
56,190
|
|||||||||||||||||
Common
Stock Warrants Issued as
|
|||||||||||||||||||||||||
Deferred
Finance Costs on Note
|
|||||||||||||||||||||||||
Payable
- 83,111 at $.116 Per Warrant
|
-
|
-
|
-
|
-
|
9,641
|
(9,641
|
)
|
-
|
-
|
||||||||||||||||
Debt
Discount on Loan Payable
|
-
|
-
|
-
|
-
|
43,246
|
-
|
-
|
43,246
|
|||||||||||||||||
Amortization
of Deferred Finance Costs
|
-
|
-
|
-
|
-
|
-
|
3,615
|
-
|
3,615
|
|||||||||||||||||
Net
Loss For the Year Ended June 30, 2007
|
-
|
-
|
-
|
-
|
-
|
-
|
(762,986
|
)
|
(762,986
|
)
|
|||||||||||||||
|
$ | - |
$
|
-
|
16,761,597
|
$
|
1,676
|
$
|
153,822
|
$
|
(6,026
|
)
|
$
|
(973,090
|
)
|
$
|
(823,618
|
)
|
For
the Year Ended June 30, 2007
|
|
For
the Period December 15, 2005 (Inception) to June 30, 2006
|
|
For
the Period December 15, 2005 (Inception) to June 30, 2007
|
||||||
Cash
Flows from Operating Activities:
|
||||||||||
Net
Loss
|
$
|
(762,986
|
)
|
$
|
(
210,104
|
)
|
$
|
(973,090
|
)
|
|
Adjustments
to Reconcile Net Loss to
|
||||||||||
Net
Cash (Used) in Operating Activities:
|
||||||||||
Amortization
of Debt Discount
|
22,592
|
-
|
22,592
|
|||||||
Amortization
of Deferred Finance Costs
|
112,012
|
28,264
|
140,276
|
|||||||
Depreciation
Expense
|
954
|
-
|
954
|
|||||||
Common
Stock Issued for Software Development
|
-
|
970
|
970
|
|||||||
Changes
in Assets and Liabilities:
|
||||||||||
Increase
in Accrued Expenses
|
117,770
|
28,482
|
146,252
|
|||||||
Increase
in Accrued Interest
|
62,737
|
-
|
62,737
|
|||||||
Increase
in Accrued Liquidated Damages
|
90,000
|
16,667
|
106,667
|
|||||||
Net
Cash (Used) in Operating Activities
|
(356,921
|
)
|
(
135,721
|
)
|
(492,642
|
)
|
||||
Cash
Flows from Investing Activities:
|
||||||||||
Purchase
of Equipment
|
(2,862
|
)
|
-
|
(2,862
|
)
|
|||||
Net
Cash Used by Investing Activities
|
(2,862
|
)
|
-
|
(2,862
|
)
|
|||||
Cash
flows from Financing Activities:
|
||||||||||
Decrease
in Stock Subscription Receivable
|
451
|
-
|
451
|
|||||||
Proceeds
from Issuance of Convertible
|
||||||||||
Debentures
|
-
|
500,000
|
500,000
|
|||||||
Proceeds
from Issuance of Notes Payable
|
170,000
|
-
|
170,000
|
|||||||
Payments
of Finance Costs
|
(30,513
|
)
|
(
185,000
|
)
|
(215,513
|
)
|
||||
Proceeds
from Issuance of Common
|
||||||||||
Stock
|
56,190
|
50,000
|
106,190
|
|||||||
Expense
on Sale of Common Stock
|
-
|
(5,000
|
)
|
(5,000
|
)
|
|||||
Net
Cash Provided by Financial Activities
|
196,128
|
360,000
|
556,128
|
|||||||
Increase
(Decrease) in Cash
|
(163,655
|
)
|
224,279
|
60,624
|
||||||
Cash
- Beginning of Period
|
224,279
|
-
|
-
|
|||||||
Cash
- End of Period
|
$
|
60,624
|
$
|
224,279
|
$
|
60,624
|
For
the Year Ended June 30, 2007
|
For
the Period December 15, 2005 (Inception) to June 30, 2007
|
For
the Period December 15, 2005 (Inception) to June 30, 2007
|
||||||||
Supplemental
Cash Flow Informaiton:
|
||||||||||
Cash
Paid for Interest
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Cash
Paid for Income Taxes
|
$
|
-
|
$
|
250
|
$
|
250
|
||||
Supplemental
Non-Cash Financing Activities:
|
||||||||||
Subscription
Receivable on Sale of Common Stock
|
$
|
-
|
$
|
451
|
$
|
451
|
||||
Common
Stock Warrants Issued as
|
||||||||||
Deferred
Finance Costs
|
$
|
9,641
|
$
|
-
|
$
|
9,641
|
||||
Debt
Discount Attributable to Common
|
||||||||||
Stock
Warrants on Notes Payable
|
$
|
43,246
|
$
|
-
|
$
|
43,246
|
||||
Deferred
Finance Costs
|
$
|
14,960
|
$
|
-
|
$
|
14,960
|
Name
|
Age
|
Position
|
||
Isidore
Sobkowski
|
50
|
President,
Chief Executive Officer, Interim Chief Financial Officer and
Director
|
||
Solomon
Lax
|
47
|
Director
|
Long-Term
Compensation
|
||||||||||||||||||||||||||||
Annual
Compensation
|
Awards
|
|||||||||||||||||||||||||||
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Restricted
Stock Awards ($)
|
Securities
Underlying Options/SARs (#)
|
Non-Equity
Incentive Plan Compensation
|
Non-Qualified
Deferred Compensation Earnings
|
All
Other Compensation ($)
|
Total
Compensation ($)
|
|||||||||||||||||||
Isidore
Sobkowski
|
2007
|
180,000
|
(1)
|
0
|
0
|
0
|
0
|
0
|
0
|
91,995
|
||||||||||||||||||
2006
|
60,000
|
0
|
0
|
0
|
0
|
0
|
0
|
60,000
|
Title
of Class
|
Name
of Beneficial Owner
|
Amount
and Nature of
Beneficial
Owner
|
Percent
of Class
|
|||
Common
Stock
|
Isidore
Sobkowski
|
9,700,000
|
57.9%
|
|||
Common
Stock
|
Solomon
Lax
|
2,200,000
|
13.1%
|
|||
Common
Stock
|
Michael
Hartstein
|
960,000
|
5.7%
|
|||
Common
Stock
|
Eroom
Systems, Inc.
|
2,083,333
|
12.4%
|
|||
Common
Stock
|
All
executive officers and directors as a group
|
11,900,000
|
71.0%
|
(1) |
Unless
otherwise indicated, the address of each beneficial owner is c/o
Aprecia,
Inc., 1177 High Ridge Rd., Stamford, CT
06905.
|
(2)
|
Applicable
percentage ownership is based on 16,761,597 shares of common stock
outstanding as of June 30, 2007, together with securities exercisable
or
convertible into shares of common stock within 60 days of June 30,
2007
for each stockholder. Beneficial ownership is determined in accordance
with the rules of the SEC and generally includes voting or investment
power with respect to securities. Shares of common stock that are
currently exercisable or exercisable within 60 days of June 30, 2007,
which are deemed to be beneficially owned by the person holding such
securities for the purpose of computing the percentage of ownership
of
such person, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person.
|
a.
|
Exhibits
pursuant to Regulation S-K:
|
DESIGNATION
OF EXHIBIT AS SET FORTH IN ITEM 601 OF REGULATION
S-B
|
DESCRIPTION
|
LOCATION
|
|||
3.1
|
Articles
of Incorporation
|
Incorporated
by Reference to the Registration Statement on Form SB-2 filed on
November
13, 2006 (File No. 333-138625).
|
|||
3.2
|
Bylaws
|
Incorporated
by Reference to the Registration Statement on Form SB-2 filed on
November
13, 2006 (File No. 333-138625).
|
|||
4.1
|
Securities
Purchase Agreement dated March 10, 2006 by and between the Company
and
Alpha Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna
Enterprises Corp., and CMS Capital
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|||
4.2
|
7%
Convertible Debenture dated March 10, 2006 issued to Alpha Capital
Aktiengesellschaft
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No.
333-138625).
|
DESIGNATION
OF EXHIBIT AS SET FORTH IN ITEM 601 OF REGULATION
S-B
|
DESCRIPTION
|
LOCATION
|
4.3
|
Registration
Rights Agreement dated March 10, 2006 by and between the Company
and Alpha
Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna Enterprises
Corp., and CMS Capital
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|||
4.4
|
Security
Agreement dated March 10, 2006 by and between the Company and Alpha
Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna Enterprises
Corp., and CMS Capital and Michael Hartstein, as collateral
agent
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|||
4.5
|
Collateral
Agent Agreement dated March 10, 2006 by and between the Company and
Alpha
Capital Aktiengesellschaft, Double U Master Fund LP, Tobanna Enterprises
Corp., and CMS Capital and Michael Hartstein, as collateral
agent
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|||
4.6
|
7%
Convertible Debenture dated March 10, 2006
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|||
4.7
|
7%
Convertible Debenture dated March 10, 2006
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|||
4.8
|
7%
Convertible Debenture dated March 10, 2006
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|||
10.1
|
Asset
Purchase Agreement by and between Isidore Sobkowski and the Company
dated
March 6, 2006
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|||
10.2
|
Voting
Agreement by and between Michael Hartstein, Solomon Lax and Isidore
Sobkowski
|
Incorporated
by Reference to Amendment No. 1 to the Registration Statement on
Form SB-2
filed on December 27, 2006 (File No. 333-138625).
|
|||
10.3
|
Subscription
Agreement by and among the Company, Alpha
Capital Anstalt, and Harborview Master Fund L.P.
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|||
10.4
|
Form
of Warrant issued by the Company to each of Alpha
Capital Anstalt, and Harborview Master Fund L.P.
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|||
10.5
|
Form
of Secured Note issued by the Company to each of Alpha
Capital Anstalt and Harborview Master Fund L.P.
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|||
10.6
|
Consent
Agreement by and among the Company, Alpha
Capital Anstalt, and Harborview Master Fund L.P.
|
Incorporated
by Reference to the Company’s Current Report of Form 8-K filed on May 30,
2007 (File No. 333-138625).
|
|||
31.1
|
Certification
of President and Chief Executive Officer (one person) pursuant to
Rule
13a-14(a)/15d-14(a) of the Exchange Act
|
Provided
Herewith
|
DESIGNATION
OF EXHIBIT AS SET FORTH IN ITEM 601 OF REGULATION
S-B
|
DESCRIPTION
|
LOCATION
|
32.1
|
Certification
of President and Chief Executive Officer (one person) pursuant to
18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
Provided
Herewith
|
b.
|
Reports
on Form 8-K:
|
APRECIA,
INC.
|
||
|
|
|
December
12, 2007
|
By: | /s/ Isidore Sobkowski |
Isidore
Sobkowski,
President,
Chief Executive Officer
and
Interim Chief Financial Officer
|
December
12, 2007
|
By: |
/s/
Isidore Sobkowski
|
|
President,
Chief Executive Officer,
Interim
Chief Financial Officer and Director
|
|||
December
12, 2007
|
By: |
/s/
Solomon Lax
|
|
Director
|