Delaware
|
20-4378866
|
|
(State
or Other Jurisdiction of Incorporation
or
Organization)
|
(I.R.S.
Employer Identification No.)
|
1177
High Ridge Road, Stamford, CT
|
06905
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(203)
321-1285
|
|
(Issuer’s
Telephone Number, Including Area
Code)
|
PAGE
|
||||
PART
I
|
FINANCIAL
INFORMATION
|
|||
ITEM
1
|
Financial
Statements
|
3
|
||
ITEM
2
|
Management’s
Discussion and Analysis and Results of Operations
|
4
|
||
ITEM
3
|
Controls
and Procedures
|
11
|
||
PART
II
|
OTHER
INFORMATION
|
|||
ITEM
1
|
Legal
Proceedings
|
12
|
||
ITEM
2
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
12
|
||
ITEM
3
|
Defaults
Upon Senior Securities
|
12
|
||
ITEM
4
|
Submission
of Matters to a Vote of Security Holders.
|
12
|
||
ITEM
5
|
Other
Information
|
12
|
||
ITEM
6
|
Exhibits
|
13
|
||
SIGNATURES
|
15
|
|||
CERTIFICATIONS
|
Balance
Sheet as of December 31, 2007
|
F-1 | |||
Statements
of Operations for the Three Months and Six Months Ended December
31, 2007
and 2006, and for the Period December 15, 2005 (Inception) to December
31,
2007
|
F-2 | |||
Statements
of Cash Flows for the Three Months and Six Months Ended December
31, 2007
and 2006, and for the Period December 15, 2005 (Inception) to December
31,
2007
|
F-3 – F-4 | |||
Notes
to Financial Statements
|
F-5
–
F-8
|
ASSETS
|
||||
Current
Assets:
|
||||
Cash
and Cash Equivalents
|
$
|
196
|
||
Total
Current Assets
|
196
|
|||
Property
and Equipment, Net
|
1,431
|
|||
Deferred
Finance Costs, Net
|
17,986
|
|||
Total
Assets
|
$
|
19,613
|
||
LIABILITIES
AND STOCKHOLDERS’ DEFICIENCY
|
||||
Current
Liabilities:
|
||||
Convertible
Debentures
|
$
|
500,000
|
||
Notes
Payable
|
201,960
|
|||
Loan
Payable - Related Party
|
28,000
|
|||
Accrued
Expenses
|
54,293
|
|||
Accrued
Liquidated Damages
|
106,667
|
|||
Accrued
Interest
|
102,937
|
|||
Total
Current Liabilities
|
993,857
|
|||
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
|
288,822
|
|||
Deficit
Accumulated During the Development Stage
|
(1,264,742
|
)
|
||
Total
Stockholders’ Deficiency
|
(
974,244
|
)
|
||
Total
Liabilities and Stockholders’ Deficiency
|
$
|
19,613
|
Three
Months Ended
December
31,
|
|
Six
Months Ended
December
31,
|
|
For
the Period December 15, 2005 (Inception) To December 31,
|
||||||||||||
2007
|
|
2006
|
|
2007
|
|
2006
|
|
2007
|
||||||||
Net
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Costs
and Expenses:
|
||||||||||||||||
Officer's
Compensation
|
-
|
45,000
|
45,000
|
90,000
|
285,000
|
|||||||||||
Software
Development
|
-
|
42,000
|
42,000
|
82,000
|
256,985
|
|||||||||||
Other
General and Administrative Expenses
|
12,294
|
22,000
|
44,946
|
40,744
|
230,781
|
|||||||||||
Total
Costs and Expenses
|
12,294
|
109,000
|
131,946
|
212,744
|
772,766
|
|||||||||||
Loss
from Operations
|
(12,294
|
)
|
(109,000
|
)
|
(131,946
|
)
|
(212,744
|
)
|
(772,766
|
)
|
||||||
Other
Expenses:
|
||||||||||||||||
Amortization
of Deferred Finance Costs
|
(23,125
|
)
|
(23,215
|
)
|
(81,851
|
)
|
(46,250
|
)
|
(222,127
|
)
|
||||||
Amortization
of Deferred Debt Discount
|
-
|
-
|
(37,654
|
)
|
-
|
(60,246
|
)
|
|||||||||
Interest
Expense
|
(22,848
|
)
|
(11,300
|
)
|
(40,201
|
)
|
(21,250
|
)
|
(102,937
|
)
|
||||||
Liquidated
Damages
|
-
|
(30,000
|
)
|
-
|
(60,000
|
)
|
(106,667
|
)
|
||||||||
Total
Other Expenses
|
(45,973
|
)
|
(64,515
|
)
|
(159,706
|
)
|
(127,500
|
)
|
(491,977
|
)
|
||||||
Net
Loss
|
$
|
(58,267
|
)
|
$
|
(173,515
|
)
|
$
|
(291,652
|
)
|
$
|
(340,244
|
)
|
$
|
(1,264,743
|
)
|
|
Weighted
Average Common Shares Outstanding -Basic
|
16,761,597
|
16,603,812
|
16,761,597 |
16,448,573
|
||||||||||||
Net
Loss Per Common Share - Basic
|
$
|
(.00
|
)
|
$
|
(0.01
|
)
|
$
|
(.02
|
)
|
$
|
(0.02
|
)
|
||||
Weighted
Average Common Shares Outstanding -Fully Diluted
|
17,344,708
|
16,603,812
|
17,344,708
|
16,448,573
|
||||||||||||
Net
Loss Per Common Share - Fully Diluted
|
$
|
(.00
|
)
|
$
|
(0.01
|
)
|
$
|
(.02
|
)
|
$
|
(0.02
|
)
|
For
the
Six
Months Ended December 31,
|
|
For
the
Six
Months Ended December 31,
|
|
For
the Period December 15, 2005 (Inception) to December 31,
|
|
|||||
|
|
2007
|
|
2006
|
|
2007
|
||||
Cash
Flows from Operating Activities:
|
||||||||||
Net
Loss
|
$
|
(291,652
|
)
|
$
|
(340,244
|
)
|
$
|
(1,264,743
|
)
|
|
Adjustments
to Reconcile Net Loss to
|
||||||||||
Net
Cash (Used) in Operating Activities:
|
||||||||||
Amortization
of Debt Discount
|
37,654
|
-
|
60,246
|
|||||||
Amortization
of Deferred Finance Costs
|
81,851
|
46,250
|
222,127
|
|||||||
Depreciation
Expense
|
477
|
477
|
1,431
|
|||||||
Common
Stock Issued for Software Development
|
-
|
-
|
970
|
|||||||
Changes
in Assets and Liabilities:
|
||||||||||
Increase
in Accrued Expenses
|
43,042
|
30,739
|
189,295
|
|||||||
Increase
in Accrued Interest
|
40,200
|
21,250
|
102,937
|
|||||||
Increase
in Accrued Liquidated Damages
|
-
|
60,000
|
106,667
|
|||||||
Net
Cash (Used) in Operating Activities
|
(88,428
|
)
|
(181,528
|
)
|
(581,070
|
)
|
||||
Cash
Flows from Investing Activities:
|
||||||||||
Purchase
of Equipment
|
-
|
(2,862
|
)
|
(2,862
|
)
|
|||||
Net
Cash Used in Investing Activities
|
-
|
(2,862
|
)
|
(2,862
|
)
|
|||||
Cash
flows from Financing Activities:
|
||||||||||
Decrease
in Stock Subscription Receivable
|
-
|
354
|
451
|
|||||||
Proceeds
from Issuance of Convertible Debentures
|
-
|
-
|
500,000
|
|||||||
Proceeds
from Issuance of Notes Payable
|
-
|
-
|
170,000
|
|||||||
Proceeds
of Loan Payable - Related Party
|
28,000
|
-
|
28,000
|
|||||||
Payments
of Finance Costs
|
-
|
-
|
(215,513
|
)
|
||||||
Proceeds
from Issuance of Common Stock
|
-
|
56,189
|
106,190
|
|||||||
Expense
on Sale of Common Stock
|
-
|
-
|
(5,000
|
)
|
||||||
Net
Cash Provided by Financial Activities
|
28,000
|
56,543
|
584,128
|
|||||||
Increase
(Decrease) in Cash
|
(60,428
|
)
|
(127,847
|
)
|
196
|
|||||
Cash
- Beginning of Period
|
60,624
|
224,279
|
-
|
|||||||
Cash
- End of Period
|
$
|
196
|
$
|
96,432
|
$
|
196
|
For
the Six
Months
Ended
December
31,
2007
|
|
For
the Six
Months
Ended December 31,
2006
|
|
For
the Period December 15, 2005 (Inception) to December 31,
2007
|
||||||
Supplemental
Cash Flow Informaiton:
|
||||||||||
Cash
Paid for Interest
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Cash
Paid for Income Taxes
|
$
|
-
|
$
|
-
|
$
|
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
|
||||
Debt
Discount Attributable to Common Stock Warrants on Notes
Payable
|
$
|
-
|
$
|
-
|
$
|
43,246
|
||||
Note
Payable Issued as Payment of Deferred Finance Costs
|
$
|
-
|
$
|
-
|
$
|
14,960
|
||||
Exchange
of Related Party Debt to Contributed Capital
|
$
|
135,000
|
$
|
-
|
$
|
135,000
|
· |
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.
|
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).
|
|||
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).
|
DESIGNATION
OF
EXHIBIT
AS SET
FORTH
IN ITEM 601 OF REGULATION
S-B
|
DESCRIPTION
|
LOCATION
|
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
|
|||
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.
|
||
|
|
|
February
13, 2008
|
By: | /s/ Isidore Sobkowski |
Isidore
Sobkowski, President, Chief Executive
Officer
and Interim Chief Financial Officer
|