Nevada | 87-40479286 | |
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer Identification Number) |
Large Accelerated Filer
o
|
Accelerated Filer
o
|
Non-Accelerated Filer
o
(Do not check if a smaller
reporting company)
|
Smaller Reporting Company
x
|
Page
|
|
Condensed Consolidated Balance Sheets, September 30, 2011 and
December 31, 2010 (Unaudited)
|
F-2
|
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended
September 30, 2011 and 2010 (Unaudited)
|
F-3
|
Condensed Consolidated Statement of Shareholders’ Deficit for the Nine Months Ended
September 30, 2011 (Unaudited)
|
F-4
|
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 2011 and 2010 (Unaudited)
|
F-5
|
Notes to Condensed Consolidated Financial Statements (Unaudited)
|
F-7
|
ACQUIRED SALES CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
||||||||||||||||
For theThree Months
|
For the Nine Months
|
|||||||||||||||
Ended September 30,
|
Ended September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue
|
||||||||||||||||
Software licensing and hardware sales
|
$ | - | $ | 501,334 | $ | - | $ | 501,334 | ||||||||
Consulting Services
|
- | 3,139,408 | - | 4,239,586 | ||||||||||||
Maintenance and support services
|
18,385 | 16,250 | 55,160 | 83,750 | ||||||||||||
Total Revenue
|
18,385 | 3,656,992 | 55,160 | 4,824,670 | ||||||||||||
Cost of Revenue
|
||||||||||||||||
Hardware and software costs
|
- | 510,427 | - | 510,427 | ||||||||||||
Cost of services
|
- | 1,385,194 | 88 | 1,982,407 | ||||||||||||
Total Cost of Revenue
|
- | 1,895,621 | 88 | 2,492,834 | ||||||||||||
Gross Profit
|
18,385 | 1,761,371 | 55,072 | 2,331,836 | ||||||||||||
Selling, General and Administrative Expenses
|
696,398 | 327,129 | 2,502,164 | 1,148,334 | ||||||||||||
Income (Loss) From Operations
|
(678,013 | ) | 1,434,242 | (2,447,092 | ) | 1,183,502 | ||||||||||
Interest Expense
|
16,442 | 18,500 | 43,001 | 55,500 | ||||||||||||
Income (Loss) Before Provision for Income Taxes
|
(694,455 | ) | 1,415,742 | (2,490,093 | ) | 1,128,002 | ||||||||||
Provision for Income Taxes
|
- | - | 800 | 800 | ||||||||||||
Net Income ( Loss)
|
$ | (694,455 | ) | $ | 1,415,742 | $ | (2,490,893 | ) | $ | 1,127,202 | ||||||
Basic Income (Loss) Per Share
|
$ | (0.32 | ) | $ | 0.65 | $ | (1.14 | ) | $ | 0.52 | ||||||
Diluted Income (Loss) Per Share
|
$ | (0.32 | ) | $ | 0.64 | $ | (1.14 | ) | $ | 0.51 | ||||||
Basic Weighted-Average Shares Outstanding
|
2,175,564 | 2,175,564 | 2,175,564 | 2,175,564 | ||||||||||||
Diluted Weighted-Average Shares Outstanding
|
2,175,564 | 2,228,973 | 2,175,564 | 2,228,973 |
ACQUIRED SALES CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
(UNAUDITED)
|
||||||||||||||||||||
Additional
|
Total
|
|||||||||||||||||||
Common Stock
|
Paid-in
|
Accumulated
|
Shareholders'
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
||||||||||||||||
Balance, December 31, 2010
|
2,175,564 | $ | 2,175 | $ | 3,409,474 | $ | (4,835,689 | ) | $ | (1,424,040 | ) | |||||||||
Services contributed by shareholder,
|
||||||||||||||||||||
no additional shares issued
|
- | - | 187,500 | - | 187,500 | |||||||||||||||
Conversion of notes payable to share-
|
||||||||||||||||||||
holder, no additional shares issued
|
- | - | 73,319 | - | 73,319 | |||||||||||||||
Share-based compensation
|
- | - | 706,704 | - | 706,704 | |||||||||||||||
Assumption of the Acquired Sales
|
||||||||||||||||||||
Corp.'s net liabilities
|
291,624 | 292 | (7,321 | ) | - | (7,029 | ) | |||||||||||||
Net loss
|
- | - | - | (2,490,893 | ) | (2,490,893 | ) | |||||||||||||
Balance, September 30, 2011
|
2,467,188 | $ | 2,467 | $ | 4,369,676 | $ | (7,326,582 | ) | $ | (2,954,439 | ) |
ACQUIRED SALES CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(UNAUDITED)
|
||||||||
For the Nine Months
|
||||||||
Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net income (loss)
|
$ | (2,490,893 | ) | $ | 1,127,202 | |||
Adjustments to reconcile net income (loss) to net cash used in
|
||||||||
operating activities:
|
||||||||
Services contributed by shareholder, no additional shares issued
|
187,500 | 75,000 | ||||||
Share-based compensation
|
706,704 | 11,703 | ||||||
Expenses paid by increase in notes payable to related party
|
3,376 | 37,784 | ||||||
Depreciation
|
31,184 | 30,391 | ||||||
Compensation from forgiveness of receivables from employees
|
- | 129,283 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(615,000 | ) | (332,452 | ) | ||||
Other
|
1,517 | 6,228 | ||||||
Accounts payable
|
(124,607 | ) | 281,387 | |||||
Accrued liabilities
|
47,580 | 12,865 | ||||||
Unearned revenue
|
(30,160 | ) | 19,798 | |||||
Billings in excess of costs on uncompleted contracts
|
686,298 | (1,815,300 | ) | |||||
Accrued compensation
|
236,016 | 215,967 | ||||||
Net Cash Used in Operating Activities
|
(1,360,485 | ) | (200,144 | ) | ||||
Cash Flows from Investing Activities
|
||||||||
Advances to and collection of loans to employees
|
5,418 | (72,006 | ) | |||||
Increase in note receivable from related party
|
(10,000 | ) | - | |||||
Purchase of property and equipment
|
(14,125 | ) | (38,494 | ) | ||||
Net Cash Flows Used in Investing Activities
|
(18,707 | ) | (110,500 | ) | ||||
Cash Flow from Financing Activities
|
||||||||
Proceeds from borrowing under notes payable
|
30,500 | - | ||||||
Proceeds from borrowing under notes payable to related parties
|
1,075,000 | - | ||||||
Principal payments on notes payable to related party
|
- | (433,445 | ) | |||||
Principal payments on notes payable
|
(5,500 | ) | (107,285 | ) | ||||
Net Cash Provided by (Used in) Financing Activities
|
1,100,000 | (540,730 | ) | |||||
Net Decrease in Cash
|
(279,192 | ) | (851,374 | ) | ||||
Cash and Cash Equivanlents at Beginning of Period
|
279,532 | 881,008 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 340 | $ | 29,634 | ||||
Supplemental Cash Flow Information
|
||||||||
Cash paid for interest
|
$ | 20,720 | $ | - |
2011
|
2010
|
|||||||
Supplemental Disclosure of Noncash Investing and Financing Activities
|
||||||||
Note receivable from Cortez acquired by issuance of note payable to
|
||||||||
Acquired Sales Corp.
|
$ | 20,000 | $ | - | ||||
Note payable to Acquired Sales Corp. issued in exchange for note
|
||||||||
payable to a related party
|
200,000 | - | ||||||
Notes payable to Acquired Sales Corp. and related accrued interest
|
||||||||
exchanged for notes payable
|
855,534 | - | ||||||
Conversion of note payable to shareholder, no additional shares issued
|
73,319 | - | ||||||
Liabilities of Acquired Sales Corp. assumed in exchange for the
|
||||||||
issuance of common stock, stock options and warrants
|
7,029 | - |
For the Nine
|
||||||||
Months Ended
|
For the Year Ended
|
|||||||
September 30, 2011
|
December 31, 2010
|
|||||||
Revenue
|
$ | 55,160 | $ | 4,851,190 | ||||
Net loss
|
(3,185,071 | ) | (770,377 | ) | ||||
Basic and diluted loss per share
|
$ | (1.29 | ) | $ | (0.31 | ) |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Billings to date
|
$ | 912,235 | $ | - | ||||
Less: Costs on uncompleted contracts
|
(225,937 | ) | - | |||||
Billings in Excess of Costs on Uncompleted Contracts
|
$ | 686,298 | $ | - |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Non-interest bearing notes payable to an officer of the Company; unsecured;
|
||||||||
due on demand
|
$ | 450,000 | $ | - | ||||
3% $400,000 Notes payable to related parties; due December 31, 2014;
|
||||||||
interest payable quarterly; secured by all of the assets of the Company; net
|
||||||||
of $50,439 unamortized discount based on imputed interest rate of 7.60%
|
349,561 | - | ||||||
10% Notes payable to the spouse of an officer of the Company; unsecured;
|
||||||||
due on demand; net of $1,477 unamortized premium based imputed interest
|
||||||||
rate of 7.60%
|
21,477 | - | ||||||
10% Note payable to a relation of an officer of the Company; unsecured; due
|
||||||||
on demand; net of $1,477 umamortized premium based on imputed interest
|
||||||||
rate of 7.60%
|
21,477 | - | ||||||
10% Notes payable to an entity related to an officer of the Company;
|
||||||||
unsecured; due on demand; net of $590 unamortized premium based on
|
||||||||
imputed interest rate of 7.60%
|
8,590 | - | ||||||
Non-interest bearing notes payable to principal shareholder;
|
||||||||
relating to accrued consulting fees; unsecured; due on demand
|
- | 69,943 | ||||||
5% Note to an entity related to an officer of the Company;
|
||||||||
unsecured; interest payable quarterly
|
- | 200,000 | ||||||
Total Notes Payable - Related Parties
|
851,105 | 269,943 | ||||||
Less: Current portion
|
(501,544 | ) | (69,943 | ) | ||||
Long-Term Notes Payable - Related Parties
|
$ | 349,561 | $ | 200,000 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
5.75% $336,728 notes payable to an individual; unsecured; due
|
||||||||
October 2012
|
$ | 336,728 | $ | 336,728 | ||||
Non-interest bearing notes payable to a lending company; unsecured;
|
||||||||
due on demand
|
130,070 | 105,070 | ||||||
3% $520,000 Notes payable; due December 31, 2014; interest payable
|
||||||||
quarterly; secured by all of the assets of the Company; net of $65,571
|
||||||||
unamortized discount based on imputed interest rate of 7.60%
|
454,429 | - | ||||||
Total Notes Payable
|
921,227 | 441,798 | ||||||
Less: Current portion
|
(466,798 | ) | (441,798 | ) | ||||
Long-Term Notes Payable
|
$ | 454,429 | $ | - |
Weighted-
|
|||||||||||
Weighted -
|
Average
|
||||||||||
Average
|
Remaining
|
Aggregate
|
|||||||||
Exercise
|
Contractual
|
Instrinsic
|
|||||||||
Shares
|
Price
|
Term (Years)
|
Value
|
||||||||
Outstanding, December 31, 2010
|
1,117,924 | $ | 1.80 | ||||||||
Granted
|
705,000 | $ | 1.93 | ||||||||
Forfeited
|
(37,735 | ) | $ | 3.53 | |||||||
Expired
|
(63 | ) | 2.12 | ||||||||
Outstanding, September 30, 2011
|
1,785,126 | $ | 1.82 |
8.70
|
$ 2,480,932
|
||||||
Exercisable, September 30, 2011
|
1,785,126 | $ | 1.82 |
8.70
|
$ 2,480,932
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Cash and cash equivalents
|
$ | 340 | $ | 279,532 | ||||
Working capital deficit
|
(2,250,958 | ) | (1,310,416 | ) | ||||
Long-term liabilitites
|
803,990 | 200,000 | ||||||
For the Nine Months
|
||||||||
Ended September 30,
|
||||||||
2011 | 2010 | |||||||
Cash used in operating activities
|
$ | (1,360,485 | ) | $ | (200,144 | ) | ||
Cash used in investing activities
|
(18,707 | ) | (110,500 | ) | ||||
Cash provided by (used in ) financing activities
|
1,100,000 | (540,730 | ) |
For the Three Months
|
||||||||||||||||
Ended September 30,
|
Percent
|
|||||||||||||||
2011
|
2010
|
Change
|
Change
|
|||||||||||||
REVENUE
|
||||||||||||||||
Software licensing and hardware sales
|
$ | - | $ | 501,334 | $ | (501,334 | ) | -100.0 | % | |||||||
Consulting Services
|
- | 3,139,408 | (3,139,408 | ) | -100.0 | % | ||||||||||
Maintenance and support services
|
18,385 | 16,250 | 2,135 | 13.1 | % | |||||||||||
Total Revenue
|
$ | 18,385 | $ | 3,656,992 | $ | (3,638,607 | ) | -99.5 | % | |||||||
COST OF REVENUE
|
||||||||||||||||
Hardware and software costs
|
$ | - | $ | 510,427 | (510,427 | ) | -100.0 | % | ||||||||
Cost of Services
|
- | 1,385,194 | (1,385,194 | ) | -100.0 | % | ||||||||||
Total Cost of Revenue
|
- | 1,895,621 | (1,895,621 | ) | -100.0 | % | ||||||||||
Gross Profit
|
$ | 18,385 | $ | 1,761,371 | $ | (1,742,986 | ) | -99.0 | % | |||||||
For the Nine Months
|
||||||||||||||||
Ended September 30,
|
Percent
|
|||||||||||||||
2011 | 2010 |
Change
|
Change
|
|||||||||||||
REVENUE
|
||||||||||||||||
Software licensing and hardware sales
|
$ | - | $ | 501,334 | $ | (501,334 | ) | -100.0 | % | |||||||
Consulting Services
|
- | 4,239,586 | (4,239,586 | ) | -100.0 | % | ||||||||||
Maintenance and support services
|
55,160 | 83,750 | (28,590 | ) | -34.1 | % | ||||||||||
Total Revenue
|
$ | 55,160 | $ | 4,824,670 | $ | (4,769,510 | ) | -98.9 | % | |||||||
COST OF REVENUE
|
||||||||||||||||
Hardware and software costs
|
$ | - | $ | 510,427 | (510,427 | ) | -100.0 | % | ||||||||
Cost of Services
|
88 | 1,982,407 | (1,982,319 | ) | -100.0 | % | ||||||||||
Total Cost of Revenue
|
88 | 2,492,834 | (2,492,746 | ) | -100.0 | % | ||||||||||
Gross Profit
|
$ | 55,072 | $ | 2,331,836 | $ | (2,276,764 | ) | -97.6 | % |
Form 10-SB
|
March 23, 2007
|
3.1
|
Articles of Incorporation dated December 12, 1985
|
3.2
|
Amended Articles of Incorporation Dated July 1992
|
3.3
|
Amended Articles of Incorporation Dated November 1996
|
3.4
|
Amended Articles of Incorporation Dated June 1999
|
3.5
|
Amended Articles of Incorporation Dated January 25, 2006
|
3.6
|
Amended Bylaws
|
Form 8-K
|
August 2, 2007
|
5.01
|
Shareholder Agreement
|
Form 10Q
|
May 18, 2009
|
10.1
|
Private Merchant Banking Agreement-Anniston Capital, Inc.
|
10.2
|
Warrant Agreement #1-Anniston Capital, Inc.
|
10.3
|
Warrant Agreement #2-Anniston Capital, Inc.
|
10.4
|
$100,000 Promissory Note – December 1, 2007
|
10.5
|
$10,000 Promissory Note – January 30, 2008
|
10.6
|
$10,000 Promissory Note – November 9, 2008
|
Form 10-K
|
August 20, 2010
|
10.7
|
$4,000 Promissory Note – April 19, 2010
|
Form 8-K
|
November 5, 2010
|
10.1
|
Letter of Intent Agreement Cogility Software dated November 4, 2010
|
99.1
|
Press Release
|
Form 10-K
|
December 17, 2010
|
10.8
|
$20,000 Promissory Note – October 12, 2010
|
Form 10-K
|
March 31, 2011
|
4.1
|
Form of Note 3%
|
4.2
|
Form of Warrant
|
10.10
|
Subscription Agreement
|
Schedule DEF 14-C
Information Statement
|
August 9, 2011 |
10.11 |
The Johns Hopkins University Applied Physics Laboratory Firm Fixed Price-Time And Material Contract No. 961420, dated October 20, 2009 (filed as Exhibit (E)(i) thereto)
|
10.12 |
The Analysis Corporation Task Order Subcontract Agreement, dated January 4, 2010 (filed as Exhibit (E)(ii) thereto)
|
10.13 |
Defense & Security Technology Group, LLC, Program Budget & Asset Management Tool Proof of Concept Pilot, dated June 27, 2011 (filed as Exhibit (E)(iii) thereto)
|
10.14 |
Defense & Security Technology Group, LLC, Command Information Center – Data Integration Proof of Concept, dated June 27, 2011 (filed as Exhibit (E)(iv) thereto)
|
Form 8-K
|
October 4, 2011
|
10.15
|
Agreement and Plan of Merger
|
10.16
|
NAVAIR PMA 265 contract, in regard to a Program Budget & Asset Management Tool Proof of Concept Pilot, dated July 15, 2011
|
10.17
|
NAVAIR 4.2 Cost Performance contract, in regard to Command Information Center - Data Integration (CIC-DI) Proof of Concept, dated July 15, 2011
|
10.18
|
Sotera Defense Solutions, Inc. subcontract number SOTERA-SA-FY11-040, dated June 20, 2011
|
10.19
|
$4,000 Promissory Note – September 13, 2011 |
10.20
|
CACI Prime Contract No.: W15P7T-06-D-E402 Prime Delivery Order No.: 0060, dated August 24, 2011
|
10.21 | $4,000 Promissory Note – September 30, 2011 |
14.1 |
[Proposed] Code of Business Conduct and Ethics
|
This 10-Q | |
10.22
|
Agreement dated as of October 17, 2011, by and among Deborah Sue Ghourdjian Separate Property Trust, Matthew Ghourdjian, Daniel F. Terry, Jr., Roberti Jacobs Family Trust, Acquired Sales Corp., Vincent J. Mesolella, and Minh Le
|
31.1 | Certification of principal executive officer and principal financial officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 executed by Gerard M. Jacobs |
32.1 | Certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 executed by Gerard M. Jacobs |
Dated: November 14, 2011
|
||
ACQUIRED SALES CORP.
|
||
By:
|
/s/
Gerard M. Jacobs
|
|
Gerard M. Jacobs
|
||
Chief Executive Officer
|
To:
ABA #:
For the account of:
Account number:
|
Wells Fargo Bank
Meadowlark Plaza
Huntington Beach, CA 92649
(714) 625-4280
121000248
Cogility Software Corporation
8710201313
|
To:
ABA #:
For the account of:
Account number:
|
Lake Forest Bank &
Lake Forest, IL 60045
(847) 234-2882
071925334
Acquired Sales Corp.
453803
|
Name of
Purchaser
|
Price per
Share
|
Number of
Shares
|
Aggregate
Purchase Price
|
RJFT
|
$3.18
|
15,724
|
$50,000
|
Mesolella
|
$3.18
|
7,862
|
$25,000
|
Date: November 14, 2011
|
/s/ Gerard M. Jacobs
|
Gerard M. Jacobs
Principal Executive Officer
Principal Financial Officer
|
/s/ Gerard M. Jacobs
|
|
Gerard M. Jacobs Principal Executive Officer
Principal Financial Officer
November 14, 2011
|