UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended:
December 31, 2012
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
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For the transition period from _________ to _________
Commission File Number:
000-11596
DEPHASIUM CORP.
(Exact Name of Registrant as Specified in its Charter)
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Nevada
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95-3506403
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(State of other jurisdiction of
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(IRS Employer Identification
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incorporation or organization)
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Number)
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7695 S.W. 104 Street, Ste. 210
Miami, FL 33156
(Address of principal executive offices)
(305) 663-7140
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, par value $.0001 per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
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No
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes
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No
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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
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No
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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
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No X
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K:
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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. (Check one):
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Large Accelerated Filer
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Accelerated Filer
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Non-Accelerated Filer
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Smaller Reporting Company
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x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
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No
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State the aggregate market value of the voting and non-voting common equity held by non-affiliates (44,964,138 shares) computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s last day of the most recent second quarter (June 30, 2012): $20,233,862($0.45).
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: The Issuer had 95,164,138 shares issued at March 7, 2013.
TABLE OF CONTENTS
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ITEM 1: BUSINESS
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ITEM 1A: RISK FACTORS
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6 |
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ITEM 1B: UNRESOLVED STAFF COMMENTS
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10 |
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ITEM 2: PROPERTIES
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ITEM 3: LEGAL PROCEEDINGS
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10 |
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ITEM 4: RESERVED
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ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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ITEM 6: SELECTED FINANCIAL DATA
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ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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ITEM 9A: CONTROLS AND PROCEDURES
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ITEM 9B: OTHER INFORMATION
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ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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ITEM 11: EXECUTIVE COMPENSATION
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ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
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ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES
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ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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SIGNATURES
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2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this Report may be “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. However, as the Company intends to issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on these safe harbor provisions. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in this Report, including the risks described under “Risk Factors,” “Management’s Discussion and Analysis” and “Our Business.”
There are important factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors, include, without limitation, the following: our ability to develop our technology platform and our products; our ability to protect our intellectual property; the risk that we will not be able to develop our technology platform and products in the current projected timeframe; the risk that our products will not achieve performance standards in clinical trials; the risk that the clinical trial process will take longer than projected; the risk that our products will not receive regulatory approval; the risk that the regulatory review process will take longer than projected; the risk that we will not be unsuccessful in implementing our strategic, operating and personnel initiatives; the risk that we will not be able to commercialize our products; any of which could impact sales, costs and expenses and/or planned strategies. Additional information regarding factors that could cause results to differ can be found in this Report and in our other filings with the Securities and Exchange Commission.
The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments, except as required by the Exchange Act. Unless otherwise provided in this Report, references to the "Company," “Dephasium,” the "Registrant," the "Issuer," "we," "us," and "our" refer to Dephasium Corp.
3
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ITEM 1:
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BUSINESS
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Introduction
Dephasium Corp., (the Company), was incorporated on March 31, 1980, under the laws of the State of California as Expertelligence, Inc. On June 26, 2006, the Company reincorporated in Nevada. On March 24, 2011, the Company amended its Articles of Incorporation to change its name to Pay Mobile, Inc. On January 2, 2013, the Company amended its Articles of Incorporation to change its name to Allied Ventures Holding Corp. Thereafter on February 21, 2013 the Company changed its name to Dephasium Corp.
On March 24, 2011, the Company entered into a Share Exchange Agreement (the Agreement) with Pay Mobile, Inc. (PMD) a Delaware corporation and its shareholders. Pursuant to the terms of the Agreement, the company issued 80,000,000 shares of its restricted common stock in exchange for 100% of the issued and outstanding shares of PMD. In addition shareholders agreed to cancel 50,000,000 shares owned by them.
On June 11, 2012 the Company entered into a Rescission Agreement whereby the Company rescinded the previous Agreement for the exchange of common stock dated March 24, 2001 with Pay Mobile, Inc., a Delaware corporation (“PMD”). As a result of the transaction, the Company cancelled all the shares which were previously issued to the shareholders of PMD in that transaction and an additional 5,550,000 shares which were issued to private investors. The issuance of these shares was an exempt transaction pursuant to Section 4(3) of the Securities Act of 1933 as amended. As a result of this the Company reverted back to the pre-acquisition status. In conjunction therewith the Company re-issued the previously cancelled 50,000,000 shares of common stock which were owned by previous management but were assigned to Irma Colón-Alonso. As a result of the rescission the Company now has 94,964,138 shares of common stock outstanding. The Company has reverted to a Shell Company status and is looking for a new opportunity. For a further description of the rescission, please refer to our 8-K/3A as amended filed with the SEC on October 9, 2012.
On March 5, 2013, the Registrant entered into an Asset Purchase Agreement for the purchase of certain patents and trademarks from Dephasium, Ltd., a limited partnership organized under the laws of the United Kingdom. Pursuant to the Agreement, in consideration of the transfer to the Registrant of the ANCILIA patent and trademark, Registration Number 4,085,620, the Registrant will issue Dephasium 70,000,000 shares of its restricted common stock. In addition, in consideration of $15,000 the Registrant will redeem 50,000,000 shares of its restricted common stock previously issued to Irma Colon-Alonso. The Registrant has also agreed to name Lucien Gerard
AIM
to its Board of Directors. Closing is conditioned upon the Registrant receiving an appraisal of the assets being purchased. In anticipation of the closing, the Registrant has already amended its Articles of Incorporation in Nevada to change its name to Dephasium Corp. For a further description of this transaction, please refer to our 8-K filed with the SEC on March 5, 2013.
Current Status of our Business
The Company is considered to be in the development stage.
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Employees
At December 31, 2012 the Company did not have any employees.
We have engaged consultants for accounting, legal, and other part-time and occasional services.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
In addition to this Report, we are also required to file periodic reports and other information with the Securities and Exchange Commission, including quarterly reports and annual reports which include our audited financial statements. You may read and copy any reports, statements or other information we file at the Commission’s public reference facility maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00am to 3:00pm. You can request copies of these documents, upon payment of a duplicating fee, by writing to the Commission. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference room. Our SEC filings are also available to the public through the Commission Internet site at
http\\www.sec.gov
. These filings may be inspected and copied (at prescribed rates) at the Commission's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.
You may also request a copy of our filings at no cost, by writing of telephoning us at:
7695 SW 104 Street
Miami, FL
33156
Telephone: 305-663-7140
Attention: Ms.
Irma Colon-Alonso
President
5
Our business is subject to numerous risks. We caution you that the following important factors, among others, could cause our actual results to differ materially from those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors and oral statements. Any or all of our forward-looking statements in this and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in the discussion below will be important in determining future results. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially from those anticipated in forward-looking statements. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosure we make in our reports filed with the SEC.
Risks Related To Our Operations And Financial Condition
We are an early stage company with significant capital resources deficiencies and we may not be able to raise adequate capital which could materially and adversely affect our ability to conduct business.
As an early stage company, we have a capital deficiency and limited operating resources. As of the date of this Report, we had cash on hand of approximately $10,000. The cash on hand in our bank accounts will not be sufficient to maintain our operations. Even if we are able to obtain third party financing, the terms and condition of financing could have a material adverse affect on our business, results of operations, liquidity and financial condition. Any investment in our shares is subject to the significant risk that we will not be able to adequately capitalize our Company. Even if we are able to raise adequate capital, the cost of such capital may be burdensome and may materially impair our ability to fully implement our business plan.
The administrative costs of public company regulatory compliance could become burdensome and consume a significant amount of our cash resources which could materially and adversely affect our business.
We will incur significant costs and expenses in connection with assuring compliance with all laws, rules and regulations applicable to us as a public company. We anticipate that our ongoing costs and expenses of complying with our public reporting company obligations will be approximately $50,000 annually. Our reporting and compliance costs and expenses may increase substantially if we are able to deploy our business model on an international basis, which will add significant cross-border jurisdictional complexity to our regulatory compliance and our accounting controls and procedures. Our compliance costs and expenses could also increase substantially if we apply for trading of our securities on a national stock exchange which may have listing requirements that engender additional administration and compliance costs. We have assigned a high priority to establishing and maintaining controls, procedures, corporate compliance and public company reporting; however, there can be no assurance that we will have sufficient cash resources available to satisfy our public company reporting and compliance obligations. If we are unable to cover the cost of proper administration of our public company compliance and reporting obligations, we could become subject to sanctions, fines and penalties, our stock could be barred from trading in public capital markets and we may have to cease doing business.
Our Auditors have issued an opinion expressing uncertainty regarding our ability to continue as a going concern. If we are not able to continue operations, investors could lose their entire investment in our company.
We have a history of operating losses, and may continue to incur operating losses for the foreseeable future. This raises substantial doubts about our ability to continue as a going concern. Our auditors expressed uncertainty about our ability to continue as a going concern. This means that there is substantial doubt whether we can continue as an ongoing business without additional financing and/or generating profits from our operations. If we are unable to continue as a going concern and our Company fails, investors in our shares could lose their entire investment.
6
Risks Related To Our Business
We will need additional funding in the future to pursue our business strategy. If additional future funding is not available to us our financial condition could be materially and adversely affected and our business may fail.
Over the next twelve months, the Company will need to raise money to operate as planned. There can be no assurance that additional financing arrangements will be available in amounts or on terms acceptable to us, if at all. Furthermore, if adequate additional funds are not available our business may fail.
Risks Related To Our Stock
We will need to raise additional capital. If we are unable to raise additional capital, our business may fail.
We will need to raise additional capital. Our current working capital is not expected to be sufficient to carry out all of our plans To secure additional financing, we may need to borrow money or sell more securities. Under the current circumstances, we may be unable to secure additional financing on favorable terms, if available at all.
The market price of our common stock may be volatile which could adversely affect the value of your investment in our common stock.
The trading price of our common stock may be highly volatile and could be subject to wide fluctuations in response to various factors. Some of the factors that may cause the market price of our common stock to fluctuate include:
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fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
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changes in estimates of our financial results or recommendations by securities analysts;
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changes in market valuations of similar companies;
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changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
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regulatory developments in Canada, United States or foreign countries;
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litigation involving our company, our general industry or both;
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investors’ general perception of us; and
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changes in general economic, industry and market conditions.
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7
We do not currently intend to pay dividends on our common stock and, consequently, the ability to achieve a return on your investment in our common stock will depend on appreciation in the price of our common stock. If our common stock does not appreciate in value, investors could suffer losses in their investment in our common stock.
We do not expect to pay cash dividends on our common stock. Any future dividend payments are within the absolute discretion of our Board of Directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure requirements, financial condition, contractual restrictions, business opportunities, anticipated cash needs, provisions of applicable law and other factors that our Board of Directors may deem relevant. We may not generate sufficient cash from operations in the future to pay dividends on our common stock. As a result, the success of your investment in our common stock will depend on future appreciation in its value. The price of our common stock may not appreciate in value or even maintain the price at which you purchased our shares. If our common stock does not appreciate in value, investors could suffer losses in their investment in our common stock.
You may experience dilution of your ownership interests due to the future issuance of additional shares of our common stock which could be materially adverse to the value of our common stock.
As of that date of this Report, we have 95,164,138 shares of our common stock issued and outstanding. We are authorized to issue up to 500,000,000 shares of common stock. Our Board of Directors may authorize the issuance of additional common or preferred shares under applicable state law without shareholder approval. We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with the hiring of personnel, future acquisitions, future private placements of our securities for capital raising purposes or for other business purposes. Future sales of substantial amounts of our common stock, or the perception that sales could occur, could have a material adverse effect on the price of our common stock. If we need to raise additional capital, it may be necessary for us to issue additional equity or convertible debt securities. If we issue equity or convertible debt securities, the net tangible book value per share may decrease, the percentage ownership of our current stockholders may be diluted and such equity securities may have rights, preferences or privileges senior or more advantageous to our common stockholders.
We anticipate that our common stock will initially be considered to be a "Penny Stock," which will cause the trading of our stock to be subject to significant regulations that could adversely affect the value of our common stock.
We anticipate that our common stock will initially be a low-priced security, or a “penny stock” as defined under rules promulgated under the Exchange Act. A stock is a "penny stock" if it meets one or more of the definitions in Rules 15g-2 through 15g-6 promulgated under Section 15(g) of the Exchange Act. These include but are not limited to the following: (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a "recognized" national exchange; (iii) it is not quoted on The NASDAQ Stock Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company with net tangible assets less than $2.0 million, if in business more than a continuous three years, or with average revenues of less than $6.0 million for the past three years. The principal result or effect of being designated a "penny stock" is that securities broker-dealers cannot recommend the stock but must trade in it on an unsolicited basis.
In accordance with these rules, broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document which describes the risks associated with such stocks, the broker-dealer’s duties in selling the stock, the customer’s rights and remedies and certain market and other information. Furthermore, the broker-dealer must make a suitability determination approving the customer for low-priced stock transactions based on the customer’s financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing to the customer, obtain specific written consent from the customer, and provide monthly account statements to the customer. The effect of these restrictions probably decreases the willingness of broker-dealers to make a market in our common stock, decreases liquidity of our common stock and increases transaction costs for sales and purchases of our common stock as compared to other securities. As a result of these effects, the trading value of our common stock could be materially and adversely affected.
8
Broker-dealer requirements may affect the trading and liquidity of our stock which could materially and adversely affect the value of our common stock.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 promulgated there under by the SEC require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effectuating any transaction in a penny stock for the investor's account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise. These requirements could discourage interest in trading in our common stock and could materially and adversely affect the public trading value of our common stock.
Our securities will be subject to sales restrictions imposed by state “Blue Sky Laws” that will limit the States where our stock may be traded and could reduce the public market value of our stock.
State securities regulations may affect the transferability of our shares. We have not registered any of our shares for sale or resale under the securities or "blue sky" laws of any state. We do not currently plant to register or qualify our shares for sale or resale in any state. In many states, but not all states, shareholders can generally make unsolicited sales of securities through registered broker-dealers. Arkansas, Georgia, Illinois, Louisiana, New York, North Dakota, Ohio, Oregon and Tennessee, do not permit shareholders to make unsolicited sales of securities through broker dealers. Persons who desire to purchase our shares in any trading market that may develop in the future should be aware that these state regulations may limit sales and purchases of our shares. The inability to trade or sell our common stock in certain states could materially and adversely affect the public market value of our stock.
If a trading market for our securities develops, it may be volatile which could make it difficult to sell shares of common stock or cause sales of common stock at a loss.
If an active trading market does develop, the market price of our common stock is likely to be highly volatile due to, among other things, the nature of our business and because we are a new public company with a limited operating history. Furthermore, even if a public market develops, the volume of trading in our common stock will presumably be limited and likely be dominated by a few individual stockholders. The limited volume, if any, will make the price of our common stock subject to manipulation by one or more stockholders and will significantly limit the number of shares that one can purchase or sell in a short period of time.
The equity markets have recently experienced significant price and volume fluctuations that have adversely affected the market prices for many companies' securities. These fluctuations may not be directly attributable to the operating performance of these companies. Any such fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. As a result, stockholders may be unable to sell their shares, or may be forced to sell shares of our common stock at a loss.
9
Shares eligible for future sale may adversely affect the market price of our common stock. The future sale of a substantial amount of our restricted stock in the public marketplace could reduce the price of our common stock.
From time to time, certain of our stockholders may be eligible to sell their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 of the Securities Act of 1933, as amended, subject to certain compliance requirements. In general, under Rule 144, unaffiliated stockholders (or stockholders whose shares are aggregated) who have satisfied a six month holding period may sell shares of our common stock, so long as we have filed all required reports under Section 13 or 15(d) of the Exchange Act during the applicable period preceding such sale. Generally, once a period of six months has elapsed since the date the common stock was acquired from us or from an affiliate of ours, unaffiliated stockholders can freely sell shares of our common stock so long as the requisite conditions of Rule 144 and other applicable rules have been satisfied. Also generally, twelve months after acquiring shares from us or an affiliate, unaffiliated stockholders can freely sell their shares without any restriction or requirement that we are current in our SEC filings. Any substantial sales of common stock pursuant to Rule 144 may have an adverse affect on the market price of our common stock.
Failure to achieve and maintain internal controls in accordance with Sections 302 and 404(a) of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price.
If we fail to maintain adequate internal controls or fail to implement required new or improved controls, as such control standards are modified, supplemented or amended from time to time, we may not be able to assert that we can conclude on an ongoing basis that we have effective internal controls over financial reporting. Effective internal controls are necessary for us to produce reliable financial reports and are important in the prevention of financial fraud. If we cannot produce reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and there could be a material adverse effect on our stock price.
None.
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ITEM 2:
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PROPERTIES
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ITEM 3:
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LEGAL PROCEEDINGS
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We are not aware of any pending or threatened litigation against us that we expect will have a material adverse effect on our business, financial condition, liquidity, or operating results. We cannot assure you that we will not be adversely affected in the future by legal proceedings.
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ITEM 4:
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RESERVED
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Not Applicable.
10
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ITEM 5:
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Market Information
Our common stock, par value $0.001 per share (the "Common Stock"), is traded on the OTC Bulletin Board market under the symbol "PYMB." Our common stock is traded sporadically and no established liquid trading market currently exists therefore.
The following table represents the range of the high and low price for our Common Stock on the OTC Bulletin Board for each fiscal quarter for the last two fiscal years ending December 31, 2012, and 2011, respectively. These Quotations represent prices between dealers, may not include retail markups, markdowns, or commissions and may not necessarily represent actual transactions.
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Year 2012
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High
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Low
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First Quarter
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0.45
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0.40
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Second Quarter
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0.45
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0.45
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Third Quarter
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0.45
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0.16
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Fourth Quarter
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0.16
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0.10
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Year 2011
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High
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Low
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First Quarter
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0.50
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0.04
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Second Quarter
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1.02
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0.20
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Third Quarter
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2.08
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0.80
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Fourth Quarter
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1.70
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0.45
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Holders
As of the date of this Report there are 95,164,138 shares of common stock issued and outstanding.
As of the date of this Report there are 305 holders of record of our common stock in certificate form, exclusive of those brokerage firms and/or clearing houses holding our Common Stock in street name for their clientele (with each such brokerage house and/or clearing house being considered as one holder).
Dividend Policy
We have not paid any dividends to the holders of our common stock and we do not expect to pay any such dividends in the foreseeable future as we expect to retain our future earnings for use in the operation and expansion of our business.
Securities Authorized for Issuance Under Equity Compensation Plans
At the present time, we have no securities authorized for issuance under equity compensation plans.
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ITEM 6:
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SELECTED FINANCIAL DATA
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Pursuant to permissive authority under Regulation S-K, Rule 301, we have omitted Selected Financial Data.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
Forward Looking Statements
The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Report. Some of the statements contained in this Report that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. However, as the Company intends to issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on these safe harbor provisions. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:
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Our ability to attract and retain management, and to integrate and maintain technical information and management information systems;
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Our ability to raise capital when needed and on acceptable terms and conditions;
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The intensity of competition;
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General economic conditions; and
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Changes in government regulations.
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The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.
Plan of Operation
On March 5, 2013, the Registrant entered into an Asset Purchase Agreement for the purchase of certain patents and trademarks from Dephasium, Ltd., a limited partnership organized under the laws of the United Kingdom. Pursuant to the Agreement, in consideration of the transfer to the Registrant of the ANCILIA patent and trademark, Registration Number 4,085,620, the Registrant will issue Dephasium 70,000,000 shares of its restricted common stock. In addition, in consideration of $15,000 the Registrant will redeem 50,000,000 shares of its restricted common stock previously issued to Irma Colon-Alonso. The Registrant has also agreed to name Lucien Gerard
AIM
to its Board of Directors. Closing is conditioned upon the Registrant receiving an appraisal of the assets being purchased. In anticipation of the closing, the Registrant has already amended its Articles of Incorporation in Nevada to change its name to Dephasium Corp.
12
Results of Operations
On May 15, 2011, the Company completed a reverse acquisition transaction through a share exchange with Paymobile whereby the Company acquired all of the issued and outstanding shares of common stock of Paymobile Delaware (“PMD”) in exchange for 80,000,000 pre-split shares of our common stock, par value $0.0001 per share. Contemporaneous with this transaction, the President and National Business Investors agreed to collectively cancel 50,000,000 shares of common stock. The Company had a total of 126,214,138 pre-split shares of common stock issued and outstanding and Paymobile's former shareholders became the majority shareholders of the Company, holding shares which constitute approximately 63.4% of our issued and outstanding shares. As a result of the reverse acquisition, Paymobile became a
wholly owned subsidiary and its stockholders became the controlling stockholders. The share exchange transaction with Paymobile was treated as a reverse acquisition, with Paymobile as the accounting acquirer and the Company as the legal survivor.
On June 11, 2012 the Company entered into a Rescission Agreement whereby the Company rescinded the previous Agreement for the exchange of common stock dated March 24, 2011 with Pay Mobile, Inc., a Delaware corporation (“PMD”). As a result of the transaction, the Company cancelled all the shares which were previously issued to the shareholders of PMD in that transaction and an additional 5,550,000 shares which were issued to private investors. The issuance of these shares was an exempt transaction pursuant to Section 4(3) of the Securities Act of 1933 as amended. As a result of this the Company reverted back to the pre-acquisition status. In conjunction therewith and in consideration of $15,000, the Company re-issued the previously cancelled 50,000,000 shares of common stock which were owned by previous management but were assigned to Irma Colón-Alonso.
As a result of the Rescission Agreement, the Company reverted back to a Shell Company and is seeking new business opportunities.
On March 5, 2013, the Registrant entered into an Asset Purchase Agreement for the purchase of certain patents and trademarks from Dephasium, Ltd., a limited partnership organized under the laws of the United Kingdom. Pursuant to the Agreement, in consideration of the transfer to the Registrant of the ANCILIA patent and trademark, Registration Number 4,085,620, the Registrant will issue Dephasium 70,000,000 shares of its restricted common stock. In addition, in consideration of $15,000 the Registrant will redeem 50,000,000 shares of its restricted common stock previously issued to Irma Colon-Alonso. The Registrant has also agreed to name Lucien Gerard
AIM
to its Board of Directors. Closing is conditioned upon the Registrant receiving an appraisal of the assets being purchased. In anticipation of the closing, the Registrant has already amended its Articles of Incorporation in Nevada to change its name to Dephasium Corp.
Liquidity and Capital Resources
As of December 31, 2012, the Company had cash of $10,601. The current cash on hand in our bank accounts will not be sufficient to maintain our operations.
Current liabilities totaled $23,051 and include a payable of $13,576 and a short term loan of $9,475.
Management believes that without obtaining additional financing we will not be able to maintain our operations. Although we have actively been pursuing new business opportunities, we cannot give assurance that we will succeed in this endeavor, or be able to enter into necessary agreements to pursue our business on terms favorable to us. Should we be unable to generate additional revenues or raise additional capital, we could eventually be forced to cease business activities altogether.
13
Results of Operations for the Twelve Months Ended December 31, 2012 and December 31, 2011
Net Loss
The Net Loss for the year ended December 31, 2012 was $501,273 including Losses from discontinued operations of $473,823. Losses from discontinued operations for the year ended December 31, 2011 was $772,118.
Assets and Liabilities
Our total assets were $10,601 at December 31, 2012, consisting of cash. Total assets were $114,198 at December 31, 2011, consisting of cash of $34,517 and assets of discontinued operations of $79,681.
Total Current Liabilities were $23,051 at December 31, 2012 and consisted of accounts payable of $13,576 and a short term loan of $9,475. Total Current Liabilities were $438,771 at December 31, 2011 representing liabilities of discontinued operations.
Our Plan of Operation for the Next Twelve Months
Complete to seek new business opportunities
Continue to raise capital to maintain operations until cash flow positive
.
Working Capital
While we do not have in-place working capital to fund normal business activities, we are actively seeking financing.
Contractual Obligations and Other Commercial Commitments
We currently do not have any obligations or commitments.
Warrants
As of December 31, 2012, we had no outstanding warrants.
Common Stock
As of December 31, 2012, there were 94,964,138 shares issued and outstanding, of which 50,000,000 are restricted. As reported in our 8-K dated February 5, 2013, in consideration of $50,000 we issued an additional 200,000 shares of our restricted common stock to an accredited investor.
Significant Business Challenges
We need to identify a new business opportunity as well as the challenge of raising adequate capital in order to fully deploy a business plan.
14
Publicly Reporting Company Considerations
We will face several material challenges of operating as a publicly reporting company and we expect to incur significant costs and expenses applicable to us as a public company. We anticipate that our ongoing costs and expenses of complying with our public reporting company obligations will be approximately $50,000 annually which we expect to pay for out of proceeds from our financing efforts during the next twelve months from the date of this Report. Subsequent to the next twelve month reporting and compliance period, we expect to pay for our publicly reporting company compliance and reporting costs from our revenues. We must structure, establish, maintain and operate our Company under corporate policies designed to ensure compliance with all required public company laws, rules, regulations, including, without limitation, the Securities Act of 1933, the Securities Act of 1934, the Sarbanes-Oxley Act of 2002, the Foreign Corrupt Practices Act and the respective rules and regulations promulgated thereunder. Some of our more significant challenges of being a publicly reporting company will include the following:
|
●
|
We will have to carefully prepare and file in the format mandated by the SEC all periodic filings required by the Securities Exchange Act of 1934 (Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and interim reports of material significant events on Form 8-K), as well as insider reporting compliance for all officers and director under Section 16 of the Securities Exchange Act of 1934 on Forms 3, 4 and 5;
|
|
|
|
●
|
In addition to auditing our annual financial statements and maintaining our books and records in accordance with the requirements of the Securities Act of 1934, we will have to prepare and submit our accounting controls and procedures for audit in compliance with Section 404 of the Sarbanes-Oxley Act of 2002, which requires increased corporate responsibility and accountability;
|
|
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●
|
We will have to assure that our Board committee charters, corporate governance principles, Board committee minutes are properly drafted and maintained;
|
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●
|
We will have to carefully analyze and assess all disclosures in all forms of public communications, including periodic SEC filings, press releases, website postings, and investor conferences to assure legal compliance;
|
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●
|
We will have assure corporate and SEC legal compliance with respect to proxy statements and information statements circulated for our annual shareholder meetings, shareholder solicitations and other shareholder information events;
|
|
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●
|
We will have to assure securities law compliance for all equity-based employee benefit plans, including registration statements and prospectus distribution procedures;
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●
|
We will have to continuously analyze the specific impact on our Company of all significant SEC initiatives, policies, proposals and developments, as well as assess the rules of Public Company Accounting Oversight Committee on governance procedures of Company and our audit committee;
|
|
|
●
|
We will have to comply with the specific listing requirements of a stock exchange if we qualify and apply for such listing;
|
|
|
●
|
Being a public company increases our director and officer liability-insurance costs;
|
|
|
●
|
We will have to engage and interface with a Transfer Agent regarding issuance and trading of our common stock, which may include Rule 144 stock transfer compliance matters; and
|
|
|
●
|
We will incur additional costs for legal services as a function of our needs to seek guidance on securities law disclosure questions and evolving compliance standards.
|
We have assigned a high priority to corporate compliance and our public company reporting obligations, however, there can be no assurance that we will have sufficient cash resources available to satisfy our public company reporting and compliance obligations. If we are unable to cover the cost of proper administration of our public company compliance and reporting obligations, we could become subject to sanctions, fines and penalties, our stock could be barred from trading in public capital markets and we may have to cease operations.
15
Our actual results may differ from our projections if there are material changes in any of the factors or assumptions upon which we have based our projections. Such factors and assumptions, include, without limitation, the development of our proprietary technology platform and our products, the timing of such development, market acceptance of our products, protection of our intellectual property, our success in implementing our strategic, operating and personnel initiatives and our ability to commercialize our products, any of which could impact sales, costs and expenses and/or planned strategies and timing. As a result, it is possible that we may require significantly more capital resources to meet our capital needs.
Off-Balance Sheet Arrangements
None.
We did not have any operations which implicated market risk as of the end of the latest fiscal year. We expect that our planned operations will engender market risk, particularly with respect to foreign currency exchange rate risk. We intend to implement an analysis and assessment program which will on a regular basis determine exposures of the Company to such risks. We expect to report the results of all such quantitative and qualitative risk assessments prior to entering into any material agreements, and on an annual basis to our audit committee so that responsive risk management measures can be discussed and actions taken to the extent reasonably feasible. Inflationary factors in the future, such as increases in overhead costs, may adversely affect our operating results. A high rate of inflation in the future may have an adverse effect on our ability to manage selling, general and administrative expenses as a percentage of net revenues if our revenues do not increase with these increased costs.
16
|
ITEM 8:
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Our financial statements have been examined to the extent indicated in their report by Paritz & Company, P.A. for the year ended December 31, 2012, and the year ended December 31, 2011, and have been prepared in accordance with generally accepted accounting principles and pursuant to Regulation S-X as promulgated by the Securities and Exchange Commission and are included herein, on Page F-2 hereof in response to Part F/S of this Form 10-K.
|
INDEX TO FINANCIAL STATEMENTS
|
Report of Independent Registered Public Accounting Firm
|
F-1 |
|
Balance Sheets
|
F-2
|
|
Statements of Operations
|
F-3
|
|
Statements of Stockholders’ Equity
|
F-4
|
|
Statements of Cash Flows
|
F-5
|
|
Notes to Financial Statements
|
F-6 to F-9
|
17
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To The Board of Directors and Stockholders of
Dephasium Corp.
f/k/a Allied Venture Holding Corp.
f/k/a Pay Mobile, Inc.
We have audited the accompanying balance sheets of
Dephasium Corp. f/k/a Allied Venture Holding Corp. f/k/a Pay Mobile, Inc.
as of December 31, 2012 and 2011 and the related statements of operations, changes in shareholders’ deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
Dephasium Corp. f/k/a Allied Venture Holding Corp. f/k/a Pay Mobile, Inc.
as of December 31, 2012 and 2011, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, as of December 31, 2012 the Company has a shareholder deficiency of $1,410,691 and a negative working capital of $12,450. The continuation of the Company as a going concern is dependent on, among other things, the Company’s ability to obtain necessary financing to repay debt that is in default and to meet future operating and capital requirements. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Hackensack, New Jersey
March 18, 2013
F-1
DEPHASIUM CORP.
f/k/a ALLIED VENTURES HOLDING CORP.
f/k/a PAY MOBILE, INC.
(A Development Stage Enterprise)
|
December 31,
2012
|
December 31,
2011
|
|||||||
|
ASSETS
|
||||||||
|
CURRENT ASSETS
|
||||||||
|
Cash and equivalents
|
$ | 10,601 | $ | 34,517 | ||||
|
Current assets of discontinued operations
|
0 | 53,931 | ||||||
|
Total current assets
|
10,601 | 88,448 | ||||||
|
OTHER ASSETS
|
||||||||
|
Other assets of discontinued operations
|
0 | 25,750 | ||||||
|
Total Assets
|
$ | 10,601 | $ | 114,198 | ||||
|
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
||||||||
|
CURRENT LIABILITIES
|
||||||||
|
Accounts payable
|
$ | 13,576 | $ | 0 | ||||
|
Short term loan
|
9,475 | 0 | ||||||
|
Current liabilities of discontinued operations
|
0 | 438,771 | ||||||
|
Total Current Liabilities and Total Liabilities
|
23,051 | 438,771 | ||||||
|
STOCKHOLDERS’ DEFICIENCY
|
||||||||
|
Preferred stock, $0.0001,par value 50,000,000 authorized, 0 (2011- 0) issued and outstanding
|
0 | 0 | ||||||
|
Common stock $0.0001, par value 500,000,000 authorized, 94,964,138 (2011 – 129,114,138) issued and outstanding
|
9,496 | 12,911 | ||||||
|
Additional paid in capital
|
1,388,745 | 574,146 | ||||||
|
Deficit Accumulated During Development Stage
|
(1,410,691 | ) | (911,630 | ) | ||||
|
Total stockholders’ (deficiency)
|
(12,450 | ) | (324,573 | ) | ||||
|
Total Liabilities and Stockholders’ Deficiency
|
$ | 10,601 | $ | 114,198 | ||||
F-2
DEPHASIUM CORP.
f/k/a ALLIED VENTURES HOLDING CORP.
f/k/a PAY MOBILE, INC.
(A Development Stage Enterprise)
| Years Ended December 31, |
Period from
October 1, 2003
(Inception)
through
|
|||||||||||
|
2012
|
2011
|
2012
|
||||||||||
|
General and administrative
|
27,450 | 0 | 27,450 | |||||||||
|
Loss from discontinued operations
|
473,823 | 772,118 | 1,383,241 | |||||||||
|
Net loss
|
$ | (501,273 | ) | $ | (772,118 | ) | $ | (1,410,691 | ) | |||
|
Basic net loss per weighted average share
|
$ | ( 0.01 | ) | $ | ( 0.01 | ) | ||||||
|
Weighted average number of shares
|
94,964,138 | 127,431,198 | ||||||||||
F-3
DEPHASIUM CORP.
f/k/a ALLIED VENTURES HOLDING CORP.
f/k/a PAY MOBILE, INC.
(A Development Stage Enterprise)
Statements of Stockholders Equity(Deficiency)
|
Number of Common
Shares
|
Common
Stock
|
Add’tl
Paid in
Capital
in
Excess
of Par
|
Deficit
Accumulated
During the
Development
Stage
|
Total
Stockholders
(Deficit)
|
||||||||||||||||
|
Balance October 1, 2003
|
5,460,325 | 546 | 14,091,822 | (14,092,368 | ) | 0 | ||||||||||||||
|
Shares issued for debt
|
19,644,513 | 1,964 | 48,036 | 0 | 50,000 | |||||||||||||||
|
Net Loss 2003-2010
|
0 | 0 | 0 | (778,337 | ) | (778,337 | ) | |||||||||||||
|
Shares issued for services
|
25,000,000 | 2,500 | 247,500 | 0 | 250,000 | |||||||||||||||
|
Shares issued for debt
|
44,859,300 | 4,486 | 444,107 | 0 | 448,593 | |||||||||||||||
|
Balance September 30, 2010
|
94,964,138 | 9,496 | 14,831,465 | (14,870,705 | ) | (29,744 | ) | |||||||||||||
|
March 24, 2011 share exchange
Agreement
|
34,150,000 | 3,415 | (14,257,319 | ) | 14,731,193 | 477,289 | ||||||||||||||
|
Net loss 2011
|
|
|
(772,118 | ) | (772,118 | ) | ||||||||||||||
|
Balance December 31, 2011
|
129,114,138 | 12,911 | 574,146 | (911,630 | ) | (324,573 | ) | |||||||||||||
|
June 11, 2012 recission
Agreement
|
(34,150,000 | ) | (3,415 | ) | 814,599 | 2,212 | 813,396 | |||||||||||||
|
Net Loss 2012
|
|
|
|
(501,273 | ) | (501,273 | ) | |||||||||||||
|
Balance December 31, 2012
|
94,964,138 | 9,496 | 1,388,745 | (1,410,691 | ) | (12,450 | ) | |||||||||||||
The accompanying notes are an integral part of the financial statements
F-4
DEPHASIUM CORP.
f/k/a ALLIED VENTURES HOLDINGS CORP.
f/k/a PAY MOBILE, INC.
(A Development Stage Enterprise)
(
Statements of Cash Flows)
|
Year Ended 2012
|
December 312011
|
From October1,2003(Inception) through December 31, 2012
|
||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net loss
|
$ | (27,450 | ) | $ | 0 | $ | (27,450 | ) | ||||
|
Net cash provided by (used in) discontinued operations
|
(28,993 | ) | (722,118 | ) | 5,524 | |||||||
|
Adjustments to reconcile net loss to net cash used by operating activities:
|
||||||||||||
|
Changes in discontinued assets and liabilities:
|
||||||||||||
|
Increase in current assets
|
0 | (53,931 | ) | 0 | ||||||||
|
Increase in other assets
|
0 | (25,750 | ) | 0 | ||||||||
|
Increase in current liabilities
|
0 | 386,228 | 0 | |||||||||
|
Changes in operating assets and liabilities:
|
23,052 | 0 | 23,052 | |||||||||
|
Net cash provided by (used in) operating activities
|
(33,391 | ) | (415,571 | ) | 1,126 | |||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds from issuance of common stock
|
0 | 450,000 | 0 | |||||||||
|
Short term loan
|
9,475 | 0 | 9,475 | |||||||||
|
Net cash provided by financing activities
|
9,475 | 450,000 | 9,475 | |||||||||
|
Net increase (decrease) in cash
|
(23,916 | ) | 34,429 | 10,601 | ||||||||
|
CASH,
beginning of period
|
34,517 | 88 | 0 | |||||||||
|
CASH,
end of period
|
$ | 10,601 | $ | 34,517 | $ | 10,601 | ||||||
F-5
DEPHASIUM CORP.
f/k/a ALLIED VENTURES HOLDING CORP.
f/k/a PAY MOBILE, INC.
Notes to Financial Statements
(1) Summary of Significant Accounting Policies
Dephasium Corp., (the Company), was incorporated on March 31, 1980, under the laws of the State of California as Expertelligence, Inc. On June 26, 2006, the Company reincorporated in Nevada. On March 24, 2011, the Company amended its Articles of Incorporation to change its name to Pay Mobile, Inc. On January 2, 2013, the Company amended its Articles of Incorporation to change its name to Allied Ventures Holding Corp. On February 21, 2013, the Company amended its Articles of Incorporation to change its name to Dephasium Corp.
On March 24, 2011, the Company entered into a Share Exchange Agreement (the Agreement) with Pay Mobile, Inc. (PMD) a Delaware corporation and its shareholders. Pursuant to the terms of the Agreement, the company issued 80,000,000 shares of its restricted common stock in exchange for 100% of the issued and outstanding shares of PMD. In addition, shareholders agreed to cancel 50,000,000 shares owned by them.
On June 11, 2012 the Company entered into a Rescission Agreement whereby the Company rescinded the previous Agreement for the exchange of common stock dated March 24, 2011 with Pay Mobile, Inc., a Delaware corporation (“PMD”). As a result of the transaction, the Company cancelled all the shares which were previously issued to the shareholders of PMD in that transaction and an additional 5,550,000 shares which were issued to private investors. As a result of this the Company reverted back to the pre-acquisition status. In conjunction therewith, the Company re-issued the previously cancelled 50,000,000 shares of common stock which were owned by previous management but were assigned to Irma Colón-Alonso. As a result of the rescission, the Company now has 94,964,138 shares of common stock outstanding. The Company has reverted to a Shell Company status and is looking for a new opportunity.
Development Stage Activities
These consolidated financial statements include the accounts of Paymobile and its wholly-owned subsidiary, Paymobile Inc. (Canada), up to June 11, 2012 when the Company entered into a Rescission Agreement. On January 19, 2010, Paymobile purchased Paymobile Inc. (Canada). The transaction was accounted for as a transaction between entities under common control in accordance with authoritative guidance issued by the Financial Accounting Standards Board. Accordingly, the net assets were recognized in the consolidated financial statements to June 11, 2012 and were recorded at their carrying amounts in the accounts of Paymobile Inc. (Canada) at the transfer date and the results of operations of Paymobile Inc. (Canada) are included as though the transaction had occurred at the beginning of the period. As a result of the Rescission Agreement, all assets and liabilities have been eliminated and the Statement of Operations reflects a loss from discontinued operations from Paymobile Inc. (Canada).
The Company is considered to be in the development stage and the accompanying financial statements represent those of a development stage company in accordance with SFAS No. 7, Accounting and Reporting by Development Stage Enterprises.
The following summarize the more significant accounting and reporting policies and practices of the Company:
Cash and Cash Equivalents
The Company considers all highly liquid instruments with an original maturity or remaining maturity at the date of purchase of three months or less to be cash equivalents.
F-6
Property and Equipment
Property and equipment are stated at cost less accumulated amortization. Amortization is calculated on a straight-line basis over the expected useful life as follows:
| Computer equipment | 3 years |
| Office furniture and equipment | 5 years |
| Leasehold improvements | term of the lease |
Repairs and maintenance expenditures are charged to operating expense as incurred. Replacements and major renewals are capitalized.
Accounting for the Impairment or Disposal of Long-Lived Assets
Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of the asset may not be recoverable. For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset, or group of assets, is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and the fair value. Fair values are determined based on quoted market values, discounted cash flows, or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.
Accounting Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
Revenue is recognized when it is realized or realizable and earned. Revenue is realized or realizable when there is persuasive evidence of an arrangement, prices are fixed or determinable, services or products are provided to the customer, and collectability is probable and reasonably assured depending upon the applicable revenue recognition guidance followed.
Foreign Currency Translation
The Company’s functional and reporting currency is the United States Dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Revenue and expense accounts are translated at average exchange rates during the period. Equity accounts are translated using historical exchange rates. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
Income Taxes
Income tax expense is based on pre-tax financial accounting income. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry-forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
F-7
Basic and Diluted Net (Loss) Per Common Share (“EPS”)
Basic net (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted net income per common share includes the potential dilution that could occur upon exercise of warrants or conversion of debt to acquire common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share.
Fair Value of Financial Instruments
The Company’s financial instruments include cash and accrued liabilities. The fair value of these financial instruments approximates their carrying values due to their short maturities.
Stock-Based Compensation
The Company records expense for stock-based compensation to directors, employees, and consultants using the fair value method. The Company may issue shares of stock and stock warrants in exchange for services. The Company values the issuance of shares based on the fair value of its stock on the date of issuance. The Company values the warrants it issues using the Black-Scholes model.
(2) Stockholders Equity:
The Company has authorized 500,000,000 shares of $0.0001 par common stock. At December 31, 2012 there were 94,964,138 shares issued and outstanding. As a result of the Rescission Agreement entered into on June 11, 2012, the Company cancelled all the shares which were previously issued to the shareholders of PMD and an additional 5,550,000 shares which were issued to private investors. In conjunction therewith the Company re-issued the previously cancelled 50,000,000 shares of common stock which were owned by previous management.
(3) Going Concern:
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s’ financial position and operating results raise substantial doubt about the Company’s’ ability to continue as a going concern, as reflected by the Company’s Stockholders’ Deficiency of $12,450 at December 31, 2012. The ability of the Company to continue as a going concern is dependent upon finding a new business opportunity and obtaining additional capital and financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
(4) Income Taxes
The Company has approximately $1,410,000 of net operating loss carryforwards available to reduce future taxable income which expire from 2013 to 2032. Utilization of these carryforwards may be revised under Internal Revenue Code section 382 that reduces utilizable losses following a greater than 50% ownership change as determined under regulations.
The comparison of income tax expense at the U.S. statutory rate of 35% in tax years 2012 and 2011, to the Company’s effective tax is as follows:
| December 31, | ||||||||
|
2012
|
2011
|
|||||||
|
U.S. Statutory Rate of 35%
|
$ | (175,446 | ) | $ | (270,241 | ) | ||
|
Valuation Allowance on U.S. Net Operating Loss
|
175,446 | 270,241 | ||||||
|
Effective Tax
|
$ | - | $ | - | ||||
|
Deferred income taxes are summarized as follows:
|
||||||||
|
Available net operating losses
|
$ | (501,273 | ) | $ | (319,071 | ) | ||
|
Valuation allowance
|
501,273 | 319,071 | ||||||
| $ | - | $ | - | |||||
F-8
(5) Subsequent Events:
On January 2, 2013 the Company changed its name from Paymobile, Inc. to Allied Ventures Holding Corp.
On February 5, 2013, the Company issued 200,000 common shares and received $50,000.
On February 21, 2013 the Company changed its name to Dephasium Corp.
On March 5, 2013, the Registrant entered into an Asset Purchase Agreement for the purchase of certain patents and trademarks from Dephasium, Ltd., a limited partnership organized under the laws of the United Kingdom. Pursuant to the Agreement, in consideration of the transfer to the Registrant of the ANCILIA patent and trademark, Registration Number 4,085,620, the Registrant will issue Dephasium 70,000,000 shares of its restricted common stock. In addition, in consideration of $15,000 the Registrant will redeem 50,000,000 shares of its restricted common stock previously issued to Irma Colon-Alonso. The Registrant has also agreed to name Lucien Gerard AIM to its Board of Directors. Closing is conditioned upon the Registrant receiving an appraisal of the assets being purchased.
F-9
|
ITEM 9:
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL
DISCLOSURE
|
We have not had any changes in or disagreements with our accountants regarding accounting and financial disclosure.
|
ITEM 9A:
|
CONTROLS AND PROCEDURES
|
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by our management, with the participation of the Chief Executive Officer / Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of December 31, 2012. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer / Chief Financial Officer, to allow timely decisions regarding required disclosures.
We lack proper internal controls and procedures
.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive, as appropriate, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rule 13a-15(e). In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Management has identified certain material weaknesses relating to our internal controls and procedures. The reason for the ineffectiveness of our disclosure controls and procedures was the result of the lack of segregation of duties and responsibilities with respect to our cash control over the disbursements related thereto. The lack of segregation of duties resulted from our limited accounting staff.
This Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There was no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended December 31, 2012 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.
Not Applicable.
18
|
ITEM 10:
|
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE
|
MANAGEMENT AND CERTAIN SECURITY HOLDERS
Directors, Executive Officers, Promoters and Control Persons
The following table presents information with respect to our officers, directors and significant employees as of December 31, 2012:
|
Name
|
Age
|
Position
|
|
Irma N. Colón-Alonso
|
43
|
Chief Executive Officer, President and Chief Financial Officer, Director
|
Biographical Information Regarding Officers and Directors
Irma N. Colón-Alonso
is currently serving as our President, Chief Executive Officer and Chief Financial Officer.
Irma N. Colón-Alonso is the sole member of the Company’s Board of Directors and the Company’s Chief Executive Officer/President and Chief Financial Officer. From March 2011 to the present, Ms. Colón-Alonso has been a director and secretary for Mokita, Inc., a company whose common stock is traded on the OTCQB with a trading symbol of MKIT. During the past seven years, Ms. Colón-Alonso has gained significant administrative, financial and legal experience as a Legal Assistant and Office Manager where she has been responsible for managing the firm’s billing and business accounts, supervising personnel and providing legal services to the firm. Further, she developed extensive business and marketing knowledge while working as an Account Executive for Transworld Systems, where she helped generate new clients, market the company’s services, and participate in sales transactions. Additionally, she has achieved over five years of broad management experience working for MetDisability as a Disability Claims Manager and Oglethorpe University as a Territory Manager. Ms. Colón-Alonso was appointed as sole officer and director of the Company due to her strong business education and many years of experience in marketing and finance.
Term of Office
All of our directors are appointed for a one-year term to hold office until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. Executive officers serve at the discretion of the Board of Directors, and are elected or appointed to serve until the next Board of Directors meeting following the annual meeting of stockholders. Our executive officers are appointed by our Board of Directors and hold office until removed by the Board.
19
Significant Employees
At the present time, we have no key employees.
Family Relationships
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, during the past five years, none of the following occurred with respect to a present director (or person nominated to become director), executive officer, founder, promoter or control person: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that the executive officers and directors, and persons who beneficially own more than 10% of the equity securities of reporting companies, file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms we received, we believe that during the year ended December 31, 2011, the filing requirements were not met. However, we anticitpate that these filings will be made in the second quarter of this year.
Code of Ethics
We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. To the knowledge of the Company, there have been no reported violations of the Code of Ethics.
Whistleblower Procedures Policy
In accordance with the requirements of Section 301 of the Sarbanes-Oxley Act of 2002, the Board of Directors of the Company has adopted a Whistleblower Procedures Policy, stating that all employees of the Company and its subsidiaries are strongly encouraged to report any evidence of financial irregularities which they may become aware of, including those with respect to internal controls, accounting or auditing matters. Under the Whistleblower Procedures Policy, the management of the Company shall promptly and periodically communicate to all employees with access to accounting, payroll and financial information the means by which they may report any such irregularities. In the event an employee is uncomfortable for any reason reporting irregularities to his or her supervisor or other management of the Company, employees may report directly to any member of the Board of Directors of the Company. The identity of any employee reporting under these procedures will be maintained as confidential at the request of the employee, or may be made on an anonymous basis. Notice must be provided to all of the Company’s employees with access to accounting, payroll and financial information in respect of these procedures.
20
The Company does not have any Committees of the Board
Director Nominations
There have been no changes in the year ended December 31, 2012 to the procedures by which security holders may recommend nominees to our board of directors.
|
ITEM 11:
|
EXECUTIVE COMPENSATION
|
Executive Compensation
The following table sets forth compensation for each of the past three fiscal years with respect to each person who served as Chief Executive Officer of the Company and each of the four most highly-compensated executive officers of the Company who earned a total annual salary and bonuses that exceeded $100,000 in any of the two preceding fiscal years.
Summary Compensation Table
|
Name and Principal
Position
|
Year (1)
|
Salary ($)
|
Stock Awards ($)
|
Total
|
|||||||||||
|
Irma N. Colón-Alonso, President, Chief Executive Officer and Chief Financial Officer
|
2012
|
NIL
|
NIL
|
NIL
|
|||||||||||
|
Gino Porco
,
President, Chief Executive Officer and Chief Financial Officer
|
2012
|
$ | 180,000 |
NIL
|
$ | 180,000 | |||||||||
|
Gino Porco, President, Chief Executive
Officer and Chief Financial Officer
|
2011
|
$ |
60,115
|
NIL | $ |
60,115
|
|||||||||
|
(1)
|
No other officers earned over $100,000 in the preceding fiscal years, other than as set forth above.
|
Employment Agreements
The Company currently has no employment agreements with its executive officers or other employees.
Director Compensation
For the years ended December 31, 2012 and December 31, 2011, the directors were not awarded any options or paid any cash compensation.
21
|
ITEM 12:
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
The following table sets forth the number of shares of common stock beneficially owned as of December 31, 2012 by (i) those persons or groups known to us to beneficially own more than 5% of our common stock; (ii) each director; (iii) each executive officer; and (iv) all directors and executive officers as a group. Except as indicated below, each of the stockholders listed below possesses sole voting and investment power with respect to their shares. The percentage of ownership set forth below assumes all share cancellations as disclosed are completed and reflects each holder’s ownership interest in the 95,164,138 shares of common stock issued and outstanding as of March 7 , 2013. Unless otherwise specified, the address of each of the persons set forth below is in care of the Company, 17695 S.W. 104 Street, Ste. 210, Miami, FL 33156
|
Name of Beneficial Owner
|
Amount and Nature of Beneficial Ownership
|
Percent of
Common Stock
|
||||||
|
Irma N. Colón-Alonso
|
50,000,000
|
52.54
|
%
|
|||||
Potential Changes in Control
At the present time, there are no arrangements known, including any pledge by any person of securities, the operation of which may at a subsequent date result in a change in control of the Company..
Stock Option Plan Information
To date, the Company has not adopted a Stock Option Plan. The Company may adopt an option plan in the future.
Adverse Interests
The Company is not aware of any material proceeding to which any director, officer, or affiliate of the Company, or any owner of record or beneficially of more than five percent of any class of the Company’s voting securities, or security holder is a party adverse to the Company or has a material interest adverse to the Company.
|
ITEM 13:
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
Except as otherwise disclosed herein, since the beginning of the last fiscal year the Company has not entered into any other transactions, nor are there any currently proposed transactions, in which the Company was, or is, to be a participant and in which any related person had or will have a direct or indirect material interest.
During the past five years, none of the following occurred with respect to any founder, promoter or control person: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
22
Audit Fees
The aggregate fees of Paritz & Company, P.A. for professional services rendered for the audit of the Company's annual financial statements for the year ended December 31, 2012, totaled $10,000. The aggregate fees of Paritz & Company, P.A for professional services rendered for the audit of the Company's annual financial statements for the year ended December 31, 2011, totaled $10,000.
Audit-Related Fees
The aggregate fees billed by Paritz & Company, P.A. for audit related services for the years ended December 31, 2012 which are not disclosed in “Audit Fees” above, were $NIL. and for December 31, 2011, which are not disclosed in “Audit Fees” above, were $1500.
Tax Fees
The aggregate fees billed by Paritz & Company, P.A for tax compliance for the year ended December 31, 2012, were $NIL. The aggregate fees billed by Paritz & Company, P.A for tax compliance for the year ended December 31, 2011, were $NIL.
All Other Fees
The aggregate fees billed for services other than those described above, for the years ended December 31, 2012 and December 31, 2011, were $0.
Audit Committee Pre-Approval Policies
Our Board of Directors reviewed the audit and non-audit services rendered by Paritz & Company, P.A during the periods set forth above and concluded that such services were compatible with maintaining the auditors’ independence. All audit and non-audit services performed by our independent accountants are pre-approved by our Board of Directors to assure that such services do not impair the auditors’ independence from us.
23
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Financial Statements
Financial Statements for the period from inception (October 1, 2003) to December 31, 2012.
|
|
Exhibit No.
|
Description of Exhibits
|
|
|
Exhibit 31.1
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Exhibit 31.2
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
Exhibit 32.1
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
|
24
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
DEPHASIUM CORP.
|
|||
|
By:
|
/s/
Irma N. Colón-Alonso
|
||
|
Name:
|
Irma N. Colón-Alonso
|
||
|
Title:
|
Chief Executive Officer and Chief
Financial Officer (Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer)
|
||
Dated: March 19, 2013
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Irma N. Colon-Alons, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
/s/
Irma N. Colón-Alonso
|
||
|
Name:
|
Irma N. Colón-Alonso
|
|
|
Title:
|
Director, Chief Executive Officer,
President and Chief Financial Officer
(Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer)
|
|
|
Dated:
|
March 19, 2013
|
|
25
TABLE OF CONTENTS
Part IItem 1: BusinessItem 1A. Risk FactorsItem 1B: Unresolved Staff CommentsItem 2: PropertiesItem 3: Legal ProceedingsItem 4: ReservedPart IIItem 5: Market For Registrant S Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity SecuritiesItem 6: Selected Financial DataItem 7: Management's Discussion and Analysis Of Financial Condition and Results Of OperationsItem 7A: Quanitative and Qualitative Disclosures About Market RiskItem 8: Financial Statements and Supplementary DataItem 9: Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A: Controls and ProceduresItem 9B: Other InformationPart IIIItem 10: Directors, Executive Officers, Promoters and Corporate GovernanceItem 11: Executive CompensationItem 12: Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13: Certain Relationships and Related Transactions and Director IndependenceItem 14: Principal Accountant Fees and ServicesPart IV