UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
==================================
AMENDMENT
NO. 1 TO FORM S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
==================================
HALBERD
CORPORATION
(Exact
Name of Small Business Issuer in its Charter)
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Nevada
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7380
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26-4346918
|
|
(State
of Incorporation)
|
(Primary
Standard Classification Code)
|
(IRS
Employer ID
No.)
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Halberd
Corporation
30600
Telegraph Road, Suite 2175
Bingham
Farms, MI 48025
248-530-0270
(Address and Telephone
Number of Registrant’s Principal
Executive
Offices and Principal Place of Business)
Mark
S. Lundquist, CEO
Halberd
Corporation
30600
Telegraph Road, Suite 2175
Bingham
Farms, MI 48025
248-530-0270
(Name,
Address and Telephone Number of Agent for Service)
Copies of
communications to:
GREGG
E. JACLIN, ESQ.
ANSLOW
& JACLIN, LLP
195
Route 9 South, Suite204
Manalapan,
NJ 07726
TELEPHONE
NO.: (732) 409-1212
FACSIMILE
NO.: (732) 577-1188
Approximate
date of commencement of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. |_|
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act of 1933, please check the following box and list
the Securities Act registration Statement number of the earlier effective
registration statement for the same offering. |_|
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.|_|
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.|_|
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box. |_|
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Large
accelerated filer
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[
]
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Accelerated
filer
|
[
]
|
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Non-accelerated
filer
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[
]
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Smaller
reporting company
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[X]
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(Do
not check if a smaller reporting company)
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CALCULATION
OF REGISTRATION FEE
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Title
of Each Class Of Securities to be Registered
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Amount
to be
Registered
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Proposed
Maximum
Aggregate
Offering
Price
per
share
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Proposed
Maximum
Aggregate
Offering
Price
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Amount
of
Registration
fee
|
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Common
Stock, par value $0.001
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656,000
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$0.25
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$164,000
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$6.45
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The
offering price has been estimated solely for the purpose of computing the amount
of the registration fee in accordance with Rule 457(o). Our common stock is not
traded on any national exchange and in accordance with Rule 457; the offering
price was determined by the price shares were sold to our shareholders in a
private placement memorandum of SellMyBusinessNow.Com, Inc., our
wholly-owned subsidiary and adjustment pursuant to the subsequent share purchase
agreement. The price of $0.25 was determined by the price shares were sold to
our shareholders in a private placement memorandum of $500 and adjusted by 2000
to 1 in accordance with our share purchase agreement dated January 28, 2009
and is a fixed price at which the selling security holders may sell their shares
until our common stock is quoted on the OTC Bulletin Board at which time the
shares may be sold at prevailing market prices or privately negotiated prices.
There can be no assurance that a market maker will agree to file the necessary
documents with the Financial Industry Regulatory Authority, nor can there be any
assurance that such an application for quotation will be
approved. There is no assurance that an active trading market for
our shares will develop, or, if developed, that it will be
sustained. In the absence of a trading market or an active trading
market, investors may be unable to liquidate their investment or make any profit
from the investment.
PRELIMINARY
PROSPECTUS SUBJECT TO COMPLETION DATED APRIL
10 , 2009
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
securities act of 1933 or until the registration statement shall become
effective on such date as the commission, acting pursuant to said section 8(a),
may determine.
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PROSPECTUS
656,000 SHARES
OF
HALBERD
CORPORATION
COMMON
STOCK
The
selling shareholders named in this prospectus are offering all of the
shares of common stock offered through this prospectus. Our common stock
is presently not traded on any market or securities exchange. The
656,000 shares of our common stock can be sold by selling
security holders at a fixed price of $0.25 per share until our shares are
quoted on the OTC Bulletin Board and thereafter at prevailing market
prices or privately negotiated prices. There can be no assurance
that a market maker will agree to file the necessary documents
with The Financial Industry Regulatory Authority (“FINRA”), nor can
there be any assurance that such an application for quotation will be
approved. We have agreed to bear the expenses relating to the
registration of the shares for the selling security holders. There
is no assurance that an active trading market for our shares will develop,
or, if developed, that it will be sustained. In the absence of
a trading market or an active trading market, investors may be unable to
liquidate their investment or make any profit from the
investment.
THE
COMPANY IS CONSIDERED TO BE IN UNSOUND FINANCIAL CONDITION. PERSONS SHOULD
NOT INVEST UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE
INVESTMENTS.
THE
COMPANY IS CONSIDERED A HIGH RISK INVESTMENT, PERSONS SHOULD NOT INVEST
UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT.
THE
PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER
THE HEADING “RISK FACTORS” BEGINNING ON PAGE 3.
Neither
the Securities and Exchange Commission nor any state securities commission
has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
The
Date of This Prospectus Is: April 10 , 2009
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This
summary highlights selected information contained elsewhere in this
prospectus. This summary does not contain all the information that
you should consider before investing in the common stock. You should
carefully read the entire prospectus, including “Risk Factors”, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
the Consolidated Financial Statements, before making an investment decision .
About
Our Company
We are a
development stage company that was incorporated under the laws of the State of
Nevada on January 26, 2009. On January 28, 2009, we entered into a share
purchase agreement with SellMyBusinessNow.Com, Inc., a corporation established
under the laws of the State of Michigan on August 2, 2007 (“SellMyBusiness”),
pursuant to which we acquired all the shares of common stock of SellMyBusiness
for 25,058,000 shares of our common stock. As a result, SellMyBusiness became
our wholly-owned subsidiary.
Our
operations are conducted under the name “Sellmybusiness.com®” established
on December 3, 2007. Sellmybusiness.com® provides a single web portal for
interested parties to find, buy and sell businesses, real estate and equipment
and all the related services needed to support the transaction, including
financing, incorporation, professional help and additional business resources.
Sellmybusiness.com® intends to support businesses of all sizes and types,
including start-ups, well-established companies, home-based businesses,
closely-held companies, multinational public corporations and franchises.
Sellmybusiness.com®’s real estate listing service assists people to buy, sell,
lease or sublease commercial and residential land and property.
Sellmybusiness.com®’s equipment listing service provides a portal to buy, sell
or lease excess inventory, capital equipment, raw materials, vehicles, aircraft,
ships and rail equipment.
“The
Company,” “we,” “us,” or “our,” are references to the combined business of
Halberd Corporation and its wholly-owned subsidiary, SellMyBusinessNow.Com,
Inc.
Where
You Can Find Us
Our
principal executive office location and mailing address is 30600 Telegraph Road,
Suite 2175, Bingham Farms, MI 48025. The corporate telephone number
is 248-530-0270.
Terms
of the Offering
The
selling shareholders named in this prospectus are offering all of the shares of
common stock offered through this prospectus. The selling stockholders are
selling shares of common stock covered by this prospectus for their own
account.
We will
not receive any of the proceeds from the sale of these shares. The offering
price of $0.25 was determined by the price shares were sold to our shareholders
in a private placement memorandum of $500 and adjusted by 2000 to 1 in
accordance with the share purchase agreement dated January 28, 2009 and is a
fixed price at which the selling security holders may sell their shares until
our common stock is quoted on the OTC Bulletin Board, at which time the shares
may be sold at prevailing market prices or privately negotiated prices. There
can be no assurance that a market maker will agree to file the necessary
documents with FINRA, nor can there be any assurance that such an application
for quotation will be approved. We have agreed to bear the expenses relating to
the registration of the shares for the selling security holders. There
is no assurance that an active trading market for our shares will
develop, or, if developed, that it will be sustained. In the absence
of a trading market or an active trading market, investors may be unable to
liquidate their investment or make any profit from the investment.
Our
operations are limited to SellMyBusiness, our wholly-owned subsidiary. The
following table provides summary consolidated financial statement data of
SellMyBusiness. The interim financial data for the three and six-month
periods ended January 31, 2009 are unaudited. The financial
statement data for the period August 2, 2007 (date of inception) to July 31,
2008 has been derived from our audited consolidated financial statements. The
data set forth below should be read in conjunction with “Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” our consolidated
financial statements and the related notes included in this prospectus, and the
unaudited financial statements and related notes included in this
prospectus.
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For
the Three Months
Ended
January
31,
2009
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For
the Six Months
Ended
January
31,
2009
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For
the Period Ended
July
31, 2008 (from inception)
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||||||||||
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(Unaudited)
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(Unaudited)
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(Audited)
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||||||||||
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Net
Sales
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$
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1,266
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$
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5,092
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$
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7,015
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||||||
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Operating
expenses
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120,913
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135,790
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44,732
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|||||||||
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Net
loss
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$
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(151,713)
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$
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(164,640
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)
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$
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(36,095
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)
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||||
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BALANCE
SHEET DATA:
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As
of
January
31, 2009
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As
of
July
31,
2008
(Audited)
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||||||
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(Unaudited)
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||||||||
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Current
assets
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$
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3,374
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$
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1,387
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||||
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Total
assets
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$
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481,287
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$
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341,708
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||||
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Total
liabilities (all current)
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$
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257,522
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$
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377,803
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Stockholders’
equity (deficit)
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$
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223,765
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$
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(36,095
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)
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An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. Please note that throughout this prospectus, the words “we”,
“our” or “us” refer to the Company and its subsidiary not to the selling
stockholders.
WE
HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE
LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES,
DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL
DEVELOPING COMPANY.
The
Company was incorporated on January 26, 2009, and as such has had
minimal operating revenues to date. Further, the Company has no significant
assets and minimal earnings from sales. The success of the Company is dependent
upon the extent to which it will gain market share. All financial information
and financial projections and other assumptions made by the Company are
speculative and, while based on management's best estimates of projected sales
levels, operational costs, consumer preferences, and the general economic and
competitive health of the Company in the business listing marketplace, there can
be no assurance that the Company will operate profitably or remain
solvent.
WE
WILL REQUIRE FINANCING TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND OUR
INABILITY TO SECURE REQUIRED FINANCING COULD PROHIBIT US FROM EXECUTING OUR
BUSINESS PLAN AND CAUSE US TO SLOW DOWN OUR EXPANSION OF
OPERATIONS.
Based on
the development stage of the Company and its operational plan, management
believes that the Company will incur operating losses in the foreseeable future.
Management has developed an operational plan that has been presented to various
institutional funds and has entered into a non-binding term sheet for securities
financing. Management believes that it can enter into definitive agreements with
the funder on terms that are acceptable. However, access to the investment fund
is predicated on the market for the Company’s stock and therefore the Company
cannot issue assurances that our shareholders will not be diluted by investment
of such capital, or to the extent of the dilution. Also, we cannot assure that
securities issued in exchange for such capital will not be sold on terms more
favorable than those of the shares sold in this or other offerings. The
availability of such funding is subject to credit, economic, market and legal
constraints.. The inability to secure required capital from the fund could have
a material adverse effect on our business, operation results, or financial
condition. Additionally, there are no guarantees that any additional
financing can be obtained.
IF
WE ARE UNABLE TO ESTABLISH A LARGE USER BASE WE MAY HAVE DIFFICULTY ATTRACTING
ADVERTISERS TO OUR WEB SITE AND GENERATING MEMBERSHIP FEES, WHICH WILL HINDER
OUR ABILITY TO GENERATE REVENUES, WHICH MAY AFFECT OUR ABILITY TO EXPAND OUR
BUSINESS OPERATIONS AND OUR USER BASE.
An
integral part of our business plan and marketing strategy requires us to
establish a large user base. We will only be able to attract additional
advertisers to our web site and obtain sufficient membership fees if we can
obtain a large enough user base. The number of users necessary to attract
advertisers will be determined though discussions with the potential advertisers
and their input as to whether we can obtain revenues from advertisements based
upon the total members at that time. If for any reason our web site is
ineffective at attracting consumers or if we are unable to continue to develop
and update our web site to keep consumers satisfied with our service, our user
base may decrease and our ability to generate revenues may decline.
IN ORDER TO IMPLEMENT OUR BUSINESS PLAN, WE WILL
REQUIRE OUR USERS TO PAY FEES FOR OUR SERVICES. IF OUR USERS ARE NOT WILLING TO
PAY FOR THESE SERVICES, WE WILL BE FORCED TO SUSPEND AND EVENTUALLY TO CEASE OUR
BUSINESS ACTIVITIES.
In order
to implement our business plan, we will require our users to pay monthly fees
for the use of our services. We cannot guarantee that either our prospective
users will be willing to pay for our services. If we are unable to generate
sufficient revenues from our user fees, we will be forced to suspend and
possible cease all operations.
OUR MARKET IS CHARACTERIZED BY RAPID TECHNOLOGICAL
CHANGE, AND IF WE FAIL TO DEVELOP AND MARKET NEW TECHNOLOGIES RAPIDLY, WE MAY
NOT BECOME PROFITABLE IN THE FUTURE.
The
internet and the online commerce industry are characterized by rapid
technological change that could render our existing web site obsolete. The
development of our web site entails significant technical and business risks. We
can give no assurance that we will successfully use new technologies effectively
or adapt our web site to customer requirements or needs. If our management is
unable, for technical, legal, financial, or other reasons, to adapt in a timely
manner in response to changing market conditions or customer requirements, we
may never become profitable.
WE
WILL ENCOUNTER INTENSIVE COMPETITION. WE ARE IN NEED OF
FINANCING.
Short-term
and/or long-term competition may become intense once the Company launches its
business beyond development stage. Although the Company's financial projections
assume that the industry will generate competition, there can be no assurances
on how any level of competition may impact the financial forecasts and
projections made by management. Some competitors may include large publicly
funded companies. Some of these potential competitors have greater financial and
business resources than the Company. The Company believes that it will be able
to effectively compete with these larger entities but there can be no assurances
that it will be able to do so.
The lack
of adequate funding may adversely affect the Company’s ability to meet its
short-term objectives. The Company requires financing to expand its operations,
maintain public awareness of its products/services and provide working capital
for the anticipated growth of the Company. There can be no assurance that
all portions of its financing will be available or, if available that the terms
thereof will be attractive to the Company. The lack of additional financing may
adversely affect the Company's ability to meet its objectives.
OUR
MANAGEMENT TEAM HOLDS MAJORITY SHARES OF THE COMPANY AND THERE IS CONFLICT OF
INTEREST WHEN MAKING DECISIONS.
Management
will have the right, assuming the ownership of the Company does not change, to
perpetuate their status as officers and directors and therefore conduct the
business and affairs of the Company. The terms of any employment
agreements or other agreements between the Company and its officers were not the
result of any arm's length bargaining or negotiation, and such transactions
involve inherent conflicts of interest. There is no assurance that such
transactions are or will be favorable to the Company due to the lack of arm's
length bargaining. The Board of Directors, does however, believe that
such agreements and arrangements are fair to the Company and its
shareholders. The Company has a policy that it will not enter into a
business combination with any entity in which any member of management serves as
an officer, director or partner, or in which such person or such person's
affiliates or associates hold any ownership interest. If there is any
related party transaction, however remote, it would be submitted for approval by
an independent quorum of the Board of Directors and the proposed transaction
would be submitted to the shareholders for prior ratification in an
appropriate manner.
THERE
IS MINIMAL HISTORICAL BASIS FOR MANAGEMENT'S OPINION.
The
Company has a limited operating history. Accordingly, there is only a minimal
basis, other than the judgment of management, upon which to estimate the volume
of sales or the amount of revenues, which the Company's planned operations may
generate. Management's judgment regarding these estimates is based, in part,
upon research into the current state of the listing service marketplace.
Investors for the shares should be aware that conditions and circumstances
beyond the control of management may result in substantial differences between
the projected and actual financial results for the Company.
THE
COMPANY IS DEPENDENT ON KEY PERSONNEL.
The
Company is dependent upon its experienced management team, including its CEO,
Mark Lundquist, President & COO, John Maddox CFO, Joel Ungar, and members of
our Advisory Board, Leland Thomas and River Star, LLC. The loss of any of their
services could negatively impact the Company, as there is a risk that their
services could not be replaced. Without these services, the growth, progress,
and overall success of the Company may be adversely affected.
THERE
IS LIMITED LIABILITY OF MANAGEMENT AND IT MAY REQUIRE THE COMPANY TO INDEMNIFY
ITS OFFICERS AND DIRECTORS.
The
Company has adopted provisions to its Articles of Incorporation and bylaws,
which limit the liability of its officers and directors and provide for
indemnification by the Company of its officers and directors to the fullest
extent permitted by Nevada corporate law. Such law generally provides
that its officers and directors shall have no personal liability to the Company
or its shareholders for monetary damages for breaches of their fiduciary duties
as directors, except for breaches of their duties of loyalty, acts or omissions
not in good faith or which involve intentional misconduct or knowing violation
of the law, acts involving unlawful payment of dividends or unlawful stock
purchases or redemptions, or any transaction from which a director derives an
improper personal benefit. Such provisions substantially limit the shareholders'
ability to hold officers and directors liable for breaches of fiduciary duty,
and may require the Company to indemnify its officers and
directors.
OUR
ABILITY TO CONTINUE DEPENDS UPON ADDITIONAL FUNDING.
We are a
development stage company that has generated minimal
revenues. For the period from inception to July 31, 2008, we have
incurred a net loss of $36,095, and for the period from inception
to January 31, 2009 , we have incurred a net loss of $ 200,735.
If we cannot generate sufficient revenues from our services or
obtain sufficient funding, we may not be able to implement our business plan and
may be forced to cease our business activities.
THE
COMPANY HAS NOT PAID OR DECLARED ANY DIVIDENDS, NOR, DOES IT ANTICIPATE PAYING
ANY DIVIDENDS IN THE FORESEEABLE FUTURE.
The
Company has not paid or declared any dividends, nor, by reason of its present
financial status and its contemplated financial requirements, does it anticipate
paying any dividends in the foreseeable future. The future payment of dividends
by the Company on its Common Stock, if any, rests within the sole discretion of
the Company's board of directors and will depend, on among other things, the
Company's earnings, its capital requirements and its financial condition as well
as other relevant factors.
OUR
ARTICLES OF INCORPORATION PROVIDE FOR INDEMNIFICATION OF OFFICERS AND DIRECTORS
AT OUR EXPENSE AND LIMIT THEIR LIABILITY WHICH MAY RESULT IN A MAJOR COST TO US
AND HURT THE INTERESTS OF OUR SHAREHOLDERS BECAUSE CORPORATE RESOURCES MAY BE
EXPENDED FOR THE BENEFIT OF OFFICERS AND/OR DIRECTORS.
Our
articles of incorporation and applicable Nevada law provide for the
indemnification of our directors, officers, employees, and agents, under certain
circumstances, against attorney's fees and other expenses incurred by them in
any litigation to which they become a party arising from their association with
or activities on our behalf. We will also bear the expenses of such
litigation for any of our directors, officers, employees, or agents, upon such
person's written promise to repay us if it is ultimately determined that any
such person shall not have been entitled to indemnification. This
indemnification policy could result in substantial expenditures by us which we
will be unable to recoup.
We have
been advised that, in the opinion of the SEC, indemnification for liabilities
arising under federal securities laws is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification for liabilities arising under federal securities laws, other
than the payment by us of expenses incurred or paid by a director, officer
or controlling person in the successful defense of any action, suit or
proceeding, is asserted by a director, officer or controlling person in
connection with the securities being registered, we will (unless in the opinion
of our counsel, the matter has been settled by controlling precedent) submit to
a court of appropriate jurisdiction, the question whether indemnification by us
is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue. The legal process relating to this
matter if it were to occur is likely to be very costly and may result in us
receiving negative publicity, either of which factors is
likely to materially reduce the market and price for our shares, if such a
market ever develops.
THE
OFFERING PRICE OF THE SHARES WAS DETERMINED BASED UPON THE PRICE SOLD IN
OUR PRIVATE PLACEMENT OFFERING AND ADJUSTED IN ACCORDANCE WITH THE SHARE
EXCHANGE AGREEMENT DATED JANUARY 28, 2009 AND SHOULD NOT BE USED AS AN INDICATOR
OF THE FUTURE MARKET PRICE OF THE SECURITIES. THEREFORE, THE OFFERING PRICE
BEARS NO RELATIONSHIP TO THE ACTUAL VALUE OF THE COMPANY, AND MAY MAKE OUR
SHARES DIFFICULT TO SELL.
Since our
shares are not listed or quoted on any exchange or quotation system, the
offering price of $0.25 for the shares of common stock was determined by the
price shares were sold to our shareholders in a private placement memorandum and
adjusted in accordance with the subsequent share exchange agreement and is a
fixed price at which the selling security holders may sell their shares until
our common stock is quoted on the OTC Bulletin Board at which time the shares
may be sold at prevailing market prices or privately negotiated prices. The
facts considered in determining the offering price were our financial condition
and prospects, our limited operating history and the general condition of the
securities market. The offering price bears no relationship to the book value,
assets or earnings of our company or any other recognized criteria of
value. The offering price should not be regarded as an indicator of the
future market price of the securities.
THERE
IS NO ASSURANCE OF A PUBLIC MARKET OR THAT THE COMMON STOCK WILL EVER TRADE ON A
RECOGNIZED EXCHANGE. THEREFORE, YOU MAY BE UNABLE TO LIQUIDATE YOUR INVESTMENT
IN OUR STOCK.
There is
no established public trading market for our common stock. Our shares are not
and have not been listed or quoted on any exchange or quotation system. There
can be no assurance that a market maker will agree to file the necessary
documents with FINRA, nor can there be any assurance that such an application
for quotation will be approved or that a regular trading market will develop or
that if developed, will be sustained. In the absence of a trading market or an
active trading market, an investor may be unable to liquidate their investment
or make any profit from their investment.
OUR
COMMON STOCK IS CONSIDERED A PENNY STOCK, WHICH IS SUBJECT TO RESTRICTIONS ON
MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.
If our
common stock becomes tradable in the secondary market, we will be subject to the
penny stock rules adopted by the Securities and Exchange Commission that require
brokers to provide extensive disclosure to their customers prior to executing
trades in penny stocks. These disclosure requirements may cause a reduction in
the trading activity of our common stock, which in all likelihood would make it
difficult for our shareholders to sell their securities.
Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system). Penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document that provides information about
penny stocks and the risks in the penny stock market. The broker-dealer also
must provide the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer’s account. The broker-dealer must also make a
special written determination that the penny stock is a suitable investment
for the purchaser and receive the purchaser’s written agreement to the
transaction. These requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security that becomes
subject to the penny stock rules. The additional burdens imposed upon
broker-dealers by such requirements may discourage broker-dealers from effecting
transactions in our securities, which could severely limit their market price
and liquidity of our securities. These requirements may restrict the ability of
broker-dealers to sell our common stock and may affect your ability to resell
our common stock.
The
selling stockholders are selling shares of common stock covered by this
prospectus for their own account. We will not receive any of the proceeds from
the resale of these shares. We have agreed to bear the expenses relating to the
registration of the shares for the selling security holders.
Since our
shares are not listed or quoted on any exchange or quotation system, the
offering price of the shares of common stock was arbitrarily determined. The
offering price was determined by the price shares were sold to our shareholders
in a private placement of SellMyBusiness which was completed in January 2009 and
adjusted by 2000 to 1 in accordance with a subsequent share purchase agreement
dated January 28, 2009.
The
offering price of the shares of our common stock has been determined arbitrarily
by us and does not necessarily bear any relationship to our book value, assets,
past operating results, financial condition or any other established criteria of
value. The facts considered in determining the offering price were our financial
condition and prospects, our limited operating history and the general
condition of the securities market. Although our common stock is not listed on a
public exchange, we will be filing to obtain a listing on the Over The Counter
Bulletin Board (OTCBB) concurrently with the filing of this prospectus. In order
to be quoted on the Bulletin Board, a market maker must file an application
on our behalf in order to make a market for our common stock. There can be no
assurance that a market maker will agree to file the necessary documents with
FINRA, nor can there be any assurance that such an application for quotation
will be approved.
In
addition, there is no assurance that our common stock will trade at market
prices in excess of the initial public offering price as prices for the common
stock in any public market which may develop will be determined in the
marketplace and may be influenced by many factors, including the depth and
liquidity.
The
common stock to be sold by the selling shareholders is common stock that is
currently issued. Accordingly, there will be no dilution to our existing
shareholders.
The
shares being offered for resale by the selling stockholders consist of 656,000
shares of our common stock held by 48 shareholders.
The
following table sets forth the name of the selling stockholders, the number of
shares of common stock beneficially owned by each of the selling stockholders as
of April 10 , 2009 and the number of shares of common stock being
offered by the selling stockholders. The shares being offered hereby are being
registered to permit public secondary trading, and the selling stockholders may
offer all or part of the shares for resale from time to time. However, the
selling stockholders are under no obligation to sell all or any portion of such
shares nor are the selling stockholders obligated to sell any shares immediately
upon effectiveness of this prospectus. All information with respect to
share ownership has been furnished by the selling stockholders.
|
Name
of selling stockholder
|
Shares
of common
stock owned
prior to
offering
|
Shares
of common
stock to
be sold
|
Shares
of common
stock owned
after offering
|
Percent
of common
stock owned
after offering
(1)
(2)
|
|
Bruce
E. Nyberg (3)
|
20,000
|
20,000
|
0
|
0
|
|
John
P. Bower Revocable Living Trust UAD 9/27/1999 (3) (4)
|
20,000
|
20,000
|
0
|
0
|
|
Mary
Jane Bower Revocable Trust UAD 6/19/1999 (3) (5)
|
20,000
|
20,000
|
0
|
0
|
|
Daniel
Dalton (3)
|
20,000
|
20,000
|
0
|
0
|
|
GBS,
LLC (3) (6)
|
20,000
|
20,000
|
0
|
0
|
|
BFADM,
LLC (3) (6)
|
20,000
|
20,000
|
0
|
0
|
|
David
R. Zimmer (3)
|
20,000
|
20,000
|
0
|
0
|
|
Richard
A. Hecker (3)
|
20,000
|
20,000
|
0
|
0
|
|
Douglas
Perry Lalone Living Trust (3) (7)
|
20,000
|
20,000
|
0
|
0
|
|
Paul
A. Miller (3)
|
20,000
|
20,000
|
0
|
0
|
|
Nicholas
S. Ahee (3)
|
20,000
|
20,000
|
0
|
0
|
|
Todd
A. Emerson (3)
|
2,000
|
2,000
|
0
|
0
|
|
Donna
Kolo (3)
|
20,000
|
20,000
|
0
|
0
|
|
Joel
M. Ungar (3) (8)
|
20,000
|
20,000
|
0
|
0
|
|
Constance
M David (3)
|
2,000
|
2,000
|
0
|
0
|
|
Awecomm
Technologies, LLC (3) (9)
|
10,000
|
10,000
|
0
|
0
|
|
Marx
Layne & Company (3) (10)
|
10,000
|
10,000
|
0
|
0
|
|
Jon
D. Johnson (3)
|
10,000
|
10,000
|
0
|
0
|
|
Douglas
Omar Perreault (3)
|
10,000
|
10,000
|
0
|
0
|
|
Michael
R. Szudarek (3)
|
8,000
|
8,000
|
0
|
0
|
|
Kathryn
E. Lundquist (3)
|
4,000
|
4,000
|
0
|
0
|
|
Sunshine
R. Jenkins (3)
|
4,000
|
4,000
|
0
|
0
|
|
Dino
S. Rotondo (3)
|
4,000
|
4,000
|
0
|
0
|
|
Vianne
Floyd (3)
|
20,000
|
20,000
|
0
|
0
|
|
Barrett
Kalellis (3)
|
20,000
|
20,000
|
0
|
0
|
|
Shelby
Starnes (3)
|
4,000
|
4,000
|
0
|
0
|
|
Michael
P. Crosson (3)
|
20,000
|
20,000
|
0
|
0
|
|
Alexandra
A. Crosson (3)
|
20,000
|
20,000
|
0
|
0
|
|
Trent
A. Lundquist (3)
|
4,000
|
4,000
|
0
|
0
|
|
Andrew
Kulpa (3)
|
2,000
|
2,000
|
0
|
0
|
|
David
J. Raska (3)
|
2,000
|
2,000
|
0
|
0
|
|
JR
Holdings Group, LLC (3) (11)
|
4,000
|
4,000
|
0
|
0
|
|
Philip
W. Thomas, Jr. (3)
|
20,000
|
20,000
|
0
|
0
|
|
Scott
P. Batey (3)
|
4,000
|
4,000
|
0
|
0
|
|
John
Alexander (3)
|
4,000
|
4,000
|
0
|
0
|
|
Craig
W. Terry (3)
|
2,000
|
2,000
|
0
|
0
|
|
Millicent
D. Sherman (3)
|
2,000
|
2,000
|
0
|
0
|
|
Bill
& Joann Batey (3)
|
4,000
|
4,000
|
0
|
0
|
|
Craig
Camp (12)
|
636,000
|
20,000
|
616,000
|
2.49%
|
|
TAB
Properties, LLC (13)
|
508,000
|
20,000
|
488,000
|
1.95%
|
|
Thomas
M. Nardone (14)
|
508,000
|
20,000
|
488,000
|
1.95%
|
|
DS
Projects, LLC (15)
|
1,064,000
|
20,000
|
1,044,000
|
4.17%
|
|
D
& P Vasilos Investment, LLC (16)
|
500,000
|
20,000
|
480,000
|
1.92%
|
|
Michael
Marcum (17)
|
572,000
|
20,000
|
552,000
|
2.20%
|
|
Vincent
Floyd (18)
|
1,018,000
|
20,000
|
998,000
|
3.98%
|
|
Thomas
IRA (19)
|
1,696,000
|
20,000
|
1,676,000
|
6.69%
|
|
Leland
M. Thomas (19)
|
1,100,000
|
20,000
|
1,080,000
|
4,14%
|
|
River
Star, LLC (20)
|
1,000,000
|
20,000
|
980,000
|
3.76%
|
|
Total
|
656,000
|
|
(1)
|
Under
applicable SEC rules, a person is deemed to beneficially own securities
which the person has the right to acquire within 60 days through the
exercise of any option or warrant or through the conversion of a
convertible security. Also under applicable SEC rules, a person is deemed
to be the “beneficial owner” of a security with regard to which the person
directly or indirectly, has or shares (a) voting power, which includes the
power to vote or direct the voting of the security, or (b) investment
power, which includes the power to dispose, or direct the disposition, of
the security, in each case, irrespective of the person’s economic interest
in the security. Each listed selling security holder has the sole
investment and voting power with respect to all shares of common stock
shown as beneficially owned by such selling security holder, except as
otherwise indicated in the footnotes to the
table.
|
|
(2)
|
As
of April 10 , 2009, there were 26,058,000 shares of our common stock
issued and outstanding.
|
|
(3)
|
We
are registering 456,000 shares of our common stock (the number herewith is
given effective to the share purchase agreement dated January 28, 2009)
sold in our Regulation D Rule 506 offering completed in January
2009.
|
|
(4)
|
John
P. Bower has voting and dispositive control over securities held by John
P. Bower Revocable Living Trust.
|
|
(5)
|
Mary
Jane Bower has voting and dispositive control over securities held by Mary
Jane Bower Revocable Trust.
|
|
(6)
|
Mario
Apruzzese has voting and dispositive control over securities held by GBS,
LLC and BFADM, LLC.
|
|
(7)
|
Douglas
Perry Lalone has voting and dispositive control over securities held by
Douglas Perry Lalone Living Trust.
|
|
(8)
|
Joel
M. Ungar is our Chief Financial Officer and Principal Accounting
Officer.
|
|
(9)
|
Brent
Yax has voting and dispositive control over securities held by Awecomm
Technologies, LLC.
|
|
(10)
|
Mike
Szuderak has voting and dispositive control over securities held by Marx
Layne & Company.
|
|
(11)
|
Jerry
Hamling has voting and dispositive control over securities held by JR
Holdings Group, LLC.
|
|
(12)
|
Mr.
Camp received 386,000 shares of our common stock acquired through the
private placement officering and 250,000 shares of our common stock
converted on November 28, 2007 pursuant to a stock conversion
agreement.
|
|
(13)
|
TAB
Properties received 308,000 shares of our common stock acquired through
the private placement officering and 200,000 shares of our common stock
converted on November 28, 2007 pursuant to a stock conversion agreement.
Joe Lutheran has voting and dispositive control over securities held by
TAB Properties, LLC.
|
|
(14)
|
Mr.
Nardone received 200,000 shares of our common stock converted on November
28, 2007 and 308,000 shares of our common stock converted on January 16,
2009 pursuant to stock conversion
agreements.
|
|
(15)
|
DS
Projects received 426,000 shares of our common stock converted on January
3, 2008 and 638,000 shares of our common stock converted on January 14,
2009 pursuant to stock conversion agreements. Dewey Steffen has voting and
dispositive control over securities held by DS Projects,
LLC.
|
|
(16)
|
D
& P Vasilos Investment received 200,000 shares of our common stock
converted on January 3, 2008 and 300,000 shares of our common stock
converted on January 13, 2009 pursuant to stock conversion agreements.
Dimitri & Patty Vasilos have voting and dispositive control over
securities held by D & P Vasilos Investment,
LLC.
|
|
(17)
|
Mr.
Marcum received 226,000 shares of our common stock converted on January 3,
2008 and 346,000 shares of our common stock converted on January 14, 2009
pursuant to stock conversion
agreements.
|
|
(18)
|
Mr.
Floyd received 400,000 shares of our common stock converted on January 3,
2008 and 618,000 shares of our common stock converted on January 14, 2009
pursuant to stock conversion
agreements.
|
|
(19)
|
Leland
M. Thomas has voting and dispositive control over securities held by
Thomas IRA. He is a member of our Advisory
Board.
|
|
(20)
|
Nicholas
A. Cocco has voting and dispositive control over securities held by River
Star, LLC. He is a member of our Advisory
Board
|
The
selling security holders may sell some or all of their shares at a fixed price
of $0.25 per share until our shares are quoted on the OTC Bulletin Board and
thereafter at prevailing market prices or privately negotiated
prices. The offering price of $0.25 was determined by the price
shares were sold to our shareholders in a private placement memorandum and
adjusted in accordance with the Share Purchase Agreement and is a fixed price at
which the selling security holders may sell their shares until our common stock
is quoted on the OTC Bulletin Board, at which time the shares may be sold at
prevailing market prices or privately negotiated prices. Prior to being quoted
on the OTCBB, shareholders may sell their shares in private transactions to
other individuals. Although our common stock is not listed on a public exchange,
we will be filing to obtain a listing on the Over The Counter Bulletin Board
(OTCBB) concurrently with the filing of this prospectus. In order to be quoted
on the Bulletin Board, a market maker must file an application on
our behalf in order to make a market for our common stock. There can be no
assurance that a market maker will agree to file the necessary documents
with FINRA, nor can there be any assurance that such an application for
quotation will be approved. There is no assurance that an active
trading market for our shares will develop, or, if developed, that it will
be sustained. In the absence of a trading market or an active trading
market, investors may be unable to liquidate their investment or make any profit
from the investment. However, sales by selling security holder must
be made at the fixed price of $0.25 until a market develops for the
stock.
Once a
market has been developed for our common stock, the shares may be sold or
distributed from time to time by the selling stockholders directly to one or
more purchasers or through brokers or dealers who act solely as agents, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed prices, which may be
changed. The distribution of the shares may be effected in one or more of the
following methods:
|
·
|
ordinary
brokers transactions, which may include long or short
sales,
|
|
·
|
transactions
involving cross or block trades on any securities or market where our
common stock is trading, market where our common stock is
trading,
|
|
·
|
through
direct sales to purchasers or sales effected through
agents,
|
|
·
|
through
transactions in options, swaps or other derivatives (whether exchange
listed of otherwise), or exchange listed or otherwise),
or
|
|
·
|
any
combination of the foregoing.
|
In
addition, the selling stockholders may enter into hedging transactions with
broker-dealers who may engage in short sales, if short sales were permitted, of
shares in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also enter into option or other
transactions with broker-dealers that require the delivery by such
broker-dealers of the shares, which shares may be resold thereafter pursuant to
this prospectus.
Brokers,
dealers, or agents participating in the distribution of the shares may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders and/or the purchasers of shares for whom such
broker-dealers may act as agent or to whom they may sell as principal, or both
(which compensation as to a particular broker-dealer may be in excess of
customary commissions). Neither the selling stockholders nor we can presently
estimate the amount of such compensation. We know of no existing arrangements
between the selling stockholders and any other stockholder, broker, dealer or
agent relating to the sale or distribution of the shares. We will not
receive any proceeds from the sale of the shares of the selling security holders
pursuant to this prospectus. We have agreed to bear the expenses of the
registration of the shares, including legal and accounting fees, and such
expenses are estimated to be approximately $85,000.
General
Our
authorized capital stock consists of 120,000,000 shares of common stock, par
value $0.001 per share, and 10,000,000 shares of preferred stock, par value
$0.001 per share. We have not yet issued any preferred stock. There are no
provisions in our charter or by-laws that would delay, defer or prevent a change
in our control.
Common
Stock
We are
authorized to issue 120,000,000 shares of common stock. Currently we
have 26,058,000 common shares issued and outstanding.
The
holders of our common stock have equal ratable rights to dividends from funds
legally available if and when declared by our Board of Directors and are
entitled to share ratably in all of our assets available for distribution to
holders of common stock upon liquidation, dissolution or winding up of our
affairs. Our common stock does not provide the right to a preemptive,
subscription or conversion rights and there are no redemption or sinking fund
provisions or rights. Our common stock holders are entitled to one
non-cumulative vote per share on all matters on which shareholders may
vote.
All
shares of common stock now outstanding are fully paid for and non-assessable and
all shares of common stock which are being registered pursuant to
this registration statement are fully paid and
non-assessable. We refer you to our Articles of Incorporation, Bylaws
and the applicable statutes of the state of Nevada for a more complete
description of the rights and liabilities of holders of our
securities. All material terms of our common stock have been
addressed in this section.
Holders
of shares of our common stock do not have cumulative voting rights, which means
that the holders of more than 50% of the outstanding shares, voting for the
election of directors, can elect all of the directors to be elected, if they so
choose, and, in that event, the holders of the remaining shares will not be able
to elect any of our directors.
Dividends
We have
not paid any cash dividends to shareholders. The declaration of any
future cash dividends is at the discretion of our board of directors and
depends upon our earnings, if any, our capital requirements and
financial position, our general economic conditions, and other pertinent
conditions. It is our present intention not to pay any cash dividends
in the foreseeable future, but rather to reinvest earnings, if any, in our
business operations.
Convertible
Notes
On
November 28, 2007 and January 3, 2008, we entered into convertible promissory
notes with certain investors totaling $300,000. In addition, we issued
1,501 shares to these investors. In January 2009, we entered into stock
conversion agreements with these investors, pursuant to which we issued 2,300
shares of our common stock as conversion of promissory notes dated November 28,
2007 and January 3, 2008 including principal of $300,000 and interest of 23,000
at a conversion price of $133.00 and $500.00 per share,
respectively.
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had, or
is to receive, in connection with the offering, a substantial interest, direct
or indirect, in the registrant or any of its parents or subsidiaries. Nor was
any such person connected with the registrant or any of its parents or
subsidiaries as a promoter, managing or principal underwriter, voting trustee,
director, officer, or employee.
The
consolidated financial statements for the period ended July 31, 2008
included in this prospectus and the registration statement have been audited by
Rehmann Robson, P.C. to the extent and for the periods set forth in their report
appearing elsewhere herein and in the registration statement, and are included
in reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
Rehmann
Robson, P.C., the Company’s independent registered public accounting firm, has
performed reviews of the unaudited consolidated financial statements included
herein. Pursuant to Rule 436(c) of the Securities Act of 1933 (“Act”)
their report on these reviews should not be considered a “report” within the
meaning of sections 7 and 11 of the Act and the independent registered public
accounting firm liability under Section 11 does not extend to it.
CORPORATE
HISTORY AND STRUCTURE
Our
History
We are a
development stage company that was incorporated under the laws of the State of
Nevada on January 26, 2009. On January 28, 2009, we entered into a share
purchase agreement with SellMyBusiness, a corporation established under the laws
of the State of Michigan in August 2007, pursuant to which we acquired all of
the issued and outstanding shares of common stock of SellMyBusiness for
25,058,000 shares of our common stock. As a result, SellMyBusiness became our
wholly-owned subsidiary.
Our
operations are conducted through our wholly owned subsidiary SellMyBusiness
under the name “Sellmybusiness.com®” established on December 3, 2007. To
date, the Company’s activities have been limited to raising capital, obtaining
financing, constructing its website and administrative functions.
Sellmybusiness.com® provides a single web portal for interested parties to find,
buy and sell businesses, real estate and equipment and all the related services
needed to support the transaction, including financing, incorporation,
professional help and additional business resources. Sellmybusiness.com® intends
to support businesses of all sizes and types, including start-ups,
well-established companies, home-based businesses, closely-held companies,
multinational public corporations and franchises. Sellmybusiness.com®’s real
estate listing service assists people to buy, sell, lease or sublease commercial
or residential land and property. Sellmybusiness.com®’s equipment listing
service provides a portal to buy, sell or lease excess inventory, capital
equipment, raw materials, vehicles, aircraft, ships and rail
equipment.
Upon
inception of SellMyBusiness on August 2, 2007, we issued 6,500 shares to John
Maddox as founder shares for no consideration. On November
28, 2007, we issued 2,000 shares to Mark Lundquist as founder shares for no
consideration. On November 28, 2007 and January 3, 2008, we entered
into convertible promissory notes with certain investors totaling of $300,000.
In addition, we issued 1,501 shares to these investors. In January 2009, we
entered into stock conversion agreements with these investors, pursuant to which
we issued 2,300 shares of our common stock as conversion of promissory notes
dated November 28, 2007 and January 3, 2008 including principal of $300,000 and
interest of 23,000 at a conversion price of $133.00 and $500.00 per share,
respectively. In January 2009, we completed an offering in which we sold 228
shares of common stock at $500 per share in connection with our private
placement. Please note that the share numbers in this paragraph are given
before the effectiveness of share exchange agreement dated January 28,
2009.
Overview
SellMyBusiness.com®
(a wholly owned subsidiary of Halberd Corporation) provides a single web portal
for business people to find, buy and sell businesses, real estate and equipment
and all the related services needed to support the transaction, including
financing, incorporation, professional help and additional business
resources. SellMyBusiness.com intends to support businesses of all
sizes and types, including start-ups, well-established companies, home-based
businesses, closely-held companies, multi-national public corporations and
franchises. SellMyBusiness.com’s real estate listing service assists
people to buy, sell, lease or sub-lease commercial and residential land and
property. SellMyBusiness.com’s equipment listing service provides
business people with a portal to buy, sell or lease excess inventory, capital
equipment, raw materials, vehicles, aircraft, ships and rail
equipment. In its first month of operation, the site attracted over
half a million visitors.
Business
Model
The
strategy for SellMyBusiness.com is to become the recognized online total
solution provider for buying or selling a business and everything related to the
transaction. This strategy encompasses the following key
elements:
|
·
|
Listing
businesses for sale with a local, regional, national and international
reach.
|
|
·
|
Listing
real estate for sale or lease, particularly when linked to a business for
sale.
|
|
·
|
Listing
equipment for sale or lease, particularly when the equipment, assets and
inventory are linked to the business for
sale.
|
|
·
|
Special
confidential listing service for businesses, real estate and
equipment.
|
|
·
|
Special
pre-qualified buyer service for businesses, real estate and
equipment.
|
|
·
|
Professional
service provider referrals to assist in the purchase, sale, start-up or
operation of a business, such as attorneys, brokers, accountants, business
valuators and consultants.
|
|
·
|
Online
document management system for handling all paperwork involved in the sale
or lease of businesses, real estate and
equipment.
|
|
·
|
Business
resources for owners and executives, such as business books, white papers,
and important links.
|
|
·
|
Live
support.
|
|
·
|
Easy-to-navigate,
easy-to-understand website.
|
|
·
|
Multilingual
website versions.
|
|
·
|
Support
for all types of businesses: public corporations, private companies,
franchises, not-for-profits and home-based
businesses.
|
Revenue
is generated from five methods:
|
1)
|
fees
for listing businesses, real estate and equipment for sale or
lease;
|
|
2)
|
membership
registration fees for lead generation for professional service providers
in multiple categories;
|
|
3)
|
registration
fees for broker/dealers to have monthly or annual access rights for
selling or leasing businesses, real estate and
equipment;
|
|
4)
|
website
banner advertising;
|
|
5)
|
affiliate
fees (incorporation services, financing services, Amazon.com book sales,
etc.);
|
Growth is
attained through an aggressive and multi-channel marketing campaign focused on
user demographics. Many Internet-based start-ups and their potential
investors quickly look for IT-related specialists to lead the
company. Although SellMyBusiness.com is an Internet-based firm,
management believes the business is based more heavily on a
“marketing-to-the-proper-user” and “solution provider” model, rather than an
“IT-based” model. The co-founders already have prior experience in
launching web-based companies and implementing sophisticated enterprise and CRM
software. Currently, web development and support is provided by one
of the leading firms in the state, but will be brought inside the company if
deemed appropriate. However, management stresses that
SellMyBusiness.com is a solution provider company for business buyers and
sellers that runs on the web, not a web-based company that happens to provide
solutions for business people.
The
Concept
SellMyBusiness.com
was developed to fill a need in the marketplace. The Internet is gradually
moving from a product and service sales model to a solutions sale model.
SellMyBusiness.com is a complete business solution selling model and provides a
full complement of services needed to support the transition of a business from
one owner to another, addressing the difficulty in finding these services, and
how technology can play a part in providing a total solution.
Unique
Value Propositions
Currently
there are multiple competitive websites acting as repositories for buyers and
sellers of businesses, real estate and equipment, but nearly all only focus on
one of these three elements. Nine unique value propositions make
SellMyBusiness.com significantly different than its competition and place it in
a leadership role in the marketplace.
|
1.
|
Total
Selling Solution. None of the competitive websites merge
all facets of buying or selling a business such as: the sale or purchase
of the business entity and its related commercial property; the sale of
its inventory and all types of equipment, and; assistance in finding
professional help to support the transaction such as attorneys,
accountants, business valuators and financiers. Viewers want
(and need) a condensation of information and sources. Said
another way, the Internet is graduating from product sales to solution
sales. SellMyBusiness.com is the solution sale for
businesses.
|
|
2.
|
Professional
Service Provider Referrals. SellMyBusiness.com has
created a special web section to enlist paid membership from service
providers such as accountants, banks, lawyers, and business valuators to
help with introductions to clients in need of their
services. Over fifty categories have been
identified.
|
|
3.
|
Multi-media
Marketing and Live Support. Current competitive websites
lack presence in the marketplace, capturing only 5%-18% of all businesses
for sale. Based on management’s research, competitive sites
rely primarily on Internet search engine optimization and online
advertising
|
SellMyBusiness.com creates a
shift in this strategy by utilizing the global reach of the Internet coupled
with targeted multimedia advertising and public relations campaigns, and live
support. A recent article from the editors at Business.com stressing
this value about SellMyBusiness.com states, “And here’s something unique: live
reps are available to answer questions by phone!”1 The result of
these two market concepts is a company that exploits the Internet’s strengths –
primarily data driven – coupled with effective marketing and real people to
provide a truly unique, personal and valuable service.
|
4.
|
Designed
for Non-Web Focused Customers. The average age of
business owners in the U.S. is 56 years (the same in Australia and New
Zealand).2
3 This age
group is certainly not ignorant of the web, but they do not spend as much
time surfing the web as other younger demographic
groups. SellMyBusiness.com management has thus targeted a
portion of its marketing on this user demographic. Furthermore,
the website was developed to be simple, clean and clutter free to simplify
navigation for those viewers less web
savvy.
|
|
5.
|
Designed
for Short Attention Span Viewers. Executives, business
owners and entrepreneurs traditionally have short attention
spans. In order to provide important information about the site
without the need to read text, SellMyBusiness.com utilizes an online web
actor to speak directly to the viewer. No competitor uses web
actors.
|
|
6.
|
Local
Language Website. Although the
language of the Internet is English, not all website viewers speak
English. Thus, SellMyBusiness.com
intends to launch culturally relevant versions of the site in
multiple foreign languages.
|
|
7.
|
The
Business Vault®. SellMyBusiness.com offers a unique
feature, the Business
Vault Confidential Listing Service: a completely private and
confidential place to list a business, real estate and equipment for sale
and receive leads only from financially pre-qualified
buyers. Many business owners and executives do not wish to
publicly list, but would utilize the Internet if they knew their
information could be kept confidential and they would only receive contact
from parties that have the financial wherewithal for the
transaction.
|
|
8.
|
Business
Watch®. Business Watch provides
a service to buyers, allowing them to conduct a search for businesses,
real estate or equipment and then lock in the search
criteria. Then, whenever a listing meeting their search
criteria is added to the SellMyBusiness.com database the Business Watch service
automatically generates an email alerting the potential buyer to the new
listing. Business Watch assures
the buyer will not miss any viable purchasing
opportunities.
|
|
9.
|
Web-based Document
Management Portal. Once a business, real estate or
equipment purchase is agreed upon by a buyer and seller,
SellMyBusiness.com can provide a unique, centralized document management
system that allows all parties involved in the transaction (buyer, seller,
attorneys, brokers, mortgagers, etc.) to upload and share
documents. SellMyBusiness.com management has made an exclusive
arrangement with the developer of this document management system, a
company that has also developed special web-based real estate listing
modules currently used by international business brokers and an
international broker association..
|
1
Technology
Insider – News and Views from Business.com editors; Kehrer, Daniel, May
12, 2008, Business.com
2
Business Enterprise Institute; Brown John, 2007.
3
What it
means to be a baby boomer!; Dibb, Sharon, Bstar Pty Ltd.,
2007.
The
Market
According
to the U.S. Census Bureau there are approximately 13.1 million firms in the
U.S., generating over $22 billion in annual sales.4 The total
number of businesses that are for sale annually just in the United States is
estimated to be 1.1 million5 and this number is
expected to continue increasing as Baby Boomers sell off their companies to the
upcoming generations. John Brown of the Business Enterprise Institute
states one out of two business owners in the country [U.S.] plan on leaving
their business within the next ten years.6 SellMyBusiness.com
management estimates that Europe and the Asia-Pacific region triple this
number.
The
initial target market for SellMyBusiness.com is:
|
·
|
the
1.1 million sellers of
businesses (and related real estate and equipment) in the
U.S.;
|
|
·
|
the
resulting 1.1 million buyers of
businesses;
|
|
·
|
the
broker/dealer
network that will assist in the buying and selling of these
businesses;
|
|
·
|
the
individuals
(For Sale By Owners) that choose not to enlist the services of brokers,
and;
|
|
·
|
the
professional
service providers that provide a vast array of services for buyers
& sellers.
|
Follow-on
growth includes expansion of local language versions of SellMyBusiness.com into
targeted countries. SellMyBusiness.com management’s estimate for the
worldwide market is over 60 million companies with approximately 10 percent
changing hands each year. Approximately 20 million firms each exist
in the Americas, Europe and Asia/Middle East. This estimate is based
on data on China, India, Europe, Russia and Brazil789. A more
dramatic market size picture is drawn from a Global Entrepreneurship
Monitor study stating that out of the 40 GEM countries, accounting for
almost 4 billion out of a world population of 6.3 billion, about 50 million
new companies will
be launch each year (about 137,000 per day) with a subsequent number of firms
being closed (potentially sold).10
Competition
& Supporting Financial Model
Three
types of competitors exist for SellMyBusiness.com: 1) current web-based sites;
2) local and regional broker sites, and; 3) vertical market
specialists.
Competition - Current
Web-based Sites
There are
eight direct competitors to SellMyBusiness.com within the business sales arena
(i.e. not including real estate and equipment). This may appear to be
an indicator of a saturated market to most, but in fact it provides strong
insight into some critical areas.
Current
Web-based Sites
|
Domain
Name
|
Owner
|
Location
|
Launched
|
#
of Bus. For Sale
|
#
of Reg. Buyers
|
#
of Agents, Brokers, ect.
|
Countries
Listed
|
Selling
Fee
($/mo)
|
Broker
Fee
($/mo)
|
Visits/
Searches per. mo.
|
|
BizBuySells.com
|
LoopNet,
Inc.
|
San
Francisco, CA
|
1996
|
48,000
|
24,000
|
2,500
|
24
|
59.95
|
49.95
|
650,000
|
|
BizQuest.com
|
Bizquest,
LLC
|
Los
Angeles, CA
|
2005
|
42,000
|
100,000
|
n/a
|
33
|
54.95
|
39.95
|
n/a
|
|
BusinessBroker.net
|
BusinessBroker.net
|
Atlanta,
GA
|
Est
1999
|
30,000
|
n/a
|
n/a
|
15
|
99.95
|
39.95
|
500,000
|
|
BusinessDistrict.com
|
Business
District, LLC
|
Shawnee,
KS
|
2006
|
998
|
n/a
|
n/a
|
1
|
Free
|
Free
|
n/a
|
|
BusinessesFor
Sale.com
|
Dynamics
PLC
|
London,
UK
|
1996
|
51,000
|
200,000
|
1,000
|
110
|
79.95
|
29.95
|
330,000
|
|
BusinessMart.com
|
Business
Mart, Inc.
|
Parlin,
NJ
|
2003
|
n/a
|
n/a
|
n/a
|
2
|
69.95
|
34.95
|
n/a
|
|
BusinessNation.com
|
Itm
Holdings, LLC
|
Lakewood,
CO
|
1998
|
2,300
|
n/a
|
n/a
|
1
|
29.95
|
39.95
|
n/a
|
|
DaltonBusiness.com
|
Untied
Business Media Ltd.
|
London,
UK
|
2001
|
25,000
|
n/a
|
n/a
|
9
|
£60
($121)
|
n/a
|
n/a
|
|
SellMyBusiness.com
|
SellMyBusiness.com
Inc.
|
Bingham
Farms, MI
|
2008
|
3,500
|
Too
new
|
Too
new
|
1
|
59.95
|
29.95
|
550,000
|
First,
none of these companies appears to have exploited the market based on the small
market share. Research indicates the primary marketing methods used by the
competition is Internet Search Engine Optimization (SEO). SellMyBusiness.com
management has been unable to identify any significant marketing used by any of
the companies, except LoopNet which owns BizBuySell. BizBuySell has
an affiliate arrangement with Wall Street Journal Online
and runs small ads in business publications such as Fast
Company. BusinessNation.com appears to be unfocused and
offering business listing services as only one small piece of a larger strategy;
resulting in only 2,300 listings. BusinessDistrict.com is basing its
growth model on business social networking. The remaining six
sites appear to rely on Internet search engine results. Of the 1.1
million companies sold in the U.S. each year, SellMyBusiness.com management
estimates the amount listed online represents less than one percent of the total
world market potential.
4 2004
United States Census Bureau data.
5 2005 Business Reference
Guide; West, Tom, 2005.
6 Business
Enterprise Institute; Brown, John, 2007.
7
“Registered SMEs in China surpass 4.3 million”, Li Zibin, China Knowledge, Oct 22,
2007
8 “Growth
Opportunities for Indian SME’s”, Deloitte Touche Tohmatsu India Private Limited
(Source: Ministry of Micro, Small and Medium Enterprises, Government of India),
Apr 22, 2008, pg 5,
9 “General
Market Outlook – Macroeconomic Projections [on Brazil]”, Canadian Heritage,
www.pch.gc.ca, 2008.
10 “Small
Business”, Mason, Moya K., (Source: 2002 Global Entrepreneurship
Monitor survey), www.moyak.com, 2008.
-12-
Although
these sites are considered direct competitors which may indicate the need to
capture market share from them, SellMyBusiness.com personnel have conducted
field studies that verify business owners and brokers sign up on multiple sites
to ensure market visibility. Therefore, SellMyBusiness.com’s growth is based on
customers listing solely with SellMyBusiness.com and jointly with its
competitors.
The
following chart shows a matrix comparing the features and unique value
propositions offered by SellMyBusiness.com relative to its
competitors.
Figure
6: SellMyBusiness.com Features versus Competition
1 Adding
multilingual sites in 2009-10
2 For
brokers only
3
Sponsored links only
4 Five
categories only
Competition - Local and
Regional Broker Sites
The
second area of competition is the myriad of local and regional broker
websites. These sites are not considered viable competitors due to
their limited reach and local or regional focus.
Competition - Vertical
Market Specialists
The third
type of competitor is the web-based specialty market seller. These
firms focus on a narrow niche business industry and essentially hook up sellers
with brokers within that niche. However, as mentioned in the previous
“Competition - Current Web-based Sites” paragraph, due to the modest fees for
the listing and registration service, business owners and brokers list in
multiple sites to ensure market visibility.
Website
Visitor Analytics
The
SellMyBusiness.com website incorporates rich analytical tools for assessing
information about website traffic and visitors such as: sessions, pageviews,
hits, requested pages, downloads (from the SellMyBusiness.com website), page
drilldowns, entrance pages, exit pages, bounce rates, click paths, length of
pageview, depth of session, length of session, referrals, domains, user IP
addresses, browser details, and reasons for de-listing.
The
capture and translation of this data into visitor demographics creates a
powerful tool for SellMyBusiness.com management for pricing banner
advertisement, affiliate arrangements, corporate sponsorships and, potentially,
company purchase.
Intellectual
Property
SellMyBusiness.com
has secured three registered service marks:
|
1.
|
The
subsidiary company name and, thus, its domain name: SellMyBusiness.com®
|
|
2.
|
The
confidential listing and pre-qualified buyer service: Business
Vault®
|
|
3.
|
The
business listing alert service: Business
Watch®
|
Employees
As
of April 10 , 2009, the Company had three employees. The
Company plans to hire more persons on as-needed basis. The Company
has not entered into any collective bargaining agreements.
Our
mailing address is located at 30600 Telegraph Road, Suite 2175, Bingham Farms,
MI 48025. Phone-based web support is located at 10755 Vernon, Huntington Woods,
MI 48070 at a facility cost of $1,500 per month.
John C.
Maddox, our President, Chief Operating Officer and Director, is subject to
certain payments under a Chapter 13 Plan approved by United States Bankruptcy
Court on June 13, 2007. He paid $600 per month to certain creditors from May 31,
2007 to September 30, 2008. He is now paying $669.04 per month to these
creditors for twelve months, effective October 1, 2008.
Except
stated above, there are no legal proceedings pending or threatened against us or
our officers and directors.
There is
presently no public market for our shares of common stock. We anticipate
applying for trading of our common stock on the Over the Counter Bulletin Board
upon the effectiveness of the registration statement of which this prospectus
forms apart. However, we can provide no assurance that our shares of common
stock will be traded on the Bulletin Board or, if traded, that a public market
will materialize.
Holders of Our Common
Stock
As of the
date of this registration statement, we had 50 shareholders of our common
stock.
Rule 144
Shares
After
July 2009, all of the shares of our common stock held by 39 shareholders who
purchased their shares in the Regulation D 506 offering by us will become
available for resale to the public without any restriction.
Stock Option
Grants
To date,
we have not granted any stock options.
Transfer Agent and
Registrar:
Our
transfer agent is Globex Transfer, LLC, 780 Deltoan Blvd., Suite 202, Deltona,
Florida 32725 and its phone number is (386)206-1133.
Dividend
Policy:
Since
inception we have not paid any dividends on our common stock. We currently do
not anticipate paying any cash dividends in the foreseeable future on our common
stock, when issued pursuant to this offering. Although we intend to retain our
earnings, if any, to finance the exploration and growth of our business, our
Board of Directors will have the discretion to declare and pay dividends in the
future. Payment of dividends in the future will depend upon our earnings,
capital requirements, and other factors, which our Board of Directors may
deem relevant.
We have
filed with the SEC a registration statement on Form S-1 under the Securities Act
with respect to the common stock offered hereby. This prospectus, which
constitutes part of the registration statement, does not contain all of the
information set forth in the registration statement and the exhibits and
schedule thereto, certain parts of which are omitted in accordance with the
rules and regulations of the SEC. For further information regarding our
common stock and our company, please review the registration statement,
including exhibits, schedules and reports filed as a part thereof. Statements in
this prospectus as to the contents of any contract or other document filed as an
exhibit to the registration statement, set forth the material terms of such
contract or other document but are not necessarily complete, and in each
instance reference is made to the copy of such document filed as an exhibit
to the registration statement, each such statement being qualified in all
respects by such reference.
We are
also subject to the informational requirements of the Exchange Act which
requires us to file reports, proxy statements and other information with the
SEC. Such reports, proxy statements and other information along with the
registration statement, including the exhibits and schedules thereto, may be
inspected at public reference facilities of the SEC at 100 F Street N.E ,
Washington D.C. 20549. Copies of such material can be obtained from
the Public Reference Section of the SEC at prescribed rates. You may call the
SEC at 1-800-SEC-0330 for further information on the operation of the public
reference room. Because we file documents electronically with the SEC, you may
also obtain this information by visiting the SEC’s Internet website at http://www.sec.gov.
HALBERD
CORPORATION AND SUBSIDIARY
|
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
Bingham
Farms, Michigan
CONSOLIDATED
FINANCIAL STATEMENTS
For
the Three and Six Months Ended
January
31, 2009 and January 31, 2008 and
August
2, 2007 (date of inception) to January 31, 2009
|
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
Bingham
Farms, Michigan
CONSOLIDATED
FINANCIAL STATEMENTS
For
the Three and Six Months Ended
January
31, 2009 and January 31, 2008 and
August
2, 2007 (date of inception) to January 31, 2009
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
TABLE
OF CONTENTS
|
Consolidated
Financial Statements
|
Page
|
|
Review
Report of Independent Registered Public Accounting Firm
|
F-1
|
|
Consolidated
Balance Sheets as of January 31, 2009 (unaudited) and July 31,
2008
|
F-2
|
|
Consolidated
Statements of Operations for the three and six months
ended
|
|
|
January
31, 2009 and 2008 and August 2, 2007 (date of inception)
|
|
|
to
January 31, 2009 (unaudited)
|
F-3
|
|
Consolidated
Statements of Stockholders’ Equity (Deficit) for the six months
ended
|
|
|
January
31, 2009 and period ended January 31, 2008 (unaudited)
|
F-4
|
|
Consolidated
Statements of Cash Flows for the six months ended
|
|
|
January
31, 2009 and 2008 and August 2, 2007 (date of inception)
|
|
|
to
January 31, 2009 (unaudited)
|
F-5
|
|
Notes
to Interim Consolidated Financial Statements
|
F-6
– F-15
|
 |
5750
New King St., Suite 200
Troy, MI 48098
Ph: 248.952.5000
Fx: 248.952.5750
www.rehman.com
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of
Directors and Stockholders
Halberd
Corporation and Subsidiary
Bingham
Farms, Michigan
We have
reviewed the consolidated balance sheet of Halberd
Corporation and Subsidiary, a development stage company (the Company) as
of January 31, 2009, the related consolidated statements of operations for the
three and six month periods ended January 31, 2009 and 2008, and the related
consolidated statements of stockholders’ equity (deficit) and cash flows for the
six-month periods ended January 31, 2009 and 2008. These consolidated financial
statements are the responsibility of the Company’s management.
We
conducted our reviews in accordance with the standards established by the Public
Company Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit conducted in accordance with
standards established by the Public Company Accounting Oversight Board (United
States), the objective of which is the expression of an opinion regarding the
consolidated financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on
our reviews, we are not aware of any material modifications that should be made
to the consolidated financial statements referred to above in order for them to
conform with accounting principles generally accepted in the United States of
America.
We have
previously audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheet of
Halberd
Corporation and Subsidiary as of July 31, 2008, and the related
consolidated statements of operations, stockholders’ deficit, and cash flows for
the period August 2, 2007 through July 31, 2008 (not presented herein); and in
our report dated January 29, 2009, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information
set forth in the accompanying consolidated balance sheet as of July 31, 2008, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
|
/s/
Rehmann Robson
|
|
Rehmann
Robson
P.C.
|
Troy,
Michigan
April 9,
2009
|
(a
development stage company)
|
||||||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
|
January
31
|
July
31,
|
||||||
|
2009
|
2008
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents, equal to total current assets
|
$ | 3,374 | $ | 1,387 | ||||
|
Property
and equipment, net
|
466,817 | 314,221 | ||||||
|
Trademarks
|
11,096 | 8,770 | ||||||
|
Deferred
income taxes
|
- | 17,330 | ||||||
|
Total
assets
|
$ | 481,287 | $ | 341,708 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
|
Liabilities
|
||||||||
|
Accounts
payable
|
$ | 139,941 | $ | 17,959 | ||||
|
Accrued
expenses
|
13,469 | 17,386 | ||||||
|
Deferred
revenue
|
1,655 | 1,510 | ||||||
|
Due
to officers
|
74,130 | 30,048 | ||||||
|
Line-of-credit
due to stockholder
|
28,327 | 10,900 | ||||||
|
Convertible
notes payable
|
- | 300,000 | ||||||
|
Total
liabilities (all current)
|
257,522 | 377,803 | ||||||
|
Stockholders'
equity (deficit) (Note 5)
|
||||||||
|
Common
stock - $0.001 par value; 120,000,000 shares
|
||||||||
|
authorized,
25,058,000 and 20,002,000 shares issued and
|
||||||||
|
outstanding
at January 31, 2009 and July 31, 2008,
|
||||||||
|
respectively
|
505 | - | ||||||
|
Additional
paid-in capital
|
423,995 | - | ||||||
|
Deficit
accumulated during the development stage
|
(200,735 | ) | (36,095 | ) | ||||
|
Total
stockholders' equity (deficit)
|
223,765 | (36,095 | ) | |||||
|
Total
liabilities and stockholders' equity (deficit)
|
$ | 481,287 | $ | 341,708 | ||||
The
accompanying notes are an integral part of these interim consolidated financial
statements.
F-2
|
HALBERD
CORPORATION AND SUBSIDIARY
|
||||||||||||||||||||
|
(a
development stage company)
|
||||||||||||||||||||
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
||||||||||||||||||||
|
Cumulative
|
||||||||||||||||||||
|
Period
From
|
||||||||||||||||||||
|
August
2, 2007
|
||||||||||||||||||||
|
(date
of inception)
|
||||||||||||||||||||
|
Three
Months Ended January 31
|
Six
Months Ended January 31
|
to
January 31
|
||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
2009
|
||||||||||||||||
|
Net
sales
|
$ | 1,266 | $ | - | $ | 5,092 | $ | - | $ | 12,108 | ||||||||||
|
Cost
of sales
|
385 | - | 913 | - | 1,559 | |||||||||||||||
|
Gross
margin
|
881 | - | 4,179 | - | 10,549 | |||||||||||||||
|
Operating
expenses
|
120,913 | 57,466 | 135,790 | 57,482 | 179,877 | |||||||||||||||
|
Operating
loss
|
(120,032 | ) | (57,466 | ) | (131,611 | ) | (57,482 | ) | (169,328 | ) | ||||||||||
|
Other
income (expense)
|
||||||||||||||||||||
|
Interest
income
|
- | - | - | - | 1,253 | |||||||||||||||
|
Interest
expense
|
(7,731 | ) | (8,237 | ) | (15,699 | ) | (8,237 | ) | (32,660 | ) | ||||||||||
|
Other
expense, net
|
(7,731 | ) | (8,237 | ) | (15,699 | ) | (8,237 | ) | (31,407 | ) | ||||||||||
|
Loss
before income taxes
|
(127,763 | ) | (65,703 | ) | (147,310 | ) | (65,719 | ) | (200,735 | ) | ||||||||||
|
Income
taxes
|
(23,950 | ) | - | (17,330 | ) | - | - | |||||||||||||
|
Net
loss
|
$ | (151,713 | ) | $ | (65,703 | ) | $ | (164,640 | ) | $ | (65,719 | ) | $ | (200,735 | ) | |||||
|
Basic
and diluted loss per common share
|
* | * | * | * | * | |||||||||||||||
|
Weighted
average number of common
|
||||||||||||||||||||
|
shares
outstanding, basic and fully diluted
|
20,844,666 | 10,001 | 20,423,335 | 10,001 | 20,142,441 | |||||||||||||||
* less than
$0.01
The
accompanying notes are an integral part of these interim consolidated financial
statements.
F-3
|
HALBERD
CORPORATION AND SUBSIDIARY
|
||||||||||||||||||||
|
(a
development stage company)
|
||||||||||||||||||||
|
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
|
||||||||||||||||||||
|
Additional
|
Deficit
Accumulated
During
the
|
Total
|
||||||||||||||||||
|
Common
Stock
|
Paid-in
|
Development
|
Stockholders'
|
|||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Stage
|
Deficit
|
||||||||||||||||
|
Balances
- August 2, 2007
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
|
Common
stock issued
|
10,001 | - | - | - | - | |||||||||||||||
|
Net
loss
|
- | - | - | (65,719 | ) | (65,719 | ) | |||||||||||||
|
Balances
- January 31, 2008
|
10,001 | $ | - | $ | - | $ | (65,719 | ) | $ | (65,719 | ) | |||||||||
|
|
||||||||||||||||||||
|
Additional
|
Deficit
Accumulated
During
the
|
Total
Stockholders'
|
||||||||||||||||||
|
Common
Stock
|
Paid-in
|
Development
|
Equity
|
|||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Stage
|
(Deficit)
|
||||||||||||||||
|
Balances
- August 1, 2008 *
|
20,002,000 | $ | - | $ | - | $ | (36,095 | ) | $ | (36,095 | ) | |||||||||
|
Conversion
of notes payable and accrued interest
|
4,600,000 | 460 | 322,540 | - | 323,000 | |||||||||||||||
|
Private
placement during January 2009 at $0.22/share
|
374,000 | 37 | 80,963 | - | 81,000 | |||||||||||||||
|
Shares
issued for consultingservices during January 2009
at $0.25/share
|
82,000 | 8 | 20,492 | - | 20,500 | |||||||||||||||
|
Net
loss
|
- | - | - | (164,640 | ) | (164,640 | ) | |||||||||||||
|
Balances
- January 31, 2009
|
25,058,000 | $ | 505 | $ | 423,995 | $ | (200,735 | ) | $ | 223,765 | ||||||||||
|
*
As adjusted to reflect recapitalization - Note 1
|
||||||||||||||||||||
The
accompanying notes are an integral part of these interim consolidated financial
statements.
F-4
|
HALBERD
CORPORATION AND SUBSIDIARY
|
||||||||||||
|
(a
development stage company)
|
||||||||||||
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
||||||||||||
|
Cumulative
|
||||||||||||
|
Period
From
|
||||||||||||
|
August
2, 2007
|
||||||||||||
|
(date
of inception)
|
||||||||||||
|
Six
Months Ended January 31
|
to
January 31
|
|||||||||||
|
2009
|
2008
|
2009
|
||||||||||
|
Cash
flows from operating activities
|
||||||||||||
|
Net
loss
|
$ | (164,640 | ) | $ | (65,719 | ) | $ | (200,735 | ) | |||
|
Adjustments
to reconcile net loss to net cash
|
||||||||||||
|
provided
by (used in) operating activities
|
||||||||||||
|
Depreciation
|
1,423 | 183 | 2,846 | |||||||||
|
Deferred
income tax valuation allowance
|
17,330 | - | - | |||||||||
|
Changes
in operating assets and liabilities that
|
||||||||||||
|
provided
(used) cash
|
||||||||||||
|
Accounts
receivable - other
|
- | (20,000 | ) | - | ||||||||
|
Prepaid
expenses
|
- | (11,500 | ) | - | ||||||||
|
Accounts
payable and accrued expenses
|
161,565 | 1,800 | 196,910 | |||||||||
|
Deferred
revenue
|
145 | - | 1,655 | |||||||||
|
Due
to officers
|
44,082 | 48 | 74,130 | |||||||||
|
Net
cash provided by (used in)
|
||||||||||||
|
operating
activities
|
59,905 | (95,188 | ) | 74,806 | ||||||||
|
Cash
flows from investing activities
|
||||||||||||
|
Trademark
costs
|
(2,326 | ) | (2,500 | ) | (11,096 | ) | ||||||
|
Purchases
of property and equipment,
|
||||||||||||
|
including
website costs
|
(154,019 | ) | (53,375 | ) | (469,663 | ) | ||||||
|
Net
cash used in investing activities
|
(156,345 | ) | (55,875 | ) | (480,759 | ) | ||||||
|
Cash
flows from financing activities
|
||||||||||||
|
Net
stockholder line-of-credit borrowings
|
17,427 | - | 28,327 | |||||||||
|
Issuance
of convertible notes payable
|
- | 300,000 | 300,000 | |||||||||
|
Proceeds
from private placement, net of
|
||||||||||||
|
offering
costs of $12,500
|
81,000 | - | 81,000 | |||||||||
|
Net
cash provided by financing activities
|
98,427 | 300,000 | 409,327 | |||||||||
|
Net
increase in cash and cash equivalents
|
1,987 | 148,937 | 3,374 | |||||||||
|
Cash
and cash equivalents - beginning of period
|
1,387 | - | - | |||||||||
|
Cash
and cash equivalents - end of period
|
$ | 3,374 | $ | 148,937 | $ | 3,374 | ||||||
|
Supplemental
disclosures of noncash financing activities:
|
||||||||||||
|
Issuance
of 82,000 shares of common stock in
|
||||||||||||
|
exchange
for consulting services
|
$ | 20,500 | $ | - | $ | 20,500 | ||||||
|
Conversion
of notes payable to common stock
|
$ | 323,000 | $ | - | $ | 323,000 | ||||||
The
accompanying notes are an integral part of these interim consolidated financial
statements.
F-5
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1.
BUSINESS
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles
of Consolidation
The
consolidated financial statements include the accounts of Halberd
Corporation and its wholly owned subsidiary Sellmybusinessnow.com,
Inc. All intercompany balances and transactions have been
eliminated in consolidation.
Organization,
Nature of Business (including development stage), and Basis of
Presentation
Sellmybusinessnow.com,
Inc., is a development stage company that was incorporated under the laws
of the state of Michigan on August 2, 2007. The Company began
operating under the name “Sellmybusiness.com®” on December 3,
2007. To date, the Company’s activities have been limited to raising
capital, obtaining financing, constructing its website and administrative
functions. Sellmybusiness.com® intends to provide a single
web portal for interested parties to find, buy and sell businesses, real estate
and equipment and all the related services needed to support the transaction,
including financing, incorporation, professional help and additional business
resources. Sellmybusiness.com® intends to support
businesses of all sizes and types, including start-ups, well-established
companies, home-based businesses, closely-held companies, multinational public
corporations and franchises. Sellmybusiness.com®’s real estate listing
service will assist business people to buy, sell, lease or sublease commercial
land and property. Sellmybusiness.com®’s equipment listing
service will provide a portal to buy, sell or lease excess inventory, capital
equipment, raw materials, vehicles, aircraft, ships and rail
equipment.
On
January 26, 2009, Halberd
Corporation, a Nevada corporation, was formed by Sellmybusinessnow.com,
Inc.’s founders in conjunction with a legal reorganization of the
Company. Halberd
Corporation is structured to act as the parent company of Sellmybusinessnow.com,
Inc. As part of this action, and effective on January 28,
2009, all of the issued and outstanding shares of Sellmybusinessnow.com,
Inc. common stock were exchanged on a 2,000-to-1 basis for Halberd
Corporation common stock. As a result, the accompanying
consolidated financial statements reflect this reorganization and are presented
on a consolidated basis and are labeled as those of the parent
company. Halberd
Corporation and Subsidiary are collectively referred to as the
“Company”.
The
Company has adopted a fiscal year end of July 31.
F-6
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Basis
of Accounting
The
accompanying unaudited consolidated financial statements have been prepared in
accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP) for
interim financial information. In the opinion of management, all
adjustments considered necessary for a fair presentation have been
included. The results of operations for the six months ended January
31, 2009 are not necessarily indicative of the results that may be expected for
the year ended July 31, 2009.
Use
of Estimates
The
preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States 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 consolidated financial statements and the reported amounts of
income and expenses during the reporting period. Actual results could
differ from those estimates.
Segment
Reporting
The
Company has determined that it does not have any separately reportable business
segments at January 31, 2009.
Cash
and Cash Equivalents
Cash and
cash equivalents consist of cash on hand and demand deposits in
banks. The Company considers all highly liquid investments purchased
with original maturities of six months or less to be cash
equivalents.
Revenue
Recognition
The
Company utilizes the guidance in Securities and Exchange Commission (SEC) Staff
Accounting Bulletin (SAB) No. 104, Revenue Recognition, to
recognize revenue. Under SAB No. 104, revenue is recognized only when
persuasive evidence of an agreement exists, delivery of the service has
occurred, the sales price is fixed or determinable and collectability is
reasonably assured. Payments received in advance of services being rendered are
recorded as deferred revenue and recognized on a straight-line basis over the
service period.
F-7
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
As the
Company is in the development stage, it has generated limited revenues during
the period ended January 31, 2009. However, management believes the
Company will principally derive its future revenue from customers that pay fees
via credit card through the web site for a suite of services to market and
search for commercial real estate and operating businesses. These services
include a premium membership that provides the customer unlimited access to
listings, maximized exposure for their listings, along with enhanced services to
market their listings.
Management
also anticipates the Company will earn revenue from other sources including
advertising revenues, which will be recognized ratably over the period in which
the advertisement is displayed on the web site, provided that no significant
obligations remain and collection of the resulting receivable is probable.
Advertising rates are dependent on the services provided and the placement of
the advertisements.
Property
and Equipment (including web site costs)
Costs
incurred to develop the Company’s web site, Sellmybusiness.com®,
are capitalized or expensed, as applicable, in accordance with the Financial
Accounting Standards Board’s Emerging Issues Task Force Issue 00-2, Accounting for Web Site Development
Costs (EITF 00-2), which addresses whether certain development costs
should be capitalized or expensed. Exhibit 00-2A of EITF 00-2 breaks
potential web site development costs into 34 distinct potential activities,
among four stages: Planning; Web Site Application and Infrastructure
Development; Graphics and Content Development; and
Operating. Management analyzes the nature of costs incurred relative
to these stages and either capitalizes or expenses the related costs in
accordance with EITF 00-2. Because the Company’s current web
site development costs incurred relate principally to development and testing,
the Company is generally capitalizing these costs.
Management
periodically reviews these assets to determine whether carrying values have been
impaired.
Depreciation
and Amortization
Depreciation
on equipment is computed using the straight-line method over the estimated
useful lives of the related assets which range from three to seven
years. Amortization of web site costs did not commence during the
period ended January 31, 2009 since the final operating version of the site was
not completed as of that date.
Trademark
Costs
The
Company has capitalized costs to obtain trademarks registered for its three
service marks Sellmybusiness.com®, Business Vault®, and Business
Watch®. Such costs principally relate to legal fees
incurred. These intangible assets have been determined to have a life
of 15 years and the Company will begin amortizing them when full website
operations begin (scheduled for May 2009).
F-8
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Income
Taxes
Deferred
income tax assets and liabilities are computed annually for differences between
the financial statement and tax bases of assets and liabilities that will result
in taxable or deductible amounts in the future, based on enacted tax laws and
rates applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be
realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities. Deferred income taxes relate principally to the
Company’s net operating loss carry forward.
Concentration
Risks
Financial
instruments that potentially subject the Company to a concentration of credit
risk consist of cash and cash equivalents and when they exist, trade accounts
receivable. Cash and cash equivalents are deposited with high credit
quality financial institutions. The Company’s revenue and accounts
receivable are primarily derived from credit card transactions with subscribers
and are typically settled within two to three business days.
Fair
Value of Financial Instruments
The
Company’s financial instruments, including cash and cash equivalents, accounts
receivable, accounts payable and accrued liabilities, are carried at cost, which
approximates their fair value because of the short-term maturity of these
instruments.
Net
Income (loss) Per Share
Net
income (loss) per share is calculated under the provisions of Statement of
Financial Accounting Standards (SFAS) No. 128, Earnings Per
Share. “Diluted” reflects the potential dilution of all common
stock equivalents except in cases where the effect would be
anti-dilutive. Common stock equivalents of 4,508,000 were excluded
from net loss per diluted share for all prior periods presented as this effect
would have been anti-dilutive. These common stock equivalents were
converted to common stock during January 2009 and as such are reflected in
weighted average common shares outstanding for the periods ended January 31,
2009.
F-9
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Recent
Accounting Pronouncements
On August
1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements,”
(SFAS 157), which defines fair value, establishes a framework for measuring fair
value under accounting principles
generally accepted in the United States, and enhances disclosures about fair
value measurements. The Company elected to delay the application of SFAS 157 to
nonfinancial assets and nonfinancial liabilities, as allowed by FASB Staff
Position (FSP) SFAS 157-2. FSP SFAS 157-3 clarifies the application of SFAS 157
in a market that is not active. SFAS 157 (as amended) applies whenever other
standards require (or permit) assets or liabilities to be measured at fair value
and, therefore, does not expand the use of fair value in any new circumstances.
Fair value is defined as the exchange price that would be received to sell an
asset or paid to transfer a liability in the principal or most advantageous
market for the asset or liability in an orderly transaction (i.e., not a forced
transaction, such as a liquidation or distressed sale) between market
participants at the measurement date. SFAS 157 (as amended) clarifies that fair
value should be based on the assumptions market participants would use when
pricing an asset or liability and establishes a fair value hierarchy that
prioritizes the information used to develop those assumptions. The fair value
hierarchy gives the highest priority to quoted prices in active markets and the
lowest priority to unobservable data. SFAS 157 (as amended) requires fair value
measurements to be separately disclosed by level within the fair value
hierarchy. For assets and liabilities recorded at fair value, it is the
Company’s policy to maximize the use of observable inputs and minimize the use
of unobservable inputs when developing fair value measurements for those items
for which there is an active market. In cases where the market for a financial
asset or liability is not active, the Company includes appropriate risk
adjustments that market participants would make for nonperformance and liquidity
risks when developing fair value measurements.
Fair
value measurements for assets and liabilities where there exists limited or no
observable market data and, therefore, are based primarily upon estimates, are
often calculated based on the economic and competitive environment, the
characteristics of the asset or liability and other factors. Therefore, the
results cannot be determined with precision and may not be realized in an actual
sale or immediate settlement of the asset or liability. Additionally, there may
be inherent weaknesses in any calculation technique, and changes in the
underlying assumptions used, including discount rates and estimates of future
cash flows, could significantly affect the results of current or future values.
The initial adoption of SFAS No. 157 did not have any impact on the Company’s
financial position or operations.
F-10
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations,” (SFAS
141(R)), which replaces SFAS 141. SFAS 141(R) establishes principles and
requirements for recognition and measurement of assets, liabilities and any
non-controlling interest acquired due to a business combination. Under SFAS
141(R) the entity that acquires the business (whether in a full or partial
acquisition) may recognize only the assets acquired, the liabilities assumed,
and any non-controlling interest in the acquiree at the acquisition date,
measured at fair value. SFAS 141(R) requires the acquirer to recognize goodwill
as of the acquisition date, measured as a residual. Under SFAS 141(R),
acquisition-related transaction and restructuring costs will be expensed as
incurred rather than treated as part of the acquisition cost and included in the
amount recorded for assets acquired. SFAS 141(R) is effective for fiscal years
beginning after December 15, 2008. Accordingly, the Company will apply the
provisions of SFAS 141(R) for acquisitions completed after July 31,
2009.
In April
2008, the FASB issued FASB Staff Position, No. 142-3, “Determination of the Useful Life of
Intangible Assets” (“FSP 142-3”). This FSP amends the factors
that should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under SFAS No. 142,
“Goodwill and Other Intangible
Assets”. The intent of this FSP is to improve the consistency
between the useful life of a recognized intangible asset under SFAS No. 142 and
the period of expected cash flows used to measure the fair value of the asset
under SFAS No. 141(R), “Business Combinations,” and other U.S. generally
accepted accounting principles. This FSP is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years and early adoption is
prohibited. Accordingly, this FSP is effective for the Company on
August 1, 2009. The Company does not believe the adoption of FSP
142-3 will have a material impact on its financial position, results of
operations or cash flows.
In June
2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating
Securities,” (FSP EITF 03-6-1). FSP EITF 03-6-1 clarifies that unvested
share-based payment awards that contain non-forfeitable rights to dividends or
dividend equivalents are considered participating securities and should be
included in the calculation of basic earnings per share using the two-class
method prescribed by SFAS 128, “Earnings Per Share.” FSP EITF
03-6-1 is effective for financial statements issued for fiscal years and interim
periods beginning after December 15, 2008. All prior period earnings per share
amounts presented are required to be adjusted retrospectively. Accordingly, the
Company will adopt the provisions of FSP EITF 03-6-1 on February 1,
2009. The Company does not expect the adoption of the provisions of
FSP EITF 03-6-1 to have a material effect on the Company’s financial condition
and results of operations.
F-11
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Other
recent accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies are not expected to apply to the Company or have
a material impact on the Company’s reported results of operations on a per share
basis.
2.
PROPERTY
AND EQUIPMENT
Property
and equipment consists of the following assets at:
|
January
31,
2009
|
July
31,
2008
|
|||||||
|
Web
site costs
|
$ | 456,288 | $ | 302,269 | ||||
|
Phone
system
|
8,464 | 8,464 | ||||||
|
Computer
equipment
|
4,911 | 4,911 | ||||||
|
Total
|
469,663 | 315,644 | ||||||
|
Less
accumulated depreciation
|
2,846 | 1,423 | ||||||
|
Property
and equipment, net
|
$ | 466,817 | $ | 314,221 | ||||
3.
RELATED PARTY TRANSACTIONS (including debt and leases)
The
Company’s majority stockholder has provided a $75,000 revolving line of credit
to the Company. Outstanding advances bear interest at 10% per annum,
and any such advances are due May 1, 2009. A total of $28,327 and
$10,900 was outstanding as of January 31, 2009 and July 31, 2008,
respectively. Interest of $1,421 and $160 on such advances is
included with accrued expenses in the accompanying balance sheet at January 31,
2009 and July 31, 2008, respectively.
The
Company incurred rent expense of $3,100 for the initial period ended July 31,
2008 under a month to month lease with an entity in which the Company’s majority
stockholder is an owner. Beginning October 1, 2008, the Company began
leasing space from the majority stockholder for $1,500 per month on a month to
month basis. Rent expense under these agreements for the six months
ended January 31, 2009 was $9,000.
F-12
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The Company leases its domain name from
an entity owned by its majority stockholder. Rent expense for the six
months ended January 31, 2009 and 2008 were $262 and $-0-, respectively. The
related liability is included in accrued expenses at January 31,
2009. The monthly rent for use of the domain name is 5% of
revenues.
The
Company accrues $5,000 a month for services provided by its majority and a
minority stockholder. Such amounts are included in the accompanying
balance sheet under “Due to Officers”, as well as a miscellaneous amount of $48
due to the majority stockholder. The balance due to officers as of
January 31, 2009 and July 31, 2008 are $74,130 and $30,048,
respectively.
4.
CONVERTIBLE DEBT
On
January 1, 2008, the Company issued convertible promissory notes totaling
$300,000 to eight stockholders, who own a combined 15% of the Company’s common
stock. The notes bore interest at 10% per annum and were due on the
earlier of the Company registering any of its securities under the Securities
Act of 1933, or eighteen months after the date of the note (April through July
2009). In addition, each of the note holders could convert the entire
outstanding amount of their note including accrued interest into shares of the
Company’s common stock at any time up to the maturity date of the respective
note.
During
January 2009, all of the convertible debt was converted to equity, resulting in
the issuance of 4,508,000 shares of the Company’s common stock. Related
accrued interest of $23,000 on these loans was also converted to equity,
resulting in the issuance of 92,000 shares of the Company’s common
stock. All shares in this note have been adjusted to reflect the
exchange discussed in Note 1.
5.
CAPITAL STOCK
The
Company’s initial common shares issued to its two founders and eight initial
investors were issued for no consideration and are thus carried at a value of
zero in the accompanying balance sheet as no services were performed or were
required to be performed in order for any of the original investors to obtain
their shares. Management determined the fair value of the initial
shares to be zero given the start-up nature of the business which included a
lack of operational history, lack of share liquidity and lack of corporate
financing for operations at the time of issuance.
F-13
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The
Company has authorized 10,000,000 shares of preferred stock at a par value of
$0.001. No preferred shares are issued or outstanding as of January
31, 2009. Any preferences, rights, voting powers, restrictions,
dividend limitations, qualifications, and terms and conditions of redemption
shall be set forth and adopted by a board of directors’ resolution prior to the
issuance of any series of preferred stock.
During
January 2009, the Company issued a private placement memorandum (“PPM”) to
increase the number of shareholders to a minimum of 35. The PPM
resulted in the Company issuing 374,000 shares of common stock to 32 additional
stockholders in exchange for cash consideration of $93,500. The
offering costs of $12,500 were offset against the proceeds. In addition, during
January 2009 seven vendors were owed a total of $20,500 as of December 31, 2008
were issued 82,000 shares of common stock in settlement of amounts owed to
them.
6.
INCOME
TAXES
The
Company establishes valuation allowances in accordance with the provisions of
SFAS No. 109, Accounting for
Income Taxes. The Company continually reviews the
realizability of deferred tax assets and recognizes these benefits only as
reassessment indicates that it is more likely than not that such tax benefits
will be realized.
As of
January 31, 2009, the Company has a net operating loss carryforward for federal
income tax purposes of approximately $193,630, which expires through 2023,
available to reduce federal taxable income, if any, of future
periods.
Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets , liabilities for financial reporting purposes and
the amounts used for income tax purposes. Significant components of
the Company’s deferred income tax liabilities and assets are summarized as
follows as of January 31, 2009 and July 31, 2008:
F-14
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
NOTES
TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
January
31,
2009
|
July
31,
2008
|
|||||||
|
Deferred
tax assets:
|
||||||||
|
Net operating loss
carry forward
|
$ | 193,630 | $ | 48,500 | ||||
|
Depreciation and
other
|
4,270 | 2,400 | ||||||
|
Total
deferred tax assets
|
197,900 | 50,900 | ||||||
|
Expected
tax rate
|
34% | 34% | ||||||
| $ | 67,275 | $ | 17,330 | |||||
|
Less
valuation allowance
|
(67,275 | ) | - | |||||
|
Net
deferred income tax asset
|
$ | - | $ | 17,330 | ||||
At
January 31, 2009, the Company did not recognize any current or deferred federal
or state income tax benefit because it has sustained operating losses since
inception. The Company has provided a full valuation allowance on the
deferred tax asset, consisting primarily of net operating loss carryforwards,
because of uncertainty regarding its realizability.
Effective
January 1, 2008, the state of Michigan enacted the Michigan Business Tax Act
(“MBTA”), replacing the Michigan single business tax with a business income tax
and modified gross receipts tax. The enactment of the MBTA does not
have a material impact on the consolidated financial statements of the Company
to date.
7.
OPERATING
LEASE
The
Company utilizes the services of a third party that houses and maintains its web
site server. Such services are provided under a month to month lease
for $650 per month.
8. SUBSEQUENT
EVENT
The
Company is preparing to become a publicly traded company and filed a Form
S-1 Registration Statement with the Securities and Exchange Commission on March
13, 2009.
* * * *
*
|
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
Bingham
Farms, Michigan
CONSOLIDATED
FINANCIAL STATEMENTS
For
the Period
August
2, 2007 (date of inception)
to
July 31, 2008
|
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
Bingham
Farms, Michigan
CONSOLIDATED
FINANCIAL STATEMENTS
For
the Period
August
2, 2007 (date of inception)
to
July 31, 2008
HALBERD
CORPORATION AND SUBSIDIARY
(a
development stage company)
TABLE
OF CONTENTS
|
Page
|
|
|
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
Consolidated
Financial Statements
|
|
| August 2, 2007 (date of inception) to July 31, 2008 | |
|
Consolidated Balance Sheets
|
F-2
|
|
Consolidated Statements of
Operations
|
F-3
|
|
Consolidated Statements of
Stockholders’ Deficit
|
F-4
|
|
Consolidated Statements of Cash
Flows
|
F-5
|
|
Notes to Interim Consolidated
Financial Statements
|
F-6
-
F-16
|
* * * *
*
|
|
5750
New King St., Suite 200
Troy, MI 48098
Ph: 248.952.5000
Fx: 248.952.5750
www.rehman.com
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
January
26, 2009
Board of
Directors and Stockholders
Halberd
Corporation and Subsidiary
Bingham
Farms, Michigan
We have
audited the accompanying consolidated balance sheet of Halberd
Corporation and Subsidiary, (a development stage company), (“the
Company”) as
of July 31, 2008, and the related consolidated statements of operations,
stockholders’ deficit, and cash flows for the period August 2, 2007 (date
of inception) to July 31, 2008. These consolidated financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Halberd
Corporation and Subsidiary as of July 31, 2008, and the results of their
consolidated operations and their cash flows for the period August 2, 2007 (date
of inception) to July 31, 2008 in conformity with accounting principles
generally accepted in the United States of America.
/s/
Rehmann Robson
Rehmann Robson, P.C.
Troy,
Michigan
|
HALBERD
CORPORATION AND SUBSIDIARY
|
||||
|
(a
development stage company)
|
||||
|
CONSOLIDATED
BALANCE SHEET
|
||||
|
JULY
31, 2008
|
||||
|
ASSETS
|
||||
|
Cash
and cash equivalents (equal to total current assets)
|
$ | 1,387 | ||
|
Property
and equipment, net
|
314,221 | |||
|
Trademarks
|
8,770 | |||
|
Deferred
income taxes
|
17,330 | |||
|
Total
assets
|
$ | 341,708 | ||
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||
|
Liabilities
|
||||
|
Accounts
payable
|
$ | 17,959 | ||
|
Accrued
expenses
|
17,386 | |||
|
Deferred
revenue
|
1,510 | |||
|
Due
to officers
|
30,048 | |||
|
Line
of credit due to stockholder
|
10,900 | |||
|
Convertible
notes payable
|
300,000 | |||
|
Total
liabilities ( all current)
|
377,803 | |||
|
Stockholders'
deficit (Note 5)
|
||||
|
Common
stock - $0.001 par value; 120,000,000 shares
|
||||
|
authorized,
20,002,000 shares issued and outstanding
|
- | |||
|
Deficit
accumulated during the development stage
|
(36,095 | ) | ||
|
Total
stockholders' deficit
|
(36,095 | ) | ||
|
Total
liabilities and stockholders' deficit
|
$ | 341,708 | ||
The accompanying notes are
an integral part of the consolidated financial statements.
|
HALBERD
CORPORATION AND SUBSIDIARY
|
||||
|
(a
development stage company)
|
||||
|
CONSOLIDATED
STATEMENT OF OPERATIONS
|
||||
|
August
2, 2007 (date of inception) to July 31, 2008
|
||||
|
Sales
|
$ | 7,015 | ||
|
Cost
of sales
|
646 | |||
|
Gross
margin
|
6,369 | |||
|
Operating
expenses
|
44,086 | |||
|
Operating
loss
|
(37,717 | ) | ||
|
Other
income (expense)
|
||||
|
Interest
income
|
1,253 | |||
|
Interest
expense
|
(16,961 | ) | ||
|
Other
expense, net
|
(15,708 | ) | ||
|
Loss
before income tax benefit
|
(53,425 | ) | ||
|
Income
tax benefit
|
17,330 | |||
|
Net
loss
|
$ | (36,095 | ) | |
The accompanying notes are
an integral part of the consolidated financial statements.
|
HALBERD
CORPORATION AND SUBSIDIARY
|
||||||||||||||||
|
(a
development stage company)
|
||||||||||||||||
|
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIT
|
||||||||||||||||
|
August
2, 2007 (date of inception) to July 31, 2008
|
||||||||||||||||
|
Deficit
Accumulated
|
Total
|
|||||||||||||||
|
Common
Stock
|
During
the
|
Stockholders'
|
||||||||||||||
|
Shares
|
Amount
|
Development
Stage
|
Deficit
|
|||||||||||||
|
Balances
- August 2, 2007
|
- | $ | - | $ | - | $ | - | |||||||||
|
Common
stock issued
|
10,001 | - | - | - | ||||||||||||
|
Net
loss
|
- | - | (36,095 | ) | (36,095 | ) | ||||||||||
|
Balances
- July 31, 2008
|
10,001 | $ | - | $ | (36,095 | ) | $ | (36,095 | ) | |||||||
|
Balances
as adjusted to reflect
|
||||||||||||||||
|
recapitalization
(Note 1)
|
20,002,000 | $ | - | $ | (36,095 | ) | $ | (36,095 | ) | |||||||
The accompanying notes are
an integral part of the consolidated financial statements.
|
HALBERD
CORPORATION AND SUBSIDIARY
|
||||
|
(a
development stage company)
|
||||
|
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
||||
|
August
2, 2007 (date of inception) to July 31, 2008
|
||||
|
Cash
flows from operating activities
|
||||
|
Net
loss
|
$ | (36,095 | ) | |
|
Adjustments
to reconcile net loss to net cash
|
||||
|
provided
by operating activities
|
||||
|
Depreciation
|
1,423 | |||
|
Deferred
income tax benefit
|
(17,330 | ) | ||
|
Changes
in operating assets and liabilities that provided cash:
|
||||
|
Accounts
payable and accrued expenses
|
35,345 | |||
|
Deferred
revenue
|
1,510 | |||
|
Due
to officers
|
30,048 | |||
|
Net
cash provided by operating activities
|
14,901 | |||
|
Cash
flows from investing activities
|
||||
|
Trademark
costs
|
(8,770 | ) | ||
|
Purchases
of property and equipment, including web site costs
|
(315,644 | ) | ||
|
Net
cash used in investing activities
|
(324,414 | ) | ||
|
Cash
flows from financing activities
|
||||
|
Proceeds
from issuance of convertible notes
|
300,000 | |||
|
Proceeds
from stockholder line of credit
|
10,900 | |||
|
Net
cash provided by financing activities
|
310,900 | |||
|
Net
increase in cash and cash equivalents, equal to cash
|
||||
|
and
cash equivalents at end of period
|
$ | 1,387 | ||
The accompanying notes are
an integral part of the consolidated financial statements.
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
1.
|
BUSINESS
AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
Principles
of Consolidation
The
consolidated financial statements include the accounts of Halberd
Corporation and its wholly owned subsidiary Sellmybusinessnow.com,
Inc. All intercompany balances and transactions have been
eliminated in consolidation.
Organization,
Nature of Business (including development stage), and Basis of
Presentation
Sellmybusinessnow.com,
Inc. is a development stage company that was incorporated under the laws
of the state of Michigan on August 2, 2007. The Company began operating under
the name “Sellmybusiness.com®” on December 3, 2007. To
date, the Company’s activities have been limited to raising capital, obtaining
financing, constructing its website and administrative functions. The Company
has ten stockholders, eight of which have also entered into convertible debt
agreements with the Company (Note 4). Sellmybusiness.com® intends to provide a single
web portal for interested parties to find, buy and sell businesses, real estate
and equipment and all the related services needed to support the transaction,
including financing, incorporation, professional help and additional business
resources. Sellmybusiness.com® intends to support
businesses of all sizes and types, including start-ups, well-established
companies, home-based businesses, closely-held companies, multinational public
corporations and franchises. Sellmybusiness.com®’s real estate listing service
will assist business people to buy, sell, lease or sublease commercial land and
property. Sellmybusiness.com®’s equipment listing service
will provide a portal to buy, sell or lease excess inventory, capital equipment,
raw materials, vehicles, aircraft, ships and rail equipment.
On
January 26, 2009, Halberd
Corporation, a Nevada corporation, was formed by Sellmybusinessnow.com,
Inc.’s founders in conjunction with a legal reorganization of the
Company. Halberd
Corporation is structured to act as the parent company of Sellmybusinessnow.com,
Inc. As part of this action, and effective on January 28, 2009
all of the issued and outstanding shares of Sellmybusinessnow.com,
Inc.’s common stock were exchanged on a 2,000-to-1 basis for Halberd
Corporation’s common stock. As a result, the accompanying
consolidated financial statements reflect this reorganization and are presented
on a consolidated basis and are labeled as those of the parent
company. Halberd
Corporation and Subsidiary are collectively referred to as the
“Company”.
The
Company has adopted a fiscal year end of July 31.
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Basis
of Accounting
The
accompanying consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States.
Use
of Estimates
The
preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States 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 consolidated financial statements and the reported amounts of
income and expenses during the reporting period. Actual results could
differ from those estimates.
Segment
Reporting
The
Company has determined that it does not have any separately reportable business
segments at July 31, 2008.
Cash
and Cash Equivalents
Cash and
cash equivalents consist of cash on hand and demand deposits in
banks. The Company considers all highly liquid investments purchased
with original maturities of six months or less to be cash
equivalents.
Revenue
Recognition
The
Company utilizes the guidance in Securities and Exchange Commission (SEC) Staff
Accounting Bulletin (SAB) No. 104, Revenue Recognition, to
recognize revenue. Under SAB No. 104, revenue is recognized only when persuasive
evidence of an agreement exists, delivery of the service has occurred, the sales
price is fixed or determinable and collectability is reasonably assured.
Payments received in advance of services being rendered are recorded as deferred
revenue and recognized on a straight-line basis over the service
period.
As the
Company is in the development stage, it has generated limited revenues during
the period ended July 31, 2008. However, management believes the
Company will principally derive its future revenue from customers that pay fees
via credit card through the web site for a suite of services to market and
search for commercial real estate and operating businesses. These services
include a premium membership that provides the customer unlimited access to
listings, maximized exposure for their listings, along with enhanced services to
market their listings.
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Management
also anticipates the Company will earn revenue from other sources including
advertising revenues, which will be recognized ratably over the period in which
the advertisement is displayed on the web site, provided that no significant
obligations remain and collection of the resulting receivable is probable.
Advertising rates are dependent on the services provided and the placement of
the advertisements.
Property
and Equipment (including web site costs)
Costs
incurred to develop the Company’s web site, Sellmybusiness.com®,
are capitalized or expensed, as applicable, in accordance with the Financial
Accounting Standards Board Emerging Issues Task Force Issues No. EITF 00-2,
Accounting for Web Site
Development Costs, which addresses whether certain development costs
should be capitalized or expensed. Exhibit 00-2A of EITF 00-2 breaks
potential web site development costs into 34 distinct potential activities,
among four stages: Planning; Web Site Application and Infrastructure
Development; Graphics and Content Development; and
Operating. Management analyzes the nature of costs incurred relative
to these stages and either capitalizes or expenses the related costs in
accordance with EITF 00-2. Because the Company’s current web
site development costs incurred relate principally to development and testing,
the Company is generally capitalizing these costs.
Management
periodically reviews these assets to determine whether carrying values have been
impaired.
Depreciation
and Amortization
Depreciation
on equipment is computed using the straight-line method over the estimated
useful lives of the related assets which range from three to seven
years. Amortization of web site costs did not commence during the
period ended July 31, 2008 since the final operating version of the site was not
completed as of that date.
Trademark
Costs
The
Company has capitalized costs to obtain trademarks registered for its three
service marks Sellmybusiness.com®, Business Vault®, and Business
Watch®. Such costs principally relate to legal fees
incurred. These intangible assets have been determined to have a life
of 15 years and the Company will begin amortizing them when full website
operations begin (scheduled for April 2009).
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Income
Taxes
Deferred
income tax assets and liabilities are computed annually for differences between
the financial statement and tax bases of assets and liabilities that will result
in taxable or deductible amounts in the future, based on enacted tax laws and
rates applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be
realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities. Deferred income taxes relate principally to the
Company’s net operating loss carry forward.
Concentration Risks
Financial
instruments that potentially subject the Company to a concentration of credit
risk consist of cash and cash equivalents and when they exist, trade accounts
receivable. Cash and cash equivalents are deposited with high credit
quality financial institutions. Revenue and accounts receivable are
primarily derived from credit card transactions with subscribers and are
typically settled within two to three business days.
Fair Value of Financial
Instruments
The
Company’s financial instruments, including cash and cash equivalents, accounts
receivable, accounts payable and accrued liabilities, are carried at cost, which
approximates their fair value because of the short-term maturity of these
instruments.
Net
Income (loss) Per Share
Net
income (loss) per share is calculated under the provisions of Statement of
Financial Accounting Standards (SFAS) No. 128, Earnings Per
Share. “Diluted” reflects the potential dilution of all common
stock equivalents except in cases where the effect would be
anti-dilutive.
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Recent Accounting Pronouncements
On August
1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements,”
(SFAS 157), which defines fair value, establishes a framework for measuring fair
value under accounting principles
generally accepted in the United States, and enhances disclosures about fair
value measurements. The Company elected to delay the application of SFAS 157 to
nonfinancial assets and nonfinancial liabilities, as allowed by FASB Staff
Position (FSP) SFAS 157-2. FSP SFAS 157-3 clarifies the application of SFAS 157
in a market that is not active. SFAS 157 (as amended) applies whenever other
standards require (or permit) assets or liabilities to be measured at fair value
and, therefore, does not expand the use of fair value in any new circumstances.
Fair value is defined as the exchange price that would be received to sell an
asset or paid to transfer a liability in the principal or most advantageous
market for the asset or liability in an orderly transaction (i.e., not a forced
transaction, such as a liquidation or distressed sale) between market
participants at the measurement date. SFAS 157 (as amended) clarifies that fair
value should be based on the assumptions market participants would use when
pricing an asset or liability and establishes a fair value hierarchy that
prioritizes the information used to develop those assumptions. The fair value
hierarchy gives the highest priority to quoted prices in active markets and the
lowest priority to unobservable data. SFAS 157 (as amended) requires fair value
measurements to be separately disclosed by level within the fair value
hierarchy. For assets and liabilities recorded at fair value, it is the
Company’s policy to maximize the use of observable inputs and minimize the use
of unobservable inputs when developing fair value measurements for those items
for which there is an active market. In cases where the market for a financial
asset or liability is not active, the Company includes appropriate risk
adjustments that market participants would make for nonperformance and liquidity
risks when developing fair value measurements.
Fair
value measurements for assets and liabilities where there exists limited or no
observable market data and, therefore, are based primarily upon estimates, are
often calculated based on the economic and competitive environment, the
characteristics of the asset or liability and other factors. Therefore, the
results cannot be determined with precision and may not be realized in an actual
sale or immediate settlement of the asset or liability. Additionally, there may
be inherent weaknesses in any calculation technique, and changes in the
underlying assumptions used, including discount rates and estimates of future
cash flows, could significantly affect the results of current or future values.
The initial adoption of SFAS No. 157 did not have any impact on the Company’s
financial position or operations.
Effective
August 1, 2008, the Company adopted SFAS No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities, including an amendment of FASB Statement No.
115" (SFAS 159), which is effective for fiscal years beginning after
November 15, 2007. SFAS 159 provides companies with an option to report selected
financial assets and liabilities at fair value. The objective of SFAS 159 is to
reduce both complexity in accounting for financial instruments and the
volatility in earnings caused by measuring related assets and liabilities
differently. SFAS 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between companies that choose different
measurement attributes for similar types of assets and liabilities. It also
requires entities to display the fair value of those assets and liabilities for
which the company has chosen to use fair value on the face of the balance sheet.
SFAS 159 does not eliminate disclosure requirements included in other accounting
standards, including requirements for disclosures about fair value measurements
included in SFAS 157 and SFAS No. 107, "Disclosures about Fair Value of
Financial Instruments." At August 1, 2008 the Company decided
not to elect the fair value option for any financial assets or
liabilities under the scope of SFAS 159.
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
In
December 2007, the FASB issued SFAS No. 141(revised 2007), “Business Combinations,” (SFAS
141(R)), which replaces SFAS 141. SFAS 141(R) establishes principles and
requirements for recognition and measurement of assets, liabilities and any
non-controlling interest acquired due to a business combination. Under SFAS
141(R) the entity that acquires the business (whether in a full or partial
acquisition) may recognize only the assets acquired, the liabilities assumed,
and any non-controlling interest in the acquiree at the acquisition date,
measured at fair value. SFAS 141(R) requires the acquirer to recognize goodwill
as of the acquisition date, measured as a residual. Under SFAS 141(R),
acquisition-related transaction and restructuring costs will be expensed as
incurred rather than treated as part of the acquisition cost and included in the
amount recorded for assets acquired. SFAS 141(R) is effective for fiscal years
beginning after December 15, 2008. Accordingly, the Company will apply the
provisions of SFAS 141(R) for acquisitions completed after July 31,
2009.
In April
2008, the FASB issued FASB Staff Position, No. 142-3, “Determination of the Useful Life of
Intangible Assets” (“FSP 142-3”). This FSP amends the factors
that should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under SFAS No. 142,
“Goodwill and Other Intangible
Assets”. The intent of this FSP is to improve the consistency
between the useful life of a recognized intangible asset under SFAS No. 142 and
the period of expected cash flows used to measure the fair value of the asset
under SFAS No. 141(R), “Business Combinations,” and other U.S. generally
accepted accounting principles. This FSP is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years and early adoption is
prohibited. Accordingly, this FSP is effective for the Company on
August 1, 2009. The Company does not believe the adoption of FSP
142-3 will have a material impact on its financial position, results of
operations or cash flows.
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
In June
2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating
Securities,” (FSP EITF 03-6-1). FSP EITF 03-6-1 clarifies that unvested
share-based payment awards that contain non-forfeitable rights to dividends or
dividend equivalents are considered participating securities and should be
included in the calculation of basic earnings per share using the two-class
method prescribed by SFAS 128, “Earnings Per Share.” FSP EITF
03-6-1 is effective for financial statements issued for fiscal years and interim
periods beginning after December 15, 2008. All prior period earnings per share
amounts presented are required to be adjusted retrospectively. Accordingly, the
Company will adopt the provisions of FSP EITF 03-6-1 on February 1,
2009. The Company does not expect the adoption of the provisions of
FSP EITF 03-6-1 to have a material effect on the Company’s financial condition
and results of operations.
Other
recent accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies are not expected to apply to the Company or have
a material impact on the Company’s reported results of operations on a per share
basis.
|
2.
|
PROPERTY
AND EQUIPMENT
|
|
|
Property
and equipment consists of the following assets at July 31,
2008:
|
|
Web
site costs
|
$ | 302,269 | ||
|
Telephone
system
|
8,464 | |||
|
Computer
equipment
|
4,911 | |||
|
Total
|
315,644 | |||
|
Less
accumulated depreciation
|
1,423 | |||
|
Property
and equipment, net
|
$ | 314,221 | ||
|
3.
|
RELATED
PARTY TRANSACTIONS (including debt and
leases)
|
The
Company’s majority stockholder has provided a $75,000 revolving line of credit
to the Company. Outstanding advances bear interest at 10% per annum, and any
such advances are due May 1, 2009. Interest of $160 on such advances is included
with accrued expenses on the accompanying consolidated balance
sheet.
The
Company incurred rent expense of $10,500 for the initial period ended July 31,
2008 under a month-to-month lease with an entity in which the Company’s majority
stockholder is an owner. Subsequent to year end, the Company began leasing space
from the majority stockholder for $1,500 per month. The arrangement operates on
an informal, month-to-month basis.
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The Company leases its domain name from
an entity owned by its majority stockholder. Rent expense for the
initial period ended July 31, 2008 was $426; the related liability is included
in accrued expenses at July 31, 2008. The monthly rent for use of the
domain name is based on 5% of revenues.
The
Company has accrued $15,000 each for services provided by its majority and 20%
stockholders during the period ended July 31, 2008. Such amounts are
included in the accompanying consolidated balance sheet under “Due to Officers”,
as well as a miscellaneous amount of $48 due to the majority
stockholder.
The
Company paid a business related by common ownership (to its 20% stockholder)
$25,000 during the period ended July 31, 2008 for various services in connection
with web site development and business planning.
|
4.
|
CONVERTIBLE
DEBT
|
On
January 1, 2008 the Company issued convertible promissory notes totaling
$300,000 to eight stockholders, who own a combined 15% of the Company’s common
stock. The notes bear interest at 10% per annum and are due on the earlier of
the Company registering any of its securities under the Securities Act of 1933
or eighteen months after the date of the note (April through July 2009). In
addition, each of the note holders may; at their option, convert the entire
outstanding principal amount of their note into shares of the Company’s common
stock at any time up to the maturity date of the respective note. If all holders
of these notes exercised the conversion option, the Company would be required to
issue an additional 4,508,000 shares (shares reflect exchange discussed in Note
1) (See Note 9).
Interest
expense on these notes was $16,800 for the period ended July 31, 2008 and is
included with accrued expenses on the accompanying consolidated balance
sheet.
|
5.
|
CAPITAL
STOCK
|
The
Company’s initial common shares issued to its two founders (65% and 20% of the
outstanding shares, respectively) and eight initial investors (15% of
outstanding shares, all of whom also hold convertible debt (see Note 4), were
issued for no consideration and are thus carried at a value of zero on the
accompanying consolidated balance sheet as no services were performed or were
required to be performed in order for any of the original investors to obtain
their shares. Management determined the fair value of the initial shares to be
zero given the start-up nature of the business which included a lack of
operational history, lack of share liquidity and a lack of corporate financing
for operations at the time of issuance.
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
Company has authorized 10,000,000 shares of preferred stock at a par value of
$0.001. No preferred shares are issued or outstanding as of July 31,
2008. Any preferences, rights, voting powers, restrictions, dividend
limitations, qualifications, and terms and conditions of redemption shall be set
forth and adopted by a board of directors’ resolution prior to issuance of any
series of preferred stock.
|
6.
|
INCOME
TAXES
|
The
Company establishes valuation allowances in accordance with the provisions of
SFAS No. 109, Accounting for
Income Taxes. The Company continually reviews realizability of
deferred tax assets and recognizes these benefits only as reassessment indicates
that it is more likely than not that such tax benefits will be
realized.
As of
July 31, 2008, the Company has a net operating loss carry forward for federal
income tax purposes of approximately $48,500, which expires in 2023, available
to reduce federal taxable income of future periods.
Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. Significant components of
the Company’s deferred income tax liabilities and assets are summarized as
follows as of July 31, 2008:
|
Amount
|
||||
|
Deferred
tax assets:
|
||||
|
Net
operating loss carry forward
|
$ | 48,500 | ||
|
Depreciation
and other
|
2,400 | |||
|
Total
deferred tax assets
|
50,900 | |||
|
Expected
tax rate
|
34 | % | ||
|
Net
deferred income tax assets
|
$ | 17,330 | ||
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
income tax benefit for the period ended July 31, 2008 consists entirely of a
deferred benefit. No valuation allowance has been recorded on the
deferred tax assets due to management’s estimates of future taxable income,
beginning in 2010. Management believes that it is more likely than
not that the deferred tax assets will be realized in full based on comparisons
of profitability with similar enterprises, the expected high margin nature of
the business and the Company’s anticipated ability to raise sufficient capital
to drive awareness of the web site through advertising.
Effective
January 1, 2008, the state of Michigan enacted the Michigan Business Tax Act
(“MBTA”), replacing the Michigan single business tax with a business income tax
and modified gross receipts tax. The enactment of the MBTA does not have a
material impact on the consolidated financial statements of the Company as of
July 31, 2008.
|
7.
|
OPERATING
LEASE
|
The
Company utilizes the services of a third party that houses and maintains its web
site server. Such services are provided under a month to month lease
for $650 per month.
|
8.
|
NET
LOSS PER SHARE
|
Basic net
loss per share is computed by dividing the net loss for the period by the
weighted average number of common shares outstanding during the period. Diluted
net loss per share is computed by dividing the net loss for the period by the
weighted average number of shares of common stock and potentially dilutive
common stock outstanding during the period. The following table sets forth the
computation of basic and diluted net loss per share for the period ended July
31, 2008:
|
Numerator:
|
||||
|
Net loss
|
$ | (36,095 | ) | |
|
Denominator
|
||||
|
Weighted average common shares-basic and diluted
|
20,002,000 | |||
|
Net
loss per share
|
||||
|
Basic
|
$ | 0.00 | ||
|
Diluted
|
$ | 0.00 | ||
|
Common
stock equivalents excluded from net loss per
|
||||
|
diluted share because their effect would have been
|
||||
|
anti-dilutive
|
4,508,000 | |||
HALBERD
CORPORATION AND
SUBSIDIARY
(a
development stage company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
9.
|
SUBSEQUENT
EVENTS (UNAUDITED)
|
The
Company is preparing to become a publicly traded company and intends to file
a Form S-1 Registration Statement with the Securities and Exchange
Commission in Spring 2009. In connection with this process, the Company
issued a private placement memorandum ("PPM") to increase the number of
shareholders to a minimum of 35. The PPM resulted in the Company issuing
374,000 shares of common stock to 32 additional stockholders in exchange for
cash consideration of $93,500 in January 2009. Seven vendors who were owed
a total of $20,500 as of December 31, 2008 were issued 82,000 shares of stock in
settlement of amounts owed to them.
During
January 2009, all of the convertible debt was converted to equity, resulting in
the issuance of 4,508,000 shares of the Company’s common stock. Related
accrued interest of $23,000 on these loans was also converted to equity,
resulting in the issuance of 92,000 shares of the Company’s common
stock. All shares in this note have been adjusted to reflect the
exchange discussed in Note 1.
* * * *
*
AND
RESULTS OF OPERATIONS
This
section of the Registration Statement includes a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from our
predictions.
Overview
of Our Performance and Operations
Our
business
We are a
development stage company that was incorporated under the laws of the State of
Nevada on January 26, 2009. On January 28, 2009, we entered into a share
purchase agreement with SellMyBusiness, a corporation established under the laws
of the State of Michigan in August 2007, pursuant to which we acquired all the
shares of common stock of SellMyBusiness for 25,058,000 shares of our common
stock. As a result, SellMyBusiness became our wholly-owned
subsidiary.
To date,
the Company’s activities have been limited to raising capital, obtaining
financing, constructing its website and administrative functions. As reflected
in the accompanying financial statements, we had liabilities of $377,803, and a
net loss of $36,095 for the period from inception to July 31, 2008. We had
liabilities of $ 257,522 , and a net loss of $ 164,640 for
the six months ended January 31, 2009 ,
respectively.
Plan
of Operation
We have
begun limited operations, and we require outside capital to implement our
business model.
1. We
believe we can complete development of version 2 of the website, continue
marketing efforts in the U.S., continue the Company’s national public relations
campaign, develop local language versions of the website in select international
markets, launch targeted marketing campaigns internationally.
2. All
business functions will be coordinated and managed by our CEO Mark
Lundquist, President & COO John Maddox, and our consultants.
3. Within
120 days of the initiation of our marketing campaign, we believe we will begin
to generate expanded revenues from our targeted approach.
In
summary, we hope to be generating increased sales revenues within 180 days of
the date of this Registration Statement.
Based on
the development stage of the Company and its operational plan, management
believes that the Company will incur operating losses in the foreseeable future.
Management has developed an operational plan that has been presented to various
institutional funds and has entered into a non-binding term sheet for securities
financing. Management believes that it can enter into definitive agreements with
the funder on terms that are acceptable. However, access to the investment fund
is predicated on the market for the Company’s stock and therefore the Company
cannot issue assurances that our shareholders will not be diluted by investment
of such capital, or to the extent of the dilution. Also, we cannot assure that
securities issued in exchange for such capital will not be sold on terms more
favorable than those of the shares sold in this or other offerings. The
availability of such funding is subject to credit, economic, market and legal
constraints. The inability to secure required capital from the fund could have a
material adverse effect on our business, operation results, or financial
condition. Additionally, there are no guarantees that any additional
financing can be obtained.
Limited
Operating History
We are a
developmental business listing and services Company incorporated on January
26, 2009, and as such had minimal operating revenues to date. Further, we
have limited assets and earnings to date. The success of our company is
dependent upon the extent to which it will gain market share. All financial
information and financial projections and other assumptions made by us are
speculative and, while based on management's best estimates of projected sales
levels, operational costs, consumer preferences, and the general economic and
competitive health of our company in the business listing and services
marketplace, there can be no assurance that we will operate profitably or remain
solvent.
Results
of Operations
As of the
most recent quarter ended January 31, 2009 , we had cash on hand of
$3,374 , and our total assets were $ 481,287 while our total
liabilities were $ 257,522 . We had shareholder’s equity of
$ 223,765 .
For the
six months ended January 31, 2009 , we had a net loss of
$ 164,640 . The company has had minimal revenues since 2007 and will need
to raise capital to further its operations. Based on the development stage
of the Company and its operational plan, management believes that the Company
will incur operating losses in the foreseeable future. Management has developed
an operational plan that has been presented to various institutional funds and
has entered into a non-binding term sheet for securities financing. Management
believes that it can enter into definitive agreements with the funder on terms
that are acceptable. However, access to the investment fund is predicated on the
market for the Company’s stock and therefore the Company cannot issue assurances
that our shareholders will not be diluted by investment of such capital, or to
the extent of the dilution. Also, we cannot assure that securities issued in
exchange for such capital will not be sold on terms more favorable than those of
the shares sold in this or other offerings. The availability of such funding is
subject to credit, economic, market and legal constraints. The inability to
secure required capital from the fund could have a material adverse effect on
our business, operation results, or financial condition. Additionally, there are
no guarantees that any additional financing can be obtained.
Liquidity
and Capital Resources
We
anticipate that our operational, and general and administrative expenses for the
twelve months following our last review date ( January 31, 2009 ) will be
$1.95 million. We anticipate based on the development stage of our
Company and our operational plan we will incur operating losses in the
foreseeable future. We have developed an operational plan that has been
presented to potential PIPE funders with the result that we have secured a
non-binding term sheet for $25 million in convertible securities to assist in
the Company’s development and growth. Therefore, we believe we can satisfy our
cash requirements for the future based upon our access to capital from this
Securities Financing Agreement (“SFA”) and our ability to generate cash from
operations.
The
amount of funding required from the SFA and our desire to request funding from
the SFA is based on our ability to generate revenue from operations. If actual
revenue exceeds projections the company’s need for SFA funding is diminished. If
actual revenue trails projections the Company’s need for SFA funding is
heightened and is dependent on the market for our stock. Therefore,
there is no assurance that we will either need or be successful in completing
all portions of the PIPE, secondary offering or any other financing when we have
an active market for our stock. Our investors should assume that any
portions of SFA or other outside funding will cause substantial dilution to
current stockholders. Further, there can be no assurances that the
SFA will close and that we will have access to this
capital.
The
foregoing represents our best estimate of our cash needs based on current
planning and business conditions. The exact allocation, purposes and timing of
any monies raised in subsequent private financings may vary significantly
depending upon the exact amount of funds raised and our progress with the
execution of our business plan.
Off
Balance Sheet Arrangements
We do not
have any off-balance sheet arrangements that we are required to disclose
pursuant to these regulations. In the ordinary course of business, we enter into
operating lease commitments, purchase commitments and other contractual
obligations. These transactions are recognized in our financial statements in
accordance with generally accepted accounting principles in the United
States.
We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).
Critical
Accounting Policies
The
discussion and analysis of our financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates based on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
A summary
of significant accounting policies is included in Note 1 to the audited
consolidated financial statements for the year ended July 31, 2008. Management
believes that the application of these policies on a consistent basis enables us
to provide useful and reliable financial information about our Company's
operating results and financial condition.
Recently
Issued Accounting Pronouncements
On August
1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements,” (SFAS
157), which defines fair value, establishes a framework for measuring fair
value under accounting principles generally accepted in the United States,
and enhances disclosures about fair value measurements. The Company elected
to delay the application of SFAS 157 to nonfinancial assets and
nonfinancial liabilities, as allowed by FASB Staff Position (FSP) SFAS
157-2. FSP SFAS 157-3 clarifies the application of SFAS 157 in a market
that is not active. SFAS 157 (as amended) applies whenever other
standards require (or permit) assets or liabilities to be measured at fair
value and, therefore, does not expand the use of fair value in any new
circumstances. Fair value is defined as the exchange price that would be
received to sell an asset or paid to transfer a liability in the principal
or most advantageous market for the asset or liability in an orderly
transaction (i.e., not a forced transaction, such as a liquidation or
distressed sale) between market participants at the measurement date. SFAS
157 (as amended) clarifies that fair value should be based on the
assumptions market participants would use when pricing an asset or
liability and establishes a fair value hierarchy that prioritizes the
information used to develop those assumptions. The fair value hierarchy
gives the highest priority to quoted prices in active markets and the
lowest priority to unobservable data. SFAS 157 (as amended) requires fair
value measurements to be separately disclosed by level within the fair
value hierarchy. For assets and liabilities recorded at fair value, it is the
Company’s policy to maximize the use of observable inputs and minimize the
use of unobservable inputs when developing fair value measurements for
those items for which there is an active market. In cases where the market
for a financial asset or liability is not active, the Company includes
appropriate risk adjustments that market participants would make
for nonperformance and liquidity risks when developing fair value
measurements.
Fair
value measurements for assets and liabilities where there exists limited or
no observable market data and, therefore, are based primarily upon
estimates, are often calculated based on the economic and competitive
environment, the characteristics of the asset or liability and other
factors. Therefore, the results cannot be determined with precision and may
not be realized in an actual sale or immediate settlement of the asset
or liability. Additionally, there may be inherent weaknesses in any
calculation technique, and changes in the underlying assumptions used,
including discount rates and estimates of future cash flows, could
significantly affect the results of current or future values. The initial
adoption of SFAS No. 157 did not have any impact on the Company’s
financial position or operations.
Effective
August 1, 2008, the Company adopted SFAS No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities, including an amendment of FASB Statement No. 115" (SFAS
159), which is effective for fiscal years beginning after November 15,
2007. SFAS 159 provides companies with an option to report
selected financial assets and liabilities at fair value. The objective of
SFAS 159 is to reduce both complexity in accounting for financial
instruments and the volatility in earnings caused by measuring related
assets and liabilities differently. SFAS 159 also establishes presentation
and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes for similar
types of assets and liabilities. It also requires entities to display the
fair value of those assets and liabilities for which the company has chosen
to use fair value on the face of the balance sheet. SFAS 159 does not
eliminate disclosure requirements included in other accounting standards,
including requirements for disclosures about fair value measurements
included in SFAS 157 and SFAS No. 107, "Disclosures about Fair Value of
Financial Instruments." At August 1,
2008 the Company decided not to elect the fair value option for any
financial assets or liabilities under the scope of SFAS 159.
In
December 2007, the FASB issued SFAS No. 141(revised 2007), “Business Combinations,” (SFAS 141(R)),
which replaces SFAS 141. SFAS 141(R) establishes principles and
requirements for recognition and measurement of assets, liabilities and
any non-controlling interest acquired due to a business combination. Under
SFAS 141(R) the entity that acquires the business (whether in a full or
partial acquisition) may recognize only the assets acquired, the
liabilities assumed, and any non-controlling interest in the acquiree at
the acquisition date, measured at fair value. SFAS 141(R) requires
the acquirer to recognize goodwill as of the acquisition date, measured as
a residual. Under SFAS 141(R), acquisition-related transaction and
restructuring costs will be expensed as incurred rather than treated as
part of the acquisition cost and included in the amount recorded for assets
acquired. SFAS 141(R) is effective for fiscal years beginning
after December 15, 2008. Accordingly, the Company will apply the provisions
of SFAS 141(R) for acquisitions completed after July 31, 2009.
In April
2008, the FASB issued FASB Staff Position, No. 142-3, “Determination of the Useful Life of
Intangible
Assets” (“FSP 142-3”). This FSP amends the factors that should be
considered in developing renewal or extension assumptions used to determine
the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets”. The
intent of this FSP is to improve the consistency between the useful life of
a recognized intangible asset under SFAS No. 142 and the period of expected
cash flows used to measure the fair value of the asset under SFAS No.
141(R), “Business Combinations,” and other U.S. generally accepted
accounting principles. This FSP is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim
periods within those fiscal years and early adoption is prohibited.
Accordingly, this FSP is effective for the Company on August 1, 2009.
The Company does not believe the adoption of FSP 142-3 will have a material
impact on its financial position, results of operations or cash
flows.
In June
2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether
Instruments Granted in Share-Based Payment
Transactions Are Participating Securities,” (FSP EITF 03-6-1). FSP
EITF 03-6-1 clarifies that unvested share-based payment awards that contain
non-forfeitable rights to dividends or dividend equivalents are
considered participating securities and should be included in the
calculation of basic earnings per share using the two-class method
prescribed by SFAS 128, “Earnings Per Share.” FSP EITF 03-6-1 is effective
for financial statements issued for fiscal years and interim periods
beginning after December 15, 2008. All prior period earnings per share
amounts presented are required to be adjusted retrospectively. Accordingly,
the Company will adopt the provisions of FSP EITF 03-6-1 on February 1,
2009. The Company does not expect the adoption of the provisions of FSP
EITF 03-6-1 to have a material effect on the Company’s financial condition
and results of operations.
Other
recent accounting standards that have been issued or proposed by the FASB
or other standards-setting bodies are not expected to apply to the Company
or have a material impact on the Company’s reported results of operations
on a per share basis.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There
have been no changes in or disagreements with accountants on accounting or
financial disclosure matters.
Our
executive officer’s and director’s and their respective ages as of April
10 , 2009 are as follows:
|
NAME
|
AGE
|
POSITION
|
|
Mark
Lundquist
|
51
|
Chief
Executive Officer, Secretary and Director
|
|
John
Maddox
|
43
|
President,
Chief Operating Officer, Treasurer and Director
|
|
Joel
M. Ungar
|
47
|
Chief
Financial Officer and Principal Accounting Officer
|
|
Leland
Thomas
|
58
|
Member
of Advisory Board
|
|
Nicholas
Cocco
|
44
|
Member
of Advisory Board and Chief of
Staff
|
Set forth
below is a brief description of the background and business experience of our
executive officers and directors for the past five years.
Mark Lundquist, Co-Founder, Chief Executive
Officer,
Secretary and Director
Mr.
Lundquist has been our Chief Executive Officer and Secretary since inception on
January 26, 2009. He is also the Founder, President and CEO of Fulcrum Edge,
Inc., a business advisory company specializing in business planning, corporate
growth, strategic planning, and sales and marketing since 2001. He spent fifteen
years in the aerospace and defense arena before coming to Detroit to work in the
automotive and high-tech automation industries. In the corporate world he was
brought in to implement change, restructuring, turnarounds and help companies
grow their business, frequently in preparation for sale. He has held executive
positions with firms such as Grimes Aerospace (now Honeywell), Valcor,
Aeroquip-Vickers, Mannesmann, Bosch and Norgren. Mr. Lundquist also founded
WebAxia, Inc., an online based business focused on website effectiveness, as
well as co-founding Petronom+Hydronom, LLC, a distributor of water purification
and combustion engine fuel enhancement devices.
Mr.
Lundquist studied astrophysics and engineering at the University of Illinois at
Urbana-Champaign and has a degree in Mechanical Engineering. He is a
mentor to Detroit’s TechTown and Ann Arbor SPARK, two high tech business
incubators; and sits on the advisory boards for multiple firms. He is
also an Executive Faculty Member of Wayne State University’s E2detroit
Entrepreneurship Program, an instructor for the University of Michigan’s
entrepreneurship immersion programs, and a contributing business writer to Michigan SmallTech, the
state’s micro- and nanotechnology association.
John Maddox,
Co-founder, President, Chief Operating
Officer and
Director
Mr.
Maddox has been our President, CEO and COO since inception on January 26, 2009.
He is also a Founder and Managing Principal with the CPA firm Maddox Ungar
Silberstein, PLLC with more than sixteen years experience working with a variety
of clients on business matters since 1992. He started his public accounting
career with the international firm of Grant Thornton after working eight
years with his father’s commercial roofing business, Lake Michigan Roofing, Inc.
Prior to forming Maddox Ungar Silberstein, PLLC, Mr. Maddox was a principal with
a large CPA firm in metropolitan Detroit. He was also the Founder and President
of MutualFundTaxInfo.com, an Internet-based firm providing information to
specialists in the mutual fund arena.
Mr.
Maddox holds a Bachelor of Science in Business Administration, a Masters Degree
in Taxation and a Graduate Certificate Degree in Taxation from
Walsh College. He is a member of the American Institute of
Certified Public Accountants, the Michigan Association of Certified Public
Accountants, and a former member of the Institute of Management
Accountants.
Joel M. Ungar, Chief Financial
Officer and
Principal Accounting Officer
Mr. Ungar
is the founding Principal of Maddox Ungar Silberstein, PLLC, a Certified Public
Accounting firm in Bingham Farms (Detroit), MI. He has been in accounting, both
public and private, since September 1984. He was the CFO of a large Detroit area
producer from October 1999 to August 2003, and is an active member of the
Business Administration Committee of the National Ready-Mixed Concrete
Association. He also developed the NRMCA Standard Industry Chart of Accounts,
has taught several courses for NRMCA and has been published in The Concrete
Producer. He also recently became a Certified Fraud Examiner in July 2007. Joel
Ungar has an extensive knowledge of financial accounting. He oversees the
Company's audit, review and compilation services to privately-held businesses in
varied industries including construction, manufacturing, investments funds, and
distributors.
Joel
began his career in the Detroit office of Deloitte & Touche LLP after
earning his bachelors in business administration degree from the University of
Michigan in 1984. Joel is a member of the American Institute of Certified Public
Accountants, the Michigan Association of Certified Public Accountants and the
Association of Certified Fraud Examiners.
Leland Thomas, Member of Advisory
Board
Mr.
Thomas has been a member of our Advisory Board since January 2008. He is also a
Director with BBK, an international business advisory firm. He has
over 28 years of financial and operational expertise, including experience as a
self-employed turnaround consultant, a Chief Operating Officer, and a Corporate
Manager of Finance. His background includes alternative financing,
national and global business expansion, marketing, project management and
securities in both closely-held and large public corporations.
Mr.
Thomas has a Master of Business Administration in Finance from
Indiana University, a Bachelor of Science in Electrical Engineering from
the University of Illinois at Urbana-Champaign, and is a Registered Professional
Engineer in the state of Michigan.
Nicholas Cocco, Member of Advisory Board
& Chief of
Staff
Mr. Cocco
has been a member of our Advisory Board and Chief of Staff since December
2008. He is also the Managing Director of River Star, LLC, a Michigan-based
liquidity management organization based in the greater Detroit area with
clients throughout the United States. Since 2001, River Star has been
specializing in business process optimization strategies for both public and
privately owned organizations. Mr. Cocco has over twenty-five years
of professional experience in sales, marketing, consulting and operations within
the retail, wholesale and technology industries. He has experience in
mergers and acquisitions, acquisition integration, turnarounds and new business
development.
Mr. Cocco
received his Baccalaureate of Science degree with distinction from the College
of Management and Business at National-Louis University in 1996. He
received his Associate of Sciences degree from
Northern Virginia Community College graduating Summa Cum
Laude. Additionally, he attended the Richard Devos Executive MBA
program at Northwood University in 2002/2003.
Director
Compensation
At this
time, our directors will not receive a fee for attending each board of directors
meeting or meeting of a committee of the board of directors. Directors are
permitted to receive fixed fees and other compensation for their services as
directors. The Board of Directors has the authority to fix the compensation of
directors. No amounts have been paid to, or accrued to, directors in such
capacity.
Family
Relationships
There are
no family relationships among any of our officers or directors.
Involvement
in Certain Legal Proceedings
John C.
Maddox, President, Chief Operating Officer Treasurer and Director of
Halberd Corporation and SellMyBusinessnow.com, Inc., is subject to certain
payments under a Chapter 13 Plan approved by United States Bankruptcy Court on
June 13, 2007. He paid $600 per month to certain creditors from May 31, 2007 to
September 30, 2008. He is now paying $669.04 per month to these creditors for
12 months, effective October 1, 2008.
Except as
disclosed above, to the best of our knowledge, none of our directors or
executive officers have been convicted in a criminal proceeding, excluding
traffic violations or similar misdemeanors, or has been a party to any judicial
or administrative proceeding during the past five years that resulted in a
judgment, decree or final order enjoining the person from future violations of,
or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws, except for matters
that were dismissed without sanction or settlement. Except as set forth in our
discussion below in “Certain Relationships and Related Transactions,” none of
our directors, director nominees or executive officers has been involved in any
transactions with us or any of our directors, executive officers, affiliates or
associates which are required to be disclosed pursuant to the rules and
regulations of the SEC.
Code
of Business Conduct and Ethics
We
currently do not have a code of ethics that applies to our officers, employees
and directors, including our Chief Executive Officer and senior
executives.
Summary
Compensation Table
The
following table sets forth information concerning all cash and non-cash
compensation awarded to, earned by or paid to the named persons for services
rendered in all capacities during the noted periods.
SUMMARY
COMPENSATION TABLE
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Non-Qualified
Deferred Compensation Earnings
($)
|
All
Other Compensation
($)
|
Totals
($)
|
||||||||||||
|
Mark
Lundquist, CEO and Secretary
|
2008
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
25,000(1)
|
$
|
25,000
|
||||||||||
|
2007
|
0
|
0
|
0
|
0
|
0
|
0
|
5,000(2)
|
$
|
5,000
|
||||||||||||
|
John
Maddox, President, COO
|
2008
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
25,000(1)
|
$
|
25,000
|
||||||||||
|
2007
|
0
|
0
|
0
|
0
|
0
|
0
|
5,000(2)
|
5,000
|
|||||||||||||
|
Leland
Thomas, Member of Advisory Board
|
2008
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||
|
2007
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
||||||||||||
|
Nicholas
Cocco, Member of Advisory Board, and Chief of Staff
|
2008
|
$
|
11,250
|
0
|
0
|
0
|
0
|
0
|
11,250(3)
|
11,250
|
|||||||||||
|
Joel
M. Ungar
Chief
Financial Officer
|
2008
|
$
|
5,000
|
0
|
0
|
0
|
0
|
0
|
5,000(4)
|
5,000
|
|||||||||||
|
(1)
|
Mr.
Lundquist and Mr. Maddox received $25,000 each for consulting services in
2008. Additional $35,000 each was accrued and will be paid to them
respectively depending on the financial conditions of the
Company.
|
|
(2)
|
Mr.
Lundquist and Mr. Maddox received $5,000 each for consulting services in
2007.
|
|
(3)
|
River
Star, LLC was paid $11,250 for consulting services rendered to the
Company. Nicholas Cocco is the managing member of River Star,
LLC
|
|
(4)
|
Joel
Ungar was granted $5,000 for services to the
Company.
|
Option Grants
Table. There were
no individual grants of stock options to purchase our common stock made to the
executive officer named in the Summary Compensation Table through April
10, 2009.
Aggregated Option Exercises
and Fiscal Year-End Option Value Table. There were no stock options
exercised until April 10 , 2009 by the executive officer named in the
Summary Compensation Table.
Long-Term Incentive Plan
(“LTIP”) Awards Table. There were no awards made to
a named executive officer in the last completed fiscal year under any
LTIP.
Compensation of
Directors
Directors
are permitted to receive fixed fees and other compensation for their services as
directors. The Board of Directors has the authority to fix the compensation of
directors. No amounts have been paid to, or accrued to, directors in such
capacity.
Employment
Agreements
We entered
into employment agreements with Mark Lundquist, our CEO, and John Maddox, our
President & COO for a term of three years. The employment agreements will
automatically renew for successive one year after such initial term, unless and
until terminated by either the Board of Directors as prescribed in the Company’s
by-laws or by John Maddox by written letter to the Chairman with thirty days
notice. Both Mr. Lundquist and Mr. Maddox will receive an annual base salary of
$120,000. Upon effectiveness of this registration statement on Form S-1, and
with the approval of the Board of Director, their salaries will increase to
$240,000 per annum. They will also receive annual bonus and other
benefits.
The
following table sets forth certain information as of April 10 ,
2009 with respect to the beneficial ownership of our common stock, the sole
outstanding class of our voting securities, by (i) any person or group owning
more than 5% of each class of voting securities, (ii) each director, (iii) each
executive officer named in the Summary Compensation Table in the section
entitled “Executive Compensation” below and (iv) all executive officers and
directors as a group.
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. Shares of common stock subject to options, warrants or
convertible securities exercisable or convertible within 60 days of April
10 , 2009 are deemed outstanding for computing the percentage of the person
or entity holding such options, warrants or convertible securities but are not
deemed outstanding for computing the percentage of any other person, and is
based on 26,058,000 shares of our common stock issued and outstanding
as of April 10 , 2009.
|
Title
of Class
|
Name
and Address
of
Beneficial Owner
|
Amount
and Nature
of
Beneficial Owner
|
Percent
of
Class (1)
|
|
Common
Stock
|
John
C. Maddox
|
13,000,000
|
49.88%
|
|
Common
Stock
|
Mark
Lundquist
|
4,000,000
|
15.35%
|
|
Common
Stock
|
Leland
Thomas (1)
|
2,796,000
|
10.73%
|
|
Common
Stock
|
Nicholas
Cocco (2)
|
1,000,000
|
3.84%
|
|
Common
Stock
|
Joel
M. Ungar
|
20,000
|
0.08%
|
|
Common
Stock
|
All
executive officers and directors as a group (5 persons)
|
20,816,000
|
79.88%
|
|
(1)
|
Including
1,100,000 shares of our common stock owned by Mr. Thomas directly and
1,696,000 shares owned through Thomas
IRA.
|
|
(2)
|
All
1,000,000 shares of our common stock are owned by River Star,
LLC.
|
Our
subsidiary SellMyBusiness was incorporated under the laws of the State of
Michigan on August 2, 2007. Upon inception, we issued 6,500 shares to John
Maddox as founder shares with no consideration. On November 28, 2007
we issued 2,000 shares to Mark Lundquist as founder shares with no
consideration.
On
November 28, 2007 and January 3, 2008, we entered into convertible promissory
notes with certain investors totaling of $300,000. In addition, we issued 1,501
shares to these investors. Leland M. Thomas is one of these investors, while he
is also a member of our Advisory Board. In January 2009, we entered into stock
conversion agreements with these investors, pursuant to which we issued 2,300
shares of our common stock as conversion of promissory notes dated November 28,
2007 and January 3, 2008 including principal of $300,000 and interest of $23,000
at a conversion price of $133.00 and $500.00 per share,
respectively.
On
November 14, 2008, we entered into a consulting agreement with River Star, LLC,
pursuant to which we will pay $7,500 per month to River Star for consulting
services. The Managing Director of River Star, Nicholas A. Cocco, is our member
of Advisory Board and Chief of Staff.
In
addition, John C. Maddox has provided a $75,000 revolving line of credit to the
Company. Outstanding advances bear interest at 10% per annum, and any such
advances are due May 1, 2009. A total of $10,900 was outstanding as of July 31,
2008 and October 31, 2008.
The
Company incurred rent expense of $13,500 with an entity in which John C. Maddox
is an owner. Beginning October 1, 2008, the Company began using space owned
by John C. Maddox personally for $1,500 per month on a month to month
basis.
The
Company leases its domain name from an entity owned by John C. Maddox. Rent
expense for the initial period ended July 31, 2008 was $426 and as of October
31, 2008, the accrued expense was $185. The monthly rent for use of the domain
name is 5% of revenues. Mr. Maddox has agreed to sell all of the relevant domain
names for Halberd Corporation and SellMyBusiness.com to the Company for the
original purchase price which is estimated at $30,000, plus interest at 10% per
annum payable when the Company has generated sufficient cash flow or has access
to sufficient cash to complete the purchase.
HALBERD
CORPORATION
656,000 SHARES
OF COMMON STOCK
PROSPECTUS
YOU
SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE
REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION
THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS
NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
Until
_____________, all dealers that effect transactions in these securities whether
or not participating in this offering may be required to deliver a prospectus.
This is in addition to the dealer’s obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
The Date of This Prospectus
Is: April , 2009
PART
II – INFORMATION NOT REQUIRED IN THE PROSPECTUS
|
Securities
and Exchange Commission registration fee
|
$
|
6
|
.45
|
|
|
Federal
Taxes
|
$
|
0
|
||
|
State
Taxes and Fees
|
$
|
0
|
||
|
Transfer
Agent Fees
|
$
|
0
|
||
|
Accounting
fees and expenses
|
$
|
45,000
|
||
|
Legal
fees and expense
|
$
|
38,000
|
||
|
Blue
Sky fees and expenses
|
$
|
700
|
||
|
Miscellaneous
|
$
|
0
|
||
|
Total
|
$
|
83,706
|
.45
|
All
amounts are estimates other than the Commission’s registration fee. We are
paying all expenses of the offering listed above. No portion of these expenses
will be borne by the selling shareholders. The selling shareholders, however,
will pay any other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
Our
director and officer are indemnified as provided by the Nevada Statutes and our
Bylaws. We have agreed to indemnify each of our directors and certain officers
against certain liabilities, including liabilities under the Securities Act of
1933. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the provisions described above, or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than our payment of expenses
incurred or paid by our director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act is against
public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court’s decision.
We were
incorporated under the laws of State of Nevada on January 26, 2009. We entered
into a share purchase agreement with SellMyBusiness, a corporation established
under the laws of the State of Michigan in August 2007, pursuant to which we
acquired all the shares of common stock of SellMyBusiness for 25,058,000 shares
of our common stock. Shareholders of SellMyBusiness received 2000 shares of our
common stock for every 1 share of common stock of SellMyBusiness. As a result,
SellMyBusiness became our wholly-owned subsidiary. These shares of our common
stock qualified for exemption under Section 4(2) of the Securities Act of 1933
since the issuance shares by us did not involve a public offering. The offering
was not a “public offering” as defined in Section 4(2) due to the insubstantial
number of persons involved in the deal, size of the offering, manner of the
offering and number of shares offered. We did not undertake an offering in which
we sold a high number of shares to a high number of investors. The stock
certificate bearing a legend stating that such shares are restricted pursuant to
Rule 144 of the 1933 Securities Act. This restriction ensures that these shares
would not be immediately redistributed into the market and therefore not be part
of a “public offering.” Based on an analysis of the above factors, we have met
the requirements to qualify for exemption under Section 4(2) of the Securities
Act of 1933 for this transaction.
Upon
inception on August 2, 2007, SellMyBusiness issued 6,500 founder shares to our
then-CEO John C. Maddox. On November 28, 2007, SellMyBusiness issued 2,000
founder shares to our then-President & COO Mark Lundquist. These shares of
our common stock qualified for exemption under Section 4(2) of the Securities
Act of 1933 since the issuance shares by us did not involve a public offering.
The offering was not a “public offering” as defined in Section 4(2) due to the
insubstantial number of persons involved in the deal, size of the offering,
manner of the offering and number of shares offered. We did not undertake an
offering in which we sold a high number of shares to a high number of investors.
The stock certificate bearing a legend stating that such shares are restricted
pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that
these shares would not be immediately redistributed into the market and
therefore not be part of a “public offering.” Based on an analysis of the above
factors, we have met the requirements to qualify for exemption under Section
4(2) of the Securities Act of 1933 for this transaction.
On
November 28, 2007 and January 3, 2008, we entered into convertible promissory
notes with certain investors totaling $300,000 and we issued
1,501 shares to these investors. The issuances of the convertible promissory
note and the shares of our common stock qualified for exemption under Section
4(2) of the Securities Act of 1933 since the issuance shares by us did not
involve a public offering. The offering was not a “public offering” as defined
in Section 4(2) due to the insubstantial number of persons involved in the deal,
size of the offering, manner of the offering and number of shares offered. We
did not undertake an offering in which we sold a high number of shares to a high
number of investors. The stock certificate bearing a legend stating that such
shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This
restriction ensures that these shares would not be immediately redistributed
into the market and therefore not be part of a “public offering.” Based on an
analysis of the above factors, we have met the requirements to qualify for
exemption under Section 4(2) of the Securities Act of 1933 for this
transaction .
During
January 2009, all of the convertible debt was converted to equity, resulting in
the issuance of 4,508,000 shares of the Company’s common stock. Related
accrued interest of $23,000 on these loans was also converted to equity,
resulting in the issuance of 92,000 shares of the Company’s common
stock. All shares in this note have been adjusted to reflect the
exchange based on the reorganization of the Company effective on January 28,
2009 pursuant to which all of the issued and outstanding shares of Sellmybusinessnow.com,
Inc. common stock were exchanged on a 2,000-to-1 basis for Halberd
Corporation common stock. Based upon same, a total of
2,300 shares of our common stock were issued as conversion of this convertible
debt. These shares of our common stock qualified for exemption under Section
4(2) of the Securities Act of 1933 since the issuance shares by us did not
involve a public offering. The offering was not a “public offering” as defined
in Section 4(2) due to the insubstantial number of persons involved in the deal,
size of the offering, manner of the offering and number of shares offered. We
did not undertake an offering in which we sold a high number of shares to a high
number of investors. The stock certificate bearing a legend stating that such
shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This
restriction ensures that these shares would not be immediately redistributed
into the market and therefore not be part of a “public offering.” Based on an
analysis of the above factors, we have met the requirements to qualify for
exemption under Section 4(2) of the Securities Act of 1933 for this
transaction.
In
January 2009, SellMyBusiness, our wholly-owned subsidiary, completed a
Regulation D Rule 506 offering in which it sold 228 shares of common stock to 39
investors, at a price per share of $500 per share for an aggregate offering
price of $114,000. The following sets forth the identity of the class of persons
to whom we sold these shares and the amount of shares for each
shareholder:
|
Name
of selling stockholder
|
Shares of common stock of SellMyBusiness
owned
|
Shares
of common stock of the Company owned pursuant to the share purchase
agreement
|
|
Bruce
E. Nyberg
|
10
|
20,000
|
|
John
P. Bower Revocable Living Trust UAD 9/27/1999
|
10
|
20,000
|
|
Mary
Jane Bower Revocable Trust UAD 6/19/1999
|
10
|
20,000
|
|
Daniel
Dalton
|
10
|
20,000
|
|
GBS,
LLC
|
10
|
20,000
|
|
BFADM,
LLC
|
10
|
20,000
|
|
David
R. Zimmer
|
10
|
20,000
|
|
Richard
A. Hecker
|
10
|
20,000
|
|
Douglas
Perry Lalone Living Trust
|
10
|
20,000
|
|
Paul
A. Miller
|
10
|
20,000
|
|
Nicholas
S. Ahee
|
10
|
20,000
|
|
Todd
A. Emerson
|
1
|
2,000
|
|
Donna
Kolo
|
10
|
20,000
|
|
Joel
M. Ungar
|
10
|
20,000
|
|
Constance
M David
|
1
|
2,000
|
|
AweComm
Technologies, LLC
|
5
|
10,000
|
|
Marx
Layne & Company
|
5
|
10,000
|
|
Jon
D. Johnson
|
5
|
10,000
|
|
Douglas
Omar Perreault
|
5
|
10,000
|
|
Michael
R. Szudarek
|
2
|
4,000
|
|
Kathryn
E. Lundquist
|
2
|
4,000
|
|
Sunshine
R. Jenkins
|
2
|
4,000
|
|
Dino
S. Rotondo
|
2
|
4,000
|
|
Vianne
Floyd
|
10
|
20,000
|
|
Barrett
Kalellis
|
10
|
20,000
|
|
Shelby
Starnes
|
2
|
4,000
|
|
Michael
P. Crosson
|
10
|
20,000
|
|
Alexandra
A. Crosson
|
10
|
20,000
|
|
Trent
A. Lundquist
|
2
|
4,000
|
|
Andrew
Kulpa
|
1
|
2,000
|
|
David
J. Raska
|
1
|
2,000
|
|
JR
Holdings Group, LLC
|
2
|
4,000
|
|
Philip
W. Thomas, Jr.
|
10
|
20,000
|
|
Scott
P. Batey
|
2
|
4,000
|
|
John
Alexander
|
2
|
4,000
|
|
Michael
R. Szudarek
|
2
|
4,000
|
|
Craig
W. Terry
|
1
|
2,000
|
|
Millicent
D. Sherman
|
1
|
2,000
|
|
Bill
& Joann Batey
|
2
|
4,000
|
|
Total
|
228
|
456,000
|
The
Common Stock issued in our Regulation D, Rule 506 Offering was issued in a
transaction not involving a public offering in reliance upon an exemption from
registration provided by Rule 506 of Regulation D of the Securities Act of 1933.
In accordance with Section 230.506 (b)(1) of the Securities Act of 1933, these
shares qualified for exemption under the Rule 506 exemption for this offerings
since it met the following requirements set forth in Reg. §230.506:
|
(A)
|
No
general solicitation or advertising was conducted by us in connection with
the offering of any of the Shares.
|
|
(B)
|
At
the time of the offering we were not: (1) subject to the reporting
requirements of Section 13 or 15 (d) of the Exchange Act; or (2) an
“investment company” within the meaning of the federal securities
laws.
|
|
(C)
|
Neither
we, nor any of our predecessors, nor any of our directors, nor any
beneficial owner of 10% or more of any class of our equity securities, nor
any promoter currently connected with us in any capacity has been
convicted within the past ten years of any felony in connection with the
purchase or sale of any security.
|
|
(D)
|
The
offers and sales of securities by us pursuant to the offerings were not
attempts to evade any registration or resale requirements of the
securities laws of the United States or any of its
states.
|
|
(E)
|
Other
than Joel M. Ungar, our CFO and Principal Accounting Officer, none of the
investors are affiliated with any of our directors, officers or promoters
or any beneficial owner of 10% or more of our
securities.
|
Please
note that pursuant to Rule 506, all shares purchased in the Regulation D Rule
506 offering completed in January 2009 were restricted in accordance with Rule
144 of the Securities Act of 1933. In addition, each of these shareholders were
either accredited as defined in Rule 501 (a) of Regulation D promulgated under
the Securities Act or sophisticated as defined in Rule 506(b)(2)(ii) of
Regulation D promulgated under the Securities Act.
In
February 2009, River Star was issued 1,000,000 shares of our common stock for
the consulting services rendered. These shares of our common stock qualified for
exemption under Section 4(2) of the Securities Act of 1933 since the issuance
shares by us did not involve a public offering. The offering was not a “public
offering” as defined in Section 4(2) due to the insubstantial number of persons
involved in the deal, size of the offering, manner of the offering and number of
shares offered. We did not undertake an offering in which we sold a high number
of shares to a high number of investors. The stock certificate bearing a legend
stating that such shares are restricted pursuant to Rule 144 of the 1933
Securities Act. This restriction ensures that these shares would not be
immediately redistributed into the market and therefore not be part of a “public
offering.” Based on an analysis of the above factors, we have met the
requirements to qualify for exemption under Section 4(2) of the Securities Act
of 1933 for this transaction.
We have
never utilized an underwriter for an offering of our securities. Other than the
securities mentioned above, we have not issued or sold any
securities.
|
EXHIBIT
NUMBER
|
DESCRIPTION
|
|
3.1
|
Articles
of Incorporation of Halberd Corporation *
|
|
3.2
|
By-Laws
of Halberd Corporation *
|
|
5.1
|
Opinion
of Anslow & Jaclin, LLP
|
|
10.1
|
Form
of Convertible Promissory Notes *
|
|
10.2
|
Form
Stock Conversion Agreement *
|
|
10.3
|
Consulting
Agreement by and between the Company and River Star, LLC, dated November
14, 2008 *
|
|
10.4
|
Employment
Agreement between the Company and John C. Maddox, dated January 2,
2009 *
|
|
10.5
|
Employment
Agreement between the Company and Mark Lundquist, dated January 2,
2009 *
|
|
10.6
|
Share
Purchase Agreement by and between the Company and SellMyBusinessNow.Com,
Inc., dated January 28, 2009 *
|
|
21.1
|
Subsidiary *
|
|
23.1
|
Consent
of Rehmann Robson, P.C.
|
|
23.2
|
Consent
of Counsel, as in Exhibit 5.1
|
|
24.1
|
Power
of Attorney (filed herewith on signature
page)
|
* Filed
as an exhibit to the S-1 Registration Statement filed with the SEC on March 13,
2009
The
undersigned registrant hereby undertakes:
(1) To file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement:
i. To
include any prospectus required by section 10(a)(3) of the Securities Act of
1933;
ii. To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
iii. To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
(2) That, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(5)
That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
i. If
the registrant is relying on Rule 430B (230.430B of this
chapter):
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A.
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Each
prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be
deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement;
and
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B.
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Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x)
for the purpose of providing the information required by section 10(a) of
the Securities Act of 1933 shall be deemed to be part of and included in
the registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof. Provided, however, that no
statement made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or modify
any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such effective date;
or
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ii.
If the registrant is subject to Rule 430C, each prospectus filed pursuant
to Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into
the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or
made in any such document immediately prior to such date of first
use.
(6) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities: The
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
i. Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
ii. Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
iii. The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
iv. Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and authorized this registration statement
to be signed on its behalf by the undersigned on April 10 ,
2009.
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HALBERD
CORPORATION
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By:
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/s/ Mark
Lundquist
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Mark
Lundquist
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Chief
Executive Officer and Director
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POWER
OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Mark Lundquist and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for his and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Halberd
Corporation) to sign any or all amendments (including post-effective amendments)
to this registration statement and any and all additional registration
statements pursuant to rule 462(b) of the Securities Act of 1933, as amended,
and to file the same, with all exhibits thereto, and all other documents in
connection therewith, with the SEC, granting unto each said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated:
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April
10, 2009
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By:
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/s/ Mark
Lundquist
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Mark
Lundquist
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CEO,
Secretary and Director
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April
10 , 2009
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By:
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/s/John C.
Maddox
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John
C. Maddox
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President,
COO, Treasurer and Director
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April
10 , 2009
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By:
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/s/ Joel M.
Ungar
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Joel
M. Ungar
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CFO
and Principal Accounting Officer
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April
10 , 2009
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By:
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/s/ Leland
M. Thomas
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Leland
M. Thomas
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Member
of Advisory Board
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April
10 , 2009
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By:
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/s/ Nicholas
Cocco
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Nicholas
Cocco
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Member
of Advisory Board, and Chief of
Staff
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