x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Nevada
|
33-0910363
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
2
San Joaquin Plaza, Suite 240, Newport Beach, CA
|
92660
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Index
|
|||
PART I FINANCIAL INFORMATION |
PAGE
|
||
Item 1. | Financial Statements (Unaudited) |
4
|
|
5
|
|||
6
|
|||
7
|
|||
8
|
|||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results ofOperations |
11
|
|
Item 3. | Quantitative and Qualitative Discussion About Market Risk |
16
|
|
Item 4. | Controls and Procedures |
16
|
|
PART II OTHER INFORMATION | |||
Item 1. | Legal Proceedings |
16
|
|
Item 6. | Exhibits |
17
|
|
SIGNATURE PAGE |
18
|
Trycera
Financial, Inc.
|
||||||||
September
|
December
|
|||||||
30,
2008
|
31,
2007
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash
|
$ | 3,014 | $ | 72,625 | ||||
Accounts
Receivable, net
|
3,816 | 30,931 | ||||||
Prepaid Expenses and other current assets
|
6,800 | 29,853 | ||||||
Client
ACH Reserves
|
5,000 | 5,000 | ||||||
Total
Current Assets
|
18,630 | 138,409 | ||||||
Property
& Equipment, net
|
- | 9,751 | ||||||
Other Assets
|
||||||||
Definite
Life Intangible Assets, net
|
- | 2,159 | ||||||
Total
Other Assets
|
- | 2,159 | ||||||
Total
Assets
|
$ | 18,630 | $ | 150,319 | ||||
Liabilities
& Stockholders’ Equity (Deficit)
|
||||||||
Current Liabilities
|
||||||||
Accounts
Payable
|
$ | 307,430 | $ | 126,629 | ||||
Portfolio
reserves
|
34,773 | 34,202 | ||||||
Accrued
Expenses
|
123,475 | 114,878 | ||||||
10%
Senior Secured Notes
|
77,500 | - | ||||||
Total
Current Liabilities
|
543,178 | 275,709 | ||||||
Total
Liabilities
|
543,178 | 275,709 | ||||||
Commitments
|
- | - | ||||||
Stockholders’ Equity
(Deficit)
|
||||||||
Preferred
Stock, 20,000,000 Shares Authorized,
|
||||||||
$.001
Par Value; None Issued and Outstanding
|
- | - | ||||||
Common
Stock, 100,000,000 Shares Authorized at
|
||||||||
$.001
Par Value; 9,514,302 and 9,250,302 Shares
|
||||||||
Issued
and Outstanding, Respectively
|
9,514 | 9,250 | ||||||
Additional
Paid In Capital
|
5,336,237 | 5,184,500 | ||||||
Prepaid
Stock Compensation
|
- | (88,376 | ) | |||||
Accumulated
Deficit
|
(5,870,299 | ) | (5,230,764 | ) | ||||
Total
Stockholders’ Equity (Deficit)
|
(524,548 | ) | (125,390 | ) | ||||
Total Liabilities & Stockholders’ Equity
(Deficit)
|
$ | 18,630 | $ | 150,319 | ||||
Trycera
Financial, Inc.
|
||||||||||||||||
For
the Three Months Ended
|
For
the Nine Months Ended
|
|||||||||||||||
September
|
September
|
September
|
September
|
|||||||||||||
30,
2008
|
30,
2007
|
30,
2008
|
30,
2007
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Revenues
|
||||||||||||||||
Stored
Value
|
$ | 38,758 | $ | 146,570 | $ | 150,878 | $ | 2,104,022 | ||||||||
38,758 | 146,570 | 150,878 | 2,104,022 | |||||||||||||
Cost of Sales
|
(20,828 | ) | 116,589 | 118,029 | 1,762,802 | |||||||||||
Gross
Profit (Loss)
|
59,586 | 29,981 | 32,849 | 341,220 | ||||||||||||
Expenses
|
||||||||||||||||
Depreciation and Amortization
|
152 | 1,808 | 2,159 | 8,485 | ||||||||||||
Salaries
and Wages
|
- | 79,557 | 32,354 | 293,437 | ||||||||||||
Stock Based Compensation
|
25,569 | 54,255 | 134,121 | 99,736 | ||||||||||||
Professional
Fees
|
32,525 | 68,183 | 120,474 | 298,281 | ||||||||||||
Bad
debt expense
|
1,762 | 27,329 | 8,083 | 236,489 | ||||||||||||
Contract termination costs
|
- | - | 70,000 | - | ||||||||||||
General & Administrative
|
146,457 | 97,268 | 299,157 | 203,497 | ||||||||||||
Total
Expenses
|
206,465 | 328,400 | 666,348 | 1,139,925 | ||||||||||||
Loss
from Operations
|
(146,879 | ) | (298,419 | ) | (633,499 | ) | (798,705 | ) | ||||||||
Other Income (Expenses)
|
||||||||||||||||
Interest,
income
|
- | 152 | 174 | 452 | ||||||||||||
Interest,
expense
|
(1,953 | ) | (40 | ) | (3,934 | ) | (878 | ) | ||||||||
Other income (expense)
|
- | - | (2,276 | ) | - | |||||||||||
Total
other Income (expense)
|
(1,953 | ) | 112 | (6,036 | ) | (426 | ) | |||||||||
Loss
from Continuing Operations before tax
|
(148,832 | ) | (298,307 | ) | (639,535 | ) | (799,131 | ) | ||||||||
Income
tax
|
- | - | - | - | ||||||||||||
Loss
from Continuing Operations
|
(148,832 | ) | (298,307 | ) | (639,535 | ) | (799,131 | ) | ||||||||
Discontinued Operations
|
||||||||||||||||
Loss
on disposal of Discontinued Operations
|
- | - | - | (27,852 | ) | |||||||||||
Gain
(Loss) from Discontinued Operations
|
- | - | - | 7,043 | ||||||||||||
Total
gain (loss) from Discountinued Operations
|
- | - | - | (20,809 | ) | |||||||||||
Net
Loss
|
$ | (148,832 | ) | $ | (298,307 | ) | $ | (639,535 | ) | $ | (819,940 | ) | ||||
Basic
earnings per share:
|
||||||||||||||||
Loss
per share Continuing operations
|
$ | (0.02 | ) | $ | (0.04 | ) | $ | (0.07 | ) | $ | (0.10 | ) | ||||
Loss
per share Discontinued operations
|
- | - | - | - | ||||||||||||
Net
Loss per share
|
$ | (0.02 | ) | $ | (0.04 | ) | $ | (0.07 | ) | $ | (0.10 | ) | ||||
Weighted
average shares
|
9,449,085 | 8,178,671 | 9,368,556 | 7,952,021 |
Trycera
Financial, Inc.
|
||||||||
For
the Nine Months Ended
|
||||||||
September
|
September
|
|||||||
30,
2008
|
30,
2007
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Cash Flows from Operating
Activities
|
||||||||
Net
Loss
|
$ | (639,535 | ) | $ | (819,940 | ) | ||
Adjustments
to Reconcile Net Loss to Net Cash
|
||||||||
Used
by Operations;
|
||||||||
Depreciation
and amortization
|
2,159 | 14,798 | ||||||
Depreciation and amortization on discontinued operation
|
- | 581 | ||||||
Amortization
of prepaid stock compensation
|
88,376 | |||||||
Bad
debt expense
|
(8,083 | ) | - | |||||
Loss
on sale of assets
|
9,751 | 27,852 | ||||||
Stock
issued for services
|
17,880 | 104,730 | ||||||
Stock
options and warrants
|
134,121 | 99,736 | ||||||
(Increase)
decrease in accounts receivable
|
35,198 | 33,478 | ||||||
(Increase) decrease in prepaid and other current assets
|
23,053 | (4,374 | ) | |||||
(Increase)
decrease in deposits
|
- | 8,814 | ||||||
Increase
(decrease) in accounts payable
|
180,801 | 49,272 | ||||||
Increase
(decrease) in portfolio reserves
|
571 | 2,925 | ||||||
Increase
(decrease) in accrued expenses
|
8,597 | (21,724 | ) | |||||
Net
Cash Used by Operating Activities
|
(147,111 | ) | (503,852 | ) | ||||
Cash Flows from Investing
Activities
|
||||||||
Proceeds
from disposal of discontinued operations
|
- | 5,000 | ||||||
Net
Cash Provided (Used) by Investing Activities
|
- | 5,000 | ||||||
Cash Flows from Financing
Activities
|
||||||||
Proceeds
for issuance of 10% Secured Notes
|
77,500 | - | ||||||
Proceeds
from issuance of common stock
|
- | 455,000 | ||||||
Net
Cash Provided by Financing Activities
|
77,500 | 455,000 | ||||||
Net
Increase (Decrease) in Cash and Cash Equivalents
|
(69,611 | ) | (43,852 | ) | ||||
Cash
and Cash Equivalents at Beginning of Period
|
72,625 | 87,193 | ||||||
Cash
and Cash Equivalents at End of Period
|
$ | 3,014 | $ | 43,341 | ||||
Cash Paid for:
|
||||||||
Interest
|
$ | - | $ | 878 | ||||
Income
Taxes
|
$ | - | $ | - | ||||
Non-cash financing
activities:
|
||||||||
Common
stock issued for services and deferred compensation
|
$ | 240,377 | $ | 205,730 |
A.
|
General
|
|
The
accompanying condensed financial statements of the Company have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in
the United States have been condensed or omitted pursuant to such rules
and regulations. These condensed financial statements reflect
all adjustments (consisting only of normal recurring adjustments) that, in
the opinion of management, are necessary to present fairly the results of
operations of the Company for the periods presented. These
condensed financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company’s Form
10-KSB for the year ended December 31, 2007. The results of
operations for the three and nine months ended September 30, 2008, are not
necessarily indicative of the results that may be expected for the fiscal
year ending December 31, 2008.
|
B.
|
Earnings (Loss) Per
Share of Common Stock
|
|
The
computation of earnings (loss) per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements. Fully diluted earnings per share, which account for
outstanding employee stock options and warrants have not been shown
because the effect would have been anti-dilutive for the periods
presented.
|
For
the Three Months Ended
|
For
the Nine Months Ended
|
|||||||||||||||
September
|
September
|
September
|
September
|
|||||||||||||
30,
2008
|
30,
2007
|
30,
2008
|
30,
2007
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Basic
earnings per share
|
||||||||||||||||
Income
(loss) (numerator)
|
$ | (148,832 | ) | $ | (298,307 | ) | $ | (639,535 | ) | $ | (819,940 | ) | ||||
Shares
(demoninator)
|
9,449,085 | 8,178,671 | 9,368,556 | 7,952,021 | ||||||||||||
Per
share amount
|
$ | (0.02 | ) | $ | (0.04 | ) | $ | (0.07 | ) | $ | (0.10 | ) |
2004
Stock Plan
|
||||||||
Weighted
|
||||||||
Amount
|
average
|
|||||||
of
|
exercise
|
|||||||
shares
|
price
|
|||||||
Outstanding
at January 1, 2008
|
2,379,500 | $ | 0.73 | |||||
Options
Granted
|
- | - | ||||||
Options
Exercised
|
- | - | ||||||
Options
Canceled
|
(400,000 | ) | - | |||||
Options
Outstanding at September 30, 2008
|
1,979,500 | $ | 0.71 | |||||
Options
Exercisable at September 30, 2008
|
1,773,667 | $ | 0.66 |
2004
Stock Plan
|
||||||||
Weighted
|
||||||||
Amount
|
average
|
|||||||
of
|
exercise
|
|||||||
shares
|
price
|
|||||||
Outstanding
at January 1, 2007
|
2,874,750 | $ | 0.63 | |||||
Options
Granted
|
528,250 | 0.96 | ||||||
Options
Exercised
|
- | - | ||||||
Options
Canceled
|
(23,500 | ) | 1.00 | |||||
Options
Outstanding at September 30, 2007
|
3,379,500 | $ | 0.68 | |||||
Options
Exercisable at September 30, 2007
|
2,734,706 | $ | 0.61 |
September
30, 2008
|
||||
Five
Year Risk Free Interest Rate
|
4.56%
-5.1%
|
|||
Divident
Yield
|
-
|
|||
Volatility
|
61%
- 244%
|
|||
Average
Expected Term (Years to exercise)
|
5
|
Weighted
|
Average
|
Weighted
|
||||||||||||||||||||
Number
of
|
Average
|
Remaining
|
Number
|
Average
|
||||||||||||||||||
Range
of
|
Options
|
Exercise
|
Contractual
|
of
Options
|
Exercise
|
|||||||||||||||||
Exercise
Price
|
Granted
|
Price
|
Life
(Years)
|
Vested
|
Price
|
|||||||||||||||||
$ | .001 - $0.99 | 1,321,250 | $ | 0.54 | 0.8 | 1,321,247 | $ | 0.54 | ||||||||||||||
$ | 1.00 - $2.00 | 658,250 | $ | 1.04 | 2.2 | 412,420 | $ | 1.06 |
Employee
stock options outstanding and exercisable under this plan as of December
31, 2007 are:
|
Weighted
|
Average
|
Weighted
|
||||||||||||||||||||
Number
of
|
Average
|
Remaining
|
Number
|
Average
|
||||||||||||||||||
Range
of
|
Options
|
Exercise
|
Contractual
|
of
Options
|
Exercise
|
|||||||||||||||||
Exercise
Price
|
Granted
|
Price
|
Life
(Years)
|
Vested
|
Price
|
|||||||||||||||||
$ | .001 - $0.99 | 1,481,250 | $ | 0.55 | 2.5 | 1,421,247 | $ | 0.55 | ||||||||||||||
$ | 1.00 - $2.00 | 898,250 | $ | 1.03 | 3.5 | 393,793 | $ | 1.06 |
For
the Three Months Ended
|
For
the Nine Months Ended
|
|||||||||||||||
September
|
September
|
September
|
September
|
|||||||||||||
30,
2008
|
30,
2007
|
30,
2008
|
30,
2007
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Basic
earnings per share
|
||||||||||||||||
Revenue
|
$ | - | $ | - | $ | - | $ | 65,293 | ||||||||
Income
(loss) from discontinued operations
|
$ | - | $ | - | $ | - | $ | 7,043 |
Exhibit No.
|
Description
|
|
Certification
pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the
Securities Exchange Act of 1934 of the Principal Executive and Principal
Financial Officer.
|
||
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, of the Principal
Executive Officer and Principal Financial
Officer.
|
Trycera Financial, Inc. | |||
Date:
November 19, 2008
|
By:
|
/s/ Alan Knitowski | |
Alan Knitowski, Chairman | |||
(Principal Executive and Financial Officer) | |||