þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada | 98-0377767 |
(State or Other Jurisdiction of
Incorporation or Organization)
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(IRS Employer
Identification No.)
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37 Inbar St., Caesarea,
Israel
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30889
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(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company þ
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Report of Independent Registered Public Accounting Firm
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F - 1
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Consolidated Balance Sheets
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F - 2
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Consolidated Statements of Operation
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F - 3
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Consolidated Statements Stockholders' Equity
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F - 4
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Consolidated Statements of Cash Flows
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F - 5
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Notes to Consolidated Financial Statements
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December 31
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December 31
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|||||||
2009
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2008
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|||||||
$ | $ | |||||||
Assets
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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25,812 | 36,943 | ||||||
Trade receivables (Note 3)
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3,359 | 8,803 | ||||||
Prepaid expenses and other current assets
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9,332 | 6,854 | ||||||
Total current assets
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38,503 | 52,600 | ||||||
Other non-current assets
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2,762 | 4,824 | ||||||
Property and equipment, net (Note 4)
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28,555 | 63,113 | ||||||
Intangible assets, net
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74,507 | 86,507 | ||||||
Total assets
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144,327 | 207,044 | ||||||
Liabilities and stockholders’ equity (deficit)
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||||||||
Current liabilities:
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||||||||
Shot term bank credit
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795 | - | ||||||
Accounts payable and accrued liabilities
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285,693 | 167,228 | ||||||
Total current liabilities
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286,488 | 167,228 | ||||||
Convertible Promissory Note
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123,274 | - | ||||||
Total liabilities
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409,762 | 167,228 | ||||||
Commitments (Notes 8 and 10)
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||||||||
Stockholders’ equity (Deficiency):
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||||||||
Common stock; $0.001 par value; 700,000,000 shares authorized;
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||||||||
and 67,824,268 shares issued and outstanding as of
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||||||||
December 31, 2009 and December 31, 2008, respectively
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67,823 | 67,823 | ||||||
Additional paid-in capital
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3,616,670 | 3,597,625 | ||||||
Deficit accumulated during the development stage
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(3,949,928 | ) | (3,625,632 | ) | ||||
Total stockholders’ equity (Deficiency):
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(265,435 | ) | 39,816 | |||||
Total liabilities and stockholders’ equity
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144,327 | 207,044 |
Cumulative
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||||||||||||
from inception
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||||||||||||
(May 22, 2002)
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||||||||||||
Year ended December 31
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to December 31
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|||||||||||
2009
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2008
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2009
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||||||||||
$ | $ | $ | ||||||||||
Revenues
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73,358 | 57,004 | 145,276 | |||||||||
Costs and expenses :
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||||||||||||
Research and development
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65,167 | 142,247 | 526,831 | |||||||||
Sales and marketing
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14,520 | 203,463 | 324,350 | |||||||||
General and administrative *
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325,921 | 602,260 | 3,240,923 | |||||||||
Total operating expenses
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405,608 | 947,970 | 4,092,104 | |||||||||
Operating loss
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(332,250 | ) | (890,966 | ) | (3,946,828 | ) | ||||||
Interest income, net
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7,954 | 2,105 | 64,927 | |||||||||
Loss before income taxes
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(324,296 | ) | (888,861 | ) | (3,881,901 | ) | ||||||
Income tax expense
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- | 7,340 | 43,916 | |||||||||
Net loss
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(324,296 | ) | (896,201 | ) | (3,949,928 | ) | ||||||
Basic and diluted net loss per common share
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(0.00 | ) | (0.01 | ) | (0.08 | ) | ||||||
Weighted average number of shares used in computing
|
||||||||||||
basic and diluted net loss per common share
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67,824,268 | 67,719,443 | 50,778,384 |
*
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Includes $19,045, $63,545 and $1,083,247 in stock-based compensation to employees and non-employees for the years ended December 31, 2009, 2008 and for the cumulative period from May 22, 2002 (date of inception) to December 31, 2009 respectively.
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Additional
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Total
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|||||||||||||||||||
Common stock
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paid-in
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Deficit
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stockholders’
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|||||||||||||||||
Shares
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Amount
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Capital
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accumulated
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equity (deficit)
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||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||
Balance as at December 31, 2007
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67,543,275 | 67,543 | 3,534,360 | (2,729,431 | ) | 872,472 | ||||||||||||||
Issuance of common stock on January 22, 2008
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33,332 | 33 | (33 | ) | - | - | ||||||||||||||
Issuance of common stock on April 27, 2008
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180,997 | 181 | (181 | ) | - | - | ||||||||||||||
Issuance of common stock on July 14, 2008
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33,332 | 33 | (33 | ) | - | - | ||||||||||||||
Issuance of common stock on October 29, 2008
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33,332 | 33 | (33 | ) | - | - | ||||||||||||||
Stock-based compensation to employees and non-employees
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- | - | 63,545 | - | 63,545 | |||||||||||||||
Net loss for the year
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- | - | - | (896,201 | ) | (896,201 | ) | |||||||||||||
Balance as at December 31, 2008
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67,824,268 | 67,823 | 3,597,625 | (3,625,632 | ) | 39,816 | ||||||||||||||
Stock-based compensation to employees and non-employees
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- | - | 19,045 | - | 19,045 | |||||||||||||||
Net loss for the year
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- | - | - | (324,296 | ) | (324,296 | ) | |||||||||||||
Balance as at December 31, 2009
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67,824,268 | 67,823 | 3,616,670 | (3,949,928 | ) | (265,435 | ) |
Cumulative
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||||||||||||
from inception
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||||||||||||
(May 22, 2002)
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||||||||||||
Year ended December 31
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to December 31
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|||||||||||
2009
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2008
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2009
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||||||||||
$ | $ | $ | ||||||||||
Cash flows from operating activities:
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||||||||||||
Net loss
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(324,296 | ) | (896,201 | ) | (3,949,928 | ) | ||||||
Adjustments to reconcile net loss to net cash used in
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||||||||||||
operating activities:
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||||||||||||
Services contributed by officers
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- | - | 3,500 | |||||||||
Depreciation and amortization
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46,557 | 49,018 | 162,707 | |||||||||
Stock-based compensation
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19,045 | 63,545 | 1,083,247 | |||||||||
Changes in operating assets and liabilities:
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||||||||||||
Trade receivables
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5,444 | (4,177 | ) | (3,359 | ) | |||||||
Prepaid expenses and other current assets
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(2,478 | ) | 63,307 | (9,332 | ) | |||||||
Accounts payable and accrued liabilities
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118,466 | (13,480 | ) | 285,693 | ||||||||
Accrued severance pay
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- | (3,146 | ) | - | ||||||||
Net cash used in operating activities
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(137,262 | ) | (741,134 | ) | (2,427,472 | ) | ||||||
Cash flows from investing activities:
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||||||||||||
Decrease (increase) in long term deposit
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2,062 | 5,855 | (2,762 | ) | ||||||||
Decrease in restricted cash
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- | 30,000 | - | |||||||||
Increase in short term deposits
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- | 650,000 | - | |||||||||
Purchase of property and equipment
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- | (4,937 | ) | (145,769 | ) | |||||||
Purchase of intangible assets
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- | - | (120,000 | ) | ||||||||
Net cash provided by (used) in investing activities
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2,062 | 680,918 | (268,531 | ) | ||||||||
Cash flows from financing activities:
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||||||||||||
Decrease in short term bank-credit
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795 | - | 795 | |||||||||
Convertible Promissory Note
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123,274 | 123,274 | ||||||||||
Proceeds from issuance of common stock
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- | - | 2,836,286 | |||||||||
Offering costs
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- | - | (238,540 | ) | ||||||||
Net cash provided by financing activities
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124,069 | - | 2,721,815 | |||||||||
Net (decrease) increase in cash and cash equivalents
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(11,131 | ) | (60,216 | ) | 25,812 | |||||||
Cash and cash equivalents at beginning of period
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36,943 | 97,159 | - | |||||||||
Cash and cash equivalents at end of period
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25,812 | 36,943 | 25,812 | |||||||||
Supplemental disclosures of cash flow information:
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||||||||||||
Cash paid for interest
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- | - | - | |||||||||
Cash paid for taxes
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- | - | - |
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1.
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How an entity should evaluate whether an instrument (or embedded feature) is indexed to its own stock.
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2.
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How the currency in which the strike price of an equity-linked financial instrument (or embedded equity-linked feature) is denominated affects the determination of whether the instrument is indexed to an entity’s own stock.
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3.
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How an issuer should account for market-based employee stock option valuation instruments.
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December 31
2009
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December 31
2008 |
|||||||
$
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$
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|||||||
Value-added tax receivable
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3,414 | 1,429 | ||||||
Prepaid expenses
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5,918 | 5,425 | ||||||
9,332 | 6,854 |
Estimated
useful life |
December 31
2009 |
December 31
2008 |
||||||||||
$
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$
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|||||||||||
Computer equipment
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3 | 13,487 | 13,487 | |||||||||
Production equipment
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3 | 122,341 | 122,341 | |||||||||
Furniture
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7-15 | 7,924 | 7,924 | |||||||||
Leasehold improvements
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( | *) | 2,017 | 2,017 | ||||||||
145,769 | 145,769 | |||||||||||
Less - Accumulated depreciation and amortization
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117,214 | 82,656 | ||||||||||
28,555 | 63,113 |
December 31
2009 |
December 31
2008 |
|||||||
$
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$
|
|||||||
United States
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(34,274 | ) | (954,198 | ) | ||||
Israel
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(261,914 | ) | 65,335 | |||||
(296,188 | ) | (888,863 | ) |
December 31
2008 |
December 31
2007 |
|||||||
$
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$
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|||||||
Deferred tax assets:
|
||||||||
Net operating loss carry forwards
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1,286,057 | 1,206,307 | ||||||
Valuation allowance
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(1,286,057 | ) | (1,206,307 | ) | ||||
Net deferred tax assets
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- | - |
Year ended December 31
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||||||||
2009
|
2008
|
|||||||
$
|
$
|
|||||||
Loss before income taxes as per the income statement
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(296,188 | ) | (888,863 | ) | ||||
Tax calculated according to the statutory tax rate of 34%
|
(100,704 | ) | (302,213 | ) | ||||
Increase (decrease) in income tax resulting from:
|
||||||||
Non-deductible expenses
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- | 4,870 | ||||||
Change in valuation allowance
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79,750 | 324,009 | ||||||
Foreign tax rate differential
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23,695 | (4,573 | ) | |||||
Exchange rate differences
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(2,741 | ) | (14,753 | ) | ||||
Total income tax expense
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- | 7,340 |
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1.
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I have reviewed this Annual Report on Form 10-K of ACRO Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
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(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
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(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ Gadi Aner | |
Gadi Aner | |||
Chief Executive Officer and Chairman | |||
|
1.
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I have reviewed this Annual Report on Form 10-K of ACRO Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ Gabby Klausner | |
Gabby Klausner | |||
Treasurer and Chief Financial Officer | |||