Item 1. Business
History
We were incorporated under the name “DP Charters” in Nevada on December 18, 1997. On April 18, 2002, we changed our name to “Nomadic Collaboration International, Inc.” Effective May 30, 2003, LGC Acquisition Company, a Delaware corporation and wholly owned subsidiary of Nomadic Collaboration International, Inc., a Nevada corporation, merged with and into LiquidGolf Corporation, a Delaware corporation, such that LiquidGolf Corporation was the surviving entity, and by virtue thereof, LiquidGolf corporation became a wholly owned subsidiary of Nomadic Collaboration. On September 29, 2003, the Company completed a re-incorporation merger into a Delaware Corporation thus changing the state of incorporation from Nevada to Delaware. As a result of the merger, the name of the Company changed to LiquidGolf Holding Corporation. Our business operations at this time became the sale of golf equipment.
On August 12, 2004, we determined to change the name of the Company from LiquidGolf Holding Corporation to Horizon Holding Corporation to reflect our business decision to diversify our business operations beyond the sale of golf equipment. As part of this effort, in January 2006, we purchased the Silent SwordTM software and all trademarks, service marks, and logos. On April 28, 2006 a majority of our stockholders approved changing the name of the Company from Horizon Holding Corporation to Inverted Paradigms Corporation to reflect our business direction of developing the Silent SwordTM software. Eventually we were not successful in achieving commercially viable operations in the sale of golf equipment or in the sale software. We discontinued the sale of golf equipment in August of 2006 and the sale of software in March of 2007. On October 2, 2007, we entered into an agreement with GAMI, LLC for GAMI, LLC to purchase from the Company the Silent SwordTM software and thereafter consummated the sale.
In September, 2007, it was determined to focus business interests on researching, developing and commercializing innovative, leading-edge technologies. On September 7, 2007, Mr. Chris Trina was hired to be our CEO to pursue this business direction. Our name would eventually be changed to Transfer Technology International Corp. (“TTIN”) to reflect this business direction.
Transfer Technology
TTIN’s goal is to build an intellectual properties portfolio and develop commercialization strategies that will lay the groundwork for the company’s future growth. To execute this business plan, the company plans to: (1) identify, evaluate and acquire promising technologies; (2) assess the potential market for each technology and recruit likely business partners; and (3) capitalize on the technology potential through commercialization.
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During the first quarter of 2008, TTIN acquired patents relating to two technologies. The first is a patented process for preventing flash rust on low carbon steel. The second patent is for a product that protects citrus groves from citrus canker, a disease that causes millions of dollars of crop damage each year. Both of these technologies address large markets and offer significant sales opportunities. A study by CCT Technologies estimates that rust damage costs U.S. businesses approximately $276 billion annually. Regarding citrus canker, the U.S. Department of Agriculture has spent more than $436 million since 2000 on citrus canker eradication efforts. In addition, the company is currently evaluating other patents for possible acquisition.
TTIN plans to research, develop and commercialize innovative, leading-edge technologies through the acquisition of licenses and the design of effective commercialization strategies in conjunction with business partners who can facilitate market penetration. The company will also help clients identify and acquire development-stage technologies and processes that can enhance the client’s business in exchange for milestone and royalty payments.
Three-fold strategy for technology acquisition
The company seeks to identify technologies that represent a significant advance over existing technologies, address an established market and are socially responsible. TTIN plans to pursue technology licensing opportunities in the government, academic and private sectors:
1. TTIN intends to negotiate Cooperative Research and Development Agreements (CRADA) with the Department of Energy, Department of Agriculture and other federal agencies. As part of these agreements, the company will fund research and development of technologies discovered by scientists employed by these government agencies;
2. In the academia market, TTIN plans to target numerous “orphaned” inventions and technology improvements. Approximately 70 percent of university patents never find a practical application or a commercial market;
3. TTIN will also search for licensing opportunities in the private sector by evaluating new technologies and entering into licensing agreements with developers.
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First two patents acquired in the first quarter of 2008:
Flash Off rust preventative targets corrosion market
Flash Off rust preventative (U.S. patent number 7,008,910) inhibits flash rusting on low carbon steel. Applications for this product include structural steel, marine vessels, offshore structures, marine terminals, cranes, bridges, storage tanks, pipelines and potable water storage tanks. Rusting and corrosion adversely affect the performance of unprotected steel and may eventually result in structural failures.
A study titled “Corrosion Costs and Preventive Strategies in the United States” conducted by CCT Technologies with support from the Federal Highway Administration and National Association of Corrosion Engineers estimates total direct cost of corrosion damage at $276 billion annually.
Canker Kill product protects citrus groves
Canker Kill is an environmentally-friendly spray that protects citrus groves from a group of diseases commonly known as citrus canker. ABC Research Corporation lab tested Canker Kill and found it effective against the Xanthomonas bacteria. Field tests by Glades Crop Care Inc. indicated Canker Kill was more effective than traditional copper spray treatments and much better than leaving trees untreated. Canker Kill also reduces or stops the growth of spoilage-causing micro-organisms such as Gram-positive bacteria, Gram-negative bacteria, mold, yeast and spores. As a result, Canker Kill has potential applications in the food and beverage processing industries.
Citrus canker is a disease that causes lesions on the leaves, stems and fruit of citrus trees, including lime, orange and grapefruit. Eradicating canker is extremely costly and typically involves burning citrus orchard trees.
Our Canker Kill product contains the active ingredient d-limonene which is required to be registered for use with the United States Environmental Protection Agency (the “EPA”). D-limonene is already registered for a use different from ours under the herbicide label, EPA Reg No. 82052-4; 55% d-limonene. In January, 2009, the EPA led us to believe that because of the existing registration, a simple label review is all that would be required for our use of the product. To that end we named our application of d-limonene EcoAvenger Citrus Canker Control and submitted it for approval expecting a four month turn around. However, subsequent to our submission, the EPA shifted its position and insisted that it would classify our regulatory request under PRIA 2 as a new use, requiring a 15 month or longer time for review. The new additional use registration (R230) application was submitted in July, 2009, and was issued a PRIA 2 date of November 3, 2010. However, as of the date of this filing we have not received approval of our conditional use label and remain subject to the EPA’s time table.
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Other Technologies and Operations
Organic Products International
The Company has begun the development of a subsidiary corporation called Organic Products International which markets organic products. We are under contract with Cutting Edge Formulations in distributing their products; Avenger Organics De-weeder, Bug and Insect killer, Bed Bug killer, kelp and granular fertilizers and nutrients.
Xt2000 Orange Oil and X-Terminate, Inc.
In about June, 2009, we were introduced to a new organic product call Xt2000 Orange Oil used for termite eradication. After becoming familiar with the product, management decided to add Xt2000 Orange Oil to its organic product line and to market the oil to licensed pest control operators in the State of Florida. In November, 2009, we went further into this market and formed a new subsidiary called Xterminate, Inc., a Florida corporation, which would take us directly into the eco-friendly pest control business of applying the oil for termite control purposes. On March 1, 2010, we opened a freestanding, full service pest control operation at 5501 54th Ave. N., St. Petersburg, Florida and have four technicians who work out of that office on an independent contractor basis. All technicians together and the subsidiary itself are licensed as wood destroying organism ID card badge holders with the state of Florida. The termite swarming season in Florida runs from May to September and represents the months of our greatest opportunity.
In 2010 the Company generated total revenues of $69,760. The majority of this revenue came from providing pest control services to the public. The balance came from the direct sale of our organic products.
Growth outlook
The company hopes to raise $1 million in the next 12 months for the purpose of sustaining the business operations of the Company and commercializing technologies owned by the Company. This capital will be augmented by revenues from our pest control services operation and organic products sales operation.
Scientific Advisory Board
Mr. Trina has assembled a Scientific Advisory Board for evaluating new technologies. TTIN’s expert advisors include: Dr. Sandy W. Shultz MD, Chief of Radiology at the Lower Keys Regional Medical Center in Key West Florida and Dr. David Silver.
Industry and Market opportunity
Technology transfers begin with the notion that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research efforts, but should instead seek to acquire or license relevant processes or patents from other companies. In addition, internally developed technologies not used by the company should be monetized through licensing, joint ventures or spin-offs.
The transfer technology market includes virtually every university, research facility, government agency and private enterprise worldwide where new technologies are researched. This market consists of literally thousands of facilities researching tens of thousands of new technologies across a broad spectrum of industries.
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Stanford University alone filed more than 300 patents in 2004, and has spun off technologies that helped build well-known companies such as Google, Sun Microsystems, Netscape, Cisco Systems and Yahoo. Each year, the Massachusetts Institute of Technology executes almost 100 licenses. The Georgia Institute of Technology in Atlanta, the University of Wisconsin in Madison, and Carnegie Mellon University in Pittsburgh have dedicated considerable resources to building productive technology transfer businesses. Universities receive hundreds of millions of dollars in royalties each year from businesses that have licensed and commercialized their inventions through technology transfers.
TTIN is a technology transfer company focused on researching, developing and commercializing innovative, leading-edge technologies. The company identifies and acquires promising technologies, knowledge and/or capabilities developed by academia, governmental research or private enterprises, with plans to utilize these technologies to address unmet needs in the public and private sector through commercialization. It should be noted that even though the Company has to date acquired the rights to two such technologies, it has yet to successfully launch the commercialization of a technology.
Employees
At the present time TTIN has three full time employees and three part time employees.
Item 1A.
Item 1A. Risk Factors
Not required
Item 1B.
Item 1B. Unresolved Staff Comments
This section does not apply since the Company is not an accelerated filer or a large accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934 or a well-known seasoned issuer as defined in Rule 405 of the Securities Act of 1933.
Item 2.
Item 2. Properties
Our headquarters are based in our facility located at 2240 Twelve Oaks Way, Suite 101-1, Wesley Chapel, FL. Our rent for this location is $535 per month. Our pest control operation is located at 5501 54th Ave. N., St. Petersburg, Florida. Our rent at that location is $1,500 per month. Both leases are on a month to month basis.
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Item 3.
Item 3. Legal Proceedings
Lawsuit by Gary Harrison
In the first quarter of 2009 a dispute arose with Gary Harrison regarding his consulting responsibilities with the Company. In a settlement of the matter, the Company agreed to pay Mr. Harrison $67,857 together with interest that accrues at 8% per annum. The payment came due on January 25, 2010. The Company was unable to make the payment and the parties agreed upon a six month extension of the payment due date to July 25, 2010. The Company was unable to make payment on July 25, 2010. This amount has been accrued in the accompanying condensed consolidated balance sheet in settlement liabilities.
On September 28, 2010, Mr. Harrison filed a lawsuit against the Company in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County Florida, Civil Division, Division J, Case Number 10019528. The suit seeks to collect $67,857 pursuant to the settlement agreement together with post default interest at the rate of 18% per annum. The suit was served upon the Company on November 11, 2010. The Company had until December 1, 2010, to answer the complaint. Due to a lack of funding, the Company was not able to retain legal counsel for the purpose of answering the complaint within the allotted time. On April 5, 2011, the court entered a default judgment against the Company in the amount of $88,949.80.
Default Judgment in favor of Marilyn Simmons
On January 27, 2010, TTIN was sued by Marilyn Simmons who had invested $90,000 with the Company. The suit claimed the investment was not suitable for her and was fraudulent. TTIN disagreed with the claims and believes the suit could have been successfully defended. However, TTIN did not have the money to retain legal counsel to defend the suit and in March, 2010, Simmons obtained a default judgment against TTIN in the amount of $97,786.
On April 9, 2010, TTIN entered into an agreement with Simmons (the “Stay Agreement”) wherein Simmons would stay any execution of the judgment if TTIN would pay her a total of $120,000. TTIN must pay 7% of any money it raises for working capital purposes toward this obligation until paid in full. During any calendar quarter that working capital is not raised, TTIN must pay at least $5,000 from other sources on this obligation. TTIN also agreed to change the conversion terms of the note from $0.25 per share to $0.06 per share and to issue Simmons an additional 50,000 shares of stock for $50. No interest will accrue on the $120,000 and no fees will be added to the $120,000. If TTIN defaults on the agreement, the stay will be lifted and Simmons will be able to execute on the judgment against the assets of TTIN. As of the date this report on Form 10-K was filed, $25,000 has come due pursuant to the stay agreement of which only $12,800 has been paid. However, no legal action has been taken as of yet to lift the stay of execution. Mrs. Simmons recently passed away and the Company is now dealing with her estate. These amounts have been accrued in the accompanying condensed consolidated balance sheet in settlement liabilities.
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Lawsuit by Brown and Goldfarb, LLC
Effective January 1, 2010, the Company entered into an agreement with Brown and Goldfarb, LLC, wherein the Company was granted an exclusive license to sell a therapeutic device for thermally assisted urinary function. On April 28, 2010, the Company was sued by Brown and Goldfarb, LLC in the Circuit Court of the Thirteenth Judicial Circuit, in and for Hillsborough County, Florida, Division K, Case Number 10008285, for failure to pay cash advance fees of $40,000 and issue 250,000 shares of Company common stock required by the Agreement. The parties settled the lawsuit by the Company agreeing to pay $10,000 on September 30, 2010 and $15,000 on July 30, 2010. The Company was unable to make the first payment and as a result, default judgment was entered against the Company in the amount of $50,000 on July 13, 2010. Brown and Goldfarb has agreed to not execute on their judgment if they receive payment of $25,000. So far the Company has only been able to pay $5,000. The Company has accrued $50,000 to reflect the liability to the Company as a result of the default judgment.
Lawsuit by Margaret Wisniewski
On December 4, 2008, Margaret Wisniewski purchased from the Company a One-year Convertible Promissory Note in the amount of $50,000. Mrs. Wisniewski has now filed suit in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, State of Florida seeking a return of her investment. The complaint alleges the investment constituted exploitation of a vulnerable adult. The Company did not have the funding necessary to defend the suit and the Company’s default has been entered with the court but no default judgment has been entered. Opposing counsel has agreed to not enter default judgment at this time but rather negotiate an agreement whereby the Company will pay the amounts owed. These amounts have been accrued in the accompanying condensed consolidated balance sheet in settlement liabilities.
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PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Trading Market
Our common stock is quoted on the OTC Electronic Bulletin Board under the symbol “TTIN.OB”. The following table presents the range of high and low quotations during the past two years. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
On March 25, 2011, the last trade of our stock was at the price of $0.006 per share.
Holders of our common stock
As of March 25, 2011, we have 674 registered shareholders.
Dividends
There are no restrictions in our Certificate of Incorporation or bylaws that restrict us from declaring dividends. However, we are prohibited from declaring dividends where, after giving effect to the distribution of the dividend:
1. We would not be able to pay our debts as they become due in the usual course of business; or
2. Our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
We have not declared any dividends. We do not plan to declare any dividends in the foreseeable future.
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Item 6.
Item 6. Selected Financial Data.
Not required.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Due to insufficient progress in prior business operations, approximately three and one- half years ago the Company liquidated its business assets and launched a new business plan. Its business assets had been comprised of software known as Silent Sword which protected computers from viruses and spyware. The Company had not been successful in marketing the software at levels sufficient to make further development of the software commercially viable. At the time of transfer on October 4, 2007, the software was not being carried on the books of the Company. The software was transferred in exchange for the acquirer’s agreement to invest $150,000 in the Company’s common stock.
To launch its new business plan, the Company hired a new CEO with experience in its new direction. The industry in which the Company is now engaged is described by the Company as technology transfer. The Company changed its name to Transfer Technology International Corp. to reflect involvement in this industry.
The Company commercializes new or underused technologies through the acquisition of licenses and through the design of effective commercialization strategies in conjunction with business partners who can facilitate market penetration. During the first quarter of 2008, the Company acquired patents relating to two technologies. The first is a patented process for preventing flash rust on low carbon steel. The second patent is for a product that protects citrus groves from citrus canker, a disease that causes millions of dollars of crop damage each year. The Company has to date realized no revenues from the first two patents and is not carrying any value for the patents or any rights therein on its financial statements.
In addition to the commercialization of our technologies, the Company has acquired the rights to be a reseller of certain organic products and engage in pest control application services. These two activities have created revenue streams for the Company, albeit in a minor way at this time. Management believes, however, that these business activities have significant potential for the Company. During the fiscal year ended December 31, 2009, the Company had top line revenues from business operations in the amount of $96,664. During the fiscal year ended December 31, 2010, the Company had top-line revenues from business operations in the amount of $69,760. The decrease was due to economic hardship in the overall economy.
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Capital Resources
Current business operations have been funded by financing activities including borrowing money and the sale of notes and equity capital. During the fiscal year ended December 31, 2009, the Company realized net cash of $787,376 through financing activities and $352,467 during the fiscal year ended December 31, 2010. Even though management believes operating revenues may be generated soon through the commercialization of acquired technologies and the sale of organic products and pest control services, management plans on continuing meeting it cash obligations in the foreseeable future through the continued sale of its common stock in private placements. Other sources of capital to the Company include bridge financings from shareholders.
Fiscal years ended December 31, 2009 and 2010
During the fiscal year ended December 31, 2009, the Company incurred $2,860,261 in general administrative expenses and a net loss of $2,424,399. Of that amount, $1,401,673 was in the form of non-cash adjustments such as stock issued to directors and executive officers for services rendered and stock issued to vendors and consultants for compensation. Changes in certain assets and liabilities such as accounts payable and accrued expenses were $91,672. Accordingly, net cash used in operating activities was $931,055 for the year ended December 31, 2009. The operations of the Company were sustained by proceeds from the sale of our common stock and proceeds from notes.
During the fiscal year ended December 31, 2010, the Company incurred $1,053,835 in general administrative expenses, down $1,806,426 from the prior year. The net loss for the year was $1,532,141. Due to lack of business revenue and the ability to raise money through the sale of equity capital, during 2010 the Company had to cut back business operations, lay off staff and economize in every way possible to keep the Company operational, thereby resulting in the decreased expense. Of the expense amount, $383,373 was in the form of non-cash adjustments, and changes in certain assets and liabilities were $786,528. Accordingly, net cash used in operating activities was $352,240. Expenses were offset by top-line revenue of $69,760. Revenues came from the sale of organic products and from the Company’s new termite control operation.
Management estimates cash expenditures in the future will total approximately $35,000 per month. Accordingly, going forward, the Company needs approximately $105,000 per quarter to stay solvent. As mentioned earlier, these cash needs will be met in the near term through the sale of equity capital and eventually through revenues from its business operations.
Liquidity
During the fiscal years ended December 31, 2009 and 2010, the Company funded its business operations through the sale of convertible notes and equity capital. During the spring and summer of 2009, it became more difficult than it had been in the past to raise operating capital in this manner as a result of the downturn in the nation’s capital markets generally. In addition, as our stock price fell with the fall of the economy, it was more difficult to raise money through the sale of equity capital. Nevertheless, the Company continues its efforts to raise money through the sale of convertible notes.
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The Company had also anticipated that it would be generating revenue by mid 2010 through the commercialization of technologies currently owned or acquired by the Company, principally its Canker Kill product. However, label delays for the Canker Kill product at the EPA has pushed back commercialization of this product approximately 18 months to the middle of 2011 or early 2012 and an inability to raise large amounts of capital has delayed our ability to acquire and commercialize other technologies.
Our current plans for addressing liquidity concerns is to continue raising money through the sale of convertible notes and to generate revenue through marketing our organic products and operating our termite eradication unit. If we are not successful in raising sufficient capital and achieving sufficient operating revenues, the Company will cease to exist as a going concern.
CONTINGENT LIABILITIES
The following is a discussion of various circumstances that could become material liabilities for the Company.
Stock Issuance to shareholder
In January, 2009, SB Investment Trust, a shareholder and related party to the Company transferred free trading shares to a third party. Sometime after that, the Company issued restricted shares to SB Investment Trust to replace the transferred shares to induce SB Investment Trust to transfer the free trading shares to three investor relation firms for services provided to the Company. The Securities and Exchange Commission (“SEC”) takes the position that this type of transaction may violate Section 5 of the Securities Act of 1933.
At the time of the transaction, Company management did not know the stock issuance violated any rule or regulation of the SEC. When informed of the SEC’s position on such matters, management cancelled the stock that had been issued to the SB Investment Trust in 2010. The shares transferred to the three investor relation firms have not been returned.
Purchase of Company Shares
Beginning in 2008 and from time to time, the Company became aware of certain shareholders who wanted to sell their stock. Rather than have large sales in the market that could put downward pressure on the market price, the board of directors approved a plan whereby the Company could purchase those shares if it determined to do so. The plan also allowed the Company to purchase its own shares in the open market. The Company issued a press release on October 2, 2008, discussing the plan and its intent to purchase its own stock from time to time. There were 20 non-market purchases of 1,725,351 common shares in the aggregate at a combined cost of $288,552 in 2008 through 2009. Upon purchase by the Company, the shares were cancelled.
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A tender offer is a means of buying a substantial portion of the outstanding stock of a company by making an offer to purchase all shares, up to a specified number, tendered by shareholders within a specified period at a fixed price. The Company believes the relatively small number of shares it purchased at individually negotiated prices from a limited number of shareholders does not come under the purpose or the intent of tender offer regulation nor subject it to that regulation.
Default on Buy Back Agreements
In February, 2009, the Company was contacted by three investors requesting the Company buy back their investments. The Company agreed to do so. The combined investment price was $235,000 and was to be paid by the Company over time on monthly payments. The Company was only able to make the first two payments and is now in default on the agreements. One of the investors who was to receive $70,000 has now contacted the Company through his lawyer and is taking the position that he was not given all appropriate rights when he made his investment and is demanding payment in full of the $70,000 plus interest. The Company is adamantly taking the position that the investment was made properly. However, the Company is in default on the three Buy Back Agreements and is subject to the liability as a result thereof. The Company has accrued for the settlements as of December 31, 2010 and December 31, 2009, in the accompanying Consolidated Balance Sheet.
Claims by two additional Shareholders
The Company was contacted by an attorney representing two of the Company’s investors on April 30, 2010. The attorney demanded the investments in the Company by the investors totaling $262,000 plus interest be paid by the Company immediately. The $262,000 in investments was comprised of $160,000 in purchases of stock and/or warrants to purchase stock and $102,000 in convertible notes. The attorney maintains the investors were not given all of their rights at the time of the investments. The Company adamantly denies any such claims but is nevertheless under the burden of settling the dispute or potentially defending litigation that may be brought by the investors. However, due to the remote nature of the claims and the length of time since the Company was contacted by the investors’ legal counsel, the Company has not accrued for potential liability in its financial statements for these claims.
Payment Demand by two Noteholders
On August 21, 2010, a convertible note issued by the Company came due in favor of Mr. Michael Buckley in the amount of $200,000. Interest was discounted at the inception of the note so the $200,000 is the full amount due. Mr. Buckley has opted to not convert the note and is demanding payment in cash from the Company. The Company is unable to make payment. Mr. Buckley has hired legal counsel who has contacted the Company. An agreement has been reached whereby Mr. Buckley will delay collection of his note in exchange for a perfected security interest in favor of Mr. Buckley in all of the assets of the Company. The perfected security interest was put in place by making UCC-1 filings with the states of Florida and Delaware on October 27, 2010, and October 29, 2010, respectively and by filing an assignment of patents with respect to the two patents owned by Company, with the United States Patent and Trademark Office on November 4, 2010. If the Company is not successful in paying this obligation to the satisfaction of Mr. Buckley, Mr. Buckley will be in a position to take over all of the assets of the Company potentially shutting down all business operations. The Company is currently attempting to make arrangements for a third party to purchase this debt from Mr. Buckley. An additional note in the amount of $100,000 payable to Michael Buckley has also recently come due so a combined amount of $300,000 is now owed to Mr. Buckley by the Company.
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In July, 2010, a convertible note issued by the Company came due in favor of Mr. Louis Fiorica in the amount of $10,000. Mr. Fiorica has decided to not convert the note and is demanding payment of $10,000 plus interest. The Company is not in a position to make payment. To date, no legal action has been taken by Mr. Fiorica against the Company. The Company is currently making arrangements for a third party to purchase this debt from Mr. Buckley.
Note to John Cawood
Approximately ninety days ago, a note payable by the Company to Mr. John Cawood in the amount of $100,000 became due and payable. At the present time the Company does not have means to repay the note. The Company has not been contacted by Mr. Cawood or any party representing Mr. Cawood regarding this note.
Forward-Looking Statements
We may have made forward-looking statements, within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, in this Annual Report on Form 10-K, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities and the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. You should understand that many important factors, in addition to those discussed elsewhere in this Annual Report on Form 10-K, could cause our results to differ materially from those expressed in the forward-looking statements. These factors include, without limitation, the rapidly changing industry and regulatory environment, our limited operating history, our ability to implement our growth strategy, our ability to integrate acquired companies and their assets and personnel into our business, our fixed obligations, our dependence on new capital to fund our growth strategy, our ability to attract and retain quality personnel, our competitive environment, economic and other conditions in markets in which we operate, increases in maintenance costs and insurance premiums and cyclical and seasonal fluctuations in our operating results. TTIN, unless legally required, undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
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Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements and do not anticipate entering into any off-balance sheet arrangements that would have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not Required.
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Item 8.
Item 8. Financial Statements and Supplementary Data.
TRANSFER TECHNOLOGY INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
`
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TRANSFER TECHNOLOGY INTERNATIONAL CORP. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders
Transfer Technology International Corporation
Wesley Chapel, Florida
We have audited the accompanying consolidated balance sheets of Transfer Technology International Corporation and Subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders' deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Transfer Technology International Corporation and Subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses and has experienced negative cash flows from operations, which raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to those matters are also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ HJ & Associates, LLC
HJ & Associates, LLC
Salt Lake City, Utah
April 15, 2011
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The accompanying notes are an integral part of these consolidated financial statements.
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The accompanying notes are an integral part of these consolidated financial statements.
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The accompanying notes are an integral part of these consolidated financial statements.
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The accompanying notes are an integral part of these consolidated financial statements.
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TRANSFER TECHNOLOGY INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
Note 1 - Organization
Transfer Technology International Corp. (the “Company”) was previously known as Inverted Paradigms Corporation (“Inverted Paradigms” or the “Company”) was incorporated in the State of Nevada on December 18, 1997. On September 29, 2003, the Company completed a re-incorporation merger into a Delaware Corporation thus changing the state of incorporation from Nevada to Delaware. The Company is in the process of seeking new technology.
On March 17, 2009 the Company announced the creation of its wholly owned subsidiary Organic Products International Corp. (OPI). The decision to launch OPI is based on the development of three market ready products, and licensing agreements that provide a base of product offerings.
In November, 2009, the Company formed a new subsidiary called Xterminate, Inc., a Florida corporation, which launched their eco-friendly termite control business. The Company applies oil for termite control purposes.
Note 2 - Basis of Presentation - Going Concern
The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has experienced net losses since February 16, 1999 (date of inception), which losses have caused an accumulated deficit of $47,933,557 as of December 31, 2010 and $46,401,416 as of December 31, 2009. This factor, among others, raises substantial doubt about the Company’s ability to continue as a going concern.
Management has been able, thus far, to finance the losses through a series of private placements and convertible notes payable. The Company is continuing to seek other sources of financing and attempting to explore alternate ways of generating revenues through partnerships with other businesses. Conversely, the seeking of new technology is expected to result in operating losses for the foreseeable future. There are no assurances that the Company will be successful in achieving its goals.
In view of these conditions, the Company’s ability to continue as a going concern is dependent upon its ability to obtain additional financing or capital sources, to meet its financing requirements, and ultimately to achieve profitable operations. Management believes that its current and future plans to raise capital provide an opportunity to continue as a going concern.
Note 3 - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Transfer Technology International, Corporation and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in the consolidated financial statements.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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Fair Value of Financial Instruments
The carrying amount of financial instruments, including cash and cash equivalents, accounts payable, and accrued expenses, debt and other liabilities, approximate fair value due to their short maturities.
Revenue Recognition
Revenue is recognized when persuasive evidence of an arrangement exists, services are rendered, pricing is fixed or determinable and collectability is reasonably assured.
Recent Accounting Pronouncements
In August 2010, the FASB issued ASU No 2010-22, Accounting for Various Topics. Technical Corrections to SEC Paragraphs- An announcement made by the staff of US Securities and Exchange Commission. This Update makes changes to several of the SEC guidance literature within the Codification. Some of the changes relate to (1) Oil and Gas Exchange Offers, (2) Accounting for Divestiture of a Subsidiary or Other Business Operations, (3) Replaces “Push Down” basis accounting references with “New” basis of accounting to be used in the acquired companies financial statements, (4) Fees paid to an investment banker in connection with an acquisition or asset purchase, when the investment banker is also providing interim financing or underwriting services must be allocated between the related service and debt issue costs. The amendments in this Update are effective immediately. The Company doesn’t expect this guidance to have a significant impact on its financials since there are no changes to accounting that were not already being applied by the Company.
In July 2010, the FASB issued ASU No 2010-20, Receivables (Topic 310) - Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. This Update requires additional disclosures for financing receivables, excluding short-term trade accounts receivables and or receivables measured at fair value. The new disclosures are designed to allow a user to better evaluate a company’s credit risk in the portfolio of financing receivables, how the risk is analyzed and in allowing for credit losses and the reason for the changes in the allowance for credit losses. Some of the additional disclosures required are to provide a rollforward of allowance for credit losses by portfolio segment basis, credit quality of indicators of financing receivables by class of financing receivables, the aging of financing receivables by class of financing receivable, significant purchases and sales of financing receivables by portfolio segment, amongst other requirements. The amendments in this Update are effective for reporting periods ending on or after December 15, 2010 for disclosures as of the end of the reporting period and disclosures related to activity are effective for reporting periods beginning on or after December 15, 2010 for public entities. For nonpublic entities, the disclosures are effective for annual reporting periods ending on or after December 15, 2011. Comparative disclosures for earlier reporting periods are encouraged, but not required. The Company doesn’t expect this guidance to have a significant impact on its financials since it doesn’t have any finance receivables. The receivables are short-term trade receivables.
In February 2010, the FASB issued ASU No 2010-10, Consolidation (Topic 810) - Amendments for Certain Investment Funds. This update provides for the deferral of the consolidation requirements under Topic 810 for a reporting entity’s interest in an entity 1) that has all the attributes of an investment company or 2) for which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies. The amendments are effective as of the first annual period that begins after November 15, 2009, and for interim periods within that period. The Company will adopt this Update on January 1, 2010 and it didn’t have a significant impact on the financials since the Company has no interest in investment type companies.
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Recent Accounting Pronouncements (Continued)
In February 2010, the FASB issued ASU No 2010-08, Technical Corrections to Various Topic. This update provides clarifications, eliminates inconsistencies and outdated provisions within the guidance. None of the provisions fundamentally change US GAAP, but certain clarifications regarding hedging and derivatives may cause a change in the application of that Subtopic. The amendments are effective for the first reporting beginning after issuance - March 31, 2010 for the Company. The amendments were reviewed and no items of significance were noted. As such, this update is not expected to have a significant impact on the Company’s financial statements.
In January 2010, the FASB issued ASU No 2010-06, Fair Value Measurements and Disclosures (Topic 820) Improving Disclosures about Fair Value Measurements. This update provides amendment to the codification regarding the disclosures required for fair value measurements. The key additions area as follows: 1) Disclose transfer in and out of Level 1 and 2, 2) Activity in Level 3 should show information about purchases, sales, settlements, etc on a gross basis rather than as net basis, and 3) Additional disclosures about inputs and valuation techniques. The new disclosure requirements are effective for interim and annual periods beginning after December 31, 2009, except for the gross disclosures of purchases, etc which is effective for periods beginning after December 15, 2010. The Company will adopt this Update on January 1, 2010 and doesn’t expect it will have a significant impact on the financials since there aren’t many items recorded at fair value, but additional disclosures about inputs and valuation techniques will be made.
In January 2010, the FASB issued ASU No 2010-04, Accounting for Various Topics - Technical Corrections to SEC Paragraphs. This update provides updates/corrections to various topics of the codification with regards to the SEC’s position on various matters. There is no new guidance, but adjustments to the SEC’s position on already issued updates. Some of the main topics covered are as follows: 1) Requirements for using push down accounting in an acquisition 2) appropriate balance sheet presentation of unvested, forfeitable equity instruments are issued to nonemployees as consideration for future services - these are to be treated as not issued and no entry recorded until the instruments are earned. 3) intangible assets arising from insurance contracts acquired in a business combination. The corrections are applicable for 2009 since the updates relate to already issued guidance. The main issue that may impact the Company is the accounting for unvested, forfeitable equity instruments. The Company will evaluate and determine if there are any contracts with non-employees for which equity instruments are granted and ensure they are accounted for in accordance with the update.
Sales Tax and Value Added Taxes
In accordance with FASB ASC 605-45, formerly EITF Issue 06-3, How Taxes Collected From Customers and Remitted to Government Authorities Should be Presented in the Income Statement, the Company accounts for sales taxes and value added taxes on its goods and services on a gross basis in the statement of operations.
Income Taxes
The Company accounts for income taxes utilizing the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enacted date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Deferred Income Taxes
Deferred income taxes reflects 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, as well as operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are classified as current or non-current based on the classification of the related assets or liabilities for financial reporting, or according to the expected reversal dates of the specific temporary differences, if not related to an asset or liability for financial reporting. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date.
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Income Tax Uncertainties
The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on the two-step process prescribed by applicable accounting principles. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as this requires the Company to determine the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period. The Company recognizes interest and penalties as incurred in finance income, (expense), net in the Consolidated Statements of Operations.
In 2009 the Company issued stock to various persons as compensation for services without issuing forms 1099 to those persons. In the event of an audit by the IRS it is possible the Company would be assessed penalties for improper tax treatment of those stock issuances. The Company has not recognized any potential interest or penalties based upon the uncertainty noted because the effect of the uncertainty has not resulted in any reduction of taxes owing. Therefore, the Comapny is not subject to any potential penalties or interest.
Net Loss Per Share Information
Basic and diluted loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. The Company’s common stock warrants have been excluded from the diluted loss per share computation since their effect is anti-dilutive.
The following is a reconciliation of the computation for basic and diluted EPS:
For the years ended December 31, 2010 and 2009 options and warrants were not included in the computation of diluted EPS because inclusion would have been anti-dilutive. Stock options were not included since none have been granted. There were 4,886,500 warrants at December 31, 2010 and 5,219,750 warrants at December 31, 2009.
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Note 4 - Equipment
Equipment is summarized as follows:
Depreciation expense for the year ended December 31, 2010 and December 31, 2009 was $806 and $806 respectively.
Note 5 - Commitments
Our headquarters are based in our facility located at 2240 Twelve Oaks Way, Suite 101-1, Wesley Chapel, FL. Our rent for this location is $535 per month. Our pest control operation is located at 5501 54th Ave. N., St. Petersburg, Florida. Our rent at that location is $1,500 per month. Both leases are on a month to month basis.
Note 6 - Convertible Notes and Notes Payable
Various notes are in default and continue to accrue interest. The Company has the option, and it is managements’ intent to convert all past due convertible notes to common stock in 2010 and 2011. The conversion price shall be based upon one half the average closing share price of the stock for the 10 prior days before conversion or .25 cents, whichever is greater.
During the year ended December 31, 2010, the Company converted debt totaling $768,724, which included $126,224 of accrued interest into 55,389,090 shares of common stock. The debt was held by 32 convertible note holders. The debt was converted at the rate of $0.13 per share. The convertible notes originally established a conversion price of $0.25 per share. On August 26, 2010, the board of directors repriced the conversion rate to $0.13 per share given the depressed value of the Company’s stock. In accordance with generally accepted accounted principles, the Company recognized approximately $50,000 of debt inducement expense in connection with this transaction.
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Note 7 - Related Party Loans
Note 8- Contingent Liabilities
Lawsuit by Gary Harrison
In the first quarter of 2009 a dispute arose with Gary Harrison regarding his consulting responsibilities with the Company. In a settlement of the matter, the Company agreed to pay Mr. Harrison $67,857 together with interest that accrues at 8% per annum. The payment came due on January 25, 2010. The Company was unable to make the payment and the parties agreed upon a six month extension of the payment due date to July 25, 2010. The Company was unable to make payment on July 25, 2010. This amount has been accrued in the accompanying condensed consolidated balance sheet in settlement liabilities.
On September 28, 2010, Mr. Harrison filed a lawsuit against the Company in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County Florida, Civil Division, Division J, Case Number 10019528. The suit seeks to collect $67,857 pursuant to the settlement agreement together with post default interest at the rate of 18% per annum. The suit was served upon the Company on November 11, 2010. The Company had until December 1, 2010, to answer the complaint. Due to a lack of funding, the Company was not able to retain legal counsel for the purpose of answering the complaint within the allotted time. On April 5, 2011, the court entered a default judgment against the Company in the amount of $88,949.80.
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Note 8 - Contingent Liabilities (CONTINUED)
Default Judgment in favor of Marilyn Simmons
On January 27, 2010, TTIN was sued by Marilyn Simmons who had invested $90,000 with the Company. The suit claimed the investment was not suitable for her and was fraudulent. TTIN disagreed with the claims and believes the suit could have been successfully defended. However, TTIN did not have the money to retain legal counsel to defend the suit and in March, 2010, Simmons obtained a default judgment against TTIN in the amount of $97,786.
On April 9, 2010, TTIN entered into an agreement with Simmons (the “Stay Agreement”) wherein Simmons would stay any execution of the judgment if TTIN would pay her a total of $120,000. TTIN must pay 7% of any money it raises for working capital purposes toward this obligation until paid in full. During any calendar quarter that working capital is not raised, TTIN must pay at least $5,000 from other sources on this obligation. No interest will accrue on the $120,000 and no fees will be added to the $120,000. If TTIN defaults on the agreement, the stay will be lifted and Simmons will be able to execute on the judgment against the assets of TTIN. As of the date this report on Form 10-K was filed, $25,000 has come due pursuant to the stay agreement of which only $12,800 has been paid. However, no legal action has been taken as of yet to lift the stay of execution. Mrs. Simmons recently passed away and the Company is now dealing with her estate. These amounts have been accrued in the accompanying condensed consolidated balance sheet in settlement liabilities.
Lawsuit by Brown and Goldfarb, LLC
Effective January 1, 2010, the Company entered into an agreement with Brown and Goldfarb, LLC, wherein the Company was granted an exclusive license to sell a therapeutic device for thermally assisted urinary function. On April 28, 2010, the Company was sued by Brown and Goldfarb, LLC in the Circuit Court of the Thirteenth Judicial Circuit, in and for Hillsborough County, Florida, Division K, Case Number 10008285, for failure to pay cash advance fees of $40,000 and issue 250,000 shares of Company common stock required by the Agreement. The parties settled the lawsuit by the Company agreeing to pay $10,000 on September 30, 2010 and $15,000 on July 30, 2010. The Company was unable to make the first payment and as a result, default judgment was entered against the Company in the amount of $50,000 on July 13, 2010. Brown and Goldfarb has agreed to not execute on their judgment if they receive payment of $25,000. So far the Company has only been able to pay $5,000. The Company has accrued $50,000 to reflect the liability to the Company as a result of the default judgment.
Stock Issuance to shareholder
In January, 2009, SB Investment Trust, a shareholder and related party to the Company transferred free trading shares to a third party. Sometime after that, the Company issued restricted shares to SB Investment Trust to replace the transferred shares to induce SB Investment Trust to transfer the free trading shares to three investor relation firms for services provided to the Company. The Securities and Exchange Commission (“SEC”) takes the position that this type of transaction may violate Section 5 of the Securities Act of 1933.
At the time of the transaction, Company management did not know the stock issuance violated any rule or regulation of the SEC. When informed of the SEC’s position on such matters, management cancelled the stock that had been issued to the SB Investment Trust in 2010. The shares transferred to the three investor relation firms have not been returned.
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Note 8 - Contingent Liabilities (CONTINUED)
Purchase of Company Shares
Beginning in 2008 and from time to time, the Company became aware of certain shareholders who wanted to sell their stock. Rather than have large sales in the market that could put downward pressure on the market price, the board of directors approved a plan whereby the Company could purchase those shares if it determined to do so. The plan also allowed the Company to purchase its own shares in the open market. The Company issued a press release on October 2, 2008, discussing the plan and its intent to purchase its own stock from time to time. There were 20 non-market purchases of 1,725,351 common shares in the aggregate at a combined cost of $288,552 in 2008 through 2009.
A tender offer is a means of buying a substantial portion of the outstanding stock of a company by making an offer to purchase all shares, up to a specified number, tendered by shareholders within a specified period at a fixed price. The Company believes the relatively small number of shares it purchased at individually negotiated prices from a limited number of shareholders does not come under the purpose or the intent of tender offer regulation nor subject it to that regulation.
Default on Buy Back Agreements
In February, 2009, the Company was contacted by three investors requesting the Company buy back their investments. The Company agreed to do so. The combined investment price was $235,000 and was to be paid by the Company over time on monthly payments. The Company was only able to make the first two payments and is now in default on the agreements. One of the investors who was to receive $70,000 has now contacted the Company through his lawyer and is taking the position that he was not given all appropriate rights when he made his investment and is demanding payment in full of the $70,000 plus interest. The Company is adamantly taking the position that the investment was made properly. However, the Company is in default on the three Buy Back Agreements and is subject to the liability as a result thereof. The Company has accrued for the settlement as of September 30, 2010 and December 31, 2009, in the accompanying Condensed Consolidated Balance Sheet.
Claims by two additional Shareholders
The Company was contacted by an attorney representing two of the Company’s investors on April 30, 2010. The attorney demanded the investments in the Company by the investors totaling $262,000 plus interest be paid by the Company immediately. The $262,000 in investments was comprised of $160,000 in purchases of stock and/or warrants to purchase stock and $102,000 in convertible notes. The attorney maintains the investors were not given all of their rights at the time of the investments. The Company adamantly denies any such claims but is nevertheless under the burden of settling the dispute or potentially defending litigation that may be brought by the investors. However, due to the remote nature of the claims and the length of time since the Company was contacted by the investors’ legal counsel, the Company has not accrued for potential liability in its financial statements for these claims.
Note to John Cawood
Ninety days ago, a note payable by the Company to Mr. John Cawood in the amount of $100,000 became due and payable. At the present time the Company does not have means to repay the note. The Company has not been contacted by Mr. Cawood or any party representing Mr. Cawood regarding this note.
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Note 8- Contingent Liabilities (CONTINUED)
Lawsuit by Margaret Wisniewski
On December 4, 2008, Margaret Wisniewski purchased from the Company a One-year Convertible Promissory Note in the amount of $50,000. Mrs. Wisniewski has now filed suit in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, State of Florida seeking a return of her investment. The complaint alleges the investment constituted exploitation of a vulnerable adult. The Company did not have the funding necessary to defend the suit and the Company’s default has been entered with the court but no default judgment has been entered. Opposing counsel has agreed to not enter default judgment at this time but rather negotiate an agreement whereby the Company will pay the amounts owed. These amounts have been accrued in the accompanying condensed consolidated balance sheet in settlement liabilities.
Payment Demand by two Noteholders
On August 21, 2010, a convertible note issued by the Company came due in favor of Mr. Michael Buckley in the amount of $200,000. Interest was discounted at the inception of the note so the $200,000 is the full amount due. Mr. Buckley has opted to not convert the note and is demanding payment in cash from the Company. The Company is unable to make payment. Mr. Buckley has hired legal counsel who has contacted the Company. An agreement has been reached whereby Mr. Buckley will delay collection of his note in exchange for a perfected security interest in favor of Mr. Buckley in all of the assets of the Company. The perfected security interest was put in place by making UCC-1 filings with the states of Florida and Delaware on October 27, 2010, and October 29, 2010, respectively and by filing an assignment of patents with respect to the two patents owned by Company, with the United States Patent and Trademark Office on November 4, 2010. If the Company is not successful in paying this obligation to the satisfaction of Mr. Buckley, Mr. Buckley will be in a position to take over all of the assets of the Company potentially shutting down all business operations. An additional note in the amount of $100,000 payable to Michael Buckley has also recently come due so a combined amount of $300,000 is now owed to Mr. Buckley by the Company. The Company is currently making arrangements for a third party to purchase this debt from Mr. Buckley.
In July, 2010, a convertible note issued by the Company came due in favor of Mr. Louis Fiorica in the amount of $10,000. Mr. Fiorica has decided to not convert the note and is demanding payment of $10,000 plus interest. The Company is not in a position to make payment. To date, no legal action has been taken by Mr. Fiorica against the Company.
The following table sets forth the accrual for settlement liability as of December 31, 2010:
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The following table sets forth the accrual for settlement liability as of December 31, 2009:
Note 9 - Income Taxes
Income Taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due. Deferred taxes related to differences between the basis of assets and liabilities for financial and income tax reporting will either be taxable or deductible when the assets or liabilities are recovered or settled. The difference between the basis of assets and liabilities for financial and income tax reporting are not material therefore, the provision for income taxes from operations consist of income taxes currently payable.
There was no provision for income tax for the years ended December 31, 2010 and 2009. At December 31, 2010 and 2009 the Company had an accumulated deficit approximating $47,933,557 and $46,401,416, respectively.
The Company has recorded full valuation allowance on its deferred tax assets as of December 31, 2010 and December 31, 2009. These assets were primarily derived from net operating losses, which The Company will more than likely than not be able to utilize.
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Net deferred tax liabilities consist of the following components as of December 31, 2010 and 2009:
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the years ended December 31, 2010 and 2009 due to the following:
At December 31, 2010, the Company had net operating loss carryforwards of approximately that may be offset against future taxable income from the year 2010 through 2030. No tax benefit has been reported in the December 31, 2010 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
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Note 10 - Stockholders’ Deficit
The Company had 250,000,000 authorized shares of common stock as of December 31, 2010 and December 31, 2009. The Company had 116,163,748 and 29,706,287 shares of common stock issued and outstanding as of December 31, 2010 and December 31, 2009 respectively.
During the quarter ended March 31, 2010, the Company issued 350,000 shares of common stock for executive compensation. The common stocks were issued at a price of $.03 per share.
During the quarter ended March 31, 2010, the Company issued 170,000 shares of common stock for directors compensation. The common stocks were issued at a price of $.03 per share.
During the quarter ended March 31, 2010, the Company issued 50,000 shares of common stock for employees compensation. The common stocks were issued at a price of $.03 per share.
During the quarter ended March 31, 2010, the Company issued 635,000 shares of common stock for consultants compensation. The common stocks were issued at a price of $.03 per share.
During the quarter ended March 31, 2010, the Company was returned and cancelled 430,000 shares of common stock issued in 2009 for consultants compensation.
There were no transactions of the common stock during the quarter ended June 30, 2010.
During the quarter ended September 30, 2010, the Company issued 6,700,000 shares for cash of $84,000.
During the quarter ended September 30, 2010, the Company issued 5,389,090 shares to convert debt.
During the quarter ended September 30, 2010, the Company issued 275,000 shares of common stock for directors compensation. The common stocks were issued at a price of $.01 per share.
During the quarter ended September 30, 2010, the Company issued 125,000 shares of common stock for employees compensation. The common stocks were issued at a price of $.01 per share.
During the quarter ended September 30, 2010, the Company issued 4,430,000 shares of common stock for consultants compensation. The common stocks were issued at a price of $.01 per share.
During the quarter ended September 30, 2010, the Company issued an additional 830,000 shares of common stock for consultants compensation. The common stocks were issued at a price of $.02 per share.
During the quarter ended September 30, 2010, the Company issued 2,500,000 shares of common stock for executive compensation. The common stocks were issued at a price of $.02 per share.
During the quarter ended December 31, 2010, the Company issued 50,000,000 shares to convert debt.
During the quarter ended December 31, 2010, the Company issued 11,250,000 shares for cash of $15,000.
During the quarter ended December 31, 2010, the Company issued 750,000 shares of S-8 common stock for consultant compensation. The common stocks were issued at a price of $.001 per share.
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Note 10 - Stockholders’ Deficit (CONTINUED)
2010 (CONTINUED)
During the quarter ended December 31, 2010, the Company issued 1,598,000 shares of common stock for executive compensation. The common stocks were issued at a price of $.01 per share.
During the quarter ended December 31, 2010, the Company issued 1,005,371 shares of common stock for consultants compensation. The common stocks were issued at a price of $.01 per share.
During the quarter ended December 31, 2010, the Company issued 100,000 shares of common stock for employees compensation. The common stocks were issued at a price of $.01 per share.
During the quarter ended March 31, 2009, the Company issued 90,000 shares of common stock for directors’ fees. The common stocks were issued at prices between $.15 and $.25 per share.
During the quarter ended March 31, 2009, the Company issued 90,000 shares of common stock for executive compensation. The common stocks were issued at prices between $.15 and $.25 per share.
During the quarter ended March 31, 2009, the Company issued 1,061,666 shares of common stock for compensation to venders and consultants. The common stocks were issued at prices between $.15 and $.25 per share.
During the quarter ended March 31, 2009, the Company issued 150,000 shares of common stock for subscribers. The common stocks were issued at a price of $.20 per share.
During the quarter ended March 31, 2009, the Company bought and held in treasury 43,235 shares of common stock. The common stocks were bought at prices ranging from $.15 to $1.04 per share, including commissions.
During the quarter ended March 31, 2009, the Company bought and cancelled 39,217 shares of common stock. The common stocks were bought at $ .21 per share.
During the quarter ended June 30, 2009, the Company issued 71,960 shares of common stock for directors’ fees. The common stocks were issued at a price of $.20 per share.
During the quarter ended June 30, 2009, the Company issued 3,125,745 shares of common stock for executive compensation. The common stocks were issued at a price of $.20 per share.
During the quarter ended June 30, 2009, the Company issued 36,000 shares of common stock for employee compensation. The common stocks were issued at a price of $.20 per share.
During the quarter ended June 30, 2009, the Company issued 468,333 shares of common stock for compensation to venders and consultants. The common stocks were issued at a price of $.20 per share.
During the quarter ended June 30, 2009, the Company issued 87,550 shares of common stock for subscribers. The common stocks were issued at a price of $.20 per share.
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Note 10 - Stockholders’ Deficit (CONTINUED)
2009 (CONTINUED)
During the quarter ended June 30, 2009, the Company bought and held in treasury 25,465 shares of common stock. The common stocks were bought at prices ranging from $.11 to $.18 per share, including commissions.
During the quarter ended June 30, 2009, the Company cancelled 291,665 shares of common stock previously issued to consultants. The stock was cancelled at $0.14 per share.
During the quarter ended June 30, 2009, the Company issued 262,890 shares of common stock as stock issued as inducement to lock up shares. $52,578 was included in other expense for the issuance.
During the quarter ended September 30, 2009, the Company issued 540,000 shares of common stock for directors’ fees. The common stocks were issued at a price of $.05 per share.
During the quarter ended September 30, 2009, the Company issued 300,000 shares of common stock for executive compensation. The common stocks were issued at a price of $.04 per share.
During the quarter ended September 30, 2009, the Company issued 70,000 shares of common stock for employee compensation. The common stocks were issued at a price of $.05 per share.
During the quarter ended September 30, 2009, the Company issued 1,165,000 shares of common stock for compensation to venders and consultants. The common stocks were issued at a price of $.05 per share.
During the quarter ended September 30, 2009, the Company issued 150,000 shares of common stock for subscribers, which was previously recorded as “liability for stock to be issued” on our balance sheet at June 30, 2009 in the amount of $30,000. The common stocks were issued at a price of $.20 per share.
No shares were issued in the fourth quarter of 2009.
The following table summarizes our warrants as of December 31, 2010:
(B) 5 day average prior to exercise, discounted at 20%, or $1.25 per share, whichever is greater.
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The following table summarizes our warrants as of December 31, 2009:
(A) 5 day average prior to exercise, discounted at 25%, or $0.50 per share, whichever is greater.
(B) 5 day average prior to exercise, discounted at 20%, or $1.25 per share, whichever is greater.
The following table summarizes warrant activity during the years ended December 31, 2010 and 2009.
(A) 5 day average prior to exercise, discounted at 25%, or $0.50 per share, whichever is greater.
(B) 5 day average prior to exercise, discounted at 20%, or $1.25 per share, whichever is greater.
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Note 11 - Restatement of Financial Statements
Subsequent to the preparation of the 2009 financial statements, Transfer Technology International Corp. determined there were adjustments to its financial statements for the fiscal year ended December 31, 2009, that would better and more efficiently present its financial condition as of that date and for the year then ended. The following statements demonstrate the adjustments that were made.
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Note 12 - Fair Value Measurements
We adopted ASC Topic 820 (originally issued as SFAS 157, “Fair Value Measurements”) as of January 1, 2008 for financial instruments measured at fair value on a recurring basis. ASC Topic 820 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
·
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
·
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
·
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at December 31, 2010:
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The table below presents our assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at December 31, 2010. We classify financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model.
Note 13 - Subsequent Events
On September 28, 2010, Mr. Harrison filed a lawsuit against the Company in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County Florida, Civil Division, Division J, Case Number 10019528. The suit seeks to collect $67,857 pursuant to the settlement agreement together with post default interest at the rate of 18% per annum. The suit was served upon the Company on November 11, 2010. The Company had until December 1, 2010, to answer the complaint. Due to a lack of funding, the Company was not able to retain legal counsel for the purpose of answering the complaint within the allotted time. On April 5, 2011, the court entered a default judgment against the Company in the amount of $88,949.80.
On December 4, 2008, Margaret Wisniewski purchased from the Company a One-year Convertible Promissory Note in the amount of $50,000. Mrs. Wisniewski has now filed suit in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, State of Florida seeking a return of her investment. The complaint alleges the investment constituted exploitation of a vulnerable adult. The Company did not have the funding necessary to defend the suit and the Company’s default has been entered with the court but no default judgment has been entered. Opposing counsel has agreed to not enter default judgment at this time but rather negotiate an agreement whereby the Company will pay the amounts owed. These amounts have been accrued in the accompanying condensed consolidated balance sheet in settlement liabilities.
On February 1, 2011, the Company issued an aggregate of 3,953,371 Rule 144 restricted shares of common stock of the Company to a total of 7 persons. The shares were issued as compensation to employees and directors for services rendered to the Company and to investors in exchange for investment proceeds. The valuation of the consideration received by the Company ranged from $0.001 to $0.004 per share depending upon the transaction. The issuance of the shares was exempt from the registration requirements of Section 5 of the Securities Act of 1933 (the “Act”) pursuant to Section 4(2) of the Act since the shares were issued by the Company and did not involve any public offering.
In the first quarter of the fiscal year beginning January 1, 2011, the Company raised $100,800 in investment capital by issuing convertible notes to a total of six persons.
The Company has evaluated subsequent events pursuant to ASC 855 and has determined that there are no additional events to disclose.
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Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
On February 24, 2011, the Company dismissed Friedman, LLP from its position as the Company’s independent registered public accounting firm. The Company’s Board of Directors approved the dismissal.
The Company engaged Friedman, LLP to serve as its independent registered public accounting firm in January 2010. The audit report of Friedman, LLP on the Company’s financial statements for the year ended December 31, 2009 did not contain an adverse opinion or disclaimer of opinion, however it did contain a qualification describing a going concern uncertainty as well as a restatement of the 2008 financial statements. Friedman, LLP did not, during the applicable periods, advise the Company of any of the enumerated items described in Item 304(a)(1)(iv) of Regulation S-K.
During the two most recent fiscal years, there were no (i) disagreements between the Company and Friedman LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to its satisfaction, would have caused Friedman LLP to make reference to the subject matter of such disagreements in connection with its report, or (ii) “reportable events,” as described in Item 304(a)(1)(v) of Regulation S-K, except as set forth in Item 9A
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as discussed below, the Company’s disclosure controls and procedures had not been effective at the reasonable assurance level to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed 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. Our evaluation of internal control over financial reporting includes using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment. The internal controls for the Company are provided by executive management’s review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:
(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2010. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permits us to provide only management's report in this annual report.
Material Weaknesses
A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. Management has identified two material weaknesses.
First, our CEO Mr. Chris Trina is the sole signer on our bank accounts and has sole decisional authority to payout money pursuant to operating the day to day business functions of the Company. Accordingly, there is not proper segregation of duties over our financial transactions. Due to budgetary constraints, the Company is not in a position to hire additional accounting staff and is therefore not able to remedy this material weakness at this time.
Second, with existing personnel the Company lacks the accounting expertise to prepare its quarterly and year end financial statements in conformity with Generally Accepted Accounting Principles. The Company intends to remedy this material weakness through additional training of its existing personnel.
Changes in Internal Control over Financial Reporting
The Company made no changes during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the exchange Act.
Item 9(B). Other Information.
None.
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PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance
The following table sets forth the names, ages, and positions with TTIN for each of the directors and officers of TTIN.
Chris Trina
On September 7, 2007 the Board of Directors appointed Chris Trina President, Director and Chief Executive Officer. In the fall of 2010, Mr. Trina also became the Chief Financial Officer of the Company. Prior to joining TTIN, Mr. Trina was a Senior Investment Advisor with National Securities Corporation from November 2006 through March 2007. Mr. Trina was the President of Secure Financial Assets Group, a retail brokerage firm, from September 2005 through September 2006. From September 1997 to August 2005, Mr. Trina was the Senior Vice President of Sales at Gunnallen Financial, Inc. Since June 1997, Mr. Trina has been the President and sole stockholder of Windsor Financial Holdings, Inc, a private investment banking and insurance firm. Mr. Trina has twenty-one years Wall Street experience and received his Bachelor of Science degree in Accountancy from the University of South Florida in 1985.
William Parsons
Mr. Parsons has served as a Director of the Company since August 2004. Mr. Parsons was a Partner with Arthur Anderson from 1992-2002. Mr. Parsons is currently an Executive Vice President and Partner with SENN-Delaney Leadership, where he has been since 2002. In addition, Mr. Parsons is the general partner of Parsons Partners. Mr. Parsons received his Bachelor of Science degree at Clarkson University and his Masters in Business Administration from UCLA.
Sandy W. Shultz, M.D.
Effective January 14, 2008, Sandy W. Shultz, M.D. was elected to the Board of Directors of TTIN. Dr. Shultz graduated from George Washington University School of Medicine where he served as senior class president. After completing his Internal Medicine internship at the Veterans Administration Medical Center, in Washington, D.C., Dr. Shultz completed a residency and became Chief Resident Department of Radiology at George Washington University. In 1985 and 1986 Dr. Shultz completed a Fellowship in Vascular and Interventional Radiology. Dr. Shultz has been published in medical journals on various topics. Dr. Shultz currently serves as Chief of Radiology in the Department of Radiology at the Lower Keys Regional Medical center in Key West Florida. Dr. Shultz has been married for thirty years. He and his wife, Shelley have three children and currently reside in Key West, Florida.
In 2010, the Company’s CEO, Mr. Chris Trina filed for personal bankruptcy. Otherwise, TTIN’s officers and directors have not been involved, during the past five years, in any bankruptcy proceedings, conviction or criminal proceedings; have not been subject to any order, judgment, or decree, not subsequently reversed or suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and have not been found by a court of competent jurisdiction, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.
There have been no changes in the procedures by which security holders may recommend nominees to TTIN’s Board of Directors.
The Board of Directors does not currently have a standing audit committee.
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TERM OF OFFICE
Our Directors are appointed for terms of one year to hold office until the next annual general meeting of the holders of our common stock, or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
SIGNIFICANT EMPLOYEES
We have no significant employees other than the officers and the directors described above.
Section 16(A) Beneficial Ownership Reporting Compliance
Based upon a review of Forms 3 and 4 and amendments thereto furnished to TTIN during the 2008 fiscal year, the following table details non-compliance with Section 16(a) of the Exchange Act of 1934.
Item 11.
Item 11. Executive Compensation
Summary Compensation Table
Name and principal position
Year
Salary ($)
Stock Awards ($)
Total ($)
Chris Trina, CEO, CFO (1)
$25,800
$175,384
$240,000
$50,000
$3,000
$75,800
$178,384
$240,000
Robert J. Calamunci, former CFO (2)
$54,000
$32,308
$6,500
$60,500
$32,308
(1)
Mr. Trina is our current CEO and CFO and has a written employment contract with TTIN pursuant to which he receives a salary of $240,000 annually. His contract also provides that Mr. Trina is entitled to a perpetual 20% ownership in the Company pursuant to which he is entitled to stock issuances as the total number of shares issued and outstanding in the Company increases. He did not receive his full cash compensation during 2009 and 2010, due to lack of funding for the Company nor has he received all stock payable to him under his right to perpetual 20% ownership.
(2)
Mr. Calamunci resigned as CFO of TTIN in August, 2010.
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DIRECTOR COMPENSATION
There are no standard arrangements pursuant to which directors are compensated for services rendered to TTIN. TTIN does compensate its directors from time to time with stock for services as directors. At the present time, directors receive stock valued at approximately $10,000 to $12,000 on an annual basis for their service on the board. The shares are restricted pursuant to the terms and conditions of Rule 144 promulgated under the Securities Act of 1933.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table provides certain information as of April 15, 2011, about persons or entities known to TTIN to be the beneficial owner of more than 5% of TTIN’s common shares.
Title of class
Name and address of beneficial owner
Amount and nature of beneficial ownership
Percent of class
Common
Chris Trina
2206 Bay Club Circle
Tampa, FL 33607
6,500,897
5.6%
Common
Dino P. Kanelos
1928 Iverson Lane
Marvin, NC 28173
11,000,000
9.5%
The following table provides certain information as of April 15, 2011 about the beneficial ownership of our common shares by our officers and directors individually and as a group.
(1) All ownership is direct ownership unless noted otherwise. Of the 2,256,534 shares reported for Mr. Shultz, $2,223,234 are owned by Mr. Shultz outright and 33,300 are owned by his son, Zachary Shultz.
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Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Director Independence
We have three directors. Chris Trina is not considered an independent director. William Parsons and Sandy W. Shultz, M.D. are considered independent directors. The definition the Company uses to determine whether a director is independent is NASDAQ Rule 4200(a)(15).
Item 14.
Item 14. Principal Accounting Fees and Services
(1)
Audit Fees - Audit fees billed to the Company by its outside independent accountants for auditing the Company’s annual financial statements for 2009 and 2010 respectively.
(2)
Audit-Related Fees- Review fees billed to the Company by its outside independent accountants for reviewing the Company’s quarterly financial statements for the calendar quarters during the fiscal years ended December 31, 2009 and 2010.
Item. 15. Exhibits
Exhibits
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Transfer Technology International Corp.
/s/ Chris Trina
By: ______________________________
Chris Trina, Chief Executive Officer
Date: April 15, 2011
In accordance with the Securities Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Chris Trina
By: __________________________________
Chris Trina, Director and
Principal Executive Officer
Principal Financial Officer
Date: April 15, 2011
/s/ William Parsons
By: __________________________________
William Parsons, Director
Date: April 15, 2011
/s/ Sandy W. Shultz, M.D.
By: __________________________________
Sandy W. Shultz, M.D., Director
Date: April 15, 2011
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