ITEM 1. BUSINESS
Business Development
We were incorporated on July 3, 2006 in the State of Nevada under the name Promotions on Wheels Holdings, Inc. We changed our name on December 12, 2008. The Company was originally a developmental stage company with a principal business objective of offering live promotions and marketing events utilizing unique custom built mobile displays. On July 21, 2008, we discontinued that business.
On June 30, 2008, the Company entered into a License Agreement (“License”) with WQN, Inc., a Texas corporation (“WQN”), which, in consideration for the sum of $300,000 grants the Company the right to market and sell WQN’s WebSafety software products. The License covers software products that have been developed by WQN and grants the Company an exclusive right for a period of 12 months to market and sell the software products through the Home Shopping Network, QVC, Inc., CVS Pharmacy, WalMart, and Walgreens and the non exclusive right to market and sell the software products worldwide. The Company has attracted a team of experienced, professional marketing personnel to market the software products.
The License provides for the Company to retain 65% of all revenue received from the sale of CYBERSAFETY software and to pay 35% of all revenue to the Licensor, WQN. The License Agreement requires Licensor to provide Company technical and customer support and requires Licensor to provide Company with all future updates of the software.
Business of Issurer
We are a development stage company that has not significantly commenced its planned principal operations. Our operations to date have been devoted primarily to startup and development activities, which include the following:
1. Development of the business plan;
2. Research on child safety software products and potential markets;
3. Coordination with the licensor on the development of the software products;
4. Formulate a marketing plan and marketing campaign in an effort to introduce our products to the market;
5. Create websites for the Company and products;
6. Identify appropriate distribution channels utilizing independent sales representatives.
We are attempting to become operational. In order to generate revenue we must address the following areas:
1. Complete the development of our software products: We continue to work with the licensor and its software programmers to complete the software products and provide for the downloading of the software products form our website.
2. Develop and implement a Marketing Plan: In order to penetrate our targeted markets, we will use a multi-faceted marketing plan that includes high-end websites and target specific marketing campaigns that are directed to specific groups whose members will benefit from the software.
3. Creation of our website: We have secured a website domain located at www.blindspotalert.com. The website is currently under construction and upon securing additional funding, we will complete and enhance the website.
Since our inception on July 3, 2006, we have not generated any significant revenues and have incurred a cumulative net loss of $644,807. We believe that we must raise additional capital of at least $1,000,000 through the sale of equity for us to become operational and sustain operations through the next twelve (12) months. The capital raise has been budgeted to establish our infrastructure and marketing and sales campaign. We believe that the recurring revenues from sales of software products eventually will be sufficient to support ongoing operations. There can be no assurance that the actual expenses incurred will not materially exceed our estimates or that cash flow from sales will be adequate to maintain our business. As a result, our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditor’s report to the financial statements included in this report.
We currently have three executive officers and three directors. These individuals allocate time on a part-time basis. We do not have any employees.
ITEM 1A.
ITEM 1A. RISK FACTORS
The Company was organized during 2006, is at an early stage of operation and has no substantial revenue. The Company has recently ceased its operations in order to devote its full resources toward marketing, selling and distributing the CYBERSAFETY software products. The earliest date the Company anticipates receiving revenue from sales of the CYBERSAFETY software is during the second half of 2009. The Company will need to generate significant revenues to overcome an accumulated deficit and obtain profitability. The Company may never achieve profitability. If revenues grow more slowly than anticipated, or if operating expenses exceed expectations the Company’s business, results of operations, and financial condition could be materially adversely affected.
RISKS RELATING TO OUR BUSINESS
THE COMPANY HAS A LIMITED OPERATING HISTORY AND FACES SIGNIFICANT RISKS AND CHALLENGES IN BUILDING THE BUSINESS
As a result of the Company’s limited operating history, to achieve profitability, the Company must successfully and timely market and sell the CYBERSAFETY software. Although the Company has very concrete and specific marketing and sales programs to be implemented, the Company cannot guarantee the success of such programs and alternately, more expensive marketing and sales programs may need to be implemented. Additionally, although the Company believes that a strong market exists for the CYBERSAFETY software, the Company has conducted no scientific, reliable market surveys but has only performed its own research and due diligence to ascertain the security concerns of parents and others responsible for the safety of children. A more scientific analysis could prove that no market exists for the CYBERSAFETY software that the Company intends to market and sell; or, if the market exits, the Company may not be able to reach the market with the Company’s limited financial resources and marketing budget. There can be no assurance that the Company will be able to successfully generate revenues. The Company has no significant historical basis to assess how it might respond to competitive, economic, regulatory, or technological challenges. The Company’s business must be considered in light of the risks and uncertainties frequently encountered by companies in the very early stages of development, particularly companies that operate in new and rapidly developing industries and marketplaces. The Company’s failure to adequately address these risks and uncertainties and rapidly respond to adverse developments as they occur could materially impact the Company’s ability to achieve profitability and, if profitability is achieved, to sustain a level of operations that will cause profitability to be sustained. Although the Company intends to hire numerous people to implement the business of the Company, there is no assurance that the Company will hire the right people or that future changes will not have to be made to find the right people to implement the Company’s business strategy. There is no assurance that the Company’s business strategy or marketing plans will achieve success.
THE COMPANY’S RELIANCE ON THE CAPABILITIES OF THE CYBERSAFETY SOFTWARE AND THE LICENSOR, WQN, INC.
The Company is heavily dependent upon the capabilities of the CYBERSAFETY software and of the ability of the Company’s Licensor, WQN, Inc., to provide technical and other support of the software. The failure of the software to accomplish the objectives as represented will hamper if not destroy the Company’s marketing efforts as will the failure or inability of WQN, Inc. to capably provide technical support for the software.
COMPANY’S RELIANCE UPON EXECUTIVES AND CONSULTANTS
The Company’s success is highly dependent upon executive officers and key consultants identified in this report for critical management decisions and to implement and pursue the Company’s business and marketing plan. A loss of any of the executives or consultants through incapacity or for any other reason could materially adversely impact the ability of the Company to complete its business and marketing plan and would require the Company to seek the assistance of other qualified personnel who may not be available.
CHALLENGES FROM COMPETITION
Although the Company is unaware of an available product that contains all the characteristics, features and capabilities of the CYBERSAFETY software, in the dynamic, ever changing field of technology, many companies of all sizes and capabilities are constantly engaged in software development. With the notoriety given to child molesters, pedophiles and others causing harm and sometimes death to children, a reasonable assumption is that many companies are currently engaged in software development activities that will possess many of the characteristics and capabilities possessed by CYBERSAFETY software. In the event another company successfully develops and markets a competitive product before the Company can establish a significant presence in its target markets, the Company may never be able to achieve a level of revenue to sustain the Company’s operations. In addition, there will be inherent competition from the license from WQN, as both the Company and WQN will be selling/licensing the same product to consumers and retailers. There is no assurance that the Company’s marketing and branding programs will be more efficient than those of WQN. Additionally, other than to those sales outlets identified above, the Company’s License is non-exclusive and WQN not only has the right to market and sell the software under its WebSafety brand in competition with Company but also has the right to issue licenses to other parties that may be more capable of marketing and selling the software than Company.
RISKS RELATED TO OUR COMMON STOCK
IF MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, OUR STOCKHOLDERS MAY BE UNABLE TO SELL THEIR SHARES.
There is currently a limited market for our common stock and we can provide no assurance that a more liquid market will develop. If a liquid market does not develop for our shares, it will be difficult for stockholders to sell their stock. In such a case, stockholders may find that they are unable to achieve benefits from their investment.
IF A MARKET FOR OUR COMMON STOCK DEVELOPS, OUR STOCK PRICE MAY BE VOLATILE.
If a market for our common stock develops, the price at which our common stock will trade may be highly volatile and may fluctuate as a result of a number of factors, including the number of shares available for sale in the market, quarterly variations in our operating results, actual or anticipated announcements of new data, studies, products or services by us or competitors, regulatory investigations or determinations, acquisitions or strategic alliances by us or our competitors, recruitment or departures of key personnel, the gain or loss of significant customers, changes in the estimates of our operating performance, market conditions in our industry and the economy as a whole.
OVER 51% OF OUR STOCK IS CONTROLLED BY A SINGLE STOCKHOLDER WHO HAS THE ABILITY TO SUBSTANTIALLY INFLUENCE THE ELECTION OF DIRECTORS AND THE OUTCOME OF MATTERS SUBMITTED TO STOCKHOLDERS.
As of April 6, 2009, Texas Atlantic Capital Partners, LLC (“TAC”), a limited liability company whose managing member is a director of the Company, directly owns 14,000,000 shares, which represents approximately 51% of our 27,091,669 shares of outstanding capital stock on a fully diluted basis. As a result, TAC presently and is expected to continue to have the ability to determine the outcome of issues submitted to our stockholders. The interests of this stockholder may not always coincide with our interests or the interests of other stockholders, and it may act in a manner that advances its best interests and not necessarily those of other stockholders. One consequence of this substantial stockholder’s interest is that it may be difficult for investors to remove management of the Company. it could also deter unsolicited takeovers, including transactions in which stockholders might otherwise receive a premium for their shares over then current market prices.
INVESTORS’ INTERESTS IN OUR COMPANY WILL BE DILUTED AND INVESTORS MAY SUFFER DILUTION IN THEIR NET BOOK VALUE PER SHARE IF WE ISSUE ADDITIONAL SHARES OR RAISE FUNDS THROUGH THE SALE OF EQUITY SECURITIES.
In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors’ interests in our Company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other stockholders. Further, any such issuance may result in a change in our control.
WE HAVE NEVER PAID CASH DIVIDENDS AND DO NOT INTEND TO DO SO.
We have never declared or paid cash dividends on our common stock. We currently plan to retain any earnings to finance the growth of our business rather than to pay cash dividends. Payments of any cash dividends in the future will depend on our financial condition, results of operations and capital requirements, as well as other factors deemed relevant by our board of directors.
WE WILL NEED ADDITIONAL FINANCING.
We will need additional financing to maintain and expand the business, and such financing may not be available on favorable terms, if at all. We intend to finance our business through the private placement and public offering of equity and debt securities. Additional financing may not be available on favorable terms, if at all. If we need funds and cannot raise them on acceptable terms, we may not be able to execute our business plan, and our shareholders may lose substantially all of their investment.
TERRORIST ATTACKS, CONTINUED WAR OR OTHER CIVIL DISTURBANCES COULD LEAD TO FURTHER ECONOMIC INSTABILITY AND ADVERSELY AFFECT OUR BUSINESS
On September 11, 2001, the United States was the target of terrorist attacks of unprecedented scope. The United States is currently engaged in a war in Iraq. These attacks and this war have caused instability in the marketplace and contributed to a downtown in the global economy. In the future, there may be armed hostilities, continued war, further acts of terrorism and civil disturbances in the United States or elsewhere, which may further contribute to economic instability in the United States. Additionally, such disturbances could have a material adverse effect on our business, financial condition and operating results.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY
We currently use the office of our CEO. Our CEO provides the office space free of charge. We believe that this space is currently adequate. When we become operational we may need additional space to serve our customers.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE FOR SECURITY HOLDERS
Not applicable.
PART II
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY. RELATED STOCKHOLDERS MATTERS AND ISSUERPURCHASE OF EQUITY SECURITIES
Market Information
Our common stock is quoted on the OTCBB under the symbol “BSAL”. The following table shows the high and low bid prices of our common stock, as quoted on the OTCBB, by quarter during our last fiscal year when trading began. These quotes reflect inter-dealer prices, without retail markup, markdown or commissions and may not represent actual transactions. The information below was obtained from the OTCBB, for the respective periods.
Over-the-counter market quotations may reflect inter-dealer prices, without retail mark-up, mark-downs or commissions and may not necessarily represent actual transactions.
Holders
As of April 6, 2009, there were approximately 13 holders of record of our common stock. This number does not include beneficial owners of common stock whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.
Dividends
We have never declared or paid any dividends. We anticipate, as our board of directors deems appropriate, that we will continue to retain all earnings for use in our business.
Securities Authorized For Issuance Under Equity Compensation Plans
None.
Item 6.
Item 6. SELECTED FINANCIAL DATA
We are a smaller reporting company as defined in 17 CFR229.10(f)(I) and are not required to provide information required by this item, per Item 301 of Regulation S-K (17 CFR 229.201)
ITEM 7.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS
Plan of Operations
Blindspot Alert, Inc. (BSA), a development stage company, formerly known as Promotions on Wheels Holdings, Inc. has, beginning in April 2008, commenced a corporate redirection with the objective of marketing and selling through the internet a range of software applications and services for computers and cell phones that allow parents or other caregivers to monitor and be notified of occurrences of predator advances, cyber bullying and pornography received on children’s computers. The cell phone application would also restrict text messaging while driving and provide location information to parents through the use of GPS technology. In June 2008 BSA acquired for $300,000 a world wide non exclusive license that permits the Company to sell the proprietary software that identifies the threats from predators, cyber bullies and transmitters of pornography. The license also allows for selective exclusivity within certain markets.
Management believes that the licensed products are a timely solution to the dangers that come with the unprecedented access to information and people that the internet and cell phones provide.
We intend to begin commercial operations in the second half of 2009. We also intend to market the products and services by developing relationships with “trusted” sources consisting of child protection advocacy groups including church, school and civic organizations. We intend to also explore opportunities to enter into strategic revenue sharing partnerships with companies having synergy with our products. These partners may include auto insurers and cell phone manufacturers.
In November 2008, we executed an option to acquire licensing rights to software that provides digital rights management to email and other data transmitted over the internet. We intend to begin selling this proprietary software in 2009. The option expired on April 1, 2009. We are currently negotiating an extension of the option. Due diligence efforts are currently being conducted.
In 2008, we raised $1,170,800 in new equity funding through the sale of common and preferred stock, the proceeds of which are being used to implement our plan of operations. As of year end 2008, we had invested $150,963 in website development, this in the furtherance of our marketing efforts and in addition to the $300,000 spent to secure the licensing noted above.
Results of Operations
For the year ended 2008 we sustained a net operating loss of $437,656 as compared to a loss of $188,094 for the same twelve month period ended December 31, 2007. In 2007 we had revenues of $201,536 contrasted to 2008 in which we had no revenue. From inception in July 2006, the Company has generated a total of $644,807 in net operating losses.
The table below highlights on a line item basis the significant elements of expense during the two periods that constituted the preponderance of expense incurred.
In 2008 as opposed to 2007 the Company initiated and completed an initial round of financing which resulted in a significant increase in accounting and legal costs as compared to 2007. The balance of the increased costs noted in 2008 in contrast to 2007 related to pre launch consulting, marketing and travel. Corporate operational activities in 2008 have increased substantially over prior periods. We intend to become fully operational in the second half of 2009 which would result in revenue generation and an expansion of marketing and administrative activities.
Liquidity
As noted previously, through December 31, 2008 we raised $1,170,800 in new equity. To support planned operations through 2009 and beyond, additional capital will be required. In that regard it is management’s intent to continue fund raising efforts to generate the capital required to support expanding operations.
Recent Accounting Pronouncements
On November 5, 2007, the SEC issued SAB No. 109, Written Loan Commitments Recorded at Fair Value Through Earnings (“SAB 109”). SAB 109 provides guidance on the accounting for written loan commitments recorded at fair value under generally accepted accounting principles. Specifically, the SAB revises the Staff’s views on incorporating expected net future cash flows related to loan servicing activities in the fair value measurement of a written loan commitment. SAB 109, which supersedes SAB 105, Application of Accounting Principles to Loan Commitments, requires the expected net future cash flows related to the associated servicing of the loan be included in the measurement of all written loan commitments that are accounted for at fair value through earnings. SAB 109 is effective in fiscal quarters beginning after December 15, 2007. The adoption of SAB 109 did not have a material impact on our financial statements.
In December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141(R), Business Combinations, which replaces SFAS No. 141. SFAS No. 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. The statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS 141(R) is effective for calendar year companies on January 1, 2009. We do not anticipate that the adoption of SFAS 141(R) will have a material effect on accounting for business combinations once adopted, but the effect is dependent upon acquisitions at that time.
In December 2007, the SEC issued SAB 110. SAB 110 expresses the views of the staff regarding the use of a “simplified” method, as discussed in SAB No. 107 (“SAB 107”), in developing an estimate of expected term of “plain vanilla” share options in accordance with SFAS No. 123 (revised 2004) which is effective on January 1, 2008. The adoption of SAB 110 did not have a material impact on our financial statements.
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, and amendment of SFAS No. 133 (“SFAS No. 161”). This statement will require additional disclosures about how and why we use derivative financial instruments, how derivative instruments and related hedged items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended and interpreted (“SFAS No. 133”), and how derivative instruments and related hedged items affect our financial position, results of operations, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008; however early adoption is encouraged, as are comparative disclosures for earlier periods. We do not believe that the adoption of SFAS No. 161 will have a material impact on our financial statements.
In April 2008, the FASB issued FASB Staff Position (“FSP”) No. SFAS 142-3, Determination of the Useful Life of Intangible Assets, (“SFAS 142-3”). FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets” and also requires expanded disclosure related to the determination of intangible asset useful lives. SFAS 142-3 is effective for fiscal years beginning after December 15, 2008. Early adoption is prohibited. We do not believe the adoption of SFAS 142-3 will have a material impact on our financial statements.
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS No. 162”). SFAS No. 162 identifies the sources of accounting principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This Statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. We currently adhere to the hierarchy of GAAP as presented in SFAS No. 162, and do not expect its adoption will have a material impact on our results of operations and financial condition.
In May 2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”). FSP APB 14-1 requires issuers of convertible debt instruments that may be settled in cash upon conversion to account separately for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. We do not anticipate that the adoption of FSP APB 14-1 will have a material effect on our results of operations or financial position.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
At December 31, 2008, we have invested our cash in money market accounts and marketable securities. We consider any liquid investment with an original maturity of three months or less when purchased to be cash equivalents. We adhere to an investment policy which requires that all investments be investment grade quality and no more than ten percent of our portfolio may be invested in any one security or with one institution.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONTENTS
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Blindspot Alert, Inc. fka Promotions On Wheels Holdings, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Blindspot Alert, Inc. fka Promotions On Wheels Holdings, Inc. (A Development Stage Company) as of December 31, 2008 and 2007, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended December 31, 2008 and 2007 and from inception on July 3, 2006 through December 31, 2008. 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 conduct our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Blindspot Alert, Inc. fka Promotions On Wheels Holdings, Inc. (A Development Stage Company) as of December 31, 2008 and 2007, and the related statements of operations, stockholders’ equity and cash flows for the years ended December 31, 2008 and 2007 and from inception on July 3, 2006 through December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has an accumulated deficit of $644,807, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Moore & Associates, Chartered
Moore & Associates, Chartered
Las Vegas, Nevada
February 23, 2009
6490 West Desert Inn Rd, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
BLINDSPOT ALERT, Inc.
Formerly Known as Promotions on Wheels Holdings, Inc.
A Development Stage Company
BALANCE SHEETS
The accompanying notes are an integral part of these financial statements.
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
A Development Stage Company
STATEMENTS OF OPERATIONS
For the years ended December 31, 2008, 2007 and the period
from inception July 3, 2006 to December 31, 2007
The accompanying notes are an integral part of these financial statements.
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
A Development Stage Company
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2008, 2007 and the period from
inception, July 2, 2006 to December 31, 2007
The accompanying notes are an integral part of these financial statements.
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
A Development Stage Company
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the year ended December 31, 2008 and the period from
inception July 3, 2006
The accompanying notes are an integral part of these financial statements.
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Nature of Business and Summary of Significant Accounting Policies
Nature of business and organization
Blindspot Alert, Inc (BSA) formerly known as Promotions on Wheels Holdings, Inc., a Nevada corporation, (hereinafter referred to as the “Company”) was incorporated in the State of Nevada on July 3, 2006. The Company from inception through June 2008 had been in the business of offering live promotions and marketing events. In June 2008 a majority ownership change was made and the business emphasis was shifted to the marketing and sales through the internet of software and services that allow parents or other caregivers to monitor and be notified of occurrences of predator advances, cyber bullying and pornography. The Company operates under a world wide licensing agreement that allows for selective exclusivity within certain markets and expects to begin full scale operations in 2009.
Development Stage Company
The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by Development Stage Enterprises”. The Company has devoted substantially all of its efforts to business planning and development. Additionally, the Company has allocated a substantial portion of its time and investment to bringing its product to the market and to raising capital.
Use of estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company is subject to uncertainty of future events, economic, environmental and political factors and changes in the Company's business environment; therefore, actual results could differ from these estimates. Accordingly, accounting estimates used in the preparation of the Company's financial statements will change as new events occur, more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Changes are made in estimates as circumstances warrant. Such changes in estimates and refinement of estimation methodologies are reflected in the statements.
Cash and cash equivalents- concentration of risk
Cash and cash equivalents include interest bearing and non-interest bearing bank deposits, money market accounts, and short-term instruments with a liquidation provision of three months or less.
The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (FDIC). This government corporation insured balances up to $100,000 through October 13, 2008. As of October 14, 2008 all non-interest bearing transaction deposit accounts at an FDIC-insured institution, including all personal and business checking deposit accounts that do not earn interest, are fully insured for the entire amount in the deposit account. This unlimited insurance coverage is temporary and will remain in effect for participating institutions until December 31, 2009.
All other deposit accounts at FDIC-insured institutions are insured up to at least $250,000 per depositor until December 31, 2009. On January 1, 2010, FDIC deposit insurance for all deposit accounts, except
for certain retirement accounts, will return to at least $100,000 per depositor. Insurance coverage for certain retirement accounts, which include all IRA deposit accounts, will remain at $250,000 per depositor.
Income taxes
The Company accounts for its income taxes in accordance with Statement of Financial Accounting Standards No. 109, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases 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 operations in the period that includes the enactment date.
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Nature of Business and Summary of Significant Accounting Policies- continued
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2008 are as follows:
Through December 31, 2008, a valuation allowance has been recorded to offset the deferred tax assets, including those related to the net operating losses. At December 31, 2008, the Company had approximately $644,800 of federal and state net operating losses. The net operating loss carry forwards, if not utilized will begin to expire in 2025. The utilization of these losses for tax purposes will be limited due to the operation of Internal Revenue Code Section 382 which restricts the utilization of net operating loss carry forwards is circumstances where there is a more than 51% change of control in a company.
Reconciliations of the U.S. federal statutory rate to the actual tax rate for the years ended December 31, 2008 and 2007 are as follows:
Net loss per common share
The Company computes net loss per share in accordance with SFAS No. 128, Earnings per Share (SFAS 128) and SEC Staff Accounting Bulletin No. 98 (SAB 98). Under the provisions of SFAS 128 and SAB 98, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is antidilutive.
Revenue recognition
Revenues are recognized at the time a sale is complete.
Accounts receivable and billing
The Company will be conducting sales primarily through the internet utilizing merchant services for the processing of customer credit card or other electronic means of paying. It is not expected that there will be any significant amount of trade receivables that will result from operations.
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Nature of Business and Summary of Significant Accounting Policies- continued
Property and equipment
Property and equipment are stated at cost net of accumulated amortization and at December 31, 2008 consisted primarily of web site development costs and software licensing fees. No amortization has been taken as of the statement date since revenue operations have not commenced. Amortization is computed using the straight-line method over the estimated useful life of the related asset. Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. The estimated useful lives are as follows:
Software License
Years
Web Site Development
Years
Fair value of financial instruments
The Financial Accounting Standards Board’s Statement 107, “Disclosures about Fair Value of Financial Instruments”, requires the determination of fair value of the Company’s financial assets and liabilities. The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies. The carrying amounts of financial instruments including cash and advance from shareholder approximate their fair value because of their short maturities.
Stock Based Compensation
We follow the provisions of SFAS No. 123R, “Share-Based Payment.” SFAS 123R requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). SFAS 123R also requires measurement of the cost of employee services received in exchange for an equity award based upon the grant-date fair value of the award. We account for non-employee share-based awards in accordance with EITF No. 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquisition, or in Conjunction with Selling Goods or Services.”
Note 2. Going concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company incurred cumulative net losses of approximately $644,807 from the period of July 3, 2006 (Inception) through December 31, 2008 and has used significant cash in support of its operating activities raising substantial doubt about the Company’s ability to continue as a going concern. The Company in 2008 has raised additional capital and will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.
The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s plan. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 3. Concentration of credit risk
For the year ended December 31, 2008 the Company had no revenues. In 2007, three customers represented 100% of the Company’s revenues.
Note 4. Property and Equipment
Property and equipment consist of the following at December 31, 2008 and 2007:
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
*On June 30, 2008 we entered into a license agreement with WQN, Inc., whose common stock trades on the pink sheets under the symbol WQNI. Under the agreement we have the right to license its software technology on a non-exclusive worldwide basis and offer the software on an exclusive basis to: Home Shopping Network, QVC, Inc., Walgreens Drugstore, CVS Pharmacy and Walmart. We have paid a one time fee of $300,000 and will pay a 35% royalty on any net licensing revenue collected by us. The initial term of the license granted pursuant to this agreement shall be perpetual.
Depreciation expense for fiscal 2008 and 2007 totaled $0 and $2,597, respectively.
Note 5. Option to acquire
In November 2008 the Company entered into an option agreement with Auburg Adams LLC (AA) a Texas limited liability company to acquire certain software licensing rights it had contracted for pursuant to a licensing agreement entered into with Essential Security Software, Inc. the developer. The option allows the Company to secure the rights of Auburg Adams once a payment of $270,000 has been made. Any payments made pursuant to the terms of the option to acquire are to be credited to the overall price of the licensing should the option be exercised. The rights that Auburg Adams has been granted are for the marketing and sales of software that provides for total digital rights management enabling users to exercise complete control over email transmissions and any attachments related to those transmissions to include restriction of forwarding and timed removal from a recipient computer. This licensing is for an initial five- year period and is automatically renewable for periods thereafter. The overall cost for the rights is $270,000.
The option expires on April 1, 2009 but requires periodic payments as outlined below to maintain the option.
Blindspot Alert can exercise the option any time during the option period or let the option lapse by not making a
required payment. Through December 31, 2008 the Company had made option payments totaling $95,000.
A principal of Auburg Adams LLC is a minority shareholder in Blindspot Alert, Inc.
Note 6. Ownership change
On June 30, 2008 Texas Atlantic Capital Partners, LLC obtained control of our company by acquiring 13,200,000 shares of stock , 72% of the then outstanding common stock. An additional 1,000,000 shares of common stock were acquired in September 2008 with no significant change in Texas Atlantic’s ownership percentage due to other issuances that had been made through year end. Coincidental with this acquisition a cancellation of 35,500,000 shares of previously issued common stock was completed pursuant to the terms of the share acquisition agreement.
Also, effective June 30, 2008, we agreed to issue shares of our Series A Convertible Preferred Stock at a price of $.30 per share in a private placement to accredited investors up to a maximum of $1,200,000. Through December 31, 2008 3,833,335 preferred shares had been sold for $1,150,000 pursuant to this offering. Each preferred share may be converted into 1.25 common shares. We intend to sell a maximum of 4,000,000 preferred shares.
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
Note 7. Stock Issuances
During 2008 we had the following common and preferred stock issuances.
Note 8. Related party transactions
In the aggregate, during 2008, the Company paid to related parties $211,225 for consulting, legal and marketing services as reflected below.
Texas Atlantic Capital Partners LLC (TA) and Rowland W. Day II are affiliates in that TA is a majority and more than 10% shareholder in the Company, Mr. Day is its CEO and Rusty Schwartz, a principal in Robertson Schwartz Agency is President and a member of Blindspot Alert’s Board of Directors.
The services that were provided are explained below.
.
Consulting- Consulting services consisted of the coordination of web design and marketing efforts aimed at product launch to include the evaluation of the appropriate merchant service agencies to be used as well as working with management relating to general corporate matters associated with business plan implementation.
Legal- Rowland Day is the Company’s SEC attorney and is responsible for all quarterly and annual filings as well as any other filings required as a result of the actions of the Company. In addition Mr. Day initiated and provided oversight to the process that resulted in the name change to Blindspot Alert, Inc.
Marketing- Marketing fees paid relate to the development of a comprehensive marketing plan whose objective is to build brand and product awareness through planned media and other exposures.
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
Note 9. Loss on sale of equipment
During the period ended March 31, 2008, the Company sold all of its equipment to Barry Van Wie (“BVW”), former CEO in exchange for the settlement of advance from BVW in the amount of $5,027. These assets had a book value of $10,243 net of accumulated depreciation. The Company incurred a loss of approximately $5,200 from the sale.
Note 10. Other income
The Company as of March 12, 2008, owed $6,000 to Cab-Tive Advertising, Inc. for unpaid equipment lease fees. The Company and Cab-Tive Advertising entered into a mutual agreement which provided for an exchange of certain equipment, and a cancellation of the unpaid lease fees resulting in a recording of $6,000 of other income.
Note 11. Facilities
The Company’s corporate headquarters are presently co located at no cost to the Company in the law offices of its Chief Executive Officer.
Note 12. Newly issued pronouncements
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted Share-Based Payment Transactions Are Participating Securities, (“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the computation of earnings per share under the two-class method as described in FASB Statement of Financial Accounting Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have material effect on our consolidated financial position and results of operations if adopted.
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.
In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133. This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of SFAS No. 161, but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows.
BLINDSPOT ALERT, INC.
Formerly Known as Promotions on Wheels Holdings, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS No. 123 (R), Share-Based Payment. In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staff believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behavior may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently uses the simplified method for “plain vanilla” share options and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51. This statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this statement was issued, limited guidance existed for reporting noncontrolling interests. As a result, considerable diversity in practice existed. So-called minority interests were reported in the consolidated statement of financial position as liabilities or in the mezzanine section between liabilities and equity. This statement improves comparability by eliminating that diversity. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this statement is the same as that of the related Statement 141 (revised 2007). The Company will adopt this Statement beginning March 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business Combinations’. This Statement replaces FASB Statement No. 141, Business Combinations, but retains the fundamental requirements in Statement 141. This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this statement is the same as that of the related FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements. The Company will adopt this statement beginning March 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities-Including an Amendment of FASB Statement No. 115. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This option is available to all entities. Most of the provisions in FAS 159 are elective; however, an amendment to FAS 115 Accounting for Certain Investments in Debt and Equity Securities applies to all entities with available for sale or trading securities. Some requirements apply differently to entities that do not report net income. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS No. 157 Fair Value Measurements. The Company will adopt SFAS No. 159 beginning March 1, 2008 and is currently evaluating the potential impact the adoption of this pronouncement will have on its consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this statement does not require any new fair value measurements. However, for some entities, the application of this statement will change current practice. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company will adopt this statement March 1, 2008, and it is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
ITEM 9.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9A(T).
ITEM 9A(T). Controls and Procedures
Our management with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act for the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, our principal executive officer and principal financial officer have concluded that these controls and procedures are effective in all material respects, including those to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, and is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.
Report of Management on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; (iii) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Management has assessed our internal control over financial reporting as of December 31, 2008. The assessment was based on criteria for effective internal control over financial reporting described in the Internal Control-Integrated Framework issued by the Sponsoring Organizations of the Treadway Commission. Based on the assessment, Management believes that we maintained effective internal control over financial reporting as of December 31, 2008.
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
Changes in Internal Controls
We have evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, that there have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting. Inherent limitations exist in any system of control including the possibility of human error and the potential of overriding controls. The effectiveness of an internal control system may also be affected by changes in conditions.
ITEM 9B.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
Our current officers and directors are listed below. Each of our directors will serve for one year or until their respective successors are elected and qualified. Our officers serve at the pleasure of the board of directors.
Name
Age
Position
Start of Term
Rowland W. Day II
CEO
Chairman of the Board
Director
February 25, 2008
Rusty Robertson
President
COO
Director
July 21, 2008
Denton Jones
Director
July 21, 2008
Robert Salluzzo
CFO
Treasurer
July 21, 2008
Rowland W. Day II, 52 years of age, Chief Executive Officer and Director.
Mr. Day is a business corporate lawyer. He has practiced law since 1983. Mr. Day has been the Chairman of the Board of Clearant, Inc. (OTCBB-CLRA) and is currently a director of RE3W WorldWide and Restaurants on the Run.
Rusty Robertson, 56 years of age, President, Chief Operating Officer and Director.
Ms. Robertson is a principal of the Robertson Schwartz Agency. Ms. Robertson specializes in marketing, sales, forecasting, literary, advertising and public relations. Advertising Age Magazine has honored Ms. Robertson as one of the top 100 Marketers and Success Magazine featured Ms. Robertson and her company as one of Americas Super 8 companies.
Denton Jones, 56 years of age, Director.
Mr. Jones has been a private investor for 30 years. He is the manager of Texas Atlantic Partners, LLC, the holder of 14,000,000 shares of common stock. Mr. Jones is a director of WQN, Inc.
Robert J. Salluzzo, 60 years of age, Treasurer and interim Chief Financial Officer.
Mr. Salluzzo has been the Chief Financial Officer of four public companies since 1997. Mr. Salluzzo is a Certified Public Accountant.
Family Relationships
There are no family relationships among any of our directors or executive officers.
Legal Proceedings
There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees, including judgments finding violations of any federal or state securities or commodities law, material to the evaluation of the ability and integrity of any of our directors, executive officers, promoters or control persons during the past five years.
Independent Registered Public Accounting Firm
The firm of Moore & Associates has been appointed to serve as our independent registered public accounting firm for the 2009 fiscal year unless the Board of Directors deems it advisable to make a substitution.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
No compensation of cash or equity has been paid or granted for the employment of our officers or for the services of our directors.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth the securities ownership of our directors, named executive officers, and any person or group who is known to us to be the beneficial owner of more than five percent of our voting stock as of April 6, 2009:
1 Applicable percentage ownership is based on 27,091,669 shares of total voting stock outstanding at April 6, 2009. The number of shares of voting stock owned are those “beneficially owned” as determined under the rules of the SEC, including any shares of voting stock as to which a person has sole or shared voting or investment power and any shares of voting stock which the person has the right to acquire within sixty days through the exercise of any option, warrant or right. All addresses are c/o 1 Hampshire Court, Newport Beach, California 92660, unless otherwise noted.
2 Includes 14,000,000 shares owned by Texas Atlantic Capital Partners. Mr. Jones is the Managing Member of Texas Atlantic Capital Partners.
3 Includes 2,400,000 shares owned by the Robertson Schwartz Agency. Ms. Robertson is a principal of the Robertson Schwartz Agency.
4..Includes 1,200,000 shares of common stock issued to Rowland W. Day II as Trustee of The Day Family Trust.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all Shares beneficially owned by them. A person is deemed to be the beneficial owner of securities which may be acquired by such person within sixty days from the date on which beneficial ownership is to be determined, upon the exercise of options, warrants or convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such person (but not those held by any other person) and which are exercisable, convertible or exchangeable within such sixty day period, have been so exercised, converted or exchanged.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Transactions with Related Persons
In the aggregate, during 2008, the Company paid to related parties $211,225 for consulting, legal and marketing services as reflected below.
Denton Jones, a director of the Company is the Managing Member of Texas Atlantic Capital Partners LLC (TA), Rowland W. Day II is our CEO and a director and Rusty Schwartz, a director is a principal in Robertson Schwartz Agency.
The services that were provided are outlined below.
Consulting- Consulting services consisted of the coordination of web design and marketing efforts aimed at product launch to include the evaluation of the appropriate merchant service agencies to be used as well as working with management relating to general corporate matters associated with business plan implementation.
Legal-Legal service consisted of corporate legal advice, document preparation and the preparation of quarterly and annual filings as well as other filings required as a result of the actions of the Company.
Marketing- Marketing services related to the development of a comprehensive marketing plan whose objective is to build brand and product awareness through planned media and other exposures.
Director Independence
It is our position that our three directors are not independent.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
The following table sets forth the aggregate fees billed to us for the fiscal years ended December 31, 2008 and 2007 by Moore & Associates.
Tax Fees
There were no fees paid in either 2008 or 2007 for tax related matters.
PART IV
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULE
Exhibit No.
Description
3.1
Amended and Restated Certificate of Incorporation of Blindspot Alert, Inc., a Nevada corporation. Incorporated by reference to our current report on Form 14-C filed with the SEC on December 5, 2008.
10.1
Incorporated by reference to our current report on Form 8-K filed with the SEC on July 25, 2008 License Agreement dated June 30, 2008.
31.1
Rule 13a-14(a) Certification of Chief Executive Officer
31.2
Rule 13a-14(a) Certification of Chief Financial Officer
32.1
Certification of Chief Executive Officer Pursuant to 18.U.S.C. Section 1350, as Pursuant to Section 906 of the Sarbanes Oxley Act of
32.2
Certification of Chief Financial Officer Pursuant to 18.U.S.C. Section 1350, as Pursuant to Section 906 of the Sarbanes Oxley Act of
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signature
Title(s)
Date
/s/ Rowland W. Day II
Chief Executive Officer
April 10, 2009
Rowland W. Day II
/s/ Robert J. Salluzzo
Chief Financial Officer
April 10, 2009
Robert J. Salluzzo
/s/ Denton Jones
Director
April 10, 2009
Denton Jones
/s/ Rusty Robertson
President and Director
April 10, 2009
Rusty Robertson