As filed
with the Securities and Exchange Commission on May 3, 2005
Registration
Number 333-____________
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
SB-2
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
ROAMING
MESSINGER, INC.
(Name of
Small Business Issuer in its Charter)
Nevada |
|
7372 |
|
30-0050402 |
(State
or other jurisdiction of incorporation or organization) |
|
(Primary
Standard Industrial
Classification
Code Number) |
|
(I.R.S.
Employer) Identification No. |
50
Castilian Dr. Suite A, Santa Barbara
California
93117
(805)
683-7626
(Address
and telephone number of principal executive offices)
Jonathan
Lei
President
Roaming
Messenger, Inc.
50
Castilian Dr. Suite A, Santa Barbara
California
93117
(805)
683-7626
(Name,
address and telephone number of agent for service)
Copies
to:
Gregory
Sichenzia, Esq.
Sichenzia
Ross Friedman Ference LLP
1065
Avenue of the Americas, 21st
Floor
New York,
New York 10018
(212)
930-9700
Approximate
date of commencement of proposed sale to the public: From time to time after the
effective date of this Registration Statement.
If any of
the securities being registered on this form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If this
form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. o______
If this
form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
number of the earlier effective registration statement for the same offering.
o ________
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box. o
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of Securities to be Registered |
|
Amount
To Be Registered |
|
Proposed
Maximum Offering Price Per Share (1) |
|
Proposed
Maximum Aggregate Offering Price |
|
Amount
of Registration Fee |
|
|
|
|
|
|
|
|
|
|
|
Common
Stock, $.0001 par value per share (2) |
|
|
5,000,000 |
|
$ |
0.18 |
|
$ |
900,000.00 |
|
$ |
106 |
|
Common
Stock, $.0001 par value per share(3) |
|
|
31,250,000 |
|
$ |
0.18 |
|
$ |
5,625,000.00 |
|
$ |
662 |
|
Total |
|
|
36,250,000 |
|
|
|
|
$ |
6,525,000.00 |
|
$ |
768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Estimated
solely for purposes of calculating the registration fee pursuant to Rule
457(c) under the Securities Act of 1933, as amended. The average of the
high and low price per share of the Registrant's Common Stock on the Over
the Counter Bulletin Board as of April 27, 2005 was $0.18 per share.
|
(2) |
Represents
shares issued pursuant to the Securities Purchase
Agreement. |
(3) |
Represents
shares underlying the Periodic Equity Investment
Agreement. |
The
registrant hereby amends this registration statement on such date or date(s) as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the registration statement shall
become effective on such date as the commission acting pursuant to said Section
8(a) may determine.
The
information in this prospectus is not complete and may be changed. The
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
Subject
to Completion, Dated May 3, 2005
ROAMING
MESSENGER, INC.
36,250,000
Shares of Common Stock
This
prospectus relates to the resale by the selling stockholder of up to 36,250,000
shares of our common stock. The selling stockholder may sell common stock from
time to time in the principal market on which the stock is traded at the
prevailing market price or in negotiated transactions.
We are
not selling any shares of common stock in this offering and therefore will not
receive any proceeds from this offering. We will, however, receive proceeds from
the sale of common stock under our Periodic Equity Investment Agreement with
Wings Fund, Inc. All costs associated with this registration will be borne by
us.
Our
common stock currently trades on the Over the Counter Bulletin Board ("OTC
Bulletin Board") under the symbol "RMSG.OB."
On May 2,
2005, the last reported sale price for our common stock on the OTC Bulletin
Board was $0.165 per share.
The
securities offered in this prospectus involve a high degree of risk. See "Risk
Factors" beginning on page of this
prospectus to read about factors you should consider before buying shares of our
common stock.
Wings
Fund, Inc. is an "underwriter" within the meaning of the Securities Act of 1933
in connection with the sale of common stock under the Periodic Equity Investment
Agreement. Wings Fund, Inc. will pay a net purchase price of 60% of our market
price as calculated in the Periodic Equity Investment Agreement.
With the
exception of Wings Fund, Inc., which is an "underwriter" within the meaning of
the Securities Act of 1933, no other underwriter or person has been engaged to
facilitate the sale of shares of common stock in this offering. None of the
proceeds from the sale of stock by the selling stockholder will be placed in
escrow, trust or any similar account.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
information in this Prospectus is not complete and may be changed. This
Prospectus is included in the Registration Statement that was filed by Roaming
Messenger, Inc. with the Securities and Exchange Commission. The selling
stockholder may not sell these securities until the registration statement
becomes effective. This Prospectus is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.
The date
of this Prospectus is May 3, 2005
TABLE
OF CONTENTS
|
Page |
Prospectus
Summary |
1 |
Risk
Factors |
2 |
Forward
Looking Statements |
6 |
Use
of Proceeds |
7 |
Management's
Discussion and Analysis of Financial Condition or Plan of
Operation |
7 |
Description
of Business |
10 |
Description
of Property |
14 |
Legal
Proceedings |
14 |
Directors
and Executive Officers |
14 |
Executive
Compensation |
16 |
Changes
In and Disagreements With Accountants on Accounting and Financial
Disclosure |
18 |
Market
for Common Equity and Related Stockholder Disclosure |
19 |
Security
Ownership of Certain Beneficial Owners and Management |
20 |
Selling
Shareholders |
21 |
Certain
Relationships and Related Transactions |
21 |
Description
of Securities |
22 |
Plan
of Distribution |
23 |
Legal
Matters |
24 |
Experts |
24 |
Where
You Can Find More Information |
24 |
Disclosure
of Commission Position on Indemnification for Securities Act
Liabilities |
25 |
Index
to Consolidated Financial Statements |
F-1 |
You may
only rely on the information contained in this prospectus or that we have
referred you to. We have not authorized anyone to provide you with different
information. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the common stock
offered by this prospectus. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any common stock in any circumstances in
which such offer or solicitation is unlawful. Neither the delivery of this
prospectus nor any sale made in connection with this prospectus shall, under any
circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus or that the information contained by
reference to this prospectus is correct as of any time after its date.
PROSPECTUS
SUMMARY
This
summary highlights information contained elsewhere in this prospectus. You
should read the entire prospectus carefully, including, the section entitled
"Risk Factors" before deciding to invest in our common stock. Roaming Messenger,
Inc. is referred to throughout this prospectus as "Roaming Messenger," "we" or
"us."
General
We have
developed a proprietary solution called "Roaming Messenger" for delivering
real-time information for homeland security, emergency response, military and
enterprise applications. Unlike solutions based on existing messaging technology
such as e-mail, text messaging, and voicemail, Roaming Messenger packages
time-critical information into smart messages. These messages automatically roam
throughout the wired and wireless worlds - from mobile devices to desktop PCs to
central servers - tracking down people and obtaining responses in real-time.
For the
year ended June 30, 2004, we generated revenues of $953,777 and incurred a
consolidated net loss of $1,035,945. For the three-month period ending December
31, 2004, we generated revenue of $307,228 and incurred a consolidated net loss
of $562,186. As a result of recurring losses from operations, a working capital
deficit and accumulated deficit, our auditors, in their report dated September
10, 2004, have expressed substantial doubt about our ability to continue as a
going concern.
Our
principal executive office is located at 50 Castilian Drive, Suite A, Santa
Barbara, California 93117 and our telephone number is (805)
683-7626.
This
Offering
|
|
Shares
offered by Selling Stockholders |
Up
to 36,250,000 shares, based on current market prices. This number
represents approximately 20% of our current outstanding stock and includes
5,000,000 shares of common stock issued pursuant to the Securities
Purchase Agreement and up to 31,250,000 shares of common stock to be
issued under the Periodic Equity Investment Agreement. |
|
|
Common
Stock to be outstanding after the offering |
216,586,204* |
|
|
Use
of Proceeds |
We
will not receive any proceeds from the sale of the common stock hereunder.
We will receive proceeds from the sale of our common stock pursuant to the
Periodic Equity Investment Agreement. See “Use of Proceeds” for a complete
description. |
|
|
Risk
Factors |
The
purchase of our common stock involves a high degree of risk. You should
carefully review and consider "Risk Factors" beginning on page
|
|
|
OTC
Bulletin Board Trading
Symbol |
RMSG.OB |
* The
above information regarding common stock to be outstanding after the offering is
based on 180,336,204 shares of common stock outstanding as of May 2,
2005.
RISK
FACTORS
An
investment in our shares involves a high degree of risk. Before making an
investment decision, you should carefully consider all of the risks described in
this prospectus. If any of the risks discussed in this prospectus actually
occur, our business, financial condition and results of operations could be
materially and adversely affected. If this were to happen, the price of our
shares could decline significantly and you may lose all or a part of your
investment. The risk factors described below are not the only ones that may
affect us. Our forward-looking statements in this prospectus are subject to the
following risks and uncertainties. Our actual results could differ materially
from those anticipated by our forward-looking statements as a result of the risk
factors below. See "Forward-Looking Statements."
Risks
Related to Our Business
We
have a history of losses, expect continuing losses and may never achieve
profitability.
We have
not achieved profitability in any period and may continue to incur net losses in
accordance with generally accepted accounting principles for the foreseeable
future. In addition, we intend to continue to spend resources on maintaining and
strengthening our business, and this may, in the near term, cause our operating
expenses to increase and our operating results to decline.
For the
years ended June 30, 2004 and 2003, we generated revenues of $953,777 and
$899,732 respectively and incurred consolidated net losses of $1,035,945 and
$424,047 respectively. For the three-month period ending December 31, 2004, we
generated revenue of $307,228 and incurred a consolidated net loss of
$562,186
Our
auditors have qualified their opinion to our financial statements because of
concerns about our ability to continue as a going concern. These concerns
arise from the fact that we have not yet established an ongoing source of
revenues sufficient to cover our operating costs and that we must raise
additional capital in order to continue to operate our business. If we are
unable to continue as a going concern, you could lose your entire investment in
us.
We
may need to raise additional capital and may need to initiate other operational
strategies to continue our operations.
In the
future, we may be required to raise additional funds, particularly if we are
unable to generate positive cash flow as a result of our operations. Such
financing may not be available in sufficient amounts or on terms acceptable to
us.
We
may not be able to successfully develop and commercialize our Roaming Messenger
Technology.
We are
still in the process of developing our technology and we cannot assure that we
will be able to complete development of our Roaming Messenger core technology
and product, or that, once developed, the technology and products can be
licensed or sold profitably. We may not develop any new products or services for
sale from our research and development efforts.
Our
revenues are dependent upon acceptance of our products by third party licensors.
We will
continue to incur substantial operating losses until such time as we are able to
generate revenues from licensing and service fees for our products. There can be
no assurance that businesses and customers will adopt our technology and
products, or that businesses and prospective customers will agree to pay the
licensing and service fees for our products. In the event that we are not able
to significantly increase the number of customers that license our products, or
if we are unable to charge the necessary license fees, our financial condition
and results of operations will be materially and adversely
affected.
Our
success is dependent upon increasing acceptance of wireless access to the
Internet in the United States.
Our
success is linked directly to the extent to which users of the Internet in the
United States increase their use and reliance upon wireless access to the
Internet. Currently, the demand for wireless access is minimal, and if such
demand does not increase, or, if such demand increases at a pace slower than
projected, then our financial condition and results of operations will be
materially and adversely affected.
We
do not maintain theft or casualty insurance, and only maintain modest liability
and property insurance coverage and therefore we could incur losses as a result
of an uninsured loss.
We do not
maintain theft or casualty insurance and we have modest liability and property
insurance coverage, along with workmen's compensation and related insurance. We
cannot assure that we will not incur not incur uninsured liabilities and losses
as a result of the conduct of our business. Any such insured loss or liability
could have a material adverse affect on our results of operations.
If
we lose key employees and consultants or are unable to attract or retain
qualified personnel, our business could suffer
Our
success is highly dependent on our ability to attract and retain qualified
scientific and management personnel. We are highly dependent on our management,
including Mr. Jonathan Lei who has been critical to the development of our
technologies and business. The loss of the services of Mr. Lei could have a
material adverse effect on our operations. We do not have an employment
agreement with Mr. Lei. Accordingly, there can be no assurance that he will
remain associated with us. The efforts of Mr. Lei will be critical to us as we
continue to develop our technology and as we attempt to transition from a
development state company to a company with commercialized products and
services. If we were to lose Mr. Lei, or any other key employees, we may
experience difficulties in competing effectively, developing our technology and
implementing our business strategies.
If
we are unable to protect our intellectual property effectively, we may be unable
to prevent third parties from using our technologies, which would impair our
competitive advantage.
We have
not yet been granted patents for our technology and we cannot assure you that
any of our currently pending or future patent applications will result in issued
patents, or that any patents issued to us will not be challenged, invalidated or
held unenforceable. We cannot guarantee you that we will be successful in
defending challenges made in connection with our patent applications. We rely on
trade secret protection, and other contractual restrictions to protect our
proprietary technologies, all of which provide limited protection and may not
adequately protect our rights or permit us to gain or keep any competitive
advantage. If we fail to protect our intellectual property, we will be unable to
prevent third parties from using our technologies and they will be able to
compete more effectively against us.
We
cannot guarantee you that any patents issued to us will be broad enough to
provide any meaningful protection nor can we assure you that one of our
competitors may not develop more effective technologies, designs or methods
without infringing our intellectual property rights or that one of our
competitors might not design around our proprietary
technologies.
If we are
not able to protect our proprietary technology, trade secrets and know-how, our
competitors may use our inventions to develop competing products. We have
applied for certain patents relating to our technology. However, these patents
may not be issued, or if issued, may not protect us against our competitors, and
patent litigation is very expensive. We may not have sufficient cash available
to pursue any patent litigation to its conclusion because currently we do not
generate revenues.
We cannot
rely solely on our current patents to be successful. The standards that the U.S.
Patent and Trademark Office and foreign patent offices use to grant patents, and
the standards that U.S. and foreign courts use to interpret patents, are not the
same and are not always applied predictably or uniformly and can change,
particularly as new technologies develop. As such, the degree of patent
protection obtained in the U.S. may differ substantially from that obtained in
various foreign countries. In some instances, patents have issued in the U.S.
while substantially less or no protection has been obtained in Europe or other
countries.
We cannot
be certain of the level of protection, if any, that will be provided by our
patents, if issued. if we attempt to enforce them and they are challenged in
court where our competitors may raise defenses such as invalidity,
unenforceability or possession of a valid license. In addition, the type and
extent of any patent claims that may be issued to us in the future are
uncertain. Any patents which are issued may not contain claims that will permit
us to stop competitors from using similar technology.
We
are subject to competition from other companies, some of which have greater
financial resources, brand recognition, management experience than we
do.
The
mobile data technology industry is characterized by intense competition. We will
be subject to competition from other companies, many of which have greater
financial resources, greater name recognition, more management experience, and
longer operating histories than we have. There is no assurance that we will be
able to compete successfully or profitably in the mobile data technology
business.
We
may not be able to respond to the rapid technological change of the mobile data
industry.
Mobile
data is a rapidly evolving technology. Our future success is dependent upon our
ability to adapt rapidly to changes in mobile data technology. To do so, we must
continually improve the performance, features and reliability of our technology
and products. If we fail to maintain a competitive level of technological
expertise, it would have a material adverse effect on our business, results of
operations, and financial condition. In addition, the widespread adoption of new
mobile data technologies or other technological changes could require
substantial expenditures by us to modify or adapt our services or
infrastructure, which could have a material adverse effect on our business,
results of operations, and financial condition.
We
may be subject to government regulation.
Currently
there are few laws or regulations that specifically regulate communications or
commerce on the Internet. Laws and regulations may be adopted in the future that
address issues such as user privacy, pricing, and the characteristics and
quality of products and services. Several telecommunications companies have
petitioned the Federal Communications Commission to regulate Internet service
providers and online services providers in a manner similar to long distance
telephone carriers and to impose access fees on these companies. Any imposition
of access fees could increase the cost of transmitting data over the Internet.
Moreover, it may take years to determine the extent to which existing laws
relating to issues such as property ownership, libel and personal privacy are
applicable to the Internet. Any new laws or regulations relating to the
Internet, or to mobile data technology, could materially adversely affect our
business and results of operations.
We
are reliant upon third parties to assist in the operation and maintenance of our
network infrastructure.
We rely
on third parties to assist in operating and maintaining our network
infrastructure. If these systems fail, user traffic could be disrupted or
delayed, which could impair our business and damage our reputation.
Fire,
floods, earthquakes, power loss, telecommunications failures, break-ins and
similar events could damage these systems and cause interruptions in our
services. Computer viruses, electronic break-ins or other similar disruptive
problems could result in reductions or termination of our services by our
customers or otherwise adversely affect our business. We do not have any backup
systems or a formal disaster recovery plan. Our Web site must be able to
accommodate a high volume of traffic and deliver frequently updated information.
We
are dependent upon the operations of the Internet and our Web site for our
business.
Our
customers depend on Internet service providers, online service providers and
other Web site operators for access to our Web site. If our Web site experiences
slower response times or decreased traffic for a variety of reasons, it could
have an adverse affect on our business and results of operations. Any outages,
delays or other Internet difficulties due to system failures unrelated to our
systems could have an adverse affect on our business and reputation. The
Internet network infrastructure may not be able to support continued growth,
which could adversely affect our business.
We
may be subject to claims of creditors of our former
subsidiary.
In the
first quarter of 2003, we conveyed to a third party our entire ownership in our
former operating subsidiary, Latinocare Management Corporation, a California
corporation. Prior thereto, our former subsidiary incurred a number of financial
obligations, many of which are still outstanding. In the event that creditors'
claims against our former subsidiary are deemed to be our obligations, we would
be adversely affected and might not have sufficient financial resources to
continue our operations.
Unknown
software defects could disrupt our services and harm our business and
reputation.
Our
software products are inherently complex. Additionally, our product and service
offerings depend on complex software, both internally developed and licensed
from third parties. Complex software often contains defects or errors in
translation, particularly when first introduced or when new versions are
released or localized for international markets. We may not discover software
defects in our products or that affect new or current services or enhancements
until after they are deployed. Despite testing, it is possible that defects may
occur in the software. These defects could cause service interruptions, which
could damage our reputation or increase service costs, cause us to lose revenue,
delay market acceptance or divert development resources.
If
our system security is breached, our reputation could suffer and our revenues
could decline.
A
fundamental requirement for online communications is the secure transmission of
confidential information over public networks. Third parties may attempt to
breach our security or that of our customers. If these attempts are successful,
customers’ confidential information, including customers’ profiles, passwords,
financial account information, credit card numbers or other personal information
could be breached. We may be liable to our customers for any breach in security
and a breach could harm our reputation. We rely on encryption technology
licensed from third parties. Our servers are vulnerable to computer viruses,
physical or electronic break-ins and similar disruptions, which could lead to
interruptions, delays or loss of data. We may be required to expend significant
capital and other resources to license encryption technology and additional
technologies to protect against security breaches or to alleviate problems
caused by any breach. Failure to prevent security breaches may make it difficult
to retain and attract customers and cause us to spend additional resources that
could cause our operating results to decline.
Risks
relating to our current Periodic Equity Investment Agreement:
There
are a large number of shares underlying our periodic equity investment agreement
that are being registered in this prospectus and the sale of these shares may
depress the market price of our common stock.
The
issuance and sale of shares upon delivery of an advance by Wings Fund, Inc.
pursuant to the Periodic Equity Investment Agreement in the amount up to
$3,000,000 is likely to result in substantial dilution to the interests of other
stockholders. As of May 2, 2005, we had 180,336,204 shares of common stock
issued and outstanding. We are registering 36,250,000 shares of common stock
pursuant to this registration statement, of which 31,250,000 shares are reserved
for issuance pursuant to the Periodic Equity Investment Agreement. As of May 2,
2005, the closing price of our common stock was $0.165. There is no upper limit
on the number of shares that we may be required to issue. This will have the
effect of further diluting the proportionate equity interest and voting power of
holders of our common stock and may result in a change of control of our
company.
THE
CONTINUOUSLY ADJUSTABLE PRICE FEATURE OF OUR PERIODIC EQUITY INVESTMENT
AGREEMENT COULD REQUIRE US TO ISSUE A SUBSTANTIALLY GREATER NUMBER OF SHARES,
WHICH WILL CAUSE DILUTION TO OUR EXISTING STOCKHOLDERS. The number of shares we
will be required to issue upon receipt of an advance pursuant to the Periodic
Equity Investment Agreement will increase if the market price of our stock
decreases. The following is an example of the amount of shares of our common
stock issuable in connection with an advance of $250,000 under the Periodic
Equity Investment Agreement, based on market prices 25%, 50% and 75% below the
average high and low prices on May 2, 2005 of $0.17:
|
|
|
|
|
|
|
|
|
|
%
BELOW MARKET |
|
PRICE
PER SHARE |
|
WITH
40% DISCOUNT |
|
NUMBER
OF SHARES |
|
PERCENTAGE |
|
25% |
|
$ |
0.128 |
|
$ |
0.077 |
|
|
3,267,974 |
|
|
1.8 |
% |
50% |
|
$ |
0.085 |
|
$ |
0.051 |
|
|
4,901,961 |
|
|
2.7 |
% |
75% |
|
$ |
0.043 |
|
$ |
0.026 |
|
|
9,803,922 |
|
|
5.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Based
upon 180,336,204 shares of common stock outstanding as of May 2, 2005.
As
illustrated, the number of shares of common stock issuable in connection with an
advance under the Periodic Equity Investment Agreement will increase if the
market price of our stock declines, which will cause dilution to our existing
stockholders.
The
sale of our stock under our periodic equity investment agreement could encourage
short sales by third parties, which could contribute to the future decline of
our stock price and materially dilute existing stockholders' equity and voting
rights.
The entry
into a Periodic Equity Investment Agreement has the potential to cause
significant downward pressure on the price of common stock. This is particularly
the case if the shares being placed into the market exceed the market's ability
to absorb the increased number of shares of stock or if we have not performed in
such a manner to show that the equity funds raised will be used by us to grow.
Such an event could place further downward pressure on the price of our common
stock. Under the terms of our Periodic Equity Investment Agreement we may
request numerous monthly drawdowns. Even if we use the Periodic Equity
Investment Agreement to grow our revenues and profits or invest in assets which
are materially beneficial to us, the opportunity exists for short sellers and
others to contribute to the future decline of our stock price. If there are
significant short sales of our stock, the price decline that would result from
this activity will cause the share price to decline more so, which, in turn, may
cause long holders of the stock to sell their shares thereby contributing to
sales of stock in the market. If there is an imbalance on the sell side of the
market for the stock, our stock price will decline. If this occurs, the number
of shares of our common stock that is issuable pursuant to the Periodic Equity
Investment Agreement will increase, which will materially dilute existing
stockholders' equity and voting rights.
We
may not be able to access sufficient funds under the periodic equity investment
agreement when needed.
We are
dependent on external financing to fund our operations. Our financing needs will
to some extent be provided from the Periodic Equity Investment Agreement. No
assurances can be given that such financing will be available in sufficient
amounts or at all when needed, in part, because we are limited to a maximum draw
down of $250,000 per advance.
The
following risks relate principally to our common stock and its market value:
There
is a limited market for our common stock.
Our
common stock is quoted on the OTC Bulletin Board under the symbol "RMSG.OB."
There is a limited trading market for our common stock. Accordingly, there can
be no assurance as to the liquidity of any markets that may develop for our
common stock, the ability of holders of our common stock to sell our common
stock, or the prices at which holders may be able to sell our common stock.
Our
stock price may be volatile.
The
market price of our common stock is likely to be highly volatile and could
fluctuate widely in price in response to various factors, many of which are
beyond our control, including:
· |
technological
innovations or new products and services by us or our
competitors; |
· |
additions
or departures of key personnel; |
· |
sales
of our common stock |
· |
our
ability to integrate operations, technology, products and services;
|
· |
our
ability to execute our business plan; |
· |
operating
results below expectations; |
· |
loss
of any strategic relationship; |
· |
economic
and other external factors; and |
· |
period-to-period
fluctuations in our financial results. |
Because
we have a limited operating history with limited revenues to date, you may
consider any one of these factors to be material. Our stock price may fluctuate
widely as a result of any of the above.
In
addition, the securities markets have from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. These market fluctuations may also materially and
adversely affect the market price of our common stock.
We
have not paid dividends in the past and do not expect to pay dividends in the
future. Any return on investment may be limited to the value of our common
stock.
We have
never paid cash dividends on our common stock and do not anticipate paying cash
dividends in the foreseeable future. The payment of dividends on our common
stock will depend on earnings, financial condition and other business and
economic factors affecting it at such time as the board of directors may
consider relevant. If we do not pay dividends, our common stock may be less
valuable because a return on your investment will only occur if its stock price
appreciates.
Our
common stock may be deemed penny stock with a limited trading market.
Our
common stock is currently listed for trading on the OTC Bulletin Board which is
generally considered to be a less efficient market than markets such as NASDAQ
or other national exchanges, and which may cause difficulty in conducting trades
and difficulty in obtaining future financing. Further, our securities are
subject to the "penny stock rules" adopted pursuant to Section 15 (g) of the
Securities Exchange Act of 1934, as amended, or Exchange Act. The penny stock
rules apply to non-NASDAQ companies whose common stock trades at less than $5.00
per share or which have tangible net worth of less than $5,000,000 ($2,000,000
if the company has been operating for three or more years). Such rules require,
among other things, that brokers who trade "penny stock" to persons other than
"established customers" complete certain documentation, make suitability
inquiries of investors and provide investors with certain information concerning
trading in the security, including a risk disclosure document and quote
information under certain circumstances. Many brokers have decided not to trade
"penny stock" because of the requirements of the penny stock rules and, as a
result, the number of broker-dealers willing to act as market makers in such
securities is limited. In the event that we remain subject to the "penny stock
rules" for any significant period, there may develop an adverse impact on the
market, if any, for our securities. Because our securities are subject to the
"penny stock rules," investors will find it more difficult to dispose of our
securities. Further, for companies whose securities are traded in the OTC
Bulletin Board, it is more difficult: (i) to obtain accurate quotations, (ii) to
obtain coverage for significant news events because major wire services, such as
the Dow Jones News Service, generally do not publish press releases about such
companies, and (iii) to obtain needed capital.
FORWARD-LOOKING
STATEMENTS
We and
our representatives may from time to time make written or oral statements that
are "forward-looking," including statements contained in this prospectus and
other filings with the Securities and Exchange Commission, reports to our
stockholders and news releases. All statements that express expectations,
estimates, forecasts or projections are forward-looking statements within the
meaning of the Act. In addition, other written or oral statements which
constitute forward-looking statements may be made by us or on our behalf. Words
such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," "projects," "forecasts," "may," "should," variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve risks, uncertainties and assumptions which are difficult to predict.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecasted in or suggested by such forward-looking statements. We
undertake no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise. Important
factors on which such statements are based are assumptions concerning
uncertainties, including but not limited to uncertainties associated with the
following:
(a)
volatility or decline of our stock price;
(b)
potential fluctuation in quarterly results;
(c) our
failure to earn revenues or profits;
(d)
inadequate capital and barriers to raising the additional capital or to
obtaining the financing needed to implement its business plans;
(e)
inadequate capital to continue business;
(f)
changes in demand for our products and services;
(g) rapid
and significant changes in markets;
(h)
litigation with or legal claims and allegations by outside parties;
(i)
insufficient revenues to cover operating costs.
USE
OF PROCEEDS
This
prospectus relates to shares of our common stock that may be offered and sold
from time to time by Wings Fund, Inc. We will receive proceeds from the sale of
shares of our common stock to Wings Fund, Inc. under the Periodic Equity
Investment Agreement. The purchase price of the shares purchased under the
Periodic Equity Investment Agreement will be equal to 60% of the volume weighted
average of the prices of our common stock for the twenty consecutive trading
days immediately preceding the notice to advance funds date.
For
illustrative purposes, we have set forth below our intended use of proceeds for
the range of net proceeds indicated below to be received under the Periodic
Equity Investment Agreement. The intended uses of proceeds are listed in order
of priority. We have the ability to draw down the full $3,000,000 pursuant to
the Periodic Equity Investment Agreement, however we may draw down less than
that amount. The table assumes estimated offering expenses of $30,000.
|
|
|
|
|
|
|
|
Gross
Proceeds |
|
$ |
1,500,000 |
|
$ |
3,000,000 |
|
Net
Proceeds after offering expenses |
|
$ |
1,475,000 |
|
$ |
2,975,000 |
|
|
|
|
|
|
|
|
|
Use
of proceeds: |
|
|
Amount |
|
|
Amount |
|
General
Working Capital |
|
$ |
1,475,000 |
|
$ |
2,975,000 |
|
|
|
|
|
|
|
|
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The
following discussion should be read in conjunction with our condensed
consolidated financial statements and notes to those statements. In addition to
historical information, the following discussion and other parts of this
quarterly report contain forward-looking information that involves risks and
uncertainties.
Overview
We have
developed a proprietary solution called "Roaming Messenger" for delivering
real-time information to wired and wireless devices for homeland security,
emergency response, military and enterprise applications. Unlike solutions based
on existing messaging technology such as e-mail, text messaging, and voicemail,
Roaming Messenger packages time-critical information into smart messages. These
messages automatically roam throughout the wired and wireless worlds - from
mobile devices to desktop PCs to central servers - tracking down people and
obtaining responses in real-time.
We expect
to sell and license the Roaming Messenger product to system integrators and
application developers in markets such as Homeland Security, Emergency Response,
Military and Enterprise Automation. For example, we might sell a Roaming
Messenger Gateway appliance to a systems integrator that is designing an
emergency alert and notification system. We plan to sell Roaming Messenger
through channel partners and value-added resellers (VARs) who are established in
their respective vertical markets.
For the
year ended June 30, 2004, we have been in product refinement and market
development mode on the Roaming Messenger product. We have forged a number of
partnerships with small to medium sized companies in the Homeland Security and
Public Safety sector. While we have validated the need for the unique
capabilities of Roaming Messenger in these markets, significant revenue has yet
to be derived, due to minimal sales and marketing efforts. Also, it took much
longer than anticipated for federal funds to flow into the information
technology procurement departments of government and public safety agencies to
which most of our channel partners sell.
A large
part of our investment capital was used for product development and
infrastructure build-out during the year ended June 30, 2004. However, this will
shift more towards sales, marketing and business development for the upcoming
fiscal year ending June 30, 2005. The Homeland Security and Public Safety
markets are still our primary markets as we are beginning to see increased
information technology spending at the state and local government level. While
Roaming Messenger is a horizontal product with application in many markets, our
primary sales and marketing strategy continues to be vertically focused. We will
execute various low-cost horizontal marketing programs, concurrently, to
identify new opportunities in non-primary vertical markets - such as healthcare
or enterprise markets.
Our
overarching growth strategy remains a three phase strategy. Phase I is the
Homeland Security and Public Safety markets. Phase II is the enterprise markets
for business process management and communication applications. Phase III is the
consumer markets for application such as mobile commerce and mobile gaming.
In
executing our growth strategy, strategic acquisition of synergistic companies
will be explored. Acquisition synergy shall be based on two primary factors (i)
access to install based of customers (ii) complementary product or service
offerings.
Results
of Operations
Years
Ended June 30 2003 and 2004.
Total
revenue for the twelve month period ended June 30, 2004 increased by $50,040 to
$953,772 from $899,732 in the prior year. Revenue was derived principally from
our Warp 9 Inc. subsidiary. The increase in revenue was the result of an
increase in Warp 9 Inc.’s clients and products upgrades.
Total
costs and expenses for the twelve month period ended June 30, 2004 increased by
$682,490 from $1,299,313 in 2003 and consisted primarily of selling, general and
administrative expenses and also include research and development expenses and
depreciation.
Selling,
general and administrative expenses increased by $474,972 during the twelve
months ended June 30, 2004 to $1,474,106 from $999,135 in the prior year. The
increase in selling, general and administrative expenses were the result of
increased costs of investor relations services, bad debts expenses, legal fees,
payments to business consultants and increased salary expenses as the result of
hiring additional staff. General and administrative expenses for the year ended
June 30, 2004 included $132,917 of non-cash expenses of stock option, and stock
compensation in lieu of payment to our consultants and employees. Expense
related to depreciation were $60,231 for the twelve months ended June 30, 2004
as compared to $49,162 for the prior year, and interest expense was $15,031 for
the twelve months ended June 30, 2004 as compared to $24,467 in the prior year.
Research
and development expenses increased by $170,057 during the twelve months ended
June 30, 2004 to $315,061 from $145,004. A majority of the increase occurred in
the latter six months as the technical staff grew.
For the
twelve months ended June 30, 2004, our consolidated net loss was $1,035,945 as
compared to a consolidated net loss of $424,047 for the twelve months ended June
30, 2003.
Three
Months Ended December 31, 2003 and 2004.
Total
revenue for the three-month period ending December 31, 2004 was $307,228 as
compared to $193,176 for the three-month period ending December 31, 2003.
Revenue was derived principally from our Warp 9 Inc. subsidiary. The increase of
$114,052 was primarily due to the reselling of third party online marketing
services.
Operating
expenses increased from $356,943 for the three months ended December 31, 2003 to
$725,727 for the three months ended December 31, 2004. The large increase in
operating expenses between the two periods is primarily due to sales and
marketing staff as well as increased marketing expenses.
The
$725,727 operating expenses includes non-cash charges of (i) $17,000 of
unregistered stock for engineering services (ii) $53,712 expense for the
issuance of warrants to business development consultants in lieu of cash payment
for their services. The value of the warrants was determined using the Black
Scholes model.
Operating
costs are expected to exceed revenue in the foreseeable future as we continue to
increase sales and marketing efforts as well as increasing staff.
For the
three months ended December 31, 2004, our consolidated net loss was ($562,186)
as compared to a consolidated net loss of ($193,371) for the three months ended
December 31, 2003.
Liquidity
and Capital Resources
We had
cash at December 31, 2004 of $595,260 as compared to cash of $1,495,102 as of
June 30, 2004. We had net working capital (i.e. the difference between current
assets and current liabilities) of $253,981 at December 31, 2004 as compared to
a net working capital of $1,191,108 at June 30, 2004. Cash flow utilized by
operating activities was ($846,324) for the six months ended December 31, 2004
as compared to cash utilized for operating activities of ($241,723) during the
six months ended December 31, 2003. Cash flow used in investing activities was
($49,065) for the six months ended December 31, 2004 as compared to cash used in
investing activities of ($16,196) during the six months ended December 31, 2003.
Cash flow used by financing activities was ($4,453) for the six months ended
December 31, 2004 as compared to cash provided by financing activities of
$1,152,915 during the six months ended December 31, 2003.
On March
28, 2005, we entered into a Periodic Equity Investment Agreement with Wings
Fund, Inc. Pursuant to the Periodic Equity Investment Agreement, we may, on a
monthly basis commencing after the effective date of the registration statement
of which this prospectus is a part, periodically sell to Wings Fund, Inc. shares
of common stock for a total purchase price of up to $3,000,000. Such monthly
sales are limited to a maximum aggregate of $250,000. Further, upon execution of
the Periodic Equity Investment Agreement, we issued to Wings Fund, Inc. an
aggregate of 5,000,000 shares of our common stock at a price of $0.10 per share
for gross proceeds of $500,000.
We will
need to obtain additional operating capital to enable continuing execution of
its business plan. We anticipate that we will obtain the additional working
capital it requires through the private placement of Common Stock to domestic
accredited investors pursuant to Regulation D of the Securities Act of 1933, as
amended (the "Act"), or to offshore investors pursuant to Regulation S of the
Act. There is no assurance that we will obtain the additional working capital
that we need through the private placement of Common Stock. We have incurred
operating deficits since inception, which are expected to continue until its
business model is fully developed.
BUSINESS
Company
History
We are a
Nevada corporation formerly known as Latinocare Management Corporation. We were
originally incorporated in Colorado in July 1983. Effective April 1, 2003, we
completed a Plan and Agreement of Reorganization with Warp 9, Inc., a Delaware
corporation and effective June 30, 2003, we completed a second Plan and
Agreement of Reorganization with Warp 9. Pursuant to the such reorganization,
Latinocare acquired all of the issued and outstanding common stock of Warp 9 in
exchange for approximately 131,026,173 newly issued shares of Latinocare common
stock, Warp 9 became a wholly owned subsidiary of Latinocare, and the
shareholders of Warp 9 became the controlling shareholders of Latinocare. Prior
to its business combination with Warp 9, Latinocare had no tangible assets and
insignificant liabilities. Subsequent to the reorganization we changed our name
to Roaming Messenger, Inc.
General
We have
developed a proprietary solution called "Roaming Messenger" for delivering
real-time information for homeland security, emergency response, military and
enterprise applications. Unlike solutions based on existing messaging technology
such as e-mail, text messaging, and voicemail, Roaming Messenger packages
time-critical information into smart messages. These messages automatically roam
throughout the wired and wireless worlds - from mobile devices to desktop PCs to
central servers - tracking down people and obtaining responses in real-time.
Our
Product Line
We offer
a range network appliances configured to meet the various mobile communication
demands of users and organizations. All the necessary Roaming Messenger software
is pre-installed in the Gateway Appliances for instant integration and
deployment.
We also
offer a hosted version of the Roaming Messenger system where customers can pay a
monthly fee to access the capabilities of Roaming Messenger without large
upfront fees.
The
entire Roaming Messenger software suite is available for licensing to strategic
VAR and OEM partners for creating customized or private labeled Roaming
Messenger systems.
Applications
For Roaming Messenger
Emergency
Response.
We
believe that Roaming Messenger can be the mobile messaging extension for any
Emergency Response Management system in automating the notification,
authorization, and deployment of an Emergency Response Team. For example, a
response team can be dynamically assembled by sending off a Roaming Messenger to
the mobile devices of Emergency Managers, informing them of the situation and
requesting authorization to deploy a Response Team. After receiving
authorization, Roaming Messenger could then proceed to all selected Tier 1 First
Responders, get their acknowledgment and also deliver the emergency incident
report.
Security.
Roaming
Messenger can be integrated with any security monitoring system to deliver
real-time notification with actionable responses. Notifications regarding
security breaches such as fire alarms, HVAC failures, motion sensors and
restricted access can be enhanced by Roaming Messenger. Responsible personnel
are presented with information regarding the breach, as well as actions such as
informing law enforcement, turning on or off mechanisms to resolve the breach -
all from mobile or desktop devices.
Military
and Defense.
The
battlefield is going hi-tech with the goal of enabling real-time command and
control capabilities from the highest to the lowest tactical echelons. Roaming
Messenger can be used for delivering situational awareness and command and
control information to tactical personnel with wireless mobile devices. Roaming
Messenger can facilitate a seamless flow of battle command information across
the battle space by roaming from person to person.
Healthcare.
Roaming
Messenger can be deployed along side existing healthcare management systems to
improve response time and patient satisfaction within a hospital. Patient
requests or patient monitoring systems can alert appropriate nurses of problems
or escalate accordingly to ensure timely response. When Roaming Messenger finds
the nurse, the nurse accepts that task or delegates it to an appropriate aide.
After the nurse's aide has resolved the patient request, Roaming Messenger can
go back to the nurse, inform the nurse of the resolution and if appropriate log
the incident into the hospital's central patient monitoring system.
Communication processes at the doctor's level can also be automated in the same
way.
Real-time
Enterprise.
The
essence of a Real-time Enterprise is event-driven. When something happens, the
people who care about it need to respond. As the workforce becomes increasingly
mobile, Enterprise information systems need to be able to securely and
efficiently contact them. Roaming Messenger is an ideal mobile extension to any
Enterprise system by providing an intelligent message that can track down
appropriate people and obtain approvals to push along the business process.
Whether it is getting an invoice paid, ordering more parts for the production
line or updating a customer management system, Roaming Messenger can be used as
the mobile messaging component.
Manufacturing.
For
manufacturing businesses, reaching the right people at the right time and
monitoring and assessing critical information from production lines and security
systems can significantly reduce costs and improve employee safety. Roaming
Messenger can be integrated to any manufacturing monitoring system to deliver
actionable notifications regarding equipment failures, security breaches,
chemical spills, and other critical events to responsible technicians, as well
as keep plant managers informed of situation progress and resolution.
Mobile
Commerce.
Roaming
Messenger can also facilitate mobile commerce transactions. For example,
wireless mobile vending solutions today require the physical machine to have a
dedicated Internet connection, which makes mass deployment very difficult and
costly. Using Roaming Messenger, a purchase transaction can be completed with
end-to-end security by allowing the vending machine to piggy-back on the
Internet connection of the user's smart phone or PDA via a local Infrared or
Bluetooth connection. Roaming Messenger can be initiated by the vending machine
to the user's handheld device, request item and payment selections, interact
with an Internet payment server, report inventory and status to a different
server and return back to the vending machine to complete the transaction in
real-time.
Marketing
Strategy
We intend
to enhance, promote and support the idea that Roaming Messenger is the most
compelling and efficient solution available in the marketplace for mobile
messaging. In order to create a favorable environment for sales, we plan to
undertake advertising and promotion efforts. These efforts will be outsourced
and will require the services of an advertising firm and public relations firm.
We plan to interview various firms and select those most capable of assisting us
with comprehensive advertising and promotion plans. We have recently commenced
building out our marketing department staff to accelerate these efforts. We have
not yet determined the potential costs of our marketing strategy.
We will
continue to invest in small test campaigns before committing to large promotions
or marketing campaigns. Our overall marketing strategy is a three pronged
approach.
· |
First,
we will market to channel sales partners in our target markets. Channel
partners are application developers and system integrators who we believe
can benefit from integrating Roaming Messenger into their products or
solutions to fulfill their mobile messaging
requirements. |
· |
Second,
we will execute direct marketing campaigns to potential end users of our
technology and make them aware of the capabilities of our
technology. |
· |
Third,
we will execute direct marketing campaigns to multiple market segments to
see what other markets have an immediate interest for Roaming Messenger
technology. Once a new market is determined to be a hot market, then we
shall execute the First and Second prong of our three-pronged strategy on
that new market. |
Sales
Strategy
We
currently have limited number of customers, which generate nominal revenue. We
intend to aggressively promote the Roaming Messenger product in the United
States. We intend to pursue international sales after establishing sales in the
domestic marketplace. Our management has identified the following primary target
market segments for the Roaming Messenger solution:
· |
Emergency
Response, Public Health and Safety |
Distribution
Channels
Roaming
Messenger is a mobile messaging component with applications in many markets. We
intend sell and license the Roaming Messenger products to system integrators and
application developers in markets such as Homeland Security, Emergency Response,
Military and Enterprise Automation. We intend to sell Roaming Messenger through
channel partners and value-added resellers (VARs) who are established in their
respective vertical markets.
Revenue
Model
Our
management believes that most of our revenues will come from the licensing of
our Roaming Messenger product, customer training and support, and software
upgrades to application developers and system integrators.
We have
decided to use a deployment pricing model for the network appliance version of
Roaming Messenger based on the number of users enabled to send and receive
Roaming Messengers. Customers will be asked to pay a one-time license fee for
each user that is activated for Roaming Messenger communication. Customers will
then be invited to subscribe to an ongoing service plan (optional) that would
provide training, support, maintenance and software upgrades.
On the
hosted, or subscription model, customers pay a monthly fee to us for access to a
Roaming Messenger system hosted and managed by us. The monthly fee is assessed
based on the number of users in the customer's Roaming Messenger deployment, and
on monthly message volume. The hosted version of Roaming Messenger is in essence
a messaging service infrastructure for applications that are integrated into it.
Proprietary
Technology
Our
intellectual property portfolio consists of the following patent applications,
which are pending:
Self
Contained Business Transaction Capsules
A
self-contained business transaction capsule, or eCapsule, is a small electronic
capsule that contains all the necessary data and logic to complete a business
transaction. The eCapsule is a “thin” and “lightweight” small computer-readable
file that is device independent. The eCapsule allows a business, for example, to
encapsulate an individual product or offer into an intelligent object that is
capable of completing entire transactions. The eCapsule includes data about the
product or service being provided, such as the product price, a textual
description, or options of the product or service (a transaction description).
The eCapsule also includes transaction logic or business logic capable of
completing the transaction, such as billing and shipping information, order
routing information, order status information, shipping status information, and
any other transaction rules necessary to process the transaction. Moreover, the
eCapsule is adapted to be broadcasted to, and stored on, a portable electronic
device, such as a mobile wireless-enabled device, like a cellular telephone, a
personal digital assistant (PDA) or a laptop computer. The application for this
patent was filed on January 2, 2001.
Utilizing
Mobile Devices as a Communication Proxy for Non-Connected
Terminals
This
invention is a method and system in which terminals, appliances and machines
without dedicated Internet connections can complete Internet based transactions
by piggy-backing on the connection of the user's handheld device. An example of
an application of this invention is a vending machine that can conduct
electronic wireless payments without having an internal wireless device that
communicates with a server on the Internet. Existing solutions require the
vending machine to be equipped with an internal cell phone. Using this
invention, the vending machine can communicate with the consumer's handheld
device via Infrared or Bluetooth and simply uses the handheld device as the
conduit to the Internet for remote payment processing. This invention also
covers many other applications including secured doorways, factory floors and
smart data acquisition sensors. The application for this patent was filed on
February 21, 2002.
A
Method of and System for Transmitting a Mobile Agent for Instruction
Execution
This
invention relates to transmitting a mobile agent for executing programmable
instructions and, more particularly, to transmitting a virtual machine in a
mobile agent to assist instruction execution. This patent application discloses
the actual system implementation of the Roaming Messenger platform using a
mobile agent approach. The application for this patent was filed on December 7,
2004.
A
Method of and Instruction Set for Executing Operations on a
Device
This
invention relates to executable instructions and, more particularly, to
instructions that are executable on a device that receives a mobile agent. This
patent application discloses the actual implementation of the Roaming Messenger
device engine and messenger instruction sets and modes of execution. The
application for this patent was filed on December 7, 2004.
Competition
We are,
and will continue to be, subject to intense competition as the wireless industry
continues to grow. Large companies with greater financial and managerial
resources than ours, and greater name recognition, are offering mobile messaging
solutions. While certain market overlaps exist between our product and other
solutions, we believe that the Roaming Messenger solution is designed to provide
unique competitive advantages. As the market for wireless continues to mature,
new players may enter the market competing directly or indirectly with us.
Roaming
Messenger is a messaging technology component that needs to be integrated into a
vertical market application to derive full value. It is possible that the
vertical marketing application providers may decide to develop their own mobile
messaging functionality instead of licensing Roaming Messenger.
Other
Products and Services
Our
wholly owned subsidiary, Warp 9 Inc., offers two primary web-based e-commerce
software products to the catalog and direct marketing industry.
Warp
9 ICS.
The Warp
9 ICS is a proprietary and extensible system that enables any business to expand
its operation to the Internet with minimal investment, overhead and risk. A
business does not need to invest in new hardware or software in order to utilize
the Warp 9 ICS, because the product is offered as a fully managed online catalog
solution that includes hosting at our datacenter. As a total solution, Warp 9
offers project management, development and integration into a customer's
existing business processes. Warp 9 has packaged the process and technology
required for complete e-commerce site deployment and management.
Warp
9 EMS.
Warp 9
EMS is a web-based e-mail campaign and list management system designed for high
performance and reliability. EMS's sophisticated technology will allow marketers
to send targeted e-mail campaigns that help grow, retain and maximize the
lifetime value of their customers. Through content personalization and list
segmentation, campaign efforts will result in higher response rates, higher
conversion rates and improved customer loyalty. Warp 9 EMS enables unprecedented
response rates that are not achievable through traditional forms of direct
marketing.
Revenue
Model
We
charges our customers a monthly subscription fee to the Warp 9 ICS and Warp 9
EMS product using an application service provider ("ASP") model.
Government
Regulation
We are
subject to various federal, state, and local laws affecting medical e-commerce
and communication businesses. The Federal Trade Commission and equivalent state
agencies regulate advertising and representations made by businesses in the sale
of their products, which apply to us. We are also subject to government laws and
regulations governing health, safety, working conditions, employee relations,
wrongful termination, wages, taxes and other matters applicable to businesses in
general.
Employees
As of
April 28, 2005, we had eighteen full time equivalent employees, seven of whom
are employed in administrative, marketing, and sales positions, and eleven
technical employees employed in research, development, and technical product
maintenance positions.
We use
independent contractors, who are available to us on a half or near full time
basis, counted as full time equivalents, for sales, marketing and business
development efforts. It is our intention during the next 12 months to increase
our workforce to 30 employees, with five of the new positions being in the
administrative, marketing, and sales areas and the remaining seven of the new
positions being in research, development, and production positions.
All of
our employees have executed agreements that impose nondisclosure obligations on
the employee and assign to us (to the extent permitted by California law) all
copyrights and other inventions created by the employee during his employment
with us. Additionally, we have a trade secret protection policy in place that
management believes to be adequate to protect our intellectual property and
trade secrets.
Seasonality
We do not
anticipate that our business will be substantially affected by seasonality.
Trademarks
We have
registered trademarks for Roaming Messenger®,
Warp9® and eCapsule®.
DESCRIPTION
OF PROPERTY
We
currently lease approximately 8,605 square feet of office space at 50 Castilian
Drive, Suite A, Santa Barbara, California 93117 for approximately $7,750 per
month, triple net, pursuant to a six year lease agreement with rent commencing
on October 1, 2004.
LEGAL
PROCEEDINGS
We are
not currently party to any legal proceedings.
DIRECTORS
AND EXECUTIVE OFFICERS
Directors
and Executive Officers
The
following table sets forth information regarding our executive officers, senior
managers and directors as of May 2, 2005:
Name |
|
Age |
|
Positions |
|
|
|
|
|
Jonathan
Lei |
|
32
|
|
Chief
Executive Officer, President, Chief Financial Officer, Secretary, and
Chairman |
Bryan
Crane |
|
45 |
|
Vice
President of Corporate Development |
Harinder
Dhillon |
|
31 |
|
Vice
President of Operations |
Mike
Chuises |
|
44 |
|
Vice
President of Engineering |
Louie
Ucciferri |
|
44 |
|
Director |
Tom
Djokovich(1) |
|
47 |
|
Director |
|
|
|
|
|
(1) |
Member
of Audit Committee. |
Jonathan
Lei has been our Chairman of the Board of Directors, Chief Executive Officer,
President, Chief Financial Officer, and Secretary since April 2003. Mr. Lei
received a Bachelor Degree in Electrical and Computer Engineering from the
University of California, Santa Barbara ("UCSB") in 1995 and a Master of Science
Degree in Electrical and Computer Engineering from UCSB in 1996. While at UCSB,
he studied and worked in the field of computer aided design and development of
VLSI and ASIC silicon chips. Mr. Lei was employed by Lockheed Martin in 1993
where he built data acquisition systems for spacecraft testing. In 1995, he
worked for Intel Corporation where he developed the Triton II Pentium PCI
chipset. From 1995 to 1996, Mr. Lei worked for RC Electronics where he designed
PCI based data acquisition systems. Mr. Lei founded Warp 9, Inc., our wholly
owned subsidiary in 1996 and in 1998, he negotiated a transaction to sell Warp
9's consumer ISP division, Sbnet, to MindSpring Enterprises. Mr. Lei was an
officer and is a lifetime member of Tau Beta Pi, a national engineering honor
society.
Bryan
Crane has been our Vice President of Corporate Development since October 2002.
Prior to joining Roaming Messenger, from 1995 to 2002, he worked for Muir, Crane
& Co., a partnership he co-founded and in which he still maintains an
ownership interest. From 1994 to 1995, Mr. Crane was a Managing Director of
Johnson & Co. For most of his career, Mr. Crane held positions in portfolio
management from retail investments at Prudential-Bache Securities to Vice
President of Investments at A.G. Edwards & Son, where, as a member of the
Presidents Council, he managed debt and equity portfolios for institutional
clients. Mr. Crane earned his dual degree in Political Science and International
Economics from San Diego State University. He is a member of the San Diego Stock
Bond Association and the Los Angeles Chapter of the National Investor Relations
Institute (NIRI).
Harinder
Dhillon has been our Vice President of Operations since October 2001. Mr.
Dhillon joined us in July 2000. Prior to joining us, from 1993 to1998, Mr.
Dhillon served as the Chief Information Officer of Informax Data Systems, an
enterprise systems integrator headquartered in Southern California. He has
designed, managed, and led the development and deployment of multi-million
dollar enterprise Internet, Intranet and integration projects for Fortune 500
companies and various government units. His client list included Department of
Justice, Immigration and Naturalization Services, US Navy, US Air Force, and the
City of Los Angeles. His projects included enterprise work flow automation,
real-time field services, infrastructure build out, and network and systems
integration. Mr. Dhillon received a Bachelor degree in Electrical and Computer
Engineering from the University of California at Santa Barbara in 1996.
Mike
Chuises has been our Vice President of Engineering since October 2004.
Prior
thereto, he was our Director of Engineering from December 2003 to October 2004.
From 1994 to 2001, Mr. Chuises was the principal engineer for OutBack Resource
Group Inc., a consulting firm located in San Luis Obispo, CA, founded by Mr.
Chuises, where he consulted on and implemented services and software for service
providers and commercial software companies such as Wynd Communications, Inc. In
2001, OutBack was acquired by GoAmerica Communications, Inc., a wireless service
provider, and from 2001 to 2003, Mr. Chuises served as a lead architect on the
Go.Web enterprise wireless messaging platform. Prior to founding OutBack, Mr.
Chuises worked for several commercial software publishers including Cheyenne
Software, XTree Company and Arcada Software. Mr. Chuises brings many years of
disciplined, process-oriented methodologies to full life-cycle software
development.
Louie
Ucciferri is currently the CEO of Regent Capital Group, a NASD registered broker
dealer dedicated to real estate investments. From 1995 to 2004, Mr. Ucciferri
served as the President of Westlake Financial Architects, an investment-banking
firm he founded in 1995 to provide financial and investment advisory services to
early stage companies. He has raised investment capital for both private and
public companies and has created liquidity for investors in the form of public
offerings. Since November 1998, he has also served as President of Camden
Financial Services, a NASD registered broker dealer that serves as the dealer
manager for a real estate company that has raised in excess of $150 million in
equity capital for the acquisition of commercial office properties in southern
California and Arizona.
Tom
Djokovich is the Chief Executive Officer of Xsunx, Inc., a position he has held
since 2004. Prior thereto, he was the founder and served from 1995 to 2002 as
the Chief Executive Officer of Accesspoint Corporation, a vertically integrated
provider of electronic transaction processing and e-business solutions for
merchants. Under Mr. Djokovich's guidance, Accesspoint became a member of the
Visa/MasterCard association, the national check processing association NACHA,
and developed one of the payment industry's most diverse set of network based
transaction processing, business management and CRM systems for both Internet
and conventional points of sale. During his tenure, Accesspoint became an early
adopter of WAP based e-commerce capabilities and the industry's first certified
Level 1 Internet payment processing engine. In his last year as executive
manager, Accesspoint grew its processing revenues by over 800% and overall
revenues by nearly 300%. Prior to Accesspoint, Mr. Djokovich founded TMD
Construction and Development where he developed an early business-to-business
ordering system for the construction industry
Audit
Committee
The Board
of Directors has appointed an Audit Committee. As of May 2, 2005, the sole
member of the Audit Committee is Tom Djokovich. Mr. Djokovich is considered
independent as defined in Rule 4200 of the National Association of Securities
Dealers' listing standards because he is not employed by us, does not
participate in our day-to-day management, and does not receive a salary or other
employment benefits from us. Our Board of Directors has adopted a written
charter of the audit committee. The Audit Committee is authorized by the Board
of Directors to review, with our independent accountants, our annual financial
statements prior to publication, and to review the work of, and approve
non-audit services preformed by, such independent accountants. The Audit
Committee will make annual recommendations to the Board for the appointment of
independent public accountants for the ensuing year. The Audit Committee will
also review the effectiveness of our financial and accounting functions and our
organization, operations and management. The Audit Committee was formed on April
19, 2003.
Compensation
Committee
Our Board
of Directors does not have a Compensation Committee.
EXECUTIVE
COMPENSATION
The
following summary compensation table sets forth certain information concerning
compensation paid to our Chief Executive Officer and our four most highly paid
executive officers (the "Named Executive Officers") whose total annual salary
and bonus for services rendered in all capacities for the year ended June 30,
2004 was $100,000 or more.
Summary
Compensation Table |
|
|
|
|
|
|
|
|
|
|
|
Long
Term Compensation |
|
|
|
|
|
|
|
Annual
Compensation |
|
Awards |
|
Payouts |
|
All
Other Compensation |
|
Name
and Principal Position |
|
Year |
|
Salary
($) |
|
Bonus
($) |
|
Other
Annual Compensation
($) |
|
Securities
Underlying Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jonathan
Lei |
|
|
2004 |
|
$ |
138,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President,
Chief Financial Officer, |
|
|
2003 |
|
$ |
138,000 |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
and
Secretary |
|
|
2002 |
|
$ |
138,000 |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian
Fox (1) |
|
|
2004 |
|
$ |
145,000 |
(1) |
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
Chief
Technology Officer |
|
|
2003 |
|
$ |
145,000 |
|
|
-0- |
|
|
-0- |
|
|
5,987,500 |
(2) |
|
-0- |
|
|
-0- |
|
|
|
|
2002 |
|
$ |
145,000 |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
Harinder
Dhillon |
|
|
2004 |
|
$ |
125,000 |
|
$ |
8,714 |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
VP
of Operations |
|
|
2003 |
|
$ |
105,000 |
|
|
-0- |
|
|
-0- |
|
|
1,875,000 |
(3) |
|
-0- |
|
|
-0- |
|
|
|
|
2002 |
|
$ |
95,000 |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
Bryan
Crane |
|
|
2004 |
|
$ |
84,000 |
|
$ |
29,000 |
(4) |
|
-0- |
|
|
878,494 |
(4) |
|
-0- |
|
|
-0- |
|
VP
of Corporate Development |
|
|
2003 |
|
$ |
84,000 |
|
|
-0- |
|
|
-0- |
|
|
700,000 |
(4) |
|
-0- |
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Effective
October 8, 2004 Mr. Fox resigned and is no longer employed by us. Pursuant
to the terms of his employment agreement with us, we were not required to
pay Mr. Fox severance and all exercised options, vested and un-vested were
canceled. |
(2) |
These
options, which consists of options granted under our 2003 Stock Option
Plan on July 15, 2003, and were scheduled to vest pursuant to the
following vesting schedule: 3,367,969 on July 15, 2003, then 1/21 per
month until all stock options have vested, were canceled. Further, an
option to purchase 5,987,500 shares of our common stock from Jonathan Lei,
the President, Chief Financial Officer, Secretary, and Chairman of the
Company, for a purchase price of $0.08 per share was also canceled.
|
(3) |
Consists
of options granted under our 2003 Stock Option Plan on July 15, 2003.
These stock options are fully vested at the time of grant. Options are to
purchase unregistered common stock at an exercise price equal to the fair
market value of unregistered common stock at the time of grant, which was
$0.08 per share for these stock options. |
(4) |
878,494
options were granted under our 2003 Stock Option Plan on July 15, 2003.
These stock options were fully vested at time of grant. Options are to
purchase unregistered common stock at an exercise price equal to the fair
market value of unregistered common stock at the time grant, which was
$0.08 per share for these stock options. On May 20, 2003, 700,000 shares
of unregistered common stock were issued to Mr. Crane in lieu of cash
payment for salaries accrued to that point. A total amount of $29,000 of
cash bonus was given to Mr. Crane, during the fiscal year ending June 30,
2004, for achieving certain milestones in managing our investment capital
efforts. |
Option
Grants in Fiscal Year 2004
The
following table sets forth certain information concerning grants of stock
options to the Named Executive Officers during the fiscal year ended June 30,
2004.
|
|
|
|
|
|
|
|
|
|
Potential
Realizable Value at Assumed Annual Rates of Stock Price Appreciation for
Option Term |
|
Name |
|
Number
of Shares Underlying Options Granted |
|
Percent
of Total Options Granted to Employees in 2004 |
|
Exercise
Price Per Share |
|
Expiration
Date |
|
5% |
|
10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian
Fox
Chief
Technology Officer |
|
|
5,987,500(1 |
) |
|
54 |
% |
$ |
0.08 |
|
|
Four
years from the date of vesting |
|
$ |
1,340,460 |
|
$ |
1,712,575 |
|
Bryan
Crane
VP
of Corporate Development |
|
|
878,494
(2)(3 |
) |
|
8 |
% |
$ |
0.08 |
|
|
Four
years from the date of grant |
|
$ |
303,455 |
|
$ |
379,892 |
|
Harinder
Dhillon
VP
of Operations |
|
|
1,875,000(2)(3 |
) |
|
17 |
% |
$ |
0.08 |
|
|
Four
years from the date of grant |
|
$ |
419,768 |
|
$ |
536,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The
options granted to Mr. Fox were canceled effective 90 days from the date
of his resignation. Mr. Fox exercised 150,000 options prior to
cancellation. |
(2) |
These
stock options are fully vested at the time of grant.
|
(3) |
Some
or all of these options have been exercised. See Fiscal Year-End Option
Exercises and Option Values |
Aggregated
Option Exercises in 2004 and Year End Option Values
The
following table provides certain information with respect to the Named Executive
Officers concerning the exercise of stock options during the fiscal year ended
June 30, 2004 and the value of unexercised stock options held as of such date.
|
|
Shares
Acquired Upon Exercise |
|
Value
Realized(2) |
|
Number
of Shares Underlying Options at June 30, 2004 |
|
Value
of Unexercised In the Money Options at June 30, 2004(2) |
|
Name |
|
|
|
|
|
Exercisable |
|
Unexercisable |
|
Exercisable |
|
Unexercisable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian
Fox(1)
Chief
Technology Officer |
|
|
-0- |
|
|
-0- |
|
|
4,740,109 |
|
|
1,247,391 |
|
$ |
2,038,247 |
|
$ |
536,378 |
|
Bryan
Crane
VP
of Corporate Development |
|
|
525,000 |
|
$ |
687,750 |
|
|
253,494 |
|
|
-0- |
|
$ |
109,002 |
|
|
-0- |
|
Harinder
Dhillon
VP
of Operations |
|
|
1,875,000 |
|
$ |
1,912,500 |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The
options granted to Mr. Fox were canceled effective 90 days from the date
of his resignation. Mr. Fox exercised 150,000 options prior to
cancellation. |
(2) |
The
value realized is the difference between the market price of the common
stock on the date of exercise, $0.51 at June 30, 2004, and the exercise
price of the stock option. The underlying securities held upon exercise
are unregistered common stock. |
(3) |
The
value of unexercised "in-the-money" options is the difference between the
market price of the common stock on June 30, 2004 ($0.51 per share) and
the exercise price of the option, multiplied by the number of shares
subject to the option. The underlying securities held upon exercise are
unregistered common stock. |
Stock
Option Plan
On July
10, 2003, our Board of Directors adopted the 2003 Stock Option Plan for our
Directors, Executive Officers, Employees and Key Consultants. The 2003 Stock
Option Plan was ratified by our shareholders by written consent effective August
25, 2003. The 2003 Stock Option Plan authorizes the issuance of up to 25,000,000
shares of our common stock pursuant to the grant and exercise of up to
25,000,000 stock options. As of April 28, 2005, options to purchase up to
14,409,994 shares of our common stock at exercise prices ranging from $0.08 to
$0.35 per share have been granted under the 2003 Stock Option Plan. As of April
28, 2005, options to purchase 2,675,000 shares of our common stock have been
exercised and 7,500,000 options have been forfeited. Common stock underlying
forfeited options shall become available for granting again under the 2003 Stock
Option Plan.
Employment
Agreements
We do not
have any employment agreements with our executive officers to date. We may enter
into employment agreements with them in the future.
CHANGES
AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
On May 5,
2003, we filed a form 8-K disclosing that Armando C. Ibarra, CPAs, had resigned
as our auditor with no disagreements and that, on April 5, 2003, we had engaged
Rose Snyder & Jacobs, a Corporation of Certified Public Accountants as our
auditors. The appointment of Rose Snyder & Jacobs as our auditors was
approved by our board of directors.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market
Information
Our
common stock has been quoted on the OTC Bulletin Board under the symbol
"RMSG.OB." The following table shows the reported high and low closing bid
quotations per share for our common stock based on information provided by the
OTC Bulletin Board. Particularly since our common stock is traded infrequently,
such over-the-counter market quotations reflect inter-dealer prices, without
markup, markdown or commissions and may not necessarily represent actual
transactions or a liquid trading market.
Year
Ended June 30, 2005 |
|
High |
|
Low |
|
|
|
|
|
|
|
First
Quarter ended September 30, 2004 |
|
$ |
0.68 |
|
$ |
0.04 |
|
Second
Quarter ended December 31, 2004 |
|
$ |
0.75 |
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
Year
Ended June 30, 2004 |
|
|
High |
|
|
Low |
|
|
|
|
|
|
|
|
|
First
Quarter ended September 30, 2003 |
|
$ |
0.52 |
|
$ |
0.27 |
|
Second
Quarter ended December 31, 2003 |
|
$ |
0.45 |
|
$ |
0.25 |
|
Third
Quarter ended March 31, 2004 |
|
$ |
3.60 |
|
$ |
0.27 |
|
Fourth
Quarter ended June 30, 2004 |
|
$ |
1.90 |
|
$ |
0.45 |
|
|
|
|
|
|
|
|
|
Year
Ended June 30, 2003 |
|
|
High |
|
|
Low |
|
|
|
|
|
|
|
|
|
First
Quarter ended September 30, 2002 |
|
$ |
0.12 |
|
$ |
0.12 |
|
Second
Quarter ended December 31, 2002 |
|
$ |
0.12 |
|
$ |
0.12 |
|
Third
Quarter ended March 31, 2003 |
|
$ |
0.12 |
|
$ |
0.06 |
|
Fourth
Quarter ended June 30, 2003 |
|
$ |
0.75 |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
Number
of Stockholders
As of
April 28, 2005, there were 550 holders of record of our common stock.
Dividend
Policy
Historically,
we have not paid any dividends to the holders of our common stock and we do not
expect to pay any such dividends in the foreseeable future as we expect to
retain our future earnings for use in the operation and expansion of our
business.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table indicates beneficial ownership of our common stock as of May 2,
2005 by:
· |
Each
person or entity known by us to beneficially own more than 5% of the
outstanding shares of our common stock; |
· |
Each
of our executive officers and directors;
and |
· |
All
of our executive officers and directors as a
group. |
Except as
otherwise indicated, the persons named in the table have sole voting and
investment power with respect to all shares beneficially owned, subject to
community property laws, where applicable. Unless other indicated, the address
of each beneficial owner listed below is c/o Roaming Messenger, Inc. 50
Castilian Drive, Suite A, Santa Barbara, California 93117.
Name
of Beneficial Owner |
|
Number
of Shares |
|
Percentage
of Shares Beneficially
Owned
(1) |
|
|
|
|
|
|
|
Executive
officers and directors: |
|
|
|
|
|
Jonathan
Lei
President,
Chief Executive Officer, Secretary and Chairman |
|
|
95,639,025 |
|
|
53.03 |
% |
Brian
Fox(2)
Chief
Technology Officer |
|
|
218,000 |
|
|
* |
|
Bryan
Crane
VP
of Corporate Development |
|
|
1,484,994(3 |
) |
|
* |
|
Harinder
Dhillon
VP
of Operations |
|
|
2,935,000 |
|
|
1.63 |
% |
Louie
Ucciferri
Director |
|
|
3,500,000 |
|
|
1.94 |
% |
Tom
Djokovich
Director |
|
|
302,500 |
|
|
* |
|
|
|
|
|
|
|
|
|
All
Directors and Executive Officers as a group (6 persons) |
|
|
104,079,519 |
|
|
57.71 |
% |
|
|
|
|
|
|
|
|
(1) |
Applicable
percentage ownership as of May 2, 2005 is based upon 180,336,204 shares of
common stock outstanding. Beneficial ownership is determined in accordance
with Rule 13d-3 of the Securities Exchange Act of 1934, as amended. Under
Rule 13d-3, shares issuable within 60 days upon exercise of outstanding
options, warrants, rights or conversion privileges ("Purchase Rights") are
deemed outstanding for the purpose of calculating the number and
percentage owned by the holder of such Purchase Rights, but not deemed
outstanding for the purpose of calculating the percentage owned by any
other person. "Beneficial ownership" under Rule 13d-3 includes all shares
over which a person has sole or shared dispositive or voting power.
|
(2) |
Effective
October 8, 2004, Mr. Fox resigned as our Chief Technology
Officer. |
(3) |
Includes
235,494 shares of common stock issuable upon the exercise of
options. |
SELLING
SHAREHOLDER
The
following table presents information regarding the selling stockholder, Wings
Fund, Inc. A description of the selling stockholder's relationship to us and how
the selling stockholder acquired the shares to be sold in this offering is
detailed in the information immediately following this table.
|
|
Shares
Beneficially Owned Prior to Offering |
|
Shares
to be Acquired Under the Periodic Equity Investment
Agreement |
|
Shares
Beneficially Owned After the Offering(2) |
|
Selling
Stockholder |
|
Number |
|
Percent(1) |
|
Number |
|
Percent(1) |
|
Number |
|
Percent(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wings
Fund, Inc. |
|
|
8,625,000 |
|
|
4.78 |
% |
|
31,250,000 |
|
|
17.33 |
% |
|
3,625,000 |
|
|
2.01 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Applicable
percentage ownership is based on 180,336,204 shares of common stock
outstanding as of May 2, 2005. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission and
generally includes voting or investment power with respect to securities.
Shares of common stock that are currently exercisable or exercisable
within 60 days of May 2, 2005 are deemed to be beneficially owned by the
person holding such securities for the purpose of computing the percentage
of ownership of such person, but are not treated as outstanding for the
purpose of computing the percentage ownership of any other
person. |
(2) |
Assumes
that all securities registered will be sold and that all shares of common
stock underlying the Periodic Equity Investment Agreement will be issued.
|
The
following is a description of the selling shareholders relationship to us and
how each the selling shareholder acquired the shares to be sold in this
offering:
Wings
Fund, Inc. has not had a position or office, or had any other material
relationship, with us. Wings Fund, Inc. is the investor under the Periodic
Equity Investment Agreement and is a private investment company. Wings Fund,
Inc. acquired all shares being registered in this offering in financing
transactions with us. Those transactions are explained below:
Periodic
Equity Investment Agreement. On March 28, 2005, we entered into a Periodic
Equity Investment Agreement with Wings Fund, Inc. Pursuant to the Periodic
Equity Investment Agreement, we may, on a monthly basis commencing after the
effective date of the registration statement of which this prospectus is a part,
periodically sell to Wings Fund, Inc. shares of common stock for a total
purchase price of up to $3,000,000. For each share of common stock purchased
under the Periodic Equity Investment Agreement, Wings Fund, Inc. will pay us 60%
of the volume weighted average of the prices of our common stock during the
twenty consecutive trading days immediately preceding the notice date. We are
registering in this offering 31,250,000 shares of common stock to be issued
under the Periodic Equity Investment Agreement.
Securities
Purchase Agreement. Upon execution of the Periodic Equity Investment Agreement,
we issued to Wings Fund, Inc. an aggregate of 5,000,000 shares of our common
stock at a price of $0.10 per share for gross proceeds of $500,000.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
During
the past two years, there has not been, nor is there currently proposed, any
transaction or series of similar transactions to which we were or are to be a
party in which the amount involved exceeded or exceeds $60,000 and in which any
director, executive officer, holder of more than 5% of our common stock or any
member of the immediate family of any of the foregoing persons had or will have
a direct or indirect material interest.
DESCRIPTION
OF SECURITIES
The
following description of our capital stock and provisions of our articles of
incorporation and bylaws, each as amended, is only a summary. You should also
refer to the copies of our articles of incorporation and bylaws which are
included as exhibits to our Report on 10-KSB filed with the SEC on April 10,
2002. Our authorized capital stock consists of 495,000,000 shares of common
stock, par value $0.001 per share and 5,000,000 shares of preferred stock $0.001
par value per share. As of May 2, 2005, there are 180,336,204 shares of
common stock issued and outstanding and no shares of preferred stock issued and
outstanding.
Common
Stock
Holders
of our common stock are entitled to one vote for each share held on all matters
submitted to a vote of our stockholders. Holders of our common stock are
entitled to receive dividends ratably, if any, as may be declared by the board
of directors out of legally available funds, subject to any preferential
dividend rights of any outstanding preferred stock. Upon our liquidation,
dissolution or winding up, the holders of our common stock are entitled to
receive ratably our net assets available after the payment of all debts and
other liabilities and subject to the prior rights of any outstanding preferred
stock. Holders of our common stock have no preemptive, subscription, redemption
or conversion rights. The outstanding shares of common stock are fully paid and
nonassessable. The rights, preferences and privileges of holders of our common
stock are subject to, and may be adversely affected by, the rights of holders of
shares of any series of preferred stock which we may designate and issue in the
future without further stockholder approval.
Preferred
Stock
Our board
of directors is authorized without further stockholder approval, to issue from
time to time up to a total of 5,000,000 shares of preferred stock in one or more
series and to fix or alter the designations, preferences, rights and any
qualifications, limitations or restrictions of the shares of each series,
including the dividend rights, dividend rates, conversion rights, voting rights,
term of redemption, redemption price or prices, liquidation preferences and the
number of shares constituting any series or designations of these series without
further vote or action by the stockholders. The issuance of preferred stock may
have the effect of delaying, deferring or preventing a change in control of our
management without further action by the stockholders and may adversely affect
the voting and other rights of the holders of common stock. The issuance of
preferred stock with voting and conversion rights may adversely affect the
voting power of the holders of common stock, including the loss of voting
control to others. Currently, there are no shares of preferred stock outstanding
and we have no present plans to issue any shares of preferred stock.
Warrants
As of
April 28, 2005, warrants to purchase 572,500 shares of our common stock were
outstanding. 100,500 of such warrants are exercisable at $0.10 per share and are
immediately exercisable and expire on September 30, 2006, 271,000 of such
warrants are exercisable at $0.10 per share and are immediately exercisable and
expire on December 31, 2006, 201,000 of such warrants are exercisable at $0.10
per share and are immediately exercisable and expire on March 31, 2007
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Mountain Share Transfer,
located at 1625 Abilene Drive, Broomfield, Colorado 80020.
PLAN
OF DISTRIBUTION
The
selling stockholder, or its pledgees, donees, transferees, or any of its
successors in interest selling shares received from the named selling
stockholder as a gift, partnership distribution or other non-sale-related
transfer after the date of this prospectus (all of whom may be a selling
stockholder) may sell the common stock offered by this prospectus from time to
time on any stock exchange or automated interdealer quotation system on which
the common stock is listed or quoted at the time of sale, in the
over-the-counter market, in privately negotiated transactions or otherwise, at
fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices related to prevailing market prices or at prices otherwise
negotiated. The selling stockholder may sell the common stock by one or more of
the following methods, without limitation:
· |
Block
trades in which the broker or dealer so engaged will attempt to sell the
common stock as agent but may position and resell a portion of the block
as principal to facilitate the transaction; |
· |
An
exchange distribution in accordance with the rules of any stock exchange
on which the common stock is listed; |
· |
Ordinary
brokerage transactions and transactions in which the broker solicits
purchases; |
· |
Privately
negotiated transactions; |
· |
In
connection with short sales of company
shares; |
· |
Through
the distribution of common stock by any selling stockholder to its
partners, members or stockholders; |
· |
By
pledge to secure debts of other
obligations; |
· |
In
connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions in
standardized or over-the-counter options; |
· |
Purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account; or |
· |
In
a combination of any of the above. |
These
transactions may include crosses, which are transactions in which the same
broker acts as an agent on both sides of the trade. The selling stockholders may
also transfer the common stock by gift. We do not know of any arrangements by
the selling stockholders for the sale of any of the common stock.
The
selling stockholders may engage brokers and dealers, and any brokers or dealers
may arrange for other brokers or dealers to participate in effecting sales of
the common stock. These brokers or dealers may act as principals, or as an agent
of a selling stockholder. Broker-dealers may agree with a selling stockholder to
sell a specified number of the stocks at a stipulated price per share. If the
broker-dealer is unable to sell common stock acting as agent for a selling
stockholder, it may purchase as principal any unsold shares at the stipulated
price. Broker-dealers who acquire common stock as principals may thereafter
resell the shares from time to time in transactions in any stock exchange or
automated interdealer quotation system on which the common stock is then listed,
at prices and on terms then prevailing at the time of sale, at prices related to
the then-current market price or in negotiated transactions. Broker-dealers may
use block transactions and sales to and through broker-dealers, including
transactions of the nature described above. The selling stockholders may also
sell the common stock in accordance with Rule 144 or Rule 144A under the
Securities Act, rather than pursuant to this prospectus. In order to comply with
the securities laws of some states, if applicable, the shares of common stock
may be sold in these jurisdictions only through registered or licensed brokers
or dealers.
From time
to time, one or more of the selling stockholders may pledge, hypothecate or
grant a security interest in some or all of the shares owned by them. The
pledgees, secured parties or person to whom the shares have been hypothecated
will, upon foreclosure in the event of default, be deemed to be selling
stockholders. The number of a selling stockholder's shares offered under this
prospectus will decrease as and when it takes such actions. The plan of
distribution for that selling stockholder's shares will otherwise remain
unchanged. In addition, a selling stockholder may, from time to time, sell the
shares short, and, in those instances, this prospectus may be delivered in
connection with the short sales and the shares offered under this prospectus may
be used to cover short sales.
To the
extent required under the Securities Act, the aggregate amount of selling
stockholders' shares being offered and the terms of the offering, the names of
any agents, brokers, dealers or underwriters, any applicable commission and
other material facts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or a post-effective amendment to the
registration statement of which this prospectus is a part, as appropriate. Any
underwriters, dealers, brokers or agents participating in the distribution of
the common stock may receive compensation in the form of underwriting discounts,
concessions, commissions or fees from a selling stockholder and/or purchasers of
selling stockholders' shares, for whom they may act (which compensation as to a
particular broker-dealer might be less than or in excess of customary
commissions). Neither we nor any selling stockholder can presently estimate the
amount of any such compensation.
The
selling stockholders and any underwriters, brokers, dealers or agents that
participate in the distribution of the common stock may be deemed to be
"underwriters" within the meaning of the Securities Act, and any discounts,
concessions, commissions or fees received by them and any profit on the resale
of the securities sold by them may be deemed to be underwriting discounts and
commissions. If a selling stockholder is deemed to be an underwriter, the
selling stockholder may be subject to certain statutory liabilities including,
but not limited to Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act. Selling stockholders who are deemed underwriters within
the meaning of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act. The SEC staff is of a view that selling
stockholders who are registered broker-dealers or affiliates of registered
broker-dealers may be underwriters under the Securities Act. We will not pay any
compensation or give any discounts or commissions to any underwriter in
connection with the securities being offered by this prospectus.
A selling
stockholder may enter into hedging transactions with broker-dealers and the
broker-dealers may engage in short sales of the common stock in the course of
hedging the positions they assume with that selling stockholder, including,
without limitation, in connection with distributions of the common stock by
those broker-dealers. A selling stockholder may enter into option or other
transactions with broker-dealers, who may then resell or otherwise transfer
those common stock. A selling stockholder may also loan or pledge the common
stock offered hereby to a broker-dealer and the broker-dealer may sell the
common stock offered by this prospectus so loaned or upon a default may sell or
otherwise transfer the pledged common stock offered by this prospectus.
The
selling stockholders and other persons participating in the sale or distribution
of the common stock will be subject to applicable provisions of the Exchange
Act, and the rules and regulations under the Exchange Act, including Regulation
M. This regulation may limit the timing of purchases and sales of any of the
common stock by the selling stockholders and any other person. The
anti-manipulation rules under the Exchange Act may apply to sales of common
stock in the market and to the activities of the selling stockholders and their
affiliates. Regulation M may restrict the ability of any person engaged in the
distribution of the common stock to engage in market-making activities with
respect to the particular common stock being distributed for a period of up to
five business days before the distribution. These restrictions may affect the
marketability of the common stock and the ability of any person or entity to
engage in market-making activities with respect to the common stock.
We have
agreed to indemnify the selling stockholder and any brokers, dealers and agents
who may be deemed to be underwriters, if any, of the common stock offered by
this prospectus, against specified liabilities, including liabilities under the
Securities Act. The selling stockholder has agreed to indemnify us against
specified liabilities.
The
common stock offered by this prospectus was originally issued to the selling
stockholders pursuant to an exemption from the registration requirements of the
Securities Act, as amended. We agreed to register the common stock issued to the
selling stockholders under the Securities Act, and to keep the registration
statement of which this prospectus is a part effective until all of the
securities registered under this registration statement have been sold. We have
agreed to pay all expenses incident to the registration of the common stock held
by the selling stockholders in connection with this offering, but all selling
expenses related to the securities registered shall be borne by the individual
holders of such securities pro rata on the basis of the number of shares of
securities so registered on their behalf.
We cannot
assure you that the selling stockholders will sell all or any portion of the
common stock offered by this prospectus. In addition, we cannot assure you that
a selling stockholder will not transfer the shares of our common stock by other
means not described in this prospectus.
LEGAL
MATTERS
The
validity of the common stock has been passed upon by Sichenzia Ross Friedman
Ference LLP, New York, New York.
EXPERTS
The June
30, 2004 financial statements included in the Prospectus have been audited by
Rose, Snyder & Jacobs, a corporation of certified public accountants to the
extent and for the periods set forth in their report appearing elsewhere herein
and are included in reliance upon such report given upon the authority of said
firm as experts in auditing and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
We filed
with the SEC a registration statement on Form SB-2 under the Securities Act for
the common stock to be sold in this offering. This prospectus does not contain
all of the information in the registration statement and the exhibits and
schedules that were filed with the registration statement. For further
information with respect to the common stock and us, we refer you to the
registration statement and the exhibits and schedules that were filed with the
registration statement. Statements made in this prospectus regarding the
contents of any contract, agreement or other document that is filed as an
exhibit to the registration statement are not necessarily complete, and we refer
you to the full text of the contract or other document filed as an exhibit to
the registration statement. A copy of the registration statement and the
exhibits and schedules that were filed with the registration statement may be
inspected without charge at the public reference facilities maintained by the
SEC in Room 1024, 450 Fifth Street, NW, Washington, DC 20549, and at the SEC's
regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661, Woolworth Building, 233 Broadway New York, New York. Copies of all or any
part of the registration statement may be obtained from the SEC upon payment of
the prescribed fee. Information regarding the operation of the public reference
rooms may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a
web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of the site is http://www.sec.gov.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Under the
Nevada General Corporation Law and our Articles of Incorporation, as amended,
our directors will have no personal liability to us or our stockholders for
monetary damages incurred as the result of the breach or alleged breach by a
director of his "duty of care". This provision does not apply to the directors'
(i) acts or omissions that involve intentional misconduct or a knowing and
culpable violation of law, (ii) acts or omissions that a director believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director, (iii) approval of
any transaction from which a director derives an improper personal benefit, (iv)
acts or omissions that show a reckless disregard for the director's duty to the
corporation or its shareholders in circumstances in which the director was
aware, or should have been aware, in the ordinary course of performing a
director's duties, of a risk of serious injury to the corporation or its
shareholders, (v) acts or omissions that constituted an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the
corporation or its shareholders, or (vi) approval of an unlawful dividend,
distribution, stock repurchase or redemption. This provision would generally
absolve directors of personal liability for negligence in the performance of
duties, including gross negligence.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons pursuant to the
foregoing, or otherwise, we have been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable.
ANTI-TAKEOVER
EFFECTS OF PROVISIONS OF NEVADA STATE LAW
We may be
or in the future we may become subject to Nevada's control share law. A
corporation is subject to Nevada's control share law if it has more than 200
stockholders, at least 100 of whom are stockholders of record and residents of
Nevada, and it does business in Nevada or through an affiliated corporation.
The law
focuses on the acquisition of a "controlling interest" which means the ownership
of outstanding voting shares sufficient, but for the control share law, to
enable the acquiring person to exercise the following proportions of the voting
power of the corporation in the election of directors: (i) one-fifth or more but
less than one-third, (ii) one-third or more but less than a majority, or (iii) a
majority or more. The ability to exercise such voting power may be direct or
indirect, as well as individual or in association with others.
The
effect of the control share law is that the acquiring person, and those acting
in association with it, obtains only such voting rights in the control shares as
are conferred by a resolution of the stockholders of the corporation, approved
at a special or annual meeting of stockholders. The control share law
contemplates that voting rights will be considered only once by the other
stockholders. Thus, there is no authority to strip voting rights from the
control shares of an acquiring person once those rights have been approved. If
the stockholders do not grant voting rights to the control shares acquired by an
acquiring person, those shares do not become permanent non-voting shares. The
acquiring person is free to sell its shares to others. If the buyers of those
shares themselves do not acquire a controlling interest, their shares do not
become governed by the control share law.
If
control shares are accorded full voting rights and the acquiring person has
acquired control shares with a majority or more of the voting power, any
stockholder of record, other than an acquiring person, who has not voted in
favor of approval of voting rights is entitled to demand fair value for such
stockholder's shares.
Nevada's
control share law may have the effect of discouraging takeovers of the
corporation.
In
addition to the control share law, Nevada has a business combination law which
prohibits certain business combinations between Nevada corporations and
"interested stockholders" for three years after the "interested stockholder"
first becomes an "interested stockholder" unless the corporation's board of
directors approves the combination in advance. For purposes of Nevada law, an
"interested stockholder" is any person who is (i) the beneficial owner, directly
or indirectly, of ten percent or more of the voting power of the outstanding
voting shares of the corporation, or (ii) an affiliate or associate of the
corporation and at any time within the three previous years was the beneficial
owner, directly or indirectly, of ten percent or more of the voting power of the
then outstanding shares of the corporation. The definition of the term "business
combination" is sufficiently broad to cover virtually any kind of transaction
that would allow a potential acquiror to use the corporation's assets to finance
the acquisition or otherwise to benefit its own interests rather than the
interests of the corporation and its other stockholders.
The
effect of Nevada's business combination law is to potentially discourage parties
interested in taking control of us from doing so if it cannot obtain the
approval of our board of directors.
ROAMING
MESSENGER, INC.
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE
YEARS ENDED JUNE 30, 2004 AND 2003
REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
AND
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2004
ACCOUNTANTS' REVIEW REPORT
CONTENTS
|
PAGE |
|
|
Report
of Independent Auditors |
F-1 |
|
|
Consolidated
Balance Sheets |
F-2 |
|
|
Consolidated
Statements of Operations |
F-3 |
|
|
Consolidated
Statements of Changes in Shareholders' Deficits |
F-4 |
|
|
Consolidated
Statements of Cash Flows |
F-5 |
|
|
Notes
to Consolidated Financial Statements |
F-6 |
|
|
Condensed
Consolidated Financial Statements |
F-17 |
|
|
Balance
Sheets as of December 31, 2004 (unaudited)
and June 30, 2004 |
F-18 |
|
|
Statements
of Operations for the Three Months and Six
Months ended December 31, 2004 and
2003 (unaudited) |
F-19 |
|
|
Statements
of Cash Flows for the Six Months ended December
31, 2004 and 2003 (unaudited) |
F-20 |
|
|
Notes
to Condensed Consolidated Financial Statements (unaudited) |
F-21 |
INDEPENDENT
AUDITORS' REPORT
To the
Board of Directors
Roaming
Messenger, Inc.
We have
audited the accompanying consolidated balance sheets of Roaming Messenger, Inc.
(a Nevada Corporation) and Subsidiary (collectively referred to as the
"Company") as of June 30, 2004 and 2003 and the related consolidated statements
of operations, shareholders' deficit and cash flows for the years then ended.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We
conducted our audits in accordance with the standards established by 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
consolidated financial statements are free of material misstatement. An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall 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 consolidated financial position of Roaming
Messenger, Inc. and Subsidiary as of June 30, 2004 and 2003, and the
consolidated results of their operations and their cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
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
negative cash flows from operations that raise substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in note 2. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Rose,
Snyder & Jacobs
Rose,
Snyder & Jacobs
A
Corporation of Certified Public Accountants
Encino,
California
September
10, 2004
ROAMING
MESSENGER, INC. AND SUBSIDIARY
CONSOLIDATED
BALANCE SHEETS
JUNE 30,
2004 AND 2003
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
Cash |
|
$ |
1,495,102 |
|
$ |
57,408 |
|
Accounts
receivable, net of allowance for doubtful account of - $20,000 and
$0 |
|
|
116,407 |
|
|
76,898 |
|
Prepaids
and other current assets |
|
|
9,944 |
|
|
32,860 |
|
TOTAL
CURRENT ASSETS |
|
|
1,621,453 |
|
|
167,166 |
|
|
|
|
|
|
|
|
|
PROPERTY
& EQUIPMENT, notes 3 and 4 |
|
|
|
|
|
|
|
Furniture,
Fixtures & Equipment |
|
|
83,225 |
|
|
75,658 |
|
Computer
Equipment |
|
|
278,715 |
|
|
152,023 |
|
Commerce
Server |
|
|
50,048 |
|
|
50,000 |
|
Computer
Software |
|
|
3,535 |
|
|
3,535 |
|
Leasehold
Improvements |
|
|
42,194 |
|
|
42,194 |
|
|
|
|
457,717 |
|
|
323,410 |
|
Less:
Accumulated depreciation & amortization |
|
|
(261,370 |
) |
|
(200,770 |
) |
|
|
|
|
|
|
|
|
NET
PROPERTY & EQUIPMENT |
|
|
196,347 |
|
|
122,640 |
|
|
|
|
|
|
|
|
|
OTHER
ASSETS |
|
|
|
|
|
|
|
Lease
deposit |
|
|
7,029 |
|
|
7,029 |
|
Other
assets |
|
|
2,503 |
|
|
2,261 |
|
TOTAL
OTHER ASSETS |
|
|
9,532 |
|
|
9,290 |
|
TOTAL
ASSETS |
|
$ |
1,827,332 |
|
$ |
299,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
24,892 |
|
$ |
45,399 |
|
Accrued
liabilities |
|
|
42,093 |
|
|
42,042 |
|
Officer
salaries payable |
|
|
243,730 |
|
|
307,366 |
|
Staff
salaries payable |
|
|
46,499 |
|
|
23,447 |
|
Note
payable, note 4 |
|
|
39,500 |
|
|
50,000 |
|
Current
portion - obligations under capitalized leases, note 3 |
|
|
33,631 |
|
|
15,348 |
|
TOTAL
CURRENT LIABILITIES |
|
|
430,345 |
|
|
483,602 |
|
|
|
|
|
|
|
|
|
LONG
TERM LIABILITIES |
|
|
|
|
|
|
|
Obligations
under capitalized leases, note 3 |
|
|
45,059 |
|
|
17,345 |
|
|
|
|
|
|
|
|
|
TOTAL
LONG TERM LIABILITIES |
|
|
45,059 |
|
|
17,345 |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
|
475,404 |
|
|
500,947 |
|
|
|
|
|
|
|
|
|
COMMITMENTS
AND CONTINGENCIES, note 9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
DEFICIT, note 7 |
|
|
|
|
|
|
|
Capital
Stock |
|
|
172,400 |
|
|
147,912 |
|
Additional
Paid-in Capital |
|
|
3,871,738 |
|
|
1,306,502 |
|
Accumulated
deficit |
|
|
(2,692,210 |
) |
|
(1,656,265 |
) |
TOTAL
SHAREHOLDERS' DEFICIT |
|
|
1,351,928 |
|
|
(201,851 |
) |
TOTAL
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|
$ |
1,827,332 |
|
$ |
299,096 |
|
|
|
|
|
|
|
|
|
See
independent auditors' report and notes to consolidated financial
statements.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE
YEARS ENDED JUNE 30, 2004 AND 2003
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
REVENUE,
notes 2 and 10 |
|
$ |
953,772 |
|
$ |
899,732 |
|
|
|
|
|
|
|
|
|
Cost
of revenue, note 2 |
|
|
132,404 |
|
|
106,011 |
|
Selling,
general and administrative expenses, notes 7 and 8 |
|
|
1,474,106 |
|
|
999,135 |
|
Depreciation
and amortization |
|
|
60,231 |
|
|
49,162 |
|
Research
and development |
|
|
315,061 |
|
|
145,004 |
|
TOTAL
COSTS AND EXPENSES |
|
|
1,981,802 |
|
|
1,299,312 |
|
OPERATING
LOSS |
|
|
(1,028,030 |
) |
|
(399,580 |
) |
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSES) |
|
|
|
|
|
|
|
Interest
income |
|
|
7,116 |
|
|
-- |
|
Interest
expense |
|
|
(15,031 |
) |
|
(24,467 |
) |
TOTAL
OTHER INCOME (EXPENSES) |
|
|
(7,915 |
) |
|
(24,467 |
) |
NET
LOSS |
|
$ |
(1,035,945 |
) |
$ |
(424,047 |
) |
Basic
and diluted loss per share |
|
$ |
(0.01 |
) |
$ |
(0.00 |
) |
Weighted
average number of shares |
|
|
161,432,015 |
|
|
133,280,601 |
|
|
|
|
|
|
|
|
|
See
independent auditors' report and notes to consolidated financial
statements.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' DEFICIT
FOR THE
YEARS ENDED JUNE 30, 2004 AND 2003
|
|
Additional |
|
|
|
|
|
|
|
|
|
|
|
Paid-in |
|
Accumulated
|
|
|
|
|
|
Common |
|
|
|
Capital |
|
Deficit |
|
Total |
|
Shares |
|
Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
July 1, 2002 |
|
|
128,944,924 |
|
$ |
128,945 |
|
$ |
968,628 |
|
$ |
(1,232,218 |
) |
$ |
(134,645 |
) |
Issuance
of common stock, note 7 |
|
|
4,363,013 |
|
|
4,363 |
|
|
344,598 |
|
|
-- |
|
|
348,961 |
|
Issuance
of warrants, note 8 |
|
|
-- |
|
|
--
|
|
|
20,000 |
|
|
-- |
|
|
20,000 |
|
Recapitalization,
notes 6 and 7 |
|
|
14,604,098 |
|
|
14,604 |
|
|
(26,724 |
) |
|
-- |
|
|
(12,120 |
) |
Net
loss |
|
|
-- |
|
|
-- |
|
|
--
|
|
|
(424,047 |
) |
|
(424,047 |
) |
Balance,
June 30, 2003 |
|
|
147,912,035 |
|
$ |
147,912 |
|
$ |
1,306,502 |
|
$ |
(1,656,265 |
) |
$ |
(201,851 |
) |
Issuance
of common stock, note 7 |
|
|
24,487,579 |
|
|
24,488 |
|
|
2,515,236 |
|
|
-- |
|
|
2,539,724 |
|
Issuance
of warrants, note 8 |
|
|
-- |
|
|
-- |
|
|
50,000
|
|
|
--
|
|
|
20,000 |
|
Net
loss |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
(1,035,945 |
) |
|
(1,035,945 |
) |
Balance,
June 30, 2004 |
|
|
172,399,614 |
|
$ |
172,400 |
|
$ |
3,871,738 |
|
$ |
(2,692,210 |
) |
$ |
1,351,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
independent auditors' report and notes to consolidated financial
statements.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR THE
YEARS ENDED JUNE 30, 2004 AND 2003
|
|
2004 |
|
2003 |
|
OPERATING
ACTIVITIES |
|
|
|
|
|
Net
loss |
|
$ |
(1,035,945 |
) |
$ |
(424,047 |
) |
Adjustments
to reconcile net loss to net cash used by operating
activities: |
|
|
|
|
|
|
|
Depreciation
and amortization 60,231 |
|
|
49,161 |
|
|
|
|
Expenses
paid with shares of common stock |
|
|
82,917 |
|
|
107,683 |
|
Issuance
of warrants and stock options |
|
|
50,000 |
|
|
20,000 |
|
Changes
in assets - (increase) decrease: |
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(39,509 |
) |
|
4,914 |
|
Prepaid
expenses and other current assets |
|
|
(5,602 |
) |
|
(409 |
) |
Changes
in liabilities - increase (decrease): |
|
|
|
|
|
|
|
Officer
salaries payable |
|
|
(63,636 |
) |
|
60,767 |
|
Accounts
payable |
|
|
(20,506 |
) |
|
(52,589 |
) |
Staff
salaries payable & other liabilities |
|
|
23,857 |
|
|
16,400 |
|
NET
CASH USED BY OPERATING ACTIVITIES |
|
|
(948,193 |
) |
|
(218,120 |
) |
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
Purchase
of property & equipment |
|
|
(64,684 |
) |
|
(4,683 |
) |
|
|
|
|
|
|
|
|
NET
CASH USED BY INVESTING ACTIVITIES |
|
|
(64,684 |
) |
|
(4,683 |
) |
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
Issuance
of common stock, net of costs |
|
|
2,485,324 |
|
|
215,641 |
|
Payments
on note payable |
|
|
(10,500 |
) |
|
- |
|
Payments
on capitalized lease obligations |
|
|
(24,253 |
) |
|
(22,524 |
) |
|
|
|
|
|
|
|
|
NET
CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
2,450,571 |
|
|
193,117 |
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH |
|
|
1,437,694 |
|
|
(29,686 |
) |
Cash
at beginning of year |
|
|
57,408 |
|
|
87,094 |
|
Cash
at end of year |
|
$ |
1,495,102 |
|
$ |
57,408 |
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
|
Cash
paid during the years for: |
|
|
|
|
|
|
|
Interest |
|
$ |
15,031 |
|
$ |
24,467 |
|
Income
taxes |
|
$ |
800 |
|
$ |
800 |
|
|
|
|
|
|
|
|
|
See
independent auditors' report and notes to consolidated financial
statements.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
Roaming
Messenger, Inc., formerly known as Latinocare Management Corporation
("LMC), originally known as JNS Marketing, Inc. was incorporated
in Colorado in 1983, and then reincorporated in Nevada. LMC was
engaged in the business of managing LatinoCare Network Medical Group
("LNMG"),
an Independent Physician Association ("IPA") primarily servicing the
growing Latin American community in the United States, and in particular
in California. Due to a dispute with LNMG, LMC was forced to lay off its
employees and close its business.
On April
1, 2003, LMC a publicly traded company, entered into a Plan and Agreement
of Reorganization which resulted in Warp 9, Inc. ("Warp 9") becoming
a wholly-owned subsidiary of LMC. In connection with the becoming
a wholly-owned subsidiary of LMC. In connection with the transaction,
all officers and directors of LMC resigned and were replaced by the
management team and directors of Warp 9. Subsequently, LMC was renamed
to Roaming Messenger Inc. by the new board of directors. Although from a
legal perspective, Roaming Messenger, Inc. acquired Warp 9, Inc., the
transaction is viewed as a recapitalization of Warp 9, Inc., accompanied
by an issuance of stock by Warp 9, Inc. to the shareholders of Roaming
Messenger, Inc. This is because Roaming Messenger, Inc. did not have
operations immediately prior to the transaction, and following the transaction,
Warp 9, Inc. was the operating company.
Warp 9,
Inc. was incorporated in the state of Delaware, under the name of eCommerceland,
on August 27, 1999. The Company, based in Goleta, California,
began operations October 1, 1999. Prior to October 1, 1999, the Company
was operated as WARP 9 Technologies, LLC ("LLC"), a California limited
liability company. LLC was merged with and into eCommerceland effective
at its close of business, September 30, 1999, and on December 21, 2000
changed its name to Warp 9, Inc. For accounting and reporting purposes,
the "merger" was considered a continuation of the same business, under a
different type of entity. The operations and ownership of Warp 9, Inc. were
substantially the same as LLC. The Company's primary source of income is
service of their Warp 9 contracts, which relates to Internet data service
and fully hosted web based software products.
Roaming
Messenger, Inc. and Warp 9, Inc. (collectively referred to as the "Company")'s
strategy is to provide a proprietary solution for real-time communication
over wired and wireless devices. The Company's flagship product,
Roaming Messenger, is a system for delivering real-time information
for homeland security, emergency response, military and enterprise
applications. Unlike solutions based on existing messaging technology
such as e-mail, text messaging, and voicemail, Roaming Messenger packages
time-critical information into smart messages. These messages automatically
roam throughout the wired and wireless worlds - from mobile devices
to desktop PCs to central servers - tracking down people and getting
responses in real-time.
2. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES |
GOING
CONCERN
The
accompanying consolidated financial statements have been prepared on a
going
concern basis of accounting, which contemplates continuity of operations,
realization of assets and liabilities and commitments in the normal
course of business. The accompanying financial statements do not reflect
any adjustments that might result if the Company is unable to continue
as a going concern. The Company's losses and negative cash flows from
operations raise substantial doubt about the Company's ability to continue
as a going concern. The ability of the Company to continue as a going
concern and appropriateness of using the going concern basis is dependent
upon, among other things, additional cash infusion. The Company has
funded its operation through the sale of its common stock through private
offerings. As discussed in note 12, the Company is selling securities
through a Private Placement Memorandum. Management believes, but there is
no assurance, that the Company will obtain the additional working capital
that it needs through the sale of its Common Stock. The Company has incurred
operating deficits since inception, which are expected to continue until its
business model is fully developed.
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
2. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(Continued) |
ACCOUNTS
RECEIVABLE
The
Company extends credit to its customers, who are located primarily in
California.
Accounts receivable are customer obligations due under normal trade
terms. The Company performs continuing credit evaluations of its customers'
financial condition. Management reviews accounts receivable on a regular
basis, based on contracted terms and how recently payments have been
received to determine if any such amounts will potentially be uncollected.
The Company includes any balances that are determined to be uncollectible
in its allowance for doubtful accounts. After all attempts to collect a
receivable have failed, the receivable is written off. Based on the
information available, management believes the Company's accounts receivable
are all collectible.
REVENUE
RECOGNITION
The
Company recognizes income when the service is provided or when product
is
delivered. Most of the income is generated from monthly fees from clients
who subscribe to the Company's fully hosted web products on terms ranging
from six months to one year. When the term ends, clients normally go on a
month-to-month basis or extend the contract for another six months to one
year.
COST OF
REVENUE
Cost of
revenue includes the direct costs of operating the Company's network,
including telecommunications charges, and software and hardware related
costs.
RESEARCH
AND DEVELOPMENT
Research
and development costs are expensed as incurred. Total research and development
costs were $315,061 and $145,004 for the years ended June 30, 2004 and
2003, respectively.
CASH AND
CASH EQUIVALENTS
The
Company considers all highly liquid investments with an original maturity
of three months or less to be cash equivalents.
USE OF
ESTIMATES
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the accompanying financial statements.
Significant estimates made in preparing these financial statements
include the allowance for doubtful accounts, the estimate of useful
lives of property and equipment, the deferred tax valuation allowance,
and the fair value of stock options. Actual results could differ from
those estimates.
FAIR
VALUE OF FINANCIAL INSTRUMENTS
The
Company's financial instruments, including cash and cash equivalents,
accounts
receivable, accounts payable and accrued liabilities are carried at cost,
which approximates their fair value, due to the relatively short maturity
of these instruments. As of June 30, 2004 and 2003, the Company's capital
lease obligations and notes payable have stated borrowing rates that are
consistent with those currently available to the Company and, accordingly,
the Company believes the carrying value of these debt instruments
approximates their fair value.
PROPERTY
AND EQUIPMENT
Property
and equipment are stated at cost, and are depreciated or amortized using the
straight-line method over the following estimated useful lives:
Furniture,
fixtures & equipment |
|
|
7
years |
|
Computer
equipment |
|
|
5
years |
|
Commerce
server |
|
|
5
years |
|
Computer
software |
|
|
3-5
years |
|
Leasehold
improvements |
|
|
Length
of the lease |
|
|
|
|
|
|
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
2. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
PROPERTY
AND EQUIPMENT (CONTINUED)
Property
and equipment includes assets leased under capitalized leases with an
original cost of $115,084 and $57,660 at June 30, 2004 and 2003, respectively.
Amortization of assets under capitalized leases is included in
depreciation and amortization expense. During the years ended June 30,
2004 and
2003, additions to fixed assets through capitalized leases totaled $70,250
and $21,701, respectively.
CONCENTRATIONS
OF BUSINESS AND CREDIT RISK
The
Company operates in a single industry segment. The Company markets its
services
to companies and individuals in many industries and geographic locations.
The Company's operations are subject to rapid technological advancement
and intense competition in the telecommunications industry.
Accounts
receivable represent financial instruments with potential credit risk. The
Company typically offers its customers credit terms. The Company makes
periodic evaluations of the credit worthiness of its enterprise customers
and other than obtaining deposits pursuant to its policies, it generally
does not require collateral. In the event of nonpayment, the Company
has the ability to terminate services.
ADVERTISING
COSTS
The
Company expenses the cost of advertising and promotional materials when
incurred.
Total advertising costs were $20,156 and $21,128 for the years ended
June 30, 2004 and 2003, respectively.
STOCK-BASED
COMPENSATION
The
Company accounts for employee stock option grants in accordance with
Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees
and related interpretations (APB 25), and has adopted the "disclosure
only" alternative described in Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting for Stock-Based Compensation.,
amended by SFAS No. 148 Accounting for Stock Based Compensation-Transition
and Disclosure.
NET LOSS
PER SHARE
Net loss
per common share is computed using the weighted average number of common
shares outstanding during the periods presented. Options to purchase
shares of
the Company's stock under its stock option plan and warrants may have a
dilutive effect on the Company's earnings per share in the future but are
not included in the calculation for 2003 and 2002 because they have an
antidilutive effect in these periods.
INCOME
TAXES
The
Company uses the liability method of accounting for income taxes.
Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to financial statements carrying amounts of existing
assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. The measurement of deferred tax
assets and liabilities is based on provisions of applicable tax law.
The
measurement of deferred tax assets is reduced, if necessary, by a valuation
allowance based on the amount of tax benefits that, based on available
evidence, is not expected to be realized.
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
2. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
RECENT
ACCOUNTING PRONOUNCEMENTS
In
January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation
of Variable Interest Entities. This interpretation of Accounting
Research Bulletin No. 51, Consolidated Financial Statements, addresses
consolidation of variable interest entities. FIN 46 requires certain
variable interest entities to be consolidated by the primary beneficiary
if the entity does not effectively disperse risks among the parties
involved. The provisions of FIN 46 are effective immediately for those
variable interest entities created after January 31, 2003. The provisions
are effective for the first period beginning after June 15, 2003, for
those variable interests held prior to February 1, 2003. The Company
has no variable interest entities and accordingly does not believe the
adoption of this Interpretation will have a material impact on the Company's
financial position or results of operations.
In April
2003, the FASB issued SFAS 149, Amendment of Statement 133 on Derivative
Instruments and Hedging Activities, which amends SFAS 133 for certain
decisions made by the FASB Derivatives Implementation Group. In particular,
SFAS 149 (1) clarifies under what circumstances a contract with an
initial net investment meets the characteristic of a derivative, (2)
clarifies
when a derivative contains a financing component, (3) amends the definition
of underlying to conform it to language used in FASB interpretation
number (FIN) 45, and (4) amends certain other existing pronouncements.
SFAS 149 is effective for contracts entered into or modified
after June 30, 2003, and for hedging relationships designated after
June 30, 2003. In addition, most provisions of SFAS 149 are to be applied
prospectively. The Company does not expect that the provisions of this
statement will have a material impact on the Company's financial statements.
In May
2003, the FASB issued SFAS 150, Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity. SFAS 150 improves
the accounting for certain financial instruments that, under previous
guidance, issuers could account for as equity. SFAS 150 requires that
those instruments be classified as liabilities in statements of financial
position. SFAS 150 is effective for interim periods beginning after
June 15, 2003. The Company does not expect this statement to have a material
impact on its financial statements.
In
December 2003, the Securities and Exchange Commission (SEC) issued Staff
Accounting
Bulletin No. 104 (SAB 104), "Revenue Recognition", which supersedes
SAB 101, "Revenue Recognition in Financial Statements." SAB 104's
primary purpose is to rescind the accounting guidance contained in SAB 101
related to multiple-element revenue arrangements that was superseded
as a result of the issuance of EITF 00-21, "Accounting for Revenue
Arrangements with Multiple Deliverables" and to rescind the SEC's related
"Revenue Recognition in Financial Statements Frequently Asked Questions
and Answers" issued with SAB 101 that had been codified in SEC Topic 13,
"Revenue Recognition." While the wording of SAB 104 has changed to
reflect the issuance of EITF 00-21, the revenue Recognition principles
of SAB
101 remain largely unchanged by the issuance of SAB 104, which was effective
upon issuance. The adoption of SAB 104 did not have a material effect on
the Company's financial position or results of operations.
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
3. |
OBLIGATIONS
UNDER CAPITALIZED LEASES |
Lessor |
|
Description |
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
B of
A |
|
|
Payable
in monthly installments of $1513, interest at 6.8%, matures in April,
2007. |
|
$ |
46,651 |
|
$ |
-- |
|
GE |
|
|
Payable
in monthly installments of $710, interest at 12.8%, matures in October
2006. |
|
|
16,360
|
|
|
-- |
|
C.I.T.
|
|
|
Payable
in monthly installments of $166, interest at 18%, matures in October,
2003. |
|
|
-- |
|
|
641 |
|
Amano |
|
|
Payable
in monthly installments of $285, interest at 15%, matures in December,
2003. |
|
|
-- |
|
|
1,374 |
|
Avaya |
|
|
Payable
in monthly installments of $655, interest at 16%, matures in December,
2004. |
|
|
3,753 |
|
|
12,089 |
|
GE |
|
|
Payable
in monthly installments of $348, interest at 13%, matured in October 2005.
|
|
|
5,094 |
|
|
8,379 |
|
Dell |
|
|
Payable
in monthly installments of $200, interest at 13%, matures in January
2006. |
|
|
3,407 |
|
|
5,255 |
|
Dell |
|
|
Payable
in monthly installments of $203, interest at 21%, matures in February
2006. |
|
|
3,425 |
|
|
4,955 |
|
|
|
|
|
|
|
78,690 |
|
|
32,693 |
|
|
|
|
Less
current portion |
|
|
33,631 |
|
|
15,348 |
|
|
|
|
Long-term
portion of obligations under capitalized leases |
|
$ |
45,059 |
|
$ |
17,345 |
|
|
|
|
|
|
|
|
|
|
|
|
Minimum
annual lease payments under capitalized lease obligations at June 30, 2004
are as follows:
Fiscal
Year |
|
|
|
|
|
|
|
2005 |
|
$ |
39,635 |
|
2006 |
|
|
30,699 |
|
2007 |
|
|
17,975 |
|
|
|
|
88,309 |
|
Less
amounts representing interest |
|
|
9,619 |
|
|
|
|
78,690 |
|
Less
current portion |
|
|
33,631 |
|
Long
term portion of capitalized lease obligations |
|
$ |
45,059 |
|
The
Company has a note payable to a vendor in the amount of $50,000, bearing
interest at 10%, with monthly interest payment only. The maturity date,
which was originally October 15, 2001, was subsequently amended to March 15,
2002 and then on demand. At June 30, 2004, the outstanding principal
amount on this note is $39,500. This note is secured by furniture of the
Company. See note 9.
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
At June
30, 2004, the Company has available for federal and state income tax
purposes, net operating loss carryforwards of approximately $6,000,000
and
$1,400,000, respectively, which expire at dates that have not been determined.
The
difference between the Company's effective income tax rate and the statutory
federal rate for the years ended June 30, 2004 and 2003 relates primarily
to losses incurred for which no tax benefit was recognized, due to the
uncertainty of its realization. The valuation allowance as $2,300,000
and $1,960,000 at June 30, 2004 and 2003, respectively, representing
an increase of $340,000 for the year ended June 30, 2004. Because
of statutory "ownership changes" the amount of net operating losses which may
be utilized in future years are subject to significant annual limitations.
A
reconciliation of income tax expense that would result from applying the
domestic
Federal statutory rate to pre-tax income, with federal income tax expense
presented in the financial statements is as follows:
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
Income
tax benefit computed at U.S. federal statutory rate (34%) |
|
$ |
350,000 |
|
$ |
135,000 |
|
State
income taxes, net of benefit federal taxes |
|
|
63,000 |
|
|
23,000 |
|
Other |
|
|
(73,000 |
) |
|
-- |
|
Less
valuation allowance |
|
|
(340,000 |
) |
|
(158,000 |
) |
Income
tax expense |
|
$ |
-- |
|
$ |
-- |
|
|
|
|
|
|
|
|
|
The
deferred income tax benefit at June 30, 2004, and 2003 and reflects the
impact of
temporary differences between the amounts of assets and liabilities
recorded for financial reporting purposes and such amounts as measured
in accordance with tax laws. The items, which comprise a significant
portion of, deferred tax assets and liabilities are approximately
as follows:
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
Depreciation
|
|
$ |
56,000 |
|
$ |
59,000 |
|
Net
operating loss carryforwards |
|
|
2,148,000 |
|
|
1,770,000 |
|
Officer
salaries payable |
|
|
96,000 |
|
|
131,000 |
|
|
|
|
2,300,000 |
|
|
1,960,000 |
|
Less:
valuation allowance |
|
|
(2,300,000 |
) |
|
(1,960,000 |
) |
Deferred
income tax asset |
|
$ |
-- |
|
$ |
-- |
|
|
|
|
|
|
|
|
|
On April
8, 2003, Warp 9, Inc. consummated a transaction, pursuant to which shareholders
of Warp 9 Inc. exchanged their shares for shares in Roaming Messenger,
Inc., with Warp 9, Inc. surviving as a wholly-owned subsidiary of
Roaming Messenger, Inc. This transaction was recorded as a recapitalization
followed by the issuance of shares by Warp 9, Inc. to the shareholders
of Roaming Messenger, Inc. Prior to the recapitalization transaction,
Roaming Messenger, Inc. was not an operating company, and its assets
consisted principally of cash of approximately $100,000, offset by the same
amount of liabilities. Under the terms of the transaction, Roaming Messenger,
Inc. issued 131,026,173 shares of Roaming Messenger, Inc. common stock to
the former shareholders of Warp 9, Inc. in exchange for all the outstanding
shares of Warp 9, Inc. (12.5 shares of Roaming Messenger, Inc. for every
share of Warp 9, Inc.). The transaction was consummated in two phases
with the first issuance of 122,620,910 shares on April 8, 2003, and 8,405,263
shares on June 30, 2003.
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
6. |
RECAPITALIZATION
(Continued) |
After the
recapitalization, options granted under the Warp 9 Inc. Employee Stock
option plan were cancelled and new options were issued under a new Roaming
Messenger Inc. Employee Stock Option Plan (effective July 10, 2003) to
employees in amounts consistent with their Warp 9 options. The Roaming
Messenger
options have the same aggregate exercise price as the Warp 9 options.
Most stock options became fully vested on grant date, while others mirrored
the same vesting periods as the Warp 9 Inc. options. The Roaming Messenger
Inc. stock options are presented at June 30, 2003 even though the effective
date was July 10, 2003.
The
number of shares of common stock of Warp 9, Inc. was retroactively restated
to present the number of shares after their conversion into Roaming
Messenger common stock in the recapitalization transaction. For all such
restatements, a conversion rate of 12.5 shares of Roaming Messenger,
Inc.
common stock for every share of Warp 9, Inc. common stock was used.
From the
date of the recapitalization, April 8, 2003 through June 30, 2003, Roaming
Messenger, Inc. issued 1,079,263 shares of common stock for a total cash
consideration of $86,341. 1,202,500 shares of common stock were also
issued
for $96,200 of services. These consulting services extended beyond June 30,
2003, therefore $67,683 and $28,517 were recorded as expense for the years
ended June 30, 2003, and 2004, respectively.
For the
fiscal year ended, June 30, 2004, the Company issued 23,807,579 shares of
restricted common stock for a total cash consideration of $2,485,324
as a result of a series of private offerings of common stock ranging
from $0.08 per share to $0.50 per share as well as stock options and
warrants exercises. 680,000 shares of restricted common stock were also
issued
for $54,400 of services.
The
common stock of Roaming Messenger, Inc. has a par value of $0.001, and
200,000,000
shares are authorized to be issued. The Company is also authorized
to issue 2,000,000 shares of preferred stock with a par value of $0.001.
The rights, preferences and privileges of the holders of the preferred
stock will be determined by the Board of Directors prior to issuance
of such shares.
At June
30, 2004, 25,000,000 shares of common stock were reserved for the issuance
of common stock pursuant to the Stock Option Plan, and 300,000 were
reserved for the issuance of common stock pursuant to outstanding warrants.
Warp 9, Inc, had 77,213 outstanding warrants at June 30, 2004.
8. |
STOCK
OPTIONS AND WARRANTS |
Warp 9,
Inc. had a Stock Option Plan that provided for the granting of stock
options to its employees and others providing services to the Company.
Options granted under the Plan could be either Incentive Options or
Nonqualified Options, and were administered by the Company's Board of
Directors.
Each options were exercisable in full or in installment and at such time
as designated by the Board. Notwithstanding any other provision
of the
Plan or of any Option agreement, each option were to expire on the date
specified in the Option agreement, which date were to be no later than
the tenth
anniversary of the date on which the Option was granted (fifth anniversary
in the case of an Incentive Option granted to a greater-than-10%
stockholder). The purchase price per share of the Common Stock
under each Incentive Option were to be no less than the Fair Market Value of
the Common Stock on the date the Option was granted (110% of the Fair
Market Value in the case of a greater-than-10% stockholder).
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
8. |
STOCK
OPTIONS AND WARRANTS (Continued) |
The
purchase price per share of the Common Stock under each Nonqualified
Option
were to be specified by the Board at the time the Option was granted,
and could be less than, equal to or greater than the Fair Market Value of
the shares of Common Stock on the date such Nonqualified Option was
granted, but were to be no less than the par value of shares of Common
Stock.
The plan provided specific language as to the termination of options
granted
hereunder.
In July
10, 2003, the Warp 9, Inc. Stock Option Plan was terminated, and the
Company adopted the Roaming Messenger, Inc. Stock Option Plan for Directors,
Executive Officers, and Employees of and Key Consultants to Roaming
Messenger, Inc. This Plan, under which 25,000,000 shares of common stock may
be issued, has essentially the same terms and conditions as the Warp 9,
Inc. Stock Option Plan.
Former
holders of employee stock options in the Warp 9 Inc. Stock Option Plan were
granted new options under the Roaming Messenger, Inc. Plan. Most options
became fully vested at grant date, while others mirrored the same vesting
periods as the Warp 9 Inc. options. The Roaming Messenger options have the
same aggregate exercise price as the Warp 9 Inc. options, using a 12.5
conversation rate. The number of stock options below in the summary of
stock
option activities has been retroactively restated to reflect the 12.5
conversation
rate.
SFAS 123,
Accounting for Stock-Based Compensation, requires pro forma information
regarding net income (loss) using compensation that would have been
incurred if the Company had accounted for its employee stock options
under the
fair value method of that statement. Options to purchase 2,478,494
shares of Roaming Messenger, Inc. were granted during the year ended
June 30, 2004. The fair value of options granted during the years ended
June 30, 2004 and 2003, which have been estimated at $159,000 and $6,000,
respectively, at the date of grant were determined using the Black-Scholes
Option pricing model with the following assumptions:
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
Risk
free interest rate |
|
|
2.79%-3.27 |
% |
|
2.40 |
% |
Stock
volatility factor |
|
|
0.01 |
|
|
0.01 |
|
Weighted
average expected option life |
|
|
4
years |
|
|
4
years |
|
Expected
dividend yield |
|
|
None |
|
|
None |
|
The pro
forma net loss and loss per share had the Company accounted for the options
using FAS 123 would have been as follows:
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
Net
loss as reported |
|
$ |
(1,035,945 |
) |
$ |
(424,047 |
) |
|
|
|
|
|
|
|
|
Basic
and diluted net loss per share as reported |
|
|
(0.01 |
) |
|
(0.00 |
) |
|
|
|
|
|
|
|
|
Add:
Stock-based employee compensation expense included in net reported loss
|
|
|
50,000 |
|
|
-- |
|
|
|
|
|
|
|
|
|
Deduct:
Stock-based employee compensation expense determined under fair value
based method for all awards |
|
|
(134,000 |
) |
|
(6,000 |
) |
Pro
forma net loss |
|
$ |
(1,119,945 |
) |
$ |
(430,047 |
) |
Basic
and diluted pro forma loss per share |
|
$ |
(0.01 |
) |
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
A summary
of the Company's stock option activity and related information follows:
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
8. |
STOCK
OPTIONS AND WARRANTS (Continued) |
|
|
Year
ended |
|
Year
ended |
|
|
|
June
30, 2004 |
|
June
30, 2003 |
|
|
|
|
|
Weighted |
|
|
|
Weighted |
|
|
|
|
|
Average |
|
|
|
average |
|
|
|
|
|
Exercise |
|
|
|
exercise |
|
|
|
Options |
|
price |
|
Options |
|
price |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
-beginning of year |
|
|
8,444,000 |
|
$ |
0.08 |
|
|
7,932,812 |
|
$ |
0.08 |
|
Granted |
|
|
2,478,494 |
|
|
0.18 |
|
|
675,000 |
|
|
0.08 |
|
Exercised |
|
|
2,500,000 |
|
|
0.08 |
|
|
--
|
|
|
-- |
|
Forfeited |
|
|
125,000 |
|
|
0.08 |
|
|
(163,812 |
) |
|
0.08 |
|
Outstanding
- end of year |
|
|
8,297,494 |
|
$ |
0.11 |
|
|
8,444,000 |
|
$ |
0.08 |
|
Exercisable
at the end of year |
|
|
5,720,935 |
|
$ |
0.09 |
|
|
5,824,469 |
|
$ |
0.08 |
|
Fair
value of options granted during the year |
|
|
|
|
$ |
159,000 |
|
|
|
|
$ |
6,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
weighted average remaining contractual life of options as of June 30,
2004 was
as follows:
|
|
|
|
Average |
|
|
|
Number
of |
|
remaining |
|
Exercise |
|
options |
|
contractual |
|
Prices |
|
outstanding |
|
life
(years) |
|
|
|
|
|
|
|
|
|
$
0.08 |
|
|
7,347,494 |
|
|
4.5 |
|
0.35 |
|
|
950,000 |
|
|
3.7 |
|
$0.11 |
|
|
8,297,494 |
|
|
4.4 |
|
STOCK
WARRANTS
During
the year ended June 30, 2004, Roaming Messenger, Inc. issued warrants
to purchase shares of common stock of Roaming Messenger, Inc. These
warrants became exercisable on their grant date. Warrants were granted
as follows:
Date
|
|
Number
of shares |
|
Maturity
Date |
|
Exercise
Price |
|
|
|
|
|
|
|
|
|
July
15, 2003 |
|
|
100,000 |
|
|
December
31, 2004 |
|
$ |
1.00 |
|
July
15, 2003 |
|
|
100,000 |
|
|
December
31, 2004 |
|
$ |
1.75 |
|
July
15, 2003 |
|
|
100,000 |
|
|
December
31, 2004 |
|
$ |
3.00 |
|
January
15, 2004 |
|
|
600,000 |
|
|
December
31, 2005 |
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
During
the year ended June 30, 2004, the warrants to purchase 600,000 shares of
common stock at $0.08 were exercised. The value of these warrants was
immaterial at their grant date.
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
8. |
STOCK
OPTIONS AND WARRANTS (Continued) |
During
the year ended June 30, 2003, Warp 9 Inc. has issued warrants to purchase
128,771 shares of Warp 9 Inc. common stock for services. These warrants
were valued at $20,000. During the year ended June 30, 2004, Warp 9 Inc.
cancelled 76,750 warrants, resulting in 77,213 total outstanding warrants.
The
following Warp 9 Inc. warrants, which are exercisable, were outstanding
at June
30, 2004:
Number
of shares |
|
Exercise
Price |
|
Expiration
date |
|
|
|
|
|
|
|
|
|
25,192 |
|
$ |
1.00
per share |
|
|
December
31, 2005 |
|
|
|
|
|
|
|
|
|
52,021 |
|
$ |
1.00
per share |
|
|
June
30, 2007-December 31, 2007 |
|
|
|
|
|
|
|
|
|
These
warrants became exercisable on their grant date. In previously issued
financial
statements, the Warp 9 Inc. warrants were mistakenly presented as if they
had been converted into Roaming Messenger, Inc. warrants. The above warrants
have been restated so they are presented as Warp 9, Inc. warrants.
9. |
COMMITMENTS
AND CONTINGENCIES |
OPERATING
LEASES
The
following is a schedule, by years, of future minimum rental payments
required
under operating leases for the facilities and equipment. The lease for one
of the facilities expires in 2007, and has 3 options to renew for each an
additional period of one year. The following is a schedule of minimum
lease payments for the next five years.
Year
Ending |
|
|
|
June
30, |
|
|
|
|
|
|
|
|
2005 |
|
$ |
173,000 |
|
2006 |
|
$ |
190,000 |
|
2007 |
|
$ |
144,000 |
|
2008 |
|
$ |
95,000 |
|
2009
|
|
$ |
95,000 |
|
|
|
|
|
|
Total
lease expense for the years ended June 30, 2004 and 2003 was $120,832
and
$121,562, respectively. The Company is also required to pay its pro rata
share of taxes, building maintenance costs, and insurance.
LOAN
DEFAULT
The note
payable has a default clause that allows the lender to assess late payment
charges in the amount of 10% of the delinquency. The delinquent charges
assessed to approximately $15,000 were in dispute, and have not been
accrued by the Company.
LEGAL
MATTERS
The
Company is involved in certain legal actions and claims arising in the
ordinary
course of business. It is the opinion of management, based on advice of
legal counsel, that such litigation and claims will be resolved without a
material effect on the Company's financial position.
For the
year ended June 30, 2004, the Company had two customers who represented
approximately 30% of total revenue. For the year ended June 30, 2003, the
Company had two customers who represented approximately 28% of total
revenue.
See
independent auditors' report.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2004 AND 2003
10. |
CONCENTRATIONS
(Continued) |
Accounts
receivable from two customers represented approximately 55% of total
accounts receivable at June 30, 2004. Accounts receivable from three
customers
represented approximately 51% of total accounts receivable at June 30,
2003.
The
Company has a concentration of credit risk for cash by maintaining deposits
with banks, which may at a time exceed insured amounts. At June 30, 2004,
the Company had $1,240,000 exceeding the amount insured by the U.S.
Federal Deposit Insurance Corporation (FDIC).
11. |
RELATED
PARTY TRANSACTIONS |
During
the year ended June 30, 2003, the Company issued 302,500 shares of common
stock to Mr. Tom Djokovich for a twelve-month contract to serve on the
Company's Board of Directors. $10,939 and $13,261 were recognized as
expense
for the years ended June 30, 2003 and 2004, respectively.
The
Company intends to raise additional working capital by selling securities
through Private Placements pursuant to Regulation D and Regulation
S of the Securities Act of 1993. As of the date of this report, the
Company does not have any concurrent offerings. However, the Company
has
entered into a Regulation S transaction with an offshore investment fund (the
"Fund") that is contingent upon the Fund being publicly traded on the
London Stock Exchange. The chance of actual closing is uncertain as of
the date
of this report.
The
Company has entered in to a new lease for 8,506 sq ft office space. The
Company
intends to sublease its current office space.
See
independent auditors' report.
FINANCIAL
INFORMATION
Condensed
Consolidated Financial Statements
A
Corporation of Certified Public Accountants
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the
Board of Directors
Roaming
Messenger, Inc.
Santa
Barbara, California
We have
reviewed the accompanying consolidated balance sheet of Roaming Messenger,
Inc. and Subsidiary as of December 31, 2004 and the consolidated statements
of operations for the three months and six months ended December 31,
2004 and
2003, and the consolidated statements of cash flows for the six months
ended
December 31, 2004 and 2003. All information included in these financial
statements
is the representation of the management of Roaming Messenger, Inc.
We
conducted our reviews in accordance with standards established by the
Public
Accounting Oversight Board (United States). A review of interim financial
information
consists principally of applying analytical procedures to financial data and
making inquiries of persons responsible for financial and accounting
matters.
It is substantially less in scope than an audit conducted in accordance
matters.
It is substantially less in scope than an audit conducted in accordance
with the
standards established by the Public Company Accounting Oversight Board
(United
States), the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on
our reviews, we are not aware of any material modifications that should be
made to the accompanying consolidated financial statements in order for them
to be in conformity with accounting principles generally accepted in
the
United States of America.
Rose,
Snyder & Jacobs
A
Corporation of Certified Public Accountants
Encino,
California
February
8, 2005
15821
Ventura Boulevard, Suite 490, Encino, California 91436
Phone:
(818) 461-0600 * Fax: (818) 461-0610
ROAMING
MESSENGER, INC. AND SUBSIDIARY
CONSOLIDATED
BALANCE SHEETS
ASSETS
|
|
(Unaudited) |
|
|
|
|
|
December
31, |
|
June
30, |
|
|
|
2004 |
|
2004 |
|
CURRENT
ASSETS |
|
|
|
|
|
Cash
|
|
$ |
595,260 |
|
$ |
1,495,102 |
|
Accounts
receivable, net of allowance for doubtful account of $0 |
|
|
132,627
|
|
|
116,407 |
|
Prepaids
and other current assets |
|
|
32,000
|
|
|
9,944 |
|
TOTAL
CURRENT ASSETS |
|
|
759,887
|
|
|
1,621,453 |
|
|
|
|
|
|
|
|
|
PROPERTY
& EQUIPMENT |
|
|
|
|
|
|
|
Furniture,
Fixtures & Equipment |
|
|
87,590
|
|
|
83,225 |
|
Computer
Equipment |
|
|
429,199
|
|
|
278,715 |
|
Commerce
Server |
|
|
50,048
|
|
|
50,048 |
|
Computer
Software |
|
|
4,748
|
|
|
3,535 |
|
Leasehold
Improvements |
|
|
42,194
|
|
|
42,194 |
|
|
|
|
613,779
|
|
|
457,717 |
|
Less:
Accumulated depreciation & amortization |
|
|
(302,305 |
) |
|
(261,370 |
) |
NET
PROPERTY & EQUIPMENT |
|
|
311,474
|
|
|
196,347 |
|
|
|
|
|
|
|
|
|
OTHER
ASSETS |
|
|
|
|
|
|
|
Lease
deposit |
|
|
10,237
|
|
|
7,029 |
|
Other
assets |
|
|
2,714
|
|
|
2,503 |
|
TOTAL
OTHER ASSETS |
|
|
12,951
|
|
|
9,532 |
|
TOTAL
ASSETS |
|
$ |
1,084,312 |
|
$ |
1,827,332 |
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
58,121 |
|
$ |
24,892 |
|
Accrued
liabilities |
|
|
32,412
|
|
|
42,093 |
|
Officer
salaries payable |
|
|
237,981
|
|
|
243,730 |
|
Staff
salaries payable |
|
|
70,671
|
|
|
46,499 |
|
Note
payable |
|
|
31,000
|
|
|
39,500 |
|
Current
portion - obligations under capitalized leases |
|
|
55,844
|
|
|
33,631 |
|
Stockholder
Deposit |
|
|
19,875 |
|
|
|
|
TOTAL
CURRENT LIABILITIES |
|
|
505,904
|
|
|
430,345 |
|
|
|
|
|
|
|
|
|
LONG
TERM LIABILITIES |
|
|
|
|
|
|
|
Obligations
under capitalized leases |
|
|
108,133
|
|
|
45,059 |
|
|
|
|
|
|
|
|
|
TOTAL
LONG TERM LIABILITIES |
|
|
108,133
|
|
|
45,059 |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
|
614,037
|
|
|
475,404 |
|
|
|
|
|
|
|
|
|
COMMITMENTS
AND CONTINGENCIES, note 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
Capital
Stock |
|
|
172,685
|
|
|
172,400 |
|
Additional
Paid-in Capital |
|
|
3,975,866
|
|
|
3,871,738 |
|
Accumulated
deficit |
|
|
(3,678,276 |
) |
|
(2,692,210 |
) |
TOTAL
SHAREHOLDERS' EQUITY |
|
|
470,275
|
|
|
1,351,928 |
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
1,084,312 |
|
$ |
1,827,332 |
|
|
|
|
|
|
|
|
|
Prepared
without audit.
See
report of independent registered public accounting firm and notes to
financial statements.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Three |
|
Six |
|
Three |
|
Six |
|
|
|
months
ended |
|
months
ended |
|
months
ended |
|
months
ended |
|
|
|
December
31, |
|
December
31, |
|
December
31, |
|
December
31, |
|
|
|
2004 |
|
2004 |
|
2003 |
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
$ |
307,228 |
|
$ |
616,932 |
|
$ |
193,176 |
|
$ |
454,126 |
|
COST
OF REVENUE |
|
|
(141,030 |
) |
|
(238,588 |
) |
|
(26,753 |
) |
|
(59,951 |
) |
GROSS
PROFIT |
|
|
166,198
|
|
|
378,344
|
|
|
166,423
|
|
|
394,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense |
|
|
637,312
|
|
|
1,130,687
|
|
|
294,069
|
|
|
509,847 |
|
Depreciation
and amortization |
|
|
21,777
|
|
|
40,472
|
|
|
13,931
|
|
|
26,814 |
|
Research
and development |
|
|
66,638
|
|
|
188,752
|
|
|
48,943
|
|
|
85,400 |
|
TOTAL
OPERATING EXPENSES |
|
|
725,727
|
|
|
1,359,911
|
|
|
356,943
|
|
|
622,061 |
|
OPERATING
LOSS |
|
|
(559,529 |
) |
|
(981,567 |
) |
|
(190,520 |
) |
|
(227,886 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSES) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
4,453
|
|
|
6,610
|
|
|
1,606
|
|
|
1,832 |
|
Interest
expense |
|
|
(7,110 |
) |
|
(11,107 |
) |
|
(4,457 |
) |
|
(9,156 |
) |
TOTAL
OTHER INCOME (EXPENSES) |
|
|
(2,657 |
) |
|
(4,497 |
) |
|
(2,851 |
) |
|
(7,324 |
) |
NET
LOSS |
|
$ |
(562,186 |
) |
$ |
(986,064 |
) |
$ |
(193,371 |
) |
$ |
(235,210 |
) |
BASIC
AND DILUTED LOSS PER SHARE |
|
$ |
(0.00 |
) |
$ |
(0.01 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
WEIGHTED
AVERAGE NUMBER OF SHARES |
|
|
172,530,810
|
|
|
172,488,310
|
|
|
157,267,191
|
|
|
153,164,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepared
without audit.
See
report of independent registered public accounting firm and notes to
financial statements.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE
SIX MONTHS ENDED DECEMBER 31, 2004 AND 2003
|
|
Six |
|
Six |
|
|
|
months
ended |
|
months
ended |
|
|
|
December
31, |
|
December
31, |
|
|
|
2004 |
|
2003 |
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
Net
loss |
|
$ |
(986,064 |
) |
$ |
(235,210 |
) |
Adjustment
to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation
and amortization |
|
|
40,472
|
|
|
26,814 |
|
Warrants
issued for services |
|
|
81,062
|
|
|
- |
|
Common
stock issued for services |
|
|
17,000
|
|
|
-- |
|
Decrease
(increase) in account receivable |
|
|
(16,220 |
) |
|
8,462 |
|
Decrease
(increase) in prepaid and other assets |
|
|
(24,545 |
) |
|
(8,550 |
) |
(Decrease)
increase in accounts payable |
|
|
33,229
|
|
|
(28,299 |
) |
(Decrease)
increase in officer salaries payable |
|
|
(5,749 |
) |
|
15,743 |
|
(Decrease)
increase in other liabilities |
|
|
14,491
|
|
|
(20,683 |
) |
NET
CASH USED IN OPERATING ACTIVITIES |
|
|
(846,324 |
) |
|
(241,723 |
) |
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Employee
advances |
|
|
(469 |
) |
|
-- |
|
Purchase
of property & equipment |
|
|
(48,596 |
) |
|
(16,196 |
) |
NET
CASH USED IN INVESTING ACTIVITIES |
|
|
(49,065 |
) |
|
(16,196 |
) |
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Issuance
of common stock, net of costs |
|
|
6,352
|
|
|
1,164,987 |
|
Deposit
for shares of common stock |
|
|
19,875
|
|
|
-- |
|
Payments
on notes payable |
|
|
(8,500 |
) |
|
-- |
|
Payments
on capitalized lease obligations |
|
|
(22,180 |
) |
|
(12,072 |
) |
NET
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
|
(4,453 |
) |
|
1,152,915 |
|
NET
INCREASE (DECREASE) IN CASH |
|
|
(899,842 |
) |
|
894,996 |
|
|
|
|
|
|
|
|
|
CASH
AT BEGINNING OF PERIOD |
|
|
1,495,102
|
|
|
57,408 |
|
CASH
AT END OF PERIOD |
|
$ |
595,260 |
|
$ |
952,404 |
|
Supplementary
disclosures: |
|
|
|
|
|
|
|
Interest
paid |
|
$ |
11,107 |
|
$ |
9,156 |
|
Capitalized
leases contracted |
|
$ |
107,469 |
|
$ |
12,125 |
|
|
|
|
|
|
|
|
|
Prepared
without audit.
See
report of independent registered public accounting firm and notes to financial
statements.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004
1. |
BASIS
OF PRESENTATION AND GOING CONCERN |
The
accompanying unaudited condensed consolidated financial statements have
been
prepared in accordance with generally accepted accounting principles
for
interim financial information and with the instructions to Form 10-Q
and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
normal recurring adjustments considered necessary for a fair presentation
have been included. Operating results for the three-month period
ended December 31, 2004 are not necessarily indicative of the results
that may be expected for the year ending June 30, 2005. For further information
refer to the financial statements and footnotes thereto included
in the Company's Form 10K-SB for the year ended June 30, 2004.
The
accompanying financial statements have been prepared on a going concern
basis of
accounting, which contemplates continuity of operations, realization
of assets and liabilities and commitments in the normal course of
business. The accompanying financial statements do not reflect any adjustments
that might result if the Company is unable to continue as a going
concern. The Company's losses and negative cash flows from operations
raise
substantial doubt about the Company's ability to continue as a going
concern.
The ability of the Company to continue as a going concern and appropriateness
of using the going concern basis is dependent upon, among other
things, additional cash infusion.
2. |
STOCK
OPTIONS AND WARRANTS |
Stock-Based
Compensation
The
Company accounts for employee stock option grants in accordance with
Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees
and related interpretations (APB 25), and has adopted the "disclosure
only" alternative described in Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting for Stock-Based Compensation,
amended by SFAS No. 148 Accounting for Stock-Based Compensation-Transition
and Disclosure.
SFAS No.
123, Accounting for Stock-Based Compensation, requires pro forma information
regarding net income (loss) using compensation that would have been
incurred if the Company had accounted for its employee stock options
under the
fair value method of that statement. Options to purchase 0 and 865,994
shares of Roaming Messenger, Inc. were granted during the six months
ended December 31, 2004 and 2003, respectively. The fair value of options
granted, which have been estimated at $0 and $8,275, respectively, at the
date of grant were determined using the Black-Scholes Option pricing
model
with the following assumptions:
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
|
Risk
free interest rate |
|
|
3.60 |
% |
|
3.18 |
% |
Stock
volatility factor |
|
|
0.40
|
|
|
0.40 |
|
Weighted
average expected option life |
|
|
4
years |
|
|
4
years |
|
Expected
dividend yield |
|
|
None
|
|
|
None |
|
|
|
|
|
|
|
|
|
Prepared
without audit.
See
report of independent registered public accounting firm.
ROAMING
MESSENGER, INC. AND SUBSIDIARY
NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004
2. |
STOCK
OPTIONS AND WARRANTS (Continued) |
The pro
forma net loss and loss per share had the Company accounted for the options
using FAS 123 would have been as follows:
|
|
Three
Months |
|
Six
Months |
|
Three
Months |
|
Six
Months |
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended |
|
|
|
December
|
|
December
|
|
December
|
|
December |
|
|
|
31,
2004 |
|
31,
2004 |
|
31,
2003 |
|
31,
2003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss as reported |
|
$ |
(562,186 |
) |
$ |
(986,064 |
) |
$ |
(193,371 |
) |
$ |
(235,210 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per share as reported |
|
|
(0.00 |
) |
|
(0.01 |
) |
|
(0.00 |
) |
|
(0.00 |
) |
Add:
Stock-based employee compensation expense included in net reported loss,
net of related taxes |
|
|
--
|
|
|
|
|
|
-- |
|
|
|
|
Deduct:
Stock-based employee compensation expense determined under fair value
based method for all awards, net of related taxes |
|
|
(42,475 |
) |
|
(61,445 |
) |
|
(55 |
) |
$ |
(8,430 |
) |
Pro
forma net loss |
|
$ |
(604,661 |
) |
$ |
(1,047,509 |
) |
$ |
(193,426 |
) |
$ |
(243,640 |
) |
Basic
and diluted pro forma loss per share |
|
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
On
December 31, 2004, the Company has granted warrants to purchase 271,000
shares of
common stocks at $0.10 per share for consulting services. These warrants
expire on December 31, 2006, and were valued at $53,712.
3. |
COMMITMENTS
AND CONTINGENCIES |
From time
to time, the Company is involved in claims and lawsuits that arise in
the ordinary course of business. In the opinion of management, they are
usually resolved without material adverse effects on the Company's financial
position.
The
Company is also the defendant in a lawsuit where a shareholder is claiming
breach of contract, damages and specific performance relating to the
removal of the restrictive legend on his unregistered shares. The shareholder
accused the Company of refusing to permit him to remove the restrictive
transfer legend on his unregistered shares under Rule 144 of the
Securities Act of 1933, as amended. The Company, based on the opinion
of its
legal counsel, believes that the claim is without merit. The Company
will
vigorously defend the lawsuit, and has not accrued any contingent liability
with respect to this claim. The Company cannot estimate the range of
potential loss, in the event of an unfavorable judgment.
Prepared
without audit.
See
report of independent registered public accounting firm.
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
ITEM
24. INDEMNIFICATION OF OFFICERS AND DIRECTORS
LIMITATION
OF LIABILITY: INDEMNIFICATION
Under the
Nevada General Corporation Law and our Articles of Incorporation, as amended,
our directors will have no personal liability to us or our stockholders for
monetary damages incurred as the result of the breach or alleged breach by a
director of his "duty of care". This provision does not apply to the directors'
(i) acts or omissions that involve intentional misconduct or a knowing and
culpable violation of law, (ii) acts or omissions that a director believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director, (iii) approval of
any transaction from which a director derives an improper personal benefit, (iv)
acts or omissions that show a reckless disregard for the director's duty to the
corporation or its shareholders in circumstances in which the director was
aware, or should have been aware, in the ordinary course of performing a
director's duties, of a risk of serious injury to the corporation or its
shareholders, (v) acts or omissions that constituted an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the
corporation or its shareholders, or (vi) approval of an unlawful dividend,
distribution, stock repurchase or redemption. This provision would generally
absolve directors of personal liability for negligence in the performance of
duties, including gross negligence.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers, and controlling persons pursuant to the
foregoing provisions or otherwise, we have been advised that in the opinion of
the Securities Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by us of expenses incurred or paid by our
director, officer, or controlling person in the successful defense of any
action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered hereunder,
we will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
ITEM
25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The
following table sets forth an estimate of the costs and expenses payable by
Roaming Messenger, Inc. in connection with the offering described in this
registration statement. All of the amounts shown are estimates except the
Securities and Exchange Commission registration fee:
Securities
and Exchange Commission Registration Fee |
|
$ |
768 |
|
Accounting
Fees and Expenses |
|
$ |
5,000 |
* |
Legal
Fees and Expenses |
|
$ |
10,000 |
* |
Total |
|
$ |
15,768 |
|
|
|
|
|
|
ITEM
26. RECENT SALES OF UNREGISTERED SECURITIES
On April
8, 2003, Warp 9, Inc. consummated a transaction, pursuant to which shareholders
of Warp 9 Inc. exchanged their shares for shares in Roaming Messenger, Inc.,
with Warp 9, Inc. surviving as a wholly-owned subsidiary of Roaming Messenger,
Inc. This transaction was recorded as a recapitalization followed by the
issuance of shares by Warp 9, Inc. to the shareholders of Roaming Messenger,
Inc. Prior to the recapitalization transaction, Roaming Messenger, Inc. was not
an operating company, and its assets consisted principally of cash of
approximately $100,000, offset by the same amount of liabilities. Under the
terms of the transaction, Roaming Messenger, Inc. issued 131,026,173 shares of
Roaming Messenger, Inc. common stock to the former shareholders of Warp 9, Inc.
in exchange for all the outstanding shares of Warp 9, Inc. (12.5 shares of
Roaming Messenger, Inc. for every share of Warp 9, Inc.). The transaction was
consummated in two phases with the first issuance of 122,620,910 shares on April
8, 2003, and 8,405,263 shares on June 30, 2003.
After the
recapitalization, options granted under the Warp 9 Inc. Employee Stock option
plan were cancelled and new options were issued under a new Roaming Messenger
Inc. Employee Stock Option Plan (effective July 10, 2003) to employees in
amounts consistent with their Warp 9 options. The Roaming Messenger options have
the same aggregate exercise price as the Warp 9 options. Most stock options
became fully vested on grant date, while others mirrored the same vesting
periods as the Warp 9 Inc. options. The Roaming Messenger Inc. stock options are
presented at June 30, 2003 even though the effective date was July 10,
2003.
From
April 2003 through October 2003, Roaming Messenger, Inc. issued and sold
2,704,263 shares of common stock at a price of $0.08 per share for aggregate
gross proceeds of $216,341. The shares were issued to 6 accredited investors in
transactions exempt under Rule 506 of Regulation D promulgated under Section
4(2) of the Securities Act of 1933, as amended.
From May
2003 through August 2003, Roaming Messenger, Inc. issued and sold 1,202,500
shares of common stock, at a price of $0.08 per share to 3 consultants for
services valued at $96,200. The shares were issued pursuant to Section 4(2) of
the Securities Act of 1933, as amended.
From
October 2003 through January 2004, Roaming Messenger, Inc. issued and sold
2,017,500 shares of common stock at a price of $0.08 per share for aggregate
gross proceeds of $161,400. The shares were issued to 7 accredited investors in
transactions exempt under Rule 506 of Regulation D promulgated under Section
4(2) of the Securities Act of 1933, as amended.
In
December 2003, Roaming Messenger, Inc. issued 150,000 shares of common stock to
4 employees as bonuses. The shares were issued pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
From
August 2003 through April 2004, Roaming Messenger, Inc. issued and sold
13,181,027 shares of common stock for aggregate consideration of $1,096,415 to
foreign investors pursuant to Regulation S.
In
February 2004, Roaming Messenger, Inc. issued and sold 1,500,000 shares of
common stock at a price of $0.16 per share for aggregate gross proceeds of
$240,400. The shares were issued to 7 accredited investors in transactions
exempt under Rule 506 of Regulation D promulgated under Section 4(2) of the
Securities Act of 1933, as amended.
From
December 2003 through June 2004, Roaming Messenger, Inc. issued and sold 497,750
shares of common stock for aggregate consideration of $89,048 to foreign
investors pursuant to Regulation S.
In
October 2003 through January 2004, Roaming Messenger, Inc. issued 530,000 shares
of common stock at a price of $0.08 per share to 3 consultants for services. The
shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as
amended.
In
February 2004, Roaming Messenger, Inc. issued 1,875,000 shares of common stock
upon the exercise of employee options. The shares were issued pursuant to
Section 4(2) of the Securities Act of 1933, as amended.
In March
2004, Roaming Messenger, Inc. issued 600,000 shares of common stock upon the
exercise of a warrant. The shares were issued pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
In April
2004, Roaming Messenger, Inc. issued 525,000 shares of common stock upon the
exercise of an employee option. The shares were issued pursuant to Section 4(2)
of the Securities Act of 1933, as amended.
In March
2004, Roaming Messenger, Inc. issued and sold 1,500,061 shares of common stock
at a price of $0.35 per share for aggregate gross proceeds of $525,000. The
shares were issued to 3 accredited investors in transactions exempt under Rule
506 of Regulation D promulgated under Section 4(2) of the Securities Act of
1933, as amended.
In April
2004, Roaming Messenger, Inc. issued and sold 420,000 shares of common stock at
price of $0.50 per share for aggregate gross proceeds of $210,000. The shares
were issued to an accredited investor in a transaction exempt under Rule 506 of
Regulation D promulgated under Section 4(2) of the Securities Act of 1933, as
amended.
In August
2004, Roaming Messenger, Inc. issued 125,000 shares of common stock upon the
exercise of an employee option. The shares were issued pursuant to Section 4(2)
of the Securities Act of 1933, as amended.
In
November 2004, Roaming Messenger, Inc. issued and sold 10,000 shares of common
stock at a price of $0.50 per share to a consultant for services. The shares
were issued pursuant to Section 4(2) of the Securities Act of 1933, as
amended.
In
December 2004, Roaming Messenger, Inc. issued 150,000 shares of common stock
upon the exercise of an employee option.
In
January 2005, Roaming Messenger, Inc. issued and sold 155,000 shares of common
stock at a price of $0.30 per share to a consultant for services. The shares
were issued pursuant to Section 4(2) of the Securities Act of 1933, as
amended.
In
February 2005, Roaming Messenger, Inc. issued and sold 272,589 shares of common
stock at a price of $0.26 per share to a consultant for services. The shares
were issued pursuant to Section 4(2) of the Securities Act of 1933, as
amended.
In March
2005, Roaming Messenger, Inc. issued and sold 624,000 shares of common stock at
a price of $0.20 per share to two consultants for services. The shares were
issued pursuant to Section 4(2) of the Securities Act of 1933, as
amended.
On March 28, 2005, Roaming Messenger, Inc. issued and
sold 5,000,000 shares of common stock at a price of $0.10 per share for
aggregate gross proceeds of $500,000. The shares were issued to an accredited
investor in a transaction exempt under Rule 506 of Regulation D promulgated
under Section 4(2) of the Securities Act of 1933, as amended.
In April 2005, Roaming Messenger, Inc. issued and sold
1,600,000 shares of common stock at a price of $0.10 per share for aggregate
gross proceeds of $160,000. The shares were issues to 9 accredited investors in
transactions exempt under rule 506 of Regulation D promulgated under section
4(2) of the Securities Act of 1933, as amended.
ITEM
27. EXHIBITS
Exhibit |
|
Description |
|
|
|
3.1 |
|
Articles
of Incorporation (1) |
3.2 |
|
Bylaws
(1) |
4.1 |
|
Specimen
Certificate for Common Stock (1) |
4.2 |
|
Non-Qualified
Employee Stock Option Plan (2) |
5.1 |
|
Opinion
of Sichenzia Ross Friedman Ference LLP |
10.1 |
|
First
Agreement and Plan of Reorganization between Latinocare Management
Corporation, a Nevada corporation, and Warp 9, Inc., a Delaware
corporation (3) |
10.2 |
|
Second
Agreement and Plan of Reorganization between Latinocare Management
Corporation, a Nevada corporation, and Warp 9, Inc., a Delaware
corporation (4) |
10.3 |
|
Exchange
Agreement and Representations for shareholders of Warp 9,
Inc.(3) |
10.4 |
|
Securities
Purchase Agreement dated as of March 28, 2005 between Roaming Messenger,
Inc. and Wings Fund, Inc.(5) |
10.5 |
|
Periodic
Equity Investment Agreement dated as of March 28, 2005 between Roaming
Messenger, Inc. and Wings Fund, Inc.(5) |
10.6 |
|
Registration
Rights Agreement dated as of March 28, 2005 between Roaming Messenger,
Inc. and Wings Fund, Inc.(5) |
21 |
|
List
of Subsidiaries* |
23.1 |
|
Consent
of Sichenzia Ross Friedman Ference LLP (included in exhibit
5.1)* |
23.2 |
|
Consent
of Rose, Snyder & Jacobs* |
24.1 |
|
Power
of Attorney (included on signature page II-5) |
|
|
|
(1) |
Incorporated
by reference from the exhibits included with the Company's prior Report on
Form 10-KSB filed with the Securities and Exchange Commission, dated March
31, 2003. |
(2) |
Incorporated
by reference from the exhibits included in the Company's Information
Statement filed with the Securities and Exchange Commission, dated August
1, 2003. |
(3) |
Incorporated
by reference from the exhibits included with the Company's prior Report on
Form SC 14F1 filed with the Securities and Exchange Commission, dated
April 8, 2003. |
(4) |
Incorporated
by reference from the exhibits included with the Company's prior Report on
Form 8K filed with the Securities and Exchange Commission, dated May 30,
2003. |
(5) |
Incorporated
by reference to exhibits filed with the Company’s Current Report on Form
8-K filed with the Securities and Exchange Commission dated March 30,
2005. |
ITEM
28. UNDERTAKINGS
(a) |
The
undersigned Registrant hereby undertakes: |
(1)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(c)
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that
it has reasonable grounds to believe that it meets all the requirements for
filing on Form SB-2 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Santa Barbara, California, on this 3rd day of May 2005.
|
|
|
|
ROAMING
MESSENGER, INC. |
|
|
|
|
By: |
/s/ Jonathan Lei |
|
|
|
Jonathan Lei
Chief Executive Officer |
|
|
POWER
OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Jonathan Lei his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and any
subsequent registration statements pursuant to Rule 462 of the Securities Act of
1933 and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that attorney-in-fact or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/
Jonathan Lei |
|
Chief
Executive Officer, President, Chief |
|
May
3, 2005 |
Jonathan
Lei |
|
Financial Officer,
Secretary, and Chairman |
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Louie
Ucciferri |
|
|
|
|
Louie
Ucciferri |
|
Director |
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Tom
Djokovich |
|
|
|
|
Tom
Djokovich |
|
Director |
|
|
INDEX
TO EXHIBITS
Exhibit |
|
Description |
|
|
|
3.1 |
|
Articles
of Incorporation (1) |
3.2 |
|
Bylaws
(1) |
4.1 |
|
Specimen
Certificate for Common Stock (1) |
4.2 |
|
Non-Qualified
Employee Stock Option Plan (2) |
5.1 |
|
Opinion
of Sichenzia Ross Friedman Ference LLP |
10.1 |
|
First
Agreement and Plan of Reorganization between Latinocare Management
Corporation, a Nevada corporation, and Warp 9, Inc., a Delaware
corporation (3) |
10.2 |
|
Second
Agreement and Plan of Reorganization between Latinocare Management
Corporation, a Nevada corporation, and Warp 9, Inc., a Delaware
corporation (4) |
10.3 |
|
Exchange
Agreement and Representations for shareholders of Warp 9,
Inc.(3) |
10.4 |
|
Securities
Purchase Agreement dated as of March 28, 2005 between Roaming Messenger,
Inc. and Wings Fund, Inc.(5) |
10.5 |
|
Periodic
Equity Investment Agreement dated as of March 28, 2005 between Roaming
Messenger, Inc. and Wings Fund, Inc.(5) |
10.6 |
|
Registration
Rights Agreement dated as of March 28, 2005 between Roaming Messenger,
Inc. and Wings Fund, Inc.(5) |
21 |
|
List
of Subsidiaries* |
23.1 |
|
Consent
of Sichenzia Ross Friedman Ference LLP (included in exhibit
5.1)* |
23.2 |
|
Consent
of Rose, Snyder & Jacobs* |
24.1 |
|
Power
of Attorney (included on signature page II-5) |
|
|
|
(1) |
Incorporated
by reference from the exhibits included with the Company's prior Report on
Form 10-KSB filed with the Securities and Exchange Commission, dated March
31, 2003. |
(2) |
Incorporated
by reference from the exhibits included in the Company's Information
Statement filed with the Securities and Exchange Commission, dated August
1, 2003. |
(3) |
Incorporated
by reference from the exhibits included with the Company's prior Report on
Form SC 14F1 filed with the Securities and Exchange Commission, dated
April 8, 2003. |
(4) |
Incorporated
by reference from the exhibits included with the Company's prior Report on
Form 8K filed with the Securities and Exchange Commission, dated May 30,
2003. |
(5) |
Incorporated
by reference to exhibits filed with the Company’s Current Report on Form
8-K filed with the Securities and Exchange Commission dated March 30,
2005. |