Delaware
|
54-1965220
|
(State
or jurisdiction of incorporation)
|
(I.R.S.
Employer or
|
organization
|
Identification
No.)
|
Part
I - Financial Information
|
Page
|
Item
1. Financial Statements (Unaudited)
|
4
|
Item
2. Management's Discussion And
|
20
|
Analysis
Of Financial Condition Or Plan Of Operations
|
|
Item
3. Controls and Procedures
|
25
|
Part
II - Other Information
|
26
|
Item
1. Legal Proceedings
|
26
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
26
|
Item
3. Defaults Upon Senior Securities
|
26
|
Item
4. Submission Of Matters To A Vote Of Security
Holders
|
26
|
Item
5. Other Information
|
26
|
Item
6. Exhibits
|
26
|
June
30, 2007
|
||||
ASSETS
|
(Unaudited)
|
|||
Current
assets:
|
||||
Cash
and cash equivalent
|
$ |
475
|
||
Marketable
securities (Note B)
|
22,505
|
|||
Financing
costs, net – current portion
|
19,116
|
|||
Deposits
|
65,300
|
|||
Total
current assets
|
107,396
|
|||
Property
and equipment:
|
||||
Land
|
1,965,000
|
|||
Equipment
|
32,167
|
|||
Building
|
100,800
|
|||
Building
improvement
|
102,906
|
|||
2,200,873
|
||||
Less:
accumulated depreciation
|
(7,131 | ) | ||
Total
property and equipment
|
2,193,742
|
|||
Other
assets:
|
||||
Financing
costs, net – less current portion
|
4,977
|
|||
Intangible
asset, net
|
23,437
|
|||
Total
other assets
|
28,414
|
|||
Total
assets
|
$ |
2,329,552
|
||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||
Current
liabilities:
|
||||
Cash
disbursed in excess of available funds
|
$ |
1,680
|
||
Accounts
payable and accrued liabilities
|
170,909
|
|||
Due
to related party (Note G)
|
156,158
|
|||
Notes
payable – current portion (Note C)
|
1,010,450
|
|||
Total
current liabilities
|
1,339,197
|
|||
Convertible
notes payable, net of debt discount (Note D)
|
32,436
|
|||
Notes
payable – less current portion (Note C)
|
518,786
|
|||
Other
long-term liabilities
|
36,107
|
|||
Total
liabilities
|
1,926,526
|
|||
STOCKHOLDERS'
EQUITY
|
||||
STOCKHOLDERS'
EQUITY
|
||||
Preferred
stock, par value $.001 per share; 100,000 shares authorized: (Note
E)
|
||||
Series
A Convertible Preferred stock, par value $.001 per share; 60,000
shares
authorized; none issued and outstanding at June 30, 2007
|
-
|
|||
Common
stock, par value $.001 per share; 19,900,000 shares authorized;
13,279,610
shares issued and outstanding at June 30, 2007 (Note E)
|
13,280
|
|||
Additional
paid-in-capital
|
6,314,749
|
|||
Preferred
stock dividend
|
(25,000 | ) | ||
Accumulated
deficit
|
(5,900,003 | ) | ||
Stockholders'
equity
|
403,026
|
|||
Total
liabilities and stockholders' equity
|
$ |
2,329,552
|
For
the three months ended June 30,
|
For
the six months ended June 30,
|
|||||||||||||||||||
2007
|
2006
|
2007
|
2006
|
For
the period from October 14, 1999 (Date of Inception) Through June
30,
2007
|
||||||||||||||||
Revenue,
net
|
$ |
1,775
|
$ |
1,010
|
$ |
2,084
|
$ |
1,600
|
$ |
7,912
|
||||||||||
Gross
profit
|
1,775
|
1,010
|
2,084
|
1,600
|
7,912
|
|||||||||||||||
Costs
and expenses:
|
||||||||||||||||||||
Selling,
general and administrative
|
365,188
|
332,295
|
546,419
|
559,847
|
4,420,211
|
|||||||||||||||
(Gain)
loss on trading securities (Note B)
|
(456 | ) |
731
|
248
|
531
|
(37,108 | ) | |||||||||||||
Amortization
and financing fees
|
456,223
|
-
|
544,051
|
-
|
544,051
|
|||||||||||||||
Marketing
expenses
|
153,392
|
-
|
295,812
|
-
|
295,812
|
|||||||||||||||
Depreciation
expenses
|
703
|
658
|
1,406
|
1,316
|
18,851
|
|||||||||||||||
Total
operating expense
|
975,050
|
333,684
|
1,387,936
|
561,694
|
5,241,817
|
|||||||||||||||
Loss
from operations
|
(973,275 | ) | (332,674 | ) | (1,385,852 | ) | (560,094 | ) | (5,233,905 | ) | ||||||||||
Other
income (expenses):
|
||||||||||||||||||||
Other
income
|
-
|
-
|
-
|
-
|
61,969
|
|||||||||||||||
Gain/(Loss)
on early extinguishment of debt
|
(79,970 | ) |
-
|
(79,970 | ) |
-
|
727,133
|
|||||||||||||
Interest
expense, net
|
(386,595 | ) | (90,755 | ) | (634,610 | ) | (170,130 | ) | (1,472,101 | ) | ||||||||||
(466,565 | ) | (90,755 | ) | (714,580 | ) | (170,130 | ) | (682,999 | ) | |||||||||||
Loss
from continuing operations before income taxes and discontinued
operations
|
(1,439,840 | ) | (423,429 | ) | (2,100,432 | ) | (730,224 | ) | (5,916,904 | ) | ||||||||||
Provision
for income tax
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Loss
from continuing operations before discontinued operations
|
(1,439,840 | ) | (423,429 | ) | (2,100,432 | ) | (730,224 | ) | (5,916,904 | ) | ||||||||||
Income
from discontinued operations
|
-
|
-
|
-
|
-
|
16,901
|
|||||||||||||||
Net
loss
|
$ | (1,439,840 | ) | $ | (423,429 | ) | $ | (2,100,432 | ) | $ | (730,224 | ) | $ | (5,900,003 | ) | |||||
Preferred
stock dividend
|
-
|
-
|
-
|
-
|
(25,000 | ) | ||||||||||||||
Net
loss attributable to common shareholders
|
$ | (1,439,840 | ) | $ | (423,429 | ) | $ | (2,100,432 | ) | $ | (730,224 | ) | $ | (5,925,003 | ) | |||||
Losses
per common share (basic and assuming dilution)
|
$ | (0.12 | ) | $ | (0.05 | ) | $ | (0.20 | ) | $ | (0.08 | ) | ||||||||
Weighted
average common shares outstanding
|
11,664,075
|
9,008,809
|
10,427,284
|
8,942,143
|
Preferred
Shares
|
Preferred
Stock Amount
|
Common
Shares
|
Common
Stock Amount
|
Additional
Paid-in Capital
|
Common
Stock Subscription
|
Preferred
Stock Dividend
|
Deficit
Accumulated During Development Stage
|
Total
|
|||||||||||||||||||||||||||||
Net
loss
|
-
|
$ |
-
|
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ | (1,291 | ) | $ | (1,291 | ) | |||||||||||||||||||
Balance
at December 31, 1999
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,291 | ) | (1,291 | ) | ||||||||||||||||||||||||||
Common
stock issued on September
|
|||||||||||||||||||||||||||||||||||||
30,
2000 in exchange for convertible
|
|||||||||||||||||||||||||||||||||||||
debt
at $.50 per share
|
-
|
-
|
78,000
|
78
|
38,922
|
-
|
-
|
-
|
39,000
|
||||||||||||||||||||||||||||
Common
stock issued on November
|
|||||||||||||||||||||||||||||||||||||
27,
2000 in exchange for convertible
|
|||||||||||||||||||||||||||||||||||||
debt
at $.50 per share
|
-
|
-
|
26,000
|
26
|
12,974
|
-
|
-
|
-
|
13,000
|
||||||||||||||||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(157,734 | ) | (157,734 | ) | ||||||||||||||||||||||||||
Balance
at December 31, 2000
|
-
|
-
|
104,000
|
104
|
51,896
|
-
|
-
|
(159,025 | ) | (107,025 | ) | ||||||||||||||||||||||||||
Common
stock issued on January 1,
|
|||||||||||||||||||||||||||||||||||||
2001
in exchange for convertible debt
|
|||||||||||||||||||||||||||||||||||||
at
$.50 per share
|
-
|
-
|
174,000
|
174
|
86,826
|
-
|
-
|
-
|
87,000
|
||||||||||||||||||||||||||||
Common
stock issued on January 2,
|
|||||||||||||||||||||||||||||||||||||
2001
to founders in exchange for
|
|||||||||||||||||||||||||||||||||||||
services
rendered at $.001 per share
|
-
|
-
|
5,000,000
|
5,000
|
20
|
-
|
-
|
-
|
5,020
|
||||||||||||||||||||||||||||
Common
stock issued on January 2,
|
|||||||||||||||||||||||||||||||||||||
2001
in exchange for services
|
|||||||||||||||||||||||||||||||||||||
rendered
at $.50 per share
|
-
|
-
|
90,000
|
90
|
44,910
|
-
|
-
|
-
|
45,000
|
||||||||||||||||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(556,921 | ) | (556,921 | ) | ||||||||||||||||||||||||||
Balance
at December 31, 2001
|
-
|
-
|
5,368,000
|
5,368
|
183,652
|
-
|
-
|
(715,946 | ) | (526,926 | ) | ||||||||||||||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(357,588 | ) | (357,588 | ) | ||||||||||||||||||||||||||
Balance
at December 31, 2002
|
-
|
$ |
-
|
5,368,000
|
$ |
5,368
|
$ |
183,652
|
$ |
-
|
$ |
-
|
$ | (1,073,534 | ) | $ | (884,514 | ) |
Preferred
Shares
|
Preferred
Stock Amount
|
Common
Shares
|
Common
Stock Amount
|
Additional
Paid-in Capital
|
Common
Stock Subscription
|
Preferred
Stock Dividend
|
Deficit
Accumulated During Development Stage
|
Total
|
||||||||||||||||||||||||||||
Balance
at December 31, 2002
|
-
|
$ |
-
|
5,368,000
|
$ |
5,368
|
$ |
183,652
|
$ |
-
|
$ |
-
|
$ | (1,073,534 | ) | $ | (884,514 | ) | ||||||||||||||||||
Preferred
stock issued in exchange
|
||||||||||||||||||||||||||||||||||||
for
cash at $5 per share
|
55,000
|
55
|
-
|
-
|
274,945
|
-
|
-
|
-
|
275,000
|
|||||||||||||||||||||||||||
Stock
options issued in exchange for
|
||||||||||||||||||||||||||||||||||||
services
rendered
|
-
|
-
|
-
|
-
|
5,276
|
-
|
-
|
-
|
5,276
|
|||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
506,846
|
506,846
|
|||||||||||||||||||||||||||
Balance
at December 31, 2003
|
55,000
|
$ |
55
|
5,368,000
|
$ |
5,368
|
$ |
463,873
|
$ |
-
|
$ |
-
|
$ | (566,688 | ) | $ | (97,392 | ) | ||||||||||||||||||
Preferred
stock cancelled in exchange
|
||||||||||||||||||||||||||||||||||||
for
stock options exercised at
|
||||||||||||||||||||||||||||||||||||
$.5625
per share
|
(5,000 | ) | (5 | ) |
160,000
|
160
|
64,845
|
-
|
-
|
-
|
65,000
|
|||||||||||||||||||||||||
Common
stock issued on April 8, 2004
|
||||||||||||||||||||||||||||||||||||
in
exchange for cash at $.30 per share
|
-
|
-
|
300,000
|
300
|
89,700
|
-
|
-
|
-
|
90,000
|
|||||||||||||||||||||||||||
Common
stock issued and subscribed
|
||||||||||||||||||||||||||||||||||||
in
connection with private placement
|
-
|
-
|
2,404,978
|
2,405
|
1,359,491
|
25,581
|
-
|
-
|
1,387,477
|
|||||||||||||||||||||||||||
Conversion
of preferred stock to
|
||||||||||||||||||||||||||||||||||||
common
stock
|
(50,000
|
) | (50 | ) |
500,000
|
500
|
(450 | ) |
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Preferred
stock dividend
|
-
|
-
|
50,000
|
50
|
24,950
|
-
|
(25,000
|
) |
-
|
-
|
||||||||||||||||||||||||||
Warrants
issued to consultants in
|
||||||||||||||||||||||||||||||||||||
exchange
for services rendered
|
-
|
-
|
-
|
-
|
545,460
|
-
|
-
|
-
|
545,460
|
|||||||||||||||||||||||||||
Beneficial
conversion feature of
|
||||||||||||||||||||||||||||||||||||
convertible
debentures
|
-
|
-
|
-
|
-
|
274,499
|
-
|
-
|
-
|
274,499
|
|||||||||||||||||||||||||||
Value
of warrants attached to
|
||||||||||||||||||||||||||||||||||||
convertible
debentures
|
-
|
-
|
-
|
-
|
187,123
|
-
|
-
|
-
|
187,123
|
|||||||||||||||||||||||||||
Return
of contributed capital to
|
||||||||||||||||||||||||||||||||||||
shareholder
|
-
|
-
|
-
|
-
|
(144,006 | ) |
-
|
-
|
-
|
(144,006 | ) | |||||||||||||||||||||||||
Reclassification
of equity to liability
|
||||||||||||||||||||||||||||||||||||
upon
issuance of put agreement
|
-
|
-
|
-
|
-
|
(90,000 | ) | (90,000 | ) | ||||||||||||||||||||||||||||
Net
loss, as restated
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(331,449 | ) | (331,449 | ) | |||||||||||||||||||||||||
Balance
at December 31, 2004
|
-
|
$ |
-
|
8,782,978
|
$ |
8,783
|
$ |
2,775,485
|
$ |
25,581
|
$ |
(25,000
|
) | $ | (898,137 | ) | $ |
1,886,712
|
Preferred
Shares
|
Preferred
Stock Amount
|
Common
Shares
|
Common
Stock Amount
|
Additional
Paid-in Capital
|
Common
Stock Subscription
|
Preferred
Stock Dividend
|
Deficit
Accumulated During Development Stage
|
Total
|
||||||||||||||||||||||||||||
Balance
at December 31, 2004
|
-
|
$ |
-
|
8,782,978
|
$ |
8,783
|
$ |
2,775,485
|
$ |
25,581
|
$ | (25,000 | ) | $ | (898,137 | ) | $ |
1,886,712
|
||||||||||||||||||
Common
stock issued in connection
|
||||||||||||||||||||||||||||||||||||
with
common stock subscribed in
|
||||||||||||||||||||||||||||||||||||
connection
with private placement
|
-
|
-
|
54,998
|
55
|
25,526
|
(25,581 | ) |
-
|
-
|
-
|
||||||||||||||||||||||||||
Common
stock issued in connection
|
||||||||||||||||||||||||||||||||||||
with
private placement
|
-
|
-
|
37,500
|
38
|
25,150
|
-
|
-
|
-
|
25,188
|
|||||||||||||||||||||||||||
Fractional
share - return of proceeds
|
-
|
-
|
-
|
-
|
(13 | ) |
-
|
-
|
-
|
(13 | ) | |||||||||||||||||||||||||
Beneficial
conversion feature of
|
||||||||||||||||||||||||||||||||||||
convertible
debentures
|
-
|
-
|
-
|
-
|
5,708
|
-
|
-
|
-
|
5,708
|
|||||||||||||||||||||||||||
Value
of warrants attached to
|
||||||||||||||||||||||||||||||||||||
convertible
debentures
|
-
|
-
|
-
|
-
|
3,020
|
-
|
-
|
-
|
3,020
|
|||||||||||||||||||||||||||
Expiration
of put agreement
|
-
|
-
|
-
|
-
|
90,000
|
-
|
-
|
-
|
90,000
|
|||||||||||||||||||||||||||
Contributed
capital
|
-
|
-
|
-
|
-
|
89,500
|
-
|
-
|
-
|
89,500
|
|||||||||||||||||||||||||||
Net
loss, as restated
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,116,048 | ) | (1,116,048 | ) | |||||||||||||||||||||||||
Balance
at December 31, 2005
|
-
|
-
|
8,875,476
|
8,876
|
3,014,376
|
-
|
(25,000 | ) | (2,014,185 | ) |
984,067
|
|||||||||||||||||||||||||
Common
stock
|
||||||||||||||||||||||||||||||||||||
issued
on May 1, 2006 in
|
||||||||||||||||||||||||||||||||||||
exchange
for cash at $0.45
|
||||||||||||||||||||||||||||||||||||
per
share
|
-
|
-
|
199,998
|
200
|
89,800
|
-
|
-
|
-
|
90,000
|
|||||||||||||||||||||||||||
Contributed
capital
|
-
|
-
|
-
|
-
|
54,505
|
-
|
-
|
-
|
54,505
|
|||||||||||||||||||||||||||
Stock
options
|
||||||||||||||||||||||||||||||||||||
issued
to consultants in
|
||||||||||||||||||||||||||||||||||||
exchange
for services rendered
|
-
|
-
|
-
|
-
|
38,490
|
-
|
-
|
-
|
38,490
|
|||||||||||||||||||||||||||
Common
stock
|
||||||||||||||||||||||||||||||||||||
issued
on September 1, 2006
|
||||||||||||||||||||||||||||||||||||
in
exchange for cash at $0.45
|
||||||||||||||||||||||||||||||||||||
per
share
|
-
|
-
|
20,000
|
20
|
8,980
|
-
|
-
|
-
|
9,000
|
|||||||||||||||||||||||||||
Return
of
|
||||||||||||||||||||||||||||||||||||
contributed
capital to
|
||||||||||||||||||||||||||||||||||||
shareholder
|
-
|
-
|
-
|
-
|
(42,951 | ) |
-
|
-
|
-
|
(42,951 | ) | |||||||||||||||||||||||||
Reacquisition
and cancellation
|
||||||||||||||||||||||||||||||||||||
of
shares
|
-
|
-
|
(160,000 | ) | (160 | ) | (81,440 | ) |
-
|
-
|
-
|
(81,600 | ) | |||||||||||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,785,386 | ) | (1,785,386 | ) | |||||||||||||||||||||||||
Balance
at December 31, 2006
|
-
|
$ |
-
|
8,935,474
|
$ |
8,936
|
$ |
3,081,760
|
$ |
-
|
$ | (25,000 | ) | $ | (3,799,571 | ) | $ | (733,875 | ) |
Preferred
Shares
|
Preferred
Stock Amount
|
Common
Shares
|
Common
Stock Amount
|
Additional
Paid-in Capital
|
Common
Stock Subscription
|
Preferred
Stock Dividend
|
Deficit
Accumulated During Development Stage
|
Total
|
||||||||||||||||||||||||||||
Balance
at
|
||||||||||||||||||||||||||||||||||||
December
31, 2006
|
-
|
$ |
-
|
8,935,474
|
$ |
8,936
|
$ |
3,081,760
|
$ |
-
|
$ | (25,000 | ) | $ | (3,799,571 | ) | $ | (733,875 | ) | |||||||||||||||||
Common
stock
|
||||||||||||||||||||||||||||||||||||
issued
in connection with
|
||||||||||||||||||||||||||||||||||||
Dutchess
put agreements for
|
-
|
-
|
218,542
|
218
|
330,687
|
-
|
-
|
-
|