Notes to the Financial Statements

NOTE 1 — GENERAL ORGANIZATION AND BUSINESS

 

Valuerich, Inc., (the Company), was incorporated under the laws of the state of Florida on July 11, 2003. The Company operates various online and offline media-based properties for corporate and financial professionals. Its properties include 1) iValueRich.com, 2) Valuerich magazine and 3) the Valuerich Small-cap Financial Expo. iValueRich.com is a global online community providing a complete range of practical business solutions for all public companies and the millions of industry related businesses and professionals that seek to do business with each other. The small-cap financial expo is a unique expo-style financial conference format for small-cap public companies to showcase their products and services and have continuous access to investment bankers and buy-side professionals. Valuerich magazine is published up to four times per year and is a glossy full-color magazine of approximately 120 pages that is geared toward an affluent readership of investment related professionals and corporate leaders.

 

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The relevant accounting policies and procedures are listed below.

 

A. Accounting Basis

 

B. Earnings (Loss) Per Share

 

The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements.

 

		Income (Loss) (Numerator)			Shares (Denominator)		Per-Share Amount
For the Year Ended December 31, 2007: Basic EPS Income (loss) to common stockholders		$	(1,747,987	)	7,215,794		$	(0.24	)
For the Year Ended December 31, 2006: Basic EPS Income (loss) to common stockholders		$	(937,170	)	6,093,135		$	(0.15	)

 

		December 31,
		2007			2006
Warrants to purchase common stock			2,376,494		2,659,021
Options Granted Exercisable at $1.00 in connection with Joint Venture Agreement			100,000		—
Shares issuable upon conversion of 6% Convertible Shareholder Notes			7,975		49,643
Excluded shares			2,484,469		2,708,664

 

 

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Notes to the Financial Statements (continued)

C. Cash and Cash Equivalents

 The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.

 

D. Income Taxes

 

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss, tax credit carry-forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.  The Company’s total loss carry forward of $3,662,653 begins to expire in the year 2018.

  

The company’s deferred tax assets consist of the following:

		December 31,
		2007				2006
Net operating loss carry forward		$	1,245,302			$	650.990
Valuation Allowance			(1,245,302	)			(650,990	)
Net deferred tax asset		$	—			$	—

 

The components of current income tax expense as December 31, 2007 and December 31, 2006, respectively, are as follows:

		December 31,
		2007				2006
Current federal tax expense		$	—			$	—
Current state tax expense			—				—
Change in NOL benefits			(594,312	)			(318,640	)
Change in valuation allowance			594,312				318,640
Income tax expense		$	—			$	—

 

I. Fixed Assets

 

Fixed Assets are reported at cost. Depreciation is computed using the straight-line method over their estimated useful lives ranging from three to fifteen years. Depreciation expense for the years ending December 31, 2007 and 2006 was $30,542 and $19,208, respectively. As of the balance sheet dates, the fixed assets consisted of the following:

 

		December 31,
		2007				2006
Computers and Equipment		$	11,296			$	48,916
Furniture and Fixtures			26,766				26,766
Leasehold Improvements			29,978				29,978
Accumulated Depreciation		$	(43,058	)			(46,572	)
Fixed Assets, net		$	24,981			$	59,088

J. Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. At December 31, 2007 and December 31, 2006, the Company had $3,568,536 and $942,066, respectively in bank deposit accounts. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

K. Joint Venture Agreement

The Company entered into a joint venture agreement with Verdund Legal.  Verdund Legal has a strong European presence focused on emerging companies seeking capital and exposure to American markets. Verdund Legal and Valuerich plan on leveraging each other’s data base to create business from engaging each other’s clients with advisory, consulting and Valuerich related businesses.  The total Capitalized cost of the agreement was $278,559 which consist of $100,000 in cash, 100,000 shares of stock and 100,000 options exercisable at $1.00.  The Profit and Losses of the Joint Venture shall be shared among the Joint Ventureres in equal shares.

 

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Notes to the Financial Statements (continued)

NOTE 3 — ACCOUNTS RECEIVABLE

 

The Company’s accounts receivable as of December 31, 2007 and December 31, 2006 consist of:

		December 31,
		2007				2006
Accounts Receivable		$	—			$	41,285
Less: Allowance for Doubtful Accounts			—				(20,000
Net Accounts Receivable		$	—			$	21,285

Management reviews its accounts receivable on a regular basis. If an account has a balance which is six months old, it is the policy of the company to record an allowance for doubtful accounts. The Company will continue to pursue all collection efforts. If at a later date, the account is deemed uncollectible, the account balance will be written off.

 

 

NOTE 4 — STOCK TRANSACTIONS

 

On May 15, 2006, the Company issued 50,000 shares of common stock for services at $1.40 per share.

 

On June 16, 2006, the Company issued 248,500 shares of common stock for the conversion of debt and accumulated interest at $1.50 and $1.40 per share.

 

On June 16, 2006, the Company issued 45,013 shares of common stock for the certain debt penalties at $1.50 per share.

 

On June 16, 2006, the Company issued 50,000 shares of common stock to a founder that had previously been overlooked. Due to the increase in the per share value, the Company recognized an expense at $1.40 per share.

  

On June 22, 2006, the Board of Directors authorized a 10 for 1 reverse stock split. These financial statements have been retroactively restated for the split.

 

During the year ended December 31, 2006, the Company issued 1,181,498 shares of common stock to third parties for cash at $1.40 per share.

On February 27, 2007, the Company issued 25,001 shares of common stock for the exercise of certain warrants at $2.00 per share.

On March 5, 2007, the Company issued 16,667 shares of common stock for the exercise of a certain warrant at $2.00 per share.

On August 13, 2007 the Company issued 1,617,230 shares of common stock as an initial public offering at 3.50 per share.

On December 15, 2007 the Company issued 100,000 shares of stock to enter into a joint venture agreement (see Note 2-K).

On November 15, 2007 the Company issued 25,000 shares of stock to purchase meet the CEO.

 

The company has 100,000,000 common shares authorized.

 

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Notes to the Financial Statements (continued)

NOTE 5 — RELATED PARTY TRANSACTION

 

The Company’s CEO and President has advanced funds to the Company as needed. The transactions are detailed as follows:

		December 31,
		2007				2006
Balance, beginning of year		$	62,167			$	76,014
Advances received			—				—
Payments made			(62,167	)			(13,847
Balance, end of year							62,167
		$	—			$	—

   

The company leases office space from Mr. Visconti the company’s president, see Note 6.

 

Various shareholders have made loans to the company. These loans are convertible into common stock of the Company at a rate of $1.75 per share. See Note 7 for details.

 

NOTE 6 — OPERATING LEASES AND OTHER COMMITMENTS:

 

The Company leases a 1750 square foot office facility at $32,400 per year from Joseph C. Visconti CEO and President. There is no long-term lease arrangement and the company pays on a month-to-month basis. The company is currently looking for a larger space.

 

NOTE 7 — DEBT

 

The Company’s debt is detailed as follows:

 

 

		December 31,
		2007				2006
NOTES PAYABLE:
Note payable to a company 5% interest accrued, Issued 7/06, Matures 12/07		$	—			$	352,800
TOTAL NOTES PAYABLE		$	—			$	352,800
SHAREHOLDER NOTES PAYABLE:
Notes payable (2) to an individual 10%-12.5% interest accrued, Issued 9/03 & 4/04, Matures 5/04 & 12/07 (in default)		$	45,000			$	45,000
Note payable to an individual 10% interest accrued, Issued 12/03, Matures 5/09		$	9,500			$	9,500
Note payable to an individual 10% interest accrued, Issued 8/04, Matures 12/07 (in default)		$	25,000			$	25,000
Notes payable (4) to an individual 10%-15% interest accrued, Issued 10/03, 4/04, 6/04 & 5/06, Matures 12/04, 12/04, 7/05 & 5/09		$	—			$	72,842
TOTAL SHAREHOLDER NOTES PAYABLE		$	79,500			$	152,342

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Notes to the Financial Statements (continued)

 

CONVERTIBLE NOTES PAYABLE:
Note payable to an individual 6% interest accrued, Issued 9/04, convertible Matures 12/07 (in default)		$	25,000			$	25,000
Note payable to an individual 6% interest accrued, Issued 10/04, convertible Matures 12/07 (in default)		$	25,000			$	25,000
TOTAL CONVERTIBLE NOTES PAYABLE		$	50,000			$	50,000
TOTAL DEBT		$	129,500			$	555,142
Less: Current Portion Notes Payable		$	—			$	(352,800	)
Less: Current Portion Shareholder Notes Payable		$	(70,000	)		$	(70,000	)
Less: Current Portion Convertible Notes Payable		$	(50,000	)		$	(50,000	)
TOTAL LONG-TERM NOTES PAYABLE		$	9,500			$	82,342

 

Principal Payments on Long-term debt due over the next five years	Year		Amount
	2008		$	120,000
	2009		$	9,500
	Total		$	129,500

In addition to the information stated above, other material terms of the convertible debt instruments include: 1) a conversion price of $1.50 per share; 2) a debt penalty to include the issuance of additional shares upon conversion totaling 10% of the shares into which the note may convert if the Company’s shares are not listed for public trading on or before October 1, 2004; 3) a debt penalty to include the issuance of additional shares upon conversion totaling 15% of the shares into which the note may convert if the Company’s shares are not listed for public trading on or before December 31, 2004 and 4) a warrant to purchase the same number of shares into which the original principal amount could be converted at an exercise price of $2.00 per share.

BENEFICIAL CONVERSION FEATURE

 We have adopted Emerging Issues Task Force (“EITF”) Issue No. 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios,” and EITF Issue No. 00-27, “Application of EITF Issue No. 98-5 to Certain Convertible Instruments.” During 2004 and 2005 we incurred debt with a conversion feature that provides for a rate of conversion , but with no trading market value there was no beneficial conversion feature to record.

 

NOTE 8 — THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

 

Below is a listing of the most recent accounting standards SFAS 155-158. The adoption of the new standards is not expected to have a material effect on the financial statements of the Company.

 

Statement No. 155 Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 and 140 (February 2006)

 

This Statement amends FASB Statements No. 133, Accounting for Derivative Instruments and Hedging Activities, and No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.  This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets.”

 

Statement No. 156 Accounting for Servicing of Financial Assets—an amendment of FASB Statement No. 140 (March 2006)

 

This Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities.

 

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Notes to the Financial Statements (continued)

Statement No. 157 Fair Value Measurements (September 2006)

 

This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice.

 

Statement No. 158 Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R) (October 2006)

 

This Statement improves financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions.

Statement No. 159 the Fair Value Option for Financial Assets and Financial Liabilities—including an amendment of FASB Statement No. 115 (February 2007)

This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board's long-term measurement objectives for accounting for financial instruments. SFAS No. 159 is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of SFAS No. 157. The Company is in the process of evaluating the impact that the adoption of SFAS No. 159 will have on its consolidated results of operations and financial condition.

Statement No. 160 Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (December 2007)

SFAS 160 states that accounting and reporting for minority interests will be recharacterized as non-controlling interests and classified as a component of equity. The Statement also establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. FAS 160 applies to all entities that prepare consolidated financial statements, except not-for-profit organizations, but will affect only those entities that have an outstanding non-controlling interest in one or more subsidiaries or that deconsolidate a subsidiary. This statement is effective as of the beginning of an entity's first fiscal year beginning after December 15, 2008. The adoption of SFAS 160 would have an impact on the presentation and disclosure of the non-controlling interest of any wholly-owned businesses acquired in the future.

Statement No. 141r (revised December 2007), "Business Combinations"

 Replaces FASB Statement No. 141. FAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non controlling interest in the acquiree and the goodwill acquired. The Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. FAS 141R will be applicable prospectively to business combinations for which the acquisition date is on or after January 1, 2009. FAS 141R would have an impact on accounting for any business acquired after the effective date of this pronouncement.

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Notes to the Financial Statements (continued)

NOTE 9 — WARRANTS & DEFERRED FINANCING COSTS

 

The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company’s common stock issued to non-employees of the Company. These warrants were granted in connection with the convertible shareholder notes payable.

		Warrants Outstanding								Warrants Exercisable
Year		Exercise Price			Number Shares Outstanding		Weighed Average Contractual Life (Years)			Number Exercisable		Weighted Average Exercise Price
2005		$	1.95		431,339			1.28		431,339		$	1.95
2006		$	1.88		2,659,021			1.17		2,659,021		$	1.88
2007		$	2.00		2,376,494			0.37		2,376,494		$	2.00

Transactions involving the Company’s warrant issuance are summarized as follows:

		Number of Shares				Weighted Average Exercise Price
Outstanding at December 31 2006			2,659,021			$	1.88
Granted			148,812			$	1.74
Exercised			(41,668	)		$	2.00
Cancelled			(332,170	)		$	—
Outstanding at December  31, 2007			2,376,494			$	2.00

The estimated value of the warrants granted to non-employees as a financing incentive was determined using the Black-Scholes pricing model and the following assumptions:

In 2007, stock price $1.40, exercise price of $1.40, expected term of 4.0 years, a risk free interest rate of 4.51%, a dividend yield of 0% and volatility of 1% per calculations at the time of issuance. During the first quarter of 2007, the amount of the expense charged to operations for warrants granted as a finance incentive was $524, or approximately 4% of the full determined value. The full estimated value of the financing incentive related to the warrants granted in the first quarter of 2007 was $12,572. $12,048 was recorded as Deferred Financing Costs and the expense was recognized at year end.

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Notes to the Financial Statements (continued)

In 2006, stock price $1.40, exercise price $2.00, expected term of 2 years, a risk free interest rate of 4.24%, a dividend yield of 0% and volatility of 1% per calculations at the time of issuance. In 2005, stock price $.025, exercise price $2.00, expected term of 2 year, a risk free interest rate of 3.88%, a dividend yield of 0% and volatility of 0% per calculations at the time of issuance. The amount of the expense charged to operations for warrants granted as a finance incentive was $12,936 (or half of the determined value as described below) and $0 during the years ended December 31, 2006 and 2005, respectively.

On October 24th 2007, the Company issued 100,000 Options exercisable at $1.00 to expire in 36 months from date of issuance to complete a Joint Venture agreement.

The following table summarizes the changes in Options outstanding and the related prices for the shares of the Company’s common stock issued to non-employees of the Company. These options were granted in connection with a joint venture agreement See note 2K.

Outstanding at December  31, 2006	—		$	—
Granted	100,000		$	1.00
Exercised	—			—
Cancelled	—		$	—
Outstanding at December  31, 2007	100,000		$	1.00

		Options Outstanding									Options Exercisable
Year		Exercise Price			Number Shares Outstanding			Weighed Average Contractual Life (Years)			Number Exercisable			Weighted Average Exercise Price
2007		$	1.00			100,000			3.00			100,000		$	1.00

 

 

NOTE 10 - DERIVATIVES

The company signed an agreement for services to be paid in stock that must be free trading and approved of by the American Stock Exchange. Because these two conditions are not within the control of the Company, EITF 00-19 requires the Company to record the share issuance as   a derivative liability until the company has free trading shares to give, and approval by AMEX. It states in the service agreement that if the company can’t provide free trading stock it must pay $100,000 in cash. Therefore revaluation under EITF 00-19 is not necessary as there is a stated value for the net cash settlement of the derivative.

 

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ITEM 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

ITEM 8A(T).  CONTROLS AND PROCEDURES

Management’s Report on Internal Control Over Financial Reporting.

Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

§	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

§

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and

§	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on the financial statements.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations.  It is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.  It also can be circumvented by collusion or improper management override.

Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.  However, these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process certain safeguards to reduce, thought not eliminate, this risk.  Management is responsible for establishing and maintaining adequate internal control over our financial reporting.

Management has used the framework set forth in the report entitled Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting.  Based upon this assessment, management has concluded that our internal control over financial reporting was effective as of and for the year ended December 31, 2007 with the following exceptions:

§

As a part of our year end review of our disclosure controls and procedures, we determined that several of our procedures require additional documentation.  It is our belief that those control procedures are being performed, however documentation of their execution is not available.  We are implementing additional documentation procedures in order to address this weakness.

Management has concluded that other than as described above, our internal control over financial reporting was effective as of and for the year ended December 31, 2007.

 

The Company is not an “accelerated filer” for the 2006 fiscal year because it is qualified as a “small business issuer”. Hence, under current law, the internal controls certification and attestation requirements of Section 404 of the Sarbanes-Oxley act will not apply to the Company.  This Annual Report on Form 10-KSB does not include an attestation report of the Company’s registered public accounting firm regarding internal control over our financial reporting.  Management’s report was not subject to an attestation by our registered public accounting firm pursuant to the temporary rules of the Securities Exchange Commission that permit the Company to provide only management’s report in this Annual Report on Form 10-KSB.

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ITEM 8B. OTHER INFORMATION

 

Not applicable.

 

PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS; PROMOTERS; CONTROL PERSONS; AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 15(A) OF THE EXCHANGE ACT

 

Name	Age	Positions with Company
Joseph Visconti	43	President, Chief Executive Officer and Chairman
Michiaki (Mike) Tsurumi	62	Director
David Lemoie	47	Director

The background of our directors and executive officers is as follows:

Joseph Visconti . Mr. Visconti has been our President, CEO and Chairman since inception in 2003. He has extensive experience in development and management of both public and private companies. For the past 15 years Mr. Visconti has worked with senior management of public and private companies to assist in their structure, finance and related banking issues. Mr. Visconti has overseen the financing of 26 public and private companies that raised more than $250,000,000 through IPO’s, secondary offerings and private placements. From 2001 to 2003 Mr. Visconti worked as a consultant with various investment banks and public and private companies.

 

Michiaki (Mike) Tsurumi . Mr. Tsurumi has been serving as a member of the board of directors of ValueRich, Inc. since June 2006. He worked with Sony Corporation in various capacities for nearly 40 years. Mr. Tsurumi most recently headed up Sony Europe GmbH as President until his retirement in 2004. During this time he oversaw 8.4 billion euro revenue growth in just three years, and oversaw 13,000 employees. While serving as the President of Sony Broadcast Media Co. Ltd. and later as Corporate Officer in charge of Broadcast and Telecommunication Services, Mr. Tsurumi has acquired experience in portfolio management, infrastructure building for e-business, and marketing and sales experience on a global scale. Mr. Tsurumi is an Advisor Professional to Solutions Europe, a division of Sony Europe. Currently residing in Germany, Mr. Tsurumi holds a law degree from Keio University, Tokyo, Japan.

David Lemoie.  Mr. Lemoie has served as a member of the board of directors of ValueRich, Inc since March 2007.  For the past 16 years, Mr. Lemoie has practiced law concentrating his practice in the areas of complex commercial, corporate, and bankruptcy litigation, and use, and corporate transactions. Mr. Lemoie is admitted to practice and is a member of the bar in Florida, Rhode Island and Massachusetts. He is also a member of the Federal Bar in the United States District Courts for the Southern and Middle District of Florida, the District of Rhode Island, and the District of Massachusetts, and United States Bankruptcy Courts for the Southern and Middle Districts of Florida. He earned his Juris Doctor degree from Santa Clara University School of Law in 1991, where he was a member of the law school’s moot court team and the trial team. He is a 1986 graduate of the University of Rhode Island, with a Bachelor of Science degree in Civil and Environmental Engineering.

 

Directors’ Term of Office

 

Directors will hold office until the next annual meeting of shareholders and the election and qualification of their successors. Officers are elected annually by our board of directors and serve at the discretion of the board of directors.

 

Independence

 

Our board of directors has determined that Messrs. Tsurumi and Lemoie satisfy the independence standards specified in Section 121 A of the AMEX Company Guide.

 

Audit Committee

Our audit committee consists of Messrs. Tsurumi and Lemoie currently serves as our audit committee. Mr Lemoie serves as chairman of the committee and is a financial expert. The audit committee is responsible for recommending independent auditors and reviewing management actions in matters relating to audit functions. The committee reviews, with independent auditors, the scope and results of its audit engagement, the system of internal controls and procedures and reviews the effectiveness of procedures intended to prevent violations of laws.

 

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The audit committee, consistent with the Sarbanes-Oxley Act of 2002 and the rules adopted thereunder, meets with management and the auditors prior to filing of officers’ certifications with the SEC to receive information concerning, among other things, significant deficiencies in the design or operation of internal controls.

 

CODE OF ETHICS

We have recently adopted a code of ethics that applies to our principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions, which is attached hereto as an exhibit.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors, and persons who beneficially own more than 10% of our common stock to file reports of securities ownership and changes in such ownership with the Securities and Exchange Commission ("SEC"). Officers, directors and greater than 10% beneficial owners are also required by rules promulgated by the SEC to furnish us with copies of all Section 16(a) forms they file.

Based solely upon a review of the copies of such forms furnished to us, or written representations that no Form 5 filings were required, we believe that during the fiscal year ended December 31, 2007, there was compliance with all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners.

 

Directors’ Term of Office

 

Directors will hold office until the next annual meeting of shareholders and the election and qualification of their successors. Officers are elected annually by our board of directors and serve at the discretion of the board of directors.

ITEM 10.  EXECUTIVE COMPENSATION

Our directors did not receive any compensation for their services in 2007.  We expect to begin compensating our directors in 2008.

 

 

SUMMARY COMPENSATION TABLE

Name and Principal Position		Year			Salary ($)			Bonus ($)			All Other Compensation ($)			Total ($)
Joseph Visconti, Chairman, President and Chief Executive Officer			2007 2006			196,763 120,000			200,000 —			— —			396,763 120,000
Gregg W. Lowenstein, Vice President of Sales			2007 2006			120,000 75,000			— —			75,839 44,583(1	)		195,839 119,583
David A. Willson, Editor in Chief			2007 2006			67,257 57,000			— —			— —			57,000

(1)   Received by Mr. Lowenstein for sales commissions earned in connection with our expos and advertising in the Valuerich Magazine.

 

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EQUITY COMPENSATION PLAN INFORMATION

 

The following table states certain information with respect to our equity compensation plans as of December 31, 2007:

Plan category		Number of securities to be issued upon exercise of outstanding options				Weighted-average exercise price of outstanding options				Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders			0			$	-				3,000,000	*
Total			0			$					3,000,000

*   In November 2007 shareholders owning a majority of the voting shares approved an amendment to the plan which included an increase in the number of awards from 500,000 to 3,000,000. The increase became effective in 2008.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of December 31, 2007  the number and percentage of shares of our outstanding common stock which are beneficially owned, directly or indirectly, by each director, executive officer and shareholder who owns more than 5% of the outstanding shares.

 

We determine beneficial ownership based on the rules of the Securities and Exchange Commission.  In general, beneficial ownership includes shares over which a person has sole or shared voting or investment power and shares which the person has the right to acquire within 60 days.  Unless otherwise indicated, the persons listed below have sole voting and investment power over the shares beneficially owned.

 

Name and Address(1)		Amount and Nature Of Beneficial Ownership			Percentage of Class
Joseph Visconti			3,838,307		46.38%
David Willson			160,000		1.93%
Gregg Lowenstein			50,000		0.6%
All officers and directors as a group (3 people)			3,810,000		48.91%
Vision Capital Advisors LLC			464,286		5.85%
Spencer Trading			550,000		6.65%

 

 

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS; DIRECTOR INDEPENDENCE

None of our  directors nor any of our executive officers nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of our common stock, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons, has any material interest, direct or indirect, in any transaction, or series of transactions, that we have entered into since our incorporation or any proposed transaction or series of transactions worth over $120,000 per year.  However, we do lease office space form our Chief Executive Officer at $34,200 per year and during the year our Chief Executive Officer advanced $62,167 to the Company, none of which was outstanding at year end. Various shareholders have made loans convertible into common stock to the Company in prior years of which $79,500 was outstanding at year end.

 

ITEM 13.  EXHIBITS

 

(a) Financial Statements

 

1. These financial statements are set forth in Item 8.

 

2. No financial statement schedules are required.

 

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(b) Reports on Form 8-K

 

There are no Reports on Form 8-K

 

 (c) Exhibits

 

3.1 Certificate of Incorporation (1)

 

3.2 By-Laws (1)

 

10. Code of Ethics (2)

 

31.1 Certification pursuant to Rule 13a-14(a)/15d-14(a) (2)

 

32.1 Certification pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002. (2)

 

___________________________________

 

(1) Incorporated by reference to the Registrant’s Form SB-2 filed on June 21, 2006, as amended

 

(2) Filed herewith

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

During 2007, our registered public accounting firm, billed us a total of $34,000 for audit and other services as follows:

 

• Audit fees of $24,000 which consist of fees related to professional services rendered in connection with the audit of our consolidated financial statements from inception through the period ending December 31, 2007;

 

• Audit-related fees of $10,000 which consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under “Audit Fees.”

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned.

 

 

VALUERICH, INC.

 

By: /s/ Joseph Visconti                                           

Joseph C. Visconti

President and Chief Executive Officer

(Principal Executive Officer and Principal Financial Officer)

Date: April 4, 2008

 

Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: April 4, 2008		By: /s/ Joseph C. Visconti Joseph C. Visconti President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)
April 9 2008         April 9 2008		By:_________________ Michael Tsurumi Director     By: _________________ David Lemoie Director

 

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