UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2015
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From to
Commission File Number: 000-55218
TRXADE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware
46-3673928
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
1115 Gunn Hwy
Odessa, Florida 33556
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (800)-261-0281
Former name, former address and former fiscal year, if changed since last report: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No X
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes X No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
.
Accelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company)
Smaller reporting company
X .
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class
Outstanding at May 4, 2015
Common Stock, $0.00001 par value per share
31,269,160 shares
For the Quarter Ended March 31, 2015
INDEX
Page
PART I.
FINANCIAL INFORMATION
Item 1.
Financial Statements
a)
Consolidated Balance Sheets Three Months Ended March 31, 2015 (unaudited) and December 31, 2014
3
b)
Consolidated Statements of Operations for the Three Months Ended March 31, 2015 and 2014 (unaudited)
4
c)
Consolidated Statements of Cash Flows for Three Months Ended March 31, 2015 and 2014 (unaudited)
5
d)
Notes to (unaudited) Financial Statements
6
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
9
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
13
Item 4.
Controls and Procedures
PART II. OTHER INFORMATION
Legal Proceedings
14
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
SIGNATURES
15
2
PART 1: FINANCIAL INFORMATION
Item 1: Financial Statements
Trxade Group, Inc.
Consolidated Balance Sheets
March 31, 2014 and December 31, 2014
(unaudited)
March 31,
December 31,
2015
2014
Assets
Current Assets
Cash
$
335,298
705,602
Accounts Receivable
350,079
349,025
Inventory
150,964
46,429
Prepaid Assets
110,870
57,676
Other Assets
2,650
59,584
Total Current Assets
949,861
1,218,316
Property and Equipment (net)
2,602
3,802
Total Assets
952,463
1,222,118
Liabilities and Shareholders’ Equity (Deficit)
Current Liabilities
Accounts Payable
375,784
291,059
Accrued Liabilities
182,117
175,786
Other Liabilities
53,704
64,264
Deferred Income
-
22,568
Total Current Liabilities
611,605
553,677
Shareholders’ Equity
Preferred Stock, $0.00001 par value; 100,000,000 shares authorized; 0 shares issued and outstanding, as of March 31, 2015 and December 31, 2014, respectively
Common Stock, $0.00001 par value; 500,000,000 shares authorized; 31,269,160 and 31,269,160 shares issued and outstanding, as of March 31, 2015 and December 31, 2014, respectively
312
Additional Paid-in Capital
5,315,954
5,199,917
Retained Earnings (Deficit)
(4,975,408)
(4,531,788)
Total Shareholders’ Equity
340,858
668,441
Total Liabilities and Shareholders’ Equity
The accompanying notes are an integral part of the unaudited consolidated financial statements.
Consolidated Statements of Operations
Three months ended March 31, 2015 and 2014
Three Months Ended
Revenues
696,133
244,196
Cost of Sales
230,463
146,790
Gross Profit
465,670
97,406
Operating Expenses
General and Administrative
908,321
441,923
Operating Loss
(442,651)
(344,517)
Loss on Debt Conversion
576,417
Interest Expense
969
1,061
Net Loss
(443,620)
(921,995)
Basic loss per Common Share
(0.01)
(0.03)
Diluted loss per Common Share
Basic weighted average number of Common Shares outstanding
31,269,160
29,130,827
Diluted weighted average number of Common Shares outstanding
Statements of Cash Flows
Operating Activities:
Adjustments to reconcile net loss to net cash provided by Operating activities:
Depreciation
1,200
Loss from Debt Conversion
Options expense
116,037
94,497
Changes in Operating assets and Liabilities:
(1,054)
(27,641)
(53,194)
(53,570)
(104,535)
12,728
56,934
84,725
56,930
6,331
12,076
(10,560)
(22,568)
Net Cash used in operating activities
(370,304)
(249,358)
Financing Activities:
Repayments of Short Term Debt – Related Parties
(39,889)
Proceeds from Short Term Debt – Related Parties
51,000
Proceeds from issuance of Common Stock
4,250
Proceeds from issuance of Preferred Stock
260,000
Net Cash provided by financing activities
275,361
Net increase or (Decrease) in Cash
26,003
Cash at Beginning of the Year
84,317
Cash at March 31, 2015 and 2014
110,320
Supplemental Cash Flow Information
Cash Paid for Interest
Cash Paid for Income Taxes
Non –Cash Transactions
Shares issued for Related Party Debt
19,333
NOTES TO UNAUDITED FINANCIAL STATEMENTS
For the three months ended March 31, 2015 and 2014
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Trxade Group, Inc. (“Company”) owns 100% of Trxade, Inc., Westminster Pharmaceutical LLC and Pinnacle Tek, Inc. The merger of Trxade, Inc. and Trxade Group, Inc. occurred in July 2013. Pinnacle Tek was merged with Trxade Group, Inc. in July 2013. Westminster Pharmaceutical LLC was formed in January 2013.
Trxade, Inc. is a web based market platform that enables trade among healthcare buyers and sellers of pharmaceuticals, accessories and services.
Westminster Pharmaceutical LLC, provides US state licensed pharmacies and other buying groups with FDA approved pharmaceuticals as well as access to current benchmark pricing of pharmaceuticals.
Pinnacle Tek, Inc. is a technology consultant provider that supports the programming needs of parent company and also provides other information technology consulting services.
Income (loss) Per Share – Basic net loss per common share is computed by dividing net loss available to commons stockholders by the weighted average number of common shares outstanding. Diluted net loss per common share is computed similar to basic net loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilute. At March 31, 2015 and March 31, 2014 diluted net loss per share is equivalent to basic net loss per share as the inclusion of any shares committed to be issued would be anti-dilutive.
The following table sets forth the computation of basic and diluted Loss per Share:
Three-month
March 31, 2015
March 31, 2014
Numerator:
Numerator for basic EPS – income (loss) Available to common shareholders
(951,995)
Numerator for diluted EPS – income (loss) Income available to common shareholders
Denominator:
Denominator for basic EPS –Weighted average shares
Denominator for diluted EPS -Weighted-average shares and assumed Conversions
Basic loss per common share
Diluted loss per common share
The accompanying unaudited interim financial statements of Trxade Group, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10K Registration Statement.
In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended December 31, 2014 as reported in the Company’s Registration Statement on Form 10K have been omitted.
NOTE 2 - WARRANTS
For the three month period ended March 31, 2015, no warrants were issued, exercised or forfeited.
The Company’s outstanding and exercisable warrants as of March 31, 2015 are presented below:
Number
Weighted Average
Contractual
Intrinsic
Outstanding
Exercise Price
Life in Years
Value
Warrants Outstanding as of December 31, 2014
635,000
$0.69
4.15
515,500
Warrants Granted
Warrants Forfeited
Warrants Outstanding as of March 31, 2015
3.90
642,500
NOTE 3 - OPTIONS
The Company maintains a stock option plan under which certain employees are awarded option grants based on a combination of performance and tenure. The stock option plan provides for the grant of up to 2,000,000 shares. All options may be exercised for a period up to 5 years following the grant date, after which they expire. Options are vested in 4 or 5 years from the grant date.
During the three months ended March 31, 2015, 480,000 options were granted to employees. These options vest over five years and are granted with an exercise price of $1.00 and the expiration date is ten years from the grant date. The last ones expire January 2025.
During the three months ended March 31, 2015, 320,000 options were forfeited due to employee resignation. The options were not vested and the option expense reversed was $36,684.
The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant. The assumptions employed in the calculation of the fair value of share-based compensation expense were calculated as follows for all years presented:
Under the Black-Scholes option price model, fair value of the option granted during the three months ended March 31, 2015 is estimated at $759,838 at the respective issuance date.
The following table summarizes the assumptions used to estimate the fair value of stock options granted during the three months ended March 31, 2015:
Expected dividend yield
0%
Weighted-average expected volatility
200%
Weighted-average risk-free interest rate
0.48%
Expected life of options
5-8 Years
7
Total compensation cost related to stock options was $116,037 for the three months ended March 31, 2015. As of March 31, 2015, there was $309,108 of unrecognized compensation costs related to stock options, which is expected to be recognized over a weighted average period of 4.0 to 5.0 years. The following table represents stock option activity as of and for the period ended March 31, 2015:
Weighted
Number of Options
Average Exercise Price
Contractual Life in Years
Intrinsic Value
Outstanding at December 31, 2014
900,000
1.00
3.41
Exercisable at December 31, 2014
112,500
3.16
56,250
Forfeited
(320,000)
Granted
480,000
1.60
9.81
Exercised
Outstanding at March 31, 2015
1,060,000
1.15
4.71
Exercisable at March 31, 2015
200,000
3.05
140,000
NOTE 4 – SUBSEQUENT EVENTS
Convertible promissory notes were issued in the amount of $200,000 in April and May 2015. The term of the notes are one year. Simple interest is payable at the maturity date of the note. Prior to maturity the notes may be converted for common stock at a conversion price of $1.50. The holders of the notes were granted warrants at one common stock for $4.00 of the note amount, 50,000 warrants were issued at a strike price of $1.50 with an expiration date of five years from date of issuance.
8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q (“Report”), including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and the future results of the Company that are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the management of the Company. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Report, and in other reports the Company files with the Securities and Exchange Commission (“SEC”), including the Company’s Registration Statement on Form 10. The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
The following discussion is based upon our unaudited Consolidated Financial Statements included elsewhere in this report, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingencies. In the course of operating our business, we routinely make decisions as to the timing of the payment of invoices, the collection of receivables, the shipment of products, the fulfillment of orders, the purchase of supplies, and the building of inventory, among other matters. Each of these decisions has some impact on the financial results for any given period. In making these decisions, we consider various factors including contractual obligations, customer satisfaction, competition, internal and external financial targets and expectations, and financial planning objectives. On an on-going basis, we evaluate our estimates, including those related to sales returns, pricing credits, warranty costs, allowance for doubtful accounts, impairment of long-term assets, especially goodwill and intangible assets, contract manufacturer exposures for carrying and obsolete material charges, assumptions used in the valuation of stock-based compensation, and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Company Overview
We have designed, developed, and now own and operate business-to-business web based marketplace focused on the US pharmaceutical industry. Our core service brings the nation’s independent pharmacies and accredited national suppliers of pharmaceuticals together to provide efficient and transparent buying and selling opportunities.
We began operations under Trxade Nevada in August of 2010 and spent over two years creating and enhancing our web-based services. Our services provide enhanced pricing transparency, purchasing capabilities and other value added services on a single platform to focus on serving the nation’s approximately 24,000 independent pharmacies with an annual purchasing power of $96 billion. Our national supplier partners are able to fulfill orders on our platform immediately and provide the pharmacy with cost saving payment terms and next day delivery capabilities in unrestrictive states under the Model State Pharmacy Act and Model Rules of the National Association of Boards of Pharmacy (Model Act). Important additions to this platform further include the generation of pharmacy to pharmacy trading capabilities to help independents with their overstocked inventories in a more organized manner. We expanded rapidly in 2013 and broke the 1,000 member pharmacy mark that year.
In December 2013 we launched a second service to help the pharmaceutical distributor better source their pharmaceutical needs within a highly structured single platform. This solution is designed to help purchasers overcome pharmaceutical supply issues related to drug shortages, as a means to control costs on drugs with volatile pricing and to help buyers make better purchasing choices based on their needs. Planned enhancements will expand this offering to manufactures and hospitals alike.
Additionally, we built and, in February 2014, launched, a new desktop application, named RxGuru, to bring product information on a just in time basis to our member base. Our pharmacy members should benefit immensely from this application by gaining advanced data analytics at point of purchase and patient care.
Other related developments include the creation of a Delaware registered supply arm in April 2013 to take advantage of certain supply disruptions for specialty and other niche pharmaceuticals and operates via a third party logistics warehouse. Our Information Technology consultancy division located in Tampa, Florida, focuses on staffing and healthcare data analytics research in areas of product pricing, drug shortages and governmental pharmaceutical reimbursement benchmark monitoring.
Company Organization
Westminster Pharmaceutical LLC, provides US state licensed pharmacies and other buying groups with FDA approved pharmaceuticals.
Pinnacle Tek, Inc. is a technology consultant provider that supports the programming needs of parent company, analyzes current benchmark pricing of pharmaceuticals and provides other information technology consulting services to third parties.
Liquidity and Capital Resources
Liquidity Outlook
Cash Requirements
Our primary objectives for the remainder of 2015 are to continue the development of the Trxade Platform, and increase our client base. In addition, we expect to pursue raising capital to fund our operations and provide personnel to expand operations and required working capital.
We estimate our operating expenses and working capital requirements for the next 12 months to be approximately as follows:
Expense
Amount
Cost of Sales(1)
750,000
General and administrative(2)
2,050,000
Total
2,800,000
(1)
Includes the cost of drugs for Westminster Pharmaceuticals as consulting expenses for Pinnacle Tek.
(2)
Includes wages and payroll, legal and accounting, marketing, rent and web development.
As of March 31, 2015, we had cash and cash equivalents of approximately $335,298 and other current assets of $614,563. Additional funds will be needed to continue to expand our platform and customer base, and cover general and administrative expense.
Since inception, we have funded our operations primarily through equity capital raises and operational revenue. We expect to continue to do so in the future although no assurance can be given that we will be able to obtain financing on reasonable terms or revenues will continue. If we obtain additional financing by issuing equity securities, our existing stockholders’ ownership will be diluted. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. We may be unable to maintain operations at a level sufficient for investors to obtain a return on their investments in our common stock. Further, we may continue to be unprofitable.
We will need significantly more cash to implement our plan to operate a business-to-business web based marketplace focused on the US pharmaceutical industry. Our core service brings the nation’s independent pharmacies and accredited national suppliers of pharmaceuticals together to provide efficient and transparent buying and selling opportunities.
10
Cash Flows
The following table summarizes our Consolidated Statement of Cash Flows for the three months ended March 31, 2015 and 2014:
Net cash provided by (used in):
Operating activities
Financing activities
Net increase (decrease) in cash and cash equivalents
Cash used in operating activities for the three months ended March 31, 2015 was $370,304. This is an increase of $120,946 from same period in 2014 and was due to increased staffing as the Company transitioned to its operational phase, continuing IT development of the Company’s web platform, professional fees and inventory purchases.
Historical Liquidity and Capital Resources
Working Capital
Our working capital as of March 31, 2015 and December 31, 2014 is summarized as follows:
At March 31,
At December 31, 2014
Current assets
553,667
338,256
664,639
The decrease in our current assets was primarily due to a $370,304 decrease in cash. Inventory and prepaid assets increased by $104,535 and $ 53,194 respectfully.
Current liabilities increase is primarily due to an increase in accounts payable by $84,725.
Results of Operations
Three Months Ended March 31, 2015 Compared To Three Months Ended March 31, 2014
Three months ending
($)
Operating expenses:
792,284
347,426
Warrants and Options Expense
Total Operating Expenses
Loss from operations
Loss on debt conversion
(576,417)
(969)
(1,061)
Net loss
11
Revenues increased for the three months ended March 31, 2015 to $696,133 compared to $244,196 for the comparable period in 2014. This increase was primarily attributable to fee income from our web-based platform. Our sales department has continued to add customers in 2015 through direct marketing and customer training.
Cost of sales increased for the three months ended March 31, 2015 to $230,463 compared to $146,790 for the comparable period in 2014. This increase was primarily attributable to an increase in revenue from the pharmaceutical sales which has higher cost of sales than our other revenue sources.
General and administrative expenses increased for the three months ended March 31, 2015 to $792,284 compared to $347,426 for the comparable period in 2014. A large component of general and administrative expenses in 2015 was affected by an increase in employee cash compensation expense in the 2015 period due to increased staffing as we reached our operational phase and our payroll expense was $443,444.
Warrant and options expense in the 2015 and 2014 periods represents compensation cost related to the issuance of employee stock options.
In February 2014, the Xcellink loan of $19,333 was converted to 600,000 shares of common stock along with $4,250 of proceeds. The shares were valued at the market price on the respective date of the transaction and the fair value of the shares was determined to be $600,000 and $576,417 was recorded as loss on conversion of debt during the three months ended March 31, 2014.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of net sales and expenses for each period. The following represents a summary of our critical accounting policies, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.
Revenue Recognition
In general the Company accounts for revenue recognition in accordance with ASC 605, “Revenue Recognition”.
Trxade, Inc. generates net fee income as a percentage of the total transactions between the buyer (independent pharmacies) and the seller (wholesaler) of pharmaceutical drugs on the Trxade web-based platform. Revenue is recognized when (1) the price is fixed and determined as the buyer orders the drugs from the wholesaler. (2) The wholesaler has signed a contract with Trxade, Inc. which recognizes that an arrangement exists. (3) The wholesaler delivers the drugs purchased to the buyer, products are delivered. (4) The collectability is reasonably assured by the wholesaler through prior credit checks and payment experience.
Pinnacle Tek, Inc. generates gross revenues from IT Consulting and Job Placement. Revenue is recognized (1) with the execution of a contract for the price and scope of services. (2) The contract also provides persuasive evidence of an existing arrangement. (3) The IT Consulting services are performed and invoiced monthly and the job placement is invoiced at the hiring of the applicant, delivery of services. (4) The collectability of the resulting receivable is determined by credit checks prior to the performance of services and payment experience with the client.
Westminster Pharmaceutical LLC generates gross revenues from the sale of pharmaceutical drugs to independent pharmacies or wholesalers. The revenue recognized when (1) the price is fixed and determinable at the time of the transaction with an invoice. (2) The invoice is also persuasive evidence that an arrangement exists. (3) The products are delivered to the buyer. (4) The collectability of the resulting receivable is reasonably assured by credit check prior to the transaction and experience with the customer.
12
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with the provision of ASC 505, “Equity Based Payments to Non-Employees” (“ASC 505”), Share Based Payments to Non-Employees, and ASC 505 which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying instruments vest.
The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation-Stock Compensation”. ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the grant date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information not required for smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this quarterly report on Form 10-Q, our principal executive officer and our principal accounting officer (the “Certifying Officers”), evaluated the effectiveness of our disclosure controls and procedures. Disclosure controls and procedures are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (the “Exchange Act”), such as this quarterly report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures are also designed to reasonably assure that such information is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure. Based on these evaluations, the Certifying Officers have concluded, that, as of the end of the period covered by this quarterly report on Form 10-Q:
(a)
our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and
(b)
our disclosure controls and procedures were not effective to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Exchange Act was accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There has not been any change in our internal control over financial reporting that occurred during the three months ended March 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
In addition to other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Form 10 which could materially affect our business, financial position and results of operations. Risk factors which could cause actual results to differ materially from those suggested by forward-looking statements include but are not limited to those discussed or identified in this document, in our public filings with the SEC, and those included in Part I, Item 1A. “Risk Factors” in our Form 10.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. MINE SAFETY DISCLOSURES
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS
Exhibit No.
Description
31.A
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.B
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.A
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.B
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101
XBRL
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
By:
/s/ SUREN AJJARAPU
Suren Ajjarapu
Chief Executive Officer
Date: May 4, 2015
/s/ HOWARD DOSS
Howard Doss
Chief Financial Officer