UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g)
OF THE SECURITIES EXCHANGE ACT OF 1934
THEDIRECTORY.COM, INC.
(Exact name of registrant as specified
in its charter)
| |
| |
|
|
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Utah
(State or other jurisdiction of incorporation
or organization) |
|
33-0052057
(I.R.S. Employer Identification No.) |
|
15100 Hutchison Rd., Suite 125
Tampa, Florida
(Address of principal executive offices) |
|
33625
(Zip Code) |
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(727) 417-7807 |
|
(Registrant’s telephone Number,
including area code)
Securities registered pursuant to Section 12(b) of the
Act: None |
| |
|
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| Securities registered pursuant to Section 12(g) of the Act: |
| Common Stock, par value $0.001 per share |
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 “small reporting company” in Rule 12b-2
of the Exchange Act.
| Large accelerated filer o |
Accelerated filer o |
Non-accelerated filer o |
Smaller reporting company o |
The registrant is as an “emerging
growth company” under the provisions of the Jumpstart our Business Startups Act. For implications of our status
as an “emerging growth company,” please see “Jumpstart our Business Startups Act” preceding Item 1, “Risk
Factors” in Item 1A and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
in Item 2 of this registration statement.
INFORMATION
REQUIRED IN REGISTRATION STATEMENT
This
registration statement contains forward-looking statements as defined under the federal securities laws. All statements other
than statements of historical facts included in this registration statement regarding our financial performance, business strategy
and plans and objectives of management for future operations and any other future events are forward-looking statements and based
on our beliefs and assumptions. Words such as “may,” “will,” “expect,” “might,”
“believe,” “anticipate,” “intend,” “could,” “estimate,” “project,”
“plan,” and other similar words are one way to identify such forward-looking statements. Actual results could vary
materially from these forward-looking statements. Such statements reflect our current view with respect to future events and are
subject to certain risks, uncertainties, and assumptions including, without limitation, those risks and uncertainties contained
in the Risk Factors section of this registration statement. Although we believe that our expectations are reasonable, we can give
no assurance that such expectations will prove to be correct. Based upon changing conditions, any one or more of these events
described herein as anticipated, believed, estimated, expected or intended may not occur. All prior and subsequent written and
oral forward-looking statements attributable to our Company or persons acting on our behalf are expressly qualified in their entirety
by this cautionary statement. We do not intend to update any of the forward-looking statements after the date of this registration
statement to conform these statements to actual results or to changes in our expectations, except as required by law.
TABLE
OF CONTENTS
| |
|
Page
No. |
| Item
1. |
Business |
1 |
| Item
1A. |
Risk
Factors |
7 |
| Item
2. |
Financial
Information |
16 |
| Item
3. |
Properties |
18 |
| Item
4. |
Security
Ownership of Certain Beneficial Owners and Management |
18 |
| Item
5. |
Directors
and Executive Officers |
19 |
| Item
6. |
Executive
Compensation |
20 |
| Item
7. |
Certain
Relationships and Related Transactions, and Director Independence |
21 |
| Item
8. |
Legal
Proceedings |
21 |
| Item
9. |
Market
Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters |
21 |
| Item
10. |
Recent
Sales of Unregistered Securities |
22 |
| Item
11. |
Description
of Registrant’s Securities to be Registered |
23 |
| Item
12. |
Indemnification
of Directors and Officers |
23 |
| Item
13. |
Financial
Statements and Supplementary Data |
24 |
| Item
14. |
Changes
in and Disagreements with Accountants on Accounting and Financial Disclosure |
25 |
| Item
15. |
Financial
Statements and Exhibits |
25 |
JUMPSTART
OUR BUSINESS STARTUPS ACT
We
qualify as an “emerging growth company” under the provisions of the Jumpstart Our Business Startups Act (“JOBS
Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of November 30,
2013, the last day of our most recent fiscal year. We are electing to use the extended transition period for complying with new
or revised accounting standards under Section 102(b)(1) of the JOBS Act.
As
an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting requirements that are
applicable to other public companies that are not emerging growth companies, including, but not limited to
| • | | not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act; |
| • | | reduced disclosure obligations
regarding executive compensation in our periodic and annual reports; |
| • | | not being required to comply
with certain new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB; and |
| • | | exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and golden parachutes. |
We
intend to take advantage of the reduced obligations. Additionally, we also qualify as a “smaller reporting company”
and also have the advantage of not being required to provide the same level of disclosure as larger public companies.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can elect to delay the adoption of certain accounting standards until those standards would otherwise apply
to private companies. We are electing to delay such adoption of new or revised accounting standards, and as a result, we may not
comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging
growth companies. As a result of such election, our financial statements may not be comparable to the financial statements of
other public companies. We cannot predict whether investors will find our common stock less attractive because we will rely on
these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market
for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are
no longer an “emerging growth company.
We
can remain an emerging growth company for up to five years, or until the earliest of:
| • | | the last day of the first fiscal
year during which we have total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years
by the Securities and Exchange Commission to reflect the change in the Consumer Price Index for All Urban Consumers published
by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more; |
| • | | the last day of our fiscal
year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective IPO registration
statement filed under the Securities Act; |
| • | | the date on which we have issued
more than $1,000,000,000 in non-convertible debt during the previous three years; or |
| • | | the date on which we are deemed
to be a “large accelerated filer” under the rules of the Securities and Exchange Commission. |
Item
1. Business.
Corporate
Information
We
incorporated under the laws of the State of Utah in June 1983 as Teal Eye, Inc. Subsequently, in 1984, we merged with Terzon Corporation
and changed our corporate name to Terzon Corporation. In September 1984, we changed our name to Candy Stripers Candy Corporation,
Inc. and engaged in the business of manufacturing and selling candy and gift items to hospital gift shops across the country.
In 1986, we ceased the candy manufacturing operations and filed for Chapter 11 bankruptcy protection. After emerging from bankruptcy
in 1993, we remained dormant until we changed our name to Piedmont, Inc. on January 6, 1998. On May 31, 2003, we changed our name
to US Biodefense, Inc.
On
August 7, 2006, we completed the acquisition of Emergency Disaster Systems, Inc., a California corporation. Emergency Disaster
Systems was engaged in the business of disaster mitigation and emergency preparedness. We purchased a 100% interest in Emergency
Disaster Systems for $25,000 in cash. On September 24, 2007, we distributed all of the shares of Emergency Disaster Systems stock
to our shareholders on a pro rata basis and thus exited that business.
Effective
January 10, 2008, we experienced a change in control as the result of a series of transactions. Effective on that date, we executed
an employment agreement with Scott Gallagher, pursuant to which he was appointed our Chief Executive Officer and Chairman of our
Board of Directors, positions which he still holds today. Simultaneously, the former Chairman, David Chin, resigned as an officer
and director of our Company leaving Mr. Gallagher as our sole director. As a result of these transactions, Mr. Gallagher assumed
control of our Company.
On
April 4, 2008, we acquired 100% of the assets of Elysium Internet, Inc., a direct navigation Internet media company, in exchange
for stock and a $1,500,000 promissory note to FTS Group, Inc. In 2008, we filed an Amended and Restated Articles of Incorporation,
and effective July 28, 2008, changed our name to Elysium Internet, Inc. Our Chairman and Chief Executive Officer, Mr. Gallagher,
also served as the chairman and chief executive officer of FTS Group, Inc. In May 2011, we changed our name to TheDirectory.com,
Inc., which we believe more accurately reflects our current business operations.
Our
principal executive offices are located at 15100 Hutchison Rd., Suite 125, Tampa, Florida 33625, and our telephone number is (727)
417-7807. Our fiscal year end is November 30. Our website is www.TheDirectory.com. We do not intend for information on our website,
or other websites notated in this registration statement, to be incorporated into this registration statement.
Our
Business
We
are an online local search and directory company. We own and operate a network of online local business directories and city guides,
which provide business listings, directory information, and user generated reviews to consumers who are searching online for services
from local businesses.
Consumers
can access any website in our network and receive free local search results, generated according to the consumer’s search
queries, which can include geographic area, zip code, and city name, for listings of business professionals, providers and contractors
in the consumer’s respective community. Our search results consist primarily of local business listings that we aggregate,
index and distribute over our network using our sophisticated technology platform. We generate revenue from subscriptions paid
by our subscribers to list on our city guides or directories, and from third party ads placed alongside our search results, which
include pay-per-click, pay-per-call, and display (banner) ad units. We also receive revenue from ad products and certain advertising
and identity management services rendered for small- and medium-sized businesses, or SMBs.
Our
goal is to help SMBs reach local customers through our platform of comprehensive business profiles and listings, which we call
“The Directory.” We use search technology, optimization and innovative site features to connect consumers with the
most relevant local business professionals, providers and contractors in their respective geographic area. We provide direct 365/24/7
access, free of charge for consumers, to certain local business information in the form of business profiles and listings, and
our content is provided by our paid subscribers. Our flagship website and primary local business search engine is www.TheDirectory.com.
Our network of directories and city guides generate approximately 6 million unique visitors each month, and we believe TheDirectory.com
has the ability to become a leading brand in the local business search space. It is our goal that the website’s descriptive
name, “The Directory,” and the extensive reach of our network of vertical directories become synonymous as a network
for consumers to find information on local businesses.
We
also operate several targeted vertical directories and city guides, including, among others:
| • | | www.PodiatristProfiles.com |
| • | | www.DentistAppointments.com |
| • | | www.HelloNewYorkCity.com |
Each
website is intended to serve as a source of targeted local business information for their respective industry. We believe that
by owning and operating these important domain names, we control websites which can become a targeted Internet destination and
widely used alternative to find local businesses on the Internet due to their descriptive, memorable Internet domain name.
We
launched TheDirectory.com in November 2010. In October 2013, we acquired one of the largest online city guide networks in the
world, Hyper-Local(TM) City Guide Network. This network of more than 1,500 city guides reaches over 6 million unique visitors
per month. The city guides are branded under the www.HelloNetwork.com brand. We now own and operate a ‘Hello’ branded
city guide site for every major market in the United States, including New York City, Los Angeles, Chicago, and several international
markets including Paris, Dublin, Tokyo, Sydney and Toronto. We generate revenue from business listings and advertisements placed
on the Hyper-Local(TM) City Guide Network, similar to TheDirectory.com.
Industry
Overview
The
Local Search Market
According
to a report by BIA/Kelsey, an independent market researcher and trusted advisor to media and technology companies, U.S. Online/Interactive/Digital
advertising revenue is expected to increase from $21.2 billion in 2011 to $38.1 billion by 2016. Digital media is defined as advertising
delivered to consumers through mobile, Internet or other electronic methods, and continues to gain traction with local advertisers.
Our Company specializes in “local search,” which is defined as searches for products, services and businesses within
a geographic region and has become an increasingly significant segment of the online advertising industry. Local search allows
consumers to search for local businesses’ products or services by including geographic area, zip code, city and other geographically
targeted search parameters in their search requests, such as by entering “podiatrist” in “Tampa, Florida”
in the search field. The BIA/Kelsey report further stated that, local search will grow faster than the overall search market from
$5.7 billion in 2011 to $10.2 billion in 2016 for a compound annual growth rate of 12.1%.
Why
Local Search Matters
Consumers
who conduct local searches on the Internet (“local searchers”) tend to convert into buying customers at a higher rate
than other types of Internet users. As a result, advertisers often pay a significant premium to place their ads in front of local
searchers on websites like www.TheDirectory.com or our vertical directories like www.Chiropractor.net. Additionally, SMBs that would not
normally compete at the national level for advertising opportunities are increasingly engaging in and competing for local advertising
opportunities, including local search and mobile search, to promote their products and services.
The
Local SMB Advertising Market
Small-
and medium-sized businesses, or SMBs, serving local markets represent significant economic activity, control substantial purchasing
power and address the needs of hundreds of millions of consumers. These SMBs include businesses and professionals such as lawyers,
physicians, car dealers, dentists, plumbers, florists, and therapists. To generate and sustain their businesses, SMBs spend money
to market their services and to acquire, maintain and retain customers, and the associated expenditures are critical components
of the operating budget for many SMBs, particularly given the potential value of each customer over the lifetime of the relationship.
For example, a new dental patient may generate several hundred dollars in revenue during the customer’s first visit, thousands
of dollars in subsequent visits and make referrals to friends and family that generate significant additional revenue. In addition
to their customer acquisition efforts, increasingly SMBs are looking for platforms that enable them to transact with their customers
online. These efforts to manage the entire customer experience online—from lead generation to transaction execution to overall
customer management—are key to the success of SMBs.
Over
the past decade, the local advertising market for SMBs and other local businesses has undergone rapid and fundamental changes.
The delivery and consumption of local advertising, like all media, is becoming increasingly fragmented and digitized. Many consumers
who used to search for a local business in the Yellow Pages or the local newspaper are now going online and searching on Google,
checking reviews on Yelp and Citysearch, buying coupons on Groupon and LivingSocial, and asking their friends for their opinions
through Facebook and Twitter. We aim to address the unique needs of the SMB and re-create the simplicity and effectiveness with
which SMBs have traditionally purchased offline advertising as they transition into online and digital media advertising. Ultimately,
our goal is to drive traffic to our subscribers’ websites and gain exposure for SMBs that they would not have been able
to have on their own.
Our
Strategy
We
believe that we are in the early stages of a large and long-term business opportunity presented by the shift of local and national
marketing budgets away from traditional media outlets including the Yellow Pages, newspapers and radio to Internet and digital
media formats. Our strategy for pursuing this opportunity includes the following key components:
| • | | Increase growth drivers
to TheDirectory.com. We are focused on the expansion of both our consumer outreach, the number of consumers who use our network
of directories and city guides, and the monetization of that reach, how much ad revenue we generate from those users. We also
aim to increase the number of SMB customers listing on TheDirectory.com network. |
| • | | Optimize monetization of
our network. As an ongoing initiative, we continuously look to optimize our ability to monetize the traffic reaching our websites. |
| • | | Consolidate and integrate
the highly fragmented local search space. Other than the major search engines like Google, Inc., Yahoo, Inc., and Microsoft
Corporation’s Bing, the local search space remains highly fragmented with no clear market leader. Over the coming years
as our Company and our capabilities grow, we plan to consolidate key websites into selected vertical directories under our brand
TheDirectory.com to create, what we believe, will be the leading local search destination in the United States. |
Our
Business Model
We
currently operate TheDirectory.com under a “Build, Buy or Partner” business model. We believe focusing our management’s
attention on forming strategic partnerships and acquisitions will allow us to create a profitable, sustainable enterprise over
both the short and long term. The “partner” pillar of our business model allows us the flexibility to partner with
industry leading technology companies and integrate their best in class products and services into our core local business offerings
without incurring the significant development expenses and uncertainty associated with creating new products. By partnering with
companies and not attempting to build our own products in certain instances, we gain a certain level of flexibility to diversify
our product offering as technology and techniques change. Going forward, we expect to grow our business by making strategic acquisitions
and opportunistically acquiring and building new online destinations in key vertical categories.
Principal
Products and Services
Our
business revolves around two key initiatives: building out our local search platform known as TheDirectory.com, of which we have
several member directories including our recent acquisition of the Hyper-Local(TM) City Guide Network, and assisting SMBs acquire,
maintain and retain customers using technology and the Internet.
Local
Search Platform
Our
Company is focused on building Internet destinations where consumers can obtain targeted information about local businesses. We
developed our local search platform, TheDirectory.com, as a network that focuses on connecting local businesses with local customers
via a custom built user interface that promotes enhanced user actions and engagements. We contract with SMBs to provide their
business listing information content on our network. The terms of such agreements vary from subscriber to subscriber based on
the services we provide, but the duration of almost all of our agreements is month to month with an option for renewal. We build
a professional, detailed business profile for each of our subscribers and market to consumers in the subscriber’s local
area. On our network of directories and city guides, consumers can locate relevant search results for local businesses, products
and services which translates into new customers for our subscribers. In areas or categories that we do not have direct subscribers,
we distribute and monetize listing information supplied from our partners.
Through
our local search platform, TheDirectory.com, we are able to provide SMBs with complete transparency and measurability of the results
of our advertising and promotion efforts via a set of performance reports they can access from our subscriber portal. These reports
provide our subscribers with detailed data including: statistics that show the traffic we drive to the subscriber’s website
and social media content; recordings of all calls to the subscriber’s telephone line linked to our directory and the return
phone number for the consumer; certain data submitted into forms on the subscriber’s website or directory listing; and fully
integrated management of their social media pages and reviews sites like Facebook and Yelp.
We
provide some of this data to our clients through partnerships and business relationships we have with industry leading technology
companies such as Yext, Duda Mobile, Google and others. We partner with a variety of third party vendors who allow us the capability
of providing specific functionality within our local search platform to further track consumers’ visits, including call
tracking and recording services. We believe by partnering with third party vendors, the “partner” aspect of our platform,
that we have a critical advantage within the fast paced Internet advertising space. By partnering with top technology firms to
provide certain functionality instead of building out our own proprietary software products, we gain a level of flexibility related
to these integrated products that other companies using proprietary products do not have. Additionally, we eliminate the massive
cost and uncertainties typically associated with many development programs.
Small
Business Online Advertising
Our
other primary initiative, which is also linked to our local search platform, is to help local SMBs acquire, maintain and retain
customers using technology and the Internet. We aim to drive traffic to our subscribers’ websites using such techniques
as search engine optimization, social media, and customer-driven marketing.
In
addition to the design, development and deployment of our subscribers’ business listings and profiles on our local search
directories, we provide our customers with an array of services designed to promote, control and enhance their corporate identity
and brand management. We specialize in providing a comprehensive suite of online marketing and branding solutions, including search
engine marketing, display advertising, Web presence, and online media and social networking products that allow our SMB clients
to control and increase their online exposure and identity over websites that cover over 95% of all U.S.-based Internet traffic,
including Google, Yahoo!, Bing, Facebook and Twitter. We design, develop and deploy custom-built search engine optimized business
websites for our subscribers and helped to manage the site content and site design. We can also design online pay-per-click campaigns
for our subscribers, based upon our access to expertise in the area of analyzing and creating relevant keyword and content driven
search engine optimized ad campaigns. Utilizing our expertise in the areas of search engine optimization and search engine marketing
services, which can be a confusing and complicating space, we can typically drive improved results while saving our subscribers
money.
We
also assist in the management of our subscribers’ online identity, Internet presence and brand by utilizing a mix of proprietary
techniques and third party software products to scan, claim and repair business listings and reviews on hundreds of websites across
the Internet that collectively account for more than 95% of all US-based Internet traffic.
Strategic
Partnerships
We
make our services available to advertisers and consumers through a combination of our own proprietary technology and commercially
available technology from industry leading providers. We believe that it is important that our technologies be compatible with
the systems used by our partners. We rely upon third parties to provide hosting services, including hardware support and service
and network coordination.
We
also partner with third party vendors who offer software products that provide specific functionality within our local search
platform to further track consumers’ visits. Such partnerships include:
| • | | Duda Mobile, a company that
focuses on creating mobile optimized websites and mobile marketing products. We have integrated Duda Mobile’s mobile website
product into our core service offering to increase our clients’ mobile web presence. |
| • | | Yext, a market-leading location
software company that lets businesses update and sync their location data on multiple websites from one place. We offer our clients
access to this product to manage their local business listings across the Yext network, which includes such websites that as Facebook
and Yelp. |
| • | | Google, the largest Internet
search engine. Since Google has for many years controlled the majority of all Internet search, we utilize the Google AdWords,
a site-targeted advertising product, as a primary source of traffic acquisition and advertising for our subscribers’ websites
as well as our network of Internet directories and city guides. Using the AdWords control panel, we enter keywords, domain names,
topics, and demographic targeting preferences (“AdWords”) related to our subscribers and advertisements, and Google
then places ads which contain the AdWords on what it determines, based upon its own algorithms, are “relevant” sites
within its content network. If domain names are targeted, Google also provides a list of related sites for placement. We may bid
on a cost-per-impression (CPM) or cost-per-click (CPC) basis for site targeting. We believe our partnership with Google allows
to increase the traffic both to our subscribers’ websites and to our own network of directories and city guides. |
We
intend to continue to seek out strategic partnerships where we believe the partnership will aid us in our initiative to increase
Internet presence and traffic to our network of directories and city guides, and to the websites and social media content of our
SMB subscribers.
Competition
The
market for local online advertising solutions is intensely competitive and rapidly changing, and with the introduction of new
technologies and market entrants, we expect competition to intensify in the future. Many of our current and potential competitors
enjoy substantial competitive advantages, such as greater name recognition, longer operating histories and larger marketing budgets,
as well as substantially greater financial, technical and other resources. In addition, many of our current and potential competitors
have established marketing relationships and access to larger customer bases.
Our
competitors include:
| • | | Internet Marketing Providers.
Our main, direct competitors include national Internet marketing companies such as Reach Local, Inc. and Yodle, Inc., smaller
Internet marketing companies located in local markets around the United States, and online directories and city guides, such as
Yellowpages.com. Our other competitors, to a lesser degree, include the major search engines, Google, Inc. (“Google”),
Yahoo!, Inc. (“Yahoo”), and Microsoft Corporation’s (“Microsoft”) Bing (“Bing”), however,
we do not compete on the same scale as those search engines or for the same target audience. Certain of these providers offer
their products and services to SMBs through online-only, self-service platforms which can be appealing to certain SMBs. We, however,
believe there is a significant number of SMBs, which are generally disinclined to purchase online advertising via self-service
platforms, and we provide a valuable service by connecting these large Internet marketing providers with SMBs. We believe that
SMBs will continue to enter into the local advertising market, especially in terms of local search, and we are able to provide
product offerings that appeal specifically to these types of clients and their unique needs. Although we currently pursue a strategy
that allows us to partner with a broad range of websites and search engines, our current and future partners may view us as a
threat to their own local advertising services. We believe that the principal competitive factors in our local advertising market
are network size, revenue sharing agreements, services, convenience, accessibility, customer service, quality of tools, quality
of editorial review and reliability and speed of fulfillment of advertising needs and requirements across the Internet infrastructure. |
| • | | Traditional, Offline Media
Companies. We also compete with other online advertising services as well as traditional offline media such as television,
radio and print, for a share of businesses’ total advertising budgets. We compete with these companies on the basis of the
strength and breadth of our technology platform and product offering and our focus exclusively on Internet advertising. Many of
our competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial,
marketing and other resources than we do. Our competitors may secure more favorable revenue sharing agreements, devote greater
resources to marketing and promotional campaigns, adopt more aggressive growth strategies and devote substantially more resources
than we can. |
| • | | Other SMB Marketing Providers.
We also compete with technology companies providing online marketing platforms focused on the SMB market such as Angie’s
List and Yelp, as well as newer market entrants, such as Groupon and LivingSocial, which are actively focused on new forms of
online marketing solutions for SMBs and in some cases building significant direct sales forces. |
The
local online search market is still relatively new, and as a result, it is difficult to determine our current market share,
or predict our future market share. However, we have a number of competitors with greater experience and resources than we
have, including Google, Yahoo and Microsoft, among many others, that have announced an intention to increase their focus on
local search with regard to U.S. online advertising.
Additionally,
larger companies may implement technologies into their search engines or software that make it less likely that consumers will
reach, or execute searches on, TheDirectory.com and less likely to access our subscribers’ sponsored listings. If we are
unable to successfully compete against current and future competitors, our operating results will be adversely affected.
Sales
and Marketing
We
currently have a small in-house sales force consisting of two employees, and continue to rely on contracted commissioned
independant sales professionals to assist in the sales of our products and services.
We
primarily advertise our products and services on other search engine websites, such as google.com and yahoo.com, by bidding on
certain keywords which we believe will drive consumers to TheDirectory.com website. During the year ended November 30, 2013, approximately
55% of the traffic on TheDirectory.com website and our network of vertical directories was acquired through Search Engine Marketing
(SEM) campaigns on Google. The remaining traffic was generated organically via search engine optimization. During the year ended
November 30, 2013, advertising costs to drive consumers to TheDirectory.com network of websites was $213,258. We are dependent
on the advertising we do with other search engines, especially Google and Yahoo, to drive consumers to TheDirectory.com website
in order to generate revenue from consumer searches and other actions they may undertake while at TheDirectory.com. If we were
unable to advertise on Google or Yahoo, or the cost to advertise on these websites increases, our financial results will suffer.
While our strategy is to grow our organic traffic through repeat usage, better content, and increased search engine optimization
efforts, we cannot guarantee that these efforts will be successful or that we will not remain dependent on advertising with other
search engines to secure the large majority of consumers who visit TheDirectory.com.
We
also receive referrals from existing clients, participate in tradeshows, and sent out targeted email campaigns to potential and
past clients.
Significant
Customers
We
primarily sell our products and services to SMBs, advertisers focused on the local market, agencies and resellers. During the
year ended November 30, 2013, one customer represented 15.3% respectively, of our net revenues. During the year ended November
30, 2012, no single customer represents more than 10% of our net revenues.
Research
and Development
Our
research and development efforts are focused on developing new services and enhancing our existing services to provide additional
features and functionality that we believe will appeal to our subscribers and consumers. Namely, we have incurred significant
expenses in redesigning the user interface of www.TheDirectory.com. During the years ended
November 30, 2013 and 2012, our research and development expenses were $10,763 and $25,685, respectively. None of these expenses
were borne by our customers.
Intellectual
Property
Our
success and ability to compete in the local search market sector is dependent in part on our ability to develop and maintain
the proprietary aspects of our technology and operate without infringing upon the proprietary rights of others. We rely primarily
on a combination of copyright, trade secret and trademark laws, confidentiality procedures, contractual provisions and other similar
measures to protect our proprietary technology and information.
On
an ongoing basis, we consider trademark registration for some of our product names, slogans and logos in the United States. Our
registered U.S. trademarks include: “TheDirectory.com” and “Hyper Local.” We may claim trademark rights
in and apply for registrations in the United States for a number of other marks.
As
a local search company, Internet domain names for our websites are crucial to the success of our business. We own over 2,000 domain
names, including:
| • | | www.PodiatristProfiles.com |
| • | | www.HelloNewYorkCity.com |
The
information on, or accessible through, these websites does not constitute part of, and is not incorporated into, this registration
statement.
Government
Regulation
We
are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet. Existing
and future laws and regulations may impede the growth of the Internet or other online services. These regulations and laws may
cover taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other
communications, consumer protection, broadband residential Internet access and the characteristics and quality of services. It
is not clear or consistent how existing laws governing issues such as property ownership, sales and other taxes, libel and personal
privacy apply to the Internet. Unfavorable resolution of these issues may substantially harm our business and operating results.
Our
Employees
At
November 30, 2013, we employed a total of four employees in the United States, all of which were full-time. We also contract with
certain outsourced vendors for programming, graphic design and sales-related activities. We are not a party to any collective
bargaining agreements. We believe our relations with our employees are good.
Available
Information
Our
website is located at www.thedirectory.com. We are not currently required to deliver an annual report to security holders or to
file reports with the Securities and Exchange Commission. However, we intend to become a reporting company and to make available
on our website, free of charge, copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to those reports, as applicable and as soon as reasonably practicable after we electronically
file or furnish such materials to the Securities and Exchange Commission. Our website and the information contained therein or
connected thereto are not intended to be incorporated into this registration statement.
Once
we become a fully reporting company with the SEC, you may also read and copy any materials we file with the SEC at the SEC’s
Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549. Information on the operation of the Public Reference
Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
Item
1A. Risk Factors.
An
investment in our common stock involves a high degree of risk. Before investing in our common stock, you should consider carefully
the specific risks detailed in this “Risk Factors” section before making a decision to invest in our common stock,
together with all of the other information contained in this registration statement. If any of these risks occur, our business,
results of operations and financial condition could be harmed, the price of our common stock could decline, and you may lose all
or part of your investment.
Risks
Related to Our Business
Our
limited operating capital could result in us not being able to execute our business plan, thereby preventing our company from
reaching profitability and expanding.
We
are a relatively young company and our proposed operations are impacted by the risks inherent in a company specializing in local
search and SMB online advertising solutions. The likelihood of our success must be considered in light of the problems, expenses,
difficulties, complications, and delays frequently encountered in connection with the development of a business in competitive
industries and multiple economies. The growth of our business will require significant additional investment. We do not presently
have adequate cash from operations or financing activities to meet our long-term needs. Additional capital will be needed for
long-term growth. If we are unable to raise additional capital in the future, we will not grow as quickly as planned.
We
have experienced rapid growth in an emerging market and have a limited operating history, which may make it difficult to evaluate
our current business and future prospects.
We
commenced operations in late 2010 as an online local search and directory company and have only a limited operating history in
the industry, which may make our current business and future prospects difficult to evaluate. We have developed a strategy for
taking advantage of what we believe is a shift of local marketing budgets from traditional media formats to digital media formats
and our strategy allowed us to grow rapidly. Recently, however, due to the need to upgrade our core local search platform and
user interface, our growth rate has slowed and although we have plans to increase our growth, we cannot assure you that our strategy
will be successful and that we will be able to increase or stabilize our growth rate. You must consider our business and prospects
in light of the risks and difficulties we encounter as an early stage company in the new and rapidly evolving online marketing
industry. These risks and difficulties include:
| • | | maintaining the effectiveness
of The Directory.com network, and adapting our technology to new market opportunities and challenges; |
| • | | competition from existing and
new competitors; |
| • | | reaching and maintaining profitability; |
| • | | our limited number of product
offerings and services and risks associated with developing and selling new product offerings; |
| • | | continuing to attract new SMB
clients, many of whom have not previously advertised online and may not understand the value to their businesses of our products
and services; and |
| • | | successfully entering new markets. |
Failing
to successfully address these challenges or others could significantly harm our business, financial condition, results of operations
and liquidity.
We
have incurred significant operating losses in the past and may incur significant operating losses in the future.
As
of November 30, 2013, we had an accumulated deficit of approximately $8,400,602. We believe our operating expenses will increase
in the future as we expand our operations. If our revenue does not grow to offset these increased expenses, we will not be profitable.
We also expect that a variety of factors, including increased competition and the maturation of our business, may cause our revenue
growth rate to decline in the future, and we cannot assure you that our revenue will continue to grow or will not decline. As
a result, you should not consider our historical revenue growth as indicative of our future performance. Furthermore, if our operating
expenses exceed our expectations, our financial performance will be adversely affected.
We
are an “emerging growth company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements
applicable to emerging growth companies will make our common stock less attractive to investors.
We
are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”),
and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor
attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors
will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less
attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying
with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that
comply with public company effective dates. We intend to remain an “emerging growth company” until the earliest of:
(i) the last day of the first fiscal year during which we have total annual gross revenues of $1,000,000,000 or more; (ii) the
last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective
IPO registration statement filed under the Securities Act; (iii) the date on which we have issued more than $1,000,000,000 in
non-convertible debt during the previous three years; or (iv) the date on which we are deemed to be a “large accelerated
filer” under the rules of the Securities and Exchange Commission.
If
we do not have the resources necessary to manage growth effectively our business, operating results and financial condition could
be materially adversely effected.
We
believe that as our business plan is more fully realized, we may experience a period of rapid growth that will result in new and
increased responsibilities for management personnel and will place a significant strain upon our management, operating and financial
systems and resources. To accommodate any rapid growth and to compete effectively and manage future growth, if any, we will be
required to implement and improve our operational, financial and management information systems, procedures and controls on a
timely basis and to expand, train, motivate and manage our workforce. Our personnel, systems, procedures and controls might not
be adequate to support our existing and future operations. Any failure to implement and improve our operational, financial and
management systems or to expand, train, motivate or manage employees could have a materially adverse effect on our business, operating
results and financial condition.
The
loss of our chief executive officer could adversely affect our operations and financial performance.
Our
success is heavily dependent upon the continued active participation of our Chief Executive Officer, Scott Gallagher. Mr. Gallagher’s
efforts are critical to us as we continue to develop our business strategy and product offerings. If we were to lose Mr. Gallagher,
we would have difficulty replacing him in a timely manner with an individual who has an equivalent level of experience. Ultimately,
the departure of Mr. Gallagher would likely affect our daily operations, the implementation of business strategies, and our financial
performance.
We
purchase a significant majority of our media from Google, Microsoft and Yahoo! in an auction marketplace. If we are unable to
purchase media from any one of these companies, if prices for media significantly increase or if the manner in which the media
is sold changes, our business could be adversely affected.
Our
success depends on our ability to purchase media from Google, Microsoft and Yahoo! at reasonable prices so that we can provide
our clients with a reasonable return on the advertising expenditures they incur through us. We generally purchase this media in
an auction marketplace. Increased competition or other factors may cause the cost of the media that we purchase from Google, Yahoo!
and Microsoft to rise. In particular, if our expectation that local SMB advertising will increasingly migrate to the Internet
is correct, the marketing budget available to bid in these auctions will increase and the price of media may increase substantially.
An increase in the cost of media in these marketplaces without a corresponding increase in our media buying efficiency could result
in an increase in our cost of revenue as a percentage of revenue even if our business expands. In addition, such an increase could
result in an increase in the prices we must charge our clients or a decrease in our ability to fulfill our clients’ service
expectations. Furthermore, the Internet search companies that operate these media marketplaces may change the operating rules
or bidding procedures in ways that decrease the effectiveness of the technology that we use to optimize our purchases or otherwise
prevent us from purchasing media at reasonable prices or at all. Any change in our ability to provide effective online marketing
campaigns to our clients may adversely affect our ability to attract and retain clients.
If
we do not deliver quality traffic that delivers value for advertisers, then our advertisers and our advertising partners may pay
us less for their listing or discontinue listings with us altogether.
For
our services to be successful, we need to deliver consumers to advertisers’ websites that are valuable to such advertiser.
If we do not meet advertisers’ expectations by delivering quality traffic, then our advertising partners may pay us less
per click or cease doing business with us altogether, which may adversely affect our business and financial results. We compete
with other web search services, online publishers and high-traffic websites, as well as traditional media such as television,
radio and print, for a share of our advertisers’ total advertising expenditures. Many potential advertisers and advertising
agencies have only limited experience advertising on the Internet and have not devoted a significant portion of their advertising
expenditures to paid-search. Acceptance of our advertising offerings among our advertisers and advertising partners will depend,
to a large extent, on its perceived effectiveness and the continued growth of commercial usage of the Internet. If we experience
downward pricing pressure for our services in the future, our financial results may suffer.
The
market in which we participate is intensely competitive, and if we do not compete effectively, our operating results could be
harmed.
The
market for local online advertising solutions is intensely competitive and rapidly changing, and with the emergence of new technologies
and market entrants, we expect competition to intensify in the future.
Our
competitors include:
| • | | Internet Marketing Providers.
We compete with large Internet marketing providers such as Google, Yahoo! and Microsoft. These providers typically offer their
products and services through disparate, online-only, self-service platforms. |
| • | | Traditional, Offline Media
Companies. We compete with traditional yellow page, newspaper, television and radio companies that, in many cases, have large,
direct sales forces. |
| • | | Other SMB Marketing Providers.
We also compete with technology companies providing online marketing platforms focused on the SMB market such as Angie’s
List and Yelp, as well as new market entrants, such as Groupon and LivingSocial, which are actively focused on new forms of online
marketing solutions for SMBs and, in some cases, building significant direct sales forces. |
Many
of our current and potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating
histories, and substantially greater financial, technical and other resources and, in some cases, the ability to combine their
online marketing products with traditional offline media such as newspapers or the Yellow Pages. These companies may use these
advantages to offer products similar to ours at a lower price, develop different products to compete with our current solutions
and respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or client requirements.
In particular, if major Internet search companies such as Google, Yahoo! and Microsoft decide to devote greater resources to develop
and market online advertising offerings directly to SMBs, greater numbers of our clients and potential clients may choose to purchase
online advertising services directly from these competitors, particularly if and as the ease of their self-service models increases.
In addition, many of our current and potential competitors have established marketing relationships with and access to larger
client bases and are heavily investing in recruiting sales personnel, while we have a small in-house sales force and rely primarily
on commissioned sales professionals to sell our products and services.
As
the market for local online advertising increases, we expect new competitors, business models and solutions to emerge, some of
which may be superior to ours. We also believe that the marketplace for online media is more transparent than other media marketplaces.
Our competitors may use information available to them to price their products at a discount to the prices that we currently offer.
Clients and potential clients might adopt competitive products and services in lieu of purchasing our solutions, even if our online
marketing and reporting solutions are more effective than those offered by our competitors, if we are not able to differentiate
our products and convince clients that our products are more effective that our competitors’ offerings. For all of these
reasons, we may not be able to compete successfully against our current and potential competitors.
Our
future success depends in part on our ability to effectively develop and sell additional products, services and features.
We
invest in the development of new products and services targeted toward SMBs with the expectation that we will be able to effectively
offer them to our clients. We plan to develop or potentially acquire other products and services that address new segments of
an SMB’s marketing activities. Our future revenue depends in part on our ability to stay competitive with our product and
service offerings. Our ability to develop and launch new products on our expected timelines, or at all, is subject to numerous
risks and uncertainties, such as the difficulties of designing complex software products, achieving desired functionality and
integrating the new products with our existing technology.
The
sale of new or additional features, products and services, the value or utility of which may be different from our current products
and services or less easily understood by our clients, may require increasingly sophisticated and costly sales efforts and increased
operating expenses, as well as education for our SMB clients. New product launches require the investment of resources in advance
of any revenue generation. If new products fail to achieve market acceptance, we may never realize a return on this investment.
If these efforts are not successful, our business may suffer. Further, many SMBs have modest advertising budgets. Accordingly,
we cannot assure you that the successful introduction of new products or services will not adversely affect sales of our current
products and services or that our SMB clients will increase their aggregate spending as a result of the introduction of new products
and services.
The
impact of worldwide economic conditions, including the resulting effect on our clients’ advertising budgets, may adversely
affect our business, operating results and financial condition.
Our
performance is subject to worldwide economic conditions and their impact on levels of advertising. We believe that the economic
conditions remain challenging, and such conditions have adversely affected our business. To the extent that economic difficulties
continue, or worldwide economic conditions materially deteriorate, our existing and potential clients may no longer consider investment
in our online marketing solutions a necessity, or may elect to reduce or eliminate advertising budgets. Historically, economic
downturns have resulted in overall reductions in advertising spending. In particular, local online advertising solutions may be
viewed by some of our existing and potential clients as a lower priority and may be among the first expenditures reduced as a
result of unfavorable economic conditions. These developments could cause us to respond by temporarily reducing hiring or taking
other measures and could have an adverse effect on our business, operating results and financial condition.
If
we fail to increase the number of our clients or retain existing clients, our revenue and our business will be harmed.
Our
ability to grow our business depends in large part on maintaining and expanding our client base. To do so, we must convince prospective
clients of the benefits of TheDirectory network and existing clients of the continuing value of our products and services. The
local search directory industry is relatively new and rapidly evolving, and many prospective clients may not be familiar with
the benefits of online marketing. These businesses may generally favor using more traditional methods of local advertising, such
as newspapers or print yellow pages directories. In addition, as the online media options for SMBs proliferate, including certain
self-service options offered through Google, and our clients become more familiar with such options, we cannot assure you that
we will be successful in maintaining or expanding our client base.
SMB
marketing and advertising campaigns are often sporadic and difficult to predict, as they may be driven by seasonal promotions
or business dynamics, evolving product and service offerings, available budgets and other factors. Some SMBs advertise only periodically,
such as to promote sales or special offers. Because we need to address these business considerations of our clients, we do not
require clients to enter into long-term obligations to purchase our products and services, most of our contracts are month to
month any contract would be for one year with a renewal option. The nature of the business is such that some clients do not renew
their campaigns. We must continually add new clients both to replace clients who choose not to renew their advertising campaigns
and to grow our business beyond our current client base, which will ultimately grow our revenues. A client’s decision not
to renew may be based on a number of factors, including dissatisfaction with our products and services, inability to continue
operations and spending levels or because their campaigns were event-driven or otherwise intentionally limited in scope or duration.
If our clients increasingly fail to fulfill their contracts or increasingly do not renew their advertising campaigns with us,
or if we are unable to attract new clients in numbers greater than the number of clients that we lose, our client base will decrease
and our business, financial condition and operating results will be adversely affected.
Growth
may place significant demands on our management and our infrastructure.
We
have experienced substantial growth in our business since our inception in 2010. This growth has placed and may continue to place
significant demands on our management and our operational and financial infrastructure. As our operations grow in size, scope
and complexity, we will need to improve and upgrade our systems and infrastructure to offer an increasing number of clients enhanced
solutions, features and functionality. The expansion of our systems and infrastructure will require us to commit substantial financial,
operational and technical resources in advance of an increase in the volume of business, with no assurance that the volume of
business will increase. Continued growth could also strain our ability to maintain reliable service levels for our clients, develop
and improve our operational, financial and management controls, enhance our reporting systems and procedures and recruit, train
and retain highly skilled personnel. Managing our growth will require significant expenditures and allocation of valuable management
resources. If we fail to maintain the necessary level of discipline and efficiency in our organization as it grows, our business,
operating results and financial condition would be harmed.
Client
complaints or negative publicity about our customer service or other business practices could adversely affect our reputation
and brand.
Client
complaints or negative publicity about our technology, personnel or customer service could severely diminish confidence in and
the use of our products and services. Effective customer service requires significant personnel expense, and this expense, if
not managed properly, could significantly impact our operating results. Moreover, failure to provide our clients with high-quality
customer experiences for any reason could substantially harm our reputation and our brand and adversely affect our efforts to
develop as a trusted provider of online marketing and reporting solutions for the SMB market.
Rapid
technological changes may render our online marketing and reporting solutions obsolete or decrease the attractiveness of our solutions
to our clients.
To
remain competitive, we must continue to enhance and improve the functionality and features of TheDirectory network. The Internet,
access to the Internet and the online marketing and advertising industry are rapidly changing. Our competitors are constantly
developing new products and services in online marketing and advertising. As a result, we must continue to invest significant
resources in order to enhance our existing products and services and introduce new products and services that clients can easily
and effectively use. If competitors introduce new solutions embodying new technologies, or if new industry practices emerge, our
existing technology may become obsolete. Our future success will depend on our ability to:
| • | | enhance our existing solutions; |
| • | | develop new solutions and technologies
that address the increasingly sophisticated and varied needs of our prospective clients; and |
| • | | respond to technological advances
and emerging industry practices on a cost-effective and timely basis. |
Developing
our online marketing and reporting solutions and the underlying technology entail significant technical and business risks. We
may use new technologies ineffectively, or we may fail to adapt our network infrastructure to client requirements or emerging
industry practices. If we face material delays in introducing new or enhanced solutions, our clients may forego the use of our
solutions in favor of those of our competitors.
We
may require additional capital to respond to business opportunities, challenges, acquisitions or unforeseen circumstances. If
capital is not available to us, our business, operating results and financial condition may be harmed.
We
may require additional capital to operate or expand our business. In addition, some of the product development initiatives we
have in the early stages of development may require substantial additional capital resources before they begin to generate material
revenue. Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. Any debt financing
secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial
and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities,
including potential acquisitions. If we do not have funds available to enhance our solutions, maintain the competitiveness of
our technology or pursue business opportunities, we may not be able to service our existing clients or acquire new clients, which
could have an adverse effect on our business, operating results and financial condition.
We
expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult
to predict our future performance.
Our
revenue and operating results could vary significantly from quarter-to-quarter and year-to-year because of a variety of factors,
many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be
meaningful. In addition to other risk factors discussed in this section, factors that may contribute to the variability of our
quarterly and annual results include:
| • | | seasonal variations in our
clients’ advertising budgets and media pricing; |
| • | | the rate at which SMBs migrate
their advertising spending to online offerings, including our offerings: |
| • | | the timing and stage of product
and technology development; |
| • | | our ability to develop, introduce
and manage consumer-facing products and services; |
| • | | our ability to accurately forecast
revenue and appropriately plan our expenses; |
| • | | the attraction and retention
of qualified employees and key personnel; |
| • | | the effectiveness of our internal
controls; |
| • | | our ability to effectively
manage our growth; |
| • | | our ability to successfully
manage any future acquisitions of businesses, solutions or technologies; |
| • | | interruptions in service and
any related impact on our reputation; |
| • | | the effects of natural or man-made
catastrophic events; and |
| • | | changes in government regulation
affecting our business. |
As
a result of these and other factors, the results of any prior quarterly or annual periods should not be relied upon as indications
of our future operating performance. In addition, our operating results may not meet the expectations of investors.
Risk
Factors Related to Third Party Relationships
We
are dependent on third-party products, services and technologies; changes to existing products, services and technologies or the
advent of new products, services and technologies could adversely affect our business.
Our
business is dependent upon our ability to use and interact with many third-party products, services and technologies, such as
browsers, data and search indices, and privacy software. Any changes made by third parties or consumers to the settings, features
or functionality of these third-party products, services and technologies or the development of new products, services and technologies
that interfere with or disrupt our products, services and technologies could adversely affect our business. For instance, if a
major search index were to alter its algorithms in a manner that resulted in our content not being indexed as often or appearing
as high in its search results, our consumers might not be able to reach and use our content, products and services and our business
could be adversely affected. Similarly, if more consumers were to switch their browsers to higher security settings to restrict
the acceptance of cookies from the websites they visit, our ability to effectively use cookies to track consumer behavior in our
business could be impacted and our business could be adversely affected.
Our
ability to deliver reporting and tracking solutions to our clients depends upon the quality, availability, policies and prices
of third-party call tracking providers..
We
rely on third parties to provide our call tracking and recording services. In the event our primary current provider were to terminate
our relationship or stop providing these services, our ability to provide our tracking services could be impaired. We may not
be able to find an alternative provider in time to avoid a disruption of our services or at all, and we cannot be certain that
such provider’s services would be compatible with our products without significant modifications or cost, if at all. The
failure of all or part of our tracking services could result in a loss of clients and associated revenue and could harm our results
of operations.
We
rely on bandwidth providers, data centers and other third parties for key aspects of the process of providing online marketing
solutions to our clients, and any failure or interruption in the services provided by these third parties could harm our ability
to operate our business and damage our reputation.
We
rely on third-party vendors, including a data center, software as a service, cloud computing Internet infrastructure and bandwidth
providers. Any disruption in the services provided by these third-party providers or any failure of these third-party providers
to handle current or higher volumes of use could significantly harm our business. Any financial or other difficulties our providers
face may have negative effects on our business, the nature and extent of which we cannot predict. We exercise little control over
these third-party vendors, which increases our vulnerability to problems with the services they provide. We have experienced and
expect to continue to experience interruptions and delays in service and availability for such elements. Any errors, failures,
interruptions or delays experienced in connection with these third-party technologies and information services could negatively
impact our relationship with our clients and adversely affect our brand and our business and could expose us to liabilities to
third parties.
Risk
Factors Related to Intellectual Property and as an Internet Company
The
market for Internet and local search advertising services is in the early stages of development, and if the market for our services
decreases it will have a material adverse effect on our business, prospects, financial condition and results of operations.
Internet
marketing and advertising, in general, and paid-search, in particular, are in the early stages of development. Our future revenue
and profits are substantially dependent upon the continued widespread acceptance, growth, and use of the Internet and other online
services as effective advertising mediums. Many of the largest advertisers have generally relied upon more traditional forms of
media advertising and have only limited experience advertising on the Internet. Local search, in particular, is still in an early
stage of development and may not be accepted by consumers for many reasons including, among others, that consumers may conclude
that local search results are less relevant and reliable than non-paid-search results, and may view paid-search results less favorably
than search results generated by non-paid-search engines. If consumers reject our paid-search services, or commercial use of the
Internet generally, and the number of click-throughs on our sponsored listings decreases, the commercial utility of our search
services could be adversely affected which could have a material adverse effect on our business, prospects, financial condition
and results of operations.
Failure
to adequately protect our intellectual property could substantially harm our business and operating results.
Because
our business is heavily dependent on our intellectual property, particularly as it pertains to Internet website domain registration,
the protection of our intellectual property rights is crucial to the success of our business. We rely on a combination of intellectual
property rights, including trade secrets, copyrights and trademarks, to safeguard our intellectual property. These rights afford
only limited protection. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects
of our online marketing and reporting solutions, technology, software and functionality or obtain and use information that we
consider proprietary. Our proprietary technology is not currently protected by any issued patents, and policing our rights to
such technology may, therefore, be difficult.
We
have registered “TheDirectory.com” and “Hyper Local” as trademarks in the United States and in certain
other countries. Also, trademark protection may not be available, or sought by us, in every country in which our technology and
products are available online. Competitors may adopt service names similar to ours, or purchase our trademarks and confusingly
similar terms as keywords in Internet search engine advertising programs, thereby impeding our ability to build brand identity
and possibly leading to client confusion. In addition, there could be potential trade name or trademark infringement claims brought
by owners of other registered trademarks or trademarks that incorporate variations of the term TheDirectory.com or our other trademarks.
Litigation
or proceedings before the U.S. Patent and Trademark Office or other governmental authorities and administrative bodies in the
United States and abroad may be necessary in the future to enforce our intellectual property rights, to protect our patent rights,
trade secrets and domain names and to determine the validity and scope of the proprietary rights of others. Our efforts to enforce
or protect our proprietary rights may be ineffective and could result in substantial costs and diversion of resources and could
substantially harm our operating results.
We
rely on third-party technology, server and hardware providers, and a failure of service by any of these providers could adversely
affect our business and reputation.
We
rely upon third-party data center providers to host our main servers and expect to continue to do so. These systems and operations
are vulnerable to damage or interruption from human error, floods, fires, power loss, telecommunication failures and similar events.
They are also subject to computer viruses, break-ins, sabotage, phishing attacks, attempts to overload our servers with denial
of service or other attacks, intentional acts of vandalism and similar misconduct. Despite any precautions we may take, the occurrence
of any disruption of service due to any such misconduct, natural disaster or other unanticipated problems at such facilities,
or the failure by such facility to provide our required data communications capacity could result in lengthy interruptions or
delays in our services. Any system failure or network disruption that causes an interruption or delay in service could impair
our reputation, damage our brand name and have a material adverse effect on our business, results of operations and financial
condition. In the event that these providers experience any interruption in operations or cease operations for any reason or if
we are unable to agree on satisfactory terms for continued hosting relationships, we would be forced to enter into a relationship
with other service providers or assume hosting responsibilities ourselves. If we are forced to switch hosting facilities, we may
not be successful in finding an alternative service provider on acceptable terms or in hosting the computer servers ourselves.
We may also be limited in our remedies against these providers in the event of a failure of service. In the event of certain system
failures, we may not be able to switch to back-up systems immediately and the time to full recovery could be prolonged. We also
rely on third-party providers for components of our technology platform, such as hardware and software providers, credit card
processors and domain name registrars. A failure or limitation of service or available capacity by any of these third-party providers
could adversely affect our business and reputation.
We
do not have confidentiality agreements with employees, except for Danny Rubino and Dan Cimba, and therefore, we may not adequately
prevent disclosure of trade secrets and other proprietary information.
In
order to protect our proprietary technology and processes, we rely in part on confidentiality agreements executed with two of
our employees, Danny Rubino, our Director of Operations, and Dan Cimba, our Vice President of Sales. These agreements may not
effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized
disclosure of confidential information. In addition, others may independently discover trade secrets and proprietary information
related to our Company, and in such cases we could not assert any trade secret rights against such parties. Costly and time-consuming
litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain
trade secret protection could adversely affect our competitive business position.
If
we fail to detect click-through fraud, we could lose the confidence of our advertisers and advertising partners, thereby causing
our business to suffer.
We
are exposed to the risk of fraudulent or illegitimate clicks on our sponsored listings. If fraudulent clicks are not detected,
the affected advertisers may experience a reduced return on their investment in our advertising programs because the fraudulent
clicks will not lead to revenue for the advertisers. As a result, our advertisers and advertising partners may become dissatisfied
with our advertising programs, which could lead to loss of advertisers, advertising partners and revenue.
Our
business is subject to complex and evolving U.S. laws and regulations regarding privacy, data protection, and other matters. Many
of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business
practices, increased cost of operations, or otherwise harm our business.
We
are subject to a variety of laws and regulations in the United States that involve matters central to our business, including
user privacy, rights of publicity, data protection, content, intellectual property, distribution, electronic contracts and other
communications, competition, protection of minors, consumer protection, taxation, and online payment services. These U.S. federal
and state laws and regulations are constantly evolving and can be subject to significant change. In addition, the application
and interpretation of these laws and regulations are often uncertain. These laws and regulations could have a significant impact
on online advertising services depending on how these laws and regulations are interpreted and enforced. It is also
clear that the laws and regulations are intending to regulate behavioral targeting, the availability of which could become highly
limited are eliminated entirely.
In
addition, a number of proposals are pending before federal and state legislative and regulatory bodies that could significantly
affect our business. For example, there have been a number of recent legislative proposals in the United States, at both the federal
and state level, that would impose new obligations in areas such as privacy, data protection and data breach notifications. Some
of the proposed changes to U.S. law could require that we obtain prior consent before using cookies or other tracking technologies
or provide a “do not track” mechanism in certain circumstances. These existing and proposed laws and regulations
can be costly to comply with and can delay or impede the development of new products, result in negative publicity, increase our
operating costs, require significant management time and attention, and subject us to claims or other remedies, including fines
or demands that we modify or cease existing business practices.
We
process, store and use personal information and other data, which subjects us to governmental regulation and other legal obligations
related to privacy. Our actual or perceived failure to comply with such obligations could harm our business.
We
receive, store and process personal information and other user data, including credit card information for certain users. There
are numerous federal, state and local laws regarding privacy and the storing, sharing, use, processing, disclosure and protection
of personal information and other user data, the scope of which are changing, subject to differing interpretations, and may be
inconsistent between countries or conflict with other rules. It is possible that these obligations may be interpreted and applied
in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Any failure
or perceived failure by us to comply with our privacy policies, our privacy-related obligations to users or other third parties,
or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of
personally identifiable information or other user data, may result in governmental enforcement actions, litigation or negative
publicity and could cause our advertisers to lose trust in us, which could have an adverse effect on our business. Additionally,
if third parties with whom we work, such as our publishers or our providers of telephony services, violate applicable laws or
our policies, such violations may also put our users’ information at risk and could have an adverse effect on our business.
Government
regulation of the Internet is evolving, and unfavorable changes could substantially harm our business and operating results.
We
are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet. Existing
and future laws and regulations may impede the growth in use of the Internet and online services. The application of existing
laws to the Internet and online services governing issues such as property ownership, sales and other taxes, libel and personal
privacy has not yet been settled. Unfavorable resolution of these issues may substantially harm our business and operating results.
Other laws and regulations that have been adopted, or may be adopted in the future, that may affect our business include those
covering user privacy, data protection, spyware, “do not email” lists, access to high speed and broadband service,
pricing, taxation, tariffs, patents, copyrights, trademarks, trade secrets, export of encryption technology, electronic contracting,
click-fraud, acceptable content, search terms, lead generation, behavioral targeting, consumer protection, and quality of products
and services. Any changes in regulations or laws that hinder growth of the Internet generally or that decrease the acceptance
of the Internet as a communications, commercial and advertising medium could adversely affect our business.
Risks
Related to Our Common Stock
Trading
in our common stock is limited and the price of our common stock may be subject to substantial volatility.
Our
common stock (OTC: SEEK) is quoted on the OTC Pink Current marketplace. We expect our common stock to continue to be quoted on
the OTC for the foreseeable future. Broker-dealers may decline to trade in OTC Pink stocks given the market for such securities
is often limited, the stocks are more volatile and the risk to investors is greater. These factors may reduce the potential market
for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common
stock to sell shares to third parties or to otherwise dispose of their shares. This could cause our stock price to decline.
Additionally,
the price of our common stock may be volatile as a result of a number of factors, including, but not limited to, the following:
| • | | our ability to retain existing
subscribers to TheDirectory network and clients’ continued demand for our products and services; |
| • | | seasonal variations in advertising
budgets and media pricing; |
| • | | the rate at which SMBs migrate
their advertising spending to online offerings, particularly our online offerings; |
| • | | the timing and level of market
acceptance of our new products or services; |
| • | | our ability to successfully
manage any future acquisitions of businesses, solutions or technologies; and |
| • | | price and volume fluctuations
in the stock market at large which do not relate to our operating performance. |
“Penny
stock” rules may make buying or selling our securities difficult which may make our stock less liquid and make it harder
for investors to buy and sell our securities.
Trading
in our securities is subject to the SEC’s “penny stock” rules and it is anticipated that trading in our securities
will continue to be subject to the penny stock rules for the foreseeable future. The SEC has adopted regulations that generally
define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions.
These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited
investors must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s
written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to
any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with
trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and
the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers
by these requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit
the liquidity of our securities and consequently adversely affect the market price for our securities.
Our
operating results may fluctuate, which could cause our stock price to decrease.
Fluctuations
in our operating results may lead to fluctuations, including declines, in our share price. Our operating results and our share
price may fluctuate from period to period due to a variety of factors, including:
| • | | actual and anticipated fluctuations
in our quarterly financial and operating results; |
| • | | new or less expensive products
and services or new technology introduced or offered by our competitors or by us; |
| • | | the development and commercialization
of products or services; |
| • | | delays in establishing new
strategic partnerships; |
| • | | costs associated with collaborations
and partnerships; |
| • | | introduction of technological
innovations or new commercial products by us or our competitors; |
| • | | changes in recommendations
of securities analysts or lack of analyst coverage; |
| • | | failure to meet analyst expectations
regarding our operating results; |
| • | | additions or departures of
key personnel; and |
| • | | general market conditions. |
Variations
in the timing of our future revenues and expenses could also cause significant fluctuations in our operating results from period
to period and may result in unanticipated earning shortfalls or losses. In addition, companies quoted on the OTC Pink® marketplace,
in general, and the market for online local advertising companies, in particular, have experienced significant price and volume
fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.
If
an active, liquid trading market for our common stock does not develop, you may not be able to sell your shares quickly or at
or above the price you paid for it.
Although
our common stock is quoted on OTC Pink Current marketplace, an active and liquid trading market for our common stock has not yet and may
not ever develop or be sustained. You may not be able to sell your shares quickly or at or above the price you paid for our
stock if trading in our stock is not active.
Item
2. Financial Information.
Selected
Financial Data
As
a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K,
we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by
this Item.
Management’s
Discussion and Analysis or Financial Condition and Results of Operations
Introduction
The
following discussion and analysis sets forth certain factors we believe could cause actual results to differ materially from those
contemplated by the forward-looking statements and should be read in conjunction with the consolidated financial statements and
notes thereto, and other financial information included elsewhere in this Form 10. This report contains forward-looking statements
that involve risks and uncertainties. Actual results in future periods may differ materially from those expressed or implied in
such forward-looking statements as a result of a number of factors, including, but not limited to, the risks discussed under the
heading “Risk Factors” and elsewhere in this Form 10.
Overview
We
are an online local search and directory company. We own and operate a network of online local business directories and city guides
which provide business listings, directory information, and user generated reviews to consumers who are searching online for services
from local businesses.
Our
business revolves around two key initiatives: building out our local search platform known as TheDirectory.com, of which we have
several member directories including our recent acquisition of the Hyper-Local(TM) City Guide Network, and assisting SMBs acquire,
maintain and retain customers using technology and the Internet.
Results
of Operations
Sales
Revenue
Our
revenue for the year ended November 30, 2013 was $780,163, as compared to revenue of $506,026 for the same period in the prior
year, and represented an increase of $274,137 or 54%. The increase in sales revenue for 2013 was primarily related to our acquisition
of the Hyper-Local(TM) City Guide Network, and was also due to our increased marketing efforts and new product roll outs such
as management tools for our local listings.
General
& Administrative Expenses
For
the year ended November 30, 2013, general and administrative expenses increased to $582,813, as compared to general and administrative
expenses of $478,829 for the same period in the prior year, and represented an increase of $103,984 or 21.7%. The increase in
general and administrative expenses for 2013 was attributed to increased costs associated with the acquisition of the Hyper-Local(TM)
City Guide Network.
Interest
Expenses
During
the year ended November 30, 2013, our interest expenses increased to $88,197, as compared to interest expenses of $20,421 for
the same period in the prior year. The increase in interest expenses for 2013 was directly related to the $5 million credit facility
we established in October 2013 in order to fund the acquisition of the Hyper-Local(TM) City Guide Network.
Net
Income
During
the year ended November 30, 2013, our net income increased to $109,153, as compared to net income of $6,776 for the same period
in the prior year. The increase in income for 2013 was primarily due to increased sales which occurred after our acquisition of
the Hyper-Local(TM) City Guide Network.
Liquidity
and Capital Resources
As
of November 30, 2013, we had total current assets of $3,335,086, as compared to total current assets of $396,200 for the
same period in the prior year, and represented an increase of $2,938,886 or 742%. The increase in total current assets for
2013 is directly related to our acquisition of the Hyper-Local(TM) City Guide Network and the acquisition of its related
assets. At November 30, 2013, our total assets consisted of $128,910 in cash; $270,717 in accounts receivable; $1,318 of
property and equipment; $1,535 of deposits; $386,817 related to intangible assets; and $2,051,861 related to our Internet
domain name portfolio and intangible assets. At November 30, 2012, our total assets consisted of $3,721 in cash; $1,972 in property
and equipment; $1,535 in deposits; $83,617 in intellectual property; and $305,355 in our Internet domain name
portfolio.
As
of November 30, 2013 our total liabilities increased to $3,861,270, as compared to total liabilities of $1,453,037 for the same
period in the prior year. At November 30, 2013, our total liabilities consisted of $572,746 in accounts payable and accrued expenses;
$1,300,000 related our commercial line of credit; $1,743,500 of notes payable to individuals; and $245,024 of notes payable to
related parties. At November 30, 2012, our total liabilities consisted of $570,752 in accounts payable and accrued expenses; $644,500
of notes payable to individuals; and $237,785 of notes payable to related parties.
We
will require additional capital to support our business plan which contemplates strategic acquisitions, to reduce our
debt and to facilitate our current expansion plans. Effective October 1, 2013, we closed on a $5 million revolving
credit financing facility with TCA Global Credit Master Fund. As of November 30, 2013 we still had $3.7 million avaliable
under the credit facility. We may also need to raise funds through private placements of our equity securities that may involve
dilution to our existing stockholders.
Our
currently anticipated levels of revenues and cash flow are subject to many uncertainties beyond our control. Even though
we have recently become profitable, our cash flow from operations may not be adequate to satisfy our cash requirements
required to paying off our outstanding debt under an established revolving credit facility, and thus we may have to raise
additional funds. We continue to seek alternative means for financing our debt repayments under our established revolving
credit financing facility, and controlling capital expenditures and/or postpone or eliminate certain investments or
expenditures.
The
inability to obtain additional financing or generate sufficient cash from operations could require us to reduce or eliminate expenditures
for acquiring or developing new directories or city guides. Furthermore, if we raise funds through the sale of additional equity
securities, the common stock currently outstanding will be diluted.
Off-Balance
Sheet Arrangements
We
currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect
on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources.
Critical
Accounting Policies and Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make judgments and estimates.
We
believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation
of our financial statements.
Derivative
Financial Instruments
We
estimate the fair value of our complex derivative financial instruments that are required to be carried as liabilities at fair
value pursuant to Statements on Financial Accounting Standards No. 133, “Accounting for Derivative Financial Instruments
and Hedging Activities (SFAS 133).”
We
do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, we frequently
enter into certain other financial instruments and contracts, such as debt financing arrangements, preferred stock arrangements
and freestanding warrants with features that are either (i) not afforded equity classification, (ii) embody risks not clearly
and closely related to host contracts or (iii) may be net-cash settled by the counterparty to a financing transaction. As required
by SFAS 133, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements.
We
estimate fair values of derivative financial instruments using various techniques, and combinations thereof, that are considered
to be consistent with the objective measuring of fair values. In selecting the appropriate technique(s), we consider, among other
factors, the nature of the instrument, the market risks that such instruments embody and the expected means of settlement. For
less complex derivative instruments, such as free-standing warrants, we generally use the Black-Scholes option valuation technique,
since it embodies all of the requisite assumptions, including trading volatility, estimated terms and risk free rates, necessary
to fair value these instruments. For complex derivative instruments, such as embedded conversion options, we generally use the
flexible Monte Carlo valuation technique since it embodies all of the requisite assumptions, including credit risk, interest-rate
risk and exercise/conversion behaviors, that are necessary to fair value these more complex instruments. For forward contracts
that contingently require net-cash settlement as the principal means of settlement, we project and discount future cash flows
applying probability-weightage to multiple possible outcomes. Estimating fair values of derivative financial instruments requires
the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument
with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive
to changes in our trading market price which has high-historical volatility. Since derivative financial instruments are initially
and subsequently carried at fair values, our income will reflect the volatility in these estimate and assumption changes.
Revenue
Recognition
We
recognize revenue when we sell a listing for one of our directories or city guides. Sales generated from third-party advertisers
who list on our network are recognized in the month the revenue is generated.
Accounts
Receivable
Accounts
receivable consist primarily of trade receivables, net of a valuation allowance for doubtful accounts.
Cash
and cash Equivalents
For
purposes of the statement of cash flows, we consider all short-term debt securities with maturity of three months or less to be
cash equivalents.
Property
and Equipment
Property
and equipment are recorded at cost less accumulated depreciation. Upon retirement or sale, the cost of the assets disposed of
and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss included in the results
of operations. Depreciation is computed over the estimated useful lives of the assets (3-20 years) using the straight-line method
for financial reporting purposes and accelerated methods for income tax purposes. Maintenance and repairs are charged to operations
as incurred.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions 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 amounts of revenues and expenses
during the reporting period. Actual results could vary from those estimates.
Goodwill
and Intangible Asset Impairment
Realization
of long-lived assets, including goodwill, is periodically assessed by our management. Accordingly, in the event that facts
and circumstances indicate that property and equipment, and intangible or other assets may be impaired, an evaluation of recoverability
would be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared
to the asset’s carrying amount to determine if a write-down to market value is necessary. In management's opinion, there
was no impairment of such assets at November 30, 2013.
Inventories
As
an online local search and directory company, we do not have physical products in our inventory.
Quantitative
and Qualitative Disclosures about Market Risk
As
a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K,
we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by
this Item.
Item
3. Properties.
We
currently lease 1,500 square feet of office space in Tampa, Florida, which serves as our principal executive offices. We have
plans to expand our operations in 2014 but for the time being, we believe that our office space is adequate for our needs.
Item
4. Security Ownership of Certain Beneficial Owners and Management.
The
following tables set forth certain information related to the beneficial ownership, as of the close of business on January 14,
2014, of our Series A Convertible Preferred Stock and common stock by: (i) all persons that we know who beneficially holds more
than 5% of our securities, (ii) all of our directors, (iii) our sole executive officer and (iv) our directors and executive officer
as a group. The information on beneficial ownership in the table and footnotes thereto is based upon data furnished to us by,
or on behalf of, the persons listed in the table.
We
have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe,
based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment
power with respect to all securities that they beneficially own, subject to applicable community property laws.
Series
A Convertible Preferred Stock
| Name
and address |
Nature
of beneficial ownership |
Amount
of beneficial ownership |
Percentage
of class beneficially owned (2) |
| Scott
Gallagher (1) |
President,
Chief Executive Officer, acting Chief Financial Officer and Chairman of the Board of Directors |
540,000 |
100% |
| (1) | | The mailing address of Mr.
Gallagher is c/o TheDirectory.com, Inc., 15100 Hutchison Rd., Suite 125, Tampa, Florida 33625. |
| (2) | | On January 14, 2014, we had
540,000 shares of Series A Convertible Preferred Stock issued and outstanding. |
Common
Stock Owned by Directors and Executive Officer
| Name
and address of beneficial owner (1) |
Nature
of beneficial ownership |
Amount
of beneficial ownership |
Percentage
of class beneficially owned (2) |
| Scott
Gallagher (3) |
President,
Chief Executive Officer, acting Chief Financial Officer and Chairman of the Board of Directors |
0 |
* |
| W.
Scott McBride (4) |
Director |
250,000 |
* |
| All
directors and executive officer as a group (2 persons) |
250,000 |
* |
*
Percentage of shares beneficially owned does not exceed one percent.
| (1) | | Unless otherwise stated, the
address of each beneficial owner listed on the table is c/o TheDirectory.com, Inc., 15100 Hutchison Rd., Suite 125, Tampa, Florida
33625. |
| (2) | | On January 14, 2014, we had
3,459,840,109 shares of common stock issued and outstanding. |
| (3) | | Mr. Gallagher is our President,
Chief Executive Officer, acting Chief Financial Officer, and Chairman of our Board of Directors. Mr. Gallagher does not beneficially
own any shares of our common stock. He does, however, hold certain holdings of our preferred stock, and such holdings are disclosed
in the table above. |
| (4) | | Mr. McBride is a director of
our Company. Mr. McBride beneficially owns 250,000 shares of common stock. |
As
of January 14, 2014, there are no arrangements among our beneficial owners known to management which may result in a change in
control of our Company.
Item
5. Directors and Executive Officers.
Identification
of Directors and Executive Officers
Set
forth below is certain information with respect to the individuals who are our directors and executive officers as of January
14, 2014.
| Name |
Age |
Position(s)
or Office(s) Held |
| Scott
Gallagher |
46 |
President,
Chief Executive Officer, acting Chief Financial Officer and Chairman of the Board of Directors |
| W.
Scott McBride |
42 |
Director |
Biographies
and Qualifications of Our Executive Officer and Directors. The biographies of our executive officer and directors and certain
information regarding each individual’s experience, attributes, skills and/or qualifications that led to the conclusion
that the individual should be serving as an executive officer and/or director of our Company are as follows:
Scott
Gallagher - President, Chief Executive Officer, acting Chief Financial Officer, and Chairman of the Board of Directors
Scott
Gallagher has served as our President, Chief Executive Officer, acting Chief Financial Officer and Chairman of the Board
of Directors since January 10, 2008. During his twenty-five year business career, Mr. Gallagher founded several public and
privately held companies and was an officer and director of FTS Group, Inc. from 2002 through 2009. Prior to 2001, Mr. Gallagher
was the Chief Investment Officer and a general partner with the Avalon Investment Fund, a private hedge fund based in New York
City and Philadelphia. Mr. Gallagher previously held SEC licenses series 7, 63 and 24, all of which were retired in good
standing. We believe Mr. Gallagher is a valuable member of our Board due to his depth of strategic, transactional, and senior
management experience, both during his time with our Company and prior to joining us.
W.
Scott McBride - Director
W.
Scott McBride was appointed to our Board of Directors on May 5, 2008. He has consulted and assisted in the development of
our Company since our pre-revenue development stage, through proof of concept stage, to the present state of the Company as
a growing profitable entity. He currently works for a privately held company handling grants. Mr. McBride has served as
a director of several public and private companies during his professional career, including serving as a director of
FTS Group, Inc., a publicly traded company from 2002 to 2008. He also founded and managed several ventures in a variety
of industries successfully. Mr. McBride is currently developing an online news company scheduled for launch in the fall of
2014. He holds a master’s degree from Western University in Colorado. We believe Mr. McBride is a valuable member of
our Board due to his depth of operating and strategic experience.
Other
Involvement in Certain Legal Proceedings
None
of our directors or our executive officer has been involved in any bankruptcy or criminal proceedings, nor have there been any
judgments or injunctions brought against any of our directors or executive officer during the last ten years that we consider
material to the evaluation of the ability and integrity of any director or executive officer.
Item
6. Executive Compensation.
Executive
Compensation
The
following table sets forth all compensation for our fiscal years ended November 30, 2013 and 2012 awarded to, earned by, or paid
to our Principal Executive Officer, who is our sole executive officer.
Summary
Compensation Table for Fiscal Years Ended November 30, 2013 and 2012
| Name
and Principal Position |
Year
Ended November 30 |
Salary
($) |
Total
($) |
Scott
Gallagher
President,
Chief Executive Officer, acting Chief Financial Officer and Chairman of the Board of Directors
(Principal
Executive Officer) |
2013 |
75,000 |
75,000 |
| 2012 |
75,000
(1) |
75,000 |
| (1) | | All of the amount of salary
represented in
the table is considered accrued but unpaid compensation due to Mr. Gallagher for the fiscal year ended November 30,
2012. |
Narrative
to Summary Compensation Table
Employment
Agreement with Mr. Gallagher
On
January 10, 2008, we entered into an executive employment agreement with Scott Gallagher, our Chief Executive Officer and Chairman
of our Board of Directors. Pursuant to the terms of the employment agreement, we engaged Mr. Gallagher to serve as our Chief Executive
Officer and Chairman for a period of two years, subject to earlier termination. We agreed to pay Mr. Gallagher an annual salary
of $100,000 and other benefits of a nature consistent with his position. Mr. Gallagher was also eligible for an annual bonus in
a minimum amount of twenty five percent (25%) of his annual base salary, based upon the achievement of certain predetermined quantitative
and qualitative goals related to the operating performance of our Company as mutually determined and agreed upon by us and Mr.
Gallagher and in accordance with our policies and practices. We also agreed to issue Mr. Gallagher 1,500,000 unrestricted shares
of our common stock as a signing bonus and to register such shares on a registration statement on Form S-8. Our employment agreement
with Mr. Gallagher expired in 2010. Mr. Gallagher is currently an employee-at-will and we pay him an annual salary of $75,000
and other benefits of a nature consistent with his position.
Outstanding
Equity Awards at Fiscal Year-End
There
are no unexercised options, stock that has not vested, or equity incentive plan awards for Mr. Gallagher outstanding as of the
end of our last completed fiscal year.
Director
Compensation
We
have no formal or informal arrangements or agreements to compensate our directors for services they provide as our directors.
Messrs. McBride and Gallagher did not receive any compensation during the year ended November 30, 2013 for their respective services
as members of our Board of Directors.
Item
7. Certain Relationships and Related Transactions.
It
is our policy that all employees, officers and directors must avoid any activity that is or has the appearance of conflicting
with the interests of our Company. Our Board conducts a review of all related party transactions for potential conflict of interest
situations on an ongoing basis and all such transactions relating to executive officers and directors must be approved by the
full Board.
Director
Independence
Our
Board of Directors has made the determination that W. Scott McBride is “independent” as defined under the standards
of independence set forth in the NASDAQ Listing Rules and the rules under the Securities Exchange Act of 1934.
Item
8. Legal Proceedings.
We
may be involved from time to time in ordinary litigation, negotiation and settlement matters that will not have a material effect
on our operations or finances. We are not aware of any pending or threatened litigation against us or our officers and directors
in their capacity as such that could have a material impact on our operations or finances.
Item
9. Market Price of and Dividends on the Registrant’s Common Equity and Related
Stockholder
Matters.
Market
Information
Our
common stock (OTC: SEEK) is quoted on OTC Pink® Current marketplace. The following table sets forth the high and low bid prices
for our common stock for each quarter during the last two fiscal years as quoted on OTC Pink® Current. Such OTC market quotations
reflect inter-dealer prices, without retail markup, markdown or commissions and may not necessarily represent actual transactions.
| |
High |
Low |
| For
the Fiscal Year Ended November 30, 2012 |
|
|
| First
Quarter Ended 2/29/12 |
$0.0018 |
$0.0010 |
| Second
Quarter Ended 5/31/12 |
$0.0017 |
$0.0008 |
| Third
Quarter Ended 8/31/12 |
$0.0009 |
$0.0004 |
| Fourth
Quarter Ended 11/30/12 |
$0.0006 |
$0.0002 |
| For
the Fiscal Year Ended November 30, 2013 |
|
|
| First
Quarter Ended 2/28/13 |
$0.0004 |
$0.0001 |
| Second
Quarter Ended 5/31/13 |
$0.0003 |
$0.0001 |
| Third
Quarter Ended 8/31/13 |
$0.0022 |
$0.0001 |
| Fourth
Quarter Ended 11/30/13 |
$0.0077 |
$0.0007 |
| For
the Fiscal Year Ending November 30, 2014 |
|
|
| First
Quarter Ended 2/28/14 (through January 14, 2014) |
$0.0075 |
$0.0001 |
Options
and Warrants
We
have no options or warrants outstanding as of the date of this registration statement.
Securities
Eligible for Resale
7,512,315
shares of our common stock are eligible for resale pursuant to Rule 144. We have not agreed to register any shares of our common
stock under the Securities Act for sale by any security holders. Future sales of large numbers of shares of our common stock into
a limited trading market or the concerns that those sales may occur could cause the trading price of our common stock to decrease
or to be lower than it might otherwise be. If an active, stable and sustained trading market does not develop, the market price
for our shares will decline and such declines are likely to be permanent.
Holders
As
of January 14, 2014, we had approximately 642 holders of record of our common stock. Holders of record include nominees who may
hold shares on behalf of multiple owners.
Dividends
We
have never declared or paid any cash dividends on our capital stock, and we do not currently intend to pay any cash dividends
on our common stock in the foreseeable future. At present, we intend to retain our earnings, if any, to finance research and development
and expansion of our business.
Securities
Authorized for Issuance under Equity Compensation Plans
As
of November 30, 2013, we do not have an active equity compensation plan.
Item
10. Recent Sales of Unregistered Securities.
On
November 29, 2010, we issued 150,000,000 shares of common stock to an institutional investor related to the conversion of $20,000
of interest on debt at a price of $0.00013 per share.
On
December 1, 2010, we issued 150,000,000 shares of common stock to an institutional investor related to the conversion of $20,545
of debt at a price of $0.00013 per share.
On
January 11, 2011, we issued 166,666,667 shares of common stock to an institutional investor related to the conversion of
$20,455 of debt at a price of $0.00012 per share.
On
June 29, 2011, we issued 200,000,000 shares of common stock to an institutional investor related to the conversion of $50,000
of debt at a price of $0.00025 per share.
On
February 8, 2012, we issued 19,444,500 shares of common stock to an institutional investor related to the conversion of $4,016
of debt at a price of $0.0002 per share.
On
March 5, 2012, we issued 38,888,833 shares of common stock to an institutional investor related to the conversion of $8,033 of
debt at a price of $0.0002 per share.
On
April 9, 2012, we issued 37,500,000 shares of common stock to an institutional investor related to the conversion of $7,746 of
debt at a price of $0.0002 per share.
On
May 7, 2012, we issued 37,500,000 shares of common stock to an institutional investor related to the conversion of $7,746 of debt
at a price of $0.0002 per share.
On
May 23, 2012, we issued 2,222,222 shares of common stock to an institutional investor related to the conversion of $459 of debt
at a price of $0.0002 per share.
On
August 1, 2012, we issued 50,000,000 shares of common stock to an institutional investor related to the conversion of $10,000
of debt at a price of $0.0002 per share.
On
November 30, 2012, we issued 100,000,000 shares of common stock to an institutional investor related to the conversion of $20,000
of debt at a price of $0.0002 per share.
On
January 7, 2013, we issued 100,000,000 shares of common stock to an institutional investor related to the conversion of $5,000
of debt at a price of $0.00005 per share.
On
February 21, 2013, we issued 40,000,000 shares of common stock to an institutional investor related to the conversion of $2,000
of debt at a price of $0.00005 per share.
On
July 29, 2013, we issued 125,000,000 shares of common stock to an institutional investor related to the conversion of $12,500
of debt at a price of $0.0001 per share.
On
August 2, 2013, we issued 100,000,000 shares of common stock to an institutional investor related to the conversion of $35,000
of debt at a price of $0.00035 per share.
On
October 4, 2013, we issued 140,000,000 shares of common stock to an institutional investor related to the conversion of $67,000
of debt at a price of $0.00047 per share.
On
October 29, 2013, we issued 90,909,090 shares of common stock to an institutional investor related to the conversion of $100,000
of debt at a price of $0.0011 per share.
Item
11. Description of Registrant’s Securities to be Registered.
General
On
December 10, 2013, our Board, acting upon shareholder approval, approved an amendment to our authorized capital stock, such that
the total number of shares of authorized capital stock we have the authority to issue is six billion, one million, two hundred
thousand (6,001,200,000) shares, consisting of six billion (6,000,000,000) shares of common stock, $0.001 par value per share,
and one million, two hundred thousand (1,200,000) shares of preferred stock, $0.001 par value per share. The amendment was filed
with the State of Utah on December 11, 2013. The following description of our capital stock and provisions of our Amended and
Restated Articles of Incorporation, as amended, and our Bylaws, is only a summary. You should also refer to our Amended and Restated
Articles of Incorporation, as amended, a copy of which is incorporated by reference as an exhibit to the registration statement,
and our Bylaws, a copy of which is incorporated by reference as an exhibit to the registration statement.
Common
Stock
We
are authorized to issue up to a total of six billion (6,000,000,000) shares of common stock, par value $0.001 per share. The shares
of common stock are non-assessable, without preemption rights, and do not carry cumulative voting rights. 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 if, as and when declared by our Board of Directors.
Preferred
Stock
We
are authorized to issue up to a total of one million, two hundred thousand (1,200,000) shares of preferred stock, par value $0.001
per share, without stockholder approval. Our Board of Directors has the authority, without action by our stockholders, to issue
all or any portion of the authorized but unissued preferred stock in one or more series and to determine the voting rights, preferences
as to dividends and liquidation, conversion rights, and other rights of such series.
Series
A Convertible Preferred Stock
On
March 30, 2011, our Board approved the creation of 270,000 shares of Series A Convertible Preferred Stock. Each share of Series
A Convertible Preferred Stock shall be convertible, at the option of the holder thereof, at any time after one year from the date
of issuance into a number of fully paid and non-assessable shares of our common stock. For each share of Series A Convertible
Preferred Stock, the holder will receive 10,000 shares of common stock upon conversion.
On
December 1, 2013, our Board approved the creation of an additional 270,000 shares of Series A Convertible Preferred Stock as additional
compensation for liabilities secured personally by our Chief Executive Officer relating to our October financing and acquisition.
Each share of Series A Convertible Preferred Stock shall be convertible, at the option of the holder thereof, at any time after
one year from the date of issuance into a number of fully paid and non-assessable shares of our common stock. For each share of
Series A Convertible Preferred Stock, the holder will receive 10,000 shares of common stock upon conversion.
Item
12. Indemnification of Directors and Officers.
Section
16-10a-902 of the Utah Revised Business Corporation Act provides that a corporation may indemnify a director if: (a) his
conduct was in good faith; (b) he reasonably believed that his conduct was in, or not opposed to, the corporation’s
best interests; and (c) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful
as long as the director is not adjudged liable to the corporation or the director is adjudged liable on the basis that he derived
an improper personal benefit.
Section
16-10a-907 of the Utah Revised Business Corporation Act further provides that a corporation may: (a) indemnify and advance
expenses to an officer, employee, fiduciary, or agent of the corporation to the same extent as to a director; and (b) also
indemnify and advance expenses to an officer, employee, fiduciary, or agent who is not a director to a greater extent, if not
inconsistent with public policy, and if provided for by its articles of incorporation, bylaws, general or specific action of its
board of directors, or contract.
Our
Amended and Restated Articles of Incorporation, as amended, authorize us to indemnify and hold harmless any person who was or
is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she is or was or has agreed to become a director or
officer of our Company or is serving at our request as a director or officer of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise or by reason of actions alleged to have been taken or omitted in such capacity
or in any other capacity while serving as a director or officer to the fullest extent authorized or permitted by applicable law.
We
may not indemnify a director or officer or advance expenses under our Amended and Restated Articles of Incorporation, as amended,
unless authorized and a determination has been made in the specific case that indemnification is permissible in the circumstances
because the director or officer has met the applicable standard of conduct set forth in the Utah Revised Business Corporation
Act. Under our Amended and Restated Articles of Incorporation, as amended, we may pay for certain expenses incurred by a director
or officer of our Company who is a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, as they are incurred and in advance of the final disposition of the action, suit, or proceeding
provided the individual furnishes us with (i) a written affirmation by or on behalf of the director or officer of his good faith
belief that he has met the applicable standard of conduct for indemnification, and (ii) an undertaking by or on behalf of the
director or officer to repay all amounts so advanced in the event that it is ultimately determined by a final decision, order
or decree of a court of competent jurisdiction that the director or officer is not entitled to be indemnified for such expenses.
We
are not obligated, however, to reimburse the amount of any settlement unless we have agreed to such settlement. If any person
shall unreasonably fail to enter into a settlement of any action, suit or proceeding, offered or assented to by the opposing party
or parties and which is acceptable to us, then, notwithstanding any other provision of our Amended and Restated Articles of Incorporation,
as amended, our indemnification obligation in connection with such action, suit or proceeding shall be limited to the total of
the amount at which settlement could have been made and the expenses incurred by such person prior to the time the settlement
could reasonably have been effected.
Under
our Amended and Restated Articles of Incorporation, as amended, we may also maintain insurance, at our expense, to protect ourselves
and any director, officer, employee or agent of our Company or another corporation, partnership, joint venture, trust or other
enterprise against any loss, liability or expense, whether or not we would have the power to indemnify such person against such
loss, liability or expense under the Utah Revised Business Corporation Act.
Item
13. Financial Statements and Supplementary Data.
FINANCIAL
STATEMENTS
| Index
to Financial Statements |
Page |
| |
|
|
| Report
of Independent Registered Public Accounting Firm |
F-1 |
| |
|
|
| Balance
Sheets at November 30, 2013 and 2012 |
F-2 |
| Statements
of Operations for the Years Ended November 30, 2013 and 2012 |
F-3 |
| Statements
of Cash Flows for the Years Ended November 30, 2013 and 2012 |
F-4 |
| Statements
of Stockholders’ Equity for the Years Ended November 30, 2013 and 2012 |
F-5 |
| Notes
to Financial Statements |
F-6 |
2451 N. McMullen Booth Road
Suite.308
Clearwater, FL 33759
Toll fee: 855.334.0934
Fax:
800.581.1908
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board
of Directors and Stockholders
TheDirectory.com
We
have audited the accompanying balance sheets of TheDirectory.com as of November 30, 2013 and 2012, and the related statement of
operations, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of TheDirectory.com
as of November 30, 2013 and 2012, and the results of its operations and its cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.
| Date: January
27, 2014 |
DKM Certified Public Accountants |
| |
By |
/s/
DKM Certified Public Accountants |
| |
|
Clearwater,
Florida |
| TheDirectory.com,
Inc. |
| Balance
Sheets |
| November
30, 2013 and 2012 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
| Assets |
2013 |
|
2012 |
| Current assets |
|
|
|
|
|
|
|
|
| |
Cash and cash equivalents |
|
|
$ |
128,910 |
$ |
3,721 |
| |
Accounts receivable |
|
|
|
|
270,717 |
|
- |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Total Current Assets |
|
|
|
|
399,627 |
|
3,721 |
| |
|
|
|
|
|
|
|
|
|
|
| Property and Equipment, Net |
|
|
|
|
1,318 |
|
1,972 |
| |
|
|
|
|
|
|
|
|
|
|
| Other Assets |
|
|
|
|
|
|
|
|
| |
Amortizable Intangible Assets, net |
|
|
|
393,928 |
|
- |
| |
Nonamortizable Intangible Assets |
|
|
|
2,538,678 |
|
388,972 |
| |
Deposits |
|
|
|
|
|
1,535 |
|
1,535 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Total Other Assets |
|
|
|
|
2,934,141 |
|
390,507 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Total Assets |
|
|
|
|
$ |
3,335,086 |
$ |
396,200 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Liabilities
and Stockholders' Equity (Deficit) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
Accounts payable and accrued expenses |
|
$ |
572,746 |
$ |
570,752 |
| |
Commercial line of credit |
|
|
|
|
1,300,000 |
|
- |
| |
Notes payable to individuals-current portion |
|
|
1,593,367 |
|
872,617 |
| |
Notes payable to related parties |
|
|
|
65,157 |
|
9,668 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Total current Liabilites |
|
|
|
3,531,270 |
|
1,453,037 |
| |
|
|
|
|
|
|
|
|
|
|
| |
Long-Term Debt-Net of Current portion |
|
|
330,000 |
|
- |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Total liabilities |
|
|
|
|
3,861,270 |
|
1,453,037 |
| |
|
|
|
|
|
|
|
|
|
|
| Stockholders' equity: |
|
|
|
|
|
|
|
| |
Preferred stock, 1,200,000 share authorized, $.001
par value, 270,000 |
|
|
|
|
| |
|
shares issued and outstanding at November 30, 2013
and 2012 |
|
270 |
|
270 |
| |
Common stock 3,500,000,000 shares authorized, $.001 |
|
|
|
|
| |
|
par value, 3,450,749,199
and 2,707,521,297 shares issued |
|
|
|
|
| |
|
and outstanding at November 30, 2013 and 2012 |
|
3,450,750 |
|
2,707,522 |
| |
Additional paid in capital |
|
|
|
|
4,423,398 |
|
4,745,126 |
| |
Accumulated deficit |
|
|
|
|
(8,400,602) |
|
(8,509,755) |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Total stockholders' equity (deficit) |
|
|
(526,184) |
|
(1,056,837) |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Total Liabilities and stockholders' equity (deficit) |
$ |
3,335,086 |
$ |
396,200 |
| TheDirectory.com,
Inc. |
| Statements
of Operations |
| For
The Years Ended November 30, 2013 and 2012 |
| | |
| |
|
| | |
| 2013 | | |
| 2012 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| REVENUES | |
$ | 780,163 | | |
$ | 506,026 | |
| | |
| | | |
| | |
| COST OF REVENUE | |
| | | |
| | |
| |
| 206,969 | | |
| 46,121 | |
| | |
| | | |
| | |
| GROSS PROFIT | |
| 573,194 | | |
| 459,905 | |
| | |
| | | |
| | |
| GENERAL AND ADMINISTRATIVE EXPENSES | |
| | | |
| | |
| Consulting | |
| 158,473 | | |
| 168,824 | |
| Other general and
administrative expenses | |
| 217,371 | | |
| 263,884 | |
| | |
| | | |
| | |
| Total
general and administrative expenses | |
| 375,844 | | |
| 432,708 | |
| | |
| | | |
| | |
| Income (Loss) from operations | |
| 197,350 | | |
| 27,197 | |
| | |
| | | |
| | |
| OTHER INCOME (EXPENSE) | |
| | | |
| | |
| Interest
expense | |
| (88,197 | ) | |
| (20,421 | ) |
| | |
| | | |
| | |
| NET INCOME (LOSS) | |
$ | 109,153 | | |
$ | 6,776 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| Basic weighted average number of
shares outstanding | |
| 2,937,485,412 | | |
| 2,642,317,428 | |
| | |
| | | |
| | |
| Basic Earnings per share | |
$ | — | | |
$ | — | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| Diluted weighted average number of
shares outstanding | |
$ | 2,940,185,412 | | |
$ | 2,645,017,428 | |
| | |
| | | |
| | |
| Fully Diluted
earnings per share | |
$ | 5,637,485,412 | | |
$ | 5,342,317,428 | |
| TheDirectory.com,
Inc. |
| Statements
of Cash Flows |
| For
The Years Ended November 30, 2013 and 2012 |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
2013 |
|
2012 |
| Cash flows from operating activities: |
|
|
|
|
|
|
| |
Net income (loss) |
|
|
|
$ |
109,153 |
$ |
6,776 |
| |
Adjustments to reconcile net income (loss) to net cash |
|
|
|
| |
from operating activities: |
|
|
|
|
|
|
| |
|
Depreciation and amortization |
|
|
23,825 |
|
563 |
| |
|
Change in operating assets and liabilities: |
|
|
|
|
| |
|
|
Accounts receivable |
|
|
(270,717) |
|
- |
| |
|
|
Accounts payable and accrued expenses |
1,994 |
|
154,341 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Total cash flows from operating activities |
|
(135,745) |
|
161,680 |
| |
|
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
| |
Purchase of domain names |
|
|
|
- |
|
(5,461) |
| |
|
|
|
|
|
|
|
|
|
| |
|
Total cash flows from investing activities |
|
- |
|
(5,461) |
| |
|
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
| |
Financing fees paid |
|
|
|
|
87,400 |
|
- |
| |
Repayment to DataBase Holdings |
|
|
- |
|
(30,617) |
| |
Advances from (repayments to) individuals, net |
|
82,250 |
|
(10,609) |
| |
Advances from (repayments to) related parties, net |
|
91,284 |
|
(116,720) |
| |
|
|
|
|
|
|
|
|
|
| |
|
Total cash flows from financing activities |
|
260,934 |
|
(157,946) |
| |
|
|
|
|
|
|
|
|
|
| Increase (decrease in) cash and cash equivalents |
|
|
125,189 |
|
(1,727) |
| |
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents, beginning of period |
|
|
3,721 |
|
5,448 |
| |
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents, end of period |
|
|
$ |
128,910 |
$ |
3,721 |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| NONCASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Purchase of assets |
|
|
|
|
|
|
|
|
| |
Domain names and intangibles |
|
|
$ |
2,150,000 |
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Line of Credit |
|
|
|
|
(1,000,000) |
|
|
| |
Acquisition note |
|
|
|
|
(1,150,000) |
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Cash paid |
|
|
|
$ |
- |
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| SUPPLEMENTAL INFORMATION: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Income taxes paid |
|
|
|
|
$ |
- |
$ |
- |
| Interest expense paid |
|
|
|
$ |
48,197 |
$ |
20,421 |
| TheDirectory.com,
Inc. |
| Statements
of Stockholders' Equity |
| For
The Years Ended November 30, 2013 and 2012 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Preferred Stock |
Common Stock |
|
Additional |
|
Accumulated |
|
|
| |
Shares |
|
Amount |
Shares |
|
Amount |
|
Paid-In Capital |
|
Deficit |
|
Total |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Balance November 30, 2011 |
270,000 |
$ |
270 |
2,486,624,262 |
$ |
2,486,625 |
$ |
4,908,023 |
$ |
(8,516,531) |
$ |
(1,121,613) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Stock issued for debt and interest |
- |
|
- |
220,897,035 |
|
220,897 |
|
(162,897) |
|
- |
|
58,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income for the year ended |
|
|
|
|
|
|
|
|
|
|
|
|
| November 30, 2012 |
- |
|
- |
- |
|
- |
|
- |
|
6,776 |
|
6,776 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Balance November 30, 2012 |
270,000 |
$ |
270 |
2,707,521,297 |
$ |
2,707,522 |
$ |
4,745,126 |
$ |
(8,509,755) |
$ |
(1,056,837) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Stock issued for debt and interest |
- |
|
|
589,909,090 |
|
589,909 |
|
(368,409) |
|
- |
|
221,500 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Stock issued for financing fees |
- |
|
|
153,318,812 |
|
153,319 |
|
46,681 |
|
- |
|
200,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income for the year ended |
|
|
|
|
|
|
|
|
|
|
|
|
| November 30, 2013 |
- |
|
- |
- |
|
- |
|
- |
|
109,153 |
|
109,153 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Balance November 30, 2013 |
270,000 |
$ |
270 |
3,450,749,199 |
$ |
3,450,750 |
$ |
4,423,398 |
$ |
(8,400,602) |
$ |
(526,184) |
TheDirectory.com,
Inc.
Notes
to Financial Statements
Note
1 - Background and Summary of Significant Accounting Policies
The
Company
TheDirectory.com,
Inc. (the “Company”), incorporated under the laws of the State of Utah in June 1983 as Teal Eye, Inc. Subsequently,
in 1984, the Company then merged with Terzon Corporation and changed its name to Terzon Corporation. In September 1984, the Company
changed its name to Candy Stripers Corporation, Inc. In 1986, the Company ceased the candy manufacturing operations and filed
for Chapter 11 bankruptcy protection. After emerging from bankruptcy in 1993, the Company remained dormant until it changed its
name to Piedmont, Inc. on January 6, 1998. On May 31, 2003, the Company changed its name to US Biodefense, Inc.
Effective
January 10, 2008, the Company experienced a change in control as the result of a series of transactions. Effective on that date,
the Company executed an employment agreement with Scott Gallagher pursuant to which he was appointed the Company’s Chief
Executive Officer and Chairman of the Company’s Board of Directors, positions which he still holds today. Simultaneously,
the former Chairman, David Chin, resigned as an officer and director of the Company, leaving Mr. Gallagher as the Company’s
sole director. As a result of these transactions, Mr. Gallagher assumed control of the Company.
On
April 4, 2008, the Company acquired 100% of the assets of Elysium Internet, Inc., a direct navigation Internet media company,
in exchange for stock and a $1,500,000 promissory note to FTS Group, Inc. In 2008, the Company filed an Amended and Restated Articles
of Incorporation, and effective July 28, 2008, changed its name to Elysium Internet, Inc. In May 2011, the Company changed its
name to TheDirectory.com, Inc. which it believes more accurately reflects the Company’s current business operations.
The
Company’s principal executive offices are located at 15100 Hutchison Rd., Suite 125, Tampa, Florida 33625. The Company’s
shares are quoted on the OTC Pink Current marketplace under the ticker symbol, “SEEK.”
Control
By Principal Shareholder
The
Chief Executive Officer of the Company owns, beneficially and in the aggregate, the majority of the voting power of the outstanding
shares of the capital stock of the Company. Accordingly, the Chief Executive Officer has the ability to control the approval of
most corporate actions, including increasing the authorized capital stock of the Company and the dissolution, merger or sale of
the Company's assets or business.
Basis
of Presentation
The
accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United
States of America, which contemplate continuation of the Company as a going concern. The Company
had net income for the year ended November 30, 2013 and 2012 of $109,153 and $6,776, respectively. The Company had an accumulated
deficit of $8,400,602 and $8,509,755 at November 30, 2013 and 2012, respectively. While the Company has generated positive net
income for its fiscal 2013 and 2012 periods, the net income for 2012 was just above break-even. In order to further to effect
its business plan and pay down its debt, the Company will need to increase sales and customer levels which will require further
investment. In addition, the Company’s business model contemplates future acquisitions, which will likely require the Company
to obtain additional funding. These plans, in addition to the current economic conditions, raise substantial doubt as to the Company's
ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome
of this uncertainty. These financial statements do not include any adjustments relating to the recoverability and classification
of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to
continue as a going concern.
Management
plans to take the following steps that it believes will be sufficient to provide the Company with the ability to continue in existence.
Management
intends to raise financing through issuances of its common stock or other means and interests that it deems necessary. Additionally,
management intends to acquire or develop business and business assets related to its “Build, Buy or Partner”
business model.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Fair
Value of Financial Instruments
For
certain of the Company’s financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable
and deferred revenues, the carrying amounts approximate fair value due to their short maturities.
Leases
The
Company leases office facilities under agreements accounted for as operating leases. For leases that contain escalation or rent
concessions provisions, management recognizes rent expense during the lease term on a straight-line basis over the term of the
lease. The difference between rent paid and straight-line rent expense is recorded as a deferred rent liability in the accompanying
consolidated balance sheets.
Revenue
Recognition
We
recognize revenue when we make a sale through one of our directories or city guides. Sales generated from third-party advertisers
are recognized in the month the revenue is generated.
Concentration
of Credit Risk
Financial
instruments which subject the Company to concentrations of credit risk include cash and cash equivalents.
The
Company maintains its cash in well-known banks selected based upon management's assessment of the bank's financial stability.
Balances may periodically exceed the $100,000 federal depository insurance limit; however, the Company has not experienced any
losses on deposits. The Company extends credit to its customers based on an evaluation of the customer's financial condition,
generally without collateral. Exposure to losses on receivables is principally dependent on each customer's financial condition.
The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required.
Cash
Equivalents
For
purposes of reporting cash flows, the Company considers all short-term investments with an original maturity of three months or
less to be cash equivalent.
Selling
and Marketing Expenses
Selling
and marketing expenses consist primarily of personnel and related expenses for selling and marketing staff, including salaries,
consulting fee’s and wages, commissions and other variable compensation, benefits, bonuses and stock-based compensation;
travel and business costs; training, recruitment, marketing and promotional events; advertising; other brand building and product
marketing expenses; and occupancy, technology and other direct overhead costs.
General
and Administrative Expenses
General
and administrative expenses consist primarily of personnel and related expenses for executive, legal, finance, human resources
and corporate communications, including wages, benefits, bonuses and stock-based compensation, professional fees, insurance premiums
and other expenses, including occupancy, technology and other direct overhead, public company costs and other corporate expenses.
Advertising
Expenses
The
Company expenses advertising as incurred. For the years ended November 30, 2013 and 2012, advertising expenses were $213,478 and
$58,450, respectively, and such expenses are included under general and administrative expenses.
Fixed
Assets
Fixed
assets are stated at cost, less accumulated depreciation. Depreciation is provided principally on the straight-line method over
the estimated useful lives of the assets, which are generally 3 to 10 years. The cost of repairs and maintenance is charged to
expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable
asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in results of operations.
The
Company will periodically evaluate whether events and circumstances have occurred that may warrant revision of the estimated useful
lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses
an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.
Income
Taxes
The
Company records income taxes using the asset and liability method which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. In estimating
future tax consequences, all expected future events other than enactments or changes in the tax law or rates are considered. Valuation
allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized.
The
Company records tax benefits for income tax positions only if it is “more-likely-than-not” to be sustained based solely
on its technical merits as of the reporting date. Management considers many factors when evaluating and estimating tax positions
and tax benefits, which may require periodic adjustments and which may differ from actual outcomes. The Company follows a comprehensive
model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected
to be taken in income tax returns. The Company’s policy is to recognize interest and penalties related to tax in income
tax expense.
Net
Income (Loss) Per Share
Basic
net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common
shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the
period by the weighted average number of common and potential dilutive shares outstanding during the period, to the extent such
shares are dilutive. Potential dilutive shares are composed of incremental common shares issuable upon the exercise of stock options,
warrants and unvested restricted shares using the treasury stock method and convertible preferred stock under the if-converted
method, where such conversions are dilutive.
Note
2 - Marketable Securities Available For Sale
The
Company has adopted SFAS 130 as required by the Financial Accounting Standards Board. SFAS 130 requires that securities that are
available for sale be presented at market value on the balance sheet date. Unrealized gains and losses are recognized as a separate
component of stockholders' equity. The specific identification method is used in calculating realized gains and losses. SFAS 130
also requires a statement of comprehensive income which adjusts net income for the unrealized activity. At November 30, 2013 and
2012, the Company held no such investments.
Note
3 - Property and Equipment
Property
and equipment consisted of the following at November 30, 2013 and 2012:
| | |
| 2013 | | |
| 2012 | |
| Furniture and fixtures (at cost) | |
$ | 8,467 | | |
$ | 8,467 | |
| Accumulated depreciation | |
| 7,149 | | |
| 6,495 | |
| Net | |
$ | 1,314 | | |
$ | 1,972 | |
Note
4 - Comprehensive Income
Accounting
principles generally require that recognized revenues, expenses, gains and losses be included in net income. Although certain
changes in assets and liabilities, such as unrealized gains and losses on available for sale securities are reported as a separate
component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.
The
components of other comprehensive income and related tax effects for the years ended November 30, 2013 and 2012 are zero.
Note 5 - Income Taxes
The income tax provision reflected in the statement of operations
consists of the following components for the years ended November 30, 2013 and 2012:
| |
|
2013 |
|
|
2012 |
|
| Current Tax Provision |
|
$ |
26,000 |
|
|
$ |
1,000- |
|
| Application of net operating losses |
|
|
(26,000 |
) |
|
|
( 1,000) |
|
| Total Tax (Benefit) Provision |
|
$ |
- |
|
|
$ |
- |
|
Deferred income taxes are the result
of timing differences between book and tax basis of certain assets and liabilities, timing of income and expense recognition of
certain items and net operating loss carry-forwards.
The Company assesses temporary differences
resulting from different treatments of items for tax and accounting purposes. These differences result in deferred tax assets and
liabilities, which are recorded in our balance sheets. The Company evaluates the realizability of its deferred tax assets and assesses
the need for a valuation allowance on an ongoing basis. In evaluating its deferred tax assets, the Company considers whether it
is more likely than not that the deferred income tax assets will be realized. The ultimate realization of deferred tax assets depends
upon generating sufficient future taxable income prior to the expiration of the tax attributes. In assessing the need
for a valuation allowance the Company must project future levels of taxable income. This assessment requires significant judgment.
The Company examined the evidence related to a recent history of tax losses, the economic conditions in which it operates recent
organizational changes, its forecasts and projections.
At November 30, 2013 and 2012
the Company had deferred tax assets for net operating losses offset by a 100% valuation allowance. For the years ended
November 30, 2013 and 2012, a portion of the net operating losses were utilized. Under the Internal Revenue Code of 1986, as
amended, these losses can be carried forward up to twenty years. As of November 30, 2013 the Company has net
operating loss carry forwards in the amount of $780,000 which expire in 2030.
The Company is currently open to audit
under the statute of limitations by the Internal Revenue Service for the years ending November 30, 2010 through 2013. The Company
state income tax returns are open to audit under the statute of limitations for the years ending November 30, 2010 through 2013.
The Company recognizes interest and
penalties related to income taxes in income tax expense. The Company had incurred no penalties and interest for the years ended
November 30, 2012 and 2013.
Note
6-Intangible Assets
| | |
| |
| |
|
| We classify Intangible Assets within Other Assets on the balance sheets. Intangible Assets consisted of the following |
| as of November 30, 2013 and 2012: | |
| |
|
| | |
| |
| |
|
| | |
| |
| |
|
| Amortizable | |
| |
| |
|
| | |
November 30, 2013 |
| | |
| | | |
| Accumulated | | |
| | |
| | |
| Gross | | |
| Amortization | | |
| Net | |
| Financing fees | |
$ | 417,100 | | |
$ | 23,172 | | |
$ | 393,928 | |
| | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Nonamortizable | |
| | | |
| | | |
| | |
| | |
| November 30, | | |
| | | |
| November 30, | |
| | |
| 2013 | | |
| | | |
| 2012 | |
| Internet Domain Portfolio | |
$ | 2,051,861 | | |
| | | |
$ | 305,355 | |
| Intellectual Property | |
| 386,817 | | |
| | | |
| 83,617 | |
| Trademarks | |
| 100,000 | | |
| | | |
| — | |
| | |
$ | 2,538,678 | | |
| | | |
$ | 388,972 | |
Note
7 - Earnings per Share
Basic
earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding during the
period.
TheDirectory.com
had convertible preferred stock issued and outstanding during the entire year ended November 30, 2013 and 2012. The preferred
stock has a $0.001 par value with each share convertible into 10,000 shares of common stock. There were 270,000 shares of the
convertible preferred stock issued and outstanding at November 30, 2013 and 2012 convertible into 2,700,000,000 shares of common
stock. Since these shares are potentially dilutive, they are included in the calculation of fully diluted earnings per share.
Note
8- Contracts
In
November 2011, the Company entered into a contract to purchase selected assets from Database Holdings Group, LLC and
its owners, Tom and Gus Skarlis. Such assets included the domain name BuisnessList.com. In July 2012, Mr. Skarlis breached
the terms of the contract. After settlement negotiations failed, the Company filed a case with the American
Arbitration Association (AAA) pursuant to the terms of the contract. After the case was heard in May 2012, the arbitrator
agreed with the Company and determined that Mr. Skarlis had in fact breached the contract in several areas. The Company was
not awarded any compensation but keep certain IP assets. The Company has accounted for the acquired intellectual property
investment as an intangible asset in its financial statements.
Note
9 – Asset Acquisition
On
October 1, 2013, the Company acquired one of the largest online city guide networks in the world, Hyper-Local(TM) City Guide Network,
and the rights to over 1,580 Internet domain names and certain intellectual property from two privately held companies, Let’s
See What Sticks, LLC and CMS Domains, LLC, for a total purchase price of $2,150,000. The purchase price consisted of a cash payment
of $1,000,000 and the issuance of a 24-month promissory note in the amount of $1,150,000 to the sellers.
Note
10 – Revolving Credit Facility
Effective
October 1, 2013, the Company closed a $5 million revolving credit financing facility with TCA Global Credit Master Fund, TCA.
The initial draw down on the line of credit was $1.3 million, and after fees, the Company netted approximately $1.1 million. The
Company used the funds from the credit financing facility to complete its October 2013 acquisition. Going forward, the Company
has access to approximately $3.7 million under the terms and conditions of the credit financing facility.
Note
11 – Subsequent Events
On
December 10, 2013, the Company’s Board of Directors, acting upon shareholder approval, approved an amendment to the Company’s
authorized capital stock, such that the total number of shares of authorized capital stock the Company has the ability to issue
is six billion, one million, two hundred thousand (6,001,200,000) shares, consisting of six billion (6,000,000,000) shares of
common stock, $0.001 par value per share, and one million, one hundred thousand (1,200,000) shares of preferred stock, $0.001
par value per share. The amendment was filed with the State of Utah on December 11, 2013. The Board proposed such amendment to
the shareholder due to several factors, including primarily the need to stay in full compliance with the terms of its revolving
credit financing facility.
On December 1, 2013, our Board approved the creation
of 270,000 shares of Series A Convertible Preferred Stock as additional compensation relating to personal guarantees entered into
by our Chief Executive Officer in order to close our October 2013 financing and acquisition. Each share of Series A Convertible
Preferred Stock shall be convertible, at the option of the holder thereof, at any time after one year from the date of issuance
into a number of fully paid and non-assessable shares of our common stock. For each share of Series A Convertible Preferred Stock,
the holder will receive 10,000 shares of common shares upon conversion.
Item
14. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.
There
have been no disagreements with our independent registered public accounting firm in regards to accounting and financial disclosure.
Item
15. Financial Statements and Exhibits.
| Exhibit |
Description |
| |
|
| 3.1. |
Articles of Incorporation, filed June 29, 1983 (included as Exhibit 3.1 to the Form 10SB12G filed September 1, 2000, and incorporated herein by reference). |
| |
|
| 3.2 |
Articles of Amendment to the Articles of Incorporation, filed July 17, 1984 (included as Exhibit 3.2 to the Form 10SB12G filed September 1, 2000, and incorporated herein by reference). |
| |
|
| 3.3 |
Articles of Amendment to the Articles of Incorporation, filed September 17, 1984 (included as Exhibit 3.3 to the Form 10SB12G filed September 1, 2000, and incorporated herein by reference). |
| |
|
| 3.4 |
Amended and Restated Articles of Incorporation, filed December 30, 1997 (included as Exhibit 3.4 to the Form 10SB12G filed September 1, 2000, and incorporated herein by reference). |
| |
|
| 3.5 |
Certificate of Amendment to the Amended and Restated Articles of Incorporation, filed May 13, 2003 (included as Exhibit 3 to the Form 10-QSB filed July 15, 2003, and incorporated herein by reference). |
| |
|
| 3.6 |
Amended and Restated Articles of Incorporation, filed July 11, 2008 (filed herewith). |
| |
|
| 3.7 |
Articles of Amendment to the Amended and Restated Articles of Incorporation, filed June 22, 2010 (filed herewith) |
| |
|
| 3.8 |
Articles of Amendment to the Amended and Restated Articles of Incorporation, filed April 13, 2011 (filed herewith). |
| |
|
| 3.9 |
Articles of Amendment to the Amended and Restated Articles of Incorporation, dated May 19, 2011 (filed herewith). |
| |
|
| 3.1 |
Articles of Amendment to the Amended and Restated Articles of Incorporation, effective December 10, 2013, dated December 11, 2013 (filed herewith). |
| |
|
| 3.11 |
Bylaws (included as Exhibit 3.5 to the Form 10SB12G filed September 1, 2000, and incorporated herein by reference). |
| |
|
| 4.1 |
Certificate of Designation of Series A Convertible Preferred Stock, filed with the State of Utah Department of Commerce on April 13, 2011 (included in Exhibit 3.8 filed herewith). |
| |
|
| 10.1 |
Executive Employment Agreement between the Company and Scott Gallagher, dated January 10, 2008 (included as Exhibit 10.1 to the Form 8-K filed January 10, 2008, and incorporated herein by reference). |
| |
|
| 10.2 |
Agreement for Purchase and Sale of Stock between the Company and Scott Gallagher, dated January 10, 2008 (included as Exhibit 10.2 to the Form 8-K filed January 10, 2008, and incorporated herein by reference). |
| |
|
| 10.3 |
Agreement for Purchase and Sale of Stock between the Company and 221 Fund, LLC, dated January 10, 2008 (included as Exhibit 10.3 to the Form 8-K filed January 10, 2008, and incorporated herein by reference). |
| |
|
| 10.4 |
Asset Purchase Agreement between the Company and FTS Group, Inc., dated March 19, 2008 (included as Exhibit 10.1 to the Form 8-K filed April 10, 2008, and incorporated herein by reference). |
| |
|
| 10.5 |
Promissory Note between due January 3, 2010, issued by the Company to FTS Group, Inc. (included as Exhibit 10.2 to the Form 8-K filed April 10, 2008, and incorporated herein by reference). |
| |
|
| 10.6 |
Credit facility with TCA Global Master Fund |
| |
|
| 23.1 |
Consent of Independent Registered Public Accounting Firm (filed herewith). |
Financial
Statement Schedules
Schedules
have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements
or notes thereto.
SIGNATURES
Pursuant
to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date:
January 27, 2014 |
THEDIRECTORY.COM,
INC. |
| |
By |
/s/
Scott Gallagher |
| |
|
Name: Scott Gallagher
Title: Chief
Executive Officer and acting Chief Financial Officer |
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