UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2014
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 333-185669
SPRIZA, INC.
(Exact name of registrant as specified in its charter)
Nevada
|
90-08883246
|
(State or other jurisdiction of incorporation of
organization)
|
(I.R.S. Employer Identification No.)
|
111 Penn
Street, El Segundo, CA 90245
|
(Address of principal executive offices)
|
650-204-7903
|
(Registrant’s telephone number)
|
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate by check mark whether the registrant has
submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post
such files).
YES [ X ] NO [ ]
Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
|
Large
Accelerated Filer
|
[
]
|
|
Accelerated
Filer
|
[
]
|
|
Non-accelerated
Filer
|
[
]
|
|
Smaller
Reporting Company
|
[X]
|
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act).
YES [ ] NO [X]
As of November 14, 2014, there were 67,718,934 shares of our common
stock issued and outstanding.
1
SPRIZA, INC.
FORM 10-Q
INDEX
2
FORWARD-LOOKING STATEMENTS
This Report on
Form 10-Q contains forward-looking statements within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act of
1995. Reference is made in particular to the description of our plans and
objectives for future operations, assumptions underlying such plans and
objectives, and other forward-looking statements included in this report.
Such statements may be identified by the use of forward-looking terminology
such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,”
“continue,” or similar terms, variations of such terms or the negative of such
terms. Such statements are based on management’s current expectations and
are subject to a number of factors and uncertainties, which could cause actual
results to differ materially from those described in the forward-looking
statements. Such statements address future events and conditions
concerning, among others, capital expenditures, earnings, litigation,
regulatory matters, liquidity and capital resources, and accounting matters.
Actual results in each case could differ materially from those anticipated in
such statements by reason of factors such as future economic conditions,
changes in consumer demand, legislative, regulatory and competitive
developments in markets in which we operate, results of litigation, and other
circumstances affecting anticipated revenues and costs, and the risk factors
set forth under the heading “Risk Factors” in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2013 filed on March 31, 2014.
The forward-looking statements made in this report
on Form 10-Q relate only to events or information as of the date on which the
statements are made in this report on Form 10-Q. Except as required by
law, we undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events, or otherwise, after the date on which the statements are made or to
reflect the occurrence of unanticipated events. You should read this report
and the documents that we reference in this report, including documents
referenced by incorporation, completely and with the understanding that our
actual future results may be materially different from what we anticipate.
Unless otherwise indicated, in this Form 10-Q,
references to “we,” “our,” “us,” the “Company,” “Spriza” or the “Registrant”
refer to Spriza, Inc., a Nevada corporation.
YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS
3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
These financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for
interim financial information and the SEC’s instructions to Form 10-Q. In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the interim period ended
September 30, 2014 are not necessarily indicative of the results that can be
expected for the full year.
Spriza, Inc.
Condensed Balance
Sheets
|
|
September 30, 2014 $ |
|
|
December 31, 2013 $ |
|
ASSETS
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
27,943 |
|
|
483,539 |
|
Cash – restricted |
|
10,000 |
|
|
10,000 |
|
Accounts Receivable |
|
43,348 |
|
|
- |
|
|
|
|
|
|
|
|
Total Current Assets |
|
81,291 |
|
|
493,539 |
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation of $9,332 and $4,271, respectively (Note 4) |
|
24,409 |
|
|
24,638 |
|
Other assets |
|
|
|
|
|
|
Intangible assets, net of accumulated amortization of $56,345 and $2,236, respectively (Note 4) |
|
330,591 |
|
|
284,132 |
|
Deposits |
|
2,737 |
|
|
- |
|
Total Other Assets |
|
357,737 |
|
|
284,132 |
|
Total Assets
|
|
439,028 |
|
|
802,309 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
35,231 |
|
|
42,334 |
|
Total Current Liabilities |
|
35,231 |
|
|
42,334 |
|
|
|
|
|
|
|
|
Contingencies (Notes 1
and 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock, 10,000,000 shares authorized, $0.0001 par value, no shares issued and outstanding |
|
- |
|
|
- |
|
Common Stock, 190,000,000 shares authorized, $0.0001 par value, 65,942,477 and 41,0000,000 issued and outstanding, respectively (Note 6) 67,718,934 and 65,942,477 shares issued and outstanding, respectively |
|
6,772 |
|
|
6,594 |
|
|
|
|
|
|
|
|
Additional
Paid in Capital
|
|
1,782,666 |
|
|
1,257,720 |
|
Accumulated Deficit
During the Development Stage
|
|
(1,385,641 |
) |
|
(504,339 |
) |
Total Stockholders’
Equity
|
|
403,797 |
|
|
759,975 |
|
Total Liabilities and
Stockholders’ Equity
|
|
439,028 |
|
|
802,309 |
|
(See Notes to Unaudited Condensed Financial Statements)
F-1
Spriza, Inc.
Condensed Statements of Operations
(Unaudited)
|
|
Three Months Ended September 30, 2014
|
|
|
Three Months Ended September 30, 2013
|
|
|
Nine Months Ended September 30, 2014
|
|
|
Nine Months Ended September 30, 2013
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Revenue
|
|
46,848 |
|
|
7,000 |
|
|
46,848 |
|
|
7,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Branding and marketing |
|
8,063 |
|
|
- |
|
|
56,317 |
|
|
27,659 |
|
Consulting |
|
46,464 |
|
|
18,487 |
|
|
144,112 |
|
|
40,813 |
|
Consulting – related party |
|
18,293 |
|
|
32,157 |
|
|
93,335 |
|
|
53,373 |
|
Depreciation and amortization |
|
25,159 |
|
|
1,445 |
|
|
59,170 |
|
|
2,826 |
|
General and administrative |
|
24,257 |
|
|
3,391 |
|
|
65,324 |
|
|
10,163 |
|
Professional fees |
|
23,420 |
|
|
7,202 |
|
|
181,380 |
|
|
31,279 |
|
Regulatory fees |
|
327 |
|
|
954 |
|
|
12,439 |
|
|
15,720 |
|
Stock based compensation |
|
60,334 |
|
|
- |
|
|
251,727 |
|
|
- |
|
Travel |
|
10,774 |
|
|
6,889 |
|
|
64,421 |
|
|
11,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
(217,092 |
) |
|
(70,525 |
) |
|
(928,225 |
) |
|
(193,196 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) before Other
Expense
|
|
(170,244 |
) |
|
(63,525 |
) |
|
(881,377 |
) |
|
(186,196 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense)
Interest Income
|
|
74 |
|
|
- |
|
|
74 |
|
|
- |
|
Interest expense |
|
- |
|
|
(4,854 |
) |
|
- |
|
|
(8,977 |
) |
Net (Loss)
|
|
(170,170 |
) |
|
(68,379 |
) |
|
(881,303 |
) |
|
(195,173 |
) |
|
|
|
|
|
- |
|
|
|
|
|
|
|
Net (Loss) Per Share –
Basic and Diluted
|
|
(0.00 |
) |
|
(0.00 |
) |
|
(0.00 |
) |
|
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding – Basic and Diluted
|
|
67,636,325 |
|
|
61,703,000 |
|
|
66,766,442 |
|
|
49,295,000 |
|
(See Notes to Unaudited Condensed Financial Statements)
F-2
Spriza, Inc.
Condensed Statements of Cash Flows
(Unaudited)
|
|
For the Nine Months Ended |
|
|
|
September 30, 2014 |
|
|
|
2014
|
|
|
2013
|
|
|
|
$
|
|
|
$
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
(881,303 |
) |
|
(195,173 |
) |
Adjustments to reconcile net loss to |
|
|
|
|
|
|
net cash (used) by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
59,170 |
|
|
2,826 |
|
Stock-based compensation |
|
251,727 |
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
(Increase) in other assets |
|
(2,737 |
) |
|
- |
|
(Increase) decrease in accounts receivable |
|
(43,348 |
) |
|
- |
|
(Decrease) increase in accounts payable and accrued expenses |
|
(7,103 |
) |
|
16,068 |
|
|
|
|
|
|
|
|
Net Cash (Used)
in Operating Activities
|
|
(623,593 |
) |
|
(176,279 |
) |
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash |
|
(10,000 |
) |
|
- |
|
Purchase of equipment |
|
(4,832 |
) |
|
(3,910 |
) |
Additions to intangible assets |
|
(100,568 |
) |
|
(173,470 |
) |
|
|
|
|
|
|
|
Net Cash (Used)
in Investing Activities
|
|
(115,400 |
) |
|
(177,380 |
) |
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
loan proceeds
|
|
- |
|
|
405,000 |
|
Repayment of
short-term loans
|
|
- |
|
|
(25,000 |
) |
Proceeds
from the issuance of common stock
|
|
273,397 |
|
|
100,000 |
|
|
|
|
|
|
|
|
Net Cash
Provided by Financing Activities
|
|
273,397 |
|
|
480,000 |
|
|
|
|
|
|
|
|
(Decrease) Increase
in Cash
|
|
(465,596 |
) |
|
126,341 |
|
|
|
|
|
|
|
|
Cash -
Beginning of Period
|
|
493,539 |
|
|
2,440 |
|
|
|
|
|
|
|
|
Cash - End
of Period
|
|
27,943 |
|
|
128,781 |
|
|
|
|
|
|
|
|
Non-cash
Financing and Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
loans and interest settled for shares
|
|
- |
|
|
- |
|
Acquisition
of assets for common shares
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Supplemental
Disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
paid |
|
- |
|
|
- |
|
Income
taxes paid |
|
- |
|
|
- |
|
F-3
Spriza, Inc.
Notes to Condensed Financial
Statements
(Unaudited)
|
The condensed interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. |
|
These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the period ended December 31, 2013 and notes thereto included in the Company's Form 10-K. The Company follows the same accounting policies in the preparation of interim reports. |
|
Results of operations for the interim periods are not indicative of annual results. |
2.
|
Summary of Significant Accounting Policies
|
|
The preparation of financial statements in accordance with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. We regularly evaluate estimates and assumptions related to the useful life and recoverability of long-lived assets, stock-based compensation, and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
|
Revenue is recognized in accordance with Accounting Standard Codification (ASC) 605-10 (previously Securities and Exchange Commission Staff Accounting Bulletin No. 104, Revenue Recognition). We recognize revenue when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the selling price is fixed or determinable; and collection is reasonably assured. The revenues are derived from the agreements with the businesses that utilize the online contest platform developed by the Company. |
|
We account for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the statement of operations based on their fair values at the date of grant. |
F-4
|
We account for stock-based payments to non-employees in accordance with ASC 718 and Topic 505-50, “Equity-Based Payments to Non-Employees.” Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. |
|
We calculate the fair value of option grants and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. We estimate forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, we monitor both stock option and warrant exercises as well as employee termination patterns. |
|
The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the requisite service period of the award. |
|
We continually assess any new accounting pronouncements to determine their applicability to us. Where it is determined that a new accounting pronouncement affects our financial reporting, we undertake a study to determine the consequence of the change to our financial statements and assure that there are proper controls in place to ascertain that our financial statements properly reflect the change. |
|
On June 10, 2014, the FASB published Accounting Standards Update No. 2014-10 “ASU No. 2014-10”, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. ASU No. 2014-10 removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. ASU No. 2014-10 will be applied retrospectively and will be effective for public business entities in interim and annual periods beginning after December 15, 2014. The requirements will be effective for nonpublic business entities for annual periods beginning after December 15, 2014, and interim and annual periods thereafter. However, both public and nonpublic entities will have additional time to adopt the amendments to ASC 810. Early adoption is permitted in all cases. We have applied ASU No. 2014-10 retrospectively by eliminating the inception to date column in our statements of operations and cash flows. |
|
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have begun operations but have not generated significant revenue to date. These conditions give rise to doubt about our ability to continue as a going concern. These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our continuation as a going concern is dependent upon our ability to obtain additional financing and to generate profits and positive cash flow. We will require a cash injection of $1,000,000 over the next twelve months to continue to grow our business. F-5 |
F-5
4.
|
Property and Equipment and Intangible Assets
|
|
On October 17, 2012, we entered into an Asset Purchase Agreement with Raptify Marketing Systems Ltd. (“Raptify”), whereby we acquired certain assets from Raptify in exchange for 5,000,000 shares of our common stock, 3,000,000 shares of which were received by Raptify and 2,000,000 shares of which were received by certain other stakeholders of Raptify. The fair value of the assets acquired was $25,000 which was allocated to identifiable assets as follows: intellectual property $1 and computer systems, $24,999. |
|
On May 15, 2013 we contracted a San Francisco consulting firm with technology development capabilities in the Philippines to complete the redevelopment of our technology platform. On December 1, 2013 we completed SPRIZA™ and on March 18, 2014 unveiled it to the public with real-time contests being run. SPRIZA™ includes: subscriber portal, mobile device support, do-it-yourself platform and tools allowing us to develop a database of concurrent customers and users. During the nine months ended September 30, 2014 we spent $101,107 on completion of this project and have allocated the cost to intellectual property. |
|
During the third quarter of 2014 the Company issued 100,000 common shares for proceeds of $50,000 from a non-brokered private placement. |
|
As at September 30, 2014 we had 3,308,634 common share purchase warrants outstanding having an average exercise price of $0.30 per common share and having an average expiration date of 2.86 years. |
7.
|
Stock-based Compensation
|
|
On October 29, 2013, we granted 4,550,000 stock options to directors, officers and employees to acquire 4,550,000 common shares at $0.15 per share having an option life of five years. A total of 25% vested on April 30, 2014, with a further 25% vesting on each of October 31, 2014, April 30, 2015 and October 31, 2015. During Q3-2014 we recorded stock-based compensation of $60,334 (Q3-2013 - $nil). |
|
The following table summarizes the continuity of our stock options: |
|
|
Number
of
Options
|
Weighted
Average
Exercise
Price
|
Weighted-Average
Remaining
Contractual
Term
(years)
|
Aggregate
Intrinsic
Value
|
|
|
|
$
|
|
$
|
|
Outstanding, December 31,
2013
|
4,550,000 |
0.15 |
|
|
|
|
|
|
|
|
|
Granted
|
- |
- |
|
|
|
|
|
|
|
|
|
Outstanding, September 30,
2014
|
4,550,000 |
0.15 |
4.34 |
2,684,500 |
|
|
|
|
|
|
|
Exercisable, September 30,
2014
|
2,275,000 |
0.15 |
- |
- |
|
A summary of the changes of
the Company’s non-vested stock options is presented below: |
F-6
|
|
Number of
Options
|
Weighted Average
Grant Date
Fair Value
|
|
|
|
$
|
|
Non-vested at December 31,
2013
|
3,412,500 |
0.10 |
|
Granted
|
- |
- |
|
Vested
|
1,137,500 |
- |
|
|
|
|
|
Non-vested at September 30,
2014
|
2,275,000 |
0.10 |
|
As at September 30, 2014, there was $112,227 of unrecognized compensation cost related to non-vested stock options expected to be recognized over a weighted average period of 1.25 years. |
8.
|
Related Party Transactions
|
|
The President and Chief Executive Officer of the Company was paid a total of $18,320 during the three months ended September 30, 2014 and $79,713 during the nine months ended September 30, 2014, (2013 -Q3 - $32,157 and $53,373 for the nine month period). The Chief Financial Officer of the Company was paid a total of $4,451 during Q3 - 2014 and $13,622 for the nine months ended September 30, 2014, (2013 -$Nil). |
|
We have evaluated all subsequent events through the date these financial statements were issued and determined that there are no subsequent events to record or to disclose. |
F-7
Item 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Overview
On September 17, 2012 we were incorporated as Level20
Inc. in the State of Nevada. On October 25, 2013 we changed our name to Spriza,
Inc.
On October 17, 2012, we entered into an
Asset Purchase Agreement with Raptify Marketing Systems Ltd. (“Raptify”), whereby
we acquired certain assets from Raptify in exchange for 5,000,000 shares of our
common stock, 3,000,000 shares of which were received by Raptify and 2,000,000
shares of which were received by certain other stakeholders of Raptify.
Our principal
executive offices are located at 111 Penn Street, El Segundo, CA 90245, and our telephone number at this address is (650) 204-7903. Our website is www.spriza.com.
Information contained on our website is not a part of this Quarterly Report on
Form 10-Q. We completed our initial public offering on June 12, 2013. On November 4, 2013, our common stock was
quoted under the symbol “SPRZ” on the OTC BB operated by the Financial Industry
Regulatory Authority, Inc. (“FINRA”).
Our Business and Intellectual Property
We own and operate the patent-pending
proprietary SPRIZA™ contest marketing platform. We filed the US Patents, filing
No. 12753864 and submitted the Canadian filings, No. 2261/P1551CA00. We
acquired these assets through an Asset Purchase Agreement and we currently hold
patent pending status for both jurisdictions.
Trademarks pertaining to
SPRIZA™ and its Star Icon logo as well as our tagline “Win, Laugh, Live” have
been applied for in the United States and Canada. Currently all trademarks
listed above are in a pending status.
Our intellectual property
is a fully developed, commercially operational incentive contest marketing
system and platform that builds brand awareness and generates qualified
targeted leads for any size of business through a patent-pending online contest
marketing solution trademarked as “SPRIZA™”. SPRIZA™ taps into the power of shared interests and personal
relationships within targeted markets producing traceable and quantifiable
results at every stage of the contest. It provides
deep, real-time analytics and reporting, through robust tools that measure
marketing and advertising budgets for real time return on investment analysis
and demographic profiling. SPRIZA™ leverages social media strategies based on
business objectives enabling our clients “Branders” to measure results of
marketing efforts. The result is a network of
subscribers that participate in contest promotions centered around their
personal and shared interests. SPRIZA™ produces quantifiable and verifiable participant data results, which can
be used for ongoing marketing purposes with targeted demographics. SPRIZA™ data results assess how many
consumers responded, whom they shared the contest with, the level of
engagement, how many other contest participants were influenced and sales value
generated. SPRIZA™ is designed to work with
most social media engines including Facebook, Twitter and Pinterest and offers
full mobile capability to engage popular mobile applications including iPhone,
Android, Blackberry and Windows mobile operating systems.
We seek patent protection for those
inventions and technologies for which we believe such protection is suitable
and is likely to provide a competitive advantage to us. Because patent
applications in the United States are maintained in secrecy until either the
patent application is published or a patent is issued, we may not be aware of
third-party patents, patent applications and other intellectual property
relevant to our products that may block our use of our intellectual property or
may be used in third-party products that compete with our products and
processes. In the event a competitor or other party successfully challenges our
products, processes, patents or licenses or claims that we have infringed upon
their intellectual property, we could incur substantial litigation costs
defending against such claims, be required to pay royalties, license fees or
other damages or be barred from using the intellectual property at issue, any
of which could have a material adverse effect on our business, operating
results and financial condition.
We also rely substantially on
trade secrets, proprietary technology, nondisclosure and other contractual
agreements, and technical measures to protect our technology, application,
design, and manufacturing know-how, and work actively to foster continuing
technological innovation to maintain and protect our competitive position. We
cannot assure you that steps taken by us to protect our intellectual property
and other contractual agreements for our business will be adequate, that our
competitors will not independently develop or patent substantially equivalent
or superior technologies or be able to design around patents that we may
receive, or that our intellectual property will not be misappropriated.
4
Spriza.com – Contest Portal
Delivery and distribution to the consumer
of all contest offerings will be based upon user profile by location, interests
and other preferences. Our web site www.spriza.com aggregates all contests, while segmenting
distribution based upon the means of client submission and their branding
strategy to specifically determine which offerings are available nationally and
regionally. Post marketing opportunities will occur within this platform to
drive affiliate revenue and secondary sales.
Small/Medium Business Contest Creation Tool
We offer a low cost entry platform
targeting small to mid-sized businesses wishing to promote themselves through
self-directed contests on a local or regional level. This portal offers a
comprehensive toolkit and tutorials to initiate, register and administer a
fully-compliant contest or sweepstake, providing basic templates and
customization options to uniquely brand their efforts and monitor their results
using fundamental reporting tools. This option may not require or include any
third-party party intervention but does provide limited access to support and
assistance through our administration team.
Advertising Agency Contest Creation Tool
Our enterprise solution is a backend system
providing every available tool and customization option to those agencies and
marketing firms wishing to offer our products to their corporate clients in a
closed loop campaign as a standalone offering or as integration to existing
programs and marketing efforts. This option is expected to provide full support
and assistance to the agency behind the scenes. We anticipate that utilities
and reporting tools will be comprehensive and customizable, allowing for
white-labeling to their own client base. We expect that this solution will be best
suited to major national brands rolling out a complete North American campaign.
International Licensing & Site Mirrors
For international expansion we anticipate
that international licensed affiliates wishing to duplicate our offerings in
foreign countries will have the opportunity to acquire exclusive licensing
through our international release of mirror programs, enabling them to tailor a
solution to their local market’s culture, currency, language and compliance to
legal requirements. We have finalized our
international licensing model and we are currently identifying licensees for
international expansion in Asia, Europe and South America.
Sales and Marketing
Our SPRIZA™ technology is
designed to integrate seamlessly within existing social media platforms. We
expect to grow our revenues through multiple streams including contest revenue,
lead generation, ecommerce conversion and ongoing marketing initiatives.
Traditional marketing efforts to promote
contests or corporate promotional giveaways have included direct mail,
newspaper, radio, television and some have included online efforts but they
have generally not successfully leveraged the viral nature of social media such
as Facebook or Twitter. Our patent-pending solution rewards a company with a
competition advantage based on its ability to drive viral distribution and
participation towards sales and lead generation. There are other online
contesting companies such as Strutta and WildfireApp that are more focused on
driving interest to social pages. This brand engagement dies at the closing of
that promotional offer and usually only incentivizes a limited amount of the
participants.
Our patent-pending method of contest
distribution uses incentive based, viral marketing where participants are
rewarded for sharing the contest with like-minded family, friends and
associates. Participants’ odds improve the more people they invite as do their
chances of sharing in that winning experience with that chain of winners. This
incentive based marketing creates a new and proprietary way for brands to
attract and identify customers, brand influencers and ambassadors to sell goods
and services.
The contest subscriber website is
www.spriza.com where users are able to create an account, set personal
preferences, link to their social media profiles and consume, share and engage
in branded contests throughout North America. This site has three main
sections: open contests they are participating in, closed contests they
previously participated in and current and available contests that can be
searched or screen based on personal preferences. Within each section
individuals will be served promotional materials, deals, and advertising
relevant to that brand and personal preference. Each section will likely
contain short videos on the brand experience, to explain what the
5
brand experience offers if customers win
and a video of the winners sharing and consuming the winning brand experience.
We email our www.Spriza.com subscribers contest offers that are
targeted by location and personal preferences. Consumers can also access our
contests directly through our website and mobile applications. We expect that
new subscribers will be driven to Spriza™ through all digital advertising
efforts such as paid, search, social, mobile, location, email and, where
essential, traditional methods. All contests will initially be seeded
throughout our database of subscribers but also promoted through our client’s
social media assets and client lists thus driving up our total subscribers.
A typical contest might offer an
all-inclusive weekend at a brand name hotel in Las Vegas and a set of brand
name golf clubs. Contests would immediately be pushed out and shared by golf
lovers and enthusiasts from one personal contact to another. The advantage of
our SPRIZA™ platform is that each contestant in the winning referral chain is a
winner and in this example goes on the trip and all share the experience
together. We anticipate that this experience will be documented and distributed
through social media to all the contestants that participated as a further
means of advertising for our clients. We believe that seeing winning
participants consume the incentive adds further validation and credibility to
our SPRIZA™ platform and capabilities and allows our clients to further
leverage their media assets. We earn upfront fees from the brands for the
campaign, online advertising fees and on some contests we can also earn
additional affiliate revenue by promoting “after-campaign” deals and incentives
to this group throughout the year.
Regardless if we are running a contest for
a national brand throughout North America or a local merchant within a single
city, they all must strictly adhere to the rules, regulatory and compliance
specified by the government and governing bodies in each jurisdiction. Age,
eligibility, terms and conditions, bonding, insurance and many other finite
details are part of our core competencies and our commitment when delivering
campaigns to our clients. We anticipate SPRIZA™ evolving
to include a campaign creation toolbox that allows for dynamic contest
creation, where an agency, brand manager or our employee can map out a campaign
quickly with proper terms conditions, contracts, approval sign off and a
compliance checklist.
Competition
The digital and mobile technology business
is highly fragmented and extremely competitive and subject to rapid change. The
market for customers is intensely competitive and such competition is expected
to continue to increase. We believe that our ability to compete depends upon
many factors within and beyond our control, including the timing and market
acceptance of new solutions and enhancements to existing businesses developed
by us, our competitors, and their advisers. SPRIZA™ is an online contest platform that
utilizes digital media and technology to distribute and feature local and
national branded promotional campaigns. Many consumers maintain simultaneous
relationships with multiple digital brands and products and can easily shift
consumption from one provider to another.
Our SPRIZA™ contest platform is both
promotional “Promotional Platform” and social “Social Platform”.
Our principal competitors, when comparing
“Promotional Platforms” are: Wildfire by Google, Strutta, Prizelogic,
HelloWorld (formerly ePrize), and Prizeo. Our SPRIZA™ contest platform differs,
in most part, from these competitors by seamlessly integrating our promotion
platform and the social experience into a channel that can provide both the
brand/cause experience to drive engagement and link that activity directly to
online and offline commerce. Through our SPRIZA™ platform, we build a referral
network of like-minded consumers who actively participate with the brands they
love and it allows us to retarget and entertain our subscribers based on their
specific preferences and activity.
Our principal competitors, when comparing
“Social Platforms” are: Pinterest, Twitter, Facebook, WhatsApp and Groupon. Our
SPRIZA™ contest platform differs, in most part, from these competitors by
establishing a unique referral network that has the means to engage, reward,
remarket and incentivize its user base to foster new connections and ongoing
commerce activity.
6
Our competitors are in segments such as the following:
- Websites promoting deal of the day gift certificates;
- Large social media networks with deep distribution; and
- Innovative search websites with local and national
advertisers.
In addition, new competitors
may be able to launch new businesses at relatively low cost. In addition,
either existing or new competitors may develop new technologies, and our
existing and potential customers may shift their mass branding campaigns to
these new technologies. Therefore, we cannot assure you that we will be able to
successfully implement our business strategy in the face of such competition.
Business goals and milestones
We have completed or advanced, over the
past few months, the following business goals and milestones:
- We have made several improvements to
the current version of the platform including a new contest portal,
contest profiles, contest functionality, contest modules, subscriber
portal, subscriber account setup and profiles, user functionality, Group
Sharing, Spriza rewards tracking, aggregate contest functionality, database
architecture, with querying, reporting and analytics.
- We continue to develop the mobile
device support, do-it-yourself platform and tools. Our corporate page is
located at www.spriza.com; we have
completed our SPRIZA trademark for the US and have started the trademark
process throughout Canada.
- Recently Closed Contests - Apple
Go-Pro promotion. - Get Fameus Hollywood Experience - "Ultimate
Stampede Experience", MembersCanada.com (Cash & Condo), Moms
Awesome (cheeseanything.com).
- During this quarter we launched Rock
and Roll Fantasy Camp Canada in partnership with Mantaray Creative &
World Wide Music Ventures. Gene Simmons is the featured RockStar at the
event. We have also launched many large brands through our aggregate
platform. Brands include the UFC, NFL and Sandals Resort. We now have the
ability to serve contests from all over the world. Also this quarter we
have signed a Statement of Work with Double Down Interactive LLC in
conjunction with The Hard Rock Resort.
- Current contests: T-Link Golf
Experience, Rock n Roll Fantasy Camp, and the upcoming Double Down
Interactive contest.
- We are completing discussions with a
large Philippines based advertising agency that represents industry
Leading brands such as Disney, GM, American Express, Adidas & Maserati
to name a few.
- Since last quarter we have been in
discussions with several mobile gaming companies in the US. These discussions continue to evolve.
- We are engaged in ongoing sales
activity with clients that include a team in the National Hockey League, a
film and television production studio, a 3D printing company and an
electronic security company. We are in the final stages of completing a
North American wide marketing campaign, which will focus on driving the
participation of prospective Fortune 500 companies and large corporate
sponsorship to the contest platform.
7
Business strategy
Secure Necessary Funds
As at September 30, 2014 we had $27,943 in
available cash and $10,000 in restricted cash pursuant to our merchant service
agreement. We also have $43,348 in accounts receivable as at September 30,
2014. We will require $1,000,000 of additional funds during the remainder of
fiscal 2014 to continue to aggressively grow our business and execute our 2015
business plan and to make strategic acquisitions. During the three month period
ended September 30, 2014 the Company conducted a private placement and received
$50,000 by issuing 100,000 common shares to two accredited investors.
Drive client growth and revenue through
contest campaigns
To drive client growth, we plan to expand
the number of ways in which subscribers can discover contests through our
marketplace. As revenue is recognized we plan to continue to make investments
in our sales force and partnership networks to further client relationships and
acquire local expertise. Retention will be focused on providing our clients
with a positive campaign experience and offering targeted placement of their
contest campaigns to our subscribers, tools to manage these campaigns more
effectively and superior customer service. Current efforts are focused on
developing a sponsorship campaign that is centered on the 18-25 year old
demographic offering four year college tuitions as the contest incentive. We
are also in negotiations with Fortune 500 companies
to run online contests. The
sponsorship fees associated with a contest driven advertising campaign of this
size is estimated at $1.5 million with 70% of this amount to be campaign costs,
and 30% would be our profit. Additionally, securing contracts directly with
brands and established advertising agencies will be necessary to achieve
desired growth. We are establishing the go-to-market strategy and digital
marketing initiatives essential to engage with prospective clients to secure
contracts and achieve this milestone.
Drive the growth of our subscriber base
We plan to invest significant effort to
acquire subscribers through online marketing initiatives. Our goal will be to
retain existing and acquire new subscribers by providing preference driven and
targeted contests, quality subscriber service and expanding the number of
contest offerings through both local and national brands. Activity has
commenced on the development and release of our digital marketing strategy to
encourage subscriber sign up and generate brand participation.
Expand affiliate and business development
partnerships
We intend to establish an online reseller
network of commissioned agents and strategic partners. We hope to sign
partnership agreements with online companies such as Google, Microsoft, Yahoo!
and Facebook. These intended partners could display, promote and distribute our
contests to their users in exchange for a share of the revenue generated from
our campaigns. We currently have no such agreements or arrangements with
Google, Microsoft, Yahoo! or Facebook. We intend to maintain ongoing efforts to
expand our business with strategic affiliates and business development
partnerships.
Increase our product offering through
innovation
We intend to develop new versions and
product releases to increase the number of subscribers and clients that
transact business through our SPRIZA™
online contest marketing
platform. We believe our network of subscribers will be a focal point for
companies to promote their brands and showcase all of their contests. Expansion
from an online presence into all mobile, tablet and operating systems is an
essential step in our development.
Establish our presence in the marketplace
as the leading Online Contesting Platform
All efforts will be made to firmly
establish us as the leader in the delivery, fulfillment and distribution of
brand driven online contests to a subscriber base. In addition to the
traditional and digital marketing efforts it is not uncommon for these efforts
to be supported by viral sharing and word of mouth marketing that is prevalent
with many online subscriber based communities. This behavior is often
encouraged through referral or loyalty incentives.
The discussion that follows is derived from
our unaudited balance sheets as of September 30, 2014 and December 31, 2013 and
the unaudited statements of operations and cash flows for the three and nine
months ended September 30, 2014 and December 31, 2013.
8
Results of Operations
During
the nine months ended September 30, 2014 we produced several contests as a
proof of concept to showcase the platform’s design and functionality to
interested advertising parties. We generated $46,848 in revenues during the
third quarter of which $43,348 is booked to accounts receivable. We were also
focused on proving our platform and received valuable user
signups and data in the process. These contests were produced by us and prizes
were sponsored and paid for by the participating vendors.
One notable client has initiated a contest hosted and
branded by Spriza in October of 2014; Mantaray Creative and World Wide Music Ventures are producing the first
Ultimate Rock n Roll Fantasy Camp Contest in Canada.
Results of Operations for the three months ended
September 30, 2014 and 2013
The net loss for the third quarter of 2014 was
$170,170 compared to a net loss of $68,379 for Q3-2013 an increase of $101,791.
This increase was due to the development and growth of the Company in the
current fiscal year as compared to incurring only professional fees to organize
our Company and obtain a public listing in 2013.
In Q3-2014 we incurred $217,092 in operating
expenses (Q3-2013 - $70,525). During Q3-2014 operating expenses consisted of:
$60,334 (Q3-2013 - $Nil) of stock-based compensation due to the vesting of options
granted under our 2013 Incentive Award Plan; $64,757 (Q3-2013 - $50,644) in
consulting fees and salaries including $18,320 (Q3-2013 - $32,157) paid to our
Chief Executive Officer; $4,451 paid to our Chief Financial Officer (Q3-2013 -
$Nil); $8,063 (Q3-2013 - $Nil) in branding and marketing; $327 (Q3-2013 - $954)
in regulatory fees, $23,420 (Q3-2013 - $7,202) in professional fees including
legal and accounting fees, $10,774 (Q3-2013 - $6,889) in travel and $24,257 (Q3-2013
- $3,391) in general and administrative expenses. We incurred 25,159 (Q3-2013 -
$1,445) in depreciation and amortization of property and equipment and $11,248
in intangible assets (Q3-2013 - $Nil). We expect that our administrative and operating
expenses will continue to increase as we further our business operations.
Results of Operations for the nine months ended
September 30, 2014 and 2013, 9 Month-2014/2013
The net loss for the nine months ended
September 30, 2014 was $881,303 compared to a net loss of $195,173 for 9
Month-2013 an increase of $686,130. This increase was due to the development
and growth of the Company over the comparative twelve months as 2013 was an
organizational year incurring only professional fees to organize our Company
and obtain a public listing in 2013.
In 9 Month-2014 we incurred a net loss of
$881,303 (9 Month-2013 - $195,173). During 9 Month-2014 total operating
expenses consisted of: $928,225 (9 Month-2013 - $193,196), $251,727 (9 Month-2013
- $Nil) of stock-based compensation due to the vesting of options granted under
our 2013 Incentive Award Plan; $237,447 (9 Month-2013 - $94,186) in consulting
fees and salaries including $79,713 (9 Month-2013 - $53,373) paid to our Chief
Executive Officer; $13,622 paid to our Chief Financial Officer (9 Month-2013 -
$Nil); $56,317 (9 Month-2013 - $27,659) in branding and marketing; $12,439 (9
Month-2013 - $15,720) in regulatory fees, $181,380 (9 Month-2013 - $31,279) in
professional fees including legal and accounting fees, $64,421 (9 Month-2013 -
$11,363) in travel and $65,324 (9 Month-2013 - $10,163) in general and
administrative expenses. We incurred $59,170 (9 Month-2013 - $2,826) in
depreciation and amortization of property and equipment and $101,107 in
intangible assets (9 Month-2013 - $Nil). We expect that operating expenses will
continue to increase as we expand our business operations.
Liquidity and Capital
Resources
As at September 30, 2014, working capital
was $46,060. Our available cash on hand was $27,943. During 2014 our available and restricted cash position decreased
by $465,596 to $37,943. Accounts receivable at September 30, 2014 was $43,348
compared to $Nil for September 30, 2013. We will require $1,000,000 of additional funds during
the remainder of fiscal 2014 to continue to aggressively grow our business and
execute our 2015 business plan and to make strategic acquisitions.
The following table sets forth
the major sources and uses of cash for the nine months ended September 30, 2014
and 2013:
9
|
|
2014
$
|
|
|
2013
$
|
|
Net cash used in operating
activities
|
|
(623,593 |
) |
|
(176,279 |
) |
Net cash used in investing
activities
|
|
(115,400 |
) |
|
(177,380 |
) |
Net cash provided
by financing activities
|
|
273,397 |
|
|
480,000 |
|
Net increase (decrease) in
cash
|
|
(465,596 |
) |
|
126,341 |
|
Cash Used in Operating
Activities
During 9 Month-2014 operating activities
used $623,593 in cash (9 Month-2013 - $176,279). Use of cash was primarily
attributable to funding the net loss of $881,303 (9 Month-2013 - $195,173) offset
by a non-cash charge of $59,170 (9 Month-2013 - $2,826) for depreciation and
amortization and a non-cash charge of $251,727 for stock-based compensation (9
Month-2013 - $Nil).
Cash Used in Investing
Activities
During 9 Month-2014 we spent $115,400
(2013 - $177,380) in investing activities. During
9 Month-2014 we spent $4,832 acquiring equipment and $100,568 developing
intangible assets (2013 - $3,910 and $173,470, respectively).
Cash from Financing
Activities
During 9 Month-2014 financing activities
provided $273,397 (9 Month-2013 - $480,000) in cash consisting of:
- $182,700 received pursuant to
our $0.25 Unit non-brokered private placement; and
- $40,697 of which $36,820 was
received from the exercise of 135,657 warrants at $0.30 per
warrant share, with a balance due of $3,877
- $50,000 received pursuant to our
$0.50 Unit non-brokered private placement.
Need for Additional Capital
We have $27,943 in unrestricted cash at
September 30, 2014 and we will require $1,000,000 of additional funds during
the remainder of fiscal 2014 to continue to aggressively grow our business and
execute our 2015 business plan and to make strategic acquisitions.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their
most “critical accounting polices” in the Management Discussion and Analysis.
The SEC indicated that a “critical accounting policy” is one which is both
important to the portrayal of a company’s financial condition and results, and
requires management’s most difficult, subjective or complex judgments, often as
a result of the need to make estimates about the effect of matters that are
inherently uncertain. We do not believe that any accounting policies applicable
to our company currently fit this definition.
Recently Issued Accounting Pronouncements
We do not expect the adoption of recently issued accounting
pronouncements to have a significant impact on our results of operations,
financial position or cash flow.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
A smaller reporting company is not required to provide the information
required by this Item.
Item 4. Controls and Procedures
10
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2014. This evaluation 7was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, 2014, our disclosure controls and procedures were not effective due to the presence of material weaknesses in our internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of September 30, 2014, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting
Limitations
on the Effectiveness of Controls: Our
Board of Directors and management, including our Chief Executive Officer and
Chief Financial Officer, do not expect that our disclosure controls and
procedures or internal control over financial reporting will prevent all errors
and all fraud. Controls, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the controls
are met. Further, we believe that the design of prudent controls must reflect
appropriate resource constraints, such that the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
controls, there can be no absolute assurance that all control issues and
instances of fraud, if any, applicable to us have been or will be detected.
These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
errors or mistakes. Additionally, controls can be circumvented by the
individual acts of some individuals, by collusion of more than one person, or
by management override of the control. The design of any system of controls
also is based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions; over time, controls may
become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.
Evaluation: An evaluation was performed under the supervision and
with the participation of the Company’s management, including our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company’s disclosure controls and procedures as
required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act. Based upon that
evaluation, the Company’s management, including our Chief Executive Officer and
Chief Financial Officer, concluded that, at September 30,
2014, the Company’s disclosure controls and procedures were effective at
the reasonable assurance level in ensuring that information required to be
disclosed in Company reports filed under the Exchange Act is (i) recorded,
processed, summarized and reported within the time periods specified in the SEC
rules and forms and (ii) accumulated and communicated to management, including
the Company’s Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.
We plan to take steps to enhance and
improve the design of our internal control over financial reporting. Additionally
we plan to continually adopt sufficient written policies and procedures for
accounting and financial reporting.
Changes in Internal Control over Financial
Reporting
There were no changes in our internal control over financial reporting during the three months ended September 30, 2014 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
11
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of
any pending legal proceeding to which any of our officers, directors, or any
beneficial holders of 5% or more of our voting securities are adverse to us or
have a material interest adverse to us.
Item 1A. Risk Factors
A smaller reporting company is not required to provide the information
required by this Item.
Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds
During the nine month period ended September 30, 2014
financing activities provided $273,397 (9 Month-2013 - $480,000) in cash
consisting of:
- $182,700 received pursuant to
our $0.25 Unit non-brokered private placement; and
- $40,697 of which $36,820 was
received from the exercise of 135,657 warrants at $0.30 per warrant
share, with a balance due of $3,877
- $50,000 received pursuant to our
$0.50 Unit non-brokered private placement.
These funds were used for general
working capital.
Item 3.
Defaults upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information
None
12
Item 6. Exhibits
1.
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Incorporated herein by reference to the Registration Statement on Form S-1/A filed on February 14, 2013.
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2.
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Incorporated herein by reference to the Registration Statement on Form S-1 filed on December 24, 2012.
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3.
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Incorporated herein by reference to the Current Report on Form 8-K filed on October 29, 2013.
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4.
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Incorporated herein by reference to the Annual Report on Form 10-K filed on March 31, 2014.
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* Filed herewith
**Furnished herewith
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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Spriza, Inc.
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Date:
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November 14,
2014
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|
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By:
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/s/ Rob
Danard
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Rob Danard
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Title:
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Chief
Executive Officer and Director
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14
CERTIFICATIONS
I, Rob Danard,
certify that;
1.
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I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2014 of Spriza, Inc. (the “registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 14, 2014
/s/ Rob Danard
By: Rob Danard
Title: Chief Executive Officer
CERTIFICATIONS
I, Christopher
Robbins, certify that;
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2014 of Spriza, Inc. (the “registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 14, 2014
/s/ Christopher Robbins
By: Christopher Robbins
Title: Chief Financial Officer
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly Report of Spriza,
Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2014 filed
with the Securities and Exchange Commission (the “Report”), I, Rob Danard,
Chief Executive Officer of the Company and I Chris Robbins, Chief Financial
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented.
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By: |
/s/ Rob Danard |
Name: |
Rob Danard |
Title: |
Principal Executive Officer
and Director |
Date: |
November 14, 2014 |
|
|
By: |
/s/ Chris Robbins
|
Name: |
Chris Robbins |
Title: |
Principal Financial Officer
and Director |
Date: |
November 14, 2014 |
This certification has been furnished solely
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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