10-Q
2011-09-30
false
LOS ANGELES SYNDICATE OF TECHNOLOGY, INC.
0000912844
--12-31
11741899
Non-accelerated Filer
Yes
No
No
2011
Q3
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<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 1: DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Business and Operations</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><u>Overview</u></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">Los Angeles Syndicate of Technology, Inc. (“last.vc”) is a technology incubator that creates, builds, and invests in web and mobile technology companies. We develop businesses in digital media, consumer internet, and social networking, and own six companies at different stages of development.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">We supply our companies with the capital to cultivate their initial product, and provide hands-on support services to reduce startup costs and accelerate time to market. Our services include product development and design, corporate formation and structure, and exposure to additional financing. last.vc also provides office space, financial and accounting resources, marketing and branding, and legal guidance. By offering these services, we enable our network of entrepreneurs to focus on developing their products. We believe that this structure offers the most value for entrepreneurs and the highest return potential to investors, and results in efficiencies in how companies are built and brought to market.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">Our mission is to foster technology innovation in Los Angeles by partnering with the most talented entrepreneurs in southern California and providing them with the capital and tools to bring their ideas to market. Los Angeles has no shortage of entrepreneurs or innovation, but currently lacks the infrastructure, capital and expertise to develop these businesses as efficiently as other markets. last.vc is working to change this.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">last.vc operates as an internally-managed, non-diversified, closed-end investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940. From incorporation through December 31, 2010, the Company was taxed as a corporation under Subchapter C of the Internal Revenue Code of 1986, (the “Code”). Effective January 1, 2011, the Company has elected to be treated for tax purposes as a regulated investment company, or RIC, under the Code (see Note 7).</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><u>History</u></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The Company, formerly Bay Street Capital (“BSC”), Small Cap Strategies (“SCS”), and Photonics Corporation (“Photonics”), was re-domiciled in Nevada through a reverse merger effective on September 30, 2006 where Photonics, a California corporation, merged into Small Cap Strategies, Inc., a Nevada corporation, with SCS being the surviving entity. The effect of this corporate action was to change the Company’s state of incorporation from the State of California to the State of Nevada.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On March 7, 2006 the Company filed a notification under Form N54a with the SEC indicating our election to be regulated as a business development company under the 1940 Act.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On November 24, 2008, the Company filed Form N-54C with the Securities and Exchange Commission (“SEC”) to notify the SEC of the withdrawal of our previous election to be regulated as a Business Development Company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). This action was taken to best facilitate a planned business model of developing and producing oil and natural gas. The Company entered into a letter of intent to acquire all the major oil and gas properties of Xtreme Oil & Gas, Inc. (XTOG.OB), which was a major shareholder of the Company. After several attempts to reach a deal to purchase the properties of Xtreme, it became evident that a deal could not be reached by the 4th Quarter of 2009.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The Board of Directors resolved on November 15, 2009 that the Company would again pursue the business model of an investment and management company. On April 12, 2010, we filed Form N-54a with the SEC to elect to be treated as a BDC governed under the Investment Act of 1940.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On July 20, 2010, the Company’s Board of Directors unanimously approved and a majority of shareholders consented to a Name Change to Bay Street Capital, Inc. and authorized the Company in enact a 1 for 50 reverse stock split of the Company’s outstanding Common Stock. Both corporate actions were effective with FINRA on August 31, 2010.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On September 24, 2010 the Company’s Board of Directors unanimously approved and a majority of shareholders consented to a Name Change to Los Angeles Syndicate of Technology, Inc. The name change was effective with FINRA on October 14, 2010.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On February 9, 2011 the Company’s Board of Directors were notified by Vineet Jindal that he was resigning as Chief Investment Officer of last.vc effective immediately in order to assume the role of Chief Executive Officer of Stockr, Inc., a majority owned portfolio company of last.vc.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On February 12, 2011 the Company’s Board of Directors were notified by Management that the Company would exercise its repurchase option to purchase 2,700,000 shares of Company Common Stock pursuant to its Share Purchase Agreement and Employment Agreement with Mr. Jindal. Per the terms of the agreement, last.vc repurchased 600,000 shares at Mr. Jindal’s cost value and then cancelled those shares. The Company transferred its right to repurchase the remaining 2,100,000 to employees of last.vc, who repurchased these shares at Mr. Jindal’s original cost value.</p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The Company currently operates as an internally managed closed-end non-diversified Business Development Company and is traded under the symbol “LAST”.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">Pursuant to Regulation S-X, Rule 6, the Company operates on a non-consolidated basis. Operations of portfolio companies are reported at the portfolio company level and only the appreciation or impairment of these investments is included in the Company’s financial statements. Pursuant to FASB Topic 250, the Company had a change in accounting principle when it re-elected to BDC status. Topic 250 requires retroactive restatement of the company’s financial statements to conform to the current presentation for all periods presented.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt"><b>Unaudited Condensed Interim Financial Statements Basis of Presentation</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">Interim financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, all adjustments necessary for the fair presentation of financial statements for the interim periods have been included. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the year. The interim unaudited financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The accompanying financial statements reflect the accounts of last.vc and the related results of its operations. In accordance with Article 6 of Regulation S-X under the Securities Act of 1933 and Securities Exchange Act of 1934, the Company does not consolidate portfolio company investments in which the Company has a controlling interest.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:center; TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt" align="center"><b>GOING CONCERN</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The Company incurred a loss from operations of $14,792 and $115,923 during the three and nine months ended September 30, 2011, respectively. The Company’s only sources of cash flow have been from the sale of the Company’s restricted common stock, management fees from portfolio companies, and loans from the CEO.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The Company is in process of raising funds through private placements of common stock to meet its operating expense requirements and to meet the initial funding requirements of its controlled portfolio companies. If the Company is unable to continue to raise sufficient capital to meet its operating needs, doubt exists regarding the Company's ability to continue as a going concern.</p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The financial statements do not include any adjustments that may result from the outcome of these uncertainties.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Basis of Presentation</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">As noted above, when the Company filed its election to be regulated pursuant to the 1940 Act, it resulted in a change in accounting principle. Accordingly, the financial statements have been restated as if the Company was operating as a BDC for all periods presented. Pursuant to Regulation S-X, Rule 6, the Company will operate on a non-consolidated basis.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Management Estimates</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">The preparation of financial statements in conformity with generally accepted accounting principles 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 differ from those estimates.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Cash and Cash Equivalents</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">For purposes of the statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity date of three months or less to be cash equivalents. None of the Company’s cash is restricted.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Net Increase (Decrease) in Net Assets (Liabilities) from Operations Per Share (Earnings (Loss) per Share)</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">The Company is required to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding, and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potentially dilutive shares outstanding. At September 30, 2011 and 2010, there are no potentially dilutive common stock equivalents. Accordingly, no common stock equivalents are included in the earnings (loss) per share calculations and basic and diluted earnings per share are the same for all periods presented.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Valuation of Investments (as an Investment Company)</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">As a BDC, we are regulated by the Investment Company Act of 1940 (the “Act”). Section 2(a)(41) of the Act defines Value as (i) the market price for those securities for which a market quotation is readily available and (ii) for all other securities and assets, fair value is determined in good faith by the Board of Directors (“BOD”). We expect that few, if any, of our portfolio companies will have market quotations, and as such, we expect to rely on market transactions involving our portfolio companies and the fair value determined in good faith by our BOD for the valuation of our portfolio companies. Prior to this conversion, only marketable debt and equity securities and certain derivative securities were required to be carried at market value.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">Portfolio assets for which market prices are available are valued at those prices. Securities that are traded in the over-the-counter market or on a stock exchange generally will be valued at the prevailing bid price on the valuation date. However, some of the Company’s current investments were acquired in privately negotiated transactions and may have no readily determinable market values. These securities are carried at fair value as determined by the BOD and outside professionals as necessary under the Company’s valuation policy. Currently, the valuation policy provides for management’s review of the management team, financial conditions, and products and services of the portfolio company. In situations that warrant such an evaluation, an independent business valuation may be obtained.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Income Taxes</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">The Company intends to operate so as to qualify to be taxed as a RIC under Subchapter M of the Code and, as such, will not be subject to federal income tax on the portion of taxable income and gains distributed to stockholders (See Note 7).</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">As of September 30, 2011 and 2010, the Company had no accrued interest or penalties relating to any tax obligations. The Company currently has no federal or state examinations in progress, nor has it had any federal or state tax examinations since its inception. The last three years of the Company's tax returns are subject to federal and state tax examination.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Comprehensive Income</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">All items required to be recognized under accounting standards as components of comprehensive income are required to be reported in a financial statement that is displayed with the same prominence as other financial statements. Standards require that an enterprise (a) classify items of other comprehensive income by their nature in financial statements and (b) display the accumulated balance of other comprehensive income separately in the equity section of the balance sheet for all periods presented. The Company’s comprehensive income (loss) does not differ from its reported net income (loss).</p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">As an investment company, the Company must report changes in the fair value of its investments outside of its operating income on its statement of operations and reflect the accumulated appreciation or depreciation in the fair value of its investments as a separate component of its stockholders’ deficit. This treatment is similar to the treatment discussed above<b>.</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Fair Value of Financial Instruments</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">Disclosure of fair value information about financial instruments is required when it is practicable to estimate that value. The carrying amounts of the Company’s cash, marketable equity securities, accounts receivable and accounts payable approximate their estimated fair value due to the short-term maturities of these financial instruments and because related interest rates offered to the Company approximate current rates.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Fixed Assets</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">Fixed assets are stated at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets (generally five and seven years). The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of property and equipment exists at September 30, 2011 and December 31, 2010. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Stock Based Compensation</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">The compensation cost relating to share-based payment transactions (including the cost of all employee stock options) is required to be recognized in the financial statements. That cost will be measured based on the estimated fair value of the equity or liability instruments issued. The Company’s financial statements reflect an expense for all share-based compensation arrangements granted on or after January 1, 2006 and for any such arrangements that are modified, cancelled or repurchased after that date, based on the grant-date estimated fair value.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">As of September 30, 2011 and December 31, 2010, there were 0 and 434 options outstanding from the 1997 Plan, respectively. These options expired in September 2011.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Concentration of Credit Risk</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt">Cash is maintained at financial institutions. The Federal Deposit Insurance Corporation (“FDIC”) insures accounts at each institution for up to $250,000. At times, cash balances may exceed the FDIC insurance limit of $250,000.</p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.5in; MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><u>Recent Accounting Pronouncements</u></b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">There are several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. At September 30, 2011, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 4: COMPOSITION OF NET ASSETS (STOCKHOLDERS’ EQUITY)</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b><i>Common Stock</i></b></p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001 with each share having one voting right. There are 11,741,899 and 11,889,363 common shares outstanding at September 30, 2011 and December 31, 2010, respectively.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">During the nine months ended September 30, 2011, the Company sold 277,500 shares of its common stock for $277,500 in cash, issued 175,000 shares of its common stock for $175,000 due to its CEO, rescinded the acquisition of one investment valued at $65,000 for which 3,250,000 shares of its common stock had been issued, cancelled 600,000 of these shares and obtained stock subscriptions for the remaining 2,650,000 shares of common stock.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">Effective August 31, 2010, the Company completed a 50:1 reverse stock split. All share transactions disclosed in the financial statements have been restated to give effect to the change.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 5: RELATED PARTY TRANSACTIONS</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The officer and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities as they become available. The officer and directors may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On September 27th, 2010 the Company entered into restricted share purchase agreements to offer restricted shares of the Company’s common stock for $.02 per share. The Company issued 11,510,000 shares to the CEO and 21 other individuals that had been engaged to join last.vc as executive officers, advisors, and consultants. The share purchase agreement contains a one year lock on the transfer of the shares and a 36 month vesting and repurchase provision that allows the Company to repurchase unvested shares at cost should an individual break the terms of their engagement agreement.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On September 28th, 2010 the Company issued 350,000 shares of Company common stock to Brad Curry pursuant to a debt to equity conversion agreement. Under the agreement, Mr. Curry agreed to convert $3,500 remaining debt to common stock at $.01 per share and forgive $3,000 of debt owed by the Company.</p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On November 24, 2008, the Company amended its Letter of Intent dated October 1, 2008, in which the Company agreed to acquire working interests in certain oil and gas properties and two operating companies from a shareholder, Xtreme Oil & Gas, Inc. The parties agreed to extend the closing date until March 30, 2009, in exchange for issuance of 50,000 shares of the Company’s common stock to Xtreme as an extension fee. The total purchase price was to be reduced by the extension fee. The shares were originally valued at $1,275,000, the amount at which the stock was trading on the date of the amendment and the total was initially expensed as an extension fee. On April 6, 2009, the Company and Xtreme agreed to rescind the extension agreement and the 50,000 shares were returned to the Company and cancelled. The LOI expired under its original terms on December 31, 2008; therefore the extension fee is not reflected in the financial statements. Xtreme owned 32.66% of the Company's common stock as of December 31, 2009. On May 10, 2010, Xtreme entered into a stock purchase agreement with the Company's CEO and the Company's CEO acquired the 8,000 shares previously owned by Xtreme.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">At September 30, 2011 and December 31, 2010, the Company owed its CEO $105,294 and $311,862, respectively, for loans, accrued compensation and expense reimbursements, which is included in due to related parties. On March 30, 2011, the Company issued its CEO 175,000 shares of its common stock in exchange for $175,000 owed to the CEO.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">Officer’s compensation and director’s fees related to the services provided by Bryce Knight, CEO and Director of the Company, are paid directly to Knight Inc. (formerly Knight Enterprises, Inc.), a Nevada corporation 100% owned by Bryce Knight.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">As a result of the Xtreme merger not being completed and effective July 1, 2010, officers and employees of Xtreme returned 5,800 shares of the Company's common stock to be cancelled. Mr. Knight also returned 541 shares to be cancelled. The 6,341 shares were cancelled by the transfer agent on July 19, 2010. The cancellation of the shares was recorded as a contribution to capital by the shareholders on July 1, 2010.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">Effective July 11, 2010, Knight, Inc., wholly owned by Bryce Knight, Chief Executive Officer of the Company, acquired 10,000 newly issued shares of the Company's common stock in exchange for $5,000 in cash previously paid to the Company. On September 27, 2010, Knight, Inc. acquired 3,250,000 shares pursuant to a share purchase agreement in exchange for $65,000 owed to Knight, Inc.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">During the quarter ended March 31, 2011 Vineet Jindal and Brendon Crawford, previously the Chief Investment Officer and Chief Technology Officer of last.vc, resigned from LAST to assume the Chief Executive Officer and lead engineer positions, respectively, at Stockr, a majority owned portfolio company of last.vc.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">On February 12, 2011 the Company’s Board of Directors were notified by Management that the Company would exercise its repurchase option to purchase 2,700,000 shares of Company Common Stock pursuant to its Share Purchase Agreement and Employment Agreement with Mr. Jindal. Per the terms of the agreement, last.vc repurchased 600,000 shares at Mr. Jindal’s cost value and then cancelled those shares. The Company transferred its right to repurchase the remaining 2,100,000 to employees of last.vc, who repurchased these shares at Mr. Jindal’s original cost value.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 6: COMMITMENTS AND CONTINGENCIES</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>General</b></p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">From time-to-time, some of the Company’s portfolio companies may receive correspondence or other notices of alleged breach of license agreement or other contract. Some of these notifications provide a period of time in which to cure an alleged breach or default. The failure of the Company’s portfolio companies to cure an alleged breach or default may have a material adverse impact on the Company’s results of operations and financial position.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Leases</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The Company currently maintains its corporate office at 3651 Lindell Road, Suite D #146, Las Vegas, Nevada 89103 on a month-to-month basis. In addition, we have maintained an operations office on a month-to-month basis in Santa Monica, California. In March 2010, the Company leased a second operations office at a rate of $2,300 per month to accommodate our expanding operations. The lease commenced April 1, 2010 for a period of two years. Rent expense amounted to $6,580 and $6,857 during the three months ended September 30, 2011 and 2010, respectively.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 7: INCOME TAXES</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">The Company intends to operate so as to qualify to be taxed as a RIC under Subchapter M of the Code and, as such, will not be subject to federal income tax on the portion of taxable income and gains distributed to stockholders.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">To qualify as a RIC, we are required to meet certain income and asset diversification tests. In addition, in order to be eligible for pass-through tax treatment as a RIC, we must distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income” as defined by the Code.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">Taxable income includes the Company’s taxable interest, dividend and fee income, as well as taxable net capital gains. Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as gains or losses are not included in taxable income until they are realized.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">In the nine months ended September 30, 2011, the Company recorded two income tax adjustments to reflect the reversal of a deferred tax liability associated with unrealized gains generated by increases in value of our portfolio companies in periods prior to our RIC election as these taxes are no longer payable.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 8: SUBSEQUENT EVENTS</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="TEXT-INDENT:0.25in; MARGIN:0in 0in 0pt">N/A</p>
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2011-07-01
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2010-09-30
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2009-12-31
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2010-09-30
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iso4217:USD
shares