UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-KSB/A
(Mark
one)
x
ANNUAL
REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the
fiscal year ended
September
30, 2007
OR
¨
TRANSITION
REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
file number:
0-32749
TRIMAX
CORPORATION
(Exact
name of small business issuer in its charter)
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Nevada
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76-0616468
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(State
or other jurisdiction
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(I.R.S.
Employer
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of
incorporation or organization)
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Identification
No.)
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2
Lombard Street, Suite 204
Toronto,
Ontario M5C-1M1
(Address
of principal executive offices)
Issuer's
telephone number:
(416)
368-4060
Securities
registered under Section 12(b) of the Exchange Act:
None
.
Securities
registered under Section 12(g) of the Exchange Act:
Common
Stock, par value $0.001 per share
(Title
of
class)
Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act
¨
Check
whether the issuer (1) filed all reports required to be filed by Section 13
or
15(d) of the Exchange Act during the past 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
¨
Yes
x
No
¨
Check
if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained,
to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.
¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes
¨
No
x
State
issuer’s revenues for its most recent fiscal year:
Registrant’s
revenues for its most recent fiscal year: $nil
As
of
December 15, 2007 the aggregate market value of the voting common equity held
by
non-affiliates of the registrant was approximately $509,668 based on the closing
trade reported on the NASD Over-the-Counter Bulletin Board National Quotation
System.
On
December 15, 2007 the registrant had issued
63,469,766
shares of Common Stock
,
par
value $0.001; and
had
issued
nil
shares of preferred stock
,
par
value $0.001.
Documents
incorporated by reference: None
Transitional
Small Business Disclosure Format: Yes
¨
No
x
Trimax
Corporation
Index
to
Annual
Report on Form 10-KSB
For
the
Year Ended September 30, 2007
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Page
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Part
I
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Item
1
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Description
of Business
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3
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Item
2
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Description
of Property
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8
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Item
3
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Legal
Proceedings
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8
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Item
4
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Submission
of Matters to a Vote of Security Holders
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8
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Part
II
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Item
5
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Market
for Common Equity and Related Stockholder Matters
and
Small Business Issuer Purchases of Equity Securities
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8
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Item
6
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Management's
Discussion and Analysis or Plan of Operation
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11
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Item
7
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Financial
Statements
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F-1
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Item
8
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Changes
In and Disagreements With Accountants on Accounting and Financial
Disclosure
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15
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Item
8A
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Controls
and Procedures
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15
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Item
8A(T)
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Controls
and Procedures
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16
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Item
8B
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Other
Information
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16
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Part
III
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Item
9
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Directors,
Executive Officers, Promoters, Control Persons and Corporate Governance;
Compliance With Section 16(a) of the Exchange Act
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16
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Item
10
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Executive
Compensation
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17
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Item
11
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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18
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Item
12
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Certain
Relationships and Related Transactions
,
and Director Independence
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18
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Item
13
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Exhibits
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18
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Item
14
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Principal
Accountant Fees and Services
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19
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SIGNATURES
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19
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PART
I
ITEM
1.
DESCRIPTION
OF BUSINESS
Nature
of Operations
Urbanesq.com
Inc. (“Urbanesq”) was incorporated August 25, 2000 under the laws of the
Province of Ontario.
Effective
October 18, 2001, Urbanesq completed a merger with Koala International Wireless
Inc. (“Koala”), a public company incorporated in the State of Nevada on August
18, 1999. This merger constituted a reverse takeover of Urbanesq by Koala
resulting in the operations of Urbanesq being reported by the Company from
the
commencement of operations of Urbanesq.
The
Company changed its name to KIWI Network Solutions Inc. on December 23, 2003.
On
November 4, 2004 the Company announced a reverse stock split of the
Corporation’s common stock of one new share for each one hundred shares
outstanding in the name of such shareholder; and authorized any fractional
shares to be rounded to one share.
On
February 11, 2005 the Company approved its Amended and Restated Articles of
Incorporation, changed the name of the Company to Trimax Corporation (“Trimax”or
the “Company”), and increased the number of its authorized stock to 100,000,000
shares of common stock and 20,000,000 shares of preferred stock, both with
a par
value of $0.001 per share.
On
August
17, 2005, pursuant to a reorganization agreement by and among PLC Network
Solutions Inc. (“PLC”), a private company incorporated in the Province of
Ontario under the Ontario Business Corporations Act, and Trimax, Trimax
Corporation acquired all of the outstanding common stock of PLC.
On
July
29, 2005 the Company entered into an Exclusive Supply Agreement with a
technology supplier (the "Partner"), a privately-held corporation based in
Toronto, Ontario. This agreement provided the Company with the exclusive right
to sell Switzerland based Ascom broadband over power line communication access
products ("Products") in Canada and non-exclusive rights world wide, which
Partner represented that it had secured itself from Ascom. In accordance with
the agreement, Partner agreed not to sell or supply Products to any other person
or legal entity in Canada with the exception of any hydro organizations. In
consideration for these rights the Company paid the Partner an annual license
fee of $100,000 in Canadian dollars for five years commencing on August 1,
2005.
Subsequent
to the signing and the advancement of funds for the Exclusive Supply Agreement
the Company was made aware that the technology supplier had no right to grant
a
sub-license from Ascom. Furthermore, the supplier was previously in default
and
was never in any position to grant any sub-license on its own license. Due
to
these events, Trimax has since developed relationships with other vendors for
BPL products, whom the Company considers to be more cost effective while
possessing similar performance characteristics. As well, no annual license
fees
are required to be paid by Trimax.
On
March
22, 2006 Trimax filed an action in The Superior Court of Ontario against
Electrolinks Corporation alleging damages of $1,250,000, subsequently received
a
court ordered judgment in the Company’s favour of $132,000, received $25,000 and
is awaiting payment of a further $107,000 plus applicable legal fees and
interest.
On
June
1, 2006, pursuant to a reorganization agreement by and among Multi-Source Inc.
(“MSI”), a private company incorporated in the Province of Ontario under the
Ontario Business Corporations Act, and Trimax, Trimax Corporation acquired
all
of the outstanding common stock of MSI.
Under
the
terms of the Reorganization Agreement, the shareholders of MSI conveyed all
of
the issued and outstanding shares of MSI to Trimax in exchange for up to
5,000,000 shares of Trimax’s common stock.
The
acquisition of MSI was accounted for under the purchase method of accounting.
Accordingly, the financial position and results of operations of MSI have been
consolidated subsequent to the acquisition date. Trimax allocated the purchase
price to the acquired tangible net assets and liabilities. In addition the
company allocated $1,557,327 to the acquired intangible assets. The intangible
assets have been amortized over a five year period on a straight-line basis.
Of
the exchange for up to 5,000,000 shares, 3,000,000 shares of common stock of
Trimax were issued at closing on June 1, 2006. 750,000 shares of this 3,000,000
were issued to a third party subscriber for transaction costs. Up to 2,000,000
additional shares may be issued to the principal shareholder of MSI, subsequent
to the acquisition, upon the achievement of certain milestones by the MSI
business within 18 months of the closing date.
The
purchase price was allocated as follows:
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At June
1, 2006
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Consideration
exchanged:
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3,000,000
shares of common stock valued at the average price two days before
and
after the measurement date
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$
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1,530,000
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Transaction
costs - 750,000 shares of common stock valued at the average price
two
days before and after the measurement date
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(382,500
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)
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Purchase
price
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$
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1,147,500
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Liabilities
assumed
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(442,540
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Estimated
fair value of tangible assets acquired
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32,713
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Estimated
fair value of identifiable intangible assets acquired— completed
technology
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1,557,327
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Goodwill
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$
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-
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Intangible
assets, net, consisted of the following:
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Estimated Useful Life and Amortization Basis
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Gross
Intangible Asset
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Accumulated
Amortization
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Net Intangible
Asset
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Completed
technology
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5
years using straight-line basis
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$
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1,557,327
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$
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103,822
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$
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1,453,505
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In
March
of 2007, Trimax terminated its acquisition of Multi-Source on the grounds of
Breach of Contract.
On
August
14, 2007, pursuant to an asset purchase agreement by and between Cybersonics
Broadcast Services Inc., a company incorporated in the Province Of Ontario
under
the Business Corporations Act, and Trimax, 2,000,000 shares of Trimax common
stock were issued as a deposit towards the acquisition of assets known as
Multi-Media Management Distribution Technology.
Overview
Trimax
is
a broadband over power line (“BPL”) integrator and service provider. Using
existing powerline infrastructures, it delivers innovative data, voice and
video
communications to commercial, residential and other markets. BPL technology
has
evolved from 85 mbps to where new generation chip sets now deliver applications
at 225 mbps transfer rates. New applications such as video streaming, online
gaming and IPTV need sufficient bandwidth to operate. BPL’s fiber-like speeds
are now considerably faster than cable or DSL without the corresponding costs.
Utility companies have been slow to adopt the technology as further test pilots
are required for any eventual broad scale deployment.
A
hydro
utilities main asset, its electrical distribution infrastructure, is in most
cases used only to deliver power. New Millennium Research recently reported
that
approximately 20 percent of U.S. utilities are considering investments in BPL
technology. Utilities are implementing Automatic Meter Reading (“AMR”) and other
real-time performance monitoring services to create a ‘smart electrical
grid’.
In
pursuit of companies and technologies that can deliver a revenue base which
will
eventually allow it to be self sufficient, Trimax has entered into on going
negotiations for BPL digital signage and content management technology with
Cybersonics Broadcast Services Inc. Trimax hopes its efforts will lead to
contracts for digital signage and content management.
The
Company has since been involved in several projects with an assortment of
potential clients for BPL enhanced digital signage screens and content
management. These projects have not yet become revenue generating and remain
at
the demonstrational stage. Trimax has been showcasing a complete digital signage
solution, including content management software and remote management tools
for
administrators to manage larger scale deployments which can be further enhanced
and be made more cost effective with the use of BPL technology.
As
a
result of its efforts, Trimax has purchased 126 digital signage screens for
an
anticipated initial order totalling $226,000. Trimax has further invested thus
far $90,000 to Cybersonics Sound Technologies Inc. in the effort to further
the
Company’s business
.
Risk
Factors
The
risks
and uncertainties described below are those that the Company currently deems
to
be material and that it believes are specific to the Company and the industry
in
which it competes. In addition to these risks, the Company’s business may be
subject to risks currently unknown to the Company.
The
Company has a history of operating losses and an accumulated deficit and expects
to continue to incur losses for the foreseeable future.
Since
inception through September 30, 2007 the Company has incurred cumulative losses
of $15,643,066 and has never generated enough funds through operations to
support its business. The Company expects to continue to incur operating losses
through 2008.
The
Company’s losses to date have resulted principally from:
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research
and development costs relating to the development of its previous
technologies which was categorized as a Personal Digital Assistance
device
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costs
and expenses associated with distribution and marketing of the
Company’s products;
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Costs
associated with the marketing and acceptance of its products within
developed and emerging
markets
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Costs
associated with deploying test pilots for potential customers and
clients within various markets around the
world;
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general
and administrative costs relating to the Company’s
operations;
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The
Company has not yet generated any meaningful revenues from the sale of its
products, is currently unprofitable and the possibility exists that it may
never
become profitable. Since inception, the Company has funded its research and
development activities primarily from private placements of equity and debt
securities, a bank loan and short term shareholder advances from
certain executive officers. As a result of its substantial research and
development expenditures and limited product revenues, the Company has incurred
substantial net losses. The Company’s ability to achieve profitability will
depend primarily on its ability to successfully commercialize its BPL solutions.
Potential
fluctuations in operating results could have a negative effect on the price
of
the Company’s common stock.
The
Company’s operating results may fluctuate significantly in the future as a
result of a variety of factors, most of which are outside the Company’s control,
including:
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The
level of use of the Internet;
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the
acceptance of BPL to be a viable alternative to existing
technologies;
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the
demand for high-tech goods; and
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the
amount and timing of capital expenditures and other costs relating
to the
expansion of the Company’s
operations.
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Ninety
six percent of the world’s population is connected by a common ubiquitous
network - the electric powerline infrastructure. BPL is an alternative to
communications technology for the Telecommunications and Cable communications
sectors that use Digital Subscriber Line (“DSL”) and cable modem technologies
for last mile delivery of high-speed internet. Trimax is attempting to position
itself to gain first-to-market traction in this relatively untapped new market
place in both the developed and developing world.
Trimax
is
attempting to expand by growing its operations and by way of partnerships and
acquisitions.
Trimax
is
well positioned to capture market share in the expanding Broadband over
Powerline (“BPL”) application and equipment markets through digital signage and
content management. Investments have been made into Cybersonics Sound
Technologies, and the acquisition of various assets known as Multi-Media
Management Distribution Technology through Cybersonics Broadcast Services Inc.
Restatement
of Financial Statements
The
Company has restated its comparative consolidated financial statements for
the
year ended September 30, 2005 due to an accounting change based on new events
and transactions during the quarter ended March 31, 2006.
On
August
17, 2005 Trimax acquired all of the outstanding common stock of PLC Network
Solutions Inc. (“PLC”) whereby each share of the 21,900,000 issued and
outstanding common stock of PLC were converted into the right to receive one
share of Trimax stock. Originally for accounting purposes the acquisition was
treated as a recapitalization of PLC with PLC as the acquirer (reverse
acquisition).
However,
on March 16, 2006 the Company effectively cancelled 16,000,000 common shares
for
reason of non payment and no consideration. Enough shares were cancelled so
that
the remaining shareholders were not sufficient enough to take control of Trimax
and therefore the original accounting treatment for the acquisition as a reverse
merger was no longer appropriate. Consequently, the Company has restated its
comparative figures and accounted for the acquisition using the purchase method
whereby Trimax acquired 100% of PLC.
As
a
result of the restatement of the September 30, 2005 consolidated financial
statements, additional paid-in capital and accumulated deficit balances have
been reclassified to include the historical financial statements of Trimax
since
August 25, 2000 (inception). The historical financial statements initially
reported were those of PLC.
The
effect on the consolidated balance sheet as of September 30, 2005 was to
increase additional paid-in capital by $9,230,593 and to increase the
accumulated deficit by $9,202,808. The effect on the consolidated statements
of
operations for the period from inception (August 25, 2000) to September 30,
2005
was an increase in the net loss of $9,830,312. This change had no effect on
the
earnings subsequent to the acquisition and had no effect on the earnings per
share for the year ended September 30, 2005.
Acquisitions
3One
Networks Inc.
On
May
17, 2006, Trimax entered into a purchase and sale agreement with 3One
Networks Inc. (“3One”). 3One is a technology and service company that has
commercialized BPL technologies that transmit digital signals through the
electrical power line infrastructure.
3One
markets products for (Industrial) Power Grid Management and (Commercial)
In-building Broadband Access. 3One’s energy saving BPL Power Grid Management
Solutions combine advanced hardware and software to enable the remote and real-
time monitoring and control of electrical power grids. 3One’s BPL In-Building
Access products provide low cost methods to deliver broadband Internet to
end-users within commercial and multi-tenant buildings.
Trimax
has made a deposit towards the purchase of a High Speed Internet Access (“HSIA”)
service business, including a portfolio of 50 Hotels consisting of approximately
4,600 rooms and all existing service contracts and related assets for providing
HSIA services to these hotels, motels and resorts. The acquisition would allow
for the potential to upgrade the services, technology, IP applications and
broadband provisioning to these hotel sites. The purchase price was
$220,230 CDN. Trimax has paid initial deposits and payments totalling $94,600
USD. The company has halted further payments while in negotiations with 3One
for
possible mutually beneficial changes in its relationship on a going forward
basis. Therefore, remaining, payments pertaining to the purchase and sale
agreement have yet to be fulfilled and the rights to these assets do not
transfer to the company until fully paid, the deposits and payments paid as
of
September 30, 2006 have been reflected in the balance sheet under prepaid
expenses and deposits. No additional deposits and payments have been paid
subsequent to year end. The agreement also provides for 3One to deliver certain
BPL equipment based on normal distribution pricing.
Multi-Media
Management Distribution Technology
On
August
14, 2007, pursuant to an asset purchase agreement by and between Cybersonics
Broadcast Services Inc., a company incorporated in the Province Of Ontario
under
the Business Corporations Act, and Trimax, 2,000,000 shares of Trimax common
stock were issued as a deposit towards the acquisition of assets known as
Multi-Media Management Distribution Technology and issued 1,200,000 shares
of
common stock pursuant to a supply chain agreement to purchase certain digital
signage screens.
As
a
result of its efforts, Trimax has purchased 126 digital signage screens for
an
anticipated initial order totalling $226,000. Trimax has further invested thus
far $90,000 to Cybersonics Sound Technologies Inc. in the effort to further
the
Company’s business
.
Intellectual
Property
The
nature of patent and trademark registration is very complex and requires legal
expertise. To date, no applications have been prepared to patent any of the
Company’s assets or concepts.
Government
Regulation
The
FCC
has ruled that BPL-enabled internet access services have been classified as
an
information service in the US instead of its previous telecommunications service
label. The CRTC in Canada has taken a similar stance with telecommunication
regulation with the intent to reduce barriers to competition. This promotes
Trimax's BPL technology and applications on an equal regulatory footing as
enjoyed by the cable and DSL companies.
Employees
The
Company currently has no employees. The Company looks to its directors and
officers for their combined entrepreneurial skills and talents, and to outside
subcontracted consultants. Management plans to use consultants, attorneys and
accountants as necessary.
A
portion
of any future employee compensation package likely would include the right
to
acquire stock in the Company, which would dilute the ownership interest of
holders of existing shares of the Company's common stock.
ITEM
2.
DESCRIPTION
OF PROPERTY
The
Company has for the past year been leasing a 2,000 square foot office facility
with principal address located at 2 Lombard Street, Suite 204, Toronto, Ontario,
M5C-1M1. Currently the lease is month-to-month and there is no
commitment.
ITEM
3.
LEGAL
PROCEEDINGS
On
March
22, 2006 Trimax filed an action in The Superior Court of Ontario against
Electrolinks Corporation alleging damages of $1,250,000. Subsequently, Trimax
received a court ordered judgment, and is awaiting payment of $107,000 plus
applicable legal fees and interest.
On
May
22, 2006 Trimax was notified of an action out of the district court of Clark
County Nevada whereby 16 plaintiffs registered an action for $120,000 against
the Company. Both parties have agreed to a settlement. The proposed settlement
will consist of a payment of $25,000 from Electrolinks Corporation (see prior
paragraph) in exchange for a full release by Trimax. Trimax will then proceed
to
pay $25,000 to have the action in Nevada dropped. This settlement is expected
to
be finalized no later than March 2008.
ITEM
4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART
II
ITEM
5.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
PURCHASES OF EQUITY SECURITIES
The
Company's common shares, par value $0.001 (the “Shares”) were approved for
quotation on the Over-the-Counter Bulletin Board (OTC-BB) under the symbol
KTLR
on August 24, 2001. In connection with the change of the Company's name to
Koala
International Wireless Inc., the Company's trading symbol was changed to KIWI
on
December 10, 2001. The Company changed its name in January 2004 to Trimax
Corporation. The Company completed a 1 for 100 reverse split on November 5,
2004
at which time the Company’s trading symbol was changed to TXMO.
The
Company has not paid dividends in prior years and has no plans to pay dividends
in the near future. The Company intends to reinvest its earnings, if any are
achieved, in the continued development and operation of its business. Any
payment of dividends would depend upon the Company's pattern of growth,
profitability, financial condition, and such other factors as the Board of
Directors may deem relevant.
RECENT
SALES OF UNREGISTERED SECURITIES
In
September 2004, the Board of Directors approved a 1-for-100 reverse stock split
of our outstanding shares of capital stock. The reverse stock split became
effective on 5 November 2004. All share and per share information included
in
these consolidated financial statements have been adjusted to reflect this
reverse stock split.
On
20
July 2005 the Company issued 21,900,000 of common shares at par value to the
Company's founders.
On
17
August 2005 Trimax acquired the net liabilities of PLC. This was accounted
for
as a recapitalization of PLC into Trimax and resulted in the issuance of
19,183,718 shares, further described in note 1.
In
August
2005 the Company's Board of Directors approved the issuance 100,000 common
stock
in exchange for the settlement of $18,446 in debt of the Company.
On
31
August 2005 the Company issued 50,000 common shares to a former director of
the
Company as compensation for his services and sundry costs as a director of
Trimax. The common shares issued have been valued at their market value of
$25,000 or $.50 per share, which is the amount that would have been received
if
the shares had been issued for cash. Management believes that the fair market
value of the services received from the former director approximates this
value.
On
21
November 2005 the Company's Board of Directors approved the issuance of 358,529
common shares to various investors. The funds were raised through a non-brokered
private placement of common stock at an average price of $0.75 per share from
a
group of accredited non-US investors.
On
11
January 2006 the Company issued 55,300 private placement restricted common
shares to various shareholders at issue prices between $0.65 and $0.80 per
share.
On
11
January 2006 the Company issued 164,247 private placement restricted common
shares to various shareholders at issue prices between $0.65 and $0.80 per
share.
On
6
February 2006 the Company issued 75,000 shares in settlement of a civil court
case in which the Company was a defendant. The common shares issued have been
valued at their market value of $59,407, which is the amount that would have
been received if the shares had been issued for cash. Management believes that
the fair market value of the services received from the former director
approximates this value.
From
10
February 2006 to 15 March 2006, the Company issued a total of 113,177 various
private placement restricted common shares for $0.50 to $0.57 per
share.
On
16
March 2006 the Company’s Board of Directors approved the cancellation of
16,000,000 common shares. These shares which were originally issued in July
2005
to the former shareholders of PLC in consideration for their shares in PLC,
however due to non payment and no consideration of the subscribing shares they
were cancelled.
From
11
April 2006 to 15 May 2006, the Company issued a total of 433,819 various private
placement restricted common shares between $0.42 to $0.60 per
share.
On
1 June
2006 pursuant to Reorganization agreement, the Company issued 2,250,000
restricted common shares for $0.01 par value in exchange for 100% the common
stock of Multi-Source Inc.
On
1 June
2006 pursuant to Reorganization agreement, the Company issued 750,000 common
shares for $0.01 par value in consideration to a company for brokering the
Multi-Source Inc. acquisition. These transaction costs have been charged as
a
reduction of additional paid-in capital.
On
1 June
2006 the Company issued 2,275,985 private placement restricted common shares
in
settlement of certain debts.
From
29
June 2006 to September 2006, the Company issued a total of 581,012 various
private placement restricted common shares between $0.16 to $0.40 per
share.
On
19
October 2006 the Company's Board of Directors approved the issuance of 750,000
restricted common shares in exchange for a draw down payment of $150,000 from
the convertible debenture described above. These shares were issued as a result
of an amending agreement in October 2006 to the convertible debenture agreement
which outlined the simultaneous issuance of 750,000 restricted common shares
and
warrants for an additional 750,000 common shares exercisable at $0.20 upon
making the first draw down payment from the convertible debenture to the
Company.
On
November 16, 2006 the Company's Board of Directors approved the issuance of
2,000,000 private placement restricted common shares in exchange for $100,000
of
services provided to the Company.
On
January 24, 2007 the Company issued 10,000,000 restricted common shares to
the
officers of the company for of services provided to the Company. The fair value
was measured at the value of the Company's common stock on the date that the
commitment for performance had been reached. This valuation date was January
24,
2007 at which time the stock was valued at $0.17. The fair value of the
equity instrument has been charged directly to compensation expense and
additional paid-in capital.
On
January 27, 2007 the Company issued 8,300,000 restricted common shares in
settlement of accounts payable of $148,400.
On
January 22, 2007 the Company filed a Form S-8 Registration Statement
‘Securities to be offered to Employees in Employee Benefit Plans’. Under
the terms of this filing the company registered 1,369,286 shares of common
stock
with a par value of $.001 per share for settlement of amounts payable by the
company to the employees. The fair value was measured at the value of the
Company's common stock on the date on the registration. This valuation date
was
January 22, 2007 at which time the stock was valued at $0.16. The fair
value of the equity instrument has been charged directly to the related amounts
due to the respective parties and additional paid-in capital.
On
March
3, 2007 the company issued 1,000,000 private placement restricted common shares
in exchange for $155,000 of services provided to the Company at which time
the
stock was valued at $0.15. The fair value of the equity instrument has
been charged directly to the income statement and additional paid-in
capital.
During
the quarter ended March 31, 2007, the Company issued 588,461 private placement
common shares to various investors at an issue price of between $0.10 and $0.13
per share.
On
April
17, 2007 the Company cancelled the 3,000,000 common shares related to
the
legal
circumstances surrounding the acquisition of MSI.
Trimax
terminated the agreement to acquire MSI.
On
April
25, 2007 the Company cancelled 122,222 shares of common stock originally issued
at $0.16 per share for services.
On
May 9,
2007 the Company adopted the 2007 Equity Incentive Plan the purpose of which
is
to provide incentives to attract, retain and motivate eligible persons whose
present and potential contributions are important to the success of the Company.
The total number of shares reserved and available for grant and issuance
pursuant to the Plan is 5,000,000 shares.
On
May
14, 2007 the Company issued 3,200,000 shares of common stock for deposits on
contracts and issued 1,263,000 shares of common stock for services from
consultants, all issued at $0.16 per share.
On
May
16, 2007 the Company issued 233,000 shares of common stock for services from
consultants at $0.15 per share and issued 200,000 for cash pursuant to a private
placement at $0.10 per share.
On
May
24, 2007 the Company issued 233,000 shares of common stock for services from
consultants at $0.14 per share.
On
July
10, 2007 the Company issued 1,700,000 shares of common stock for management
services and issued 3,550,000 shares of common stock for services from
consultants, all issued at $0.12 per share.
ITEM
6.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Certain
statements in this report and elsewhere (such as in other filings by the Company
with the Securities and Exchange Commission ("SEC"), press releases,
presentations by the Company of its management and oral statements) may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates," and
"should," and variations of these words and similar expressions, are intended
to
identify these forward-looking statements. Actual results may materially differ
from any forward-looking statements. Factors that might cause or contribute
to
such differences include, among others, competitive pressures and constantly
changing technology and market acceptance of the Company's products and
services. The Company undertakes no obligation to publicly release the result
of
any revisions to these forward-looking statements, which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence
of
unanticipated events.
The
following discussion should be read in conjunction with the consolidated
financial statements included herein. Certain statements contained herein may
constitute forward-looking statements, as discussed above. Because such
statements include risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. Several
factors that could cause or contribute to such differences include those
discussed in the "Risk Factors" section of this Form 10-KSB.
PLAN
OF OPERATIONS
Trimax
and its wholly owned subsidiary, PLC Network Solutions Inc., are providers
of
broadband over power lines (‘BPL’) communication technologies. Trimax
specializes in the development, distribution, implementation, and servicing
technologies that use the power grid to deliver 128-bit encrypted high-speed
symmetrical broadband for data, voice and video transmission.
BPL
is a
communications technology that turns the existing power line infrastructure
and
electrical wiring in commercial and residential buildings into a high-bandwidth
network. Broadband is delivered to every electrical outlet throughout the home
or business. To connect, users plug a modem into any electrical outlet and
plug
their computer, phone or IP device into the modem. There is no need to
install any new wiring in the walls. The company's technologies use the existing
electrical wiring as a "smart" network to deliver broadband access to computers,
video on demand (“VOD”), VOIP phones, surveillance cameras, elevator
applications, IPTVs, AMR, etc. as well as connect printers, faxes, entertainment
systems, etc. on the hotel, office or home network.
Installation
is usually implemented in a matter of hours or days instead of weeks or months
and avoids the expense and disruption to the business of burying cables or
opening walls and ceilings to run new cables, which is necessary for other
hard
wired broadband access technologies. This technology has been successfully
deployed by others around the globe, in hotels, homes, apartments, office
towers, schools, hospitals, museums and government buildings.
To
date,
Trimax has generated nil revenues from sales of its products.
The
Company and its BPL devices are presently Federal Communications Commission
(“FCC”) certified. No further research and development is needed in order for
the Company to be able to sell and market its products. The Company is
undergoing pilot projects, deployed test equipment and been in negotiations
with
various parties and anticipates an increase in interest for deployment of its
devices and bundled services in the 2008 calendar year. The Company anticipates
securing some contracts in 2008 for its devices and bundled services in emerging
markets.
For
the
fiscal year ended September 30, 2007 the Company incurred a loss in the amount
of $4,959,595. Most of the expenses incurred during this period were for basic
monthly Company expenses including marketing and technological expenses. These
expenditures were principally due to costs related to the development of
marketing strategies and costs associated with deploying pilot projects for
potential customers and clients. Also included are salary and travel costs
related to increased sales and marketing functions. Operation costs over the
next year will depend on a number of factors, including the costs attributed
to
the various products acquired from third party suppliers, as well as the cost
of
marketing, research and executing its marketing campaign. These expenditures
are
expected to be financed mainly through a convertible debenture agreement and
through various private placements. No sources of funds are currently in place
or available to the Company.
Recent
Developments and Discussions
The
company has been involved in several pilot projects with an assortment of
potential clients for BPL enhanced digital signage screens and content
management. These pilots thus far have yielded promising reactions and feedback.
Trimax has been showcasing a complete digital signage solution, including
content management software and professional remote management tools for
administrators to manage larger-scale deployments which tools can be enhanced
and more cost effective with the use of the Broadband over Power Lines
technology (BPL).
Trimax
has purchased 126 Digital Signage Screens for an anticipated initial order
totalling $226,000usd and has invested thus far $90,000 to Cybersonics Sound
Technologies Inc., a company established in the distribution of advertising
content to off sight locations via radio and streaming video over the internet.
The Company continues to negotiate with Cybersonics Sound Technologies for
a
mutually beneficial business arrangement
.
Liquidity
and Capital Resources
Since
the
consummation of the acquisition of PLC Network Solutions Inc. the Company has
raised funds through a convertible debenture and private placement funds through
various investors. The Company continues to attempt to raise funds through
its
convertible debenture and various small individual investors in the effort
to
keep its business operational until it can be self sufficient. The Company
foresees a trend towards the adoption of BPL devices and the technology in
general which will assist the Company in the prospects of being able to attract
and procure revenue generating clients and contracts. Although the Company
anticipates raising the finances necessary to allow it to fulfill its needs
until revenues are received and the Company is self sufficient, there can be
no
assurance that any additional funds will be available on terms acceptable to
the
Company, or at all.
The
forecast of the period of time through which the Company's financial resources
will be adequate to support operations is a forward-looking statement that
involves risks and uncertainties. The actual funding requirements may differ
materially from this as a result of a number of factors including plans to
expand its operations. There can be no guarantee that financing in amounts
adequate to carry out the Company's business plan will be available on terms
acceptable to the Company, or at all. No material commitments for capital
expenditures were in place or made at September 30, 2007.
The
forecasted expenses of implementing the Company's business plan will exceed
the
Company's current resources. The Company therefore will need to secure
additional funding through an offering of its securities or through capital
contributions from its stockholders.
No
commitments to provide additional funds have been made by management; however,
the Company hopes that it can draw down on funds through a previously executed
convertible debenture agreement executed on May 15, 2006. This commitment is
non
binding; there can be no assurances that any additional funds will be available
on terms acceptable to the Company, or at all. The agreement is with a private
accredited group of investors. The commitment of $1,500,000 is available to
be
drawn down in $300,000 tranches at Trimax's option. The loans mature on May
14,
2009 and bear an annual interest rate of 12%. At the investor's option, the
loan
is convertible to common shares at the prior 20 day average price. Each common
share has one purchase warrant attached, with each warrant exercisable for
one
common share at $1.25 until May 14, 2009. In October 2006 the Company and the
investors agreed to allow the Company to draw down two increments of $150,000
of
the available funds. The Company has drawn down a total of $300,000usd from
this
financing convertible debenture agreement. The finance group has elected to
convert to equity, and as a result Trimax has issued shares for the funds
received. There are presently no interest charges accruing or fees owed by
Trimax.
The
Company does not require any further research and development at this time
in
order to be able to market and sell its products although the Company requires
financing and/or joint ventures with strategic partners in order to keep
operational. To date the Company has raised funds to keep its business
operational and to allow it to market its products and procure contracts. The
availability of future financings will depend on market conditions.
Effect
of Fluctuations in Foreign Exchange Rates
The
Company's reporting and functional currency is the US dollar. Currently, most
of
the Company's assets are located in Canada. Transactions in Canadian dollars
have been translated into U.S. dollars using the current rate method, such
that
assets and liabilities are translated at the rates of exchange in effect at
the
balance sheet date and revenue and expenses are translated at the average rates
of exchange during the appropriate fiscal period. As a result, the carrying
value of the Company's investments in Canada is subject to the risk of foreign
currency fluctuations. Additionally, any revenues received from the Company's
international operations in other than US dollars will be subject to foreign
exchange risk. To date, there have been no international
operations.
Critical
Accounting Policies
The
Company’s financial statements and accompanying notes are prepared in accordance
with accounting principles generally accepted in the United States. Preparing
financial statements requires management to make estimates and assumptions
that
affect the reported amounts of assets, liabilities, revenue and expenses. These
estimates and assumptions are affected by management’s application of accounting
policies. The Company believes that understanding the basis and nature of the
estimates and assumptions involved with the following aspects of our financial
statements is critical to an understanding of our financial statements. We
believe the following critical accounting policies require us to make
significant judgments and estimates in the preparation of our financial
statements:
Going
Concern
The
Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business. The Company has experienced losses from operations
since inception that raise substantial doubt as to its ability to continue
as a
going concern. The Company's ability to continue as a going concern is
contingent upon its ability to obtain the financing and strategic alliances
necessary to attain profitable operations. Management is pursuing various
sources of financing and intends to raise equity financing through a private
placement with a private group of investors in the near future.
The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability
of
the Company to continue as a going concern.
Foreign
Translation Adjustment
The
accounts of the Company were translated into United States dollars in accordance
with the provisions of SFAS No. 52, Foreign Currency Translation. In accordance
with the provisions of SFAS No. 52 transaction gains and losses on these assets
and liabilities are included in the determination of income for the relevant
periods. Adjustments resulting from the translation of the financial statements
from their functional currencies to United States dollars are accumulated as
a
separate component of accumulated other comprehensive income and have not been
included in the determination of income for the relevant periods.
Intangible
Assets
Intangible
assets of acquired businesses are stated at cost. The intangibles have limited
lives which the Company has determined to be five years. Other intangible assets
include deferred financing fees. The Company evaluates intangible assets at
least annually to determine whether events and circumstances continue to support
a definite useful life.
Deferred
Financing Costs
The
costs
of financing are capitalized and amortized by the straight-line method over
the
term of the related debt. If any or all of the related debt is repaid prior
to
its maturity date, a pro-rata share of the related deferred financing costs
are
written off and recorded as amortization expense in the period of the repayment
in the consolidated statement of operations.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
and
the 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. These
estimates are reviewed periodically, and, as adjustments become necessary,
they
are reported in earnings in the period in which they become known.
ITEM
7.
FINANCIAL
STATEMENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors and Stockholders of
Trimax
Corporation and Subsidiaries
We
have
audited the accompanying consolidated balance sheet of
Trimax
Corporation and Subsidiaries
(A
Development Stage Company) as at
September
30,
2007
and the
related consolidated statements of operations
and
comprehensive income
,
changes
in stockholders' equity and cash flows for the
year
then
ended
and for
the cumulative period from inception to September 30, 2007. These consolidated
financial statements are the responsibility of the Company's management.
Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
The
financial statements of Trimax Corporation and Subsidiaries as of September
30,
2006 and 2005, were audited by other auditors whose report dated December
20,
2006, expressed an unqualified opinion on those statements.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform an audit to obtain reasonable assurance whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well
as evaluating the overall consolidated financial statement presentation. We
believe our audits provide a reasonable basis for our opinion.
In
our
opinion, the consolidated financial statements referred to above present
fairly,
in all material respects, the financial position of Trimax Corporation and
Subsidiaries (A Development Stage Company) as at
September
30,
2007
and
the
results of its operations, cash flows and changes in stockholders' deficit
for
the
year
then
ended
and
for
the cumulative period from inception to September 30,
2007
in
accordance with accounting principles generally accepted in the United States
of
America.
The
accompanying consolidated financial statements have been prepared assuming
that
the Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered losses from operations since
inception that raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are described in note
3.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/Chisholm,
Bierwolf & Nilson
Chisholm,
Bierwolf & Nilson, LLC
Bountiful,
Utah
December
17,
2007
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Trimax Corporation and Subsidiaries
We have audited the accompanying consolidated balance sheet of
Trimax Corporation and Subsidiaries
(A Development Stage Company) as at 30 September 2006 and 2005 and the related consolidated statements of operations, changes in stockholders' equity and cash flows for the years ended 30 September 2006 and 2005 and for the cumulative period from inception to September 30, 2006. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Trimax Corporation and Subsidiaries (A Development Stage Company) as at 30 September 2006 and 2005 and the results of its operations, cash flows and changes in stockholders' deficit for the years ended 30 September 2006 and 2005 and for the cumulative period from inception to September 30, 2006 in accordance with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 3 to the financial statements, the Company has suffered losses from operations since inception that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Since the accompanying consolidated financial statements have not been prepared and audited in accordance with generally accepted accounting principles and standards in Canada, they may not satisfy the reporting requirements of Canadian statutes and regulations.
As discussed in Note 2 to the financial statements, the Company restated its 2005 consolidated financial statements to correct the accounting treatment applied to a business combination.
Walker & Company"
Chartered Accountants
Professional Corporation
Markham, Canada
20 December 2006
TRIMAX
CORPORATION
(A
Development Stage Company)
CONSOLIDATED
BALANCE SHEETS
AS
AT 30 SEPTEMBER
(Expressed
in United States Dollars)
|
|
2007
|
|
2006
|
|
ASSETS
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash
|
|
$
|
12,011
|
|
$
|
764
|
|
Prepaid
expenses
|
|
|
-
|
|
|
107,027
|
|
Deposits
on acquisitions
|
|
|
811,380
|
|
|
-
|
|
Total
Current Assets
|
|
|
823,391
|
|
|
107,791
|
|
Long
Term Assets
|
|
|
|
|
|
|
|
Equipment
|
|
|
9,863
|
|
|
17,654
|
|
Intangibles
|
|
|
-
|
|
|
1,463,483
|
|
Total
Long Term Assets
|
|
|
9,863
|
|
|
1,481,137
|
|
Total
Assets
|
|
$
|
833,254
|
|
$
|
1,588,928
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Bank
Indebtedness
|
|
|
-
|
|
|
20,622
|
|
Accounts
payable and accrued liabilities
|
|
|
339,668
|
|
|
364,967
|
|
Payable
to related parties
|
|
|
434,586
|
|
|
413,603
|
|
Other
loans and advances payable
|
|
|
158,637
|
|
|
-
|
|
Long
term debt - current portion
|
|
|
-
|
|
|
54,528
|
|
Total
Current Liabilities
|
|
|
932,891
|
|
|
853,720
|
|
Long
Term Liabilities
|
|
|
|
|
|
|
|
Long
term debt
|
|
|
-
|
|
|
98,496
|
|
Total
Liabilities
|
|
|
932,891
|
|
|
952,216
|
|
Commitment
and Contingent Liability
|
|
|
|
|
|
|
|
Stockholders'
Equity (Deficit)
|
|
|
|
|
|
Authorized
|
|
|
|
|
|
|
|
100,000,000
Common shares par value of $0.001 each
|
|
|
|
|
|
|
|
20,000,000
Preferred shares par value of $0.001 each
|
|
|
|
|
|
|
|
Issued
and outstanding
|
|
|
|
|
|
|
|
63,469,766
(32,290,787 - 2006) Common shares
|
|
|
63,470
|
|
|
32,291
|
|
Nil
preferred shares
|
|
|
-
|
|
|
-
|
|
Additional
paid-in capital
|
|
|
15,399,248
|
|
|
11,311,180
|
|
Accumulated
other comprehensive loss
|
|
|
80,711
|
|
|
(23,288
|
)
|
Deficit
accumulated during the development stage
|
|
|
(15,643,066
|
)
|
|
(10,683,471
|
)
|
Total
Stockholders' Equity (Deficit)
|
|
|
(99,637
|
)
|
|
636,712
|
|
Total
Liabilities and Stockholders' Equity
|
|
$
|
833,254
|
|
$
|
1,588,928
|
|
The
accompanying notes are an integral part of these financial
statements.
TRIMAX
CORPORATION
(A
Development Stage Company)
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Expressed
in United States Dollars)
|
|
For
The Year Ended 30 September 2007
|
|
For
The Year Ended 30 September 2006
|
|
For
The Period From Inception to 30 September 2007
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
Consultants
and professional fees
|
|
$
|
913,640
|
|
$
|
276,469
|
|
$
|
7,392,954
|
|
Stock
compensation expense
|
|
|
1,319,625
|
|
|
-
|
|
|
1,319,625
|
|
General
and administrative
|
|
|
398,889
|
|
|
257,065
|
|
|
1,949,858
|
|
Management
fees
|
|
|
100,957
|
|
|
231,438
|
|
|
1,019,395
|
|
License
fees
|
|
|
-
|
|
|
50,523
|
|
|
64,953
|
|
Investor
relations
|
|
|
155,000
|
|
|
-
|
|
|
155,000
|
|
Financial
|
|
|
85,927
|
|
|
8,379
|
|
|
181,319
|
|
(Gain)
loss on exchange
|
|
|
(9,131
|
)
|
|
(9,565
|
|
|
(17,569
|
)
|
Stock
based compensation
|
|
|
1,964,000
|
|
|
-
|
|
|
2,962,660
|
|
Product
development
|
|
|
-
|
|
|
-
|
|
|
400,495
|
|
Selling
and promotion
|
|
|
105,900
|
|
|
-
|
|
|
310,974
|
|
Depreciation
of intangible assets
|
|
|
80,959
|
|
|
104,526
|
|
|
181,683
|
|
Depreciation
of tangible assets
|
|
|
2,360
|
|
|
7,772
|
|
|
38,263
|
|
|
|
|
5,118,126
|
|
|
926,607
|
|
|
15,959,610
|
|
NET
OPERATING LOSS
|
|
|
(5,118,126
|
)
|
|
(926,607
|
)
|
|
(15,959,610
|
)
|
GAIN
ON DISPOSAL OF SUBSIDIARY
|
|
|
158,531
|
|
|
-
|
|
|
158,531
|
|
LEGAL
SETTLEMENT
|
|
|
-
|
|
|
120,000
|
|
|
120,000
|
|
WRITE
OFF MERGER GOODWILL
|
|
|
-
|
|
|
-
|
|
|
38,013
|
|
OPERATING
LOSS
BEFORE INCOME TAX
|
|
$
|
(4,959,595
|
)
|
$
|
(1,046,607
|
)
|
$
|
(15,643,066
|
)
|
Income
Tax
|
|
|
-
|
|
|
-
|
|
|
-
|
|
NET
LOSS
|
|
$
|
(4,959,595
|
)
|
$
|
(1,046,607
|
)
|
$
|
(15,643,066
|
)
|
FOREIGN
CURRENCY TRANSLATION ADJUSTMENT
|
|
|
103,999
|
|
|
(17,929
|
)
|
|
80,711
|
|
COMPREHENSIVE
LOSS
|
|
$
|
(4,855,596
|
)
|
$
|
(1,064,536
|
)
|
$
|
(15,562,355
|
)
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND
DILUTED
|
|
$
|
(0.09
|
)
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND
DILUTED
|
|
|
53,243,903
|
|
|
27,836,636
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
TRIMAX
CORPORATION
(A
Development Stage Company)
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR
THE YEARS ENDED 30 SEPTEMBER 2007 AND 2006 AND FROM INCEPTION TO 30 SEPTEMBER
2007
(Expressed
in United States Dollars)
|
|
Shares
|
|
Common
Stock
|
|
Additional
Paid-in Capital
|
|
Stock
issuable
|
|
Accumulated
Other Comprehensive Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25
August 2000
|
|
|
5,400
|
|
$
|
6
|
|
$
|
27,183
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
27,189
|
|
Foreign
currency
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(194
|
)
|
|
-
|
|
|
(194
|
)
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(45,676
|
)
|
|
(45,676
|
)
|
Stock
subscribed for services and concept
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
40,192
|
|
|
-
|
|
|
-
|
|
|
40,192
|
|
Balance
30
September 2000
|
|
|
5,400
|
|
|
6
|
|
|
27,183
|
|
|
40,192
|
|
|
(194
|
)
|
|
(45,676
|
)
|
|
21,511
|
|
Foreign
currency
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
8,643
|
|
|
-
|
|
|
8,643
|
|
Stock
issued
|
|
|
8,142
|
|
|
8
|
|
|
187,397
|
|
|
(40,192
|
)
|
|
-
|
|
|
-
|
|
|
147,213
|
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(179,888
|
)
|
|
(179,888
|
)
|
Balance
30
September
2001
|
|
|
13,542
|
|
|
14
|
|
|
214,580
|
|
|
-
|
|
|
8,449
|
|
|
(225,564
|
)
|
|
(2,521
|
)
|
Stock
issued to
acquire
subsidiary
|
|
|
111,458
|
|
|
111
|
|
|
(119,328
|
)
|
|
-
|
|
|
-
|
|
|
119,218
|
|
|
1
|
|
Stock
cancelled
|
|
|
(5,000
|
)
|
|
(5
|
)
|
|
(3,810
|
)
|
|
-
|
|
|
-
|
|
|
3,815
|
|
|
-
|
|
Stock
issued for settlement of debt
|
|
|
16,460
|
|
|
16
|
|
|
59,364
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
59,380
|
|
Stock
issued for salaries
|
|
|
500
|
|
|
1
|
|
|
2,499
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,500
|
|
Stock
option benefit
|
|
|
-
|
|
|
-
|
|
|
2,263,560
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,263,560
|
|
Foreign
currency
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(3,436
|
)
|
|
-
|
|
|
(3,436
|
)
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(3,137,115
|
)
|
|
(3,137,115
|
)
|
Balance
30
September 2002
|
|
|
136,690
|
|
|
137
|
|
|
2,416,865
|
|
|
-
|
|
|
5,013
|
|
|
(3,239,646
|
)
|
|
(817,631
|
)
|
Sock
issued for debt
|
|
|
87,590
|
|
|
87
|
|
|
926,468
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
926,555
|
|
Stock
issued on exercise of options
|
|
|
11,000
|
|
|
11
|
|
|
42,989
|
|
|
(7,100
|
)
|
|
-
|
|
|
-
|
|
|
35,900
|
|
Stock
issued for services and technology
|
|
|
28,645
|
|
|
29
|
|
|
289,427
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
289,456
|
|
Stock
issued for consulting
|
|
|
155,000
|
|
|
155
|
|
|
1,549,845
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,550,000
|
|
Stock
compensation benefit
|
|
|
-
|
|
|
-
|
|
|
214,660
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
214,660
|
|
Stock
compensation
|
|
|
95,000
|
|
|
95
|
|
|
949,905
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
950,000
|
|
Foreign
currency
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(162
|
)
|
|
-
|
|
|
(162
|
)
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(3,212,184
|
)
|
|
(3,212,184
|
)
|
Balance
30
September 2003
|
|
|
514,195
|
|
|
514
|
|
|
6,390,159
|
|
|
(7,100
|
)
|
|
4,851
|
|
|
(6,451,830
|
)
|
|
(63,406
|
)
|
Adjustment
|
|
|
23
|
|
|
-
|
|
|
123,031
|
|
|
-
|
|
|
-
|
|
|
(123,031
|
)
|
|
-
|
|
Stock
issued for debt
|
|
|
378,000
|
|
|
378
|
|
|
188,622
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
189,000
|
|
Shares
cancelled
|
|
|
(38,000
|
)
|
|
(38
|
)
|
|
(379,962
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(380,000
|
)
|
Stock
issued on exercise of options
|
|
|
3,000
|
|
|
3
|
|
|
14,997
|
|
|
7,100
|
|
|
-
|
|
|
-
|
|
|
22,100
|
|
Stock
issued for services and technology
|
|
|
115,000
|
|
|
115
|
|
|
1,379,885
|
|
|
-
|
|
|
-
|
|
|
-/
|
|
|
1,380,000
|
|
Shares
issued for consulting
|
|
|
189,000
|
|
|
189
|
|
|
1,330,811
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,331,000
|
|
Stock
issued for compensation
|
|
|
1,500
|
|
|
2
|
|
|
23,998
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
24,000
|
|
Shares
cancelled
|
|
|
(39,000
|
)
|
|
(39
|
)
|
|
(398,961
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(399,000
|
)
|
Shares
cancelled
|
|
|
(40,000
|
)
|
|
(40
|
)
|
|
(399,960
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(400,000
|
)
|
Foreign
currency
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
769
|
|
|
-
|
|
|
769
|
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,799,751
|
)
|
|
(2,799,751
|
)
|
Balance
30
September 2004
|
|
|
1,083,718
|
|
$
|
1,084
|
|
$
|
8,272,620
|
|
$
|
-
|
|
$
|
5,620
|
|
$
|
(9,374,612
|
)
|
$
|
(1,095,288
|
)
|
Acquisition
of PLC Network Solutions Inc.
|
|
|
21,900,000
|
|
|
21,900
|
|
|
-
|
|
|
-
|
|
|
(5,620
|
)
|
|
(99,668
|
)
|
|
(83,388
|
)
|
Common
stock issued for debt
|
|
|
18,200,000
|
|
|
18,200
|
|
|
937,554
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
955,754
|
|
Common
stock issued for services
|
|
|
50,000
|
|
|
50
|
|
|
24,950
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
25,000
|
|
Common
stock issuable - debt settlement
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
50,998
|
|
|
-
|
|
|
-
|
|
|
50,998
|
|
Common
stock issuable - cash
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
166,316
|
|
|
-
|
|
|
-
|
|
|
166,316
|
|
Foreign
currency
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(5,359
|
)
|
|
-
|
|
|
(5,359
|
)
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(162,584
|
)
|
|
(162,584
|
)
|
Balance
30
September 2005
|
|
|
41,233,718
|
|
$
|
41,234
|
|
$
|
9,235,124
|
|
$
|
217,314
|
|
$
|
(5,359
|
)
|
$
|
(9,636,864
|
)
|
$
|
(148,551
|
)
|
Common
stock issued for cash
|
|
|
1,706,084
|
|
|
1,706
|
|
|
760,700
|
|
|
(217,314
|
)
|
|
-
|
|
|
-
|
|
|
545,092
|
|
Cancellation
of common stock
|
|
|
(16,000,000
|
)
|
|
(16,000
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(16,000
|
)
|
Common
stock issued for debt
|
|
|
2,275,985
|
|
|
2,276
|
|
|
111,523
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
113,799
|
|
Common
stock issued in settlement of legal claim
|
|
|
75,000
|
|
|
75
|
|
|
59,333
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
59,408
|
|
Acquisition
of Multi-Source Inc.
|
|
|
3,000,000
|
|
|
3,000
|
|
|
1,144,500
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,147,500
|
|
Foreign
currency
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(17,929
|
)
|
|
-
|
|
|
(17,929
|
)
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,046,607
|
)
|
|
(1,046,607
|
)
|
Balance
30
September 2006
|
|
|
32,290,787
|
|
$
|
32,291
|
|
$
|
11,311,180
|
|
$
|
-
|
|
$
|
(23,288
|
)
|
$
|
(10,683,471
|
)
|
$
|
636,712
|
|
Common
stock issued for cash
|
|
|
1,538,461
|
|
|
1,538
|
|
|
227,308
|
|
|
-
|
|
|
|
|
|
|
|
|
228,846
|
|
Cancellation
of common stock
|
|
|
(3,000,000
|
)
|
|
(3,000
|
)
|
|
(1,144,500
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,147,500
|
)
|
Common
stock issued for services
|
|
|
29,440,518
|
|
|
29,441
|
|
|
4,408,520
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,437,961
|
|
Common
stock issued for deposits on acquisitions
|
|
|
3,200,000
|
|
|
3,200
|
|
|
508,800
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
512,000
|
|
Value
of warrants issued
|
|
|
-
|
|
|
-
|
|
|
87,940
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
87,940
|
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4,959,595
|
)
|
|
(4,959,595
|
)
|
Foreign
exchange
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
103,999
|
|
|
-
|
|
|
103,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
30
September
2007
|
|
|
63,469,766
|
|
|
63,470
|
|
|
15,399,248
|
|
|
-
|
|
|
80,711
|
|
|
(15,643,066
|
)
|
|
(99,637
|
)
|
The
accompanying notes are an integral part of these financial
statements.
TRIMAX
CORPORATION (A Development Stage Company)
CONSOLIDATED
STATEMENT OF CASH FLOWS
(Expressed
in United States Dollars)
|
|
For
The Year Ended 30 September 2007
|
|
For
The Year Ended 30 September 2006
|
|
For
The Period From Inception to 30 September 2007
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(4,959,595
|
)
|
$
|
(1,046,607
|
)
|
$
|
(15,643,066
|
)
|
Adjustment
to reconcile net loss to net cash used:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
of tangible assets
|
|
|
2,360
|
|
|
7,772
|
|
|
38,263
|
|
Depreciation
of intangible assets
|
|
|
80,959
|
|
|
107,024
|
|
|
181,683
|
|
Gain
on disposal of subsidiary
|
|
|
158,531
|
|
|
-
|
|
|
158,531
|
|
Cancellation
of common stock
|
|
|
-
|
|
|
(16,000
|
)
|
|
(16,000
|
)
|
Stock
compensation expense - warrants
|
|
|
87,940
|
|
|
-
|
|
|
87,940
|
|
Common
stock issued for debt
|
|
|
-
|
|
|
113,799
|
|
|
113,799
|
|
Common
stock issued in settlement of legal claim
|
|
|
-
|
|
|
59,408
|
|
|
59,408
|
|
Accounts
payable forgiven
|
|
|
-
|
|
|
-
|
|
|
(10,171
|
)
|
Common
stock issued for services
|
|
|
4,437,961
|
|
|
-
|
|
|
11,894,037
|
|
Write
off of salaries payable
|
|
|
-
|
|
|
-
|
|
|
(111,355
|
)
|
Write
off of directors compensation
|
|
|
-
|
|
|
-
|
|
|
(200,000
|
)
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Stock
subscriptions receivable
|
|
|
-
|
|
|
21,900
|
|
|
-
|
|
Prepaid
expenses
|
|
|
107,027
|
|
|
(22,864
|
)
|
|
-
|
|
Accounts
payable and accrued liabilities
|
|
|
(17,054
|
)
|
|
71,306
|
|
|
1,411,308
|
|
NET
CASH USED IN OPERATING ACTIVITIES
|
|
|
(101,871
|
)
|
|
(704,262
|
)
|
|
(2,035,623
|
)
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Advances
to Multi-Source Inc.
|
|
|
(240,696
|
)
|
|
14,016
|
|
|
(226,680
|
)
|
Deposits
on acquisitions
|
|
|
(299,380
|
)
|
|
-
|
|
|
(299,380
|
)
|
Acquisition
of equipment
|
|
|
(4,818
|
)
|
|
(7,110
|
)
|
|
(58,190
|
)
|
CASH
FLOWS USED IN INVESTING ACTIVITIES
|
|
|
(544,894
|
)
|
|
6,906
|
|
|
(584,250
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
(Repayment)
proceeds from long term debt
|
|
|
12,332
|
|
|
2,077
|
|
|
165,356
|
|
(Repayment)
advances from related parties
|
|
|
312,729
|
|
|
105,095
|
|
|
456,917
|
|
Other
loans and advances
|
|
|
158,637
|
|
|
-
|
|
|
910,452
|
|
Proceeds
from the issuance of common stock
|
|
|
228,846
|
|
|
545,092
|
|
|
1,133,049
|
|
CASH
FLOWS USED IN FINANCING ACTIVITIES
|
|
|
712,544
|
|
|
652,264
|
|
|
2,665,774
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFECT
OF FOREIGN CURRENCY TRANSLATION
|
|
|
(54,532
|
)
|
|
26,001
|
|
|
(33,890
|
)
|
NET
(DECREASE) INCREASE IN CASH
|
|
|
11,247
|
|
|
(19,091
|
)
|
|
12,011
|
|
CASH,
BEGINNING OF YEAR
|
|
|
764
|
|
|
19,855
|
|
|
-
|
|
CASH,
END OF YEAR
|
|
$
|
12,011
|
|
$
|
764
|
|
$
|
12,011
|
|
The
accompanying notes are an integral part of these financial
statements.
TRIMAX
CORPORATION
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
On
11
February 2005 Kiwi Network Solutions Inc. approved its Amended and Restated
Articles of Incorporation and changed its name to Trimax Corporation (“Trimax”
or "the Company"), and increased the number of its authorized shares of common
and preferred stock to 100,000,000 shares of common stock and 20,000,000 shares
of preferred stock, both with a par value of $0.001 per share.
On
17
August 2005, pursuant to a reorganization agreement by and among PLC Network
Solutions Inc. (“PLC”), a private company incorporated in the Province of
Ontario under the Ontario Business Corporations Act and Trimax, Trimax acquired
all of the outstanding common stock of PLC for the issuance of 5,900,000 shares
of common stock.
Basis
of
Consolidation:
The
consolidated financial statements include the accounts of PLC Network Solutions
Inc. and the Company. All inter-company accounts and transactions have
been eliminated in the consolidation.
On
29
July 2005, the Company entered into an Exclusive Supply agreement with a
technology partner (the "Partner"), a privately-held corporation based in
Toronto, Ontario. This agreement provided the Company with the exclusive right
to sell Switzerland based Ascom broadband over power line communication access
products ("Products") in Canada and non-exclusive rights world wide, which
the
Partner represented that it had secured from Ascom for itself. In accordance
with the agreement, the Partner agreed not to sell or supply Products to any
other person or legal entity in Canada with the exception of any hydro
organizations. In consideration for these rights the Company agreed to pay
the
Partner an annual license fee of $100,000 in Canadian dollars for five years
commencing on 1 August 2005. Subsequent to the signing and advancement of funds
for the “Exclusive Supply Agreement” the Company was made aware that the product
supplier had no right to grant a sub-license from Ascom. Furthermore, the
supplier was previously in default and was never in any position to grant any
sub-license on its own license. Due to these events, Trimax has secured product
from other vendors for BPL products, which it considers to be more cost
effective and possessing similar performance characteristics and for which
no
annual license fees are required to be paid by Trimax.
On
22
March 2006 Trimax filed an action in The Superior Court of Ontario against
Electrolinks Corporation alleging damages of $1,250,000. Subsequently, Trimax
received $23,925 towards settlement and is awaiting further payment of $107,000
plus applicable taxes and legal fees.
On
17 May
2006 Trimax entered into a purchase and sale agreement with 3One Networks Inc.
("3One"), a broadband over powerline provider ("BPL"), for the purchase of
their
High Speed Internet Access ("HSIA") service business, including all existing
service contracts and related assets for providing HSIA services to their client
list of hotels, motels and resort customers. The purchase price was $220,230.
Trimax has paid initial deposits and payments totalling $94,594, with the
balance payable in equal monthly instalments ending 18 October 2006. As final
payments pertaining to the purchase and sale agreement have yet to be fulfilled
and the rights to these assets do not transfer to the Company until fully paid,
the deposits and payments paid as at 30 September 2007 have been reflected
in
the balance sheet under ‘Deposits on Acquisitions’. No additional deposits and
payments have been paid subsequent to year end. The agreement also provides
for
3One to deliver certain BPL equipment based on normal distribution pricing.
The
agreement called for the acquisition of the service book for fifty hotels,
which
represents a recurring revenue stream from 4,600 rooms in total.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
1.
|
NATURE
OF OPERATIONS (Continued)
|
The
3One
acquisition allows for the potential to upgrade the services by adding
applications and Internet Service Provider provisioning to these hotel sites.
The Company has halted further payments while in negotiations with 3One for
possible mutually beneficial changes in its relationship on a going forward
basis.
On
1 June
2006 Trimax entered into a Reorganization Agreement with the shareholders of
Multi-Source Inc. ("MSI"), a company incorporated in the Province of Ontario,
Canada.
Under
the
terms of the Reorganization Agreement the shareholders of MSI conveyed all
of
the issued and outstanding shares of MSI to Trimax in exchange for 3,000,000
shares of Trimax’s common stock. The acquisition was accounted for under the
purchase method of accounting. Accordingly, the financial position and results
of operations of MSI have been consolidated subsequent to the acquisition date.
Trimax allocated the purchase price to the acquired tangible net assets and
liabilities. The Company allocated an additional $1,557,327 to the acquired
intangible assets. The intangible assets have been amortized over a five year
period on a straight-line basis. Up to an additional 2,000,000 shares were
eligible to be issued to the principal shareholder of MSI, subsequent to the
acquisition, upon the achievement of certain milestones by the MSI business
within 18 months.
The
purchase price was allocated as follows:
|
|
At
1 June
2006
|
|
3,000,000
shares of common stock (valued at the average price two days before
and
after the measurement date)
|
|
|
1,530,000
|
|
Transaction
costs (750,000 shares of common stock valued at the average price
two days
before and after the measurement date)
|
|
|
(382,500
|
)
|
Purchase
price
|
|
|
1,147,500
|
|
Liabilities
assumed
|
|
|
(442,540
|
)
|
Estimated
fair value of tangible assets acquired
|
|
|
32,713
|
|
Estimated
fair value of identifiable intangible assets acquired - completed
technology
|
|
|
1,557,327
|
|
Goodwill
|
|
|
-
|
|
Due
to
legal circumstances surrounding the acquisition and effective April
1,
2007
Trimax terminated the agreement entered into with MSI and on April 17, 2007
Trimax cancelled the 3,000,000 shares issued to the shareholders of MSI as
part
of the original acquisition. As a result of these changes the assets and
liabilities previously recognized through the acquisition of MSI have been
written off by the Company and returned to the original owners at their current
net book value. The Company has written off its investment in MSI as
follows:
Disposal
of the net liabilities of MSI due to cancellation of acquisition
agreement
Intangible
assets - net of amortization
|
|
$
|
(1,384,567
|
)
|
Fixed
assets
|
|
|
(6,999
|
)
|
Loan
payable
|
|
|
291,746
|
|
Bank
loan payable
|
|
|
165,356
|
|
Accounts
payable
|
|
|
28,941
|
|
Deficit
|
|
|
1,064,054
|
|
Gain
on disposal
|
|
$
|
158,531
|
|
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
1.
|
NATURE
OF OPERATIONS (Continued)
|
Intangible
assets of MSI, net, consisted of the following:
|
|
Estimated Useful Life and
Amortization Basis
|
|
Gross
Intangible Asset
|
|
Accumulated
Amortization
|
|
Net Intangible
Asset
|
|
Technology
|
|
|
5
years using straight-line basis
|
|
$
|
1,566,250
|
)
|
$
|
(181,683
|
)
|
$
|
1,384,567
|
|
Write
off
|
|
|
|
|
$
|
(1,566,250
|
)
|
$
|
181,683
|
|
$
|
(1,384,567
|
)
|
Balance
|
|
|
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
2.
|
DEPOSITS
ON ACQUISITIONS
|
Trimax
continues to negotiate the purchase of a High Speed Internet Access (“HSIA”)
service business, including a portfolio of 50 hotels consisting of approximately
4,600 rooms and all existing service contracts and related assets for providing
HSIA services to these hotels. The purchase price was $220,230 CDN. Trimax
has
paid initial deposits and payments totaling $94,595 USD. The Company has halted
further payments while in negotiations with 3One for possible mutually
beneficial changes in its relationship on a going forward basis. Therefore,
remaining payments pertaining to the purchase and sale agreement have yet to
be
fulfilled and the rights to these assets do not transfer to the Company until
fully paid. The deposits and payments paid as of September 30, 2007 have been
reflected in the balance sheet under prepaid expenses and deposits. The
agreement also provides for 3One to deliver certain BPL equipment based on
normal distribution pricing. The acquisition would allow for the potential
to
upgrade the services, technology, IP applications and broadband provisioning
to
these hotel sites.
The
Company has deposited or caused to be deposited $149,745 towards the acquisition
of LCD monitors for the potential future use in advertising media distribution
and has issued 3,200,000 shares of common stock valued at $512,000 as a deposit
towards the acquisition of certain rights, agreements and contracts pertaining
to the development of advertising media distribution.
The
Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business. The Company has experienced losses from operations
since inception that raise substantial doubt as to its ability to continue
as a
going concern.
The
Company's ability to continue as a going concern is contingent upon its ability
to obtain the financing and strategic alliances necessary to attain profitable
operations. Management is pursuing various sources of financing and intends
to
raise equity financings by private placements with a private group of investors
in the near future.
The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability
of
the Company to continue as a going concern.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
The
accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, PLC Network Solutions Inc., an Ontario
corporation, and have been prepared in accordance with accounting principles
generally accepted in the United States of America ("GAAP"). All significant
inter-company accounts and transactions are eliminated.
The
Company has not earned any revenues from limited principal operations and
accordingly, the Company's activities have been accounted for as those of a
"Development Stage Enterprise" as set forth in SFAS No. 7,
Accounting
and Reporting by Development Stage Enterprises
.
Among
the disclosures required by SFAS No. 7 are that the Company's financial
statements be identified as those of a development stage company, and that
the
statements of operation, stockholders' equity and cash flows disclose activity
since the date of the Company's inception.
5.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
|
The
accounting policies of the Company are in accordance with accounting principles
generally accepted in the United States of America. Outlined below are those
policies considered particularly significant:
Cash
and Cash Equivalents
Cash
and
cash equivalents consist of commercial accounts, trust accounts and
interest-bearing bank deposits and are carried at cost, which approximates
current value. Items are considered to be cash equivalents if the original
maturity is three months or less.
Equipment
and Depreciation
Equipment
is stated at cost less accumulated depreciation. Depreciation, based on the
estimated useful lives of the assets, is provided using the under noted annual
rates and methods:
Equipment
|
|
20%
straight line over five years
|
Furniture
and fixtures
|
|
20%
straight line over five years
|
Computer
|
|
30%
straight line over four years
|
Income
Taxes
The
Company accounts for income taxes pursuant to SFAS No. 109,
Accounting
for Income Taxes
.
Deferred tax assets and liabilities are recorded for differences between the
financial statements and tax basis of the assets and liabilities that will
result in taxable or deductible amounts in the future based on enacted tax
laws
and rates. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. Income tax expense
is
recorded for the amount of income tax payable or refundable for the period
increased or decreased by the change in deferred tax assets and liabilities
during the period.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
5.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
Fair
Value of Financial Instruments
The
carrying value of the Company's prepaid expenses and deposits on acquisitions,
accounts payable and accrued liabilities, payables to related parties and other
loans and advances payable approximates fair value because of the short-term
maturity of these instruments.
Foreign
Translation Adjustment
The
accounts of the Company were translated into United States dollars in accordance
with the provisions of SFAS No. 52,
Foreign
Currency Translation
.
In
accordance with the provisions of SFAS No. 52, transaction gains and losses
on
these assets and liabilities are included in the determination of income for
the
relevant periods. Adjustments resulting from the translation of the financial
statements from their functional currencies to United States dollars are
accumulated as a separate component of accumulated other comprehensive income
and have not been included in the determination of income for the relevant
periods.
Comprehensive
Income
The
Company adopted SFAS No. 130,
Reporting
Comprehensive Income
.
SFAS
No. 130 establishes standards for reporting and presentation of comprehensive
income and its components in a full set of financial statements. Comprehensive
income is presented in the statements of changes in stockholders' equity, and
consists of net income (loss) and unrealized gains (losses) on available for
sale marketable securities; foreign currency translation adjustments and changes
in market value of future contracts that qualify as a hedge; and negative equity
adjustments recognized in accordance with SFAS 87. SFAS No. 130 requires only
additional disclosures in the financial statements and does not affect the
Company's financial position or results of operations.
Intangible
Assets
Intangible
assets of acquired business is stated at cost. The intangibles have limited
lives, which the Company has determined to be five years. Other intangible
assets include deferred financing fees. The Company evaluates intangible assets
at least annually to determine whether events and circumstances continue to
support a definite useful life.
Deferred
Financing Costs
The
costs
of financing are capitalized and amortized by the straight-line method over
the
term of the related debt. If any or all of the related debt is repaid prior
to
its maturity date, a pro-rata share of the related deferred financing costs
are
written off and recorded as amortization expense in the period of the repayment
in the consolidated statement of operations.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
5.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
Earnings
or Loss Per Share
The
Company accounts for earnings per share pursuant to SFAS No. 128,
Earnings
per Share
,
which
requires disclosure on the financial statements of "basic" and "diluted"
earnings (loss) per share. Basic earnings or (loss) per share is computed by
dividing net income (loss) by the weighted average number of common shares
outstanding for the year. Diluted earnings (loss) per share is computed by
dividing net income (loss) by the weighted average number of common shares
outstanding plus common stock equivalents (if dilutive) related to stock options
and warrants for each year. Warrants convertible into 750,000 shares of common
stock were excluded from the calculation of diluted earnings per share as they
would be anti dilutive. There were no dilutive financial instruments for the
period ended 30 September 2007 or 2006.
Earnings
per share have been calculated as follows:
|
|
2007
|
|
2006
|
|
Numerator:
Net loss
|
|
$
|
4,959,595
|
|
$
|
1,046,647
|
|
Denominator: Weighted
average number of shares issued
|
|
|
53,243,903
|
|
|
27,836,636
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share
|
|
$
|
(0.09
|
)
|
$
|
(0.04
|
)
|
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
and
the 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. These
estimates are reviewed periodically, and, as adjustments become necessary,
they
are reported in earnings in the period in which they become known.
Recent
Accounting Pronouncements
In
September 2006, the FASB issued SFAS No. 158, Employers’ Accounting
for Defined Benefit Pension and Other Postretirement Plans. We will be required
to fully recognize the assets and obligations associated with any defined
benefit plan which we may put in place. Effective for our fiscal year ending
2008, we will be required to measure a plan’s assets and liabilities as of the
end of the fiscal year instead of our current measurement date of September
30.
Currently there is no impact from this standard on our consolidated financial
statements.
In
February 2007, the Financial Accounting Standards Board (“FASB”) issued
SFAS No. 159,
The
Fair Value Option for Financial Assets and Financial Liabilities, including
an
amendment of FASB Statement No. 115
(“SFAS
159”), which allows an entity the irrevocable option to elect fair value for the
initial and subsequent measurement for certain financial assets and liabilities
under an instrument-by-instrument election. Subsequent measurements for the
financial assets and liabilities an entity elects to fair value will be
recognized in earnings. SFAS 159 also establishes additional disclosure
requirements. SFAS 159 is effective for fiscal years beginning after
November 15, 2007, with early adoption permitted provided that the entity
also adopts SFAS 157. We have not yet determined the impact this standard will
have on our financial statements.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
The
details of equipment and the related accumulated depreciation are set forth
below for the indicated periods:
|
|
Cost
|
|
Accumulated
Depreciation
|
|
Net
2007
|
|
Net
2006
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
$
|
5,348
|
|
$
|
4,679
|
|
$
|
669
|
|
$
|
382
|
|
Furniture
and fixtures
|
|
|
2,349
|
|
|
926
|
|
|
1,423
|
|
|
2,710
|
|
Computer
|
|
|
13,105
|
|
|
5,334
|
|
|
7,771
|
|
|
14,562
|
|
|
|
$
|
20,802
|
|
$
|
10,939
|
|
$
|
9,863
|
|
$
|
17,654
|
|
Intangible
assets: see note 1
During
the year ended September 30, 2007 the Company claimed depreciation on
intangibles of $80,959 (2006 - $107,024)
8.
|
ADVANCES
FROM RELATED PARTIES
|
The
advances from directors of the Company, to facilitate the payment of debts,
are
non-interest bearing, unsecured and have no specific terms of repayment. The
carrying value of the advances approximates their market value due to the
short-term maturity of the financial instruments.
Owing
to:
|
|
2007
|
|
Receipts
|
|
Repayments
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
D.
Peppler, Director
|
|
$
|
7,343
|
|
$
|
7,343
|
|
$
|
-
|
|
$
|
-
|
|
R.
Vivacqua, Director
|
|
|
12,573
|
|
|
12,573
|
|
|
-
|
|
|
-
|
|
Pegassus
Investments, shareholder
|
|
|
9,985
|
|
|
9,985
|
|
|
-
|
|
|
-
|
|
Alliance
Marketing, shareholder
|
|
|
100,000
|
|
|
100,000
|
|
|
-
|
|
|
-
|
|
Gateways
International, shareholder
|
|
|
304,685
|
|
|
182,828
|
|
|
-
|
|
|
121,857
|
|
M
Spasov, Director
|
|
|
-
|
|
|
-
|
|
|
(291,746
|
)
|
|
291,746
|
|
|
|
$
|
434,586
|
|
$
|
312,729
|
|
$
|
(291,746
|
)
|
$
|
413,603
|
|
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
Liabilities
of Multi-Source Inc. - see note 1
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
Bank
loan, bearing interest at the Business Development Bank of Canada
floating
rate plus a variance of 2%, repayable in monthly principal payments
of
$835 plus interest, with the final payment due on 23 July 2009. The
loan
is personally guaranteed by a shareholder of the Company. This loan
is in
default and has been demanded to be paid in full by the Business
Development Bank of Canada. As a result, the entire amount has been
classified as a current liability.
|
|
$
|
-
|
|
$
|
30,927
|
|
Bank
loan, bearing interest at the Bank of Montreal Canadian prime rate
plus
3%, repayable in monthly principal payments of $1,778 plus interest,
with
the final payment due on 31 July 2012. The loan is secured by a general
security agreement, chattel mortgage, assignment of insurance monies,
$40,000 Canadian guaranteed by a shareholder of the Company and
subrogation note and pledge of bills in the amount of $50,000 Canadian
signed by a shareholder of the Company.
|
|
|
-
|
|
|
122,097
|
|
|
|
|
-
|
|
|
153,024
|
|
Less
current portion
|
|
|
-
|
|
|
54,528
|
|
|
|
$
|
-
|
|
$
|
98,496
|
|
10.
|
COMMITMENT
AND CONTINGENT LIABILITY
|
In
order
to complete the acquisition of 3One, as described in note 2, the Company must
complete the required payments of $125,636. The deposits are otherwise
non-refundable.
The
Company was sued in the State of Nevada, in a class action lawsuit involving
multiple plaintiffs, all of whom are former shareholders to PLC Network
Solutions Inc., a Canadian company. The Company has negotiated a settlement
agreement with the plaintiffs, which has been accepted. The settlement is for
a
payment of $120,000 over a period of eight months. The Company has recorded
this
expense for the year ended 30 September 2006.
On
May
15, 2006 Trimax secured financing from a private accredited group of investors.
The commitment of $1,500,000 is available to be drawn down in $150,000 tranches.
Any loans advanced are to mature on May 14, 2009 and bear an annual interest
rate of 12%. At the investor's option, any loan is convertible to common shares
at their twenty day average trading price. Each common share has one purchase
warrant attached, with each warrant exercisable for one common share at $1.25
until May 14, 2009. In October of 2006 the company signed an amendment to the
convertible financing agreement which encompasses pricing changes and more
flexible terms to Trimax. On 10 October 2006 the Company drew down $150,000
of
the available loan under the terms of the supplementary and amending agreement
to the convertible debenture and simultaneously converted the debenture to
equity for the issuance of 750,000 restricted common shares plus warrants for
an
additional 750,000 common shares exercisable at $0.20 per share.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
10.
|
COMMITMENT
AND CONTINGENT LIABILITY (C
ontinued)
|
The
following table summarizes the Company's warrant activity for the years ended
September 30, 2007 and 2006:
|
|
Number
of Shares
|
|
Exercise
Price per Share
|
|
Weighted
Average Exercise Price
|
|
|
|
|
|
|
|
|
|
Balance,
September 30, 2006
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Granted
during the year
|
|
|
750,000
|
|
$
|
0.20
|
|
$
|
0.20
|
|
Cancelled/Expired
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
September 30, 2007
|
|
|
750,000
|
|
$
|
0.20
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized
|
|
|
100,000,000
|
|
common
stock, par value $0.001
|
20,000,000
|
|
preferred
stock, par value $0.001
|
|
|
2007
|
|
2006
|
|
Issued
|
|
|
|
|
|
63,469,766
|
|
|
common
stock
|
|
$
|
63,470
|
|
$
|
32,291
|
|
In
September 2004, the Board of Directors approved a 1 new - for -100 old reverse
stock split of our outstanding shares of capital stock effective on 5 November
2004. All share and per share information included in these consolidated
financial statements have been adjusted to reflect this reverse stock
split.
On
20
July 2005 the Company issued 21,900,000 common shares at par value to the
Company's founders.
On
17
August 2005 Trimax acquired the net liabilities of PLC. This was accounted
for
as a recapitalization of PLC into Trimax and resulted in the issuance of
19,183,718 shares, further described in note 1.
In
August
2005 the Company's Board of Directors approved the issuance 100,000 shares
of
common stock in exchange for the settlement of $18,446 in debt of the
Company.
On
31
August 2005 the Company issued 50,000 common shares to a former director of
the
Company as compensation for his services and sundry costs as a director of
Trimax. The common shares issued have been valued at their market value of
$25,000 or $.50 per share, which is the amount that would have been received
if
the shares had been issued for cash. Management believes that the fair market
value of the services received from the former director approximates this
value.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
11.
|
CAPITAL
STOCK (Continued)
|
On
21
November 2005 the Company's Board of Directors approved the issuance of 358,529
common shares to various investors. The funds were raised through a non-brokered
private placement of common stock at an average price of $0.75 per share from
a
group of accredited non-US investors.
On
11
January 2006 the Company issued 55,300 private placement restricted common
shares to various shareholders at issue prices between $0.65 and $0.80 per
share.
On
11
January 2006 the Company issued 164,247 private placement restricted common
shares to various shareholders at issue prices between $0.65 and $0.80 per
share.
On
6
February 2006 the Company issued 75,000 shares in settlement of a civil court
case in which the Company was a defendant. The common shares issued have been
valued at their market value of $59,407, which is the amount that would have
been received if the shares had been issued for cash. Management believes that
the fair market value of the services received from the former director
approximates this value.
From
10
February 2006 to 15 March 2006, the Company issued a total of 113,177 various
private placement restricted common shares between $0.50 to $0.57 per
share.
On
16
March 2006 the Company’s Board of Directors approved the cancellation of
16,000,000 common shares. These shares which were originally issued in July
2005
to the former shareholders of PLC in consideration for their shares in PLC,
however due to non payment and no consideration of the subscribing shares they
were cancelled.
From
11
April 2006 to 15 May 2006, the Company issued a total of 433,819 various private
placement restricted common shares between $0.42 to $0.60 per
share.
On
1 June
2006 pursuant to Reorganization agreement, the Company issued 2,250,000
restricted common shares for $0.01 par value in exchange for 100% the common
stock of Multi-Source Inc.
On
1 June
2006 pursuant to Reorganization agreement, the Company issued 750,000 common
shares for $0.01 par value in consideration to a company for brokering the
Multi-Source Inc. acquisition. These transaction costs have been charged as
a
reduction of additional paid-in capital.
On
1 June
2006 the Company issued 2,275,985 private placement restricted common shares
in
settlement of certain debts.
From
29
June 2006 to September 2006, the Company issued a total of 581,012 various
private placement restricted common shares for between $0.16 and $0.40 per
share.
On
19
October 2006 the Company's Board of Directors approved the issuance of 750,000
restricted common shares in exchange for a draw down payment of $150,000 from
the convertible debenture described above.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
11.
|
CAPITAL
STOCK (Continued)
|
These
shares were issued as a result of an amending agreement in October 2006 to
the
convertible debenture agreement which outlined the simultaneous issuance of
750,000 restricted common shares and warrants for an additional 750,000 common
shares exercisable at $0.20 upon making the first draw down payment from the
convertible debenture to the Company.
On
November 16, 2006 the Company's Board of Directors approved the issuance of
2,000,000 private placement restricted common shares in exchange for $100,000
of
services provided to the Company.
On
January 24, 2007 the Company issued 10,000,000 restricted common shares to
the
officers of the company for of services provided to the Company. The fair value
was measured at the value of the Company's common stock on the date that the
commitment for performance had been reached. This valuation date was January
24,
2007 at which time the stock was valued at $0.17. The fair value of the
equity instrument has been charged directly to compensation expense and
additional paid-in capital.
On
January 27, 2007 the Company issued 8,300,000 restricted common shares in
settlement of accounts payable of $1,393,400 or approximately $0.17 per
share.
On
January 22, 2007 the Company filed a Form S-8 Registration Statement
‘Securities to be offered to Employees in Employee Benefit Plans’. Under
the terms of this filing the company registered 1,369,286 shares of common
stock
with a par value of $.001 per share for settlement of amounts payable by the
company to the employees. The fair value was measured at the value of the
Company's common stock on the date on the registration. This valuation date
was
January 22, 2007 at which time the stock was valued at $0.16. The fair
value of the equity instrument has been charged directly to the related amounts
due to the respective parties and additional paid-in capital.
On
March
3, 2007 the company issued 1,000,000 private placement restricted common shares
in exchange for $155,000 of services provided to the Company. The fair value
was
measured at the value of the Company's common stock on the date that the
commitment for performance by the counterparty had been reached and the
counterparty's performance was substantially complete. This date was March
3,
2007 at which time the stock was valued at $0.15. The fair value of the
equity instrument has been charged directly to the income statement and
additional paid-in capital.
During
the quarter ended March 31, 2007, the Company issued 588,461 private placement
common shares to various investments at an issue price of between $0.10 and
$0.13 per share.
On
April
17, 2007 the Company cancelled the 3,000,000 common shares related to
the
legal
circumstances surrounding the acquisition of MSI.
Trimax
terminated the agreement to acquire MSI.
On
April
25, 2007 the Company cancelled 122,222 shares of common stock originally issued
at $0.16 per share for services.
On
May 9,
2007 the Company adopted the 2007 Equity Incentive Plan the purpose of which
is
to provide incentives to attract, retain and motivate eligible persons whose
present and potential contributions are important to the success of the Company.
The total number of shares reserved and available for grant and issuance
pursuant to the Plan is 5,000,000 Shares.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
11.
|
CAPITAL
STOCK (Continued)
|
On
May
14, 2007 the Company issued 3,200,000 shares of common stock for deposits on
contracts and issued 1,263,000 shares of common stock for services from
consultants, all issued at $0.16 per share.
On
May
16, 2007 the Company issued 233,000 shares of common stock for services from
consultants at $0.15 per share and issued 200,000 for cash pursuant to a private
placement at $0.10 per share.
On
May
24, 2007 the Company issued 233,000 shares of common stock for services from
consultants at $0.14 per share.
On
July
10, 2007 the Company issued 1,700,000 shares of common stock for management
services and issued 3,550,000 shares of common stock for services from
consultants, all issued at $0.12 per share.
12.
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
During
the years ended 30 September 2007 and 2006 there were no taxes paid and $nil
(2006 - $8,379) in interest paid by the Company.
During
the year ended 30 September 2006 the Company issued 75,000 shares in settlement
of a legal matter.
During
the year ended 30 September 2006 the Company issued 2,275,985 private placement
restricted common shares in settlement of certain debts for $0.05 per
share.
During
the year ended 30 September 2007 the Company issued 29,440,518 private placement
restricted common shares for services valued at $3,206,276.
During
the year ended 30 September 2007 the Company issued 3,200,000 restricted
common
shares for deposits on acquisitions and valued at $512,000.
13.
|
RELATED
PARTY TRANSACTIONS
|
Related
party transactions are in the normal course of operations and are recorded
at
amounts established and agreed between the related parties. Related party
transactions not disclosed elsewhere in these consolidated financial statements
are as follows:
The
Company issued 11,800,000 common shares to directors of the Company in payment
for services rendered to the Company and valued at $1,285,102.
During
the year management salaries have been recorded for services of the Chief
Executive Officer, Chief Financial Officer and Chief Operating Officer totalling
$100,000 (2006 - $250,000).
The
Company accounts for income taxes in accordance with SFAS No. 109,
Accounting
for Income Taxes
.
SFAS
No. 109 prescribes the use of the liability method whereby deferred tax asset
and liability account balances are determined based on differences between
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates. The effects of future changes in tax laws or rates
are not anticipated. Under SFAS No. 109 income taxes are recognized for the
following: a) amount of tax payable for the current year, and b) deferred tax
liabilities and assets for future tax consequences of events that have been
recognized differently in the financial statements than for tax
purposes.
TRIMAX
CORPORATION AND SUBSIDIARIES
(A
Development Stage Company)
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
September 2007
(Expressed
in United States Dollars)
14.
|
INCOME
TAXES (Continued)
|
As
at 30
September 2007 the Company has tax losses available to be applied against future
year’s income as a result of the losses incurred in the current period as well
as losses carried forward from Trimax. However, due to the losses incurred
in
the period and expected future operating results, management determined that
it
is more likely than not that the deferred tax asset resulting from the tax
losses available for carry forward will not be realized through the reduction
of
future income tax payments. Accordingly a 100% valuation allowance has been
recorded for deferred income tax assets.
Components
of future income tax assets are:
|
|
2007
|
|
2006
|
|
Non-capital
loss carry-forwards
|
|
$
|
15,643,066
|
|
$
|
10,683,471
|
|
Approximate
tax rate
|
|
|
31.12
|
%
|
|
35.62
|
%
|
|
|
|
4,868,122
|
|
|
3,805,452
|
|
Valuation
allowance
|
|
|
(
4,868,122
|
)
|
|
(
3,805,452
|
)
|
|
|
$
|
0
|
|
$
|
0
|
|
Components
of Income Taxes
|
|
2007
|
|
2006
|
|
Federal
|
|
$
|
-
|
|
$
|
-
|
|
State
|
|
|
-
|
|
|
-
|
|
Change
in deferred tax benefit
|
|
|
1,062,670
|
|
|
721,656
|
|
Change
in valuation allowance
|
|
|
(1,062,670
|
)
|
|
(721,656
|
)
|
Income
taxes
|
|
$
|
-
|
|
$
|
-
|
|
On
27
November 2007 the Company's Board of Directors approved the issuance of up
to
41,767,000 common shares in settlement of amounts payable to related parties
and
other loans and advances payable of $417,670.
ITEM
8.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There
are
no reportable disagreements on accounting or financial disclosure
issues.
ITEM
8A.
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 December 31, 2006. This evaluation was carried
out under the supervision and with the participation of our Chief Executive
Officer and Chief Financial Officer. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that as of September
30,
2007 our disclosure controls and procedures are insufficient to ensure that
information required to be disclosed in our reports filed or submitted under
the
Exchange Act are recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms. There have been no significant
changes in our internal controls over financial reporting during the quarter
ended September 30, 2007 that have materially affected or are reasonably likely
to materially affect such controls.
Disclosure
controls and procedures are controls and other procedures that are designed
to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed in our reports
filed under the Exchange Act is accumulated and communicated to management,
including our Chief Executive Officer and Chief Financial Officer, to allow
timely decisions regarding required disclosure.
Limitations
on the Effectiveness of Internal Controls
Management
believes that the Company’s records provide the
information
required to be disclosed in our reports filed or submitted under the Exchange
Act and that such information is recorded, processed, summarized and reported,
but not on a timely basis. This weakness is due to a lack of personnel and
is
being overcome by the direct involvement of the Company’s directors.
O
ur
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud
and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and
that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of
two
or more people, or by management override of the internal 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, control may become inadequate because of changes in conditions,
or
the degree of compliance with the policies or procedures may deteriorate.
ITEM
8A(T).
CONTROLS
AND PROCEDURES
ITEM
8B.
OTHER
INFORMATION
None
PART
III
ITEM
9.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
All
directors of our company, hold office until the next annual meeting of the
stockholders or until their successors have been elected and qualified. The
officers of our company are appointed by our board of directors and hold office
until their death, resignation or removal from office
.
Our
directors and executive officers, their ages and position held are as follows:
NAME
OF DIRECTOR
|
|
AGE
|
|
POSITION
|
Robert
Vivacqua
|
|
43
|
|
Director,
President and Chief Financial Officer
|
Todd
Ingram
|
|
36
|
|
Director
|
Henry
Huber
|
|
64
|
|
Director
|
Derek
Pepler *
|
|
49
|
|
Former
Director, President and Chief Executive Officer
|
Robert
Vivacqua
President,
Director and Chief Financial Officer. Mr. Vivacqua has over eight years
experience as a Financial Planner and Investment Advisor and has worked within
several large and medium sized firms
within
the investment industry. He gained his start in the investment industry while
at
Bank of America where he made the transition to a currency trader. From there
he
graduated into the position of Financial Analyst at Elliott & Page Mutual
Funds, which eventually amalgamated into Manulife Financial. Additionally,
he
became a partner in a small boutique independent Venture Capital Firm named
RJ
Sterling Venture Capital where he performs a wide range of duties such as
financial and estate planning, advising, and mortgage facilitator for individual
investors. In addition he has procured and assisted in raising financing for
various small to mid sized private and public companies through RJ Sterling
and
the company’s relationships within the investment industry.
Todd
Ingram
Mr.
Ingram has a varied back ground in Investor Relations and Marketing. In the
year
2000, Todd
was
employed with The Westminster Club, one of the oldest gentleman’s clubs in
British Columbia, in their marketing department. After completing a successful
marketing campaign for the Club, in 2001 Todd moved to OnlineOffice.com where
he
acted as the VP of Investor Relations. During this tenure he assisted with
the direction of the company to a pre-IPO status at which time JP Morgan bought
the company directly for their Morgan OnLine project. Subsequently Todd took
a
position as the lead manager in charge of developing technology based solutions
for Forbes Financial. During four years of service (2002 - 2006) with Forbes
Financial Services, Todd played an integral role in the development of the
Automotive Finance Company. During this time he implemented a VPN (Virtual
Private Network) strategy, web applications, DOS Database networking, complete
CRM (customer relationship management software) for the leasing side, a mobile
computing solution and a liquidation center for the disposition of returned
and
repossessed vehicles. The company grew from 3 to 24 employees within an
eighteen month time frame. Todd currently is the Chief Operating Officer of
Communications USA.
Henry
Huber
Mr.
Huber
has a Masters of Education degree, and has spent the last five years as
President of his company, Uptrend Investment Services, providing investment
services to private clients.
Mr.
Huber
is also a director of Transnational Automotive Group, Inc. (TAUG on the
OTCBB)
Derek
Pepler*
Former
Director, President and Chief Executive Officer - resigned November 22, 2007.
From 1986 to 1994, Mr. Pepler specialized in commercial, investment and
development real estate as a Senior Consultant with Colliers International
and
with Oxford Development Group as a Director. From 1994 to 1999, Mr. Pepler
worked with several merchant banks with the position of V. P. of Sales and
Marketing where he managed debt financing and venture capital opportunities.
From 1999 to 2005 Derek managed sales and distribution of limited partnerships,
hedge funds and financial products for several securities dealers.
ITEM
10.
EXECUTIVE
COMPENSATION
At
this
time there is no set executive compensation package for any of the directors
or
officers of the Company. The Company currently has an employee incentive stock
option plan but has no employees. The company believes that it will adopt an
executive compensation plan sometime within the next calendar year. The Company
has paid executive compensation for services from its two key
officers/shareholders of approximately $230,000 for the year ended September
30,
2006. Of this, $210,000 remains unpaid and has been accrued as management fees
payable.
Employment
Contracts
The
Company does not presently have employment contracts with its executive officers
and directors. The Company has various consulting contracts with companies
and
individuals for sales, marketing, technical and other general
services.
ITEM
11.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
The
following table sets forth as of January 24, 2007 certain information known
to
the Company regarding the beneficial ownership of the Company's common stock,
and as adjusted to reflect the share ownership for (i) each executive officer
or
director of the Company who beneficially owns shares; (ii) each stockholder
known to the Company to beneficially own five percent or more of the outstanding
shares of its common stock; and (iii) all executive officers and directors
as a
group. The Company believes that the beneficial owners of the common stock
listed below, based on information furnished by such owners, have sole
investment and voting power with respect to such shares, subject to community
property laws where applicable.
|
|
PERCENTAGE
OF
|
|
|
OUTSTANDING
|
NAME
AND POSITION
|
NUMBER
OF SHARES
(1)
|
SHARES
|
Derek
Pepler (former Director)
|
6,120,000
|
9.64%
|
Robert
Vivacqua
|
6,383,000
|
10.06%
|
All
Past, Current Directors and
|
|
|
Officers
As A Group (2 Persons)
|
12,503,000
|
19.70%
|
|
(1)
Based on
63,469,766
shares
of common stock issued and outstanding as of December 15,
2007.
|
ITEM
12.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The
Company issued 2,275,985 private placement restricted common shares in
settlement of certain debts from shareholders of the Company for $0.05 per
share.
During
the year ended September 30, 2007 accrued management salaries have been recorded
for services of the Chief Executive Officer, Chief Financial Officer and Chief
Operating Officer totalling $100,000
(2006
-
$250,000) and are included in accrued liabilities.
During
the year ended September 30, 2007 the Company issued 11,800,000 shares of common
stock valued at $1,285,102 to directors of the Company in payment for services
rendered to the Company.
ITEM
13.
EXHIBITS
ITEM
14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
|
2007
|
|
2006
|
|
1.
Audit Fees *
|
|
$
|
18,500
|
|
$
|
29,700
|
|
2.
Audit Related Fees *
|
|
$
|
-
|
|
$
|
13,500
|
|
3.
Tax Fees **
|
|
$
|
-
|
|
$
|
-
|
|
4.
All Other Fees
|
|
$
|
-
|
|
$
|
-
|
|
*
|
Consists
of fees billed for professional services rendered for the audit of
the
Company's financial statements and review of the interim financial
statements included in quarterly
reports.
|
**
|
Consists
primarily of fees paid for tax compliance and tax planning
services.
|
The
Company currently does not have a designated Audit Committee, and accordingly,
the Company's Board of Directors' policy is to pre-approve all audit and
permissible non-audit services provided by the independent auditors. These
services may include audit services, audit-related services, tax services and
other services. Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to the particular service or category of services
and is generally subject to a specific budget. The independent auditors and
management are required to periodically report to the Company's Board of
Directors regarding the extent of services provided by the independent auditors
in accordance with this pre-approval, and the fees for the services performed
to
date. The Board of Directors may also pre-approve particular services on a
case-by-case basis.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TRIMAX
CORPORATION.
By:
|
/s/
Robert Vivacqua
|
|
Robert
Vivacqua
|
|
President
and Director and Chief Executive Officer
|
Date:
January 14, 2008
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the
dates indicated.
By:
|
/s/
Robert Vivacqua
|
|
Robert
Vivacqua
|
|
President
and Chief Executive Officer and Director
|
|
January
14, 2008
|
|
|
By:
|
/s/
Todd Ingram
|
|
Todd
Ingram
|
|
Director
|
|
January
14, 2008
|
|
|
By:
|
/s/
Henry Huber
|
|
Henry
Huber
|
|
Director
|
|
January
14, 2008
|
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