CURRENT REPORT FOR ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
For the Fiscal Year Ended June 30, 2002
ICHARGEIT, INC.
---------------
(Exact name of registrant as specified in its charter)
Delaware 000-28753 33-0880427
-------- --------- ----------
(State or other jurisdiction (Commission File Number) (IRS Employer
Of incorporation) Identification No.)
11 Washington Street, Hawthorne, NJ 07506
-----------------------------------------
(Address of principal executive offices (zip code))
973-949-3200
------------
(Registrant's telephone number, including area code)
(Former address)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the
past12 months and (2) has been subject to such filing requirement for the past
90days.
YES X NO
------ ------
Indicate by a check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Securities Exchange Act of 1934. Yes [X] No [ ].
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 30, 2002: $11,306
Shares of common stock outstanding at June 30, 2002: 11,306,260
PART I.
ITEM 1. DESCRIPTION OF BUSINESS
ITEM 2. DESCRIPTION OF PROPERTY
iChargeit's corporate offices were located at 11 Washington Street Hawthorne, NJ
07506. IChargeit shares these corporate facilities with the President of
iChargeit, which includes the use of telephones, equipment and the internet.
ITEM 3. LEGAL PROCEEDINGS
IChargeit is not involved in any legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
IChargeit did not submit any matters to a vote to the security holders during
2002.
2
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
The Common Stock is currently quoted on the Pink Sheets under the
symbol "FSNR."
The following table sets forth the quarterly high and low bid prices
for the Common Stock for 2007. The prices set forth below represent interdealer
quotations, without retail markup, markdown or commission and may not be
reflective of actual transactions.
FISCAL 2007 HIGH LOW
---- ---
First Quarter $0.28 $0.13
Second Quarter $0.30 $0.13
Third Quarter $0.30 $0.13
Shareholders
As of May 31, 2007, there were approximately 185 record holders of the
Common Stock. This number excludes any estimate by iChargeit of the number of
beneficial owners of shares held in street name, the accuracy of which cannot be
guaranteed.
Dividends
IChargeit has not paid cash dividends on any class of common equity
since formation and iChargeit does not anticipate paying any dividends on its
outstanding common stock in the foreseeable future.
Warrants
IChargeit has no warrants outstanding.
ITEM 6 MANAGEMENT DISCUSSIONS AND ANALYSIS OR PLAN OF OPERATION
SUMMARY OF 2002
IChargeit has no operations. Minimal expenses are incurred for corporate
survival such as filing fees for the State of Delaware and transfer agent fees.
In addition to those fees, we incur interest expense on an outstanding note
payable.
Year Ended June 30, 2002 Compared to the Year Ended June 30, 2001
In the year ended June 30, 2001, we had a loss of $3,430,728 due to the
discontinuance of operations of our subsidiary, Bay Micro Computers. We had no
3
other activity in the year ended June 30, 2001 and the only activity we had in
June 30, 2002 was the payment of basic liabilities as explained above. In the
year ended June 30, 2002 we had a loss of $5,800.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of iChargeit, together with Report of Independent
Registered Public Accounting Firm thereon of Malone & Bailey, PC appear on pages
F-1 through F-8 of this report.
ITEM 7. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANICAL DISCLOSURES
On July 31, 2006 the management of iChargeit, Inc. dismissed Richard A. Eisner &
Company, LLP ("Richard Eisner") as its independent auditors. On July 31, 2006,
the management of iChargeit engaged Malone & Bailey, PC ("Malone & Bailey") as
its independent public accountants to audit its financial statements for the
fiscal year ending June 30, 2001, June 30, 2002, June 30, 2003, June 30, 2004,
June 30, 2005 and June 30, 2006. The decision to dismiss Richard Eisner and to
retain Malone and Bailey, PC was recommended by iChargeit's committee and
approved by its Board of Directors.
During the most recent fiscal year and any subsequent interim period prior to
engaging Malone & Bailey, iChargeit did not consult with Malone & Bailey
regarding either (i) the application of accounting principals to a specified
transaction, either completed or proposed; or the type of audit opinion that
might be rendered on the Company's financial statements; or (ii) any matter that
was either the subject matter of a disagreement (as defined in Item
304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable
event (as defined in Item 304(a)(1)(v) of Regulation S-K). Malone & Bailey, PC
has reviewed the disclosure required by Item 304(a) before it was filed with the
Commission and has been provided an opportunity to furnish iChargeit with a
letter addressed to the Commission containing any new information, clarification
of iChargeit's expression of its views, or the respects in which it does not
agree with the statements made by iChargeit in response to Item 304(a). Malone &
Bailey, PC did not furnish a letter to the Commission.
IChargeit has requested that Eisner review the disclosure and give him an
opportunity to furnish the Registrant with a letter addressed to the Commission
containing any new information, clarification of the Company's expression of its
views, or the respect in which it does not agree with the statements made by the
Company herein. Any such letter, when received, will be filed by amendment to
the 8-K filed by iChargeit on June 7, 2007.
ITEM 8A. CONTROLS AND PROCEDURES
(a) As required by Rule 13a-15 under the Exchange Act, as of the end of the
period covered by this report, being June 30, 2002, we have carried out an
evaluation of the effectiveness of the design and operation of our company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of our management, including our
president and chief executive officer. Based upon that evaluation, our chief
executive officer and chief financial officer concluded that our disclosure
controls and procedures were not effective as of the end of the period covered
4
by this report. Controls were not effective primarily because of failure to
timely file reports and in the course of performing their audit, our independent
auditors determined there were numerous audit adjustments in various areas due
to a lack of resources devoted to the accounting and financial reporting
function. There have been no significant changes in our internal controls over
financial reporting that occurred during our most recent fiscal quarter that
have materially affected, or are reasonably likely to materially affect our
internal controls over financial reporting.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our company's
reports filed or submitted under the Securities and Exchange Act of 1933 is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission'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
president and chief executive officer as appropriate, to allow timely decisions
regarding required disclosure.
(b) Changes in internal controls
----------------------------
There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to
the date of the evaluation of those controls by the chief executive
officer and principal financial officer.
5
PART III.
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
The following persons serve as directors and officers of iChargeit.
James F. Carroll Chief Executive Officer, President, Chief Financial Officer and
Director
JAMES F. CARROLL, 46, has served as the Chief Financial Officer and Treasurer of
iChargeit since May 1, 1999. He has served as a director of iChargeit since
November 12, 1999. From December 1973 to April 1999, Mr. Carroll was employed by
F. Schumacher & Co., a New York Fabric Company, as a manager of Production,
Purchasing and Inventory. Mr. Carroll received a B.B.A. degree in accounting
from Pace University of New York in 1985.
ITEM 10. EXECUTIVE COMPENSATION
No executive compensation was paid in the year ended June 30, 2002.
ITEM 11. SECUIRTY OWNERSHIP OF MANANGEMENT AND BENEFICIAL OWNERS
As of June 30, 2002, the following persons are known to iChargeit to own 5% or
more of iChargeit's Voting Stock:
AMOUNT PERCENT
Name and Address BENEFICIALLY OWNED* OF CLASS
----------------
Saeid "Andrew" Akavan 2,224,301 19.48%
2184 West 190th Street
Torrance California 90504
Jesse Cohen 2,172,500 18.65%
2184 West 190th Street,
Torrance, California 90504
Future Holdings Corp. 1,185,000 10.33%
133 Rolling Hills Road
Clifton, New Jersey 07103
James F. Carroll 481,325 4.11%
2184 West 190th Street,
Torrance, California 90504
Alexis Quintana 378,882 3.35%
2184 West 190thStreet
Torrance, California 90504
6
Randall S. Waldman 257,500 2.20%
2184 West 190th Street,
Torrance, California 90504
All directors and officers 5,514,508 44.55%
as a group (1 persons)
* Unless otherwise indicated such person is the sole beneficial owner of
the shares set forth opposite his name.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
None.
ITEM 13. EXHIBITS, FINANICAL STATEMENTS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report: Included in Part
II, Item 7 of this report:
Report of Independent Registered Public Accountant
Consolidated Balance Sheet as of June 30, 2002
Consolidated Statements of Operations - For the Years Ended June 30,
2002 and 2001, And for the Period July 1, 2001 (Re-entering Development
Stage) to June 30, 2002
Consolidated Statements of Cash Flows - For the Years Ended June 30,
2002 and 2001, And for the Period July 1, 2001 (Re-entering Development
Stage) to June 30, 2002
Consolidated Statements of Stockholders Deficit - For the Years Ended
June 30, 2002 and 2001
Notes to Consolidated Financial Statements
(b) IChargeit filed the following Form 8-K's in 2002.
None
(c) Exhibits
31 Certification
32 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 - CEO and CFO
7
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(1) AUDIT FEES
The aggregate fees billed for professional services rendered by our auditors,
for the audit of the registrant's annual financial statements and review of the
financial statements included in the registrant's Form 10-QSB or services that
are normally provided by the accountant in connection with statutory and
regulatory filings or engagements for the year ended June 30, 2002 was $3,500
and $3,500 for the years ended June 30, 2002 and 2001, respectively.
(2) AUDIT-RELATED FEES
NONE
(3) TAX FEES
NONE
(4) ALL OTHER FEES
NONE
(5) AUDIT COMMITTEE POLICIES AND PROCEDURES
IChargeit does not have an audit committee.
(6) Not applicable.
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Annual Report on Form 10-KSB to be signed on its
behalf by the undersigned hereunto duly authorized.
ICHARGEIT, INC.
By: /s/ James F. Carroll
--------------------
James F. Carroll
Chief Executive Officer & Chief Financial Officer
Dated: April 16, 2007
9
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
iChargeit, Inc.
(Development Stage Company)
Rockwall, TX
We have audited the accompanying consolidated balance sheet of iChargeit, Inc.
("iChargeit") as of June 30, 2002 and the related consolidated statements of
operations, stockholders' deficit, and cash flows for the two years then ended
and the period from July 1, 2001 (re-entering the development stage) through
June 30, 2002. These consolidated financial statements are the responsibility of
iChargeit'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 the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements, assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of iChargeit as of June
30, 2002 and the results of operations and cash flows for the two years ended
June 30, 2002 and the period from July 1, 2001 (re-entering the development
stage) through June 30,2002, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming
that iChargeit will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, iChargeit suffered recurring losses from
operations and has a working capital deficiency, which raises substantial doubt
about its ability to continue as a going concern. Management's plans regarding
those matters also are described in Note 2. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Malone & Bailey, PC
------------------------
Malone & Bailey, PC
www.malone-bailey.com
Houston, Texas
May 31, 2007
F-1
ICHARGEIT, INC.
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
JUNE 30, 2002
ASSETS $ --
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable $ 784,435
Accrued expenses 223,966
Notes payable 395,351
------------
Total current liabilities 1,403,752
------------
STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value, 5,000,000 shares
authorized, -0- shares issued and outstanding --
Common stock, $.001 par value, 50,000,000 shares
authorized, 11,306,260 shares issued and outstanding 11,306
Additional paid in capital 13,068,307
Accumulated deficit (14,477,565)
Accumulated deficit during development stage
(5,800)
------------
Total Stockholders' Deficit (1,403,752)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ --
============
The accompanying notes are an integral part to these consolidated financial
statements.
F-2
ICHARGEIT, INC.
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2002 AND 2001, AND FOR THE
PERIOD FROM JULY 1, 2001 (RE-ENTERING THE DEVELOPMENT STAGE)
TO JUNE 30, 2002
Re-entering the
Year Ended Year Ended Development
June 30, June 30, Stage to June 30,
2002 2001 2002
------------------------------------------------
General and administrative expenses $ 1,800 $ -- $ 1,800
Interest expense 4,000 -- 4,000
------------------------------------------------
LOSS FROM CONTINUING OPERATIONS 5,800 -- 5,800
DISCONTINUED OPERATIONS
Loss from discontinued operations -- 488,067 --
Loss on disposal of discontinued operations -- 2,942,661 --
------------------------------------------------
NET LOSS $ (5,800) $ (3,430,728) $ (5,800)
================================================
BASIC AND DILUTED LOSS PER SHARE:
Continuing operations $ (0.00) $ (0.00)
Discontinued operations (0.00) (0.30)
Net loss (0.00) (0.30)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic and diluted 11,306,260 11,306,260
The accompanying notes are an integral part of these financial statements.
F-3
ICHARGEIT, INC.
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2002 AND 2001, AND FOR THE
PERIOD FROM JULY 1, 2001 (RE-ENTERING THE DEVELOPMENT STAGE)
TO JUNE 30, 2002
Re-entering the
Year Ended Year Ended Development
June 30, June 30, Stage to June
30,
2002 2001 2002
--------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (5,800) $(3,430,728) $ (5,800)
Net loss from discontinued operations -- 3,430,728 --
----------- ----------- -----------
Net loss from continuing operations (5,800) -- --
Adjustments to reconcile net loss to net cash used in
operating activities:
Change in accounts payable and accrued expenses 5,800 (117,964) 5,800
----------- ----------- -----------
Net cash used in continuing operations -- -- --
Net cash used in discontinued operations -- (117,964) --
----------- ----------- -----------
Net cash used in operating activities -- (117,964) --
----------- ----------- -----------
NET CHANGE IN CASH -- (117,964) --
CASH AT BEGINNING OF PERIOD -- 117,964 --
--------------------------------------------
CASH AT END OF PERIOD $ -- $ -- $ --
============================================
Supplemental cash flow information:
Cash paid for interest $ -- $ -- $ --
Cash paid for income taxes -- -- --
The accompanying notes are an integral part of these financial statements.
F-4
ICHARGEIT, INC.
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' DEFICIT PERIOD FROM JULY 1, 2001
(RE-ENTERING THE DEVELOPMENT STAGE) THROUGH JUNE 30,
2002
Accumulated deficit
Other -------------------------------
Additional comprehensive Prior Development
Common stock paid in capital income operations stage Total
-------------------------------------------------------------------------------------------------------
Shares Amount
Balance, June 30, 2000 11,306,260 $ 11,306 $ 13,063,307 $ (20,500) $(11,046,837) $ -- $ 2,007,276
Write-off of unrealized
loss on marketable
securities -- -- -- 20,500 -- -- 20,500
Contributed services -- -- 5,000 -- -- -- 5,000
Net loss -- -- -- -- (3,430,728) -- (3,430,728)
-------------------------------------------------------------------------------------------------------
Balance, June 30, 2001 11,306,260 11,306 13,068,307 -- (14,477,565) -- (1,397,952)
Net loss -- -- -- -- -- (5,800) (5,800)
-------------------------------------------------------------------------------------------------------
Balance, June 30, 2002 11,306,260 $ 11,306 $ 13,068,307 $ -- $(14,477,565) $ (5,800) $ (1,403,752)
=======================================================================================================
The accompanying notes are an integral part of these financial statements.
F-5
ICHARGEIT, INC.
(Development Stage Company)
Notes To The Consolidated Financial Statements
NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Activities, History and Organization:
-----------------------------------------------
Ichargeit, Inc. ("iChargeit") was involved in the operation of an internet
computer supply business until its operations were discontinued in 2001. It has
had no business since that time. IChargeit was incorporated as Para-Link, Inc.
in the State of Texas on January 22, 1997 and on March 10, 1999, Para-Link
acquired 100% of the outstanding capital stock of iChargeit Inc. ("iChargeit"),
which was incorporated on January 6, 1999 in the State of Nevada. On March 17,
1999, iChargeit changed its name to iChargeit, Inc.. On November 5, 1999
iChargeit was reincorporated in Delaware.
Income Taxes:
-------------
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized.
Earnings per Share:
-------------------
Basic net loss per share is calculated by dividing the net loss by the weighted
average number of common shares outstanding for the period covered. As iChargeit
has no potentially dilutive securities, therefore fully diluted loss per share
is identical to basic loss per share.
Use of Estimates:
-----------------
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Re-entering the Development Stage:
----------------------------------
IChargeit disposed of all of its operations during the year ended June 30, 2001.
Since it had no operations, it re-entered the development stage as of July 1,
2001 and will continue in the development stage until it generates revenues from
operations.
Marketable Securities
----------------------
Investments include marketable equity securities available for sale at their
fair value. For the available for sale securities, any unrealized holding gains
and losses are excluded from operating results and are recognized as other
comprehensive income (loss). The fair values of the securities at period-end are
determined based on prevailing market prices. During the year management may
F-6
estimate the fair value of securities not regularly traded. Unrealized holding
losses of $20,500 were written off to discontinued operations during the year
ended June 30, 2001.
Recently Issued Accounting Pronouncements:
------------------------------------------
iChargeit does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on its results of operations,
financial position or cash flow.
NOTE 2 - GOING CONCERN
----------------------
As reflected in the accompanying consolidated financial statements, iChargeit
incurred operating losses, and has a negative working capital position as of
June 30, 2002. The above factors raise substantial doubt about iChargeit's
ability to continue as a going concern. IChargeit's continued existence is
dependent on its ability to obtain additional equity and/or debt financing to
fund its operations. IChargeit plans to raise additional financing and to
increase sales volume. There is no assurance that iChargeit will obtain
additional financing or achieve profitable operations or cash inflows. The
consolidated financial statements do not include any adjustments relating to the
recoverability or classification of recorded asset amounts or the amount and
classification of liabilities that might be necessary as a result of this
uncertainty.
NOTE 3 - NOTES PAYABLE
----------------------
IChargeit has two notes payable, both originating from the discontinued
operations of iChargeit's subsidiary in 2001, of $316, 000 and $75,351. No
interest is charged on the $316,000 note. The $75,351 note is in default,
accrues interest at 18%, is secured by all assets of Bay Micro, iChargeit's
former subsidiary, and guaranteed by iChargeit. As of June 30, 2002, interest of
$4,000 was included in the balance of this note.
NOTE 4 - INCOME TAXES
---------------------
IChargeit has adopted Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes (SFAS No. 109), which requires the use of the
liability method in the computation of income tax expense and the current and
deferred income taxes payable. iChargeit had net losses for the years ended June
30, 2002 and 2001 and therefore had no tax liability. The cumulative net
operating loss carry-forward is approximately $4,959,528 and will expire between
2003 and 2023.
iChargeit's net deferred tax amounts are as follows:
Deferred tax asset attributable to:
Net operating loss carryover $ (1,686,240)
Less: Valuation allowance 1,686,240
-------------
Net deferred tax asset $ 0
=============
F-7
NOTE 5 - DISCONTINUED OPERATIONS
--------------------------------
In May of 2001, iChargeit's subsidiary Bay Micro Computers ceased operations. As
a result of the shutdown of this business, iChargeit has recorded a loss on
disposal of discontinued operations of $2,942,661 and loss from discontinued
operations of $488,067 for the year ended June 30, 2001.
NOTE 6 - SUBSEQUENT EVENTS
--------------------------
On August 22, 2006 iChargeit was reincorporated in the State of Nevada under the
laws of the State of Nevada. On August 22, 2006, iChargeit changed its name to
Freestone Resources, Inc.
F-8