UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
For the fiscal years ended December 31, 2011
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to to
Commission File Number: 000-51815
siTOA GLOBAL inc.
(Exact name of registrant as specified in its charter)
Securities registered under Section 12 (b) of the Exchange Act: None
Securities registered under Section 12 (g) of the Exchange Act: Common stock, $0.002 par value (the “Common Stock”).
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
[ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not 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-K or any amendment to this Form 10-K.
[ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
As of June 30, 2011 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the shares of the registrant’s common stock held by non-affiliates (based upon the closing sale price of such shares as reported on the OTCQB Market) was approximately $14.2 million. Shares of the registrant’s common stock held by each executive officer and director and each person who owns 10% or more of the outstanding common stock have been excluded from the calculation in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
There were a total of 28,246,131 shares of the registrant’s common stock outstanding as of March 27, 2012.
| ii |
DOCUMENTS INCORPORATED BY REFERENCE
None.
| iii |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this annual report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions. These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward looking statements. Any or all of the forward-looking statements in this annual report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:
· dependence on key personnel;
· competitive factors;
· continued growth of e-commerce markets;
· the operation of our business; and
· general economic conditions in the United States and in the Asia-Pacific Region.
These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this annual report.
Except as otherwise indicated by the context, all references in this report to:
· “Sitoa Global,” “Company,” “we,” or “our,” unless the context otherwise requires, are to Sitoa Global Inc.
· “SEC” are to the United States Securities and Exchange Commission;
· “Securities Act” are to the Securities Act of 1933, as amended;
· “Exchange Act” are to the Securities Exchange Act of 1934, as amended;
· “U.S. dollar,” “USD,” “US$” and “$” are to the legal currency of the United States; and
· “China,” “Chinese” and “PRC” are to the People’s Republic of China.
Available Information
The Company’s website is www.sitoaglobal.com, where information about the Company may be reviewed and obtained. In addition, the Company’s filings with the Securities and Exchange Commission (“SEC”) may be accessed at the internet address of the SEC, which is http://www.sec.gov. Also, the public may read and copy any materials that the Company files with at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580 Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Overview
Sitoa Global specializes in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions. Its solutions and services enable e-commerce transactions with speed and efficiency, and allow an interactive and engaging customer experience as well as targeted marketing and advertising.
The Company’s revenues are generated from one-time integration fees for the implementation of e-commerce solutions as well as recurring license and service fees including revenue share arrangements. The Company currently hosts five existing e-commerce solutions:
We service 4-GS, ZBL Cybermarketing and i-Media under the strategic partnership agreement with Soconison Technology Ventures, dated July 11, 2011.
The Company has recently entered into two partnership agreements to develop additional e-commerce solutions.
Our corporate headquarters are located at 2225 East Bayshore Road, Suite 200, Palo Alto, CA 94303 and our telephone number is (415) 830-6210. Although we maintain a website at www.sitoaglobal.com, we do not intend that information available on our website be incorporated into this filing.
History and Corporate Structure
Sitoa Global Inc. is a Delaware corporation that was originally incorporated under the name CDoor Corp. on November 18, 2004. At that time the Company was a development stage company that owned a United States patent (patent No. 5,074,073) (the “Patent”) for a Car Door Safety Feature Device, and the Company’s principal business plan was to develop a prototype of the Patent and then manufacture and market the product and/or seek third party entities interested in licensing the rights to manufacture and market the safety system.
Acquisition and Sale of Wanxin
Following a change of management that occurred on November 2, 2006, the Company changed its business plan from the development of the Car Door Safety Feature Patent and began focusing on the Chinese biopharmaceutical industry. On January 12, 2007, the Company acquired Wanxin Bio-Technology Limited (“Wanxin”), a British Virgin Islands company, pursuant to a share exchange transaction, whereby the Company acquired 100% of the issued and outstanding shares of Wanxin in exchange for 1,750,000 shares of Common Stock of the Company (before giving effect to a 40-for-1 forward split effected on March 2, 2007), and the surrender and cancellation of 95% of the voting stock of the former majority shareholder of the Company. As a result of the share exchange transaction, Wanxin became the Company’s subsidiary, and Wanxin’s subsidiaries and indirect subsidiaries, Manhing Enterprises Limited, a Hong Kong company, Shanghai Wanxing Bio-pharmaceuticals Co., Ltd., a PRC company, and Shanghai Wanxing Bio-science Cosmetic Co., Ltd., a PRC company, became the Company’s indirect subsidiaries. Through its subsidiaries, Wanxin was a developer of genetically engineered recombinant protein drugs and vaccines in China. On March 2, 2007, the Company changed its name to “Sinobiomed, Inc.” to reflect its new business.
In March 2009, all the assets of Wanxin’s PRC subsidiaries, including their books and records, were seized by the China Construction Bank in satisfaction of bank loans owed to the bank by them. As a result of the seizure, Wanxin could not carry on its business and operations. The debt of the subsidiaries exceeded the value of the assets and the prospects for generating sufficient cash flow to repay the debt were doubtful. Furthermore, the Company’s President and Chief Executive Officer at the time, resigned his positions with the Company, but retained management control of the subsidiaries by virtue of his nominee’s status as their Chief Representative, a legal status in China that is difficult to change without cooperation of the incumbent. In June 2009 the Company’s Board of Directors decided to abandon Wanxin. In December 2010, the Company sold all its interest in Wanxin to China Nonferrous Metals Resource Geological Survey Inc. (“China Nonferrous”), a British Virgin Islands company, for an aggregate sale price of $200,000, pursuant to a stock purchase and sale agreement. The abandonment and sale of Wanxin was accounted for in the financial statements as a disposition of the subsidiaries for proceeds of $200,000 as of January 1, 2009. The foregoing description of the terms of the Purchase and Sale Agreement is qualified by reference to the Purchase and Sale Agreement which is attached as Exhibit 10.1 to the Form 8-K filed with the SEC on EDGAR on December 22, 2010.
Acquisition of Computer Server Assets
On December 10, 2010, the Company consummated an asset purchase agreement, dated December 10, 2010, pursuant to which the Company agreed to purchase eight computer servers and associated fixtures for 225,000 shares of the Company’s common stock. The Company believed that the acquisition of the assets would enable the Company to utilize such telecommunications infrastructure to pursue its new business direction in the areas of e-commerce, media and social networking.
Our Growth Strategy
We aim to position ourselves as a leading provider in e-commerce solutions and services. We have identified the following factors critical to the achievement of this goal:
· Enable our current customers to continue growing their e-commerce business
· Leverage our business development relationships to acquire new customers
· Continue utilizing our efficient cost structure, and source technical and engineering personnel in Asia for servicing our customers
· Develop new technologies and service products
· Identify opportunities to acquire technologies or companies to accelerate the growth of the Company.
Growth of the E-Commerce Industry
We believe there are a number of factors that are contributing to the continued growth of e-commerce: (i) adoption of the Internet continues to increase globally; (ii) broadband technology is increasingly being used to deliver Internet service enabling the delivery of richer content as well as larger files to consumers; (iii) Internet users are becoming increasingly comfortable with the process of buying products online; (iv) the functionality of online stores continues to improve, offering a broader assortment of payment options with more promotion alternatives; (v) businesses are placing more emphasis on their online channel, reaching a larger audience at comparatively lower costs than other methods; and (vi) concerns about conflicts between online and traditional sales channels continue to subside. We believe that the Company will be able to participate in the growth of the e-commerce industry be leveraging its current business model.
Competition
Our business is rapidly evolving and highly competitive. Our current and potential competitors include: (1) physical-world retailers, vendors, distributors, and manufacturers of our products; (2) other online e-commerce and mobile e-commerce sites; (3) a number of indirect competitors, including media companies, web portals, comparison shopping websites, and web search engines, either directly or in collaboration with other retailers; (4) companies that provide e-commerce services, including website development, fulfillment, and customer service; (5) companies that provide infrastructure web services or other information storage or computing services or products. We believe that the principal competitive factors in our e-commerce business include selection, price, and convenience, including fast and reliable fulfillment. Many of our current and potential competitors have greater resources, longer histories, more customers, and greater brand recognition. They may secure better terms from suppliers, adopt more aggressive pricing and devote more resources to technology, infrastructure, fulfillment, and marketing. Other companies also may enter into business combinations or alliances that strengthen their competitive positions.
Employees
The Company has a core team of six employees based in the US focused on project management and technology development. It sources technical and engineering personnel in Asia on an outsourced basis to develop e-commerce solutions and provide ongoing hosting services to individual customers. Competition for qualified personnel in the industry is intense. The Company’s future success will depend, in part, on its continued ability to attract and retain qualified personnel.
Transfer Agent
We have engaged Nevada Agency and Trust Company as our stock transfer agent. Nevada Agency and Trust Company is located at 50 West Liberty Street, Reno, Nevada 89501.
Regulations
The servers for our online e-commerce platform are located in Hong Kong. The Hong Kong government or regulatory agencies may block or suspend our internet transmission capabilities if we are deemed to be in violation of the following content regulations for online services:
· Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) – We are subject to the laws, rules and regulations regarding trading. The Securities and Futures Commission is responsible for: maintaining and promoting the fairness, efficiency, competitiveness, transparency and orderliness of the securities and futures industry. The Commission may suppress illegal, dishonorable and improper practices in the securities and futures industry; to take appropriate steps in relation to the securities and futures industry. Regardless of the communication or delivery medium used, the Commission will continue to apply the general anti-fraud and anti-manipulation provisions of the relevant Ordinances in its enforcement actions. If any person responsible for activities over the Internet is found to have acted in contravention of the provisions of the Ordinances or appears to have been involved in any misconduct whether in Hong Kong or elsewhere, the Commission may exercise its regulatory powers (including prosecution or taking other disciplinary actions as may be required); and when necessary, the Commission may consider other regulatory means available to it including seeking cooperation from foreign regulators and law enforcement agencies to take joint enforcement action, if necessary. We are prohibited from carrying on any regulated activity, as defined under the Securities and Futures Ordinance, such as dealing in securities and/or futures contracts, unless we have been granted the appropriate license(s) from the Commission.