General
Up until June 29, 2005 our business plan was to develop and market an Internet computer software program that was designed to automate the process of submission of Internet web page information in multiple languages to major Internet search engines. Currently, our business plan strategy is now focusing on developing technologies for homeland security applications. This new focus is based on an exclusive technology licensing agreement with Tracetrack Technologies Ltd., ("TraceTrack"), which was finalized in a licensing agreement between our wholly owned subsidiary, TraceGuard Technologies Ltd. (the "Subsidiary") and Tracetrack on February 15, 2006. Since inception, Tracetrack has focused on developing technologies for homeland security applications. Accordingly, since we intend to continue the business of TraceTrack, we consider TraceTrack to be a "predecessor entity" and have included the financial statement of TraceTrack as of February 15, 2006 in this Quaterly Report on Form 10-QSB. In addition discussions of TraceTrack's results of operations are included below.
Cash Requirements
Our plan of operations for 2006 requires financing of $3,500,000 to initiate the
development of our products, based on the licensed technology, through our
Subsidiary, registered in Israel, and for marketing efforts, as follows:
Estimated funding required during 2006:
Development and Engineering $ 2,200,000
Marketing and business development $ 300,000
General and Administrative $ 1,000,000
-----------
Total $ 3,500,000
-----------
As of March 31, 2006, we had a working capital and shareholders' equity of $1,385,142 and $1,746,192 respectively. Since April 1, 2006 we have raised additional sum of approximately $1,476,064 in private placements. We plan to raise additional cash of approximately $1,500,000 by June 30, 2006, primarily through private placements. We plan to raise additional funding through public offering of our securities by the end of 2006. This will allow us to continue with the development of our product, There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.
The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.
Product Research and Development
We anticipate that our Subsidiary, TraceGuard Technologies Ltd registered in Israel will continue recruiting several professional employees over the next few months as part of the establishment of an R&D center in Israel.
Lease agreements & investments
The Company and our wholly owned subsidiary, entered into agreements to lease office space in Arlington VA, Manhattan NY and Petach-Tikva (Israel). Total expected fees for the next 12 months are approximately $92,500.
For the three months period ended March 31, 2006 the Company its subsidiary have invested approximately $213,000 in leasehold improvements and furniture for its new facilities.
In addition, as of March 31, 2006 , a sum of approximately $40,000 has been invested in equipment, computer hardware and computer software for the Subsidiary's development group. Additional $450,000 are planned to be invested in 2006 for this purpose.
Employees
As of May 15, 2006 there are 18 employees, other than and its directors, being employed by our Subsidiary. We expect to further recruit number of part time and full time employees in the field of engineering, R&D, administrative and business development over the next 12-month period.
Recently Issued Accounting Standards
The Company does not expect that the adoption of recently issued accounting pronouncements will have a significant impact on our results of operations, financial position or cash flows.
ACCOUNTING POLICIES
The Securities and Exchange Commission ("SEC") defines "critical accounting policies" as those that require application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
Not all of the accounting policies require management to make difficult, subjective or complex judgments or estimates. However, the following policies could be deemed to be critical within the SEC definition. We have historically incurred losses, and through March 31, 2006 have incurred losses of $1,152,302.
On February 2, 2006, the Board of Directors of the Company approved a change in its fiscal year so it will end December 31, rather than end at March 31. As a result, the Company reported on the Form 10-KSB, the results of its activities for the transition period between April 1, 2005 and December 31, 2005.
Effective January 1, 2006 the Company adopted SFAS No. 123 (Revised 2004) "Share-Based Payment" ("SFAS No. 123R") using the Modified Prospective Approach. SFAS No. 123R revises SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123) and requires the measurement and recognition of compensation of all share-based payments including grants of employee stock options, to be based on their estimated fair values at grant date, or the date of later modification, over the requisite service period. Under SFAS No. 123R, the Company required to select a valuation technique that meets the criteria as stated in the standard. Allowable valuation models includes a binomial model and the Black-Scholes model. At the present time the Company uses the Black-Scholes model.
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 as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions relate to recording net revenue, collectibility of accounts receivable, and the realizability of other intangible assets, accruals, income taxes, inventory realization and other factors. Management has exercised reasonable judgment in deriving these estimates; however, actual results could differ from these estimates. Consequently, change in conditions could affect our estimates.
Fair Value of Financial Instruments
The Company considers all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents The financial instruments of the Company consist mainly of non-derivative current assets and current liabilities. In view of their nature, the fair value of financial instruments included in working capital of the Company is usually identical or close to their carrying value.
Results of Operations
Three months ended March 31, 2006 and 2005
Our Company recorded losses of $704,697 and $7,287 for the three months ended March 31, 2006 and 2005, respectively, and losses of $1,152,302 since March 20, 2002 (commencement of operations). The principal components of the losses were for R&D and general and administrative expenses.
TraceTrack recorded in 2006 over the period ended February 15, 2006 losses of $21,517 over, for the three months ended March 31, 2005 were $30,957 and total losses of $1,145,567 since inception.
The Company's operating expenses for the three months ended March 31, 2006 and March 31, 2005, respectively , were $706,563 and $7,287, respectively. The principal components of the losses were for R&D and general and administrative expenses, mainly consisting of payroll cost and consulting expenses.
TraceTrack's operating expenses in 2006, over the period ended February 15, 2006 were $21,652 and for the three months ended March 31, 2005 were $30,912. The principal components of the losses were for R&D and general and administrative expenses, mainly consisting of payroll cost and consulting expenses.
Liquidity and Capital Resources
At March 31, 2006, the Company had positive working capital of $ 1,385,142.
At March 31, 2006, the Company's total assets were $ 2,122,334 which consisted of cash, other receivables, restricted deposit, property and equipment And license rights.
At March 31, 2006, the Company's total liabilities were $ 376,142.
The Company has had no revenues since inception.
As of March 31, 2006, the Company had working capital of $1.4 million and $1.7 million in cash and cash equivalents. Net cash of $1.5 million was provided during the three months period ended March 31, 2006. Net cash of $474 thousand was used in operating activities during the three months period ended March 31, 2006. The net loss for the three months period ended March 31, 2006 was $705 thousand, and was primarily due to research and development activities of $163 thousand, general and administrative activities of $544 thousand, which were partially offset by financial incomes of $1.8 thousand. The Company's used cash of $189 thousand in investment activities during the three months period ended March 31, 2006 primarily due to investing in, property and equipment. Net cash of $1.5 million provided by financing activities was from receipt on account of shares to be allotted.
Based on the Company's expectations and contingency plans described above, all of the above are expected to provide more than sufficient liquidity for the foreseeable future and the next 12 months in particular. The Company cannot be certain that funding will be available on acceptable terms, or at all.
The Company has no long-term debt and does not regard long-term borrowing as a good, prospective source of financing.
http://biz.yahoo.com/e/060515/tcgd.ob10qsb.html
Dubi
News 
Market Data 
Discover 
