As filed with the Securities and Exchange Commission on April 15, 2011


File No. 333-156934




UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





FORM 10-K





x ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended December 31, 2010





 ̈ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from __________ to _________





Commission file number: 333-156934





SEBRING SOFTWARE, INC.


(Name of registrant in its charter)





SUMOTEXT INCORPORATED


(Former name of registrant in its charter)





Nevada

4822

26-0319491(State or jurisdiction

(Primary Standard

(IRS Employerof incorporation or

Industrial Classification

Identification No.)organization)

Code Number)





1400 Cattlemen Rd, Suite D


Sarasota, Florida 34232


(Address of principal executive offices)





N/A


(Address of former principal executive offices)





(941) 377-0715


(Registrant's telephone number)





SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF


THE EXCHANGE ACT:





None.





SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF


THE EXCHANGE ACT:





Common Stock, $0.0001 Par Value Per Share.





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ̈ No x.





Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes  ̈ No x




Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter periods 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  ̈





Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K  contained in this form, and no disclosure will be contained, to the best of the 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 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 (§232.405 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 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   ̈
Smaller reporting company  x





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ̈ No x.





The aggregate market value of the issuer's voting and non-voting common equity held by non-affiliates computed by reference to the closing price of such common equity on the Over-The-Counter Bulletin Board as of June 30, 2010, the end of the issuer’s most recently completed second fiscal quarter, was approximately $6,535,037.04.





As of April 13, 2010, the registrant had 34,980,515 shares of common stock, $0.0001 par value per share, outstanding (which number includes 18,729,098 shares issuable in connection with the Exchange (described below) and 50,000 shares issuable for legal services, which have not been physically issued to date).










TABLE OF CONTENTS





PART IITEM 1. BUSINESS

3ITEM 1A. RISK FACTORS

14ITEM 2. PROPERTIES

28ITEM 3. LEGAL PROCEEDINGS

28ITEM 4. (REMOVED AND RESERVED)

28PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

28ITEM 6. SELECTED FINANCIAL DATA

31ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

31ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

F-1ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

34ITEM 9A. CONTROLS AND PROCEDURES

34ITEM 9B. OTHER INFORMATION

36PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

36ITEM 11. EXECUTIVE COMPENSATION

38ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

40ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

41ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

44PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

45SIGNATURES

47




2





PART I





FORWARD-LOOKING STATEMENTS





Portions of this Form 10-K, including disclosure under “Management’s Discussion and Analysis or Plan of Operation,” contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, as amended. All statements other than statements of historical fact contained in this Periodic Report on Form 10-K, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements.  We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” or “should,” or the negative of these terms or other comparable terminology.  Although we do not make forward looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or elsewhere in this Annual Report on Form 10-K, which may cause our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.  Moreover, we operate in a very competitive and rapidly changing environment.  New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements.  All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements, except as expressly required by law.





You should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this Annual Report on Form 10-K.  Before you invest in our securities, you should be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this Annual Report on Form 10-K could negatively affect our business, operating results, financial condition and stock price.  Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this Annual Report on Form 10-K to conform our statements to actual results or changed expectations.  Unless otherwise stated, references in this Form 10-K “we”, the “Company,” “us” or “Sebring”, refer to Sebring Software, Inc., formerly Sumotext Incorporated.  References in this Form 10-K, unless another date is stated are to December 31, 2010.





ITEM 1. BUSINESS





History





The Company was incorporated in Arkansas on June 8, 2007, as Reminderbox, Inc.  The Company began selling its services to clients on January 8, 2008 under the brand name SUMOTEXT Incorporated. On September 10, 2008, the Company converted into a Nevada corporation and contemporaneously changed its name to SUMOTEXT Incorporated.   As disclosed below, the Company has subsequently changed its name to Sebring Software, Inc.





On or about June 30, 2008, the Company’s shareholders approved a 16,740:1 forward stock split of our issued and outstanding shares of common stock (the “June 2008 Forward Split”), with an effective date of June 30, 2008.





On August 25, 2010, the Board of Directors (the “Board”) of the Company, consented to and approved an eleven-for-one forward split of the Company’s issued and outstanding shares of common stock (the “August 2010 Forward Split” and together with the June 2008 Forward Split, the “Forward Splits”).  In connection with the August 2010 Forward Split, the authorized common stock of the Company was increased from 100,000,000 shares to 1,100,000,000 shares of common stock.  There were no changes to the number of authorized shares of the Company’s preferred stock, or the par value of the common or preferred stock.  The August 2010 Forward Split became effective on September 15, 2010 (the “Effective Date”) with the Secretary of State of Nevada and on September 27, 2010 with FINRA.  The effects of the Forward Splits are retroactively reflected throughout this report, unless otherwise noted.


3




On October 25, 2010, pursuant to the terms of an Exchange and Reorganization Agreement between the Company, Sebring Software, LLC (“Sebring LLC”), Leif Andersen (“Mr. Andersen”), Asbjorn Melo (“Mr. Melo”) and Lester Petracca (“Mr. Petracca” and, together with Mr. Melo and Mr. Andersen, the “Sebring Members”), the Company acquired all of the membership interests of Sebring LLC in exchange for 18,729,098 shares of the Company’s common stock and the assumption of certain Sebring LLC liabilities (the “Exchange”).  The liabilities assumed by the Company include an aggregate of $1,435,000 in convertible promissory notes, one of which is issued to Thor Nor, LLC, a limited liability company owned and controlled by Mr. Andersen, in the principal amount of $275,638.  Mr. Andersen is an officer and director of the Company and was appointed in connection with the Securities Purchase Agreement between the Company and Sebring LLC that was consummated on September 17, 2010, pursuant to which Sebring LLC purchased a controlling interest in the Company (the “Securities Purchase Agreement”).  As a result of the Exchange, Mr. Andersen, through Thor Nor, LLC, is also the beneficial owner of approximately 20.85% of the issued and outstanding capital stock of the Company. A copy of the Securities Purchase Agreement was filed with the Form 8-K filed by the Company on September 21, 2010.





The Company also assumed Sebring LLC’s obligations under the terms of a Settlement Agreement dated as of October 1, 2010 by and between Sebring LLC and Mr. Petracca (the “Settlement Agreement”) together with a promissory note in the principal amount of $1,170,718 issued to Mr. Petracca dated as of October 1, 2010 in connection therewith (the “Petracca Note”).  Mr. Petracca, as a result of the Exchange is the beneficial owner of approximately 8.34% of the Company’s issued and outstanding capital stock.





Pursuant to the terms of the Exchange, Sebring LLC caused the Company to cancel 69,376,450 shares of the Company’s common stock (after giving effect to a recent 11-to-1 forward split) on October 29, 2010.





The Company also entered into a Spin-Off Agreement with Timothy Miller and Jim Stevenson that became effective on October 25, 2010 whereby Mr. Miller and Mr. Bova acquired the assets, liabilities and outstanding convertible securities of the Company existing as of September 17, 2010 (the “Spin-Off”).





Prior to entering into the agreements referenced above, no material relationship existed between Sumotext and its affiliates, on the one hand, and Sebring Software and its affiliates on the other hand.  In April of 2007, Sebring LLC engaged Galileo Asset Management, SA (“Galileo”) to act as an investment advisor to Sebring LLC.  As a part of Galileo’s engagement, Galileo advised Sebring on strategies to meet the Company’s working capital and capital resource needs and the formulation of the terms and structure of reasonable proposed business combination transactions involving the Company.  During the term of Galileo’s engagement, it was determined that Sebring LLC should seek to be acquired by a public company in order to assist Sebring LLC in gaining wider recognition and accessing investments necessary to fulfill contracts with potential customers.  In July of 2010, Galileo introduced Sebring LLC to New World Merchant Partners (“New World”) and Abraxis Financial (“Abraxis”).





On August 1, 2010, Sebring LLC entered into an agreement with Abraxis whereby Abraxis would seek to introduce companies to Sebring LLC that were looking to enter into business combinations with operating companies.  In consideration of Abraxis’ services, Abraxis was entitled to receive cash compensation equal to the portion of the purchase price in excess of the amount payable to the seller or sellers of the controlling position of the introduced entity, which, in this case, totaled $100,000.  On August 1, 2010, Sebring LLC also entered into a letter agreement with New World whereby New World agreed to provide financial and strategic advisor services to Sebring LLC in connection with the execution of a proposed merger of Sebring LLC with a publicly-traded corporation. In consideration of the services provided by New World, New World was entitled to receive, at or prior to the closing of the transaction, shares equaling the greater of 300,000 or 1.5% of the outstanding common stock of the surviving company immediately following the transaction, in each case without restriction as to resale under applicable securities laws.  In addition, Sebring LLC agreed to reimburse New World for expenses incurred in connection with its retention under the letter agreement.  The structure of the transaction was advised by New World and Sebring LLC, in the interest of time and conservation of financial resources, followed New World’s advice.




4


On October 28, 2010, shareholders of the Company holding a majority of the issued and outstanding shares of capital stock of the Company, by written consent, approved an amendment to the Company’s Articles of Incorporation to change the Company’s name from “Sumotext Incorporated” to “Sebring Software, Inc.”  The amendment was filed with the Nevada Secretary of State on October 29, 2010.  The amendment has been affected in the marketplace by FINRA; however, the Company did not provide the non-consenting shareholders the required notice and documentation of the proposed name change pursuant to Regulation 14C of the Securities Exchange Act of 1934, as amended.  As such, the Company plans to file a Schedule 14C filing with the Commission and take appropriate action pursuant to Regulation 14C moving forward, to properly affect such name change provided that the Company has already discontinued to use the corporate name “Sumotext Incorporated” and affected a name change to “Sebring Software, Inc.”





The Company’s Prior Operations:





During the period of this report and prior to October 25, 2010, and the effective date of the Exchange, the Company operated as a short code application provider that enabled businesses and organizations to instantly launch product offers, promotions, and time-sensitive alerts into the mobile channel via text messaging.





The Company’s software service enabled marketers to fully control keywords on short codes and configure highly interactive campaigns and message flows that identify, attract, profile, and reward customers.





The Company’s system was designed to ensure that its client’s campaigns remain ‘real-time’ compliant with the FTC's CAN-SPAM Act, the Mobile Marketing Association's Code of Conduct, and the most stringent of all Operational Playbooks published by any wireless carrier.





Short Codes





Taking cues from Asia and Europe, U.S. wireless carriers (through the Cellular Telecommunications and Internet Association (“CTIA”)) created the Common Short Code Administration (“CSCA”) as an entity to regulate access to the SMS channel.  A ‘Short Code’ is a 5 or 6 digit abbreviated phone number that is used to address SMS.





Short codes provide consumers a trusted method to ‘Opt-in’ and ‘Opt-out’ of marketing campaigns and alert services.  Short codes also identify application providers and content providers and keep spammers and unsolicited marketers out of wireless networks. Each short code has to be independently approved, provisioned, tested, and certified by each wireless carrier to gain access to that network.





There are two (2) major categories of short codes: standard rated codes and premium rated codes. SUMOTEXT, Inc. currently operates standard rated short codes only. Unlike ‘premium’ short code programs which can add a subscription or content access charge to a consumer’s phone bill (e.g. 99 cents to download a ring tone or $4.99 for a monthly subscription service), standard rated short codes do not charge the consumer to interact with the content provider’s program; though standard message and data charges may apply. For standard rates short code programs, the only charge to the consumer is based on the number of text message credits which are included in their wireless carrier’s phone plan. If a consumer has ‘unlimited’ text messaging as part of their plan, they will see no additional charges from their wireless carrier to interact with a standard rated short code program.





Unlike premium short codes, a standard rated short code can be shared by multiple content providers if the program is managed by an approved application provider like SUMOTEXT with a system capable of maintaining carrier compliance while differentiating between program traffic through the use of unique keywords. However, due to the growing number of programs being run over shared short codes, wireless carriers continue to tighten requirements for the application providers who offer these services and SUMOTEXT remains vigilant to meet these requirements and enhance our service delivery platform with the features that keep our clients ‘real-time’ compliant with all industry standards, best practices, and unique carrier requirements.





The Company commercially launched its service on January 8, 2008, and maintained a diverse roster of clients including national retail and restaurant brands, professional sports venues and teams, radio stations, political campaigns, direct selling organizations, publishers, universities, school systems, mega-churches, chambers, non-profits, and local small businesses.


5




Subscription Revenues




During the period covered by this report and prior to the date of the Exchange, the Company derived substantially all of its revenue from fees associated with its monthly subscription services.  The Company’s typical subscription was a monthly contract, although terms range up to 12 months. The Company billed a majority of its customers on a monthly basis through their credit cards and bank accounts.





Intellectual Property





Prior to the date of the Exchange, the Company owned the rights to the registered internet domain names “www.textmarketing.com” and “www.sumotext.com,” which contain information that the Company does not desire to be incorporated by reference herein.





Employees





Prior to the date of the Spin-Off, the Company had eight (8) full-time employees, including six (6) employees at its then primary office located in Little Rock, Arkansas.  Subsequent to the Spin-Off, as a result of the Exchange, and as of December 31, 2010, the Company has a total of three employees.





Material Agreements:





The following material agreements affected the Company’s pre-Exchange operations, and have since been spun-off and no longer affect the Company subsequent to the Exchange.





On or about January 1, 2007, the Company entered into a Software Development and Consulting Agreement with Timothy Miller, the then President of the Company, in his capacity as President of Atreides, LLC (“Atreides”), which was amended in February and March 2009, to clarify several of the provisions of the agreement. Timothy Miller is the former Chief Executive Officer, President and Director of the Company.   Mr. Miller is also the sole officer and employee of Atreides.   During the year ending August 31, 2010, and during the year ending August 31, 2009, the Company paid Atreides $127,822 and $115,041 respectively, for managing and training the Company’s sales representatives, which was recorded as selling, general and administrative expenses.





On or about January 1, 2007, the Company entered into a Software Development and Consulting Agreement with Eric Woods in his capacity as President of DataMethodology, LLC (“DataMethodology”), which was amended in February 2009, to clarify several of the provisions of the agreement.  Eric Woods previously held approximately 7.7% of the Company’s outstanding Common Stock at the time of the parties entry into the Software Development and Consulting Agreement.  Mr. Woods is the sole officer and employee of DataMethodology, LLC.   For the year ended August 31, 2010, and for the year ended August 31, 2009, the Company paid DataMethodology $127,020 and $124,200, respectively, for maintenance and upgrading software related issues which was recorded as a cost of revenue.





On April 16, 2009, the Company’s then President, Timothy Miller, who was also a shareholder, loaned the Company $100,000 which was to mature on April 15, 2010 with interest only payments due quarterly at 10% per annum.





Effective July 1, 2009, Mr. Miller, loaned the Company $50,000 which was to mature on July 2, 2010 with interest only payments due quarterly at 10% per annum.  Effective August 3, 2009, Mr. Miller, loaned the Company $50,000 which was to mature on August 4, 2010 with interest only payments due quarterly at 10% per annum.  Effective August 27, 2009, Mr. Miller, loaned the Company $75,000 which was to mature on August 28, 2010 with interest only payments due quarterly at 10% per annum.


Effective February 17, 2010, the Company entered into an Amended and Restated Promissory Note with Mr. Miller (which amended and restated a previous promissory note which also had an effective date of February 17, 2010 (the “Consolidated Note”).  The Consolidated Note which had a principal amount of $275,000, amended and replaced the April 16, 2009, July 1, 2009, August 3, 2009 and August 27, 2009 promissory notes between the Company and Mr. Miller.  The Consolidated Note accrues interest at the rate of 8% per annum, with all principal and accrued interest due on the due date of February 17, 2012.  The repayment of the Consolidated Note was senior to all of the Company’s other outstanding obligations other than the Bova Note (defined below).  In connection with Mr. Miller agreeing to the terms and conditions of the Consolidated Note, the Company agreed to grant Mr. Miller warrants to purchase 6,050,000 shares of the Company’s common stock at an exercise price of $0.0455 per share, which warrants vested immediately and were to expire on February 17, 2012 (the “Miller Warrants”).


6




Effective November 30, 2009, Mr. Miller loaned the Company an additional $125,000 which was to mature on December 1, 2010, with interest only payments due quarterly at 10% per annum.





Effective February 17, 2010, the Company entered into an Amended and Restated Promissory Note with Steve Bova, an individual, and an accredited investor (which amended and restated a previous promissory note which also had an effective date of February 17, 2010 (the “Bova Note”).  The Bova Note had a principal amount of $150,000, which represented amounts loaned to the Company by Mr. Bova.  The Bova Note accrues interest at the rate of 8% per annum, with all principal and accrued interest due on the due date of February 17, 2012.  The repayment of the Bova Note was senior to all of the Company’s other outstanding obligations.  In connection with Mr. Bova agreeing to the terms and conditions of the Bova Note, the Company agreed to grant Mr. Bova warrants to purchase 3,300,000 shares of the Company’s common stock at an exercise price of $0.0455 per share, which warrants vested immediately and were to expire on February 17, 2012 (the “Bova Warrants”).





In March 2010, the Company entered into a $6,000 per month consulting agreement with the Clark Bova Group, LLC (the “Bova Agreement”).  Mr. Bova is partner at the Clark Bova Group, LLC.  Under the terms of this agreement, the Clark Bova Group, LLC agreed to provide the Company management oversight, strategic consulting, and corporate finance advisory services for the period of one year. The agreement provided the Company specific deliverables and work products produced by multiple named individuals. The Company can terminate this agreement at any time with 90 days prior notice.  The parties mutually agreed to terminate this agreement in June 2010 after total payments of $18,000.





In connection with and pursuant to the terms of the Spin-Off (described below) all of the Company’s pre-Exchange (also defined below) assets, operations, liabilities and warrants were spun-off to Sumotext Corporation, a private Nevada corporation then solely owned by Timothy Miller, our former President and Director and James Stevenson (a former shareholder of the Company).  As a result, the Consolidated Note, November 2009 note owed to Mr. Miller, the Miller Warrants, Bova Warrants and Cooper Warrants (as defined below), as well as the Company’s assets including the Atreides and DataMethodology agreements and Bova Agreement agreements were assumed by Sumotext Corporation, and are no longer owned by, held by or represent liabilities of the Company as of October 25, 2010.





Recent Change Of Control and Change Of Business Focus:





On September 17, 2010, the Company consummated a Securities Purchase Agreement (the “Purchase Agreement”) with Timothy Miller, Jim Stevenson, Doug Cooper, Joe Miller, the brother of Timothy Miller, and Eric Woods, all then greater than 5% shareholders of the Company (the “Selling Shareholders”) and Sebring Software LLC, a Florida limited liability company (“Sebring”), pursuant to which the Selling Shareholders sold 69,376,450 shares (the “Shares”) of the Company’s common stock to Sebring in exchange for $286,147 or $0.004125 per share (the “Purchase Price”).  The Shares represented approximately 81.1% of the issued and outstanding shares of the Company.  Mr. Timothy Miller is one of the Selling Shareholders and, at the time the Purchase Agreement was executed, was the President and sole Director of the Company. Additionally, certain other shareholders of the Company, including Eric Woods, Jim Stevenson and Sharon Miller, Timothy Miller’s Mother, who were then greater than 5% shareholders of the Company also agreed to sell an aggregate of 15,475,416 shares of the Company’s common stock to unaffiliated third parties in private transactions in consideration for an aggregate of $63,830 or $0.004125 per share.





Galileo Asset Management loaned the funds to Sebring to acquire the Shares pursuant to the terms of a secured convertible debt agreement.





Pursuant to the terms of the Purchase Agreement, effective September 23, 2010, Leif Andersen was appointed as a Director of the Company.





On October 18, 2010, Matthew Lozeau resigned his position as the Company’s secretary.


7





On October 25, 2010, Timothy Miller resigned as the President and Chief Executive Officer of the Company and Mr. Andersen was appointed to serve as the President and Chief Executive Officer of the Company.  Following Mr. Andersen’s appointment as President and Chief Executive Officer of the Company, Timothy Miller resigned as a Director of the Company, leaving Mr. Andersen as the sole officer and Director of the Company.





On October 25, 2010, pursuant to the terms of an Exchange and Reorganization Agreement between the Company, Sebring, Thor Nor, LLC, which is controlled by Leif Andersen (“Mr. Andersen”), Asbjorn Melo (“Mr. Melo”) and Lester Petracca (“Mr. Petracca” and, together with Mr. Melo and Mr. Andersen, the “Sebring Members”), the Company acquired all of the membership interests of Sebring in exchange for 18,729,098 shares of the Company’s common stock and the assumption of all of Sebring’s then liabilities (the “Exchange” and the “Exchange Shares”).  The liabilities assumed by the Company include an aggregate of $1,435,638 as of October 25, 2010  in convertible promissory notes (the “Convertible Notes”), an aggregate of $1,170,718 owed to Mr. Petracca, as described below and an aggregate of $737,000 in the form of non-convertible notes, among other liabilities.  As a result of the Exchange, Mr. Andersen, the sole officer and Director of the Company, through Thor Nor, LLC, a limited liability company controlled by Mr. Andersen, is also the beneficial owner of approximately 20.85% of the issued and outstanding capital stock of the Company.  As a result of the Exchange, the Company acquired all of the assets and liabilities of Sebring, including Sebring’s Management Employment Agreement with Mr. Andersen (as described in greater detail below under “Employment Agreement” and the rights to the License Agreement (described below under “Overview”).





Included in the Convertible Notes are notes issued to Thor Nor, LLC, a limited liability company controlled by Mr. Andersen, in the principal amount of $275,638.  Convertible Notes totaling $1,245,638 as of October 25, 2010 bears interest at the rate of 12% per annum and is due and payable in March 2011which as of the date of this report are all past due).  Upon an event of default as provided in the Convertible Notes, accrued and unpaid interest thereon is payable quarterly in cash or stock (as provided below).  The Convertible Notes provide the holders thereof the right, beginning on the seventh full month following the closing of the Exchange (i.e., May 2011)(the “Conversion Date”) to receive 1/6th of the principal amount of such Convertible Note (the “Conversion Amount”) in cash or shares of stock based on the Conversion Price.  The “Conversion Price” is equal to the lesser of a price per share of (a) 75% of the price per share paid by investors in any equity financing(s) which occur after the date of the Convertible Note in which the gross proceeds received by the Company meet or exceed $4,000,000; or (b) $1.72.  The Convertible Notes may be prepaid in full or in part at any time without penalty.  In the event the Convertible Notes are not paid within five days after notice of such default is given by the holder thereof, all principal and accrued interest due thereunder shall become immediately due and payable.  Assuming the full conversion of the Convertible Notes at the current Conversion Price of $1.72 per share, such Convertible Notes will convert into an aggregate of 724,208 shares of our common stock. Another $140,000 of the convertible notes are convertible at a rate determined based on a future financing.  $140,000 of convertible notes was in default as of October 25, 2010.





Each Convertible Note holder also has certain rights to warrants in connection with the Convertible Notes.  Specifically, in the event such Convertible Note holder converts all or part of the Convertible Note they hold into shares of our common stock, they will receive warrants to purchase a number of shares of common stock equal to the total number of shares received in connection with such conversion.  In the event they choose not to convert the Convertible Notes, they will receive warrants to purchase 25% of the total number of shares of common stock of the Company as they would have received upon full conversion of the Convertible Notes.  Additionally, for each month after an event of default under the Convertible Notes has occurred and is not cured, they will receive warrants to purchase a number of shares equal to the total number of shares they would have received in connection with a full conversion of the Convertible Notes (the “Total Warrants”)(provided that the warrants issued for such damages are capped at three times the amount of Total Warrants).  Additionally, in the event the Company fails to register the shares issuable in connection with the exercise of the warrants by June 1, 2011, the Convertible Note holders will receive additional warrants to purchase such number of shares of the Company’s common stock that equals 2% of the Total Warrants for each full month that the Company fails to register such underlying shares, which damages are capped at warrants in an amount equal to 10% of the Total Warrants.  The warrants described above have an exercise price of 110% of the Conversion Price of the Convertible Notes (currently $1.89), and a five year term.  Finally, the Company provided the Convertible Note holders piggy-back registration rights in connection with the shares of common stock issuable upon exercise of the warrants described above.


8




The Company also assumed Sebring’s obligations under the terms of a Settlement Agreement dated as of October 1, 2010, by and between Sebring LLC and Mr. Petracca (the “Settlement Agreement”), which settled certain amounts payable by Sebring to Mr. Petracca and required Mr. Petracca to dismiss a lawsuit previously filed against Sebring regarding the payment of such outstanding amounts payable, together with a promissory note in the principal amount of $1,170,718 issued to Mr. Petracca dated as of October 1, 2010 in connection therewith (the “Petracca Note”).  The Petracca Note bears interest at the rate of 12% per annum, provided that if an event of default occurs under the note, the Petracca Note bears interest at the rate of 20% per annum.  The Company is required to pay Mr. Petracca 1/3 of the outstanding and accrued interest due under the Petracca Note every 120 days (i.e., January 29, 2011, May 29, 2011 and September 26, 2011), with the entire amount of the note payable by or before January 24, 2012.  Additionally, for each 120 days that the Petracca Note is issued and outstanding, the Company agreed to issue Mr. Petracca 1% of the issued and outstanding common stock of the Company (approximately 349,305 shares based on the current number of shares outstanding). The Petracca Note is secured by a security interest in substantially all of Sebring’s assets (the “Petracca Security Agreement”).  Pursuant to the Petracca Security Agreement, we agreed to pay Mr. Petracca 25% of the first $750,000 in net proceeds received by us in connection with any debt or equity financing and 30% of the net proceeds of any amount of debt or equity financing received by us in excess of $750,000, which amount if paid will decrease the amount of the Petracca Note. Mr. Petracca, as a result of the Exchange, is the beneficial owner of approximately 8.6% of the Company’s issued and outstanding capital stock.





Pursuant to the terms of the Exchange, Sebring LLC caused the Company to cancel the 69,376,450 shares of the Company’s common stock acquired in connection with the Purchase Agreement, described above, which shares were cancelled effective October 29, 2010.  As a result of the Exchange and cancellation, Thor Nor LLC (which is controlled by Mr. Andersen), Lester Petracca and Asbjorn Melo acquired 14,234,114, 2,996,656, and 1,498,328 shares of the Company’s common stock, respectively, representing approximately 41%, 8.6% and 4.3% of the issued and outstanding shares of the Company’s common stock, respectively (in all cases including the Collateral Shares described below and not including any other convertible securities which they hold)(the Exchange Shares have not been physically issued to date, but have been included in the number of issued and outstanding shares disclosed throughout this report).   Sebring previously held 7,491,639 shares of the Company’s common stock for the benefit of the Sebring Members (the “Collateral Shares”), which have already been included in the totals above, which shares were released upon our payment of a promissory note issued by Sebring to Die CON AG in the principal amount of $100,000 (the “Redemption Note”).





The Company also entered into a Spin-Off Agreement with Timothy Miller and Jim Stevenson that became effective on October 25, 2010, whereby Mr. Miller and Mr. Stevenson, through Sumotext Corporation, a newly formed Nevada corporation, which was owned solely by Mr. Miller and Mr. Stevenson and had no affiliation with the Company, acquired all of the pre-Exchange assets, liabilities and outstanding convertible securities of the Company existing as of September 17, 2010 (the “Spin-Off”).  Additionally, in connection with the Spin-Off of all of the Company’s pre-Exchange assets, operations, liabilities and warrants were spun-off to Sumotext Corporation, a private Nevada corporation then solely owned by Timothy Miller, our former President and Director and James Stevenson (a former shareholder of the Company) and Sebring’s assets, liabilities and operations became the sole assets, liabilities and operations of the Company effective October 25, 2010, and the Company’s business focus changed to that of Sebring.





Post-Exchange and Spin-Off Operations:





As a result of the Exchange and the Spin-Off, and effective as of October 25, 2010, the Company’s prior assets, liabilities and operations relating to the Company’s operations as a short-code application provider were transferred and spun-off to Mr. Miller and Mr. Stevenson (as discussed above) and moving forward, the Company’s sole assets are be those owned by Sebring (acquired in the Exchange), and the Company’s sole operations will be conducted through Sebring, which operations are described in greater detail below.  The assets and operations of the Company’s prior short-code application provider services are reflected in the audited financial statements of the Company as of August 31, 2010 and 2009, which were filed on the Company’s Form 10-K with the Commission on December 14, 2010, as the Exchange did not close until October 25, 2010, subsequent to the end of the Company’s fiscal year.  Furthermore, the Company filed audited and pro forma information, as of September 30, 2010, relating to the acquisition of Sebring as an amendment to its Form 8-K filed with the Commission on January 31, 2011.  The operations of Sebring Software, Inc. post-exchange are reflected in the audited financial consolidated statements of the Company as of December 31, 2010 and 2009, which are filed herewith.


9




Sebring History





Sebring LLC was formed in 2006 as a Florida limited liability company. Initially known as Riacom, LLC, Sebring LLC subsequently changed its name to Sebring Software, LLC on January 22, 2007. The company has never had any subsidiaries or been known by any other names.





Sebring was formed by Thor Nor, LLC (controlled by Leif Andersen), Asbjorn Melo and Die Con AG (controlled by the founder of ECS GmbH, discussed below).  Sebring was formed for the purpose of developing adaptors for the eCenter software and marketing those adaptors and eCenter software in the United States.  Since its inception, Sebring’s software engineers have focused on developing eCenter adaptors for the eCenter product to be used in connection with certain systems commonly used in the United States.  Sebring’s CEO has travelled extensively in Europe to collaborate with ECS GmbH in making introductions with company interested in licensing Sebring’s and ECS’ products in the United States and to negotiate with potential partners in North and South America such as Hewlett Packard.





Overview





The Company, through Sebring, has rights, pursuant to the License Agreement (described below), to become a reseller ofa product which enables enterprises to apply rich internet application (“RIA”) technology to the wealth of existing (legacy) applications to help deliver a maximum on "return on assets."





The Company’s focus is to act as a unique integration tool that interconnects business applications through a flexible user interface creating a composite application that simplifies business processes and allows users access through single sign-on, role-based security.





Sebring was founded in 2006 to pursue specific markets like the automotive, aerospace, manufacturing and health care industries with the above described product.  The Company plans to pursue those markets and is looking to market this solution in North and South America commencing in 2011.





The Company’s primary product is called eCenter and was developed by ECS GmbH in Germany and will be sold both independently and with adaptors developed by the Company, as needed by the Company’s customers. The Company believes that, as described below under “Products and Services” and compared to our competitors, it is an ideal solution for its unsurpassed scope, universal compatibility, flexible user interface, and the smooth integration and improved mobilization of software assets that it delivers.  eCenter is a rich internet application (RIA) software that offers an inexpensive and more secure program consolidation solution.  The program integrates various widely used applications — such as SAP, PeopleSoft and Siemens PL — and legacy software within an organization to seamlessly connect all existing programs into a single user interface.





Sebring is a party to a license agreement with Engineering Consulting and Solutions GmbH (“ECS”) that permits the Company, through Sebring, to market eCenter and its eCenter-icm2 products as a reseller in North and South America, subject to the Company making a payment of $150,000 to ECS, which was due and payable by December 1, 2010, and has not been paid to date (the “Advance Payment” and the “License Agreement”).  Assuming the Advance Payment is made (which Advance Payment is treated as an advance against Royalties) and Sebring obtains rights to the License, the Company is required to pay ECS as a royalty, 50% of the amount generated by Sebring as a result of the sale of products under the License Agreement (the “Royalties”).




Under the terms of the License Agreement with ECS, the Company will, through Sebring, assuming payment of the Advance Payment (which has not been paid to date), receive a non-exclusive right to market and sell ECS’ eCenter products in North and South America (the “License”).  The License Agreement remains in effect (assuming the Advance Payment is made by the date provided above) until and unless there is a breach of the agreement by either party, or any patents on the technology licensed pursuant to the License expire, subject to Sebring’s right to terminate the License at any time with one month’s prior notice to ECS.  Furthermore, ECS has the right to terminate the License if the Royalties under the License do not reach a minimum of $150,000 in the first year of the License and $250,000 in the second year of the License; provided that if within eighteen (18) months of the effective date of the License, Sebring (or the Company on its behalf) fails to satisfy its obligations under its outstanding promissory notes, ECS has the right to terminate the License Agreement and therefore the License by providing written notice of such termination to Sebring.  Additionally, if at any time during the term of the License, ECS shall make any further improvements on the technology licensed in connection with the License, Sebring has the right to include such improvements under the License provided that it pays ECS the Royalties in connection with the sale of such improvements.





10




The Industry





In North America there are approximately 47,300 corporations with more than 500 employees each (Bureau of Labor Statistics, 2006) just within the manufacturing sector alone. These are within Sebring LLC’s target market segment. According to the Gartner Group (a leading manufacturing industry watch group), up to 80% of all "Internet enabled" applications will use RIA technology within the next few years (“Management Update: Rich Internet Applications Are the Next Evolution of the Web”; Published May 11, 2005 by the Gartner Group, ID Number G00127774).





In addition, there are 9,100 main offices in banking, and they have 72,000 branches. In the insurance industry, there are 1,023 underwriting companies and 975 major carriers. These businesses combined with state and local government agencies are viable customers for the Company (US Dept. of Commerce).





According to two 2009 reports by Forrester Research, Inc. ("The State of Enterprise Software: 2009" and "The State of SMB Software: 2009"), of more than 2,200 IT executives and technology decision-makers in North America and Europe, “Modernizing key legacy applications is the top software initiative for businesses this year.”  Costs of operating large legacy applications makes businesses unsustainable, results from the survey show that firms are seeking efficient ways to modernize.





Customers





Our target customers are all companies and organizations with the need to easily distribute their company’s data to mobilize their employees, potential clients and suppliers. These companies are running core applications on mainframe and midrange systems with external relationships (customers, suppliers or other business partners). The potential client industries include: automotive, aerospace and defense, health care, manufacturing, financial institutions, insurance companies, the public sector, retail and service providers.  Typical customers of the eCenter products will be medium and large companies that are in need of process integration.





All are similar in the fact that they are running multiple business applications in order to perform day-to-day business tasks.  The large number of diverse applications used by customers creates a highly complex and interactive environment.  Customer’s plans to connect with their customers, suppliers and employees are necessary using internet strategies (e.g., business-to-business (B2B) and business-to-consumer (B2C)).  Also included are those companies looking for additional Client/Server infrastructure.





Our customer’s goal is to improve processes and make available the appropriate information in the corporation.  The Company believes that its software helps unlock the potential in a customer’s current systems and data and lets it flow into a creation of value in their current process of operation and life cycle. This is Sebring’s area of expertise and where we concentrate our efforts; technical as well as organizational know how.





Solutions and services are offered for EDM (Engineering Data Management), PLM (Product Life Cycle Management) as well as EAI (Enterprise Application Integration) and MDM (Master Data Management).




eCenter has extensive competence in integrating the following systems:




·
Agile PLM;
 ·
BEA WebLogic;
 ·
IBM WebSphere;
 ·
Matrix10;
 ·
mySAP PLM;
 ·
ORACLE;
  11
  ·
SAP NetWeaver;
 ·
Enterprise and Engineering Teamcenter;
 ·
Windshill; as well as
 ·
In programming with Java, XML, C, C++, PHP, Perl and Python.


Currently, the Company, through Sebring, has outstanding North American bids to Endries International, Inc., Hitachi Truck and Saturn Engineering & Electronics for integration between their Enterprise Resource Planning (ERP) systems and International Material Data Sheets (IMDS) using our product eCenter/icm2.





Our Products and Services





The Company plans to offer one desktop solution for complex connections to multiple software’s and software applications such as various departments, vendors and customers.  This approach simplifies a user’s day to day routine by offering a single format work station.  The user will access any company software via one window much like Microsoft Outlook links e-mail, contacts, tasks and so forth.  We believe that this software may eliminate the need to train employees in a variety of applications.





The solution that the Company plans to offer has been developed and is used primarily in Europe, but also in other parts of the world.  The product presently has functional adapters to SAP, Oracle and several other enterprise software platforms.  The product is adaptable to any industry, and we believe can be supplied at a fraction of the cost of any existing server based system presently on the market.  In addition, the product is highly adaptable in the event a customer acquires another business with its own unique software.  This flexibility allows data to be integrated seamlessly into the customer’s established format without converting the customer’s existing software.





The product suite that the Company plans to offer enables customers to create a single point of operation or a role based user interface connecting several applications over the Intranet as well as the Internet.  The Company will make the connection between remote users and centralized applications via Intranet and Internet. The Company’s solution can be roughly summarized as a three- tiered architecture:





1.
Encapsulates business functions into standardized interfaces at the back end;
 
 2.
Integrates diverse applications in the middle tier; and
 
 3.
Results in an intuitive user interface, like a dashboard, for the user at the front end.





Thus, the Company plans to help generate a true end-to-end solution with one desktop user interface.




Competition




Canoo (CH), Laszlo (US), JackBe (US) and Corizon are players in the same market segment. However, they are all focusing on the front end presentation and new applications. We believe that Sebring does more; Sebring adds the back end with legacy applications.





Enterprise Application Integration (EAI) vendors (i.e., Oracle Fusion, BEA (an Oracle company), SeeBeyond (a Sun company) and WebMethods (a Software AG company)) are indirect competitors. Their focus is generally on the back end, supporting the automated communication between applications, not desktop integration.


Business Intelligence companies such as Cognos, Business Objects and Informatica retrieve data from disparate systems for reporting and analysis purposes only.  Data cannot be inputed using these systems, whereas the Company’s software will allow a single access, which populates all related applications as well as an integrated reporting product.





12




Strategy





By leveraging reference projects with international manufacturing companies, the Company, through Sebring, believes it will be able to enter the market within 3 months after the payment of the Advance Payment to ECS. We believe that, by engaging the support of Vizquest (a company that specializes in supplying sales forces to small companies), we will be in a position to quickly establish a marketing group which will enable the Company’s entry into additional industry segments with similar business processes as the Company’s current eCenter-icm2 product in the automotive industry. Due to the generic nature of our software which we have the right to license, we believe that we will also have access to several synergistic markets through collaboration with larger companies in vertical markets that the Company is pursuing, such as Hewlett Packard, with which the Company has engaged in extended discussions and negotiations. The Company’s management also has numerous contacts within our target industries.





Suppliers





We are not dependent on any significant product or service from third parties other than the license from ECS GmbH.  We are currently basing our planned rollout of the software which we have the right to license, on future planned alliances with strategic partners such as ECS (which has existing relationships in the European market) and Hewlett Packard (which has relationships within the vertical market we are pursuing) for the automotive and other vertical markets.





Research and Development





Continuous research and development will help the Company stay relevant and grow.  We plan to allocate approximately $400,000 to research and development in 2011 funding permitting, which we hope will allow us to increase the library of connectors that the software we have the right to license, uses. By expanding its offering and enhancing its features the Company will continue to look for better and more efficient ways to provide consumers affordable ways to integrate their software systems.





Intellectual Property





Licenses





Through Sebring, we have entered into a License Agreement with ECS to be a non-exclusive reseller of ECS’s eCenter software, as described in greater detail above, which License is not effective until and unless we pay ECS $150,000.





Copyrights





Although the Company does not hold registered copyrights, the Company does claim copyright protection on all text and graphics used in conjunction with its published digital media (e.g., its website) and published printed promotional materials as stated generally in Title 17 of the United States Code, Circular 92, Chapter 1, Section 102.  The Company also claims a common law copyright in the software adaptors developed by the Company for use with the eCenter software.





We plan to apply for additional patents, copyrights and trademarks as applicable necessary or desirable in the evolution of our business.





Regulatory Matters





Our operations are not currently subject to any governmental regulations specific to the software integration industry.





Employees





We currently have a total of three employees. Our employees are not party to any collective bargaining agreement. We believe our relations with our employees are good.




13




ITEM 1A. RISK FACTORS.





An investment in our common stock is highly speculative, and should only be made by persons who can afford to lose their entire investment in us. You should carefully consider the following risk factors and other information in this quarterly report before deciding to become a holder of our common stock. If any of the following risks actually occur, our business and financial results could be negatively affected to a significant extent.





WE HAVE FUTURE CAPITAL NEEDS, INCLUDING, BUT NOT LIMITED TO $1,435,638 PLUS ACCRUED INTEREST WHICH WE OWE UNDER CONVERTIBLE PROMISSORY NOTES, $737,000 PLUS ACCRUED INTEREST WHICH WE OWE UNDER NON-CONVERTIBLE NOTES, $1,170,718 WHICH WE OWE UNDER THE PETRACCA NOTE, $189,080 IN LOANS PAYABLE, AND $150,000 WHICH WE OWE TO ECS IN CONNECTION WITH THE LICENSE, AND WITHOUT ADEQUATE CAPITAL WE MAY BE FORECED TO CEASE OR CURTAIL OUR BUSIENSS OPERATIONS.





We have generated no revenues to date and anticipate the need for approximately $4,000,000 of additional funding to continue our business operations for the next 12 months and an additional $3,000,000 to significantly expand our operations, of which there can be no assurance we will be able to raise, not including amounts we owe to repay our current liabilities.  We will also require $3,843,021 to repay convertible and non-convertible notes, including accrued  interest, as of December 31, 2010. The Company is required to pay Mr. Petracca 1/3 of the outstanding and accrued interest due under the $1,170,718 Petracca Note every 120 days (i.e., January 29, 2011, May 29, 2011 and September 26, 2011), with the entire amount of the note payable by or before January 24, 2012; and $150,000 which is due to ECS under the terms of the License Agreement by December 1, 2010, which amount has not been paid to date.  At December 31, 2010 we were in default on $165,000 of notes and as of April 14, 2010 we were in default on $2,631,356





Each Convertible Note holder also has certain rights to warrants in connection with the Convertible Notes.  Specifically, in the event such Convertible Note holder converts all or part of the Convertible Note they hold into shares of our common stock, they will receive warrants to purchase a number of shares of common stock equal to the total number of shares received in connection with such conversion.  In the event they choose not to convert the Convertible Notes, they will receive warrants to purchase 25% of the total number of shares of common stock of the Company as they would have received upon full conversion of the Convertible Notes.  Additionally, for each month after an event of default under the Convertible Notes has occurred and is not cured, they will receive warrants to purchase a number of shares equal to the total number of shares they would have received in connection with a full conversion of the Convertible Notes (the “Total Warrants”)(provided that the warrants issued for such damages are capped at three times the amount of Total Warrants).  Additionally, in the event the Company fails to register the shares issuable in connection with the exercise of the warrants by June 1, 2011, the Convertible Note holders will receive additional warrants to purchase such number of shares of the Company’s common stock that equals 2% of the Total Warrants for each full month that the Company fails to register such underlying shares, which damages are capped at warrants in an amount equal to 10% of the Total Warrants.  The warrants described above have an exercise price of 110% of the Conversion Price of the Convertible Notes (currently $1.89), and a five year term.  Finally, the Company provided the Convertible Note holders piggy-back registration rights in connection with the shares of common stock issuable upon exercise of the warrants described above.





We estimate that we can continue to operate through June 2011 with our cash on hand if no additional funding is raised.


If financing is available, it may involve issuing securities senior to our common stock or equity financings, which are dilutive to holders of our common stock (or require us to pay a portion of such proceeds to our debt holders (as described in greater detail below)).  In addition, in the event we do not raise additional capital from conventional sources, such as our existing investors or commercial banks, there is a likelihood that our growth will be restricted and we may be forced to scale back or curtail implementing our business plan. Failure to secure additional financing in a timely manner to repay our obligations and supply us sufficient funds to continue our business operations and on favorable terms if and when needed in the future could have a material adverse effect on our financial performance, results of operations. Furthermore, additional equity financing may be dilutive to the holders of our common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that we relinquish valuable rights.  If we are unable to raise the additional funding the value of our securities, if any, would likely become worthless and we may be forced to abandon our business plan, sell all or substantially all of our assets, cease filing with the Securities and Exchange Commission and/or file for bankruptcy protection.   Even assuming we raise the additional capital we require to continue our business operations, we anticipate incurring net losses for the foreseeable future.




14




THE PETRACCA NOTE IS SECURED BY A SECURITY INTEREST IN SUBSTANTIALLY ALL OF THE ASSETS OF SEBRING.





We provided Mr. Petracca a security interest over substantially all of the assets of Sebring in connection with the Petracca Note.  The Petracca Note in the amount of $1,170,718 bears interest at the rate of 12% per annum, provided that if an event of default occurs under the note, the Petracca Note bears interest at the rate of 20% per annum.  The Company is required to pay Mr. Petracca 1/3 of the outstanding and accrued interest due under the Petracca Note every 120 days (i.e., January 29, 2011, May 29, 2011 and September 26, 2011), with the entire amount of the note payable by or before January 24, 2012.  Additionally, for each 120 days that the Petracca Note is issued and outstanding, the Company agreed to issue Mr. Petracca 1% of the issued and outstanding common stock of the Company (approximately 349,305 shares based on the total number of shares currently outstanding). The Petracca Note is secured by a security interest in substantially all of Sebring’s assets (the “ Petracca Security Agreement”).  Pursuant to the Petracca Security Agreement, we agreed to pay Mr. Petracca 25% of the first $750,000 in net proceeds received by us in connection with any debt or equity financing and 30% of the net proceeds of any amount of debt or equity financing received by us in excess of $750,000, which amount if paid will decrease the amount of the Petracca Note. We were unable to make the payment that was due on January 29, 2011 and are in technical default of this note.





If we default on the repayment of the Petracca Note, Mr. Petracca may enforce his security interest over the assets of Sebring (which currently represent all of the Company’s assets and operations), and we could be forced to curtail or abandon our current business plans and operations. If that were to happen, any investment in the Company could become worthless.





WE MAY BE REQUIRED TO ISSUE ADDITIONAL SHARES OF OUR COMMON STOCK TO OUR CONVERTIBLE NOTE HOLDERS AND OTHER DEBT HOLDERS IN THE FUTURE.





We have $1,295,638 of Convertible Notes are due in March 2011 which are past due as of the date of this report, and provide the holders thereof the right, beginning on the seventh full month following the closing of the Exchange (i.e., May 2011)(the “ Conversion Date”) to receive 1/6th of the principal amount of such Convertible Note (the “ Conversion Amount”) in cash or shares of stock based on the Conversion Price.  The “Conversion Price” is equal to the lesser of a price per share of (a) 75% of the price per share paid by investors in any equity financing(s) which occur after the date of the Convertible Note in which the gross proceeds received by the Company meet or exceed $4,000,000; or (b) $1.72.  Assuming the full conversion of the Convertible Notes at the current Conversion Price of $1.72 per share, such Convertible Notes will convert into an aggregate of 753,278 shares of our common stock.





Additionally, we agreed that for each 120 days that the $1,170,718 Petracca Note is issued and outstanding (i.e., January 29, 2011, May 29, 2011 and September 26, 2011), the Company would issue Mr. Petracca 1% of the issued and outstanding common stock of the Company (approximately 349,305 shares).




Each Convertible Note holder also has certain rights to warrants in connection with the Convertible Notes.  Specifically, in the event such Convertible Note holder converts all or part of the Convertible Note they hold into shares of our common stock, they will receive warrants to purchase a number of shares of common stock equal to the total number of shares received in connection with such conversion.  In the event they choose not to convert the Convertible Notes, they will receive warrants to purchase 25% of the total number of shares of common stock of the Company as they would have received upon full conversion of the Convertible Notes.  Additionally, for each month after an event of default under the Convertible Notes has occurred and is not cured, they will receive warrants to purchase a number of shares equal to the total number of shares they would have received in connection with a full conversion of the Convertible Notes (the “Total Warrants”) (provided that the warrants issued for such damages are capped at three times the amount of Total Warrants).  Additionally, in the event the Company fails to register the shares issuable in connection with the exercise of the warrants by June 1, 2011, the Convertible Note holders will receive additional warrants to purchase such number of shares of the Company’s common stock that equals 2% of the Total Warrants for each full month that the Company fails to register such underlying shares, which damages are capped at warrants in an amount equal to 10% of the Total Warrants.  The warrants described above have an exercise price of 110% of the Conversion Price of the Convertible Notes (currently $1.89), and a five year term.  Finally, the Company provided the Convertible Note holders piggy-back registration rights in connection with the shares of common stock issuable upon exercise of the warrants described above.




15




These actions will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material.  Such dilution could result in the value of the Company’s outstanding shares of common stock declining in value.





WE ARE REQUIRED TO PAY CERTAIN PERCENTAGES OF ANY FUNDS RAISED BY US THROUGH THE SALE OF DEBT OR EQUITY SECURITIES MOVING FORWARD UNDER THE PETRACCA NOTE.





Sebring is obligated under the terms of a Settlement Agreement dated as of October 1, 2010, by and between Sebring and Mr. Petracca (the “ Settlement Agreement”), which settled certain amounts payable by Sebring to Mr. Petracca and required Mr. Petracca to dismiss a lawsuit previously filed against Sebring regarding the payment of such outstanding amounts payable, together with a promissory note in the principal amount of $1,170,718 issued to Mr. Petracca dated as of October 1, 2010, in connection therewith (the “Petracca Note”).  The Petracca Note is secured by a security interest in substantially all of Sebring’s assets (the “Petracca Security Agreement”).  Pursuant to the Petracca Security Agreement, we agreed to pay Mr. Petracca 25% of the first $750,000 in net proceeds received by us in connection with any debt or equity financing and 30% of the net proceeds of any amount of debt or equity financing received by us in excess of $750,000, which amount if paid will decrease the amount of the Petracca Note.  As such, we may be required to pay a significant portion of any funds we raise through debt or equity funding moving forward to Mr. Petracca pursuant to the Security Agreement, and such funds may not be available to us for working capital and/or the repayment of our outstanding obligations.  Consequently, we may be forced to raise additional capital than we need to satisfy our then working capital obligations and/or we may be unable to raise additional funding on favorable terms if at all.  Our failure to raise additional capital and/or the requirement that we pay a significant portion of any funds raised to Mr. Petracca could cause the value of our securities, if any, to decline in value or become worthless.





WE DO NOT OBTAIN ANY RIGHTS UNDER THE LICENSE AGREEMENT, WHICH REPRESENTS SUBSTANTIALLY ALL OF OUR ASSETS, UNTIL WE MAKE THE REQUIRED ADVANCE PAYMENTS THEREUNDER, AND WE ARE FURTHER REQUIRED TO PAY 50% OF ANY FUNDS GENERATED PURSUANT TO THE LICENSE AGREEMENT TO THE LICENSOR AND MEET CERTAIN REQUIRED MINIMUM LEVELS OF YEARLY ROYALTY PAYMENTS IN ORDER TO KEEP THE LICENSE IN PLACE.





Sebring is a party to a license agreement with Engineering Consulting and Solutions GmbH (“ ECS”) that permits the Company, through Sebring, to market eCenter and its eCenter-icm2 products as a reseller in North and South America, subject to the Company making a payment of $150,000 to ECS, which was due and payable by December 1, 2010, and has not been paid to date (the “Advance Payment” and the “License Agreement”).  Assuming the Advance Payment is made (which Advance Payment is treated as an advance against Royalties) and Sebring obtains rights to the License, the Company is required to pay ECS as a royalty, 50% of the amount generated by Sebring as a result of the sale of products under the License Agreement (the “Royalties”).


Under the terms of the License Agreement with ECS, the Company will, through Sebring, assuming payment of the Advance Payment (which was due December 1, 2010, and has not been paid to date), receive a non-exclusive right to market and sell ECS’ eCenter products in North and South America (the  “License”).  The License Agreement remains in effect (assuming the Advance Payment is made by the date provided above) until and unless there is a breach of the agreement by either party, or any patents on the technology licensed pursuant to the License expire, subject to Sebring’s right to terminate the License at any time with one month’s prior notice to ECS.  Furthermore, ECS has the right to terminate the License if the Royalties under the License do not reach a minimum of $150,000 in the first year of the License and $250,000 in the second year of the License; provided that if within eighteen (18) months of the effective date of the License, Sebring (or the Company on its behalf) fails to satisfy its obligations under its outstanding promissory notes, ECS has the right to terminate the License Agreement and therefore the License by providing written notice of such termination to Sebring.    As a result, if we are unable to pay ECS the Advance Payment when due or are unable to meet the required minimum Royalty payments, the License will either not take effect, or ECS could terminate the License, which could cause any investment in the Company to become worthless.




16




OUR LICENSE ONLY PROVIDES US NON-EXCLUSIVE RIGHTS AND AS SUCH, THIRD PARTIES MAY SELL THE SAME PRODUCTS AS US AND COMPETE WITH US ON TERMS OF PRICE, SUPPORT OR OTHER FACTORS.





Pursuant to the terms and conditions of the License with ECS (as described above), assuming we make the required Advance Payment, we will have rights (subject to the terms of the License Agreement) to a non-exclusive License to market and sell ECS’ eCenter software in North and South America.  As such, ECS has the right and may from time to time sell additional licenses to third-parties to market and sell the eCenter software in North and South America.  We may be forced to compete with these third parties on terms of price, product support and other factors.  These third-parties may have greater resources than us, obtain more beneficial license terms and have greater brand recognition and a more established distribution chain. As such, we may be unable to compete with third-parties who have similar license arrangements with ECS and as a result, we may be forced to terminate or abandon the License, which could cause the value of our securities to decline in value or become worthless.





WE HAVE PREVIOUSLY GENERATED NO REVENUES AND HAVE NOT GENERATED A PROFIT SINCE INCEPTION.





We make no assurances that we will be able to generate revenues in the future sufficient to support our operations, if at all, and/or that we will be able to gain clients in the future to build our business to the point that we generate a profit.





IF WE ARE DEEMED TO BE A “SHELL COMPANY” OR FORMER “SHELL COMPANY”, SHAREHOLDERS WHO HOLD UNREGISTERED SHARES OF OUR COMMON STOCK WILL BE SUBJECT TO RESALE RESTRICTIONS PURSUANT TO RULE 144.





Pursuant to Rule 144 of the Securities Act of 1933, as amended (“Rule 144”), a “shell company” is defined as a company that has no or nominal operations; and, either no or nominal assets; assets consisting solely of cash and cash equivalents; or assets consisting of any amount of cash and cash equivalents and nominal other assets.  We do not currently believe that we are a “shell company” or a former “shell company” however, the SEC has provided us correspondence advising us that they believe that we were deemed to be a “shell company” prior to the Exchange and we have agreed to file Form 10 information (as described below) in this filing.  As such we may be deemed to be a “shell company” or a former “shell company”. If we are deemed to be a “shell company” or former “shell company” pursuant to Rule 144, sales of our securities pursuant to Rule 144 will not be able to be made until 1) we have ceased to be a “shell company”; 2) we are subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and have filed all of our required periodic reports for the prior one year period; and a period of at least twelve months has elapsed from the date “Form 10 information” has been filed with the Commission reflecting the Company’s status as a non-“ shell company.”  Because none of our securities will be able to be sold pursuant to Rule 144, until at least a year after we cease to be a “ shell company” (as described in greater detail above), any securities we issue to consultants, employees, in consideration for services rendered or for any other purpose will have no liquidity in the event we are deemed to be a “shell company” until and unless such securities are registered with the Commission and/or until a year after we cease to be a “shell company” and have complied with the other requirements of Rule 144, as described above.  As a result, it may be harder for us to fund our operations and pay our consultants with our securities instead of cash.  Furthermore, it will be harder for us to raise funding through the sale of debt or equity securities unless we agree to register such securities with the Commission, which could cause us to expend additional resources in the future.  If we are deemed a “shell company,” or former “shell company” it could prevent us from raising additional funds, engaging consultants using our securities to pay for any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.


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THE SUCCESS OF THE COMPANY DEPENDS HEAVILY ON LEIF ANDERSEN AND HIS INDUSTRY KNOWLEDGE, RELATIONSHIPS, AND EXPERTISE.





The success of the Company will depend on the abilities of Leif Andersen, Chief Executive Officer, to manage our business.   Mr. Andersen is employed by Sebring (which agreement was assumed by us in connection with the Exchange) pursuant to an Employment Agreement, described in greater detail below, provided that either we or Mr. Andersen can terminate the agreement at any time, subject to the terms of such Employment Agreement.  The loss of Mr. Andersen will have a material adverse effect on the business, results of operations and financial condition of the Company.  In addition, the loss of Mr. Andersen may force the Company to seek a replacement who may have less experience, fewer contacts, or less understanding of the business.  Further, we can make no assurances that we will be able to find a suitable replacement for Mr. Andersen, which could force the Company to curtail its operations and/or cause any investment in the Company to become worthless.





OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO FORECAST OUR FUTURE RESULTS, MAKING ANY INVESTMENT IN US HIGHLY SPECULATIVE.





We have a limited operating history, and our historical financial and operating information is of limited value in predicting our future operating results.  We may not accurately forecast customer behavior and recognize or respond to emerging trends, changing preferences or competitive factors facing us, and, therefore, we may fail to make accurate financial forecasts.  Our current and future expense levels are based largely on our investment plans and estimates of future revenue.  As a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfall, which could then force us to curtail or cease our business operations.





OUR LOSSES RAISE DOUBT AS TO WHETHER WE CAN CONTINUE AS A GOING CONCERN.





We had an accumulated deficit of $4,132,990 and negative working capital of $4,116,133 as of December 31, 2010, and a net loss and net cash used in operations of $1,215,991 and $598,224, respectively for the year ended December 31, 2010.  These factors among others indicate that we may be unable to continue as a going concern, particularly in the event that we cannot generate revenues, obtain additional financing and/or attain profitable operations. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty and if we cannot continue as a going concern, your investment in us could become devalued or worthless.





Our independent registered public accounting firm has added an emphasis paragraph to its report on our consolidated financial statements for the years ended December 31, 2010 and 2009 regarding our ability to continue as a going concern. Key to this determination is our recurring net losses, an accumulated deficit, and a working capital deficiency. The Company’s consolidated financial statements are prepared using principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  However, the Company does not have significant cash or other material liquid assets, nor does it have an established source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern.  The Company may, in the future, experience significant fluctuations in its results of operations.





DEPRESSED GENERAL ECONOMIC CONDITIONS OR ADVERSE CHANGES IN GENERAL ECONOMIC CONDITIONS COULD ADVERSELY AFFECT OUR OPERATING RESULTS.IF ECONOMIC OR OTHER FACTORS MAY NEGATIVELY AFFECT OUR FUTURE POTENTIAL CUSTOMERS, AND SUCH POTENTIAL CUSTOMERS MAY BECOME UNWILLING OR UNABLE TO PURCHASE OUR SERVICES, WHICH COULD IMPAIR OUR ABILITY TO OPERATE PROFITABLY.





Our results of operations are subject to the risks arising from adverse changes in domestic and global economic conditions. Uncertainty about future economic conditions makes it difficult for us to forecast operating results and to make decisions about future investments. For example, the direction and relative strength of the global economy has recently been increasingly uncertain due to softness in the residential real estate and mortgage markets, volatility in fuel and other energy costs, difficulties in the financial services sector and credit markets, continuing geopolitical uncertainties and other macroeconomic factors affecting spending behavior. If economic growth in North and South America continues to be slowed, or if other adverse general economic changes occur or continue, many potential customers for the Company’s planned products may delay or reduce technology purchases. This could result in reductions in sales of our products (if any), longer sales cycles, and increased price competition.


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OUR BUSINESS MAY BE NEGATIVELY IMPACTED AS A RESULT OF CHANGES IN THE ECONOMY AND CORPORATE AND INSTITUTIONAL SPENDING.





Our business will depend on the general economic environment and levels of corporate and institutional spending. Purchases of software may decline in periods of recession or uncertainty regarding future economic prospects. During periods of recession or economic uncertainty, we may not be able to maintain or increase our sales to customers (assuming we have sales to customers to begin with), maintain sales levels, if any, establish operations on a profitable basis or create earnings from operations as a percentage of net sales. As a result, our operating results, if any, may be adversely and materially affected by downward trends in the economy or the occurrence of events that adversely affect the economy in general. Our operating results and margins, if any, will be adversely impacted if we do not grow as anticipated.





OUR OPERATING RESULTS WILL BE DIFFICULT TO PREDICT AND FLUCTUATIONS IN OUR PERFORMANCE MAY RESULT IN VOLATILITY IN THE MARKET PRICE OF OUR COMMON STOCK.





Due to our limited operating history, among other things, our future operating results, if any, will be difficult to predict. We could experience fluctuations in our future operating and financial results due to a number of factors, such as:





•
our ability to attract new customers, and satisfy our customers’ requirements;





•
technical difficulties or interruptions in our services;





•
general economic conditions; and





•
the availability of additional investment in our services or operations.





These factors and others all tend to make the timing and amount of our revenue unpredictable and may lead to greater period-to-period fluctuations in revenue, if we are able to generate any revenue at all moving forward, of which we can provide no assurances.





IF OUR SECURITY MEASURES ARE BREACHED, OUR PRODUCTS MAY BE PERCEIVED AS NOT BEING SECURE, AND OUR BUSINESS AND REPUTATION COULD SUFFER.





Our planned products will involve the storage and transmission of our customers’ proprietary information. Although we plan to employ technical and internal control procedures to assure the security of our customers’ data, we cannot guarantee that these measures will be sufficient for this purpose. If our security measures are breached as a result of third-party action, employee error or otherwise, and as a result our customers’ data becomes available to unauthorized parties, we could incur liability and our reputation would be damaged, which could lead to the loss of then current and potential customers. If we experience any breaches of our network security or sabotage, we might be required to expend significant capital and other resources to remedy, protect against or alleviate these and related problems, and we may not be able to remedy these problems in a timely manner, or at all. Because techniques used by outsiders to obtain unauthorized network access or to sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.





IF WE CANNOT ADAPT TO TECHNOLOGICAL ADVANCES, OUR SERVICES AND PRODUCTS MAY BECOME OBSOLETE AND OUR ABILITY TO COMPETE WOULD BE IMPAIRED.


Changes in our industry occur very rapidly. As a result, our services and products could become obsolete. The introduction of competing products employing new technologies and the evolution of new industry standards could render our existing products or services obsolete and unmarketable. To be successful, our services and products must keep pace with technological developments and evolving industry standards, address the ever-changing and increasingly sophisticated needs of our customers, and achieve market acceptance. If we are unable to develop new services, or enhancements to our future services on a timely and cost-effective basis, or if new services or products or enhancements do not achieve market acceptance, our business would be seriously harmed.





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DEFECTS OR ERRORS IN THE SOFTWARE WE PLAN TO LICENSE COULD ADVERSELY AFFECT OUR REPUTATION, RESULT IN SIGNIFICANT COSTS TO US AND IMPAIR OUR ABILITY TO SELL OUR SOFTWARE.





If the software we plan to license is determined to contain defects or errors, our reputation could be materially adversely affected, which could result in significant costs to us and impair our ability to sell our software in the future. The costs we would incur to correct software defects or errors may be substantial and would materially adversely affect our operating results.





Any defects in our applications or the software we plan to license, or defects that cause other applications to malfunction or fail, could result in:





● lost or delayed market acceptance and sales of our licensed software;





● loss of clients;





● product liability suits against us;





● diversion of development resources;





● injury to our reputation; and





● increased maintenance and warranty costs.





OUR MARKET IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE AND IF WE AND OUR LICENSOR FAIL TO CONTINUALLY ENHANCE THE PRODUCTS WE SELL IN THE FUTURE, IN A TIMELY MANNER, OUR REVENUE AND BUSINESS WOULD BE HARMED.





We and the licensor of the products we plan to sell must continue to enhance and improve the performance, functionality and reliability of such products in a timely manner. The software industry is characterized by rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies, and the emergence of new industry standards and practices that could render our products and services obsolete. The failure to continually enhance our products and services in a timely manner would adversely impact our business and prospects. Our success will depend, in part, on our and our licensor’s ability to develop leading technologies to enhance existing products and services, to develop new products and services that address the increasingly sophisticated and varied needs of our future customers, and to respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. If we or our licensor are unable to adapt products and services to changing market conditions, customer requirements or emerging industry standards, we may be forced to curtail or abandon our business operations.





SIGNIFICANT UNAUTHORIZED USE OF OUR LICENSED SOFTWARE WOULD RESULT IN MATERIAL LOSS OF POTENTIAL REVENUES AND OUR PURSUIT OF PROTECTION FOR OUR INTELLECTUAL PROPERTY RIGHTS COULD RESULT IN SUBSTANTIAL COSTS TO US.





Our licensed eCenter software is planned to be licensed to customers under license agreements, which license may include provisions prohibiting the unauthorized use, copying and transfer of the licensed program. Policing unauthorized use of our products will likely be difficult and, while we are unable to determine the extent to which piracy of our software products exists, any significant piracy of our products could materially and adversely affect our business, results of operations and financial condition. In addition, the laws of some foreign countries do not protect the proprietary rights to as great an extent as do the laws of the United States and our means of protecting our proprietary rights may not be adequate.


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WE MAY FACE PRODUCT LIABILITY CLAIMS FROM OUR FUTURE CUSTOMERS WHICH COULD LEAD TO ADDITIONAL COSTS AND LOSSES TO THE COMPANY.





Our license agreements with our future customers will contain provisions designed to limit our exposure to potential product liability claims. It is possible, however, that the limitation of liability provisions contained in the license agreements may not be effective under the laws of some jurisdictions. A successful product liability claim brought against us could result in payment by us of substantial damages, which would harm our business, operating results and financial condition and cause the price of our common stock to fall.





WE AND OUR LICENSOR MAY NOT BE ABLE TO RESPOND TO TECHNOLOGICAL CHANGES WITH NEW SOFTWARE APPLICATIONS, WHICH COULD MATERIALLY ADVERSELY AFFECT OUR SALES AND PROFITABILITY.





The markets for our future software applications are characterized by rapid technological changes, changing customer needs, frequent introduction of new software applications and evolving industry standards. The introduction of software applications that embody new technologies or the emergence of new industry standards could make our software applications obsolete or otherwise unmarketable. As a result, we may not be able to accurately predict the lifecycle of our licensed software applications, which may become obsolete before we receive any revenue or the amount of revenue that we anticipate receiving from them. If any of the foregoing events were to occur, our ability to generate revenues would be adversely affected.





To be successful, we and our licensor need to anticipate, develop and introduce new software applications on a timely and cost-effective basis that keep pace with technological developments and emerging industry standards and that address the increasingly sophisticated needs of our future customers and their budgets. We and our licensor may fail to develop or sell software applications that respond to technological changes or evolving industry standards, experience difficulties that could delay or prevent the successful development, introduction or sale of these applications or fail to develop applications that adequately meet the requirements of the marketplace or achieve market acceptance. Our or our licensor’s failure to develop and market such applications and services on a timely basis, or at all, could materially adversely affect our sales and profitability.





OUR FAILURE TO OFFER HIGH QUALITY CUSTOMER SUPPORT SERVICES COULD HARM OUR REPUTATION AND COULD MATERIALLY ADVERSELY AFFECT OUR SALES OF SOFTWARE APPLICATIONS AND RESULTS OF OPERATIONS.





Our future customers, if any, will depend on us to resolve implementation, technical or other issues relating to our software. A high level of service is critical for the successful marketing and sale of our software. If we do not succeed in helping our customers quickly resolve post-deployment issues, our reputation could be harmed and our ability to make new sales or increase sales to customers could be damaged.





OUR BUSINESS AND THE SUCCESS OF OUR PRODUCTS COULD BE HARMED IF WE ARE UNABLE TO ESTABLISH AND MAINTAIN A BRAND IMAGE.





We believe that establishing a brand is critical to achieving acceptance of our software products and to establishing key strategic relationships. As a new company with a new brand, we believe that we have little to no brand recognition with the public. We may experience difficulty in establishing a brand name that is well-known and regarded, and any brand image that we may be able to create may be quickly impaired. The importance of brand recognition will increase when and if our competitors create products that are similar to our products. Even if we are able to establish a brand image and react appropriately to changes in customer preferences, customers may consider our brand image to be less prestigious or trustworthy than those of our larger competitors. Our results of operations may be affected in the future should our products even be successfully launched.





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WE MAY FAIL IN INTRODUCING AND PROMOTING OUR PRODUCTS TO THE SOFTWARE MARKET, WHICH WILL HAVE AN ADVERSE EFFECT ON OUR ABILITY TO GENERATE REVENUES.





Demand for and market acceptance of new products is inherently uncertain. Our revenue will come from the sale of our licensed products, and our ability to sell our products will depend on various factors, including the eventual strength, if any, of our brand name, competitive conditions and our access to necessary capital. If we fail to introduce and promote our products, we may not be able to generate any significant revenues. In addition, as part of our growth strategy, we intend to expand our product offerings to introduce more products in other categories. This strategy may however prove unsuccessful and our association with failed products could impair our brand image. Introducing and achieving market acceptance for these products will require, among other things:





● the establishment of our brand;





● the development and performance to our planned product introductions;





● the establishment of key relationships with customers for our software products; and





● substantial marketing efforts and expenditures to create and sustain customer demand.





WE WILL FACE INTENSE COMPETITION, INCLUDING COMPETITION FROM COMPANIES WITH SIGNIFICANTLY GREATER RESOURCES THAN OURS, AND IF WE ARE UNABLE TO COMPETE EFFECTIVELY WITH THESE COMPANIES, OUR BUSINESS COULD BE HARMED.





We will face intense competition in the software industry from other established companies. Almost all of our competitors have significantly greater financial, technological, engineering, manufacturing, marketing and distribution resources than we do. Their greater capabilities in these areas will enable them to better withstand periodic downturns in the software industry, compete more effectively on the basis of price and production and more quickly develop new products. In addition, new companies may enter the markets in which we expect to compete, further increasing competition in the software industry.





We believe that our ability to compete successfully will depend on a number of factors, including the functionality of our products once marketed and the strength of our brand, once established, as well as many factors beyond our control. We may not be able to compete successfully in the future, and increased competition may result in price reductions, reduced profit margins, loss of market share and an inability to generate cash flows that are sufficient to maintain or expand our development and marketing of new products.





THE DISRUPTION, EXPENSE AND POTENTIAL LIABILITY ASSOCIATED WITH UNANTICIPATED FUTURE LITIGATION AGAINST US COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.





We may be subject to various legal proceedings and threatened legal proceedings from time to time as part of our ordinary business. We are not currently a party to any legal proceedings. However, any unanticipated litigation in the future, regardless of merits, could significantly divert management’s attention from our operations and result in substantial legal fees to us. Further, there can be no assurance that any actions that have been or will be brought against us will be resolved in our favor or, if significant monetary judgments are rendered against us, that we will have the ability to pay such judgments. Such disruptions, legal fees and any losses resulting from these claims could have a material adverse effect on our business, results of operations and financial condition.





PROTECTION OF OUR INTELLECTUAL PROPERTY IS LIMITED, AND ANY MISUSE OF OUR INTELLECTUAL PROPERTY BY OTHERS COULD MATERIALLY ADVERSELY AFFECT OUR SALES AND RESULTS OF OPERATIONS.





Proprietary technology in our licensed software is important to our success. To protect our proprietary rights, we plan to rely on a combination of patents, copyrights, trademarks, trade secrets, confidentiality procedures and contractual provisions, funding permitting. We do not own any issued patents and we have not emphasized patents as a source of significant competitive advantage. We have sought to protect our proprietary technology under laws affording protection for trade secrets, copyright and trademark protection of our software, products and developments where available and appropriate. In the event we are issued patents, our issued patents may not provide us with any competitive advantages or may be challenged by third parties, and the patents of others may seriously impede our ability to conduct our business. Further, any patents issued to us may not be timely or broad enough to protect our proprietary rights.


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Protection of trade secrets and other intellectual property rights in the markets in which we operate and compete is highly uncertain and may involve complex legal and scientific questions. The laws of countries in which we operate may afford little or no protection to our trade secrets and other intellectual property rights. Policing unauthorized use of our trade secret technologies and proving misappropriation of our technologies is particularly difficult, and we expect software piracy to continue to be a persistent problem. Piracy of our products represents a loss of revenue to us. Furthermore, any changes in, or unexpected interpretations of, the trade secret and other intellectual property laws in any country in which we operate may adversely affect our ability to enforce our trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our confidential information and trade secret protection. If we are unable to protect our proprietary rights or if third-parties independently develop or gain access to our or similar technologies, our competitive position and revenue could suffer.





WE MAY INCUR SIGNIFICANT LITIGATION EXPENSES PROTECTING OUR INTELLECTUAL PROPERTY OR DEFENDING OUR USE OF INTELLECTUAL PROPERTY, WHICH MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR CASH FLOW AND RESULTS OF OPERATIONS, IF ANY.





If our efforts to protect our intellectual property rights are inadequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products as a violation of the intellectual property rights of others, we could incur substantial significant legal expenses in resolving such disputes.





OUR COMPETITORS MAY DEVELOP SIMILAR, NON-INFRINGING PRODUCTS THAT ADVERSELY AFFECT OUR ABILITY TO GENERATE REVENUES.





Our competitors may be able to produce a software product that is similar to our licensed product without infringing on our or our licensor’s intellectual property rights. Since we have yet to establish any significant brand recognition for our product, we could lose a substantial amount of business due to competitors developing products similar to our software products. As a result, our future growth and ability to generate revenues from the sale of our product could suffer a material adverse effect.





CLAIMS THAT WE MISUSE THE INTELLECTUAL PROPERTY OF OTHERS COULD SUBJECT US TO SIGNIFICANT LIABILITY AND DISRUPT OUR BUSINESS, WHICH COULD MATERIALLY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION.





Because of the nature of our business, we may become subject to material claims of infringement by competitors and other third-parties with respect to current or future software applications, trademarks or other proprietary rights. Our competitors, some of which may have substantially greater resources than us and have made significant investments in competing technologies or products, may have, or seek to apply for and obtain, patents that will prevent, limit or interfere with our ability to make, use and sell our current and future products, and we and our licensor may not be successful in defending allegations of infringement of these patents. Further, we may not be aware of all of the patents and other intellectual property rights owned by third-parties that may be potentially adverse to our interests. We or our licensor may need to resort to litigation to enforce our proprietary rights or to determine the scope and validity of a third party’s patents or other proprietary rights, including whether any of our products or processes infringe the patents or other proprietary rights of third-parties. The outcome of any such proceedings is uncertain and, if unfavorable, could significantly harm our business. If we or our licensor does not prevail in this type of litigation, we may be required to:





● pay damages, including actual monetary damages, royalties, lost profits or other damages and third-party’s attorneys’ fees, which may be substantial;





● expend significant time and resources to modify or redesign the affected products or procedures so that they do not infringe a third-party’s patents or other intellectual property rights; further, there can be no assurance that we will be successful in modifying or redesigning the affected products or procedures;




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● obtain a license in order to continue marketing the affected products or processes, and pay license fees and royalties; if we are able to obtain such a license, it may be non-exclusive, giving our competitors access to the same intellectual property, or the patent owner may require that we grant a cross-license to part of our proprietary technologies; or





● stop the development, manufacture, use, marketing or sale of the affected products through a court-ordered sanction called an injunction, if a license is not available on acceptable terms, or not available at all, or attempts to redesign the affected products are unsuccessful.





Any of these events could adversely affect our business strategy and the value of our business. In addition, the defense and prosecution of intellectual property suits, interferences, oppositions and related legal and administrative proceedings in the United States and elsewhere, even if resolved in our favor, could be expensive, time consuming, generate negative publicity and could divert financial and managerial resources.





We expect that software developers will increasingly be subject to infringement claims as the number of software applications and competitors in our industry segment grows and the functionality of software applications in different industry segments overlaps. Thus, we could be subject to additional patent infringement claims in the future. There can be no assurance that the claims that may arise in the future can be amicably disposed of, and it is possible that litigation could ensue.





Intellectual property litigation can be complex, costly and protracted. As a result, any intellectual property litigation to which we are subject could disrupt our business operations, require us to incur substantial costs and subject us to significant liabilities, each of which could severely harm our business.





Plaintiffs in intellectual property cases often seek injunctive relief. Any intellectual property litigation commenced against us could force us to take actions that could be harmful to our business, including the following:





● stop selling products or using the technology that contains the allegedly infringing intellectual property;





● stop selling products or using the technology that contains the allegedly infringing intellectual property;





● attempt to obtain a license to use the relevant intellectual property, which may not be available on reasonable terms or at all; and





● attempt to redesign the products that allegedly infringed upon the intellectual property.





If we or our licensor is forced to take any of the foregoing actions, our business, financial position and operating results could be harmed. We and our licensor may not be able to develop, license or acquire non-infringing technology under reasonable terms, if at all. These developments would result in an inability to compete for customers and would adversely affect our ability to generate revenue. The measure of damages in intellectual property litigation can be complex, and is often subjective or uncertain. If we were to be found liable for the infringement of a third party’s proprietary rights, the amount of damages we might have to pay could be substantial and would be difficult to predict.





ANY GROWTH COULD STRAIN OUR RESOURCES AND OUR BUSINESS MAY SUFFER IF WE FAIL TO IMPLEMENT APPROPRIATE CONTROLS AND PROCEDURES TO MANAGE OUR GROWTH.





Growth in our business may place a strain on our management, administrative, and sales and marketing infrastructure. If we fail to successfully manage our growth, our business could be disrupted, and our ability to operate our business profitably could suffer. Growth in our employee base may be required to expand our customer base and to continue to develop and enhance our services. To manage growth of our operations and personnel, we would need to enhance our operational, financial, and management controls and our reporting systems and procedures. This would require additional personnel and capital investments, which would increase our cost base. The growth in our fixed cost base may make it more difficult for us to reduce expenses in the short term to offset any shortfalls in revenue.




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OUR ARTICLES OF INCORPORATION, AS AMENDED, AND BYLAWS LIMIT THE LIABILITY OF, AND PROVIDE INDEMNIFICATION FOR, OUR OFFICERS AND DIRECTORS.





The Nevada Revised Statutes and our Articles of Incorporation, as amended, allow us to indemnify our officers and Directors from certain liabilities and our Bylaws state that we shall indemnify every (i) present or former Director, advisory Director or officer of us, (ii) any person who while serving in any of the capacities referred to in clause (i) served at our request as a Director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and (iii) any person nominated or designated by (or pursuant to authority granted by) the Board of Directors or any committee thereof to serve in any of the capacities referred to in clauses (i) or (ii) (each an “Indemnitee”).





Our Bylaws provide that we shall indemnify an Indemnitee against all judgments, penalties (including excise and similar taxes), fines, amounts paid in settlement and reasonable expenses actually incurred by the Indemnitee in connection with any proceeding in which he was, is or is threatened to be named as a defendant or respondent, or in which he was or is a witness without being named a defendant or respondent, by reason, in whole or in part, of his serving or having served, or having been nominated or designated to serve, if it is determined that the Indemnitee (a) conducted himself in good faith, (b) reasonably believed, in the case of conduct in his Official Capacity, that his conduct was in our best interests and, in all other cases, that his conduct was at least not opposed to our best interests, and (c) in the case of any criminal proceeding, had no reasonable cause to believe that his conduct was unlawful; provided, however, that in the event that an Indemnitee is found liable to us or is found liable on the basis that personal benefit was improperly received by the Indemnitee, the indemnification (i) is limited to reasonable expenses actually incurred by the Indemnitee in connection with the Proceeding and (ii) shall not be made in respect of any Proceeding in which the Indemnitee shall have been found liable for willful or intentional misconduct in the performance of his duty to us.





Except as provided above, the Bylaws provide that no indemnification shall be made in respect to any proceeding in which such Indemnitee has been (a) found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in the Indemnitee's official capacity, or (b) found liable to us.  The termination of any proceeding by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent, is not of itself determinative that the Indemnitee did not meet the requirements set forth in clauses (a) or (b) above.  An Indemnitee shall be deemed to have been found liable in respect of any claim, issue or matter only after the Indemnitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom.  Reasonable expenses shall, include, without limitation, all court costs and all fees and disbursements of attorneys’ fees for the Indemnitee.  The indemnification provided shall be applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven.





Neither our Bylaws nor our Articles of Incorporation include any specific indemnification provisions for our officer or Director against liability under the Securities Act of 1933, as amended. Additionally, insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Act") may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.





WE MAY BE UNABLE TO SCALE OUR OPERATIONS SUCCESSFULLY AND FAIL TO ATTAIN OUR PLANNED GROWTH.





Our plan is to grow our business rapidly. Our growth, if it occurs as planned, will place significant demands on our management, as well as our financial, administrative and other resources. We will need to hire highly skilled personnel to effectuate our planned growth. There is no guarantee that we will be able to locate and retain qualified personnel for such positions, which would likely hinder our ability to manage operations. Furthermore, we cannot guarantee that any of the systems, procedures and controls we put in place will be adequate to support the commercialization of our products or other operations. Our operating results will depend substantially on the ability of our officers and key employees to manage changing business conditions and to implement and improve our financial, administrative and other resources. If we are unable to respond to and manage changing business conditions, or the scale of our products, services and operations, then the quality of our services, our ability to retain key personnel and our business could be harmed.




25




WE HAVE NEVER ISSUED CASH DIVIDENDS IN CONNECTION WITH OUR COMMON STOCK AND HAVE NO PLANS TO ISSUE DIVIDENDS IN THE FUTURE.





We have paid no cash dividends on our common stock to date and it is not anticipated that any cash dividends will be paid to holders of our common stock in the foreseeable future.  While our dividend policy will be based on the operating results and capital needs of our business, it is anticipated that any earnings will be retained to finance our future expansion.





INVESTORS MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF OUR COMMON STOCK DUE TO FEDERAL REGULATIONS OF PENNY STOCKS.





Our common stock will be subject to the requirements of Rule 15(g)9, promulgated under the Securities Exchange Act as long as the price of our common stock is below $5.00 per share. Under such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements, including a requirement that they make an individualized written suitability determination for the purchaser and receive the purchaser's consent prior to the transaction. The Securities Enforcement Remedies and Penny Stock Reform Act of 1990, also requires additional disclosure in connection with any trades involving a stock defined as a penny stock. Generally, the Commission defines a penny stock as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share. The required penny stock disclosures include the delivery, prior to any transaction, of a disclosure schedule explaining the penny stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and the ability of purchasers to sell their securities in the secondary market.





In addition, various state securities laws impose restrictions on transferring " penny stocks" and as a result, investors in the common stock may have their ability to sell their shares of the common stock impaired.





SHAREHOLDERS MAY BE DILUTED SIGNIFICANTLY THROUGH OUR EFFORTS TO OBTAIN FINANCING AND SATISFY OBLIGATIONS THROUGH THE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK.





We have no committed source of financing. Wherever possible, our Board of Directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. Our Board of Directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued shares of common stock. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting existing management.





STATE SECURITIES LAWS MAY LIMIT SECONDARY TRADING, WHICH MAY RESTRICT THE STATES IN WHICH AND CONDITIONS UNDER WHICH SHAREHOLDERS CAN SELL OUR SHARES.





Secondary trading in our common stock may not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted.





26


BECAUSE WE ARE NOT SUBJECT TO COMPLIANCE WITH RULES REQUIRING THE ADOPTION OF CERTAIN CORPORATE GOVERNANCE MEASURES, OUR STOCKHOLDERS HAVE LIMITED PROTECTIONS AGAINST INTERESTED DIRECTOR TRANSACTIONS, CONFLICTS OF INTEREST AND SIMILAR MATTERS.





The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.





Because our Directors are not independent directors, we do not currently have independent audit or compensation committees. As a result, our Directors have the ability to, among other things, determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and any potential investors may be reluctant to provide us with funds necessary to expand our operations.





We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, Directors and members of board committees required to provide for our effective management as a result of the Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of Directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.





WE CURRENTLY HAVE A LIMITED PUBLIC MARKET FOR OUR SECURITIES WHICH MAY BE VOLATILE AND ILLIQUID.





In April 2009, we obtained quotation for our common stock on the Over-The-Counter Bulletin Board (“OTCBB”) under the symbol SMXI.OB.  However, there is currently a limited public market for our common stock, and we can make no assurances that there will be demand for our common stock in the future. If there is a market for our common stock in the future, we anticipate that such market would continue to be illiquid and would be subject to wide fluctuations in response to several factors, including, but not limited to:





(1)
actual or anticipated variations in our results of operations;


(2)
our ability or inability to generate new revenues;


(3)
the number of shares in our public float;


(4)
increased competition; and


(5)
conditions and trends in the market for our services.





Furthermore, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price and liquidity of our common stock.





NEVADA LAW AND OUR ARTICLES OF INCORPORATION AUTHORIZE US TO ISSUE SHARES OF COMMON STOCK, WHICH SHARES MAY CAUSE SUBSTANTIAL DILUTION TO OUR SHAREHOLDERS.





Pursuant to our Articles of Incorporation, we have 1,100,000,000 shares of common stock authorized. As of December 31, 2010, we had 34,980,515 shares of common stock issued (or to be issued) and outstanding (which number includes the 18,729,098 Exchange Shares, which have not been physically issued to date and another 50,000 shares issuable for legal services). As a result, our Board of Directors has the ability to issue a large number of additional shares of common stock without shareholder approval, which if issued would cause substantial dilution to our then shareholders.  As a result, the issuance of shares of common stock may cause the value of our securities to decrease and/or become worthless.




27





ITEM 2. PROPERTIES





As a result of the Exchange, we assumed Sebring’s obligations under a lease encompassing approximately 1,500 square feet of office space at 1400 Cattlemen Rd., Suite D, Sarasota, Florida 34232, which continues on a month to month basis at approximately $2,140 per month. This facility serves as our corporate headquarters.  In connection with the continuation of the lease, we agreed to pay our landlord $26,846.30 for back due rent.





ITEM 3. LEGAL PROCEEDINGS





From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations, except as discussed below; however, we may become involved in material legal proceedings in the future.





Management has been notified of a legal claim against the Company whereby an investor relations consultant claims he is owed stock compensation under a March 9, 2010 consulting agreement.  The agreement describes common stock payments of 400,000 shares to be issued on October 25, 2010 and 100,000 shares each month for the following 11 months for a total of 1,500,000 shares.  Management asserts that no services were performed and no share or other compensation is due to the consultant except for $25,000 the consultant loaned to the Company which is recorded as a loan payable in the accompanying December 31, 2010 consolidated balance sheet.  Management believes that they will prevail in this matter and that any potential negative outcome will not have a material adverse impact on the Company’s financial position.  No liability has been accrued for this claim as of December 31, 2010.





ITEM 4. (REMOVED AND RESERVED)





PART II





ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES





On April 29, 2009, we obtained quotation for our common stock on the Over-The-Counter Bulletin Board (“OTCBB”) under the symbol SMXI.OB; however, a limited number of shares of our common stock have traded to date and there is currently a limited public market for our common stock.  The quotations provided are for the over the counter market, which reflect interdealer prices without retail mark-up, mark-down or commissions, and may not represent actual transactions.  The values listed below retroactively reflect our Forward Splits as described above.  There was no trading in the Company’s common stock prior to the quarter ended November 30, 2009.





Quarter Ended

High


LowFebruary 28, 2011

$
1.25


$
0.80November 30, 2010

$
1.25


$
0.12August 31, 2010

$
2.00


$
0.12May 31, 2010

$
0.80


$
0.80February 28, 2010

$
0.80


$
0.80November 30, 2009

$
0.73


$
0.70





The Company's common stock is considered a "penny stock" as defined in the Commission's rules promulgated under the Exchange Act. The Commission's rules regarding penny stocks impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally persons with net worth in excess of $1,000,000 or an annual income exceeding $200,000 or $300,000 jointly with their spouse). For transactions covered by the rules, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Thus the Rules affect the ability of broker-dealers to sell the Company's shares should they wish to do so because of the adverse effect that the Rules have upon liquidity of penny stocks. Unless the transaction is exempt under the Rules, under the Securities Enforcement Remedies and Penny Stock Reform Act of 1990, broker-dealers effecting customer transactions in penny stocks are required to provide their customers with (i) a risk disclosure document; (ii) disclosure of current bid and ask quotations if any; (iii) disclosure of the compensation of the broker-dealer and its sales personnel in the transaction; and (iv) monthly account statements showing the market value of each penny stock held in the customer's account. As a result of the penny stock rules, the market liquidity for the Company's securities may be severely adversely affected by limiting the ability of broker-dealers to sell the Company's securities and the ability of purchasers of the securities to resell them.




28





DESCRIPTION OF CAPITAL STOCK





We have authorized capital stock consisting of 1,100,000,000 shares of common stock, $0.0001 par value per share (“Common Stock”) and 10,000,000 shares of preferred stock, $0.0001 par value per share (“Preferred Stock”).





Common Stock





The holders of outstanding shares of Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine.  Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders.  There is no cumulative voting of the election of Directors then standing for election.  The Common Stock is not entitled to pre-emptive rights and is not subject to conversion or redemption.  Upon liquidation, dissolution or winding up of our company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors.  Each outstanding share of Common Stock is duly and validly issued, fully paid and non-assessable.





As of April 13, 2011, we had 34,980,515 shares of common stock outstanding held by approximately 31 active shareholders of record (which number includes the 18,729,098 Exchange Shares issuable to the three Exchange shareholders described above and 50,000 shares for legal services,, which Shares have not been physically issued to date).





Preferred Stock





Shares of Preferred Stock may be issued from time to time in one or more series, each of which shall have such distinctive designation or title as shall be determined by our Board of Directors (“Board of Directors”) prior to the issuance of any shares thereof.  Preferred Stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such class or series of Preferred Stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof.  The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all the then outstanding shares of our capital stock entitled to vote generally in the election of the Directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.





As of April 13, 2011, we had no shares of preferred stock issued or outstanding..





Options and Warrants





In October 2008, we issued an aggregate of 1,571,427 units to Doug Cooper, each unit consisting of one share of our Common Stock and one warrant to purchase one share of our Common Stock at an exercise price of $0.0636 per share for cash (the “Cooper Warrants”).   The warrants expire in October 2011.





29


In connection with Mr. Miller agreeing to the terms and conditions of the Consolidated Note (described above), the Company agreed to grant Mr. Miller warrants to purchase 6,050,000 shares of the Company’s common stock at an exercise price of $0.0455 per share, which warrants vested immediately and were to expire on February 17, 2012 (the “Miller Warrants”).





In connection with Mr. Bova agreeing to the terms and conditions of the Bova Note (described above), the Company agreed to grant Mr. Bova warrants to purchase 3,300,000 shares of the Company’s common stock at an exercise price of $0.0455 per share, which warrants vested immediately and were to expire on February 17, 2012 (the “Bova Warrants”).





In connection with the Spin-Off, the Cooper Warrants, Miller Warrants and Bova Warrants were assigned to and assumed by Sumotext Corporation (a separate entity from the Company).





As such, as of the date of this filing, the Company has no outstanding warrants or convertible securities.





RECENT SALES OF EQUITY SECURITIES





On September 17, 2010, the Company consummated a Securities Purchase Agreement (the “Purchase Agreement”) with Timothy Miller, Jim Stevenson, Doug Cooper, Joe Miller, the brother of Timothy Miller, and Eric Woods, all then greater than 5% shareholders of the Company (the “Selling Shareholders”) and Sebring Software LLC, a Florida limited liability company (“Sebring”), pursuant to which the Selling Shareholders sold 69,376,450 shares (the “Shares”) of the Company’s common stock to Sebring in exchange for $286,147 or $0.004125 per share (the “Purchase Price”).  The Shares represented approximately 81.1% of the issued and outstanding shares of the Company.  Mr. Miller is one of the Selling Shareholders and, at the time the Purchase Agreement was executed, was the President and sole Director of the Company. Additionally, certain other shareholders of the Company, including Eric Woods, Jim Stevenson and Sharon Miller, Timothy Miller’s Mother, who were then greater than 5% shareholders of the Company also agreed to sell an aggregate of 15,475,416 shares of the Company’s common stock to unaffiliated third parties in private transactions in consideration for an aggregate of $63,830 or $0.004125 per share.





On October 25, 2010, pursuant to the terms of an Exchange and Reorganization Agreement between the Company, Sebring, Thor Nor, LLC, which is controlled by Leif Andersen (“Mr. Andersen”), Asbjorn Melo (“Mr. Melo”) and Lester Petracca (“Mr. Petracca” and, together with Mr. Melo and Mr. Andersen, the “Sebring Members”), the Company acquired all of the membership interests of Sebring in exchange for 18,729,098 shares of the Company’s common stock and the assumption of all of Sebring’s then liabilities (the “Exchange” and the “Exchange Shares”).  The liabilities assumed by the Company include an aggregate of $1,435,638 in convertible promissory notes (the “Convertible Notes”), an aggregate of $1,170,718 owed to Mr. Petracca, as described below and an aggregate of $737,000 in the form of non-convertible notes, among other liabilities.





Pursuant to the terms of the Exchange, Sebring LLC caused the Company to cancel the 69,376,450 shares of the Company’s common stock acquired in connection with the Purchase Agreement, described above, which shares were cancelled effective October 29, 2010.





As a result of the Exchange and cancellation, Thor Nor LLC (which is controlled by Mr. Andersen), Lester Petracca and Asbjorn Melo acquired 14,234,114, 2,996,656, and 1,498,328shares of the Company’s common stock, respectively, representing approximately 41%, 8.6% and 4.3%  of the issued and outstanding shares of the Company’s common stock, respectively (in all cases including the Collateral Shares described below and not including any other convertible securities which they hold)(the Exchange Shares have not been physically issued to date, but have been included in the number of issued and outstanding shares disclosed throughout this report).  In addition, Sebring previously held 7,491,639 shares of the Company’s common stock for the benefit of the Sebring Members (the “Collateral Shares”), which shares have already been included in the total above, which shares were released upon our payment of a promissory note issued by Sebring to Die CON AG in the principal amount of $100,000 (the “Redemption Note”).





30


Each Convertible Note holder also has certain rights to warrants in connection with the Convertible Notes.  Specifically, in the event such Convertible Note holder converts all or part of the Convertible Note they hold into shares of our common stock, they will receive warrants to purchase a number of shares of common stock equal to the total number of shares received in connection with such conversion.  In the event they choose not to convert the Convertible Notes, they will receive warrants to purchase 25% of the total number of shares of common stock of the Company as they would have received upon full conversion of the Convertible Notes.  Additionally, for each month after an event of default under the Convertible Notes has occurred and is not cured, they will receive warrants to purchase a number of shares equal to the total number of shares they would have received in connection with a full conversion of the Convertible Notes (the “Total Warrants”)(provided that the warrants issued for such damages are capped at three times the amount of Total Warrants).  Additionally, in the event the Company fails to register the shares issuable in connection with the exercise of the warrants by June 1, 2011, the Convertible Note holders will receive additional warrants to purchase such number of shares of the Company’s common stock that equals 2% of the Total Warrants for each full month that the Company fails to register such underlying shares, which damages are capped at warrants in an amount equal to 10% of the Total Warrants.  The warrants described above have an exercise price of 110% of the Conversion Price of the Convertible Notes (currently $1.89), and a five year term.  Finally, the Company provided the Convertible Note holders piggy-back registration rights in connection with the shares of common stock issuable upon exercise of the warrants described above.





We claim an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuances did not involve a public offering, the recipients took the securities for investment and not resale and we took appropriate measures to restrict transfer.  No underwriters or agents were involved in the foregoing issuances and we paid no underwriting discounts or commissions.





ITEM 6. SELECTED FINANCIAL DATA





Not required pursuant to Item 301 of Regulation S-K.





ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





The following discussion should be read in conjunction with our financial statements.





Management’s Discussion and Analysis of Financial Condition and Results of Operations





This discussion should be read in conjunction with the other sections of this Report, including “Risk Factors,” “Description of Business” and the Financial Statements attached hereto pursuant to Exhibit 99.1 and the related exhibits. The various sections of this discussion contain a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Report. See “Forward-Looking Statements.” Our actual results may differ materially.





Recent Events





Prior to October 25, 2010, we were an operating company, with minimal assets and activities. On October 25, 2010, we completed an acquisition, whereby we acquired Sebring Software, LLC, and changed our name to Sebring Software, Inc. leaving Sebring Software, LLC as our wholly-owned subsidiary. In connection with this transaction, we spun-off our former business into a separate corporation owned by our shareholders, and the business of Sebring Software, LLC is now our sole line of business. This transaction is being accounted for as a recapitalization, with Sebring Software, LLC deemed to be the accounting acquirer and Sebring Software, Inc. f/k/a Sumotext, Inc., the acquired company. Accordingly, Sebring Software, LLC’s historical financial statements for periods prior to the transaction have become those of the registrant (Sebring Software, Inc. f/k/a Sumotext, Inc.) and all common stock shares issued and outstanding were retroactively adjusted for the effect of the recapitalization. The accumulated deficits of Sebring Software, LLC were also carried forward after the acquisition. Operations reported for periods prior to December 31, 2010 are those of Sebring Software, LLC.





Overview





Sebring is in the development stage and therefore has not collected any revenue.  Sebring’s designed purpose is to be a subscription based reseller of software to companies in the automotive, manufacturing, aerospace, healthcare and financial services industries.  Sebring has developed “Adaptors” which allow the licensed software to be used by companies in North and South America and allows them to navigate multiple enterprise applications used in their numerous operating units in a single user interface so the users can gather and use their intercompany business information more quickly and effectively.




31





Results of Operations





Due to the development stage nature of Sebring, the changes in operating activity was not material except for those items described below.





Year Ended December 31, 2010 Compared to the Year Ended December 31, 2009:





Impairment expense of $452,287 during 2009 was a result of the Company recognizing an impairment charge on the software development costs it had capitalized from 2007 to 2009.  The Company has developed software “adaptors” to allow it to sell, on a subscription basis, certain software that was developed by another company in Germany.  While management still believe this project is viable it has recognized an impairment charge on the software development costs due to insufficient funding available to secure the product rights or license rights and market and sell the product.





General and administrative expenses increased by $363,691, from $213,139 in 2009 to $576,830 in 2010.  The increase was due mainly to $101,000 and $222,870 in fees and professional services incurred to consummate the recapitalization transaction between Sebring LLC and Sumotext, Inc., respectively, and $74,480 of fees paid to a consultant.





Employee compensation & benefits decreased from $424,728 for 2009 to $336,086 in 2010.  The decrease was due to a reduction in staff and compensation to management.





Interest expense increased from $268,146 for 2009 to $354,124 in 2010.  The increase was due to the interest on the additional debt incurred during late 2010 to support the operations of the Company and amortization of debt discounts.





Inflation and seasonality





Sebring does not believe that inflation or seasonality will significantly affect it results of operations.





Liquidity and capital resources





Sebring’s cash and liquidity resources have been provided by investors through convertible and non-convertible notes and loans payable.  Investors have loaned the company $3,022,638 from September 18, 2006 (inception) through December 31, 2010.  Investors have also loaned the company $280,000 subsequent to December 31, 2010.  These cash investments have generally been used for software development and for general and administrative expenses including management compensation.  However, we don’t believe our current funds will be sufficient to sustain operations and for implementation of our business plan.





The Company anticipates a complete a funding in the near future that will be sufficient to fund the execution of its business plan.  However, the Company cannot guarantee that these funding will be completed and that it will receive the necessary funding to sustain operations.





Debt and contractual obligations





Sebring has commitments to pay investors $3,949,470 of principal and accrued interest in various convertible notes, non-convertible notes and loans payable through December 31, 2010, and an additional $280,000 plus interest borrowed subsequent to December 31, 2010.  It is also owes $306,357 in accounts payable and accrued liabilities and $327,581 of payroll related liabilities as of December 31, 2010.  The Company was in default on $165,000 of debt as of December 31, 2010 and was in default on $2,631,356 of debt as of the date of this report.




32





On June 3, 2010, the Company entered into three-year management agreements with two key members of management.  The agreements commit the Company to pay a combined total of $339,000 per year in base salary, $1,600 a month in two auto allowances, and stock compensation as determined by the Board of Directors.





A third agreement was also executed; however, the management member has not begun to provide services so the Company has not become liable for the compensation described in the agreement.





The Company has also committed to pay various stock compensation and finder fees to entities that are raising funds on the Company’s behalf.  Those funds are payable in the event that they are successful in raising capital described above and as more fully described in the Sebring financial statements.





Critical Accounting Estimates and Policies





Software Development Costs.  The Company accounts for its software development costs in accordance with Accounting Standards Codification (“ASC”) ASC 350-40 “Computer Software Developed or Obtained for Internal Use”.  These costs are included in intangible assets in the accompanying financial statements.





ASC 350-10 requires the expensing of all costs of the preliminary project stage and the training and application maintenance stage and the capitalization of all internal or external direct costs incurred during the application development stage.  The Company amortizes the capitalized cost of software developed or obtained for internal use over at the greater of i) the straight-line method over the expected life of three years and ii) the ratio of the current gross revenues  for the software to the total of current and estimated future gross revenues for the software.  The Company recorded $452,287 of software development costs from 2007 through 2009, including $55,733 of accrued interest.  Those costs were subsequently expensed through an impairment analysis as described below.





Impairment of Long-Lived Assets.  The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”.  This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset.  If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.  Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.





The company recorded an impairment of $452,287 in 2009 relating to its software development costs that was capitalized from 2007 through 2009.  If sufficient funding is received and the Company is able to execute its business plan, it will experience lower than normal costs of revenue because these costs were expensed in December of 2009.





Off Balance Sheet Arrangements





We do not have any off balance sheet arrangements.





33





ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




PART I. FINANCIAL INFORMATION





ITEM 1. FINANCIAL STATEMENTS





Sebring Software, Inc. and Subsidiary
 (a development stage company)
 
 Consolidated Financial Statements
 
 Years ended December 31, 2010 and 2009
 and for the Period from September 18, 2006
 (Inception) to December 31, 2010
 F-1
 
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 
 Index to Consolidated Financial Statements
 
 PageReport of Independent Registered Public Accounting Firm


F-3Consolidated Balance Sheets


F-4Consolidated Statements of Operations


F-5Consolidated Statements of Changes in Stockholders’ Deficit


F-6Consolidated Statements of Cash Flows


F-7Notes to Consolidated Financial Statements


F-8
  F-2
  
 
 Report of Independent Registered Public Accounting Firm
  To the Board of Directors and Stockholders of:
 Sebring Software, Inc.
 
 We have audited the accompanying consolidated balance sheets of Sebring Software, Inc. and Subsidiary (a development stage company) at December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2010 and for the period from September 18, 2006 (inception) to December 31, 2010.  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 the audits to obtain reasonable assurance about 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 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 consolidated financial position of Sebring Software, Inc. and Subsidiary (a development stage company) at December 31, 2010 and 2009 and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2010 and for the period from September 18, 2006 (inception) to December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company reported a net loss and cash used in operations in 2010 of $1,215,991 and $598,224, respectively, and has a working capital deficit, stockholders' deficit and deficit accumulated during the development stage of $4,116,133, $4,460,584 and $4,132,990, respectively, at December 31, 2010, and through the date of this report has been in the development stage with no revenues.  Furthermore, the Company was in default on $165,000 of debt as of December 31, 2010 and was in default on $2,631,356 of debt as of the date of this report.  These matters raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans as to these matters are also described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 /s/ Salberg & Company, P.A.
 
 SALBERG & COMPANY, P.A.
 Boca Raton, Florida
 April 14, 2011
  2295 NW Corporate Blvd., Suite 240 • Boca Raton, FL 33431-7328
 Phone: (561) 995-8270 • Toll Free: (866) CPA-8500 • Fax: (561) 995-1920
 www.salbergco.com • info@salbergco.com
 Member National Association of Certified Valuation Analysts • Registered with the PCAOB
 Member CPAConnect with Affiliated Offices Worldwide • Member AICPA Center for Audit Quality
 F-3
 
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Consolidated Balance Sheets
 December 31, 2010 and 2009
  2010


2009ASSETSCurrent assets:Cash

$
6,359


$
35,505Prepaid expenses


7,588



-Total current assets


13,947



35,505Furniture and equipment, net


1,428



1,285Deposits


1,000



1,000Total assets

$
16,375


$
37,790LIABILITIES AND STOCKHOLDERS' DEFICITCurrent liabilities:Accounts payable and accrued liabilities

$
306,357


$
377,723Accrued payroll related liabilities


327,581



162,658Accrued interest payable


417,034



398,770Current portion of notes payable, net of debt discount


2,614,390



915,000Loans payable


189,080



-Notes payable, related parties


275,638



-Total current liabilities


4,130,080



1,854,151Notes payable, net of current portion


346,879



725,000Notes payable, related parties


-



375,638Total liabilities


4,476,959



2,954,789Commitments and contingencies (Note 8)Common stock issued or to be issued- $0.0001 par value, 1,100,000,000 shares authorized, 34,980,515 and 29,966,557 shares issued or to be issued and outstanding,  at December 31, 2010 and 2009, respectively.


3,498



2,997Additional paid-in-capital


(331,092
)


(2,997
)Deficit accumulated during the development stage


(4,132,990
)


(2,916,999
)Total stockholders' deficit


(4,460,584
)


(2,916,999
)Total liabilities and stockholders' deficit

$
16,375


$
37,790
  The accompanying notes are an integral part of these consolidated financial statements.
  F-4
  Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Consolidated Statements of Operations
 
 Years Ended

December 31,


September 18, 2006

(inception) to

December 31,2010


2009


2010Operating expenses:Employee compensation and benefits

$
336,086


$
424,728


$
1,401,188Impairment expense


-



452,287



452,287General & administrative expenses


576,830



213,139



1,502,299Total operating expenses


912,916



1,090,154



3,355,774Loss from operations


(912,916
)


(1,090,154
)


(3,355,774
)Other income (expense):Gain on debt settlement


39,068



-



39,068Gain on foreign currency transactions


11,981



8,896



20,877Interest expense


(354,124
)


(268,146
)


(837,161
)Net loss

$
(1,215,991
)

$
(1,349,404
)

$
(4,132,990
)Net loss per share - basic and diluted

$
(0.04
)

$
(0.05
)

$
(0.14
)Weighted average shares outstanding - basic and diluted


30,966,975



29,966,557



30,199,881
  The accompanying notes are an integral part of these consolidated financial statements.
  F-5
  Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Consolidated Statements of Changes in Stockholders’ Deficit
 Years Ended December 31, 2010 and 2009 and for the Period from
 September 18, 2006 (inception) to December, 31 2010
  DeficitAccumulatedCommon Stock issued


Additional


During


Totalor to be issued


Paid-in


Development


Stockholders'Shares


Amount


Capital


Stage


DeficitShares to be issued to founders


29,966,557


$
2,997


$
(2,997
)

$
-


$
-Net loss from September 16, 2006 (inception) to December 31, 2006


-



-



-



(10,631
)


(10,631
)Balance - December 31, 2006


29,966,557


$
2,997


$
(2,997
)

$
(10,631
)

$
(10,631
)Net loss for year ended December 31, 2007


-



-



-



(339,454
)


(339,454
)Balance - December 31, 2007


29,966,557


$
2,997


$
(2,997
)

$
(350,085
)

$
(350,085
)Net loss for year ended December 31, 2008


-



-



-



(1,217,510
)


(1,217,510
)Balance - December 31, 2008


29,966,557


$
2,997


$
(2,997
)

$
(1,567,595
)

$
(1,567,595
)Net loss for year ended December 31, 2009


-



-



-



(1,349,404
)


(1,349,404
)Balance - December 31, 2009


29,966,557


$
2,997


$
(2,997
)

$
(2,916,999
)

$
(2,916,999
)Shares to be issued for debt settlement


2,996,656



300



20,753



-



21,053Redemption of ownership interest


(14,234,114
)


(1,424
)


(98,576
)


-



(100,000
)Recapitalization


16,201,416



1,620



(287,767
)


-



(286,147
)Shares to be issued for legal services


50,000



5



37,495



-



37,500Net loss for year ended December 31, 2010


-



-



-



(1,215,991
)


(1,215,991
)34,980,515


$
3,498


$
(331,092
)

$
(4,132,990
)

$
(4,460,584
)
  The accompanying notes are an integral part of these consolidated financial statements
  F-6
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Consolidated Statements of Cash Flows
 
 Years Ended

December 31,


September 18, 2006

(inception) to

December 31,2010


2009


2010Cash flows from operating activities:Net loss

$
(1,215,991
)

$
(1,349,404
)

$
(4,132,990
)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation


712



402



1,298Common stock issued for legal services


37,500



-



37,500Gain on debt settlements


(39,068
)


-



(39,068
)Impairment expense


-



452,287



452,287Amortization of debt issuance costs


-



34,532



140,000Amortization of debt discount


23,157



-



23,157Changes in assets and liabilities:Prepaid expenses


(7,588
)


-



(7,588
)Deposits


-



-



(1,000
)Accounts payable and accrued liabilities


107,165



129,962



484,888Accrued payroll related liabilities


164,923



142,223



327,581Accrued interest payable


330,966



261,309



729,736Net cash used in operating actives


(598,224
)


(328,689
)


(1,984,199
)Cash flows from investing activities:Investment pursuant to recapitalization


(286,147
)


-



(286,147
)Software development costs


-



(85,609
)


(452,287
)Purchase of furniture and equipment


(855
)


(774
)


(2,726
)Net cash used in investing activities


(287,002
)


(86,383
)


(741,160
)Cash flows from financing activities:Payment of debt issuance costs


-



-



(140,000
)Proceeds from issuance of notes payable


992,000



449,300



3,022,638Repayment of notes payable


(35,920
)


-



(50,920
)Repayment of notes issued for redemption of equity interest


(100,000
)


-



(100,000
)Proceeds provided by financing activities


856,080



449,300



2,731,718Net increase (decrease) in cash


(29,146
)


34,228



6,359Cash, beginning of period


35,505



1,277



-Cash, end of period

$
6,359


$
35,505


$
6,359Supplemental Cash Flow Information:Interest paid

$
-


$
-


$
-Taxes paid

$
-


$
-


$
-Supplemental Non-Cash Investing and Financing Activities:Accounts payable settled with note payable

$
178,531


$
-


$
178,531Note payable principal and interest refinanced

$
1,062,165


$
-


$
1,062,165Stock based lender fees recorded as debt discount pursuant to settlement

$
21,053


$
-


$
21,053Lender fee recorded as discount pursuant to settlement

$
108,553


$
-


$
108,553Note issued for redemption of equity

$
100,000


$
-


$
100,000Deemed issuance of common stock pursuant to recapitalization

$
1,620


$
-


$
1,620
  The accompanying notes are an integral part of these consolidated financial statements.
  F-7
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
 1.  NATURE OF BUSINESS, ORGANIZATION AND GOING CONCERN
 
 Nature of Business – Sebring Software, Inc. and Subsidiary ("the Company", "us", "we", "our")intends to be a subscription based reseller of software to companies in the automotive, manufacturing, aerospace, healthcare and financial services industries.  The software is intended to be licensed from a German based company (see Note 11). Sebring has developed “Adaptors” to the original software product developed by the German company which allow the software to be used by companies in North and South America and allows them to navigate multiple enterprise applications used in their numerous operating units in a single user interface so the users can gather and use their intercompany business information more quickly and effectively.
 
 Organization– Sebring Software, LLC ("the LLC")was originally organized in the state of Florida on September 18, 2006.  On October 25, 2010 the Company consummated a transaction whereby the LLC was acquired by an inactive publicly-held company in a transaction accounted for as a recapitalization of the LLC.  The publicly-held company was incorporated in Arkansas on June 8, 2007 and redomiciled in Nevada in September 2008. (see "Reverse Recapitalization" below)
 
 The Company has been in the development stage through December 31, 2010.  Activities during the development stage have been principally devoted to organizational activities, raising capital, software development and evaluating operational opportunities.  Since its formation, the LLC has not realized any revenues from its planned operations.
 
 Principles of Consolidation - The consolidated financial statements include the accounts of Sebring and its wholly-owned subsidiary, the LLC.  All material intercompany balances and transactions have been eliminated in consolidation.
 
 Reverse Recapitalization - On October 25, 2010, (the "recapitalization date") pursuant to the terms of an Exchange and Reorganization Agreement between Sumotext Incorporated ("Sumotext"), an inactive publicly-held company, the LLC and the members of the LLC, Sumotext acquired all of the membership interests of the LLC in exchange for 18,729,098 shares of Sumotext common stock to be issued to the members of the LLC and the assumption of certain LLC liabilities.  Sumotext then changed its name to Sebring Software, Inc.
 
 Pursuant to the terms of the Exchange, LLC caused Sumotext to cancel controlling shares of the Sumotext common stock that had been acquired by LLC on September 17, 2010 for $286,147 in contemplation of this reverse recapitalization.  The $286,147 investment was then recorded as a reduction to additional paid-in capital at the recapitalization date.  Concurrent with the reverse recapitalization, Sumotext had spun-off all its prior assets, liabilities and operations to a company controlled by a shareholder of Sumotext, which spin-off made it inactive. The Company also incurred $101,000 of transaction costs on the September 17, 2010 transaction date which was charged as an expense to operations.
 
 This transaction resulted in the LLC becoming a wholly-owned subsidiary of Sebring Software, Inc. and the Company intends to carry on LLC’s business as its sole line of business.
 
 Since the spin-off was contemplated as part of the transaction and occurred on the transaction date of October 25, 2010, and since the members of LLC obtained an approximate 53% voting interest and Board and management control in Sumotext, the transaction is deemed to be a reverse recapitalization of the LLC with a public shell.  However, since control was obtained of the shell, Sumotext, on September 17, 2010 and the acquisition occurred on October 25, 2010, the transaction will be accounted for as a combination of entities under common control.  The historical operations of the Company are those historical operations of the LLC and those of Sumotext from the September 17, 2010 date when the entities became under common control.
 
 All share and per share data in the accompanying consolidated financial statements has been retroactively adjusted for the effect of the recapitalization.
  F-8
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
 
 Going Concern - The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company and its ability to meet its ongoing obligations. The Company has a net loss of $1,215,991 and net cash used in operations of $598,224 in 2010 and a working capital deficit, stockholders' deficit and deficit accumulated during the development stage of $4,116,133, $4,460,584 and $4,132,990, respectively, at December 31, 2010.  In addition, the Company has not generated any revenues through December 31, 2010. Furthermore, the Company was in default on $165,000 of debt as of December 31, 2010 and was in default on $2,631,356 of debt as of the date of this report.
 
 These conditions, as well as the conditions noted below, were considered when evaluating the Company’s liquidity and its ability to meet its ongoing obligations. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties.
 
 The Company continues to work towards a completion of the funding agreement with Enerizon Partners Ltd (EPL) to fund the company with an investment of $11 million in the form of convertible preferred shares. EPL has since decided to increase this to $15 million and the Company originally expected to receive this funding by February 15, 2011, it is now looking at May 15th as a possible date. In addition the company has signed a term sheet with Socius Capital Group for a funding of up to $10 million over the next 10 months in increments of $1 million per month, with the first investment to happen in the month of April, 2011.
 
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Cash and Cash Equivalents - The Company considers investments that have original maturities of three months or less when purchased to be cash equivalents.
 
 Use of Estimates in Financial Statements - The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates during the period covered by these financial statements include the valuation of software for impairment analysis purposes, valuation of any derivatives or beneficial conversion features on convertible debt, valuation of stock or other equity-based instruments issued for services or settlements and valuation of deferred tax assets.
 
 Foreign Currency Transactions – Gains and losses resulting from foreign currency transactions are included in the statement of operations as other income (expense).
 
 Reclassification – Certain 2009 income and expense items have been reclassified to conform to the 2010 presentation on the consolidated statements of operations.
 
 Fair value measurements and Fair value of Financial Instruments -The Company adopted ASC Topic 820, Fair Value Measurements. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
 
 Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
 
 Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.
 
 Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
  F-9
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
 
 The Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with ASC Topic 820.
 
 Due to the short-term nature of all financial assets and liabilities, their carrying value approximates their fair value as of the balance sheet date.
 
 Software -Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 “Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market. Amortization of capitalized software development costs begins upon initial product shipment. Capitalized software development costs are amortized over the estimated life of the related product (generally thirty-six months), at the greater of i) the straight-line method and ii) the ratio of the current gross revenues for the software to the total of current and estimated future gross revenues for the software. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable.  Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset.  If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset.  The software was considered impaired in 2009 as described in Note 3.
 
 Software maintenance costs are charged to expense as incurred. Expenditures for enhanced functionality are capitalized. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations.  No amortization expense was recorded in the accompanying financial statements.
 
 Furniture and Equipment, net - Furniture and equipment are capitalized at cost, net of accumulated depreciation. Depreciation is calculated by using the straight-line method over the estimated useful lives of the assets, which is three years for all categories. Repairs and maintenance are charged to expense as incurred. Expenditures for betterments and renewals are capitalized. The cost of furniture and equipment and the related accumulated depreciation are removed from the accounts upon retirement or disposal with any resulting gain or loss being recorded in operations.
 
 Impairment of Long-Lived Assets - The Company evaluates its long-lived assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the asset.
 
 Debt Issuance Costs, net – Costs such as commission and commitment fees of obtaining debt financing are capitalized as debt issuance costs and amortized over the term of the debt agreement on the effective interest method.
 
 Debt Discount – Costs such as the shares issued of common stock and legal fees paid to refinance past due debt is recorded as debt discount, which is netted against the debt liability, and amortized over the term of the debt agreement on the effective interest method.
 
 Income Taxes – Prior to the recapitalization described above, the company did not incur income taxes because it was a limited liability company and earnings and losses are included in the members’ personal income tax return and taxed depending on their personal tax situations.
 
 After the October 25, 2010 recapitalization, the Company accounts for income taxes using the asset and liability method, which requires the determination of deferred tax assets and liabilities based on the differences between the financial and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which differences are expected to reverse. Deferred tax assets are adjusted by a valuation allowance, if based on the weight of available evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized.
  F-10
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
 
 The Company has evaluated their uncertain tax positions to determine if any disclosure is required under the current account standards.  These standards provide detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the consolidated financial statements as require a “more-likely-than-not” recognition threshold before a position should be recorded.  The Company had no unrecognized tax benefits and no uncertain tax positions that needed to be disclosed. During the period from October 25, 2010 to December 31, 2010, no adjustments were recognized for uncertain tax benefits. Year 2010 is still subject to audit.
 
 Net Loss Per Share - Basic net loss per common share is based on the weighted-average number of all common shares outstanding. The computation of diluted loss per share does not assume the conversion, exercise or contingent issuance of securities because that would have an anti-dilutive effect on net loss per share.
 
 There were contingent convertible notes payable which if the contingencies were satisfied would be convertible into common stock and warrants to purchase shares of common stock as described in Note 6.  However, these instruments had restrictions that did not allow the holder to convert them as of December 31, 2010.
 
 Recently Issued Accounting Standards - The following is a summary of recent authoritative pronouncements that were adopted in the attached consolidated financial statements by the Company.
 
 In July 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.”  This Update improves the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate by portfolio segment or class certain existing disclosures and provide certain new disclosures about its financing receivables (including trade and notes receivable) and related allowance for credit losses.  This disclosure was initial effective for the Company’s financial statements ending December 31, 2010, but the effective date was deferred to financial statements ended on or after June 30, 2011.  Management doesn’t believe that this ASU will have a material impact on its financial statements.
  3.  SOFTWARE COSTS
 
 Software costs consisted of the following at December 31:
  2010


2009Software costs

$
-


$
452,287Accumulated amortization


-



-Impairment


-



(452,287
)Software costs, net

$
-


$
-
 
 Capitalized interest included in software costs was $ 0 and $55,733 at December 31, 2010 and 2009, respectively.  There was no amortization expense in 2010 or 2009 since the Company has not yet offered the product for sale.  The Company begins amortization when it offers its products for sale at the greater of i) the straight-line method over the expected life of three years and ii) the ratio of the current gross revenues  for the software to the total of current and estimated future gross revenues for the software.  As of December 31, 2009, the Company determined that the software was impaired due to insufficient funding available to secure the product rights or license rights and market and sell the product (see Note 11).
 
 F-11
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
 
 4.  FURNITURE AND EQUIPMENT, NET
 
 Furniture and equipment consisted of the following at December 31:
  2010


2009Furniture and equipment

$
2,727


$
1,872Accumulated depreciation of furniture and equipment


(1,299
)


(587
)Furniture and equipment, net

$
1,428


$
1,285
 
 Depreciation expense for 2010 and 2009 was $712 and $402, respectively.
  5.  DEBT ISSUANCE COSTS, NET
 
 Debt issuance costs consisted of the following at December 31:
 
 2010


2009Debt issuance costs

$
140,000


$
140,000Accumulated amortization of debt issuance costs


(140,000
)


(140,000
)Debt issuance costs, net

$
-


$
-
 
 Amortization expense for 2010 and 2009 was $0 and $34,532, respectively.  The debt issuance costs were amortized over the original terms of the promissory notes (see “Note Modifications" in Note 6).
 
 6. NOTES AND CONVERTIBLE NOTES PAYABLE
 
 The Company has financed its operation mainly through the issuance of notes payable.  The notes payable are as follows at December 31:
 
 2010


2009Convertible notes payable to related and unrelated parties bearing interest at a rate of 12%, principal is payable on March 1, 2011 and interest is payable quarterly in cash or common stock at Company option using conversion terms below.  If the Company is merged with or acquired by a public company (public event) during the term of the note, then on the first day of each month, starting with the 7th full month following the public event, the lender shall have the right to (a) receive payment equal to one-sixth of the principal outstanding or (b) convert the monthly principal amount as follows: Note is convertible at the lesser of (1) 75% of the price per share paid by investors in the next equity financing after the note was issued, or (2) either (a) if the Company has forty-five million or more shares issued and outstanding then $0.75 per share or (b) if the Company has less than forty-five million shares issued and outstanding then a price per share determined by dividing 45,000,000 by the product of the number of shares issued and outstanding after the closing of a Public Event multiplied by $0.75.  Upon conversion of any portion of principal or accrued interest the lender will receive an equal number of warrants to purchase common stock. For any portion of the note not converted, the lender will receive warrants equal to 25% of the quantity the lender would have received had they converted. In event of default with respect to principal payment, as liquidated damages, the lender will receive an additional warrant to purchase such number of shares as equals the number of shares issuable upon exercise of a warrant issued under the 25% provision above.  The warrants contain piggy-back registration rights, however, if the warrant shares have not been registered on or before June 1, 2011 and a public event, as defined, has occurred, the Company will use its best efforts to file a registration statement as soon as practicable thereafter and use commercially reasonable efforts to cause the registration statement to become effective on or before September 1, 2011.  In the event the Company fails to register the warrant shares on or before June 1, 2011, the lender will be entitled, as liquidated damages, to an additional warrant to purchase such number of shares as equals 2% of the number of warrant shares that may be purchased under all of the lenders warrants multiplied by the number of full months that the registration statement is delayed.  All warrants shall have an exercise price that is 110% of the conversion price and shall be exercisable for 5 years from the warrant issuance date. The Public Event occurred on October 25, 2010 and the notes will be convertible at a price of $1.72 or a lesser price based on any equity financing on May 1, 2011. In the event all holders converted, a minimum of 753,278 warrants (based on the $1.72 conversion price) would be issued at an exercise price of $1.89. In the event none of the holders converted, a minimum of 188,319 warrants would be issued at the same price.

$
1,295,638


$
1,100,638  F-12
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
  Convertible notes payable bearing interest at a rate of 12%. Principal payable on June 30, 2009.  Interest payable every six months.  The note and accrued interest are convertible at 75% of the price per share paid by investors in the next equity financing and such conversion rights will expire 60 days after such equity financing.  The holder also has the right to 100% warrant coverage with an exercise price of 110% of the next $4 million equity round. Notes are in default as of December 31, 2010.


40,000



40,000Convertible notes payable bearing interest at a rate of 12%.  Principal payable in September 2010.  Interest payable every six months.  Note is convertible at 75% of the price per equity interest paid by investors in the next equity financing and such conversion rights will expire 60 days after such equity financing.  The holder also has the right to 100% warrant coverage with an exercise price of 110% of the next $4 million equity round.  The note is in default as of December 31, 2010.


100,000



100,000Secured convertible notes payable to one lender dated March 2008 and July 2008 and maturing March 17, 2009, bearing interest at 12% (20% default rate), secured by substantially all assets of the Company, convertible at 75% of the price of a future offering or into Company membership interests of 4.5% on a fully-diluted basis.  On March 17, 2009 (default date) the Company defaulted on payments and a forbearance agreement was executed on September 9, 2009.  The forbearance modified the note to 20% compounded interest on principal and accrued interest starting at the default date and extended the maturity date to the earlier of April 13, 2010 or 5 days after a defined financing with 25% due and the remainder due on April 13, 2010.   In 2010, the Company defaulted on the Forbearance agreement and on October 1, 2010 the Company executed a settlement agreement.  Under the settlement a new secured non-convertible note was made consolidating the prior $750,000 convertible promissory notes plus all accrued interest plus estimated legal costs of the lender for a new note balance of $1,170,718. The company recorded a debt discount of $129,606 on the debt extinguishment of the old debt and issuing the new common stock, such debt discount consisting of $108,553 fees and $21,053 value of the shares to be issued.  Amortization of the debt discount of $23,157 was recorded as interest expenses in the year ended December 31, 2010 and the remaining $106,449 will be amortized in the year ended December 31, 2011.  The note is secured by substantially all assets of the Company and bears interest at 12% (20% default rate). One-third of outstanding principal and interest is due every 120 days with all principal and interest due on or before the 480th day of this Note which is January 24, 2012.  The lender was also granted a 16% common equity interest, on a fully-diluted basis, in the Company. Additionally, the lender is granted a 1% equity interest on issued and outstanding equity interests for each 120 days that any amount is outstanding on this Note. Based on October 1, 2010 settlement agreement 2,996,656 shares are to be issued to the lender to satisfy the settlement agreement.  This note is in default as of January 29, 2011 since the Company missed first payment and interest accrues at a rate of 20%.  In addition, a 1% common stock interest or 349,805 common shares are due on January 29, 2011 to the lender.


1,170,718



750,000  F-13
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
  Non-convertible notes payable dated in September 2010, bearing 6% interest with principal and interest due December 31, 2011.  Notes issued in connection with the September 17, 2010 transaction as described in Note 1.


572,000



-Non-convertible note payable dated February 18, 2009, bearing 12% interest payable plus an origination fee of $2,500, due March 2009.  In default for non-payment as of December 31, 2009 and December 31, 2010.


25,000



25,000Non-convertible note payable dated May 10, 2010 bearing interest at 12% due May 12, 2011.  Note issued in settlement of $178,531 accounts payable with a gain on settlement recognized of $38,531.


140,000



-Total notes payable


3,343,356



2,015,638Debt discount, net of $23,157 interest amortization


(106,449
)


-Total notes payable, net of discount


3,236,907



2,015,638Notes payable, related parties - current


(275,638
)


-Notes payable, related parties – non-current


-



(375,638
)Current portion of notes payable, net of debt discount


(2,614,390
)


(915,000
)Notes payable, net of current portion

$
346,879


$
725,000
  Note Modifications
 
 The above descriptions of the first group of convertible notes due March 1, 2011 and the respective classifications as current or non-current liabilities reflect the terms under modified note agreements issued in May 2010 in accordance with ASC 470-10 "Short Term Obligations Expected to be Refinanced".  Original notes were issued during 2007, 2008 and 2009 with due dates of one-year from the note date and conversion terms at a 25% discount from any future equity offering price. No beneficial conversion values were originally recorded at the note dates since the conversion features were considered contingent and no value disclosed since such value could not be computed at the notes dates.  The conversion features are still considered contingent as of December 31, 2010.  At December 31, 2009, $776,338 was considered in default under the terms of the original notes.  Such default was cured for all these notes upon the modifications in May 2010. There was no other accounting effect for the modification which occurred in May 2010.
 
 In total, for all above notes, there was $841,338 in default at December 31, 2009 of which $776,338 was cured through note modifications in May 2010.  However all $1,295,638 of these notes went into default for non-payment of principal and interest on the maturity date of March 1, 2011.
  F-14
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
 
 7. LOANS PAYABLE
 
 During 2010 the Company received unsecured, non-interest bearing advances of $225,000 which were recorded as loans payable.  The Company paid back $35,920 of these loans leaving a balance owed of $189,080 at December 31, 2010.
  8.  COMMITMENTS AND CONTINGENCIES
 
 Legal Matters - Management has been notified of a legal claim against the Company whereby an investor relations consultant claims he is owed stock compensation under a March 9, 2010 consulting agreement.  The agreement describes common stock payments of 400,000 shares to be issued on October 25, 2010 and 100,000 shares each month for the following 11 months for a total of 1,500,000 shares.  Management asserts that no services were performed and no share or other compensation is due to the consultant except for $25,000 the consultant loaned to the Company which is recorded as a loan payable in the accompanying December 31, 2010 consolidated balance sheet.  Management believes that they will prevail in this matter and that any potential negative outcome will not have a material adverse impact on the Company’s financial position.  No liability has been accrued for this claim as of December 31, 2010.
 
 Advisor agreement - The Company entered into an agreement with a Swiss Corporation, (the advisor) to assist the Company in raising capital.  At the completion of an equity financing, the agreement calls for compensation to the advisor of ten percent (10%) of total gross cash proceeds of funds raised, non-accountable expense allowance of 3%, and the issuance of five year warrants equal to 10% of the shares of the common stock issued with an exercise price of 110% of the market value.  If there is a debt financing, the advisor is to be paid (i) 6% of consideration received by the company and non-accountable expense allowance of 1%, (ii) 3% of any revolving credit line, (iii) 2% of any credit enhancement instrument, and (iv) 10% of any revenue-producing contract, fee-sharing arrangement, licensing, royalty or similar agreement.
 
 Immediately following receipt by the Company of bridge financing, the advisor is to receive 9% of the Company.  In the event the advisor fails to secure a minimum of $20 million on a firm underwriting basis during the term of this agreement, the advisor shall return any of those advisor shares received for cancellation.  No shares were earned or issued as of the date of this report.
 
 The Company paid the vendor $140,000 under this agreement in 2008 which was recorded as debt issue costs and was amortized over the debt term.
 
 Lender Contingency - As discussed in Note 6, under an October 1, 2010 secured promissory note, a lender is granted a 1% equity interest on issued and outstanding equity interests for each 120 days that any amount is outstanding. (See Notes 6 and 13)
 
 Management agreement – On June 3, 2010, the Company entered into three-year management agreements with two key members of management.  The agreements commit the Company to pay a combined total of $339,000 per year in base salary, $1,600 a month in two auto allowances, and stock compensation as determined by the Board of Directors.
 
 A third agreement was also executed; however, the management member has not begun to provide services so the Company has not become liable for the compensation described in the agreement, which includes the Company issuing 1 million shares of restricted common stock.  The Company will recognize the expense of those shares based on their fair market value and the terms under which the shares vest.
 
 F-15
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
 
 9.STOCKHOLDERS’ DEFICIT
 
 Pursuant to the reverse recapitalization described above, all share and per share data in the accompanying consolidated financial statements has been retroactively adjusted for the effect of the recapitalization.
 
 Common Stock Issued and Issuable - Due to certain administrative delays after the recapitalization date, including a change in transfer agents by the Company, of the total 34,980,515 common shares outstanding at December 31, 2010, 18,779,099 shares remain to be physically issued by the transfer agent.
 
 Common Stock
 
 In 2006 the Company issued 29,966,557 common shares to founders for no consideration.  The value of these shares was de minimis
 
 In October 2010, prior to the recapitalization transaction, 2,996,656 shares of common stock were issued for the October 2010 debt settlement that is described in Note 6.  The shares were valued at a total $21,053 based upon the redemption price paid, as discussed below, since there was no other reliable evidence of fair value at the time of the issuance as the Company was still privately-held.
 
 In October 2010, prior to the recapitalization transaction, the Company redeemed 14,234,114 common shares from an original founder for $100,000. These shares represented 100% of that founder's equity interests.  The shares were redeemed in exchange for a secured promissory note for $100,000.  The note bore interest at 7% and was due November 1, 2010.  The note was secured by the redeemed equity interests which were held in escrow until the note was paid.  The payment of principal and interest was made in November 2010.  The Company recognized a $537 gain on repayment of this note related to accrued interest.
 
 On October 25, 2010 the Company is deemed to have issued 16,201,416 common shares to the original stockholders of the public shell as a result of the recapitalization.
 
 In October 2010, the Company issued 50,000 shares of the Company’s common stock in exchange for legal services that were agreed to and provided in the first half of 2010.  Since there was no other indication of value of post-reorganization common stock at the measurement date in early 2010, the shares were valued at the $37,500 value of services and recorded as a liability until such time the recapitalization was completed on October 25, 2010 when the shares were reflected as issuable and the $37,500 was reclassified from liability to equity.
 
 During 2010 the Company entered into several agreements with service providers which provided for post-reorganization stock for services. The commitment in aggregate was for 1,875,000 common shares plus 1.5% of fully-diluted shares just post-reverse merger.  In lieu of issuing shares in the post-recapitalization Company, the Company purchased common shares from certain pre-recapitalization original stockholders of the public shell, prior to the recapitalization date, and paid such shares to the consultants.  The Company also purchased other shell shares which were provided to other consultants.  The total cost of such purchase of $63,853 was charged to expense in September 2010 and represents cash consulting fees rather than stock based compensation.
 
 Preferred Stock
 
 The Company has 10,000,000 shares of preferred shares authorized which can be designated by the board of directors at a later date.  No preferences have been set for these preferred shares as of the date of these consolidated financial statements.
 
 10.  RELATED PARTIES
 
 At December 31, 2010 and 2009 there were $275,638 and $375,638 due to principal shareholders of the Company under promissory notes due on March 1, 2011 (see Note 6).
  F-16
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
 
 11.  CONCENTRATIONS
 
 License Concentration - The Company entered into an agreement with a Germany-based Company (licensor) to license its technology under a non-exclusive licensing agreement.  The Company intends to resell that licensor's software product as adapted by the Company for its potential North and South American territory customers.  The license agreement was executed but does not become effective until the Company pays a prepaid royalty fee to the licensor of $150,000.  This payment has not been made to-date.  Royalties due under the agreement are based on a percentage of gross revenues.
 
 Concentration of Credit Risk - The Company maintains its cash accounts in certain financial institutions.  The amounts on deposit with the institutions are insured through the Federal Deposit Insurance Corporation (FDIC) in the amount of $250,000 per entity per institution.  The Company had no uninsured balances at December 31, 2010.  The Company has not experienced any losses on such accounts.
 
 12.  INCOME TAXES
 
 From September 18, 2006 (inception) to the recapitalization date of October 25, 2010, the Company was treated as a partnership for federal Income tax purposes. The corporate tax benefits of its losses were passed through to its owners and the Company did not have any income tax expense or benefit. Starting October 25, 2010 the Company became subject to paying income tax. There was no income tax expense from October 25, 2010 to December 31, 2010 due to the Company's net losses.
 
 The blended Federal and State tax rate of 37.63% applies to loss before taxes. The Company's tax expense differs from the “expected” tax expense for Federal income tax purposes for the period of October 25, 2010 to December 31, 2010 (computed by applying United States Federal Corporate tax rate of 34% to net loss attributable to Sebring before taxes), as follows:
  October 25,

2010 (Recapitalization) to

December 31,

2010Computed “expected” tax benefit

(42,132
)State income tax

(4,498
)Meals and entertainment

1,019Change in deferred tax asset valuation allowance

45,611Deferred tax asset

$
-
 The effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at the end of each period are as follows:
 
 Deferred tax assets:

December 31,

2010Net operating loss carryforward

46,362Gain on foreign currency exchange rates


(751
)Less valuation allowance


(45,611
)Net deferred tax assets

$
-
 The valuation allowance at December 31, 2010 was $45,611. The Company has a net operating loss carryforward of approximately $123,205 available to offset future U.S. net income over 20 years through 2030.
 
 The utilization of the net operating loss carryforwards is dependent upon the ability of the Company to generate sufficient taxable income during the carryforward period.
 
 F-17
 Sebring Software, Inc. and Subsidiary
 (a development stage company)
 Notes to Consolidated Financial Statements
 Years ended December 31, 2010 and 2009 and from September 18, 2006 (Inception) to December 31, 2010
 
 13.  SUBSEQUENT EVENTS
 
 Loans and Notes Payable- As described below, in 2011, the Company recorded notes payable for an aggregate of $280,000 under promissory notes as follows:
 
 In January and February 2011 the Company issued $200,000 of convertible promissory notes for cash.  These convertible notes payable bear interest at a rate of 12%, and principal is payable on September 1, 2011 and interest is payable quarterly in cash or common stock at Company option using conversion terms below.  If the Company is merged with or acquired by a public company (public event) during the term of the note, then on the first day of each month, starting with the 7th full month following the public event, the lender shall have the right to (a) receive payment equal to one-sixth of the principal outstanding or (b) convert the monthly principal amount as follows: Note is convertible at the lesser of (1) 75% of the price per share paid by investors in the next equity financing after the note was issued, or (2) either (a) if the Company has forty-five million or more shares issued and outstanding then $0.75 per share or (b) if the Company has less than forty-five million shares issued and outstanding then a price per share determined by dividing 45,000,000 by the product of the number of shares issued and outstanding after the closing of a Public Event multiplied by $0.75.  Upon conversion of any portion of principal or accrued interest the lender will receive an equal number of warrants to purchase common stock. For any portion of the note not converted, the lender will receive warrants equal to 25% of the quantity the lender would have received had they converted. In event of default with respect to principal payment, as liquidated damages, the lender will receive an additional warrant to purchase such number of shares as equals the number of shares issuable upon exercise of a warrant issued under the 25% provision above.  The warrants contain piggy-back registration rights, however, if the warrant shares have not been registered on or before June 1, 2011 and a public event, as defined, has occurred, the Company will use its best efforts to file a registration statement as soon as practicable thereafter and use commercially reasonable efforts to cause the registration statement to become effective on or before September 1, 2011.  In the event the Company fails to register the warrant shares on or before June 1, 2011, the lender will be entitled, as liquidated damages, to an additional warrant to purchase such number of shares as equals 2% of the number of warrant shares that may be purchased under all of the lenders warrants multiplied by the number of full months that the registration statement is delayed.  All warrants shall have an exercise price that is 110% of the conversion price and shall be exercisable for 5 years from the warrant issuance date.
 
 At January 29, 2011 a 1% common stock interest or 349,805 common shares are due to a lender pursuant to a settlement agreement and promissory note (see Note 6).
 
 At January 29, 2011 a secured convertible promissory note for $1,170,718 went into default for non-payment of the first installment. (see Note 6)
 
 On March 1, 2011, $1,295,638 of promissory notes went into default for non-payment of principal and interest. (see Note 6).
 
 In April 2011 the Company executed a $70,000 in promissory notes to fund operating expenses.  The notes bear interest at 8% and mature on April 5, 2012.  The company also received $10,000 in non-interest bearing advances in April 2011.
 
 In April 2011 the Company executed a contract for financial advisory services to be provided over a six month period in exchange for 845,000 shares of the Company’s common stock  which will be paid by a stockholder of the Company.  These shares vest and will be valued for accounting purposes at the date of issuance and such value will be recognized over the contract term and the payment of shares by the stockholder will be recorded as contributed capital.
 
 F-18




ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





On April 12, 2011, the Company dismissed its principal independent accountants, M&K CPAS, PLLC, (“M&K”). The decision to dismiss M&K as the Company’s principal independent accountant was approved by the Company’s Board of Directors on March 29, 2011.  M&K’s report on the Company’s financial statements for the fiscal years ended August 31, 2009 and 2010 contained no adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles except as stated herein.





Except as stated herein, during the period from M&K’s engagement through the date of M&K’s dismissal, there were no disagreements with M&K on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of M&K, would have caused M&K to make reference to the subject matter of the disagreements in connection with its report on the financial statements for such period. None of the “reportable events” described under Item 304(a)(1)(iv) of Regulation S-K occurred within the period of M&K’s engagement.  The audit report relating to the audit of Sebring Software, Inc.’s financial statements for the year ended August 31, 2010 and filed on December 14, 2010 indicated the auditors’ substantial doubt about the Company’s ability to continue as a going concern because, at those times, the Company required additional funds to meet its obligations and the costs of its operations.





On April 1, 2011, the Company engaged Salberg & Company, P.A. (“Salberg”) as its new principal independent accountants, effective immediately upon the dismissal of M&K. The decision to engage Salberg as the Company’s principal independent accountants was approved by the Company’s Board of Directors on March 29, 2011.  During the period that M&K was the Registrant’s independent registered public accounting firm, the Registrant (or someone on its behalf) had not consulted with Salberg, or any other auditor, regarding any accounting or audit concerns for the two most recent years and the subsequent interim period through the date the firm was engaged, to include, but not by way of limitation, those stated in Item 304 of Regulation S-K.





ITEM 9A. CONTROLS AND PROCEDURES.





(a)           Evaluation of disclosure controls and procedures. Our Chief Executive Officer, and our acting Chief Financial Officer, after evaluating the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"), has concluded that as of the Evaluation Date, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.





(b)           Management’s Annual Report on Internal Control over Financial Reporting





The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. The Company's internal control over financial reporting is a process designed under the supervision of the Company's Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (US GAAP) and includes those policies and procedures that:





-
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions  of our assets;





-
provide reasonable assurance that the transactions are recorded  as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and





-
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.




34





Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.





As of December 31, 2010, management assessed the effectiveness of the Company's internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments.





Based on that evaluation, management concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that taken together may be considered to be a material weakness.





A material weakness is a deficiency, or combination of deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses at December 31, 2010:





·
Segregation of duties in the handling of cash, cash receipt, and cash disbursement was not formalized.


·
Maintenance of books and records on a non-GAAP basis which are converted to GAAP basis for financial reporting purposes.





Management believes that the material weaknesses set forth in items (1) and (2) above did not have an effect on the Company's financial reporting in 2010. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors can adversely affect reporting in the future years, when our operations become more complex and less transparent and require higher level of financial expertise from the overseeing body of the Company.





We are committed to improving our financial organization. As part of this commitment, we will, as soon as funds are available to the Company (1) appoint one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; (2) create a position to segregate duties consistent with control objectives and will increase our personnel resources; and (3) hire independent third parties to provide expert advice.





We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. This annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's report is not subject to attestation by the Company's independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that exempt smaller reporting companies.





(c)           There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules13a-15 or 15d-15 under the Exchange Act that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




35





ITEM 9B. OTHER INFORMATION.





None.





PART III





ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE





The following table sets forth the name, age and position of our Director and executive officer as of the date of this filing. There are no other persons who can be classified as a promoter or controlling person of us.





Name

Age

PositionLeif Andersen

55

President, Chief Executive Officerand DirectorJohn Sauickie, Jr.

47

Chief Financial Officer and Vice President





Leif Andersen:





Mr. Andersen was appointed as a Director of the Company effective September 23, 2010 and as the President and Chief Executive Officer of the Company on October 25, 2010.  Mr. Andersen has been the managing member of Sebring Software, LLC, a Florida limited liability company (which became a wholly-owned subsidiary of the Company as a result of the Exchange), since its inception in November of 2006.  Sebring Software, LLC is in the business of providing software integration solutions.  From 1987 to August 2006, Mr. Andersen was the President of Vermax, Inc., a Utah corporation that manufactured bathroom fixtures.  Mr. Andersen was born in Norway, was raised in Brazil and has worked in a number of western countries. Mr. Andersen studied Chemical Engineering at the Norwegian Institute of Technology from 1975-1979.  Subsequently, he has led companies in the hospitality industry, building materials, management consulting, high technology and energy markets.  Mr. Andersen began his business career with the Donovan Companies, St. Paul, Minnesota, USA.  While at Donovan he was involved with the distribution of propane, natural gas, coal mining and other ventures. In addition Mr. Andersen was engaged in cogeneration projects and introducing new technology into natural gas air conditioning systems manufactured by Yazaki in Japan.  Mr. Andersen has been the CEO of 4 start ups and led companies with as many as 460 employees. Mr. Andersen served as liaison for the Norwegian Olympic Committee, was appointed and served as the Salt Lake City, Utah Consul for the Kingdom of Norway from 1995 to 2004 and was made a Knight of the First Order by His Majesty King Harald V in 2002.





Our Director and any additional Directors we may appoint in the future are elected annually and will hold office until our next annual meeting of the shareholders and until their successors are elected and qualified. Officers will hold their positions at the pleasure of the Board of Directors, absent any employment agreement. Our officers and Directors may receive compensation as determined by us from time to time by vote of the Board of Directors. Such compensation might be in the form of stock options. Directors may be reimbursed by the Company for expenses incurred in attending meetings of the Board of Directors. Vacancies in the Board are filled by majority vote of the remaining Directors.





John Sauickie, Jr.:





Mr. Sauickie has served as the Chief Financial Officer and Executive Vice President of Sebring (a wholly-owned subsidiary as a result of the Exchange) since June 1, 2010. Previously, Mr. Sauickie was Founder and also served as the Chief Executive Officer of Titanium Asset Management Corp. from February 2007 to April 2008, and led the company through its initial public offering and listing on the London AIM Stock Exchange. Mr. Sauickie also served as the Managing Director and Portfolio Manager at Wood Asset Management and as the Managing Partner of SKC Capital from April 2004 to May 2010, where he was responsible for managing portfolios of corporate and high net worth individuals. From November 1993 to March 2004, Mr. Sauickie served as Vice President with Merrill Lynch. From August 1988 to October 1993, Mr. Sauickie served as Vice Present of Shearson Lehman Brothers. Mr. Sauickie is a Registered Investment Adviser and obtained a Bachelors degree from William Paterson College in 1988.





36





Involvement in Certain Legal Proceedings





Other than as described below, our Director and executive officers have not been involved in any of the following events during the past ten years:





1.
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;





2.
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences’);





3.
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or





4.
being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.





In May of 2003, our CEO Leif Andersen was the President of Vermax, Inc. and he guided Vermax, Inc. through a Chapter 11 reorganization.   Vermax, Inc. exited Chapter 11 successfully in September 2004.  Additionally, due to representations from the senior lender of Vermax, Inc. related to Mr. Andersen’s personal guarantee on a loan to Vermax, Inc., Mr. Anderson entered into a Chapter 13 reorganization in October 2003 to protect his personal assets, which was voluntarily dismissed in May 2004.





Independence of Directors





We are not required to have independent members of our Board of Directors, and do not anticipate having independent Directors until such time as we are required to do so.





Committees of the Board





Our Company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our Company have a written nominating, compensation or audit committee charter. Our Director believes that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by the Board of Directors.





Shareholder Proposals





Our Company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for Directors. The Board of Directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. Board of Directors, will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.





A shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President and Director, at the address appearing on the first page of this report.





Code of Ethics





We have not adopted a formal Code of Ethics. The Board of Directors evaluated the business of the Company and the number of employees and determined that since the business is operated by only a limited number of employees, general rules of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines.   In the event our operations, employees and/or Directors expand in the future, we may take actions to adopt a formal Code of Ethics.




37





Compliance with Section 16(a) of the Exchange Act





Section 16(a) of the Exchange Act of 1934, as amended (the “Exchange Act”) requires our Directors and officers, and the persons who beneficially own more than ten percent of our common stock, to file reports of ownership and changes in ownership with the SEC. Copies of all filed reports are required to be furnished to us pursuant to Rule 16a-3 promulgated under the Exchange Act.  Based solely on the reports received by us and on the representations of the reporting persons, we believe that Thor Nor, LLC (which is controlled by our President and Chief Executive Officer, Leif Andersen), Leif Andersen, Sebring Software, LLC (our current wholly-owned subsidiary and our prior majority shareholder) and Lester Petracca, have not complied with applicable filing requirements under the Exchange Act.  We anticipate such persons making their required Exchange Act filings shortly after the filing of this report.





Corporate Governance





The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.





In lieu of an Audit Committee, the Company’s Board of Directors is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements and other services provided by the Company’s independent public accountants. The Board of Directors reviews the Company's internal accounting controls, practices and policies.





ITEM 11. EXECUTIVE COMPENSATION.





Summary Compensation Table:





The table below sets forth, for our last two fiscal years, the compensation earned by our officers and directors.  Except as provided below,.





Name and






Deferred





Stock


Option


All OtherPrincipal Position



Salary (1)


Compensation


Bonus


Awards


Awards


Compensation (2)Leif Andersen

2010

$
220,833


$
-


$
-


$
-


$
-


$
34,931CEO and Director

2009

$
180,000


$
-


$
-


$
-


$
-


$
52,417John Sauicki

2010

$
0


$
-


$
-


$
-


$
-


$
0CFO and Vice President

2009

$
0


$
-


$
-


$
-


$
-


$
0





Notes:


(1)
$233,543 of the 2009 and 2010 compensation is still owed to Mr. Andersen.


(2)
These amounts represent fringe benefits that were taken as compensation by Mr. Andersen.





Employment Agreements





Mr. Andersen and Sebring entered into a Management Employment Agreement (the “Employment Agreement”) effective June 3, 2010, which Employment Agreement was assumed by the Company in connection with the Exchange.  Pursuant to the Employment Agreement, Mr. Andersen agreed to serve as the Chief Executive Officer and President of Sebring for a term of 36 months (i.e., until June 3, 2013), provided that the Employment Agreement is automatically renewed if not terminated with thirty days prior notice.  Pursuant to the Employment Agreement, Mr. Andersen is to receive a salary of $250,000 per year, as well as bonuses as determined by the Board of Directors, and a car allowance of $800 per month.




38





Mr. Andersen’s Employment Agreement can be terminated by Mr. Andersen at any time with thirty days written notice; by Sebring with five days written notice; or at any time by Sebring for “Cause” as defined in the agreement or Mr. Andersen for “Good Reason” as defined in the agreement.  In the event the Employment Agreement is terminated by the Company without Cause or by Mr. Andersen for Good Reason, Mr. Andersen is due severance pay in an amount equal to 100% of his then annual salary, plus payments equal to 12 months of COBRA health insurance payments, which is required to be made in four equal quarterly payments without interest, following Mr. Andersen’s entry into a release satisfactory to Sebring.





Mr. Andersen’s Employment Agreement includes a non-compete clause, whereby Mr. Andersen agreed not to compete with Sebring for a period of two years following the termination of the Employment Agreement.





Mr. Andersen was paid $88,718 in compensation from Sebring during the year ended December 31, 2010.  Pursuant to an agreement between Sebring and Mr. Andersen, Sebring agreed to pay Mr. Andersen $233,543 in accrued, but unpaid salary.


Sebring also has an employment agreement in place with John Sauickie, its Executive Vice President and Chief Financial Officer.  The employment agreement has a three year term, effective as of June 3, 2010, and provides for yearly compensation to Mr. Sauickie of $180,000 as well as bonuses as determined by the Board of Directors, and a car allowance of up to $800 per month.  The Company also agreed to issue Mr. Sauickie 1,000,000 shares of common stock, which the Company anticipates issuing in February 2011 in consideration for services rendered.  However, Mr. Sauickie has not commenced his employment with the Company and therefore is not currently owed any compensation from this agreement.





Mr. Sauickie’s employment agreement can be terminated by Mr. Sauickie at any time with thirty days written notice; by Sebring with five days written notice; or at any time by Sebring for “Cause” as defined in the agreement or Mr. Sauickie for “Good Reason” as defined in the agreement.  In the event the employment agreement is terminated by the Company without Cause or by Mr. Sauickie for Good Reason, Mr. Sauickie is due severance pay in an amount equal to 100% of his then annual salary, plus payments equal to 12 months of COBRA health insurance payments, which is required to be made in four equal quarterly payments without interest, following Mr. Sauickie’s entry into a release satisfactory to Sebring.





Mr. Sauickie’s employment agreement includes a non-compete clause, whereby Mr. Sauickie agreed not to compete with Sebring for a period of two years following the termination of the employment agreement.





Indemnification of our Officers and Directors





The Nevada Revised Statutes and our Articles of Incorporation, as amended, allow us to indemnify our officers and Directors from certain liabilities and our Bylaws state that we shall indemnify every (i) present or former Director, advisory Director or officer of us, (ii) any person who while serving in any of the capacities referred to in clause (i) served at our request as a Director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and (iii) any person nominated or designated by (or pursuant to authority granted by) the Board of Directors or any committee thereof to serve in any of the capacities referred to in clauses (i) or (ii) (each an “Indemnitee”).





Our Bylaws provide that we shall indemnify an Indemnitee against all judgments, penalties (including excise and similar taxes), fines, amounts paid in settlement and reasonable expenses actually incurred by the Indemnitee in connection with any proceeding in which he was, is or is threatened to be named as a defendant or respondent, or in which he was or is a witness without being named a defendant or respondent, by reason, in whole or in part, of his serving or having served, or having been nominated or designated to serve, if it is determined that the Indemnitee (a) conducted himself in good faith, (b) reasonably believed, in the case of conduct in his Official Capacity, that his conduct was in our best interests and, in all other cases, that his conduct was at least not opposed to our best interests, and (c) in the case of any criminal proceeding, had no reasonable cause to believe that his conduct was unlawful; provided, however, that in the event that an Indemnitee is found liable to us or is found liable on the basis that personal benefit was improperly received by the Indemnitee, the indemnification (i) is limited to reasonable expenses actually incurred by the Indemnitee in connection with the Proceeding and (ii) shall not be made in respect of any Proceeding in which the Indemnitee shall have been found liable for willful or intentional misconduct in the performance of his duty to us.




39





Except as provided above, the Bylaws provide that no indemnification shall be made in respect to any proceeding in which such Indemnitee has been (a) found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in the Indemnitee's official capacity, or (b) found liable to us.  The termination of any proceeding by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent, is not of itself determinative that the Indemnitee did not meet the requirements set forth in clauses (a) or (b) above.  An Indemnitee shall be deemed to have been found liable in respect of any claim, issue or matter only after the Indemnitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom.  Reasonable expenses shall, include, without limitation, all court costs and all fees and disbursements of attorneys’ fees for the Indemnitee.  The indemnification provided shall be applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven.





Neither our Bylaws nor our Articles of Incorporation include any specific indemnification provisions for our officer or Director against liability under the Securities Act of 1933, as amended. Additionally, insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Act") may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.





ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.





The following table presents certain information regarding the beneficial ownership of all shares of Common Stock as of December 31, 2010, by (i) each person who owns beneficially more than five percent (5%) of the outstanding shares of Common Stock based on 34,980,515 shares outstanding as of December 31, 2010 (which number includes 18,729,098 shares issuable in connection with the Exchange (described above) and another 50,000 shares, which have not been physically issued as of December 31, 2010, but have been included in the number of issued and outstanding shares disclosed throughout this report), (ii) each of our Directors, (iii) each named executive officer and (iv) all Directors and officers as a group.





Beneficial ownership of the common stock is determined in accordance with the rules of the Securities and Exchange Commission and includes any shares of common stock over which a person exercises sole or shared voting or investment powers, or of which a person has a right to acquire ownership at any time within 60 days of December 31, 2010.  Except as otherwise indicated, and subject to applicable community property laws, the persons named in this table have sole voting and investment power with respect to all shares of common stock held by them.





Name and Address of Beneficial Owner

Shares Beneficially Owned


Percentage

Beneficially OwnedLeif Andersen

Chief Executive Officer and Director of the Company and Sebring

1400 Cattlemen Rd, Suite D

Sarasota,  Florida 34232


14,394,369
(1)


41.1
%John Sauickie, Jr.

CFO and VP of Sebring

1400 Cattlemen Rd, Suite D

Sarasota,  Florida 34232


(2
)


*Lester Petracca

c/o Triangle Equities

30-56 Whitestone Expressway

Whitestone, NY 11354


2,996,656



8.6
%All Officers and Directors as a Group

(2 persons)


14,394,369
(1)(2)


41.1
%





40





(1) Mr. Andersen holds 14,394,369shares of the Company’s common stock through Thor Nor, LLC, an entity which he controls.  Includes 160,255 shares issuable in connection with the conversion of an outstanding convertible promissory note held by Thor Nor, LLC, in the amount of $275,638, which has a conversion rate of $1.72 per share.  Does not include any warrants due to Thor Nor, LLC in connection with the $275,638 of Convertible Notes held by it, as such warrants have not been granted to date.





(2) Does not include 1,000,000 shares which the Company has agreed to issue Mr. Sauickie in consideration for services rendered.





ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE





In March 2010, the Company entered into a $6,000 per month consulting agreement with the Clark Bova Group, LLC (the “Bova Agreement”).  Mr. Bova is partner at the Clark Bova Group, LLC.  Under the terms of this agreement, the Clark Bova Group, LLC agreed to provide the Company management oversight, strategic consulting, and corporate finance advisory services for the period of one year. The agreement provided the Company specific deliverables and work products produced by multiple named individuals. The Company can terminate this agreement at any time with 90 days prior notice.  The parties mutually agreed to terminate this agreement in June 2010 after total payments of $18,000.





In connection with and pursuant to the terms of the Spin-Off (described below) all of the Company’s pre-Exchange (also defined below) assets, operations, liabilities and warrants were spun-off to Sumotext Corporation, a private Nevada corporation then solely owned by Timothy Miller, our former President and Director and James Stevenson (a former shareholder of the Company).  As a result, the Consolidated Note, November 2009 note owed to Mr. Miller, the Miller Warrants, Bova Warrants and Cooper Warrants (as defined below), as well as the Company’s assets including the Atreides and DataMethodology agreements and Bova Agreement agreements were assumed by Sumotext Corporation, and are no longer owned by, held by or represent liabilities of the Company as of October 25, 2010.





On September 17, 2010, the Company consummated a Securities Purchase Agreement (the “Purchase Agreement”) with Timothy Miller, Jim Stevenson, Doug Cooper, Joe Miller, the brother of Timothy Miller, and Eric Woods, all then greater than 5% shareholders of the Company (the “Selling Shareholders”) and Sebring Software LLC, a Florida limited liability company (“Sebring”), pursuant to which the Selling Shareholders sold 69,376,450 shares (the “Shares”) of the Company’s common stock to Sebring in exchange for $286,147 or $0.004125 per share (the “Purchase Price”).  The Shares represented approximately 81.1% of the issued and outstanding shares of the Company.  Mr. Miller is one of the Selling Shareholders and, at the time the Purchase Agreement was executed, was the President and sole Director of the Company. Additionally, certain other shareholders of the Company, including Eric Woods, Jim Stevenson and Sharon Miller, Timothy Miller’s Mother, who were then greater than 5% shareholders of the Company also agreed to sell an aggregate of 15,475,416 shares of the Company’s common stock to unaffiliated third parties in private transactions in consideration for an aggregate of $63,830 or $0.004125 per share.





Gallileo Asset Management loaned the funds to Sebring to acquire the Shares pursuant to the terms of a secured convertible debt agreement.





Pursuant to the terms of the Purchase Agreement, effective September 23, 2010, Leif Andersen was appointed as a Director of the Company.





On October 18, 2010, Matthew Lozeau resigned his position as the Company’s secretary.




41





On October 25, 2010, Timothy Miller resigned as the President and Chief Executive Officer of the Company and Mr. Andersen was appointed to serve as the President and Chief Executive Officer of the Company.  Following Mr. Andersen’s appointment as President and Chief Executive Officer of the Company, Timothy Miller resigned as a Director of the Company, leaving Mr. Andersen as the sole officer and Director of the Company.





On October 25, 2010, pursuant to the terms of an Exchange and Reorganization Agreement between the Company, Sebring, Thor Nor, LLC, which is controlled by Leif Andersen (“Mr. Andersen”), Asbjorn Melo (“Mr. Melo”) and Lester Petracca (“Mr. Petracca” and, together with Mr. Melo and Mr. Andersen, the “Sebring Members”), the Company acquired all of the membership interests of Sebring in exchange for 18,729,098 shares of the Company’s common stock and the assumption of all of Sebring’s then liabilities (the “Exchange” and the “Exchange Shares”).  The liabilities assumed by the Company include an aggregate of $1,435,638 in convertible promissory notes (the “Convertible Notes”), an aggregate of $1,170,718 owed to Mr. Petracca, as described below and an aggregate of $737,000 in the form of non-convertible notes, among other liabilities.  As a result of the Exchange, Mr. Andersen, the sole officer and Director of the Company, through Thor Nor, LLC, a limited liability company controlled by Mr. Andersen, is also the beneficial owner of approximately 41% of the issued and outstanding capital stock of the Company.  As a result of the Exchange, the Company acquired all of the assets and liabilities of Sebring, including Sebring’s Management Employment Agreement with Mr. Andersen (as described in greater detail above under “Employment Agreement” and the rights to the License Agreement (described above under “Overview”).





Included in the Convertible Notes are notes issued to (a) Thor Nor, LLC, a limited liability company controlled by Mr. Andersen, in the principal amount of $275,638;   The Convertible Notes are described in greater detail above under “Recent Change of Control and Change of Business Focus”.





The Company also assumed Sebring’s obligations under the terms of a Settlement Agreement dated as of October 1, 2010 by and between Sebring LLC and Mr. Petracca (the “Settlement Agreement”), which settled certain amounts payable by Sebring to Mr. Petracca and required Mr. Petracca to dismiss a lawsuit previously filed against Sebring regarding the payment of such outstanding amounts payable, together with a promissory note in the principal amount of $1,170,718 issued to Mr. Petracca dated as of October 1, 2010 in connection therewith (the “Petracca Note”).  The Petracca Note is secured by a security interest in substantially all of Sebring’s assets (the “Petracca Security Agreement”).  Mr. Petracca, as a result of the Exchange is the beneficial owner of approximately 15.1% of the Company’s issued and outstanding capital stock.  The Petracca Note and Petracca Security Agreement are described in greater detail above under “Recent Change of Control and Change of Business Focus”.





Pursuant to the terms of the Exchange, Sebring LLC caused the Company to cancel the 69,376,450 shares of the Company’s common stock acquired in connection with the Purchase Agreement, described above, which shares were cancelled effective October 29, 2010.  As a result of the Exchange and cancellation, Thor Nor LLC (which is controlled by Mr. Andersen), Lester Petracca and Asbjorn Melo acquired 14,234,114, 2,996,656, and 1,498,328 shares of the Company’s common stock, respectively, representing approximately 41%, 8.6% and 4.3% of the issued and outstanding shares of the Company’s common stock, respectively (in all cases including the Collateral Shares described below and not including any other convertible securities which they hold)(the Exchange Shares have not been physically issued to date, but have been included in the number of issued and outstanding shares disclosed throughout this report).  In addition, Sebring previously held 7,491,639 shares of the Company’s common stock for the benefit of the Sebring Members (the “Collateral Shares”), which shares have already been included in the totals above, which shares were released upon our payment of a promissory note issued by Sebring to Die CON AG in the principal amount of $100,000 (the “Redemption Note”).





The Company also entered into a Spin-Off Agreement with Timothy Miller and Jim Stevenson that became effective on October 25, 2010, whereby Mr. Miller and Mr. Stevenson, through Sumotext Corporation, a newly formed Nevada corporation, which was owned solely by Mr. Miller and Mr. Stevenson and had no affiliation with the Company acquired all of the pre-Exchange assets, liabilities and outstanding convertible securities of the Company existing as of September 17, 2010 (the “Spin-Off”).  Additionally, in connection with the Spin-Off all of the Company’s pre-Exchange assets, operations, liabilities and warrants were spun-off to Sumotext Corporation, a private Nevada corporation then solely owned by Timothy Miller, our former President and Director and James Stevenson (a former shareholder of the Company) and Sebring’s assets, liabilities and operations became the sole assets, liabilities and operations of the Company effective October 25, 2010, and the Company’s business focus changed to that of Sebring.




42





Leif Andresen is a party to an employment agreement with Sebring LLC providing for the payment of an annual salary of $250,000 for his service as Manager of Sebring LLC, a car allowance of up to $800 per month and a bonus determined by the Company’s board of directors or its compensation committee (the “Employment Agreement”).  Mr. Andersen’s employment agreement can be terminated by Mr. Andersen at any time with thirty days written notice; by Sebring with five days written notice; or at any time by Sebring for “Cause” as defined in the agreement or Mr. Andersen for “Good Reason” as defined in the agreement.  In the event the employment agreement is terminated by the Company without Cause or by Mr. Andersen for Good Reason, Mr. Andersen is due severance pay in an amount equal to 100% of his then annual salary, plus payments equal to 12 months of COBRA health insurance payments, which is required to be made in four equal quarterly payments without interest, following Mr. Andersen’s entry into a release satisfactory to Sebring. A copy of the Employment Agreement is filed as an exhibit to this Agreement.





There is an agreement between Sebring LLC and Leif Andersen to pay Mr. Andersen $233,543 in accrued, but unpaid salary, as of December 31, 2010.





Sebring has an employment agreement in place with John Sauickie, its Executive Vice President and Chief Financial Officer.  The employment agreement has a three year term, effective as of June 3, 2010, and provides for yearly compensation to Mr. Sauickie of $180,000 as well as bonuses as determined by the Board of Directors, and a car allowance of up to $800 per month.  The Company also agreed to issue Mr. Sauickie 1,000,000 shares of common stock, which the Company anticipates issuing in February 2011 in consideration for services rendered. Mr. Sauickie’s employment agreement can be terminated by Mr. Sauickie at any time with thirty days written notice; by Sebring with five days written notice; or at any time by Sebring for “Cause” as defined in the agreement or Mr. Sauickie for “Good Reason” as defined in the agreement.  In the event the employment agreement is terminated by the Company without Cause or by Mr. Sauickie for Good Reason, Mr. Sauickie is due severance pay in an amount equal to 100% of his then annual salary, plus payments equal to 12 months of COBRA health insurance payments, which is required to be made in four equal quarterly payments without interest, following Mr. Sauickie’s entry into a release satisfactory to Sebring. Mr. Sauickie’s employment agreement includes a non-compete clause, whereby Mr. Sauickie agreed not to compete with Sebring for a period of two years following the termination of the employment agreement.





Sebring has an employment agreement in place with L. Michael Andersen, its Director of Sales and Marketing.  The employment agreement has a three year term, effective as of June 3, 2010, and provides for yearly compensation to Mr. Andersen of $89,000 as well as bonuses as determined by the Board of Directors, and a car allowance of up to $800 per month.   Michael Andersen’s employment agreement can be terminated by Mr. Andersen at any time with thirty days written notice; by Sebring with five days written notice; or at any time by Sebring for “Cause” as defined in the agreement or Mr. Andersen for “Good Reason” as defined in the agreement.  In the event the employment agreement is terminated by the Company without Cause or by Mr. Andersen for Good Reason, Mr. Andersen is due severance pay in an amount equal to 100% of his then annual salary, plus payments equal to 12 months of COBRA health insurance payments, which is required to be made in four equal quarterly payments without interest, following Mr. Andersen’s entry into a release satisfactory to Sebring.





Mr. Andersen is the father of L. Michael Andersen, who is Director of Sales and Marketing for the Company and whose employment terms are discussed below.





Review, Approval and Ratification of Related Party Transactions





Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officers, Directors and significant stockholders.  However, all of the transactions described above were approved and ratified by Directors.  In connection with the approval of the transactions described above, our Directors, took into account several factors, including their fiduciary duties to the Company; the relationships of the related parties described above to the Company; the material facts underlying each transaction; the anticipated benefits to the Company and related costs associated with such benefits; whether comparable products or services were available; and the terms the Company could receive from an unrelated third party.




43





We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof.   On a moving forward basis, our Directors will continue to approve any related party transaction based on the criteria set forth above.





ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.





AUDIT FEES





The following table sets forth the fees billed by our independent registered public accounting firm, Salberg & Company, P.A. for each of our last two fiscal years for the categories of services indicated.


Years Ended December 31,Category

2010


2009Audit Fees

$
24,900


$
44,300Audit Related Fees


0



1,950Tax Fees


0



0All Other Fees


0



0





Audit fees.    Consists of fees billed for the audit of our annual financial statements and review of our interim financial information and services that are normally provided by the accountant in connection with year-end and quarter-end statutory and regulatory filings or engagements.  The 2009 fees include the fees for the combined audit of fiscal years 2009 and 2008.
  Audit-related fees.    Consists of fees billed for services relating to review of other regulatory filings including registration statements, periodic reports and audit related consulting.
  Tax fees.Consists of professional services rendered by our principal accountant for tax compliance, tax advice and tax planning.
  Other fees.    Other services provided by our independent registered public accounting firm.
  44





AUDIT RELATED FEES





None.





TAX FEES





None.





ALL OTHER FEES





None.





PART IV





ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES





Exhibit

Number

Description of Exhibit2.1(5)

Exchange and Reorganization Agreement dated as of October 25, 20102.2(5)

Spin-Off Agreement by and among Sumotext Incorporated, Tim Miller and Jim Stevenson effective as of October 25, 20103.1(1)

Articles of Incorporation3.2(3)

Certificate of Change Pursuant to NRS 78.2093.3(6)

Amendment to Articles of Incorporation3.4(1)

Bylaws10.1(4)

Securities Purchase Agreement10.2(4)

Spin-Off Agreement10.3(5)

Settlement Agreement by and between Lester Petracca and Sebring Software, LLC dated as of October 1, 201010.4(5)

Secured Promissory Note issued by Sebring Software, LLC to Lester Petracca dated as of October 1, 201010.5(5)

Security Agreement by and between Lester Petracca and Sebring dated as of October 1, 201010.6(5)

License Agreement by and between Sebring Software, LLC and Engineering Consulting and Solutions, GMBH dated as of October 22, 201010.7(5)

Form of Convertible Promissory Note10.8(5)

Redemption and Security Agreement by and between Die CON AG and Sebring Software, LLC dated as of October 22, 201010.9(5)

Redemption Note issued by Sebring Software, LLC to Die CON AG dated as of October 22, 201010.10*

Employment Agreement by and between Leif Andersen and Sebring Software, LLC dated as of June 3, 2010





45





10.11(5)

Resignation letter to Sumotext Incorporated from Tim Miller10.12*

Employment Agreement by and between John J. Sauickie and Sebring Software, LLC dated as of June 3, 201010.13*

Employment Agreement by and between L. Michael Andersen and Sebring Software, LLC dated as of June 3, 201010.14*

Letter Agreement by and between Sebring Software, LLC and New World Merchant Partners dated as of August 2, 201010.15*

Letter Agreement by and between Sebring Software, LLC and Abraxis Financial dated as of August 1, 201010.16*

Investment Advisory Agreement by and between Sebring Software, LLC and Galileo Asset Management, SA dated as of April 5, 200716.1(2)

Letter from M & K CPAS, PLLC31.1*

Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2*

Certificate of the Chief Financial Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1*

Certificate of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2*

Certificate of the Chief Financial Officer and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





* Filed herewith.





(1) Filed as an Exhibit to the Company’s Registration Statement on Form S-1, filed with the Commission on January 23, 2009, and incorporated by reference herein.





(2) Filed as an Exhibit to the Company’s Report on Form 8-K, filed with the Commission on April 14, 2011, and incorporated herein by reference.





(3) Filed as an Exhibit to the Company’s Report on Form 8-K, filed with the Commission on September 21, 2010 and incorporated herein by reference.





(4) Filed as Exhibits to the Company’s Report on Form 8-K, filed with the Commission on September 24, 2010 and incorporated herein by reference.





(5) Filed as Exhibits to the Company’s Report on Form 8-K, filed with the Commission on October 29, 2010 and incorporated herein by reference.




(6) Filed as Exhibit to the Company’s Report on Form 10-K, filed with the Commission on December 14, 2010.




46




SIGNATURES
 
 In accordance with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 SEBRING SOFTWARE, INC.Date: April 15, 2011
By:
/s/ Leif AndersenLeif AndersenChief Executive Officer

(Principal Executive Officer)
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, 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/ Leif AndersenLeif AndersenChief Executive Officer(Principal Executive Officer)By:
/s/ John SauickieJohn SauickieChief Financial Officer(Principal Financial Officer)




47