Delaware
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36-3688583
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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P.O. Box 711308, Salt
Lake City, Utah, 84171
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(Address
of principal executive offices)
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(801)
942-6444
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(Issuer’s
Telephone Number)
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Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o (Do
not check if a smaller reporting company)
|
Smaller
reporting company x
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KLEVER
MARKETING, INC.
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||||||||
(a
Development Stage Company)
|
||||||||
BALANCE
SHEETS
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||||||||
(Unaudited)
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||||||||
September
30,
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December
31,
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|||||||
ASSETS
|
2008
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2007
|
||||||
Current
Assets
|
||||||||
Cash
|
$ | 4,545 | $ | 375 | ||||
Other
Receivable
|
- | 25,000 | ||||||
Total
Current Assets
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4,545 | 25,375 | ||||||
Fixed
Assets
|
||||||||
Office
Equipment
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92,964 | 92,964 | ||||||
Less
Accumulated Depreciation
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(92,964 | ) | (92,964 | ) | ||||
Net
Fixed Assets
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- | - | ||||||
Other
Assets
|
||||||||
Patents
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775,045 | 775,045 | ||||||
Less
Accumulated Amortization
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(775,045 | ) | (775,045 | ) | ||||
Net
Other Assets
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- | - | ||||||
Total
Assets
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$ | 4,545 | $ | 25,375 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
Liabilities
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||||||||
Accounts
Payable, Trade
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$ | 308,636 | $ | 302,037 | ||||
Accrued
Liabilities
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593,495 | 748,615 | ||||||
Line
of Credit
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21,072 | 23,023 | ||||||
Related
Party Payables
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58,393 | 58,393 | ||||||
Notes
Payable
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45,000 | 45,000 | ||||||
Total
Current Liabilities
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1,026,596 | 1,177,068 | ||||||
Stockholders'
Equity
|
||||||||
Preferred
stock (par value $.01), 2,000,000 shares authorized
|
||||||||
168,434
issued and outstanding September 30, 2008
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||||||||
and
December 31, 2007
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1,684 | 1,684 | ||||||
Common
Stock (Par Value $.01), 50,000,000 shares
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||||||||
authorized
46,762,303 shares issued and outstanding
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||||||||
at
September 30, 2008 and 46,718,303 and December 31, 2007
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467,623 | 467,183 | ||||||
Common
Stock to be issued, 469,752 shares at
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||||||||
September
30, 2008 and December 31, 2007
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4,698 | 4,698 | ||||||
Treasury
Stock, 1,000 shares at September 30, 2008
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||||||||
and
December 31, 2007
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(52,700 | ) | (52,700 | ) | ||||
Paid
in Capital in Excess of Par Value
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16,042,768 | 16,032,208 | ||||||
Retained
Deficit
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(3,333,785 | ) | (3,333,785 | ) | ||||
Deficit
Accumulated During Development Stage
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(14,152,339 | ) | (14,270,981 | ) | ||||
Total
Stockholders' Equity
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(1,022,051 | ) | (1,151,693 | ) | ||||
Total
Liabilities and Stockholders' Equity
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$ | 4,545 | $ | 25,375 | ||||
The
accompanying notes are an integral part of these financial
statements
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KLEVER
MARKETING, INC.
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||||||||||||||||||||
(A
Development Stage Company)
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||||||||||||||||||||
STATEMENTS
OF OPERATIONS
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||||||||||||||||||||
Cumulative
|
||||||||||||||||||||
From
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||||||||||||||||||||
(Unaudited)
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(Unaudited)
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5-Jul-96
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||||||||||||||||||
For
the Three Months Ended
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For
the Nine Months Ended
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Inception
of
|
||||||||||||||||||
September
30,
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September
30,
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Development
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||||||||||||||||||
2008
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2007
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2008
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2007
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Stage
|
||||||||||||||||
Revenue
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$ | - | $ | - | $ | - | $ | - | $ | 256,000 | ||||||||||
Expenses
|
||||||||||||||||||||
Sales
and Marketing
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- | - | - | - | 163,306 | |||||||||||||||
General
and Administrative
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13,973 | 226,317 | 74,246 | 385,263 | 10,425,532 | |||||||||||||||
Research
and Development
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- | - | - | - | 4,529,656 | |||||||||||||||
Total
Expenses
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13,973 | 226,317 | 74,246 | 385,263 | 15,118,494 | |||||||||||||||
Other
Income (Expense)
|
||||||||||||||||||||
Other
Income
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164,991 | 25,000 | 214,991 | 25,000 | 668,834 | |||||||||||||||
Interest
Income
|
- | - | - | 126 | 18,902 | |||||||||||||||
Interest
Expense
|
(9,460 | ) | (81,574 | ) | (22,103 | ) | (305,913 | ) | (2,593,351 | ) | ||||||||||
Forgiveness
of debt
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- | 46,689 | - | 127,137 | 127,137 | |||||||||||||||
Gain
(Loss) on sale of assets
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- | - | - | - | 26,947 | |||||||||||||||
Capital
gain on sale of investments
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- | - | - | - | 191,492 | |||||||||||||||
Total
Other Income (Expense)
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155,531 | (9,885 | ) | 192,888 | (153,650 | ) | (1,560,039 | ) | ||||||||||||
Loss
Before Taxes
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141,558 | (236,202 | ) | 118,642 | (538,913 | ) | (16,422,533 | ) | ||||||||||||
Income
Taxes
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- | - | - | - | (1,200 | ) | ||||||||||||||
Net
Loss before extraordinary items
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141,558 | (236,202 | ) | 118,642 | (538,913 | ) | (16,423,733 | ) | ||||||||||||
Extraordinary
item - troubled debt restructuring
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- | 2,271,394 | - | 2,271,394 | 2,271,394 | |||||||||||||||
Net
Income (loss)
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$ | 141,558 | $ | 2,035,192 | $ | 118,642 | $ | 1,732,481 | $ | (14,152,339 | ) | |||||||||
Loss
per Common Share
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||||||||||||||||||||
Income
(loss) before extraordinary item
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$ | - | $ | (0.01 | ) | $ | - | $ | (0.01 | ) | ||||||||||
Extraordinary
item
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- | 0.06 | - | 0.05 | ||||||||||||||||
Loss
per share
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$ | - | $ | 0.05 | $ | - | $ | 0.04 | ||||||||||||
Weighted
Average Shares Outstanding
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46,762,303 | 40,067,068 | 46,760,055 | 39,662,696 | ||||||||||||||||
The
accompanying notes are an integral part of these financial
statements
|
KLEVER
MARKETING, INC.
|
||||||||||||
(A
Development Stage Company)
|
||||||||||||
STATEMENT
OF CASH FLOWS
|
||||||||||||
Cumulative
|
||||||||||||
From
|
||||||||||||
(Unaudited)
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5-Jul-96
|
|||||||||||
For
the Nine Months Ended
|
Inception
of
|
|||||||||||
September
30,
|
Development
|
|||||||||||
2008
|
2007
|
Stage
|
||||||||||
CASH
FLOWS FROM OPERATING
|
||||||||||||
ACTIVITIES:
|
||||||||||||
Net
Loss
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$ | 118,642 | $ | 1,732,481 | $ | (14,152,339 | ) | |||||
Adjustments
used to reconcile net loss to net
|
||||||||||||
cash
provided by (used in) operating activities:
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||||||||||||
Stock
issued for general and administrative
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- | 7,500 | 1,004,982 | |||||||||
Stock
issued for research and development
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- | - | 62,850 | |||||||||
Stock
returned for services not rendered
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- | - | (200,790 | ) | ||||||||
(Gain)
loss on sale/disposal of assets
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- | - | 486,536 | |||||||||
Compensation
expense from stock options
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- | - | 89,791 | |||||||||
Stock
issued for interest
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- | 15,525 | 135,226 | |||||||||
Stock
issued for accounts payable
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- | 16,996 | 243,457 | |||||||||
Deferred
income
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- | - | (214,000 | ) | ||||||||
Depreciation
and amortization
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- | - | 1,912,883 | |||||||||
Write-off
bad debts
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- | 15,000 | ||||||||||
Gain
from reversal of contingent liability
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(164,991 | ) | (164,991 | ) | ||||||||
(Increase)
decrease in accounts receivable
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- | - | (413 | ) | ||||||||
(Increase)
decrease in shareholder receivable
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- | - | 37,694 | |||||||||
(Increase)
decrease in other assets & prepaids
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25,000 | 3,124 | 114,238 | |||||||||
Increase
(decrease) in accounts payable
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6,599 | (120,478 | ) | 222,931 | ||||||||
Increase
(decrease) in accrued liabilities
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9,871 | (1,901,797 | ) | 707,155 | ||||||||
Net
Cash Used in Operating Activities
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(4,879 | ) | (246,649 | ) | (9,699,790 | ) | ||||||
CASH
FLOWS FROM INVESTING
|
||||||||||||
ACTIVITIES:
|
||||||||||||
Acquisition/Sale
of equipment, net
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- | - | (587,801 | ) | ||||||||
Acquisition/Sale
of patents
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- | - | 25,089 | |||||||||
Acquisition/Sale
of stock, net
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- | - | 12,375 | |||||||||
Net
Cash Used by Investing Activities
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- | - | (550,337 | ) | ||||||||
CASH
FLOWS FROM FINANCING
|
||||||||||||
ACTIVITIES:
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||||||||||||
Proceeds
capital stock issued
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11,000 | 242,500 | 7,049,173 | |||||||||
Proceeds
from loans
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- | - | 3,473,252 | |||||||||
Proceeds
from line of credit
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(1,951 | ) | 23,473 | 21,072 | ||||||||
Loan
receivables
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- | - | (15,000 | ) | ||||||||
Principal
payments on lease obligations
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- | - | (18,769 | ) | ||||||||
Increase
in bank overdraft
|
- | - | - | |||||||||
Cash
payments on notes payable
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- | - | (279,730 | ) | ||||||||
Net
Cash Provided by Financing Activities
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9,049 | 265,973 | 10,229,998 | |||||||||
Net
Increase (Decrease) in Cash and Cash
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||||||||||||
Equivalents
|
4,170 | 19,324 | (20,129 | ) | ||||||||
Cash
and Cash Equivalents at Beginning of the Year
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375 | 3,172 | 24,674 | |||||||||
Cash
and Cash Equivalents at End of the Year
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$ | 4,545 | $ | 22,496 | $ | 4,545 |
KLEVER
MARKETING, INC.
|
||||||||||||
(A
Development Stage Company)
|
||||||||||||
STATEMENT
OF CASH FLOWS
|
||||||||||||
(continued)
|
||||||||||||
Cumulative
|
||||||||||||
From
|
||||||||||||
(Unaudited)
|
5-Jul-96
|
|||||||||||
For the Nne Months Ended |
Inception
of
|
|||||||||||
September
30,
|
Development
|
|||||||||||
2008
|
2007
|
Stage
|
||||||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||
Interest
|
$ | - | $ | - | $ | - | ||||||
Income
Taxes
|
$ | - | $ | - | $ | 1,200 | ||||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||||||
On
September 30, 2007, the Company issued 8,281,016 shares of common stock in
exchange for
|
||||||||||||
notes
payable totaling $2,070,254. As part of the agreements, accrued
interest related to these notes
|
||||||||||||
totaling
$2,190,946 was forgiven, and recorded as extraordinary gain at September
30, 2007.
|
||||||||||||
During
the 3rd quarter, the Company determined that contingent liabilities
totaling $164,991 that had
|
||||||||||||
been
previously recorded in prior financial statements were no longer payable,
and recorded the gain from
|
||||||||||||
the
reversal of the contingent liabilities as "Other Income" in the financial
statements.
|
||||||||||||
The
accompanying notes are an integral part of these financial
statements
|
Computer
equipment
|
3
years
|
Office
furniture and fixtures
|
5-10
years
|
2007
|
2006
|
|||||||
Net
Operating Losses
|
$ | 2,622,667 | $ | 2,860,236 | ||||
Valuation
Allowance
|
(2,622,667 | ) | (2,860,236 | ) | ||||
$ | - | $ | - |
2007
|
2006
|
|||||||
Provision
(Benefit) at US Statutory Rate
|
$ | (237,569 | ) | $ | 119,907 | |||
Increase
(Decrease) in Valuation Allowance
|
237,569 | (119,907 | ) | |||||
$ | - | $ | - |
Weighted
|
||||||||||||
Option
/
|
Average
|
Weighted
|
||||||||||
Warrants
|
Exercise
|
Average
|
||||||||||
Shares
|
Price
|
Fair
Value
|
||||||||||
Options
& warrants outstanding,
|
||||||||||||
December
31, 2006
|
5,070,388 | $ | 0.18 | |||||||||
Granted,
Exercise price more than fair value
|
545,000 - | $ | 0.75 | - | ||||||||
Granted,
Exercise price less than fair value
|
- | - | - | |||||||||
Expired
|
3,156,800 | $ | 0.13 | |||||||||
Exercised
|
- | - | ||||||||||
Options
& warrants outstanding,
|
||||||||||||
December
31, 2007
|
2,458,088 | $ | 0.52 | |||||||||
Weighted
|
||||||||||||
Option
/
|
Average
|
Weighted
|
||||||||||
Warrants
|
Exercise
|
Average
|
||||||||||
Shares
|
Price
|
Fair
Value
|
||||||||||
Options
& warrants outstanding,
|
||||||||||||
December
31, 2007
|
2,458,088 | $ | 0.52 | |||||||||
Granted,
Exercise price more than fair value
|
0 - | $ | 0 | - | ||||||||
Granted,
Exercise price less than fair value
|
- | - | - | |||||||||
Expired
|
0 | $ | 0 | |||||||||
Expired
|
1,186,000 | $ | 0.55 | |||||||||
Options
& warrants outstanding,
|
||||||||||||
September
30, 2008
|
1,272,088 | $ | 0.61 | |||||||||
Weighted-
|
Weighted-
|
|||||||||
Weighted-
|
Shares/
|
Average
|
Average
|
|||||||
Shares
/
|
Average
|
Warrants
|
Exercise
Price
|
Contractual
|
||||||
Exercise
|
Warrants
|
Exercise
|
Currently
|
Currently
|
Remaining
|
|||||
Price
|
Outstanding
|
Price
|
Exercisable
|
Exercisable
|
Life
|
|||||
0.10
|
225,000
|
0.10
|
225,000
|
0.10
|
4.4
|
|||||
.50
|
591,188
|
0.50
|
591,188
|
0.50
|
10.8
|
|||||
1.00
|
455,900
|
1.00
|
455,900
|
1.00
|
11.5
|
United
States (a)
|
2004
– Present
|
|
(a)
Includes federal as well as state or similar local jurisdictions, as
applicable.
|
3.01
|
Restated
Certificate of Incorporation of Klever Marketing, Inc. a Delaware
corporation (1)
|
3.02
|
Certificate
of Designation of Rights, Privileges and Preferences: Rights of A Class
Voting Preferred Stock, Series 1, of Klever Marketing, Inc., dated
February 7, 2000 (2)
|
3.03
|
Bylaws,
as amended (2)
|
4.01
|
Amended
Certificate of Designation of Rights, Privileges and Preferences: Rights
of A Class of Voting Preferred Stock, Series 1, of Klever Marketing, Inc.,
Dated February 7, 2000 (3)
|
4.02
|
Certificate
of Designation of Rights, Privileges and Preferences of Class B Voting
Preferred Stock, of Klever Marketing, Inc., dated September 24, 2000
(3)
|
4.03
|
Certificate
of Designation of Rights, Privileges and Preferences of Class C Voting
Preferred Stock, of Klever Marketing, Inc., dated January 2, 2001
(3)
|
4.04
|
Certificate
of Designation of Rights, Privileges and Preferences of Class D Voting
Preferred Stock, of Klever Marketing, Inc., dated June 14, 2002
(5)
|
4.05
|
Amendment
to the Certificates of Designation of Rights, Privileges and Preferences
of Class A, B, and C Voting Preferred Stock, of Klever Marketing, Inc.,
dated June 12, 2002 (5)
|
10.01
|
Separation
Agreement between Paul G. Begum and the Registrant Dated January 8, 2001
(2)
|
10.02
|
Stock
Incentive Plan, effective June 1, 1998 (2)
|
10.03
|
Amended
and Restated Promissory Note (Secured) of the Registrant payable to
Presidio Investments, LLC, dated June 27, 2000, with Financing Statement
and Exhibit “A” (2)
|
10.04
|
Intercreditor
Agreement between Seabury Investors III, Limited Partnership, The Olson
Foundation, Presidio Investments, LLC, and the Registrant dated August 27,
2001 (4)
|
10.05
|
Asset
Purchase Agreement, dated August 27, 2004 (6)
|
31.1
|
Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
31.2
|
Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
32.1
|
Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.2
|
Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
(1)
Incorporated herein by reference from Registrant’s Form 10KSB,
dated June 20, 1997.
|
(2)
Incorporated herein by reference from Registrant’s Form 10KSB, dated March
29, 2001
|
(3)
Incorporated herein by reference from Registrant’s Form 10QSB, dated May
15, 2001.
|
(4)
Incorporated herein by reference from Registrant’s Form 10QSB, dated May
15, 2002.
|
(5) Incorporated
herein by reference from Registrant’s Form 10QSB, dated August 19,
2002.
|
(6) Incorporated
herein by reference from Registrant’s Form 10QSB, dated November 19,
2004.
|