|
VELOCITY ASSET MANAGEMENT, INC. AND
SUBSIDIARIES
|
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
|
(Unaudited for the information related to June 30, 2008 and 2007 and
|
audited for the information related to December 31, 2007 and 2006)
|
NOTE 8 - CONVERTIBLE SECURED DEBENTURES AND
NOTES
On October 27,
2005, the Company issued a 10% Secured Convertible Debenture, due April 27,
2007, in the aggregate principal amount of $1.8 million (the Debenture) and a
warrant to purchase 200,000 shares of the Companys common stock at an exercise
price of $3.10 per share which expires in October 2008.
The Debenture
was convertible at $4.00 per share. The Debenture bore interest at 10% per
annum, payable monthly on the first day of each calendar month, beginning on
November 1, 2005. Interest was payable in cash or, at the Companys option, in
shares of common stock provided that certain conditions were satisfied. The
holder of the Debenture was granted (i) a security interest in the assets of
the Company, and (ii) a pledge of the Companys ownership of its subsidiaries,
which is subject to existing liens, existing indebtedness, permitted liens and
permitted indebtedness. Additionally, the subsidiaries guaranteed the
obligations of the Company under the Debenture. The Debenture was also
guaranteed personally by John C. Kleinert, the Companys President and Chief
Executive Officer, W. Peter Ragan, Sr., the Companys Vice President and W.
Peter Ragan, Jr., President of Velocity.
On April 1, 2006, the holder
extended the initial payment due date of the Debenture to June 1, 2006, and in
consideration thereof, the Company issued an additional warrant to purchase
50,000 shares of the Companys common stock at an exercise price of $3.10 per
share which expires in April 2009. On May 19, 2006, the Company used $1,823,000
of the proceeds from its preferred stock offering to repay the interest and
principal under the Debenture.
On June 29,
2007, and July 27, 2007, the Company closed on its private placement offering
of 10% Convertible Subordinated Notes (the Notes) due 2017 (the Offering)
to accredited investors (Investors). The Notes were offered and sold pursuant
to exemption from registration under Section 4(2) of the Securities Act of
1933, as amended (the Securities Act). The Notes were sold by the Company
through an NASD member firm which served as placement agent. In connection with
the Offering, the Company issued the Notes and also entered into a Subscription
Agreement with each of the Note holders.
Pursuant to
the Offering, the Company issued Notes in the aggregate principal amount of
$2,350,000. Interest on the notes is payable monthly in arrears commencing
September 30, 2007. The Notes are subordinated in liquidation preference and in
right of payment to all of the Companys existing debt. The Notes are senior in
right of payment and in liquidation preference to any future long term debt of
the Company. To the extent the Company were to complete a subsequent financing
with the placement agent on or before March 29, 2008 (Subsequent Financing),
the Notes will automatically convert into the underlying securities (either
convertible debt or preferred stock) sold in the Subsequent Financing. To the
extent the new issue in the Subsequent Financing contains an interest rate less
than 10% per annum; the exchange ratio of the Notes will automatically adjust
to maintain a 10.0% yield. To the extent the Company does not complete a
Subsequent Financing; the Notes may be converted, at the option of the holder,
into shares of the Companys common stock at a price of $2.50 per share,
subject to certain adjustments.
The Company
used the net proceeds from the Offering primarily for the purchase of
portfolios of consumer receivables and for general corporate purposes.
For its
services in connection with the Offering, the placement agent received a fee of
7% of the principal amount of the Notes sold. In addition, the Company paid an
unaccountable expense allowance of 1% of the principal amount of the Notes
sold. As a result, after other Offering expenses of approximately $41,500, the
Company received net proceeds of approximately $2,125,500. Total costs of
$224,500 related to this offering have been capitalized and are being amortized
over the life of the notes.
NOTE 9 - RELATED PARTY TRANSACTIONS
The Company
received a note receivable in the amount of $205,000 in partial payment of the
$455,000 purchase price from an officer and related party, John C. Kleinert for
the assignment of membership interests in Ridgedale Avenue Commons, LLC, and
Morris Avenue Commons, LLC, previously owned by J. Holder, Inc. As of December
31, 2007, the note has a balance of $100,000, along with interest at the rate
of 12% which shall accrue only on and after December 26, 2007, and is payable
by means of one lump sum payment of principal and accrued interest on August
25, 2008. As of March 14, 2008, Mr. Kleinert made a $100,000 lump sum payment
to the Company and the promissory note was retired. The Company waived $2,630
in accrued interest on the prepayment.
On December
28, 2007, the Company paid $115,146 in withholding taxes in connection with the
vesting of 175,000 shares of restricted stock granted to James J. Mastriani. As
of March 14, 2008, Mr. Mastriani has returned 136,000 of such shares for
cancellation and retirement to offset this payment.
Of the
$3,350,000 in acquisition financing on the Melbourne Property, $1,400,000 was
provided by Dr. Kelly and Mr. Granatell, who subsequently became members of the
Companys Board of Directors. Additionally, Mr. Robert Kleinert and Ms. Yoke,
related parties of the President and CEO of the Company, provided $900,000 of
this financing in connection with the acquisition. The $2,300,000 is reported
in liabilities of discontinued operations. Interest on these related party
notes with respect to the Melbourne Property accrued in the amounts of $123,278
and $116,103 for the six months ended June 30, 2008 and 2007 and $242,273 and
$216,528 as of the years ended December 31, 2007 and 2006 which is included in
accounts payable and accrued expenses of the discontinued operations. Interest
paid to other related parties as referenced in NOTE 7 totaled $7,000 and $7,000
for the six months ended June 30, 2008 and 2007 and $14,000 and $18,269 and
years ended December 31, 2007 and 2006.
Total interest
to related parties for the six months ended June 30, 2008 and 2007 and the
years ended December 31, 2007 and 2006 was $123,278 and $116,103 and $247,194
and $216,528, respectively. Of the total interest to related parties for the
six months ended June 30, 2008 and 2007 and the years ended December 31, 2007
and 2006, $116,278 and $109,103 and $233,194 and $216,528, respectively, are
included in the results of operations of discontinued operations.
The Company
engages Ragan & Ragan, PC, an entity owned by Messrs. Ragan & Ragan, to
pursue legal collection of its receivable portfolios with respect to obligors
and properties located in the State of New Jersey. The fee arrangements between
the Companys subsidiaries Velocity, J. Holder and VOM and Ragan & Ragan,
P.C., each dated as of January 1, 2005, have been reviewed and approved by all
the members of a committee appointed by the Board of Directors other than Mr.
Ragan, Sr. who abstained. John C. Kleinert and James J. Mastriani comprised the
committee. In May 2007, the fee arrangements were approved by Unanimous Written
Consent of the Board of Directors other than Mr. Ragan, Sr. who abstained.
F-16
|
VELOCITY ASSET MANAGEMENT, INC. AND
SUBSIDIARIES
|
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
|
(Unaudited for the information related to June 30, 2008 and 2007 and
|
audited for the information related to December 31, 2007 and 2006)
|
Ragan and
Ragan, P.C. routinely advances court costs associated with their servicing of
consumer receivable portfolios, which are subsequently reimbursed by the
Company. These costs are included in the estimated court and media costs in the
consolidated balance sheets.
Legal fees
paid to Ragan & Ragan, P.C., by the Companys subsidiaries were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended
|
|
For the Years Ended
|
|
|
|
|
|
|
|
|
|
June 30,
2008
|
|
June 30,
2007
|
|
December 31,
2007
|
|
December 31,
2006
|
|
|
|
|
|
|
|
|
|
|
|
Velocity
Investments, LLC
|
|
$
|
436,645
|
|
$
|
611,450
|
|
$
|
1,128,107
|
|
$
|
1,225,577
|
|
J. Holder,
Inc.
|
|
|
|
|
|
|
|
|
6,000
|
|
|
10,139
|
|
VOM, LLC
|
|
|
|
|
|
192
|
|
|
238
|
|
|
5,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
436,645
|
|
$
|
611,642
|
|
$
|
1,134,345
|
|
$
|
1,241,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 10 - STOCK BASED COMPENSATION
Stock Based Consideration to Employees
The 2004
Equity Incentive Program of the Company, (the Employee Plan) authorizes the
issuance of up to 1,000,000 shares of common stock in connection with the grant
of options or issuance of restricted stock awards. To the extent that the
Company derives a tax benefit from options exercised by employees, if any, such
benefit will be credited to additional paid-in capital when realized on our
income tax return. There were no tax benefits realized by the Company. No
options have been granted to date.
The Company
did not make any awards under the Employee Plan during the year ended December
31, 2007. During the year ended December 31, 2006, the Company issued
restricted stock awards. The following summarizes shares of common stock under
the Employee Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Recorded
|
|
|
|
Number of
Shares
Granted
|
|
Number of
Shares
Vested
|
|
|
|
|
|
|
Employee
|
|
|
|
Date of Grant
Market
Value
|
|
December 31,
2007
|
|
December 31,
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Mastriani
|
|
|
200,000
|
|
|
200,000
|
|
|
1.55
|
|
$
|
110,000
|
|
$
|
200,000
|
|
Craig Buckley
|
|
|
25,000
|
|
|
25,000
|
|
|
1.50
to 1.90
|
|
|
|
|
|
44,300
|
|
Adam Atkinson
|
|
|
3,000
|
|
|
3,000
|
|
|
1.50
to 1.90
|
|
|
|
|
|
5,300
|
|
Lisa Cullen
|
|
|
3,000
|
|
|
3,000
|
|
|
1.50
to 1.90
|
|
|
|
|
|
5,300
|
|
Kristina Vingara
|
|
|
1,000
|
|
|
1,000
|
|
|
1.90
|
|
|
|
|
|
1,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
110,000
|
|
$
|
256,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The stock
based compensation expense of $110,000 pertained to 75,000 shares of common
stock which vested to James J. Mastriani in 2007. For the year ended December
31, 2007, there was no tax benefits realized related to stock based
compensation issued to employees in 2006.
NOTE 11 - COMMON STOCK OFFERING
On September
26, 2007, the Company consummated a closing of its private placement offering
(the Offering) of shares of common stock (the Shares) and warrants to
purchase shares of common stock (the Warrants, together with the Shares, the
Securities) to accredited investors (Investors). The Securities were
offered and sold pursuant to an exemption from registration under Section 4(2)
of the Securities Act of 1933, as amended (the Securities Act). In connection
with the Offering, the Company also entered into a Securities Purchase
Agreement and a Registration Rights Agreement with the investors in the
Offering. The Company sold an aggregate of 675,000 shares at a purchase price
of $2.00 per share and delivered Warrants to purchase an aggregate of 165,000
shares.
On October 11,
2007, the Company closed on its second offering of shares of common stock and
warrants to purchase shares of common stock to accredited investors under the
same terms described above. Together with the first closing, the Company sold
an aggregate of 862,500 shares at a purchase price of $2.00 per share and
delivered Warrants to purchase an aggregate of 172,500 shares of the Companys
common stock. Net proceeds from the financing were used for working capital
purposes including the purchase of distressed consumer receivable portfolios.
F-17
|
VELOCITY ASSET MANAGEMENT, INC. AND
SUBSIDIARIES
|
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
|
(Unaudited for the information related to June 30, 2008 and 2007 and
|
audited for the information related to December 31, 2007 and 2006)
|
NOTE 11 - COMMON STOCK OFFERING (Continued)
The Company
received net proceeds of $1,632,500 from these placements, after offering
expenses of approximately $10,000 and commissions of approximately $82,500. In
addition, the placement agent received 2 year warrants to acquire 41,250 shares
of the Companys common stock.
The Warrants
entitle the holders to purchase shares of the Companys common stock (the
Warrant Shares) for a period of three years commencing on April 4, 2008 at an
exercise price of $2.50 per share. The Warrants contain certain anti-dilution
rights. In addition, the Investors are entitled to additional shares of common
stock if, during the six month period after the Initial Closing, the Company
sells or issues additional shares of Common Stock, or securities (debt and/or
equity) convertible into common stock, with a purchase, exercise or conversion
price of less than $2.00.
Pursuant to
the Registration Rights Agreement, the Company agreed to file a registration
statement providing for the resale of the Shares and the Warrant Shares. The
Company agreed to file the registration statement within 45 days of the initial
closing and to use its best efforts to cause the registration statement to
become effective within 90 or 120 days, The Company met its obligations under
the registration rights arrangement and therefore, the carrying amount of the
liability representing the Companys registration rights obligations was $0.
The registration statement for the Offering was filed on November 9, 2007 and
declared effective on November 21, 2007.
On May 6,
2008, the Company consummated an initial closing of its private placement
offering of units comprised of shares of common stock and warrants to purchase
shares of common stock to accredited investors. The Company sold an aggregate
of 800,003 shares at a purchase price of $0.90 per share with three year
warrants to purchase an aggregate of 200,001 shares of the Companys common
stock at an exercise price of $1.125 per share.
On May 19,
2008, the Company consummated its second and final closing of its private
placement offering of Units comprised of shares of common stock and warrants to
purchase shares of common stock to accredited investors. Together with the
first closing, the Company sold an aggregate of 945,166 shares, 800,003 of
which were at a purchase price of $0.90 per share and 145,163 of which were at
a purchase price of $0.93 per share and delivered three-year warrants to
purchase an aggregate of 236,293 shares of the Companys common stock. The
Company used the net proceeds from the offering primarily for the purchase of
portfolios of unsecured consumer receivables and for general corporate
purposes, including working capital.
The warrants
entitle the holders to purchase shares of the Companys common stock reserved
for issuance thereunder for a period of three years from the date of issuance.
200,001 of the warrants have an exercise price of $1.125 per share and 36,292
of the warrants have an exercise price of $1.16 per share, or the holders may
receive shares pursuant to a cashless exercise provision. The warrants contain
certain anti-dilution rights on terms specified in the Warrants.
The Company
received net proceeds of $793,650 from the placement, after commissions of approximately
$61,350. The Company retained a registered FINRA broker dealer to act as
placement agent. In addition, the placement agent will receive three-year
warrants to acquire 80,000 shares of the Companys common stock at an exercise
price of $1.125 per share.
NOTE 12 - PREFERRED STOCK OFFERING
On May 18,
2006, the Company sold 1,200,000 shares of Series A 10% Convertible Preferred
Stock (Preferred Stock) at $10 per share resulting in gross proceeds of
$12,000,000. The underwriters were granted an over allotment option to purchase
up to an additional 180,000 shares of Preferred Stock. The underwriters were
also issued a warrant to purchase 120,000 shares of Preferred Stock at $10 per
share. On May 31, 2006, the underwriters exercised their overallotment option
to purchase 180,000 shares of the Preferred Stock. The shares of Series A
Convertible Preferred Stock are listed on the American Stock Exchange under the
symbol JVI.PR.
Each share of Preferred Stock
is convertible into four (4) shares of the Companys Common Stock. If after May
18, 2009, the Companys common stock exceeds the conversion price of the
Preferred Stock by more than 35% and is traded on a national exchange, the
Company may terminate the conversion right. If the Company issues a conversion
cancellation notice, the Company will have the right to redeem the stock after
May 18, 2008 for cash, at the Companys option, at $10 per share, plus accrued
and unpaid dividends to the redemption date.
F-18
|
VELOCITY ASSET MANAGEMENT, INC. AND
SUBSIDIARIES
|
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
|
(Unaudited for the information related to June 30, 2008 and 2007 and
|
audited for the information related to December 31, 2007 and 2006)
|
NOTE 13 - OUTSTANDING WARRANTS AND OPTIONS
At December
31, 2006, the Company had outstanding warrants and options to purchase
4,376,660 shares of its common stock at prices ranging from $1.04 to $3.10 per
share. The first warrants (3,199,500 shares of common stock) expire in February
2009. The second warrants for 677,160 shares of common stock were granted
pursuant to a private offering as compensation for services rendered and expire
on September 30, 2009. A third warrant for 200,000 shares of common stock was
granted in connection with the October 2005 convertible debt financing and
expires on October 10, 2010. On May 19, 2006, the Company entered into an
amendment to the Securities Purchase Agreement, effective April 1, 2006, for
the October 2005 convertible debt financing, pursuant to which it extended the
initial payment due date of its outstanding convertible secured debenture and
issued to the holder an additional warrant to purchase 50,000 shares of the
Companys common stock at an exercise price of $3.10 per share which expires on
April 1, 2011. In May 2008, under the full ratchet anti-dilution provision of
the 250,000 in outstanding warrants exercisable at $3.10 a share, such warrants
were exchanged for 861,111 warrants at a reset strike price of $0.90 per share.
At December
31, 2007, the Company had issued three year warrants to purchase an aggregate
of 172,500 shares of the Companys common stock at $2.50 and 41,250 of two year
warrants of the Companys common stock at $2.50 in conjunction with the private
offering discussed in NOTE 11 COMMON STOCK OFFERING.
At December
31, 2007, the Company had an option outstanding to an independent consultant
(issued in 2005) in exchange for services rendered for 250,000 shares of common
stock at an exercise price per share of $2.50 which expires on September 1,
2008.
The following
table summarizes information on all common share purchase options and warrants
issued by the Company for the six months and years ended June 30, 2008 and
December 31, 2007 and 2006, including common share equivalents relating to convertible
debenture share warrants.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2008
|
|
December 31, 2007
|
|
December 31, 2006
|
|
|
|
|
|
|
|
|
|
Outstanding at the beginning of the year
|
|
|
4,590,410
|
|
$
|
1.49
|
|
|
4,376,660
|
|
$
|
1.47
|
|
|
4,326,660
|
|
$
|
1.45
|
|
Granted during period
|
|
|
1,177,404
|
|
|
2.18
|
|
|
213,750
|
|
|
2.50
|
|
|
50,000
|
|
|
3.10
|
|
Exercised during period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminated, replaced or expired during the period
|
|
|
(250,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at the end of the period
|
|
|
5,517,814
|
|
$
|
1.42
|
|
|
4,590,410
|
|
$
|
1.49
|
|
|
4,376,660
|
|
$
|
1.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at the end of the period
|
|
|
5,517,814
|
|
$
|
1.42
|
|
|
4,590,410
|
|
$
|
1.49
|
|
|
4,376,660
|
|
$
|
1.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The number and
weighted average exercise prices of all common shares and common share
equivalents issuable and stock purchase options and warrants outstanding as of
June 30, 2008 is as follows:
|
|
|
|
|
|
|
|
Range of Exercise Prices
|
|
Remaining
Number
Outstanding
|
|
Weighted
Average
Exercise Price
|
|
|
|
|
|
|
|
$0 - 2
|
|
|
4,376,904
|
|
$
|
1.07
|
|
$2 - 4
|
|
|
1,140,910
|
|
|
2.50
|
|
The number and weighted average exercise price of all common shares
and common share equivalents issuable and stock purchase options and warrants outstanding
as of December 31, 2007 is as follows:
|
|
|
|
|
|
|
|
Range
of Exercise Prices
|
|
Remaining
Number
Outstanding
|
|
Weighted
Average
Exercise Price
|
|
|
|
|
|
|
|
$0
- 2
|
|
|
3,199,500
|
|
$
|
1.04
|
|
$2
- 4
|
|
|
1,390,910
|
|
|
2.70
|
|
NOTE 14 - EARNINGS PER SHARE
Basic earnings
per share are computed using the weighted average number of shares outstanding
during each period. Diluted earnings per share are computed using the weighted
average number of shares outstanding during each period, plus the dilutive
effects of potential convertible securities related to preferred stock,
convertible notes, options and warrants. Outstanding options and warrants to
non-employees convertible into 1,457,203 and 1,177,160 and 1,390,910 and
1,177,160 shares of common stock, convertible preferred stock, convertible into
5,520,000 shares of common stock and convertible notes, convertible into
940,000 and 4,945 and 467,308 and 208,463 shares for the six months ended June
30, 2008 and 2007 and the years ended December 31, 2007 and 2006, respectively,
were not included in the dilutive per share calculations because their effect
would have been anti-dilutive.
F-19
|
VELOCITY ASSET MANAGEMENT, INC. AND
SUBSIDIARIES
|
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
|
(Unaudited for the information related to June 30, 2008 and 2007 and
|
audited for the information related to December 31, 2007 and 2006)
|
NOTE 14 - EARNINGS PER SHARE (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended
|
|
For the Years Ended
|
|
|
|
|
|
|
|
|
|
June 30,
2008
|
|
June 30,
2007
|
|
December 31,
2007
|
|
December 31,
2006
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
1,798,427
|
|
$
|
1,304,450
|
|
$
|
2,906,890
|
|
$
|
1,535,025
|
|
Preferred stock dividends
|
|
|
(690,000
|
)
|
|
(690,000
|
)
|
|
(1,380,000
|
)
|
|
(851,005
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations available to common
stockholders
|
|
|
1,108,427
|
|
|
614,450
|
|
|
1,526,890
|
|
|
684,020
|
|
Discontinued operations, net of tax
|
|
|
(843,297
|
)
|
|
(128,910
|
)
|
|
(334,815
|
)
|
|
(216,335
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders - Basic and
Diluted
|
|
$
|
265,130
|
|
$
|
485,540
|
|
$
|
1,192,075
|
|
$
|
467,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares of common stock outstanding - Basic
|
|
|
17,267,963
|
|
|
16,151,144
|
|
|
16,395,040
|
|
|
16,008,653
|
|
Effect of dilutive instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
87,139
|
|
|
1,651,373
|
|
|
1,680,706
|
|
|
1,268,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - Diluted
|
|
|
17,355,102
|
|
|
17,802,517
|
|
|
18,075,746
|
|
|
17,276,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 15 - INCOME TAXES
The provision
for corporate income taxes consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended
|
|
For the Years Ended
|
|
|
|
|
|
|
|
|
|
June 30,
2008
|
|
June 30,
2007
|
|
December 31,
2007
|
|
December 31,
2006
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations before discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
958,078
|
|
$
|
555,144
|
|
$
|
1,417,070
|
|
$
|
841,245
|
|
State
|
|
|
343,150
|
|
|
161,031
|
|
|
565,773
|
|
|
357,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,301,228
|
|
|
716,175
|
|
|
1,982,843
|
|
|
1,199,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(174,790
|
)
|
|
(57,700
|
)
|
|
(26,382
|
)
|
|
(76,173
|
)
|
State
|
|
|
1,836
|
|
|
2,536
|
|
|
5,574
|
|
|
8,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(172,954
|
)
|
|
(55,164
|
)
|
|
(20,808
|
)
|
|
(67,897
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current tax expense
|
|
|
1,128,274
|
|
|
661,011
|
|
|
1,962,035
|
|
|
1,131,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax (benefit) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations before discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
17,700
|
|
|
65,000
|
|
|
87,300
|
|
|
(73,000
|
)
|
State
|
|
|
2,900
|
|
|
15,600
|
|
|
20,000
|
|
|
(23,400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,600
|
|
|
80,600
|
|
|
107,300
|
|
|
(96,400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(211,100
|
)
|
|
(18,000
|
)
|
|
(168,500
|
)
|
|
(30,000
|
)
|
State
|
|
|
88,500
|
|
|
(21,000
|
)
|
|
(55,500
|
)
|
|
(32,700
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(122,600
|
)
|
|
(39,000
|
)
|
|
(224,000
|
)
|
|
(62,700
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax (benefit) expense
|
|
|
(102,000
|
)
|
|
41,600
|
|
|
(116,700
|
)
|
|
(159,100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current and deferred tax expense
|
|
$
|
1,026,274
|
|
$
|
702,611
|
|
$
|
1,845,335
|
|
$
|
972,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-20
VELOCITY ASSET MANAGEMENT, INC. AND
SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited for the information related to June 30,
2008 and 2007 and
audited for the information related to December 31, 2007 and 2006)
NOTE 15 - INCOME TAXES (Continued)
The tax effect of temporary
differences that make up the significant components of the deferred tax assets
and liability for financial reporting purposes for the six months and year
ended June 30, 2008 and December 31, 2007 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six
Months Ended
June 30, 2008
|
|
For the
Year Ended
December 31, 2007
|
|
For the
Year Ended
December 31, 2006
|
|
|
|
|
|
|
|
|
|
Deferred tax asset
|
|
|
|
|
|
|
|
|
|
|
Continuing operations before discontinued operations
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
94,000
|
|
$
|
102,100
|
|
$
|
129,000
|
|
Stock compensation
|
|
|
|
|
|
16,800
|
|
|
110,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94,000
|
|
|
118,900
|
|
|
239,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
|
101,700
|
|
|
54,000
|
|
|
47,100
|
|
Accrued interest
|
|
|
76,500
|
|
|
61,200
|
|
|
30,000
|
|
Impairment of property held for sale
|
|
|
269,500
|
|
|
96,000
|
|
|
|
|
Section 263(a)
|
|
|
209,400
|
|
|
128,200
|
|
|
38,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
657,100
|
|
|
339,400
|
|
|
115,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax asset
|
|
|
751,100
|
|
|
458,300
|
|
|
355,200
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liability -
continuing operations
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(16,000
|
)
|
|
(20,300
|
)
|
|
(23,100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred income taxes
|
|
|
735,100
|
|
|
438,000
|
|
|
332,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance -
continuing operations
|
|
|
|
|
|
|
|
|
(10,400
|
)
|
Valuation allowance -
discontinued operations
|
|
|
(209,500
|
)
|
|
(14,400
|
)
|
|
(14,800
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total valuation allowance
|
|
|
(209,500
|
)
|
|
(14,400
|
)
|
|
(25,200
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
525,600
|
|
$
|
423,600
|
|
$
|
306,900
|
|
|
|
|
|
|
|
|
|
|
|
|
Velocity Asset
Management, Inc. generated net operating losses prior to its acquisition of
STB. As a result of the reverse acquisition, the ownership change of Velocity
Asset Management, Inc. as of February 3, 2004 limits and reduces the future
utilization of the Companys net operating loss carryforwards. These
pre-reverse acquisition net operating loss carryforwards will be limited and
reduced based upon the applicable Federal and New Jersey rules.
The total
valuation allowance increased $195,100 in the six months ended June 30, 2008 and decreased
$10,800 in the year ended December 31, 2007.
At June 30,
2008, the Company had unused net operating loss carryforwards of approximately
$355,500 for Federal purposes and $795,000 for New Jersey purposes. These net
operating losses may provide future income tax benefits of approximately
$106,100 which will expire between the years 2008 and 2023.
At December 31, 2007, the Company had unused net operating loss carryforwards of approximately $380,500 for Federal purposes and $284,000 for New Jersey
purposes. Those net operating losses may provide future income tax benefits of approximately $156,100 which will
expire between the years 2008 and 2023.
The ability to
utilize such losses is dependent upon the Companys ability to generate taxable
income as well as the annual limit per the Internal Revenue Code Section 382
versus the expiration dates of the losses. Because some of the losses are due
to expire prior to fully utilizing the carryforwards, a valuation reserve has
been established equal to the amount expected to expire unused.
The Company
adopted FIN 48, Accounting for Uncertainty in Income Taxes an interpretation
of FASB Statement No. 109 effective January 1, 2007. FIN 48 contains a
two-step approach to recognizing and measuring uncertain tax positions
accounted for in accordance with SFAS No. 109, Accounting for Income Taxes.
The first step is to evaluate the tax position for recognition by determining
if the weight of available evidence indicates that it is more likely than not
that the position will be sustained on audit, including resolution of any
related appeals or litigation processes. The second step is to measure the tax
benefit as the largest amount that is more than 50% likely of being realized
upon ultimate settlement.
F-21
VELOCITY ASSET MANAGEMENT, INC. AND
SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited for the information related to June 30,
2008 and 2007 and
audited for the information related to December 31, 2007 and 2006)
NOTE 15 - INCOME TAXES (Continued)
As a result of
the implementation of FIN 48, no adjustments have been deemed necessary to
retained earnings for prior periods due to immateriality; therefore the
liability for income taxes associated with uncertain tax positions at January
1, 2007 was $0. This liability was increased during 2007 by approximately
$29,000 (including penalties and interest) for State income taxes. Therefore,
the liability for income taxes associated with uncertain tax positions at
December 31, 2007 is approximately $29,000. During the six months ended June
30, 2008, this liability increased by approximately $6,500 for state income
taxes. The Company has determined that there is no material impact on the
effective tax rate with respect to any uncertain tax positions. In addition,
the Company has also determined that there are no material uncertain tax
positions in the net deferred tax asset account as of June 30, 2008 and
December 31, 2007 with respect to the implementation of FIN 48.
The Company
files Federal and State income tax returns in jurisdictions with varying
statutes of limitations. The 2004, 2006 and 2007 tax years remain subject to
examination by Federal taxing authorities and the 2004 through 2007 tax years
generally remain subject to examination by State tax authorities. In 2007, the
U.S. Internal Revenue Service audited the 2005 U.S. Federal tax return. This
audit has been closed. There was no material effect on the Companys financial
position.
A reconciliation of the
provision for income taxes attributable to income on continuing operations
computed at the Federal statutory rate to the reported provision for income
taxes is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended
|
|
For the Year Ended
|
|
|
|
|
|
|
|
|
|
June 30,
2008
|
|
June 30,
2007
|
|
December 31,
2007
|
|
December 31,
2006
|
|
|
|
|
|
|
|
|
|
|
|
Tax provision a Federal
statutory rate
|
|
|
34.00
|
%
|
|
34.00
|
%
|
|
34.00
|
%
|
|
34.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State income taxes net of
Federal benefit
|
|
|
6.20
|
%
|
|
5.94
|
%
|
|
5.94
|
%
|
|
5.94
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-deductible expenses
|
|
|
11.10
|
%
|
|
-3.32
|
%
|
|
2.68
|
%
|
|
7.04
|
%
|
Other (permanent
differences, overaccrual, etc.)
|
|
|
0.20
|
%
|
|
0.79
|
%
|
|
-0.85
|
%
|
|
-4.55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
51.50
|
%
|
|
37.41
|
%
|
|
41.77
|
%
|
|
42.43
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 16 - COMMITMENTS
On May 2,
2007, the Company signed a lease with respect to its new business office
located at 1800 Route 34, Wall, New Jersey 07719. The lease covers 2,450 square
feet of office space and commenced on July 1, 2007 with an initial term of five
years (the Term). The Company has two options to extend the Term for a period
of five years each. The total annual lease payment is $43,488, payable in equal
monthly installments on or before the first of each month.
The future minimum lease payments
for each of the twelve month periods ended June 30, 2008 are as follows:
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2009
|
|
$
|
43,488
|
|
2010
|
|
|
43,488
|
|
2011
|
|
|
43,488
|
|
2012
|
|
|
43,488
|
|
|
|
|
|
|
|
|
$
|
173,952
|
|
|
|
|
|
|
F-22
VELOCITY ASSET MANAGEMENT, INC. AND
SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited for the information related to June 30,
2008 and 2007 and
audited for the information related to December 31, 2007 and 2006)
The future minimum lease
payments for each of the twelve month periods ended December 31, 2007 are as follows:
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2008
|
|
$
|
43,488
|
|
2009
|
|
|
43,488
|
|
2010
|
|
|
43,488
|
|
2011
|
|
|
43,488
|
|
2012
|
|
|
21,744
|
|
|
|
|
|
|
|
|
$
|
195,696
|
|
|
|
|
|
|
Rent expense for the six months
ended June 30, 2008 and 2007 was $32,469 and $23,700 and $56,198 and $21,328
for the years ended December 31, 2007 and 2006, respectively.
The Company has entered into
employment agreements with several officers with terms expiring through
December 31, 2009. The Companys gross commitments related to these agreements
amounted to $1,080,000.
F-23
|
___________ Shares
|
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
|
PROSPECTUS
|
|
|
|
|
|
|
|
|
|
|
|
, 2008
|
No dealer, salesperson or other person is
authorized to give any information or to represent anything not contained in
this prospectus. You must not rely on any unauthorized information or
representations. This prospectus is an offer to sell only the shares offered
hereby, but only under circumstances and in jurisdictions where it is lawful to
do so. The information contained in this prospectus is current only as of its
date.
PART IIINFORMATION NOT REQUIRED IN
PROSPECTUS
|
|
Item 13.
|
Other Expenses of Issuance and Distribution.
|
The
following table shows the costs and expenses, payable in connection with the
sale and distribution of the securities being registered pursuant to this
registration statement. We will pay all of these amounts. All amounts except
the SEC registration fee are estimated.
|
|
|
|
|
SEC
registration fee
|
|
$
|
786.00
|
|
|
NASD filing
fee
|
|
|
2,500.00
|
|
|
Accounting
fees and expenses
|
|
|
*
|
|
|
Legal fees
and expenses
|
|
|
*
|
|
|
Printing
fees and expenses
|
|
|
*
|
|
|
Transfer
Agent fees and expenses
|
|
|
*
|
|
|
Blue sky
fees and expenses (including legal fees)
|
|
|
*
|
|
|
Underwriter
fees and expenses
|
|
|
*
|
|
|
Miscellaneous
|
|
|
*
|
|
|
Total
|
|
$
|
*
|
|
|
|
|
|
*
|
To be
completed by amendment
|
|
|
Item 14.
|
Indemnification of Directors and Officers.
|
Our
certificate of incorporation provides that all our directors, officers,
employees and agents shall be entitled to be indemnified by us to the fullest
extent permitted under the Delaware General Corporation Law, provided that they
acted in good faith and that they reasonably believed their conduct or action
was in, or not opposed to, the best interest of our company.
Our
bylaws provide for indemnification of our officers, directors and others who
become a party to an action on our behalf by us to the fullest extent not
prohibited under the Delaware General Corporation Law. Further, we maintain
officer and director liability insurance.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers, and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. If
a claim for indemnification against such liabilities (other than the payment of
expenses incurred or paid by a director, officer or controlling person in a successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to the court of appropriate
jurisdiction the question whether such indemnification by us is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
|
|
Item 15.
|
Recent Sales of Unregistered Securities.
|
On
October 27, 2005, we and our wholly owned subsidiary, J Holder, Inc., entered
into a Securities Purchase Agreement with DKR SoundShore Oasis Ltd. relating to
a sale of a 10% Secured Convertible Debenture, due April 27, 2007, in the
aggregate principal amount of $1.8 million, and an associated common stock
purchase warrant to purchase 200,000 shares of our common stock at an exercise
price of $3.10 per share.
II-1
On
July 27, 2007, we consummated the final closing of our private placement
offering of 10.0% convertible subordinated notes in the aggregate principal
amount of $2,350,000, due 2017 to accredited investors. The notes were sold by
us through Anderson & Strudwick, which served as placement agent. The notes
are subordinated in liquidation preference and in right of payment to all of
our then-existing debt and senior in right of payment and in liquidation
preference to any of our future long term debt.
On
September 26, 2007, we consummated an initial closing of a private placement
offering of shares of common stock and warrants to purchase shares of common
stock to accredited investors. On October 11, 2007, we consummated the second
and final closing of this offering. We sold an aggregate of 675,000 Shares at a
purchase price of $2.00 per share and delivered warrants to purchase an
aggregate of 135,000 shares of our common stock. . We sold an aggregate of
862,500 shares at a purchase price of $2.00 per share and delivered warrants to
purchase an aggregate of 172,500 shares of our common stock. We received
aggregate net proceeds of $1,596,500 from the placement, after payment of
offering expenses of approximately $25,000 and commissions of approximately
$82,500. We retained Anderson & Strudwick to act as placement agent. In
addition, the placement agent is entitled to receive 2 year warrants to acquire
41,250 shares of the Companys common stock.
On
May 6, 2008, we consummated an initial closing of a private placement offering
of Units comprised of shares of common stock and warrants to purchase shares of
common stock to accredited investors. On May 19, 2008, we consummated our
second and final closing of the private placement offering. We sold an
aggregate of 945,166 Shares, 800,003 of which were at a purchase price of $.90
per share and 145,163 of which were at a purchase price of $.93 per Share and
delivered three-year warrants to purchase an aggregate of 236,293 shares of our
common stock.
The
Warrants entitle the holders to purchase shares of our common stock reserved
for issuance thereunder for a period of three years from the date of issuance.
200,001 of the warrants have an exercise price of $1.13 per share and 36,292 of
the warrants have an exercise price of $1.16 per share, or the holders may
receive shares pursuant to a cashless exercise provision.
We
received net proceeds of $599,600 from the placement, after payment of offering
expenses of approximately $70,000 and commissions of approximately $50,400. In addition,
Anderson & Strudwick received three-year warrants to acquire 80,000 shares
of our common stock at an exercise price of $1.125 per share.
Net
proceeds from the sales of securities discussed in this Item 15 were used
primarily for working capital purposes including, but not limited to, the
purchase of distressed consumer receivable portfolios. All of the offers and
sales referred to above were in private offerings to accredited investors (as
such term is defined in Regulation D) in reliance upon the exemption provided
by Section 4(2) of the Securities Act and Regulation D promulgated under such
act by the Commission. Each of the purchasers was furnished with information
about us and had the opportunity to verify such information. Additionally, we
obtained a representation from each purchaser of such purchasers intent to
acquire the securities for the purpose of investment only, and not with a view
toward the subsequent distribution thereof. The securities bear appropriate
legends and we have issued stop transfer instructions to our transfer agent.
|
|
Item 16.
|
Exhibits and Financial Statement Schedules.
|
See the
Exhibit Index immediately following the signature page hereof.
II-2
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The
undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, to
treat the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or 497(h) under
the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933,
to treat each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
SIGNATURES
In
accordance with the requirements of the Securities Act, the Registrant has only
caused authorized this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wall, State of New
Jersey, on the 18th day of September, 2008.
|
|
|
|
VELOCITY
ASSET MANAGEMENT, INC.
|
|
|
|
|
By:
|
/s/ John
C. Kleinert
|
|
|
|
|
|
John C.
Kleinert
|
|
|
Chief
Executive Officer and President
|
POWER OF ATTORNEY
KNOW
ALL MEN BY THESE PRESENTS that each person whose signature appears below
constitutes and appoints John C. Kleinert, with the power to act without the
other, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution for him or in his name, place and stead, in any
and all capacities to sign any and all amendments or post-effective amendments
to this Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, and in connection with
any registration of additional securities pursuant to Rule 462(b) under the
Securities Act, as amended, to sign any abbreviated registration statements and
any and all amendments thereto, and to file the same, with all exhibits thereto
and other documents in connection therewith, in each case, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite or necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act, this registration statement has been
signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
Person
|
|
Capacity
|
|
Date
|
|
|
|
|
|
/s/ John C. Kleinert
|
|
Chief Executive
Officer, President,
|
|
September 18,
2008
|
|
|
Chairman of
the Board and Director
|
|
|
John C. Kleinert
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
/s/ W. Peter Ragan Sr.
|
|
Vice
President, Director
|
|
September 18,
2008
|
|
|
|
|
|
W. Peter Ragan Sr.
|
|
|
|
|
|
|
|
|
|
/s/ Steven Marcus
|
|
Director
|
|
September 18,
2008
|
|
|
|
|
|
Steven Marcus
|
|
|
|
|
|
|
|
|
|
/s/ Dr. Michael Kelly
|
|
Director
|
|
September 18,
2008
|
|
|
|
|
|
Dr. Michael Kelly
|
|
|
|
|
|
|
|
|
|
/s/ David Granatell
|
|
Director
|
|
September 18,
2008
|
|
|
|
|
|
David Granatell
|
|
|
|
|
|
|
|
|
|
/s/ James J. Mastriani
|
|
Chief
Financial Officer, Chief Legal
|
|
September 18,
2008
|
|
|
Officer,
Secretary, Treasurer
|
|
|
James J. Mastriani
|
|
(Principal
Accounting Officer)
|
|
|
II-4
Exhibit Index
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
1.1*
|
|
Form of Underwriting
Agreement
|
|
|
|
3.1(A)
|
|
Amended and Restated
Certificate of Incorporation
|
|
|
|
3.2(B)
|
|
Amended and Restated
By-laws
|
|
|
|
4.1(C)
|
|
Specimen Common Stock
certificate
|
|
|
|
4.2(S)
|
|
Loan and Security
Agreement, dated as of January 27, 2005, by and between Velocity Investments,
LLC and Wells Fargo Inc.
|
|
|
|
4.3(S)
|
|
General Continuing
Guaranty, dated January 27, 2005, executed by Registrant in favor of Wells
Fargo Inc.
|
|
|
|
4.4(S)
|
|
Security and Pledge
Agreement, dated as of January 27, 2005, by and between Registrant and Wells
Fargo Inc.
|
|
|
|
4.5(S)
|
|
Subordination Agreement,
dated as of January 27, 2005, by and between Registrant and Wells Fargo Inc.
|
|
|
|
4.6(T)
|
|
Form of promissory note
issued on April 15, 2005
|
|
|
|
4.7(K)
|
|
10% Convertible Debenture
due April 27, 2005
|
|
|
|
4.8(K)
|
|
Common Stock Purchase
Warrant
|
|
|
|
4.9(U)
|
|
Warrant to Purchase 100,000
Shares of Series A Convertible Preferred Stock
|
|
|
|
4.10(U)
|
|
Specimen Series A
Convertible Preferred Stock Certificate
|
|
|
|
4.11(V)
|
|
Common Stock Purchase
Warrant
|
|
|
|
4.12(V)
|
|
Amended 10% Convertible
Secured Debenture
|
|
|
|
4.13(W)
|
|
Form of Common Stock
Warrant
|
|
|
|
5.1*
|
|
Opinion of Ellenoff
Grossman & Schole LLP
|
|
|
|
10.1(E)
|
|
Business Advisory Agreement, dated as of February 5, 2004, by and between
Lomond International, Inc. and Registrant
|
|
|
|
10.2(F)
|
|
Employment Contract, dated as of September 8, 2004, by and between
Registrant and James J. Mastriani
|
|
|
|
10.3(G)
|
|
Independent Consulting Agreement, dated December 16, 2004, between
Registrant and The Del Mar Consulting Group, Inc.
|
|
|
|
10.4(G)
|
|
Non-qualified Stock Option Agreement, dated December 16, 2004,
Between Registrant and The Del Mar Consulting Group, Inc.
|
|
|
|
10.5(H)
|
|
Employment Agreement, dated as of January 1, 2004, between John C.
Kleinert and STB, Inc. (n/k/a Velocity Asset Management, Inc.)
|
|
|
|
10.6(H)
|
|
Addendum, dated September 1, 2004, to Employment Agreement, dated as of January 1, 2004, between John C. Kleinert and Registrant
|
|
|
|
10.7(H)
|
|
Employment Agreement, dated as of January 1, 2004, between John C. Kleinert and J. Holder, Inc.
|
|
|
|
10.8(H)
|
|
Addendum, dated September 1, 2004, to Employment Agreement, dated As of January 1, 2004, between John C. Kleinert and J. Holder, Inc.
|
|
|
|
10.9(H)
|
|
Employment Agreement, dated as of January 1, 2004, between Velocity Investments, LLC and W. Peter Ragan, Jr.
|
|
|
|
10.10(H)
|
|
Addendum, dated September 1, 2004, to Employment Agreement, dated As of January 1, 2004, between W. Peter Ragan, Jr. and Velocity
Investments, LLC
|
|
|
|
10.11(H)
|
|
Employment Agreement, dated as of January 1, 2004, between VOM, LLC and W. Peter Ragan, Sr.
|
|
|
|
10.12(H)
|
|
Addendum, dated September 1, 2004, to Employment Agreement, dated As of January 1, 2004, between W. Peter Ragan, Sr. and VOM, LLC
|
|
|
|
10.13(H)
|
|
Retainer Agreement, dated as of January 1, 2005, between Ragan & Ragan, P.C. and Velocity Investments, LLC
|
|
|
|
II-5
|
|
|
10.14(H)
|
|
Retainer Agreement, dated as of January 1, 2005, between Ragan & Ragan, P.C. and VOM, LLC
|
|
|
|
10.15(H)
|
|
Retainer Agreement, dated as of January 1, 2005, between Ragan & Ragan, P.C. and J. Holder, Inc.
|
|
|
|
10.16(AA)
|
|
Addendum, dated January 1, 2006, to Employment Agreement, dated as of January 1, 2004, between John C. Kleinert and Registrant
|
|
|
|
10.17(AA)
|
|
Addendum, dated January 1, 2006, to Employment Agreement, dated As of January 1, 2004, between W. Peter Ragan, Jr. and Velocity
Investments, LLC
|
|
|
|
10.18(AA)
|
|
Addendum, dated January 1, 2006, to Employment Agreement, dated As of January 1, 2004, between W. Peter Ragan, Sr. and VOM, LLC
|
|
|
|
10.19(H)
|
|
Form of Legal Collection Agreement
|
|
|
|
10.20(I)
|
|
Real Estate Joint Venture Agreement dated June 2, 2005
|
|
|
|
10.21(J)
|
|
Business Advisory Agreement dated September 1, 2005
|
|
|
|
10.22(K)
|
|
Securities Purchase Agreement dated October 27, 2005
|
|
|
|
10.23(K)
|
|
Registration Rights Agreement dated October 27, 2005
|
|
|
|
10.24(K)
|
|
Security Agreement dated October 27, 2005
|
|
|
|
10.25(K)
|
|
Subsidiary Guarantee dated October 27, 2005
|
|
|
|
10.26(L)
|
|
Amendment No. 1 to Business Advisory Agreement dated as of November 11, 2005
|
|
|
|
10.27(L)
|
|
Form of Director Indemnification Agreement
|
|
|
|
10.28(M)
|
|
First Amendment to Loan and Security Agreement by and between Wells Fargo Inc. and Velocity Investments, L.L.C. dated as of February 27,
2006
|
|
|
|
10.29(O)
|
|
Amendment Agreement
|
|
|
|
10.30(P)
|
|
Second Amendment to Loan and Security Agreement, dated December 8, 2006
|
|
|
|
10.31(P)
|
|
Third Amendment to Loan and Security Agreement, dated December 8, 2006
|
|
|
|
10.32(Q)
|
|
Agreement of Lease, dated May 2, 2007
|
|
|
|
10.33(R)
|
|
Registration Rights Agreement, dated September 26, 2007
|
|
|
|
21.1(D)
|
|
Subsidiaries of the registrant
|
|
|
|
23.1
|
|
Consent of Weiser LLP
|
|
|
|
23.2*
|
|
Consent of Ellenoff
Grossman & Schole LLP (contained in Exhibit 5.1)
|
|
|
|
24.1
|
|
Powers of Attorney
(contained on page II-4)
|
|
|
* To be filed by
amendment.
|
|
A.
Incorporated by reference to Registrants Definitive Information Statement
filed with the Securities and Exchange Commission on March 19, 2004.
|
|
B.
Incorporated by reference to Registrants Current Report on Form 8-A filed
with the Securities and Exchange Commission on May 15, 2006.
|
|
C.
Previously filed with Registrants Annual Report on Form
10-KSB for the year ended December 31, 2004.
|
|
D. Filed as
part of Amendment No. 1 to the Registration Statement on Form SB-2, File No.
333-130234, filed with the Securities Exchange Commission on December 29,
2005.
|
|
E. Incorporated by reference to Schedule 13D filed by Lomond International, Inc. with the Securities and Exchange Commission on March 10, 2004.
|
|
F. Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 14, 2004.
|
|
II-6
|
|
G. Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2005.
|
|
H. Filed as part of Amendment No. 1 to the Registration Statement on Form SB-2, File No. 333-122062, filed with the Securities Exchange Commission on March
16, 2005.
|
|
I. Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 22, 2005
|
|
J. Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 7, 2005.
|
|
K. Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 31, 2005
|
|
L. Incorporated by reference to Registrant's Quarterly Report on Form 10-QSB/A for the quarter ended September 30, 2005 filed with the Securities and
Exchange Commission on December 2, 2005
|
|
M. First Amendment to Loan and Security Agreement by and between Wells Fargo Inc. and Velocity Investments, L.L.C. dated as of February 27, 2006
|
|
N. Filed as part of Amendment No. 1 to the Registration Statement on Form SB-2, File
No. 333-122062, filed with the Securities and Exchange Commission on March 16, 2005
|
|
O. Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2006.
|
|
P. Incorporated by reference to Registrant's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 5, 2007
|
|
Q. Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 8, 2007.
|
|
R. Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 27, 2007.
|
|
S. Incorporated
by reference to Registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on February 2, 2005.
|
|
T. Incorporated by reference
to Registrants Current Report on Form 8-K filed with the Securities and
Exchange Commission on April 19, 2005.
|
|
U. Incorporated by reference
to Registrants Current Report on Form SB-2/A filed with the Securities and
Exchange Commission on April 18, 2006
|
|
V. Incorporated by reference
to Registrants Current Report on Form 10-QSB filed with the Securities and
Exchange Commission on May 22, 2006.
|
|
W. Incorporated by reference
to Registrants Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 27, 2007.
|
II-7
Velocity Asset Management, (AMEX:JVI)
Historical Stock Chart
Von Mai 2024 bis Jun 2024
Velocity Asset Management, (AMEX:JVI)
Historical Stock Chart
Von Jun 2023 bis Jun 2024