This annual report contains forward-looking statements as that
term is defined in the Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These
statements relate to future events or our future results of operation or future
financial performance, including, but not limited to, the following: statements
relating to our ability to raise sufficient capital to finance our planned
operations, and our estimates of cash expenditures for the next 12 months.
In some cases, you can identify forward-looking statements by terminology
such as may, should, intends, expects, plans, anticipates,
believes, estimates, predicts, potential, or continue or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled Risk Factors on page 4,
which may cause our or our industrys actual results, levels of activity or
performance to be materially different from any future results, levels of
activity or performance expressed or implied by these forward-looking
statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance. You should not place undue reliance on these
statements, which speak only as of the date that they were made. These
cautionary statements should be considered with any written or oral
forward-looking statements that we may issue in the future. Except as required
by applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to reflect actual results, later events or circumstances or to
reflect the occurrence of unanticipated events.
Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.
In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
shares refer to common shares in our capital stock.
As used in this current report and unless otherwise indicated,
the terms we, us and our company refer to Lusora Healthcare Systems Inc.
Corporate History
Lusora Healthcare Systems Inc.
We were incorporated in the State of Nevada on February 2, 2005
under the name Comtrix Inc. From incorporation until June 2005, our operating
activities consisted primarily of developing fingerprint recognition products
for residential buildings in China. We were not successful in implementing our
business plan. Our management investigated opportunities and challenges in the
business of developing fingerprint recognition products and security for
residential buildings in China and determined that the business did not present
the best opportunity for our company to realize value for our shareholders.
Accordingly, we abandoned our previous business plan and focussed on the
identification of suitable businesses with which to enter into a business
opportunity or business combination.
On June 23, 2006, we executed a letter of intent with Lusora
Inc. The letter of intent as amended contemplates, among other things, the following:
(i) we will change our name from “Comtrix Inc.” to “Lusora
Healthcare Systems Inc.” (ii) we will effect a 25:1 forward stock split
of our authorized, issued and outstanding common stock; (iii) we will complete
a financing in the aggregate amount of $1 million; (iv) the existing stakeholders
of Lusora Inc. will exchange the issued and outstanding shares of Lusora Inc.
for and equal number of our common shares; and (v) certain directors and officers
of our company will resign. The closing of the acquisition is subject to the
satisfaction of conditions precedent to closing as set forth in the letter of
intent including, but not limited to, the following: (i) mutual agreement and
execution of all definitive documentation by the parties; (ii) agreement by
our legal counsel and accounting firm to perform the work necessary for the
filing by
our company of a registration statement; (iii) completion by
our company of the $1 million financing; and (iv) our satisfactory due diligence
of Lusora Inc. and (v) the continuing development of Lusora Inc.’s business
through to closing.
Effective June 23, 2006, we completed a merger with Lusora
Corp., which was created for the sole purpose of effecting a name change. As a
result, we changed our name from Comtrix Inc. to Lusora Healthcare Systems
Inc. We changed the name of our company to better reflect the anticipated
direction and business of our company. In addition, effective June 23, 2006 we
effected a twenty-five (25) for one (1) forward stock split of our authorized,
issued and outstanding common stock. As a result, our authorized capital
increased from 75,000,000 shares of common stock with a par value of $0.001 to
1,875,000,000 shares of common stock with a par value of $0.001. Our issued and
outstanding share capital increased from 2,500,000 shares of common stock to
62,500,000 shares of common stock.
Reports to Security Holders
We are not required to deliver an annual report to our
shareholders and we may not send an annual report, together with our annual
audited financial statements. We are required to file annual, quarterly and
current reports, proxy statements and other information with the Securities and
Exchange Commission and our filings are available to the public over the
internet at the Securities and Exchange Commissions website at
http://www.sec.gov.
The public may read and copy any materials filed by us with the
Securities and Exchange Commission at the Securities and Exchange Commissions
Public Reference Room at 100 F Street N.E. Washington D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
Securities and Exchange Commission at 1-800-732-0330.
RISK FACTORS
RISKS RELATED TO OUR BUSINESS
We have had negative cash flows from operations since
inception. We will require significant additional financing, the availability of
which cannot be assured, and if our company is unable to obtain such financing,
our business may fail.
To date, we have had negative cash flows from operations and
have depended on sales of our equity securities and debt financing to meet our
cash requirements. Our ability to develop and, if warranted, commercialize our
technologies, will be dependent upon our ability to raise significant additional
financing. If we are unable to obtain such financing, we will not be able to
fully develop our business.
We may not be able to obtain additional equity or debt
financing on acceptable terms as required. Even if financing is available, it
may not be available on terms that are favorable to us or in sufficient amounts
to satisfy our requirements. If we require, but are unable to obtain, additional
financing in the future, we may be unable to implement our business plan and our
growth strategies, respond to changing business or economic conditions,
withstand adverse operating results and compete effectively. More importantly,
if we are unable to raise further financing when required, we may be forced to
scale down our operations and our ability to generate revenues may be negatively
affected.
We have a history of losses and nominal operating results,
which raise substantial doubt about our ability to continue as a going concern.
Since inception, we have incurred aggregate net losses of
approximately $158,805 from operations. We can offer no assurance that we will
operate profitably or that we will generate positive cash flow in the future. In
addition, our operating results in the future may be subject to significant
fluctuations due to many factors not within our control.
Our company's operations will be subject to all the risks inherent
in the establishment of a developing enterprise and the uncertainties arising
from the absence of a significant operating history. No assurance can be given
that we may be able to operate on a profitable basis.
Due to the nature of our business and the early stage of our development, our securities must be considered highly speculative. We have not realized a profit from our operations to date and there is little likelihood that we will realize any profits
in the short or medium term.
We expect to continue to incur business development costs
and operating expenses. Consequently, we expect to incur operating losses and
negative cash flows. Our history of losses and nominal operating results raise
substantial doubt about our ability to continue as a going concern, as described
in the explanatory paragraph in our independent registered public accounting
firm's report dated November 9, 2006.
Substantially all of our assets and a majority of our directors and officers are outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our
directors or officers.
Although we are organized under the laws of the State of Nevada, United States, a majority of our directors and our officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such
persons assets are located outside the United States. As a result, it may be difficult for investors to enforce judgements against us that are obtained in the United States in any action, including actions predicated upon civil liability
provisions of federal securities laws. In addition, as the majority of our assets are located outside of the United States, it may be difficult to enforce United States bankruptcy proceedings against us. Under bankruptcy laws in the United States,
courts typically have jurisdiction over a debtor's property, wherever it is located, including property situated in other countries. Courts outside of the United States may not recognize the United States bankruptcy court's jurisdiction.
Accordingly, you may have trouble administering a United States bankruptcy case involving a Nevada company as debtor with most of its property located outside the United States. Any orders or judgements of a bankruptcy court obtained by you in the
United States may not be enforceable.
Because our officers, directors and principal shareholders control a significant percentage of our common stock, you will have little or no control over our management or other matters requiring shareholder approval.
Our directors and officers collectively own approximately 59% of the issued and outstanding shares of our common stock. As a result, our director and officers collectively have the ability to control matters affecting minority shareholders,
including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because our directors and officers collectively own a significant percentage of our common stock, you will have difficulty
replacing our management if you disagree with the way our business is being run. Because control by an insider could result in management making decisions that are in the best interest of the insider and not in the best interest of the investors,
you may lose some or all of the value of your investment in our common stock.
RISKS RELATED TO OUR COMMON STOCK
A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our ability to continue operations .
A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because a significant portion of our operations have been and will be financed
through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a
significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we can offer no assurance that we will be able to raise additional
capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.
The market price for our common stock may also be affected
by our ability to meet or exceed expectations of analysts or investors. Any
failure to meet these expectations, even if minor, may have a material adverse
effect on the market price of our common stock.
If we issue additional shares in the future, it will result in the dilution of our existing shareholders.
Our certificate of incorporation authorizes the issuance of up to 1,875,000,000 shares of common stock with a par value of $0.001. Our board of directors may choose to issue some or all of such shares to acquire one or more businesses or to
provide additional financing in the future. The issuance of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will cause
a reduction in the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.
Trading of our stock may be restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's ability to buy and sell our stock.
The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share,
subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term
"accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides
information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to
the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not
otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure
requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
NASD sales practice requirements may also limit a stockholder's ability to buy and sell our stock.
In addition to the "penny stock" rules described above, the National Association of Securities Dealers (NASD) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing
that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial
status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The
NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.