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ITEM
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1.
DESCRIPTION OF BUSINESS
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Overview of the Business and Recent Developments
SaaSMAX, Inc. is a Nevada Corporation incorporated
January 19, 2011, with its principal place of business in San Diego, California. SaaSMAX is a development stage company that is
developing and launching an online business-to-business marketplace (the "SaaSMAX Marketplace") and channel management
tools for the rapidly growing software-as-a-service ("SaaS") market.
Software-as-a-Service
,
sometimes referred
to as "on-demand software," is a software delivery model in which software is delivered over the Internet through a web
browser. With SaaS Applications ("SaaS Apps"), software and data is hosted on virtual servers (often referred to
as "cloud-based" or "cloud computing"). Cloud computing fundamentally changes the way business software
applications are developed and deployed. SaaS App developers no longer need to create and manage their own infrastructure
of servers, storage, network devices, operating system software and development tools in order to create a business application.
Instead, the entire software infrastructure is managed by third parties who specialize in infrastructure management, and
developers use a remote management connection/console to access the development environment. SaaS App users can gain access
to a multitude of business applications via an Internet browser or mobile device, and are able to take advantage of a robust, secure,
scalable and highly available application at a relatively low cost, without the cost and complexity of managing the application.
While practically every Internet service (such
as a Web search engine or web-based Email) is driven by some underlying software, the terms "SaaS" or "SaaS Apps"
are often used in the context of business software. Independent Software Vendors ("ISVs" or "App Vendors")
of SaaS Apps or traditional software applications develop and sell software apps that run on one or more operating system platforms.
The companies that make the operating platforms encourage and lend support to ISVs, often with special "business partner"
programs. Some ISVs focus on a particular operating platform like Apple iPhone's iOS for which there are tens of thousands
of ISV applications. Other ISVs specialize in a particular application area, such as customer relationship management or business
intelligence, for example, and integrate with multiple platforms.
The Company intends to become a sales distribution
channel program for SaaS, by offering a Marketplace for SaaS Apps and by facilitating, improving and increasing the Sales Value
Chain for SaaS ISVs. The "Sales Value Chain" refers to the value-adding activities and the participants that are
involved in selling a software product to an end-user. For example, a software application is typically developed and
sold by an ISV. That ISV may offer to sell licenses for its software application directly to an end user, or it may contract with
a wholesaler, distributor or retailer (collectively referred to herein as "Reseller") which then markets and resells
that software application to end users. Moreover, when software applications require customization or user training before
they are employed by the end user, ISV's will seek to partner with independent VARs, service providers, solution providers,
systems integrators or other types of consultants (collectively referred to herein as "Solution Providers") who will
provide those services to the end users.
With SaaS Apps, there is no physical delivery
of a software product. Instead, a SaaS App is available and ready-to-use when it is accessed on-line. As a result of this
non-physical, direct-to-end-customer deployment method, there is no product that can be accounted for physically. This may
lead to a situation where a Solution Provider in the Sales Value Chain is ignored during a sales transaction and, in such a case,
may not be compensated by the SaaS App Vendor for referring the end-user.
In traditional software sales, the Solution
Provider usually has a pre-existing relationship with the end-user and is therefore the trusted advisor to the end-user for most
software purchases. For SaaS App Vendors, we believe that the Sales Value Chain must also incorporate the Solution Providers for
software purchases. We believe that when completed and implemented, the SaaSMAX Marketplace will provide SaaS App Vendors with
the tools to track sales and manage reseller programs for each Solution Provider interested in their SaaS App.
Our SaaSMAX Marketplace is intended to be
a "B2B" or "business to business" solution to be implemented between SaaS App Vendors and SaaS Solution Providers,
which will enable SaaS App Vendors to market, promote and manage the sales and distribution of their SaaS App to participants in
the Sales Value Chain and to business users around the world.
SaaSMAX management believes that the SaaSMAX
Marketplace will:
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Make it easier and more efficient for SaaS App Vendors to promote their SaaS Apps, sell licenses,
find new customers, and build a channel of Solution Providers.
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Be the first SaaS marketplace that will enable SaaS App Vendors to sell, market, manage and monitor
their sales and marketing efforts in real time across the SaaS Sales Value Chain.
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Be a valuable, efficient business and educational tool for SaaS Solution Providers, enabling
them to thoroughly research each listed SaaS App and gain access to online demos, technical specifications, peer ratings,
support, pricing, commission plans and much more.
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Make it easier for Solution Providers to find SaaS Apps for their customers and earn commissions
from SaaS App Vendors for reselling or referring their SaaS Apps to end user customers.
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Include a Solution Provider Directory which will contain the business profiles of Solution Providers,
to enable end user businesses to identify and do business with Solution Providers, and to enable SaaS App Vendors to network with
Solution Providers.
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In late 2011 the SaaSMAX Marketplace entered
into its beta test-phase ("SaaSMAX Beta,"). During the Beta phase, our primary focus has been and will continue
to be to recruit several dozen SaaS Apps Vendors and several dozen Solution Providers to use our service. During SaaSMAX
Beta we have and will continue to: i) study the use of our service; ii) adjust the business pricing model ; iii) add features and
functionality ; iv) plan and prepare marketing campaigns; v) adjust our standard service agreement to meet the expressed needs
and wants of participating SaaS App Vendors and Solution Providers.
The Company has entered into several dozen
agreements with ISVs in which the ISV agrees to compensate SaaSMAX for every purchase transaction that is initiated through the
SaaSMAX Marketplace. The Company is responsible for monitoring, aggregating and reporting total transaction volumes completed between
its member Solution Provides and the ISVs, as well as the commissions earned by the Solution Providers. The Company has also entered
into more than one hundred agreements with Solution Providers, who currently are not required to pay fees to SaaSMAX.
Once management is satisfied with the results
of SaaSMAX Beta, we will commercially launch SaaSMAX. We intend to continually develop new features and functionality for
the SaaSMAX Marketplace into the foreseeable future, and have identified several additional potential product opportunities that
stem from what we have learned to date.
We are a development stage business and have
had limited revenues since our formation. There can be no assurance that even if revenues are generated by the SaaSMAX Marketplace,,
that those revenues will be sufficient to enable the Company to maintain its operations. The Company will need to secure additional
financing in the future to continue to develop the product, attract customers, and start generating revenues. There are no assurances
that the Company will be successful with any subsequent financings
The Auditor's
Report included in our audited financial statements at December 31, 2012 included language raising doubt about our ability to continue
as a going concern. Since inception we have had limited revenues.
Our business plan estimates that we will need to raise
additional capital to fund our operations during the remainder of 2013 and there can be no assurance that we will be able to raise
any or all of the capital required. During the year ended December 31, 2012 we have incurred a net loss of $478,174, have net cash
used in operating activities of $249,347 and have an accumulated deficit of $660,195 at December 31, 2012. Accordingly, we
will have to obtain additional funding from the sale of our securities or from strategic transactions in order to fund our current
level of operations and there can be no assurance that we will be able to raise any or all of the capital required. If the Company
is unable to generate sufficient cash flow from operations and/or continue to obtain financing to meet its working capital requirements,
it may have to curtail its business sharply or cease business altogether.
Customers
The SaaSMAX Marketplace will be utilized primarily
by two different types of customers. App Vendors, who make business-related SaaS Apps, and Solution Providers, who are IT Consultants,
VARs MSPs and other Trusted Advisors who will resell business-related SaaS Apps through the SaaSMAX Marketplace. In addition, the
SaaSMAX Marketplace will be available to other business organizations ("Business Users"), who will be provided limited
access to the proposed features and functionality of SaaSMAX. There can be no assurance that these types of customers will in fact
utilize the SaaSMAX Marketplace.
The SaaSMAX Platform - How it Works
The SaaSMAX Platform is comprised of the SaaSMAX
Marketplace, channel management tools for App Vendors and Solution Providers, and will eventually include premium marketing and
advertising tools for App Vendors and Solution Providers. The SaaSMAX Platform is currently under development and is expected to
be released in multiple phases as the features and functionality become available. The Company contracts with independent software
developers who are currently designing, building, and testing the SaaSMAX Platform.
Revenue Generation
SaaSMAX intends to generate revenue from the
following revenue streams:
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Annual Membership Fees from SaaS App Vendors who list their SaaS App on the SaaSMAX Marketplace.
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Annual Membership Fees from Solution Providers who want to resell SaaS Apps and also list their
profile in the SaaSMAX Solution Provider Directory.
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Advertising and Marketing Fees from SaaS App Vendors who want to conduct premium marketing and/or
advertising campaigns within the SaaSMAX Marketplace.
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Transaction fees based on a percentage of the revenue earned by SaaS App Vendors who sell and
promote their SaaS App through the SaaSMAX Marketplace.
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Advertising and marketing fees from companies who want to advertise within the SaaSMAX Marketplace
or on the SaaSMAX website.
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User Participation
In order to participate in SaaSMAX, a potential
user will first register as an App Vendor, a Solution Provider or a Business User. App Vendors and Solution Providers will be manually
screened by Management and approved in order to maintain a high degree of quality and integrity in the SaaSMAX
Marketplace.
App Vendors will be required to select from
one of several pricing plans in order to: a) display their App's profile(s) on the SaaSMAX Marketplace; b) utilize our channel
management tools, and; c) take advantage of marketing and advertising tools. Premium marketing programs will also be available
"a la carte" to potential members of any pricing plan.
Solution Providers may join free of charge
and are required to: a) display their Company Profile in the SaaSMAX Solution Provider Directory; b) utilize our channel management
tools, and; c) take advantage of marketing and advertising tools. Premium marketing programs are planned to also be available "a
la carte" to members of any pricing plan.
Business Users may join free of charge and
may be able to a) find, view and purchase the Apps in the SaaSMAX Marketplace, and; b) view and contact Solution Providers in the
SaaSMAX Solution Provider Directory.
Searching and Viewing the SaaSMAX Marketplace
End users will have access to search and view
the planned SaaSMAX Marketplace depending on what type of user they may be. Solution Providers are enabled to view a comprehensive
profile of every SaaS App that is registered in the SaaSMAX Marketplace and have access to more information and assessment tools
than the other user types.
SaaSMAX Solution Provider Directory
"Lead Generation" will be one of
the expected major benefits of being a SaaSMAX Solution Provider. Also, Business Users who may be seeking a trusted Solution Provider
to help implement, integrate or provide training for a SaaS App, will be able to inquire through SaaSMAX and identify potential
candidates.
SaaSMAX Channel Management Tools
SaaSMAX Channel Management Tools are our own
proprietary software-as-a-service that enables App Vendors to track and manage their reseller channel of SaaSMAX Solution Providers,
and enables Solution Providers to track and manage their various SaaS App transactions. Using our Tools App, Vendors will be able
to administer and manage reseller incentive programs, address commission provisioning, and have real time access to performance
analytics and reports.
SaaSMAX Premium Marketing Services
The Company intends to sell App Vendors and
Solution Providers "premium" advertising and marketing campaign opportunities to increase their brand and product exposure
within the SaaSMAX Marketplace. Such campaigns will include advertising on the public pages of the SaaSMAX.com website; offering
webinars; publishing real-time announcements; sponsorships of email newsletters; custom email campaigns, and more.
Sales and Business Development
We anticipate that our sales and business
development resources will be primarily dedicated to identifying quality Solution Providers and SaaS App Vendors to join and participate
in the SaaSMAX Marketplace. Relationships with our members are anticipated to be managed by the same resources, and we will strive
to facilitate and increase the business conducted between our member Service Providers and App Vendors. We also anticipate that
our sales and business development resources will focus on selling premium marketing and advertising opportunities to our members
and to non-members. We intend to accomplish these strategies through telesales, online and email communication and by attending
and speaking at relevant conferences.
Marketing
Our current and future marketing activities
may include all or some of the below activities:
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Press releases and nurturing relationships with industry thought leaders and bloggers to gain
third-party validation and generate positive coverage for the Company;
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Participation in industry events, trade shows and online trade shows, webinars, etc. to create
customer awareness, trust and enthusiasm;
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Search engine marketing and search engine optimization;
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Social Media - blog, LinkedIn groups, FaceBook and other online resources;
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Web site development and design to create a pleasant and productive user-experience, engage and
educate prospects and generate interest through information and demonstration, case studies, white papers and marketing collateral;
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Email and phone campaigns to capture leads, promote the brand, conduct surveys and communicate
information about our member participants;
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Use of customer testimonials and case studies;
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Promotions, partnerships and sponsorships as appropriate;
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Advertising in industry related websites, blogs, e-newsletters and publications;
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Industry contacts and relationships.
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Customer Service and Support
Basic customer support during business hours
will be available to SaaSMAX customers.
Technology and Development
In order to build SaaSMAX services, we have
employed resources that have included and may continue to include, but are not limited to, independent software developer consultants,
software development firms, an Agile project manager consultant, graphic design consultants and other qualified consultants to
meet the various needs of the effort. The Company believes that retaining experienced consultants in the Software programming
/ IT field is critical to ensure the success of the Company's development and implementation plans.
Our customers can and will access our services
through an easy-to-use web-based interface. Our web-based SaaS delivery method provides us with control over our SaaSMAX Marketplace
content and permits us to make modifications at a single central location. We further expect to add additional functionality to
our services and to be able to deliver additional products to our customers.
We intend to optimize the SaaSMAX Platform
to run on a specific database and operating system using the tools and platforms best suited to serve our customers. Performance,
functional depth and the usability of our service will drive our technology decisions and product direction. The SaaSMAX Platform
will continually be optimized for use on desktop computers, workstations, laptop computers, tablet devices and other handheld devices.
Certain parts of the SaaSMAX Platform will also be available on mobile devices.
Infrastructure
Our technology infrastructure is presently
hosted externally by cloud service providers and redundantly stored in multiple data center locations. We expect that our customers
will depend on the availability and reliability of our services and we have therefore selected an external hosting cloud service
provider that is highly reliable and employs system redundancy in order to minimize potential system downtime.
Security
We intend to maintain high security standards
and employ an intrusion detection system. Our software "firewalls" will be managed and monitored continuously. Our communications
are secured using secure socket layer 128-bit encryption. All incoming traffic must be authenticated before it is authorized to
be passed on to the application. Once a user has been authorized, access control to specific functions within the site is performed
by the application. Our access control system is highly granular and includes the granting and revocation of user permissions to
functions on the site.
Competition
We have numerous direct, indirect and partial
competitors, many of which have valuable industry relationships and access to greater resources than we do. The numerous types
of direct or indirect competitors that exist in the market today include but may not be limited to: ecosystem marketplaces such
as Google Apps Marketplace; enterprise software distributors who are now offering SaaS marketplaces, such as Ingram Micro; unaffiliated
online SaaS marketplaces such as GetApp.com; affiliate programs, such as Commission Junction; and ISV in-house channel partner/reseller
programs.
There is no assurance that we will be able
to produce a product that will be competitive in the marketplace, and even if competitive that we will be able to earn a profit.
INTELLECTUAL PROPERTY
SaaSMAX
®
and WiseSaaS
®
are registered U.S. Trademarks.
On November 21, 2011 we applied for patent
No. 61562325 - "Transaction and Auditing Systems Architecture" with the United States Patent Office. In late October
2012, we abandoned this application process as the technology is not applicable to our current technological development efforts.
We have registered several Internet domain
names related to our business in order to protect our proprietary interests, including but not limited to SaaSMAX.com, SaasResellerNetwork.com
and WiseSaaS.com.
From time to time, we may encounter disputes
over rights and obligations concerning intellectual property. Also, the efforts we have taken to protect our proprietary rights
may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business, our
brand and reputation, or our ability to compete. Also, protecting our intellectual property rights could be costly and time consuming.
EMPLOYEES
As of
March
25, 2013
, the Company does not have any employees besides the Chief Executive Officer, Dina Moskowitz. Any administrative,
marketing, technical, IT and/or software development work that is not handled by the CEO is outsourced to qualified professionals
as deemed necessary.
PROPERTY
Our principal executive offices are temporarily
located at the residence of Dina Moskowitz, our sole Director and Chief Executive Officer, for which we pay no rent.
ITEM
1A: RISK
FACTORS
RISKS RELATED TO THE BUSINESS AND FINANCIAL CONDITION
Investing in our common stock
is highly speculative and involves a high degree of risk. Any potential investor should carefully consider the risks and uncertainties
described below before purchasing any shares of our common stock. The risks described below are those we currently believe may
materially affect us. If any of them occur, our business, financial condition, operating results or cash flow could be materially
harmed. As a result, the trading price of our stock could decline, and you might lose all or part of your investment. Our business,
financial condition and operating results, or the value of any investment you make in the stock of our company, or both, could
be adversely affected by any of the factors listed and described below. These risks and uncertainties, however, are not the only
ones that we face. Additional risks and uncertainties not currently known to us, or that we currently think are immaterial, may
also impair our business operations or the value of your investment.
There is substantial doubt as to whether our Company can continue
as a going concern as of December 31, 2012.
We have generated limited revenues since our
inception. For the year ended December 31, 2012 we have incurred a net loss of $478,174, have net cash used in operations of $249,347
and have an accumulated deficit of $660,195 at December 31, 2012. Accordingly, we will have to obtain additional funding from the
sale of our securities or from strategic transactions in order to fund our current level of operations and there can be no assurance
that we will be able to raise any or all of the capital required. If the Company is unable to generate sufficient cash flow from
operations and/or continue to obtain financing to meet its working capital requirements, it may have to curtail its business sharply
or cease business altogether.
Our business plans estimate that we will need to raise
additional capital to fund our operations and there can be no assurance that we will be able to raise any or all of the capital
required. These factors indicate that we may be unable to continue as a going concern, particularly in the event that we cannot
generate sufficient cash flow or raise sufficient capital to conduct our operations. Our financial statements do not include any
adjustments to the value of our assets or the classification of our liabilities that might result if we would be unable to continue
as a going concern.
No assurance can be given that a market for SaaSMAX will develop,
or that participants, sponsors, partners or non-member advertisers will be willing to pay for the Company's services.
SaaSMAX is a new and unproven business model. The success
of our business model depends upon;
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Our ability to recruit a critical mass of Solution Providers and ISV's to join, pay for and participate
in our online marketplace;
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Our ability to develop and provide a working commission provisioning tool to our members, and;
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Our ability to sell sponsorships, advertising space and other marketing programs.
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Failure to execute on any or all of the above
activities would adversely affect the results of our operations.
No assurance can be given that we will have sufficient funding
to finance the continued development and completion of a SaaSMAX Marketplace to fulfill our mission and execute our business model.
While the SaaSMAX Marketplace is already in
operation, there can be no assurance that we will be able to allocate sufficient funds to complete the development of additional
features and functionality of our services.
We may elect from time to time to make changes to our pricing,
service, hiring and marketing decisions that could increase our expenses, affect our revenues and impact our financial results.
Because our expense levels in any given quarter
are based, in part, on management's expectations regarding future revenues, if revenues are below expectations, the effect on our
operating results may be magnified by our inability to adjust spending in a timely manner to compensate for a shortfall in revenues.
The extent to which expenses are not subsequently followed by increased revenues would harm our operating results and could seriously
impair our business.
If we are unable to generate sufficient cash
flow from operations or are unable to obtain additional equity or debt financing, to meet our working capital requirements, we
may have to curtail our business operations sharply or cease business altogether.
We have no operating history on which to evaluate our potential
for future success. This makes it difficult to evaluate our future prospects and the risk of success or failure of our business.
We began our operations informally in January
2011 and your evaluation of our business and prospects will be based on our limited history. Consequently, our short history and
results of operations may not give you an accurate indication of our future results of operations or prospects. You must consider
our business and prospects in light of the risks and difficulties we will encounter as an early-stage company in a highly competitive
market. We may not be able to successfully address these risks and difficulties, which could materially harm our business and operating
results.
As we grow our business, we cannot guarantee our business strategies
will be successful or that our revenues will ever increase sufficiently to achieve and maintain profitability on a quarterly or
annual basis.
Our software platform may have defects or errors
which could cause delays in product introductions and commercial launch, result in increased costs and diversion of development
resources, or require design modifications.
Software products and services such as those
offered by SaaSMAX frequently contain undetected errors or failures when first introduced or as new versions are released. Despite
extensive testing, from time to time we may discover defects or errors in products. In addition, there can be no assurance
that, despite testing by us and by current and potential customers, errors will not be found after commencement of commercial launch,
resulting in loss of or delay in market acceptance, which could have a material adverse effect upon our business, operating results
and financial condition.
Defects or disruptions in the delivery of our service could diminish
demand, decrease market acceptance or decrease customer satisfaction of our service and subject us to substantial liability.
We may, from time to time, find defects in
our service and errors in our proposed service may be detected in the future. In addition, our customers may use our service in
unanticipated ways that may cause a disruption in service for other customers attempting to access their data. Any errors, defects,
disruptions in service or other performance problems with our proposed service could hurt our reputation and may damage our customers'
businesses. If that occurs, potential customers could elect not to renew, or delay or withhold payment to us, we could lose future
sales, or, customers may make warranty or other claims against us, which could result in an increase in our provision for doubtful
accounts, an increase in collection cycles for accounts receivable or the expense and risk of litigation.
Interruptions or delays in service from our third-party data
center hosting facilities could impair the delivery of our service and harm our business.
We currently intend to serve our customers
from third-party data center hosting. Any damage to, or failure of, our systems generally could result in interruptions in our
proposed service. We may in the future move or transfer our data and our customers' data. Despite precautions taken during this
process, any unsuccessful data transfers may impair the delivery of our service. Further, any damage to, or failure of, our systems
generally could result in interruptions in our proposed service. Interruptions in our proposed service may reduce our revenue,
cause us to issue credits or pay penalties, cause customers to terminate their subscriptions and adversely affect our renewal rates
and our ability to attract new customers. Our business will also be harmed if our customers and potential customers believe our
service is unreliable.
If our security measures are breached and unauthorized access
is obtained to a customer's data or our data, our proposed service may be perceived as not being secure, customers may curtail
or stop using our service and we may incur significant legal and financial exposure and liabilities.
Our proposed service involves the storage
and transmission of customers' proprietary information, and security breaches could expose us to a risk of loss of this information,
litigation and possible liability. These security measures may be breached as a result of third-party action, employee error, malfeasance
or otherwise, during transfer of data to additional data centers or at any time, and result in someone obtaining unauthorized access
to our data or our customers' data. Additionally, third parties may attempt to fraudulently induce employees or customers into
disclosing sensitive information such as user names, passwords or other information in order to gain access to our data or our
customers' data. Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently and generally
are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative
measures.
If we fail to develop strong relationships with providers of
major software ecosystems, our ability to grow our business will be diminished.
In the enterprise, internet and mobile software
industries, the market leaders typically adopt an open platform strategy that makes their software the center of their own "ecosystems."
Many of these providers of major software ecosystems nurture relationships with Third Party ISVs and create Authorized Reseller
Programs for Solution Providers. We may be perceived as a direct competitor or future direct competitor in situations where the
ecosystem is already facilitating or plans to facilitate commission-based reseller programs and tools for their authorized resellers
to do business directly with Third Party ISV's. There can be no assurance that the Company will be able to form relationships with
the providers of major software ecosystems. As well, providers of major software ecosystems may already be exclusively collaborating
with other, larger and more established distributors and online marketplaces.
If the demand for Internet-based Software-as-a-Service applications
in the small and medium-sized business space ("SMB") and in the small and medium-sized enterprise space does not continue
to grow, our business will be adversely affected.
The use of SaaS Apps for enterprises, small
business and personal business purposes has been growing at an increasing rate over the past five years and is projected to continue
to grow. However, no assurance can be given that any or all of these business segments will continue to adopt SaaS Apps into their
business infrastructure or that they will renew their subscriptions with SaaS Apps for long periods of time.
As well, there can be no assurance given that
ISV's will continue to innovate and develop new SaaS Apps, or that the market of SaaS Apps will not experience aggressive consolidation
in the future, thereby reducing the potential number of SaaS Apps available to participate in SaaSMAX.
Weakened global economic conditions may adversely affect our
industry, business and results of operations.
Our overall performance will depend, in part,
on worldwide economic conditions. The United States and other key international economies have been impacted by falling demand
for a variety of goods and services, restricted credit, going concern threats to major multinational companies and medium and small
businesses, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets and bankruptcies.
These conditions affect the rate of information technology spending and could adversely affect our customers' ability or willingness
to purchase our proposed enterprise cloud computing application service, delay prospective customers' purchasing decisions, reduce
the value or duration of their subscription contracts, or affect renewal rates, all of which could adversely affect our operating
results.
If we experience significant fluctuations in our rate of anticipated
growth and fail to balance our expenses with our revenue forecasts, our results could be harmed.
Due to our evolving business model, the unpredictability
of new markets that we intend to enter and the unpredictability of future general economic and financial market conditions, we
may not be able to accurately forecast our rate of growth. We plan our expense levels and investment on estimates of future revenue
and future anticipated rate of growth. As a result, we expect that our revenues, operating results and cash flows may fluctuate
significantly on a quarterly basis
We may in the future be sued by third parties for alleged infringement
of their proprietary rights.
The software and Internet industries are characterized
by the existence of a large number of patents, trademarks and copyrights and by frequent litigation based on allegations of infringement
or other violations of intellectual property rights. We may receive in the future communications from third parties claiming that
we have infringed the intellectual property rights of others. We may in the future be, sued by third parties for alleged infringement
of their proprietary rights. Our technologies may not be able to withstand any third-party claims against their use. The outcome
of any litigation is inherently uncertain. Any intellectual property claims, whether with or without merit, could be time-consuming
and expensive to resolve, could divert management attention from executing our business plan and could require us to change our
technology, change our business practices and/or pay monetary damages or enter into short- or long-term royalty or licensing agreements
which may not be available in the future at the same terms or at all. In addition, many of our subscription agreements require
us to indemnify our customers for third-party intellectual property infringement claims, which would increase the cost to us of
an adverse ruling on such a claim. Any adverse determination related to intellectual property claims or litigation could prevent
us from offering our service to others, or could otherwise adversely affect our operating results or cash flows or both in a particular
quarter.
We rely on third-party computer hardware and software that may
be difficult to replace or which could cause errors or failures of our service.
We will rely on computer hardware purchased
or leased and software licensed from third parties in order to offer our proposed service, including database software from Oracle
Corporation and an open source content management system. This hardware and software may not continue to be available at reasonable
prices or on commercially reasonable terms, or at all. Any loss of the right to use any of this hardware or software could significantly
increase our expenses and otherwise result in delays in the provisioning of our service until equivalent technology is either developed
by us, or, if available, is identified, obtained and integrated, which could harm our business. Any errors or defects in third-party
hardware or software could result in errors or a failure of our service which could harm our business.
Supporting a growing customer base could strain our personnel
and corporate infrastructure, and if we are unable to scale our operations and increase productivity, we may not be able to successfully
implement our business plan.
Our current Management and human resources
infrastructure is comprised of our CEO and several outsourced consultants. Our success will depend, in part, upon the ability of
our Management to manage our proposed business effectively. To do so, we will need to hire, train and manage new employees as needed.
To manage the expected domestic growth of our operations and personnel, we will need to continue to improve our operational, financial
and management controls and our reporting systems and procedures. If we fail to successfully scale our operations and increase
productivity, we will be unable to execute our business plan.
Our business could be adversely affected if our customers are
not satisfied with the SaaS Apps they purchase through us or the implementation and customization services provided by our member
Service Providers.
Our business will depend on our ability to
satisfy our potential customers. If a customer is not satisfied with the quality of the SaaS App they may purchase through SaaSMAX
or our member Service Providers, and/or if they are not satisfied with the work performed a Service Providers identified through
SaaSMAX, the customer's dissatisfaction could damage our ability to obtain additional or future orders from that customer. In addition,
potential negative publicity related to our customer relationships, regardless of its accuracy, may further damage our business
by affecting our ability to compete for new business with prospective customers.
We are dependent on our CEO and outsourced consultants, and the
loss of one or more of these individuals could harm our business and prevent us from implementing our business plan in a timely
manner.
Our success depends substantially upon the
continued services of our executive officers and other key members of management, particularly our Chief Executive Officer
and Chief Financial Officer,
Dina
Moskowitz.
We do not have an employment agreement
with our Ms. Moskowitz and, therefore, she could terminate her employment with us at any time. We do not maintain key person life
insurance policies on Ms. Moskowitz and the loss of her services could seriously harm our
business.
Our ability to grow our business may depend on developing a positive
brand reputation and member loyalty.
Establishing and maintaining a positive brand
reputation and nurturing member loyalty is critical to attracting new resellers, ISVs and end-user purchasers. We expect to expend
reasonable but limited resources to develop, maintain and enhance our brand in the near future. In addition, nurturing member loyalty
will depend on our ability to provide a high-quality user experience and ensure that our ISV members include best-of-breed SMB
apps that offer worthwhile commission incentives to our Reseller members, which we may not do successfully. If we are unable to
maintain and enhance our brand reputation and member participation, our ability to attract new marketplace participants or convert
new sponsors and advertisers will be harmed.
There can be no assurance that we will be able to compete against
the numerous direct, indirect and partial competitors, many of which have valuable industry relationships and access to greater
resources than we do.
The numerous types of direct or indirect competitors
that exist in the market today include but may not be limited to: ecosystem marketplaces such as Google Apps Marketplace; enterprise
software distributors who are now offering SaaS marketplaces, such as Ingram Micro; unaffiliated online SaaS marketplaces such
as GetApp.com; affiliate programs, such as Commission Junction; and ISV in-house channel partner/reseller programs. There can be
no assurance that we will be able to produce a product that will be competitive in the marketplace, and even if competitive that
we will be able to earn a profit.
Our reliance upon third party providers to develop our Services,
add new functionality and manage technical issues could result in delays to our commercial launch and customer service
.
The Company's outsourced software developers
and other consultants participate in non-related projects, employment and/or consulting arrangements. Should our outsourced software
developers or other consultants be unable to execute their portion of the development effort or their responsibilities, the activities
of SaaSMAX or any of its future planned software functionality could be delayed until a replacement(s) is found.
Investors may lose their entire investment if we fail to reach
profitability.
We commenced business in January 2011. We
have no demonstrable operations record from which you can evaluate the business and its prospects. Our prospects must be considered
in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development.
We cannot guarantee that we will be successful in accomplishing our objectives. To date, we have incurred losses and will continue
to do so in the foreseeable future. Investors should therefore be aware that they may lose their entire investment in the securities.
In order to execute our business plan, we may need to raise additional
capital. If we are unable to raise additional capital, we may not be able to achieve our business plan and you could lose your
investment.
We will need to raise additional funds through
public or private debt or equity financings as well as obtain credit from vendors to be able to fully execute our business plan.
Any additional capital raised through the sale of equity may dilute your ownership interest. We may not be able to raise additional
funds on favorable terms, or at all. If we are unable to obtain additional funds or credit from our vendors, we will be unable
to execute our business plan and you could lose your investment.
We have limited protection of our intellectual property.
Our business prospects do not rely upon company-owned
patented technologies. Our business prospects will depend largely on our ability to develop a critical mass of participants in
the SaaSMAX online business-to-business marketplace, as well as our ability to successfully develop and provide to our members
a commission provisioning SaaSMAX software tool. There can be no assurance that we will be able to adequately protect our trade
secrets. In the event competitors independently develop or otherwise obtain access to our know-how, concepts or trade secrets,
we may be adversely affected.
RISKS RELATED TO COMMON STOCK
There is currently no trading market for our common stock, and
liquidity of shares of our common stock is limited.
Even though our common shares are currently
listed on the Over the Counter Bulletin Board in the United States under the symbol "SAAX" since June 22, 2012, there
has been very little sales or purchases of our common shares reported. Failure to develop or maintain a liquid trading market could
negatively affect our common share's value and make it difficult or impossible for you to sell your shares. Even if a liquid market
for common shares does develop, the market price may be highly volatile. In addition to the uncertainties relating to future operating
performance and the profitability of operations, factors such as variations in interim financial results or various, as yet unpredictable,
factors, many of which are beyond our control, may have a negative effect on the market price of our common shares.
If we fail to remain current on our reporting requirements, we
could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities in the secondary
market.
Companies trading on the Over the Counter Bulletin
Board, such as we, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current
in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain
current on our reporting requirements, the market liquidity for our securities could be severely adversely affected by limiting
the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary
market. In addition, we may be unable to get relisted on the OTC Bulletin Board, which may have an adverse material effect on the
Company.
We do not expect to pay dividends in the future; any return on
investment may be limited to the value of our common stock.
We do not currently anticipate paying cash
dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition
and other business and economic factors affecting it at such time as the board of directors may consider relevant. Our current
intention is to apply net earnings, if any, in the foreseeable future to increasing our capital base and development and marketing
efforts. There can be no assurance that the Company will ever have sufficient earnings to declare and pay dividends to the holders
of our common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors.
If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock
price appreciates.
Our board of directors has the authority to issue up to 20 million
shares of "blank check" preferred stock. The issuance of any preferred stock may adversely affect the holders of
common stock.
Our Certificate of Incorporation authorizes
the issuance of up to 20,000,000 shares of preferred stock with designations, rights and preferences determined from time to time
by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock
with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of
the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances,
as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to
issue any shares of our authorized preferred stock, there can be no assurance that the Company will not do so in the future.
Our shares are subject to the U.S. "Penny Stock" Rules
and investors who purchase our shares may have difficulty re-selling their shares as the liquidity of the market for our shares
may be adversely affected by the impact of the "Penny Stock" Rules.
Our stock is subject to U.S. "Penny Stock"
rules, which may make the stock more difficult to trade on the open market. Our common shares are not currently traded on the OTCBB,
but it is the Company's plan that the common shares be quoted on the OTCBB. A "penny stock" is generally defined by regulations
of the U.S. Securities and Exchange Commission ("SEC") as an equity security with a market price of less than US$5.00
per share. However, an equity security with a market price under US$5.00 will not be considered a penny stock if it fits within
any of the following exceptions:
|
(i)
|
the equity security is listed on NASDAQ or a national securities exchange;
|
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(ii)
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the issuer of the equity security has been in continuous operation for less than three years,
and either has (a) net tangible assets of at least US$5,000,000, or (b) average annual revenue of at least US$6,000,000; or
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(iii) the issuer of the equity security
has been in continuous operation for more than three years, and has net tangible assets of at least US$2,000,000.
Our common stock does not currently fit into
any of the above exceptions.
If an investor buys or sells a penny stock,
SEC regulations require that the investor receive, prior to the transaction, a disclosure explaining the penny stock market and
associated risks. Furthermore, trading in our common stock will be subject to Rule 15g-9 of the Exchange Act, which relates to
non-NASDAQ and non-exchange listed securities. Under this rule, broker/dealers who recommend our securities to persons other than
established customers and accredited investors must make a special written suitability determination for the purchaser and receive
the purchaser's written agreement to a transaction prior to sale. Securities are exempt from this rule if their market price is
at least $5.00 per share. Since our common stock is currently deemed penny stock regulations, it may tend to reduce market liquidity
of our common stock, because they limit the broker/dealers' ability to trade, and a purchaser's ability to sell, the stock in the
secondary market.
The low price of our common stock has a negative
effect on the amount and percentage of transaction costs paid by individual shareholders. The low price of our common stock also
limits our ability to raise additional capital by issuing additional shares. There are several reasons for these effects. First,
the internal policies of certain institutional investors prohibit the purchase of low-priced stocks. Second, many brokerage houses
do not permit low-priced stocks to be used as collateral for margin accounts or to be purchased on margin. Third, some brokerage
house policies and practices tend to discourage individual brokers from dealing in low-priced stocks. Finally, broker's commissions
on low-priced stocks usually represent a higher percentage of the stock price than commissions on higher priced stocks. As a result,
the Company's shareholders may pay transaction costs that are a higher percentage of their total share value than if our share
price were substantially higher.