Nxchain (NXCN) 10-Q 2008 Q2 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-QSB

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended November 30, 2007
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ______________ to_________________.

Commission File Number 0-22735

ROBOCOM SYSTEMS INTERNATIONAL INC.

(Name of small business issuer as specified in its charter)

New York	11-2617048
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

17 Fairbanks Boulevard, Woodbury, NY 11797

(Address of principal executive offices)

516-692-8394

(Issuer’s telephone number)

Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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

As of January 08, 2008, 4,840,984 shares of the registrant’s common stock were outstanding.

Transitional Small Business Disclosure Format (check one):          Yes o No x

ROBOCOM SYSTEMS INTERNATIONAL INC.

FORM 10-QSB

INDEX

PART I.	Financial Information
		Page
Item 1.	Financial Statements:	No.
	Balance Sheets – November 30, 2007 and May 31, 2007	3
	Statements of Operations – Three months ended November 30, 2007and November 30, 2006	4
	Statements of Operations – Six months ended November 30, 2007and November 30, 2006	5
	Statements of Cash Flows – Six months ended November 30, 2007and November 30, 2006	6
	Notes to Financial Statements	7
Item 2.	Management’s Discussion and Analysis or Plan of Operation	8
Item 3.	Controls and Procedures	10
PART II.	Other Information:
Item 6.	Exhibits	11
Signatures		11

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ROBOCOM SYSTEMS INTERNATIONAL INC.

BALANCE SHEETS

	November 30, 2007			May 31, 2007
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	450,622		$	449,317
Due from Avantcé		—			73,563
Other current assets		7,000			1,000
Total assets	$	457,622		$	523,880
Liabilities and Shareholders’ Equity
Current liabilities:
Accrued expenses		35,478			39,428
Shareholders’ equity:
Preferred stock, $.01 par value; 1,000,000 shares authorized; None issued		—			—
Common stock, $.01 par value; 10,000,000 shares authorized; 4,840,984 issued and outstanding at November 30, 2007 and May 31, 2007.		48,410			48,410
Additional paid-in capital		12,163,574			12,163,574
Accumulated deficit		(11,789,840	)		(11,727,532	)
Total shareholders’ equity		422,144			484,452
Total liabilities and shareholders’ equity	$	457,622		$	523,880

See accompanying notes.

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ROBOCOM SYSTEMS INTERNATIONAL INC.

STATEMENTS OF OPERATIONS
(unaudited)

	Three months ended November 30,
	2007			2006
Selling, general and administrative expenses	$	(36,301	)	$	(40,656	)
Interest income		4,656			3,442
Net loss	$	(31,645	)	$	(37,214	)
Basic and diluted net loss per share:
Net loss per basic and diluted share	$	(0.01	)	$	(0.01	)
Weighted average shares outstanding: Basic and diluted		4,840,984			4,840,984

See accompanying notes.

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ROBOCOM SYSTEMS INTERNATIONAL INC.

STATEMENTS OF OPERATIONS
(unaudited)

	Six months ended November 30,
	2007			2006
Selling, general and administrative expenses	$	(72,119	)	$	(84,159	)
Interest income		9,811			24,572
Net loss	$	(62,308	)	$	(59,587	)
Basic and diluted net loss per share:
Net loss per basic and diluted share	$	(0.01	)	$	(0.01	)
Weighted average shares outstanding: Basic and diluted		4,840,984			4,793,989

See accompanying notes.

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ROBOCOM SYSTEMS INTERNATIONAL INC.

STATEMENTS OF CASH FLOWS
(unaudited)

	Six months ended November 30,
	2007			2006
Operating activities
Net loss	$	(62,308	)	$	(59,587	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Other current assets		(6,000	)		(5,417	)
Accounts payable					(481	)
Accrued expenses		(3,950	)		(39,465	)
Net cash used in operating activities		(72,258	)		(104,950	)
Investing activities
Net cash provided by investing activities - proceeds from sale of assets		73,563			94,061
Financing activities
Dividend paid to shareholders		—			(2,759,361	)
Proceeds from stock option exercise		—			114,000
Net cash used in financing activities		—			(2,645,361	)
Increase (decrease) in cash and cash equivalents		1,305			(2,656,250	)
Cash and cash equivalents at beginning of period		449,317			3,130,625
Cash and cash equivalents at end of period	$	450,622		$	474,375

See accompanying notes.

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ROBOCOM SYSTEMS INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS

(unaudited)

1.     Background and Basis of Financial Statement Presentation

          The accompanying unaudited financial statements of Robocom Systems Internatonal Inc. (“we,” “us,” “our,” or “our company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and with the instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

          Robocom Systems International Inc. was incorporated under the laws of the State of New York in 1982. Our company was organized to develop, market and support advanced warehouse management software solutions that enable companies to realize significant cost savings by automating their warehouse operations and providing inventory visibility throughout the supply chain. On October 11, 2005, we sold substantially all of our assets to Avantce RSI, LLC (“Avantce”), a Delaware limited liability company, for $2,970,000 in cash, plus a $200,000 promissory note payable over two years. In July 2006, we paid a dividend to our shareholders totaling approximately $2,760,000, which represented approximately 87% of our total assets at that time.

          Since the asset sale on October 11, 2005, we have not engaged in any operations and our business has been dormant. As such, we may presently be defined as a “shell” company, whose sole purpose, at this time, is to locate and consummate a merger with or an acquisition of a private entity.

          We will continue our filing with the Securities and Exchange Commission of reporting documentation and reports in an effort to maximize shareholder value. We believe our best use and primary attraction, as a merger partner or acquisition vehicle, will be our status as a reporting public company. Any business combination or transaction may potentially result in a significant issuance of shares and substantial dilution to our present stockholders.

          The balance sheet at May 31, 2007 has been derived from the audited financial statements at that date but, as presented, does not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements.

          Operating results for the three and six-month periods ended November 30, 2007 are not necessarily indicative of the results that may be expected for the year ending May 31, 2008. For further information, refer to the financial statements and footnotes thereto included in our Annual Report on Form 10-KSB for the year ended May 31, 2007.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Certain statements in this Report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of our company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, among others, uncertainties relating to general economic and business conditions, intense competition for the acquisition of businesses, and domestic and foreign government regulations. The words “believe,” “expect,” “anticipate,” “intend” and “plan” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Overview

          On October 11, 2005, we sold substantially all of our assets to Avantce RSI, LLC, a Delaware limited liability company, for $2,970,000 in cash, plus a $200,000 promissory note payable over two years. On July 28, 2006, we paid a dividend to our shareholders totaling approximately $2,760,000, which represented approximately 87% of our total assets at that time.

          Since the asset sale on October 11, 2005, we have not engaged in any operations and the business has been dormant. As such, our company may presently be defined as a “shell” company, whose sole purpose, at this time, is to locate and consummate a merger with or an acquisition of a private entity.

          We will continue our filing with the Securities and Exchange Commission of reporting documentation and reports in an effort to maximize shareholder value. We believe our best use and primary attraction, as a merger partner or acquisition vehicle, will be our status as a reporting public company. Any business combination or transaction may potentially result in a significant issuance of shares and substantial dilution to our present stockholders.

          The proposed business activities described herein classify us as a “blank check” company. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any offering of our securities, either debt or equity, until such time as we have successfully implemented our business plan described herein.

          At this time, our purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons or firms who or which desire to seek the perceived advantages of a corporation whose securities are registered pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We will not restrict our search to any specific business, industry or geographical location and we may participate in a business venture of virtually any kind or nature.

          This discussion of our proposed business is purposefully general and is not meant to be restrictive of our virtually unlimited discretion to search for and enter into potential business opportunities. Management anticipates that we may be able to participate in only one potential business venture because we have nominal assets and limited financial resources. This lack of diversification should be considered a substantial risk to our shareholders because it will not permit us to offset potential losses from one venture against gains from another.

          Our company will remain an insignificant participant among the firms that engage in the acquisition of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than we have. In view of our combined extremely limited financial resources and limited management availability, we will continue to be at a significant competitive disadvantage compared to our competitors.

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Three Months ended November 30, 2007 compared to the three months ended November 30, 2006.

          Selling, General and Administrative Expenses. Selling, general and administrative expenses consisted of fees for financial personnel, professional fees and insurances, as well as other miscellaneous administrative expenses. Selling, general and administrative expenses decreased by $4,355 to $36,301 in the three months ended November 30, 2007, as compared to $40,656 in the three months ended November 30, 2006. This decrease was primarily due to decreased professional and consulting fees related to the dividend distribution completed on July 28, 2006.

          Interest Income, Net. Interest income increased by $1,214 to $4,656 in the three months ended November 30, 2007, as compared to $3,442 in the three months ended November 30, 2006. This increase was primarily due to an increase in cash on hand during the three months ended November 30, 2007.

          Income Taxes. No provision for or benefit of income taxes was reflected in the 2008 or 2007 periods, as the benefits of operating loss carryforwards have been reserved.

Six Months ended November 30, 2007 compared to the six months ended November 30, 2006.

          Selling, General and Administrative Expenses. Selling, general and administrative expenses consisted of fees for financial personnel, professional fees and insurances, as well as other miscellaneous administrative expenses. Selling, general and administrative expenses decreased by $12,040 to $72,119 in the six months ended November 30, 2007, as compared to $84,159 in the six months ended November 30, 2006. This decrease was primarily due to decreased professional and consulting fees related to the dividend distribution completed on July 28, 2006.

          Interest Income, Net. Interest income decreased by $14,761 to $9,811 in the six months ended November 30, 2007, as compared to $24,572 in the six months ended November 30, 2006. This decrease was primarily due to a decrease in cash on hand as a result of the dividend paid and the type of short-term investments held.

          Income Taxes. No provision for or benefit of income taxes was reflected in the 2008 or 2007 periods, as the benefits of operating loss carryforwards have been reserved.

LIQUIDITY AND CAPITAL RESOURCES

          During the fiscal quarter ended November 30, 2007, we funded our operations from cash on hand derived from the sale of substantially all of our assets on October 11, 2005. As of November 30, 2007, we had $450,622 in cash and cash equivalents.

          Net cash used in operating activities was $72,258 for the six months ended November 30, 2007. Net cash used in operating activities was $104,950 for the six months ended November 30, 2006. During the six months ended November 30, 2007, we were not engaged in any revenue-generating operations. Cash used in operations was higher in the 2006 period primarily as a result of increased costs related to the dividend distribution completed on July 28, 2006.

          We believe that our existing cash and cash equivalents will be sufficient to fund our legal, accounting and reporting requirements as a publicly-held “shell” company over the next twelve months.

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ITEM 3. CONTROLS AND PROCEDURES

(a)

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and principal accounting officer, of the effectiveness of the design and operation of the disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon the evaluation, our Chief Executive Officer and principal accounting officer concluded that, as of the end of the period, the disclosure controls and procedures were effective in timely alerting him to material information relating to our company required to be included in the reports that are filed and submitted pursuant to the Exchange Act.

(b)

During the period covered by this report, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the internal controls over financial reporting.

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PART II. OTHER INFORMATION

ITEM 6. EXHIBITS

          The exhibits required by this item are listed on the Exhibit Index attached hereto.

SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in Woodbury, New York, on January 08, 2008.

ROBOCOM SYSTEMS INTERNATIONAL INC.
By:	/s/Irwin Balaban
Irwin Balaban
Chief Executive Officer and Principal Financial and Accounting Officer

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Exhibit Index

Exhibit No.		Description
31.1	Certification of our Chief Executive Officer and Principal Financial and Accounting Officer, Irwin Balaban, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of our Chief Executive Officer and Principal Financial and Accounting Officer, Irwin Balaban, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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