SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X ] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period endedNovember 30, 2005.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to .
Commission file number:000-33255
NEWTECH RESOURCES LTD.
(Exact name of small business issuer as specified in its charter)
2610-1066 West Hastings Street, Vancouver, British Columbia, Canada V6E 3X2
(Address of Principal Executive Office) (Postal Code)
(604) 602-1717
(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
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes X No
The number of outstanding shares of the registrant’s common stock, $0.001 par value (the only class of voting stock), as of January 13, 2006 was 29,686,996.
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTSAs used herein, the term “Company” refers to Newtech Resources Ltd., a Nevada corporation, unless otherwise indicated. In the opinion of management, the accompanying unaudited financial statements included in this Form 10-QSB reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.
NEWTECH RESOURCES LTD.
(A Development Stage Company)
BALANCE SHEETS
November 30, August 31,
2005 2005
ASSETS (Unaudited) (Audited)
------------------- ------------------
Current assets:
Cash $ 11,760 1,616
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Total current assets $ 11,760 1,616
=================== ==================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses $ 81,932 57,697
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Total current liabilities 81,932 57,697
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Commitments and contingencies
Stockholders' deficit:
Common stock, $.001 par value, 30,000,000 shares
authorized, 29,686,996 and 28,686,996 shares 29,687 28,687
issued and outstanding
Additional paid-in capital 934,101 925,101
Deficit accumulated during the developmental stage (1,033,960) (1,009,869)
------------------- ------------------
Total stockholders' deficit (70,172) (56,081)
------------------- ------------------
Total liabilities and stockholders' deficit $ 11,760 1,616
=================== ==================
The accompanying notes are an integral part of these financial statements
NEWTECH RESOURCES LTD.
(A Development Stage Company)
UNAUDITED STATEMENTS OF OPERATIONS
Three Months Ended
November 30, Cumulative
-----------------------------------
2005 2004 Amounts
---------------- --------------- ---------------
Revenue $ - - -
General and administrative costs 24,091 27,184 1,065,885
Gain on forgiveness of debt - - (31,925)
---------------- --------------- ---------------
Loss before income taxes (24,091) (27,184) (1,033,960)
Provision for income taxes - - -
---------------- --------------- ---------------
Net loss $ (24,091) (27,184) (1,033,960)
================ =============== ===============
Loss per common share - basic and diluted $ - -
================ ===============
Weighted average common shares -
basic and diluted 28,687,000 14,320,000
================ ===============
The accompanying notes are an integral part of these financial statements
NEWTECH RESOURCES LTD.
(A Development Stage Company)
UNAUDITED STATEMENTS OF CASH FLOWS
Three Months Ended
November 30, Cumulative
------------------------------
2005 2004 Amounts
------------- ------------- --------------
Cash flows from operating activities:
Net loss $ (24,091) (27,184) (1,033,960)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Gain on forgiveness of debt - - (31,925)
Increase in accounts payable and
accrued expenses 24,235 7,078 212,395
------------- ------------- --------------
Net cash provided by (used in)
operating activities 144 (20,106) (853,490)
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Cash flows from investing activities: - - -
------------- ------------- --------------
Cash flows from financing activities:
Related party notes payable - - 460,000
Issuance of common stock 10,000 30,000 405,250
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Net cash provided by financing activities 10,000 30,000 865,250
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Net increase in cash 10,144 9,894 11,760
Cash, beginning of period 1,616 33 -
------------- ------------- --------------
Cash, end of period $ 11,760 9,927 11,760
============= ============= ==============
The accompanying notes are an integral part of these financial statements
NEWTECH RESOURCES LTD.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
November 30, 2005
Note 1 — Basis of Presentation
The accompanying unaudited financial statements have been prepared by management in accordance with the instructions in Form 10-QSB and, therefore, do not include all information and footnotes required by generally accepted accounting principles and should, therefore, be read in conjunction with the Company’s Form 10-KSB for the year ended August 31, 2005, filed with the Securities and Exchange Commission. These statements do include all normal recurring adjustments which the Company believes necessary for a fair presentation of the statements. The interim operations are not necessarily indicative of the results to be expected for the full year ended August 31, 2006.
Note 2 – Additional Footnotes Included By Reference
Except as indicated in the following Notes, there have been no other material changes in the information disclosed in the notes to the financial statements included in the Company’s Form 10-KSB for the year ended August 31, 2005, filed with the Securities and Exchange Commission. Therefore, those footnotes are included herein by reference.
Note 3 — Going Concern
At November 30, 2005 the Company has an accumulated deficit and has incurred losses since inception. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The Company’s ability to continue as a going concern is subject to obtaining necessary funding from outside sources. There can be no assurance that the Company will be successful in these efforts.
Note 4 – Supplemental Cash Flow Information
During the three months ended November 30, 2005 and 2004 the Company paid no interest.
Since inception:
o No amounts have been paid for income taxes.
o The Company has issued 1,483,871 shares of common stock in exchange for related party notes payable and accrued interest of $460,000 and $84,225, respectively.
o The Company has issued 143,125 shares of common stock in exchange for accounts payable of $14,313.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
The following plan of operation should be read in conjunction with the financial statements and accompanying notes and the other financial information appearing elsewhere in this periodic report. The Company’s fiscal year end is August 31.
This report and the exhibits attached hereto contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include, without limitation, statements as to management’s good faith expectations and beliefs, which are subject to inherent uncertainties which are difficult to predict and may be beyond the ability of the Company to control. Forward-looking statements are made based upon management’s expectations and belief concerning future developments and their potential effect upon the Company. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management.
The words “believes,” “expects,” “intends,” “plans,” “anticipates,” “hopes,” “likely,” “will,” and similar expressions identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company, or industry results, to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements.
These risks and uncertainties, many of which are beyond the Company’s control, include (i) the sufficiency of existing capital resources and the Company’s ability to raise additional capital to fund cash requirements for future operations; (ii) uncertainties involved in the decision to acquire an existing business opportunity or to embark on a start up venture; (iii) the ability of the Company to achieve sufficient revenues from the operation of a business opportunity; and (iv) general economic conditions. Although the Company believes the expectations reflected in these forward-looking statements are reasonable, such expectations may prove to be incorrect.
Readers are cautioned not to place undue reliance on these forward-looking statements which reflect management’s view only as of the date of this report. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, conditions or circumstances. For additional information about risks and uncertainties that could adversely affect the Company’s forward-looking statements, please refer to the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-KSB for the fiscal year ended August 31, 2005.
Plan of Operations
The Company’s plan of operation for the coming year is to identify and acquire a favorable business opportunity. The Company does not plan to limit its options to any particular industry, but will evaluate each opportunity on its merits.
The Company has not yet entered into any agreement, nor does it have any commitment or understanding to enter into or become engaged in any transaction, as of the date of this filing.
Liquidity and Capital Resources
As of November 30, 2005, the Company had no significant assets and does not have sufficient resources to meet the anticipated needs of the Company’s minimum operations for the fiscal year ending August 31, 2006. The Company may seek additional capital through the placement of private equity or debt to support future operations.
Should the Company fail to realize sufficient proceeds from private equity or debt placements, it will most likely have to obtain loans from shareholders until such time as an acquisition or merger candidate is identified and an agreement concluded. However, there can be no assurance that the Company will be able to obtain shareholder funding, as the Company has no agreement in place with any of its shareholders to provide any form of funding. Further, the Company’s need for capital may change dramatically if it acquires a business opportunity during the next annual period. The Company believes that if no acquisition candidate is found within the next twelve months then its operating requirements will not exceed $50,000.
The Company adopted The 2004 Benefit Plan of Newtech Resources Ltd., on April 19, 2004. Under the benefit plan, the Company may issue stock, or grant options to acquire the Company’s common stock to employees of the Company. The board of directors, at its own discretion may also issue stock or grant options to other individuals, including consultants or advisors, who render services to the Company or its subsidiaries, provided that the services rendered are not in connection with the offer or sale of securities in a capital-raising transaction. Further, no stock may be issued, or option granted under the benefit plan to consultants, advisors, or other persons who directly or indirectly promote or maintain a market for the Company’s stock. The Company has issued 143,125 shares in consideration of advisory services rendered but granted no options pursuant to the benefit plan as of the period ended November 30, 2005. The benefit plan is registered on Form S-8 with the Securities and Exchange Commission.
Critical Accounting Policies
In the notes to the audited consolidated financial statements for the year ended August 31, 2005 included in the Company’ Form 10-KSB, the Company discusses those accounting policies that are considered to be significant in determining the results of operations and its financial position. The Company believes that the accounting principles utilized by it conform to accounting principles generally accepted in the United States of America.
Going Concern
The Company’s audit expressed substantial doubt as to the Company’s ability to continue as a going concern as a result of reoccurring losses, lack of revenue generating activities and an accumulated deficit of $1,009,869 as of August 31, 2005. The Company’s ability to continue as a going concern is subject to the ability of the Company to realize a profit from operations and /or obtain funding from outside sources. Management’s plan to address the Company’s ability to continue as a going concern includes: (1) obtaining funding from private placement sources; (2) obtaining additional funding from the sale of the Company’s securities; (3) establishing revenues from a suitable business opportunity; (4) obtaining loans and grants from various financial institutions where possible. Although management believes that it will be able to obtain the necessary funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful.
ITEM 3. CONTROLS AND PROCEDURES
The Company’s president acts both as the Company’s chief executive officer and chief financial officer and is responsible for establishing and maintaining disclosure controls and procedures for the Company.
a) Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of management, our chief executive officer and chief financial officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”), as of November 30, 2005 Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to our chief executive officer and chief financial officer, in a manner that allowed for timely decisions regarding required disclosure.
The auditors did not test the effectiveness of nor relied on the internal controls of the Company for the fiscal quarters ended November 30, 2005 and 2004.
(b) Changes in internal controls over financial reporting.
During the quarter ended November 30, 2005, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
ITEM 1. LEGAL PROCEEDINGSNone.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIESOn November 30, 2005 the Company authorized the issuance of 1,000,000 shares of common stock to Valor Invest Ltd., in exchange for cash consideration of $0.01 a share or $10,000 pursuant to the terms of a stock subscription agreement. The Company relied on exemptions provided by Regulation S of the Securities Act. No sales commissions were paid in connection with this transaction.
Regulation S provides generally that any offer or sale that occurs outside of the United States is exempt from the registration requirements of the Securities Act, provided that certain conditions are met. Regulation S has two safe harbors. One safe harbor applies to offers and sales by issuers, securities professionals involved in the distribution process pursuant to contract, their respective affiliates, and persons acting on behalf of any of the foregoing (the “issuer safe harbor”), and the other applies to resales by persons other than the issuer, securities professionals involved in the distribution process pursuant to contract, their respective affiliates (except certain officers and directors), and persons acting on behalf of any of the forgoing (the “resale safe harbor”). An offer, sale or resale of securities that satisfied all conditions of the applicable safe harbor is deemed to be outside the United States as required by Regulation S. The distribution compliance period for shares sold in reliance on Regulation S is one year.
The Company complied with the requirements of Regulation S by having no directed selling efforts made in the United States, by selling only to a purchaser who was outside the United States at the time the subscription originated, and ensuring that the subscriber is a non-U.S. person with an address in a foreign country.
ITEM 3. DEFAULTS ON SENIOR SECURITIESNone.
ITEM 4. MATTERS SUBMITTED TO A VOTE OF SECURITY HOLDERSNone.
ITEM 5. OTHER INFORMATIONNone.
ITEM 6. EXHIBITSExhibits required to be attached by Item 601 of Regulation S-B are listed in the Index to Exhibits on page 13 of this Form 10-QSB, and are incorporated herein by this reference.
SIGNATURES
Pursuant to the requirements 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, this 13th day of January 2006.
NEWTECH RESOURCES LTD.
/s/ Nora Coccaro
Nora Coccaro
Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, and Director
INDEX TO EXHIBITS
Exhibit No. | Page No. | Description |
3(i) | * | Articles of Incorporation of the Company (incorporated by reference to the Form 10-SB filed with the Commission on October 16, 2001) |
3(ii) | * | By-laws of the Company (incorporated by reference to the Form 10-SB filed with the Commission on October 16, 2001) |
10(i) | * | Option Agreement between the Company and Kaizen Food Corporation (incorporated by reference to the Form 10-SB filed with the Commission on October 16, 2001) |
10(ii) | * | Amended Option Agreement between the Company and the Kaizen Food Corporation (incorporated by reference to the Form 10-SB/A filed with the Commission on June 3, 2002) |
10(iii) | * | Debt Settlement Agreement between the Company and Noni Wee (incorporated by reference to the Form 10-KSB filed with the Commission on December 15, 2003) |
10(iv) | * | Debt Settlement Agreement between the Company and Chaim Ai Ngoh (incorporated by reference to the Form 10-KSB filed with the Commission on December 15, 2003) |
31 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934 as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |