SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2007
OR
o TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
From the transition period from ____________ to ___________.
Commission File Number 000-26493
(Exact name of small business issuer as specified in its charter)
| Nevada | 88-0390251 |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
770 South Post Oak Lane, Suite 330, Houston, TX 77056
(Address of principal executive offices)
(832) 487- 8689
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| Large accelerated filer | o | Non-accelerated Filer | o |
| Accelerated Filer | o | Smaller Reporting Company | x |
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
Indicate by check mark 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 o No x
| Class | Shares Outstanding | Date |
| Common, $.001 par value | 94,374,679 | July 15, 2008 |
INDEX
| | Page Number |
| PART I - FINANCIAL INFORMATION | 3 |
| | |
| Item 1. Financial Statements | 3 |
| | |
Condensed Balance Sheets – June 30, 2007 (unaudited) and December 31, 2006 | 3 |
| | |
Condensed Statements of Operations – (unaudited) - For the three months and six months ended June 30, 2007 and 2006 and for the period from inception (February 19, 1997) to June 30, 2007 | 4 |
| | |
Condensed Statements of Cash Flows – (unaudited) - For the three months and six months ended June 30, 2007 and 2006 and for the period from inception (February 19, 1997) to June 30, 2007 | 5 |
| | |
| Notes to unaudited Condensed Financial Statements | 6 |
| | |
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 8 |
| | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risks | 8 |
| | |
| Item 4. Controls and Procedures | 8 |
| | |
| PART II - OTHER INFORMATION | 10 |
| | |
| Item 1. Legal Proceedings | 10 |
| | |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 10 |
| | |
| Item 3. Defaults Upon Senior Securities | 10 |
| | |
| Item 4. Submission of Matters to a Vote of Security Holders | 10 |
| | |
| Item 5. Other Information | 10 |
| | |
| Item 6. Exhibits | 11 |
31.1 Certification Pursuant to 18 USC, Section 1350 as adopted Pursuant to Section 302 of the Sarbanes Oxley Act of 2002 | |
32.1 Certification Pursuant to 18 USC Section 1350 as adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EXTENSIONS, INC.
(A Development Stage Company)
Balance Sheets
| Assets |
| | | June 30, 2007 (unaudited) | | | December 31, 2006 | |
| | | | | | | |
| Other Assets | | | 0 | | | | 0 | |
| | | | | | | | | |
| Total Assets | | $ | 0 | | | | 0 | |
| | | | | | | | | |
| Liabilities & Stockholders’ Deficit |
| | | | | | | | | |
| Current Liabilities | | | | | | | | |
| | | | | | | | | |
| Accounts Payable | | | - | | | | - | |
| | | | | | | | | |
| Total Current Liabilities | | | - | | | | - | |
| | | | | | | | | |
Preferred Stock, $.001 par value, 10,000,000 Shares authorized, 1,000,000 shares issued | | | 1,000 | | | | - | |
| | | | | | | | | |
| Stockholders’ Equity | | | | | | | | |
| Common Stock Authorized shares 100,000,000 | | | | | | | - | |
$0.001 par value; 27,300,000 outstanding at 6-30-07 and at 12-31-06 | | | 27,300 | | | | 27,300 | |
| | | | | | | | | |
| Additional paid-in Capital | | | 16,500 | | | | - | |
| | | | | | | | | |
| Deficit accumulated during development stage | | | (44,800 | ) | | | (27,300 | ) |
| | | | | | | | | |
| Total Stockholders’ Equity | | | 0 | | | | 0 | |
| | | | | | | | | |
| Total Liabilities & Stockholders’ Deficit | | $ | 0 | | | $ | 0 | |
See Notes to the Financial Statements
EXTENSIONS, INC.
(A Development Stage Company)
Statements of Operations
(unaudited)
| | | For the Three Months Ended June 30 | | | For the Six Months Ended June 30 | | | From Inception (February 19, 1997) Through June 30, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | | | 2007 | |
| | | | | | | | | | | | | | | | | | | | | |
| REVENUES | | $ | 0 | | | $ | 0 | | | | - | | | | - | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | | | | | | | | | |
| Administrative Expenses | | | | | | | | | | | | | | | | | | | | |
| Impairment Loss | | | 17,500 | | | | 0 | | | | 17,500 | | | | - | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Expenses | | | 17,500 | | | | 0 | | | | - | | | | 27,300 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET LOSS | | $ | 17,500 | | | $ | 0 | | | | 17,500 | | | | 27,300 | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | |
| (LOSS) PER SHARE | | $ | (0.01 | ) | | $ | (0.00 | ) | | $ | (0.01 | ) | | $ | (0.01 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| WEIGHTED AVERAGE SHARES OUTSTANDING | | | 27,300,000 | | | | 27,.300,000 | | | | 27,300,000 | | | | 27,300,000 | | | | | |
See Notes to the Financial Statements
EXTENSIONS, INC.
(A Development Stage Company)
Statements of Cash Flows
(unaudited)
| | | For the Six Months Ended June 30, | | | From Inception (February 19, 1997) through | |
| | | 2007 | | | 2006 | | | June 30, 2007 | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | |
| Net Income (Loss) | | | (17,500 | ) | | | (27,300 | ) | | | (44,800 | ) |
| | | | | | | | | | | | | |
Adjustments to reconcile net loss to cash used in operating activities: | | | | | | | | | | | | |
| Non cash expense | | | 0 | | | | (27,300 | ) | | | 27,300 | |
| Increase in accounts payable | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| Net Cash Used By Operating Activities | | | (17,500 | ) | | | 0 | | | | (17,500 | ) |
| | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | |
| Proceeds from issuance of preferred stock | | | 17,500 | | | | 0 | | | | 17,500 | |
| | | | | | | | | | | | | |
| Net cash provided from financing activities | | | 17,500 | | | | 0 | | | | 17,500 | |
| | | | | | | | | | | | | |
| Net increase (Decrease) in cash | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | |
| Cash at beginning of period | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | |
| Cash at end of period | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | |
| Supplemental cash flow information | | | | | | | | | | | | |
| stock issued for accounts payable | | $ | 0 | | | $ | 0 | | | $ | 0 | |
See Notes to the Financial Statements
(A Development Stage Company)
Notes to the Unaudited Condensed Financial Statements
June 30, 2007
The interim financial statements are prepared pursuant to the requirements for reporting on Form 10-Q. The December 31, 2006 balance sheet data was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes included in the Company's Form 10-K for the year ended December 31, 2006. In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods presented.
NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN
The accompanying financial statements have been prepared on the basis of accounting principles applicable to a “going concern”, which assume that the company will continue in operation for at least one year and will be able to realize its assets and discharge its liabilities in the normal course of operations.
Several conditions and events cast doubt about the company’s ability to continue as a “going concern”. The company has incurred indeterminate net losses prior to October 1, 2003, has a liquidity problem, and requires additional financing in order to finance its business activities on an ongoing basis. The company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained. The company’s future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities.
These financial statements do not reflect adjustments that would be necessary if the company were unable to continue as a “going concern”. While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the “going concern” assumption used in preparing these financial statements, there can be no assurance that these actions will be successful. If the company were unable to continue as a “going concern”, then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported revenues and expenses, and the balance sheet classifications used.
Organization and Basis of Presentation
The company was incorporated under the laws of the State of Nevada on February 19, 1997. The company ceased all operating activities during the period from October 1, 2003 to December 31, 2005 and was considered dormant. Since October 6, 2006, the company is in the development stage, and has not commenced planned principal operations. The company also was delinquent on its filing with the Secretary of State for Nevada and as a result was not a corporation in good standing until October 30, 2006. The company’s common shares are listed for trading on the Pink Sheets under the symbol MNEI.
Prior to approximately October 1, 2003, Millennium National Events, Inc. was an operating company with its common shares listed for trading on the OTCBB market. The company failed to remain current on its SEC filing requirements and as a result was demoted to the Pink Sheets. The company has not filed any periodic reports since the report filed for the third quarter of 2003. Subsequently, the Company ceases all business operations and has been dormant since approximately October 1, 2003. During the same period, all the Company’s officers and directors ceased acting on behalf of the Company and abandoned their obligations to the Company and its shareholders. As a result, the Company was considered to be dormant from October 1, 2003 to December 31, 2005.
On August 18, 2006, a complaint was filed in the Superior Court for Washoe County, Nevada seeking the appointment for custodian for the Company under Nevada Revised Statutes 78.347(2). On October 6, 2006, a Custodian was appointed to the Company who commenced an investigation of the assets, management, liabilities, business, condition and liabilities of the Company.
As a result of the investigation by the Custodian, a report was prepared and filed with the Court, finding that there were no apparent assets, liabilities, or business of the company existing or enforceable, that there were 27,300,000 common shares and no preferred shares issued and outstanding and that the company was in revoked status under Nevada law. The accompanying financial statements were prepared on the basis of that investigation, as approved by the Court.
Further, based on his investigation, the custodian has been unable to locate any assets belonging to the company, and no records of any valid remaining liabilities, liens, judgments, warrants, options, or other claims against the Company or its stock.
In the event that any liabilities, liens, judgments, warrants, options, or other claims against the Company arise, these will be recorded when discovered.
Nature of Business
The Company has no products or services as of June 30, 2007. The company was organized as a vehicle to seek merger or acquisition candidates. The company intends to acquire interest in various business opportunities, which in the opinion of management would provide a profit to the company.
(A Development Stage Company)
Notes to the Unaudited Condensed Financial Statements
June 30, 2007
NOTE 2 – SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies for Millennium National Events, Inc. (a development stage company) is presented to assist in understanding the Company’s financial statements. The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Pervasiveness of Estimates
The preparation of financial statements is conformity with generally accepted accounting principles required management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Loss Per Share
Basic loss per share has been computed by dividing the loss for the year applicable to the common stockholders by the weighted average number of common shares outstanding during the years.
Concentration of Credit Risk
The company has no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.
NOTE 3 – INCOME TAXES
The company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes”. SFAS No. 109 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities.
NOTE 4 – DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a development stage company, the company has had recurring losses during its development stage. The company’s financial statements are prepared using generally accepted accounting principals applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the company does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. In the interim, shareholders of the company have committed to meeting its minimal operating expenses.
NOTE 5 -- COMMITMENTS
As of January 1, 2006 all activities of the company have been conducted by corporate officers from either their homes or business offices. Currently, there are no outstanding debts owed by the company for the use of these facilities and there are no commitments for future use of the facilities.
NOTE 6 – COMMON STOCK
Prior to December 31, 2005, the company issued 27,300,000 shares of common stock for cash and other consideration.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Material Changes in Result of Operations
During both the three months and six months ended June 30, 2007 and 2006, the Company had no operations other than the search for a business to acquire or with which to combine.
The Company reported no revenues for either of the three month or six month periods ended June 30, 2007 or 2006. The Company incurred $17,500 of expenses during the three months and six months ended June 30, 2007, all for transfer agent fees. The Company incurred no expenses during the three months ended June 30, 2006. For the six months ended June 30, 2006 the Company incurred an impairment expense of $27,300.
Material Changes in Financial Condition, Liquidity and Capital Resources
As of June 30, 2007 the Company had no assets and no liabilities as compared to no assets and no current liabilities as of December 31, 2006.
Although the Company has no liquidity, it believes that it will be able to find a suitable Company with which to merge.
ITEM 3. QUANTITIVE AND QUALITIVE DISCLOSURE ABOUT MARKET RISK
None
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in its reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The Company's management, with the participation of its chief executive officer who at that time was also its chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as of December 31, 2007. Based on that evaluation, the Company's chief executive / financial concluded that, as of that date, the Company's disclosure controls and procedures, were not effective at a reasonable assurance level, due to the identification of a material weakness, as discussed further below under Management's Report on Internal Control over Financial Reporting.
Management's Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section 13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or under the supervision of, the Company's CEO who is also the company’s CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting purposes in conformity with U.S. generally accepted accounting principles and include those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
As of December 31, 2007, management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the framework established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the criteria established by COSO management concluded that the Company's internal control over financial reporting was not effective as of December 31, 2007, as a result of the identification of the material weakness described below.
ITEM 4. CONTROLS AND PROCEDURES - continued
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
Our management, including our chief executive officer who at that time was also chief financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
The Company's management has identified a material weakness in the effectiveness of internal control over financial reporting related to a shortage of resources in the accounting department required to close its books and records effectively at each reporting date, obtain the necessary information from operational departments and to complete the work necessary to file its financial reports timely.
This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities Exchange Commission that permit the company to provide only management’s report in this annual report.
Management determined that a material weakness existed due to a lack of an adequate number of personnel in the accounting department. Management is in the process of mediating the material weakness identified by hiring a sufficient number of resources to perform controls and to aid in the timeliness of the financial statement close process leading to the correct preparation, review, presentation of and disclosures in our consolidated statements. The Company has hired temporary contractors to help perform certain accounting functions, until management can employ a more permanent solution. We cannot assure you that, as circumstances change, any additional material weakness will not be identified.
We believe that our disclosure controls and procedures, including our internal control over financial reporting, have improved since year-end due to the scrutiny of such matters by our management and a board of directors and the changes described above. We have hired certain resources in the accounting and finance departments and we will make additional changes in the future, as we deem necessary. We cannot assure you that, as circumstances change, any additional material weakness will not be identified.
Changes in Internal Control over Financial Reporting
Except as noted above, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEDINGS
None
ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES & USE OF PROCEEDS
On May 25, 2007, the Company issued 1,000,000 shares of its preferred stock in exchange for $17,500 in cash. All of these proceeds were used to pay transfer agent fees.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | EXTENSIONS, INC. | |
| | | | |
| Date: July 21, 2008 | By: | /s/ Crawford Shaw | |
| | | Crawford Shaw | |
| | | Principal Executive Officer and Principal Financial Officer | |
| | | | |
