UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 10-QSB
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
and Exchange Act of 1934.
For the quarterly period ended March 31, 2003.
( ) Transition report pursuant to Section 13 or 15(d) of the Exchange
Act for the transition period from _________ to _________ .
Commission File Number: 333-87111
HOJO HOLDINGS, INC.
(Exact name of registrant as specified in charter)
DELAWARE 11-3504866
(State of or other jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)
2424 N. Federal Hwy., Suite 350
Boca Raton, FL 33431
(Address of Principal Executive Offices)
(561) 237-6285
(Registrant's Telephone Number, Including Area Code)
Check whether the registrant: (1) has filed all reports required to be filed by
Section by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 the number of shares outstanding of each of the issuer's classes of
stock as of March 31, 2003.
4,800,000 Common Shares
Transitional Small Business Disclosure Format:
YES ( ) NO (x)
1
HOJO HOLDINGS, INC.
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements (unaudited)
Balance Sheets as of March 31, 2003 and December 31, 2002 3
Statements of Operations for the three months ended March 4
31, 2003 and 2002, and the period January 5, 1999 (date of
incorporation) to March 31, 2003
Statement of Stockholders' Deficit for the three months 5
ended March 31, 2003
Statements of Cash Flows for the three months ended 6
March 31, 2003 and 2002, and the period January 5, 1999
(date of incorporation) to March 31, 2003
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition 10
and Results of Operations (including Cautionary Statement)
Item 3. Controls and Procedures 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Securities Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 12
Certifications 13
2
Item 1.
HOJO HOLDINGS, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
ASSETS March 31,
2003 December
(unaudited) 31, 2002
CURRENT ASSETS:
Furniture and equipment (net of
accumulated depreciation of $4,083
and $3,398, respectively) $ 926 $ 1,611
Investments (net of unrealized loss
of $5,000) - -
TOTAL $ 926 $ 1,611 $
=========== ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Due to stockholders $ 22,232 $ 19,846 $
Accrued liabilities 12,511 12,000
Total liabilities 34,743 31,846
STOCKHOLDERS' DEFICIT:
Common stock - $0.001 par value;
20,000,000 shares authorized; 4,800,000
shares issued and outstanding 4,800 4,800
Additional paid-in capital 126,700 126,700
Deficit accumulated during the
development stage (165,317) (161,735)
Total stockholders' deficit (33,817) (30,235)
TOTAL $ 926 $ 1,611 $
=========== ============
________________________________________________________________________________
SEE NOTES TO FINANCIAL STATEMENTS.
3
HOJO HOLDINGS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
________________________________________________________________________________________
For the
Period
January 5, 1999
For the Three For the three (date of
months ended months ended incorporation) to
March 31, 2003 March 31, 2002 March 31, 2003
REVENUES $ - $ - $ 5,275
EXPENSES:
Stock based consulting - - 50,000
Office - - 23,837
Other professional fees 2,897 1,500 55,900
Travel and entertainment - - 13,756
Employee compensation - 500 14,000
Unrealized loss - - 5,000
Other 685 37 8,099
Total expenses $ 3,582 $ 2,037 $ 170,592
NET LOSS $ (3,582) $ (2,037) $ (165,317)
============== ============= ==============
Net Loss Per Share - Basic and
Diluted $ (.00) $ (.00)
============== =============
Weighted Average Number of Shares
Outstanding 4,800,000 4,800,000
============== =============
________________________________________________________________________________________
SEE NOTES TO FINANCIAL STATEMENTS.
4
HOJO HOLDINGS, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' DEFICIT
For the three months ended March 31, 2003
(Unaudited)
_____________________________________________________________________________________________
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage Total
Balances, December 31, 2002 4,800,000 $ 4,800 $ 126,700 $ (161,735) $(30,235)
Net Loss - - - (3,582) (3,582)
Balances, March 31, 2003 4,800,000 $ 4,800 $ 126,700 $ (165,317) $ (33,817)
========= ======== ========== =========== ==========
_____________________________________________________________________________________________
SEE NOTES TO FINANCIAL STATEMENTS.
5
HOJO HOLDINGS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
_________________________________________________________________________________________
For the period
January 5,
For the For the 1999 (date of
three months three months incorporation)
ended March ended March to March 31,
31, 2003 31, 2002 2003
Cash Flows From Operating Activities:
Net loss $ (3,582) $ (2,037) $ (165,317)
Adjustments to reconcile net loss to net
cash used by operating activities:
Stock based consulting services - - 50,000
Depreciation 685 324 4,083
Non-cash compensation - 500 14,000
Increase in prepaid assets - - -
Increase in accrued liabilities 511 (287) 12,511
Net Cash Used by Operating Activities (2,386) (1,500) (84,723)
Cash Flows From Investing Activities -
Purchases of furniture and equipment - - (5,009)
Cash Flows From Financing Activities:
Proceeds from issuance of common stock - - 45,268
Net increase in due to stockholder 2,386 1,500 44,464
Cash Provided by Financing Activities 2,386 1,500 89,732
Net Increase (decrease) In Cash and Cash
Equivalents - - -
Cash and Cash Equivalents at Beginning of Period - - -
Cash and Cash Equivalents at End of Period $ - $ - $ -
=========== ========== ===========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: During
the year ended December 31, 2000, common stock and additional paid-in capital
increased by $445 and $21,787, respectively when $22,232 of affiliate advances
were converted to common stock.
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ - $ - $ -
=========== ========== ===========
Cash paid for income taxes $ - $ - $ -
=========== ========== ===========
_________________________________________________________________________________________
SEE NOTES TO FINANCIAL STATEMENTS.
6
HOJO HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
________________________________________________________________________________
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
Hojo Holdings, Inc. ("we", "us", "our") was incorporated under the laws of the
state of Delaware on January 5, 1999. We are considered to be in the development
stage as defined in Financial Accounting Standards Board Statement No. 7. We
initially intended to become an internet professional services firm specializing
in high-end web site development, however for various reasons, our Board has
decided that it is the best interests of our shareholders to seek other
opportunities by merging and/or acquiring another company. We are currently
having discussions with several potential partners, however we are uncertain as
to whether any of these negotiations will result in a merger and/or acquisition.
Our planned principal operations have not commenced; therefore most of our
accounting policies and procedures have not yet been established.
In April 2003, we formed a wholly owned subsidiary, Global Wi Fi Corp. for
the purpose of acquiring companies or assets used in the wireless Internet
connection field. In furtherance thereof, we acquired substantially all of the
assets of Global lWeb TV, Inc., a Florida based company.
The agreement provided in part for us to issue 5 million shares of Class A
preferred stock and for us to assume certain liabilities. The preferred shares
are convertible into shares of common stock at a conversion ratio of two shares
of preferred stock for every share of common stock. Holders of the class A
preferred stock will be required to hold their shares for a period of two years
following closing.
The holders of a majority of our issued and outstanding shares have approved the
amendment to our articles of incorporation to provide for the issuance of the
preferred stock. We anticipate closing of this transaction will take place
immediately following the amended articles of incorporation with the Secretary
of State.
Basis of Presentation
Our accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and the instructions to Form 10-QSB and Rule
10-1 of Regulation S-X of the Securities and Exchange Commission (the "SEC").
Accordingly, these financial statements do not include all of the footnotes
required by generally accepted accounting principles. In our opinion, all
adjustments (consisting of normal and recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for the
three months ended March 31, 2003 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2003. The accompanying
financial statements and the notes should be read in conjunction with our
audited financial statements as of and for the year ended December 31, 2002
contained in our Form 10-KSB.
Use of Estimates
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements. The reported amounts of revenues and expenses during the reporting
period may be affected by the estimates and assumptions we are required to make.
Actual results could differ from those estimates.
7
NOTE B - GOING CONCERN
Our financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. We have incurred net operating losses since our
inception and have a stockholders' deficit at March 31, 2003. Our ability to
continue as a going concern is ultimately contingent upon our ability to attain
profitable operations through the successful development or integration of an
operating business. Our plans include selling shares of our common stock and/or
raising other debt or equity capital, however there is no assurance that we will
be successful in our efforts to raise capital, and/or in our efforts to locate
and merge with, acquire, or develop a suitable business. These factors, among
others, indicate that we may be unable to continue as a going concern for a
reasonable period of time. Our financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or the amounts and classification of liabilities that might be necessary
should we be unable to continue as a going concern.
NOTE C - INCOME TAXES
We recognized losses for both financial and tax reporting purposes during each
of the periods in the accompanying statements of operations. Accordingly, no
provisions for income taxes and/or deferred income taxes payable have been
provided for in the accompanying financial statements.
Assuming they are not limited and/or lost as a result of "change in control"
provisions of the Internal Revenue Code, at March 31, 2003, we had net
operating loss carryforwards of approximately $61,600 for income taxes. These
carryforwards expire in various periods through the year ended December 31,
2022. The deferred income tax asset arising from these net operating loss
carryforwards is not recorded in the accompanying balance sheet because we
established a valuation allowance to fully reserve such asset, as its
realization did not meet the required asset recognition standards established
by SFAS 109.
NOTE D - RELATED PARTY TRANSACTIONS
We recognized $0 and $500 of employee compensation during the respective
quarters ended March 31, 2003 and 2002. We believe these amounts represent the
fair value of services provided to us by our president during these years.
Because this compensation will not be paid, now or in the future, the amounts
have been reflected as increases in additional paid-in capital. No amounts have
been ascribed to the use of a portion of our president's home for office space
in the accompanying statements of operations because the value of such office
space was not considered significant.
In addition, we periodically borrow funds from various stockholders (one of whom
was our prior president's husband). These advances, which are reflected as due
to stockholders in the accompanying balance sheet, are unsecured, non-interest
bearing and due on demand.
NOTE E - LOSS PER SHARE
We compute net loss per share in accordance with SFAS No. 128 "Earnings per
Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98 ("SAB 98").
Under the provisions of SFAS No. 128 and SAB 98, basic net loss per share is
computed by dividing the net loss available to common stockholders for the
period by the weighted average number of common shares outstanding during the
period. Diluted net loss per share is computed by dividing the net loss for the
period by the number of common and common equivalent shares outstanding during
the period. There were no common equivalent shares outstanding during the period
January 5, 1999 (date of incorporation) to December 31, 2002; accordingly basic
and diluted net loss per share are identical for each of the periods in the
accompanying statements of operations.
8
NOTE F - COMMITMENTS
On June 13, 2001, we engaged a financial consulting firm to act as our financial
advisor, and to furnish investment-banking services to us. The agreement was for
a term of one year and required us to pay total consideration of $25,000. At
March 31, 2003, we have paid $13,000 under this arrangement. Accordingly, as of
such date, we still owe $12,000 under this arrangement (such amount is reflected
in accrued liabilities).
________________________________________________________________________________
9
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
balance sheets as of December 31, 2002 and March 31, 2003 and the statements of
operations and cash flows as of and for the three months ended March 31, 2003
and 2002 included with this Form 10-QSB. In addition, readers are referred to
the cautionary statement on page 19, which addresses forward-looking statements.
We are considered to be in the development stage as defined in Financial
Accounting Standards Board Statement No. 7. With the exception of certain
furniture and equipment, we have no assets. In addition, since our inception, we
have only generated $5,275 of revenues ($5,000 of which resulted in us receiving
stock in lieu of cash).
Results of Operations
We did not generate any revenues during the three months ended March 31, 2003
and 2002, and our respective net losses for such quarters were $3,582 and $2,037
(of which $0 and $500 were non-cash compensation expenses).
Since our inception we have incurred approximately $170,600 of expenses;
approximately $96,300 of which resulted, or are expected to ultimately result,
in the outlay of cash. These expenses, which were primarily funded by
approximately $45,200 of proceeds received from the sale of our common stock and
approximately $44,500 of affiliate advances resulted substantially from our
efforts to establish clients and expand our business operations.
Liquidity and capital resources
Because we are a development stage enterprise, our operating and capital
requirements have exceeded our cash flow generated by operations. During the
period January 5, 1999 to March 31, 2003, we used cash of approximately $89,700
for operating and investing activities. As mentioned above, these cash outflows
have been funded primarily by stockholder advances and proceeds received from
sales of common stock of approximately $45,300 and $44,500, respectively
(approximately $22,200 of these advances were converted to common stock during
the year ended December 31, 2000).
As a result of our limited operating history, and because we plan to merge with
and/or acquire an operating business, we have limited meaningful historical
financial data upon which to base planned operating expenses. However, assuming
we have not merged with, and/or acquired an operating company by March 31, 2004,
we expect to make expenditures of at least $5,000 during the next twelve months.
These expenditures will be used to pay salaries, professional fees and other
expenses incident to our business. We will need to raise additional funds
through private equity or debt placements, or public offerings of our stock. If
we are unable to raise these funds we will not be able to meet our cash needs
for the next year, and investors may lose their entire investment.
Our anticipated expense levels in the future are based in part on our
expectations as to future revenue. Revenues and operating results generally will
depend on the volume and timing of transactions, as well as our ability to
complete transactions. There can be no assurance that we will be able to
accurately predict our net revenue, particularly in light of our limited
operating history, and we may be unable to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall or other unanticipated changes
in our industry. Any failure by us to accurately make predictions would have a
material adverse effect on our business, results of operations and financial
condition.
CAUTIONARY STATEMENT
This Form 10-QSB, press releases and certain information provided periodically
in writing or orally by our officers or our agents contain statements which
constitute forward-looking statements within the meaning of Section 27A of the
Securities Act, as amended and Section 21E of the Securities Exchange Act of
1934. The words expect, anticipate, believe, goal, plan, intend, estimate and
similar expressions and variations thereof if used are intended to specifically
identify forward-looking statements. Those statements appear in a number of
places in this Form 10-QSB and in other places, particularly, Management's
10
Discussion and Analysis and Results of Operations, and include statements
regarding the intent, belief or current expectations us, our directors or our
officers with respect to, among other things: (i) our liquidity and capital
resources; (ii) our financing opportunities and plans and (iii) our future
performance and operating results. Investors and prospective investors are
cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual results may
differ materially from those projected in the forward-looking statements as a
result of various factors. The factors that might cause such differences
include, among others, the following: (i) any material inability of us to
successfully internally develop our products; (ii) any adverse effect or
limitations caused by Governmental regulations; (iii) any adverse effect on our
positive cash flow and abilities to obtain acceptable financing in connection
with our growth plans; (iv) any increased competition in business; (v) any
inability of us to successfully conduct our business in new markets; and (vi)
other risks including those identified in our filings with the Securities and
Exchange Commission. We undertake no obligation to publicly update or revise the
forward looking statements made in this Form 10-QSB to reflect events or
circumstances after the date of this Form 10-QSB or to reflect the occurrence of
unanticipated events.
Item 3.
CONTROLS AND PROCEDURES
Within 90 days prior to the date of filing of this report, we carried out an
evaluation, under the supervision and with the participation of our management,
including the Chief Executive Officer (who also effectively serves as the Chief
Financial Officer), of the design and operation of our disclosure controls and
procedures. Based on this evaluation, our Chief Executive Officer concluded that
our disclosure controls and procedures are effective for gathering, analyzing
and disclosing the information we are required to disclose in the reports we
file under the Securities Exchange Act of 1934, within the time periods
specified in the SEC's rules and forms. There have been no significant changes
in our internal controls or in other factors that could significantly affect
internal controls subsequent to the date of this evaluation.
11
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
NONE
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Securities Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Purchase and Sale Agreement made April 21, 2003
99.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act 2002
(b) Reports on Form 8-K.
NONE
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.
SIGNATURE TITLE DATE
/s/ Rohit Patel CEO May 20, 2003
/s/ Carl Gessner President & CFO May 20, 2003
12
CERTIFICATIONS
I, Rohit Patel, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Hojo Holdings,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial position, results of operations, and
cash flows of the issuer as of, and for, the periods presented in this
quarterly report.
4. I am responsible for establishing and maintaining disclosure controls
and procedures for the issuer and have:
(i) Designed such disclosure controls and procedures to ensure that
material information relating to the issuer is made known to me,
particularly during the period in which the periodic reports are
being prepared;
(ii) Evaluated the effectiveness of the issuer's disclosure controls
and procedures as of March 31, 2003; and
(iii)Presented in the report my conclusions about the effectiveness
of the disclosure controls and procedures based on my evaluation
as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the issuer's
auditors and the audit committee of the board of directors (or persons
fulfilling the equivalent function):
(i) All significant deficiencies in the design or operation of
internal controls which could adversely affect the issuer's
ability to record, process, summarize and report financial data
and have identified for the issuer's auditors any material
weaknesses in internal controls; and
(ii)Any fraud, whether or not material, that involves management or
other employees who have a significant role in the issuer's
internal controls; and
6. I have indicated in the report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
Date: May 20, 2003
/s/ Rohit Patel
Chief Executive Officer
13
CERTIFICATIONS
I, Carl Gessner, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Hojo Holdings,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial position, results of operations, and
cash flows of the issuer as of, and for, the periods presented in this
quarterly report.
4. I am responsible for establishing and maintaining disclosure controls
and procedures for the issuer and have:
(i) Designed such disclosure controls and procedures to ensure that
material information relating to the issuer is made known to me,
particularly during the period in which the periodic reports are
being prepared;
(ii) Evaluated the effectiveness of the issuer's disclosure controls
and procedures as of March 31, 2003; and
(iii)Presented in the report my conclusions about the effectiveness
of the disclosure controls and procedures based on my evaluation
as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the issuer's
auditors and the audit committee of the board of directors (or persons
fulfilling the equivalent function):
(i) All significant deficiencies in the design or operation of
internal controls which could adversely affect the issuer's
ability to record, process, summarize and report financial data
and have identified for the issuer's auditors any material
weaknesses in internal controls; and
(ii)Any fraud, whether or not material, that involves management or
other employees who have a significant role in the issuer's
internal controls; and
6. I have indicated in the report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
Date: May 20, 2003
/s/ Carl Gessner
President & CFO
14
