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 June 30, 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
SENTICORE, INC.
(fka 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)
2410 Hollywood Blvd.
Hollywood, FL 33020
(Address of Principal Executive Offices)
(954) 927-0866
(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 August 15, 2003
4,900,000 Common Shares
Transitional Small Business Disclosure Format:
YES ( ) NO (x)
1
SENTICORE, INC.
(fka Hojo Holdings, Inc.)
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION Page
Item 1. Consolidated Financial Statements (unaudited)
Balance Sheets as of June 30, 2003 and December 31, 2002 3
Statements of Operations for the three and six months
ended June 30, 2003 and 2002 and the period January 5,
1999 (date of incorporation) to June 30, 2003 4
Statement of Stockholders' Deficit for the six months
ended June 30, 2003 5
Statements of Cash Flows for the three and six months
ended June 30, 2003 and 2002, and the period January 5,
1999 (date of incorporation) to June 30, 2003 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (including cautionary statement) 9
Item 3. Controls and Procedures 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Securities Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
Certifications 12
2
SENTICORE, INC.
(fka Hojo Holdings, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
______________________________________________________________________________________
ASSETS June 30, 2003 December 31,
(unaudited) 2002
CURRENT ASSETS:
Furniture and equipment (net of
accumulated depreciation) $ 926 $ 1,611
Investments (net of unrealized loss of $5,000) - -
TOTAL $ 926 $ 1,611
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Due to shareholders $ 2,386 $ 19,846
Accrued liabilities 12,511 12,000
Total liabilities 14,897 31,846
STOCKHOLDERS' DEFICIT:
Preferred stock - $.001 par value; 10,000,000
shares authorized; zero shares issued and
outstanding - -
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 146,546 126,700
Deficit accumulated during the development stage (165,317) (161,735)
Total stockholders' deficit (13,971) (30,235)
TOTAL $ 926 $ 1,611
============ ============
______________________________________________________________________________________
SEE NOTES TO FINANCIAL STATEMENTS.
3
SENTICORE, INC.
(fka Hojo Holdings, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
_________________________________________________________________________________________
For the For the For the For the For the
three six three six Period
months months months months January 5, 1999
ended ended ended ended (date of
June 30, June 30, June 30, June 30, incorporation) to
2003 2003 2002 2002 June 30, 2003
REVENUES $ - $ - $ - $ - $ 5,275
EXPENSES:
Stock based consulting - - - - 50,000
Office - - - - 23,837
Other professional fees - 2,897 13,250 14,750 55,900
Travel and entertainment - - - - 13,756
Employee compensation - - 500 1,000 14,000
Unrealized loss - - - - 5,000
Other - 685 324 361 8,099
Total expenses - 3,582 14,074 16,111 170,592
NET LOSS $ - $ (3,582) $(14,074) $ (16,111) $ (165,317)
======== ========== ========= =========== ============
Net Loss Per Share -
Basic and Diluted $ (.00) $ (.00) $ (.00) $ (.00)
======== ========== ========= ===========
Weighted Average Number
of Shares Outstanding 4,800,000 4,800,000 4,800,000 4,800,000
======== ========== ========= ===========
____________________________________________________________________________________________
SEE NOTES TO FINANCIAL STATEMENTS.
4
SENTICORE, INC.
(fka Hojo Holdings, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
For the six months ended June 30, 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)
Capital Contribution - - 19,846 - 19,846
Net Loss - - - (3,582) (3,582)
Balances, June 30, 2003 4,800,000 $4,800 $146,546 $ (165,317) $ (13,971)
========== ======= ========= =========== ===========
____________________________________________________________________________________________
SEE NOTES TO FINANCIAL STATEMENTS.
5
SENTICORE, INC.
(fka Hojo Holdings, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
___________________________________________________________________________________________________________________
For the period
January 5,
For the three For the six For the three For the six 1999 (date of
months months months months incorporation)
ended June ended June ended June ended June to June 30,
30, 2002 30, 2002 30, 2002 30, 2002 2003
Cash Flows From Operating Activities:
Net loss $ - $ (3,582) $ (14,074) $ (16,111) $ (165,317)
Adjustments to reconcile net loss to net
cash used by operating activities:
Stock based consulting services - - - - 50,000
Depreciation - 685 324 648 4,083
Non-cash compensation - - 500 1,000 14,000
Increase in prepaid assets - - - - -
Increase in accrued liabilities - 511 13,250 12,963 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:
Capital Contribution - 19,846 - - 19,846
Proceeds from issuance of common stock - - - - 45,268
Advances from (repayments to) affiliate - (17,460) - 1,500 24,618
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 cash flow information:
Cash paid for interest $ - $ - $ - $ -
========= =========== =========== ==========
Cash paid for income taxes $ - $ - $ - $ -
========= =========== =========== ==========
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.
___________________________________________________________________________________________________________________
SEE NOTES TO FINANCIAL STATEMENTS.
6
SENTICORE, INC.
(fka Hojo Holdings, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
________________________________________________________________________________
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
Senticore, Inc. fka 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. Accordingly, the accompanying financial statements have been
reflected as consolidated. In furtherance thereof, we anticipated that we would
acquire substantially all of the assets of Global lWeb TV, Inc., a Florida based
company, however the acquisition was never consummated and the agreement has
been canceled.
In April 2003, the holders of a majority of our issued and outstanding shares
approved the amendment to our articles of incorporation to provide for the
authorization of 10,000,000 shares of preferred stock.
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 accounting principles generally accepted in the United States of
America. In our opinion, all adjustments (consisting of normal and recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the six months ended June 30, 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.
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 June 30, 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
7
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 June 30, 2003, we had net operating
loss carryforwards of approximately $61,600 for income taxes. These
carryforwards expire in various periods through June 30, 2023. 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 $1,000 of employee compensation during the respective six
months periods ended June 30, 2003 and 2002. We believe these amounts represent
the fair value of services provided to us by our president during these periods.
Because this compensation will not be paid, now or in the future, the amount
recorded as of June 30, 2002 was reflected as an increase in additional paid-in
capital.
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 June 30, 2003; accordingly basic and
diluted net loss per share are identical for each of the periods in the
accompanying statements of operations.
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
June 30, 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).
NOTE G - SUBSEQUENT EVENT
In July 2003, we entered a non-binding letter of intent to acquire certain real
property in Canada in exchange for $50,000 and 2,000,000 shares of our preferred
stock.
________________________________________________________________________________
8
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (INCLUDING CAUTIONARY STATEMENT)
The following discussion and analysis should be read in conjunction with the
balance sheets as of December 31, 2002 and June 30, 2003 and the statements of
operations and cash flows as of and for the three and six months ended June 30,
2003 and 2002 included with this Form 10-QSB. In addition, readers are referred
to the cautionary statement below, 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).
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
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.
Results of Operations
We did not generate any revenues during the six months ended June 30, 2003 and
2002, and our respective net losses for such periods were $3,582 and $16,111.
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 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 June 30, 2003, we used cash of approximately $89,700
for operating and investing activities. These cash outflows have been funded
primarily by stockholder advances and contributed capital.
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 June 30, 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
9
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.
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.
10
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
31 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
32 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/ Carl Gessner CEO & Acting CFO August 28, 2003
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