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 September 30, 2001.
( ) 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 |
21 Blackheath Road
Lido Beach, New York 11561
(Address of Principal Executive Offices)
(678) 458-0982
(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 September 30, 2001.
4,800,000 Common Shares
Transitional Small Business Disclosure Format:
YES ( ) NO (x)
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HOJO HOLDINGS, INC.
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION | Page |
Item 1. Financial Statements (unaudited) | |
Balance Sheets as of September 30, 2001 and December 31, 2000 | 3 |
Statements of Operations for the three and nine months ended September 30, 2001 and 2000, and the period January 5, 1999 (date of incorporation) to September 30, 2001 | 4 |
Statement of Stockholders' Equity (Deficit) for the nine months ended September 30, 2001 | 5 |
Statements of Cash Flows for the three and nine months ended September 30, 2001 and 2000, and the period January 5, 1999 (date of incorporation) to September 30, 2001 | 6 |
Notes to Financial Statements | 7 |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (including cautionary statement) | 9 |
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 | 11 |
Signatures | 11 |
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HOJO HOLDINGS, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
ASSETS | September 30, 2001 | December31, 2000 | |
CURRENT ASSETS- | |||
Cash and cash equivalents | $ 1,674 | $ 10,361 | |
Furniture and equipment (net of accumulated depreciation of $1,779 and $807, respectively) | 3,230 | 4,202 | |
Investments (net of unrealized loss of $5,000) | - | - | |
Prepaid assets | 6,375 | - | |
TOTAL | $ 11,279 | $ 14,563 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||
CURRENT LIABILITIES – Due to shareholder | $ 11,970 | $ - | |
STOCKHOLDERS' EQUITY (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 | 123,200 | 118,700 | |
Deficit accumulated during the development stage | (128,691) | (108,937) | |
Total stockholders' equity (deficit) | ( 691) | 14,563 | |
TOTAL | $ 11,279 | $ 14,563 |
SEE NOTES TO FINANCIAL STATEMENTS.
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HOJO HOLDINGS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended September 30, 2001 | For the nine months ended September 30, 2001 | For the three months ended September 30, 2000 | For the nine months ended September 30, 2000 | For the Period January 5, 1999 (date of in- corporation) to September 30, 2001 | ||||||
REVENUES | $ | - | $ | 155 | $ | - | $ | - | $ | 5,275 |
EXPENSES: | ||||||||||
Stock based consulting | - | - | - | 50,000 | 50,000 | |||||
Office | 484 | 2,777 | 7,482 | 12,755 | 22,522 | |||||
Other professional fees | 4,504 | 8,551 | 1,250 | 10,776 | 26,573 | |||||
Travel and entertainment | - | 1,859 | 2,962 | 7,533 | 13,636 | |||||
Employee compensation | 1,500 | 4,500 | - | - | 10,500 | |||||
Unrealized loss | - | - | - | - | 5,000 | |||||
Other | 324 | 2,222 | 200 | 400 | 5,735 | |||||
Total expenses | 6,812 | 19,909 | 11,894 | 81,464 | $ | 133,966 | ||||
NET LOSS | $ | (6,812) | $ | (19,754) | $ | (11,894) | $ | (81,464) | $ | (128,691) |
Net Loss Per Share – Basic and Diluted | $ | (.00) | $ | (.00) | $ | (0.00) | $ | (0.02) | $ | (0.03) |
Weighted Average Number of Shares Outstanding | 4,800,000 | 4,800,000 | 4,800,000 | 3,473,000 | 3,746,600 | |||||
SEE NOTES TO FINANCIAL STATEMENTS.
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HOJO HOLDINGS, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the nine months ended September 30, 2001
(Unaudited)
Common Stock | Additional Paid-In | Deficit Accumulated During the Development | ||||||||||||
Shares | Amount | Capital | Stage | Total | ||||||||||
Balances, December 31, 2000 | 4,800,000 | $ 4,800 | $ 118,700 | $ (108,937) | $ 14,563 | |||||||||
Contribution of services by employee | 4,500 | 4,500 | ||||||||||||
Net Loss | (19,754) | (19,754) | ||||||||||||
Balances, September 30, 2001 | 4,800,000 | $ 4,800 | $ 123,200 | $ (128,691) | $ (691) | |||||||||
SEE NOTES TO FINANCIAL STATEMENTS.
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HOJO HOLDINGS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended September 30, 2001 | For the nine months ended September 30, 2001 | For the three months ended September 30, 2000 | For the nine months ended September 30, 2000 | For the period January 5, 1999 (date of incorporation) to September 30, 2001 | ||||||
Cash Flows From Operating Activities: | ||||||||||
Net loss | $ | (6,812) | $ | (19,754) | $ | (11,894) | $ | (81,464) | $ | (128,691) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||||
Stock based consulting services | - | 50,000 | 50,000 | |||||||
Depreciation | 324 | 972 | 200 | 400 | 1,779 | |||||
Non-cash compensation | 1,500 | 4,500 | 10,500 | |||||||
Decrease (increase) in prepaid assets | 2,125 | (6,375) | - | - | (6,375) | |||||
Net Cash Used by Operating Activities | (2,863) | (20,657) | (11,694) | (31,064) | (72,787) | |||||
Cash flows from Investing Activities - | ||||||||||
Purchases of furniture and equipment | - | - | - | - | (5,009) | |||||
Cash Flows From Financing Activities: | ||||||||||
Proceeds from issuance of common stock | - | - | - | 42,768 | 45,268 | |||||
Net increase in advances from stockholder | 1,970 | 11,970 | - | 12,229 | 34,202 | |||||
Cash Provided by Financing Activities | 1,970 | 11,970 | - | 54,997 | 79,470 | |||||
Net Increase (decrease) In Cash and Cash Equivalents | (893) | (8,687) | (11,694) | 23,933 | - | |||||
Cash and Cash Equivalents at Beginning of Period | 2,567 | 10,361 | 35,647 | 20 | - | |||||
Cash and Cash Equivalents at End of Period | $ | 1,674 | $ | 1,674 | $ | 23,953 | $ | 23,953 | $ | 1,674 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES- During the nine months ended September 30, 2001, common stock and additional paid-in capital increased by $455 and $21,787 respectively when $22,232 of affiliate advances were converted to common stock (see Note D).
Supplemental disclosure of cash flow information: | ||||||||||
Cash paid for interest | $ | - | $ | - | $ | - | $ | - | $ | - |
Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | $ | - |
SEE NOTES TO FINANCIAL STATEMENTS.
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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, and intend to become an Internet professional services firm specializing in high-end web site development. Our planned principal operations have not commenced; therefore most of our accounting policies and procedures have not yet been established.
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 our estimates.
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 nine months ended September 30, 2001 are not necessarily indicative of the results that may be expected for the year ended December 31, 2001. The accompanying financial statements and the notes thereto should be read in conjunction with our audited financial statements as of and for the year ended December 31, 2000 contained in our Form 10-KSB.
NOTE B - GOING CONCERN
Our accompanying 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 losses since our inception, anticipate incurring net losses for at least the next two years and will require a significant amount of capital to commence our planned principal operations and proceed with our business plan. Accordingly, our ability to continue as a going concern is dependent upon our ability to secure
an adequate amount of capital to finance our planned principal operations and implement our business plan. Our plans include selling shares of our common stock through private
placements, however there is no assurance that we will be successful in our efforts to raise capital. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time. The 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.
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NOTE C - INCOME TAXES
During the period January 5, 1999 (date of incorporation) to June 30, 2001, we recognized losses for both financial and tax reporting purposes. As such, no provision for income taxes and/or deferred income taxes payable have been provided for in the accompanying financial statements.
At September 30, 2001, we had a net operating loss carryforward of approximately $63,200 for income tax purposes. The carryforward will be available to offset future taxable income through the period ended September 30, 2021. The deferred income tax asset arising from this net operating loss carryforward 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 standard established by SFAS 109.
NOTE D - RELATED PARTY TRANSACTIONS
At December 31, 1999, and during a portion of the year ended December 31, 2000, we had informal line of credit with our president’s husband, under which we borrowed approximately $22,200. In April 2000, we satisfied this liability through the issuance of 444,643 shares of our common stock ($.05 per share based on the price at which other shares were being sold at that date– see Note F).
Since our inception we have recognized $10,500 of employee compensation ($6,000 during the year ended December 31, 2000 and $4,500 during the nine months ended September 30, 2001). We believe these amounts represent the fair value of services provided to us by our president. Because this compensation will not be paid, now or in the future, this amount has been reflected as an increase 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.
Our president and majority stockholder periodically advances funds to us. These advances, which were repaid as of September 30, 2001, were unsecured, non-interest bearing and due on demand.
In addition, two of our minority shareholders have advanced us $11,970 as of September 30, 2001. The advances are unsecured, non-interest bearing and due on demand.
During the year ended December 31, 2000, we issued 1,000,000 shares of our common stock as consideration for certain professional services. The value of these services, which was based on the number, and fair value, of shares issued ($.05 per share based on the price at which other shares were being offered at the date the services were rendered), has been reflected as stock based consulting expense in the accompanying statement of operations.
NOTE E – NET 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
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outstanding during the period. There have been no common equivalent shares outstanding at any time since our inception; accordingly, basic and diluted net loss per share are identical for each of the periods in the accompanying statements of operations.
NOTE F - COMMON STOCK OFFERING
In January 2001, our registration statement with the SEC to sell up to 12,500,000 shares of our common stock at $0.05 per share, was closed. We issued 2,300,000 shares of our common stock under the offering.
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, which may be canceled by either party at any time upon 10 days written notice, is for a term of one year, and requires us to pay total consideration of $25,000. At September 30, 2001, we have paid $10,000 under this arrangement (consisting of a $8,500 retainer paid in June 2001, and 1 monthly installment of $1,500). Accordingly, as of such date, we still owe $15,000 under this arrangement, which amount is due in 10 monthly installments of $1,500. The unamortized portion of the $8,500 retainer has been reflected as a prepaid asset in the accompanying balance sheet.
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 sheet as of December 31, 2000 and the financial statements as of and for the three and nine months ended September 30, 2001 and 2000 included with this Form 10-QSB.
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, cash and prepaid assets, 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).
During the three and nine months ended September 30, 2001 and 2000, we did not generate any revenues of significance and our expenses approximated $6,800, $19,800, $11,900 and $81,500, respectively. These expenses included non-cash compensation of $1,500 during each of the quarters ending March 31, June 30 and September 30, 2001, and $50,000 of consulting services during the nine months ended September 30, 2000 for which the related consideration was 1,000,000 shares of our common stock.
Since our inception we have incurred approximately $134,000 of expenses; approximately $68,500 of which resulted in the outlay of cash. These expenses, which were funded by approximately $45,000 of proceeds received from the sale of our common stock and approximately $34,000 of affiliate advances (of which $22,232 were satisfied by the issuance of shares of our common stock), resulted primarily from our efforts to establish clients and expand our business operations. Assuming we are successful in raising the requisite funds through private placements of our stock, we anticipate that we will make expenditures of at least $50,000 during the next 12 months. These expenditures will be used primarily for continuation of web site development, recruiting independent contractors and sales and marketing. If we are unable to raise additional funds, we will not have the cash to meet our required and/or projected expenditures for the next twelve months.
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Readers are referred to the cautionary statement at page 10, which addresses forward-looking statements.
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 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.
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
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Item 6. Exhibits and Reports on Form 8-K
NONE
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/ Holli Arberman | Director, Chief Accounting Officer | October 23, 2001 |
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