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, 2005
( ) 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.
(F/K/A HOJO HOLDINGS, INC.)
(Exact name of registrant as specified in charter)
DELAWARE (State of or other jurisdiction of incorporation or organization) | 11-3504866 (IRS Employer I.D. No.) |
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 November 21, 2005.
180,845,154 Common Shares
-0- Preferred Shares
Transitional Small Business Disclosure Format:
YES ( ) NO (x)
(F/K/A HOJO HOLDINGS, INC.)
INDEX TO FORM 10-QSB
Item 1. Financial State
ments
|
Balance Sheet |
At September 30, 2005 |
| | | | |
ASSETS | | | |
| | | | |
CURRENT ASSETS | | | |
| Cash | | $ | 3,390 | |
| Available for Sale Investments | | | 57,693 | |
| Advances to Affiliate | | | 189,000 | |
| TOTAL CURRENT ASSETS | | | 250,083 | |
| | | | | |
OTHER ASSETS | | | | |
| Other Assets | | | 5,867 | |
| | | | | |
| TOTAL ASSETS | | $ | 255,950 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | |
| | | | | |
CURRENT LIABILITIES | | | | |
| Accounts Payable and Other Current Liabilities | | $ | 72,147 | |
| Notes Payable | | | 300,000 | |
| Stockholder Loans Payable | | | 315,058 | |
| TOTAL CURRENT LIABILITIES | | | 687,205 | |
| | | | | |
STOCKHOLDERS' DEFICIT | | | | |
| Preferred Stock (20,000,000 shares authorized, $.001 par value) | | | - | |
| Common Stock (200,000,000 shares authorized, 180,845,154 | | | | |
| shares issued and outstanding, par value $.001) | | | 180,845 | |
| Additional Paid in Capital | | | 3,816,430 | |
| Retained Deficit | | | (4,428,530 | ) |
| TOTAL STOCKHOLDERS' DEFICIT | | | (431,255 | ) |
| | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | | $ | 255,950 | |
|
Statements of Operations |
For the Three and Nine Months Ended September 30, 2005 and 2004 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | Three Months Ended Sept. 30, | | Nine Months Ended Sept. 30, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
| | | | | | | | | | |
REVENUES: | | | | | | | | | |
| Sales | | $ | - | | $ | - | | $ | - | | $ | - | |
| | | | | | | | | | | | | | |
OPERATING EXPENSES: | | | | | | | | | | | | | |
| Other General and Administrative | | $ | 136,202 | | $ | 94,998 | | $ | 298,153 | | $ | 454,798 | |
| Stock Based Interest | | | - | | | - | | | - | | | 141,420 | |
| Goodwill Impairment | | | 140,000 | | | - | | | 140,000 | | | - | |
| Stock Based Compensation | | | - | | | 249,680 | | | 273,190 | | | 876,045 | |
| TOTAL EXPENSES | | | 276,202 | | | 344,678 | | | 711,343 | | | 1,472,263 | |
| | | | | | | | | | | | | | |
| NET LOSS | | $ | (276,202 | ) | $ | (344,678 | ) | $ | (711,343 | ) | $ | (1,472,263 | ) |
| | | | | | | | | | | | | | |
| Basic and Fully Diluted Loss per Share | | $ | ** | | $ | ** | | $ | (0.01 | ) | $ | (0.02 | ) |
| | | | | | | | | | | | | | |
| Weighted Average Shares Outstanding | | | 165,440,529 | | | 96,558,971 | | | 141,795,299 | | | 71,745,589 | |
| | | | | | | | | | | | | | |
| ** Less than $.01 | | | | | | | | | | | | | |
|
Statements of Cash Flows |
For the Nine Months Ended September 30, 2005 and 2004 |
| | | | | | |
| | | | | | |
| | | 2005 | | 2004 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | |
| Net loss | | $ | (711,343 | ) | $ | (1,472,263 | ) |
| Adjustments to reconcile net loss to net | | | | | | | |
| cash provided by operating activities: | | | | | | | |
| Depreciation | | | - | | | 191 | |
| Goodwill impairment | | | 140,000 | | | - | |
| Stock based compensation | | | 273,190 | | | 876,045 | |
| Stock based interest | | | - | | | 141,420 | |
| Other stock based expenses | | | - | | | 585,350 | |
| (Increase) decrease in operating assets: | | | | | | | |
| Available for Sale Investments | | | (57,693 | ) | | - | |
| Advances to employees | | | - | | | (16,281 | ) |
| Security deposits | | | 2,000 | | | - | |
| Increase (decrease) in operating liabilities: | | | | | | | |
| Accounts payable and accrued expenses | | | (206,113 | ) | | (106,179 | ) |
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | | | (559,959 | ) | | 8,283 | |
| | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | |
| Purchases of fixed assets | | | - | | | (1,588 | ) |
| NET CASH (USED IN) INVESTING ACTIVITIES | | | - | | | (1,588 | ) |
| | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | |
| Proceeds from borrowings of notes payable | | | 313,325 | | | 436,475 | |
| Repayments of notes payable | | | (19,476 | ) | | - | |
| Proceeds from sale of common stock | | | 268,500 | | | - | |
| Advances to affiliate | | | - | | | (157,500 | ) |
| Advances to stockholder | | | 1,000 | | | 81,000 | |
| Repayments to stockholder | | | - | | | (366,670 | ) |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | | | 563,349 | | | (6,695 | ) |
| | | | | | | | |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | | | 3,390 | | | - | |
| | | | | | | | |
CASH AND CASH EQUIVALENTS: | | | | | | | |
| Beginning of period | | | - | | | - | |
| End of period | | $ | 3,390 | | $ | - | |
| | | | | | | | |
NON-CASH FINANCING ACTIVITIES: | | | | | | | |
| Exchange of 5,769,250 common shares for 11,538 shares in investment | | $ | 57,693 | | $ | - | |
(F/K/A HOJO HOLDINGS, INC.)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
Senticore, Inc. fka Hojo Holdings, Inc. (collectively “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 accordingly, most of our accounting policies and procedures have not yet been established.
Issuances and Sales of Common Shares
During the periods covered by these financial statements and subsequent thereto we issued shares of common stock without registration under the Securities Act of 1933. Although we believe that the issuances and sales did not involve a public offering of its securities and that the we did comply with the “safe harbor” exemptions from registration, we could be liable for rescission of the sales and/or issuances if such exemptions were found not to apply and this could have a material negative impact on our financial position and results of operations.
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 and nine months ended September 30, 2005 are not necessarily indicative of the results that may be expected for the year ended December 31, 2005. 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, 2004 contained in our Form 10-KSB.
Management’s 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.
Stock-Based Compensation
We account for equity instruments issued to employees for services based on the fair value of the equity instruments issued and account for equity instruments issued to other than employees based on the fair value of the consideration received or the fair value of the equity instruments, whichever is more reliably measurable.
We account for stock based compensation in accordance with SFAS 123, "Accounting for Stock-Based Compensation." The provisions of SFAS 123 allow companies to either expense the estimated fair value of stock options or to continue to follow the intrinsic value method set forth in Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees" (APB 25) but disclose the pro forma effects on net income (loss) had the fair value of the options been expensed. We elected to continue to apply APB 25 in accounting for its stock option incentive plans.
After becoming a BDC, there has been no stock based compensation.
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) through September 30, 2005 Certain stock options and warrants have been issued, however they are ignored in the loss per share calculations as they are anti-dilutive. Accordingly basic and diluted net loss per share is identical for each of the periods in the accompanying statements of operations
Reclassifications
Certain amounts in the September 30, 2005 financial statements have been reclassified to conform to the presentation in the 2004 financial statements.
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 significant stockholders' deficit September 30, 2005. In addition, as a holding company, we had no revenue generating operations at the end of the third quarter of fiscal year 2005. As a third quarter event, LoboGaming Corporation and Taj Systems, Inc., formerly known as MRLD Holdings, Inc. and Emerald Powerboats, Inc. have become operating companies and begun generating revenues during the beginning of the fourth quarter of fiscal year 2005. 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. In addition, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which we operate. Our plans include consummating various acquisitions of operating companies as discussed in our audited financial statements included in Form 10-KSB. In the interim, we plan to continue to fund our operating expenses through the issuance of our common stock for cash and to continue to borrow from certain shareholders or unrelated parties. However, there is no assurance that we will be successful in our efforts to raise capital, and/or in our efforts to complete these transactions or to locate and merge with, acquire, or develop any other 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 B - SIGNIFICANT THIRD QUARTER EVENTS
Acquisitions
In the quarter ended September 30, 2005, we acquired Emerald Powerboats, Inc. We issued 25,000,000 common shares to acquire this business and we also received $60,000 for this issuance.
During the third quarter ended September 30, 2005, we entered into the following transactions:
| 1. | We acquired a 45% interest in LoboGaming, Inc., a Costa Rican company with no prior revenues or assets, other than its gaming software. Shortly thereafter, LoboGaming launched LoboPoker, an operating poker site. |
| 2. | In the second week of July, we entered into a preliminary agreement to acquire a publicly traded pink sheet shell - Emerald Powerboats, Inc. |
| 3. | The deal to acquire Emerald Powerboats, Inc. closed during the third quarter of 2005. Terms of the deal were as follows: |
| a. | We paid 25 million shares of our common stock priced at approximately $.008 per share on the date of issuance to acquire controlling interest in Emerald Powerboats. Emerald Powerboats then went through two names changes to MRLD Holdings and ultimately Taj Systems, but it remained the same company. |
| b. | We received the aforementioned shell which was valued at $140,000 and $60,000 in cash. |
| 4. | The acquisition of Emerald Powerboats, Inc. officially closed in September of 2005. |
| 5. | Emerald Powerboats, Inc. underwent a name change to MRLD Holdings on 9/26/05. |
| 6. | MRLD Holdings, Inc. officially closed on its acquisition of LoboGaming Corp on 9/29/05. |
| 7. | MRLD Holdings underwent a name change to become Taj Systems on 10/13/05. |
| 8. | LoboGaming completed its proprietary TeenPatti (3-card poker) gaming software on 10/5/05. |
| a. | LoboGaming now owned a valuable asset in the complete Indian Poker software. |
| b. | Senticore assisted in the funding and development of the proprietary software. |
| 9. | LoboGaming Corporation (now a wholly owned subsidiary of Taj Systems) signed a licensing deal with a new licensee - TeenPatti.com. The transaction was valued at $1,000,000 and concluded on 10/18/05. |
| a. | The contract increased the value to LoboGaming Corp. as a company, as well as its parent Taj Systems, Inc. (Pink Sheets: TJSS). |
| b. | We continue to maintain approximately 40% equity ownership in Taj Systems. |
Stock Exchange
During the third quarter ending September 30, 2005, we entered into a stock exchange with Wall Street Inside Report, Inc. as explained below:
We issued to them 5,769,250 common shares in exchange for 11,538 common shares of Strategic Growth Ventures, Inc. [Pink Sheets: SGWV].
| a. | This stock deal was a share exchange for equal valued shares. |
In addition to receiving the shares of SGWV, Senticore also received three months of PR consulting work from Wall Street Inside Report, Inc.
NOTE C - OTHER RELATED PARTY TRANSACTIONS
We periodically receive advances from various stockholders. The net balance of these advances, which are reflected as due to stockholders in the accompanying balance sheet, are unsecured, non-interest bearing and due on demand. Imputed interest has been included in the financial statements herein with a charge to interest expense and a credit to equity.
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 September 30, 2005 and the statements of operations and cash flows as of and for the three and nine months ended September 30, 2005 and 2004 included with this Form 10-QSB, as well as the audited financial statements included in our Form 10-KSB In addition, readers are referred to the cautionary statement on pages 11 and 12, which addresses forward-looking statements.
We were previously considered to be in the development stage as defined in Financial Accounting Standards Board Statement No. 7. Since our inception and through the end of the September 30, 2005 quarter, we have only generated $5,275 of revenues ($5,000 of which resulted in us receiving stock in lieu of cash). However, subsequent to the quarter ended September 30, 2005, we earned revenue thus making our cumulative total to date much higher in cumulative revenues. These revenues were earned mainly for shares we received from unrelated companies for services rendered in the third quarter.
Results of Operations
We did not generate any revenues during the three and nine months ended September 30, 2005 and 2004. Our respective net losses for the quarter ended September 30, 2005 and 2004 were $276,202 and $344,678 (of which $-0- and $-0- were non-cash compensation expenses, respectively.) Our stock based expenses decreased significantly because we became a business development company in 2005 and used less of our common stock as a vehicle to pay various consultants that were, and are, helping us develop our business plan and operations. In addition, our cash based expenses have also increased significantly as we have begun to develop infrastructure and incur other costs necessary to implement our planned principal operations.
Liquidity and Capital Resources
Net cash provided by financing activities for the nine months ended September 30, 2005 was $563,349 as compared with net cash used in financing activities of $6,695 for the nine months ended September 30, 2004. The increase in net cash provided by financing activities is attributable to proceeds in short-term notes payable and in common stock sales in the nine months ended September 30, 2005 less the effects of repayments on notes payable and repayments of shareholder loans.
As a result of our limited operating history, and because we plan to merge with and/or acquire various operating businesses, we have limited meaningful historical financial data upon which to base planned operating expenses. However, we do not have enough cash to cover our operating expenses in the next twelve months. Accordingly, unless we are successful in consummating an acquisition with an operating company, and/or raising additional funds through private equity or debt placements, or public offerings of our stock, 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 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.
CONTROLS AND PROCEDURES
Quarterly Evaluation of Controls
As of the end of the period covered by this quarterly report on Form 10-QSB, We evaluated the effectiveness of the design and operation of (i) our disclosure controls and procedures ("Disclosure Controls"), and (ii) our internal control over financial reporting ("Internal Controls"). This evaluation ("Evaluation") was performed by our Chief Executive and Operating Officer, Jay Patel ("CEO") and our Chief Financial Officer and President, Carl Gessner ("CFO"). In this section, we present the conclusions of our CEO and CFO based on and as of the date of the Evaluation, (i) with respect to the effectiveness of our Disclosure Controls, and (ii) with respect to any change in our Internal Controls that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect our Internal Controls.
CEO and CFO Certifications
Attached to this annual report, as Exhibits 31.1 and 31.2, are certain certifications of the CEO and CFO, which are required in accordance with the Exchange Act and the Commission's rules implementing such section (the "Rule 13a-14(a)/15d-14(a) Certifications"). This section of the annual report contains the information concerning the Evaluation referred to in the Rule 13a-14(a)/15d-14(a) Certifications. This information should be read in conjunction with the Rule 13a-14(a)/15d-14(a) Certifications for a more complete understanding of the topic presented.
Disclosure Controls and Internal Controls
Disclosure Controls are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed with the Commission under the Exchange Act, such as this annual report, is recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms. Disclosure Controls are also designed with the objective of ensuring that material information relating to the Company is made known to the CEO and the CFO by others, particularly during the period in which the applicable report is being prepared. Internal Controls, on the other hand, are procedures which are designed with the objective of providing reasonable assurance that (i) our transactions are properly authorized, (ii) the Company's assets are safeguarded against unauthorized or improper use, and (iii) our transactions are properly recorded and reported, all to permit the preparation of complete and accurate financial statements in conformity with accounting principals generally accepted in the United States.
Limitations on the Effectiveness of Controls
Our management does not expect that our Disclosure Controls or our Internal Controls will prevent all error and all fraud. A control system, no matter how well developed and operated, can provide only reasonable, but not absolute assurance that the objectives of the control system are met. Further, the design of the 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 so 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. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of a system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Scope of the Evaluation
The CEO and CFO's evaluation of our Disclosure Controls and Internal Controls included a review of the controls' (i) objectives, (ii) design, (iii) implementation, and (iv) the effect of the controls on the information generated for use in this annual report. In the course of the Evaluation, the CEO and CFO sought to identify data errors, control problems, acts of fraud, and they sought to confirm that appropriate corrective action, including process improvements, was being undertaken. This type of evaluation is done on a quarterly basis so that the conclusions concerning the effectiveness of our controls can be reported in our quarterly reports on Form 10-QSB and annual reports on Form 10-KSB. The overall goals of these various evaluation activities are to monitor our Disclosure Controls and our Internal Controls, and to make modifications if and as necessary. Our external auditors also review Internal Controls in connection with their audit and review activities. Our intent in this regard is that the Disclosure Controls and the Internal Controls will be maintained as dynamic systems that change (including improvements and corrections) as conditions warrant.
Among other matters, we sought in our Evaluation to determine whether there were any significant deficiencies or material weaknesses in our Internal Controls, which are reasonably likely to adversely affect our ability to record, process, summarize and report financial information, or whether we had identified any acts of fraud, whether or not material, involving management or other employees who have a significant role in our Internal Controls. This information was important for both the Evaluation, generally, and because the Rule 13a-14(a)/15d-14(a) Certifications, Item 5, require that the CEO and CFO disclose that information to our Board (audit committee), and to our independent auditors, and to report on related matters in this section of the annual report. In the professional auditing literature, "significant deficiencies" are referred to as "reportable conditions". These are control issues that could have significant adverse affect on the ability to record, process, summarize and report financial data in the financial statements. A "material weakness" is defined in the auditing literature as a particularly serious reportable condition where the internal control does not reduce, to a relatively low level, the risk that misstatement cause by error or fraud may occur in amounts that would be material in relation to the financial statements and not be detected within a timely period by employee in the normal course of performing their assigned functions. We also sought to deal with other controls matters in the Evaluation, and in each case, if a problem was identified; we considered what revisions, improvements and/or corrections to make in accordance with our ongoing procedures.
Conclusions
Based upon the Evaluation, the Company's CEO and CFO have concluded that, subject to the limitations noted above, our Disclosure Controls are effective to ensure that material information relating to the Company is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared, and that our Internal Controls are effective to provide reasonable assurance that our financial statements are fairly presented inconformity with accounting principals generally accepted in the United States. Additionally, there has been no change in our Internal Controls that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to affect, our Internal Controls.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We do not have any material risk with respect to changes in foreign currency exchange rates, commodities prices or interest rates. We do not believe that we have any other relevant market risk with respect to the categories intended to be discussed in this item of this report.
PART II. - OTHER INFORMATION
NONE
During the period ended September 30, 2005, we issued 5,769,250 common shares to an unrelated company in exchange for 11,538 common shares of its publicly traded stock traded on the National Quotation Bureau's Pink sheets ("SGWV").
During the period ended September 30, 2005, we issued 25,000,000 common shares to an unrelated company for the acquisition of a controlling interest of the company traded on the National Quotation Bureau's Pink sheets ("TJSS").
Item 3. Defaults Upon Senior Securities
Golden Gate Investors, Inc. was awarded a judgment for non-performance of a financing contract in October of 2005. The judgment award was not a specific dollar amount, but rather “Specific Performance” per the terms of the original financing agreement. The judgment was awarded prior our ability to contest it; therefore, we are already preparing an appeal to overturn the decision in light of multiple clauses contained within the document benefiting us. In addition, we have begun negotiations with the awarded party to resolve this matter expeditiously and without harm to us. We elected not to continue with the agreement to protect us and our shareholders due to the decrease in stock price below the minimum predefined threshold per our 1-E registration statement during the most recent quarter.
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
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/ Jay Patel | CEO & COO | November 21, 2005 |
| | | |
/s/ Carl Gessner | President, Treasurer, Secretary, Director, CFO | November 21, 2005 |
