UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the quarterly period ended March 31, 2008 |
¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ____________
| Commission File Number 000-49752 |
| Colorado | 84-15070556 |
| (State of incorporation) | (I.R.S. Employer Identification No.) |
| 3225 S. Garrison, Unit 21, Lakewood, Colorado 80227 (Address of principal executive offices) (303) 763-7527 (Issuer’s telephone number, including area code) Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value |
| Securities registered under Section 12(b) of the Exchange Act: None |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed 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:Yesx No¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated filer ¨ | Accelerated filer ¨ Smaller reporting companyx |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes¨ Nox
The Company had 7,278,000 shares of its $.001 par value common stock outstanding as of May 12, 2008.
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ITEM 1. FINANCIAL STATEMENTS.
The financial statements for the quarter ended March 31, 2008 immediately follow.
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SIN HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| | | March 31, 2008 (Unaudited) | | | | December 31, 2007 | |
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and Cash Equivalents | $ | 2,338 | $ | 1,551 | |||
| Accounts Receivable | - | - | |||||
| Total Current Assets | 2,338 | 1,551 | |||||
| Long Term Assets | |||||||
| Equipment | 992 | 992 | |||||
| Less Accumulated Depreciation | (992 | ) | (992 | ) | |||
| Total Long Term Assets | - | - | |||||
| Other Assets | |||||||
| Goodwill (Net of accumulated amortization of $616) | 5,071 | 5,071 | |||||
| Total Other Assets | 5,071 | 5,071 | |||||
| TOTAL ASSETS | $ | 7,409 | $ | 6,622 | |||
| LIABILITIES | |||||||
| Current Liabilities | |||||||
| Accounts Payable | 5,981 | 1,411 | |||||
| Loan from Shareholder | 61,000 | - | |||||
| Notes Payable - Offering | 19,176 | - | |||||
| Accrued Interest - Shareholder Loan | 5,788 | - | |||||
| Accrued Interest - Offering Notes | 509 | 2,040 | |||||
| Total Current Liabilities | 92,454 | 3,451 | |||||
| Long Term Liabilities | |||||||
| Loan from Shareholder | - | 56,000 | |||||
| Accrued Interest - Shareholder Notes | - | 5,184 | |||||
| Notes Payable - Offering | - | 19,176 | |||||
| Total Long Term Liabilities | - | 80,360 | |||||
| TOTAL LIABILITIES | 92,454 | 83,811 | |||||
| Stockholders' Equity (Deficit) | |||||||
| Preferred Stock, $0.001 par value; 100,000,000 shares | |||||||
| authorized; 100,000 shares issued and outstanding at | |||||||
| March 31, 2008 and December 31, 2007, respectively | 100 | 100 | |||||
| Common Stock, $0.001 par value; 400,000,000 shares | |||||||
| authorized; 7,278,000 shares issued and outstanding | |||||||
| at March 31, 2008 and December 31, 2007, respectively | 7,278 | 7,278 | |||||
| Additional Paid In Capital | 13,611 | 13,386 | |||||
| Accumulated Deficit | (106,034 | ) | (97,953 | ) | |||
| Total Stockholders' Deficit | (85,045 | ) | (77,189 | ) | |||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT ) | $ | 7,409 | $ | 6,622 | |||
The accompanying notes are an integral part of the consolidated financial statements.
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SIN HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS
(UNAUDITED)
| | | March 31, 2008 | | | | March 31, 2007 | |
| REVENUES | |||||||
| Net Subscriptions | $ | - | $ | 570 | |||
| EXPENSES | |||||||
| Bank Service Charges | 3 | 3 | |||||
| ISP | 300 | 300 | |||||
| Licenses & Permits | - | 25 | |||||
| Miscellaneous | 561 | - | |||||
| Professional Fees | 5,631 | 451 | |||||
| Rent | 225 | 225 | |||||
| Transfer Fees | 225 | 285 | |||||
| Operating expenses | 6,945 | 1,289 | |||||
| LOSS FROM OPERATIONS | (6,945 | ) | (719 | ) | |||
| OTHER INCOME (EXPENSE) | |||||||
| Finance Charges | (23 | ) | - | ||||
| Loan Interest | (1,113 | ) | (969 | ) | |||
| TOTAL OTHER INCOME (EXPENSE) | (1,136 | ) | (969 | ) | |||
| NET LOSS BEFORE TAXES | (8,081 | ) | (1,688 | ) | |||
| INCOME TAX EXPENSE | - | - | |||||
| NET LOSS | $ | (8,081 | ) | $ | (1,688 | ) | |
| NET INCOME PER SHARE - BASIC | $ | (0.00 | ) | $ | (0.00 | ) | |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 7,278,000 | 7,278,000 | |||||
The accompanying notes are an integral part of the consolidated financial statements.
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SIN HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | | For the three months ended | ||
| March 31, 2008 | | March 31, 2007 | ||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net loss | $ | (8,081) | $ | (1,688) |
| Adjustments to reconcile net loss to net cash | ||||
| Rent | 225 | 225 | ||
| Interest Payment | - | 10 | ||
| Increase in Accounts Receivable | - | 95 | ||
| Increase (Decrease) in Accounts Payable | 4,570 | (3,810) | ||
| Increase (Decrease) in Accrued Interest | (927) | (1,152) | ||
| Net Cash Flows from Operating Activities | (4,213) | (6,320) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Loan from Shareholder | 5,000 | 2,000 | ||
| Net Cash Flows from Financing Activities | 5,000 | 2,000 | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Net Cash Flows from Investing Activities | - | - | ||
| NET INCREASE (DECREASE) IN CASH AND | 787 | (4,320) | ||
| CASH EQUIVALENTS | ||||
| CASH AND CASH EQUIVALENTS, | ||||
| BEGINNING OF PERIOD | 1,551 | 6,050 | ||
| END OF PERIOD | $ | 2,338 | $ | 1,730 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOWS: | ||||
| Cash paid during the year for: | ||||
| interest | $ | 2,040 | $ | 2,110 |
| Income taxes | - | - | ||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOWS: | ||||
| None | $ | - | $ | - |
The accompanying notes are an integral part of the consolidated financial statements.
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SIN HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| March 31, 2008 |
| NOTE A - SUMMARY OF ACCOUNTING POLICIES |
Management’s Representation of Interim Financial Information
SIN Holdings, Inc. has prepared the accompanying financial statements without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments that, in the opinion of management, are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. These financial statements should be read in conjunction with the audited financial statements at December 31, 2007 included in the Annual Report on Form 10-KSB for the year then ended. The results o f operations for the periods presented are not necessarily indicative of the results we expect for the full year.
| Description of Business |
SIN Holdings, Inc. (the "Company") was incorporated under the laws of the State of Colorado on November 27, 2000. SIN Holdings, Inc. is 82.44% owned subsidiary of Desert Bloom Investments, Inc. Desert Bloom Investments, Inc.’s sole shareholder and director is also the sole director of SIN Holdings, Inc. (See Footnote C).
The Company was founded for the purpose of developing a web portal listing the providers of senior resources across the United States by the community in which those services are provided, thus enabling the seeker of these resources to be able to access this information in an easy manner without becoming sidetracked into non-relevant avenues on the World Wide Web.
| Accounting Method |
The Company records income and expense on the accrual method.
| Revenue Recognition |
The Company sells web sites and advertising to providers of senior resources. Revenue is recognized when earned. In cases where customers prepay an entire year, revenue is recognized in equal monthly installments.
| Fiscal Year |
| The Company has selected a December 31 fiscal year end. |
| Organization Costs |
Organization costs have been charged to operations in the period incurred.
| Impairment or Disposal of Long-Lived Assets |
The Company has implemented the Financial Accounting Standards Board (“FASB”) Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). SFAS 144 clarified the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.
No impairment was recorded for the three months ending March 31, 2008.
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NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
| Depreciation and Amortization |
Depreciation on assets is recorded using the straight-line method over the estimated life of the asset, which is three years. The FASB issued Statement No. 142, “Goodwill and Other Intangible Assets,” (“SFAS 142”) which provides, among other things, for the nonamortization of goodwill and intangible assets with indefinite useful lives. The Company adopted SFAS 142 effective January 1, 2002. Goodwill and intangible assets deemed to have an indefinite useful life will be subject to an annual review for impairment using fair value measurement techniques upon adoption (January 1, 2002) and annually thereafter. The Company performs its annual impairment review during the fourth quarter each year.
| Recent Accounting Standards |
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financials Accounting Standards (“SFAS”) No. 141R, “Business Combinations” (“SFAS 141R”), which replaces SFAS No. 141 “Business Combinations”. SFAS 141R establishes principles and requirements for determining how an enterprise recognizes and measures the fair value of certain assets and liabilities acquired in a business combination, including noncontrolling interest, contingent consideration, and certain acquired contingencies. SFAS 141R also requires acquisition-related transaction expenses and restructuring cost to be expensed as incurred rather than capitalized as a component of the business combination.
SFAS 141R will be applicable prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. SFAS 141R would have an impact on accounting for any business acquired after the effective date of this pronouncement.
In February 2007, the FASB issued SFAS no, 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 provides companies with an option to report selected financials assets and liabilities at fair value. The objective of SFAS 159 is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently.
Generally accepted accounting principles have required different measurement attributes for different assets and liabilities that can create artificial volatility in earnings. The FASB has indicated it believes that SFAS 159 helps to mitigate this type of accounting-induced volatility by enabling companies to report related assets and liabilities at fair value, which would likely reduce the need for companies to comply with detailed rules for hedge accounting. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS 157 and SFA No. 107, “Disclosures about Fair Value of Financial Instruments.” SFAS 159 is effective for the Company as of the beginning of fiscal year 2008. The adoption of this pronouncement is not expected to have an impact on the Company’s financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary (previously referred to as minority interests). SFAS 160 also requires that a retained noncontrolling interest upon the deconsolidation of a subsidiary be initially measured at its fair value. Upon adoption of SFAS 160, the Company would be required to report any noncontrolling interests as a separate component of stockholders’ deficit. The Company would also be required to present any net income attributable to the stockholders of the Company separately in its condensed consolidated statement of operations. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. SFAS 160 requi res retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of SFAS 160 shall be applied prospectively. SFAS 160 would have an impact on the presentation and disclosure of the noncontrolling interests of any non-wholly owned business acquired in the future.
In March 2008, the FASB issued No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (“SFAS 161"). SFAS 161 requires enhanced disclosures about an entity's derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company’s financial statements.
| Financial Instruments |
Unless otherwise indicated, the fair value of all reported assets and liabilities that represent financial instruments (none of which are held for trading purposes) approximate the carrying values of such amount.
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NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
| Accounting Changes and Error Corrections |
In August 2005, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 154, "Accounting Changes and Error Corrections." SFAS 154 changes the requirements for the accounting for and reporting of a change in accounting principle, requiring, in general, retrospective application to prior periods' financial statements of changes in accounting principle. The Company has adopted the provisions of SFAS No. 154 which are effective for accounting changes and corrections of errors beginning after December 31, 2005. The adoption did not have a material effect on the results of operations of the Company.
| Income Per Share |
Income per share was computed using the weighted average number of shares outstanding during the period.
| Statements of Cash Flows |
For purposes of the consolidated statements of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity date of three months or less to be cash equivalents.
| Use of Estimates |
The preparation of the Company’s consolidated financial statements in conformity with generally accepted accounting principles requires the Company’s management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
| Consideration of Other Comprehensive Income Items |
SFAS 130 — Reporting Comprehensive Income, requires companies to present comprehensive income (consisting primarily of net income plus other direct equity changes and credits) and its components as part of the basic consolidated financial statements. For the three months ended March 31, 2008, the Company’s consolidated financial statements do not contain any changes in equity that are required to be reported separately in comprehensive income.
| Stock Basis |
Shares of both common and preferred stock issued for other than cash have been assigned amounts equivalent to the fair value of the service or assets received in exchange.
| Principles of Consolidation |
The consolidated financials statements for the three months ended March 31, 2008 include the accounts of SIN Holdings, Inc. and its wholly owned subsidiary, Senior-Inet. Intercompany transactions and balances have been eliminated in consolidation and combination.
| Mitigation of Going Concern Uncertainty |
The Company has experienced recurring losses resulting primarily from the costs of periodic reporting with the Securities and Exchange Commission and related administrative expenses. These negative operating cash flows were funded with loans from the Company's majority shareholder. As discussed in note C, the Company owes a total of $61,000 to its majority shareholder, which matures in 2008. Furthermore, the Company has outstanding notes and accrued interest totaling $19,176 to unrelated parties which were to mature in 2005 but which were extended by the lenders to 2009. Subsequent to year end, the Company's majority shareholder agreed to provide funding for the operational expenses for the 2008 fiscal year.
| NOTE B - STOCKHOLDERS' EQUITY |
| Preferred Stock |
The Company is authorized to issue up to 100,000,000 shares of preferred stock. The preferred stock is non-voting, and has priority in liquidation over outstanding common shares. During the period ended December 31, 2000, the Company issued 100,000 shares of its preferred stock for $9,000 cash to Desert Bloom Investments, Inc., which is owned by the Company’s President, Steve Sinohui. As of March 31, 2008, 100,000 shares of the Company’s preferred stock were issued and outstanding.
| Common Stock |
The Company is authorized to issue up to 400,000,000 shares of common stock. During the period ended December 31, 2000, the Company issued 6,000,000 shares of its common stock for $6,000 cash to Desert Bloom Investments, Inc., which is owned by the Company’s President. On February 19, 2002, the Company completed an offering and issued 1,278,000 shares of common stock to 17 persons for $1,278 in cash. As of March 31, 2008, 7,278,000 shares of the Company’s $0.001 par value common stock were issued and outstanding.
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| NOTE C - RELATED PARTY TRANSACTIONS |
When the Company purchased the sole proprietorship on December 1, 2000, it entered into a Profit Participation Agreement with Stan Mingus, the seller. The Profit Participation Agreement provided for Senior-Inet to pay Mr. Mingus the sum of $32,000 in cash upon our realization of gross revenues of at least $400,000 during any consecutive 12-month period during the three-year term of the agreement through November 30, 2003. The Company did not reach its benchmark of $400,000 in a consecutive 12-month period prior to the termination date of the Profit Participation Agreement. As of December 31, 2004, the terms of the Profit Participation Agreement have expired. The Company has no continuing obligation to Mr. Mingus.
The Company’s sole executive officer, director and shareholder is providing office space at no charge to the Company. For purposes of the financial statements, the Company is accruing $75 per month as additional paid-in capital for this use.
During the period ended December 31, 2000, the Company issued 100,000 shares of its preferred stock for $9,000 cash to Desert Bloom Investments, Inc.
During the period ended December 31, 2000, the Company issued 6,000,000 shares of its common stock for $6,000 cash to Desert Bloom Investments, Inc.
As of March 31, 2008, the Company has received a total of 19 loans from the controlling shareholder of the Company, Desert Bloom Investments. The aggregate amount of the notes total $61,000. The notes bear no interest unless not paid, in which case interest will be charged at the rate of 10% annually. The notes mature on December 31, 2008. The table below reflects the issue date of the notes, the principal amount and the current maturity date:
| ISSUE DATE | PRINCIPAL AMOUNT | MATURITY DATE | ||
| November 30, 2001 | $1,500 | December 31, 2008 | ||
| March 28, 2003 | $5,000 | December 31, 2008 | ||
| June 25, 2003 | $3,000 | December 31, 2008 | ||
| December 31, 2003 | $2,500 | December 31, 2008 | ||
| July 9, 2004 | $3,000 | December 31, 2008 | ||
| November 15, 2004 | $2,500 | December 31, 2008 | ||
| January 25, 2005 | $5,000 | December 31, 2008 | ||
| August 4, 2005 | $1,000 | December 31, 2008 | ||
| December 15, 2005 | $1,500 | December 31, 2008 | ||
| January 9, 2006 | $5,000 | December 31, 2008 | ||
| March 13, 2006 | $2,000 | December 31, 2008 | ||
| May 1, 2006 | $1,000 | December 31, 2008 | ||
| June 15, 2006 | $5,000 | December 31, 2008 | ||
| November 15, 2006 | $2,000 | December 31, 2008 | ||
| December 29, 2006 | $5,000 | December 31, 2008 | ||
| February 9, 2007 | $2,000 | December 31, 2008 | ||
| April 30, 2007 | $3,000 | December 31, 2008 | ||
| November 13, 2007 | $6,000 | December 31, 2008 | ||
| January 8, 2008 | $5,000 | December 31, 2008 |
Although Mr. Sinohui has agreed to donate his services to the Company, we intend to compensate Mr. Sinohui with sales commissions on each subscriber he enrolls. The Company plans to pay Mr. Sinohui a commission equal to 20% of the gross annualized contract value from each new subscriber, payable monthly over the term of the subscriber’s agreement with the Company. To date, the Company has not paid any commissions to Mr. Sinohui.
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| NOTE D – UNCERTAIN TAX POSITIONS |
Effective January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The adoption of the provisions of FIN 48 did not have a material impact on the company’s condensed consolidated financial position and results of operations. At January 1, 2007, the Company had no liability for unrecognized tax benefits and no accrual for the payment of related interest.
Interest costs related to unrecognized tax benefits are classified as “Interest expense, net” in the accompanying consolidated statements of operations. Penalties, if any, would be recognized as a component of “Selling, general and administrative expenses”. The Company recognized $0 of interest expense related to unrecognized tax benefits during 2007. In many cases the company’s uncertain tax positions are related to tax years that remain subject to examination by relevant tax authorities.
With few exceptions, the company is generally no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for years before 2005. The following describes the open tax years, by major tax jurisdiction, as of March 31, 2008.
United States (a) 2005– Present
(a) Includes federal as well as state or similar local jurisdictions, as applicable.
| NOTE E - INCOME TAXES |
The Company has net operating loss carryforwards of approximately $97,555 that may be offset against future table income through 2027. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.
| December 31, 2007 | December 31, 2006 | |||||
| Net Operating Losses | $ | 33,169 | $ | 27,018 | ||
| Valuation Allowance | $ | (33,169 | ) | $ | (27,018 | ) |
| Total | $ | - | $ | - |
The provision for income taxes differ from the amount computed using the Federal US statutory income tax rate as follows:
| December 31, 2007 | December 31, 2006 | |||||
| Provisions (Benefit) at US Statutory Rate | $ | 5,252 | $ | 7,612 | ||
| Increase (Decrease) in Valuation Allowance | $ | (6,151 | ) | $ | (6,713 | ) |
| Other Differences | $ | (899 | ) | $ | (899 | ) |
| Total | $ | $ | - |
The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and causes a change in management's judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income.
NOTE F - OFFERING OF DEBT AND EQUITY SECURITIES
On December 14, 2001, SIN Holdings, Inc. commenced an offering of Units pursuant to the Securities Act of 1933 and Regulation A promulgated thereunder. Each Unit had an offering price of $100 and consisted of one three-year promissory note in the principal amount of $94 with simple interest at 10.64% per annum, plus 6,000 shares of common stock offered at $0.001 per share (an aggregate price of $6.00 for the 6,000 shares). Price per share for the common stock was determined in reference to the previous sale of common stock for cash.
The Company closed its offering February 19, 2002 after receiving subscriptions for 213 Units, or an aggregate of $20,022 in Promissory Notes. The maturity date of the promissory notes is three years from the date of the closing of the offering for the sale of the minimum units offered (200 units), or February 19, 2005. As of December 31, 2007, the Company owed $2,040 in interest on the notes. The interest due to the Note Holders was paid on January 8, 2008.
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The Company incurred a total of $12,939 in professional fees directly related to the offering, which were offset against additional paid in capital.
In January of 2001, the Company retained an attorney to begin work on the preparation of a registration statement. The work done by this attorney went uncompleted and the Company discontinued its relationship with the attorney. The fees paid to this attorney had been booked as deferred offering expenses. In July of 2001, the Company retained a new attorney to prepare its registration statement, which the Company subsequently filed with the Securities and Exchange Commission. All expenses associated with the new attorney were charged to deferred offering costs. The deferred offering costs of $17,531, presented on the December 31, 2001 balance sheet consisted of the legal fees associated with the work of the Company’s first attorney and of the legal and accounting costs associated with the Form 1-A Registration Statement.
When the Company closed its Registration A offering on February 19, 2002, the expenses that were associated with the first attorney were deemed not part of the costs directly associated with the proceeds of the offering and were expensed in the first quarter (rather than written against paid in capital). The costs directly related to the proceeds received from the Registration A offering were $12,939 and were charged against additional paid in capital when the offering closed.
The maturity date of the above mentioned promissory notes was February 19, 2005. On February 5, 2005, the Company entered into extension agreements with all but two of the Note Holders to extend the notes until February 19, 2007. Under the terms of the extension, the Company will continue to pay interest at 10.64% per year. The Company repaid the two Note Holders that did not return their extension agreements. On January 30, 2007, the Company again requested the Note Holders to extend their promissory notes for another two years.
Of the 15 Note Holders, eight chose to extend their notes. The principal amount of the notes that were extended until February 19, 2009 aggregate is $19,176. The Company repaid the seven Note Holders that elected not to extend their notes.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION
| FORWARD-LOOKING STATEMENT NOTICE |
When used in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Company’s future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Further, persons reviewing this report are advised that actual results may differ materially from those included within the forward-looking statements because of various factors such as:
| § | the Company’s limited revenues and earnings to date and its possible inability to achieve meaningful revenues or earnings in the near future; | |
| § | the Company has limited assets and working capital and may not be able to continue in operation without the infusion of additional capital; | |
| § | our expectation to incur losses through the first half of 2007; | |
| § | we may need to raise additional funds and these funds may not be available to us when we need them we may need to change our business plan, sell or merger our business or face bankruptcy; | |
| § | we do not expect to increase our revenues and earnings significantly until we increase our customer base; | |
| § | we may enter into a merger or acquisition transaction in which our shareholders incur substantial dilution of their ownership interests; | |
| § | we must enter into strategic relationships to help promote our web site and, if we fail to develop, maintain or enhance these relationships, we may not be able to attract and retain customers, generate adequate traffic to our site, build our brand and enhance our sales and marketing capabilities; | |
| § | the success of our business depends on selling web pages and access to our web site to a large number of providers of senior services that are listed on our online database; | |
| § | competition from traditional and online providers of senior resource information may result in price reductions and decreased demand for advertising on our web site; | |
| § | we may be unable to adequately protect or enforce our intellectual property rights, which may have a detrimental effect on our business; | |
| § | we face the risk of systems interruptions and capacity constraints on our web site, possibly resulting in losses of revenue, erosion of customer trust and adverse publicity; | |
| § | our systems and operations, and those of our customers, are vulnerable to natural disasters and other unexpected problems, which could reduce customer satisfaction and traffic to our web site and harm our sales; and, | |
| § | the limited time commitment or the loss of the services of Steve Sinohui, the sole executive officer and director of the Company could have a negative impact on our business. |
| OUR HISTORY AND BUSINESS |
SIN Holdings, Inc. and our wholly owned subsidiary, Senior-Inet, Inc. (collectively, the “Company”), were both organized under the laws of the State of Colorado on November 27, 2000. SIN Holdings, Inc. is 82.44% owned by Desert Bloom Investments, Inc., which our President, Steve Sinohui owns. We conduct all our business through Senior-Inet, Inc. (“Senior-Inet”).
Currently, the Company owns and operateswww.senior-inet.com, a web portal for senior resources. Our portal lists service providers categorically by geographic location, allowing users to access information quickly and efficiently. Presently, we list resources in 10 cities in Colorado and in Houston, Texas. We designed our portal so that users could gather information from a variety of companies offering the same service. We developed our current network of senior service providers with the assistance of local agencies serving senior citizens, through telephone listings and other web sites. Our portal provides seniors access to information concerning the following categories:
When entering a geographic area, we develop a list of senior resources in that area. We then ascertain whether or not those providers already have an Internet presence. If they do, we contact the providers and offer them the opportunity to attach a link from our portal to their web site. Even though the customer may have a web site already, having a listing on a senior resource network (such as Senior-Inet) improves their exposure. Currently, the Company’s site is ranked fairly high (number two on our last search) when you “Google” the term “senior information.” The primary reason the Company is ranked high for this search, is because of our web site’s name – Senior Information Network. Management believes that its current ranking on Google is a great selling tool in convincing customers who already have web sites to link their sites to ours.
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If the provider does not have an Internet presence, we offer to create a web page on our portal for them. By developing an Internet presence for the provider, we provide them the opportunity to cost effectively and efficiently introduce their sales and marketing materials to a wider base of prospective clients. If the senior service provider elects to purchase a web page, we enter into a six or 12-month contract with the provider that includes the initial design cost of the web page and a monthly fee for maintenance of the page.
We also offer annual contracts for banner and box advertisements for our home page and each of the community and category pages. To date, we have not sold any advertisements on our site nor do we have any contracts for such advertisements.
The sale of web pages that we design and maintain for senior service providers listed on our site have accounted for all of our revenues. Currently, we do not have contracts with any of the facilities or services listed on our website. We intend to continue to attempt to increase the number of paying subscribers in the 11 cities in which we now list senior service providers, as well as to increase the number of cities in Colorado for which we provide listings.
Our original intent was to grow the Company slowly by increasing the number of providers as well as geographic locations on our portal. We had planned to do that solely through the efforts of our President, Steve Sinohui. However, over the last year, Mr. Sinohui’s time has been divided between a variety of projects, including the Company, and he has not been able to afford the Company the attention it needs to substantially increase its subscriber base. Management believes that to grow the Company it needs to bring on independent contractors as sales people to increase its subscriber base.
Based on our existing business model, our growth strategy is simple. To increase revenues, we must increase the number of subscriptions by senior service providers listing on our site as well as to increase the number of cities for which we provide listings. We have focused our marketing efforts on Colorado since we can increase our presence and begin to build brand awareness without incurring substantial increases in our operating expenses. As capital resources permit, we plan to expand our listings in other geographic regions. However, when we attempt to expand into additional markets, our operating costs will increase and we will probably incur losses from operations until we have grown revenue to a level well in excess of our marketing and selling expenses. Presently, our monthly operating expenses are limited and we plan to increase the number of subscribers in Colorado without materially increasing our expenses. We can g ive no assurances regarding these plans and you should not expect that we will achieve them.
Additionally, Mr. Sinohui is considering reshaping the business model. Today’s seniors are living longer and beginning to face issues that seniors have not had to deal with in the past (i.e. raising grandchildren, dating, continuing to work after retirement, running out of money). Management believes that currently the marketplace does not offer a forum where seniors can share their experiences, gather information or gain access to resources to help them deal with these issues. To respond to this need, the Company may add more categories to its current listing that will address issues other than housing, travel and medical care. Also, the Company may focus on providing a forum where not only can seniors and families gather information pertinent to their situations but where seniors can interact with each other in a variety of different ways including, but not limited to: (1) sharing information about issues facing today&# 146;s seniors; (2) buying and selling new and used, senior-specific products online; (3) meeting other seniors online; and, (4) getting access to resources to help seniors start entrepreneurial ventures or provide mentoring.
We believe that the Company may have value to third parties in connection with an acquisition or merger transaction pursuant to which a privately-owned business or entity could acquire or become merged with our Company and thereby become a publicly-owned business. We intend to consider carefully any such business opportunities that are brought to our attention; until an acquisition or merger transaction is completed we intend to continue to maintain our present business.
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Steve S. Sinohui, the sole executive officer and director and the controlling shareholder of SIN Holdings and the President, the Secretary, the Treasurer and the sole director of Senior-Inet, is employed on a part time basis by both companies. During the next three months, the Company’s President will be the sole sales person for the Company while we attempt to secure new subscribers. Thereafter, the Company will bring on sales consultants as it is able to support financially such sales people. Mr. Sinohui has background experience that enables him to effectively market our web site and manage the Company. Although Mr. Sinohui has agreed to donate his services to the Company, we intend to compensate Mr. Sinohui with sales commissions on each subscriber he enrolls. The Company plans to pay Mr. Sinohui a commission equal to 20% of the gross annualized contract value from each new subscriber, payable monthly over the term of the subscriber’s agreement with the Company.
Except for part time marketing and sales employees and consultants as needed, we do not intend to employ any individuals other than Mr. Sinohui and Senior-Inet does not anticipate the full time employment of any individuals.
| RESULTS OF OPERATIONS |
The Company was not profitable during the year ended December 31, 2007 and has not been profitable during the first three months of 2008.
| Three Month Periods Ended September 30, 2008 and 2007 |
The Company had no revenues from continuing operations for the three-month period ended March 31, 2008 and revenue of $570 for the same three-month period in 2007.
General and administrative expenses for the three-month period ended March 31, 2008 were $6,945 compared to $1,289 for the same period in 2007. Expenses consisted of general corporate administration, rent, Internet service provider, legal and professional expenses and accounting costs. Increase in general and administrative expenses were due to primarily increases in legal and accounting fees.
Because of the foregoing factors, the Company realized a net loss of $8,081 for the three months ended March 31, 2008 as compared to net loss of $1,688 for the same period in 2007.
| LIQUIDITY AND CAPITAL RESOURCES |
At March 31, 2008, the Company had assets consisting of $2,338 cash on hand. Current liabilities consisted of accounts payable of $5,981, accrued interest of $6,297 and notes payable of $80,176 for total current liabilities of $92,454.
The Company believes that current and anticipated future cash requirements for the next three months cannot be met with the cash on hand and from revenue from current customers. The Company will find it necessary to raise additional capital. The Company may sell common stock of the Company or enter into additional debt financing agreements.
The Company has received a total of 19 loans from the controlling shareholder of the Company, Desert Bloom Investments. The aggregate amount of the notes total $61,000. All of the notes are due on December 31, 2008, unless extended. The notes bear no interest unless not paid, in which case interest will be charged at the rate of 10% annually.
To consummate our business plan, we will need additional capital. Additional capital may be raised through additional private financings as well as borrowings and other resources. To the extent that additional capital is raised through the sale of equity or equity-related securities, the issuance of such securities could result in dilution of our stockholders. There can be no assurance that additional funding will be available on favorable terms, if at all. If adequate funds are not available when we need them, we may be required to curtail our operations. No assurance can be given, however, that we will have access to the capital markets in the future, or that financing will be available on acceptable terms to satisfy our cash requirements needed to implement our business strategies. Our inability to access the capital markets or obtain acceptable financing could have a material adverse effect on our results of operations and financial condition and could severely threaten our ability as a going concern.
In addition to attempting to grow our present business, we intend to consider an acquisition or merger transaction with a privately-owned business under which our Company would acquire the business and would thereafter be managed by former owners of the private business. If we are able to complete such a transaction we expect that our shareholders would become minority shareholders in the resulting entity and that the management of the corporation would be changed. We are unable to predict whether or when such a transaction might be completed.
Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward –looking statement that involves risks and uncertainties, and actual results could vary as a result of a number of factors.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable, as the Company is a smaller reporting Company.
| ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures. |
Our Chief Executive Officer who is also the principal accounting officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”). Based on such evaluation, he has concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective in alerting him on a timely basis to material information relating to the company (including consolidated subsidiaries) required to be included in reports filed or submitted under the Exchange Act.
| Changes in Internal Controls. |
Based on the Chief Executive Officer’s evaluation, he has concluded that since the Evaluation Date, there have not been any significant changes in the Company’s internal controls or in other factors that have affected materially, or are reasonably likely to affect, our internal control over financial reporting.
This quarterly report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this quarterly report.
| PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. |
None.
| ITEM 1A. RISK FACTORS. |
There have been no material changes to the risk factors previously discussed in Item 1 of the Company's Form 10-KSB for the year ended December 31, 2007.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
| ITEM 3. DEFAULTS UPON SENIOR SECURITIES. |
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
| ITEM 5. OTHER INFORMATION. |
None.
| ITEM 6. EXHIBITS |
| 31 | Certification by Chief Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32 | Certification by the Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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| SIGNATURES |
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SIN HOLDINGS, INC. | ||||
| Date: May 12, 2008 | By | /s/ Steve S. Sinohui | ||
| Steve S. Sinohui, President | ||||
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