U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
| | | |
| þ | | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| | | for the quarterly period ended June 30, 2005 |
| | | |
| o | | Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Commission file number:333-64840
iCURIE, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
| | | |
| Nevada | | 91-2015441 |
| (State or Other Jurisdiction of | | (I.R.S. Employer |
| Incorporation or Organization) | | Identification No.) |
Espirito Santo Plaza, 1395 Brickell Avenue, Suite 800, Miami, Florida 33131
(Address of Principal Executive Offices)
(305) 529-6290
(Issuer’s Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| | | |
| Class | | Outstanding as of August 12, 2005 |
| | | |
| Common Stock | | 29,050,578 |
Transitional Small Business Disclosure Format: Yes No X
TABLE OF CONTENTS
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
iCURIE, INC.
(formerly Cedar Mountain Distributors, Inc.)
Condensed Balance Sheet
June 30, 2005
(Unaudited)
| | | | | |
Assets
|
| Current assets: | | | | |
| Cash | | $ | 38,424 | |
| | | | |
| | | | | |
| Total assets | | $ | 38,424 | |
| | | | |
| | | | | |
Liabilities and Shareholders’ Equity
|
| Liabilities: | | | | |
| Accounts payable | | $ | 2,580 | |
| Accrued expenses | | | 1,000 | |
| | | | |
| | | | | |
| Total liabilities | | | 3,580 | |
| | | | | |
| Shareholders’ equity (Note 2): | | | | |
| Preferred stock, Series A, $.001 par value; 30,000,000 shares authorized, - -0- shares issued and outstanding | | | — | |
| Common stock, $.001 par value; 50,000,000 shares authorized, 4,400,001 shares issued and outstanding | | | 4,400 | |
| Additional paid-in capital | | | 319,547 | |
| Retained deficit | | | (289,103 | ) |
| | | | |
| | | | | |
| Total shareholders’ equity | | | 34,844 | |
| | | | |
| | | | | |
| Total liabilities and shareholders’ equity | | $ | 38,424 | |
| | | | |
See accompanying notes
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iCURIE, INC.
(formerly Cedar Mountain Distributors, Inc.)
Condensed Statements of Operations
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | | | | | | | | | | | | | | | | |
| Costs and expenses: | | | | | | | | | | | | | | | | |
| General and administrative expenses | | $ | 5,122 | | | $ | 5,773 | | | | 10,368 | | | $ | 14,048 | |
| Interest expense | | | 824 | | | | 783 | | | | 1,595 | | | | 1,425 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Loss from operations | | | (5,946 | ) | | | (6,556 | ) | | | (11,963 | ) | | | (15,473 | ) |
| | | | | | | | | | | | | | | | | |
| Other income: | | | | | | | | | | | | | | | | |
| Fee from merger candidate (Note 5) | | | 50,000 | | | | — | | | | 50,000 | | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Profit/(Loss) before income taxes | | | 44,054 | | | | (6,556 | ) | | | 38,037 | | | | (15,473 | ) |
| | | | | | | | | | | | | | | | | |
| Income tax provision (Note 3) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net Profit/(Loss) | | $ | 44,054 | | | $ | (6,556 | ) | | | 38,037 | | | $ | (15,473 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic and diluted profit/(loss) per share | | $ | 0.01 | | | $ | (0.00 | ) | | | 0.01 | | | $ | (0.00 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding | | | 4,400,001 | | | | 4,400,001 | | | | 4,400,001 | | | | 4,400,001 | |
| | | | | | | | | | | | | |
See accompanying notes
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iCURIE, INC.
(formerly Cedar Mountain Distributors, Inc.)
Condensed Statements of Cash Flows
(Unaudited)
| | | | | | | | | |
| | | Six Months Ended | |
| | | June 30, | |
| | | 2005 | | | 2004 | |
| | | | | | | | | |
| Net cash used in operating activities | | $ | 33,698 | | | $ | (7,848 | ) |
| | | | | | | |
| | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | |
| Proceeds from notes payable (Note 2) | | | 4,000 | | | | 5,000 | |
| | | | | | | |
| | | | | | | | | |
| Net cash provided by financing activities | | | 4,000 | | | | 5,000 | |
| | | | | | | |
| | | | | | | | | |
| Net change in cash | | | 37,698 | | | | (2,848 | ) |
| | | | | | | | | |
| Cash, beginning of period | | | 726 | | | | 5,026 | |
| | | | | | | |
| | | | | | | | | |
| Cash, end of period | | $ | 38,424 | | | $ | 2,178 | |
| | | | | | | |
| | | | | | | | | |
| Supplemental disclosure of cash flow information: | | | | | | | | |
| Cash paid during the period for: | | | | | | | | |
| Interest | | $ | — | | | $ | — | |
| | | | | | | |
| Income taxes | | $ | — | | | $ | — | |
| | | | | | | |
See accompanying notes
4
iCURIE, INC.
(formerly Cedar Mountain Distributors, Inc.)
Statement of Changes in Shareholders’ Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Additional | | | | | | | |
| | | Preferred Stock | | | Common Stock | | | Paid-In | | | Retained | | | | |
| | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Deficit | | | Total | |
| Balance at January 1, 2005 | | | — | | | $ | — | | | | 13,200,000 | | | $ | 13,200 | | | | 258,519 | | | $ | (327,140 | ) | | $ | (55,421 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| June 3, 2005 – 3:1 reverse stock split (Note 4) | | | — | | | | — | | | | (8,799,999 | ) | | | (8,800 | ) | | | 267,319 | | | | — | | | | — | |
| Distribute investment in subsidiary to former officer and director in exchange for the forgiveness of debts owed by the Company (Note 2) | | | — | | | | — | | | | — | | | | — | | | | 45,028 | | | | — | | | | 45,028 | |
| Contributed rent and services (Note 2) | | | — | | | | — | | | | — | | | | — | | | | 7,200 | | | | — | | | | 7,200 | |
| Net income | | | — | | | | — | | | | — | | | | — | | | | — | | | | 38,037 | | | | 38,037 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at June 30, 2005 | | | — | | | $ | — | | | | 4,400,001 | | | $ | 4,400 | | | | 319,547 | | | $ | (289,103 | ) | | $ | 34,844 | |
| | | | | | | | | | | | | | | | | | | | | | |
See accompanying notes
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iCURIE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
| 1. | | Interim Reporting — Basis Of Presentation |
| |
| | | The summary of the significant accounting policies of iCurie, Inc. (known prior to July 8, 2005, as Cedar Mountain Distributors, Inc.)(the “Company”) are incorporated herein by reference from the consolidated financial statements included in the Company’s Form 10-KSB for the year ended December 31, 2004. |
| |
| | | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles and with Form 10-QSB requirements. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2005, are not necessarily indicative of the results that may be expected for the year ended December 31, 2005. |
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| 2. | | Related Party Transactions |
| |
| | | During the six month periods ended June 30, 2004 and 2005, the Company utilized the services, furniture, equipment, and facilities of an officer and director of the subsidiary of the Company, valued at $1,200 each month. These services have been reflected as an operating expense and with a corresponding charge to additional paid-in capital in the unaudited condensed consolidated financial statements. |
| |
| | | During the six month period ended June 20, 2005, Dassity, Inc., a corporation wholly-owned by Brenda M. Hall, sole officer and director of the Company prior to July 8, 2005, loaned the Company $4,000 at 8% interest. The note has subsequently been paid in full. |
| |
| | | On June 30, 2005, the Company entered into a settlement and release agreement with James R. Smith, a former officer, director and shareholder of the Company, pursuant to which the Company transferred to Mr. Smith 200,000 shares of common stock of Tarus International, Inc. (“Tarus”) (which represented all of the issued and outstanding shares of capital stock of Tarus) in exchange for the release of all claims of Mr. Smith against the Company and the discharge by Mr. Smith of all obligations owed to Mr. Smith by the Company, including, without limitation, an obligation of $45,028. |
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| 3. | | Income Taxes |
| |
| | | The Company accounts for income taxes in accordance with Statement of Financial Accounting Standard No. 109, “Accounting for Income Taxes”. The Company incurred net operating losses during the periods presented in the unaudited condensed consolidated financial statements resulting in a deferred tax asset, which was fully allowed for. Therefore, the net tax benefit and expense is $0. |
| |
| 4. | | Changes in Equity |
| |
| | | As reported in the Company’s Form 8-K dated May 20, 2005, effective on June 3, 2005, the Company effectuated a 3-for-1 reverse stock split of all the outstanding shares of the Company’s Common Stock, resulting in the number of outstanding shares of Company Common Stock being reduced from 13,200,000 to 4,400,000. |
| |
| 5. | | Fees Received |
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| | | During the period ended June 30, 2005, the Company received $50,000 in fees from iCurie Lab Holdings, Ltd. (“iCurie UK”) in relation to due diligence conducted by iCurie UK in contemplation of a possible transaction between the companies. |
| 6. | | Subsequent Events |
| |
| | | On July 8, 2005 and July 11, 2005, the Company entered into a series of transactions with the shareholders of iCurie UK and certain other parties, pursuant to which (i) iCurie UK became a wholly-owned subsidiary of the Company, (ii) the Company changed its name from Cedar Mountain Distributors, Inc. to iCurie, Inc., (iii) the management of iCurie UK assumed similar management positions in the Company and (iv) the Company issued preferred stock and warrants in exchange for approximately $12.48 million in cash and the transfer to the Company of $4.6 million of notes. These transactions are described in greater detail in the Company’s Form 8-K dated July 8, 2005. |
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Item 2. Management’s Discussion and Analysis or Plan of Operation
The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the plan of operation and financial condition of iCurie, Inc. (“we” or the “Company”) as of June 30, 2005. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this Form 10-QSB.
Subsequent Event
Other than the disclosures under this “Subsequent Event” heading, the disclosures contained in this report are as of June 30, 2005. On July 8, 2005 and July 11, 2005, the Company entered into a series of transactions with the shareholders of iCurie Lab Holdings, Ltd (“iCurie UK”) and certain other parties, pursuant to which (i) iCurie UK became a wholly-owned subsidiary of the Company, (ii) the Company changed its name from Cedar Mountain Distributors, Inc. to iCurie, Inc., (iii) the management of iCurie UK assumed similar management positions in the Company and (iv) the Company issued preferred stock and warrants in exchange for approximately $12.48 million in cash and the transfer to the Company of $4.6 million of notes. These transactions are described in greater detail in the Company’s Form 8-K dated July 8, 2005. The following disclosures under this Item 2 are as of June 30, 2005 and do not take into account the transactions described above.
Plan of Operation
As of June 30, 2005, the Company has no business operations, and very limited assets or capital resources. The Company’s business plan is to seek one or more potential business ventures that, in the opinion of management, may warrant involvement by the Company. The Company recognizes that because of its limited financial, managerial and other resources, the type of suitable potential business ventures which may be available to it will be extremely limited. The Company’s principal business objective will be to seek long-term growth potential in the business venture in which it participates rather than to seek immediate, short-term earnings. In seeking to attain the Company’s business objective, it will not restrict its search to any particular business or industry, but may participate in business ventures of essentially any kind or nature. It is emphasized that the business objectives discussed are extremely general and are not intended to be restrictive upon the discretion of management.
The Company will not restrict its search for any specific kind of firms, but may participate in a venture in its preliminary or development stage, may participate in a business that is already in operation or in a business in various stages of its corporate existence. It is impossible to predict at this stage the status of any venture in which the Company may participate, in that the venture may need additional capital, may merely desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer. In some instances, the business endeavors may involve the acquisition of or merger with a corporation which does not need substantial additional cash but which desires to establish a public trading market for its common stock.
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In furtherance of this objective, on March 29, 2005 the Company executed a letter agreement with iCurie Lab Holdings, Ltd. pursuant to which the parties are conducting due diligence in anticipation of a possible transaction. The letter agreement provided for the payment of $50,000 to the Company under certain circumstances. On or about May 12, 2005, the parties amended the letter agreement whereby the $50,000 is to be released to the Company which funds are non-refundable unless the Company enters into certain business reorganizations or recapitalizations not involving iCurie on or before June 30, 2005. The letter agreements do not obligate either party to enter into a transaction and there can be no assurance that the parties will complete a transaction in the future.
The Company does not have sufficient funding to meet its cash needs. The Company believes that its current cash will not be sufficient to support the Company’s planned operations for the next twelve months. The Company estimates that it will need to raise at least $20,000 in new funding to pay outstanding obligations, assuming that it does not enter into a new business venture during this period. If the Company enters into a new business venture during the next twelve months, it will likely be required to raise additional funds in amounts that cannot be determined at this time. To the extent necessary, the Company may seek to raise additional funds through the sale of equity securities or by borrowing to funds until a suitable business venture can be completed. There is no assurance that the Company will be able to successfully identify and/or negotiate a suitable potential business venture or raise additional funds.
The Company has experienced net losses during the past two fiscal years and has had no significant revenues during such period. During the past two fiscal years the Company has had no significant business operations. In light of these circumstances, the ability of the Company to continue as a going concern is significantly in doubt. The attached financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Critical Accounting Policies
Due to the lack of current operations and limited business activities, the Company does not have any accounting policies that it believes are critical to facilitate an investor’s understanding of the Company’s financial and operating status.
Recent Accounting Pronouncements
The Company has not adopted any new accounting policies that would have a material impact on the Company’s financial condition, changes in financial conditions or results of operations.
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Forward-Looking Statements
When used in this Form 10-QSB or other filings by the Company with the Securities and Exchange Commission, in the Company’s press releases or other public or shareholder communications, or in oral statements made with the approval of an authorized officer of the Company’s executive officers, the words or phrases “would be”, “will allow”, “intends to”, “will likely result”, “are expected to”, “will continue”, “is anticipated”, “estimate”, “project”, or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and advises readers that forward-looking statements involve various risks and uncertainties. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statement.
Item 3. Controls and Procedures
The Company has evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2005 pursuant to Exchange Act Rule 15d-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s periodic SEC filings. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation.
PART II
OTHER INFORMATION
Item 6. Exhibits
(a) Exhibits
Index to Exhibits
| | | |
| Exhibit No. | | Description |
| | | |
| 3(i).1 | | Amended and Restated Articles of Incorporation |
| 3(ii).2 | | Amended and Restated Bylaws |
| 31.1 | | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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| | | |
| 32.1 | | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2 | | Certification 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.
| | | | | |
Date: August 15, 2005 | iCURIE, INC.
(Registrant)
| |
| | By: | /s/ Michael Karpheden | |
| | | Michael Karpheden | |
| | | Chief Financial Officer | |
| |
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