UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission file number 000-50329
IBHAS TECHNOLOGIES INC. |
(Exact name of small business issuer as specified in its charter) |
Nevada | 98-0370398 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
3061 West 15th Avenue, Vancouver, British Columbia, Canada V6K 3A5 |
(Address of principal executive offices) |
(604) 691-1754 |
(Issuer's telephone number) |
N/A |
(Former name, former address and former fiscal year, if changed since last report) |
(Zip 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 [ ] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 2,740,000 common shares issued and outstanding as of November 1, 2004
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
IBHAS TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
September 30, 2004
(unaudited)
ASSETS | |
Current assets | |
Cash | $ 2,360 |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
Current liabilities: | |
Accounts payable | $ 10,204 |
Note payable - shareholder | 21,070 |
Total current liabilities | 31,274 |
STOCKHOLDERS' DEFICIT: | |
Common stock, $.001 par value, 25,000,000 shares |
|
Additional paid in capital | 47,760 |
Deficit accumulated during the development stage | (79,414) |
Total Stockholders' Deficit | (28,914) |
|
|
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IBHAS TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended | Six Months Ended | Inception throughSeptember 30, | |||||||
2004 | 2003 | 2004 | 2003 | 2004 | |||||
General and administrative | $ 2,053 | $ 15,202 | $ 3,151 | $ 49,967 | $ 79,414 | ||||
_________ | _________ | _________ | _________ | _________ | |||||
Net loss | $ 2,053 | $ 15,202 | $ 3,151 | $ 49,967 | $ 79,414 | ||||
Net loss per share: | |||||||||
Basic and diluted | $ (0.00) | $ (0.01) | $ (0.00) | $ (0.02) | |||||
Weighted average | |||||||||
Basic and diluted | 2,740,000 | 2,590,995 | 2,740,000 | 2,607,831 | |||||
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IBHAS TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended | Six Months Ended | Inception through | |||
2004 | 2003 | 2004 | |||
CASH FLOWS FROM OPERATING | |||||
Net loss | $ (3,151) | $ (49,967) | $ (79,414) | ||
Changes in current assets and liabilities: | |||||
Accounts payable | (2,172) | 6,303 | 10,203 | ||
NET CASH USED IN OPERATING | (5,323) | (43,664) | (69,211) | ||
CASH FLOWS FROM FINANCING | |||||
Proceeds form notes payable-shareholder | 6,701 | 2,371 | 21,071 | ||
Issuance of common stock | - | 48,000 | 50,500 | ||
NET CASH PROVIDED BY | 6,701 | 50,371 | 71,571 | ||
NET CHANGE IN CASH | 1,378 | 6,707 | 2,360 | ||
Cash, beginning of period | 982 | 72 | - | ||
Cash, end of period | $ 2,360 | $ 6,779 | $ 2,360 |
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IBHAS TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Ibhas Technologies, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's registration statement filed with the SEC on Form 10-KSB. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal 2004 as reported in Form 10-KSB, have been omitted.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in conformity with generally accepted accounting principles in the United States of America for interim financial statements. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.
As used in this quarterly report, the terms "we", "us", "our company", and "Ibhas Technologies" mean Ibhas Technologies Inc., unless otherwise indicated. All dollar amounts refer to US dollars unless otherwise indicated.
THE FOLLOWING DISCUSSION AND ANALYSIS PROVIDES INFORMATION WHICH OUR MANAGEMENT BELIEVES IS RELEVANT TO AN ASSESSMENT AND UNDERSTANDING OF OUR COMPANY'S RESULTS OF OPERATIONS AND FINANCIAL CONDITION. THIS DISCUSSION SHOULD BE READ TOGETHER WITH OUR FINANCIAL STATEMENTS AND THE NOTES TO FINANCIAL STATEMENTS WHICH ARE INCLUDED IN THIS REPORT, AND WITH OUR COMPANY'S FORM 10-KSB.
General
We were incorporated in Nevada on March 20, 2002. Our business plan is to develop and market an Internet computer software program known as Ibhas through our www.ibhas.com Internet web site. The Ibhas computer software program will be designed to automate the process of submission of Internet web page information in multiple languages to major Internet search engines.
Our business plan is to develop and market an Internet computer software program known as Ibhas through our www.ibhas.com Internet web site. The Ibhas computer software program will be designed to automate the process of submission of Internet web page information in multiple languages to major Internet search engines. In particular, the software will allow an owner whose website is in a language other than English (e.g. Arabic) to automatically submit its web page information to major Internet search engines. This will allow Internet users to enter in key terms (which are either in English or non-English) into a search engine and locate the website. The software will initially support the Arabic language. The process of submission is accomplished by the software automatically translating content on the non-English website and then submitting the translated content to the search engines, in the same manner as English content is currently submitted, so that the website can be located by Internet users. Upon completion of the development process, we plan to market our Ibhas software to Internet web page owners and designers who are trying to maximize their visibility to Internet users on major Internet search engines. Our plan is to earn revenue from sales of Ibhas software licenses once development of this software is complete.
Our software will translate a site, word by word, by comparing each word on the site to words listed in a database. When a word is matched the software will provide the translated word linked to it. The software will then
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automatically submit the translated words to the search engine. For example, an Arabic website owner who wants to use our proposed software would take the following steps. First, he would download our software onto his computer. Upon loading the software he would be prompted to provide the URL for his website. "URL" is an abbreviation for Uniform Resource Locator, which is the address of a website on the Internet. The software would then compare the words listed on the website to all of those words in the database of words. Each word would be matched so as to produce a word by word translation. These translated words are then automatically submitted (after being prompted to proceed as such) to a website, as is the normal case for submission of website information to a search engine. Our belief that we can develop our software to be capable of automatically submitting the URL to the search engine along with a translated list of content words is based on the knowledge and experience of our director, Moh anad Shurrab.
We raised a total of $48,000 under our SB-2 registration statement which declared effective April 28, 2003. This amount was less than the $285,000 we believed necessary to complete the development and marketing of our proposed software. We are currently using funds raised in our offering to pay for the commencement of development of the Ibhas software. On September 1, 2003 we entered into a software development agreement with Networks Advanced Systems Co. ("NASCO") for commencement of the development of our software. We are paying NASCO $20,000 for the initial work on the development of our software. However, we will require additional funds to complete its development and we will require additional funds to market our software once it is developed. We estimate that we require additional financing in the amount of approximately $250,000. We have not determined how we will raise this necessary financing; however, we are considering debt financing, private placements of our securities and the possibility of another public offering. We have yet to earn any revenues. We have not started operations of our web site. Accordingly, our business operations are in the start-up phase.
We have no patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts. We do not have any plans to obtain any patents or trademarks in the near future.
Results of Operations
Three months ended September 30, 2004 and 2003
Our company posted losses of $2,053 for the three months ending September 30, 2004 and losses of $15,202 for the three months ended September 30, 2003. The principal component of the losses were for general and administrative expenses.
Operating expenses for the three months ending September 30, 2004 were $2,053, compared to our operating expenses for the three months ending September 30, 2003 of $15,202.
Six months ended September 30, 2004 and 2003
Our company posted losses of $3,151 for the six months ending September 30, 2004, losses of $49,967 for the six months ended September 30, 2003 and losses of $79,414 since inception to September 30, 2004. The principal component of the losses were for general and administrative expenses.
Operating expenses for the six months ending September 30, 2004 were $3,151, compared to our operating expenses for the six months ending September 30, 2003 of $49,967 and our losses from inception to September 30, 2004 which were $79,414.
Financial Condition, Liquidity and Capital Resources
At September 30, 2004, we had a working capital deficit of $28,914.
At September 30, 2004, our company's total assets were $2,360 which consisted of cash.
At September 30, 2004, our company's total liabilities were $31,274.
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We have had no revenues from inception. There is currently insufficient capital to develop our software development business. We are currently trying to obtain additional financing in the form of a private placement or shareholder loans to obtain the capital necessary to survive and implement our business plan. However, to date we have been unsuccessful obtaining such financing and we may be unable to fully implement our business plan as a result of this. Our directors will be conducting an in-depth analysis of our business plan and related future opportunities. To better protect stockholder interests and provide future appreciation, we may concurrently pursue other opportunities or initiatives as an extension to our existing business.
The continuation of our business is dependent upon obtaining further financing, a successful program of acquisition and development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
We have no long-term debt and do not regard long-term borrowing as a good, prospective source of financing.
Cash Requirements
Over the next twelve months we require financing in the amount of at least $50,000 to initiate the development of our software and for marketing efforts, as follows:
Estimated Funding Required During the Next Twelve Months
General and Administrative | $20,000 | ||
Operations | |||
Software development and marketing costs | $20,000 | ||
Working Capital | $10,000 | ||
Total | $50,000 | ||
As at September 30, 2004, we had a working capital deficiency of $28,914. We anticipate that we will have to raise additional cash of a minimum of $50,000 no later than December 31, 2004, to allow us to commence the development of our software and to provide us with approximately $10,000 in working capital to continue our normal operations. We plan to raise the capital required to meet these immediate short-term needs, and additional capital required to meet the balance of our estimated funding requirements for the twelve months, primarily through the private placement of our securities. However, to date we have been unsuccessful obtaining any such financing and we may be unable to fully implement our business plan as a result of this. Our directors are continuing to conduct an in-depth analysis of our business plan and related future opportunities for software development companies. To better protect stockholder interests and provide future appreciation, we may concurrently pursue other opp ortunities or initiatives as an extension to our existing business.
There are no assurances that we will be able to obtain further funds required for our continued operations. We are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be
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unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Product Research and Development
We do not anticipate that we will expend any significant funds on research and development over the twelve months ending September 30, 2005.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the twelve months ending September 30, 2005.
Employees
Currently there are no full time or part-time employees of our company (other than our directors and officers who, at present, have not signed employment or consulting agreements with us). We do not expect any material changes in the number of employees over the next 12 month period (although we may enter into employment or consulting agreements with our officers or directors).
Going Concern
Due to our being a development stage company and not having generated revenues, in the consolidated financial statements for the year ended March 31, 2004, we included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our consolidated financial statements contain additional note disclosures describing the circumstances that lead to this disclosure.
The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
Recently Issued Accounting Standards
In June 2002, FASB finalized FAS 146, Accounting for Costs Associated with Exit or Disposal Activities. FAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The principal difference between this Statement and Issue 94-3 relates to its requirements for recognition of a liability for a cost associated with an exit or disposal activity. This Statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under Issue 94-3, a liability for an exit cost as defined in Issue 94-3 was recognized at the date of an entity's commitment to an exit plan. A fundamental conclusion reached by the Board in this Statement is that an entity's commitment to a plan, by itself, d oes not create a present obligation to others that meets the definition of a liability. Therefore, this Statement eliminates the definition and requirements for recognition of exit costs in Issue 94-3. This Statement also establishes that fair value is the objective for initial measurement of the liability. The adoption of this statement is not expected to have a material impact on the Company's financial position and results of operations. FAS 146 is effective for exit and disposal activities initiated after December 31, 2002.
In December 2002, the Financial Accounting Standards Board Issued Statement No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of FASB Statement No. 123", ("SFAS 148"). SFAS 148 amends FASB Statement No. 123, "Accounting for Stock Based Compensation" ("SFAS 123") and provides alternative methods for accounting for a change by registrants to the fair value method of accounting for stock-based compensation. Additionally, SFAS 148 amends the disclosure requirements of SFAS 123 to require disclosure in the significant accounting policy footnote of both annual and interim financial statements of the method of accounting for stock-based compensation and the related pro-forma disclosures when the intrinsic value method continues to be
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used. The statement is effective for fiscal years beginning after December 15, 2002, and disclosures are effective for the first fiscal quarter beginning after December 15, 2002.
In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees and Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107 and Recession of FASB Interpretation No. 34" ("FIN No. 45"). FIN No. 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. FIN No. 45 does not prescribe a specific approach for subsequently measuring the guarantor's recognized liability over the term of the related guarantee. It also incorporates, without change, the guidance in FASB Interpretation No. 34, "Disclosure of Indirect Guarantees of Indebtedness of Others," which is being superseded. The disclosure provisio ns of FIN No. 45 are effective for financial statements of interim or annual periods that end after December 15, 2003 and the provisions for initial recognition and measurement are effective on a prospective basis for guarantees that are issued or modified after December 31, 2003 irrespective of a guarantor's year-end. We do not expect the adoption of FIN No. 45 to have a material impact on our results of operations or financial position
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This Statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) because that financial instrument embodies an obligation of the issuer. This Statement is effective for financial instruments entered into or modified after March 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003 except for mandatory redeemable financial instruments of nonpublic entities. We do not expect that the adoption of this standard will have a material effect on our financial position or results of operations.
In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46"). The objective of FIN 46 is to improve financial reporting by companies involved with variable interest entities. A variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either 9a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. FIN 46 also requires disclosures about variable interest entities that the company is not required to consolidate but in which it has a significant variable interest. The consolidation requirements of Interpretation 46 appl y immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure variable interest entity were established. As of September 30, 2004, we do not expect that the adoption of this standard will have a material effect on our financial position or results of operations.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our financials.
We have historically incurred losses, and through September 30, 2004 have incurred losses of $79,414 from our inception. Because of these historical losses, we will require additional working capital to develop our business operations.
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We intend to raise additional working capital through private placements, public offerings and/or bank financing. As of November 1, 2004, we were in discussions with several investors, however no definitive agreements have been reached.
There are no assurances that we will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available we may not increase our operations.
These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.
RISK FACTORS
Much of the information included in this current report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".
Our common shares are considered speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors set out below.
Because we have only just commenced our business operations, we face a high risk of business failure and we expect to incur operating losses for the foreseeable future.
We were incorporated in March 2002. We have only just commenced the development of our Ibhas software product. We require additional financing to continue and complete its development. We have not yet earned any revenues. Accordingly, we have no operating history from which investors can evaluate our business. We have never been profitable or made any income whatsoever. Our net loss since inception is $79,414 as of September 30, 2004. Prior to completion of our Ibhas software, we anticipate that we will incur increased operating expenses without realizing any revenues from sales. We therefore expect to incur significant losses into the foreseeable future and recognize that if we are unable to generate significant revenues from sales of licenses for our Ibhas software, we will not be able to achieve profitability or continue operations.
We have only just commenced the development of the Ibhas software. We have insufficient funds to complete the development of the Ibhas software and we will require additional financing to do so. If we are unable to raise additional financing to complete the development of the Ibhas software and sell the Ibhas software if and when it is completed we will not be able to generate revenues and you will lose your investment. If we are unable to develop a marketable product then our business will fail.
We have only just commenced the development of the Ibhas software. We have insufficient funds to complete the development of the Ibhas software and we require additional financing to do so. The success of our proposed business will depend on raising additional financing and the completion and acceptance of the Ibhas software by the computer and technology industry. Achieving such acceptance will require significant marketing investment. The
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Ibhas software may not be accepted by the computer and technology industry at sufficient levels to support our operations and build our business. If the Ibhas software is not accepted by the computer technology industry our proposed business will fail. In order to develop the Ibhas software into a commercial product, we will have to complete programming of the computer code required for the Ibhas software. In addition, we will have to finish development of the Ibhas website which we will use for marketing and servicing the Ibhas software. Prior to commencing commercial sales, we will have to complete testing of both the Ibhas software and our website to ensure that the software and the website are functioning properly and are capable of being marketed to the public. If we are unable to develop a final software product that is capable of commercial sale and market acceptance, we will not be able to earn any revenues. Our failure to earn revenues will cause our business to fail.
If major search engines change their search format, then our Ibhas software may not be able operate properly and our business may fail.
Our business plan is based on our ability to develop a computer software program that is able to access major search engines and directly submit web pages. Search engine submission is the process of a web site getting listed with search engines. Another term for this is "search engine registration." In simplest terms, this involves providing the search engine with information about the web site so that the search engine knows the page exists and will locate the website if certain terms are input by the Internet user. However, if these major search engines restrict this access or change the manner in which they gather information on Internet web sites, then our Ibhas software product could be redundant or may not work properly, and we may not be able to produce a viable product. For example, search engines may in the future no longer allow web sites to freely submit their information thereby allowing the site to be located. Instead search engines may charge expensive fees (some already charge fees now) for submission and/or be selective in what web sites they will list.
We need financing to complete the development of the Ibhas software and to implement our proposed business plan. If we do not raise at least $50,000 we may not be able to complete the development of our proposed software and we may cease operations. We may incur unexpected costs, delays or difficulties in developing our software which may result in us requiring more than a minimum or $50,000 and which may result in our failure to implement our proposed operations.
We need financing to commence the development of the Ibhas software and to implement our proposed business plan. If we are unable to raise at least $50,000 we may not be able to pay for completion of the development of our proposed software. We may encounter unexpected costs, delays or difficulties in the development of the Ibhas software which may result in us requiring more than $50,000 and which may cause our business plan and proposed operations to fail. In particular, we may:
- incur unexpected costs in completing the development of the Ibhas software or encounter unexpected technical or other difficulties, which may result in us requiring more than a minimum of $50,000 and/or cause our proposed operations to fail;
- incur delays and additional expenses as a result of technology failure, which may result in us requiring more than a minimum of $50,000 and/or cause our business plan and proposed operations to fail;
- be unable to create a substantial market for our software products which may cause our proposed business plan and proposed operations to fail; or
- incur significant and unanticipated expenses, which may result in us requiring more than a minimum of $50,000 and/or cause our proposed business plan and operations to fail.
The occurrence of any of the aforementioned events could result in us requiring more than a minimum of $50,000 and/or adversely affect our ability to complete the development of our software. We will require at least $10,000 of these funds to market our software once it is developed. We will depend exclusively on outside capital to pay for the development and marketing of the Ibhas software. Such outside capital may include borrowing. Capital may not be available to meet these continuing development costs or, if the capital is available, it may be on terms acceptable to us. The issuance of additional equity securities by us would result in a significant dilution in the equity interests of
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our current stockholders. Obtaining loans, assuming those loans would be available, will increase our liabilities and future cash commitments. If we were unable to obtain financing in the amounts required our proposed business will fail and you will lose your entire investment.
Because our directors have foreign addresses this may create potential difficulties relating to service of process in the event that you wish to serve them with legal documents.
Neither of our current directors and officers have resident addresses in the United States. They are both resident in Canada. Because our officers and directors have foreign addresses this may create potential difficulties relating to the service of legal or other documents on any of them in the event that you wish to serve them with legal documents. This is because the laws related to service of process may differ between Canada and the US. Similar difficulties could not be encountered in serving the company, proper, since our registered address is located in the United States at 880 - 50 West Liberty Street, Reno, Nevada, 89501. In addition, our US counsel are located at 4745 Caughlin Parkway, Ste. 200, Reno, Nevada 89509.
Because the SEC imposes additional sales practice requirements on brokers who deal in our shares which are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty in reselling your shares and may cause the price of the shares to decline.
Our shares qualify as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement prior to making a sale to you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.
Messrs. Shurrab and Anabtawi own more than 50% of the outstanding shares of our company, so they are able to decide who are the directors and you may not be able to elect any directors.
Messrs. Shurrab and Anabtawi own more than 50% of the issued and outstanding shares of our company and because of this they are able to elect all of our directors and control our operations.
There is no public trading market for our common stock, so you may be unable to sell your shares.
There is currently no public trading market for our common stock. A market may never develop for our common stock. If a market does not develop, it will be very difficult, if not impossible for you to resell your shares.
Sales of common stock by our officers and directors will likely cause the market price for the common stock to drop.
A total of 2,500,000 shares of stock were issued to our two officers and directors. They paid an average price of $0.001 per share. Subject to the restrictions of Securities Act of 1933, and in particular Rule 144, they are able to sell portions of their stock after the hold period expired on March 29, 2003. If they do sell their stock into the market, the sales may cause the market price of the stock to drop.
Item 3. Controls and Procedures.
As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this report, being September 30, 2004, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our management, including our president and chief executive officer. Based upon that evaluation, our president and chief executive officer concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report. There have been no significant changes in our internal controls or in other factors, which could significantly affect internal controls subsequent to the date we carried out our evaluation.
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Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our president and chief executive officer as appropriate, to allow timely decisions regarding required disclosure.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder are an adverse party or has a material interest adverse to us.
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.
Committees of the Board
Currently our company has the following committees:
Our Audit Committee is currently made up of Mohanad Shurrab and Abdellatif Anabtawi. The Audit Committee is governed by the Audit Committee Charter adopted by the board of directors on January 29, 2004.
Our Nominating and Corporate Governance Committee is currently made up of Mohanad Shurrab and Abdellatif Anabtawi. The Nominating and Corporate Governance Committee is governed by the Nominating and Corporate Governance Committee Charter adopted by the board of directors on January 29, 2004.
Our Compensation Committee is currently made up of Mohanad Shurrab and Abdellatif Anabtawi. The Compensation Committee is governed by the Compensation Committee Charter adopted by the board of directors on January 29, 2004.
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Item 6. Exhibits.
Exhibits required by Item 601 of Regulation S-B
(3) Articles of Incorporation and By-laws
3.1 Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2, filed on June 18, 2002).
3.2 Bylaws (incorporated by reference from our Registration Statement on Form SB-2, filed on June 18, 2002).
(10) Material Contracts
10.1 Software Development Agreement with Networks Advanced Systems Co. dated September 1, 2003 (incorporated by reference from our Quarterly Report on Form 10-QSB, filed on November 18, 2003).
(14) Code of Ethics
14.1 Code of Ethics (incorporated by reference from our Annual Report on Form 10-KSB, filed on July 6, 2004)
(31) Section 302 Certifications
31.1 Section 302 Certification.
(32) Section 906 Certifications
32.1 Section 906 Certification.
.
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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.
IBHAS TECHNOLOGIES INC.
By:
/s/ Ben West
Ben West, President, Chief Executive
Officer, Treasurer, Chief Financial Officer and Director
(Principal Executive Officer and Principal Financial Officer)
Date: November 15, 2004
