| [ X ] | Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 |
| for the quarterly period ended November 30, 2005 |
| [ ] | Transition report pursuant to section 13 or 15(d) of the Securities Exchange act of 1934 |
| for the transition period from ________ to ________ |
Commission File No. 333-100110
SimplaGene USA, Inc
(Exact name of small business issuer as specified in its charter)
| Nevada | 01-0741042 | |
| (State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) |
11900 Wayzata Blvd., Suite 100, Hopkins, MN 55305
(Address of Principal Executive Offices and Zip Code)
(952) 541-1155
(Issuer’s Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by sections 13 or 15(d) of the Exchange Act during the past 12 months (or such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes [X] No [ ]
State the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date:January 13, 2006: 2,950,000
Transitional Small Business Disclosure Format (check one): YES [ ] NO [ X]
SimplaGene USA, Inc.
(a development stage enterprise)
Form 10-QSB for the Quarter ended November 30, 2005
Table of Contents
Page
Part I - Financial Information
Item 1 | Financial Statements | 3 |
Item 2 | Management's Discussion and Analysis or Plan of Operation | 14 |
Item 3 | Controls and Procedures | 14 |
Part II - Other Information
Item 1 | Legal Proceedings | 15 |
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 15 |
Item 3 | Defaults Upon Senior Securities | 15 |
Item 4 | Submission of Matters to a Vote of Security Holders | 15 |
Item 5 | Other Information | 15 |
Item 6 | Exhibits | 15 |
Signatures | 15 |
2
PART I
Item 1 - Financial Statements
SimplaGene USA, Inc.
(a development stage enterprise)
Balance Sheets
November 30, 2005 and 2004
(Unaudited)
| November 30, 2005 | November 30, 2004 | |||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash in bank | $ | 47,820 | $ | 73,481 | ||||
| Total Assets | $ | 47,820 | $ | 73,481 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable - trade | $ | 1,496 | $ | -- | ||||
| Loans from officer/shareholder | -- | 16,200 | ||||||
| Total Liabilities | 1,496 | 16,200 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Preferred stock - $0.001 par value | ||||||||
| 10,000,000 shares authorized | ||||||||
| None issued and outstanding | -- | -- | ||||||
| Common stock - $0.001 par value | ||||||||
| 50,000,000 shares authorized | ||||||||
| 2,950,000 shares issued and outstanding | 2,950 | 2,950 | ||||||
| Additional paid-in capital | 94,466 | 94,466 | ||||||
| Deficit accumulated during the development stage | (51,092 | ) | (40,135 | ) | ||||
| Total Stockholders’ Equity | 46,324 | 57,281 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 47,820 | $ | 73,481 | ||||
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
3
SimplaGene USA, Inc.
(a development stage enterprise)
Statements of Operations and comprehensive Loss
three months ended November 30, 2005 and 2004 and
Period from August 2, 2002 (date of inception) through November 30, 2005
(Unaudited)
| Three months ended November 30, 2005 | Three months ended November 30, 2004 | Period from August 2, 2002 (date of inception) through November 30, 2005 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | $ | -- | $ | -- | $ | -- | |||||
| Cost of Sales | -- | -- | -- | ||||||||
| Gross Profit | -- | -- | -- | ||||||||
| Operating expenses | |||||||||||
| Marketing and selling expenses | -- | 4,425 | 16,225 | ||||||||
| Organizational and start-up costs | -- | -- | 4,679 | ||||||||
| General and administrative expenses | 2,834 | 1,738 | 30,188 | ||||||||
| Depreciation and amortization | -- | -- | -- | ||||||||
| Total operating expenses | 2,834 | 6,163 | 51,092 | ||||||||
| Loss from operations and | |||||||||||
| before provision for income taxes | (2,834 | ) | (6,163 | ) | (51,092 | ) | |||||
| Provision for income taxes | -- | -- | -- | ||||||||
| Net Income | (2,834 | ) | (6,163 | ) | (51,092 | ) | |||||
| Other comprehensive income | -- | -- | -- | ||||||||
| Comprehensive Loss | $ | (2,834 | ) | $ | (6,163 | ) | $ | (51,092 | ) | ||
| Loss per weighted-average share | |||||||||||
| of common stock outstanding, | |||||||||||
| computed on net loss - | |||||||||||
| basic and fully diluted | nil | nil | $ | (0.02 | ) | ||||||
| Weighted-average number | |||||||||||
| of common shares outstanding | 2,950,000 | 2,950,000 | 2,741,077 | ||||||||
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
4
SimplaGene USA, Inc.
(a development stage enterprise)
Statements of Cash Flows
three months ended November 30, 2005 and 2004 and
Period from August 2, 2002 (date of inception) through November 30, 2005
(Unaudited)
| Three months ended November 30, 2005 | Three months ended November 30, 2004 | Period from August 2, 2002 (date of inception) through November 30, 2005 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash Flows from Operating Activities | |||||||||||
| Net Loss | $ | (2,834 | ) | $ | (6,163 | ) | $ | (51,092 | ) | ||
| Adjustments to reconcile net income to | |||||||||||
| net cash provided by operating activities | |||||||||||
| Depreciation | -- | -- | -- | ||||||||
| Increase (Decrease) in Accounts payable-trade | 1,419 | (315 | ) | 1,496 | |||||||
| Net cash used in operating activities | (1,415 | ) | (6,478 | ) | (49,596 | ) | |||||
| Cash Flows from Investing Activities | -- | -- | -- | ||||||||
| Cash Flows from Financing Activities | |||||||||||
| Cash advanced by officer/shareholder | -- | 4,400 | 16,800 | ||||||||
| Cash repaid to officer shareholder | -- | (600 | ) | (16,800 | ) | ||||||
| Proceeds from sale of common stock | -- | -- | 119,500 | ||||||||
| Cash paid to raise capital | -- | -- | (22,084 | ) | |||||||
| Net cash provided by financing activities | -- | 3,800 | 97,416 | ||||||||
| Increase (Decrease) in | |||||||||||
| Cash and Cash Equivalents | (1,415 | ) | (4,678 | ) | 47,820 | ||||||
| Cash and cash equivalents at beginning of period | 49,235 | 76,159 | -- | ||||||||
| Cash and cash equivalents at end of period | $ | 47,820 | $ | 73,481 | $ | 47,820 | |||||
| Supplemental Disclosures of | |||||||||||
| Interest and Income Taxes Paid | |||||||||||
| Interest paid during the period | $ | -- | $ | -- | $ | -- | |||||
| Income taxes paid (refunded) | $ | -- | $ | -- | $ | -- | |||||
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
5
SimplaGene USA, Inc.
(a development stage enterprise)
Notes to Financial Statements
NOTE A - Organization and Description of Business
SimplaGene USA, Inc. (Company) was incorporated on August 2, 2002 under the laws of the State of Nevada. The Company was formed to market hepatitis B virus (HBV) genetic data gathered by Ningbo SimplaGene Institute, a Chinese research institute, to pharmaceutical firms and research organizations.
In November 2005, the Company’s U. S. based management discovered that Ningbo SimplaGene Institute had substantially curtailed its business and sold a number of its assets, including a substantial portion of its blood samples. As a result of these developments, the marketing agreement with Ningbo SimplaGene Institute was terminated and the Company has does not have access to any saleable product, as anticipated in its initial business plan.
Management has determined that it is in the best interests of the Company, and its shareholders, to abandon its initial business plan and seek an opportunity to participate with the available remaining resources in another to-be-determined business venture which management believes has the appropriate, in management’s opinion, potential for being successful.
The Company is no longer engaged in active business operations and is seeking a business venture in which to participate. The selection of a business venture in which to participate is complex and risky and will be made by management in the exercise of its business judgment. There is no assurance that the Company will be able to identify and align itself with, through a merger or other types of business relationships, any business venture that will ultimately prove to be beneficial to the Company and its shareholders.
As the Company has never implemented any business plan and has had no substantial assets or operations since inception, it is considered in the development stage.
NOTE B - Preparation of Financial Statements
The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has a year-end of August 31.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.
6
SimplaGene USA, Inc.
(a development stage enterprise)
Notes to Financial Statements - Continued
NOTE B - Preparation of Financial Statements - Continued
During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-KSB for the year ended August 31, 2005. The information presented within these interim financial statements may not include all disclosures required by generally accepted accounting principles and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein.
In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S. Securities and Exchange Commission’s instructions for Form 10-QSB, are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented. The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending December 31, 2004.
NOTE C - Going Concern Uncertainty
In April 2003, the Company completed an initial public offering of common stock, has not completed implementation of a business plan and has not generated revenue producing transactions. Accordingly, the Company is considered in the development stage.
From inception through November 2005, the Company attempted to market hepatitis B virus (HBV) genetic data gathered by Ningbo SimplaGene Institute, a Chinese related party research institute, to pharmaceutical firms and research organizations through a Marketing Agreement with Ningbo Freetrade Zone Aipuweixi Trading Co., Ltd. (Ningbo Freetrade), located in Ningbo, Zhejiang Province, China (an unrelated entity).
In November 2004, the Company’s U. S. based management discovered that Ningbo SimplaGene Institute had substantially curtailed its business and sold a number of its assets, including a substantial portion of its blood samples. As a result of these developments, the marketing agreement with Ningbo SimplaGene Institute was terminated and the Company has does not have access to any saleable product, as anticipated in it’s initial business plan.
Management has determined that it is in the best interests of the Company, and it’s shareholders, to abandon its prior business plan and seek an opportunity to participate with the limited resources remaining in another business venture that management believes has potential for being successful.
The Company is no longer engaged in active business operations and is seeking a business venture in which to participate. The selection of a business venture in which to participate is complex and risky and will be made by management in the exercise of its business judgment. There is no assurance that the Company will be able to identify and align itself with, through a merger or other types of business relationships, any business venture that will ultimately prove to be beneficial to the Company and its shareholders.
7
SimplaGene USA, Inc.
(a development stage enterprise)
Notes to Financial Statements - Continued
NOTE C - Going Concern Uncertainty - Continued
The Company’s management continues to believe that the proceeds from the Company’s initial capitalization and initial public offering of common stock will be sufficient to maintain the corporate status of the Company in the immediate future. Because of the Company's lack of operating assets, the Company’s continuance may become dependent on either future sales of securities and/or advances or loans from significant stockholders or corporate officers to provide sufficient working capital to preserve the integrity of the corporate entity during the development phase.
There is no assurance that the Company will be able to obtain additional equity or debt funding or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.
It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding.
NOTE D - Summary of Significant Accounting Policies
1. Cash and cash equivalents
For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.
Cash overdraft positions may occur from time to time due to the timing of making bank deposits and releasing checks, in accordance with the Company's cash management policies.
2. Organization costs
The Company has adopted the provisions of AICPA Statement of Position 98-5, “Reporting on the Costs of Start-Up Activities” whereby all organization and initial costs incurred with the incorporation and initial capitalization of the Company were charged to operations as incurred.
3. Deferred public offering costs
During the process of “going public” through an initial public offering (an IPO), the Company deferred certain costs related to the registration process. Deferred public offering costs represent accounting, legal and underwriting costs incurred by the Company pertaining to this process. These costs were charged against additional paid-in capital (deducted from stock proceeds) upon completion of the public offering.
8
SimplaGene USA, Inc.
(a development stage enterprise)
Notes to Financial Statements - Continued
NOTE D - Summary of Significant Accounting Policies - Continued
4. Income Taxes
The Company uses the asset and liability method of accounting for income taxes. At November 30, 2005 and 2004, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences. Temporary differences represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.
As of September 30, 2005 and 2004, the deferred tax asset related to the Company’s net operating loss carryforward is fully reserved. If these carryforwards are not utilized, they will begin to expire in 2020.
5. Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing the net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.
Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).
Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.
As of November 30, 2005 and 2004, the Company has no outstanding stock options and warrants which would be deemed dilutive.
NOTE E - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.
Interest rate risk is the risk that the Company’s earnings are subject to fluctuations in interest rates on either investments or on debt and is fully dependent upon the volatility of these rates. The Company does not use derivative instruments to moderate its exposure to interest rate risk, if any.
9
SimplaGene USA, Inc.
(a development stage enterprise)
Notes to Financial Statements - Continued
NOTE E - Fair Value of Financial Instruments - Continued
Financial risk is the risk that the Company’s earnings are subject to fluctuations in interest rates or foreign exchange rates and are fully dependent upon the volatility of these rates. The company does not use derivative instruments to moderate its exposure to financial risk, if any.
NOTE F - Advances from Shareholder
Through August 31, 2005, the Company was advanced approximately an aggregate of $16,800 by the Company’s former President and then-controlling shareholder, Xinbo Wang, for the purpose of funding the Company’s Marketing Agreement and to provide working capital. These advances were non-interest bearing and were repaid in full as of August 31, 2005.
NOTE G - Income Taxes
The components of income tax (benefit) expense for each of the three month periods ended November 30, 2005 and 2004 and for the period from August 2, 2002 (date of inception) through November 30, 2005, are as follows:
| Three months ended November 30, 2005 | Three months ended November 30, 2004 | Period from August 2, 2002 (date of inception) through November 30, 2005 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Federal: | |||||||||||
| Current | $ | -- | $ | -- | $ | -- | |||||
| Deferred | -- | -- | -- | ||||||||
| State: | |||||||||||
| Current | -- | -- | -- | ||||||||
| Deferred | -- | -- | -- | ||||||||
| -- | -- | -- | |||||||||
| Total | $ | -- | $ | -- | $ | -- | |||||
As of November 30, 2005, the Company has a net operating loss carryforward of approximately $49,500 to offset future taxable income. Subject to current regulations, this carryforward will begin to expire in 2023. The amount and availability of the net operating loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control among shareholders controlling 5.0% or more of the Company’s issued and outstanding common stock; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carryforwards.
10
SimplaGene USA, Inc.
(a development stage enterprise)
Notes to Financial Statements - Continued
NOTE G - Income Taxes - Continued
The Company's income tax expense (benefit) for each of the three month periods ended November 30, 2005 and 2004 and for the period from August 2, 2002 (date of inception) through November 30, 2005, respectively, differed from the statutory rate of 34% as follows:
| Three months ended November 30, 2005 | Three months ended November 30, 2004 | Period from August 2, 2002 (date of inception) through November 30, 2005 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Statutory rate applied to loss | |||||||||||
| before income taxes | $ | (965 | ) | $ | (2,095 | ) | $ | (17,375 | ) | ||
| Increase (decrease) in income taxes | |||||||||||
| resulting from: | |||||||||||
| State income taxes | -- | -- | -- | ||||||||
| Difference between book method and | |||||||||||
| statutory recognition differences on | |||||||||||
| organization costs | (80 | ) | (80 | ) | 560 | ||||||
| Other, including reserve for deferred tax | |||||||||||
| asset and application of net operating | |||||||||||
| loss carryforward | 1,045 | 2,175 | 16,815 | ||||||||
| Income tax expense | $ | -- | $ | -- | $ | -- | |||||
Temporary differences, traditionally consisting primarily of statutory deferrals of expenses for organizational costs and statutory differences in the depreciable lives for property and equipment, between the financial statement carrying amounts and tax bases of assets and liabilities, where present and applicable, give rise to deferred tax assets and liabilities as of November 30, 2005 and 2004, respectively:
| November 30, 2005 | November 30, 2004 | |||||||
|---|---|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||||
| Net operating loss carryforwards | $ | 16,815 | $ | 12,770 | ||||
| Less valuation allowance | (16,815 | ) | (12,770 | ) | ||||
| Net Deferred Tax Asset | $ | -- | $ | -- | ||||
During each of the three month periods ended November 30, 2005 and 2004, respectively, the valuation allowance increased by approximately $1,045 and $2,170.
11
SimplaGene USA, Inc.
(a development stage enterprise)
Notes to Financial Statements - Continued
NOTE H - Equity Transactions
On April 16, 2003, the Company completed the sale of an aggregate of 1,000,000 shares of its common stock for aggregate proceeds of approximately $100,000, in satisfaction of the offering requirement of its self-underwritten public offering of securities, pursuant to a Registration Statement Under The Securities Act of 1933 on Form SB-2. Offering proceeds were released from escrow in April 2003 pursuant to the terms of the offering as detailed in the Company's prospectus dated January 9, 2003. On April 16, 2003, the Company closed its self-underwritten public offering of securities.
NOTE I - Commitments
On May 15, 2004, the Company entered into a Marketing Agreement with Ningbo Freetrade Zone Aipuweixi Trading Co., Ltd. (an unrelated party) (Ningbo Freetrade), located in Ningbo, Zhejiang Province, China whereby Ningbo Freetrade would provide all marketing activities related to the Company’s HBV DNA data and data processing results in the United States of America and Canada. This agreement was for an initial term of six (6) months and required an initial payment of $3,000 USD and monthly payments of $2,200 USD. Further, Ningbo Freetrade would receive a commission of 20% of the retail selling price of any products sold through Ningbo Freetrade’s efforts. As of August 31, 2005, all amounts due to Ningbo Freetrade have been paid in full and no sales transactions triggering the commission payment have been consummated.
12
SimplaGene USA, Inc.
(a development stage enterprise)
Notes to Financial Statements - Continued
NOTE J - Selected Financial Data (Unaudited)
The following is a summary of the quarterly results of operations for the fiscal years ended August 31, 2006, 2005 and 2004, respectively.
| Quarter ended November 30 | Quarter ended February 28/29 | Quarter ended May 31 | Quarter ended August 31 | Year ended August 31 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year ended August 31, 2006 | |||||||||||||||||
| Net revenues | $ | -- | - | ||||||||||||||
| Gross profit | -- | ||||||||||||||||
| Net loss from operations | (2,834 | ) | |||||||||||||||
| Basic and fully diluted | |||||||||||||||||
| earnings per share | nil | ||||||||||||||||
| Weighted-average | |||||||||||||||||
| number of shares | |||||||||||||||||
| outstanding | 2,950,000 | ||||||||||||||||
| Year ended August 31, 2005 | |||||||||||||||||
| Net revenues | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||
| Gross profit | -- | -- | -- | -- | -- | ||||||||||||
| Net loss from operations | (6,163 | ) | (3,471 | ) | (4,171 | ) | (481 | ) | (14,286 | ) | |||||||
| Basic and fully diluted | |||||||||||||||||
| earnings per share | nil | nil | nil | nil | nil | ||||||||||||
| Weighted-average | |||||||||||||||||
| number of shares | |||||||||||||||||
| outstanding | 2,950,000 | 2,950,000 | 2,950,000 | 2,950,000 | 2,950,000 | ||||||||||||
| Year ended August 31, 2004 | |||||||||||||||||
| Net revenues | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||
| Gross profit | -- | -- | -- | -- | -- | ||||||||||||
| Net loss from operations | (3,268 | ) | (4,163 | ) | (1,927 | ) | (14,916 | ) | (24,274 | ) | |||||||
| Basic and fully diluted | |||||||||||||||||
| earnings per share | nil | nil | nil | nil | (0.01 | ) | |||||||||||
| Weighted-average | |||||||||||||||||
| number of shares | |||||||||||||||||
| outstanding | 2,950,000 | 2,950,000 | 2,950,000 | 2,950,000 | 2,950,000 | ||||||||||||
The Company experiences fluctuations in quarterly operating expenses, principally an expired marketing contract and professional services, which are charged to expense as the services are incurred.
13
Item 2. Management’s Discussion and Analysis or Plan of Operation
Plan of operation
SimplaGene USA is no longer engaged in active business operations and is seeking a business venture in which to participate. The selection of a business venture in which to participate is complex and risky and will be made by Company management and directors in the exercise of their business judgment. There is no assurance that SimplaGene USA will be able to identify and align itself with, through a merger or other types of business relationships, any business venture that will ultimately prove to be beneficial to SimplaGene USA and its shareholders.
SimplaGene USA’s current operating plan is to handle the administrative and reporting requirements of a public company. At present, SimplaGene USA has no understandings, commitments or agreements with respect to the acquisition of any business venture, and there can be no assurance that SimplaGene USA will identify a business venture suitable for acquisition in the future. Further, there can be no assurance that SimplaGene USA would be successful in consummating any business venture on favorable terms, if at all, or that it will be able to profitably manage the business venture it acquires. These circumstances raise substantial doubt about the ability of SimplaGene USA to continue as a going concern.
At November 30, 2005, SimplaGene USA had working capital of $46,324, which consisted entirely of cash. Management believes that SimplaGene USA has sufficient cash and short-term investments to meet the anticipated needs of SimplaGene USA's activities through the next 12 months. However, there can be no assurances to that effect, as SimplaGene USA has no significant revenues and its need for capital may change dramatically if it acquires an interest in a business opportunity during that period.
Caution regarding forward-looking information
Certain statements contained in this annual filing, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of SimplaGene USA, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Given these uncertainties, readers of this Form 10-KSB and investors are cautioned not to place undue reliance on such forward-looking statements. SimplaGene USA disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
Item 3 - Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, on November 30, 2005, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer. Based upon that evaluation, the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective. There have been no significant changes in the Company’s internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.
14
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in Company 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 Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.
PART II Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings of shareholders during the reporting period.
Item 5 - Other Information
None
Item 6 - Exhibits
Exhibits
31.1 Certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1 Certifications pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
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.
SimplaGene USA, Inc.
| Dated:January 17, 2006 | /s/ Craig S. Laughlin | |
Craig S. Laughlin, President |
15
