UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB/A
| [X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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| | For the quarterly period ended December 31, 2006 |
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| [ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
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| | For the transition period __________ to __________ |
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| | Commission File Number: 333-115444 |
Technology Holdings, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada | 20-0987069 |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
7311 W Charleston Blvd., Suite 110, Las Vegas, Nevada 89117 |
| (Address of principal executive offices) |
702-228-7105 |
| (Issuer’s telephone number) |
_______________________________________________________________ |
| (Former name, former address and former fiscal year, if changed since last report) |
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [X] Yes [ ] No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [ ] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 7,500,000 common shares as of December 31, 2006.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
Explanatory Note
The purpose of this Amendment No. 1 to the Quarterly Report on Form 10-QSB previously filed with the United States Securities and Exchange Commission on February 7, 2007, is to revise the "Statements of Operations for the three and six months ended December 31, 2006 and 2005 and for the period from September 2, 2003 (inception) to December 31, 2006" to include columns for thethree months ended December 31, 2006 and 2005 that were inadvertently omitted.
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PART I - FINANCIAL INFORMATION |
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PART II - OTHER INFORMATION |
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PART I - FINANCIAL INFORMATION
| Our unaudited financial statements included in this Form 10-QSB are as follows: |
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These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-QSB. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, 2006 are not necessarily indicative of the results that can be expected for the full year.
Technology Holdings, Inc.
Formerly known as MV Fund II, LLC
(a Development Stage Company)
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ASSETS | |
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| Current assets: | | |
| Cash | $ | 250,050 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | | |
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LIABILITIES | | |
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| Current liabilities: | | |
| Accrued expenses | $ | 26,397 |
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STOCKHOLDERS' EQUITY | | |
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Common Stock | | |
| Authorized: | | |
| 100,000,000 common shares, par value $0.001 per share | | |
| Issued and outstanding: | | |
| 7,500,000 common shares | $ | 7,500 |
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| Additional paid-in capital | | 515,793 |
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Deficit Accumulated During the Development Stage | | (299,640) |
| | | 223,653 |
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| | $ | 250,050 |
The accompanying notes are an integral part of these financial statements.
Technology Holdings, Inc.
Formerly known as MV Fund II, LLC
(a Development Stage Company)
(unaudited)
| | Three months ended December 31, | | Three Months Ended December 31, | | Six Months Ended December 31, | | Six Months Ended December 31, | | September 2, 2003 (Inception) to December 31, 2006 |
| | 2006 | | 2005 | | 2006 | | 2005 | | (Unaudited) |
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| Net Revenue | $ | - | | $ | - | | $ | - | | $ | - | | $ | - |
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| Expenses: | | | | | | | | | | | | | | |
| General and administrative expenses | | 10,165 | | | 86,650 | | | 19,374 | | | 111,126 | | | 299,640 |
| Total expenses | | 10,165 | | | 86,650 | | | 19,374 | | | 111,126 | | | 299,640 |
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| Net Loss for the Period | $ | (10,165) | | $ | (86,650) | | $ | (19,374) | | $ | (111,126) | | $ | (299,640) |
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| Basic and Diluted Loss Per Share | $ | (0.01) | | | | | $ | (0.01) | | | | | $ | (0.04) |
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| Weighted Average Number of Shares Outstanding | | 7,500,000 | | | | | | 7,500,000 | | | | | | 7,500,000 |
Technology Holdings, Inc.
Formerly known as MV Fund II, LLC
(a Development Stage Company)
| | | | Additional | | Accumulated Deficit During | | |
| | Shares | | Amount | | Paid-in Capital | | | | Equity |
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| September 2, 2003 (Inception) | | - | | $ | - | | $ | - | | $ | - | | $ | - |
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| Managing member donated capital | | | | | | | | 18,793 | | | | | | 18,793 |
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Net loss for the period September 2, 2003 thru June 30, 2004 (Restated) | | | | | | | | - | | | (33,682) | | | (33,682) |
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| Balance, June 30, 2004 (Restated) | | - | | | - | | | 18,793 | | | (33,682) | | | (14,889) |
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| Managing member donated capital | | | | | | | | 4,500 | | | | | | 4,500 |
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Net loss for the year ended June 30, 2005 | | | | | | | | - | | | (91,924) | | | (91,924) |
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| Balance, June 30, 2005 | | - | | | - | | | 23,293 | | | (125,606) | | | (102,313) |
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| Shares issued to managing member | | 4,000,000 | | | 4,000 | | | | | | | | | 4,000 |
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| Shares issued for cash proceeds | | 2,450,000 | | | 2,450 | | | 343,550 | | | | | | 346,000 |
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| Shares issued for services | | 1,050,000 | | | 1,050 | | | 148,950 | | | | | | 150,000 |
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Net loss for the year ended June 30, 2006 | | | | | | | | - | | | (154,660) | | | (154,660) |
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| Balance, June 30, 2006 | | 7,500,000 | | | 7,500 | | | 515,793 | | | (280,266) | | | 243,027 |
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Net loss for the six months ended December 31, 2006 | | | | | | | | - | | | (19,374) | | | (19,374) |
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| Balance, December 31, 2006 | $ | 7,500,000 | | $ | 7,500 | | $ | 515,793 | | $ | (299,640) | | $ | 223,653 |
The accompanying notes are an integral part of these financial statements.
Technology Holdings, Inc.
Formerly known as MV Fund II, LLC
(a Development Stage Company)
(unaudited)
| | Six Months Ended December 31, 2006 | | Six Months Ended December 31, 2005 | | September 2, 2003 (Inception) to December 31, 2006 (Unaudited) |
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Cash flows from operating activities | | | | | |
| Net (loss) | $ | (19,374) | | $ | (111,126) | | $ | (299,640) |
| Changes in operating assets and liabilities: | | | | | | | | |
| Increase (decrease) in accrued expenses | | 19,374 | | | 111,126 | | | 26,397 |
| Net cash (used) by operating activities | | - | | | - | | | (273,243) |
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Cash flows from financing activities | | | | | | | | |
| Proceeds from issuance of membership units | | - | | | - | | | 350,000 |
| Services performed for stock | | - | | | - | | | 150,000 |
Expenses paid in capital by managing member | | - | | | - | | | 23,293 |
| Net cash provided by financing activities | | - | | | - | | | 523,293 |
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| Net increase in cash | | - | | | - | | | 250,050 |
| Cash - beginning of period | | 250,050 | | | - | | | - |
| Cash - end of period | $ | 250,050 | | $ | - | | $ | 250,050 |
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| Supplemental Cash Flow Information: | | | | | | | | |
| Cash paid for interest | $ | - | | $ | - | | $ | - |
| Cash paid for income taxes | $ | - | | $ | - | | $ | - |
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Non-cash transactions: | | | | | | | | |
| Expenses paid for by the managing member | $ | - | | $ | - | | $ | 23,293 |
| Shares issued for expenses | $ | - | | $ | - | | $ | 150,000 |
The accompanying notes are an integral part of these financial statements.
Technology Holdings, Inc.
Formerly known as MV Fund II, LLC
(a Development Stage Company)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Technology Holdings, Inc. is a development stage company that prior to January 30, 2006 was organized as a Nevada Limited Liability Company. On January 30, 2006, the membership unanimously approved a Plan of Conversion that restructured the Company from a Limited Liability Company to a C-Corporation as permitted under Chapter 92A of the Nevada Revised Statutes (the “Conversion”).
On July 20, 2006, in connection with the abandonment of negotiations with MSC, the Company changed its name from MedaSorb Technologies, Inc. to Technology Holdings, Inc. The Company accomplished this name change through a merger with a wholly-owned subsidiary, Technology Holdings, Inc., a Nevada corporation, set up solely for this purpose of changing the Company's name.
For the period from September 2, 2003 (date of inception) through December 31, 2006, the Company has not commenced its planned operations and the only transactions were costs associated with the equity offering (i.e., legal and accounting fees).
Development Stage Company
The accompanying financial statements have been prepared in accordance with the Statement of Financial Accounting Standards No. 7 ”Accounting and Reporting by Development-Stage Enterprises”. A development-stage enterprise is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.
Definition of fiscal year
The Company’s fiscal year end is June 30.
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.
Fair value of financial instruments
Technology Holdings, Inc. Formerly known as MV Fund II, LLC
(a Development Stage Company)
Notes to Financial Statements
Financial accounting standards Statement No. 107, “Disclosure About Fair Value of Financial Instruments”, requires the Company to disclose, when reasonably attainable, the fair market values of its assets and liabilities which are deemed to be financial instruments. The carrying amounts and estimated fair values of the Company’s financial instruments approximate their fair value due to the short-term nature.
Cash and equivalents
Cash includes all cash and highly liquid investments with original maturities of three months or less. As of December 31, 2006 Technology Holdings, Inc. had $250,000 unrestricted funds in escrow, to be used for future business opportunities should a meaningful opportunity arise. These funds were raised pursuant to the Company's post effective amendment to its original registration statement on form S-1 by using a form S-11 (Registration No. 333-115444) under the Securities Act of 1933, as amended. This related to the Company's initial public offering of its Common Stock, which became effective on January 13, 2006. The Company reached the minimum sale of units, raising the required $500,000 through the receipt of cash proceeds of $350,000 on the sale of 140 units and the reduction of $150,000 of debt to the Company's attorneys for past services rendered.
Earnings (loss) per share
Basic earnings (loss) per share exclude any dilutive effects of options, warrants and convertible securities. Basic earnings (loss) per share is computed using the weighted-average number of outstanding common stocks during the applicable period. Diluted earnings per share is computed using the weighted-average number of common and common stock equivalent shares outstanding during the period. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.
Income taxes
The Company accounts for its income taxes in accordance with Statement of Financial Accounting Standards No. 109, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company has incurred operating losses while in the Development Stage and has not yet incurred any income tax expense. Due to the uncertainty as to whether the Company can operate as a going concern, the Company has not recognized a deferred tax asset resulting from the losses. See Note 4.
Technology Holdings, Inc. Formerly known as MV Fund II, LLC
(a Development Stage Company)
Notes to Financial Statements
NOTE 2 - STOCKHOLDERS’ EQUITY
Common Stock Issued and Outstanding
The Company has 100,000,000 common shares authorized and 7,500,000 shares issued and outstanding at December 31, 2006.
In January 2006, the Company raised $350,000 on the sale of membership units which were converted to 2,450,000 shares of common stock.
In January 2006, membership units were issued for the reduction of $150,000 in debt to the Company’s legal counsel in partial exchange for their past legal services which were converted into 1,050,000 shares of common stock.
In January 2006, membership units were issued to the Company’s managing member in exchange for the managing member’s interest in the Company which were converted into 4,000,000 shares of common stock.
In January 2006, the Company adopted an incentive stock option plan for its future employees and consultants. The Company has not granted any stock options to the executive directors or officers from inception on September 2, 2003 to December 31, 2006.
Technology Holdings, Inc.
Formerly known as MV Fund II, LLC
(a Development Stage Company)
Notes to Financial Statements
NOTE 3 - LIQUIDITY AND GOING CONCERN
As shown in the accompanying financial statements, the Company has accumulated net losses from operations totaling $299,640 as of December 31, 2006, and has had no revenue from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has generated no revenue from its planned principal operations. In order to obtain the necessary capital, the Company plans to begin operations with the receipt of a minimum investment of membership units and negotiating the purchase of the Fund’s first loans with this investment. However, the Company is dependent upon its ability to secure financing, and there are no assurances that the Company will be successful. Without sufficient financing it would be unlikely for the Company to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 - INCOME TAXES
For the period ended December 31, 2006, the Company has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $299,000 at December 31, 2006, and will expire in various amounts through the year 2027.
The income tax benefit for the six months ended December 31, 2006 is as follows:
| | 2006 |
| Income tax benefit at statutory rate | $ | 6,600 |
| Valuation allowance | | (6,600) |
| | $ | - |
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
| | 2006 |
| Deferred tax asset attributable to: | |
| Net operating loss carryover | $ | 102,000 |
| Stock valuation for services | | (51,000) |
| Valuation allowance | | (51,000) |
| Net deferred tax asset | $ | - |
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Plan of Operation
We currently have no business activities. Our plan of operations is to continue our attempts to identify and evaluate other businesses and make arrangements to acquire one that is consistent with our expertise and income needs. At the present time, we have not identified any other businesses that management believes in consistent with our expertise and income needs.
We can provide no assurance that we will be successful in acquiring another business due to our limited working capital. We anticipate that if we are successfully able to identify businesses for acquisition, we may require additional financing in order to enable us to complete any acquisition. However, we can provide no assurance that if we pursue additional financing we will receive any financing.
We currently have forecasted the expenditure of approximately $20,000 during the next six to twelve months in order to remain in compliance with the reporting requirements of the Securities Exchange Act of 1934 and to identify additional businesses for acquisition. Although our present cash reserves allow us to meet this expectation, the completion of a business acquisition in the
next 12 months may depend on our ability to obtain additional financing. If we are unable to obtain additional financing, our business plan will be significantly impaired. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds.
We do not anticipate purchasing any real property or significant equipment during the next 12 months.
At the present time we have no employees other than our sole officer and director, Mr. Sam Medley. We do not anticipate hiring any employees until such time as we are able acquire any additional businesses.
Results of Operations for the three and six months ended December 31, 2006 and 2005
We did not earn any revenues during the three or six months ended December 31, 2006, and have not earned any since our inception in September 2, 2003.
We incurred expenses in the amount of $10,165 for the three months ended December 31, 2006, compared with $86,650 for the three months ended December 31, 2005. We incurred expenses in the amount of $19,374 for the six months ended December 31, 2006, compared with $111,126 for the six months ended December 31, 2005. Our expenses for the three and six months ended December 31, 2006 and 2005 were entirely attributable to general and administrative expenses. We anticipate our operating expenses will increase as we undertake a business acquisition in the future.
We incurred a loss of $10,165 for the three months ended December 31, 2006, compared with $86,650 for the three months ended December 31, 2005. We incurred a loss of $19,374 for the six months ended December 31, 2006, compared with $111,126 for the six months ended December 31, 2005. Our losses for the three and six months ended December 31, 2006 and 2005 have been attributable entirely to operating expenses.
Liquidity and Capital Resources
As of December 31, 2006, our sole asset was cash in the amount of $250,050. As of December 31, 2006, we had current liabilities in the amount of $26,397. As a result, we had a working capital of $223,653 as of December 31, 2006. Accordingly, we currently have sufficient working capital to fund our reporting obligations, but may require additional capital to finance a business acquisition.
Off Balance Sheet Arrangements
As of December 31, 2006, there were no off balance sheet arrangements.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operations. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2006. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, Mr. Sam Medley. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2006, our disclosure controls and procedures are effective. There have been no changes in our internal controls over financial reporting during the quarter ended December 31, 2006.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC'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 Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
PART II - OTHER INFORMATION
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
None
None
No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended December 31, 2006.
None
Exhibit Number | Description of Exhibit |
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | Technology Holdings, Inc. |
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| Date: | March 16, 2007 |
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| | By: /s/ William D. Kirkland William D. Kirkland Title: Chief Executive Officer, Chief Financial Officer and Director |
