UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2008
OR
¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission file number:333-136027
NEEMA, INC.
(Exact name of small business issuer as specified in its charter)
Nevada
(State or other jurisdiction of
incorporation or organization)
20-4126700
(I.R.S. Employer
Identification Number)
#215-2211 W. 4thAvenue
Vancouver, BC
V6K 4S2
(Address including zip code of principal executive offices)
Issuer’s telephone number:(604) 731-7789
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 issuer was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yesþ No¨
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act): Yes¨ Noþ
As of July 31, 2008, the registrant had outstanding 2,205,000 shares of
its $.001 par value Common Stock.
Transitional Small Business Disclosure Format: Yesþ No¨
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of July 31, 2008 (unaudited) and April 30, 2007
Consolidated Statements of Operations for the Three Months ended July 31, 2008 (unaudited) and July 31, 2007 (unaudited)
Consolidated Statements of Cash Flows for the Three Months ended July 31, 2008 (unaudited) and July 31, 2007 (unaudited)
Condensed Notes to Unaudited Consolidated Interim Financial Statements
Item 2. Management’s Discussion and Analysis or Plan of Operation
Item 3. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 5. Other Information
Item 6. Exhibits
SIGNATURE PAGE
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| PART I. | |||||||
| ITEM 1. Financial Statements | |||||||
| NEEMA, Inc. | |||||||
| (A Development Stage Company) | |||||||
| Consolidated Balance Sheets | |||||||
| unaudited | |||||||
| July 31, 2008 | April 30, 2008 | ||||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash | 686 | 577 | |||||
| TOTAL CURRENT ASSETS | 686 | 577 | |||||
| Fixed assets, net | 16,251 | 17,402 | |||||
| Other assets | 2,307 | 2,331 | |||||
| TOTAL ASSETS | 19,244 | 20,310 | |||||
| LIABILITIES & STOCKHOLDERS' DEFICIT | |||||||
| Current liabilities | |||||||
| Due to related party | 34,091 | 27,405 | |||||
| Accrued liabilities | 12,716 | 19,653 | |||||
| TOTAL CURRENT LIABILITIES | 46,806 | 47,058 | |||||
| Stockholders' Deficit | |||||||
| Common stock | |||||||
| 25,000,000 shares authorized, $0.001 par | |||||||
| value; 2,205,000 shares issued and | |||||||
| outstanding | 2,205 | 2,205 | |||||
| Additional paid-in capital | 63,045 | 63,045 | |||||
| Other comprehensive income (loss) | 6,901 | (6,388 | ) | ||||
| Accumulated deficit during development stage | (99,713 | ) | (85,610 | ) | |||
| TOTAL STOCKHOLDERS' DEFICIT | (27,562 | ) | (26,748 | ) | |||
| TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ | 19,244 | $ | 20,310 | |||
The accompanying notes are an integral part of these financial statements.
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| NEEMA, Inc. | |||||||||
| (A Development Stage Company) | |||||||||
| Consolidated Statements of Operations | |||||||||
| For the three months | For the three months | From Inception | |||||||
| ended | ended | January 16, 2006 | |||||||
| July 31, 2008 | July 31, 2007 | through July 31, 2008 | |||||||
| RENTAL INCOME | $ | 10,767 | $ | 10,011 | $ | 52,255 | |||
| OPERATING EXPENSES | |||||||||
| Rent | 8,061 | 6,644 | 36,025 | ||||||
| General and administrative | 2,191 | 6,762 | 15,302 | ||||||
| Supplies | 49 | - | 234 | ||||||
| Professional Fees | 6,951 | 11,764 | 42,794 | ||||||
| Depreciation | 1,229 | 1,331 | 6,704 | ||||||
| Total Operating Expenses | 18,481 | 26,501 | 101,059 | ||||||
| LOSS FROM OPERATIONS | (7,715 | ) | (16,490 | ) | $ | (48,805 | ) | ||
| OTHER INCOME (EXPENSE) | |||||||||
| Interest Expense | - | 750 | (790 | ) | |||||
| Total Other Income (Expense) | - | (790 | ) | ||||||
| LOSS BEFORE INCOME TAXES | (7,715 | ) | (17,240 | ) | $ | (49,595 | ) | ||
| INCOME TAX EXPENSE | - | - | - | ||||||
| NET LOSS | $ | (7,715 | ) | $ | (17,240 | ) | $ | (49,595 | ) |
| OTHER COMPREHENSIVE INCOME/(LOSS) | |||||||||
| Foreign exchange gain (loss) | 6,901 | - | 513 | ||||||
| COMPREHENSIVE NET LOSS | $ | (814 | ) | $ | (17,240 | ) | $ | (49,082 | ) |
| NET LOSS PER SHARE, | $ | (0.00 | ) | $ | (0.01 | ) | $ | ||
| BASIC AND DILUTED | |||||||||
| WEIGHTED AVERAGE NUMBER OF | |||||||||
| COMMON SHARES OUTSTANDING | |||||||||
| BASIC AND DILUTED | 2,004,167 | 1,401,667 | |||||||
The accompanying notes are an integral part of these financial statements.
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| NEEMA, Inc. | |||||||||||
| (A Development Stage Company) | |||||||||||
| Consolidated Statements of Cash Flows | |||||||||||
| For the three months | For the three months | From Inception | |||||||||
| ended | ended | January 31, 2006 | |||||||||
| July 31, 2008 | July 31, 2007 | through July 31, 2008 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net profit/loss | $ | (7,715 | ) | $ | (17,240 | ) | $ | (93,325 | ) | ||
| Adjustment to reconcile net loss | |||||||||||
| Depreciation | 1,229 | 1,331 | 8,715 | ||||||||
| Changes in assets and liabilities: | |||||||||||
| (Increase) decrease other assets | 24 | 1,839 | (2,307 | ) | |||||||
| Increase (decrease) accrued liabilities | (6,801 | ) | 7,742 | 19,538 | |||||||
| Increase (decrease) accounts payable | - | (1,330 | ) | - | |||||||
| Increase (decrease) related party accounts payable | 6,686 | (4,204 | ) | - | |||||||
| Net cash used in operating activities | (6,577 | ) | (11,862 | ) | (67,379 | ) | |||||
| Cash flows from investing activities: | |||||||||||
| Purchase of fixed assets | - | - | (25,383 | ) | |||||||
| Net cash used in investing activities | - | - | (25,383 | ) | |||||||
| Cash flows from financing activities: | |||||||||||
| Sale of common stock | - | - | 5,000 | ||||||||
| Cash from subscription agreements | - | 10,000 | 60,250 | ||||||||
| Loan repayment | (10,767 | ) | - | (85,377 | ) | ||||||
| Proceeds from loans and advances, related party | 17,453 | 9,189 | 113,575 | ||||||||
| Net cash used in investing activities | 6,686 | 19,189 | 93,448 | ||||||||
| Net increase (decrease) in cash | 109 | 7,327 | 686 | ||||||||
| Other comprehensive income (loss) | - | - | - | ||||||||
| Cash, beginning of period | 577 | 49,918 | $ | - | |||||||
| Cash, end of period | $ | 686 | $ | 57,245 | $ | 686 | |||||
| Supplemental Cash Flow Information: | |||||||||||
| Interest expense | $ | - | $ | - | $ | - | |||||
| Income tax paid | $ | - | $ | - | $ | - | |||||
The accompanying notes are an integral part of these financial statements.
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| NEEMA, INC. |
| Condensed Notes to Consolidated Interim Financial Statements |
| July 31, 2008 |
NOTE 1 – BASIS OF PRESENTATION
The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements for the period ended April 30, 2008. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.
The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As at July 31, 2008, the Company has a working capital deficit of approximately $46,120, and an accumulated deficit of approximately, including other comprehensive income $92,812.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Cost Recognition
The Company recognizes revenue from sales when there is persuasive evidence that an arrangement exists, services have been rendered, and the seller’s price to the buyer is determinable. Revenue is recognized as it is earned.
NOTE 3 – COMMON STOCK
The Company is authorized to issue 25,000,000 shares of $0.001 par value common stock. All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.
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During the period ended April 30, 2006, the Company issued 1,000,000 shares of common stock for $5,000 cash.
In August 2006, the Company held an initial public offering of its shares of common stock. The offering was to sell a minimum of 1,200,000 up to 3,800,000 shares of $0.001 par value common stock at $0.05 per share. This offering was closed on July 19, 2007.
For the year ended April 30, 2007, the Company received funds in the amount of $50,250 for the purchase of 1,005,000 common shares at $0.05 per share, which were issued in July 2007. During the period ended July 31, 2007, the Company received an additional $10,000 for the purchase of 200,000 common shares at $0.05. In the year ended April 30, 2008, 1,205,000 shares were issued for the proceeds received totaling $60,250.
NOTE 4 – RELATED PARTIES
During the year ended April 30, 2008 the Company repaid its officers $60,986 of the amounts due. Its officers advanced the Company additional funds in the amount of $6,500 and paid $17,840 in expenses on behalf of the Company during the year ended April 30, 2008.
During the quarter ended July 31, 2008, the Company’s officers paid $17,453 in expenses on behalf of the company and were repaid a total $10,767.
NOTE 5 – SUBSEQUENT EVENTS
On September 10, 2008 the Board of directors unanimously passed a resolution increasing the size of the Board of Directors from four to five, and determined that in the best interest of the Company and its shareholders to fill the Board vacancy by appointing David Brow as Director.
On September 11, 2008, Nigel Liang, Nicholas Wu, Audra Yap, and Eugene Liang resigned as Directors, Officers and/or any other positions currently held in this Company effective immediately.
On September 11, 2008, the Board of Directors unanimously passed a resolution to amend the bylaws of the Company to reduce the minimum size of the Board of Directors from two to one.
On September 11, 2008, David Brow the Board of directors unanimously passed a resolution appointing David Brow Chief Executive Officer, and Chief Financial Officer.
On September 11, 2008 David Brow, in consideration of $18,500, agreed to purchase 400,000 shares of the Company's issued and outstanding stock from Nigel Liang, 400,000 shares of the Company's issued and outstanding stock from Nicholas Wu, and 200,000 shares of the Company's issued and outstanding stock from Audra Yap.
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying condensed notes filed as part of this report.
For further information refer to the financial statements and notes for the year ended April 30, 2008 included in our 10-KSB filed on July 30, 2008.
Forward-Looking Statements
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as information contained elsewhere in this report, contain statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements include statements regarding the intent, belief or current expectations of us, our directors or our officers with respect to, among other things: anticipated financial or operating results, financial projections, business prospects, future product performance and other matters that are not historical facts. The success of our business operations is dependent on factors such as the impact of competitive products, product development, commercialization and technology difficulties, the results of financing efforts and the effectiveness of our marketing strategies, general competitive and economic conditions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected in the forward-looking statements as a result of various factors.
Results of Operations
Comparison of the three months ended July 31, 2008 and July 31, 2007.
Revenues
Our revenues come directly from the rental of our facility to practitioners with whom True Health Studio has membership agreements. Revenues are collected on a cash basis, however, recognized when earnings process is complete. In the quarter ended July 31, 2008, we earned $10,767 in rental income, an 8% increase over rental income of $10,011 for the same period in 2007.
Rent
True Health Studio currently leases premises at a rate of approximately $2,430 a month.
General and Administrative
We incurred $2,191 in general and administrative expenses in the three months ended July 31, 2008, a decrease of 67% from $6,644 in the same period in 2007, during which we recorded approximately $6,900 in transactional foreign exchange loss.
Professional Fees
We incurred $6,951 in professional fees in the three months ended July 31, 2008, a decrease of 41% from $11,764 in the same period ended July 31, 2007.
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Net Income (Loss)
We incurred a loss of $7,715 for the three months ended July 31, 2008 compared to a loss of $17,240 for the three months ended July 31, 2007. Our revenues remained consistent between the two comparative quarters, while our operating expenses decreased by 30%, which led to a smaller loss position.
Liquidity and Capital Resources
As of July 31, 2008, we had a working capital deficit of $46,120.
Since inception, we financed operations through short term related party loans. To date, we have borrowed approximately $114,000 from our officers of which approximately $85,000 has been repaid. Such funds have been used as working capital.
While we continue to work towards 100% capacity, we feel that current cash on hand is insufficient to satisfy cash requirements. If we are unable to continue to develop and implement a profitable business plan, we will be required to seek additional avenues to obtain funds necessary to sustain operations.
ITEM 3. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2008. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based on their evaluation of our disclosure controls and procedures as of July 31, 2008 we concluded that such disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
Management’s Report on Internal Control Over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed, under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.
Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of July 31, 2008, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of July 31, 2008 was effective.
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Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States; (2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) unauthorized acquisitions, use, or disposition of the Company’s assets that could have a material affect on the Company’s financial statements are prevented or timely detected.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparations and presentations. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control Over Financial Reporting
During our most recent fiscal quarter, there has not occurred any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits
| Exhibit No. | Document Description. |
| 31.1 | Certification of the Chief Executive Officer and Chief Financial |
| Officer pursuant to Section 302 of the Sarbanes-Oxley Act | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act |
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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.
NEEMA, INC.
By: /s/ David Brow
David Brow
Chief Executive Officer and Chief Financial Officer
Dated: September 15, 2008
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EXHIBIT INDEX
| Exhibit No. | Document Description. |
| 31.1 | Certification of the Chief Executive Officer and Chief Financial |
| Officer pursuant to Section 302 of the Sarbanes-Oxley Act | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act |
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