UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| | | |
| þ | | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2008
OR
| | | |
| o | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________
Commission file number 0-52202
____________________________
ANASAZI CAPITAL CORP.
(Exact name of registrant as specified in its charter)
| Florida | | 20-5223382 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) |
18101 Von Karman Avenue, Suite 330 Irvine, California | | 92612 |
| (Address of principal executive offices) | | (Zip Code) |
(949) 646-8370
(Issuer’s telephone number, including area code)
Not applicable
(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 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 þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company x
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.
| Class | | Outstanding at November 1, 2008 |
| | | |
| Common Stock, no par value per share | | 5,000,000 shares |
ANASAZI CAPITAL CORP.
TABLE OF CONTENTS
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Item 1. Financial Statements
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| (A DEVELOPMENT STAGE COMPANY) | | | |
| BALANCE SHEETS | | | |
| | | | |
| | | | | | | |
| | | (unaudited) | | | (audited) | |
| ASSETS | | | |
| | | | | | | |
| CURRENT ASSETS: | | | | | | |
| Cash & equivalents | | $ | 494 | | | $ | - | |
| | | | | | | | | |
| Total Assets | | $ | 494 | | | $ | - | |
| | | | | | | | | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' DEFICIENCY | | | | |
| | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | |
| Accounts payable & accrued expenses | | $ | 25,831 | | | $ | 4,880 | |
| Loan from shareholder | | | 1,500 | | | | - | |
| | | | | | | | | |
| Total Liabilities | | | 27,331 | | | | 4,880 | |
| | | | | | | | | |
| SHAREHOLDERS' DEFICIENCY | | | | | | | | |
| Common stock (no par value, 100,000,000 shares authorized; | | | | | | | | |
| 5,000,000 issued and outstanding) | | | 5,000 | | | | 5,000 | |
| Common stock warrants | | | 6,803 | | | | 6,803 | |
| Deficit accumulated during the development stage | | | (38,640 | ) | | | (16,683 | ) |
| | | $ | (26,837 | ) | | $ | (4,880 | ) |
| | | | | | | | | |
| Total Liabilities and Shareholders' Deficiency | | $ | 494 | | | $ | - | |
| | | | | | | | | |
| ANASAZI CAPITAL CORP. |
| (A DEVELOPMENT STAGE COMPANY) |
|
| | | | |
| (Unaudited) |
| | | | | | | | | | | | | | | Cumulative from | |
| | | For the three months | | | For the three months | | | For the nine months | | | For the nine months | | | July 17, 2006 (Inception) | |
| | | ended September 30, 2008 | | | ended September 30, 2007 | | | ended September 30, 2008 | | | ended September 30, 2007 | | | through September 30, 2008 | |
| | | | | | | | | | | | | | | | |
| Revenue: | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | | | | | |
| General and Administrative | | | 1,007 | | | | 1,094 | | | | 21,958 | | | | 8,276 | | | | 38,640 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Expenses | | | (1,007 | ) | | | (1,094 | ) | | | (21,958 | ) | | | (8,276 | ) | | | (38,640 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net (loss) before Income Taxes | | | (1,007 | ) | | | (1,094 | ) | | | (21,958 | ) | | | (8,276 | ) | | | (38,640 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Income Tax Expense | | | - | | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Net (loss) | | $ | (1,007 | ) | | $ | (1,094 | ) | | $ | (21,958 | ) | | $ | (8,276 | ) | | $ | (38,640 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Basic and diluted net loss per share | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average number of shares outstanding | | | 5,000,000 | | | | 5,000,000 | | | | 5,000,000 | | | | 5,000,000 | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| ANASAZI CAPITAL CORP. |
| (A DEVELOPMENT STAGE COMPANY) |
|
| | | |
| (Unaudited) |
| | | | | | | | | Cumulative from | |
| | | For the nine months | | | For the nine months | | | July 17, 2006 (Inception) | |
| | | ended September 30, 2008 | | | ended September 30, 2007 | | | through September 30, 2008 | |
| OPERATING ACTIVITIES: | | | | | | | | | |
| Net loss | | $ | (21,958 | ) | | $ | (10,562 | ) | | $ | (38,640 | ) |
| Common stock warrants issued for debt | | | - | | | | 6,803 | | | | 6,803 | |
| Increase (decrease) in accounts payable | | | 20,952 | | | | (1,241 | ) | | | 25,831 | |
| | | | | | | | | | | | | |
| Net cash used in operating activities | | | (1,006 | ) | | | (5,000 | ) | | | (6,006 | ) |
| | | | | | | | | | | | | |
| FINANCING ACTIVITIES: | | | | | | | | | | | | |
| Proceeds from loan from shareholder | | | 1,500 | | | | - | | | | 1,500 | |
| Proceeds from issuance of common stock | | | - | | | | 5,000 | | | | 5,000 | |
| | | | | | | | | | | | | |
| Net cash provided by financing activities | | | 1,500 | | | | 5,000 | | | | 6,500 | |
| | | | | | | | | | | | | |
| NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS | | | 494 | | | | - | | | | 494 | |
| | | | | | | | | | | | | |
| CASH & CASH EQUIVALENTS, BEGINNING BALANCE | | | - | | | | 5,000 | | | | - | |
| | | | | | | | | | | | | |
| CASH & CASH EQUIVALENTS, ENDING BALANCE | | $ | 494 | | | $ | - | | | $ | 494 | |
| | | | | | | | | | | | | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | | | | | |
| Taxes paid | | $ | - | | | $ | - | | | $ | - | |
| Interest paid | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | |
| NON-CASH ACTIVITIES | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | |
ANASAZI CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2008
Note 1 – Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for the presentation of interim financial information, but do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The audited financial statements for the period July 17, 2006 (Inception) through December 31, 2007 and for the year ended December 31, 2007 were filed on February 22, 2008 with the Securities and Exchange Commission and are hereby referenced. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2008 and for the period ended July 17, 2006 (Inception) through September 30, 2008 are not necessarily indicative of the results that may be expected for the year ended December 31, 2008.
Note 2 - Accounting Policies and Operations
Organization
Anasazi Capital Corp. (the “Company”), a development stage company, was incorporated in Florida on July 17, 2006. The Company intends to serve as a vehicle to effect an asset acquisition, merger, exchange of capital stock or other type of business combination with a domestic or foreign business. At November 1, 2008, the Company had not yet commenced any formal business operations and all activity to date has related to the Company formation, capital stock issuance and professional fees with regard to filings with the Securities and Exchange Commission and identification of businesses. The Company’s fiscal year ends on December 31st.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents.
Earnings Per Share
The Company computes earnings per share in accordance with Statement of Accounting Standards No. 128, “Earnings per Share” (“SFAS No. 128”). Under the provisions of SFAS No. 128, basic earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potentially dilutive common shares outstanding during the period. There were no potentially dilutive common shares outstanding during the period.
Use of Estimates
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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Income Taxes
The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Fair Value of Financial Instruments
The Company considers that the carrying amount of financial instruments, including accounts payable, approximates fair value because of the short maturity of these instruments.
Recent Accounting Pronouncements
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.
In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133. This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of SFAS No. 161, but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows.
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS No. 123 (R), Share-Based Payment. In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staff believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behavior may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently uses the simplified method for “plain vanilla” share options and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51. This statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this statement was issued, limited guidance existed for reporting noncontrolling interests. As a result, considerable diversity in practice existed. So-called minority interests were reported in the consolidated statement of financial position as liabilities or in the mezzanine section between liabilities and equity. This statement improves comparability by eliminating that diversity. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this statement is the same as that of the related Statement 141 (revised 2007). The Company will adopt this Statement beginning January 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business Combinations. This Statement replaces FASB Statement No. 141, Business Combinations, but retains the fundamental requirements in Statement 141. This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this statement is the same as that of the related FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements. The Company will adopt this statement beginning on January 1, 2008. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities—Including an Amendment of FASB Statement No. 115. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This option is available to all entities. Most of the provisions in FAS 159 are elective; however, an amendment to FAS 115 Accounting for Certain Investments in Debt and Equity Securities applies to all entities with available for sale or trading securities. Some requirements apply differently to entities that do not report net income. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS No. 157 Fair Value Measurements. The Company will adopt SFAS No. 159 for the year ended December 31, 2007. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this statement does not require any new fair value measurements. However, for some entities, the application of this statement will change current practice. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company will adopt this statement for the year ended December 31, 2006, and it is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
In June 2006, the FASB issued Interpretation No. 48 (“FIN No. 48”), Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. The Interpretation provides a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Under FIN No. 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. FIN No. 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN No. 48 is effective for us for the year ended December 31, 2006. We do not expect FIN No. 48 to have a material impact on our financial statements.
In June 2006, the FASB ratified the Emerging Issues Task Force (“EITF”) consensus on EITF Issue No. 06-2, “Accounting for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement No. 43.” EITF Issue No. 06-2 requires companies to accrue the costs of compensated absences under a sabbatical or similar benefit arrangement over the requisite service period. EITF Issue No. 06-2 is effective for us for the year ended December 31, 2006. The cumulative effect of the application of this consensus on prior period results should be recognized through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. Elective retrospective application is also permitted. We do not expect the application of this consensus to have a material impact on our financial statements.
Staff Accounting Bulletin (“SAB”) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Current Year Misstatements. SAB No. 108 requires companies to quantify misstatements using both a balance sheet (iron curtain) and an income statement (rollover) approach to evaluate whether either approach results in an error that is material in light of relevant quantitative and qualitative factors, and provides for a one-time cumulative effect transition adjustment. This statement is effective for us for the year ended December 31, 2006. SAB No. 108 will not have an impact on our financial statements.
Going Concern
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management’s Plan to Continue as a Going Concern
The Company has met its historical working capital requirements from the sale of its capital shares. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) obtaining capital from the sale of the equity, (2) loans from U.S.A. Capital Management Group, Inc. to meet its general and administrative expenses, and (3) seeking out and completing a merger with an existing operating company. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. In order to minimize the financial burden on the Company, U.S.A. Capital Management Group, Inc., the Company’s majority shareholder, has agreed to provide non-interest bearing demand loans to the Company to pay the Company’s annual audit fees, filing costs, legal fees and other costs as long as the Board of Directors of the Company and U.S.A. Capital Management Group, Inc. deem it necessary. The Company will account for each such payment as a demand loan and, accordingly, be recorded as a current liability on the Company’s books. There can be no assurance that such financial support shall be ongoing or available on terms or conditions acceptable to the Company.
Development Stage Risk
Since its inception, the Company has been dependent upon the receipt of capital investment to fund its continuing activities. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company's business plan will be successfully executed. Our ability to execute our business plan will depend on our ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that sufficient financing will be obtained. Further, we cannot give any assurance that we will generate substantial revenues or that our business operations will prove to be profitable.
Note 3 – Shareholders’ Equity
On July 21, 2006, the Company issued 5,000,000 shares of common stock to its initial shareholder in exchange for $5,000 in cash.
On August 14, 2007, the Company issued warrants to purchase 262,800 shares of its common stock to a consultant to the Company, Law Offices of Michael H. Hoffman, P.A., in exchange for services and reimbursement of expenses in the amount of $6,803 pursuant to a Warrant Agreement. These warrants have certain rights identified in the Warrant Agreement, including an exercise price of $.01 per share, a term of five years, a cashless exercise feature, if the strike price of the warrant it exercises is lower than the public market price of a share of the Company’s common stock, a put feature requiring the Company to purchase the warrants if the shares underlying the warrants are not listed for quotation on a recognized national securities exchange, the Nasdaq National Market (or a similar national quotation system), the over-the-counter electronic bulletin board or the Pink Sheets (each a “Public Market”), and the warrants have anti-dilution protection, such that the holder shall continue to have the same percentage of ownership and the same percentage of voting rights of the class of the Company’s common stock regardless whether the Company or its successors or its assigns may thereafter increase or decrease the authorized number of shares of the Company’s common stock or increase or decrease the number of shares issued and outstanding. The anti-dilution rights will continue in effect until two years from the date that all shares of the Company’s common stock then purchasable under the warrant are registered under the Securities Act of 1933, as amended (the “Securities Act”). The non-dilution rights will not attach to any shares sold in open market transactions. The warrants have no market at the present time, because they are not exercisable until the Company’s shares of common stock are listed on a Public Market.
Note - - 4 Income Taxes
Deferred income taxes reflect the net income tax effect of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and amounts used for income taxes. The Company’s deferred income tax assets and liabilities consist of the following:
| Net operating loss carryforward | | $ | -- | |
| | | | | |
| Deferred tax asset | | | 340 | |
| Valuation allowance | | | (340 | ) |
| | | | | |
| Net Deferred tax asset | | $ | -- | |
Net operating loss carryforwards totaled approximately $38,640 at September 30, 2008. The net operating loss carryforwards will begin to expire in the year 2026 if not utilized. After consideration of all the evidence, both positive and negative, management has recorded a valuation allowance at September 30, 2008 due to the doubtfulness of realizing the deferred tax assets.
| Tax expense (benefit) at Federal rate (34%) | | $ | (680 | ) |
| Federal bracket adjustment | | | 340 | |
| State income tax, net of Federal benefit | | | -- | |
| | | | | |
| Change in valuation allowance | | | 340 | |
| | | | | |
| Net income tax (benefit) allowance | | $ | -- | |
The reconciliation of the income tax computed at the U.S. Federal statutory rate to income tax expense for the period September 30, 2008:
Utilization of the Company's net operating loss carryforwards are limited based on changes in ownership as defined in Internal Revenue Code Section 382.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
Anasazi Capital Corp., a Florida corporation (the “Company”, “us”, “we” and “our”), is a development stage company conducting no business operations, other than our efforts to effect a business combination with a target business that desires to utilize our status as a reporting corporation under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which we consider to have significant growth potential. To date, we have neither engaged in any operations nor generated any revenue. We have not generated any cash flows from operations. We cannot predict to what extent our liquidity and capital resources will be diminished prior to the consummation of a business combination or whether our capital will be further depleted by the operating losses, if any, of the target business with which we may effectuate a business combination. The continuation of our business is dependent upon our ability to obtain adequate financing arrangements, effectuate a business combination and, ultimately, engage in future profitable operations.
Presently, we are not in a position to meet our cash requirements for the next 12 months, as we do not have any cash. From inception, our shareholders have committed to make loans to us on an as needed basis. There are no further commitments, agreements or understandings of any kind with respect to any loans or advances to be made on our behalf.
Prior to the occurrence of a business combination, we may be required to raise capital through the sale or issuance of additional securities or obtain borrowings or advances from third party sources in order to ensure that we can pay our operating expenses. It is also possible that a business combination might not occur during the next 12 months, if at all. In the event we are unable to pay our operating expenses prior to the effectuation of a business combination, we may cease operations and a business combination may not occur.
Critical Accounting Policies and Estimates
A summary of significant accounting policies is provided in Note 1 to our financial statements included in our initial filing on Form 10-K with the Securities and Exchange Commission. Our sole officer and director believes that the application of these policies on a consistent basis enables the Company to provide useful and reliable financial information about the Company's operating results and financial condition.
The preparation of financial statements in conformity with generally accepted accounting principles requires our sole officer and director 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 will differ from those estimates.
Plan of Operation
The Company was incorporated in Florida on July 17, 2006. We intend to serve as a vehicle to effect an acquisition, merger, exchange of capital stock or other type of business combination with a domestic or foreign business. Since our inception, we had not commenced any formal business operations and all activity to date has related to the Company’s formation, capital stock issuance, professional fees with regard to the subject matter of the filings with the Securities and Exchange Commission and identification of businesses.
We have not utilized any derivative financial instruments such as futures contracts, options and swaps, forward foreign exchange contracts or interest rate swaps and futures. We believe that adequate controls are in place to monitor any hedging activities. We do not currently have any sales or own assets and operate facilities in countries outside the United States and, consequently, we are not effected by foreign currency fluctuations or exchange rate changes. Overall, we believe that our exposure to interest rate risk and foreign currency exchange rate changes is not material to our financial condition or results of operations.
Item 4. Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file 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, and that such information is accumulated and communicated to our management, including our President and Treasurer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our President and Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of our first fiscal quarter covered by this report. Based on the foregoing, our President and Treasurer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.
There has been no change in our internal controls over financial reporting during our first fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
| | · | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
| | · | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
| | · | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2008. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.
Based on the assessment performed, management has concluded that the Company’s internal control over financial reporting is effective and provides reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements as of September 30, 2008 in accordance with generally accepted accounting principles. Further, management has not identified any material weaknesses in internal control over financial reporting as of September 30, 2008.
This quarterly report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
/s/ Paul Garcia
CEO, President, Secretary, Treasurer and Director
Item 6. Exhibits
(a) Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | ANASAZI CAPITAL CORP | |
| | | | |
| DATE: November 6, 2008 | By: | /s/ Paul Garcia | |
| | | Paul Garcia | |
| | | President, Secretary and Treasurer (Principal Accounting Officer and Authorized Officer) | |
| | | | |
Anasazi Capital Corp.
Index to Exhibits
| Exhibit Number | Description |
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