U.S. SECURITIES AND EXCHANGE COMMISSION
| Washington, D.C. 20549 FORM 10-Q/A |
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the quarterly period ended February 28, 2009 |
¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
| For the transition period from to Commission file number 000-53156 ________________ |
QUADRA PROJECTS INC.
(Exact name of small business issuer as specified in its charter)
________________
NEVADA | 45-0588917 |
| (State or other jurisdiction of | IRS employer |
incorporation or organization) | (Identification No.) |
| 6130 Elton Avenue, Las Vegas, NV, 89107 (Address of principal executive offices) |
| 1-888-597-8899 (Issuer’s telephone number) |
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. Yesx No¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the 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 | Smaller reporting |
| filer¨ | companyx | ||
| (Do not check if a smaller | |||
| reporting company) |
As of February 28, 2009, 30,500,000 shares of the issuer’s Common Stock, $ 0.001 par value per share, were outstanding.
Transitional Small Business Disclosure Format Yes¨ Nox
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Form 10Q for February 28, 2009 originally filed with the SEC on April 14, 2009 has been amended to correct the valuation of 18,000,000 common shares, as adjusted for subsequent stock splits that were issued to the former President on June 30, 2007. The value initially assigned to those shares had been initially capitalized as organization costs and has been expensed in the amendment. The previously recorded amortization expense has been eliminated.
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Item 1. FINANCIAL STATEMENTS
QUADRA PROJECTS INC. (Restated) |
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| QUADRA PROJECTS INC. | ||
| (A Development Stage Company) | ||
| BALANCE SHEETS | ||
| (Restated) | ||
| February | November 30, | |
| 28, 2009 | 2008 | |
| ASSETS | (Unaudited) | (Audited) |
| Current Assets: | ||
| Cash | $ 7,271 | $ 5,384 |
| Total current assets | 7,271 | 5,384 |
| Total Assets | $ 7,271 | $ 5,384 |
| LIABILITIES AND SHAREHOLDER’S DEFICIT | ||
| Liabilities: | ||
| Accrued expenses | $ 8,000 | $ 6,000 |
| Loans payable | 6,000 | - |
| Due to shareholder | 5,000 | - |
| Total Liabilities | 19,000 | 6,000 |
| Shareholders’ Deficit: | ||
| Common stock: authorized 750,000,000 shares of $0.001 par | 30,500 | 30,500 |
| value; issued and outstanding, 30,500,000 shares | ||
| Deficit of par value | (6,100) | (6,100) |
| Accumulated deficit | (36,129) | (25,016) |
| Total Shareholder’s Deficit | (11,729) | (616) |
| Total Liabilities and Shareholders’ Deficit | $ 7,271 | $ 5,384 |
| These accompanying notes are an integral part of these financial statements. | ||
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QUADRA PROJECTS INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS AND
DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE
FOR THE THREE MONTH PERIOD ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008 AND
FOR THE PERIOD JUNE 7, 2007 TOFEBRUARY 28, 2009
(Unaudited)
(Restated)
| June 7, 2007 (Date | |||
| of Inception of | |||
| Development | |||
| Three Month Period Ended | Stage) to | ||
| February 28, | February29, | February 28, | |
| 2009 | 2008 | 2009 | |
| Revenue | $ - | $ - | $ - |
| Expenses: | |||
| Administrative Expenses | 11,113 | 4,024 | 36,129 |
| Net loss | $ (11,113) | $ (4,024) | $ (36,129) |
| Loss Per Share - | |||
| Basic and Diluted | $ - | $ - | $ - |
| Weighted average number of shares | 30,500,000 | 30,500,000 | |
| outstanding | |||
| Included within expenses are the following: | |||
| Professional fees | $ 11,105 | $ 4,000 | |
| Other | 8 | 24 | |
| $ 11,113 | $ 4,024 | ||
These accompanying notes are an integral part of these financial statements.
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QUADRA PROJECTS INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED FEBRUARY 28, 2009
(Unaudited)
(Restated)
| June 7, 2007 | |||
| (Date of | |||
| Inception of | |||
| Three Month | Three Month | Development | |
| Period Ended | Period Ended | Stage) To | |
| February 28, | February 29, | February 28, | |
| 2009 | 2008 | 2009 | |
| CASH FLOWS FROM OPERATIONS: | |||
| Net loss | $ (11,113) | $ (4,024) | $ (36,129) |
| Reconciliation of net loss to cash flows from operating activities: | |||
| Stock compensation expense | - | - | 14,400 |
| Changes in assets and liabilities | |||
| Accrued expenses | 2,000 | 4,000 | 8,000 |
| Net Cash Consumed by Operating Activities | (9,113) | (24) | (13,729) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||
| Proceeds from shareholder loans | 6,000 | - | 6,000 |
| Proceeds from affiliate loans | 5,000 | - | 5,000 |
| Proceeds of sales of common stock | - | - | 10,000 |
| Net Cash Provided by Financing Activities | 11,000 | - | 21,000 |
| Net increase (decrease) in cash | 1,887 | (24) | 7,271 |
| Cash balance, beginning of period | 5,384 | 9,913 | - |
| Cash balance, end of period | $ 7,271 | $9,889 | $ 7,271 |
| These accompanying notes are an integral part of these financial statements. |
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| QUADRA PROJECTS INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS FEBRUAY 28, 2009 |
| 1. BASIS OF PRESENTATION |
The unaudited interim financial statements of Quadra Projects Inc. (“the Company”) as of February 28, 2009 and for the three month periods ended February 28, 2009 and February 29, 2008 and the period June 7, 2007 (date of inception) to February 28, 2009, have been prepared in accordance with generally accepted accounting principles. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of such periods. The results of operations for the three month period ended February 28, 2009 are not necessarily indicative of the results to be expected for the full fiscal year ending November 30, 2009.
Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended November 30, 2008.
| 2. RESTATEMENTS |
On August 12, 2009 the Company determined that a restatement of its financial statements for the year ended November 30, 2008 was necessary to properly value the common shares issued to the Company President on June 30, 2007 as compensation for the organization and formation of the Company. These shares were previously been recorded as an asset and amortized on a straight line basis over a period of 5 years. They were more appropriately recorded as stock compensation expense as part of the restatement for November 30, 2008. The restatement for the Statements of Operations for the three month periods ended February 28, 2009 and February 29, 2008 relates to the reversal of previously recorded amortization expense. The restatement of the balance sheet includes the effects of adjustments included in the amendment for November 30, 2008.
The effect of these restatements on the Company’s previously issued statements is detailed below:
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| QUADRA PROJECTS INC. | |||||
| (A Development Stage Company) | |||||
| NOTES TO FINANCIAL STATEMENTS | |||||
| FEBRUARY 28, 2009 | |||||
| 2. | RESTATEMENTS, CONTINUED | ||||
| Balance sheet February 28, 2009 | |||||
| Previously | As | ||||
| Reported | Adjustments | Restated | |||
| Organizational expense | $ 1,200 | $ (1,200) | (1) | $ - | |
| Total assets | $ 8,471 | $ (1,200) | $ 7,271 | ||
| Par value of stock | 15,250 | 15,250 | (3) | 30,500 | |
| Deficit of par value | (3,450) | (2,650) | (1,2,3) | (6,100) | |
| Deficit accumulated during development stage | ( 22,329) | (13,800) | (1,2) | ( 36,129) | |
| Shareholder’s deficit | (10,529) | (1,200) | (11,729) | ||
| Total assets and liabilities | $ 8,471 | $ (1,200) | $ 7,271 | ||
| Statement of Operations | |||||
| Three Month Period Ended February 28, 2009 | |||||
| Previously | As | ||||
| Reported | Adjustments | Restated | |||
| Expenses | $ 11,203 | $ (90) | (1) | $ 11,113 | |
| Net Loss | $ (11,203) | $ 90 | $ (11,113) | ||
| Statement of Operations | |||||
| Three Month Period Ended February 29, 2008 | |||||
| Previously | As | ||||
| Reported | Adjustments | Restated | |||
| Expenses | $ 4,114 | $ (90) | (1) | $ 4,024 | |
| Net Loss | $ ( 4,114) | $ 90 | $ ( 4,024) | ||
| Statement of Operations | |||||
| June 7, 2007 (date of inception of Development Stage) to February 28, 2009 | |||||
| Previously | As | ||||
| Reported | Adjustments | Restated | |||
| Expenses | $ 22,329 | $ 13,800 | (1,2) | $ 36,129 | |
| Net Loss | $ ( 22,329) | $ (13,800) | $ ( 36,129) | ||
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| QUADRA PROJECTS INC. | |||||
| (A Development Stage Company) | |||||
| NOTES TO FINANCIAL STATEMENTS | |||||
| FEBRUARY 28, 2009 | |||||
| 2. | RESTATEMENTS, CONTINUED | ||||
| Statement of Cash Flows | |||||
| Three Month Period Ended February 28, 2009 | |||||
| Previously | As | ||||
| Reported | Adjustments | Restated | |||
| Net loss | $ (11,203) | $ 90 | $ (11,113) | ||
| Amortization expense | 90 | (90) | (1) | - | |
| Cash consumed in operating activities | $ (9,113) | $ - | $ (9,113) | ||
| Statement of Cash Flows | |||||
| Three Month Period Ended February 29, 2008 | |||||
| Previously | As | ||||
| Reported | Adjustments | Restated | |||
| Net loss | $ (4,114) | $ 90 | $ (4,024) | ||
| Amortization expense | 90 | (90) | - | ||
| Cash consumed in operating activities | $ (24) | $ - | $ (24) | ||
| Statement of Cash Flows | |||||
| June 7, 2007 ( date of inception of development stage) to February 28, 2009 | |||||
| Previously | As | ||||
| Reported | Adjustments | Restated | |||
| Net loss | $ (22,329) | $ (13,800) | $ (36,129) | ||
| Stock compensation expense | - | 14,400 | (2) | 14,400 | |
| Amortization expense | 600 | (600) | (1) | - | |
| Cash consumed in operating activities | $ (13,729) | $ - | $ (13,729) | ||
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QUADRA PROJECTS INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2009
| 2. RESTATEMENTS, CONTINUED Explanations for adjustments: |
| (1) | The organization cost was originally recorded as an asset ($1,800) and amortized. The accumulated amortization ($ 600) has been eliminated. |
| (2) | The shares issued for services in the period ended November 30, 2007 was increased from $1,800 to $ 14,400. |
| (3) | To reflect the 2 for 1 stock split subsequently announced.Please refer to Note 4. |
3. SUPPLEMENTAL CASH FLOWS INFORMATION
There was no cash paid for either interest or income taxes during either of the periods presented. There were no non cash investing or financing activities during either of the periods presented.
| 4. STOCK SPLITS |
The accompanying balance sheet for February 28, 2009 and November 30, 2008 has been adjusted for the 2 for 1 stock split for which the Company filed notice with the Secretary of State of Nevada on April 16, 2009. The profit and loss statements for the three month periods ended February 28, 2009 and February 29, 2008 have been adjusted for both a prior 5 for 1 stock split and the 2 for 1 stock split previously mentioned.
| 5. CONTINGENCY The Company does not carry insurance. 6. GOING CONCERN |
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company has experienced losses and does not presently have sufficient resources to accomplish its objectives during the next twelve months. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation. The Company’s present plans, the realization of which cannot be assured, are to raise necessary funds through shareholder loans
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things:
| · | general economic and business conditions, both nationally and in our markets, |
| · | our expectations and estimates concerning future financial performance, financing plans and the impact of competition, |
| · | our ability to implement our growth strategy, |
| · | anticipated trends in our business, |
| · | advances in technologies, and |
| · | other risk factors set forth herein. |
In addition, in this report, we use words such as "anticipates," "believes," "plans," "expects," "future," "intends," and similar expressions to identify forward-looking statements.
Quadra Projects Inc. (or the “Company”) undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this prospectus. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.
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As of the date of filing of this amended 10Q for the quarter ended February 28, 2009, the Company has ceased operations relating to distribution of the electronic non invasive acupuncture pen. Upon further market research, it was determined that pursuing the marketing and sale of this product was not as profitable as previously projected. On April 30, 2009, the Company acquired Energy Conversion and Waste Disposal Technology and has established Joint Ventures and Distribution agreements with various parties. The Company intends on pursuing its efforts in the Energy Conversion and Waste Disposal sector as its principle business activity indefinitely.
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| History |
We, Quadra Projects Inc. (the “Company”), are a distributor of an electronic non invasive acupuncture pen (the “Pen”) as an alternative to traditional needles used during acupuncture treatments. We have a distribution agreement which entitles us to market and sell the Pen on an exclusive basis throughout Asia (with the exception of China), Middle East and the Caribbean (collectively referred to as the “Region”). We obtained our distribution rights through United Overseas Products Pty., Ltd, (“United”) a Belize incorporated company based in Taiwan. We entered into this distribution agreement on November 30, 2007 for a period of 10 years and have ancillary rights to the patent held in China through United.
As an added incentive to enter into the Distribution Agreement with United, we obtained sample inventory of a dozen Pens at no charge for the purposes of conducting market research and outsourcing target markets and appointment of sub-distributors.
There are no terms which determine whether the distribution agreement will or will not be renewed; however, the distribution agreement may be terminated at any time if either party commits a material breach of this
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Agreement and fails to correct such default within 30 days from mailing of a notice to do so by the other party, or both parties consent in writing to have the agreement terminated.
Our operations are based in Kaohsiung, Taiwan. We commenced operations in June, 2007.
We intend on establishing a local network of sub distributors wherein we are able to monitor the performance of each sub distributor. We intend on establishing a branch office or with appointed sales managers to oversee operations in each new location where we appoint sub distributors.
We expect initial sales to be generated mostly in Asia and the Caribbean through appointment of sub distributors and internet sales. To date, we have not generated sales in any other location nor have we marketed the Pen in any other location. We also have not made any sales to date.
On January 31, 2008, the Company entered into an exclusive sub distribution agreement with Body Language Ltd. (“BLL”), a Jamaican company for exclusive distribution in the Caribbean. As of to date, BLL has not fulfilled minimum order quotas and therefore the agreement is now under a non exclusive basis. Please refer to Exhibit 10.3.
Our principal business office is located at the 14th floor, No. 68 Yucheng Road, Sanmin District, Kaohsiung City, 807, Taiwan. Our administrative office for North American investor relations and U.S. regulatory reporting is located at Suite 200, 245 East Liberty Street, Reno, Nevada, 89501.
| The market in which we operate Our target markets are as follows: |
| · | Certified acupuncture practitioners |
| · | Patients receiving acupuncture treatments |
| · | Patients seeking alternative treatments |
| Marketing Strategy |
We will embark on an extensive advertising campaign designed to create awareness of our product. Media advertising will include Trade Journals. In addition we will use direct mail advertising and establish direct contact with consumers through Trade Shows and other exhibition opportunities. We will engage sub distributors who will be our link to the trade and the end user. The main focus will be our commitment to supplying a quality product at an affordable price.
Any defective Pen will be replaced at no cost to the consumer.
| Internet sales: |
We intend to market our website through online community websites and by advertising in health trade magazines. The more traffic our website receives, the higher our website is placed in rankings on various search engines.
We are in the process of preparing promotional materials and we expect to launch the marketing of our website within the next 6 months.
| Sub Distributors: |
Efforts are underway to market the product in Asia and the Middle East through the appointment of sub-distributors. We are currently in negotiations with interested parties; however, we have not yet finalized any distribution agreements in these areas. Our only sub distributor is BLL.
Our efforts to appoint sub distributors consist of contacting health supplement suppliers or companies in the business of importing/exporting. We do not have any history of contacts in these industries and all our
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marketing efforts in securing potential sub distributors will be obtained through our own market research through the internet, trade magazines, and attendance at trade shows.
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| Results of Operations |
Three month periods ended February 28, 2009 and February 29, 2008.
| Revenues |
We did not generate any revenues for the three month periods ended February 28, 2009 and February 29, 2008. To date we have not signed any further distribution agreements nor have we generated sales from BLL.
Until we have launched a marketing plan to expose our website to various avenues such as health trade magazines, online communities specific to health/herbal products, etc, we expect all of our sales to be generated through BLL and other sub distributors when they are appointed.
| Cost of sales |
There were no costs of goods sold as we received a sample of inventory from United as mentioned above. This was a one time benefit and we do not expect to receive this benefit when this supply has been depleted.
| Expenses |
Expenses for the three months period ended February 28, 2009, consisted of $ 10,000 in consultation expenses incurred for accounting, marketing and promotion fees, $ 330 in legal fees and $ 775 in transfer agent fees. The remaining balance consists of bank charges.
Expenses for the three months period ended February 29, 2008, our expenses consist of $24 in bank charges, and $4,000 accrued for professional fees. Professional fees consist of fees paid for edgar filing fees and related cost for preparation of periodic reports and other reports as required by the SEC.
Our expenses are expected to vary and we cannot determine trends in our expenditures given our lack of operating history.
| Liquidity and Capital Resources |
As of February 28, 2009, we had a working capital deficit of $ 11,729. Over the next 12 months, we will require approximately $ 15,000 to sustain our working capital needs as follows:
| Payment of accrued expenses and liabilities | $ 10,000 |
| Consulting and legal expenses | 5,000 |
| Total | $ 15,000 |
Our cash flows from financing activities were $ 11,000 for the three month period ended February 28, 2009. We obtained a loan from an affiliate in the amount of $ 5,000 and a further $ 6,000 from shareholders for the purpose of funding our working capital needs. These loans are without stated terms of repayment or interest.
| Sources of Capital: |
We expect our revenues generated to absorb these costs if we obtain further sub-distributors; however, if additional capital is needed, we will explore financing options such as shareholder loans. Shareholder loans will be without stated terms of repayment or interest. We will not be considering taking on any long-term or short-term debt from financial institutions in the immediate future. Shareholders loans may be granted from time to time as required to meet current working capital needs. We have no formal agreement that ensures that we will receive such loans. We may exhaust this source of funding at any time.
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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash. The Company does not believe that it is significantly exposed to interest rate risk, foreign currency exchange rate risk, commodity price risk, or equity price risk.
| Item 4T. CONTROLS AND PROCEDURES |
(A) Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer/Chief Accounting Officer of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of achieving the Company’s disclosure control objectives. The Company’s Chief Executive Officer/Chief Accounting Officer has concluded that the Company’s disclosure controls and procedures are, in fact, not effective at this reasonable assurance level as of the period covered.
The Company has filed Form 10K/A for the year ended November 30, 2008 to amended and correct the valuation of 18,000,000 common shares, as adjusted for subsequent stock splits, that was issued to the former company President on June 30, 2007. In addition, the value initially assigned to those shares had been initially capitalized as organization costs and has been expensed in the amendment. The error has caused our Chief Executive Officer and Chief Financial Officer to re-evaluate whether the Company’s disclosure controls and procedures and internal control over financial reporting were effective and have concluded that such controls were not effective in that the error was not rectified prior to the filing of Form 10K for the year ended November 30, 2008 and Form 10Q for the February 28, 2009 fiscal quarter.
(B) Changes in Internal Controls Over Financial Reporting
In connection with the evaluation of the Company’s internal controls during the Company’s 1st fiscal quarter ended February 28, 2009, the Company’s Chief Executive Officer/Chief Accounting Officer has determined that there are no changes to the Company’s internal controls over financial reporting that has materially affected, or is reasonably likely to materially effect, the Company’s internal controls over financial reporting.
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PART II. |
|
| OTHER INFORMATION | |
Item 1. | Legal Proceedings:None. |
| Item 1A. | Risk Factors |
A description of the risks associated with our business, financial condition, and results of operations is set forth in our annual report on Form 10-K/A for the year ended November 30, 2008 filed simultaneously with this Quarterly Report on Form 10-Q/A. | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds:None. |
| Item 3. | Defaults Upon Senior Securities:None. |
| Item 4. | Submission of Matters to a Vote of Security Holders:None |
| Item 5. | Other Information:None. |
| Item 6. | |
| A) | Exhibits |
| Exhibit Number | Description | |
| 3.1 | Certificate of Incorporation dated June 8, 2007* | |
| 3.2 | Articles of Incorporation dated June 8, 2007* | |
| 3.3 | Bylaws, effective June 7, 2008* | |
| 10.2 | Distribution Agreement with United Research Corporation dated September 30, | |
| 2007* | ||
| 10.3 | Sub Distribution Agreement with Body Language of Jamaica dated January 31, | |
| 2008* | ||
| 31.1 | CEO, CAO Section 302 Certification | |
| 32.1 | CEO, CAO Section 906 Certification | |
| (*) | Incorporated by reference from Form S-1 that was originally filed with the SEC on March 18, 2008. | |
B) Reports on Form 8-K
None
| SIGNATURES |
| SIGNATURES |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.
QUADRA PROJECTS INC.
Date: November 27, 2009
/s/ Claude Diedrick
By:
Claude Diedrick
President, CEO, CAO, Treasurer and Director
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