UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2011 |
| OR | |
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 000-54093
iMETRIK M2M SOLUTIONS INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
740 Notre-Dame Street W
Suite 1555
Montreal, Quebec
Canada H3C 3X6
(Address of principal executive offices, including zip code.)
(514) 904-2333
(Registrant’s telephone number, including area code)
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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 last 90 days. YES x NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES o NO x
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 the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated Filer | o | Accelerated Filer | o | ||
| Non-accelerated Filer | o | Smaller Reporting Company | x | ||
| (Do not check if 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 x NO o
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicated the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 57,615,000 as of April 14, 2011.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
IMETRIK M2M SOLUTIONS INC
(Formerly known as MONTREAL SERVICES COMPANY)
BALANCE SHEET
| February 28, | May 31, | |||||||
| 2011 | 2010 | |||||||
| (unaudited) | (audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | 43,137 | 69,282 | ||||||
| Account receivable | 600 | 600 | ||||||
| TOTAL CURRENT ASSETS | 43,737 | 69,882 | ||||||
| TOTAL ASSETS | $ | 43,737 | $ | 69,882 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Note payable-stockholders (note 6) | 75,423 | 31,885 | ||||||
| Note payable ( note 5 ) | 65,325 | - | ||||||
| Accrued expenses and sundry current liabilities (note 4) | 56,951 | 20,758 | ||||||
| TOTAL CURRENT LIABILITIES | $ | 197,699 | $ | 52,643 | ||||
| STOCKHOLDERS’ EQUITY (DEFICIENCY) | ||||||||
| Common stock | $ | 576 | $ | 58 | ||||
| Additional paid in capital | 76,142 | 76,142 | ||||||
| Offering costs | (27,155 | ) | (27,155 | ) | ||||
| Accumulated Deficit | (203,525 | ) | (31,806 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY (DEFICIENCY) | $ | (153,962 | ) | $ | 17,239 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) | $ | 43,737 | $ | 69,882 | ||||
The accompanying notes are an integral part of the financial statements
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IMETRIK M2M SOLUTIONS INC
(Formerly known as MONTREAL SERVICES COMPANY)
STATEMENTS OF STOCKHOLDERS (DEFICIENCY)
Period of inception (May 6, 2009) to February 28, 2011 (unaudited)
Stockholders (Deficiency)
| Stockholders Equity (Deficiency) | Shares | Common stock Authorized 500,000,000 Shares, Par value $0,00001 | Additional paid in Capital | Accumulated Deficit | Offering Costs | Total | ||||||||||||||||||
| Period of Inception (May 6,2009) | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
| Proceeds from the issuance of common stock | 5,000,000 | 50 | - | - | - | 50 | ||||||||||||||||||
| Offering costs | (15,000 | ) | (15,000 | ) | ||||||||||||||||||||
| Net Loss | - | - | (294 | ) | (294 | ) | ||||||||||||||||||
| May 31,2009 | 5,000,000 | $ | 50 | $ | - | $ | (294 | ) | $ | (15,000 | ) | $ | (15,244 | ) | ||||||||||
| Proceeds from the issuance of common stock | 761,500 | 8 | 76,142 | 76,150 | ||||||||||||||||||||
| Offering costs | - | - | - | (12,155 | ) | (12,155 | ) | |||||||||||||||||
| Net Loss | - | - | (31,512 | ) | (31,512 | ) | ||||||||||||||||||
| May 31,2010 | 5,761,500 | $ | 58 | $ | 76,142 | $ | (31,806 | ) | $ | (27,155 | ) | $ | 17,239 | |||||||||||
| Stock dividend (note 9) | 51,853,500 | 518 | (518 | ) | - | |||||||||||||||||||
| Net Loss | (171,201 | ) | (171,201 | ) | ||||||||||||||||||||
| February 28, 2011 | 57,615,000 | $ | 576 | $ | 76,142 | $ | (203,525 | ) | $ | (27,155 | ) | $ | (153,962 | ) | ||||||||||
The accompanying notes are an integral part of the financial statements
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IMETRIK M2M SOLUTIONS INC
(Formerly known as MONTREAL SERVICES COMPANY)
STATEMENTS OF OPERATIONS
Nine months ended February 28, 2011 and 2010 and Period from May 6, 2009, (Inception)
through November 30, 2010 (unaudited)
| Nine months | Nine months | Period from inception (May 6, 2009) | ||||||||||
Ended February 28, 2011 | Ended February 28, 2010 | to February 28, 2011 | ||||||||||
| SALES | $ | - | $ | - | $ | 600 | ||||||
| COSTS AND EXPENSES: Cost of sales | ||||||||||||
| Selling, general and administrative | 165,096 | 3,934 | 195,038 | |||||||||
| Interests | 6,105 | 819 | 8,566 | |||||||||
| Exchange loss | - | - | 3 | |||||||||
| TOTAL COSTS AND EXPENSES | 171,201 | 4,753 | 203,607 | |||||||||
| NET (LOSS) | $ | (171,201 | ) | $ | (4,753 | ) | $ | (203,007 | ) | |||
| Net (Loss) Per Share | $ | (0.00 | ) | $ | (0.00 | ) | $ | N/A | ||||
| Average weighted Number of Shares | 43,211,250 | 5,000,000 | N/A | |||||||||
The accompanying notes are an integral part of the financial statements
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| IMETRIK M2M SOLUTIONS INC | ||||||||||||
| (Formerly known as MONTREAL SERVICES COMPANY) | ||||||||||||
| STATEMENTS OF CASH FLOWS | ||||||||||||
| Nine months ended February 28, 2011 and 2010 and Period of inception (May 6, 2009) | ||||||||||||
| through February 28, 2011 (unaudited) | ||||||||||||
Nine months Ended February 28, 2011 | Nine months Ended February 28, 2010 | Period from inception (May 6, 2009) to February 28, 2011 | ||||||||||
| Net (loss) | $ | (171,201 | ) | $ | (12,360 | ) | $ | (203,007 | ) | |||
| Changes in operating assets and liabilities: | ||||||||||||
| Account receivable | (600 | ) | (600 | ) | ||||||||
| Note payable | 65,325 | 65,325 | ||||||||||
| Accrued expenses and sundry current liabilities | 36,193 | 12,037 | 56,951 | |||||||||
| Net cash used by operating activities | $ | (69,683 | ) | $ | (923 | ) | $ | (81,331 | ) | |||
| Financing activities | ||||||||||||
| Sale of common stock | 518 | 76,150 | 76,718 | |||||||||
| Offering costs | (518 | ) | (12,155 | ) | (27,673 | ) | ||||||
| Proceeds of loans payable shareholder | 43,538 | 13,039 | 75,423 | |||||||||
| Net cash provide by financing activities | $ | 43,538 | $ | 77,034 | $ | 124,468 | ||||||
| (Decrease) increase in cash | (26,145 | ) | 76,111 | 43,137 | ||||||||
| Cash- beginning of period | 69,282 | 100 | - | |||||||||
| Cash - end of period | $ | 43,137 | $ | 76,211 | $ | 43,137 | ||||||
The accompanying notes are an integral part of the financial statements
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IMETRIK M2M SOLUTIONS INC
(Formerly known as MONTREAL SERVICES COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1-NATURE OF BUSINESS
The Company was incorporated under the laws of the State of Nevada on May 6, 2009. The Company’s specific goal was to create a profitable service for placing Canadian citizens in accounting positions with Canadian corporations. On August 5, 2010, we changed our name to iMetrik M2M Solutions Inc. to reflect our new business purpose of bringing solutions to the Machine-to-Machine market ( Machine-to-Machine (M2M) refers to technologies that allow both wireless and wired systems to communicate with other devices of the same ability). Initially the Company wants to cover applications for fixed assets.
NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments with original maturities not exceeding three months to be cash equivalents.
INCOME TAXES
The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.
LOSS PER COMMON SHARE
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding.
Diluted net loss per common share is computed by dividing the net loss, adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities.
USE OF ESTIMATES
In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenue and expenses in the income statement. Actual results could differ from those estimates.
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STOCK BASED COMPENSATION
The Company accounts for stock options and similar equity instruments issued in accordance with the authoritative literature, "Share-Based Payment". Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. Transactions in which goods or services are received in exchange for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The authoritative literature requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.
ORGANIZATIONAL
Organizational costs, which relate to the Company start-up organization, are expenses as incurred. Such costs are included in selling, general and administrative costs.
OFFERING COSTS
Offering costs, which relate to the Company Registration Statement on form S-1, are taken directly as a reduction of shareholders equity as incurred.
NOTE 3--GOING CONCERN
The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company posted net loss of $171,201 for the nine month ended February 28, 2011. The Company had no revenue for the nine month period ended February 28, 2011.These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.
Management’s plans for the Company’s continued existence include selling additional stock and borrowing additional funds to pay overhead expenses.
The Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that the Company will be able to generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds.
The Company’s inability to obtain additional cash could have a material adverse effect on its financial position, results of operations and its ability to continue in existence. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 4--ACCRUED EXPENSES AND SUNDRY CURRENT LIABILITIES
Accrued expenses consisted of the following at February 28:
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| 2011 | May 2010 | |||||||
| Accrued interest | $ | 8,048 | $ | 2,055 | ||||
| Accrued operating expenses | 48,903 | 18,703 | ||||||
| $ | 56,951 | $ | 20,758 | |||||
NOTE 5—PAYABLE
In 2010, the Company received loans from Capex Investments Limited in the amount of $65,325. The amount owed to Capex Investments Limited at December 31 is $65,325. These loans carry an interest of 10% and are payable on demand.
NOTE 6--PAYABLE – STOCKHOLDERS’
For the nine month period ended February 28, 2011, the Company received additional loans from Michel St-Pierre, a shareholder, in the amount of $43,538. In 2009, the Company received loans from Michel St-Pierre, a shareholder, in the amount of $15,050. In 2010, the Company received additional loans from Michel St-Pierre in the amount of $16,835. At February 28, 2011, the loans amounted to $75,423. These loans carry an interest of 10% and are payable on demand.
NOTE 7 --CAPITAL STOCK
The company is authorized to issue 500,000,000 shares of common stock (par value $0.00001) of which 57,615,000 were issued and outstanding as of February 28, 2011.
On January 13, 2010 the Company sold 761,500 shares of common stock (par value $0.00001) for an aggregate consideration of $76,150 and incurred related expenses of $27,155.
On September 28, 2010 the Company paid a stock dividend of 9 additional shares of common stock for each 1 share of common stock outstanding. The record date for the stock dividend was August 18, 2010.
NOTE 8 -INCOME TAXES
Income taxes are provided for using the liability method of accounting in accordance with the Income Taxes Topic of the FASB ASC. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized and when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The computation of limitations relating to the amount of such tax assets, and the determination of appropriate valuation allowances relating to the realizing of such assets, are inherently complex and require the exercise of judgment. As additional information becomes available, we continually assess the carrying value of our net deferred tax assets.
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As of February 28, 2011 the Company had net operating loss carry forwards of approximately $171,201. These net operating losses are being utilized against the reported income for the three month period ended February 28, 2011. This results in no tax expense or provision for the year.
Components of deferred tax assets and liabilities at February 28, 2011 are as follows:
| 2011 | ||||
| Deferred tax asset | $ | 68,308 | ||
| Valuation allowance | (68,308 | ) | ||
| Net deferred tax asset | $ | 0 | ||
NOTE 9 -RELATED PARTY TRANSACTIONS
During the nine month period ended February 28, 2011, the Company received loans from Michel St-Pierre, a shareholder, in the amount of $43,538. In the year ended May 31, 2009, the Company received loans from Michel St-Pierre, a shareholder, in the amount of $15,050. For the year ended May 31, 2010, the Company received loans of $16,835.These loans carry an interest of 10% and are payable on demand.
NOTE 10 - RECENTLY ISSUED ACCOUNTING STANDARDS
New accounting pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.
NOTE 11 – LITIGATION
As of the filing of the present Quarterly report on Form 10-Q, the Company considers there was no pending or threatened litigation, claims, or assessments against the Company for its acts or omission.
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| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION. |
The following discussion of the financial condition and results of our operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the period ended February 28, 2011, (this “Report”). This Report contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Certain statements contained in this report, including, without limitation, “believes”, “anticipates,” “expects” and the like, constitute “forward-looking statements”. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.
On August 5, 2010, we changed our name to iMetrik M2M Solutions Inc. to reflect our new business purpose of bringing solutions to the Machine-to-Machine market ( Machine-to-Machine (M2M) refers to technologies that allow both wireless and wired systems to communicate with other devices of the same ability). Initially the Company wants to cover applications for fixed assets.
On November 30, 2010 the Company announced the receipt of a Letter of Intent from iMetrik Global Inc., granting it an exclusive license to use the iMetrik platform, including devices, network, and applications, to bring solutions to the Machine-to-Machine ("M2M") market.
For the Nine Month Period ended February, 2011
Overview
We posted net losses of $171,201 for the nine month period ended February 28, 2011. For the nine month period ended February 28, 2011 we had no gross revenues.
Total Cost and Expenses
For the nine month period ended February 28, 2011, we incurred total costs and expenses of $171,201.
Selling, General and Administration
For the nine month period ended February 28, 2011, we incurred selling, general and administration expenses of $165,096.
We calculate interest in accordance with the respective note payable. For the nine month period ended February 28, 2011, we incurred a charge of $6,105.
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Liquidity and Capital Resources
At February 28, 2011, we had $43,137 in cash, as opposed to $69,282 in cash at May 31, 2010. Total cash requirements for operations for the nine month period ended February 28, 2011 was $69,683. As a result of its new business plan, management estimates that cash requirements through the end of the fiscal year ended May 31, 2011 will be between $75,000 thousand to $200,000 thousand. As of the date of this Report, we do not have available resources sufficient to cover the expected cash requirements through the end of the fourth quarter of 2011 or the balance of the year. As a result, there is substantial doubt that we can continue as an ongoing business without obtaining additional financing. Management’s plans for maintaining our operations and continued existence include selling additional equity securities and borrowing additional funds to pay operational expenses. There is no assurance we will be able to generate sufficient cash from operations, sell additional shares of Common Stock or borrow additional funds. Our inability to obtain additional cash could have a material adverse effect on our financial position, results of operations and our ability to continue our existence. If our losses continue and we are unable to secure additional financing, we may ultimately be required to seek protection from creditors under applicable bankruptcy laws.
At February 28, 2011, we had total assets of $43,737 compared to total assets of $69,882 at May 31, 2010.
At February 28,2011, we had total current liabilities of $197,699 compared to total current liabilities of $52,643 at May 31, 2010. The liabilities are mainly due to (i) accrued operational costs ($56,951), (ii) note payable ($65,325) and (iii) loan notes from shareholders ($75,423).
For the nine month period ended February 28, 2011, the Company received additional loans from Michel St-Pierre, a shareholder, in the amount of $43,538. In 2009, the Company received loans from Michel St-Pierre, a stockholder, in the amount of $15,050. In 2010, the Company received loans of $16,835. At February 28, 2011, the loans amounted to $75,423. These loans carry an interest of 10% and are payable on demand.
For the nine month period ended February 28, 2011, the Company received loans from Capex Investments Limited, a shareholder, in the amount of $65,325. At February 28, 2011, the loans amounted to $65,325. These loans carry an interest of 10% and are payable on demand.
Our financial condition raises substantial doubt about our ability to continue as a going concern. Management’s plan for our continued existence includes selling additional stock through private placements and borrowing additional funds to pay overhead expenses while maintaining marketing efforts to raise our sales volume. Our future success is dependent upon our ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that we will be able to generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds. Our inability to obtain additional cash could have a material adverse effect on our financial position, results of operations and our ability to continue as a going concern.
Off-Balance Sheet Arrangements
We are not a party to any off-balance sheet arrangements.
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| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter ended February 28, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 2. USE OF PROCEEDS.
On October 7, 2009, the SEC declared our Form S-1 registration statement effective (SEC File no. 333-160128). Under the terms thereof we offered a minimum of 750,000 shares of common stock, maximum 2,000,000 shares of common stock at an offering price of $0.10 per share. There is no underwriter involved in our offering. On January 14, 2010, we completed our public offering and sold 761,500 shares of common stock for a total of $76,150. Since then, we have spent the proceeds as follows:
| Legal and accounting (offering costs) | $ | 27,155 | ||
| Working capital | $ | 48,995 |
ITEM 6. EXHIBITS.
The following documents are included herein:
| Exhibit No. | Document Description |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 14th day of April, 2011.
| iMETRIK M2M SOLUTIONS INC. | ||
| BY: | MICHEL ST-PIERRE | |
| Michel St-Pierre | ||
| President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and sole member of the Board of Directors. | ||
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EXHIBIT INDEX
| Exhibit No. | Document Description |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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