UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
OR
[ ] TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 333-100046
CINTEL CORP.
(Exact name of registrant as specified in its charter)
NEVADA 52-2360156
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7F, MSA B/D, 891-43, Daechi-dong, Kangnam-gu, Seoul, KOREA (Zip : 135-280)
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(Address, including zip code, of principal executive offices)
011-822-508-2033
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(Registrant's telephone number, including area code)
LINK2 TECHNOLOGIES, INC.
3235 WEST 4TH AVENUE, SUITE 101, VANCOUVER, BC CANADA V6K 1R8
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(Former name and former address if changed since last report)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of the Registrant's Common Stock, $0.001 par value,
outstanding as of November 12, 2003 is 20,383,300.
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CINTEL CORP.
FORM 10-QSB
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
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Page
----
Item 1. Financial Statements (unaudited):
Financial Information 4
Balance Sheets 5
Statements of Operations 6
Statements of Cash Flows 7
Notes to Financial Statements 8
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations 11
Item 3. Controls and Procedures 12
PART II - OTHER INFORMATION
---------------------------
Item 1: Legal Proceedings 12
Item 2: Changes in Securities and
Use of Proceeds 12
Item 3: Defaults upon Senior Securities 12
Item 4: Submission of Matters to Vote
of Security Holders 12
Item 5: Other Information 12
Item 6. Exhibits and Report on Form 8-K 12
Signatures 13
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FINANCIAL STATEMENTS
LINK2 TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
VANCOUVER, BRITISH COLUMBIA, CANADA
NINE MONTHS ENDED SEPTEMBER 30, 2003
1. FINANCIAL INFORMATION
2. BALANCE SHEETS
3. STATEMENTS OF OPERATIONS
4. STATEMENTS OF CASH FLOWS
5. NOTES TO FINANCIAL STATEMENTS
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FINANCIAL INFORMATION
To the Shareholders
Link2 Technologies, Inc.
(Development Stage Company)
The accompanying balance sheets of Link2 Technologies, Inc. (development stage
company) at September 30, 2003 and December 31, 2002, and the statements of
operations for the nine months ended September 30, 2003 and the period August
16, 1996 (date of inception) to September 30, 2003, and the statements of cash
flows for the nine months ended September 30, 2003, and the period from August
16, 1996 to September 30, 2003, have been prepared by the Company's management
and they do not include all information and notes to the financial statements
necessary for a complete presentation of the financial position, results of
operations, and cash flows in conformity with generally accepted accounting
principles in the United States of America. In the opinion of management, all
adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included and all such adjustments
are of a normal recurring nature.
Operating results for the quarter ended September 30, 2003, are not necessarily
indicative of the results that can be expected for the year ending December 31,
2003.
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LINK2 TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(EXPRESSED IN U.S. DOLLARS)
SEPTEMBER 30, December 31,
2003 2002
(unaudited) (audited)
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ASSETS. . . . . . . . . . . . . . . . . . . . . . $ - -
================================================================================
LIABILITIES
Current
Accounts payable and accrued expenses . . . . . $ 2,000 6,079
Due to shareholder [Note 3] . . . . . . . . . . 30,903 24,365
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Total current liabilities . . . . . . . . . . . 32,903 30,444
Promissory notes. . . . . . . . . . . . . . . . . 39,000 15,000
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Total liabilities . . . . . . . . . . . . . . . 71,903 45,444
STOCKHOLDERS' DEFICIENCY
Common capital stock; with a par value of $0.001
Authorized: 50,000,000 shares; issued and
outstanding: 21,077,500 (2001: 21,077,500) . . 21,077 21,077
Discount on common stock. . . . . . . . . . . . . (11,900) (11,900)
Additional paid-in capital. . . . . . . . . . . . 67,523 67,523
Accumulated deficit during the development stage. (148,603) (122,144)
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Total stockholder deficiency. . . . . . . . . . (71,903) (45,444)
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$ - -
================================================================================
APPROVED ON BEHALF OF THE BOARD:
/s/ Sang Don Kim
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Director Sang Don Kim
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LINK2 TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(EXPRESSED IN U.S. DOLLARS)
August 16, 1996
Three months Three months Nine months Nine months (Date of
Sep 30 Sep 30 Sep 30 Sep 30 inception)
2003 2002 2003 2002 to Sep 30, 2003
------------ ------------ ------------ ------------ -----------------
REVENUE . . . . . . . $ - $ 5,000 $ 1,000 $ 5,000 $ 7,200
============ ============ ============ ============ =============
EXPENSES:
Professional fees . . $ 2,283 $ 3,896 $ 9,279 $ 8,351 $ 43,343
Office and general. . 1,003 470 1,495 1,066 16,404
Telephone . . . . . . 367 435 558 743 6,764
Filing fees . . . . . 490 75 2,719 75 3,208
Travel. . . . . . . . - - - 716 1,453
Consulting. . . . . . 3,560 - 13,408 - 76,855
Advertising . . . . . - - - - 3,202
Rent. . . . . . . . . - - - - 2,974
Management fees . . . - - - - 1,600
------------ ------------ ------------ ----------- -------------
Total expenses. 7,703 4,876 27,459 10,951 155,803
------------ ------------ ------------ ------------ -------------
NET LOSS $ (7,703) $ (124) $ (26,459) $ (5,951) $ (148,603)
============ ============ ============ ============= =============
BASIC AND DILUTED NET
LOSS PER COMMON
SHARE $ (0.000) $ (0.000) $ (0.000) $ (0.000)
============ ============ ============ =============
WEIGHTED AVERAGE
SHARES OF COMMON
STOCK OUTSTANDING 21,077,500 21,077,500 21,077,500 21,077,500
============ ============ ============ =============
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LINK2 TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(EXPRESSED IN U.S. DOLLARS)
August 16, 1996
Three months ended Nine months ended (Date of
Sep 30 SEP 30 Sep 30 Sep 30 inception)
2003 2002 2003 2002 to Sep 30, 2003
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OPERATIONS
Net loss. . . . . . . . . . . . . $ (7,003) $ 124 $ (26,459) $ (5,951) $ (147,903)
Shares issued for services. . . . - - - - 5,100
Increase in accounts payable
and accrued expenses . . . . . . - - (4,079) - 2,000
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Net cash used in operating
Activities . . . . . . . . . . . (7,003) 124 (30,538) (5,951) (140,803)
FINANCING
Promissory notes issued for cash. - - 24,000 - 39,000
Increase in amount due to
shareholder 7,003 (124) 6,538 5,951 30,203
Shares issued for cash. . . . . . - - - 71,600
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Net cash provided by financing. . 7,003 (124) 30,538 5,951 140,803
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Increase in cash. . . . . . . . . - - - - -
Cash, beginning of period . . . . - - - - -
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Cash, end of period . . . . . . . $ - $ - $ - $ - $ -
===========================================================================================================
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LINK2 TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
1. NATURE OF OPERATIONS AND GOING CONCERN
The Company was incorporated in the State of Nevada on August 16, 1996 and on
April 24, 2001 changed its name from "Great Energy Corporation International" to
Link2 Technologies, Inc.
The Company is currently in the development stage and has been in the process of
investigating and evaluating new business opportunities prior to its recent
acquisition of Cintel Co. Ltd. of Korea whose financial information will be
included in a consolidated financial statement pursuant to the acquisition of
form 8K-A.
The Company has suffered recurring losses from operations and has a working
capital deficiency of $32,903 that raises substantial doubt about its ability to
continue as a going concern. The continuation of the Company as a going concern
is dependent upon the Company attaining profitable operations and raising funds.
Management's plan in this regard is to raise additional funding through debt
financing. The financial statements do not include any adjustment relating to
the recovery and classification of recorded asset amounts or the amount and
classification of liabilities that might be necessary should the Company
discontinue operations.
However due to its recent acquisition of Cintel Co. Ltd. the financial condition
of the newly acquired company as the "accounting acquirer" may significantly
differ which will be discussed in financial information included in a
consolidated financial proforma statement pursuant to the acquisition of form
8K-A
2. SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION - Revenue from sales of products and services is recognized
at the time of shipment or performance of services.
FINANCIAL INSTRUMENTS - The Company's financial instruments consist of accounts
payable and accrued expenses and amount due to shareholder. Amount due to
shareholder is interest free. It is management's opinion that the Company is
not exposed to significant interest, currency or credit risks arising from its
financial instruments and that their fair values approximate their carrying
values, unless otherwise noted.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - 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 the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reporting period. 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.
3. DUE TO SHAREHOLDER
Amounts due to shareholder are non-interest bearing with no specific terms of
repayment.
Promissory notes to members of the board of directors bear interest at 10%, are
unsecured and have no specific terms of repayment.
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LINK2 TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(EXPRESSED IN U.S. DOLLARS)
4. INCOME TAXES
At September 30, 2003 the Company had a federal net operating loss carryforward
of approximately $148,000 that may be available to be applied against any future
taxable income. This net operating loss carryforward may result in future
income tax benefits of approximately $28,120, however, because realization is
uncertain at this time, a valuation reserve in the same amount has been
established.
Significant components of the Company's deferred tax liabilities and assets as
of September 30, 2003 are as follows:
2003
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Deferred tax liabilities $ -
==============================================================================
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Deferred tax assets:
Net operating loss carryforwards $ 40,970
Valuation allowance ( 40,970)
--------------
$ -
==============================================================================
The valuation allowance for deferred tax assets was increased by $3,320 during
the period ended September 30, 2003.
The Company's net operating loss carryforwards, if not used, will expire as
follows:
2012 $ 45,300
2018 33,800
2020 2,800
2021 6,100
2022 34,000
2023 26,000
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$ 148,000
==============================================================================
5. RELATED PARTY TRANSACTION
The Company is indebted to a shareholder as described in Note 3.
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LINK2 TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(EXPRESSED IN U.S. DOLLARS)
6. SUBSEQUENT EVENT
On September 30, 2003, the Company entered into a definitive Share Exchange
Agreement (the "Agreement") with CINTEL CO., LTD., a Korean corporation
("CINTEL") and the shareholders of CINTEL (the "Shareholders"). The Agreement
provides for the acquisition by the Company from the Shareholders of 100% of
the issued and outstanding capital stock of CINTEL. In exchange, the
Shareholders shall receive 16,683,300 post-split shares of the Company.
As of September 30, 2003, the Company has 21,077,500 shares issued and
outstanding. As a condition to closing, the Company will cancel 11,827,500 of
its issued shares and reverse split the remaining 9,250,000 shares on a 2
for 5 basis, leaving 3,700,000 shares of the Company issued and outstanding.
Following the issuance of 16,683,300 post-split shares of the Company in the
share exchange, there will be a total of 20,383,300 shares issued and
outstanding with 82% of that amount held by the current shareholders of
CINTEL.
The closing of the share exchange is set for the first business day following
the completion of the contingencies to the exchange as set forth in the
Agreement. If the contingencies are not performed on or before October
30, 2003, either the Company or CINTEL may unilaterally cancel the Agreement and
all transactions contemplated thereby. Upon closing, the officers and
directors of the Company will resign and will cause the nominees of CINTEL to
fill applicable vacancies.
Upon completion of the share exchange, the business operations of CINTEL will
constitute virtually all of the business operations of the Company. CINTEL
develops network solutions to address technical limitations to the Internet.
CINTEL has developed what it believes is the first Korean server load
balancing technology. CINTEL is now focused on the development of advanced
solutions for Internet traffic management, and on developing quality of
service solutions. The business operations of CINTEL are located in
Seoul Korea.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The Company has been in the business of providing three dimensional animation
and digital effects to the music video industry. The Company entered into its
initial engagement on August 21, 2002. Pursuant to that engagement, the Company
worked at producing a music video based on performances of the rock group Search
for Utopia. The Company realized a total of $7,200.00 in revenue from its work
on the video which represents all of the revenues of the Company since its
inception on August 16, 1996. None of that revenue was realized during the
fiscal quarter ended September 30, 2003.
Since its inception, the Company has incurred expenses totalling $155,803.00
which has generated a net loss for the Company since inception of $148,603.00.
Expenses for the quarter ended September 30, 2003, totalled $7,703.00 generating
a net loss for the quarter of $7,703.00.
Recent Events
On October 10, 2003, in accordance with a Share Exchange Agreement dated
September 30, 2003, (the "Agreement"), the Company acquired 100% of the issued
and outstanding stock of CINTEL CO., LTD., a Korean corporation ("Cintel"). The
business operations of Cintel now constitute all of the business operations of
the Company. The Company decided the business prospects of Cintel provided more
potential for profit for the Company than ongoing operations in the animation
market.
Pursuant to the Agreement, the Company cancelled 11,827,500 of its issued shares
and reverse split the remaining 9,250,000 shares on a 2 for 5 basis leaving
3,700,000 shares issued and outstanding. In addition, all the issued and
outstanding shares of Cintel were exchanged for 16,683,300 post split shares of
restricted stock of the Company. As a result of the transaction, the
shareholders of Cintel own 82% of the issued and outstanding stock of the
Company. Accordingly, while the Company is the legal parent, Cintel became the
parent company for accounting purposes and the results of operations will now be
those of Cintel.
Future Business
Cintel develops network solutions to address technical limitations to the
Internet. CINTEL has developed what it believes is the first Korean server load
balancing technology. CINTEL is now focused on the development of advanced
solutions for Internet traffic management, and on developing quality of service
solutions. The business operations of CINTEL are located in Seoul Korea.
Cintel is an enterprise devoted to solutions and products in the Internet
Traffic Management and cache server marketplace, providing faster Internet
service to consumers and businesses. The Company develops Internet traffic
management products, Internet cache servers, Content Delivery Network (CDN)
servers and provides solutions to Internet Traffic Management. In addition,
Cintel is applying its expertise to become a leader in Quality of Service (QoS)
and Peer to Peer (P2P) marketplaces.
Liquidity and Capital Resources
The Company will need additional capital in order to continue its operations
through Cintel in Internet traffic management products as well as to finance the
administrative costs including but not limited to legal and accounting fees.
Management is seeking additional capital. However, there is no assurance that
this needed capital can be raised, or raised on terms acceptable to the
Registrant.
The Company will file the required financial statements and pro forma
financial information as an amendment to its Current Report on Form 8-K as
soon as practicable but not later than sixty (60) days from the date of
the acquisition.
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ITEM 3. CONTROLS AND PROCEDURES
(a) Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
conducted an evaluation of our disclosure controls and procedures, as such term
is defined under Rule 13a-14(c) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), within 90 days of the filing date of this
report. Based on their evaluation, our principal executive officer and principal
financial officer concluded that our disclosure controls and procedures are
effective.
(b) There have been no significant changes (including corrective actions with
regard to significant deficiencies or material weaknesses) in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation referenced in paragraph (a) above.
PART II - OTHER INFORMATION
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ITEM 1. LEGAL PROCEDURES
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
See Part I, Item 2.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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99.1 CERTIFICATION BY CEO PURSUANT TO RULE 13A-14(A) OR 15D-14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002.
99.2 CERTIFICATION BY CFO PURSUANT TO RULE 13A-14(A) OR 15D-14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002.
99.3 CERTIFICATION BY CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.
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99.4 CERTIFICATION BY CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION
(b) Reports on Form 8-K
----------------------
On September 30, 2003, the Company filed Current Report on Form 8-K announcing
its entering into a definitive Share Exchange Agreement (the "Agreement") with
CINTEL CO., LTD., a Korean corporation ("CINTEL") and the shareholders of CINTEL
(the "Shareholders"). The Agreement provided for the acquisition by the Company
from the Shareholders of 100% of the issued and outstanding capital stock of
CINTEL.
SIGNATURES
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.
Cintel Corp.
Date: November 13, 2003 By: /s/ Sang Don Kim
---------------------------
Sang Don Kim
Chief Executive Officer
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