UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
================================================================================
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Second quarter ended Commission file number
March 31, 2008 33-27042-NY
- ---------------------------- -- --------------------
Baxx Systems Inc.
(Formerly known as: Barrington Sciences Corporation)
(Exact name of registrant as specified in its charter)
Nevada 93-0996537
------ ----------
(State of Incorporation) (I.R.S. Employer
Identification No.)
1107 Bennet Drive
Port Coquitlam, British Columbia, Canada V3C 6H2
- ---------------------------------------- -------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (604) 868-7400
Securities registered pursuant to Section 12(b) of the Act:
NONE NONE
---- ----
(Title of Each Class) (Name of Each Exchange
on which Registered)
Securities registered pursuant to Section 12 (g) of the Act:
Common
------
(Title of Class)
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.
(1) Yes X No (2) Yes X No
----- ----- ----- -----
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer Accelerated filer Non-accelerated filer X
--- --- ---
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes X No
--- ---
The number of shares of the Common Stock of the registrant outstanding as of
March 31, 2008 was 1,000,000. The aggregate common stock held by non-affiliates
on March 31, 2008 was 593,108.
Baxx Systems Inc.
(A development stage enterprise)
-----------------------------
INDEX
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
- ------ ---------------------
Independent Registered Auditors Report 4
Balance Sheet - at March 31, 2008 5
Statements of Operations - for the
quarters ended March 31, 2008 and
March 31, 2007 6
Statement of Cash Flows - for the
Six months Ended March 31, 2008
And March 31, 2007 6
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis
- ------ of Financial Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
- ------
Item 4. Controls and Procedures 10
- ------
Part II. Other Information
--------------------------
Item 1. Legal Proceedings 11
- ------
Item 2. Changes in Securities 11
- ------
Item 3. Defaults Upon Senior Securities 11
- ------
Item 4. Submission of Matters to a Vote of Security Holders 11
- ------
Item 5. Other Information 11
- ------
Item 6. Exhibits and Reports on Form 8-K
- ------
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
------------------------
PCAOB REGISTERED
Report of Independent Registered Public Accounting Firm
-------------------------------------------------------
To the Board of Directors
Baxx Systems Inc.
(Formerly Barrington Sciences Corporation)
(A Development Stage Company)
We have reviewed the accompanying condensed balance sheet of Baxx Systems Inc.
(A Development Stage Company) as of March 31, 2008, and the related condensed
statements of operations, stockholders' equity (deficit), and cash flows for the
three-month periods ended March 31, 2008 and March 31, 2007 and the six-month
period ended March 31, 2008. These interim financial statements are the
responsibility of the Corporation's management.
We conducted our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists of principally applying analytical procedures and making
inquiries of persons responsible for the financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States), the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Moore & Associates, Chartered
Moore & Associates, Chartered
Las Vegas, Nevada
April 28, 2008
2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NEVADA 89146
(702) 253-7499 Fax: (702)253-7501
-4-
Baxx Systems Inc.
(Formerly Barrington Sciences Corporation)
(A development stage enterprise)
Balance Sheet
As at
Mar 31, 2008 Sept 30, 2007
(Unaudited) (Audited)
------------------------------------
Current assets:
Cash 1,812 75,656
Prepaid Expenses & Other 2,030 2,007
Inventory 6,647 6,647
------------------------------------
Total current assets 10,489 84,310
------------------------------------
------------------------------------
Total assets 10,489 84,310
====================================
Liabilities and Stockholders Equity
Current liabilities:
Accounts payable 47,737 2,120
------------------------------------
Stockholders' equity:
Common stock $.001 par value;
2,745,000 authorized; 1,000,000 issued
and outstanding 1,000 1,000
Additional paid in Capital 4,384,405 4,384,405
----------
4,385,405 4,385,405
Losses accumulated during the --
development stage (4,422,653) (4,303,215)
------------------------------------
Total stockholders' equity (37,248) 82,190
------------------------------------
Total liabilities and stockholders' equity 10,489 84,310
====================================
The accompanying notes are an integral part of these financial statements.
-5-
Baxx Systems Inc
(Formerly Barrington Sciences Corporation)
(A development stage enterprise)
STATEMENTS OF OPERATIONS
For the period ended March 31
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
Mar 31, 2008 Mar 31, 2007 Mar 31, 2008 Mar 31, 2007
----------------------------------------------------------------------
Sales $ -- $ -- $ -- $ --
Costs and Expenses
Cost of sales --
Selling, general and administrative 53,429 5,494 119,439 14,490
Write-down of goodwill --
Write-down of intangibles and inventory -- --
Write-down of other assets -- --
--------------------------------------------------------------------
53,429 5,494 119,439 14,490
--------------------------------------------------------------------
(Loss) from operations (53,429) (5,494) (119,439) (14,490)
Other income (expense)
Interest expense -- -- -- --
--------------------------------------------------------------------
Net (loss) $ (53,429) $ (5,494) $ (119,439) $ (14,490)
=========== =========== =========== ===========
Per share information:
Basic and diluted (loss)
per common share $ (0.053) $ (0.005) $ (0.119) $ (0.014)
=========== =========== =========== ===========
Weighted average shares outstanding 1,000,000 1,000,000 1,000,000 1,000,000
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
-6-
Baxx Systems Inc
(Formerly Barrington Sciences Corporation)
(A development stage enterprise)
STATEMENTS OF CASH FLOWS
For the six months ended March 31, 2008 and 2007 From Inception
(Unaudited) August 22, 2001
Mar 31, 2008 Mar 31, 2007 to Mar 31, 2008
-------------------------------------------------
OPERATING ACTIVITIES
Net Loss (119,439) (14,490) (4,422,653)
Items not affecting cash:
Depreciation and amortization -- -- --
Changes in Assets and Liabilities
Accounts receivable -- -- --
Inventory (6,647)
Prepaid Expenses (22) -- (2,030)
Increase (decrease) in: -- --
Accounts payable and accrued liabilities 45,617 (51,700) 47,737
-----------------------------------------------
Net cash provided by (used in) Operating activities (73,844) (66,190) (4,383,593)
-----------------------------------------------
Cash flows from investing activities:
Acquisition of property & Equipment
-----------------------------------------------
Cash flow from investing activities 0 0 0
-----------------------------------------------
Cash flows from financing activities
Proceeds from the sale of common stock 4,385,405
Loans from related parties 0 0 0
-----------------------------------------------
Cash flow from financing activities 0 0 4,385,405
-----------------------------------------------
INCREASE IN CASH FLOW (73,844) (66,190) 1,812
CASH - Beginning of period 75,656 259,007 --
-----------------------------------------------
CASH - End of period 1,812 192,817 1,812
-----------------------------------------------
Cash Paid For:
Interest $ -- $ -- $ --
Income Taxes $ -- $ -- $ --
===============================================
Non-Cash Activities:
Stock issued for services $ -- $ -- $ 68,450
===============================================
Stock issued for accounts payable $ -- $ -- $ 85,861
===============================================
Stock issued for notes payable $ -- $ -- $ 1,163,069
===============================================
Stock Issued for Acquisition of Baxx Systems Inc. (Canada) $ -- $ -- $ 3,511
===============================================
Stock Issued for reverse merger with
Financial Express Corporation $ -- $ -- $ 3,745
===============================================
Stock issued for acquisition of ABP Dignostics Inc. $ -- $ -- $ 1,424,859
===============================================
The accompanying notes are an integral part of these financial statements.
-7-
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly
the financial position, results of operations and cash flows at March 31,
2008 and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. It is suggested that these condensed financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company's September 30, 2007 audited financial
statements. The results of operations for the period ended March 31, 2008
are not necessarily indicative of the operating results for the full
years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using accounting
principles generally accepted in the United States of America applicable
to a going concern which contemplates the realization of assets and
liquidation 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.
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
management and significant shareholders sufficient to meet its minimal
operating expenses, and (2) seeking out and completing a merger with an
existing operating company. (3) seek investment from other sources
through an offering memorandum. However, management cannot provide any
assurances 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. The accompanying financial statements do
not include any adjustments that might be necessary if the Company is
unable to continue as a going concern.
NOTE 3- ROLLBACK SHARES
On March 17, 2008 the company rolled back the common shares from
19,276,700 to 2,745,000. The total number of common shares issued and
outstanding is now 1,000,000. Form 8 K was filed with the SEC.
-8-
Item 2. Management's Discussion and Analysis of Financial Condition and
Plan of Operations
- ------ ---------------------------------------------------------------
(a) Plan of Operation
The company operates a corporate owned dealership in Mississauga Ontario. The
part time sales representative has been very active and very successful in
creating interest in the Intelligent Retrofit System(TM). He continues to
develop sales opportunities and to date has created over $3 million of possible
business. The company has now engaged a second sales agent who will focus on
school boards and Government accounts. The company has prepared quotes and
estimates for over 75% of this activity and additional quotes will be prepared
within the next few days.
The following are our projections for 2008. It is possible one contact will
close in Q - 3.
Budget for 2007-2008
- --------------------
(In 000's)
Q - 1 Q - 2 Q - 3 Q - 4 Total
--------------------------------------------------------------------------
Sales
Direct to Customer 0 0 625 600 1,225
--------------------------------------------------------------------------
To Dealer 0 0 150 150 300
--------------------------------------------------------------------------
Total Sales 0 0 775 750 1,525
--------------------------------------------------------------------------
Cost of Sales 0 0 399 375 763
--------------------------------------------------------------------------
Gross Margin 0 0 388 37 763
--------------------------------------------------------------------------
Expenses 59 59 126 132 376
--------------------------------------------------------------------------
EBITA (59) (59) 262 243 387
==========================================================================
The company already has approximately $4 million of orders in the pipe line. Of
this amount $625,000 has been identified for installation in early 2008.
In order to implement the business plan the company needs to raise working
capital. It intends to sell 2.4 million shares in private placements at $0.25
per share.
If the Company is able to raise the needed capital to implement its plans, it is
expected that the Company will increase its employment from the current 4 part
time employees to a total of approximately 5 full time employees by the end of
2008.
-9-
Baxx has also recently identified another opportunity and has moved quickly to
take full advantage of it. While totally unrelated to the windows industry this
new opportunity has a great potential. The product is called Fuel Performance
Catalyst (FPC) and when added to gasoline or diesel engines it will greatly
increase engine performance, while significantly reducing fuel costs. Baxx has
obtained the rights to the exclusive Canadian distributor. Baxx is looking to
assign this agreement to an unrelated party as it is not congruent with Baxx's
core business.
(b) Liquidity and capital resources
The Company is currently assessing short and long-term cash requirements based
on near term operating needs and requirement to roll out the Intelligent
Retrofit System and FPC Baxx. Management believes that it will be able to raise
additional equity capital to meet the Company's liquidity needs, due to the
prospects for success with the Company's products. However, the Company has no
commitments from potential equity investors and has not generated any revenues
from its products or operations.
(c) Comparison of 2007 and 2008 for six months. Operating costs increased
significantly. The company started operations in Ontario to introduce the new
product to the market place. This included advances to a sales person and
payments for product development. These costs totaled $32,085 for 2008. In 2007
the cost was $0. In 2007 professional fees were $9,418 in 2008 $5,857. In 2007
consulting fees were $5,000 in 2008 $$72,480. In 2007 advertising and promotion
costs were $0 in 2008 $6,069. In 2007 office and sundry costs were $72 in 2008
$2,595.
The increase in operating expenses reflects the start up of Baxx Systems and
promotion of the Intelligent Retrofit System. (TM)
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- ------- ----------------------------------------------------------
None. The Company does not hold any material market risk sensitive
instruments.
Item 4. Controls and Procedures
- ------- -----------------------
(a) With the participation of management, including the CEO and CFO, we
conducted an evaluation of our disclosure controls and procedures our CEO and
CFO 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.
-10-
PART II Other Information.
Item 1. Legal Proceedings.
- ------ -----------------
None
Item 2. Changes in Securities
- ------- ---------------------
None this quarter.
Item 3. Defaults Upon Senior Securities
- ------- -------------------------------
(Not applicable)
Item 4. Submission of Matters to a Vote of Security Holders
- ------ ---------------------------------------------------
None this quarter
Item 5. Other Information
- ------ -----------------
(Not applicable)
Item 6. Exhibits and Reports on Form 8-K
- ------ --------------------------------
(a) Exhibits
None this quarter
(b) Reports on Form 8-K
Section 3
Change to Authorized Capital and shares issued
1. On March 17, 2008 the registrant, Baxx Systems Inc. (Formerly known as
Barrington Sciences Corporation) elected to roll back the common shares
from 19,276,700 to 2,745,000 and this resulted in the reducing the issued
common shares so that there are only 1,000,000 issued and outstanding. It
did not change the percentage of ownership of any shareholder.
-11-
Signature
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Baxx Systems Inc.
/s/ Lorne Broten
----------------------------
By: Lorne Broten
Its: Chief Financial Officer
-12-