SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2004
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from __________________
to __________________
Commission File Number 0-27799
CIK Number 0001092797
RUSSIAN ATHENA, INC.
(Exact Name of small business issuer as specified in its charter)
Delaware 33-0619531
(State or other Jurisdiction of I.R.S. Employer Identi-
Incorporation or Organization fication No.)
24351 Pasto Road, #B, Dana Point, California 92629
(Address of Principal Executive Offices) (Zip Code)
(949) 489-2400
(Issuer's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (i) 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 (of for such shorter period that the
Registrant was required to file such reports) and (ii) has been subject to such
filing requirements for the past 90 days.
Yes No X__
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Common Stock, $.001 par value 13,600,000
- ---------------------------------- ----------------------
Title of Class Number of Shares outstanding
at September 30, 2004
Transitional Small Business Format Yes No X
No exhibits included.
RUSSIAN ATHENA, INC.
(fka MYERCOM, INC.)
(A Development Stage Company)
ASSETS
June 30, September 30,
2004 2003
CURRENT ASSETS
Cash and Cash Equivalents $ 8,365 $ 3,777
Deposit 250 250
Accounts receivable -- 57
Marketable Securities [Note F] 32,966 26,829
---------------- ------------
Total Current Assets $ 41,581 $ 30,913
Property and equipment, net -- 3,393
---------------- ------------
TOTAL ASSETS $ 41,581 $ 34,306
================ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 787 $ 1,712
Accrued Interest [Note E] 1,000 2,000
Shareholder loan [Note E] 20,533 23,276
Note Payable [Note E] 50,000 50,000
---------------- ------------
Total Current Liabilities 72,320 76,988
---------------- ------------
STOCKHOLDERS' EQUITY
Preferred Stock, $0.001 par value; 1,000,000 shares
authorized; no shares issued and outstanding $ -- $ --
Common Stock, $0.001 par value; 20,000,000 shares
authorized; 13,600,000 shares issued and outstanding 13,600 13,600
Additional paid in capital 2,415 2,415
Deficit accumulated during the development stage (45,251) (56,792)
Accumulated unrealized gains (losses) (1,503) (1,905)
Total Stockholders' Equity (30,739) (42,682)
---------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 41,581 34,306
================ ============
See accompanying notes to financial statements
RUSSIAN ATHENA, INC.
(fka Myercom, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the three months ended September 30, 2004 and
2003, and for the Period from Inception (April 20,
1994) through September 30, 2004
CUMULATIVE
FOR THE THREE FROM INCEPTION
MONTHS ENDED (April 20, 1994)
September 30, To
2004 2003 September 30, 2004
---- ---- ------------------
REVENUES $ 57 $ -- $ 57
General and Administrative 11,247 1,745 56,272
---------------- ---------------- ---------------
Net Income (Loss) from operations (11,190) 1,741 (56,215)
Other Income (Expenses)
Interest Income 4 -- 4
Interest Expense (1,000) -- (2,000)
Dividend Income 649 -- 1,419
Total Other Income (Expense) (351) -- (577)
---------------- --------------- --------------
Net Income (Loss) Before Taxes (11,541) (1,745) (56,792)
Provision for Income Taxes -- -- --
--------------- ------------- ----------------
- --
Net Income (11,541) (1,745) (56,792)
================ ================ ===============
Other Comprehensive Income (Loss)
Unrealized Gain (Loss) on Securities [Note F] (402) (1,905)
- -- ----------------
Total Comprehensive Income (11,943) (1,745) (58,697)
================ ================ ===============
Income (Loss) Per Share $ (0.01) $ (0.00) $ (0.01)
================ ================ ===============
Weighted Average Shares 13,600,000 13,600,000 13,600,000
---------------- ---------------- ---------------
See accompanying Notes to Financial Statements
RUSSIAN ATHENA, INC.
(fka Myercom, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the three months ended September 30, 2004 and
2003, and for the Period from Inception (April 20,
1994) through September 30, 2004
CUMULATIVE
FOR THE THREE FROM INCEPTION
MONTHS ENDED (April 20, 1994)
September 30, To
2004 2003 September 30, 2004
---- ---- ------------------
Cash Flows From Operating Activities:
Net Income (Loss) $ (11,541) $ (1,745) $ (56,792)
Adjustments to reconcile net loss to
net cash used for operating
activities:
Increase in accounts receivable (57) -- (57)
Contribution of research and development -- -- 15,000
(Increase) in Prepaid Expenses -- -- (250)
Increase (decrease) in accounts payable 925 -- 1,712
Increase (decrease) in accrued interest 1,000 -- 2,000
Increase (decrease) in related party payable 2,743 (1,745) 23,276
------- -------------- -------------
Net Cash Provided (Used) by
Operating Activities (6,930) -- (15,611)
Cash Flows From Investing Activities:
Purchase of Furniture and Equipment (3,393) -- (3,393)
Purchase of Securities -- -- (32,967)
Sale of Securities 6,137 -- 6,137
------------- -------------- -------------
Net Cash Provided (Used) by
Investing Activities 2,744 -- (30,223)
Cash Flows From Financing Activities:
Proceeds from sale of common stock -- -- 1,015
Proceeds from Note Payable -- -- 50,000
------------- --------------- --------------
Net Cash Provided (Used) by
Financing Activities -- -- 51,015
Effect of unrealized gain or loss on
Cash and Cash Equivalents (402) -- (1,905)
Net Increase (Decrease) in Cash (4,588) -- 3,777
Beginning Cash Balance 8,365 -- --
---------------- ---------------- --------------
Ending Cash Balance $ 3,777 $ -- $ 3,777
================ ================ ===============
Supplemental disclosures
Cash paid for interest $ -- $ -- $ --
Cash paid for income taxes -- -- --
See accompanying notes to financial statements
RUSSIAN ATHENA, INC.
(fka Myercom, Inc.)
[A Development Stage Company]
Notes to Financial Statements
September 30, 2004
NOTE A Summary of Significant Accounting Policies
Organization
Russian Athena, Inc. [fka Myercom, Inc.] ("the Company") was organized
under the laws of the State of Delaware on April 20, 1994 for the
purpose of seeking out business opportunities, including acquisitions.
The Company is considered a development stage company as defined in
Statement of Financial Accounting Standards ("SFAS") No. 7. The Company
will be very dependent on the skills, talents and abilities of
management to successfully implement its business plan. Since
inception, the Company's activities have been limited to organizational
matters and development of its business plan. The Company has begun
operations in Russia; setting up preliminary operations for their
planned bride services there. The Company has, at present time, not
paid any dividends and any dividends that may be paid in the future
will depend upon the financial requirements of the Company and other
factors.
Statement of Cash Flows
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid debt investments purchased with a maturity of three
months or less to be cash equivalents. The Company had cash and cash
equivalents totaling $3,777 as of September 30, 2004.
Loss Per Share
The computation of loss per share is based on the weighted average
number of shares outstanding during the period, presented in accordance
with Statement of Financial Accounting Standards No. 128, "Earnings Per
Share".
Income Taxes
The Company applies Statement of Financial Accounting Standard (SFAS)
No. 109, "Accounting for Income Taxes," which requires the asset and
liability method of accounting for income taxes. The asset and
liability method requires that the current or deferred tax consequences
of all events, recognized in the financial statements, be measured by
applying the provisions of enacted tax laws to determine the amount of
taxes payable or refundable currently or in future years. (See Note C)
NOTE A Summary of Significant Accounting Policies [continued]
Revenue Recognition
The Company recognizes revenues in accordance with the Securities and
Exchange Commission, Staff Accounting Bulletin (SAB) No. 104, "Revenue
Recognition in Financial Statements." SAB 104 clarifies application of
U.S. generally accepted accounting principles to revenue transactions.
The Company shall recognize revenue from fees as earned, which is when
addresses are sold, introductions are made, tours or travel assistance
is provided, e-mail forwarding and translation is complete, or other
services or products are delivered to the customer. Currently, the
Company has no revenue generating operations.
Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles 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 reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Investments
The Company's investments comprise money market funds and equity
securities. These investments are held in the custody of a major
financial institution. At September 30, 2004, the Company's investments
were classified as available-for-sale. These investments are recorded
in the Balance Sheets at fair value. Unrealized gains and losses on
these investments are included as a separate component of accumulated
other comprehensive income, net of tax. [See Note F]
Fair Value Financial Instruments
The fair values of accounts receivable, prepaid expenses and accounts
payable, accrued expenses, and notes payable are estimated to
approximate the carrying values at June 30, 2004 due to the short
maturities of such instruments.
Furniture and Equipment
All furniture and equipment was purchased at the end of the quarter and
depreciation is not material.
Recently Enacted Accounting Standards
In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation-Transition and Disclosure. SFAS No. 148 amends
SFAS No. 123 to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for
stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The provisions of SFAS
No. 148 are effective for financial statements for fiscal years and
interim periods ending after December 15, 2002. The disclosure
provisions of SFAS No. 148 have been adopted by the Company (See 1994
Stock Option Plan in Note B).
SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liability and
Equity ("SFAS No. 150") was issued in May 2003. SFAS No. 150
establishes standards for how an issuer
classifies and measures certain financial instruments with
characteristics of both liability and equity
in its statement of financial position. The adoption of SFAS No. 150
did not have a material impact on
the Company's Consolidated Financial Statements.
In November 2002, the Financial Accounting Standards Board ("FASB")
issued Financial Accounting Standards Board Interpretation No. ("FIN")
45, Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others, which requires
the guarantor to recognize as a liability the fair value of the
obligation at the inception of the guarantee. The disclosure
requirements in FIN 45 are effective for financial statements of
interim or annual periods ending after December 15, 2002. Management
believes the Company has no guarantees that are required to be
disclosed in the financial statements. The recognition provisions are
to be applied on a prospective basis to guarantees issued after
December 31, 2002. The adoption of the recognition provisions of FIN 45
did not have a material impact on the Company's financial statements.
In January 2003, the FASB issued FIN No. 46, Consolidation of Variable
Interest Entities, an interpretation of Accounting Research Bulletin
("ARB") No. 51. FIN No. 46, as revised in December 2003, addresses
consolidation by business enterprises of variable interest entities.
FIN No. 46 applies immediately to variable interest entities created
after January 31, 2003, and to variable interest entities in which an
enterprise obtains an interest after that date. FIN No. 46 applies in
the first year or interim period ending after December 15, 2003, to
variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. The adoption of FIN
No. 46 did not have a material impact on the Company's financial
statements.
NOTE B Stock
Preferred Stock
The Company has authorized 1,000,000 shares of preferred stock,
$0.001 par value, with such rights,
preferences and designations to be issued in such series as
determined by the Board of Directors. No
shares are issued and outstanding at September 30, 2004.
Common Stock
The Company has authorized 20,000,000 shares of common stock with a par
value of $0.001. On April 20, 1994, in connection with its
organization, the Company issued 13,600,000 shares of its previously
authorized, but un-issued common stock. The shares were issued for cash
of $1,015 (or $0.00007 per share). The shares outstanding have been
adjusted for a 13.6 for one forward stock split in fiscal 2002.
1994 Stock Option Plan
On April 20, 1994, the Company adopted the 1994 Stock Option Plan. The
plan provides for the granting of awards of up to 2,000,000 shares of
common stock to officers, directors, employees, advisors, and employees
of other companies that do business with the Company as non-qualified
and qualified stock options. The Stock Option Committee of the Board of
Directors determines the option price, which cannot be less than the
fair market value at the date of the grant or 110% of the fair market
value if the recipient of the grant holds 10% or more of the Company's
common stock. The price per share of shares subject to a Non-Qualifies
option cannot be less than 85% of the fair market value. Options
granted under the plan will typically expire ten years from the date of
the grant (five years if the recipient of the grant holds 10% or more
of the Company's common stock on the date of the grant) or three months
after termination of employment. As of September 30, 2004, no options
have been granted.
NOTE C Accounting for Income Taxes
No provision has been made in the financial statements for income taxes
because the Company has accumulated losses from operations since
Inception. Any deferred tax benefit arising from the operating loss
carried forward is offset entirely by a valuation allowance since it is
currently not likely that the Company will be sufficiently profitable
in the near future to take advantage of the losses.
Deferred Tax Assets Balance Tax Rate
Federal Loss carryforward (expires through 2024) 58,833 8,824 15%
Valuation Allowance -- (8,824) --
-------- ------- --------
Deferred Tax Asset -- -- --
======== ======= ========
The allowance has increased $1,730 from $7,094 as of June 30, 2004.
NOTE D Liquidity
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company
has accumulated losses since Inception totaling $58,697, and has
limited operations as of September 30, 2004. Further, the Company has
current liabilities in excess of current assets. Financing for the
Company's limited activities, to date, have been provided primarily by
the issuance of stock and by advances from a related party, or
shareholders. These factors raise substantial doubt about the ability
of the Company to continue as a going concern.
Management is proposing to raise any necessary additional funds, not
provided by operation, through loans or through additional sales of its
common stock or through a possible business combination with another
company. There is no assurance that the Company will be successful in
raising this additional capital or achieving profitable operations. The
financial statements do not include any adjustments that might result
from the outcome of these uncertainties.
NOTE E Related Party Transactions
Management Compensation
For the quarters ended September 30, 2004 and 2003, the Company did not
pay any compensation to any officer or director of the Company.
Office Space
The Company has not had a need to rent office space in the U.S. An
officer/shareholder of the Company is allowing the Company to use his
offices as a mailing address, as needed, at no expense to the Company.
Shareholder Loan
During the three months ended September 30, 2004 and 2003, an
officer/shareholder of the Company directly paid expenses totaling
$3,243 and $1,745 on behalf of the Company. At September 30, 2004, the
Company owed the shareholder $23,771. No interest is being accrued on
the payable.
Note Payable
In March 2004, the Company received loan proceeds from a lender who is
controlled by an officer/shareholder of the Company. As of September
30, 2004, the Company owed the related party $50,000 in principal on
the note and $2,000 in accrued interest. The Company issued a
convertible promissory note in the amount of $50,000. The lender has
the right, at maturity (July 1, 2005), to convert the principal sum and
all accrued interest into a number of shares of common stock of the
Company at a price of $.01 per share, or book value per share, which
ever is lower. The following summarizes the Company's indebtedness as
of September 30, 2004:
Convertible Promissory Note, interest at 8%,
payable in lump sum payment, roginally due July 1, 2005 $ 50,000
----------
Total $ 50,000
----------
NOTE F Marketable Securities
The components of Marketable Securities are as follows:
Available
Unrealized Unrealized Recorded for Sale
Cost Basis Gains Losses Basis Securities
Common Stock & Equivalents 28,734 -- (1,905) 26,829 26,829
----------- ----------- ----------- ---------- ----------
Totals 28,734 -- (1,905) 26,829 26,829
----------- ----------- ----------- ---------- ----------
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
We have only received revenues from operations in September 2004, of $57. We
opened our first office in Sochi, Russia in July 2004 and commenced receiving
revenues in September 2004. The Sochi office is also our administrative
headquarters, where payment, bookkeeping and programming are centralized. The
opening costs for Sochi were $12,217 including advance rent and other lease
acquisition costs, computer equipment, furniture and fixtures, and local
advertising. Sochi has an office manager and a translator on staff, for total
salaries of $1,350 per month. Rent and other expenses is an additional $1,350
per month, resulting in total overhead of $2,700 for this office.
It is management's experience with another marriage agency it operates
that office revenues are dependent on the number of ladies registered with each
office as potential brides, and ranges from $3 to $4 per month per lady.
Therefore a base of 770 ladies will be necessary to obtain break even for Sochi.
Our experience is that this level of ladies will require about $2,000
in advertising. Additional offices will only require a manager and translator,
with total monthly salary and office costs of $800, with 300 ladies needed for
break even and opening costs of $6,500 per office after the initial office is
opened in Sochi. We have hired an in-country manager at a salary of $1,000 per
month to open the offices and supervise them. As of the date of this prospectus,
no other employees have been hired.
Based on management's experience in operating a marriage agency in
Ukraine, we expect that through June 30, 2005 we can open a total of 6 offices
(Sochi plus five additional offices) for $45,000 total budget. We have
identified 50 cities in Russia where we intend to open offices. Opening a total
of 50 offices will require approximately $328,000 in capital, including
internally generated funds, and we believe will result in revenues of $100,000
per month. We also estimate that other annual general and administrative costs
related to being public will be $22,000.
Russian Athena has funds on hand for operations and expansion through
June 30, 2005. After June 30, 2005, we believe that internally generated funds
or additional equity investments totaling $300,000 will be necessary to complete
expansion. If we received all the funding, we can open four offices per month
commencing on April 1, 2006. If we do not receive all the outside funding we
need, we will be limited to using internally generated funds and will require up
to several years to open all our offices.
We do not have any agreements or understandings with respect to sources
of capital. We have not identified any potential sources. It's likely that we
will not be able to raise the entire amount required initially, in which case
our development time will be extended until such full amount can be obtained.
Information included in this prospectus includes forward looking
statements, which can be identified by the use of forward-looking terminology
such as may, expect, anticipate, believe, estimate, or continue, or the negative
thereof or other variations thereon or comparable terminology. The statements in
"Risk Factors" and other statements and disclaimers in this prospectus
constitute cautionary statements identifying important factors, including risks
and uncertainties, relating to the forward-looking statements that could cause
actual results to differ materially from those reflected in the forward-looking
statements.
Since we have not yet generated any revenues, we are a development
stage company as that term is defined in paragraphs 8 and 9 of SFAS No. 7. Our
activities to date have been limited to seeking capital; seeking supply
contracts and development of a business plan. Our auditors have included an
explanatory paragraph in their report on our financial statements, relating to
the uncertainty of our business as a going concern, due to our lack of operating
history or current revenues, its nature as a start up business, management's
limited experience and limited funds. We do not believe that conventional
financing, such as bank loans, is available to us due to these factors.
Management believes that it will be able to raise the required funds for
operations from one or more future offerings, and to be able to effect our
business plan. However, Management believes that Russian Athena's ability to
raise significant amounts of financing, including the additional $300,000
required as set forth above, will be dependent on obtaining an initial contract,
and other risks inherent in the business as discussed under the caption "Risk
Factors" may affect the outcome of Management's plans.
Item 3. CONTROLS AND PROCEDURES.
a) Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as of September 30, 2004. Based on this
evaluation, our principal executive officer and our principal financial officer
concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures were effective and adequately designed to
ensure that the information required to be disclosed by us in the reports we
file or submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in applicable rules
and forms.
(b) Changes in internal controls over financial reporting.
During the quarter ended September 30, 2004, there has been no change
in our internal control over financial reporting that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS - None
Item 2. CHANGES IN SECURITIES - 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. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits--None
Reports on Form 8-K--None.
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.
RUSSIAN ATHENA, INC.
Date: December 1, 2004 By:/s/ Jehu Hand
-------------
Jehu Hand,
President and Chief Financial
Officer (chief financial officer
and accounting officer and duly
authorized officer)