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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 10-QSB
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
For quarterly period ended: December 31, 2004; or
----- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
For the transition period _________ to __________
Commission File Number: 0-14869
-----------------------
KOMODO, INC.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 95-3932052
------------------------------ ------------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
SUITE 1322 - 1111 WEST GEORGIA ST, VANCOUVER BC V6E 4M3 CANADA
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(604) 689-9417
-------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that a registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No
--- ---
State the number of shares outstanding of the issuer's common equity: $0.001 par
value, as of December 31, 2004, was 11,473,793.
Transitional Small Business Disclosure Format. Yes No X
--- ---
1
Report on Form 10-QSB
For the Quarter Ended December 31, 2004
INDEX
Page
----
Part I. Financial Information
Item 1. Financial Statements (unaudited)........................3
Balance Sheets .........................................4
Statements of Operations ...............................5
Statements of Cash Flows..............................6-7
Notes to the Financial Statements ...................8-12
Item 2. Management's Discussion and Analysis .................13
or Plan of Operation
Item 3. Controls and Procedures ...............................15
Part II. Other Information
Item 1. Legal Proceedings .....................................15
Item 2. Changes in Securities .................................15
Item 3. Defaults Upon Senior Securities .......................16
Item 4. Submission of Matters to a Vote of Security Holders ...16
Item 5. Other Information .....................................16
Item 6. Exhibits and Reports on Form 8-K ......................16
Signatures.............................................17
2
KOMODO, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 2004 and March 31, 2004
3
KOMODO, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
------ December 31, March 31,
2004 2004
-------------- -------------
(Unaudited)
CURRENT ASSETS
Cash $ 220,743 $ 150,908
Prepaid expenses 47 24,438
------------- ------------
Total Current Assets 220,790 175,346
------------- ------------
FIXED ASSETS, NET 65,558 77,781
------------- ------------
TOTAL ASSETS $ 286,348 $ 253,127
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 467,603 $ 18,776
Accounts payable - related parties 54,093 26,426
Stock subscription payable - 10,000
Liabilities of discontinued operations 205,676 205,676
------------- ------------
Total Current Liabilities 727,372 260,878
------------- ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 10,000,000 shares
authorized of $0.001 par value,
2,000,000 shares issued and outstanding 2,000 2,000
Common stock: 100,000,000 shares
authorized of $0.001 par value,
11,473,793 and 9,861,793 shares
issued and outstanding, respectively 11,474 9,862
Additional paid-in capital 14,170,090 13,527,785
Stock subscriptions receivable (715,000) (150,000)
Deficit accumulated during the development stage (13,909,588) (13,397,398)
------------- ------------
Total Stockholders' Equity (Deficit) (441,024) (7,751)
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 286,348 $ 253,127
============= ============
The accompanying notes are an integral part of the financial statements.
4
KOMODO, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
Inception on
For the Three Months Ended For the Nine Months Ended November 10,
December 31, December 31, 1995 Through
--------------------------- --------------------------- December 31,
2004 2003 2004 2003 2004
------------- ------------- ------------- ------------- -------------
REVENUES $ - $ - $ - $ - $ -
------------ ------------ ------------ ------------ ------------
EXPENSES
Impairment of asset - - - - 50
Depreciation and amortization 4,075 667 12,223 667 186,464
General and administrative 146,911 148,848 499,967 294,289 2,807,880
------------ ------------ ------------ ------------ ------------
Total Expenses 150,986 149,515 512,190 294,956 2,994,394
------------ ------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (150,986) (149,515) (512,190) (294,956) (2,994,394)
------------ ------------ ------------ ------------ ------------
OTHER (EXPENSES)
Interest expense - (636) - (2,669) (5,464)
------------ ------------ ------------ ------------ ------------
Total Other (Expense) - (636) - (2,669) (5,464)
------------ ------------ ------------ ------------ ------------
LOSS BEFORE DISCONTINUED
OPERATIONS (150,986) (150,151) (512,190) (297,625) (2,999,858)
------------ ------------ ------------ ------------ ------------
LOSS FROM DISCONTINUED
OPERATIONS NET OF ZERO TAX
EFFECT - - - - (10,909,730)
------------ ------------ ------------ ------------ ------------
NET LOSS $ (150,986) $ (150,151) $ (512,190) $ (297,625) $(13,909,588)
============ ============ ============ ============ ============
BASIC LOSS PER SHARE OF
COMMON STOCK $ (0.01) $ (0.02) $ (0.05) $ (0.04)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 11,240,360 9,167,867 10,540,638 8,073,667
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
5
KOMODO, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
Inception on
For the Nine Months Ended November 10,
December 31, 1995 Through
------------------------- December 31,
2004 2003 2004
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (512,190) $ (297,625) $(13,909,588)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation and amortization expense 12,223 667 209,948
Common stock issued for services and donations 5,500 29,841 3,781,023
Common stock issued for payment of accounts payable - - 8,800
Bad debt expense - - 224,941
Write-off mineral property - - 3,914,434
Write-off of stock subscription receivable - - 250
Services rendered for deferred compensation - 9,250 339,750
Services performed to reduce stock subscription
receivable - - 246,761
Warrants granted below market value - 15,750 513,331
Currency translation adjustment - - (168,626)
Impairment of asset - - 50
Forgiveness of debt by shareholder - 90,705 90,705
Changes in operating assets and liabilities:
(Increase) in accounts receivable - - (213,312)
(Increase) decrease in deposits and
prepaid expenses 24,391 (10,626) (85,412)
Increase (decrease )in accounts payable-related parties 27,667 (11,156) 198,189
(Decrease) in stock subscription payable (10,000) - -
Increase (decrease) in accounts payable and accrued liabilities 448,827 18,899 457,355
Increase in liabilities of discontinued operations - - 258,161
----------- - ------------
Net Cash Provided (Used) by Operating Activities (3,582) (154,295) (4,133,240)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets - (40,000) (230,499)
Purchase of mineral property and deferred
exploration costs - - (2,762,539)
----------- ----------- ------------
Net Cash Used by Investing Activities - (40,000) (2,993,038)
----------- ----------- ------------
The accompanying notes are an integral part of the financial statements.
6
KOMODO, INC.
(A Development Stage Company)
Statements of Cash Flows (Continued)
(Unaudited)
From
Inception on
For the Nine Months Ended November 10,
December 31, 1995 Through
------------------------- December 31,
2004 2003 2004
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock offering costs (513,583) - (569,083)
Cash received on stock subscription - - 11,510
Change in cash overdraft - (176) -
Proceeds from common stock 587,000 505,000 6,432,174
Proceeds on notes payable - related party - - 1,472,420
----------- ----------- ------------
Net Cash Provided (Used) by Financing Activities 73,417 504,824 7,347,021
----------- ----------- ------------
NET INCREASE (DECREASE) IN CASH 69,835 310,529 220,743
CASH AT BEGINNING OF PERIOD 150,908 - -
----------- ----------- ------------
CASH AT END OF PERIOD $ 220,743 $ 310,529 $ 220,743
=========== =========== ============
CASH PAID FOR:
Interest $ - $ - $ 114
Income taxes $ - $ - $ -
NON-CASH FINANCING ACTIVITIES
Common stock issued for acquisition of asset $ - $ - $ 394,062
Common stock issued for debt conversion $ - $ - $ 1,210,719
Common stock issued for mineral properties $ - $ - $ 550,000
Common stock issued for services and donation $ 5,500 $ 29,841 $ 3,781,023
Common stock issued for license $ - $ - $ 125,000
Common stock issued for subscription $ - $ - $ 387,750
Common stock issued for payment of
accounts payable $ - $ - $ 8,800
Services performed by related parties for the
reduction in stock subscription receivable $ - $ 54,346 $ 246,761
The accompanying notes are an integral part of the financial statements.
7
KOMODO, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2004 and March 31, 2004
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. 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 in accordance with
such rules and regulations. The information furnished in the interim
condensed financial statements include normal recurring adjustments and
reflects all adjustments, which, in the opinion of management, are
necessary for a fair presentation of such financial statements.
Although management believes the disclosures and information presented
are adequate to make the information not misleading, it is suggested
that these interim condensed financial statements be read in
conjunction with the Company's most recent audited financial statements
and notes thereto included in its March 31, 2004 Annual Report on Form
10-KSB. Operating results for the nine months ended December 31, 2004
are not necessarily indicative of the results that may be expected for
the year ending March 31, 2005.
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, develop a reliable source of
revenues, and achieve a profitable level of operations the Company will
need, among other things, additional capital resources. Management's
plans to continue as a going concern include raising additional capital
through sales of common stock. 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.
8
KOMODO, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2004 and March 31, 2004
NOTE 3 - RELATED PARTY TRANSACTIONS
As of December 31, 2004, the Company owed related parties $54,093
amounts advanced to the Company to cover operating expenses and accrued
salaries.
On July 23, 2003, the Company granted 1,000,000 warrants to two
directors of the Company for a total of 2,000,000 warrants. The
exercise price is $0.12 per share and the warrants expire in ten years.
On August 8, 2003, the Company granted 700,000 stock options to related
parties under the 2003 stock option plan (See Note 4).
On November 17, 2004, the Company granted 2,000,000 warrants to two
directors of the Company for a total of 4,000,000 warrants. The
exercise price is $0.70 per share and the warrants expire in ten years.
NOTE 4 - OPTIONS AND WARRANTS
On September 27, 2002, the Company established the 2002 stock option
plan (the plan) to promote the interests of the Company. The Board of
Directors of the Company has sole and complete authority to determine
the employees to whom options shall be granted, the number of each
grant and any additional conditions and limitations. The total number
of shares of common stock subject to outstanding options shall be
1,000,000 shares. The exercise price shall not be less than the fair
market value of the underlying shares.
On August 8, 2003, the Company established the 2003 stock option plan
(the plan) to promote the interests of the Company. The Board of
Directors of the Company has sole and complete authority to determine
the employees and/or consultants to who options shall be granted, the
number of each grant and any additional conditions and limitations. The
total number of shares of common stock subject to outstanding options
shall be 1,150,000 shares. The exercise price shall not be less than
the fair market value of the underlying shares.
A summary of the status of the Company's outstanding stock options as
of December 31, 2004 (FY2005) and March 31,2004 (FY2004) and changes
during the nine months ended December 31, 2004 and the year ended March
31, 2004 is presented below:
9
KOMODO, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2004 and March 31, 2004
NOTE 4 - OPTIONS AND WARRANTS (Continued)
December 31, March 31,
2004 2004
------------------- -------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
--------- -------- --------- --------
Outstanding, beginning of
year 2,150,000 $ 0.17 1,000,000 $ 0.21
Granted - - 1,150,000 0.14
Expired/Cancelled - - - -
Exercised - - - -
--------- -------- --------- --------
Outstanding, end of year 2,150,000 $ 0.17 2,150,000 $ 0.17
========= ======== ========= ========
Exercisable 2,150,000 $ 0.17 2,150,000 $ 0.17
========= ======== ========= ========
Outstanding Exercisable
--------------------------------------------- ---------------------
Weighted
Number Average Weighted Number Weighted
Range of Outstanding Remaining Average Exercisable Average
Exercise at Dec. 31, Contractual Exercise at Dec. 31, Exercise
Prices 2004 Life Price 2004 Price
------------ ----------- ----------- -------- ------------ --------
$0.14 - 0.21 2,150,000 10.00 $ 0.17 2,150,000 $ 0.17
------------ ----------- ----------- -------- ------------ --------
$0.14 - 0.21 2,150,000 10.00 $ 0.17 2,150,000 $ 0.17
============ =========== =========== ======== ============ ========
The Company has the following outstanding warrants:
10
KOMODO, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2004 and March 31, 2004
NOTE 4 - OPTIONS AND WARRANTS (Continued)
December 31, March 31,
2004 2003
------------------ ------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
--------- -------- --------- --------
Outstanding, beginning of
year 3,600,000 $ 0.20 1,600,000 $ 0.30
Granted 4,000,000 0.70 2,000,000 0.12
Expired/Cancelled - - - -
Exercised - - - -
--------- -------- --------- --------
Outstanding end of period 7,600,000 $ 0.46 3,600,000 $ 0.20
========= ======== ========= ========
Exercisable 7,600,000 $ 0.46 3,600,000 $ 0.20
========= ======== ========= ========
Outstanding Exercisable
-------------------------------- ---------------------
Weighted
Number Average Weighted Number Weighted
Range of Outstanding Remaining Average Exercisable Average
Exercise at Dec. 31, Contractual Exercise at Dec. 31, Exercise
Prices 2004 Life Price 2004 Price
------------ ----------- ----------- ---------- ----------- --------
$ 0.12-1.00 7,600,000 9.50 $0.12-1.00 7,600,000 $ 0.20
------------ ----------- ----------- ---------- ----------- --------
$ 0.12-1.00 7,600,000 9.50 $0.12-1.00 7,600,000 $ 0.20
============ =========== =========== ========== =========== ========
Under FASB Statement 123, the Company estimates the fair value of each
stock award at the grant date by using the Black-Scholes option pricing
model with the following weighted average assumptions used for grants,
respectively; dividend yield of zero percent for all years; expected
volatility of 151.20% and 0.00%; risk-free interest rates of 2.14, and
2.77 percent and expected lives of 5.0 and 0.0, for the nine months
ended December 31, 2004 and 2003, respectively.
Had compensation cost for the Company's stock options granted to
directors and employees been based on the fair value as determined by
the Black-Scholes option pricing model at the grant date under the
accounting provisions of SFAS No. 123, the Company would have recorded
an additional expense of $2,799,962 and $-0- for the nine months ended
December 31, 2004 and 2003, respectively. Also under these same
provisions, the Company's net loss would have been changed by the pro
forma amounts indicated below:
11
KOMODO, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2004 and March 31, 2004
NOTE 4 - OPTIONS AND WARRANTS (Continued)
For the Nine Months Ended
December 31,
---------------------------------------
2004 2003
------------------ -------------------
Net loss:
As reported $ (512,190) $ (297,625)
Pro forma $ (3,312,152) $ (297,625)
December 31,
---------------------------------------
2004 2003
------------------ -------------------
Basic loss per share:
As reported $ (0.05) $ (0.04)
Pro forma $ (0.31) $ (0.04)
NOTE 5 - COMMON STOCK
On June 22, 2004, the Company issued 147,000 shares of common stock at
$1.00 per share for cash of $147,000.
On June 22, 2004, the Company issued 35,000 shares of common stock at
$1.50 per share for cash of $52,500.
On August 4, 2004, the Company issued 500,000 shares of common stock at
$0.35 per share pursuant to a subscription for $175,000. The Company
has not received any proceeds of the subscription as of September 30,
2004.
On September 3, 2004, the Company issued 500,000 shares of common stock
at $0.78 per share pursuant to a subscription for $390,000. The Company
has not received any proceeds of the subscription as of September 30,
2004.
On October 7, 2004, the Company issued 5,000 shares of common stock at
$1.10 per share as a donation to a charitable entity.
On November 17, 2004, the Company issued 375,000 shares of common stock
at $0.90 per share for cash proceeds of $337,500. The Company incurred
stock offering costs in shares and cash of $491,183 in connection with
this offering.
On December 8, 2004, the Company issued 50,000 shares of common stock
at $1.00 per share for cash proceeds of $50,000.
12
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying balance sheets of Komodo, Inc. at December 31,
2004 and March 31, 2004, related statements of operations and cash flows for the
three months and nine months ended December 31, 2004 and 2003, have been
prepared by our management in conformity with accounting principles generally
accepted 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 and nine
months ended December 31, 2004, are not necessarily indicative of the results
that can be expected for the fiscal year ending March 31, 2005.
Item 2. Management's Discussion and Analysis of Financial Condition or Plan of
Operations
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Form 10-QSB.
Forward-looking and Cautionary Statements
This report contains certain forward-looking statements. These statements relate
to future events or our future financial performance and involve known and
unknown risks and uncertainties. These factors may cause our company's, or our
industry's actual results, levels of activity, performance or achievements to be
materially different from those expressed or implied by the forward-looking
statements. In some cases, you can identify forward-looking statements by
terminology such as "may," "will" "should," "expects," "intends," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," "continue," or
the negative of these terms or other comparable terminology.
These statements are only predictions. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
Business Overview
-----------------
Komodo is a software development company in the process of designing and
building a web based application designed to eradicate viruses, spam, unwanted
e-mails while providing complete privacy and or anonymity. E-mail traffic is
rampant with viruses, unwanted spam, unsolicited adult content and causes 100's
of millions of dollars in wasted time and added bandwidth costs to the current
infrastructure. This annoying and costly phenomenon increasingly results in
extra expenses in terms of lost productivity when computers are virus infected
and getting rid of unwanted e-mails. Current solutions are ineffective
filtration methods and usually require special software or equipment to be
installed on the client side.
We believe our e-mail system will be 100% effective in eliminating spam,
viruses, unwanted e-mail solicitations and will dramatically speed up the
delivery of all mail, especially larger files. The application will be a
13
subscription based service which will enable customers to continue using their
current e-mail address thereby minimizing any frustrations and eliminating
unnecessary stress caused by changing e-e-mail addresses or domains. Subscribers
will be able to sign up online for the services and will be provided with a
multiple selection of products designed for eliminating spam, viruses while
providing extremely high levels of security and privacy. Our technology is in
development and it is anticipated will undergo some structural changes before
release in its beta format. Development of web based technology requires
open-ended development and typically code is rewritten, adjusted and modified
during development which may result in delays.
We expect that we need approximately $1,000,000 over the next 12 month period.
We raised $845,000 subsequent to December 31, 2004. In the 12 months ended
December 31, 2004 we raised $700,000. This funding was completed in the form of
private placement funding from the sale of shares of the company's common stock.
Without adequate funding the product will not progress. Obtaining financing
depends on current market conditions, the willingness of the investment
community to make investments into software development, the timing of key
developments of the software and other similar factors. We cannot provide any
assurances that we will be able to secure the funding.
Results of Operations
The net loss for the quarter ended December 31, 2004 was $150,986, as compared
to $150,151 for the same period in 2003. The net loss for 2004 translates into a
loss of $0.01 per share compared to a loss of $0.02 per share for the same
period in 2003. The net loss in both periods was primarily attributed to
consulting fees incurred in the development of our technology and for the
management our company, which began in October 2003. In October 2003, we also
leased office space and incurred related occupancy expenses in order to provide
work space for the consultants. We paid or accrued approximately $115,000 to our
consultants in the third quarter of fiscal 2004. The balance of our general and
administrative expenses were made up primarily of legal and accounting of
approximately $5,000, depreciation of $4,000, travel of $4,000 and rent of
$4,000. We had no revenues in the quarter.
Net losses for the nine months ended December 31, 2004 were $512,190 as compared
to $297,625 for the same period in 2003. The net loss for 2004 translates into a
loss of $0.05 per share compared to a loss of $0.04 per share for the same
period in 2003. The increase in the net loss was also primarily consulting fees
incurred in the development of our technology and management fees, which began
in October 2003, and related occupancy expenses in order to provide work space
for the consultants. We paid or accrued approximately $352,000 to our
consultants during the first three quarters of fiscal 2004. The remainder of our
general and administrative expenses were primarily made up of legal and
accounting of approximately $28,000, depreciation of $12,000, travel costs of
$10,000 and marketing of $36,000. We had no revenues in the nine months.
Liquidity and Capital Resources
We had approximately $221,000 cash on hand at December 31, 2004 compared to
$151,000 at March 31, 2004. We used approximately $4,000 of cash for operations
during the nine months ended December 31, 2004 compared to $154,000 for the same
period of 2003. The increase in 2003 was due to the start up of operations for
the development of our e-mail security technology.
14
We raised a net $587,000 from the private placement of our common shares during
the nine months ended December 31, 2004 at prices ranging from $0.90 to $1.50
per share. We incurred fees of $565,100 for the funds which were raised. The
fees were paid in 1,700,000 shares of our common stock and cash of $37,850.
We estimate that existing sources of liquidity and the funds provided by
anticipated capital activity will not satisfy our projected working capital
requirements through calendar 2004. Our ability to maintain sufficient liquidity
through calendar 2004 is dependent on our raising additional capital and such
capital may not be available on acceptable terms, if at all. Additional
financing may result in substantial and immediate dilution to existing
stockholders. If adequate funds are not available to satisfy either short or
long-term capital requirements, we may be required to curtail operations
significantly or to seek funds through arrangements with strategic partners,
existing investors or other parties.
We have received stock subscriptions for $715,000 for 1,000,000 shares of our
common stock but we have not received any proceeds from the subscriptions as of
December 31, 2004. We have met our operating obligations because a related
company has advanced us $54,093, as of December 31, 2004, by paying some of our
expenses. We need to repay these advances from the proceeds of our stock
subscriptions.
Item 3. Controls and Procedures
As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of management,
including our chief executive officer and principal financial officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934. Based upon that evaluation, our chief executive officer
and principal financial officer concluded that our disclosure controls and
procedures are effective to cause the material information required to be
disclosed by us in the reports that we file or submit under the Exchange Act to
be recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. There have been no significant changes
in our internal controls or in other factors which could significantly affect
internal controls subsequent to the date we carried out our evaluation.
PART II - OTHER INFORMATION.
Item 1. Legal Proceedings.
We are not aware of any pending claims or assessments, that may have a
material adverse impact on Komodo's financial position or results of operations.
Item 2. Changes in Securities.
The following unregistered securities have been issued since October 1st, 2003:
15
Valued
Date No. of Shares Title At Reason
Oct. 8/03 1,500,000 Common $0.10 Private Placement
Nov. 14/03 450,000 Common $0.50 Private Placement
Nov. 28/03 373,333 Common $0.75 Private Placement
June 22/04 147,000 Common $1.00 Private Placement
June 22/04 35,000 Common $1.50 Private Placement
Aug. 4/04 500,000 Common $0.35 Private Placement
Sep. 3/04 500,000 Common $0.78 Private Placement
Oct. 7/04 5,000 Common $1.10 Private Placement
Nov. 17/04 375,000 Common $0.90 Private Placement
Dec. 8/04 50,000 Common $1.00 Private Placement
The above noted shares were issued in private, isolated transactions without
registration under the Securities Act. The shares were issued in reliance on the
exemption provided by Rule 506 and/or Section 4(2) of the Securities Act as a
transaction by an issuer not involving a public offering to Consultants or to
companies owned or controlled by Consultants or Officers of Komodo. Aggregate
gross proceeds realized from the private sale of common stock was $1,096,999.
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.
(a) Exhibits
Exhibit 31.1 Certification of C.E.O. and Principal Accounting Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Certification of C.E.O. and Principal Accounting Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Report on Form 8-K
None
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SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
KOMODO, INC.
Date: February 10, 2005 / s / Gordon Muir
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President / Director
Principal Accounting Officer
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