================================================================================
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: June 30, 2008; 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 116C - 930 WEST 1ST STREET, NORTH VANCOUVER BC V7P 3N4 CANADA
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(604) 986-9866
-------------------------
(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 June 30, 2008, was 25,926,247.
Transitional Small Business Disclosure Format. Yes No X
--- ---
1
Report on Form 10-QSB
For the Six Months Ended June 30, 2008
INDEX
Page
----
Part I. Financial Information
Item 1. Financial Statements (unaudited)........................3
Balance Sheets .........................................4
Statements of Operations ...............................5
Statements of Cash Flows.............................9-10
Notes to the Financial Statements ..................11-14
Item 2. Management's Discussion and Analysis .................15
or Plan of Operation
Item 3. Controls and Procedures ...............................16
Part II. Other Information
Item 1. Legal Proceedings .....................................17
Item 2. Changes in Securities .................................17
Item 3. Defaults Upon Senior Securities .......................17
Item 4. Submission of Matters to a Vote of Security Holders ...17
Item 5. Other Information .....................................17
Item 6. Exhibits and Reports on Form 8-K ......................17
Signatures.............................................18
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying balance sheets of Komodo, Inc. at June 30, 2008 and March 31,
2008, and the related statements of operations, stockholders' equity (deficit)
and cash flows for the three months ending June 30, 2008 and 2007, have been
prepared by our management in conformity with accounting principles generally
accepted in the United States. 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 June 30, 2008, are not
necessarily indicative of the results that can be expected for the fiscal year
ending March 31, 2009.
KOMODO, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 2008 and March 31, 2008
3
KOMODO, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
------
June 30, March 31,
2008 2008
------------- -------------
(unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 84 $ 102
------------ ------------
Total Current Assets 84 102
------------ ------------
EQUIPMENT, NET - -
------------ ------------
TOTAL ASSETS $ 84 $ 102
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 72,258 $ 71,918
Related party payable 200,695 200,695
------------ ------------
Total Current Liabilities 272,953 272,613
------------ ------------
STOCKHOLDERS' DEFICIT
Preferred stock; 10,000,000 shares
authorized at $0.001 par value,
2,000,000 shares issued and outstanding 2,000 2,000
Common stock; 100,000,000 shares authorized
at $0.001 par value, 25,926,247 shares
issued and outstanding 25,926 25,926
Additional paid-in capital 17,987,173 17,987,173
Deficit accumulated during the development stage (18,287,968) (18,287,610)
------------ ------------
Total Stockholders' Deficit (272,869) (272,511)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 84 $ 102
============ ============
The accompanying notes are an integral part of these financial statements.
4
KOMODO, INC.
(A Development Stage Company)
Statements of Operations
(unaudited)
From
Inception on
For For November 10,
the Three the Three 1995
Months Ended Months Ended Through
June 30, June 30, June 30,
2008 2007 2008
------------- ------------- -------------
REVENUES $ - $ - $ 10,724
COST OF SALES - - -
------------ ------------ ------------
GROSS MARGIN - - 10,724
OPERATING EXPENSES
Impairment of asset - - 136,993
Research and development - - 647,390
Depreciation and amortization - 12,837 290,323
Management fees-related parties - 120,000 1,297,500
General and administrative 358 11,313 5,216,968
------------ ---------- ------------
Total Operating Expenses 358 144,150 7,589,174
------------ ---------- ------------
INCOME FROM OPERATIONS (358) (144,150) (7,578,450)
OTHER INCOME (EXPENSE)
Interest expense - - (5,464)
------------ ---------- ------------
Total Other Income (Expense) - - (5,464)
------------ ---------- ------------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (358) (144,150) (7,583,914)
INCOME TAX EXPENSE - - -
------------ ---------- ------------
LOSS FROM CONTINUING OPERATIONS (358) (144,150) (7,583,914)
GAIN (LOSS) FROM DISCONTINUED
OPERATIONS - - (10,704,054)
------------ ---------- ------------
NET LOSS $ (358) $ (144,150) $(18,287,968)
============ ========== ============
BASIC AND DILUTED LOSS PER SHARE $ (0.00) $ (0.01)
============ ==========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 25,926,247 25,926,247
============ ==========
The accompanying notes are an integral part of these financial statements
5
KOMODO, INC.
(A Development Stage Company)
Statements of Stockholders' Deficit
Deficit
Accumulated
Preferred Stock Common Stock Additional Stock Other During the Total
---------------- --------------- Paid-In Subscriptions Deferred Comprehensive Development Stockholders'
Shares Amount Shares Amount Capital Receivable Compensation Income(Loss) Stage Deficit
--------- -------- ------- ------ ----------- ---------- ------------ ------------ ------------ ------------
Balance at
November 10,
1995 - $ - - $ - $ - $ - $ - $ - $ - $ -
(inception)
Issuance of
common stock
for cash at
$0.00 per
share - - - - - - - - - -
Currency
translation
adjustment - - - - - - - (1,230) - (1,230)
Net loss for
the year
ended March
31, 1996 - - - - - - - - (157,549) (157,549)
--------- -------- ------- ------ ---------- --------- ----------- ----------- ----------- -----------
Balance,
March 31,
1996 - - - - - - - (1,230) (157,549) (158,779)
Issuance of
common stock
for cash at
$28.32 per
share - - 38,467 39 1,089,448 - - - - 1,089,487
Issuance of
common stock
for services
at $57.08 per
share - - 1,534 2 87,554 - - 8,542 - 96,098
Net loss for
the year
ended March
31, 1997 - - - - - - - - (157,549) (157,549)
--------- -------- ------- ------ ---------- --------- ----------- ----------- ----------- -----------
Balance,
March 31, 1997 - - 40,001 41 1,177,002 - - 7,312 (1,545,938) (361,583)
Recapitalization
(Note 1) - - 164,120 164 393,898 - - - - 394,062
Issuance of
common stock
for cash at
$34.65 per
share - - 81,435 82 2,822,045 (100,000) - - - 2,722,127
Issuance of
common stock
for services
at $26.28 per
share - - 44,887 45 1,179,581 (154,281) - - - 1,025,345
Issuance of
warrants - - - - 17,220 - - - - 17,220
Issuance of
common stock
for debt at
$19.51 per
share - - 51,040 51 995,668 - - - - 995,719
Issuance of
common stock
for
properties
at $74.99
per share - - 7,334 7 549,993 - - - - 550,000
Issuance of
preferred
stock for
services at
$0.18 per
share 2,000,000 200,000 - - 160,000 - - - - 360,000
Currency
translation
adjustment - - - - - - - 260,719 - 260,719
Net loss
for the year
ended March
31, 1998 - - - - - - - - (3,332,577) (3,332,577)
--------- -------- ------- ------ ---------- --------- ----------- ----------- ----------- -----------
Balance,
March 31,
1998 2,000,000 200,000 388,817 390 7,295,407 (254,281) - 268,031 (4,878,515) 2,631,032
Issuance of
common stock
for cash at
$10.72 per
share - - 114,178 114 1,224,166 - - - - 1,224,280
Issuance of
common stock
for services
at $10.97 per
share - - 136,363 137 1,495,085 - - - - 1,495,222
Receipt of
subscriptions
receivable - - - - - 254,281 - - - 254,281
Issuance of
common stock
for debt at
$15.00 per
share - - 1,600 2 23,998 - - - - 24,000
Currency
translation
adjustment - - - - - - - (268,031) - (268,031)
Net loss for
the year
ended March
31, 1999 - - - - - - - - (6,031,215) (6,031,215)
--------- -------- ------- ------ ---------- --------- ----------- ----------- ----------- -----------
Balance,
March 31,1999 2,000,000 200,000 640,958 643 10,038,656 - - - (10,909,730) (670,431)
Issuance of
common stock
for debt at
$5.31 per
share - - 98,160 98 520,848 - - - - 520,946
Issuance of
common stock
for cash at
$3.75 per
share - - 13,334 13 49,987 - - - - 50,000
Issuance of
common stock
for services
at $3.48 per
share - - 158,972 159 553,732 - - - - 553,891
Issuance of
common stock
for license
at $3.75 per
share - - 33,334 33 124,967 - - - - 125,000
Cancellation
of common
stock - - (334) (1) (3,749) - - - - (3,750)
Change in par
value of
preferred stock - (198,000) - - 198,000 - - - - -
Net loss for
the year
ended March 31,
2000 - - - - - - - - (796,123) (796,123)
--------- -------- ------- ------ ----------- --------- ----------- ----------- ------------ ----------
Balance,
March 31, 2000 2,000,000 $ 2,000 944,424 $ 945 $11,482,441 $ - $ - $ - $(11,705,853) $ (220,467)
========= ======== ======= ====== =========== ========= =========== =========== ============ ==========
The accompanying notes are an integral part of these financial statements.
6
KOMODO, INC.
(A Development Stage Company)
Statements of Stockholders' Deficit
Deficit
Accumulated
Preferred Stock Common Stock Additional Stock Other During the Total
----------------- ----------------- Paid-In Subscriptions Deferred Comprehensive Development Stockholders'
Shares Amount Shares Amount Capital Receivable Compensation Income(Loss) Stage Deficit
--------- -------- --------- ------ ----------- ---------- ------------ ------------ ------------- ------------
Balance at
March 31, 2000 2,000,000 $ 2,000 944,424 $ 945 $11,482,441 $ - $ - $ - $(11,705,853) $ (220,467)
Issuance of
common stock
for services
at $0.60 per
share - - 13,334 13 7,987 - - - - 8,000
Issuance of
common stock
for cash at
$0.04 per
share - - 649,233 649 23,697 (24,346) - - - -
Additional
expense
through
extension
and
revaluation
of warrants - - - - 51,761 - - - - 51,761
Net loss for
the year
ended March
31, 2001 - - - - - - - - (75,091) (75,091)
--------- -------- --------- ------ ----------- --------- ----------- ----------- ------------ -----------
Balance,
March 31, 2001 2,000,000 2,000 1,606,991 1,607 11,565,886 (24,346) - - (11,780,944) (235,797)
Issuance of
common stock
for cash at
$0.20 per
share - - 1,206,668 1,207 236,543 (237,750) - - - -
Payables for
subscriptions
receivable - - - - - 11,510 - - - 11,510
Receipt of
subscriptions
receivable - - - - - 3,575 - - - 3,575
Write off of
subscriptions
receivable - - - - - 250 - - - 250
Issuance of
common stock
for services
at $0.07 per
share - - 2,271,671 2,272 150,978 - - - - 153,250
Issuance of
common stock
for deferred
services at
$0.07 per
share - - 1,359,000 1,359 338,391 - (339,750) - - -
Receipt of
deferred
services - - - - - - 110,000 - - 110,000
Issuance of
common stock
for debt at
$0.02 per
share - - 469,333 469 8,331 - - - - 8,800
Issuance of
common stock
for technology
at $0.00 per
share - - 200,000 200 (150) - - - - 50
Additional
expense
through
issuance of
warrants - - - - 428,600 - - - - 428,600
Fractional
shares
issued - - 7,937 8 (8) - - - - -
Net loss for
the year
ended March
31, 2002 - - - - - - - - (720,206) (720,206)
--------- -------- --------- ------ ----------- --------- ----------- ----------- ------------ -----------
Balance,
March 31, 2002 2,000,000 2,000 7,121,600 7,122 12,728,571 (246,761) (229,750) - (12,501,150) (239,968)
Issuance of
common stock
for services
at $0.60 per
share - - 20,000 20 11,980 - - - - 12,000
Issuance of
common stock
for services
at $0.21 per
share - - 400,000 400 83,600 - - - - 84,000
Receipt of
deferred
services - - - - - - 229,750 - - 229,750
Fractional
shares
corrected - - (3,140) (3) 3 - - - - -
Related party
services
received for
stock
subscription
receivable - - - - - 10,250 - - - 10,250
Net loss for
the year
ended March
31, 2003 - - - - - - - - (362,640) (362,640)
--------- -------- --------- ------ ----------- ---------- ---------- --------- ------------- -----------
Balance,
March 31, 2003 2,000,000 2,000 7,538,460 7,539 12,824,154 (236,511) - - (12,863,790) (266,608)
Additional
expense
through
issuance of
options - - - - 15,750 - - - - 15,750
Issuance of
common stock
for cash at
$0.01 per
share - - 1,500,000 1,500 148,500 (150,000) - - - -
Issuance of
common stock
for cash at
$0.50 per
share - - 450,000 450 224,550 - - - - 225,000
Issuance of
common stock
for cash at
$0.75 per
share - - 373,333 373 279,626 - - - - 279,999
Debt forgiven
by a shareholder - - - - 90,705 - - - - 90,705
Receipt of
deferred
services - - - - - 49,011 - - - 49,011
Write off of
subscriptions
receivable - - - - - 187,500 - - - 187,500
Stock
offering
costs - - - - (55,500) - - - - (55,500)
Net loss for
the year
ended March
31, 2004 - - - - - - - - (533,608) (533,608)
--------- -------- --------- ------ ----------- --------- --------- -------- ------------ ----------
Balance,
March 31, 2004 2,000,000 $ 2,000 9,861,793 $9,862 $13,527,785 $(150,000) $ - $ - $(13,397,398) $ 7,751
========= ======== ========= ====== =========== ========= ========= ======== ============ ==========
The accompanying notes are an integral part of these financial statements.
7
KOMODO, INC.
(A Development Stage Company)
Statements of Stockholders' Deficit
Deficit
Accumulated
Preferred Stock Common Stock Additional Stock Other During the Total
---------------- ------------------ Paid-In Subscriptions Deferred Comprehensive Development Stockholders'
Shares Amount Shares Amount Capital Receivable Compensation Income(Loss) Stage Deficit
--------- -------- ---------- ------ ----------- ---------- ------------ ------------ ------------- ------------
Balance at
March 31, 2004 2,000,000 $ 2,000 9,861,793 $9,862 $13,527,785 $(150,000) $ - $ - $(13,397,398) $ (7,751)
Issuance of
common stock
for cash at
$1.00 per
share - - 147,000 147 146,853 - - - - 147,000
Issuance of
common stock
for cash at
$1.50 per
share - - 35,000 35 52,465 - - - - 52,500
Issuance of
common stock
for cash at
$0.35 per
share - - 500,000 500 174,500 (175,000) - - - -
Issuance of
common stock
for cash at
$0.78 per
share - - 500,000 500 389,500 (390,000) - - - -
Issuance of
common stock
for services
at $1.10 per
share - - 5,000 5 5,495 - - - - 5,500
Issuance of
common stock
for cash at
$0.90 per
share - - 375,000 375 337,125 - - - - 337,500
Issuance of
common stock
for cash at
$1.00 per
share - - 50,000 50 49,950 - - - - 50,000
Issuance of
common stock
for services
at $0.83 per
share - - 1,700,000 1,700 1,409,300 - - - - 1,411,000
Issuance of
common stock
for cash at
$0.90 per
share - - 750,000 750 674,250 - - - - 675,000
Receipt of
subscriptions
receivable - - - - - 150,000 - - - 150,000
Issuance of
common stock
for cash at
$1.00 per
share - - 170,000 170 169,830 - - - - 170,000
Stock
offering
costs - - - - (1,574,750) - - - - (1,574,750)
Net loss for
the year
ended March
31, 2005 - - - - - - - - (812,258) (812,258)
--------- -------- ---------- ------- ----------- ---------- ----------- ----------- ------------ -----------
Balance,
March 31, 2005 2,000,000 2,000 14,093,793 $14,094 15,362,303 (565,000) - - (14,209,656) 603,741
Issuance of
common stock
for cash at
$0.88 per
share - - 300,000 300 263,700 - - - - 264,000
Issuance of
common stock
for cash at
$1.00 per
share - - 25,000 25 24,975 - - - - 25,000
Issuance of
common stock
for cash at
$1.00 per
share - - 320,000 320 319,680 (40,000) - - - 280,000
Issuance of
common stock
for services
at $0.71 per
share - - 150,000 150 106,350 - - - - 106,500
Additional
expense
through
issuance of
warrants and
options - - - - 808,719 - - - - 808,719
Receipt of
subscriptions
receivable - - - - - 109,500 - - - 109,500
Stock
offering
costs - - - - (23,000) - - - - (23,000)
Net loss for
the year
ended March
31, 2006 - - - - - - - - (2,259,376) (2,259,376)
--------- -------- ---------- ------- ----------- ---------- ----------- ----------- ------------ -----------
Balance,
March 31, 2006 2,000,000 2,000 14,888,793 14,889 16,862,727 (495,500) - - (16,469,032) (84,916)
Issuance of
common stock
for services
at $0.58 per
share - - 171,000 171 99,009 - - - - 99,180
Issuance of
common stock
for cash at
$0.80 per
share - - 25,000 25 19,975 - - - - 20,000
Issuance of
common stock
for cash at
$0.75 per
share - - 13,333 13 9,987 - - - - 10,000
Issuance of
common stock
for services
at $0.50 per
share - - 60,000 60 29,940 - - - - 30,000
Issuance of
common stock
for services
at $0.44 per
share - - 50,000 50 21,950 - - - - 22,000
Issuance of
common stock
for cash at
$0.75 per
share - - 313,333 313 234,687 - - - - 235,000
Issuance of
common stock
for cash at
$0.50 per
share - - 40,000 40 19,960 - - - - 20,000
Issuance of
common stock
for services
at $0.40 per
share - - 150,000 150 59,850 - - - - 60,000
Issuance of
common stock
for services
at $0.33 per
share - - 27,500 28 9,047 - - - - 9,075
Issuance of
common stock
for services
at $0.15 per
share - - 333,334 333 49,667 - - - - 50,000
Issuance of
common stock
for debt at
$0.06 per
share - - 9,853,954 9,854 581,383 - - - - 591,237
Receipt of
subscriptions
receivable - - - - - 495,500 - - - 495,500
Stock
offering
costs - - - - (16,000) - - - - (16,000)
Net loss
for the year
ended March
31, 2007 - - - - - - - - (1,648,511) (1,648,511)
--------- -------- ---------- -------- ----------- ---------- ----------- ----------- ------------ ----------
Balance,
March 31, 2007 2,000,000 2,000 25,926,247 25,926 17,982,182 - - - (18,117,543) (107,435)
Contributed
capital - - - - 4,991 - - - - 4,991
Net loss
for the year
ended March
31, 2008 - - - - - - - - (170,067) (170,067)
--------- -------- ---------- ------- ----------- ---------- ----------- ----------- ------------ ----------
Balance,
March 31, 2008 2,000,000 2,000 25,926,247 25,926 17,987,173 - - - (18,287,610) (272,511)
Net loss for
the three months
ended June 30,
2008 (unaudited) - - - - - - - - (358) (358)
--------- -------- ---------- ------- ----------- ---------- ----------- ----------- ------------ ----------
Balance,
June 30, 2008
(unaudited) 2,000,000 $ 2,000 25,926,247 $25,926 $17,987,173 $ - $ - $ - $(18,287,968) $ (272,869)
========= ======== ========== ======= =========== ========== =========== =========== ============ ==========
The accompanying notes are an integral part of these financial statements.
8
KOMODO, INC.
(A Development Stage Company)
Statements of Cash Flows
(unaudited)
From
For the Three For the Three Inception
Months Ended Months Ended Through
June 30, June 30, June 30,
2008 2007 2008
OPERATING ACTIVITIES ------------ ------------ -------------
Net loss $ (358) $ (144,150) $(18,287,968)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation and amortization - 12,837 313,806
Stock issued for services - - 5,240,039
Stock issued for accounts payable - - 600,037
Bad debt expense - - 224,941
Impairment of assets - - 4,051,427
Warrants and options issued
for services - - 1,322,050
Currency translation - - (168,626)
Forgiveness of debt by shareholder - - 90,705
Changes in operating assets and
liabilities:
Change in accounts receivable - - (213,312)
Change in prepaid expenses - - (85,365)
Change in reserve for
discontinued operations - 64,042
Change in accounts payable 340 123,144 438,381
----------- ----------- ------------
Net Cash Used by
Operating Activities (18) (8,169) (6,409,843)
----------- ----------- ------------
INVESTING ACTIVITIES
Purchase of property and equipment - - (3,168,281)
----------- ----------- ------------
Net Cash Used by
Investing Activities - - (3,168,281)
----------- ----------- ------------
FINANCING ACTIVITIES
Stock offering costs - - (248,249)
Contributed capital - - 4,991
Proceeds from common stock issued - - 8,392,184
Proceeds from related parties - 7,866 1,429,282
----------- ----------- ------------
Net Cash Used by
Financing Activities - 7,866 9,578,208
----------- ----------- ------------
NET DECREASE IN CASH (18) (303) 84
CASH AT BEGINNING OF PERIOD 102 687 -
----------- ----------- ------------
CASH AT END OF PERIOD $ 84 $ 384 $ 84
=========== =========== ============
The accompanying notes are an integral part of these financial statements.
9
KOMODO, INC.
(A Development Stage Company)
Statements of Cash Flows
(unaudited)
(continued)
From
For the Three For the Three Inception
Months Ended Months Ended Through
June 30, June 30, June 30,
2008 2007 2008
------------ ------------ -------------
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ - $ - $ 114
Income Taxes $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for
acquisition $ - $ - $ 394,062
Common stock issued for debt $ - $ - $ 1,810,756
Common stock issued for assets $ - $ - $ 675,000
Common stock issued for services $ - $ - $ 5,240,039
The accompanying notes are an integral part of these financial statements.
10
KOMODO, INC.
(A Development Stage Company)
Condensed Notes to the Financial Statements
June 30, 2008 and March 31, 2008
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, 2008 Annual Report on Form
10-KSB. Operating results for the three months ended June 30, 2008 are
not necessarily indicative of the results that may be expected for the
year ending March 31, 2009.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates 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 reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using United States
generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company has
not established a reliable source of revenues sufficient to meet the
operational cash flow needs of the Company. The Company failed in the
launch of its products and is now seeking another business opportunity.
The ability of the Company to continue as a going concern is dependent
upon its ability to successfully accomplish the plan described in the
preceding paragraph and eventually attain profitable operations. The
accompanying financial statements do not include any adjustments that
may be necessary if the Company is unable to continue as a going
concern.
11
KOMODO, INC.
(A Development Stage Company)
Condensed Notes to the Financial Statements
June 30, 2008 and March 31, 2008
NOTE 4 - RELATED PARTY TRANSACTIONS
As of June 30, 2008, the Company owed related parties $200,695 for
amounts advanced to the Company to cover operating expenses and for
accrued salaries.
NOTE 5 - COMMON STOCK OPTIONS AND WARRANTS
OPTIONS ------- 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 options in 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 at the date of
grant 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 whom options shall be granted, the
number of options in 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 at
the date of grant shall not be less than the fair market value of the
underlying shares.
On February 12, 2004, the Company established the 2004 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 options in 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 at
the date of grant shall not be less than the fair market value of the
underlying shares.
On December 1, 2004, in connection with the private placement of its
common stock, the Company granted warrants to purchase 500,000 shares
of its common stock at $1.50 per share, warrants to purchase 500,000
shares of its common stock at $3.00 per share and warrants to purchase
500,000 shares of its common stock at $5.00 per share.
On November 11, 2005, the Company established the 2005 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 whom options shall be granted, the
number of options in each grant and any additional conditions and
limitations. The total number of shares of common stock subject to
12
KOMODO, INC.
(A Development Stage Company)
Condensed Notes to the Financial Statements
June 30, 2008 and March 31, 2008
NOTE 5 - OPTIONS AND WARRANTS (Continued)
OPTIONS (Continued)
------------------
outstanding options shall be 2,200,000 shares. The exercise price is
$0.72 per share. On the same date the 2,200,000 options were granted to
various consultants. The grantees were vested for 25% of the options
with additional vesting to be determined by the board of directors. The
Company recognized an expense of $310,214 for the value of warrants
vested using the Black-Scholes formula and assumes a 10 year maturity,
a risk free interest rate of 2.81% and a volatility of 73%.
On December 9, 2005, the Company established the 2005 stock option 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
2,200,000 shares. The exercise price is $1.00 per share. On the same
date 2,200,000 options were granted to various consultants. The
grantees vested for 25% of the options with additional vesting to be
determined by the board of directors. The Company recognized an expense
of $406,205 for the value of the options vested using the Black-Scholes
formula and assumes a 10 year maturity, a risk free interest rate of
2.81% and a volatility of 73%.
A summary of the status of the Company's outstanding stock options as
of June 30, 2008 (FY2009) and March 31, 2008 (FY2008) and changes
during the three months ended June 30, 2007 and the year ended March
31, 2008 is presented below:
2009 2008
---------------- ------------------
Weighted Weighted
Shares Average Shares Average
under Exercise under Exercise
Options Price Options Price
--------- ------ --------- --------
Outstanding, beginning of
year 7,550,000 $ 0.65 7,550,000 $ 0.65
Granted - - - -
Expired/Cancelled - - - -
Exercised - - - -
--------- ------ --------- --------
Outstanding, end of year 7,550,000 $ 0.65 7,550,000 $ 0.65
========= ====== ========= ========
Exercisable 3,175,000 $ 0.51 3,175,000 $ 0.51
========= ====== ========= ========
13
KOMODO, INC.
(A Development Stage Company)
Condensed Notes to the Financial Statements
June 30, 2007 and March 31, 2007
NOTE 5 - OPTIONS AND WARRANTS (Continued)
OPTIONS (Continued)
------------------
Outstanding Exercisable
------------------------------- --------------------
Number Weighted Number
Outstanding Average Weighted Exercisable Weighted
Range of at June 30/ Remaining Average atJune 30/ Average
Exercise March 31, Contractual Exercise March 31, Exercise
Prices 2008/2008 Life Price 2008/2008 Price
-------------- --------- ----------- -------- --------- ----------
$ 0.21 to 1.00 7,550,000 6.40 $ 0.65 3,175,000 $ 0.51
============== ========= =========== ======== ========= ==========
$ 0.21 to 1.00 7,550,000 6.40 $ 0.65 3,175,000 $ 0.51
============== ========= =========== ======== ========= ==========
WARRANTS
--------
A summary of the status of the Company's outstanding warrants as of
June 30, 2008 (FY2009) and March 31, 2008 (FY2008) and changes during
the three months ended June 30, 2008 and the year ended March 31, 2008
is presented below:
2009 2008
---------------- ------------------
Weighted Weighted
Shares Average Shares Average
under Exercise under Exercise
Options Price Options Price
--------- ------ --------- --------
Outstanding, beginning of
year 1,000,000 $ 0.77 1,805,000 $ 2.07
Granted - - - -
Expired/Cancelled - - (805,000) 1.50
Exercised - - - -
--------- ------ --------- --------
Outstanding end of year 1,000,000 $ 0.77 1,000,000 $ 0.77
========= ====== ========= ========
Exercisable 1,000,000 $ 0.77 1,000,000 $ 0.77
========= ====== ========= ========
Outstanding Exercisable
------------------------------- --------------------
Number Weighted Number
Outstanding Average Weighted Exercisable Weighted
Range of at June 30/ Remaining Average atJune 30/ Average
Exercise March 31, Contractual Exercise March 31, Exercise
Prices 2008/2008 Life Price 2008/2008 Price
-------------- --------- ----------- ---------- --------- ----------
$ 0.77-1.50 1,000,000 5.62 $0.77-1.50 1,000,000 $ 0.77
-------------- --------- ----------- ---------- --------- ----------
$ 0.77-1.50 1,000,000 5.87 $0.77-1.50 1,000,000 $ 0.77
============== ========= =========== ========== ========= ==========
14
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying balance sheets of Komodo, Inc. at June 30, 2008 and
March 31, 2008, related statements of operations and cash flows for the three
months ended June 30, 2008 and 2007, 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 ended June 30, 2008, are not necessarily
indicative of the results that can be expected for the fiscal year ending March
31, 2009.
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
- ----------------
The current activities conducted by the Company are to manage its limited assets
and to seek out and secure a financing or investigate the acquisition of any
viable business opportunity by purchase and exchange for securities of the
Company or pursuant to a reorganization or merger through which securities of
the Company will be issued or exchanged.
Other than seeking and investigating potential capital raising activities the
Company has had no material business operations for the past twelve months. The
Company has limited assets and conducts no material business, management
anticipates that both a financing or an acquisition would require it to issue
shares of its common stock. This would result in substantial dilution of the
shares of current stockholders. The Company's Board of Directors shall make the
final determination whether to complete any acquisition; the approval of
stockholders will not be sought unless required by applicable laws, rules and
regulations, its Articles of Incorporation or Bylaws, or contract. The Company
makes no assurance that any future enterprise will be profitable or successful.
15
We expect that we need approximately $250,000 over the next 12 month period to
continue operations. In the past 2 years we have raised approximately $610,000.
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
Our net loss for the three months ended June 30, 2008 was $358 as compared to
$144,150 for the same period in 2007. The net loss for 2008 translates into a
loss of $0.00 per share compared to a loss of $0.01 per share for the same
period in 2007. The decrease in the net loss is partially attributable to a one
time impairment of assets recorded in 2007 of $136,943 and the termination of
management fees of $120,000. The balance of our operating expenses were made up
primarily of office expenses of $358 compared to $11,313 in the prior year.
We recorded no revenues during the quarter ended June 30, 2008. We do not expect
to have revenues through out the remainder of fiscal 2009 and we do not
anticipate becoming cash flow positive in fiscal 2009.
Liquidity and Capital Resources
We had $84 of cash on hand at June 30, 2008 compared to $102 at March 31, 2008.
We used $18 of cash for operations during the three months ended June 30, 2008
compared to approximately $18 for the same period of FYE 2008. We estimate that
we will need approximately $250,000 of additional funds over the next twelve
months.
We estimate that existing sources of liquidity and the funds provided by
anticipated capital activity will not satisfy our projected working capital
requirements through fiscal 2009. Our ability to maintain sufficient liquidity
through fiscal 2009 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.
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
16
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 March 31st, 2007:
Valued
Date No. of Shares Title At Reason
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.
(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
17
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: August 14, 2008 / s / Gordon Muir
-----------------------------
President / Director
Principal Accounting Officer
18