UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 2003
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from __________ to __________
Commission File Number 0-20297
HIBSHMAN OPTICAL CORP.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
New Jersey 88-0284402
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
266 Cedar Street, Cedar Grove, New Jersey 07009
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(Address of Principal executive offices)
(973) 239-2952
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(Issuer's telephone number, including area code)
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(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all reports required to be filed by Section
12, 13 or 15(d) of the Exchange Act after the distribution of securities under a
plan confirmed by a court. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of August 1, 2002: 10,088,235 shares
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
Hibshman Optical Corp.
(A Development Stage Company)
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION Page
----
Item 1 - Financial Statements (unaudited)
Hibshman Optical Corp.
Balance Sheets as of
March 31, 2003 and December 31, 2002......................... 3
Statements of Operations
for the three month period
ended March 31, 2003 and March 31, 2002...................... 4
Statements of Cash Flows
for the three month period
ended March 31, 2003 and March 31, 2002...................... 5
Notes to Financial Statements (unaudited)....................... 6
Item 2 - Management's Discussion and Analysis or
Plan of Operations........................................... 8
Item 3 - Controls and Procedures......................................... 11
PART II
Item 1 - Legal Proceedings............................................... 11
Item 2 - Changes in Securities and Use of Proceeds....................... 11
Item 3 - Defaults Upon Senior Securities................................. 11
Item 4 - Submission of Matters to a Vote of Security Holders............. 11
Item 5 - Other Information............................................... 11
Item 6 - Exhibits and Reports on Form 8-K................................ 11
Signatures............................................................... 12
2
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENTS
HIBSHMAN OPTICAL CORPORATION
BALANCE SHEETS
March 31, December 31,
ASSETS 2003 2002
- ------ ----------- -----------
(Unaudited) (Audited)
Current Assets:
Cash and cash equivalents $ 41,371 $ 46,274
----------- -----------
Total Current Assets 41,371 46,274
----------- -----------
Total Assets $ 41,371 $ 46,274
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
- ----------------------------------------------
Current Liabilities:
Accrued interest payable $ 6,526 $ 5,286
Accounts payable 13,312 14,160
----------- -----------
Total Current Liabilities 19,838 19,446
Convertible Notes Payable 62,000 62,000
----------- -----------
Total Liabilities 81,838 81,446
----------- -----------
Stockholders' Equity (Deficit):
Common stock, $.001 par value, 100,000,000
shares authorized, 10,088,235 shares issued
and outstanding at March 31, 2002 and
December 31, 2001 10,088 10,088
Additional paid-in capital 19,912 19,912
Retained earnings (deficit) (70,467) (65,172)
----------- -----------
Total Stockholders' Equity (Deficit) (40,467) (35,172)
----------- -----------
Total Liabilities and Stockholders' Equity (Deficit) $ 41,371 $ 46,274
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
HIBSHMAN OPTICAL CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended
March 31,
------------------------------
2003 2002
------------ ------------
Revenues $ -- $ --
Cost of Revenues -- --
------------ ------------
Gross Profit -- --
Other Costs:
General and administrative expenses 4,315 1,739
------------ ------------
Total Other Costs 4,315 1,739
Other Income and Expense:
Interest income (expense) net (980) (689)
------------ ------------
Net Loss before Income Taxes (5,295) (2,428)
Income Taxes -- --
------------ ------------
Net Loss $ (5,295) $ (2,428)
============ ============
Earnings (Loss) per Share:
Basic and diluted earnings (loss) per
common share $ -- $ --
============ ============
Basic and diluted common shares
outstanding 10,088,235 10,088,235
============ ============
The accompanying notes are an integral part of these financial statements.
4
HIBSHMAN OPTICAL CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended
March 31,
------------------------
2003 2002
---------- ----------
Cash Flows from Operating Activities:
Net loss $ (5,295) $ (2,428)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Interest expense 1,240 1,223
Change in liabilities:
Increase (decrease) in accounts payable (848) 1,739
---------- ----------
Net cash provided by (used in) operating
activities (4,903) 534
---------- ----------
Cash Flows from Investing Activities -- --
---------- ----------
Cash Flows from Financing Activities -- --
---------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents (4,903) 534
Cash and Cash Equivalents, beginning of period 46,274 50,086
---------- ----------
Cash and Cash Equivalents, end of period $ 41,371 $ 50,620
========== ==========
Supplemental Disclosures of Cash Flow Information:
Amounts paid during the period for:
Interest $ -- $ --
========== ==========
Taxes $ -- $ --
========== ==========
The accompanying notes are an integral part of these financial statements.
5
HIBSHMAN OPTICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
Hibshman Optical Corporation (formerly known as Fianza Commercial Corp. and
hereinafter referred to as the "Company") was formed in 1991 as a subsidiary of
People Ridesharing Systems, Inc., ("PRS") a public corporation which filed for
the protection of the Bankruptcy Court in 1989, to assist with the
reorganization of PRS either through the operation of a related business or
through a merger or combination with an operating company. During the bankruptcy
proceeding a reorganization plan was developed which was considered by the Court
and Creditors committee which provided that PRS will issue 15% of the total
shares of each subsidiary to the creditors and shareholders who as classes
receive a total of 10% and 5%, respectively. Pursuant to that plan the Court
entered an order in May of 1996 authorizing said issuances based upon the
authority of an exemption from registration, Section 3(a)(10) of the Securities
Act of 1933, as amended. As a result, approximately 1,000,000 shares were
authorized to the creditor class and approximately 500,000 shares were
authorized to the stockholders of PRS as a class. The balance of approximately
8,500,000 shares were acquired directly from the Bankruptcy Court by a
nonaffiliated third party approved in the bankruptcy proceeding in May of 1996.
PRS was discharged from bankruptcy after its Chapter XI proceeding was converted
to a Chapter 7 proceeding.
The Company will attempt to identify and negotiate with a business target for
the merger of that entity with and into the Company. In certain instances, a
target company may wish to become a subsidiary of the Company or may wish to
contribute assets to the Company rather than merge. No assurances can be given
that the Company will be successful in identifying or negotiating with any
target company. The Company provides a means for a foreign or domestic private
company to become a reporting (public) company whose securities would be
qualified for trading in the United States secondary market.
Earnings (Loss) Per Share
The Company computes earnings or loss per share in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per Share." Basic
earnings per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding.
Diluted earnings per share reflects the potential dilution that could occur if
securities or other agreements to issue common stock were exercised or converted
into common stock. Diluted earnings per share is computed based upon the
weighted average number of common shares and dilutive common equivalent shares
outstanding, which includes convertible debentures, stock options and warrants.
6
Impairment of Long-Lived Assets
The Company has adopted Statement of Financial Accounting Standards No. 144
(SFAS 144), "Accounting for the Impairment or Disposal of Long-Lived Assets,"
which is effective for years beginning after December 15, 2001. SFAS 144
supersedes SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of". SFAS 144 requires that if events or
changes in circumstances indicate that the cost of long-lived assets or asset
groups may be impaired, an evaluation of recoverability would be performed by
comparing the estimated future undiscounted cash flows associated with the asset
to the asset's carrying value to determine if a write-down to market value would
be required. Long-lived assets or asset groups that meet the criteria in SFAS
144 as being held for disposal by sale are reflected at the lower of their
carrying amount or fair market value, less costs to sell.
Recent Accounting Pronouncements
In December 2002 the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 148 (SFAS 148), "Accounting for
Stock-Based Compensation-Transition and Disclosure, (An Amendment to FASB
Statement No. 123)." SFAS 148 amends SFAS 123, "Accounting for Stock-Based
Compensation," to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS
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. SFAS 148 is effective for
the Company beginning January 1, 2003. The adoption of SFAS 148 had no impact on
the Company's financial position or result of operations for the three months
ended March 31, 2003, nor is it expected to have a significant impact in the
future.
2. INTERIM PRESENTATION
The December 31, 2002 balance sheet data was derived from audited financial
statements but does not include all disclosures required by generally accepted
accounting principles. In the opinion of management, the accompanying unaudited
financial statements contain all normal and recurring adjustments necessary to
present fairly the financial position of the Company as of March 31, 2003, and
its results of operations and cash flows for the three months ended March 31,
2003 and 2002.
The statements of operations for the three months ended March 31, 2003 and 2002
are not necessarily indicative of results for the full year.
While the Company believes that the disclosures presented are adequate to make
the information not misleading, these financial statements should be read in
conjunction with the financial statements and accompanying notes included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2002
7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
The following is Management's discussion and analysis of significant
factors, which have affected the Company's financial position and operations
during the three months ended March 31, 2003. This discussion also includes
events which occurred subsequent to the end of the period and contains both
historical and forward-looking statements. When used in this discussion, the
words "expect(s)", "feel(s)", "believe(s)", "will", "may", "anticipate(s)"
"intend(s)" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. This discussion should be
read in conjunction with our Financial Statements and respective notes included
elsewhere in this Report.
The Company was formed in 1991 under the name PRS Sub I, Inc. as a
subsidiary of People Ridesharing Systems, Inc., ("PRS") a public corporation
which filed for the protection of the Bankruptcy Court in 1989, to assist with
the reorganization of PRS either through the operation of a related business or
through a merger or combination with an operating company. During the bankruptcy
proceeding a reorganization plan was developed which was considered by the Court
and creditors committee which provided that PRS will issue 15% of the total
shares of common stock of each subsidiary to the creditors and shareholders who,
as a class would receive a total of 10% and 5% of those shares respectively.
Pursuant to that plan the Court entered an order in May of 1996 authorizing said
issuances based upon the authority of an exemption from registration provided in
Section 3 (a) (10) of the Securities Act of 1933, as amended. As a result,
approximately 1,000,000 shares were authorized to be issued to the creditor
class and approximately 500,000 shares were authorized to be issued to the
stockholders of PRS as a class. 8,500,000 shares were acquired directly from the
Bankruptcy Court by a nonaffiliated third party approved in the bankruptcy
proceeding in May of 1996. PRS was discharged from bankruptcy after its Chapter
XI proceeding was converted to a Chapter 7 proceeding.
In March 1992, the Board of Directors authorized the name change from PRS
Sub I, Inc. to Service Lube Inc. The Company entered into a transaction with an
operating company in March of 1992 and in April 1992 the Board of Directors of
the Company authorized the name change from Service Lube, Inc. to Fianza
Commercial Corp. On April 23, 1992 the Board of Directors and shareholders
authorized the name change from Fianza Commercial Corp. to Hibshman Optical
Corporation. Due to a change in the policy of that operating company's
management team, the transaction between the Company and the operating company
was rescinded and the stock ownership of Hibshman Optical Corp. was transferred
to John B.M. Frohling, Esq., in exchange for monies owed to Mr. Frohling on
account for legal services rendered to the Company. This returned the Company to
its status as a public company with no assets and no liabilities, Mr. Frohling
having canceled any obligations owed to him by the Company and its former
principal stockholders.
8
On May 5, 1996, Mr. Frohling sold his interest in the Company to the
"Catizone Group." The Company currently seeks to merge with a going concern,
preferably with assets and a financial history, such that same will facilitate
the merged entity to trading status. We will not restrict our search to any
specific business, industry, or geographical location and we may participate in
a business venture of virtually any kind or nature. This discussion of the
proposed business is not meant to be restrictive of our broad discretion to
search for and enter into potential business opportunities. We anticipate that
we will be able to participate in only one potential business venture in the
near future because the Company has nominal assets and limited financial
resources. See "FINANCIAL STATEMENTS." This lack of diversification should be
considered a substantial risk to our shareholders because it will not permit us
to offset potential losses from one venture against gains from another.
We intend to seek a business opportunity with an entity which has recently
commenced operations, or which wishes to utilize the public marketplace in order
to raise additional capital to expand into new products or markets, to develop a
new product or service, or for other corporate purposes. We may acquire assets
and establish wholly-owned subsidiaries in various businesses or acquire
existing businesses as subsidiaries.
We anticipate that the selection of a business opportunity in which to
participate will be complex and attendant with risk. We believe (but have not
conducted any research to confirm) that there are business entities seeking the
perceived benefits of a publicly registered corporation. Such perceived benefits
may include facilitating or improving the terms on which additional equity
financing may be sought, providing liquidity for incentive stock options or
similar benefits to key employees, increasing the opportunity to use securities
for acquisitions, providing liquidity for shareholders and other factors.
Business opportunities may be available in many different industries and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and complex.
Critical Accounting Policies
This Management's Discussion and Analysis of Financial Condition and Results of
Operations, as well as disclosures included elsewhere in this Form 10-QSB, are
based upon our unaudited consolidated financial statements, which have been
prepared in accordance with generally accepted accounting principles in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingencies. On an on-going
basis, we evaluate the estimates used, including those related to, impairments
of tangible and intangible assets, if applicable, accruals and contingencies. We
base our estimates on historical experience, current conditions and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources as well as identifying and assessing our accounting treatment with
respect to commitments and contingencies. Actual results may differ from these
estimates under different assumptions or conditions.
9
Liquidity and Capital Resources
We have, and will continue to have, very limited to no capital with which to
provide the owners of business opportunities with any cash or other assets.
However, we believe we will be able to offer owners of acquisition candidates
the opportunity to acquire a controlling ownership interest in a publicly
registered company without incurring the cost and time required to conduct an
initial public offering. We have not conducted market research and are not aware
of statistical data to support the perceived benefits of a merger or acquisition
transaction for the owners of a business opportunity.
As of March 31, 2003, we had total assets of $41,371 as compared to $46,274
at December 31, 2002 reflecting a decrease of $4,903. As of March 31, 2003, we
had total liabilities of $81,838 as compared to $81,446 at December 31, 2002,
reflecting an increase in liabilities of $392. Reflecting the foregoing, the
financial statements indicate that at March 31, 2003, we had working capital
(current assets minus current liabilities) of $21,533, and at December 31, 2002,
we had working capital of $26,828. At March 31,2003 we had a deficit in
stockholders' equity of ($40,467) compared to a deficit in stockholders' equity
of ($35,172) at December 31, 2002.
In the event that we need any additional funds for operating capital or for
costs in connection with searching for or completing an acquisition or merger,
management contemplates that it will seek to issue additional shares of our
common stock. There is no fixed minimum or maximum amount we will raise in
connection with such an issuance. We do not intend to borrow any funds to make
any payments to promoters, management or their affiliates or associates.
Results of Operations
We are presently in the very early stages of seeking an interest in a
business entity. Unless and until we successfully identify and acquire an
interest in a business entity, we will continue to generate no revenues from
operations. Except for the foregoing, we have never engaged in any significant
business activities.
The financial statements which are included in this Report reflect total
general and administrative expenses of $4,315 for the three-month period ended
March 31, 2003 versus $1,739 for the comparable three-month period ended March
31, 2002, reflecting an increase of $2,576. The increase is primarily due to
expenses incurred in meeting current public company reporting requirements.
The Company has never commenced its proposed operations and therefore, has
generated no revenues there from.
10
ITEM 3 - CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
Our Chief Executive Officer and Treasurer have reviewed and evaluated the
effectiveness of our disclosure controls and procedures (as defined in Exchange
Act Rules 240.13a-14(c) and 15d-14(c)) as of a date within 90 days before the
filing date of this quarterly report. Based on that evaluation, they have
concluded that our current disclosure controls and procedures are effective in
providing the material information required to be disclosed in the reports we
file or submit under the Exchange Act.
Changes in Internal Controls.
There have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the date
we carried out this evaluation.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
We are unaware of any other pending or threatened legal proceedings to which
the Company is a party or of which any of its assets is the subject.
Item 2 - Changes in Securities and Use of Proceeds
The total number of shares of Common Stock issued and outstanding as of
December 31, 2002 was 10,088,235.
No new shares were issued during the three months ended March 31, 2003.
Item 3 - Defaults Upon Senior Securities
Not applicable.
Item 4 - Submission of Matters to a Vote of Security Holders
Not applicable.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
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99.1 Certification of Chief Executive Officer Pursuant to 18
U.S.C.ss.1350.
99.2 Certification of Chief Financial Officer Pursuant to 18
U.S.C.ss.1350.
11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
HIBSHMAN OPTICAL CORP,
Date: May 15, 2003 By: /s/ PASQUALE CATIZONE
----------------------------------------
Pasquale Catizone, President and
Chief Executive Officer
Date: May 15, 2002 By: /s/ CARMINE CATIZONE
----------------------------------------
Carmine Catizone, Treasurer and
Chief Financial and Accounting Officer
12
CERTIFICATION
PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
I, Pasquale Catizone, President, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Hibshman
Optical Corp;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly
report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 15, 2003 /s/ PASQUALE CATIZONE
----------------------------------
Pasquale Catizone
President
CERTIFICATION
PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
I, Carmine Catizone, President, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Hibshman
Optical Corp;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly
report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 15, 2003 /s/ CARMINE CATIZONE
----------------------------------
Carmine Catizone
Treasurer