UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment #1 to
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2005
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number: 000-32249
ARMOR ELECTRIC INC.
(Exact name of small business issuer as specified in its charter)
Nevada 65-0853784
(State or other jurisdiction of (IRS Employee Identification No.)
incorporation or organization)
201 Lomas Santa Fe, Suite #420, Solana Beach, CA 92075
(Address of principal executive offices)
(858) 720-0123
(Issuer's telephone number)
Number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:
Common Stock, $0.001 par value 39,631,681
(Class) (Outstanding as of May 20, 2005)
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
ARMOR ELECTRIC INC.
FORM 10-QSB
INDEX
Page
----
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets
March 31, 2005 (unaudited) (restated) and June 30, 2004 (restated)..........F-1
Unaudited Consolidated Condensed Statements of Operations for
the three and nine months ended March 31, 2005 (restated), for three months
ended March 31, 2004, for October 29, 2003 to March 31, 2004 and cumulative
from inception on October 29, 2003 through March 31, 2005 (restated).........F-2
Unaudited Consolidated Condensed Statements of Cash Flows for
the nine months ended March 31, 2005 (restated),
for October 29, 2003 to March 31, 2004 and cumulative
from inception on October 29, 2003 through March 31, 2005 (restated).........F-3
Statements of Stockholders' equity for the period from from inception on
October 29, 2003 through March 31, 2005 (unaudited) (restated)...............F-4
Notes to Consolidated Financial Statements (unaudited).......................F-5
Item 2. Management's Discussion and Analysis or Plan of Operation.............3
Item 3. Controls and Procedures...............................................5
Part II OTHER INFORMATION
Item 1. Legal Proceedings.....................................................6
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds...........6
Item 3. Defaults upon Senior Securities.......................................6
Item 4. Submission of Matters to a Vote of Security Holders...................6
Item 5. Other Information.....................................................6
Item 6. Exhibits and Reports on Form 8-K......................................7
Signatures.....................................................................7
2
ARMOR ELECTRIC, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, JUNE 30,
2005 2004
--------- ---------
(unaudited) (restated)
(restated)
ASSETS
------
CURRENT ASSETS
Cash $ 167,101 $ --
Funds held in trust by related party 553 553
--------- ---------
167,654 553
Advanced royalty - NuAge 200,000 --
--------- ---------
Total Current Assets $ 367,654 $ 553
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ 526 $ 526
State income tax payable 1,600 800
Accounts payable-related parties 15,868 15,868
Accrued payroll 20,925 11,000
--------- ---------
Total Current Liabilities 38,919 28,194
--------- ---------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value, 10,000,000
shares authorized, none issued -- --
Common stock, par value $.001, 100,000,000
shares authorized, 34,717,333 issued and
outstanding - 2004 40,121,681 issued and
outstanding - 2005 40,121 34,717
Common stock subscription receivable (1,000) --
Paid in capital 501,784 3,308
(Deficit) accumulated during the development stage (212,170) (65,666)
--------- ---------
Total Stockholders' Equity 328,735 (27,641)
--------- ---------
$ 367,654 $ 553
========= =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-1
ARMOR ELECTRIC, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(restated)
CUMULATIVE
THREE MONTHS NINE MONTHS OCTOBER 29, FROM
ENDED ENDED 2003, INCEPTION OCTOBER 29, 2003
MARCH 31, MARCH 31, TO MARCH 31, (INCEPTION) TO
2005 2004 2005 2004 MARCH 31, 2005
---------- ---------- ---------- -------------- -------------
REVENUES $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- -------------- -------------
XPENSES
General and administrative:
Consulting Fees 62,596 -- 62,596 1 83,597
Other 22,289 4,125 45,488 7,375 63,828
Research & Development 38,420 7,000 38,420 7,000 45,420
---------- ---------- ---------- -------------- -------------
Total expenses 123,305 11,125 146,504 14,376 192,845
---------- ---------- ---------- -------------- -------------
NET (LOSS) $(123,305) $ (11,125) $(146,504) $ (14,376) $ (192,845)
========== ========== ========== ============== =============
NET (LOSS) PER SHARE * * * *
========== ========== ========== ==============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 38,405,014 21,000,000 35,946,560 21,000,000
========== ========== ========== ==============
* less than $.01 per share
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-2
ARMOR ELECTRIC, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(UNAUDITED)
(RESTATED)
CUMULATIVE FROM
OCTOBER 29, OCTOBER 29,
NINE 2003 2003
MONTHS ENDED, TO (INCEPTION) TO
MARCH 31, MARCH 31, MARCH 31,
2005 2004 2005
--------- --------- ---------
OPERATING ACTIVITIES
Net (loss) from operations $(146,504) $ (14,376) $(192,845)
Common Stock issued for Services 35,000 1 56,001
Contributions to capital 18,880 14,375 37,420
Adjustments to reconcile net (loss) to net
cash provided (used) by operating activities:
Increase in state income tax payable 800 -- 1,600
Increase in accrued payroll 9,925 -- 10,925
--------- --------- ---------
NET CASH PROVIDED (USED BY) OPERATING ACTIVITIES (81,899) -- (86,899)
--------- --------- ---------
INVESTING ACTIVITIES:
Advanced royalties - NuAge (200,000) -- (200,000)
--------- --------- ---------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (200,000) -- (200,000)
--------- --------- ---------
FINANCING ACTIVITIES
Proceeds from sale of common stock, net 449,000 -- 449,000
Increase in accounts payable - related party -- -- 5,000
--------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 449,000 -- 454,000
--------- --------- ---------
NET INCREASE IN CASH 167,101 -- 167,101
CASH, BEGINNING OF PERIOD -- -- --
--------- --------- ---------
CASH, END OF PERIOD $ 167,101 $ -- $ 167,101
========= ========= =========
SUPPLEMENTAL NON-CASH INFORMATION
Common Stock Subscribed $ 1,000 $ 1,000
Common Stock Subscription receivable (1,000) (1,000)
--------- ---------
$ -- $ --
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-3
ARMOR ELECTRIC, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
(Deficit)
Common Stock Common Accumulated
----------------------- Stock During Total
Paid-in Subscription Development Stockholders'
Shares Amount Capital Receivable Stage Equity
---------- ---------- ---------- ---------- ---------- ----------
Inception, Oct 30, 2003,
Stock issued for services
@ $.001 per share 1,000 $ 1 $ -- $ -- $ -- $ 1
April 21, 2004
Stock issued for
services @ $0.001
per share 20,999,000 20,999 1 -- -- 21,000
Contributed Capital -- -- 15,232 -- -- 15,232
Net (Loss), for the
period ended April
27, 2004 -- -- -- -- (37,033) (37,033)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE,
APRIL 27, 2004 21,000,000 21,000 (15,233) -- (37,033) (800)
Recapitalization,
April 27, 2004 13,717,333 13,717 (15,233) -- (19,325) (20,841)
Contributed Capital -- -- 3,308 -- -- 3,308
Net (loss) for period -- -- -- -- (9,308) (9,308)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, JUNE 30, 2004 34,717,333 34,717 3,308 -- (65,666) (27,641)
Shares issued January
21, 2005 @ $.115 per share
for legal services provided 304,348 304 34,696 -- -- 35,000
Shares issued February
4, 2005 for cash at
$.10 per share 300,000 300 29,700 -- -- 30,000
Shares issued February
8, 2005 for cash at
$.10 per share 1,050,000 1,050 103,950 -- -- 105,000
Shares issued February
9, 2005 for cash at
$.10 per share 100,000 100 9,900 -- -- 10,000
Shares issued February
16, 2005 for cash at
$.10 per share 350,000 350 34,650 -- -- 35,000
Shares issued February
17, 2005 for cash at
$.10 per share 350,000 350 34,650 -- -- 35,000
Shares issued February
18, 2005 for cash at
$.10 per share 100,000 100 9,900 -- -- 10,000
Shares issued February
20, 2005 for cash at
$.10 per share 100,000 100 9,900 -- -- 10,000
Shares issued February
22, 2005 for cash at
$.10 per share 2,600,000 2,600 257,400 -- -- 260,000
Shares issued February
28, 2005 for cash at
$.10 per share 100,000 100 9,900 -- -- 10,000
Shares issued March
4, 2005 for cash at
$.10 per share 40,000 40 3,960 -- -- 4,000
Common stock subscribed,
March 4, 2005 at $.10 per
share 10,000 10 990 -- -- 1,000
Common stock subscription
receivable -- -- -- (1,000) -- (1,000)
Stock offering costs -- -- (60,000) -- -- (60,000)
Contributed Capital -- -- 18,880 -- -- 18,880
Net (loss) for nine months -- -- -- -- (146,504) (146,504)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, MARCH 31,
2005 (RESTATED) 40,121,681 $ 40,121 $ 501,784 $ (1,000) $ (212,170) $ 328,735
========== ========== ========== ========== ========== ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-4
ARMOR ELECTRIC, INC.
Notes to Financial Statements (unaudited)
NOTE 1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the Company's financial position as of March 31, 2005 and the
results of its operations for the three months and nine months ended March 31,
2005, and cash flows for the nine months ended March 31, 2005 and comparative
period of October 29, 2003 to March 31, 2004 have been made. Operating results
for the nine months ended March 31, 2005 are not necessarily indicative of the
results that may be expected for the year ended June 30, 2005.
These consolidated condensed financial statements should be read in conjunction
with the financial statements and notes thereto contained in the Company's Form
10-KSB for the year ended June 30, 2004.
On April 27, 2004 Armor acquired all of the issued and outstanding shares of
common stock of Nova Electric, Inc. (Nova, or the Company) a development stage
Nevada Corporation, formed October 29, 2003, in exchange for 21 million
restricted shares of common stock of Armor, pursuant to Section 368 (a) (1) (A)
of the Internal Revenue Code, which provides for a tax-free exchange under that
reorganization provision.
This stock exchange transaction, which is treated as a recapitalization of Nova
for accounting purposes, resulted in a change of control wherein the financial
statements included herein are those of the acquired company, Nova, the
accounting parent, consolidated with, Armor, Nova's accounting subsidiary, as
required for proper financial presentation purposes only. For legal purposes,
Armor is the parent and Nova is the subsidiary.
At the date of the stock exchange, all of the net assets of Armor were acquired
by Nova at fair value which equaled Armor's book value. Nova's fiscal year end
is June 30.
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
The March 31, 2005 financial statements included herein have been restated to
reflect the above presentation since when originally issued, such financial
statements were the financial statements of Armor only.
The acquisition of the marketing rights was retroactively rescinded and the
agreements restructured to provide for the acquisition of all of the outstanding
common stock of Nova, as above. Accordingly, the restructure resulted in the
restatement of all of the financial statements of Armor as presented herein.
F-5
NOTE 2 - EFFECT OF RESTATEMENT OF FINANCIAL STATEMENTS
The effect of restating the financial statements for Amor Electric, Inc. was to
eliminate financial information for all periods prior to the inception of Nova
Electric, Inc. on October 29, 2003 as the accompanying financial statements are
considered those of Nova Electric, Inc. only.
Accordingly, the following was the effect on operations for the period three
months ended, March 31, 2005:
Originally
Restated presented Increase
--------- --------- ---------
Revenues $ - 0 - $ - 0 - $ - 0 -
--------- --------- ---------
Expenses
Research and Development 38,420 38,420 - 0 -
General and administrative 84,885 81,180 3,705
--------- --------- ---------
Total Expenses 123,305 119,600 3,705
========= ========= =========
Net (Loss) $(123,305) $(119,600) $ 3,705
========= ========= =========
(LOSS) PER SHARE * * *
* LESS THAN (.01) PER SHARE
Accordingly, the following was the effect on operations for the period nine
months ended, March 31, 2005:
Originally
Restated presented Increase
--------- --------- ---------
Revenues $ - 0 - $ - 0 - $ - 0 -
--------- --------- ---------
Expenses
Research and Development 38,420 38,420 - 0 -
General and administrative 108,084 96,534 11,550
--------- --------- ---------
Total Expenses 146,504 134,954 11,550
--------- --------- ---------
Net (Loss) $(146,504) $(134,954) $ 11,550
========= ========= =========
(LOSS) PER SHARE * * *
* LESS THAN (.01) PER SHARE
The effect on cash flows for nine months ended March 31, 2005 was as follows:
F-6
Originally Increase /
Restated presented (Decrease)
--------- --------- ---------
OPERATING ACTIVITIES
Net (loss) from operations $(146,504) $(134,954) $ (11,550)
Contributions to capital 18,880 8,130 10,750
Common Stock issued for Services 35,000 35,000 - 0 -
Adjustments to reconcile net (loss) to net
cash (used) by operating activities:
Increase in state income tax payable 800 - 0 - 800
Increase (decrease) in Accounts Payable - 0 - - 0 - - 0 -
Increase in accrued payroll 9,925 9,925 - 0 -
--------- --------- ---------
NET CASH (USED BY) OPERATING ACTIVITIES (81,899) (81,899) - 0 -
--------- --------- ---------
INVESTING ACTIVITIES:
Advanced royalties - NuAge (200,000) (200,000) - 0 -
--------- --------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES (200,000) (200,000) - 0 -
--------- --------- ---------
FINANCING ACTIVITIES:
Proceeds from sale of common stock 449,000 449,000 - 0 -
--------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 449,000 449,000 - 0 -
--------- --------- ---------
NET INCREASE IN CASH 167,101 167,101 - 0 -
CASH, BEGINNING OF PERIOD - 0 - - 0 - - 0 -
CASH, END OF PERIOD 167,101 167,101 - 0 -
Accordingly, the following was the effect on operations for the period from
inception, October 29, 2003, to March 31, 2005:
Originally
Restated presented Increase
--------- --------- ---------
Revenues $ - 0 - $ - 0 - $ - 0 -
--------- --------- ---------
Expenses
Research and Development 45,420 38,420 7,000
General and administrative 147,425 164,965 (17,540)
--------- --------- ---------
Total Expenses 192,845 203,385 (10,540)
--------- --------- ---------
Net (Loss) $(192,845) $(201,385) $ (10,540)
========= ========= =========
(LOSS) PER SHARE * * *
* LESS THAN (.01) PER SHARE
The effect on cash flows from the inception, October 29, 2003, to March 31,
2005, was as follows:
F-7
Originally Increase /
Restated presented (Decrease)
--------- --------- ---------
OPERATING ACTIVITIES
Net (loss) from operations $(192,845) $(203,385) $ 10,540
Contributions to capital 37,420 12,930 24,490
Common Stock issued for Services 56,001 50,010 5,991
Adjustments to reconcile net (loss) to net
cash (used) by operating activities:
Increase in state income tax payable 1,600 - 0 - 1,600
(Decrease) in trust funds - 0 - (553) 553
Increase (decrease) in Accounts Payable - 0 - 527 (527)
Increase in accrued payroll 10,925 20,925 (10,000)
--------- --------- ---------
NET CASH (USED BY) OPERATING ACTIVITIES (86,899) (119,546) 32,647
--------- --------- ---------
INVESTING ACTIVITIES:
Advanced royalties - NuAge (200,000) (200,000) - 0 -
--------- --------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES (200,000) (200,000) - 0 -
--------- --------- ---------
FINANCING ACTIVITIES:
Proceeds from sale of common stock 449,000 464,240 (15,240)
Increase in accounts payable
related party 5,000 22,407 (17,407)
--------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 454,000 486,647 (32,647)
--------- --------- ---------
NET INCREASE IN CASH 167,101 167,101 - 0 -
CASH, BEGINNING OF PERIOD - 0 - - 0 - - 0 -
CASH, END OF PERIOD 167,101 167,101 - 0 -
Accordingly, the following was the effect on operations for the period three
months ended March 31, 2004:
Originally
Restated presented Increase
--------- --------- ---------
Revenues $ - 0 - $ - 0 - $ - 0 -
-------- --------- ---------
Expenses
Research and Development 7,000 - 0 - 7,000
General and administrative 4,125 2,385 1,740
-------- --------- ---------
Total Expenses 11,125 2,385 8,740
-------- --------- ---------
Net (Loss) $(11,125) $ (2,385) $ 8,740
======== ========= =========
(LOSS) PER SHARE * * *
* LESS THAN (.01) PER SHARE
F-8
Accordingly, the following was the effect on operations for the period from
inception, October 29, 2003, to March 31, 2004:
Originally
Restated presented Increase
-------- -------- --------
Revenues $ - 0 - $ - 0 - $ - 0 -
-------- -------- --------
Expenses
Research and development 7,000 - 0 - 7,000
General and administrative 7,376 5,956 1,420
-------- -------- --------
Total Expenses 14,376 5,956 8,420
-------- -------- --------
Net (Loss) $(14,376) $ (5,956) $ 8,420
======== ======== ========
(LOSS) PER SHARE * * *
* LESS THAN (.01) PER SHARE
The effect on cash flows from the inception, October 29, 2003, to March 31, 2004
were as follows:
Originally Increase /
Restated presented (Decrease)
--------- -------- --------
OPERATING ACTIVITIES
Net (loss) from operations $ (14,376) $ 5,956) $ (8,420)
Common Stock issued for Services 1 - 0 - 1
Contributions to capital 14,375 900 13,475
Adjustments to reconcile net (loss) to net
cash (used) by operating activities:
Increase in state income tax payable - 0 - - 0 - - 0 -
Increase (decrease) accounts payable - 0 - 71 (71)
Increase (decrease) in accrued payroll - 0 - 1,875 (1,875)
--------- -------- --------
NET CASH (USED BY) OPERATING ACTIVITIES - 0 - (3,110) 3,110
--------- -------- --------
FINANCING ACTIVITIES:
Increase in accounts payable - related party - 0 - 3,110 (3,110)
--------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES - 0 - - 0 - - 0 -
NET INCREASE IN CASH - 0 - - 0 - - 0 -
CASH, BEGINNING OF PERIOD - 0 - - 0 - - 0 -
CASH, END OF PERIOD - 0 - - 0 - - 0 -
The effect on stockholders' equity as a result of the restatement of financial
statements was not material.
F-9
ITEM 2. Plan of Operation
Now that the Company has received financing under two private placements of
common stock during the current quarter, it is proceeding to development the
business opportunity which it finalized in April 2004, which was the acquisition
of Nova Electric Systems, Inc, which will lead to the ultimate set up of
dealerships for the sale of electric powered vehicles. This plan which is
currently under way involves obtaining strategic partners with whom the Company
can arrange financing for its products and provide marketing for the set up of a
distribution network for product sales. The Company has also commenced research
and development on new technology which could lead to additional products for
the Company to sell.
3
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion contains forward-looking statements that are subject to
significant risks and uncertainties. There are several important factors that
could cause actual results to differ materially from historical results and
percentages and results anticipated by the forward-looking statements. The
Company has sought to identify the most significant risks to its business, but
cannot predict whether or to what extent any of such risks may be realized nor
can there be any assurance that the Company has identified all possible risks
that might arise. Investors should carefully consider all of such risks before
making an investment decision with respect to the Company's stock.
Overview
The Company is a development stage company in the business of developing certain
distribution rights to electric vehicle and electric propulsion systems.
Plan of Operation
The Company has had no operations since inception and is financially dependent
on its shareholders, who have financed its existence to date.
For the near term, the Company continues to develop the rights owned by Nova
Electric Systems Inc., ("Nova"). The Company acquired all the issued and
outstanding shares of Nova through an stock exchange agreement dated effective
April 27, 2004. Nova is in the business of developing and marketing electronic
propulsion and battery power systems for electric powered vehicles. Under the
stock exchange agreement with Nova, the Company issued 21,000,000 Common Shares
in the capital stock of the Company in exchange for the 21,000,000 shares of
Nova outstanding. Under the agreement, the Company also agreed to pay, upon
obtaining financing, $650,000 USD as an advance on royalties to Nu Age pursuant
to an agreement between Nova and Nu Age..
Financing for the above advance of on royalties was arranged during the first
calendar quarter of 2005 through two private placements of the Company's common
stock totaling $520,000. Substantial stock offering and legal fees in connection
with this financing were also incurred. The stock sold through the two private
placements are the shares that are being registered under a Form SB-2.
3
Through an agreement with NuAge Electric Inc., Nova holds the rights for the use
of certain proprietary technology to install electric propulsion systems on a
variety of electric powered vehicles to include, but not limited to, mountain
bikes, regular cycles, children's cycle toys and riding vehicles, recreation ATV
units, scooters, motorcycles, go-karts, NEV (Neighborhood Electric Vehicle)
cars, race cars, regular passenger cars, buses and all other types of two and
three wheeled vehicles, water craft and in addition, a wide variety of other
vehicles and products.
Nova has also acquired the rights from NuAge Electric Inc., to certain
agreements between NuAge and the largest bicycle manufacturer in the world, Hero
Cycles in India, for the joint venture to manufacture and distribute many of the
electric powered two and three wheel vehicles in India and for distribution from
the Hero manufacturing facilities worldwide.
The Nova Business Plan details a number of electric powered vehicles built as
prototype working models at the Las Vegas facility and it is the intent of Armor
to work closely with their strategic partner, NuAge to continue to develop a
wide variety of commercially viable vehicles and products there.
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
- ----------------------------------------------
The Company has incurred operating losses since its inception related primarily
to development general administration costs. During the three months ended March
31, 2005, the Company posted a loss of $123,305 and a cumulative loss of
$192,845 since inception.
The Company's main focus during the three months ended March 31, 2005 has been
continued development of the marketing rights owned Nova Electric Systems Inc.
and financing of the Agreement used to obtain those rights.
GENERAL & ADMINISTRATIVE EXPENSES
- ---------------------------------
General and administrative expenses were $84,885 during the three months ended
March 31, 2005 and cumulative general and administrative expenses from inception
was $147,425 as of March 31, 2005. The Company anticipate this expense to
increase as operations increase.
4
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Since inception, the Company has financed its operations from private financing.
The company has suffered recurring losses from operations but has recently
undergone financing activities and has working capital of $ 128,735 (current
assets less current liabilities).
FINANCING
- ---------
The Company's capital requirements have not been significant in the past but the
Company anticipates it will increase as development and product launch begins.
CASH REQUIREMENTS AND NEED FOR ADDITIONAL FUNDS
In its attempts to develop the Company's marketing strategy and launch a
product, the Company anticipates it will require approximately $1,500,000.00 in
the coming year. To satisfy these cash requirements, the Company will likely
have to raise additional funds in the coming year. There are no assurances that
the Company will be able to obtain the additional financing.
ITEM 3. CONTROLS AND PROCEDURES
The registrant's Principal executive officers and principal financial officer,
based on their evaluation of the registrant's disclosure controls and procedures
(as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of
March 31, 2005 have concluded that the registrants' disclosure controls and
procedures are adequate and effective to ensure that information relating to the
registrants and their consolidated subsidiaries is recorded, processed,
summarized and reported within the time periods specified by the SEC's rules and
forms, particularly during the period in which this quarterly report has been
prepared. The registrant's Principal executive officers and principal financial
officer have also concluded, based on the evaluation described above, that
information required to be disclosed in the reports filed or submitted under the
Exchange Act is accumulated and communicated to the Company's management,
including the chief executive officer and chief financial officer, to allow
timely decisions regarding required disclosure.
The registrants' principal executive officers and principal financial officer
have concluded that there were no changes in our internal controls or in other
factors that have materially affected, or that are reasonably likely to
materially affect, the Company's internal control over financial reporting,
subsequent to March 31, 2005, the date of their most recent evaluation of
such controls.
5
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Between February 8 and April 18, 2005, in private placement transactions under
Regulation D and Regulations S of the SECURITIES ACT, 1933, the Company sold
5,200,000 shares of Common Stock and 5,460,000 common share purchase warrants to
the Selling Security Holders. The warrants have an exercise price of $0.15 and
an expiry date of February 22, 2012. These shares and the shares that will be
issued when and if thee warrants are exercised, are the shares that are being
registered in this prospectus.
Granite Financial Inc. ("Granite") is a broker-dealer who received 260,000 of
the warrants with an exercise price of $0.15 and an expiry date of February 22,
2012 as compensation for acting as a placement agent in the private placement
transactions. Other than the warrants issued to Granite, no brokerage or
finder's fees or commissions were paid by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the private placement transactions.
Gross proceeds to the Company from the private placement transaction was
$520,000. Approximate expenses relating to the transactions are estimated at
$101,662. Therefore, net proceeds are estimated at $418,338. These proceeds will
be used for paying off the amount due under an Acquisition Agreement with Nova
Electric, Inc. and to pay operating expenses.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
6
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1.1(1) Articles of Incorporation dated June 5, 1998
3.1.2(1) Articles of Amendment dated August 31, 1999
3.1.3 (2) Articles of Amendment dated June 4, 2004
3.2(1) Bylaws 31.1 Section 302 Certification
32.1 Section 906 Certification of CEO
32.2 Section 906 Certification of CFO
------------------------------------
(1) Previously filed as an exhibit to the Company's Form 10-SB as filed on
January 6, 2003
(2) Previously filed as an exhibit to the Company's Form 10-KSB as filed on
October 15, 2004
b) The following current report on Form 8-K was filed during the period
ended March 31, 2005:
On March 9, 2005, the Company filed a report on Form 8-K under Item 5, and 7
disclosing that it had entered into private placement transactions
with various purchasers pursuant to section 4(2) of the Securities Act and
Rule 506 thereof, and an offering under Regulation S pursuant to rules 901
to 905 of the Securities Act.
On the same Form 8-K, the Company further announced that it has been approved
for listing in Standard & Poor's Corporation Records of publicly traded
companies.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: August 9, 2005 ARMOR ELECTRIC INC.
/S/ MERRILL MOSES
------------------------------------
Merrill Moses
President
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