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
June 30, 2002
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-31389
CABINET ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-2257550
(State or other jurisdiction of (I.R.S. Employer incorporation
organization) Or Identification No.)
1504 R Street, N.W., Washington, D.C. 20009
(Address of principal executive offices (zip code))
202/387-5400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the last 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at June 30, 2002
Common Stock, par value $0.0001 1,000,000
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CABINET ACQUISITION CORPORATION
(A Development Stage Company)
As of June 30, 2002
(Unaudited)
ASSETS
Cash
$ 100
--------
TOTAL ASSETS $ 100
========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES $ -
-------
STOCKHOLDER'S EQUITY
Preferred Stock, $.0001 par value,
20,000,000 shares authorized, none
issued and outstanding -
Common Stock, $.0001 par value,
100,000,000 shares authorized,
1,000,000 issued and outstanding 100
Additional paid-in capital 535
Deficit accumulated during
development stage (535)
-------
Total Stockholder's Equity 100
-------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $100
======
See accompanying notes to financial statements
CABINET ACQUISITION CORPORATION
(A Development Stage Company)
Statement of Operations
(Unaudited)
For the six For the six March24,1999
Months Ended Months ended (Inception)to
June 30,2002 June 30,2001 June 30,2002
Income $ - $ - $ -
Expenses
Organization
expense - - 535
---------- -------- --------
Total expenses - - 535
---------- -------- -------
NET LOSS - - (535)
========= ======== =======
See accompanying notes to financial statements
CABINET ACQUISITION CORPORATION
(A Development Stage Company)
Statement of Changes in Stockholder's Equity
For the Period From March 24, 1999 (Inception)
To June 30, 2002
(Unaudited)
Deficit
Accumulated
Common Stock Additional During
Issued Paid-In Development
Shares Amount Capital Stage Total
Common Stock
Issuance 1,000,000 $ 100 $ - $ - $ 100
Fair value of
expenses contributed - - 535 - 535
Net loss for the periods ended:
December 31, 1999 - - - (535) (535)
December 31, 2000 - - - - -
December 31, 2001 - - - - -
June 30, 2002 - - - - -
------- ------- ------- --------- --------
BALANCE AT
June 30, 2002 1,000,000 $ 100 $535 $ (535) $ 100
============== ========= ====== ======= ========= ========
See accompanying notes to financial statements
CABINET ACQUISITION CORPORATION
(A Development Stage Company)
Statements of Cash Flows
Unaudited
January 1, 2002 January 1, 2001 March 24, 1999
to to (Inception) to
June 30, 2002 June 30, 2001 June 30, 2002
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ - $ - $ (535)
Adjustment to reconcile net
loss to net cash
used by operating activities
Contributed expenses - - 535
---------- ------------ ----------
Net cash used in operating
activities - - -
---------- ------------ ----------
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
---------- ------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
common stock - - 100
---------- ------------ ----------
Net cash provided by
financing activities - - 100
---------- ------------ ----------
INCREASE IN CASH AND CASH
EQUIVALENTS - - 100
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 100 100 -
---------- ----------- ----------
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 100 100 $ 100
========== ========== ===========
See accompanying notes to financial statement.
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
Cabinet Acquisition Corporation (a development stage company) ("the
Company") was incorporated in Delaware on March 24, 1999 to serve as a
vehicle to effect a merger, exchange of capital stock, asset acquisition or
other business combination with a domestic or foreign private business. At
June 30, 2002, the Company had not yet commenced any formal business
operations, and all activity to date relates to the Company's formation.
The Company's fiscal year end is December 31.
The Company's ability to commence operations is contingent upon its ability
to identify a prospective target business.
(B) Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(C) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.
(D) Income Taxes
The Company accounts for income taxes under the Financial Accounting
Standards Board of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("Statement 109"). Under Statement 109, deferred tax assets
and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax basis. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under Statement 109, the effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. There were no current or deferred income tax
expense or benefits due to the Company not having any material operations
for the years ended December 31, 2001 and 2000.
(E) New Accounting Pronouncements
The Financial Accounting Standards Board has recently issued several new
Statements of Financial Accounting Standards. Statement No. 141, "Business
Combinations" supersedes APB Opinion 16 and various related
pronouncements. Pursuant to the new guidance in Statement No. 141, all
business combinations must be accounted for under the purchase method of
accounting; the pooling-of-interests method is no longer permitted. SFAS
141 also establishes new rules concerning the recognition of goodwill and
other intangible assets arising in a purchase business combination and
requires disclosure of more information concerning a business combination
in the period in which it is completed. This statement is generally
effective for business combinations initiated on or after July 1, 2001.
Statement No. 142, "Goodwill and Other Intangible Assets" supercedes APB
Opinion 17 and related interpretations. Statement No. 142 establishes new
rules on accounting for the acquisition of intangible assets not acquired
in a business combination and the manner in which goodwill and all other
intangibles should be accounted for subsequent to their initial recognition
in a business combination accounted for under SFAS No. 141. Under SFAS No.
142, intangible assets should be recorded at fair value. Intangible assets
with finite useful lives should be amortized over such period and those with
indefinite lives should not be amortized. All intangible assets being
amortized as well as those that are not, are both subject to review for
potential impairment under SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of". SFAS No. 142
also requires that goodwill arising in a business combination should not be
amortized but is subject to impairment testing at the reporting unit level to
which the goodwill was assigned to at the date of the business combination.
SFAS No. 142 is effective for fiscal years beginning after December 15, 2001
and must be applied as of the beginning of such year to all goodwill and other
intangible assets that have already been recorded in the balance sheet as of
the first day in which SFAS No. 142 is initially applied, regardless of when
such assets were acquired. Goodwill acquired in a business combination whose
acquisition date is on or after July 1, 2001, should not be amortized, but
should be reviewed for impairment pursuant to SFAS No. 121, even though
SFAS No. 142 has not yet been adopted. However, previously acquired
goodwill should continue to be amortized until SFAS No. 142 is first adopted.
Statement No. 143 "Accounting for Asset Retirement Obligations" establishes
standards for the initial measurement and subsequent accounting for
obligations associated with the sale, abandonment, or other type of disposal
of long-lived tangible assets arising from the acquisition, construction, or
development and/or normal operation of such assets. SFAS No. 143 is
effective for fiscal years beginning after June 15, 2002, with earlier
application encouraged.
The adoption of these pronouncements will not have a material effect on the
Company's financial position or results of operations.
NOTE 2 STOCKHOLDER'S EQUITY
(A) Preferred Stock
The Company is authorized to issue 20,000,000 shares of preferred stock at
$.0001 par value, with such designations, voting and other rights and
preferences as may be determined from time to time by the Board of
Directors.
(B) Common Stock
The Company is authorized to issue 100,000,000 shares of common stock at
$.0001 par value. The Company issued 1,000,000 shares of its common stock
to Pierce Mill Associates, Inc. pursuant to Section 4(2) of the Securities Act
of 1933 for an aggregate consideration of $100.
(C) Additional Paid-In Capital
Additional paid-in capital at June 30, 2002 represents the fair value of the
amount of organization and professional costs incurred by related parties on
behalf of the Company (See Note 3).
NOTE 3 AGREEMENT
On April 1, 1999, the Company signed an agreement with Rock Creek Capital
Corporation ("Rock Creek"), a related entity (See Note 4). The Agreement
calls for Rock Creek to provide the following services, without reimbursement
from the Company, until the Company enters into a business combination as
described in Note 1(A):
1. Preparation and filing of required documents with the Securities and
Exchange Commission.
2. Location and review of potential target companies.
3. Payment of all corporate, organizational, and other costs incurred by the
Company.
NOTE 4 RELATED PARTIES
Legal counsel to the Company is a firm owned by a director of the Company
who also owns 100% of the outstanding stock of Pierce Mill Associates, Inc.
and Rock Creek (See Note 3).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company was formed to locate and negotiate
with a business entity for the combination of that
target company with the Company. The combination
will normally take the form of a merger,
stock-for-stock exchange or stock-for-assets
exchange (the "business combination"). In most
instances the target company will wish to structure
the business combination to be within the definition
of a tax-free reorganization under Section 351 or
Section 368 of the Internal Revenue Code of 1986, as
amended. No assurances can be given that the
Company will be successful in locating or
negotiating with any target business.
The Company has not restricted its search for any
specific kind of businesses, and it may acquire a
business which is in its preliminary or development
stage, which is already in operation, or in
essentially any stage of its business life. It is
impossible to predict the status of any business in
which the Company may become engaged, in that such
business may need to seek additional capital, may
desire to have its shares publicly traded, or may
seek other perceived advantages which the Company
may offer.
In implementing a structure for a particular
business acquisition, the Company may become a party
to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another
corporation or entity.
It is anticipated that any securities issued in
any such business combination would be issued in
reliance upon exemption from registration under
applicable federal and state securities laws. In
some circumstances, however, as a negotiated element
of its transaction, the Company may agree to
register all or a part of such securities as part of
the business combination or at specified times
thereafter.
Negotiations with a target company will likely
focus on the percentage of the Company which the
target company shareholders would acquire in
exchange for their shareholdings. Although the
terms of such agreements cannot be predicted,
generally such agreements will require certain
representations and warranties of the parties
thereto, will specify certain events of default,
will detail the terms of closing and the conditions
which must be satisfied by the parties prior to and
after such closing and will include miscellaneous
other terms. Any merger or acquisition effected by
the Company can be expected to have a significant
dilutive effect on the percentage of shares held by
the Company's shareholders at such time.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company
and the Company is unaware of such proceedings
contemplated against it.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
There are no exhibits required to be filed with this
quarterly report.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed by the
Company during the quarter.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABINET ACQUISITION CORPORATION
By: James M. Cassidy
/s/ President
Dated: August 12, 2002
CERTIFICATION
By execution below, the Chief Executive Officer and the Chief Financial
Officer hereby certify that the Quarterly Report on Form 10-QSB for the
period ending December 31, 2001, fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the
information contained in such periodic report fairly presents, in all
material respects, the financial condition and results of operations
of the registrant.
By: /s/ James M. Cassidy
Chief Executive Officer
Dated: August 12, 2002
By: /s/ James M. Cassidy
Chief Financial Officer
Dated: August 12, 2002