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
September 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 September 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 September 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 nine For the nine March24,1999
Months Ended Months ended (Inception)to
Sept.30,2002 Sept.30,2001 Sept.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 September 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 - - - - -
Sept.30, 2002 - - - - -
------- ------- ------- --------- --------
BALANCE AT
Sept. 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
Sept.30,2002 Sept.30,2001 Sept.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
September 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 September 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.
Pursuant to Rules adopted by the Securities and Exchange Commission
under Section 302(a) of the Sarbanes-Oxley Act of 2002, the principal
executive and financial officer of the Company has certified the financial and
other information contained in this report, has evaluated the effectiveness of
the Company's disclosure controls and procedures within the period covered
by this report, and has concluded that such disclosure controls and procedures
are effective. There have been no significant changes in the internal controls
of the Company or other factors that could significantly affect internal
controls subsequent to the date of that evaluation.
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
None
(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: /s/ James M. Cassidy
President
Dated: November 13, 2002
CERTIFICATION
I, James M. Cassidy, certify that:
1. I have reviewed this quarterly report on Form
10-QSB.
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. As the registrant's sole certifying officer, I
am 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 any consolidated
subsidiaries, is made known to me, 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 of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report my conclusion
about the effectiveness of the disclosure
controls and procedures based on my evaluation
as of the Evaluation Date;
5. As the registrant's sole certifying officer, I
have disclosed, based on my most recent
evaluation, to the registrant's auditors:
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.
6. As the registrant's sole certifying
officer, 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 the most
recent evaluation, including any corrective
actions with regard to significant deficiencies
and material weaknesses.
Date 11/13/02 /s/ James M. Cassidy
Chief Executive
Officer/President
Chief Financial Officer