SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2006
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 or organization) 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)
Check whether the registrant (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act
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 by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No
State 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, 2006
Common Stock, par value $0.0001 1,000,000
Documents incorporated by reference: None
PART I -- FINANCIAL INFORMATION
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF June 30, 2006
(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 1,315
Deficit accumulated during
development stage (1,315)
-----
Total Stockholder's Equity 100
-----
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 100
=====
See accompanying notes to financial statements
2
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(Unaudited)
-----------------------
For the For the For the For the March 24,
3-Months 3-Months 6-Months 6-Months 1999
Ended Ended Ended Ended (Inception)
June 30, June 30, June 30, June 30, to June 30,
2006 2005 2006 2005 2006
Income $ - $ - $ - $ - $ -
Expenses
Professional Fees 780 - 780 780
Organization
expense - - - - 535
------- ------- ------ ------- -------
Total expenses 780 - 780 - 1,315
------- ------- ------ ------- -------
NET LOSS (780) - (780) - (1,315)
======= ======= ====== ======== =======
See accompanying notes to financial statements
3
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, 2006
(Unaudited)
--------------------
Deficit
Accumulated
Additional During
Common Stock Issued Paid-In Development
Shares Amount Capital Stage Total
- ----------- ------ ----- ------ ----- -----
Common Stock Issuance 1,000,000 $ 100 $ - $ - $ 100
Fair value of expenses
contributed - - 1,315 - 1,315
Net loss for the years ended:
December 31, 1999 - - - (535) (535)
December 31, 2000 - - - - -
December 31, 2001 - - - - -
December 31, 2002 - - - - -
December 31, 2003 - - - - -
December 31, 2004 - - - - -
December 31, 2005 - - - - -
June 30, 2006 - - - (780) (780)
- ----------- ------ ----- ------ ----- ------
BALANCE AT
June 30, 2006 1,000,000 100 $1,315 $(1,315) $ 100
============ ========= ===== ===== ==== =====
See accompanying notes to financial statements
4
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Unaudited)
------------------------
For The Period
From
January 1, January 1, March 24, 1999
2006 to 2005 to (Inception) to
June 30, 2006 June 30, 2005 June 30, 2006
----------- ----------- ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (780) $ - $(1,315)
Adjustment to reconcile
net loss to net cash used by
operating activities
Contributed expenses 780 - 1,315
------- ------ -------
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 statements
5
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF June 30, 2006
---------------
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 March 31, 2006, 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, 2005 and 2004.
6
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF June 30, 2006
-----------------------
(E) Recent Accounting Pronouncements
In December 2004, the FASB issued SFAS No. 123 (R), "Share-Based Payment".
SFAS No. 123 (R) revises SFAS No. 123, "Accounting for Stock-Based
Compensation" and supersedes APB Opinion No. 25, "Accounting for Stock
Issued to Employees". SFAS No. 123 (R) focuses primarily on the accounting
for transactions in which an entity obtains employee services in share-based
payment transactions. SFAS No. 123 (R) requires companies to recognize in
the statement of operations the cost of employee services received in
exchange for awards of equity instruments based on the grant-date fair value
of those awards (with limited exceptions). SFAS No. 123 (R) is effective as
of the first interim or annual reporting period that begins after June 15,
2005 for non-small business issuers and after December 15, 2005 for small
business issuers. Accordingly, the Company has adopted SFAS No. 123 (R)
in its first quarter ending March 31, 2006. The Company has determined
that the provisions of SFAS No. 123 (R) will not have an effect on its
financial statement presentation or disclosures.
In May 2005, the FASB issued SFAS No. 154 that establishes new standards on
accounting for changes in accounting principles. Pursuant to the new rules,
all such changes must be accounted for by retrospective application to the
financial statements of prior periods unless it is impracticable to do so.
SFAS No. 154 completely replaces Accounting Principles Bulletin (APB) Opinion
20 and SFAS 3, though it carries forward the guidance in those pronouncements
with respect to accounting for changes in estimates, changes in the reporting
entity, and the correction of errors. This statement is effective for
accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005.
The adoption of these pronouncements will not have a material effect on
the Company's financial position or results of operations.
7
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF June 30, 2006
-----------------------
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, 2006 represents the fair value of
the amount of organization costs and professional fees incurred by related
parties on behalf of the Company (See Note 4).
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).
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company will attempt 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
immediately after the transaction is consummated or at specified times
thereafter. If such registration occurs, it will be undertaken by the
surviving entity after the Company has entered into an agreement for a
business combination or has consummated a business combination. The
issuance of additional securities and their potential sale into any
trading market which may develop in the Company's securities may depress
the market value of the Company's securities in the future if such a
market develops, of which there is no assurance.
The Company will participate in a business combination only after
the negotiation and execution of appropriate agreements. 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.
ITEM 3. CONTROLS AND PROCEDURES
Pursuant to Rules adopted by the Securities and Exchange Commission
under Section 302(a) of the Sarbanes-Oxley Act of 2002, the
Company carried out an evaluation of the effectiveness of the design and
operation of its disclosure controls and procedures pursuant to Exchange
Act Rule 13a-14. This evaluation was done as of the end of the fiscal
period covered by this report under the supervision and
with the participation of the Company's principal executive officer (who
is also the principal financial officer). There have been no significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of the evaluation. Based
upon that evaluation, he believes that the Company's disclosure controls
and procedures are effective in gathering, analyzing and disclosing
information needed to ensure that the information required to be disclosed
by the Company in its periodic reports is recorded, summarized and processed
timely. The principal executive officer is directly involved in the day-
to-day operations of the Company.
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. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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
(a) Not applicable.
(b) Item 401(g) of Regulation S-B:
During the quarter covered by this Report, there have not been any
material changes to the procedures by which our security holders may
recommend nominees to our Board of Directors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
(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: August 4, 2006
Pursuant to the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
NAME OFFICE DATE
/s/ James M. Cassidy Director August 4, 2006