SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 2008
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)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of
the Exchange Act.
Large accelerated filer Accelerated Filer
Non-accelerated filer Smaller reporting company X
(do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at June 30, 2008
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)
CONDENSED BALANCE SHEET
AS OF June 30, 2008
(Unaudited)
-----------------------
ASSETS
------
Cash $ 100
------
TOTAL ASSETS $ 100
------
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
LIABILITIES
Accrued expenses $2,500
------
TOTAL LIABILITIES 2,500
------
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 2,095
Deficit accumulated during
development stage (4,595)
--------
Total Stockholder's Equity (2,400)
--------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 100
========
See accompanying notes to condensed financial statements
2
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS 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,
2008 2007 2008 2007 2008
Income $ - $ - $ - $ - $ -
Expenses
Professional Fees - - 2,500 - 4,060
Organization
expense - - - - 535
------- ------- ------ ------- -------
Total expenses - - 2,500 - 4,595
------- ------- ------ ------- -------
NET LOSS - - (2,500) - (4,595)
========= ======= ======= ====== ======== =======
Basic and diluted--
loss per share $ - $ -
======== ========
Weighted average
number of shares
outstanding;
basic and diluted 1,000,000 1,000,000
========= =========
See accompanying notes to condensed 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)
THROUGH June 30, 2008
(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 - - 2,095 - 2,095
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 - - - - -
December 31, 2006 - - - (780) (780)
December 31, 2007 - - - (780) (780)
June 30, 2008 - - - (2,500) (2,500)
- ----------- ------ ----- ------ ------- --------
BALANCE AS OF
June 30, 2008 1,000,000 $ 100 $2,095 $(4,595) $(2,400)
============ ========= ===== ====== ========
========
See accompanying notes to condensed financial statements
4
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Unaudited)
------------------------
For the Six For the Six March 24, 1999
Months Ended Months Ended (Inception) to
June 30, 2008 June 30, 2007 June 30, 2008
----------- ----------- ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $(2,500) $ - $ (4,595)
Adjustment to reconcile
net loss to net cash used by
operating activities
Accrued expenses 2,500 - 2,500
Contributed expenses - - 2,095
------- ------ --------
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 condensed financial statements
5
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF June 30, 2008
(Unaudited)
---------------
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.
As of June 30, 2008, 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) Interim Financial Statements
The accompanying unaudited condensed financial statements have been
prepared by the Company and reflect all adjustments, consisting only
of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair presentation of the financial position as of
three and six month periods ended June 30, 2008, and the period
March 24, 1999 (inception) through June 30, 2008, in accordance with
accounting principles generally accepted in the United States of
America for interim financial statements and pursuant to Form
10-Q and Regulation S-X.
Certain information and footnote disclosures normally included in the
Company's annual audited finanical statements have been condensed or
omitted pursuant to such rules and regulations. The results of
operations for the three and six month periods ended June 30, 2008,
are not necessarily indicative of the results of operations to be
expected for a full fiscal year. These interim condensed financial
statements should be read in conjunction with the financial
statements for the fiscal year ended December 31, 2007, which are
included in the Company's Annual Report on Form 10-KSB filed with
the Securities and Exchange Commission on March 31, 2008.
(C) Use of Estimates
The preparation of the condensed 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 condensed financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
(D) 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.
(E) Fair Value of Financial Instruments
The Company measures its financial assets and liabilities in accordance
with generally accepted accounting principles. Financial instruments
applicable to the Company include cash and accrued expenses. The
carrying amounts approximate the fair value due to their short
maturities of less than one year.
(F) Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequence attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to be applied to taxable income in the years in which
those temporary differences are expected to reverse. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the
statement of operations in the period that includes the enactment date. A
valuation allowance is provided for deferred tax assets if it is more
likely than not these items will either expire before the Company is able
to realize their benefits, or that future deductibility is uncertain.
There were no current or deferred income tax expense or benefits due to
the Company not having any material operations for the period ended
June 30, 2008.
6
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF June 30, 2008
(Unaudited)
--------------------------------
(G) Loss Per Share
Basic loss per share is computed by dividing income available to
common shareholders by the weighted-average number of common shares
outstanding during the period. Diluted loss per share is computed
similar to basic loss per share except that the denominator is
increased to include the number of additional common shares that would
have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive. There were no potentially
dilutive securities for the three and six month periods ended
June 30, 2008.
(H) Recent Accounting Pronouncements
In December 2007, the FASB issued SFAS No. 141 (R), Business
Combinations, and SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements. SFAS No. 141 (R) requires an
acquirer to measure the identifiable assets acquired, the liabilities
assumed, and any non-controlling interest in the acquiree at their fair
values on the acquisition date, with goodwill being the excess value
over the net identifiable assets acquired. SFAS No. 160 clarifies that
a non-controlling interest in a subsidiary should be reported as equity
in the consolidated financial statement. The calculation of earnings
per share will continue to be
7
CABINET ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF June 30, 2008
(Unaudited)
--------------------------------
based on income amounts attributable to the parent. SFAS No. 141 (R) and
SFAS No. 160 are effective for financial statements issued for fiscal years
beginning after December 15, 2008. Early adoption is prohibited. We have
not yet determined the effect on our financial statements, if any, upon
adoption of SFAS No. 141 (R) or SFAS No. 160.
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 as of June 30, 2008 represents the fair
value of the amount of organization and professional costs 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.
In September 2006, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard ("SFAS") No. 157,
"Fair Value Measurements," which provides enhanced guidance for using
fair value to measure assets and liabilities. SFAS No. 157 provides a
common definition of fair value and establishes a framework to make the
measurement of fair value in generally accepted accounting principles
more consistent and comparable. SFAS No. 157 also requires expanded
disclosures to provide information about the extent to which fair value
is used to measure assets and liabilities, the methods and assumptions
used to measure fair value, and the effect of fair value measures on
earnings. SFAS No. 157 is effective as of January 1, 2008. This
statement was adopted without effect on its results of operations,
financial position or cash flows.
In December 2007, the FASB issued SFAS No. 141 (R), Business
Combinations, and SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements. SFAS No. 141 (R) requires an
acquirer to measure the identifiable assets acquired, the liabilities
assumed, and any non-controlling interest in the acquiree at their fair
values on the acquisition date, with goodwill being the excess value
over the net identifiable assets acquired. SFAS No. 160 clarifies that
a non-controlling interest in a subsidiary should be reported as equity
in the consolidated financial statement. The calculation of earnings
per share will continue to be based on income amounts attributable to
the parent. SFAS No. 141 (R) and SFAS No. 160 are effective for
financial statements issued for fiscal years beginning after
December 15, 2008. Early adoption is prohibited. We have not yet
determined the effect on our financial statements, if any, upon
adoption of SFAS No. 141 (R) or SFAS No. 160.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Information not required to be filed by Smaller reporting companies.
ITEM 4(T). Controls and Procedures.
Disclosures and Procedures
Pursuant to Rules adopted by the Securities and Exchange Commission.
the Company carried out an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures pursuant to
Exchange Act Rules. This evaluation was done as of the end of the 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.
This Quarterly Report does not include an attestation report of
the Company's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the Company's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management's
report in this Quarterly Report.
Changes in Internal Controls
There was no change in the Company's internal control over
financial reporting that was identified in connection with such
evaluation that occurred during the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
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
(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
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, Chief Financial Officer
Dated: August 8, 2008
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 8, 2008