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 September 30, 2012
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 000-54720
HAUGE TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
ENTREE ACQUISITION CORPORATION
(Former name of registrant as specified in its charter)
Delaware 00-0000000
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1525 3rd Street, Suite F
Riverside, California 92507
(Address of principal executive offices) (zip code)
215 Apolena AVenue
Newport Beach, California 92662
(Former address of principal executive offices) (zip code)
757-277-2858
(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 stock, as of the latest practicable date.
Class Outstanding at
November 1, 2012
Common Stock, par value $0.0001 3,274,126
Documents incorporated by reference: None
FINANCIAL STATEMENTS
Balance Sheets as of September 30, 2012 (unaudited) and
April 30, 2012 1
Statements of Operations for the Three months ended
September 30, 2012 and the Period from April 23, 2012
(Inception) to September 30, 2012 (unaudited) 2
Statements of Cash Flows for the Period from April 23,
2012 (Inception) to September 30, 2012 (unaudited) 3
Notes to Financial Statements (unaudited) 4-7
Hauge Technology, Inc.
(formerly Entree Acquisition Corporation)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
September 30, 2012 April 30, 2012
------------------ --------------
Current assets
Cash $ 2,000 $ 2,000
-------- ---------
TOTAL ASSETS $ 2,000 $ 2,000
======== =========
STOCKHOLDERS' EQUITY
Stockholders' Equity
Preferred stock, $0.0001 par value,
20,000,000 shares authorized;
none outstanding $ - $ -
Common Stock, $0.0001 par value,
100,000,000 shares authorized;
20,000,000 shares issued and
outstanding 2,000 2,000
Additional paid-in capital 750 750
Accumulated deficit (750) (750)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY $ 2,000 $ 2,000
========= =========
The accompanying notes are an integral part of these financial statements
1
Hauge Technology, Inc.
(formerly Entree Acquisition Corporation)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(unaudited)
For the period from
For the three months April 23, 2012
ended (Inception) to
September 30, 2012 September 30, 2012
----------------- -------------------
Revenues $ - $ -
Cost of revenues - -
----------------- -------------------
Gross profit - -
Operating expenses - 750
----------------- -------------------
Loss before income tax - (750)
Income tax - -
----------------- -------------------
Net loss $ - $ (750)
================= ===================
Loss per share - basic and diluted 0.00 0.00
================= ===================
Weighted average shares outstanding-
basic and diluted 20,000,000
-----------------
The accompanying notes are an integral part of these financial statements
2
Hauge Technology, Inc.
(formerly Entree Acquisition Corporation)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(unaudited)
For the Period from
April 23, 2012
(Inception) to
September 30, 2012
-------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (750)
-------------------
Net cash used in operating activities (750)
-------------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 2,000
Proceeds from stockholders' additional
paid-in capital 750
-------------------
Net cash provided by financing activities 2,750
-------------------
Net increase in cash 2,000
Cash at beginning of period -
-------------------
Cash at end of period $ 2,000
===================
The accompanying notes are an integral part of these financial statements
3
Hauge Technology, Inc.
(formerly Entree Acquisition Corporation)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Hauge Technology, INc. (formerly Entree Acquisition Corporation
("Hauge" or "the Company") was incorporated on April 23, 2012 under
the laws of the State of Delaware to
engage in any lawful corporate undertaking, including, but not limited to,
selected mergers and acquisitions. Hauge has been in the developmental
stage since inception and its operations to date have been limited to
issuing shares to its original shareholders. Hauge will attempt to
locate and negotiate with a business entity for the combination of that
target company with Hauge. The combination will normally take the form
of a merger, stock-for-stock exchange or stock-for-assets exchange. 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 Hauge will be successful in locating or
negotiating with any target company. Hauge has been formed to provide
a method for a foreign or domestic private company to become a reporting
company with a class of securities registered under the Securities Exchange
Act of 1934.
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission
("SEC") for interim financial information. Accordingly, they do not include
all of the information and notes required by U.S. GAAP for complete financial
statements. The accompanying unaudited financial statements include all
adjustments, composed of normal recurring adjustments, considered necessary
by management to fairly state our results of operations, financial position
and cash flows. The operating results for interim periods are not
necessarily indicative of results that may be expected for any other
interim period or for the full year.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP 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 periods. Actual
results could differ from those estimates.
CONCENTRATION OF RISK
Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of cash. The Company places its cash with
high quality banking institutions. The Company did not have cash balances
in excess of the Federal Deposit Insurance Corporation limit as of September
30, 2012.
INCOME TAXES
Under ASC 740, "Income Taxes", deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary
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 apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. Valuation allowances are established
when it is more likely than not that some or all of the deferred tax assets
will not be realized.
4
Hauge Technology, Inc.
(formerly Entree Acquisition Corporation)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
LOSS PER COMMON SHARE
Basic loss per common share excludes dilution and is computed by dividing
net loss by the weighted average number of common shares outstanding
during the period. Diluted loss per common share reflects the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the loss of the entity. As
of September 30, 2012, there are no outstanding dilutive securities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows guidance for accounting for fair value measurements
of financial assets and financial liabilities and for fair value measurements
of nonfinancial items that are recognized or disclosed at fair value in the
financial statements on a recurring basis. Additionally, the Company adopted
guidance for fair value measurement related to nonfinancial items that are
recognized and disclosed at fair value in the financial statements on a
nonrecurring basis. The guidance establishes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to measurements involving significant unobservable inputs
(Level 3 measurements). The three levels of the fair value hierarchy are as
follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities that the Company has the ability to access
at the measurement date.
Level 2 inputs are inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly
or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
The Company monitors the market conditions and evaluates the fair value
hierarchy levels at least quarterly. For any transfers in and out of the
levels of the fair value hierarchy, the Company elects to disclose the fair
value measurement at the beginning of the reporting period during which the
transfer occurred.
NOTE 2 - GOING CONCERN
The Company has sustained operating losses since inception. It has an
accumulated deficit of $750 as of September 30, 2012. The Company's
continuation as a going concern is dependent on its ability to generate
sufficient cash flows from operations to meet its obligations, which it
has not been able to accomplish to date, and /or obtain additional financing
from its stockholders and/or other third parties.
These financial statements have been prepared on a going concern basis,
which implies the Company will continue to meet its obligations and
continue its operations for the next fiscal year. The continuation of
the Company as a going concern is dependent upon financial support from
its stockholders, the ability of the Company to obtain necessary equity
financing to continue operations, successfully locating and negotiate with
a business entity for the combination of that target company with the
Company. Tiber Creek Corporation, a company affiliated with management,
will pay all expenses incurred by the Company until a business combination
is effected, without repayment. There is no assurance that the Company will
ever be profitable. The financial statements do not include any adjustments
to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classifications of liabilities
that may result should the Company be unable to continue as a going concern.
5
Hauge Technology, Inc.
(formerly Entree Acquisition Corporation)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
Adopted
In May 2011, the FASB issued ASU 2011-04, "Amendments to Achieve
Common Fair Value Measurement and Disclosure Requirements in U.S.
GAAP and International Financial Reporting Standards (IFRS) of Fair Value
Measurement Topic 820." ASU 2011-04 is intended to provide a consistent
definition of fair value and improve the comparability of fair value
measurements presented and disclosed in financial statements prepared in
accordance with U.S. GAAP and IFRS. The amendments include those that
clarify the FASB's intent about the application of existing fair value
measurement and disclosure requirements, as well as those that change
a particular principle or requirement for measuring fair value or for
disclosing information about fair value measurements. This update is
effective for annual and interim periods beginning after December 15,
2011. The adoption of this ASU did not have a material impact on the
company's financial statements.
Not Adopted
In December 2011, the FASB issued ASU No. 2011-11: Balance Sheet
(Topic 210): Disclosures about Offsetting Assets and Liabilities, which
requires new disclosure requirements mandating that entities disclose both
gross and net information about instruments and transactions eligible for
offset in the statement of financial position as well as instruments and
transactions subject to an agreement similar to a master netting arrangement.
In addition, the standard requires disclosure of collateral received and
posted in connection with master netting agreements or similar arrangements.
This ASU is effective for annual reporting periods beginning on or after
January 1, 2013, and interim period within those annual periods. Entities
should provide the disclosures required retrospectively for all comparative
periods presented. We are currently evaluating the impact of adopting ASU
2011-11 on the financial statements.
The FASB issued Accounting Standards Update (ASU) No.
2012-02---Intangibles---Goodwill and Other (Topic 350): Testing Indefinite-
Lived Intangible Assets for Impairment, on July 27, 2012, to simplify the
testing for a drop in value of intangible assets such as trademarks,
patents, and distribution rights. The amended standard reduces the cost of
accounting for indefinite-lived intangible assets, especially in cases where
the likelihood of impairment is low. The changes permit businesses and other
organizations to first use subjective criteria to determine if an intangible
asset has lost value. The amendments to U.S. GAAP will be effective for
fiscal years starting after September 15, 2012. Early adoption is permitted.
The Company is currently evaluating the impact of adopting ASU 2012 on the
financial statements.
Other recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force), the American Institute of Certified Public
Accountants, and the United States Securities and Exchange Commission did
not or are not believed by management to have a material impact on the
Company's present or future financial statements.
6
Hauge Technology, Inc.
(formerly Entree Acquisition Corporation)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 4 STOCKHOLDER'S EQUITY
The Company is authorized to issue 100,000,000 shares of common stock
and 20,000,000 shares of preferred stock. As of September 30, 2012,
20,000,000 shares of common stock and no preferred stock were issued
and outstanding.
On April 30, 2012, the Company issued 20,000,000 common shares to two
directors and officers for $2,000 in cash.
A shareholder made a contribution in the amount of $750.
NOTE 5 SUBSEQUENT EVENTS
On October 2, 2012, the following events occurred which resulted in a
change of control of the Company:
The Company redeemed an aggregate of 19,500,000 of the then
20,000,000 shares of outstanding stock at a redemption price of $.0001
per share for an aggregate redemption price of $1,950.
James M. Cassidy resigned as the Company's president, secretary
and director. James McKillop resigned as the Company's vice
president and director.
Leif J. Hauge was named as the director of the Company and appointed
President, Secretary and Treasurer.
On October 3, 2012, the Company"issued 2,774,126 shares of
its common stock pursuant to Section 4(2) of the Securities Act of 1933 at
par representing 84.7% of the total outstanding 3,274,126 shares of common
stock.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
On September 17, 2012, Entree Acquisition Corporation
(the "Company") changed its name to Hauge Technology, Inc.
The Company was incorporated on April 23, 2012 under the laws
of the State of Delaware to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisitions. The
Company has been in the developmental stage since inception and its
operations to date have been limited to issuing shares to its original
shareholders and filing a registration statement on Form 10 with the
Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934 as amended on May 30, 2012 to register its class of common
stock. The Company has been formed to provide a method for a foreign
or domestic private company to become a reporting company with a
class of securities registered under the Securities Exchange Act
of 1934.
The most likely target companies are those seeking the perceived
benefits of a reporting corporation. Such perceived benefits may include
facilitating or improving the terms on which additional equity financing
may be sought, providing liquidity for incentive stock options or similar
benefits to key employees, increasing the opportunity to use securities
for acquisitions, providing liquidity for shareholders and other factors.
A combination will normally take the form of a merger, stock-for-stock
exchange or stock-for-assets exchange. 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.
As of September 30, 2012, the Company had not generated revenues
and had no income or cash flows from operations since inception. The
continuation of the Company as a going concern is dependent upon financial
support from its stockholders, its ability to obtain necessary equity
financing to continue operations, to successfully locate and negotiate
with a business entity for the combination of that target company with
the Company. Tiber Creek Corporation will pay all expenses incurred by
the Company until a change in control is effected, without repayment.
The Company's independent auditors have issued a report raising
substantial doubt about the Company's ability to continue as a going
concern. At present, the Company has no operations and the continuation
of the Company as a going concern is dependent upon financial support
from its stockholders, its ability to obtain necessary equity financing
to continue operations and/or to successfully locate and negotiate with
a business entity for the combination with a target company.
Subsequent to the date of this Report, on October 2, 2012, the
Company effected a change in control by effecting the following:
James M. Cassidy resigned as the Company's president, secretary
and director. James McKillop resigned as the Company's vice
president and director.
Leif J. Hauge was named as the director of the Company and appointed
President, Secretary and Treasurer.
Leif J. Hauge has been the Chairman and chief executive officer of
Isobaric Strategies Inc. since 2009. Mr. Hauge has 25 years of international
business, R & D and innovation experience. Mr. Hauge invented the XPR Energy
Recovery Device) in 2004 and brought to the desalination market last year.
He is the founder of Energy Recovery, Inc. (NASDAQ:ERII), which today is a
large manufacturer of energy recovery devices for reverse osmosis
desalination. Mr. Hauge received the Sidney Loeb inaugural award by
the European Desalination Society in 2006 for his invention and has
published several papers and holds six patents.
The former president of the Company is the president, director and
shareholder of Tiber Creek Corporation. Tiber Creek Corporation assists
companies in becoming public reporting companies and with introductions to
the financial community. In order to become a trading company, Tiber Creek
Corporation may recommend that a company file a registration statement, most
likely on Form S-1, following a business combination with a target company.
New management plans to use its personal funds to pay all expenses
incurred by the Company in 2012 without reimbursement at any future time.
There is no assurance that the Company will ever be profitable. The
financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of
assets or the amounts and classifications of liabilities that may
result should the Company be unable to continue as a going concern.
The Company anticipates that it will acquire Isobaric Strategies,
Inc., a company dedicated to the market introduction of the XPR
(aXle Position Rotor) pressure exchanger technology for liquid flow
energy recovery.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Information not required to be filed by Smaller reporting companies.
ITEM 4. 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).
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, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Act is accumulated and
communicated to the issuer's management, including its principal executive
and principal financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
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
During the past three years, the Company has issued 20,000,000
common shares pursuant to Section 4(2) of the Securities Act of 1933
for an aggregate purchase price of $2,000:
On April 30, 2012, Entree issued the following shares of its
common stock
Name Number of Shares Consideration
Tiber Creek Corporation 10,000,000 $1,000
MB Americus LLC 10,000,000 $1,000
Of the 20,000,000 shares issued, 19,500,000 shares were redeemed on
October 2, 2012 at a redemption price of $1,950.
On October 3, 2012, the Company issued 2,774,126 shares of its common
stock.
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 407(c)(3) of Regulation S-K:
During the quarter covered by this Report, there have not been
any material changes to the procedures by which security holders
may recommend nominees to the 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.
ENTREE ACQUISITION CORPORATION
By: /s/ James M. Cassidy
President, Chief Financial Officer
For period covered by this report
Dated: November 14, 2012