SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended March 31, 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: 001-15777
Unitrend, Inc.
(Exact name of registrant as specified in its charter)
Nevada 34-1904923
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
4665 West Bancroft St.
Toledo, Ohio 43615
(Address of principal executive offices, including zip code)
(419) 536-2090
(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 [ ]
Number of shares of registrant's common stock outstanding as of March 31, 2005:
70,390,770
UNITREND, INC. AND SUBSIDIARY
FORM 10-QSB
QUARTER ENDED MARCH 31, 2006
Table of Contents
PART I FINANCIAL INFORMATION Page
Item 1. Condensed Financial Statements
Condensed Balance Sheets at March 31, 2006 And December 31, 2005.. 4
Condensed Statements of Operations for the three months
ended March 31, 2006, 2005 and for the period from September
27, 1994 (date of inception) to March 31, 2006.................... 5
Condensed Statements of Cash Flows for the three months ended
March 31, 2006, 2005 and for the period from September 27,
1994 (date of inception) to March 31, 2006........................ 6
Statements of Stockholders' Equity for the three months ended
March 31, 2006 and for the years ended December 31, 2005, 2004
and 2003.......................................................... 7
Notes to Condensed Financial Statements......................... 8-9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.....................................10-12
PART II OTHER INFORMATION
Item 1. Legal Proceedings............................................... 12
Item 2. Changes In Securities And Use Of Proceeds....................... 12
Item 3. Defaults Upon Senior Securities................................. 12
Item 4. Submission Of Matters To A Vote Of Security Holders............. 12
Item 5. Other Information............................................... 12
Item 6. Exhibit......................................................... 12
Signatures...................................................... 13
This quarterly report on Form 10-QSB is for the three months ended March 31,2006
This quarterly report modifies and supersedes documents filed prior to this
quarterly report. The Securities and Exchange Commission (SEC) allows us to
"incorporate by reference" information that we file with them, which means that
we can disclose important information to you by referring you directly to those
documents. Information incorporated by reference is considered to be part of
this quarterly report. In addition, information that we file with the SEC in
the future will automatically update and supersede information contained in this
quarterly report. In this quarterly report, "Unitrend," "we," "us" and "our"
refer to Unitrend, Inc.
You should carefully review the information contained in this quarterly report
and in other reports or documents that we file from time to time with the SEC.
In this quarterly report, we state our beliefs of future events and of our
future financial performance. In some cases, you can identify those so-called
"forward-looking statements" by words such as "may," "will," "should," "expects"
"plans," "anticipates," "believes," "estimates," "predicts," "potential," or
"continue" or the negative of those words and other comparable words. You should
be aware that those statements are only our predictions. Actual events or
results may differ materially. In evaluating those statements, you should
specifically consider various factors, including the risks outlined below.
Those factors may cause our actual results to differ materially from any of our
forward-looking statements.
Part I. Financial Information
Item I. Condensed Financial Statements
UNITREND, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
(unaudited) (unaudited)
March 31, 2006 December 31,2005
---------------- ----------------
CURRENT ASSETS
Cash $ 183 $ 291
Accounts Receivable 434 569
Inventory - Finished goods 13,168 13,168
---------------- ----------------
Total current assets 13,784 14,028
PROPERTY AND EQUIPMENT, at cost
Land 67,485 67,485
Building and improvements 351,168 351,168
Furniture and fixtures 65,496 65,496
Computer equipment 151,055 151,055
Computer software 46,719 46,719
Automobiles 15,937 15,937
Tooling and dies under construction 940,007 940,007
---------------- ----------------
1,637,867 1,637,867
Less accumulated depreciation (332,633) (328,540)
---------------- ----------------
Net property and equipment 1,305,234 1,309,327
---------------- ----------------
OTHER ASSETS
Patent licensing costs,
net of accumulated amortization 18,069 18,598
---------------- ----------------
TOTAL ASSETS $ 1,337,086 $ 1,341,953
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITES
Accounts payable $ 512,975 $ 510,176
Current portion of note payable - -
Accrued expenses 1,032,532 1,006,477
---------------- ----------------
Total current liabilities 1,545,506 1,516,653
---------------- ----------------
NOTES PAYABLE - RELATED PARTIES 898,388 850,068
---------------- ----------------
STOCKHOLDERS' EQUITY
Common stock, no par value 3,805,098 3,805,098
Additional paid-in capital 9,332,592 9,332,592
Deficit accumulated in the development stage (14,244,498) (14,162,458)
---------------- ----------------
Total stockholders' equity (1,106,808) (1,024,769)
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 1,337,086 $ 1,341,953
================ ================
UNITREND, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS (UNAUDITED)
(unaudited)
(unaudited) (unaudited) September 27, 1994
Three Months Ended Three Months Ended (Date of Inception)
March 31, 2006 March 31, 2005 to March 31, 2006
---------------- ---------------- ----------------
Sales $ - $ 68 $ 6,725
Cost of Sales (147) (235) (11,229)
---------------- ---------------- ----------------
Gross Loss (147) (167) (4,504)
Research and development expenses - (786) (610,228)
Selling, general and administrative expenses (81,893) (107,692) (12,728,225)
---------------- ---------------- ----------------
Operating loss (82,040) (108,644) (13,342,957)
Other income - - (546,875)
Interest income - - 1,546
Interest expense - (3,298) (332,244)
---------------- ---------------- ----------------
Net loss before cumulative effect of change
in accounting principle (82,040) (111,942) (14,220,530)
Cumulative effect of change in accounting principle - - (23,968)
---------------- ---------------- ----------------
Net loss $ (82,040) $ (111,942) $ (14,244,498)
================ ================ ================
Basic and diluted loss per share:
Before cumulative effect of change in
accounting principle $ (0.00) $ (0.00) $ (0.21)
Cumulative effect of change in
accounting principle - - -
---------------- ---------------- ----------------
Net loss $ (0.00) $ (0.00) $ (0.21)
================ ================ ================
Weighted average shares outstanding used to
compute basic and diluted loss per share 70,390,770 70,390,770 68,542,843
================ ================ ================
UNITREND, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(unaudited)
(unaudited) (unaudited) September 27, 1994
Three Months Ended Three Months Ended (Date Of Inception)
March 31, 2006 March 31, 2005 to March 31, 2006
---------------- ---------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (82,040) $ (111,942) $ (14,244,498)
---------------- ---------------- ----------------
Adjustments to reconcile net loss to
net cash used in operating activities:
Change in accounting principle - - 23,968
Options issued for services - - 5,326,989
Depreciation & amortization 4,622 4,689 377,508
Loss on disposal of property and equipment - - 608,643
Bad debt - - 42,157
Accrued interest income - - (3,091)
Common stock issued for services - - 10,000
Increase in operating assets:
Accounts receivable 136 (68) (434)
Inventory - (5,533) (13,168)
Prepaid Expenses - - -
Increase (decrease) in operating liabilities:
Accounts payable 2,799 24,164 512,795
Accrued expenses 26,055 (19,834) 1,248,222
---------------- ---------------- ----------------
Total adjustments 33,612 3,419 8,133,769
---------------- ---------------- ----------------
Net cash used in operating activities (48,428) (108,523) (6,110,729)
---------------- ---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for patent licensing costs - - (31,723)
Purchase of property and equipment - - (2,277,022)
Proceeds from sale of property and equipment - - 10,941
Loans to related parties - - (18,191)
Loans to other entities - - (23,916)
Repayment from employee - - 3,041
Payment of organizational cost - - (30,168)
---------------- ---------------- ----------------
Net cash provided by (used in )
investing activities - - (2,367,038)
---------------- ---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of loan costs - - (5,448)
Loans from stockholder 48,320 113,400 4,721,484
Proceeds from note payable - - 290,000
Payment on note payable - (4,172) (290,000)
Proceeds from sale of common stock
and exercise of stock options - - 2,629,063
Payments for stock recissions - - (134,170)
Sale of stock subject to recission
for cash - - 1,267,020
---------------- ---------------- ----------------
Net cash provided by financing
activities 48,320 109,228 8,477,949
---------------- ---------------- ----------------
Net increase (decrease) in cash (108) 705 183
Cash - beginning of period 291 427 -
---------------- ---------------- ----------------
Cash - end of period $ 183 $ 1,132 $ 183
================ ================ ================
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period
Interest $ $ 4,657 $ 179,795
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
The President/Majority Stockholder forgave debt of $136,832 during the
period ended March 31, 2004.
UNITREND, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Three Months Ended March 31, 2006
And For the Year Ended December 31, 2005, 2004 and 2003
(unaudited)
Deficit
Accumulated
Common Stock Additional During the
------------------------- Paid-in Development
Shares Amount Capital Stage Total
------------- ------------- ------------- ------------- -------------
BALANCE -
DECEMBER 31, 2002 70,371,770 $ 3,795,598 $ 8,023,695 $ (12,150,321) $ (331,028)
Majority stockholder
forgives loans and
accrued salary on
on December 31, 2003 - - 577,988 - 577,988
Net loss - 2003 - - - (280,938) (280,938)
------------- ------------- ------------- ------------- -------------
BALANCE -
DECEMBER 31, 2003 70,371,770 $ 3,795,598 $ 8,601,683 $ (12,431,259) $ (33,978)
Exercise of stock
options at $0.50
per share on
January 14, 2004 19,000 9,500 - - 9,500
Majority stockholder
forgives loans and
accrued salary on
March 31, 2004 - - 136,832 - 136,832
Majority stockholder
forgives loans and
accrued salary on
June 30, 2004 - - 237,077 - 237,077
Net loss - 2004 - - - (1,185,679) (1,185,679)
------------- ------------- ------------- ------------- -------------
BALANCE -
DECEMBER 31, 2004 70,390,770 $ 3,805,098 $ 8,975,592 $ (13,616,938) $ (836,248)
Majority stockholder
forgives loans on
June 30, 2005 - - 357,000 - 357,000
Net loss - 2005 - - - (545,520) (545,520)
------------- ------------- ------------- ------------- -------------
BALANCE -
DECEMBER 31, 2003 70,390,770 $ 3,805,098 $ 9,332,592 $ (14,162,458) $ (1,024,769)
Net loss for the
period ended
March 31, 2005 - - - (82,040) (82,040)
------------- ------------- ------------- ------------- -------------
BALANCE -
MARCH 31, 2006 70,390,770 $ 3,805,098 $ 9,332,592 $ (14,244,498) $ (1,106,808)
============= ============= ============= ============== =============
UNITREND, INC.
FORM 10-Q SB
QUARTER ENDED MARCH 31, 2006
NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited)
BASIS OF PRESENTATION
The condensed financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. However, the Company believes that the disclosures are adequate
to make the information presented not misleading.
The unaudited condensed financial statements included herein reflect all
adjustments (which include only normal, recurring adjustments) that are, in the
opinion of management, necessary to state fairly the results for the three month
period ended March 31, 2006. The results for the three month period ended March
31, 2006 are not necessarily indicative of the results expected for the full
fiscal year.
NATURE AND SCOPE OF BUSINESS
Unitrend, Inc. (the Company) a Nevada corporation as of January, 1999, formerly
an Ohio corporation, is a development stage company formed with the purpose of
expanding the useful life of computer technology through our patented computer
enclosures, power supplies and related products that will ultimately be sold to
a national market. The Company was incorporated on April 11, 1996 as Versa Case,
Inc. On May 15, 1996, the Company changed its name to Unitrend, Inc. The
Company's operations to date have consisted primarily of incidental sales of
computer components while the Company personnel have concentrated on the
research and development of its products and procuring the necessary patents on
its technology. To date, the Company has been issued nine United States patents
with eight patent applications pending. The VersaCase patent alone was valued at
$9,478,000 by Robinwood Consulting, an independent firm experienced in the
valuation of intellectual property. Generally accepted accounting principles do
not allow us to record this valuation on the balance sheets, we can only account
for the direct costs involved in obtaining a patent. We also have nine
registered trademarks and service marks. As of March 31, 2006, expenses
incurred have been primarily for administrative support, obtaining patents,
tooling and product development of the enclosures and power supplies that will
ultimately be sold and tooling, product development and inventory of the wire
management systems that are currently being sold, which has resulted in an
accumulated deficit in the development stage of approximately $14,244,000.
On April 16, 1998, the Company formed Osborne Manufacturing, Inc. (OMI) to
produce the Company's products. In 2002, OMI was dissolved because management
determined that it could save time and money by entering into a contract with
New Product Innovations, Inc. (NPI) to provide turnkey manufacturing of its
product line. NPI began as a joint venture between General Electric (GE) and
Fitch,Inc. NPI along with Fitch will complete product development, obtain agency
approvals, engage in product positioning and manufacturing development.
The Company merged with Server Systems Technology, Inc. (SSTI) effective
December 15, 1998. SSTI was the predecessor to the Company and was formed
September 27, 1994. It owns several patents that are key to the Company's
products, but otherwise has ceased its development stage operations when the
Company was formed in April, 1996. SSTI is a related party to the Company since
the two entities have common stockholders.
In early 2003, research and development began on the Cablety wire management
system. Designs were finalized and a tool was built to produce the Cablety.
Production of the Cablety began late in the fourth quarter of 2003 and the
Cablety was made available for sale over our e-commerce site. As of the date of
this filing, sales have been modest, but we anticipate sales to increase as we
move forward and concentrate on marketing our products through direct and
indirect channels. In 2006, we hope to finalize any design changes to the
VersaCase, Stable power supply and Breeze power supply.
On March 1, 2004, Unitrend entered into a contract with Titan Technologies, an
established national sales and marketing group, to market and sell the Cablety,
VersaCase, and Stable power supply product lines and any future products
developed by Unitrend. The first product that has been sold by the Company is
the Cablety, with initial sales focus on large domestic distributors and
original equipment manufacturers (OEMs). We will modify our distribution plans
as demanded by the markets we serve in order to maximize efficiency throughout
all channels of distribution. In March 2004, R & R Plastics began building a
high volume production tool for the Cablety with new industrial/military "Safety
Wire" capabilities molded into it. This tool was completed in June 2004. Each
tool is a four-cavity mold and together are capable of producing 35,000 kits per
week. Molding, assembly and distribution of the Cablety components will be
performed by a local outside vendor.
In April 2004, Unitrend along with a representative from Titan Technologies
participated in RetailVision Spring 2004. RetailVision Spring 2004 is a trade
show that allows the manufacturer to sit face to face with potential retailers
and distributors in the computer industry. Unitrend presented to representatives
that comprise approximately 90% of the computer industry's manufacturers and/or
distributors. Positive results of this show include agreements signed with
Micro Center, Inc., TigerDirect.com and Zones, Inc. Micro Center, Inc. offers a
huge selection of competitively priced, high-quality products, and a wealth of
information to help customers make informed buying decisions. Micro Center has
twenty nationwide retail stores along with an online retail site. Currently,
the Cablety may be purchased at www.microcenter.com. TigerDirect.com carries
the world's largest selection of computer components, making them the reseller
of choice for the "build-it-yourselfer." Zones, Inc. and their affiliates are
single-source, multi-vendor direct marketing resellers of name-brand information
technology products to the small to medium sized business market, enterprise and
public sector accounts and sells product through outbound and inbound call
center account executives, specialty print and e-catalogs, and the Internet. The
Cablety is available for purchase at www.zones.com. In August 2004, Unitrend
exhibited at the Zones Accessories Training Fair where representatives from
Unitrend showed the benefits of using our product line. This show was attended
by only Zones sales and marketing representatives in order for them to learn
about all the products that Zones carries. In September 2004, Unitrend attended
the Gartner System Builders Summit. This show is the leading event for the white
box market. Vendors and resellers meet at this show to explore new technologies
and build strategic relationships. Unitrend established relationships with
interested vendors for when our product line is in full production. In early
April 2005, Unitrend exhibited at the FOSE trade show. FOSE is the most
comprehensive technology event serving the government marketplace. The U.S.
government is the largest buyer of technology in the world, which made this show
the most efficient way for Unitrend to reach government customers. At this show
we introduced the Breeze power supply and the "new" flame orange Cablety with
the industrial/military safety wire capabilities. We also exhibited the
VersaCase and Cablety kits. Many government agencies reviewed our products and
gave us positive feedback. Many leads were made to place beta units within the
government for testing.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, 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 these estimates.
RELATED PARTY PAYABLE
In the past, there were unsecured notes payable to the President/majority
stockholder, including interest at prime on the first business day of the year,
payable in ten equal installments after the Company is profitable for one year.
As of March 31, 2006 note payable to the President/majority stockholder was
$898,388. As of December 31, 2005 and December 31, 2004, the outstanding balance
of the note payable to the President/majority stockholder was $213,245 and
$99,846, respectively. During 2004, our President/majority stockholder forgave
loans to the Company of $373,909. He also forgave debt of $432,240, accrued
interest of $22,280 and accrued salary of $199,352 during the year ended
December 31, 2003. On March 31, 2000, our President/majority stockholder
forgave loans to the Company of $2,171,854 and accrued interest of $69,942. The
forgiveness was accounted for as contributed capital.
NEW ACCOUNTING PRONOUNCEMENTS
None
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS - FIRST THREE MONTHS OF 2006 COMPARED TO FIRST THREE
MONTHS OF 2005
We had no significant revenues in the first three months of 2006 or in the first
three months of 2005. In the fourth quarter 2003, we began to produce and sell
the Cablety wire management system. Revenues were modest during the first
quarter of 2006 and during the first quarter of 2005. Unitrend had developed a
new marketing program in 2004 and began to implement it during the last half of
2004. This program includes, but will not be limited to, trade and consumer
advertising, public relations and trade shows. We anticipate not being
classified as a development stage enterprise sometime during 2007.
We had an operating loss of $82,040 during the three months ended March 31,2006
as compared to an operating loss of $108,644 during the three months ended March
31, 2005, a decrease of approximately 24%. As discussed below, this operating
Loss decreased primarily because of a reduction in selling, general and
administrative expenses.
The Company did not have any expenditures on research and development during the
three months ended March 31, 2006 as compared to $786 for the three months ended
March 31, 2005. Mr. Jelinger performs many internal research and development
functions for Unitrend of which he does not collect or accrue a salary. We
believe that research and development expenses with outside firms will increase
as we go forward due to the contract entered into with New Product Innovations,
Inc. (NPI) to provide turnkey manufacturing of our product line. NPI along with
Fitch, Inc. will complete product development, obtain agency approvals, engage
in product positioning and manufacturing development. We anticipate this
spending to continue to increase as we continue to produce the Cablety, our
first product that was made available to the market in the fourth quarter of
2003 and for the final product development and production of the Stable "Breeze"
and "Blizzard" power supplies, and the VersaCase "Viking" and "Neptune" chassis.
There was zero spent on tooling during the first three months of 2006 and
zero spent on tooling and dies during the first three months of 2005, we
anticipate this to increase as we move forward.
Selling, general and administrative expenses decreased to $81,893 during the
three months ended March 31, 2006 as compared to $107,692 during the three
months ended March 31, 2005, a decrease of approximately 24%. The decrease in
selling, general and administrative expenses is primarily due to an overall
reduction in expenditures company wide with the near completion of the research
and development phase of the Breeze power supply. There were no significant
decreases or increases in any one category of the selling, general and
administrative expenses during the three months ended March 31, 2005 as compared
to the three months ended March 31, 2005.
There were no stock options granted to non-employees during the three months
ended March 31, 2006 or during the three months ended March 31, 2005.
Accounts payable increased to $512,795 for the three months ended March 31, 2006
compared to $510,176 at years end December 31, 2005. The Company notified
its employees on January 1, 2001 that due to its financial condition, payment
of wages would cease for an undetermined amount of time and employees could
remain, if they should choose to, on a voluntary basis. In 2002, the Company
decided that payroll expense would resume and has accrued wages since then.
Our interest expense for the three months ended March 31, 2006 was zero as
compared to $3,298 from the same time period last year.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through public
and private sales of equity securities that provided aggregate net proceeds of
$2,630,000, and net loans from its founder received from inception of
$4,721,484. As of March 31, 2006, the Company's cash totaled $183 and accounts
receivable totaled $434. Loans from Mr. Jelinger during the three months ended
March 31, 2006 totaled $48,320. He forgave $373,909 of loans in 2004. The
President/majority stockholder forgave debt of $432,240, accrued interest of
$22,280 and accrued salary of $199,352 during the year ended December 31, 2003.
On March 31, 2000, our President/majority stockholder forgave loans to the
Company of $2,171,854 and accrued interest of $69,942. This was accounted for
as contributed capital.
Primary uses of cash for the three months ended March 31, 2006 included $48,428
for the Company's operations and working capital requirements. For the three
months ended March 31, 2006, primary uses of cash for the Company's investing
requirements totaled zero due to no purchases of property or equipment.
Our future capital requirements will depend upon numerous factors, including the
amount of revenues generated from operations, the cost of our sales and
marketing activities and the progress of our research and development
activities, none of which can be predicted with certainty. In December, 2000,
the company filed an SB-2 registration statement with the Securities and
Exchange Commission to register 4,000,000 shares of common stock, at $10.00 per
share in a "Best Efforts" offering. The filing was declared effective on
December 28, 2000. The purpose of the offering was to raise sufficient funds to
enable the Company to commence manufacturing of its VersaCase product.
Ultimately, the Company did not receive sufficient subscriptions to enable to
commence manufacturing operations and the offering terminated with all funds
returned to subscribers. Currently, the Company plans to raise sufficient funds
through the advancement of monies by its founder and/or through private
placements. While funds advanced and raised from the founder may enable the
Company to continue product development and commence out-source manufacturing,
we cannot be certain that the founder will continue to fund our capital needs.
Consequently, we may seek additional funding during the next 24 months through a
post effective amendment to the SB-2 registration statement. There can be no
assurance that any additional financing will be available on acceptable terms,
if required. Moreover, if additional financing is not available, we could be
required to reduce or suspend our operations, seek an acquisition partner or
sell securities on terms that may be highly dilutive or otherwise
disadvantageous to existing investors, or investors purchasing stock offered in
the anticipated secondary offering. In the event that neither of the
capital-raising mechanisms described above result in timely usable proceeds to
the Company, we may have a serious shortfall of working capital. We have
experienced in the past, and may continue to experience, operational
difficulties and delays in product development due to working capital
constraints. Any such difficulties or delays could have a material adverse
effect on our business, financial condition and results of operations.
OUTLOOK
The outlook section contains a number of forward-looking statements, all of
which are based on current expectations. Actual results may differ materially.
Our growth strategy is built around five imperatives: maintaining technological
leadership; increasing market share; acquiring other business entities;
leveraging strategic relationships; and the recruiting and retaining of key
personnel.
MAINTAINING TECHNOLOGICAL LEADERSHIP. The cutting edge of our effort to achieve
technological leadership is to establish a standard for open architecture and
modularity in the computer enclosure industry. Other components, accessories,
and products are in various stages of development. They will be supported by an
aggressive research and development budget.
INCREASING MARKET SHARE. Our entry into the market is estimated at a modest
level to allow us to grow at a reasonable pace. However, we make no
representations or guarantees that we will be able to manage the growth of our
business. The Cablety was introduced to the market in the fourth quarter of
2003 and we experienced modest sales. We anticipate sales to grow as we move
forward into 2006. Once VersaCase and the Stable power supply product lines are
introduced, we expect that there will be significant interest across a number of
market segments. The VersaCase product line is unparalleled in its versatile
application as a PC or server enclosure. The ease of access and scalability will
provide numerous benefits to routine and mission-critical users that will propel
and increase market share.
ACQUIRING OTHER BUSINESS ENTITIES. In order to expand our technological and
market capabilities, we may consider the pursuit of other companies. Such
acquisitions may include core and non-core entities. A core entity may be a
research and development group, and a non-core firm could be one that might
enhance our production process.
LEVERAGING STRATEGIC RELATIONSHIPS. We intend to leverage our relationship
with companies that complement our mission. For instance, the uniqueness of
Cablety, Stable, Breeze and VersaCase technology will create opportunities for
us to establish strong relationships with key distributors. These distributors
will be able to offer their clients a product that is very competitive and
distinctive. We have been approached by distributors to consider a channel
relationship or exclusive position with them. While we must maintain a broader
market focus, we may selectively enter into agreements that would enhance market
credibility and penetration.
RECRUITING AND RETAINING OF KEY PERSONNEL. An entrepreneurial spirit that was
based in creativity, risk and reward drove the birth of this company. We intend
to maintain this quality by offering competitive salary and incentive
compensation. Our overriding human resources philosophy is to build a corporate
culture that supports the success of each employee, as well as the company.
Part II. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes In Securities And Use Of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission Of Matters To A Vote Of Security Holders
Not Applicable
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits
99. Additional Exhibits
Exhibit 99.1 Certification Under Section 906 of Sarbanes-Oxley Act
of 2002
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Unitrend,
Inc. has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
UNITREND, INC.
Dated: November 16, 2006 By: /S/ CONRAD A.H. JELINGER:
_________________________
Conrad A.H. Jelinger
Chief Executive Officer,
Interim Chief Financial Officer
and President
EXHIBIT 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Unitrend, Inc. (The
Company) on Form 10-QSB for the period ending March 31, 2006, as
filed with the Securities and Exchange Commission on the date
hereof (the Report), I, Conrad A.H. Jelinger, Chief Executive
Officer and Interim Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of
the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of the Company.
/s/ Conrad A.H. Jelinger
-----------------------------
Conrad A.H. Jelinger
November 16, 2006
Chief Executive Officer, Interim
Chief Financial Officer and
President