UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10Q
(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, 2008
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to ___________
Commission file number: 000-52856
ATOMIC PAINTBALL, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-2942917
----- ----------
(State of Incorporation) (IRS Employer ID Number)
2460 WEST 26TH AVENUE, SUITE 380-C, DENVER, COLORADO 80211
--------------------------------------------------------------
(Address of principal executive offices)
303-380-2282
(Registrant's Telephone number)
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 past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated file, 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 [ ] (Do not check if a smaller reporting company)
Smaller reporting company [X]
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 share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of November 14, 2008, there were 7,488,804 shares of the registrant's common
stock, no par value, issued and outstanding.
ATOMIC PAINTBALL, INC.
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Balance Sheet - September 30, 2008 and December 31, 2007 3
Statement of Operations - Three and Nine months ended September 30, 2008 and
2007 and for the period from inception (May 8, 2001) through
September 30, 2008 4
Statement of Cash Flows - Three and Nine months ended September 30, 2008 and
2007and for the period from inception (May 8, 2001) through
September 30, 2008 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
Item 4. Controls and Procedures 19
Item 4T. Controls and Procedures 19
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 5. Other Information 19
Item 6. Exhibits 19
SIGNATURES 20
2
PART I
ITEM 1. FINANCIAL STATEMENTS
ATOMIC PAINTBALL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2008 2007
(Unaudited) (Audited)
ASSETS
Current Assets
Cash & Cash Equivalents $ 6,748 $ 14,217
Prepaid Expenses - 361
------------ ------------
Total Current Assets 6,748 14,578
------------ ------------
TOTAL ASSETS $ 6,748 $ 14,578
============ ============
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts Payable $ 33,296 $ 7,014
Accrued Expenses 12,459 8,166
Loans from Shareholders 110,564 56,689
------------ ------------
Total Liabilities, all current 156,320 71,869
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COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDERS' DEFICIT
Preferred Stock, no par value: 2,000,000 shares authorized
Series A Convertible Preferred Stock, no par value; 400,000 shares authorized - -
no shares issued and outstanding as at September 30, 2008 and
December 31, 2007 respectively, with a $0.25 per share liquidation preference
Common Stock, no par value: 10,000,000 shares authorized, 436,790 436,790
7,488,804 shares issued and outstanding as at September 30, 2008 and
December 31, 2007, respectively
Deficit accumulated during the development stage. (586,362) (494,082)
------------ ------------
Total Stockholders' Deficit (149,572) (57,291)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 6,748 $ 14,578
============ ============
See accompanying Notes to Financial Statements.
3
ATOMIC PAINTBALL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(Unaudited)
FROM INCEPTION
THREE MONTHS ENDED NINE MONTHS ENDED (May 8, 2001)
SEPTEMBER 30, SEPTEMBER 30, THROUGH SEPTEMBER 30,
2008 2007 2008 2007 2008
-------------- -------------------------- ----------- --------------
OPERATING EXPENSES
General and Administrative $ 18,270 $ 17,656 $ 87,810 $ 109,667 $ 575,225
Depreciation and amortization - - - - 6,835
Gain on Settlement of Liabilities - - - - (13,600)
-------------- -------------------------- ----------- ------------
Total Operating Expenses 18,270 17,656 87,810 109,667 568,460
OPERATING LOSS (18,270) (17,656) (87,810) (109,667) (568,460)
OTHER INCOME (EXPENSE)
Interest Expense (1,956) (749) (4,471) (3,473) (17,902)
-------------- -------------------------- ----------- ------------
Net Loss before Income Taxes (20,227) (18,405) (92,281) (113,139) (586,362)
Income tax expense - - - - -
-------------- -------------------------- ----------- ------------
NET LOSS $ (20,227)$ (18,405)$ (92,281)$ (113,139) $ (586,362)
============== ========================== =========== ============
NET LOSS PER COMMON SHARE
Basic & Diluted ($0.00) ($0.00) ($0.01) ($0.02) ($0.24)
============== ========================== =========== ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Basic & Diluted 7,488,804 7,132,804 7,488,804 6,537,891 2,463,966
============== ========================== =========== ============
See accompanying Notes to Financial Statements.
4
ATOMIC PAINTBALL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(Unaudited)
FROM INCEPTION
NINE MONTHS ENDED (May 8, 2001)
SEPTEMBER 30, THROUGH SEPTEMBER 30,
2008 2007 2008
---------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
NET LOSS $ (92,281)$ (113,139) $ (586,362)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Depreciation - - 6,835
Loss on Disposal of Fixed Assets - - 3,464
Issuance of Common Stock For Services - - 181,944
Gain on Settlement of Liabilities - - (13,600)
CHANGES IN OPERATING ASSETS & LIABILITIES
Decrease in Prepaid Expenses 361 - -
Decrease in Other Receivables - 36 -
Increase (Decrease) in Accounts Payable 26,282 (3,184) 46,896
Increase in Accrued Expenses 4,293 4,472 12,459
------------------------------ ---------------
Total Cash Flow Used In Operating Activities (61,344) (111,816) (348,364)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets - - (10,299)
------------- ------------- ---------------
Total Cash Flow Used In Investing Activities - - (10,299)
CASH FLOW FROM FINANCING ACTIVITIES
Advances Under Loans From Shareholders 53,875 33,375 184,411
Net Proceeds from Issuance of Common Stock - 100,000 106,000
Net Proceeds from Issuance of Preferred Stock - - 75,000
------------- ------------- ---------------
Total Cash Flow Provided By Financing Activities 53,875 133,375 365,411
NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS $ (7,469)$ 21,559 $ 6,748
============= ============= ===============
Cash and Cash Equivalents at the beginning of the period $ 14,217 $ 44 $ -
============= ============= ===============
Cash and Cash Equivalents at the end of the period $ 6,748 $ 21,603 $ 6,748
============= ============= ===============
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid for interest $ - $ - $ 207
============= ============= ===============
Cash paid for income tax $ - $ - $ -
============= ============= ===============
See accompanying Notes to Financial Statements.
5
ATOMIC PAINTBALL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2008
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:
Nature of Operations - Atomic Paintball, Inc., is a development stage
corporation incorporated on May 8, 2001 in the State of Texas, which plans to
own and operate paintball facilities and to provide services and products in
connection with paintball sport activities at our facilities and through a
website. The website has not been developed at this time.
We largely exhausted our available funding during the year ended December 31,
2004 and were forced to reduce our operations to a subsistence level for much of
the year ended December 31, 2004 and the year ended December 31, 2005.
Subsequently, during the years ended December 31 2007 and 2006, we were able to
raise sufficient interim funding and issue shares of our common stock as
compensation to certain consultants to accelerate the implementation of our
proposed business plan. However, so far we have been unable to raise the
substantial additional funding required to fully implement our proposed business
plan.
On October 11, 2007, we filed a Form 10-SB12G with the Securities and Exchange
Commission (SEC) seeking to become a fully reporting company pursuant to Section
12 (g) of the Securities Exchange Act of 1934. The filing became effective on
December 10, 2007, at which time we succeeded in becoming a fully reporting
company pursuant to Section 12 (g) of the Securities Exchange Act of 1934.
In May 2008, Pennaluna & Co, a broker dealer, submitted a Form 15c-211 on our
behalf to FINRA seeking to have our shares of common stock listed on the OTC
Bulletin Board. In FINRA's response to the Form 15c-211 that was filed on our
behalf, FINRA took the position that, under their own interpretation of what
constitutes a "shell" company as opposed to a "development" stage company, we
constitute a "shell" company rather than a "development" stage company.
Accordingly FINRA instructed us to re-file our previous filings with the SEC
with the "box checked" on the first page to indicate we are a shell company (as
defined in Rule 12b-2 of the Exchange Act). Our management is in no doubt that
we were, and are, a development stage company as defined by Statement of
Financial Accounting Standards No 7 "Accounting and Reporting by Development
Stage Enterprises". Our management's belief that we were, and are, a development
stage company is supported by current SEC guidelines, our auditors and our
outside legal counsel. At the same time, our management recognizes FINRA's right
to apply its own definition to this issue. Accordingly in accordance with FINRA
instructions, this Form 10Q has is filed with the "box checked" on the first
page to indicate we are a shell company (as defined in Rule 12b-2 of the
Exchange Act) and we have submitted amended filings for the Form 10SB/A filed on
November 29, 2007 and the Form 10KSB filed on April 3, 2008 that similarly have
the "box checked" on the first page to indicate we are a shell company (as
defined in Rule 12b-2 of the Exchange Act). Amending our filings in this way, on
the instruction of FINRA, in no way alters the fact that we have, and continue
6
to, consistently pursue our business plan to own and operate paintball
facilities and to provide services and products in connection with paintball
sport activities at our facilities and through a website.
In October 2008, FINRA approved shares of our common stock to trade on both the
Over the Counter Bulletin Board and the Pink Sheets. Our stock now trades under
the symbol "ATOC".
It is our current intention, within our existing level of interim funding, to
continue to accelerate progress on the implementation of our proposed business.
At present, we have brought our financial books and records up to date, become a
fully reporting company pursuant to Section 12 (g) of the Securities Exchange
Act of 1934 and eligible to be quoted on both the Over the Counter Bulletin
Board and the Pink Sheets, appointed a highly experienced paintball executive as
our non-executive director, initiated an up date of our initial business plan to
reflect recent developments within the paintball sector, appointed a consultant
to seek potential acquisition targets within the paintball sector and intend to
launch a website to sell paintball products shortly.
If we are successful in raising further equity finance we plan to establish
corporate offices, hire senior management, conduct feasibility studies for real
estate acquisitions for paintball locations, purchase land and equipment for
operating paintball parks, purchase inventory for resale and develop our website
for marketing our paintball games and miscellaneous services via the Internet.
We will consider acquiring existing underperforming paintball parks where we can
create value through new capital expenditure and the application of state of the
art marketing and operating disciplines. We will also consider acquiring
existing, established, profitable paintball parks as a means of establishing
rapidly a critical mass of profitable operations. We would need to raise
substantial funds to complete this business plan and there can be no assurance
that we will be able to raise sufficient equity to fund our strategy.
Significant Accounting Policies
Basis of Presentation:
The accompanying unaudited financial statements of Atomic Paintball, Inc. have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In our opinion the financial statements include all
adjustments (consisting of normal recurring accruals) necessary in order to make
the financial statements not misleading. Operating results for the three and
nine months ended September 30, 2008, are not necessarily indicative of the
results that may be expected for the year ended December 31, 2008. For more
complete financial information, these unaudited financial statements should be
read in conjunction with the audited financial statements for the year ended
December 31, 2007 included in our Annual Report on Form 10-KSB filed with the
SEC.
Cash and Cash Equivalents -- Cash and cash equivalents consist of cash and
highly liquid debt instruments with original maturities of less than three
months.
Property and Equipment -- Property and equipment are recorded at cost.
Depreciation is provided using the straight line method over the estimated
7
useful lives of the related assets. Amortization of leasehold improvements is
computed using the straight-line method over the shorter of the remaining lease
term or the estimated useful life of the improvement.
The useful lives of property and equipment for purposes of computing
depreciation are:
Leasehold Improvements 1 year
Equipment 7 years
Computer Equipment 5 years
Expenditures for maintenance and repairs are charged to operations as incurred,
while betterments that extend the useful lives of the assets are capitalized.
Assets held by the Company are periodically reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.
Deferred Costs and Other -- Offering costs with respect to issue of common
stock, warrants or options by us were initially deferred and ultimately offset
against the proceeds from these equity transactions if successful or expensed if
the proposed equity transaction is unsuccessful.
Impairment of Long-Lived and Intangible Assets -- In the event that facts and
circumstances indicated that the cost of long-lived and intangible assets may be
impaired, an evaluation of recoverability was performed. If an evaluation was
required, the estimated future undiscounted cash flows associated with the asset
were compared to the asset's carrying amount to determine if a write-down to
market value or discounted cash flow value was required.
Financial Instruments -- The estimated fair values for financial instruments was
determined at discrete points in time based on relevant market information.
These estimates involved uncertainties and could not be determined with
precision. The carrying amounts of notes receivable, accounts receivable,
accounts payable and accrued liabilities approximated fair value because of the
short-term maturities of these instruments. The fair value of notes payable
approximated to their carrying value as generally their interest rates reflected
our effective annual borrowing rate.
Income Taxes -- We account for income taxes under the liability method which
requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax assets and
liabilities are determined based on the difference between financial statements
and tax base of assets and liabilities using enacted tax rates in effect fro the
year in which the differences are expected to reverse.
Revenue Recognition - We expect to generate revenue from providing facilities,
services and products in connection with paintball sport activities. Revenues
will be recognized as services and products are delivered. We are currently in
the development stage and had no revenue during the three and nine months ended
September 30, 2008 and 2007 or during the period from inception (May 8, 2001)
through September 30, 2008.
Comprehensive Income (Loss) -- Comprehensive income is defined as all changes in
stockholders' equity (deficit), exclusive of transactions with owners, such as
capital investments. Comprehensive income includes net income or loss, changes
8
in certain assets and liabilities that are reported directly in equity such as
translation adjustments on investments in foreign subsidiaries and unrealized
gains (losses) on available-for-sale securities.
There were no differences between our comprehensive loss and net loss during the
three and nine months ended September 30, 2008 and 2007 or during the period
from inception (May 8, 2001) through September 30, 2008.
Income (Loss) Per Share -- The income (loss) per share is presented in
accordance with the provisions of Statement of Financial Accounting Standards
(SFAS) No.128, Earnings Per Share. SFAS No. 128 replaced the presentation of
primary and fully diluted earnings (loss) per share (EPS) with a presentation of
basic EPS and diluted EPS. Basic EPS is calculated by dividing the income or
loss available to common stockholders by the weighted average number of common
stock outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. Diluted EPS was the same as Basic EPS
for the three and nine months ended September 30, 2008 and 2007 and during the
period from inception (May 8, 2001) through September 30, 2008 we have had
losses in all periods since our inception and, therefore, the effect of all
additional potential common stock would be antidilutive.
Stock-Based Compensation -- As permitted under the SFAS No. 123, Accounting for
Stock-Based Compensation, we account for our stock-based compensation in
accordance with the provisions of Accounting Principles Board (APB) Opinion No.
25, Accounting for Stock Issued to Employees. As such, compensation expense is
recorded on the date of grant if the current market price of the underlying
stock exceeds the exercise price. Certain pro forma net income and EPS
disclosures for employee stock option grants are also included in the notes to
the financial statements as if the fair value method as defined in SFAS No. 123
had been applied. Transactions in equity instruments with non-employees for
goods or services are accounted for by the fair value method.
Use of Estimates -- The preparation of our consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in these
financial statements and accompanying notes. Actual results could differ from
those estimates. Due to uncertainties inherent in the estimation process, it is
possible that these estimates could be materially revised within the next year.
Recently Issued Accounting Pronouncements-- In December 2007, the FASB issued
SFAS No. 141 (Revised 2007), Business Combinations, or SFAS No. 141R. SFAS No.
141R will change the accounting for business combinations. Under SFAS No. 141R,
an acquiring entity will be required to recognize all the assets acquired and
liabilities assumed in a transaction at the acquisition-date fair value with
limited exceptions. SFAS No. 141R will change the accounting treatment and
disclosure for certain specific items in a business combination. SFAS No. 141R
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. Accordingly, any business combinations we engage in
will be recorded and disclosed following existing GAAP until January 1, 2009. We
expect SFAS No. 141R will have an impact on accounting for business combinations
once adopted but the effect is dependent upon acquisitions at that time.
9
In March 2008, the FASB issued Statement No. 161, "Disclosures about Derivative
Instruments and Hedging Activities" ("SFAS No. 161"). SFAS No. 161 amends and
expands the disclosure requirements of Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities." It requires qualitative
disclosures about objectives and strategies for using derivatives, quantitative
disclosures about credit-risk-related contingent features in derivative
agreements. SFAS No. 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008. The Company does
not anticipate the adoption of SFAS No. 161 will have a material impact on its
results of operations, cash flows or financial condition.
In April 2008, the FASB issued FSP FAS 142-3, "Determination of the Useful Life
of Intangible Assets" ("FSP FAS 142-3"). FSP FAS 142-3 amends the factors that
should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under FASB Statement
No. 142, "Goodwill and Other Intangible Assets". FSP FAS 142-3 also requires
expanded disclosure related to the determination of intangible asset useful
lives. FSP FAS 142-3 is effective for financial statements issued for fiscal
years beginning after December 15, 2008, and interim periods within those fiscal
years. The Company does not expect that the adoption of FSP FAS 142-3 will have
a material effect on its consolidated results of operations or financial
condition.
In May 2008, the FASB issued FASB Staff Position (FSP) No. APB 14-1 "Accounting
for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)" (FSP APB 14-1). FSP APB 14-1 requires the
issuer of certain convertible debt instruments that may be settled in cash (or
other assets) on conversion to separately account for the liability (debt) and
equity (conversion option) components of the instrument in a manner that
reflects the issuer's non-convertible debt borrowing rate. FSP APB 14-1 is
effective for fiscal years beginning after December 15, 2008 on a retroactive
basis and will be adopted by the Company in the first quarter of fiscal 2009.
The Company does not expect the adoption of FSP APB 14-1 to have a material
effect on its results of operations and financial condition.
In June 2008, the Financial Accounting Standards Board ("FASB") issued FASB
Staff Position ("FSP") EITF 03-6-1, "Determining Whether Instruments Granted in
Share-Based Payment Transactions are Participating Securities." This FSP
provides that unvested share-based payment awards that contain nonforfeitable
rights to dividends or dividend equivalents (whether paid or unpaid) are
participating securities and shall be included in the computation of earnings
per share pursuant to the two-class method. The FSP is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. Upon adoption, companies are required
to retrospectively adjust earnings per share data (including any amounts related
to interim periods, summaries of earnings and selected financial data) to
conform to provisions of this FSP. The Company does not anticipate the adoption
of FSP EITF 03-6-1 will have a material impact on its results of operations,
cash flows or financial condition.
2. GOING CONCERN AND LIQUIDITY:
At September 30, 2008, we had total assets of $6,748 consisting of cash, no
operating business or other source of income, outstanding liabilities totaling
$156,320 and a stockholder' deficit of $149,572.
10
In our financial statements for the fiscal years ended December 31, 2007 and
2006, the Report of the Independent Registered Public Accounting Firm includes
an explanatory paragraph that describes substantial doubt about our ability to
continue as a going concern. Our financial statements for the three and nine
months ended September 30, 2008 and 2007, have been prepared on a going concern
basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. At September 30,
2008, we had a working capital deficit of $149,572 and reported an accumulated
deficit of $586,362.
It is our current intention to seek to raise the debt and/or equity financing to
meet ongoing operating expenses and fully implement our proposed business plan.
There is no assurance that this series of events will be satisfactorily
completed
During the year ended December 31, 2007, we raised $105,000 in cash through the
private placement of 840,000 shares of our common stock at $0.125 per share. Mr.
Perlmutter, a director of the Company, subscribed for 200,000 of these shares in
exchange for $25,000. There can be no assurance that we will be able to secure
additional financing on an ongoing basis.
Since his appointment on August 31, 2006 and through September 30, 2008, Mr.
Cutler, our sole officer and a director, has made net advances to us of $158,486
by way of a loan. These funds are used to support our ongoing operating costs
and settle certain outstanding liabilities. In December 2006, Mr. Cutler
converted $30,000 of his loan into 697,674 shares of common stock. In March
2007, Mr. Cutler converted an additional $30,000 of his loan into an additional
697,674 shares of our common stock. At September 30, 2008, the Company owed Mr.
Cutler $98,486. There can be no assurance that Mr. Cutler will continue to
provide such financing on an ongoing basis
3. ACCOUNTS PAYABLE
The balances of accounts payable as at September 30, 2008 and December 31, 2007,
include certain liabilities that were substantially over due as at the date of
these balance sheets but were still outstanding as we did not have the necessary
funding in to pay these liabilities.
No interest accrual has been made in respect of these outstanding accounts
payable as we believe they will be settled at or below their current carrying
value on our balance sheet
4. ACCRUED EXPENSES
The balances of accrued expenses at September 30, 2008 and December 31, 2007,
represents accrued interest on loan notes provided to us by certain of our
existing shareholders or former shareholders.
5. LOANS FROM SHAREHOLDERS
Barbara J. Smith, formerly an officer, director and a shareholder of the
Company, loaned us a total of $10,900 between April and July of 2002 to pay for
further research and development and for general corporate overhead. This loan
bears interest at an annual rate of 6.5%, was repayable in full in July 15,
2004. The loan was convertible, at Ms. Smith's option, into shares of our common
stock at $0.125 per share. This loan has not been repaid and Ms. Smith has
11
declined to convert the outstanding balance into shares. Accordingly, the entire
balance of the loan continues to be outstanding and we continue to accrue
interest on the balance outstanding.
Since his appointment on August 31, 2006 and through June 30, 2008, Mr. Cutler,
our sole officer and a director, has made net advances to us of $158,486 by way
of a loan. These funds are used to support our ongoing operating costs and
settle certain outstanding liabilities. In December 2006, Mr. Cutler converted
$30,000 of his loan into 697,674 shares of common stock. In March 2007, Mr.
Cutler converted an additional $30,000 of his loan into an additional 697,674
shares of our common stock. At June 30, 2008, the Company owed Mr. Cutler
$98,486. There can be no assurance that Mr. Cutler will continue to provide such
financing on an ongoing basis.
6. RELATED PARTY TRANSACTIONS
In March 2007, Mr. Cutler, our Chief Executive Officer and a director, converted
$30,000 of the debt for advances he had provided to us into 697,674 shares of
our common stock.
In May 2007, Mr. Perlmutter, our non-executive director, subscribed for 200,000
shares of our common stock at a price of $0.125 per share for total
consideration of $25,000.
Barbara J. Smith, formerly an officer, director and a shareholder of the Company
loaned a total of $10,900 between April and July of 2002 to the Company, to pay
for further research and development and for general corporate overhead. The
note bore interest at an annual rate of 6.5% and was repayable in full in July
15, 2004. The note was convertible into shares of our common stock at $0.125 per
share. This loan has not been repaid and Mrs. Smith has declined to convert the
outstanding balance into shares. Accordingly, the entire balance of the loan
continues to be outstanding and we continue to accrue interest on the balance
outstanding.
Since his appointment on August 31, 2006 and through June 30, 2008, Mr. Cutler,
our sole officer and a director, has made net advances to us of $158,486 by way
of a loan. These funds are used to support our ongoing operating costs and
settle certain outstanding liabilities. In December 2006, Mr. Cutler converted
$30,000 of his loan into 697,674 shares of common stock. In March 2007, Mr.
Cutler converted an additional $30,000 of his loan into an additional 697,674
shares of our common stock. At September 30, 2008, the Company owed Mr. Cutler
$98,486. There can be no assurance that Mr. Cutler will continue to provide such
financing on an ongoing basis.
7. STOCKHOLDERS' DEFICIT:
Preferred Stock
In October 2003, our Board of Directors adopted a resolution to authorize the
issuance (in series) of up to 2,000,000 shares of preferred stock with no par
value. Our board of directors may determine to issue shares of our preferred
stock. If done, the preferred stock may be created and issued in one or more
series and with such designations, rights, preference and restrictions as shall
be stated and expressed in the resolution(s) providing for the creation and
issuance of such preferred stock. If preferred stock is issued and we are
subsequently liquidated or dissolved, the preferred stock would be entitled to
our assets, to the exclusion of the common stockholders, to the full extent of
the preferred stockholders' interest in us.
12
Beginning in October 2003, we conducted a private offering of 800,000 shares of
Series A Convertible Preferred Stock of Atomic Paintball at a purchase price of
$0.25 per share. These shares were offered and sold to a limited number of
accredited investors, without public solicitation. A total of eight individuals
purchased shares from us for a total of $75,000. The offering was completed on
February 15, 2004. The federal exemption we relied upon in issuing these
securities was Rule 506 under of the Securities Act. The Rule 506 exemption was
available to us because we did not publicly solicit any investment in us. We
also gave all of these investors the opportunity to ask questions of and receive
answers from us as to all aspects of our business as well as access to such
information as they deemed necessary to fully evaluate an investment in us.
The Series A Convertible Preferred Stock ("Series A Preferred") has no par value
and has a liquidation preference of $0.25 per share. The Series A Preferred is
convertible into shares of our common stock at a conversion rate of 2:1, and
will automatically convert into common stock upon the effectiveness of any
registration statement filed by us with the Securities and Exchange Commission.
During October and November of 2003, we issued 116,000 shares of Series A
Convertible Preferred Stock for $29,000.
During January and February 2004, we initially issued a total of 284,000 shares
of Series A Convertible Preferred Stock for an aggregate purchase price of
$71,000 although we were subsequently forced to cancel 100,000 of these shares
for non payment and consequently the final issuance was for 184,000 shares of
Series A Convertible Preferred Stock with an aggregate purchase price of
$46,000.
During September 2006, shareholders holding 112,000 of our Series A Convertible
Preferred Shares converted these Convertible Preferred Shares into 224,000
shares of our common stock.
During January and February 2007, shareholders holding 180,000 of our Series A
Convertible Preferred Shares converted these Convertible Preferred Shares into
360,000 shares of our common stock.
In December 2007, following our registration pursuant to Section 12 (g) of the
Securities Exchange Act of 1934 the remaining 8,000 shares of our Series A
Convertible Preferred Shares automatically converted into 16,000 shares of our
common stock.
Common Stock
We are authorized to issue 10,000,000 shares of common stock, no par value per
share. The holders of common stock are entitled to one vote per share for the
election of directors and with respect to all other matters submitted to a vote
of stockholders. Shares of common stock do not have cumulative voting rights,
which means that the holders of more than 50% of such shares voting for the
election of directors can elect 100% of the directors if they choose to do so.
Our common stock does not have preemptive rights, meaning that our common
shareholders' ownership interest would be diluted if additional shares of common
13
stock are subsequently issued and the existing shareholders are not granted the
right, in the discretion of the Board of Directors, to maintain their ownership
interest in us.
Upon any liquidation, dissolution or winding-up of us, our assets, after the
payment of debts and liabilities and any liquidation preferences of, and unpaid
dividends on, any class of preferred stock then outstanding, will be distributed
pro-rata to the holders of the common stock. The holders of the common stock do
not have preemptive or conversion rights to subscribe for any of our securities
and have no right to require us to redeem or purchase their shares.
The holders of Common Stock are entitled to share equally in dividends, if and
when declared by our Board of Directors, out of funds legally available
therefore, subject to the priorities given to any class of preferred stock which
may be issued.
In January and February 2007, shareholders holding 180,000 of our Series A
Convertible Preferred Shares converted these Convertible Preferred Shares into
360,000 shares of our common stock.
In March 2007, we issued a further 697,674 shares of our common stock to Mr.
Cutler, our Chief Executive Officer and director, to convert $30,000 of the debt
for advances he had provided to us into equity.
In April and May 2007, we issued 800,000 shares of our common stock at a price
of $0.125 per share for total consideration of $100,000 to a number of
accredited investors. One of these investors was, Mr. Perlmutter, our
non-executive director, who subscribed for 200,000 shares of our common stock at
a price of $0.125 per share for total consideration of $25,000.
Stock Options
On October 21, 2003, we adopted a stock purchase plan entitled "2003 Stock
Incentive Plan" to attract and retain selected directors, officers, employees
and consultants to participate in our long-term success and growth through an
equity interest in us. We have been authorized to make available up to 2,000,000
shares of our common stock for grant as part of the long term incentive plan.
No stock options were issued or outstanding during the three and nine months
ended September 30, 2008 or 2007.
8. COMMITMENTS AND CONTINGENCIES:
No legal proceedings are pending or threatened to the best of our knowledge.
9. INCOME TAX
We have had losses since our Inception (May 8, 2001) through September 30, 2008
and therefore have not been subject to federal or state income taxes. We have
accumulated tax losses available for carry forward of approximately $586,000.
The carry forward is subject to examination by the tax authorities and expires
at various dates through the year 2030. The Tax Reform Act of 1986 contains
provisions that limit the NOL carry forwards available for use in any given year
upon the occurrence of certain events, including significant changes in
ownership interest. Consequently following the issue of 55.1% of our total
authorized and issued share capital in August 2006 to Mr. Cutler, one of our
directors, our ability to use these losses is substantially restricted by the
impact of section 382 of the Internal Revenue Code.
14
10. SUBSEQUENT EVENTS
In October 2008, FINRA approved shares of our common stock to trade on both the
Over the Counter Bulletin Board and the Pink Sheets. Our common stock trades
under the symbol "ATOC."
15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto and the other financial information
included elsewhere in this report. This discussion contains forward-looking
statements that involve risks and uncertainties. We believe that our
expectations are based on reasonable assumptions within the bounds of our
knowledge of our business and operations: there can be no assurance that actual
results will not differ materially from our expectations. Such forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those anticipated, including but not limited
to, our ability to raise sufficient debt or equity financing to fund on going
operations and fully implement our proposed business plan, recruit senior
management with the skill and experience to implement our business plan
effectively, identify and acquire real estate in suitable locations on which to
build paintball parks, obtain the necessary planning approvals to build our
paintball parks, build our paintball parks that directly address market demand
in a cost effective manner, identify existing paintball parks we would wish to
acquire, negotiate successfully to acquire existing paintball parks we wish to
acquire, operate our paintball parks, whether we have built them ourselves or
acquired them, on a profitable basis, provide services and products in
connection with paintball sport activities at our facilities and through a
website on a profitable basis within a fiercely competitive market place, avoid,
or effectively insurance against, liability claims for personal injury incurred
by customers at our paintball parks or using paintball equipment we have
provided to them, or be able to identify and successfully negotiate to acquire
assets or businesses in the paintball sector in return for shares of our common
stock. . You are urged to carefully consider these factors, as well as other
information contained in this Quarterly Report on Form 10-Q and in our other
periodic reports and documents filed with the SEC.
OVERVIEW
We are a development stage corporation, incorporated on May 8, 2001 in the State
of Texas, which plans to own and operate paintball facilities and to provide
services and products in connection with paintball sport activities at our
facilities and through a website. The website has not been developed at this
time.
We exhausted our available funding during the year ended December 31, 2004 and
were forced to reduce our operations to a subsistence level for much of the year
ended December 31, 2004 and the year ended December 31, 2005. Subsequently,
during the years ended December 31 2007 and 2006, we were able to raise
sufficient further interim funding and issue shares of our common stock as
compensation to certain consultants to accelerate the implementation of our
proposed business plan. However, so far we have been unable to raise the
additional funding required to fully implement our proposed business plan.
On October 11, 2007, we filed a Form 10-SB12G with the Securities and Exchange
Commission (SEC) seeking to become a fully reporting company pursuant to Section
12 (g) of the Securities Exchange Act of 1934. The filing became effective on
December 10, 2007, at which time we succeeded in becoming a fully reporting
company pursuant to Section 12 (g) of the Securities Exchange Act of 1934.
16
In May 2008, Pennaluna & Co, a broker dealer, submitted a Form 15c-211 on our
behalf to FINRA seeking to have our shares of common stock listed on the OTC
Bulletin Board. In FINRA's response to the Form 15c-211 that was filed on our
behalf, FINRA took the position that, under their own interpretation of what
constitutes a "shell" company as opposed to a "development" stage company, we
constitute a "shell" company rather than a "development" stage company.
Accordingly FINRA instructed us to re-file our previous filings with the SEC
with the "box checked" on the first page to indicate we are a shell company (as
defined in Rule 12b-2 of the Exchange Act). Our management is in no doubt that
we were, and are, a development stage company as defined by Statement of
Financial Accounting Standards No 7 "Accounting and Reporting by Development
Stage Enterprises". Our management's belief that we were, and are, a development
stage company is supported by current SEC guidelines, our auditors and our
outside legal counsel. At the same time, our management recognizes FINRA's right
to apply its own definition to this issue. Accordingly in accordance with FINRA
instructions, this Form 10Q has is filed with the "box checked" on the first
page to indicate we are a shell company (as defined in Rule 12b-2 of the
Exchange Act) and we have submitted amended filings for the Form 10SB/A filed on
November 29, 2007 and the Form 10KSB filed on April 3, 2008 that similarly have
the "box checked" on the first page to indicate we are a shell company (as
defined in Rule 12b-2 of the Exchange Act). Amending our filings in this way, on
the instruction of FINRA, in no way alters the fact that we have, and continue
to, consistently pursue our business plan to own and operate paintball
facilities and to provide services and products in connection with paintball
sport activities at our facilities and through a website.
In October 2008, FINRA approved shares of our common stock to trade on both the
Over the Counter Bulletin Board and the Pink Sheets. Our common stock trades
under the symbol "ATOC".
It is our current intention, within our existing level of interim funding, to
continue to accelerate progress on the implementation of our proposed business.
At present, we have brought our financial books and records up to date, become a
fully reporting company pursuant to Section 12 (g) of the Securities Exchange
Act of 1934 and eligible to be quoted on both the Over the Counter Bulletin
Board and the Pink Sheets, appointed a highly experienced paintball executive as
our non-executive director, initiated an up date of our initial business plan to
reflect recent developments within the paintball sector, appointed a consultant
to seek potential acquisition targets within the paintball sector and intend to
launch a website to sell paintball products shortly.
If we are successful in raising further equity finance we plan to establish
corporate offices, hire senior management, conduct feasibility studies for real
estate acquisitions for paintball locations, purchase land and equipment for
operating paintball parks, purchase inventory for resale and develop our website
for marketing our paintball games and miscellaneous services via the Internet.
We will consider acquiring existing underperforming paintball parks where we can
create value through new capital expenditure and the application of state of the
art marketing and operating disciplines. We will also consider acquiring
existing, established, profitable paintball parks as a means of establishing
rapidly a critical mass of profitable operations. We would need to raise
substantial funds to complete this business plan and there can be no assurance
that we will be able to raise sufficient equity to fund our strategy.
17
PLAN OF OPERATIONS
We intend to attempt to raise $250,000 in an initial private placement during
2008 to fund our business plan.
Our proposed operating budget for the next twelve months is:
Accounting and legal expenses $ 10,000
Salaries and wages 100,000
Feasibility 50,000
Marketing 30,000
Development of website 10,000
Travel and administrative 25,000
Office expenses 25,000
-------------
$250,000
=============
If we are successful in raising further equity finance, we plan to establish
corporate offices, hire senior management, conduct feasibility studies for real
estate acquisitions for paintball locations, purchase land and equipment for
operating paintball parks, purchase inventory for resale and develop our website
for marketing our paintball games and miscellaneous services via the Internet.
We will consider acquiring existing underperforming paintball parks where we can
create value through new capital expenditure and the application of state of the
art marketing and operating disciplines. We will also consider acquiring
existing, established, profitable paintball parks as a means of establishing
rapidly a critical mass of profitable operations. We would need to raise
substantial funds to complete this business plan and there can be no assurance
that we will be able to raise sufficient equity to fund our strategy.
There can be no assurance we will be able to raise sufficient debt or equity
financing to fund ongoing operations and implement our proposed business plan,
recruit senior management with the skill and experience to implement our
business plan effectively, identify and acquire real estate in suitable
locations on which to build paintball parks, obtain the necessary planning
approvals to build our paintball parks, build our paintball parks that directly
address market demand in a cost effective manner, identify existing paintball
parks we would wish to acquire, negotiate successfully to acquire existing
paintball parks we wish to acquire, operate our paintball parks, whether we have
built them ourselves or acquired them, on a profitable basis, provide services
and products in connection with paintball sport activities at our facilities and
through a website on a profitable basis within a fiercely competitive market
place, avoid, or effectively insurance against, liability claims for personal
injury incurred by customers at our paintball parks or using paintball equipment
we have provided to them, be able to identify or successfully negotiate to
acquire assets or businesses in the paintball sector in return for shares of our
common stock, or that any stockholder will realize any return on their shares
after any such transactions have been completed.
18
Liquidity and Capital Resources
At September 30, 2008, we had total assets of $6,748 consisting of cash, no
operating business or other source of income, outstanding liabilities totaling
$156,320 and a stockholder' deficit of $149,572.
In our financial statements for the fiscal years ended December 31, 2007 and
2006, the Report of the Independent Registered Public Accounting Firm includes
an explanatory paragraph that describes substantial doubt about our ability to
continue as a going concern. Our financial statements for the three and nine
months ended September 30, 2008 and 2007, have been prepared on a going concern
basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. At September 30,
2008, we had a working capital deficit of $149,572 and reported an accumulated
deficit of $586,362.
It is our current intention to seek to raise the debt and/or equity financing to
meet ongoing operating expenses and fully implement our proposed business plan.
There is no assurance that this series of events will be satisfactorily
completed
During the year ended December 31, 2007, we raised $105,000 in cash through the
private placement of 840,000 shares of our common stock at $0.125 per share. Mr.
Perlmutter, a director of the Company, subscribed for 200,000 of these shares in
exchange for $25,000. There can be no assurance that we will be able to secure
additional financing on an ongoing basis.
Since his appointment on August 31, 2006 and through September 30, 2008, Mr.
Cutler, our sole officer and a director, has made net advances to us of $158,486
by way of a loan. These funds are used to support our ongoing operating costs
and settle certain outstanding liabilities. In December 2006, Mr. Cutler
converted $30,000 of his loan into 697,674 shares of common stock. In March
2007, Mr. Cutler converted an additional $30,000 of his loan into an additional
697,674 shares of our common stock. At September 30, 2008, the Company owed Mr.
Cutler $98,486. There can be no assurance that Mr. Cutler will continue to
provide such financing on an ongoing basis
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2007
During the three months ended September 30, 2008 and 2007, the Company did not
recognize any revenues from its minimal operations.
General and Administrative Expenses
During the three months ended September 30, 2008, we incurred $18,270 in general
and administrative expenses, broadly in line with the $17,656 we incurred in the
three months ended September 30, 2007.
19
Interest Expense
We recognized an interest expense of $1,956 during the three months ended
September 30, 2008, compared to $749 incurred during the three months ended
September 30, 2007, an increase of $1,207.
This interest expense relates to the interest accrued on the loan made to us by
certain of our officers and shareholders. The increase in interest expense
between the two periods reflects the increase in the principal balances of the
loan between the two periods
Provision for Income Taxes
No provision for income taxes was required during the three months ended
September 30, 2008 or 2007, as we generated tax losses in both periods.
Net Loss and Comprehensive Loss
During the three months ended September 30, 2008, we recognized a net loss of
$20,227 as compared to a net loss of $18,405, we incurred during the three
months ended September 30, 2007, an increase of $1,822 due to the factors set
out above.
The comprehensive loss was identical to the net loss during both the three
months ended September 30, 2008 and 2007.
NINE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 2007
During the nine months ended September 30, 2008 and 2007, the Company did not
recognize any revenues from its minimal operations.
General and Administrative Expenses
During the nine months ended September 30, 2008, we incurred $87,810 in general
and administrative expenses compared to $109,667 in the nine months ended
September 30, 2007, a decrease of $21,857.
During the nine months ended September 30, 2007, we incurred substantial
consulting and professional fees in bringing our affairs up to date as no
financial statements had been produced since December 2003. By the nine months
ended September 30, 2008, our affairs were once again current and no additional
costs were required in respect of prior periods.
Interest Expense
We recognized an interest expense of $4,471 during the nine months ended
September 30, 2008, compared to $3,473 incurred during the nine months ended
September 30, 2007, an increase of $998.
20
This interest expense relates to the interest accrued on the loan made to us by
certain of our officers and shareholders. The increase in interest expense
between the two periods reflects the increase in the principal balances of the
loan between the two periods
Provision for Income Taxes
No provision for income taxes was required during the nine months ended
September 30, 2008 or 2007, as we generated tax losses in both periods.
Net Loss and Comprehensive Loss
During the nine months ended September 30, 2008, we recognized a net loss of
$92,281 compared to a net loss of $113,139 during the nine months ended
September 30, 2007, a decrease of $20,858 due to a decrease in general and
administrative expenses as discussed above.
The comprehensive loss was identical to the net loss during both the nine months
ended September 30, 2008 and 2007.
CASH FLOW INFORMATION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2007
At September 30, 2008, we had total assets of $6,748 consisting of cash, no
operating business or other source of income, outstanding liabilities totaling
$156,320 and a stockholder' deficit of $149,572.
Net cash used in operations in the nine months ended September 30, 2008, was
$61,344 compared to $111,816 in the nine months ended September 30, 2007, a
decrease of $50,472. In the nine months ended September 30, 2008, our net
losses, without any need for adjustment for non-cash items, resulted in a
negative cash flow of $92,281, which was partially offset by a positive cash
flow of $30,947 generated from the net movement in our operating assets and
liabilities. This compares with net losses, without any need for adjustment for
non-cash items, which resulted in negative cash flow of $113,139 in the nine
months ended September 30, 2007, which was partially offset by a positive cash
flow of $1,323 generated from the net movement in our operating assets and
liabilities.
No cash was provided by or used in investing activities during the nine months
ended September 30, 2008 or 2007.
Net cash provided by financing activities during the nine months ended September
30, 2008, was $53,875 compared to $133,375 net cash provided by financing
activities during the nine months ended September 30, 2007, a decrease $79,500.
During nine months ended September 30, 2007 we issued 800,000 shares of our
common stock at a price of $0.125 per share for total consideration of $100,000
to a number of accredited investors and we also received net loan finance of
$33,375 from one of our directors. During nine months ended September 30, 2008
we received no equity funding and received net loan finance of $53,875 from one
of our directors.
21
Consequently, we are now dependent on raising additional equity and/or debt to
fund any negotiated settlements with our outstanding creditors and meet our
ongoing operating expenses. There is no assurance that we will be able to raise
the necessary equity and/or debt that we will need to be able to negotiate
acceptable settlements with our outstanding creditors or fund our ongoing
operating expenses.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the
Company is not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we conducted an evaluation,
under the supervision and with the participation of our Chief Executive Officer
and Chief Financial Officer, of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the 1934 Act). Based on this
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective to ensure that
information required to be disclosed by us in reports that we file or submit
under the 1934 Act is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission rules and
forms.
ITEM 4T. CONTROLS AND PROCEDURES
Management's Quarterly Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company in accordance with as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes
those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation
(iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized
Management's assessment of the effectiveness of the small business issuer's
internal control over financial reporting is as of the quarter ended September
30, 2008. We believe that internal control over financial reporting is
effective. We have not identified any, current material weaknesses considering
the nature and extent of our current operations and any risks or errors in
financial reporting under current operations.
22
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
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 annual report.
There have been no changes in the issuer's internal control over financial
reporting identified in connection with the evaluation required by paragraph (d)
of Rule 240.15d-15 that occurred during the issuer's last fiscal quarter that
has materially affected, or is reasonable likely to materially affect, the
issuer's internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No legal proceedings are pending or threatened to the best of our knowledge.
ITEM 2. CHANGES IN SECURITIES
Changes in our securities in the period January 1, 2008 through September 30,
2008 are described in Note 7 Stockholders' Deficit in the Notes to Financial
Statements above.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
We are in default under the terms of a loan note with a former officer, director
and a shareholder of the Company as described in Note 5 Loan from Shareholders
in the Notes to Financial Statements above.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE.
ITEM 5. OTHER INFORMATION
NONE.
ITEM 6. EXHIBITS
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act
Exhibit 32.1 Certification of Principal Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
23
SIGNATURES
In accordance with the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
ATOMIC PAINTBALL, INC.
Date: November 12, 2008 By: /s/ DAVID J. CUTLER
----------------------------------
David J. Cutler
Chief Executive Officer, &
Chief Financial Officer
24