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, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to ___________
Commission file number: 000-27055
CONCORD VENTURES, INC.
------------------------
(Exact name of registrant as specified in its charter)
COLORADO 84-1472763
- ------------------------- ------------------------
(State of Incorporation) (IRS Employer ID Number)
2460 WEST 26TH AVENUE, SUITE 380-C, DENVER, COLORADO 80211
----------------------------------------------------------
(Address of principal executive offices)
303-380-8280
----------------
(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 has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
Yes [ ] 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 October 31, 2009, there were 2,359,407 shares of the registrant's common
stock, $0.0001 par value, issued and outstanding.
CONCORD VENTURES, INC.
INDEX
PART I - FINANCIAL INFORMATION Page
----
Item 1. Financial Statements (Unaudited)........................................................3
Balance Sheet - September 30, 2009 and December 31, 2008 ...............................3
Statement of Operations - Three and nine months ended September 30, 2009
and 2008................................................................................4
Statement of Cash Flows - Nine months ended September 30, 2009 and 2008.................5
Notes to Financial Statements ..........................................................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..............................................................15
Item 3. Quantitative and Qualitative Disclosures About Market Risk ............................21
Item 4. Controls and Procedures................................................................21
Item 4T. Controls and Procedures................................................................21
PART II - OTHER INFORMATION
Item 1. Legal Proceedings ....................................................................22
Item 1.A. Risk Factors .........................................................................22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ..........................22
Item 3. Defaults Upon Senior Securities.......................................................22
Item 4. Submission of Matters to a Vote of Security Holders ..................................22
Item 5. Other Information.....................................................................23
Item 6. Exhibits..............................................................................23
SIGNATURES .....................................................................................25
PART I
ITEM 1. FINANCIAL STATEMENTS
CONCORD VENTURES, INC.
BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2009 2008
Unaudited Audited
ASSETS
TOTAL ASSETS $ - $ -
=============== ===============
LIABILITIES & STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts Payable $ 174,035 $ 150,390
Accrued Expenses 100,005 96,915
Capital Leases 210,960 210,960
Operating Leases 196,216 196,216
Loans - Related Parties 82,809 30,686
--------------- ---------------
Total Current Liabilities 764,025 685,167
LONG TERM LIABILITIES - -
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDERS' DEFICIT
Class A Common Stock; $0.0001 par value, 100,000,000, 1,148 1,148
shares authorized as at September 30, 2009 and December 31, 2008,
2,359,407 shares issued and outstanding as at September 30, 2009
and December 31, 2008
Additional Paid In Capital 16,872,733 16,872,733
Accumulated Deficit (17,637,906) (17,559,048)
--------------- ---------------
Total Stockholders' Deficit (764,025) (685,167)
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ - $ -
=============== ===============
See accompanying Notes to Financial Statements.
3
CONCORD VENTURES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
2009 2008 2009 2008
------------- -------------- ------------- -------------
OPERATING EXPENSES / (INCOME)
General & Administrative Expenses $ 17,412 $ 96,715 $ 75,768 $ 165,630
------------- -------------- ------------- -------------
Total Operating Expenses / (Income) 17,412 (96,715) 75,768 165,630
OPERATING PROFIT / (LOSS) (17,412) (96,715) (75,768) (165,630)
Interest and Other Income / (Expenses) Net (1,263) (460) (3,090) (848)
------------- -------------- ------------- -------------
Profit / (Loss) before Income Taxes (18,675) (97,175) (78,858) (166,479)
Provision for Income Taxes - - - -
------------- -------------- ------------- -------------
NET PROFIT / (LOSS) $ (18,675) $ (97,175) $ (78,858) $ (166,479)
============= ============== ============= =============
NET PROFIT / (LOSS) PER COMMON SHARE
Basic & Diluted ($0.01) ($0.04) ($0.03) ($0.07)
============= ============== ============= =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic & Diluted 2,359,407 2,300,980 2,359,407 2,272,422
============= ============== ============= =============
See accompanying Notes to Financial Statements.
4
CONCORD VENTURES, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
2009 2008
------------ -------------
CASH FLOW PROVIDED BY / (USED IN) OPERATING ACTIVITIES
NET PROFIT / (LOSS) $ (78,858) $ (166,479)
ADJUSTMENTS TO RECONCILE NET PROFIT / (LOSS) TO NET CASH
PROVIDED BY / (USED IN) OPERATING ACTIVITIES
Stock Issued for Services - 75,000
CHANGES IN OPERATING ASSETS & LIABILITIES
(Increase) / decrease in Prepaid Expenses - 208
Increase / (decrease) in Accounts Payable 23,645 36,500
Increase / (decrease) in Accrued Expenses 3,091 7,459
-------------- -------------
Total Cash Flow provided by / (used in) Operating Activities (52,123) (47,312)
CASH FLOW FROM INVESTING ACTIVITIES - -
-------------- -------------
Total Cash Flow provided by / (used in) Investing Activities - -
CASH FLOW FROM FINANCING ACTIVITIES
Increase in Other Loans 52,123 41,333
Issue of Stock - -
-------------- -------------
Total Cash Flow provided by / (used in) Financing Activities 52,123 41,333
INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS $ - $ (5,979)
============== =============
Cash and Cash Equivalents at the beginning of the period $ - $ 5,979
============== =============
Cash and Cash Equivalents at the end of the period $ - $ -
============== =============
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid for interest $ - $ -
-------------- -------------
Cash paid for income tax $ - $ -
-------------- -------------
No corporate bank account was maintained during the nine months ended September
30, 2009.
See accompanying Notes to Financial Statements.
5
CONCORD VENTURES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
(UNAUDITED)
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Concord Ventures, Inc. was incorporated in August 1998 in the State of Colorado.
On February 16, 2001, we sold our entire business, and all of our assets, for
the benefit of our creditors under a Chapter 11 reorganization. We were
subsequently dismissed from the Chapter 11 reorganization, effective March 13,
2001, at which time the last of our remaining directors resigned. On March 13,
2001, we had no business or other source of income, no assets, no employees or
directors, outstanding liabilities of approximately $8.4 million and had
terminated our duty to file reports under securities law.
In March 2006, we appointed a new board of directors and focused on reaching
satisfactory negotiated settlements with our outstanding creditors, bringing our
financial records up to date, seeking a listing on the over the counter bulletin
board, raising debt and/or equity to fund negotiated settlements with our
creditors and to meet our ongoing operating expenses and attempting to merge
with another entity with experienced management and opportunities for growth in
return for shares of our common stock to create value for our shareholders.
There can be no assurance that this series of events will be successfully
completed.
Our business activities during the nine months ended September 30, 2009 and 2008
were focused on the settlement of our outstanding liabilities and the renewal of
and maintaining our SEC reporting status.
In February 2008, we were re-listed on the OTC Bulletin Board and so are now
listed on both the Pink Sheets and the OTC Bulletin Board and trade under the
symbol "CCVR."
On April 29, 2008, we held our annual meeting of stockholders at which meeting
the majority of stockholders approved resolutions to re-elect Messrs. Cutler,
Whiting and Green as our directors, reincorporate the Company in Delaware,
authorize an up to 3 for 1 reverse split of our shares of common stock, change
our name to a name to be chosen at the discretion of the Board of directors and
to ratify the appointment of our auditor, Larry O'Donnell, CPA, PC.
On August 22, 2008, we issued 75,000 of restricted common stock, valued at
$75,000, to three consultants (25,000 shares each) as compensation for services
they had provided to us One of the consultants is an existing shareholder of
ours. We further issued 26,421 shares of restricted common stock to David
Cutler, our President and a director of ours, in full settlement of the our debt
to Mr. Cutler as at June 30, 2008 of $26,421.
6
On January 6, 2009, Mr. Wesley Whiting resigned as a director of ours for
personal reasons. We are actively seeking to appoint a replacement for Mr.
Whiting as a non-executive director.
Basis of Presentation:
The accompanying unaudited financial statements of Concord Ventures, 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, 2009 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2009. 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, 2008 included in our Form 10-K filed with the SEC.
Significant Accounting Policies:
Cash and Cash Equivalents -- Cash and cash equivalents consist of cash and
highly liquid debt instruments with original maturities of less than three
months.
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 the financial
statements and tax bases of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse.
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
in certain assets and liabilities that are reported directly in equity such as
7
translation adjustments on investments in foreign subsidiaries and unrealized
gains (losses) on available-for-sale securities. From our inception there were
no differences between our comprehensive loss and net loss.
Our comprehensive loss was identical to our net loss for the three and nine
months ended September 30, 2009 and 2008.
Income (Loss) Per Share -- 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, 2009 and 2008 as the exercise
price of our outstanding stock options was substantially in excess of our share
price throughout these periods.
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.
Business Segments -- We believe that our activities during the three and nine
months ended September 30, 2009 and 2008 comprised a single segment.
Subsequent Events -- We evaluated the effects of all subsequent events from the
end of the third quarter through November 13, 2009, the date we filed our
financial statements with the U.S. Securities and Exchange Commission ("SEC").
Recent Accounting Pronouncements -- In June 2009, the Financial Accounting
Standards Board ("FASB") issued Accounting Standards Codification ("ASC") 105,
"Generally Accepted Accounting Principals" (formerly Statement of Financial
Accounting Standards ("SFAS") No. 168, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles").
ASC 105 establishes the FASB ASC as the single source of authoritative
nongovernmental U.S. GAAP. The standard is effective for interim and annual
periods ending after September 15, 2009. We adopted the provisions of the
standard on September 30, 2009, which did not have a material impact on our
financial statements.
There were various other accounting standards and interpretations issued in
2009, none of which are expected to have a material impact on the Company's
financial position, operations or cash flows.
2. GOING CONCERN AND LIQUIDITY
At June 30, 2009, we had no assets, no operating business or other source of
income, outstanding liabilities and a stockholder' deficit of $764,025.
8
In our financial statements for the fiscal years ended December 31, 2008 and
2007, 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 fiscal years ended
December 31, 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. We had a working capital deficit
of $685,167 and reported an accumulated deficit of $17,559,048 as at December
31, 2008.
It is our current intention to seek to reach satisfactory negotiated settlements
with our outstanding creditors, raise debt and/or equity financing to fund the
negotiated settlements with our creditors and to meet ongoing operating expenses
and attempt to merge with another entity with experienced management and
opportunities for growth in return for shares of our common stock to create
value for our shareholders. There is no assurance that this series of events
will be satisfactorily completed.
3. ASSETS
We had no assets during the three and nine months ended September 30, 2009
4. ACCOUNTS PAYABLE
The increase in accounts payable during the three and nine months ended
September 30, 2009 reflects the legal and professional fees incurred
implementing our business plan.
5. ACCRUED EXPENSES
Interest is accrued at 8% on the loan made to us by Mr. David J. Cutler, an
officer and a director of the Company.
6. CAPITAL AND OPERATING LEASES
Effective December 2000, when we filed for bankruptcy, we recognized in full the
outstanding liabilities under all our capital and operating leases.
7. LOANS - RELATED PARTIES
Loans -Related Parties represent the loan made to us by one of our directors,
Mr. David J. Cutler. Interest is accrued on the loan at 8%.
On August 22, 2008, we further issued 26,421 shares of restricted common stock
to David Cutler, in full settlement of the our debt to Mr. Cutler as at June 30,
2008 of $26,421. The share issuance was authorized by the independent members of
our Board of Directors.
At September 30, 2009, we owed Mr. Cutler $86,774 including accrued interest of
$3,965.
9
8. COMMITMENTS
Capital and Operating Leases
Effective December 2000, when we filed for bankruptcy, we recognized in full the
outstanding liabilities under all our capital and operating leases.
Litigation
To the best of our knowledge and our belief there is no pending legal action
against us.
9. RELATED PARTY TRANSACTIONS
On August 22, 2008, we issued 25,000 of restricted common stock, valued at
$25,000, to a consultant, who is an existing shareholder of ours, as
compensation for services he had provided to us.
On August 22, 2008, we further issued 26,421 shares of restricted common stock
to David Cutler, our President and a director of ours, in full settlement of the
our debt to Mr. Cutler as at June 30, 2008 of $26,421. The share issuance was
authorized by the independent members of our Board of Directors.
At September 30, 2009, we owed Mr. Cutler $86,774 including accrued interest of
$3,965
During the nine months ended September 30, 2009, we paid $45,000 (nine months
ended September 30, 2008 - $45,000) of Mr. Cutler's remuneration to Burlingham
Corporate Finance, Inc. ("Burlingham") in the form of consulting fees. Mr.
Cutler is the principal shareholder of Burlingham.
10. STOCKHOLDERS' DEFICIT
Preferred Stock
We were authorized, without further action by the shareholders, to issue
10,000,000 shares of one or more series of preferred stock at a par value of
$0.0001, all of which is nonvoting. The Board of Directors may, without
shareholder approval, determine the dividend rates, redemption prices,
preferences on liquidation or dissolution, conversion rights, voting rights and
any other preferences.
No shares of preferred stock were issued or outstanding during the nine months
ended September 30, 2009 and 2008.
10
Common Stock
We were authorized to issue 100,000,000 shares of common stock, par value
$0.0001 per share.
On April 29, 2008, we held our annual meeting of stockholders at which meeting
the majority of stockholders approved, an up to 3 for 1 reverse split of our
shares of common stock. No such reverse split has been effected as yet.
RECENT ISSUANCES
On August 22, 2008, we issued 75,000 of restricted common stock, valued at
$75,000, to three consultants (25,000 shares each) as compensation for services
they had provided to us. One of the consultants is an existing shareholder of
ours.
We further issued 26,421 shares of restricted common stock to David Cutler, our
President and a director of ours, in full settlement of the our debt to Mr.
Cutler as at June 30, 2008 of $26,421.
Warrants
No warrants were issued or outstanding during the nine months ended September
30, 2009 and 2008.
Stock Options
Effective March 19, 1999, we adopted a stock option plan (the "Plan"). The Plan
provides for grants of incentive stock options, nonqualified stock options and
restricted stock to designated employees, officers, directors, advisors and
independent contractors. The Plan authorized the issuance of up to 75,000 shares
of Class A Common Stock. Under the Plan, the exercise price per share of a
non-qualified stock option must be equal to at least 50% of the fair market
value of the common stock at the grant date, and the exercise price per share of
an incentive stock option must equal the fair market value of the common stock
at the grant date.
11
The following table summarizes stock option activity under the Plan:
Under the Stock Option Plan Other Grants:
--------------------------- -------------
Granted to Granted to
Non- Employees Non-Employees
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Share Price
Outstanding at December 31, 2008 2,000 $45.00 ------ ------
Granted ----- ------ ------ ------
Exercised ----- ------ ------ ------
Canceled ----- ------ ------ ------
Outstanding at September 30, 2009 2,000 $45.00 ------ ------
===== ====== ====== ======
Exercisable at September 30, 2009 2,000 $45.00 ------ ------
===== ====== ====== ======
Exercisable at September 30, 2008 2,000 $45.00 ------ ------
===== ====== ====== ======
11. INCOME TAXES
We had losses since our Inception, and therefore were not subject to federal or
state income taxes. We have accumulated tax losses available for carryforward in
excess $17 million. The carryforward is subject to examination by the tax
authorities and expires at various dates through the year 2064. The Tax Reform
Act of 1986 contains provisions that may limit the NOL carryforwards available
for use in any given year upon the occurrence of certain events, including
significant changes in ownership interest. Consequently, following the issue
more than 50% of our total authorized and issued share capital in September 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.
12. SUBSEQUENT EVENTS
None.
12
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 reach satisfactorily negotiated settlements with our
outstanding creditors, raise debt and/or equity to fund negotiated settlements
with our creditors and to meet our ongoing operating expenses and merge with
another entity with experienced management and opportunities for growth in
return for shares of our common stock to create value for our shareholders. You
are urged to carefully consider these factors, as well as other information
contained in this Annual Report on Form 10-K and in our other periodic reports
and documents filed with the SEC.
OVERVIEW
On February 16, 2001, we sold our entire business, and all of our assets, for
the benefit of our creditors under a Chapter 11 reorganization. We were
subsequently dismissed from the Chapter 11 reorganization, effective March 13,
2001, at which time the last of our remaining directors resigned. On March 13,
2001, we had no business or other source of income, no assets, no employees or
directors, outstanding liabilities of approximately $8.4 million and had
terminated our duty to file reports under securities law.
Our business activities over the nine months ended September 30, 2009 and 2008
were focused on the settlement of our outstanding liabilities and the renewal of
and maintaining our SEC reporting status.
In February 2008, we were re-listed on the OTC Bulletin Board and so are now
listed on both the Pink Sheets and the OTC Bulletin Board and trade under the
symbol "CCVR"
On April 29, 2008, we held our annual meeting of stockholders at which meeting
the majority of stockholders approved resolutions to re-elect Messrs. Cutler,
Whiting and Green as our directors, reincorporate the Company in Delaware,
authorize an up to 3 for 1 reverse split of our shares of common stock, change
our name to a name to be chosen at the discretion of the Board of directors and
to ratify the appointment of our auditor, Larry O'Donnell, CPA, PC.
On August 22, 2008, we issued 75,000 of restricted common stock, valued at
$75,000, to three consultants (25,000 shares each) as compensation for services
they had provided to us One of the consultants is an existing shareholder of
ours. We further issued 26,421 shares of restricted common stock to David
Cutler, our President and a director of ours, in full settlement of the our debt
to Mr. Cutler as at June 30, 2008 of $26,421.
13
On January 6, 2009, Mr. Wesley Whiting resigned as a director of ours for
personal reasons. We are actively seeking to appoint a replacement for Mr.
Whiting as a non-executive director.
PLAN OF OPERATIONS
Our plan of operation is to reach satisfactory negotiated settlements with our
outstanding creditors, obtain debt or equity finance to fund negotiated
settlements with our creditors and to meet our ongoing operating expenses, seek
a listing on the over the counter bulletin board and attempt to merge with
another entity with experienced management and opportunities for growth in
return for shares of our common stock to create value for our shareholders.
There is can be no assurance that this series of events can be successfully
completed, that any such business will be identified or that any stockholder
will realize any return on their shares after such a transaction has been
completed. In particular there is no assurance that any such business will be
located or that any stockholder will realize any return on their shares after
such a transaction. Any merger or acquisition completed by us can be expected to
have a significant dilutive effect on the percentage of shares held by our
current stockholders. We believe we are an insignificant participant among the
firms which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns that have significantly
greater financial and personnel resources and technical expertise than we have.
In view of our limited financial resources and limited management availability,
we will continue to be at a significant competitive disadvantage compared to our
competitors.
General Business Plan
We intend to seek, investigate and, if such investigation warrants, acquire an
interest in business opportunities presented to us by persons or firms which
desire to seek the advantages of an issuer who has complied with the Securities
Act of 1934 (the "1934 Act"). We will not restrict our search to any specific
business, industry or geographical location, and we may participate in business
ventures of virtually any nature. This discussion of our proposed business is
purposefully general and is not meant to be restrictive of our unlimited
discretion to search for and enter into potential business opportunities. We
anticipate that we may be able to participate in only one potential business
venture because of our lack of financial resources.
We may seek a business opportunity with entities which have recently commenced
operations, or that desire to utilize the public marketplace in order to raise
additional capital in order to expand into new products or markets, to develop a
new product or service, or for other corporate purposes. We may acquire assets
and establish wholly owned subsidiaries in various businesses or acquire
existing businesses as subsidiaries.
14
We expect that the selection of a business opportunity will be complex. Due to
general economic conditions, rapid technological advances being made in some
industries and shortages of available capital, we believe that there are
numerous firms seeking the benefits of an issuer who has complied with the 1934
Act. Such benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes) for all stockholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. We have, and will continue to have, essentially
no assets to provide the owners of business opportunities. However, we will be
able to offer owners of acquisition candidates the opportunity to acquire a
controlling ownership interest in an issuer who has complied with the 1934 Act
without incurring the cost and time required to conduct an initial public
offering.
The analysis of new business opportunities will be undertaken by, or under the
supervision of, our Board of Directors. We intend to concentrate on identifying
preliminary prospective business opportunities which may be brought to our
attention through present associations of our director, professional advisors or
by our stockholders. In analyzing prospective business opportunities, we will
consider such matters as (i) available technical, financial and managerial
resources; (ii) working capital and other financial requirements; (iii) history
of operations, if any, and prospects for the future; (iv) nature of present and
expected competition; (v) quality, experience and depth of management services;
(vi) potential for further research, development or exploration; (vii) specific
risk factors not now foreseeable but that may be anticipated to impact the
proposed activities of the company; (viii) potential for growth or expansion;
(ix) potential for profit; (x) public recognition and acceptance of products,
services or trades; (xi) name identification; and (xii) other factors that we
consider relevant. As part of our investigation of the business opportunity, we
expect to meet personally with management and key personnel. To the extent
possible, we intend to utilize written reports and personal investigation to
evaluate the above factors.
We will not acquire or merge with any company for which audited financial
statements cannot be obtained within a reasonable period of time after closing
of the proposed transaction.
Acquisition Opportunities
In implementing a structure for a particular business acquisition, we may become
a party to a merger, consolidation, reorganization, joint venture, or licensing
agreement with another company or entity. We may also acquire stock or assets of
an existing business. Upon consummation of a transaction, it is probable that
our present management and stockholders will no longer be in control of us. In
addition, our sole director may, as part of the terms of the acquisition
transaction, resign and be replaced by new directors without a vote of our
stockholders, or sell his stock in us. Any such sale will only be made in
compliance with the securities laws of the United States and any applicable
state.
15
It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration under application federal
and state securities laws. In some circumstances, as a negotiated element of the
transaction, we may agree to register all or a part of such securities
immediately after the transaction is consummated or at specified times
thereafter. If such registration occurs, it will be undertaken by the surviving
entity after it has successfully consummated a merger or acquisition and is no
longer considered an inactive company. The issuance of substantial additional
securities and their potential sale into any trading market which may develop in
our securities may have a depressive effect on the value of our securities in
the future. There is no assurance that such a trading market will develop.
While the actual terms of a transaction cannot be predicted, it is expected that
the parties to any business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the business transaction in a
so-called "tax-free" reorganization under Sections 368(a)(1) or 351 of the
Internal Revenue Code (the "Code"). In order to obtain tax-free treatment under
the Code, it may be necessary for the owner of the acquired business to own 80%
or more of the voting stock of the surviving entity. In such event, our
stockholders would retain less than 20% of the issued and outstanding shares of
the surviving entity. This would result in significant dilution in the equity of
our stockholders.
As part of our investigation, we expect to meet personally with management and
key personnel, visit and inspect material facilities, obtain independent
analysis of verification of certain information provided, check references of
management and key personnel, and take other reasonable investigative measures,
to the extent of our limited financial resources and management expertise. The
manner in which we participate in an opportunity will depend on the nature of
the opportunity, the respective needs and desires of both parties, and the
management of the opportunity.
With respect to any merger or acquisition, and depending upon, among other
things, the target company's assets and liabilities, our stockholders will in
all likelihood hold a substantially lesser percentage ownership interest in us
following any merger or acquisition. The percentage ownership may be subject to
significant reduction in the event we acquire a target company with assets and
expectations of growth. Any merger or acquisition can be expected to have a
significant dilutive effect on the percentage of shares held by our
stockholders.
We will participate in a business opportunity only after the negotiation and
execution of appropriate written business agreements. Although the terms of such
agreements cannot be predicted, generally we anticipate that such agreements
will (i) require specific representations and warranties by all of the parties;
(ii) specify certain events of default; (iii) detail the terms of closing and
the conditions which must be satisfied by each of the parties prior to and after
such closing; (iv) outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants; (v) set forth remedies
on defaults; and (vi) include miscellaneous other terms.
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As stated above, we will not acquire or merge with any entity which cannot
provide independent audited financial statements within a reasonable period of
time after closing of the proposed transaction. If such audited financial
statements are not available at closing, or within time parameters necessary to
insure our compliance within the requirements of the 1934 Act, or if the audited
financial statements provided do not conform to the representations made by that
business to be acquired, the definitive closing documents will provide that the
proposed transaction will be voidable, at the discretion of our present
management. If such transaction is voided, the definitive closing documents will
also contain a provision providing for reimbursement for our costs associated
with the proposed transaction.
Competition
We believe we are an insignificant participant among the firms which engage in
the acquisition of business opportunities. There are many established venture
capital and financial concerns that have significantly greater financial and
personnel resources and technical expertise than we have. In view of our limited
financial resources and limited management availability, we will continue to be
at a significant competitive disadvantage compared to our competitors.
Investment Company Act 1940
Although we will be subject to regulation under the Securities Act of 1933, as
amended, and the 1934 Act, we believe we will not be subject to regulation under
the Investment Company Act of 1940 (the "1940 Act") insofar as we will not be
engaged in the business of investing or trading in securities. In the event we
engage in business combinations that result in us holding passive investment
interests in a number of entities, we could be subject to regulation under the
1940 Act. In such event, we would be required to register as an investment
company and incur significant registration and compliance costs. We have
obtained no formal determination from the SEC as to our status under the 1940
Act and, consequently, any violation of the 1940 Act would subject us to
material adverse consequences. We believe that, currently, we are exempt under
Regulation 3a-2 of the 1940 Act.
Liquidity and Capital Resources
At September 30, 2009, we had no assets, no operating business or other source
of income, outstanding liabilities and a stockholder' deficit of $764,025
In our financial statements for the fiscal years ended December 31, 2008 and
2007, 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 fiscal years ended
December 31, 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. We had a working capital deficit
of $685,167 and reported an accumulated deficit of $17,559,048 at December 31,
2008.
17
It is our current intention to seek to reach satisfactory negotiated settlements
with our outstanding creditors, raise debt and/or equity financing to fund the
negotiated settlements with our creditors and to meet ongoing operating expenses
and attempt to merge with another entity with experienced management and
opportunities for growth in return for shares of our common stock to create
value for our shareholders. There is no assurance that this series of events
will be satisfactorily completed.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2008
General and Administrative Expenses
During the three months ended September 30, 2009, we incurred $17,412 in general
and administrative expenses compared to $96,715 in the three months ended
September 30, 2008, a decrease of $79,303. The decrease was largely due to the
fact that in the three months ended September 30, 2008. we issued 75,000 shares
of restricted common stock, valued at $75,000, to three consultants (25,000
shares each) as compensation for services they had provided to us One of the
consultants is an existing shareholder of ours. No such stock issue was made in
the three months ended September 30, 2009.
Interest Expense
We recognized an interest expense of $1,263 during the three months ended
September 30, 2009, compared to $460 during the three months ended September 30,
2008, an increase of $803. This interest expense relates to the interest accrued
on the loans made to us by certain of our officers and shareholders. The
increase in the amount of interest between the two periods reflects the increase
in the average principal balance of the loans made to us by our officers and
shareholders between the two peri.
Profit / (Loss) before Income Tax
In the three months ended September 30, 2009, we recognized a loss before income
tax of $18,675 compared to a loss before income tax of $97,175 in the three
months ended September 30, 2008, a decrease of $78,500 due to the factors
discussed above.
Provision for Income Taxes
No provision for income taxes was required in the three months ended September
30, 2009 or 2008 as we generated tax losses both periods.
Net Profit / (Loss) and Comprehensive Profit / (Loss)
In the three months ended September 30, 2009, we recognized a net loss of
$18,675 compared to a net loss of $97,175 in the three months ended September
30, 2008, a decrease of $78,500 due to the factors discussed above.
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The comprehensive loss was identical to the net loss in both the three months
ended September 30, 2009 and 2008.
NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 2008
General and Administrative Expenses
During the nine months ended September 30, 2009, we incurred $75,768 in general
and administrative expenses compared to $165,630 in the nine months ended
September 30, 2008, a decrease of $89,862. The decrease was due to the fact that
in the three months ended September 30, 2008 we issued 75,000 shares of
restricted common stock, valued at $75,000, to three consultants (25,000 shares
each) as compensation for services they had provided to us and incurred higher
than usual legal fees in connection with our effort to become a fully reporting
company pursuant to Section 12 (g) of the Securities Exchange Act of 1934 and
being re-listed on the OTC Bulletin Board.
Interest Expense
We recognized an interest expense of $3,090 during the nine months ended
September 30, 2009, compared to $848 during the nine months ended September 30,
2008, an increase of $2,242. This interest expense relates to the interest
accrued on the loans made to us by certain of our officers and shareholders. The
increase in the amount of interest between the two periods reflects the increase
in the average principal balance of the loans made to us by our officers and
shareholders between the two periods .
Profit / (Loss) before Income Tax
In the nine months ended September 30, 2009, we recognized a loss before income
tax of $78,858 compared to a loss before income tax of $166,479 in the nine
months ended September 30, 2008, a decrease of $87,621 due to the factors
discussed above.
Provision for Income Taxes
No provision for income taxes was required in the nine months ended September
30, 2009 or 2008, as we generated tax losses both periods.
Net Profit / (Loss) and Comprehensive Profit / (Loss)
In the nine months ended September 30, 2009, we recognized a net loss of $78,858
compared to a net loss of $166,479 in the nine months ended September 30, 2008,
a decrease of $87,621 due to the factors discussed above.
The comprehensive loss was identical to the net loss in both the nine months
ended September 30, 2009 and 2008.
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CASH FLOW INFORMATION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2008
At September 30, 2009, we had no assets, no operating business or other source
of income, outstanding liabilities and a stockholder' deficit of $764,025.
In our financial statements for the fiscal years ended December 31, 2008 and
2007, 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 fiscal years ended
December 31, 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. We had a working capital deficit
of $685,167 and reported an accumulated deficit of $17,559,048 as at December
31, 2008.
It is our current intention to seek to reach satisfactory negotiated settlements
with our outstanding creditors, raise debt and/or equity financing to fund the
negotiated settlements with our creditors and to meet ongoing operating expenses
and attempt to merge with another entity with experienced management and
opportunities for growth in return for shares of our common stock to create
value for our shareholders. There is no assurance that this series of events
will be satisfactorily completed.
During the nine months ended September 30, 2009, we did not have a bank account
and consequently, there were no movements in cash flow in the nine months ended
September 30, 2009. All our costs we paid for directly by Mr. Cutler, an officer
and director of the Company.
Net cash used in operations in the nine months ended September 30, 2009, was
$52,123 compared to $47,312 in the nine months ended September 30, 2008, an
increase of $4,811. Our net losses for the nine months ended September 30, 2009
of $78,858, without any required adjustment for non-cash items, were partially
offset by a cash positive movement of 26,736 in our operating assets and
liabilities. This compares with net losses of $91,479, after adjustment for non
cash items, in the nine months ended September 30, 2008, which were partially
offset by a $44,167 cash positive movement of 26,736 in our operating assets and
liabilities.
No cash was provided by or used in investing activities during the nine months
ended September 30, 2009 and 2008.
Net cash provided by our financing activities was $52,123 in the nine months
ended September 30, 2009, compared to $41,333 in the nine months ended September
30, 2008, an increase of $10,790. This increase arose from an increase in
related party loans as a result of the payment of liabilities and expenses on
our behalf by officers, directors and shareholders.
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ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are
not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
As of the quarter ended September 30, 2009, 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
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 of financial statements in accordance
with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations
of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of our assets that
could have a material effect on our financial statements.
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, 2009. 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.
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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
We were not subject to any legal proceedings during the three and nine months
ended September 30, 2009 and 2008 and, to the best of our knowledge, no legal
proceedings are pending or threatened.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
Changes in our securities are described in Note 10. Stockholders' Deficit in the
Notes to Financial Statements above. During the period of July 1, 2009 through
September 30, 2009, there was no issuance of our securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
We are in default under the terms of certain capital and operating leases as
described in Note 6. Capital and Operating Leases in the Notes to Financial
Statements above.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the nine months ended September 30, 2009, we did not hold any
shareholders meetings or submit any matters to our shareholders for approval.
We held an Annual Meeting of Stockholders on April 29, 2008, and the results of
the stockholder voting were as follows:
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Resolution 1: To elect three (3) directors to hold office until the next annual
meeting of stockholders or until their respective successors have been elected
and qualified: Nominees David Cutler, Wesley Whiting and Redgie Green:
David Cutler Wesley Whiting Redgie Green
FOR 1,673,753 1,807,553 1,795,053
WITHHOLD 146,300 12,500 12,500
Resolution 2: To consider and act upon a proposal to authorize the Company to
reincorporate in the State of Delaware:
FOR 1,820,053
AGAINST 0
ABSTAIN 0
Resolution 3: To authorize a reverse split of the common stock issued and
outstanding on an up to one new share for three old share basis:
FOR 1,581,090
AGAINST 146,652
ABSTAIN 92,311
Resolution 4: To authorize a change in the name of the Company to a new name to
be chosen in the discretion of the Board of Directors:
FOR 1,819,921
AGAINST 12
ABSTAIN 120
Resolution 5: To ratify the appointment of our auditors, Larry O'Donnell, CPA,
PC.
FOR 1,807,553
AGAINST 0
ABSTAIN 12,500
ITEM 5. OTHER INFORMATION
NONE.
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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
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CONCORD VENTURES, INC.
Date: November 16, 2009 By: /s/ David J. Cutler
---------------------
David J Cutler
Chief Executive Officer &
Chief Financial Officer
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