UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[ X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended SEPTEMBER 30, 2001
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period to
Commission File Number 000-32747
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FIRST CYPRESS TECHNOLOGIES, INC.
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(Exact name of small Business Issuer as specified in its charter)
NEVADA 98-0218688
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1281 WEST GEORGIA STREET, SUITE NO. 501
VANCOUVER, BRITISH COLUMBIA V6E 3J7
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(Address of principal executive (Zip Code)
offices)
Issuer's telephone number, including area code: 604-817-1441
NONE
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [ X ] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 7,057,500 SHARES OF $.001 PAR VALUE
COMMON STOCK OUTSTANDING AS OF NOVEMBER 12, 2001.
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B, and,
therefore, do not include all information and footnotes necessary for a complete
presentation of financial position, results of operations, cash flows, and
stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the nine months ended September 30, 2001 are not
necessarily indicative of the results that can be expected for the year ending
December 31, 2001.
FIRST CYPRESS TECHNOLOGIES, INC.
(A Development Stage Company)
Interim Financial Statements
For the nine-month period ended September 30, 2001
(Expressed in US Dollars)
(Unaudited)
Contents
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Interim Financial Statements
Balance Sheets
Statements of Changes in Shareholders' Equity
Statements of Operations
Statements of Cash Flows
Notes to Financial Statements
See the accompanying notes to these interim financial statements.
================================================================================
First Cypress Technologies, Inc.
(A Development Stage Company)
Balance Sheets
(Expressed in US Dollars)
September 30 December 31
2001 2000
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(Unaudited)
Assets
Current
Cash $ 564 $ 427
================================================================================
Liabilities and Shareholders' Equity
Current
Accounts payable and accrued liabilities $ 44,730 $ 40,622
Due to related party 93,521 67,469
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138,251 108,091
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Share Capital and Deficit
Share capital
Authorized - 25,000,000 common shares with
par value $0.001
Issued and fully paid - 7,057,500 common
shares 7,058 7,058
Additional paid-in capital 24,592 24,592
Deficit accumulated during the development
stage (169,337) (139,314)
----------------------------
(137,687) (107,664)
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$ 564 $ 427
================================================================================
See the accompanying notes to these interim financial statements.
===================================================================================================
First Cypress Technologies, Inc.
(A Development Stage Company)
Interim Statement of Changes in Shareholders' Equity
(Expressed in US Dollars)
(Unaudited)
Number of Per Carrying Additional Total Total
Common share Value Paid in Accumulated Stockholders'
Shares price Capital Deficit Equity
Incorporation,
September 14, 1999 5,000,000 $ 0.001 $ 5,000 $ - $ - $ 5,000
Sale of common shares,
November 15, 1999 1,990,000 $ 0.010 1,990 17,910 - 19,900
Sale of common shares,
December 31, 1999 67,500 $ 0.100 68 6,682 - 6,750
Net loss to December 31, 1999 - - - (33,298) (33,298)
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Balance, December 31, 1999 7,057,500 7,058 24,592 (33,298) (1,648)
Net loss to December 31, 2000 - - - (108,996) (108,996)
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Balance, December 31, 2000 7,057,500 7,058 24,592 (142,294) (110,644)
Net loss to September 30, 2001 - - - (27,043) (27,043)
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Balance, September 30, 2001 7,057,500 $ 7,058 $ 24,592 $(169,337) $(137,687)
====================================================================================================
See the accompanying notes to these interim financial statements.
================================================================================
First Cypress Technologies, Inc.
(A Development Stage Company)
Interim Statement of Operations
(Expressed in US Dollars)
(Unaudited)
For the For the For the For the Period
three (3) nine (9) three (3) nine (9) from
months months months months September 14
ended ended ended ended 1999
September September September September (inception) to
30 30 30 30 September 30
2001 2001 2000 2000 2001
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Expenses
Interest $ 1,828 $ 5,010 $ 33 $ 105 $ 8,147
Management
fees 3,000 9,000 - 1,000 10,000
Office and
administration - - - 1,170 1,241
Professional
fees 205 8,533 4,791 95,311 124,449
Rent 1,500 4,500 1,500 4,500 10,500
Software
development - - - - 15,000
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Net loss for
the period $ (6,533) $ (27,043) $ (6,324) $ (102,086) $ (169,337)
==============================================================
Basic loss per
share - Basic
and diluted $ (0.001) $ (0.004) $ (0.001) $ (0.014) $ (0.025)
==============================================================
Weighted average
shares
outstanding 7,057,500 7,057,500 7,057,500 7,057,500 6,882,574
==============================================================================
See accompanying notes to these interim financial statements
================================================================================
First Cypress Technologies, Inc.
(A Development Stage Company)
Interim Statement of Cash Flows
(Expresses in US Dollars)
(Unaudited)
For the For the Period from
nine (9) nine (9) September 14
months months 1999
ended ended (inception) to
September September September 30
30 30 2001
2001 2000
===================================
Cash flows from operating activities
Net loss for the period $ (27,043) $(102,086) $(169,337)
Changes in assets and liabilities
Accounts payable and accrued
liabilities 4,108 43,824 44,730
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(22,935) (58,262) (124,607)
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Cash flows from financing activities
Increase in amounts due to related party 23,072 43,388 93,521
Issuance of share capital - - 31,650
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23,072 43,388 125,171
-----------------------------------
Increase (decrease) in cash during
the period 137 (14,874) 564
Cash, beginning of period 427 15,352 -
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Cash, end of period $ 564 478 $ 564
================================================================================
See accompanying notes to these interim financial statements
================================================================================
First Cypress Technologies, Inc.
(A Development Stage Company)
Notes to the Interim Financial Statements
(Expressed in US Dollars)
(Unaudited)
September 30, 2001
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1. Basis of Presentation and Ability to Continue as a Going Concern
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The interim financial statements included herein, presented in accordance with
United States generally accepted accounting principles and stated in US Dollars,
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make information present not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these
interim financial statements be read in conjunction with the financial
statements of the company for the year ended December 31, 2000 and notes thereto
included in the Company's SB-2 filing. The Company follows the same accounting
policies in the preparation of interim reports.
Results of operations for the interim period are not indicative of annual
results.
These accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. As at September
30, 2001, the Company has recognized no revenue and has accumulated operating
losses of $169,337 since its inception, has negative working capital of $137,687
and has shareholders' deficit of $137,687. The continuation of the Company is
dependent upon the continuing financial support of creditors and stockholders
and obtaining long-term financing as well as achieving a profitable level of
operations. Management plans to raise equity capital to finance the operations
and capital requirements of the Company. It is management's intention to raise
new equity financing of approximately $850,000 during the next twelve months.
Amounts raised will be used to complete the development of the EngineMax
software, commence development of the Company's web site, undertake an
advertising and marketing campaign and purchase necessary equipment and supplies
for the operation of the business. While the Company is expending its best
efforts to achieve the above plans, there is no assurance that any such activity
will generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. These financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might arise from this
uncertainty.
2. Related Party Transactions
During the three-month period the Company has incurred rent and office services
in the amount of $1,500 ($4,500 for the nine months). These services are
provided to the Company, by the President of the Company, on a month to month
basis at $500 per month and can be terminated by the Company without notice.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
FORWARD LOOKING STATEMENTS
This report on Form 10-QSB contains certain forward-looking statements within
the meaning of section 21(e) of the Securities Exchange Act of 1934, as amended,
and other applicable securities laws. All statements other than statements of
historical fact are "forward-looking statements" for purposes of these
provisions, including any projections of earnings, revenues, or other financial
items; any statements of the plans, strategies, and objectives of management for
future operation; any statements concerning proposed new products, services, or
developments, any statements regarding future economic conditions or
performance, statements of belief, and any statement of assumptions underlying
any of the foregoing. Such forward-looking statements are subject to inherent
risks and uncertainties, and actual results could differ materially from those
anticipated by the forward-looking statements.
PLAN OF OPERATIONS
Our plan of operations for the twelve months following the date of this
quarterly report for the period ending September 30, 2001 is to complete the
following objectives within the time period specified, subject to our obtaining
financing for the development and marketing of our EngineMax software:
Build an internal administrative and managerial organization to oversee all
areas of development and long-term operations
Develop a functional and marketable piece of software
Create a cost-effective and internet-based marketing campaign
Develop a web site to market the software
To fund our plan of operations, we need to raise $850,000 over the twelve months
following September 30, 2001. In building our internal administrative and
managerial organization, we will seek to minimize the hiring of full-time
employees. Full-time positions will be limited to the president/CEO, CFO, a
software development project manger, an office manager, and a marketing manager
(see later discussion regarding the time frame for the hiring of some of these
positions). Other part-time and contract people are expected to be required to
provide assistance to these roles. We project that the cost of these employees
will not exceed $300,000 for the twelve months following September 30, 2001.
We also anticipate building an internal enhancement, support and marketing
infrastructure for the business. For the twelve months following September 30,
2001, we anticipate spending approximately $50,000 on the purchase of necessary
equipment and supplies.
The most important and difficult goal is to complete the development of the
EngineMax
software. We plan to hire an external software development firm to build the
software rather than handle this process ourselves.
We anticipate that we will hire the external software development firm by the
end of the first quarter of 2002 and that the development of the EngineMax
software will begin immediately thereafter. We anticipate that the development
costs will be approximately $250,000 and will consist primarily of payments to
consultants for programming and software development services. Therefore the
independent third party consultants will conduct all research and development.
The development of our EngineMax software will commence once financing is
obtained.
We plan to commence development of our web site slightly before completion of
the EngineMax software. We anticipate that our web site will be fully
operational by the end of the first quarter of 2002. We anticipate that the
development expenses for this web site will be approximately $50,000.
We plan to undertake an advertising and marketing campaign once the development
of our EngineMax software is complete. We anticipate that initial marketing
expenses for the twelve months following September 30, 2001 will be
approximately $100,000. A third party marketing consulting firm will design this
campaign and conduct the majority of the work. We anticipate that this will
minimize start up expenses and optimize results in the ever-changing world of
Internet marketing.
We anticipate that our first revenues will be earned within the second or third
quarter of 2002.
In summary, we anticipate the following steps will be necessary to make us
operational:
1. Hire support staff, including a software development project manger, an
office manager and a marketing manager. This is expected to occur during the
first quarter of 2002 and cost approximately $33,333 per month once we are fully
staffed.
2. Create the EngineMax software. This is expected to occur during the first
quarter of 2002 and cost approximately $250,000.
3. Create the web site. This is expected to occur during the first quarter of
2002 and cost approximately $50,000.
4. Launch our advertising and marketing campaign. This is expected to occur
during the first quarter of 2002 and cost approximately $100,000 initially.
We thus anticipate that we will be spending approximately $850,000 over the
twelve-month period after September 30, 2001 in pursuing this plan of
operations. Of these expenditures, we anticipate that approximately $475,000
will be spent in the first six months following September 30, 2001. Our cash
position as of September 30, 2001 was $564.
Accordingly, we will require additional financing in order to pursue this
business plan.
We anticipate that if we are successful in completing a financing, the financing
would be an equity financing through the sale of our common stock. We do not
have any arrangement in place for any debt or equity financing. If we are
successful in completing an equity financing, existing shareholders will
experience dilution of their interest in our company. In the event we are not
successful in raising additional financing and in the event that one of the
alternatives described directly below does not come to fruition, we anticipate
that we will not be able to proceed with our business plan for the development
and marketing of the EngineMax software and that our business may fail.
As of September 30, 2001 the company has been unsuccessful in its efforts to
raise additional capital to meet its plan of operations. Due to our lack of
operating history and present inability to generate revenues, our auditors have
stated their opinion that there currently exists substantial doubt about our
ability to continue as a going concern. At the present time, the Company is
exploring other alternatives including various methods for raising additional
funds, forming partnerships with other entities, as well as other business
opportunities.
We anticipate incurring continuing operating losses for the foreseeable future.
We base this expectation, in part, on the fact that we will incur substantial
operating expenses in completing the development of our software and web site
and do not anticipate earning any revenues until sometime next year. We intend
to raise to obtain financing through additional equity financing until such time
as cash flows are generated from operations sufficient to support us. We are
currently pursuing financing from various potential investors. Due to cash
constraints, the Company has been severely limited in its ability to make
progress towards achievement of its business plan. Our future financial results
are also uncertain due to a number of factors, some of which are outside our
control. These factors include, but are not limited to:
- - our ability to develop a commercially marketable computer software program
with the features and functionality sought by potential customers;
- - our ability to successfully market our EngineMax computer software to
potential customers;
- - our ability to charge customers a license fee that will enable us to
generate revenues exceeding operating costs;
- - the introduction and availability of competing products by competitors.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS
Exhibit 99.1 Risk Factors
REPORTS ON FORM 8-K
None
SIGNATURES
In accordance with the requirements 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.
FIRST CYPRESS TECHNOLOGIES, INC.
Date: November 16, 2001
By: /s/ Robert Rosner
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Robert Rosner
President, CEO and Director