UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 1 TO 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, 2002
[ ] 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
---------
FIRST CYPRESS TECHNOLOGIES, INC.
---------------------------------------------------------------------
(Exact name of small Business Issuer as specified in its charter)
Nevada 98-0218688
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1281 West Georgia Street, Suite No. 501
Vancouver, British Columbia V6E 3J7
- ----------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number,
including area code: 604-817-1441
------------
Not Applicable
----------------------------------------------------
(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: 20,362,500 Post-Split Shares of $.001
par value Common Stock outstanding as of November 15, 2002.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
3
First Cypress Technologies, Inc.
(A Development Stage Company)
Interim Financial Statements
For the nine-month periods ended
September 30, 2002 and 2001
(Unaudited - Expressed in US Dollars)
Contents
- --------------------------------------------------------------------------------
Interim Financial Statements
Balance Sheets
Statements of Changes in Capital Deficit
Statements of Operations
Statements of Cash Flows
Notes to Financial Statements
First Cypress Technologies, Inc.
(A Development Stage Company)
Interim Balance Sheets
(Expressed in US Dollars)
September 30 December 31
2002 2001
- ---------------------------------------------------------------
(Unaudited)
Assets
Current
Cash $ 222 $ 313
===============================================================
Liabilities and Capital Deficit
Current
Accounts payable and
accrued liabilities $ 41,884 $ 55,503
Due to stockholder (Note 2) 148,138 107,552
-----------------------------
Total liabilities 190,022 163,055
-----------------------------
Capital deficit
Share capital
Authorized:
25,000,000 common shares
with par value $0.001
Issued:
7,057,500 common shares 7,058 7,058
Additional paid-in capital 24,592 24,592
Deficit accumulated in
the development stage (221,450) (194,392)
-----------------------------
Total capital deficit (189,800) (162,742)
-----------------------------
Total Liabilities and
Capital Deficit $ 222 $ 313
===============================================================
The accompanying notes are an integral part of these interim financial
statements.
First Cypress Technologies, Inc.
(A Development Stage Company)
Interim Statements of Changes in Capital Deficit
(Unaudited - Expressed in US Dollars)
From the period September 14, 1999 (inception) to September 30, 2002
- --------------------------------------------------------------------------------
Deficit
Accumulated
Common Stock Additional In the Total
------------------ Paid-in Development Capital
Shares Amount Capital Stage Deficit
- --------------------------------------------------------------------------------
Issuance of
shares on
incorporation in
September 1999
for cash at
0.001 per share 5,000,000 $ 5,000 $ - $ - $ 5,000
Issuance of shares
for cash in
November 1999 at
$0.01 per share 1,990,000 1,990 17,910 - 19,900
Issuance of shares
for cash in
December 1999 at
0.10 per share 67,500 68 6,682 - 6,750
Net loss and
comprehensive loss - - - (33,298) (33,298)
--------- ------- -------- ---------- ----------
Balance,
December 31, 1999 7,057,500 7,058 24,592 (33,298) (1,648)
Net loss and
comprehensive loss - - - (108,996) (108,996)
--------- ------- -------- ---------- ----------
Balance,
December 31, 2000 7,057,500 7,058 24,592 (142,294) (110,644)
Net loss and
comprehensive loss - - - (52,098) (52,098)
--------- ------- -------- ---------- ----------
Balance,
December 31, 2001 7,057,500 7,058 24,592 (194,392) (162,742)
--------- ------- -------- ---------- ----------
Net loss and
comprehensive loss - - - (27,058) (27,058)
--------- ------- -------- ---------- ----------
Balance,
September 30, 2002 7,057,500 $ 7,058 $ 24,592 $(221,450) $(189,800)
====================================================
The accompanying notes are an integral part of these interim financial
statements.
First Cypress Technologies, Inc.
(A Development Stage Company)
Interim Statements of Operations
(Unaudited - Expressed in US Dollars)
Period from
For the three-month For the nine-month September 14
periods ended periods ended 1999
September 30 September 30 (inception) to
----------------------------------------------- September 30
2002 2001 2002 2001 2002
- ---------------------------------------------------------------------------------------------
Expenses
Interest and bank charges $ 2,737 $ 1,828 $ 7,444 $ 5,010 $ 18,441
Management fees
(Note 3) 3,000 3,000 9,000 9,000 22,000
Other 25 - 463 - 1,704
Professional fees 3,997 205 5,651 8,533 147,805
Rent and office
services (Note 3) 1,500 1,500 4,500 4,500 16,500
Software development - - - - 15,000
---------------------------------------------------------------
Net loss and
comprehensive loss
for the period $ (11,259) $ (6,533) $ (27,058) $ (27,043) $ (221,450)
===========================================================================================
Loss per share -
basic and diluted $ (0.002) $ (0.001) $ (0.004) $ (0.004) $ (0.033)
===========================================================================================
Weighted average
shares
outstanding 7,057,500 7,057,500 7,057,500 7,057,500 6,773,150
===========================================================================================
First Cypress Technologies, Inc.
(A Development Stage Company)
Interim Statements of Cash Flows
(Unaudited - Expressed in US Dollars)
Period from
For the nine-month September 14
periods ended 1999
September 30 (inception) to
------------------------- September 30
2002 2001 2002
- --------------------------------------------------------------------------------
Cash flows from operating activities
Net loss for the period $ (27,058) $(27,043) $(221,450)
Adjustments to reconcile
net loss for the period to
cash used in operating
activities
Interest accrued on
stockholder loan 7,353 4,940 18,079
Increase (decrease) in
liabilities
Accounts payable and
accrued liabilities (13,619) 4,108 41,884
-------------------------------------
Cash used in
operating activities (33,324) (17,995) (161,487)
-------------------------------------
Cash flows from
financing activities
Loans from stockholder 33,233 18,132 130,059
Proceeds from
issuance of
share capital - - 31,650
-------------------------------------
Cash provided by
financing activities 33,233 18,132 161,709
Increase (decrease) in
cash during the period (91) 137 222
Cash,
beginning of period 313 427 -
Cash,
end of period $ 222 $ 564 $ 222
-------------------------------------
Supplemental information
===========================================================================
Interest and
taxes paid $ - $ - $ -
===========================================================================
First Cypress Technologies, Inc.
(A Development Stage Company)
Notes to Interim Financial Statements
(Unaudited - Expressed in US Dollars)
September 30, 2002 and 2001
- -------------------------------
1. Basis and Presentation and Ability to Continue Operations
- --------------------------------------------------------------------
First Cypress Technologies, Inc. was incorporated on September 14, 1999 under
the laws of the State of Nevada. The Company was developing an Internet computer
software program known as EngineMax. The EngineMax computer software program
will be designed to automate the process of submission of Internet web page
information to major Internet search engines. In October 2002, the Company
completed the acquisition of the "Money Club Financial" business concept (Note
4), website, certain technology and the business plan and intends to pursue this
opportunity. The Money Club Financial business plan involves entering into the
alternative financial services market in order to provide check cashing and
short-term loans to fixed and lower income individuals in North America. To
date, the Money Club Financial business concept has not generated any revenues.
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 the information presented 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 audited financial
statements of the Company for the years ended December 31, 2001 and 2000
included in the Company's 10-KSB Annual Report. The Company follows the same
accounting policies in the preparation of interim reports.
Results of operations for the interim periods 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, 2002, the Company has recognized no revenue and has accumulated operating
losses of $221,450 since its inception, has a working capital deficiency of
$189,800 and has been relatively inactive through the period ended September 30,
2002. 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 Money Club Financial operations and
the Company's capital requirements. It is management's intention to raise new
equity financing of up to $2 million within the upcoming year. Amounts raised
will be used to commercialize the Money Plan Financial business concept (Note
4), undertake an advertising and marketing campaign and make necessary
acquisitions to commence 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.
First Cypress Technologies, Inc.
(A Development Stage Company)
Notes to Interim Financial Statements
(Unaudited - Expressed in US Dollars)
September 30, 2002 and 2001
- ---------------------------
2. Due to Stockholder
- ------------------------
Amounts due to the Company's president are unsecured and repayable on demand
with interest at 8% per annum. Interest expense accrued in respect of these
advances totalled $7,353 for the nine months ended September 30, 2002 (2001 -
$4,940).
3. Related Party Transactions
- --------------------------------
Related party transactions not disclosed elsewhere in these financial statements
are as follows:
For nine-month
periods ended
September 30
2002 2001
-----------------
Rent and office services paid to the President of the Company $ 4,500 $ 4,500
Management fees paid to the President of the Company $ 9,000 $ 9,000
Related party transactions are recorded at the exchange amount, being the amount
established and agreed to by the related parties.
- --------------------------------------------------------------------------------
4. Subsequent Events
- ----------------------
a) On October 8, 2002, the Company issued and redeemed the shares necessary to
complete the acquisition of the "Money Club Financial" business concept, web
site, technology and business plan (the "Assets"). The Assets were acquired in
consideration for the issuance of 15,000 shares of the Company's common stock.
Concurrent with the closing of this acquisition, the Company's president also
transferred to the vendor an additional 500,000 shares of his common stock. No
consideration is payable by the Company to the Company's president in respect of
this transfer.
In connection with the acquisition, on October 8, 2002 the Company's directors
surrendered 3,000,000 shares of common stock of the Company for cancellation for
nil consideration. The surrender of shares for cancellation by the directors and
the transfer of shares by the Company's president to the vendor were conditions
precedent to the closing of the acquisition of the Assets under the terms of the
Acquisition Agreement.
The Money Club Financial business plan involves entering into the alternative
financial services market in order to provide short-term loans to individuals in
the fixed and lower income bracket in North America. The Company currently has
limited financial resources and will require significant additional financing in
order to commercialize this business concept.
First Cypress Technologies, Inc.
(A Development Stage Company)
Notes to Interim Financial Statements
(Unaudited - Expressed in US Dollars)
September 30, 2002 and 2001
- ---------------------------
4. Subsequent Events - Continued
The purchase will be recorded in the Company's fourth quarter as an expense
based upon the trading price of the Company's common stock on the date the
acquisition was agreed to.
b) On October 14, 2002, the Company completed a five for one split of its
common stock effected by a stock dividend to the Company's stockholders. The
effects of the stock split have not been recognized in these financial
statements.
5. Comparative Figures
- ------------------------
Certain comparative figures have been reclassified to conform with the current
year's presentation.
6. New Accounting Pronouncements
- -----------------------------------
In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". This Statement rescinds the requirement to report gains and
losses from extinguishment of debt as an extraordinary item. Additionally, this
Statement amends Statement 13 to require sale-leaseback accounting for certain
lease modifications that have economic effects similar to sale-leaseback
transactions. The provisions of this Statement relating to Statement 4 are
applicable in fiscal years beginning after May 15, 2002. The provisions of this
Statement related to Statement 13 are effective for transactions occurring after
May 15, 2002. All other provisions of this Statement are effective for
financial statements issued on or after May 15, 2002. The adoption of SFAS No.
145 did not have a material effect on the Company's financial statements.
SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities"
("SFAS 146") provides guidance on the recognition and measurement of liabilities
for costs associated with exit or disposal activities. The provisions of this
Statement are effective for exit or disposal activities that are initiated after
December 31, 2002. The Company is currently reviewing SFAS 146 to determine the
impact upon adoption.
11
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
We closed the acquisition of the "MoneyClub Financial" business concept,
website, technology and business plan on September 26, 2002. The certificates
for the common shares issuable and redeemed pursuant to the acquisition
agreement were exchanged on October 8, 2002. Our plan of operations is to
pursue the development and commercialization of the "MoneyClub Financial"
business. The business plan involves development of a financial services and
lending business that would concentrate on between-pay-day loans and title loans
on automobiles. The business plan would include a "Club" component to attract
repeat business. Customers would receive points based on their loan business
with us and would be able to use these points to obtain discounts on purchases
of goods. We would negotiate with targeted retailers and wholesalers of goods
in order to obtain bulk pricing which we could then offer to our customers in
exchange for their "Club" points.
Our plan of operations for the "MoneyClub Financial" business over the next
twelve months is as follows:
1. We plan to open a head office and retail store location in Las Vegas,
Nevada by January 2003. The cost to open the store, including leasehold
improvements, initial advertising and set up, is anticipated to be
approximately $65,000. The initial stage will have approximately six
employees.
2. We plan to commence our initial lending business through our Las Vegas
store in January 2003. In order to commence business through the store, we
anticipate we will need a minimum of $100,000 in order to enable us to have
sufficient financing to commence loans to customers.
3. We plan to offer and advertise our services on the Internet. Our plan is to
enable our customers to apply for credit online through the Internet.
4. We plan to open up eight additional stores during the twelve months. The
number of stores that we are able to acquire is subject to financing and
our ability to complete acquisitions. We plan on targeting smaller, single
outlet operations for acquisition. We plan to negotiate acquisitions for
our common stock, rather than cash, where possible. We anticipate that each
new store will require approximately $65,000 in start-up costs and a
minimum of $100,000 in capital for lending. We anticipate each store will
have approximately six employees.
We currently have minimal cash reserves and a significant working capital
deficit. Accordingly, our ability to pursue our plan of operations is
contingent on our being able to obtain funding for the "MoneyClub Financial"
business. We have commenced an offering of convertible debentures in the
principal amount of up to $2,000,000 to persons who are "accredited investors"
in private placement transactions. The convertible debentures will be
convertible into shares of our common stock. There is no assurance we will be
able to raise any funds through this offering.
12
We have no current arrangements for financing and there is no assurance that we
will be able to raise the financing necessary to proceed with our plan of
operations. If we are not able to achieve all financings necessary, then we
will have to scale back our plan of operations to the extent of our capital
resources. In view of our financial position, there is no assurance that we
will be able to generate revenues from our plan of operations or that we will
realize a profit. Investors are cautioned that our ability to succeed is
conditioned on many factors, including:
1. our ability to raise the necessary financing;
2. our ability to compete in the "pay day" loan market;
3. our ability to convince consumers that the "MoneyClub Financial" concept is
preferable to services offered by competitors;
4. our ability to obtain viable locations for the establishment of our retail
stores;
5. our ability to conduct a successful marketing and advertising campaign in
order to make consumers aware of our products and services;
6. our ability to achieve a return on capital through "pay day" loans.
Investors are cautioned that if our customers default on their loans, then
we may not have sufficient capital resources in order to enable us to
recover the funds advanced to customers.
The acquisition of the Money Club Financial assets will be accounted for as an
organizational or start-up cost during our fourth quarter based upon the trading
price of our common stock on the date the acquisition was agreed to.
ITEM 3. CONTROLS AND PROCEDURES.
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the
"Exchange Act"), we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures within the 90 days prior
to the filing date of this report. This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer, Mr. Robert Rosner. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective in timely alerting management to material
information relating to us required to be included in our periodic SEC filings.
There have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the date
we carried out our evaluation.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed our reports filed
or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material legal proceedings and to our knowledge, no
such proceedings are threatened or contemplated.
Item 2. Changes in Securities
13
We closed the acquisition of the "Money Club Financial" business concept, web
site, technology and business plan (the "Assets") on September 26, 2002 in
consideration for the issue of 15,000 (pre-split) shares of its common stock.
The Assets were acquired from Ms. Elaine Lugo pursuant to an acquisition
agreement between First Cypress and Ms. Lugo dated September 26, 2002 (the
"Acquisition Agreement"). The shares were issued to Ms. Lugo on October 8, 2002
pursuant to Section 4(2) of the Securities Act of 1933. Concurrent with the
closing of this acquisition, Mr. Robert Rosner, president and the sole director
of First Cypress, surrendered 500,000 (pre-split) shares of common stock of
First Cypress for cancellation and transferred to Ms. Lugo 500,000 (pre-split)
shares of his common stock for a purchase price of $500. Mr. Rosner now owns
1,500,000 (pre-split) shares of the Company's common stock on completion of the
Acquisition. Mr. Carl Chow, the former secretary and treasurer and a former
director of First Cypress, surrendered 2,500,000 (pre-split) shares of common
stock of First Cypress for cancellation concurrent with the Closing. Mr. Chow
has ceased to be an officer or director of the Company and no longer owns any
shares of First Cypress's common stock. The surrender of shares for cancellation
by Mr. Chow and Mr. Rosner and the transfer of shares by Mr. Rosner to Ms. Lugo
were conditions precedent to the closing of the acquisition of the Assets under
the terms of the Acquisition Agreement.
We completed a one to five stock split by the issue to each of the shareholders
of the Company of record on October 14, 2002 a total of four additional shares
of the Company's common stock for each outstanding share of the Company's common
stock held by each shareholder.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to our security holders for a vote during the fiscal
quarter ended September 30, 2002.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
EXHIBITS REQUIRED BY ITEM 601 OF FORM 8-K
Exhibit
Number Description of Exhibit
- -------- ----------------------------------------------------------------------
99.1 Certification of Chief Executive Officer and Chief Financial Officer
pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (1)
- --------------------------------------------------------------------------------
(1) Filed as an Exhibit to this Quarterly Report on Form 10-QSB
- --------------------------------------------------------------------------------
REPORTS ON FORM 8-K
Current Report on Form 8-K filed on October 7, 2002 disclosing the acquisition
of the "Money Club Financial"
14
business concept, web site, technology and business plan.
15
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: December 17, 2002
By: /s/ Robert Rosner
---------------------------
Robert Rosner
President, Secretary, Treasurer
Chief Executive Officer and Chief Financial Officer Director
CERTIFICATIONS
I, Robert Rosner, Chief Executive Officer and Chief Financial Officer of First
Cypress Technologies, Inc. (the "Registrant"), certify that;
(1) I have reviewed this quarterly report on Form10-QSB of First Cypress
Technologies, Inc., as amended;
(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
quarterly report.
(4) The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
(5) The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
(6) The Registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other facts that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 17, 2002 /s/ Robert Rosner
___________________________________
(Signature)
President and Chief Executive Officer
Treasurer and Chief Financial Officer
-----------------------------------------
(Title)
17