U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
(Mark One)
[X] Quarterly report pursuant section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2004
[ ] Transition report pursuant section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from__________to____________
Commission file number: 000-50739
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EDWARD II, INC.
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(Exact name of small business issuer in its charter)
Nevada 20-1044677
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3415 Ocatillo Mesa Way, North Las Vegas, NV 89031
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(Address of principal executive officers, including Zip Code)
(702) 250-0917
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(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 such filing requirements for the past 90 days. Yes [X] No [ ]
Number of shares outstanding of the issuer's classes of common equity, as of
September 30, 2004:
430,000 Shares of Common Stock (One Class)
Transitional Small Business Disclosure Format: Yes [ ] No [X]
This document consists of 13 pages, excluding exhibits.
The Exhibit Index is on page 12.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements................................. 3
Independent Accountants Review Report................ 4
Balance Sheet (unaudited)............................ 5
Statements of Operations (unaudited)................. 6
Statements of Cash Flows (unaudited)................. 7
Notes to Financial Statements........................ 8-9
Item 2. Management's Discussion and Analysis of Plan
of Operation........................................ 10
Item 3. Controls and Procedures.............................. 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................... 15
Item 2. Changes in Securities and Use of Proceeds............ 15
Item 3. Defaults upon Senior Securities...................... 15
Item 4. Submission of Matters to a Vote
of Security Holders.................................. 15
Item 5. Other Information.................................... 15
Item 6. Exhibits and Reports on Form 8-K..................... 15
Signatures..................................................... 16
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
As prescribed by item 310 of Regulation S-B, the independent auditor has
reviewed these unaudited interim financial statements of the registrant
for the period ended September 30, 2004. The financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim period presented. The unaudited
financial statements of registrant for the period ended September 30, 2004,
follow.
3
Beckstead and Watts, LLP
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Certified Public Accountants
3340 Wynn Road, Suite B
Las Vegas, NV 89102
702.257.1984
702.362.0540 fax
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
October 24, 2004
Board of Directors
Edward II, Inc.
(a Development Stage Company)
Las Vegas, NV
We have reviewed the accompanying balance sheet of Edward II, Inc. (a Nevada
corporation) (a development stage company) as of September 30, 2004 and the
related statements of operations for the three and months ended September 30,
2004 and for the period March 30, 2004 (Inception) to September 30, 2004, and
statements of cash flows for the period March 30, 2004 (Inception) to September
30, 2004. These financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established by the Public
Company Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying financial statements referred to above for
them to be in conformity with generally accepted accounting principles in the
United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has had limited operations and has not commenced
planned principal operations. This raises substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Beckstead and Watts, LLP
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Edward II, Inc.
(a Development Stage Company)
Balance Sheet
(unaudited)
Balance Sheet
(unaudited)
Sept. 30,
2004
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Assets
Current assets:
Cash $ -
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$ -
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Liabilities and Stockholders' Equity
Stockholders' equity:
Series A preferred stock, $0.001
par value, 2,000,000 shares authorized,
no shares issued or outstanding -
Series B preferred stock, $0.001
par value, 2,000,000 shares authorized,
no shares issued or outstanding -
Series C preferred stock, $0.001
par value, 1,000,000 shares authorized,
no shares issued or outstanding -
Common stock, $0.001 par value, 70,000,000
shares authorized, 430,000 shares issued and
outstanding as of 6/30/04 and 3/31/04 430
Earnings (Deficit) accumulated during
development stage (430)
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-
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$ -
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The accompanying notes are an integral part of these financial statements.
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Edward II, Inc.
(a Development Stage Company)
Statement of Operations
(unaudited)
Statement of Operations
For Three Months March 30, 2004
ended (Inception) to
Sept. 30, 2004 Sept. 30, 2004
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Revenue $ - $ -
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General and administrative expenses - 430
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Net (loss) $ - $ (430)
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Weighted average number of common
shares outstanding -
basic and fully diluted 430,000 430,000
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Net income (loss) per share - basic
and fully diluted $ (0.00) $ (0.00)
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The accompanying notes are an integral part of these financial statements.
6
Edward II, Inc.
(a Development Stage Company)
Statement of Cash Flows
(unaudited)
Statement of Cash Flows
Mar. 30, 2004
(Inception) to
Sept. 30, 2004
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Cash flows from operating activities
Net (loss) $ (430)
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Cash flows from financing activities
Issuances of common stock 430
Donated capital -
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Net cash provided by financing activities 430
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Net increase (decrease) in cash -
Cash - beginning -
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Cash - ending $ -
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Supplemental disclosures:
Interest paid $ -
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Income taxes paid $ -
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Edward II, Inc.
(a Development Stage Company)
Notes
Note 1 - Basis of Presentation
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
consolidated interim financial statements be read in conjunction with the
financial statements of the Company for the period ended March 31, 2004 and
notes thereto 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.
Note 2 - Going concern
These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. As at September 30, 2004,
the Company has recognized minimal revenue to date and has accumulated
operating losses of approximately $430 since inception. The Company's ability
to continue as a going concern is contingent upon the successful completion
of additional financing arrangements and its ability to achieve and maintain
profitable operations. Management plans to raise equity capital to finance
the operating and capital requirements of the Company. Amounts raised will
be used to further development of the Company's products, to provide
financing for marketing and promotion, to secure additional property and
equipment, and for other working capital purposes. 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 that might arise from this uncertainty.
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Edward II, Inc.
(a Development Stage Company)
Notes
Note 3 - Related party transactions
The Company does not lease or rent any property. A director provides office
services without charge. Such costs are immaterial to the financial
statements and, accordingly, have not been reflected therein. The officers
and directors of the Company are involved in other business activities and
may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
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ITEM 2. Management's Discussion and Analysis of Plan of Operation.
(a) Results of Operations
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As a developmental stage Company, the Company had no revenues for the nine
months ending September 30, 2004. The Company does not expect to generate any
revenues over the next approximately to twelve (12) months. During nine months
ending September 30, 2004 the Company experienced net losses $(430). These
expenses, organizational costs and classified as general and administrative
costs. Since the Company's inception on March 30, 2004 through September 30,
2004 it has lost $(430). The Company does not have any material commitments
for capital expenditures.
(b) Plan of Operation
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The management of Edward II, Inc. is currently seeking to engage in a merger
with or acquisition of an unidentified foreign or domestic company which
desires to become a reporting ("public") company whose securities are qualified
for trading in the United States secondary market. Edward II has been in the
developmental stage since inception and have no operations to date. Other than
issuing shares to the Registrant's sole stockholder, the Registrant has not
commenced any operational activities.
Edward II, Inc. will not acquire or merge with any entity which cannot provide
audited financial statements at or within a reasonable period of time after
closing of the proposed transaction. Edward II is subject to all the reporting
requirements included in the Exchange Act. Included in these requirements is
Edward II's duty to file audited financial statements as part of Edward II's
Form 8-K to be filed with the U. S. Securities and Exchange Commission upon
consummation of a merger or acquisition, as well as Edward II's audited
financial statements included in the annual report on Form 10-KSB. If such
audited financial statements are not available at closing, or within time
parameters necessary to insure the Registrant's compliance with the
requirements of the Exchange Act, or if the audited financial statements
provided do not conform to the representations made by the target business,
the closing documents may provide that the proposed transaction will be
voidable at the discretion of the Company's present management.
The management of Edward II, Inc. will not restrict its search for any specific
kind of businesses, but may acquire a business which is in its preliminary or
development stage, which is already in operation, or in essentially any stage
of its business life. It is impossible to predict at this time the status of
any business in which the Registrant may become engaged, in that such business
may need to seek additional capital, may desire to have its shares publicly
traded, or may seek other perceived advantages which the Registrant may offer.
10
A business combination with a target business will normally involve the
transfer to the target business of the majority of the Company's common stock,
and the substitution by the target business of its own management and board of
directors.
Edward II, Inc. has, and will continue to have, no capital with which to
provide the owners of business opportunities with any cash or other assets.
The Company's sole officer and director has not conducted market research and
is not aware of statistical data to support the perceived benefits of a merger
or acquisition transaction for the owners of a business opportunity.
The Edward II audit reflects the fact that the Company has no current source of
income. Further, that without realization of additional capital, it would be
unlikely for the Company to continue as a going concern.
another.
The Company may seek a business opportunity with entities that have recently
commenced operations, or that wish 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.
We anticipate that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation.
Such perceived 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
shareholders 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, no capital with which to provide the
owners of business opportunities with any significant cash or other assets.
However, management believes we will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
publicly registered company without incurring the cost and time required to
conduct an initial public offering. The owners of the business opportunities
will, however, incur significant legal and accounting costs in connection
with acquisition of a business opportunity, including the costs of preparing
Form 8-K's, 10-K's or 10-KSB's, agreements and related reports and documents.
The 1934 Act specifically requires that any merger or acquisition candidate
comply with all applicable reporting requirements, which include providing
audited financial statements to be included within the numerous filings
relevant to complying with the 1934 Act.
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Acquisition of 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 corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and shareholders of
the Company will no longer be in control of the Company. In addition, our
directors may, as part of the terms of the acquisition transaction, resign
and be replaced by new directors without a vote of the Company's
shareholders.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its 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, of which there can
be no assurance, it will be undertaken by the surviving entity after the
Company has successfully consummated a merger or acquisition and the Company
is no longer considered a "shell" company. Until a merger or acquisition is
consummated, the Company will not attempt to register any additional
securities. The issuance of substantial additional securities and their
potential sale into any trading market which may develop in the Company's
securities may have a depressive effect on the value of the Company's
securities in the future, if such a market develops, of which there is no
assurance.
As part of the Company's "due diligence" investigation, the officer and
director of the Company will meet personally with management and key
personnel, may 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 the Company's limited financial resources and
management expertise. The manner in which the Company participates in an
opportunity will depend on the nature of the opportunity, the respective
needs and desires of the Company and other parties, the management of the
opportunity and the relative negotiation strength of the Company and such
other management.
With respect to any merger or acquisition, negotiations with target
company management is expected to focus on the percentage of the Company
which the target company shareholders would acquire in exchange for all of
their shareholdings in the target company. Depending upon, among other
things, the target company's assets and liabilities, the Company's
shareholders will in all likelihood hold a substantially lesser percentage
ownership interest in the Company following any merger or acquisition.
The percentage ownership may be subject to significant reduction in the
event the Company acquires a target company with substantial assets. Any
merger or acquisition effected by the Company can be expected to have a
significant dilutive effect on the percentage of shares held by the
Company's then shareholders.
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We will participate in a business opportunity only after the negotiation
and execution of appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require some
specific representations and warranties by all of the parties, will specify
certain events of default, will detail the terms of closing and the conditions
that must be satisfied by each of the parties prior to and after such closing,
will outline the manner of bearing costs, including costs associated with the
Company's attorneys and accountants, will set forth remedies on default and
will include miscellaneous other terms.
As stated previously, we will not acquire or merge with any entity that
cannot provide independent audited financial statements within a reasonable
period of time after closing of the proposed transaction. The Company is
subject to the reporting requirements of the 1934 Act. Included in these
requirements is the affirmative duty of the Company to file independent
audited financial statements as part of its Form 8-K to be filed with the
Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as the Company's audited financial statements included
in its annual report on Form 10-K (or 10-KSB, as applicable). If such
audited financial statements are not available at closing, or within time
parameters necessary to insure the Company's compliance with the requirements
of the 1934 Act, or if the audited financial statements provided do not
conform to the representations made by the candidate to be acquired in the
closing documents, the closing documents will provide that the proposed
transaction will be voidable at the discretion of the present management of
the Company. If such transaction is voided, the agreement will also contain
a provision providing for the acquisition entity to reimburse the Company for
all costs associated with the proposed transaction.
Competition
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial
resources and limited management availability, the Company will continue to
be at a significant competitive disadvantage compared to the Company's
competitors.
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ITEM 3. Controls and Procedures
As of the end of the period covered by this report, the Company conducted an
evaluation, under the supervision and with the participation of the principal
executive officer and principal financial officer, of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation,
the principal executive officer and principal financial officer concluded that
the Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms. There was no change in the Company's internal control over financial
reporting during the Company's most recently completed fiscal year that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
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PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
There is no litigation pending or threatened by or against the Company.
ITEM 2. Changes in Securities and Use of Proceeds
None.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
During the quarter ended September 30, 2004, no matters were submitted to
the Company's security holders.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Title of Document
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(a) Exhibits
31.1 Certifications of the Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certifications of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
During the quarter ended September 30, 2004, no Current Reports were filed on
Form 8-K.
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
EDWARD II, INC.
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Registrant
Date: October 25, 2004 By: /s/ Edward Zimmerman, Jr.
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Edward Zimmerman, Jr.
Chief Executive Officer
Chief Financial Officer
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
By: /s/ Edward Zimmerman, Jr. October 25, 2004
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Edward Zimmerman, Jr.
Chief Executive Officer
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