SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: October 31, 2009
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________________ to __________________
Commission File Number 333-143750
BARRICODE, INC.
_______________
(Exact name of small business issuer as specified in its charter)
Nevada 20-4662814
______ __________
(State of Incorporation or organization) (I.R.S. Employer Identification No.)
112 North Curry Street
Carson City, Nevada, 89703
__________________________
(Address of principal executive offices)
(775) 284-3769
______________
(Issuer's telephone number)
Indicate by check 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 preceding 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 |_|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
rule 12b-2 of the Exchange Act). Yes |X] No |_|
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of October 31, 2009, the
registrant had 18,950,000 shares of common stock, $0.001 par value, issued and
outstanding.
BARRICODE, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED FINANCIAL STATEMENTS
OCTOBER 31, 2009
(UNAUDITED)
CONDENSED BALANCE SHEETS
CONDENSED STATEMENTS OF OPERATIONS
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
CONDENSED STATEMENTS OF CASH FLOWS
NOTES TO CONDENSED FINANCIAL STATEMENT
BARRICODE, INC.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
Year ended Year ended
October 31, 2009 April 30, 2009
(Audited)
ASSETS
CURRENT ASSETS
Cash $ $
229 301
Prepaid Expense
- -
Total Current Assets
229 301
Total Assets $ $
229 301
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable $ $
35,721 30,606
Due to related party
25,002 22,593
Total Current Liabilities
60,723 53,199
Total Liabilities $ $
60,723 53,199
STOCKHOLDERS' EQUITY (DEFICIT)
Capital stock
Authorized
200,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
18,950,000 shares of common stock at October 31, 2009, and
April 30, 2009
18,950 18,950
Additional paid-in capital
425 425
Deficit accumulated during the development stage
(79,869) (72,273)
Total Stockholders' Equity (Deficit)
(60,494) (52,898)
Total liabilities & Stockholders' Equity (Deficit) $ $
229 301
The accompanying notes are an integral part of
these financial statements.
BARRICODE, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months Three months Six months Six months Cumulative from
ended ended ended ended inception (April
October October 31,2008 October October 3, 2006) to
31, 2009 31, 2009 31,2008 October 31, 2009
REVENUE $ $ $ $ $
- - - - -
EXPENSES
Office and general $ $ $ 1,321 $ $ 20,937
660 668 10,937
Professional 3,275 6,275 58,932
fees 2,500 5,137
Loss before income $ $ $ (7,596) $ $ (79,869)
taxes (3,935) (3,168) (16,074)
Provision for Income taxes $ $ $ - $ $ -
- - -
NET $ $ $ (7,596) $ $ (79,869)
LOSS (3,935) (3,168) (16,074)
BASIC AND DILUTED LOSS PER COMMON
SHARE $ $ 0.00 $ 0.00 $ 0.00 $
0.00 0.00
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
- BASIC AND DILUTED
18,950,000 16,377,050 18,950,000 16,377,050
The accompanying notes are an integral part of
these financial statements.
BARRICODE, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (APRIL 3, 2006) TO OCTOBER 31, 2009,
(Unaudited)
Additional Subscription Deficit
Accumulated
During the
Paid-in Development
Common Stock Capital Receivable Stage Total
Number of Amount
shares
Balance, April 3,2006 - $ $ $ $ $
- - - - -
Common stock issued at $0.0005 per share 30,000,000 30,000 (15,000) (15,000) -
on April 26, 2006 (par value $0.001) -
Net loss for year ended April 30, 2006 - - - (1,279) (1,279)
Balance, April 30, 2006 30,000,000 30,000 (15,000) (15,000) (1,279)
(1,279)
Proceeds received from share subscriptions - - - 15,000 - 15,000
receivable
Common stock issued at $0.0025 per share.
(May 1, 2006 to April 30, 2007) 4,950,000 4,950 7,425 - - 12,375
(par value $0.001)
Net loss for year ended April 30, 2007 - - - (8,691) (8,691)
-
Balance, April 30, 2007 34,950,000 $34,950 $ (7,575) - $ $ 17,405
(9,970)
Net loss for year ended April 30, 2008 - - - - (25,000)
(25,000)
Balance, April 30, 2008 34,950,000 $34,950 $ (7,575) - (7,595)
(34,970)
Common stock redeemed at $0.0005 - March
18, 2009 (16,000,000) (16,000) (8,000)
8,000
Net loss for year ended April 30, 2009 - - - - (37,303) (37,303)
Balance , April 30, 2009 18,950,000 18,950 425 - (52,898)
(72,273)
Net loss for the period ended October 31,
2009 (7,596)
(7,596)
Balance, October 31, 2009 18,950,000 $ 18,950 $ 425 $ - $ (79,869) $
(60,494)
he accompanying notes are an integral part of these financial statements.
BARRICODE, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative
results of
Three months Three months Six months Six months operations from
Ended ended Ended ended inception (April
October 31, October 31, October 31, October 31, 3, 2006) to
2009 2008 2009 2008 October 31, 2009
OPERATING ACTIVITIES
Net loss $ $ $ $ $
(3,936) (3,168) (7,596) (16,074) (79,869)
Changes in operating assets and
liabilities
Accrual of Expenses 2,900
(3,132) 5,638 115 35,721
NET CASH FROM OPERATING ACTIVITIES
(1,036) (36) (1,958) (15,959) (44,148)
FINANCING ACTIVITIES
Proceeds from sale of common stock
Increase in Related Party Payable -
- - - 27,375
1,000
- 1,886 10,075 25,002
Portion of Increase in Related Party
Payable from Redemption of Shares
(8,000)
NET CASH FROM FINANCING ACTIVITIES
1,000 - 1,886 10,075 44,377
NET INCREASE (DECREASE) IN CASH
(36) (36) (72) (5,884) 229
CASH, BEGINNING 2,881
265 301 8,729 -
CASH, ENDING $ 229 $ 2,845 $ $ $
229 2,845 229
Supplemental cash flow information:
Cash paid for:
Interest $
$ - $ $ $
- - - -
Income Taxes $
$ - $ $ $
- - - -
NON-CASH ACTIVITIES
Increase in Related Party Payable from
Redemption of Shares $ $ $
$ - - $ 8,000
- -
The accompanying notes are an integral part of
these financial statements.
BARRICODE, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
October 31, 2009
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly
the financial position, results of operations, and cash flows at October
31, 2009, and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. It is suggested that these condensed financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company's April 30, 2009 audited financial statements.
The results of operations for the periods ended October 31, 2009 and 2008
are not necessarily indicative of the operating results for the full
years.
NOTE 2 - GOING CONCERN
The company has incurred losses since inception totalling $79,869
The Company's financial statements are prepared using generally accepted
accounting principles in the United States of America applicable to a
going concern which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. The Company
has not yet established an ongoing source of revenues sufficient to cover
its operating costs and allow it to continue as a going concern. The
ability of the Company to continue as a going concern is dependent on the
Company obtaining adequate capital to fund operating losses until it
becomes profitable. If the Company is unable to obtain adequate capital,
it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among
other things, additional capital resources. Management's plan is to
obtain such resources for the Company by obtaining capital from
management and significant shareholders sufficient to meet its minimal
operating expenses and seeking equity and/or debt financing. However
management cannot provide any assurances that the Company will be
successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent
upon its ability to successfully accomplish the plans described in the
preceding paragraph and eventually secure other sources of financing and
attain profitable operations. The accompanying financial statements do
not include any adjustments that might be necessary if the Company is
unable to continue as a going concern.
NOTE 3 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date
through December 17, 2009 and has determined that there are no events to
disclose.
ITEM 2: MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Overview
Barricode, Inc. (" the Company," "Barricode," "we," "us," "it" and "our" refer
to Barricode, Inc.) was incorporated in the State of Nevada as a for-profit
company on April 3, 2006. Barricode is a development-stage company organized to
enter into the computer security software industry specializing in the
packaging, sales, distribution and support of user-friendly open-source network
security software. Our low cost security software products and services will add
value to open-source code supplied by independent third party providers.
The Company's goal is to become a major supplier and supporter of easy-to-use
open-source network security software that works seamlessly in the background to
protect computers and computer networks. Our "set it and forget it" approach
frees uses to concentrate on the work that makes them more productive while the
security of their systems is monitored automatically without the user being
required to actively monitor the process.
Barricode plans to provide three network security products. The first will be
ChainMail, an easy to use freeware document protection (encryption) application.
ChainMail will allow users to encrypt outgoing email messages and decrypt
incoming messages. The second product is ChainMail Pro, a retail version of
ChainMail that will have more features and functionality than the freeware
version. The third is Impasse, a network intrusion detection application which
monitors networks and detects activity that indicates the presence of an
intruder on the network.
We did not earn any revenues during the three-month period ending October 31,
2009. During the period we incurred operating expenses of $3,935 comprising of
professional fees in the amount of $3,275 and office and administrative expenses
of $660. In the three-month period ending October 31, 2008 we incurred operating
expenses of $3,935.
Plan of Operation
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and
related notes included elsewhere in this report.
This interim report contains forward looking statements relating to our future
economic performance, the plans and objectives of management for future
operations, projections of revenue mix and other financial items that are based
on the beliefs of, as well as assumptions made by and information currently
known to, our management. The words "expects", "intends", "believes",
"anticipates", "may", "could", "should" and similar expressions and variations
thereof are intended to identify forward-looking statements. The cautionary
statements set forth in this section are intended to emphasize that actual
results may differ materially from those contained in any forward looking
statement.
We anticipate that our current cash and cash equivalents and cash generated from
operations, if any, will be insufficient to satisfy our liquidity requirements
for at least the next 12 months. We will require additional funds prior to such
time and the Company will seek to sell additional capital through private equity
placements, debt or other sources of financing. If we are unable to obtain
sufficient additional financing, we may be required to reduce the scope of our
business plan, which could harm our business, financial condition and operating
results. Additional funding to meet our requirements may not be available on
favourable terms, if at all.
Over the next 12 months the company must raise capital and start the procurement
of our security software systems. We plan to first obtain open-source e-mail
encryption and network intrusion software applications that we can customize to
provide initial freeware security applications to a wide variety of computer
users. The estimated cost to customize these applications is $7,000.
The company's primary revenue stream will be derived from subscribers who will
pay a recurring monthly fee to obtain security threat updates and computer
protection software enhancements. We expect the majority of subscribers will pay
for the material by using a credit card. A small percentage of the subscribers,
less than two percent (2%), are expected to pay using a money order sent via the
post office. We will contract with a third party e-commerce gateway provider to
support our e-commerce transactions software required to distribute and receive
payment for our proposed software products. We expect this license to cost
$7,000.
Barricode, Inc intends to develop and operate a website which will feature the
current products and news of our future products. Product documentation
including user's manuals, product registration and other supporting
documentation will also be delivered electronically from our web site in Adobe
PDF format. Website development and content is anticipated to cost $6,000
The final activity will be to procure client functionality modules in order to
augment the network intrusion systems with automatic periodic updates of
resident threat signatures and website integration at an estimated cost of
$8,000.
We also plan to initiate our marketing initiative out of which we expect to
attract a large number of customers (personal and institutional computer network
users) for our security systems. The marketing plan, which includes advertising
in trade journals and attendance at industry trade shows, is estimated to cost
$15,000.
At the present time, we have not made any arrangements to raise any additional
cash to support and enhance product development. If we need additional cash but
are unable to raise it, we will either suspend our development and marketing
operations until we do raise the cash, or cease operations entirely. Other than
as described in this paragraph, we have no other financing plans.
If we are unable to complete any phase of our systems development or marketing
efforts because we don't have enough money, we will cease our development and or
marketing operations until we raise sufficient funding. Attempting to raise
capital after failing in any phase of our software procurement plan would be
difficult. As such, if we cannot secure additional proceeds we will have to
cease operations.
Management does not plan to hire employees at this time. Our sole officer and
director will be responsible for the initial product development. Once the
company has product to market over the Internet, we will hire an independent
consultant to build our website. The company also intends to hire sales
representatives initially on a commission only basis to keep administrative
overhead to a minimum.
We do not expect to purchase or sell plant or significant equipment in the next
twelve months.
Off Balance Sheet Arrangements.
As of the date of this quarterly report, the current funds available to the
Company will not be sufficient to continue operations. The cost to establish the
Company and begin operations is estimated to be approximately $43,000 over the
next twelve months and the cost of maintaining our reporting status is estimated
to be $12,000 over this same period. The officer and director, Mr. Delaney has
undertaken to provide the Company with initial operating capital to sustain our
business over the next twelve month period as the expenses are incurred in the
form of a non-secured loan. However, there is no contract in place or written
agreement securing this agreement. Management believes that if the Company
cannot raise sufficient revenues or maintain its reporting status with the SEC
it will have to cease all efforts directed towards the Company. As such, any
investment previously made would be lost in its entirety.
Other than the above described situation the Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company's financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities
Act of 1934 and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
- - Pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the company;
- - Provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America and that receipts
and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and
- - Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company's assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. 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. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
As of October 31, 2009 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described below. This
was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Chief Executive Officer in connection with the review of our financial
statements as of October 31, 2009.
Management believes that the material weaknesses set forth in items (2) and (3)
above did not have an effect on our financial results. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.
We will continue to monitor and evaluate the effectiveness of our internal
controls and procedures and our internal controls over financial reporting on an
ongoing basis and are committed to taking further action and implementing
additional enhancements or improvements, as necessary and as funds allow.
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
No director, officer, or affiliate of the issuer and no owner of record or
beneficiary of more than 5% of the securities of the issuer, or any security
holder is a party adverse to the small business issuer or has a material
interest adverse to the small business issuer.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities
Act of 1934 and are not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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
31.1 Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer
31.2 Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer *
32.1 Section 1350 Certification of Chief Executive Officer
32.2 Section 1350 Certification of Chief Financial Officer **
* Included in Exhibit 31.1
** Included in Exhibit 32.1
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Barricode, Inc.
BY: /s/ TOM DELANEY
__________________________________________________
Tom Delaney
President, Treasurer, Principal Executive Officer,
Principal Financial Officer and Director
Dated: December 21, 2009