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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For Period ended September 30, 2005
Commission File Number: 333-117114
COMLINK COMMUNICATIONS COMPANY
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(Exact Name of Issuer as Specified in Its Charter)
Nevada 4813 30-0220588
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State of Incorporation Primary Standard Industrial I.R.S. Employer
Classification Code Number Identification No.
4127 S. Lamonte Street
Spokane, Washington 99203
(509) 482-1159
(Address and Telephone Number of Issuer's Principal Executive Offices)
4127 S. Lamonte Street
Spokane, Washington 99203
(509) 482-1159
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(Name, Address, and Telephone Number of Agent)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the 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 the number of shares outstanding of each of the issuer's classes of
common stock at the latest practicable date. As of November 11, 2005, the
registrant had 10,560,000 shares of common stock, $0.0001 par value, issued and
outstanding.
Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements - Unaudited
Balance Sheets 3
Statements of Operations 4
Statement of Stockholders' Equity 5
Statements of Cash Flows 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3. Controls and Procedures 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibit and Reports on Form 8-K 12
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
COMLINK COMMUNICATIONS COMPANY.
(A Development Stage Company)
BALANCE SHEETS
(unaudited)
September 30, December 31,
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2005 2004
ASSETS
CURRENT ASSETS
Cash $ 2,713 $ 6,399
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Total current assets $ 2,713 $ 6,399
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Total assets $ 2,713 $ 6,399
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 228 $ 750
Shareholders loan (refer Note 4) 500 --
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Total current liabilities $ 728 $ 750
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STOCKHOLDERS' EQUITY
Common stock, 75,000,000 shares
authorized with $0.001 par value
Issued and outstanding
10,560,000 common shares at
September 30, 2005 and December 31, 2004 10,560 10,560
Additional paid-in capital 8,420 8,420
Accumulated deficit during development stage (16,995) (13,331)
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Total stockholders' equity $ 1,985 $ 5,649
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Total liabilities and stockholder's equity $ 2,713 $ 6,399
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The accompanying notes are an integral part of these financial statements.
3
COMLINK COMMUNICATIONS COMPANY
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(unaudited)
Nov. 12,
2003
(inception)
Three month period Nine month period to
ended September 30, ended September 30, September 30,
2005 2004 2005 2004 2005
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REVENUES $ 3,850 -- $ 4,718 -- $ 4,718
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COST OF GOODS -- -- -- -- --
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Gross Profits $ 3,850 -- $ 4,718 -- $ 4,718
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GENERAL SELLING AND
ADMINISTRATIVE EXPENSES
2,787 4,851 8,382 5,883 21,713
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OPERATING LOSS $ 1,063 $ (4,851) $ (3,664) $ (5,883) $ (16,995)
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NET LOSS FOR THE PERIOD $ 1,063 $ (4,851) $ (3,664) $ (5,883) $ (16,995)
=========================================================================================================
BASIC LOSS PER COMMON SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
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WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 10,560,000 10,560,000 10,560,000 10,007,802
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The accompanying notes are an integral part of these financial statements.
4
COMLINK COMMUNICATIONS COMPANY
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited)
FOR THE PERIOD FROM NOVEMBER 12, 2003 (INCEPTION) TO SEPTEMBER 30, 2005
Deficit
Common Stock Accumulated
------------------------- Additional During
Number of Paid In Development
shares Amount Capital Stage Total
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Issuance of common stock
November 12, 2003, date
of inception 7,500,000 $ 7,500 $ (5,000) $ 0.00 $ 2,500
Contribution of capital 280 -- 280
Net loss, December 31, 2003 -- -- -- (280) (280)
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Balance, December 31, 2003 7,500,000 $ 7,500 $ (4,720) $ (280) $ 2,500
Issuance of common stock 3,060,000 3,060 13,140 16,200
March 30, 2004, forward
split 15:1
Net loss, December 31, 2004 (13,051) (13,051)
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Balance, December 31, 2004 10,560,000 $ 10,560 $ 8,420 $ (13,331) $ 5,649
April 8, 2005, forward
split 2:1
Net loss, September 30, 2005 (3,664) (3,664)
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Balance, September 30, 2005 10,560,000 $ 10,560 $ 8,420 $ (16,995) $ 1,985
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The accompanying notes are an integral part of these financial statements.
5
COMLINK COMMUNICATIONS COMPANY
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(unaudited)
Nov. 12,
2003
(inception)
to
Nine month period September
ended June 30, 30,
2005 2004 2005
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CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss for the period $ (3,664) $ (5,883) $(16,995)
Adjustment to reconcile net loss
to net cash from operating activities:
Accounts payable and accrued liabilities (522) -- 228
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NET CASH USED IN OPERATING ACTIVITIES $ (4,186) $ (5,883) $(16,767)
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CASH FLOWS FROM INVESTING ACTIVITIES -- -- --
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NET CASH FLOWS USED IN INVESTING ACTIVITIES -- -- --
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CASH FLOWS FROM FINANCING ACTIVITIES
Paid-in-capital from officer -- $ 280
Proceeds on sale of common stock -- 16,200 18,700
Proceeds from shareholders loan 500 -- 500
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NET CASH PROVIDED BY FINANCING ACTIVITIES 500 $ 16,200 $ 19,480
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(DECREASE) INCREASE IN CASH $ (3,686) $ 10,317 $ 2,713
CASH, BEGINNING OF PERIOD 6,399 2,500 --
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CASH, END OF PERIOD $ 2,713 $ 12,817 $ 2,713
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Supplemental Information
Interest paid $ 0 $ 0 $ 0
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Income taxes paid $ 0 $ 0 $ 0
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The accompanying notes are an integral part of these financial statements.
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COMLINK COMMUNICATIONS COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
Note 1. Nature of Business and Significant Accounting Policies
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Nature of business
ComLink Communications Company ("Company") was organized November 12, 2003 under
the laws of the State of Nevada. The Company currently has limited operations
and, in accordance with Statement of Financial Accounting Standard (SFAS) No. 7,
"Accounting and Reporting by Development Stage Enterprises," is considered a
Development Stage Enterprise.
The Company is in the business of internet ecommerce website that sells two-way
radio devices and accessories. The Company does not manufacture any equipment or
accessories, but resells two-way communication equipment from various
manufactures.
A summary of the Company's significant accounting policies is as follows:
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash
For the Statements of Cash Flows, all highly liquid investments with maturity of
three months or less are considered to be cash equivalents. There were no cash
equivalents as of September 30, 2005 and December 31, 2004.
Revenue Recognition
The Company is engaged in the sale of two-way radio devices through a website on
the internet. The Company recognizes the revenue at the time of shipping of the
product when responsibility of the product is transferred to the purchaser and
payment has been accepted or assured. The Company does not carry an inventory.
Instead, the product sold is drop shipped directly from the supplier to the
customer. In this capacity, the company is acting as an agent for the supplier
and under EITF 99-19 recognizes transactions on the net basis.
Income taxes
Income taxes are provided for using the liability method of accounting in
accordance with SFAS No. 109 "Accounting for Income Taxes." A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax basis. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effect of
changes in tax laws and rates on the date of enactment.
Recent Accounting Pronouncements
In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment
of Accounting Research Bulletin No. 43, Chapter 4" ("SFAS No. 151"). SFAS No.
151 requires that abnormal amounts of idle facility expense, freight, handling
costs and wasted materials (spoilage) be recorded as current period charges and
that the allocation of fixed production overheads to inventory be
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COMLINK COMMUNICATIONS COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
based on the normal capacity of the production facilities. SFAS No. 151 becomes
effective for our Company on January 1, 2006. The Company does not believe that
the adoption of SFAS No. 151 will have a material impact on our consolidated
financial statements.
In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based
Payment." SFAS No. 123R replaced SFAS No. 123 and superseded Accounting
Principles Board Opinion No. 25. SFAS No. 123R will require compensation costs
related to share-based payment transactions to be recognized in the financial
statements. The effective date of SFAS No. 123R is the first reporting period
beginning after June 15, 2005. The adoption of SFAS No. 123 (revised 2004)
should not have a significant impact on the Company's financial position or
results of operations until such time the Company has share-based payments. The
Company will adopt the provisions of SFAS No. 123R at that time.
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29" ("SFAS No. 153"). SFAS No. 153 is
based on the principle that exchanges of nonmonetary assets should be measured
based on the fair value of the assets exchanged. APB Opinion No. 29, "Accounting
for Nonmonetary Transactions," provided an exception to its basic measurement
principle (fair value) for exchanges of similar productive assets. Under APB
Opinion No. 29, an exchange of a productive asset for a similar productive asset
was based on the recorded amount of the asset relinquished. SFAS No. 153
eliminates this exception and replaces it with an exception of exchanges of
nonmonetary assets that do not have commercial substance. SFAS No. 153 became
effective for our Company as of July 1, 2005. The Company will apply the
requirements of SFAS No. 153 on any future nonmonetary exchange transactions.
In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of APB No. 20 and FASB Statement No. 3" ("SFAS No.
154"). SFAS No. 154 requires retrospective application to prior periods'
financial statements of a voluntary change in accounting principle unless it is
impracticable. APB Opinion No. 20 "Accounting Changes," previously required that
most voluntary changes in accounting principle be recognized by including in net
income of the period of the change the cumulative effect of changing to the new
accounting principle. This statement is effective for our Company as of January
1, 2006. The Company does not believe that the adoption of SFAS No. 154 will
have a material impact on our consolidated financial statements.
Going Concern
The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Currently, the Company does not have significant cash of
other material assets, nor does it have operations or a source of revenue
sufficient to cover its operation costs and raises substantial doubt about its
ability to continue as a going concern. The Company will be dependent upon the
raising of additional capital through placement of our common stock in order to
continue with the business plan. There can be no assurance that the Company will
be successful in raising the capital it requires through the sale of our common
stock in order to continue as a going concern. For the start up operations until
the Company began raising equity, the stockholders, officers, and directors
advanced the operating costs of the company.
Note 2. Stockholders' Equity
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Common stock
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COMLINK COMMUNICATIONS COMPANY
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
The authorized common stock of the Company consists of 75,000,000 shares with
par value of $0.001. On November 12, 2003, the Company authorized and issued
3,750,000 shares of $0.001 par value common stock at par in consideration of
$2,500 in cash to the officers of the Company.
>From February 3 through February 23, 2004, the Company sold 1,080,000 shares of
stock to individuals and companies at $0.00667 per share, raising $7,200. From
March 1, 2004 through March 8, 2004, the Company sold 450,000 shares of stock
for foreign investors for $0.02 per share raising $9,000.
On March 30, 2004, The Company's shareholders approved a forward split of its
common stock of fifteen (15) shares for one (1) share of existing stock for
shareholders of record on March 30, 2004. The number of common stock shares
outstanding increased from 352,000 to 5,280,000. Prior period information has
been restated to reflect the stock split.
On April 8, 2005, The Company's shareholders approved a forward split of its
common stock of two (2) shares for one (1) share of existing stock for
shareholders of record on April 8, 2005. The number of common stock shares
outstanding increased from 5,280,000 to 10,560,000. Prior period information has
been restated to reflect the stock split.
Net loss per common share
Net loss per share is calculated in accordance with SFAS No. 128, "Earnings Per
Share." The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. Diluted loss per share is
computed using the weighted averaged number of shares and dilutive potential
common shares outstanding. Dilutive potential common shares are additional
common shares assumed to be exercised.
Basic net loss per common share is based on the weighted average number of
shares of common stock outstanding of 10,560,000 for the three and nine-month
periods ending September 30, 2005 and the three-month period ending September
30, 2004, and 10,007,802 for the nine-month period ended September 30, 2004. As
of September 30, 2005 and 2004 the Company had no dilutive potential common
shares. All share amounts have been restated to reflect the 15:1 forward split
on March 30, 2004 and the 2:1 forward split on April 8, 2005.
Note 2. Income Taxes
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We did not provide any current or deferred U.S. federal income tax provision or
benefit for any of the periods presented because we have experienced operating
losses since inception. We provided a full valuation allowance on the net
deferred tax asset, consisting of net operating loss carryforwards, because
management has determined that it is more likely than not that we will not earn
income sufficient to realize the deferred tax assets during the carryforward
period.
The components of the Company's deferred tax asset as of December 31,2004 is as
follows:
2004
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Net operating loss carryforward $ 4,666
Valuation allowance (4,666)
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Net deferred tax asset $ 0
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A reconciliation of income taxes computed at the statutory rate to the income
tax amount recorded is as follows:
2004 Since Inception
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Tax at statutory rate (35%) $ 4,568 $ 4,666
Increase in valuation allowance (4,568) (4,666)
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Net deferred tax asset $ 0 $ 0
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The net federal operating loss carry forward will expire in 2023 through 2024.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
9
COMLINK COMMUNICATIONS COMPANY
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
Note 3. Related Party Transactions
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The Company neither owns nor leases any real or personal property. The officers
of the corporation provide office services without charge. Such costs are
immaterial to the financial statements and accordingly, have not been reflected
therein. The officer and director for 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 interest. The Company has not formulated a policy for the resolution of
such conflicts. The loss of the services of its officer or director may have a
negative impact on the further development of the business.
An officer and director of the company loaned $500 to the Company. There are no
definite repayment terms or accruing interest on the advance.
Note 4. Warrants and Options
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There are no warrants or options outstanding to acquire any additional shares of
common stock of the Company.
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES SUCH AS THE DEPENDENCE OF THE COMPANY ON AND THE ADEQUACY OF CASH
FLOWS. THESE FORWARD-LOOKING STATEMENTS AND OTHER STATEMENTS MADE ELSEWHERE IN
THIS REPORT ARE MADE IN RELIANCE ON THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995.
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Item 2. Plan of Operations
ComLink Communications Company is a development stage company that plans to sell
2-way communications equipment and accessories specifically through the Internet
medium. The Company is in the process of developing an e-commerce enabled
website which will attract prospective industrial clientele, businesses,
municipalities and individual customers. The Company has begun development of
the web site (www.comlinkcommunications.com) and plans to continue the
development of the website to a level of full electronic commerce capabilities,
which will be used to offer 2-way communications equipment for sale to the
consumer. ComLink plans to have the website fully operational by the end of the
fourth quarter of 2005. However, management cannot guarantee or provide assure
that the site will be operational at this time.
For the three month period ended September 30, 2005, the Company has generated
revenues of $3,850 compared to $0 revenues for the three month period ended
September 30, 2004. The revenue was a result of communication consultation
services performed by the Company to one customer. The Company cannot provide
any assurance that it will continue to generate revenue in the future. The
primary focus of the Company for the fourth quarter of 2005 is to complete the
development of its web site.
Cash Requirements and Need for Additional Funds
As of September 30, 2005, the current cash on hand was $2,713. These funds will
be directed towards maintaining the requirements of a reporting company under
the 1934 Act, which will generally include accounting, legal and EDGAR filing
fees. Management believes the current funds available to the Company will not be
sufficient for the continued ongoing operational costs of the Company beyond the
next ninety to one hundred and twenty days. Therefore, it will be necessary to
find additional funds either through loans from the officer and/or directors, or
through private funding from the sale of the Company's common stock. Currently,
no steps have been taken for the furtherance of an offering of the Company's
common stock. If the Company is unsuccessful in beginning operations and
generating revenue or in the alternative is unsuccessful in obtaining additional
funding, it will most likely be unable to continue as a going concern, which
would result in the complete loss of any investment made into the Company.
In September of 2005 the Company's common stock was cleared for an unpriced
quotation on the OTC Bulletin Board. As of the date of this report there have
been no recorded trades of the common stock on any exchange.
Product Research and Development
The Company does not anticipate any costs or expenses to be incurred for product
research and development within the next twelve months.
There were none and there is no anticipated purchase or sale of plant or
significant equipment in the next twelve months.
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There are no employees of the Company, excluding the current President, James
Bell, and Director, Daniel Brailey, of the corporation and no changes are
anticipated in the next twelve months.
Item 3. Controls and Procedures
Regulations under the Securities Exchange Act of 1934 require public companies
to maintain "disclosure controls and procedures," which are defined to mean a
company's controls and other procedures that are designed to ensure that
information required to be disclosed in the reports that it files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Commission's rules and forms.
The Company's Chief Executive Officer, based on his evaluation of the Company's
disclosure controls and procedures within 90 days before the filing date of this
report, concluded that the Company's disclosure and procedures were effective
for this purpose.
Changes In Internal Controls.
There were no significant changes in the Company's internal controls or, to the
Company's knowledge, in other factors that could significantly affect these
controls subsequent to the date of their evaluation.
PART II - OTHER INFORMATION
Item 1. Not applicable.
Item 2. Not applicable.
Item 3. Not applicable.
Item 4. Not applicable.
Item 5. Not applicable.
Item 6. Not applicable.
Exhibit Number Description
31.1 Section 302 Certification of Chief Executive Officer
and Chief Financial Officer
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of The Sarbanes-Oxley
Act of 2002
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.
ComLink Communications Company.
Dated: November 11, 2005 /s/ James Bell
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James Bell
Chief Executive Officer and
Chief Financial Officer
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