UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the Fiscal Quarter ended: March 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ________ to __________
Commission file number: 000-26627
Algiers Resources, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 13-4031359
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1090 King George's Post Road, Suite 802
Edison, New Jersey 08837
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(Address of principal executive offices)
(732) 738-6500
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(Issuer's telephone number)
317 Madison Avenue, Suite 2310
New York, NY 10017
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(Former name, former address and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: There were a total of 11,801,976
shares of the registrant's common stock, par value $.001 per share, outstanding
as of April 26, 2003.
- INDEX -
Page(s)
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PART I. Financial Information:
ITEM 1. Financial Statements
Condensed Balance Sheets - March 31, 2003 (Unaudited)
and December 31, 2002 3.
Condensed Statements of Operations (Unaudited) - Cumulative Period
During the Development Stage (October 6, 1998 to March 31, 2003)
and the Three Months Ended March 31, 2003 and 2002 4.
Condensed Statements of Cash Flows (Unaudited) - Cumulative Period
During the Development Stage (October 6, 1998 to March 31, 2003)
and the Three Months Ended March 31, 2003 and 2002 5.
Notes to Interim Condensed Financial Statements (Unaudited) 6. - 9.
ITEM 2. Management's Discussion and Analysis or Plan of Operation 10.
ITEM 3. Controls and Procedures 11.
PART II. Other Information
Item 6 Exhibits and Reports on Form 8-K 12.
SIGNATURES 13.
EXHIBITS 15.
PART I. Financial Information:
ITEM 1. Financial Statements
ALGIERS RESOURCES, INC.
(A Development Stage Company)
BALANCE SHEETS
March 31, December 31,
2003 2002
----------- ------------
(unaudited)
ASSETS
ASSETS:
Cash $ - $ 483
Prepaid expenses - 201
-------- --------
TOTAL ASSETS $ - $ 684
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued expenses $ 10,547 $ 9,030
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TOTAL CURRENT LIABILITIES 10,547 9,030
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STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value 5,000,000 shares
authorized no shares issued and outstanding - -
Common stock, $0.001 par value 40,000,000 shares authorized,
2,545,000 shares issued and outstanding 2,545 2,545
Additional paid-in capital 44,868 44,868
Deficit accumulated during the development stage (57,960) (55,759)
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TOTAL STOCKHOLDERS' (DEFICIT) (10,547) (8,346)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ 684
======== ========
See notes to financial statements.
3
ALGIERS RESOURCES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the
Cumulative
Period from
October 6,
For the Three Months Ended 1998
March 31, (Inception) to
----------------------------------- March 31,
2003 2002 2003
--------------- --------------- ----------------
OPERATING EXPENSES $ 2,201 $ 814 $ 57,960
--------------- --------------- ---------------
NET LOSS $ (2,201) $ (814) $ (57,960)
================ ================ ================
BASIC AND DILUTED LOSS PER COMMON SHARE $ - $ - $ (0.024)
=============== =============== ===============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,545,000 2,545,000 2,341,790
=============== =============== ===============
See notes to financial statements.
4
ALGIERS RESOURCES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Cumulative
For the Year Three Months Period from October 6,
March 31, 1998 (Inception) to
----------------------------------- March 31,
2003 2002 2003
--------------- --------------- ----------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,201) $ (814) $ (57,960)
Adjustments to reconcile net loss to net cash used in operating
activities:
Stock warrants outstanding - - 2,813
Issuance of common stock for services rendered - - 3,950
Exercise of warrants issued for services rendered - - 800
Change in:
Prepaid expenses 201 70 -
Accrued expenses (1,517) 114 10,547
---------------- --------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES (483) (630) (39,850)
---------------- ---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash received for common stock - - 39,850
--------------- --------------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES - - 39,850
--------------- --------------- ---------------
NET (DECREASE) IN CASH (483) (630) -
Cash, beginning of period 483 3,306 -
--------------- ---------------- --------------
CASH, END OF PERIOD $ - $ 2,678 $ -
=============== =============== ==============
See notes to financial statements.
5
ALGIERS RESOURCES, INC.
(A Development Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(a) Organization and Line of Business:
Algiers Resources, Inc. (the "Company") was incorporated on
October 6, 1998 in the State of Delaware. The Company is in
the development stage, and its intent is to operate as a
capital market access corporation and to acquire one or more
existing businesses through merger or acquisition. On May 8,
2003, pursuant to an Agreement and Plan of Merger dated March
20, 2003 (the "Merger Agreement"), Command International
Acquisition Corporation, a Delaware corporation merged with
and into Algiers Merger Co., a recently formed Delaware
subsidiary of the Company. See Note (7) below. The Company had
no significant business activity through March 31, 2003.
Operating expenses incurred to date consist primarily of legal
and accounting fees.
(b) Basis of Presentation:
The Company has been in the development stage since its
inception on October 6, 1998. The Company has incurred losses
from operations. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
(c) Start-Up Costs:
Start-up costs include legal and professional fees. In
accordance with Statement of Position 98-5, "Costs of Start-Up
Activities," these costs have been expensed as incurred.
(d) Estimates:
The preparation of the Company's financial statements in
conformity with generally accepted accounting principles
requires the Company's management to make estimates and
assumptions that affect the amounts reported in these
financial statements and accompanying notes. Actual results
could differ from those estimates.
(e) Loss per Share:
The Company utilizes Statements of Financial Accounting
Standards ("SFAS") No. 128, "Earnings per Share." Basic loss
per share is computed by dividing the loss available to common
stockholders by the weighted-average number of common shares
outstanding. Diluted loss per share is computed similar to
basic loss per share except that the denominator is increased
to include the number of additional common shares that would
have been outstanding if the potential common shares had been
issued and if the additional common shares were dilutive.
Because the Company has incurred net losses, basic and diluted
loss per share are the same.
6
ALGIERS RESOURCES, INC.
(A Development Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
(f) Income Taxes:
The Company uses the asset and liability method of accounting
for income taxes. The asset and liability method accounts for
deferred income taxes by applying enacted statutory rates in
effect for periods in which the difference between the book
value and the tax bases of assets and liabilities are
scheduled to reverse. The resulting deferred tax asset or
liability is adjusted to reflect changes in tax laws or rates.
Because the Company is in the development stage and has
incurred a loss from operations, no benefit is realized for
the tax effect of the net operating loss carryforward due to
the uncertainty of its realization.
(g) Recently Issued Accounting Pronouncements:
In June 2002, the FASB issued SFAS No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities." This
statement addresses financial accounting and reporting for
costs associated with exit or disposal activities and
nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3,
"Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)." This statement
requires that a liability for a cost associated with an exit
or disposal activity be recognized when the liability is
incurred. Under EITF Issue 94-3, a liability for an exit cost,
as defined, was recognized at the date of an entity's
commitment to an exit plan. The provisions of this statement
are effective for exit or disposal activities that are
initiated after December 31, 2002 with earlier application
encouraged.
In December 2002, the FASB issued SFAS No. 148, "Accounting
for Stock-Based Compensation - Transition and Disclosure - an
Amendment to FASB Statement No. 123." SFAS No. 148 amends SFAS
No. 123, "Accounting for Stock-Based Compensation," to provide
alternative methods for transition to SFAS No. 123's fair
value method of accounting for stock-based compensation. As
amended by SFAS No. 148, SFAS No. 123 also requires additional
disclosure regarding stock-based compensation in annual and
condensed interim financial statements. The new disclosure
requirements are effective for financial statements for fiscal
years ending after December 15, 2002.
7
ALGIERS RESOURCES, INC.
(A Development Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 2 - WARRANTS OUTSTANDING:
On April 19, 1999, warrants to purchase 51,000 shares of the
Company's common stock, par value $0.001, were issued to the
placement agent at an exercise price of $0.255 per share. The
shares vest immediately and can be exercised within seven
years from the date of issuance of the warrants. The fair
value of the warrants at the date of issuance was
approximately $2,813 based on the fair value of the placement
agent's services, less cash paid. As of March 31, 2003, the
warrants were still outstanding. Pursuant to the terms and
conditions of the Merger Agreement 51,000 shares of common
stock will be issued to the holder of the warrants on a
cashless basis following the completion of the merger with
Command International.
NOTE 3 - ISSUANCE OF COMMON STOCK:
On November 5, 2001, the Company issued 55,000 shares of
common stock valued at $1,500 for certain professional
services rendered, which were not related to raising capital.
On August 8, 2000, the Company issued 170,000 shares of common
stock valued at $2,450 under various agreements with several
consultants in return for certain professional services
rendered, which were not related to raising capital.
NOTE 4 - RESTRICTED STOCK:
2,170,000 shares of common stock issued to the President and
other stockholders are subject to a Lockup and Registration
Rights Agreement. Under the terms of the agreement, these
shares cannot be sold, pledged, assigned, or otherwise
transferred or hypothecated (a) for a period of six months
after the registration of the common stock and merger and (b)
to the extent of 50% of the shares of the Company, for a
period of 12 months following the consummation of the merger.
An additional 44,853 shares of common stock are restricted
securities as defined in The Securities Act of 1933.
Subsequent to March 31, 2003, the Lock up and Registration
Rights Agreement was superseded by one signed by James
Prestiano, which was filed as an Exhibit to the Company's
Current Report on Form 8-K for April 26, 2003.
NOTE 5 - EXERCISE OF WARRANTS ISSUED:
On June 26, 2000, pursuant to a consulting agreement, warrants
to purchase a total of 150,000 shares of the Company's common
stock, par value $0.001, were issued to various consultants at
an exercise price of $0.01 per share. In September 2000,
holders of these warrants exchanged the warrants for 150,000
shares of common stock, the consideration for which was the
fair value of their services, valued at $800, and a cash
payment of $1,500.
8
ALGIERS RESOURCES, INC.
(A Development Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 6 - RELATED PARTY TRANSACTIONS:
Through March 31, 2003, the Company utilized office space of a
law firm owned by its President/Director. The Company did not
pay any rent for such office space. The President/Director
also provided certain administrative services at no charge to
the Company.
NOTE 7 - SUBSEQUENT EVENT:
On April 26, 2003 (the "Closing Date"), the Merger (as defined
herein) pursuant to an Agreement and Plan of Merger, dated as
of March 20, 2003 (the "Merger Agreement") by and between the
Company, Algiers Merger Co., a Delaware corporation and a
wholly owned subsidiary of the Company ("Merger Sub") and
Command International Acquisition Corporation, a Delaware
corporation ("CIAC") closed. Pursuant to the Merger Agreement,
CIAC was merged with and into Merger Sub (the "Merger") at the
Effective Time (as defined herein), with Merger Sub continuing
as the surviving corporation (the "Surviving Corporation"). As
a result of the Merger, (i) each outstanding share of common
stock, par value $0.0001 per share, of CIAC ("CIAC Common
Stock") was converted into one share of common stock, par
value $0.001 per share ("Common Stock"), of the Company at the
time the Certificate of Merger was filed with Delaware
Secretary of State on May 8, 2003 (the "Effective Time") and
(ii) each outstanding share of common stock, par value $.001
per share, of Algiers Merger Co. shall remain one share of
common stock, par value $.001 per share, of the Surviving
Corporation.
In addition, CIAC entered into a Plan and Agreement of
Reorganization dated as of July 1, 2002, as amended as of
February 24, 2003 ("CIG Agreement"), with Command
International Group Inc. ("CIG") and stockholders of CIG
whereby CIAC was given the right to acquire all of the issued
and outstanding shares of common stock of CIG in exchange for
5,239,238 shares of CIAC Common Stock. CIG is a provider of
web-based and LAN-based software solutions through its
wholly-owned subsidiaries, Command Line Corp., a New Jersey
corporation and Command Internet Corp., a Delaware
corporation. In connection with the Merger Agreement, CIAC
assigned its rights under the CIG Agreement to the Company
pursuant to an Assignment and Assumption Agreement dated as of
April 26, 2003. In accordance therewith, the Company deposited
in escrow with Snow Becker Krauss P.C., counsel to CIAC,
5,239,238 shares of Common Stock of the Company for issuance
to CIG upon the closing of the CIG Agreement. In accordance
therewith, stockholders of CIAC and CIG will receive an
aggregate of 10,478,476 shares of Common Stock of the Company
or approximately 89% of the issued and outstanding Common
Stock.
9
Item 2. Plan of Operation.
Statements contained in this Plan of Operation of this Quarterly Report on Form
10-QSB include "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 as amended (the "Securities Act") and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which could cause the actual results of the Company (sometimes
referred to as "we", "us" or the "Company"), performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements not to occur or be realized. Such forward-looking statements
generally are based upon the Company's best estimates of future results, general
merger and acquisition activity in the marketplace, performance or achievement,
current conditions and the most recent results of operations. Forward-looking
statements may be identified by the use of forward-looking terminology such as
"may," "will," "project," "expect," "believe," "estimate," "anticipate,"
"intends," "continue", "potential," "opportunity" or similar terms, variations
of those terms or the negative of those terms or other variations of those terms
or comparable words or expressions. (See the Company's Form 10-SB and Annual
report on Form 10-KSB for the fiscal year ended December 31, 2002 for a
description of certain of the known risks and uncertainties of the Company.)
General
Our plan is to seek, investigate, and if such investigation warrants, consummate
a merger or other business combination, purchase of assets or other strategic
transaction (i.e. Merger) with a corporation, partnership, limited liability
company or other business entity (a "Merger Target") desiring the perceived
advantages of becoming a publicly reporting and publicly held corporation.
On May 8, 2003, pursuant to an Agreement and Plan of Merger dated March 20, 2003
(the "Merger Agreement"), Command International Acquisition Corporation, a
Delaware corporation merged with and into Algiers Merger Co., a recently formed
Delaware subsidiary of the Company.
Our auditors have included an explanatory paragraph in their report for the year
ended December 31, 2002, indicating that certain conditions raise substantial
doubt regarding our ability to continue as a going concern. The financial
statements included in this Form 10-QSB do not include any adjustment to asset
values or recorded amounts of liability that might be necessary in the event we
are unable to continue as a going concern. If we are in fact unable to continue
as a going concern, shareholders may lose their entire investment in our common
stock.
Equipment and Employees
We have no operating business and thus no equipment and no employees other than
our president, who does not receive a salary. We do not expect to acquire any
equipment or employees.
Expenses for the Three Months Ended March 31, 2003
Net cash used in operating activities for the three months ended March 31, 2003
was $483, as compared to $630 for the three months ended March 31, 2002. The
Company did not have other sources or uses of cash during the three months ended
March 31, 2003. Accordingly cash on hand decreased by $483 for the three months
ended March 31, 2003 to $0. The Company's total liabilities and stockholders'
equity as of March 31, 2003 was reduced by $684 to $0, as compared to total
liabilities and stockholders' equity of $684 at the fiscal year end December 31,
2002.
10
The Company incurred $2,201 of expenses for the three months ended March 31,
2003, which expenses are a result of accounting/auditing, legal, and general
administrative expenses relating to the Company's annual and periodic public
disclosure and reporting requirements. The Company has incurred substantial
expenses, including expenses for professional and other consulting services, in
connection with the negotiation and entering into the merger agreement with
Command International.
Item 3. Control and Procedures.
Controls and Procedures under the Sarbanes-Oxley Act of 2002
Within 90 days prior to the date of this quarterly report on Form 10-QSB for the
quarter ended March 31, 2003, the Company's President, acting as its principal
executive officer and principal financial officer, carried out an evaluation of
the effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Rule 13a-14 of the Securities Exchange Act
of 1934. Based upon that evaluation, the President concluded that the Company's
disclosure controls and procedures are effective in timely alerting him to
material information relating to the Company required to be included in the
Company's periodic SEC filings. There were no significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of the President's most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
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PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit Number Description
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99.1* Certificate of Robert Fallah
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* Filed with this report
(b) Reports on Form 8-K
None
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SIGNATURE
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ALGIERS RESOURCES, INC.
Date: May 19, 2003 BY:/s/ Robert Fallah
-----------------------------
Robert Fallah, Chief Financial Officer
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CERTIFICATION
_________I, Robert Fallah, Chief Financial Officer (principal executive
and financial officer) of Algiers Resources, Inc., certify that:
1. I have reviewed this Quarterly Report on Form 10-QSB of Algiers
Resources, Inc.;
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; and
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. I am 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 me
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 my conclusions about the
effectiveness of the disclosure controls and procedures based
on my evaluation as of the Evaluation Date;
5. I have disclosed, based on my 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. I have indicated in this Quarterly Report whether there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 19, 2003
/s/ Robert Fallah
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Robert Fallah
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