United States
Securities and Exchange Commission
Washington, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
November 30, 2002 000-13822
RESCON TECHNOLOGY CORPORATION
------------------------------
(Exact name of registrant as specified in its charter)
NEVADA
-------
(State or other jurisdiction of incorporation or organization
83-0210455
----------
(I.R.S. Employer Identification No.)
25 Fairchild Avenue, Suite 500, Plainview, New York 11803
----------------------------------------------------------
(Address of principal executive offices)
(516) 576-0600
---------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
None
----
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.
X Yes No
----- -----
State the number of shares outstanding of each of the registrants classes
of common equity, as of the latest practicable date.
Common stock, par value $.0001; 11,258,091 shares outstanding
as of January 10, 2003
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
RESCON TECHNOLOGY CORPORATION
Condensed Balance Sheet
(Unaudited)
<Table>
<Caption>
ASSETS
------
November 30,
2002
-------------
Current Assets
Prepaid professional fees $ 63,567
-------------
Total Current Assets 63,567
Investment in GIT Securities Corp 65,945
-------------
Total Assets $ 129,512
-------------
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
Liabilities
Accounts payable $ 989
-------------
Total Current Liabilities 989
-------------
Total Liabilities 989
-------------
Stockholders' Equity
Common stock 1,126
Additional paid in capital 4,648,995
Accumulated deficit prior to development stage (4,467,609)
Accumulated deficit during the development stage (53,989)
-------------
Total Stockholders' Equity 128,523
-------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 129,512
-------------
</Table>
See accompanying notes
2
RESCON TECHNOLOGY CORPORATION
Condensed Statements of Operations
(Unaudited)
<Table>
<Caption>
For the For the For the
Three Three Development
Months Months Stage
Ended Ended Through
November November November
30, 2002 30, 2001 30, 2002
----------- ----------- -----------
Revenues $ 0 $ 0 $ 0
General & Administrative Expenses 27,120 601 77,216
----------- ----------- -----------
Operating Income (Loss) (27,120) (601) (77,216)
Other Income and Expense
Income from forgiveness of debt 0 0 5,345
Income (Loss) on investment in GIT 26,266 0 17,882
----------- ----------- -----------
Net Income (Loss) Before Taxes (854) (601) (53,989)
Current Year Provision for
Income Taxes 0 0 0
----------- ----------- -----------
Net Income (Loss) $ (854) $ (601) $ (53,989)
----------- ----------- -----------
Income Per Share $ (0.01) $ (0.01) $ (0.01)
----------- ----------- -----------
Weighted Average Number of
Shares Outstanding 11,258,091 3,860,869 4,351,012
----------- ----------- -----------
</Table>
See accompanying notes
3
RESCON TECHNOLOGY CORPORATION
Condensed Statements of Cash Flows
(Unaudited)
<Table>
<Caption>
For the For the For the
Three Three Development
Months Months Stage
Ended Ended Through
November November November
30, 2002 30, 2001 30, 2002
----------- ----------- -----------
Cash Flows Used for Operating Activities:
Net Income (Loss) $ (854) $ (601) $ (53,989)
Adjustments to reconcile net loss to
net cash used for operating activities:
Income from investment in GIT (26,266) 0 (17,882)
Income from forgiveness of debt 0 0 (5,345)
Issued common stock for service or
expenses 0 0 44,682
Increase in accounts payable 920 0 989
Decrease in prepaid expenses 26,200 0 26,200
Expenses paid by shareholders 0 601 5,345
----------- ----------- -----------
Net Cash from operating Activities 0 0 0
Net Increase/(Decrease) in Cash 0 0 0
Beginning Cash Balance 0 0 0
----------- ----------- -----------
Ending Cash Balance 0 0 0
----------- ----------- -----------
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the year for interest $ 0 $ 0 $ 0
Cash paid during the year for income
taxes $ 0 $ 0 $ 0
Issued stock for investment in GIT $ 0 $ 0 $ 48,063
Issued stock for professional fees
contracts $ 0 $ 0 $ 98,500
</Table>
See accompanying notes
4
RESCON TECHNOLOGY CORPORATION
Notes to Condensed Financial Statements
November 30, 2002
PRELIMINARY NOTE
----------------
The accompanying condensed financial statements have been prepared
without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles 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 Annual Report on Form 10-KSB for the year
ended August 31, 2002.
Item 2. Plan of Operations
This Form 10-QSB contains certain forward-looking statements. For
this purpose any statements contained in this Form 10-QSB that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "estimate" or "continue" or comparable
terminology are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainties.
Actual results may differ materially depending on a variety of factors.
For a complete understanding, this Plan of Operations should be read in
conjunction with Part I- Item 1. Financial Statements to this Form 10-QSB.
The Company currently owns 20% of the issued and outstanding common
shares of GIT Securities Corporation, an NASD registered broker-dealer.
The Company acquired this interest pursuant to an Agreement and Plan of
Reorganization it entered into with Radical Technologies, Inc., and GIT on
July 12, 2002. Pursuant to the terms and conditions of the Agreement and
Plan of Reorganization the Company is to acquire 100% of the issued and
outstanding shares of GIT. As an NASD broker-dealer, however, before the
remaining 80% interest in GIT can be transferred to the Company, GIT must
obtain NASD approval of any change in its beneficial ownership that exceeds
25%. GIT is currently seeking NASD approval. Until such time as the NASD
approves the change in beneficial ownership, the 80% interest in GIT shall
not be transferred to the Company. Therefore, in accordance with generally
accepted accounting principles, the financial statements of GIT are not
consolidated with the financial statements of the Company.
The Company has not generated any revenue from sales of products and
has incurred losses since inception. The Company has accumulated losses
from operations, no assets, and a working capital deficiency that raise
substantial doubt about its ability to continue as a going concern. Until
such time as the NASD approves the change in beneficial ownership, the
Company will continue to have very limited business operations and will
likely continue to accumulate losses.
Upon NASD approval of the change in beneficial ownership, the
remaining 80% interest in GIT shall transfer to the Company and GIT will
become a wholly owned subsidiary of the Company. When this occurs, the
principal operations of the Company will become those of GIT. Currently,
revenue from the operations of GIT are sufficient to meet the working
capital needs of GIT without additional capital investments. Upon transfer
of the remaining 80% interest in GIT to the Company, the Company
anticipates the revenues of GIT will be sufficient to meet the capital
needs of GIT and the Company.
5
Item 3. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. The Company's
Chief Executive Officer and Chief Financial Officer has conducted an
evaluation of the Company's disclosure controls and procedures as of a date
(the "Evaluation Date") within 90 days before the filing of this quarterly
report. Based on his evaluation, the Company's Chief Executive Officer and
Chief 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
Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the applicable Securities and
Exchange Commission rules and forms.
(b) Changes in Internal Controls and Procedures. Subsequent to the
Evaluation Date, there were no significant changes in the Company's
internal controls or in other factors that could significantly affect these
controls, nor were any corrective actions required with regard to
significant deficiencies and material weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
No instruments defining the rights of the holders of any class of
registered securities were materially modified, limited or qualified
during the quarter ended November 30, 2002.
The Company issued no securities during the quarter ended November 30,
2002.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
quarter ended November 30, 2002.
6
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(A) Reports on Form 8-K
On September 25, 2002, the Company filed an amendment to the Current
Report on Form 8-K filed on July 23, 2002. This amended Current Report
provided additional disclosure regarding the business of GIT and the
financial statements and pro forma information required under the Rules and
Regulations adopted by the Securities and Exchange Commission.
(B) Exhibits. The following exhibits are included as part of this
report:
Exhibit 99.1 Certification Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this to be signed on its behalf by the
undersigned thereunto duly authorized.
ResCon Technology Corporation,
a Nevada corporation
Dated: January 13, 2003 By:_______________________________
Christian Nigohossian, CEO
8
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
AND PRINCIPAL FINANCIAL OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Christian Nigohossian, certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of ResCon
Technology Corporation, (the "Company");
(2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the Company 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 Company and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the Company 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 Company's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
my evaluation as of the Evaluation Date;
(5) I have disclosed, based on my most recent evaluation, to the
Company's auditors and the audit committee of the Company's board of
directors (or persons fulfilling the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data
and have identified for the Company'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 Company's
internal controls; and
(6) I have indicated in this quarterly report whether or not there
were significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of the
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: January 13, 2003 By: /S/ Christian Nigohossian
--------------------------------------
Christian Nigohossian
Chief Executive Officer and
Chief Financial Officer
9