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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended September 30, 2005
[ ] 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: 000-31165
CYGNI INVESTMENTS, INC.
(Exact name of Registrant as specified in charter)
NEVADA 88-0442584
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
3857 BIRCH STREET, #606, NEWPORT BEACH, CA 92660
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (949) 644-0095
Check whether the Issuer (1) has 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 fling requirements for the past 90 days.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
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: At November 14, 2005,
there were 500,001 shares of the Registrant's Common Stock outstanding.
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PART I
ITEM 1. FINANCIAL STATEMENTS
The condensed financial statements included herein 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.
In the opinion of the Company, all adjustments, consisting of only
normal recurring adjustments, necessary to present fairly the financial
position of the Company as of September 30, 2005, and the results of its
operations and changes in its financial position from November 17, 1999,
through September 30, 2005, have been made. The results of its operations
for such interim period is not necessarily indicative of the results to be
expected for the entire year. These condensed financial statements should
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
December 31, 2004.
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Cygni Investments, Inc.
(A Development Stage Company)
Financial Statements
September 30, 2005
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Cygni Investments, Inc.
(A Development Stage Company)
Balance Sheets
<Table>
<Caption>
September December
30, 2005 31, 2004
------------- ------------
(Unaudited)
Assets
Current Assets
- --------------
Total Current Assets $ - $ -
------------- ------------
Liabilities and Stockholders' Equity
Current Liabilities
- -------------------
Accounts Payable $ 31,729 $ 20,811
Interest Payable 11,954 9,591
Note Payable - Related Party 31,563 31,563
------------- ------------
Total Current Liabilities 75,246 61,965
Stockholders' Equity
- --------------------
Common Stock 100,000,000 Shares
Authorized at $.001 Par Value;
500,001 Shares Issued and Outstanding,
retroactively restated 500 500
Additional Paid in Capital 9,500 9,500
Accumulated Deficit during Development Stage (85,246) (71,965)
------------- ------------
Total Stockholders' Equity (Deficit) (75,246) (61,965)
------------- ------------
Total Liabilities and Stockholders' Equity $ - $ -
============= ============
</Table>
The accompanying notes are an integral part of these financial statements.
4
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Cygni Investments, Inc.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<Table>
<Caption>
For the Period
November
For the For the 17, 1999
Three Months Ended Nine Months Ended (Inception)
September September September September to September
30, 2005 30, 2004 30, 2005 30, 2004 30, 2005
------------ ------------ ------------ ------------ ------------
Revenue $ - $ - $ - $ - $ -
------------ ------------ ------------ ------------ ------------
Expenses
- --------
General &
Administrative 790 6,896 10,915 12,256 73,043
------------ ------------ ------------ ------------ ------------
Total Expenses 790 6,896 10,915 12,256 73,043
------------ ------------ ------------ ------------ ------------
Income (Loss)
from Operations (790) (6,896) (10,915) (12,256) (73,043)
Other Income
(Expenses)
- ------------
Interest Expense (789) (911) (2,365) (2,066) (12,203)
------------ ------------ ------------ ------------ ------------
Total Other
Income
(Expenses) (789) (911) (2,365) (2,066) (12,203)
------------ ------------ ------------ ------------ ------------
Net Income
(Loss)
Before Taxes (1,579) (7,807) (13,280) (14,322) (85,246)
Taxes - - - - -
------------ ------------ ------------ ------------ ------------
Net Income
(Loss) $ (1,579) $ (7,807) $ (13,280) $ (14,322) $ (85,246)
============ ============ ============ ============ ============
Loss per
Common Share $ (.00) $ (.02) $ (.03) $ (.03)
============ ============ ============ ============
Weighted
Average
Outstanding
Shares 500,001 500,001 500,001 500,001
============ ============ ============ ============
</Table>
The accompanying notes are an integral part of these financial statements.
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Cygni Investments, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<Table>
<Caption>
For the Period
November
17, 1999
For the Nine Months Ended (Inception)
September September to September
30, 2005 30, 2004 30, 2005
------------ ------------ ------------
Cash Flows from Operating Activities
- ------------------------------------
Net Income (Loss) $ (13,280) $ (14,322) $ (85,246)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
Operating Activities:
Stock Issued for Services - - 2,285
Increase in Accounts Payable 10,915 4,215 35,251
Increase in Interest Payable 2,365 2,066 11,958
------------ ------------ ------------
Net Cash Provided (Used) by
Operating Activities - (8,041) (35,752)
Cash Flows from Investing Activities - - -
- ------------------------------------ ------------ ------------ ------------
Cash Flows from Financing Activities
- ------------------------------------
Issuance of Common Stock for Cash - - 7,715
Issuance of Note Payable for Cash - 8,041 28,037
------------ ------------ ------------
Net Cash Provided (Used) by
Financing Activities - 8,041 35,752
------------ ------------ ------------
Increase (Decrease) in Cash - - -
Cash, Beginning of Period - - -
------------ ------------ ------------
Cash, End of Period $ - $ - $ -
============ ============ ============
Supplemental Cash Flow Information
- ----------------------------------
Interest $ - $ - $ -
Income Taxes - - -
</Table>
The accompanying notes are an integral part of these financial statements.
6
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Cygni Investments, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2005
NOTE 1 - CORPORATE HISTORY
- --------------------------
Cygni Investments, Inc. (the "Company") was incorporated in Nevada on
November 17, 1999, as Cygni Investments, Inc. for the purpose of seeking
and consummating a merger or acquisition with a business entity organized
as a private corporation, partnership, or sole proprietorship.
The Company has yet to fully develop any material income from its stated
primary objective and it is classified as a development stage company. All
income, expenses, cash flows and stock transactions are reported since the
beginning of development stage.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
Cash and Cash Equivalents:
- --------------------------
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
Earnings (Loss) Per Share:
- --------------------------
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
Use of Estimates:
- -----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the reporting period.
In these financial statements, assets, liabilities and earnings involve
extensive reliance on management's estimates. Actual results could differ
from those estimates.
NOTE 3 -INCOME TAXES
- --------------------
The Company adopted Statement of Financial Accounting Standards No. 109
"ACCOUNTING FOR INCOME TAXES" in the fiscal year ended December 31, 2000
and has applied the provisions of the statement to the current year which
resulted in no significant adjustment.
Statement of Financial Accounting Standards No. 109 "ACCOUNTING FOR INCOME
TAXES" requires an asset and liability approach for financial accounting
and reporting for income tax purposes. This statement recognizes (a) the
amount of taxes payable or refundable for the current year and (b) deferred
tax liabilities and assets for future tax consequences of events that have
been recognized in the financial statements or tax returns.
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Cygni Investments, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2005
NOTE 3 -INCOME TAXES (continued)
- --------------------
Deferred income taxes result from temporary differences in the recognition
of accounting transactions for tax and financial reporting purposes.
There were no temporary differences at September 30, 2005 and earlier
years; accordingly, no deferred tax liabilities have been recognized for
all years.
The Company has cumulative net operating loss carryforwards of $85,246 at
September 30, 2005. No effect has been shown in the financial statements
for the net operating loss carryforwards as the likelihood of future tax
benefit from such net operating loss carryforwards is not presently
determinable. Accordingly, the potential tax benefits of the net operating
loss carryforwards, estimated based upon current tax rates at September 30,
2005 have been offset by valuation reserves in the same amount. The net
operating losses begin to expire in 2019.
NOTE 4 - NOTE PAYABLE RELATED PARTY
- -----------------------------------
The Company has issued several promissory notes to various corporations
whose shareholder is an officer of the Company. The notes are unsecured,
bear an interest rate of 10% per annum and are due and payable on demand.
At September 30, 2005, the accrued interest associated with the various
notes was $11,954.
<Table>
<Caption>
September 30, December 31,
The Company has the following note payable obligations: 2005 2004
------------- -------------
(Unaudited)
Related party notes payable due on demand plus accrued
interest at a rate of 10% per annum $ 31,563 $ 31,563
------------- -------------
Totals $ 31,563 $ 31,563
Less Current Maturities (31,563) (31,563)
------------- -------------
Total Long-Term Notes Payable $ - $ -
============= =============
</Table>
Following are maturities of long-term debt for each of the next five years:
<Table>
<Caption>
Year Amount
------------ -------------
2005 $ 31,563
2006 -
2007 -
2008 -
Thereafter -
-------------
Total $ 31,563
=============
</Table>
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Cygni Investments, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2005
NOTE 5 - GOING CONCERN
- ----------------------
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course
of business. Currently, the Company has no cash or other material assets,
nor does it have an established source of revenues sufficient to cover any
anticipated operating costs to allow it to continue as a going concern. It
is the intent of the Company to find additional capital funding and/or a
profitable business venture to acquire or merge.
NOTE 6 COMMON STOCK
- ---------------------
On February 7, 2005, the Board of Directors approved a resolution to effect
a one-for-two reverse split of the Company's issued and outstanding shares
of common stock. The shareholders approved the reverse stock split on
February 8, 2005. The effective date was March 21, 2005. Each share of
common stock issued and outstanding immediately prior to the effective
date was reclassified as and changed into one-half of one share of common
stock. These financial statements have been retroactively restated to
reflect the stock split at December 31, 2004.
The common stock issued pursuant to the reverse stock split is fully paid
and non-assessable. The respective relative voting rights and other rights
that accompany the common stock were not altered by the reverse stock
split, and the common stock continues to have a par value of $0.001 per
share. Consummation of the reverse stock split did not alter the number of
our authorized shares of common stock, which remains at 100,000,000 shares.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
The Company is a development stage company. Since its inception, the
Company has had no operations. The Company was organized for the purpose
of engaging in any lawful activity permitted under Nevada state law;
however, the Company does not have any significant cash or other material
assets, nor does it have an established source of revenues sufficient to
cover operating costs and to allow it to continue as a going concern. The
Company intends to take advantage of any reasonable business proposal
presented which management believes will provide the Company and its
stockholders with a viable business opportunity. The board of directors
will make the final approval in determining whether to complete any
acquisition, but may submit the proposal to the shareholders for final
approval.
The original shareholders contributed a total of $7,715 in cash and
$2,285 in services as capital contributions for stock of the Company.
Since inception the Company has borrowed funds from corporations related to
the Company for operating expenses.
Management estimates that the cash requirements for the year ending
December 31, 2005, will be approximately $9,000, if no change in operations
occurs during the year. Management anticipates that any additional needed
funds will be loaned to the Company on the same or similar terms as those
of other loans to the Company. There are no agreements with any of the
companies and no assurance that all or a portion of these funds will be
loaned to the Company. If the Company is unable to borrow such funds,
management will seek other sources of funding which are currently unknown
to management. There is no assurance that such funding would be available
or that if it is made available, it could be obtained on terms favorable to
the Company.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements, disclosure
documents, and other instruments will require substantial management time
and attention and will require the Company to incur costs for payment of
accountants, attorneys, and others. If a decision is made not to
participate in or complete the acquisition of a specific business
opportunity, the costs incurred in a related investigation will not be
recoverable. Further, even if an agreement is reached for the
participation in a specific business opportunity by way of investment or
otherwise, the failure to consummate the particular transaction may result
in a loss to the Company of all related costs incurred.
Currently, management is not able to determine the time or resources
that will be necessary to locate and acquire or merge with a business
prospect. There is no assurance that the Company will be able to acquire
an interest in any such prospects, products, or opportunities that may
exist or that any activity of the Company, regardless of the completion of
any transaction, will be profitable. If and when the Company locates a
business opportunity, management of the Company will give consideration to
the dollar amount of that entity's profitable operations and the adequacy
of its working capital in determining the terms and conditions under which
the Company would consummate such an acquisition. Potential business
opportunities, no matter which form they may take, will most likely result
in substantial dilution for the Company's shareholders due to the likely
issuance of stock to acquire such an opportunity.
10
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Off-Balance Sheet Arrangements
Management does not believe the Company has any off-balance sheet
arrangements that have, or are reasonable likely to have, a current or
future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital
expenditures, or capital resources which would be material to investors.
ITEM 3. CONTROLS AND PROCEDURES
Evaluation of disclosure and controls and procedure
Carl Suter, the Company's chief executive officer and principal
financial officer, has evaluated the effectiveness of the design and
operation of the Company's disclosure controls and procedures (as defined
in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended)
as of the end of the period covered by this quarterly report. Based on
that evaluation the he has concluded that the Company's disclosure controls
and procedures are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and are operating in
an effective manner.
Changes in internal controls
During the last quarter ended September 30, 2005, there were no
changes in the Company's internal control over financial reporting that
have materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting.
It should be noted that any system of controls, however well designed
and operated, can provide only reasonable and not absolute assurance that
the objectives of the system will be met. In addition, the design of any
control system is based in part upon certain assumptions about the
likelihood of future events. Because of these and other inherent
limitations of control systems, there is only reasonable assurance that our
controls will succeed in achieving their stated goals under all potential
future conditions.
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PART II
OTHER INFORMATION
ITEM 6. EXHIBITS
Exhibits.
31.1 Rule 13a-14(a) Certification by Principal Executive Officer
31.2 Rule 13a-14(a) Certification by Principal Financial Officer
32 Section 1350 Certification of Principal Executive Officer
and Principal Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Cygni Investments, Inc.
Date: November 14, 2005 By: /s/ Carl Suter
-------------------------------------
Carl Suter, President and Treasurer
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
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