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 quarterly period ended: SEPTEMBER 30, 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
KEY COMMAND INTERNATIONAL CORP.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 13-4031359
------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
C/O VERTICAL CAPITAL PARTNERS, INC.
488 MADISON AVENUE
NEW YORK, NY 10022
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(Address of principal executive offices)
(212) 446-0006
---------------------------
(Issuer's telephone number)
COMMAND INTERNATIONAL CORPORATION
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) 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 filing requirements for the past 90 days. Yes [_] No [X]
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 96,473,040 shares of the
registrant's common stock, par value $.0001 per share, outstanding as of October
7, 2004.
Transitional Small Business Disclosure Format (Check one): Yes [_] No [X]
- INDEX -
Page(s)
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheet as of
September 30, 2003 (Unaudited) F-1
Condensed Consolidated Statements of Operations
for the Nine Months and Three Months Ended
September 30, 2003 and 2002 (Unaudited) F-2
Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 2003 and 2002
(Unaudited) F-3 - F-4
Notes to Condensed Consolidated Interim Financial
Statements (Unaudited) F-5 - F-16
Item 2. Management's Discussion and Analysis or Plan of Operation 2
Item 3. Controls and Procedures 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 6
Item 2. Changes in Securities 6
Item 4. Submission of Matters to a Vote of Security Holders 6
Item 6. Exhibits and Reports on Form 8-K 7
Signature Page 8
Exhibit 31.1
Exhibit 32.1
i
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2003 AND 2002
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Financial Statements
Balance Sheet as of September 30, 2003 F-1
Statements of Operations for the Nine and Three Months Ended
September 30, 2003 and 2002 F-2
Statements of Cash Flows for the Nine Months Ended
June 30, 2003 and 2002 F-3 - F-4
Notes to Condensed Consolidated Financial Statements F-5
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2003
(UNAUDITED)
ASSETS
2003
-----------
Current Assets:
Cash and cash equivalents $ 38,563
Accounts receivable, net 101,359
-----------
Total Current Assets 139,922
-----------
Fixed assets, net of depreciation 20,990
-----------
Other Assets:
Intangible assets - goodwill, net of impairment 250,000
-----------
TOTAL ASSETS $ 410,912
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Current Liabilities:
Notes payable - banks $ 15,500
Taxes payable 143,626
Deferred revenue 7,401
Accounts payable and accrued expenses 484,302
-----------
Total Current Liabilities 650,829
-----------
Officers loans payable 486,840
-----------
TOTAL LIABILITIES 1,137,669
-----------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.001 par value, 5,000,000 shares authorized,
0 shares issued and outstanding --
Common stock, $.001 Par Value; 40,000,000 shares authorized
12,051,976 shares issued and outstanding 12,051
Additional paid-in capital --
Retained earnings (deficit) (738,808)
-----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (726,757)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 410,912
===========
The accompanying notes are an integral part of the condensed consolidated
financial statements
F-1
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
--------------------------- --------------------------
OPERATING REVENUES
Sales $ 640,036 $ 620,259 $ 235,559 $ 219,565
OPERATING EXPENSES
Salaries, commissions and payroll related expenses 547,157 521,782 193,600 178,099
Production expense 3,501 12,976 1,620 11,471
Rent 39,575 75,591 15,033 29,246
Travel and automobile expenses 3,140 5,296 1,586 2,151
Telephone 12,393 12,285 3,944 5,330
Advertising and promotion 1,637 5,850 995 1,531
Office and administrative 84,424 17,224 22,677 4,986
Insurance 2,013 2,056 730 160
Bad debt 70,427 -- 60,427 --
Professional fees 93,371 22,483 77,308 6,695
--------------------------- --------------------------
TOTAL OPERATING EXPENSES 857,638 675,543 377,920 239,669
--------------------------- --------------------------
LOSS BEFORE OTHER INCOME (EXPENSE) (217,602) (55,284) (142,361) (20,104)
OTHER INCOME (EXPENSE)
Depreciation and amortization (20,987) (19,373) (6,996) (1,500)
Impairment of intangible assets (532,800) -- (532,800) --
Gain on purchase 122,816 -- --
Gain on sale of automobile -- 2,911 -- --
Interest income 5 32 -- 4
Interest expense (1,018) (2,067) (187) (394)
--------------------------- --------------------------
TOTAL OTHER INCOME (EXPENSE) (554,800) 104,319 (539,983) (1,890)
--------------------------- --------------------------
NET INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES $ (772,402) $ 49,035 $ (682,344) $ (21,994)
PROVISION FOR INCOME TAXES (335) (847) (335) (208)
--------------------------- --------------------------
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES $ (772,737) $ 48,188 $ (682,679) $ (22,202)
=========================== ==========================
NET INCOME (LOSS) PER BASIC AND DILUTED SHARES $ (0.07997) $32.14676 $ (0.05664) $(14.81121)
=========================== ==========================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 9,662,238 1,499 12,051,976 1,499
=========================== ==========================
The accompanying notes are an integral part of the condensed consolidated
financial statements
F-2
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
2003 2002
--------- ---------
CASH FLOW FROM OPERATING ACTIVITES
Net income (loss) $(772,737) $ 48,188
--------- ---------
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities
Depreciation and amortization 20,987 19,373
Provision for bad debt 70,427
(Gain) on sale of automobile -- (2,911)
(Gain) on purchase -- (122,816)
Common stock issued for services 250 --
Impairment of intangible assets 532,800 --
CHANGES IN ASSETS AND LIABILITIES
(Increase) in accounts receivable (1,964) (65,544)
Increase (decrease) in deferred revenue (52,622) 15,562
Inecrease (decrease) in accounts payable and
accrued expenses 252,655 (8,387)
--------- ---------
Total adjustments 822,533 (164,723)
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 49,796 (116,535)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITES
Loans from officer, net (20,511) 66,995
Proceeds (repayment) of line of credit, net (14,500) 35,000
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (35,011) 101,995
--------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 14,785 (14,540)
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 23,778 66,453
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 38,563 $ 51,913
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
CASH PAID DURING THE YEAR FOR:
Interest expense $ 930 $ 2,067
========= =========
The accompanying notes are an integral part of the condensed consolidated
financial statements
F-3
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
2003 2002
----------- -----------
SUPPLEMENTAL DISCLOSURE OF NONCASH
ACTIVITIES:
Net effect of asset acquisitions between
Spiderfuel and CIC
Common stock $ -- $ (1,605)
Additional paid in capital -- (1,802,324)
Deficit -- 2,293,929
Note payable -- (240,000)
Other loans payable -- (250,000)
----------- -----------
$ -- $ --
=========== ===========
Net effect of stock acquisition between CLC and CIGI
Common stock $ -- $ (25,000)
Additional paid in capital -- (184,264)
Deficit -- 81,647
Fixed assets -- 16,982
Other receivable -- 93
Security deposits -- 1,343
Accounts payable -- (13,617)
----------- -----------
Extraordinary item - gain on purchase $ -- $ (122,816)
=========== ===========
Net effect of stock acquisition between CIC and CIGI
Common stock $ 12,051 $ --
Additional paid in capital -- --
Deficit (22,598) --
Accounts payable 10,547 --
----------- -----------
$ -- $ --
=========== ===========
The accompanying notes are an integral part of the condensed consolidated
financial statements
F-4
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2004 AND 2003
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
The condensed consolidated unaudited interim financial statements
included herein have been prepared without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. The
condensed consolidated financial statements and notes are presented
as permitted on Form 10-QSB and do not contain information included
in the Company's annual consolidated financial statements and notes.
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 pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that
these condensed consolidated financial statements be read in
conjunction with the December 31, 2002 audited financial statements
of the Company and the accompanying notes thereto. While management
of the Company believes the procedures followed in preparing these
condensed consolidated financial statements are reasonable, the
accuracy of the amounts are in some respects dependent upon the
facts that will exist, and procedures that will be accomplished by
the Company later in the year.
Command Line Corp. ("CLC") was formed on January 8, 1985 in the
State of New Jersey and is qualified to do business in several other
states. CLC markets interactive systems used in manufacturing,
purchasing and maritime management. CLC specializes in modifying
existing application software to fit a customer's unique business
needs. All of CLC's products can be run on either a PC network or in
a Web environment.
Spiderfuel, Inc. was originally incorporated in the State of
Delaware on February 13, 1997 under the name of Global Internet
Group, Inc. Global Internet Group, Inc. changed its corporate name
to PlanetWebcom.com on November 2, 1999, and on November 21, 2000,
to Spiderfuel, Inc. ("Spiderfuel").
Spiderfuel is a provider of web-based software and implementation
services. Spiderfuel helps companies use technologies, like the
Internet, to build closer customer relationships, increase their
revenues and reduce their operating expenses. Spiderfuel's
completely integrated applications suite helps mid-sized businesses
run their growing businesses more efficiently.
On May 21, 2002, Command Internet Corp. ("CIC") was formed. On May
22, 2002, CIC entered into an Asset Purchase Agreement with
Spiderfuel, whereby CIC acquired all of the assets, and assumed a
portion of the liabilities, of Spiderfuel, in exchange for 1,334
shares of common stock of CIC (See Note 12). For purposes of these
financial statements, CIC is synonymous with Spiderfuel post-merger.
On May 29, 2002, CLC entered into a Stock Purchase Agreement with
Command International Group, Inc. ("CIGI"), whereby CIGI acquired
all of the capital stock of CLC in exchange for 165 shares of common
stock of CIGI; and therefore, CLC became a wholly-owned subsidiary
of CIGI (See Note 13).
F-5
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
On June 3, 2002, CIC entered into a Stock Purchase Agreement with
CIGI, whereby CIGI acquired all of the capital stock of CIC; and
therefore, CIC became a wholly-owned subsidiary of CIGI (See Note
14).
Command International Acquisition Corporation, a Delaware
corporation ("CIAC") entered into an Agreement and Plan of
Reorganization dated as of July 1, 2002, as amended as of February
24, 2003 (the "CIG Agreement"), with CIGI and stockholders of CIGI,
whereby CIAC was given the right to acquire all of the issued and
outstanding common stock of CIGI in exchange for shares of common
stock of CIAC.
Algiers Resources, Inc., a Delaware corporation ("Algiers") was
formed on October 6, 1998, as a blind pool. On April 26, 2003,
pursuant to an Agreement and Plan of Merger dated as of March 20,
2003 (the "Merger Agreement"), CIAC merged (the "Merger") with and
into Algiers Merger Co., a Delaware corporation and wholly-owned
subsidiary of Algiers ("Algiers Merger Co."), with Algiers Merger
Co. continuing as the surviving entity. As a result of the Merger,
Algiers Merger Co. changed its corporate name to Command
International Corporation and each issued and outstanding share of
common stock, par value $0.001 per share, of CIAC was converted into
one share of common stock, par value $0.001 per share, of Algiers.
Accordingly, stockholders of CIAC received an aggregate of 5,239,238
shares of common stock of Algiers. In addition, pursuant to the
Merger, the former president of Algiers retired 1,272,500 shares of
common stock of Algiers.
In connection with the Merger Agreement and pursuant to the
Assignment and Assumption Agreement dated as of March 20, 2003, by
and between CIAC and Algiers, CIAC assigned to Algiers all of its
right, title and interest, subject to any and all liabilities in
connection therewith, to acquire 1,500 shares of common stock of
CIGI, constituting all of the issued and outstanding common stock of
CIGI, in (a tax-free) exchange for 5,239,238 shares of common stock
of the Algiers under the CIGI Agreement. In accordance therewith, on
April 26, 2003, Algiers deposited in escrow with Snow Becker Krauss
P.C., 5,239,238 shares of its common stock for issuance to
stockholders of CIGI upon the closing of the CIGI Agreement.
On July 7, 2003, Command International Corporation (f/k/a Algiers
Merger Co.) merged with and into Algiers, with Algiers continuing as
the surviving entity and changed its name from Algiers Resources,
Inc. to Command International Corporation (the "Company").
On May 12, 2004, the Company sold to Staffin Group International,
LLC ("Staffin") 100 shares of its wholly - owned subsidiary CLC,
which constituted all of the issued and outstanding capital stock of
CLC. In consideration of the CLC shares, Staffin surrendered 578,936
shares of the Company representing 100% of its ownership in the
Company.
F-6
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
On July 6, 2004, the Company amended its Articles of Incorporation
and increased the authorized number of its common stock from
40,000,000 to 100,000,000 and changed the par value per share from
$0.001 to $0.0001. In addition, the Company changed its name to Key
Command International Corp.
On August 17, 2004, the Company issued 85,000,000 sharers of common
stock to five investors for cash of $8,500.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The condensed consolidated financial statements include the accounts
of CIC and CLC. All significant intercompany accounts and
transactions have been eliminated in the consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosures 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.
REVENUE RECOGNITION
Revenue is recognized under the accrual method of accounting whereby
revenue is recognized as the contracts enter different phases of
completion. Contracts may have different phases until they are fully
completed, and management records revenue on these contracts as each
phase is completed and installed. Typical contracts take anywhere
from six to nine months to complete. All costs incurred in servicing
these contracts are expensed as incurred.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments and other
short-term investments with an initial maturity of three months or
less to be cash equivalents.
The Company maintains cash and cash equivalent balances at financial
institutions which are insured by the Federal Deposit Insurance
Corporation up to $100,000.
F-7
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FIXED ASSETS
Fixed assets are stated at cost. Depreciation is computed primarily
using the straight-line method over the estimated useful life of the
assets.
Machinery and equipment 3-5 Years
Furniture and fixtures 5-7 Years
Automobile 5 Years
INCOME TAXES
Income taxes are computed on the pretax income, offset by
pre-existing net operating losses, based on the current tax law.
Deferred income taxes are recognized for the tax consequences in
future years of differences between the tax basis of assets and
liabilities and their financial reporting amounts at each year-end
based on enacted tax laws and statutory tax rates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount reported in the condensed consolidated balance
sheet for cash and cash equivalents, accounts receivable, accounts
payable and loans payable approximate fair value because of the
immediate or short-term maturity of these financial instruments.
F-8
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Historical net income (loss) per common share is computed using the
weighted average number of common shares outstanding. Diluted
earnings per share (EPS) includes additional dilution from common
stock equivalents, such as stock issuable pursuant to the exercise
of stock options and warrants. Common stock equivalents were not
included in the computation of diluted earnings per share at
September 30, 2003 when the Company reported a loss because to do so
would be anti-dilutive for periods presented.
The following is a reconciliation of the computation for basic and
diluted EPS:
September 30, September 30,
2003 2002
---- ----
Net Income (Loss) ($772,737) $ 48,188
---------- ---------
Weighted-average common shares
outstanding (Basic) 9,662,238 1,499
Weighted-average common stock
equivalents:
Stock options -- --
Warrants -- --
---------- ---------
Weighted-average common shares
outstanding (Diluted) 9,662,238 1,499
========== =========
ADVERTISING
Costs of advertising and promotion are expensed as incurred.
Advertising costs were $1,637 and $5,850 for the nine months ended
September 30, 2003 and 2002.
ACCOUNTS RECEIVABLE
CIC has established a reserve for doubtful accounts for contracts
entered into that have the potential of not being completed due to
circumstances beyond the control of CIC. The allowance for doubtful
accounts is adjusted by management of CIC on a regular basis. At
September 30, 2003, the allowance for doubtful accounts was
$124,624.
DEFERRED REVENUE
Deferred revenue represents the portion of the contracts that will
be realized in the subsequent reporting period. Deferred revenue at
September 30, 2003 was $7,401.
F-9
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INTANGIBLE ASSETS
Intangible assets were stated at cost. Amortization was computed
using the straight-line method over fifteen years. Amortization
expense for the year ended December 31, 2001 was $75,000.
Additionally, in 2001, Spiderfuel determined that the intangible
assets that were acquired have been impaired according to FASB 142,
"Goodwill and Other Intangible Assets". Originally, the intangible
assets were recorded by management at $2 per share for the 750,000
shares given to The Strategy Factory, Inc. (See Note 11). After one
full year of operations, Spiderfuel impaired the remaining
unamortized balance to just over $1 per share at $782,800. As such,
Spiderfuel recorded a one-time charge to operations in the amount of
$608,870 as impairment of intangible assets in 2001. Management has
impaired this balance to $250,000 at September 30, 2003. As such,
$532,800 is reflected as impairment of intangible assets in the
consolidated statements of operations for the nine months ended
September 30, 2003.
GOODWILL
In connection with the Asset Purchase Agreement between Spiderfuel
and CIC on May 22, 2002, the fair value of the assets acquired
approximated the fair value of the liabilities assumed by CIC.
Therefore, no goodwill was recorded in the transaction. This
transaction did impact the condensed consolidated financial
statements for the nine months ended September 30, 2002.
In connection with the Stock Purchase Agreement between CLC and CIG
on May 29, 2002, the fair value of the assets acquired and
liabilities assumed by CIGI resulted in a negative goodwill amount
of $141,234. After applying the negative goodwill amount to
F-10
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
GOODWILL (CONTINUED)
fixed assets ($16,982), other receivables ($93), and security
deposits ($1,343), the net effect was an extraordinary item for the
gain on purchase of $122,816, which is reflected in the consolidated
statements of operations in 2002. This transaction did impact the
condensed consolidated financial statements for the nine months
ended September 30, 2002.
In connection with the Stock Purchase Agreement between CIC and CIGI
on June 3, 2002, virtually no change in value occurred due to the
transactions being only two weeks apart, with the fair values
unchanged, and the stock issued to CIC was for the identical number
of shares and par value. Therefore, no goodwill was recorded. This
transaction did impact the condensed consolidated financial
statements for the nine months ended September 30, 2002.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board issued
Statement No. 142 "Goodwill and Other Intangible Assets". This
statement addresses financial accounting and reporting for acquired
goodwill and other intangible assets and supersedes APB Opinion No.
17, Intangible Assets. It addresses how intangible assets that are
acquired individually or with a group of other assets (but not those
acquired in a business combination) should be accounted for in
financial statements upon their acquisition. This statement also
addresses how goodwill and other intangible assets should be
accounted for after they have been initially recognized in the
financial statements. This statement has been considered when
determining impairment of intangible assets in certain transactions.
NOTE 3 - OFFICERS LOANS PAYABLE
The CIC loans represent advances to and from its President. These
loans are interest-free and are not anticipated to be paid in the
next year, and therefore are reflected as long-term liabilities. The
balances due such officer at September 30, 2003 was $486,840.
NOTE 4- OTHER LOANS PAYABLE
Represents amounts due to third parties, unrelated to Spiderfuel.
Amounts were utilized to provide software implementation for various
projects started by Spiderfuel. These loans were non-interest
bearing, had no determined due date, and Spiderfuel's management had
determined its classification to be long-term. These other loans at
September 30, 2002 were not part of CIC due to the fact that they
remained with Spiderfuel and were not assumed by CIC at the time of
the Asset Purchase Agreement between CIC and Spiderfuel on May 22,
2002. These liabilities remain with Spiderfuel and are anticipated
to be paid by that company.
F-11
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 5 - LINE OF CREDIT
CLC had lines of credit with two banks. Under each line of credit
the maximum borrowing amount was $50,000 each. Only one of these
lines of credit was borrowed against. This line of credit had a
current interest rate of 5.75% prior to expiring. Once these lines
expired, the Company entered into a line of credit with another bank
with availability of $100,000 at September 30, 2003. As of September
30, 2003, there was $15,500 drawn against this line of credit. The
interest expense on the lines of credit were $1,018 and $2,067 for
the nine months ended September 30, 2003 and 2002, respectively.
NOTE 6- NOTES PAYABLE
Spiderfuel entered into various promissory notes and receivable
lines with individuals. These were short-term agreements, and
interest had been accrued for at March 31, 2002. These notes
remained with Spiderfuel and were not assumed by CIC at the time of
the Asset Purchase Agreement between CIC and Spiderfuel on May 22,
2002. These liabilities remain with Spiderfuel and are anticipated
to be paid by that company.
NOTE 7- FIXED ASSETS
Fixed assets consist of the following at September 30, 2003:
Machinery and equipment $116,438
Furniture and fixtures 48,858
--------
Subtotal 165,296
Accumulated depreciation (144,306)
Total $ 20,990
========
Depreciation expense was $20,987 and $19,373 for the nine months
ended September 30, 2003 and 2002. In May 2002, when CLC was
acquired by CIGI, the fair value of the net assets acquired was
greater than the amount paid by CIGI creating a negative goodwill
amount. As required by accounting principles generally accepted in
the United States of America, the negative goodwill amount must
first be applied against fixed assets and other assets prior to be
recognized as an extraordinary item. As such, the net fixed assets
amount on CLC's books of $16,982 was written off during the quarter
ended June 30, 2002. Additionally, there was a gain on the sale of
an automobile in 2002 prior to the acquisition of CLC by CIGI of
$2,911 in the quarter ended June 30, 2002.
F-12
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 8- COMMITMENTS AND CONTINGENCIES
Related Party Transactions
The Company, as noted in Note 3, is advanced and repays amounts
regularly with its officers. These amounts were funded by its
officers for, among other things, working capital for development of
certain products and marketing of those products, and to float
working capital at various times due to the inconsistent collections
based on the nature of the contracts entered into.
Leases
Beginning in 2001, Spiderfuel entered into a sublease agreement in
Mineola, New York, for approximately $5,000 per month. This sublease
agreement was terminated in 2002, and Spiderfuel's corporate
headquarters were relocated to Edison, New Jersey in the offices of
CLC simultaneously with the asset acquisition of Spiderfuel by CIC
and CIGI's stock acquisition of CIC. All related party rent has been
eliminated in the consolidation.
In addition to the office rental lease, Spiderfuel has entered into
other agreements with a term of one year or month-to-month terms,
which are not considered to be material. Due to the length of the
terms, there are no annual future minimum rentals for CIC due at
September 30, 2003.
CLC entered into a lease agreement for office space in Edison, New
Jersey that expired at the end of 2001. CLC paid $3,863 per month.
In addition to the rent, CLC paid an initial security deposit of
$1,343, which was subsequently adjusted for by the negative goodwill
at the time of the Stock Purchase Agreement between CLC CIG on May
29, 2002. The lease has been extended for another few years.
In addition to the office rental lease, CLC has entered into other
agreements with a term not exceeding one-year that are not
considered to be material. Due to the length of the terms, there are
no annual future minimum rentals due at September 30, 2003.
NOTE 9- INCOME TAXES
Deferred income taxes will be determined using the liability method
for the temporary differences between the financial reporting basis
and income tax basis of the Company's assets and liabilities.
Deferred income taxes will be measured based on the tax rates
expected to be in effect when the temporary differences are included
in the Company's consolidated tax return. Deferred tax assets and
liabilities are recognized based on anticipated future tax
consequences attributable to differences between financial statement
carrying amounts of assets and liabilities and their respective tax
bases.
F-13
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 9- INCOME TAXES (CONTINUED)
At September 30, 2003, deferred tax assets consist of the following:
Net operating loss carryforwards $ 295,500
Less: valuation allowance (295,500)
------------
$ -0-
============
At September 30, 2003, the Company had deficits accumulated during
the development stage in the approximate amount of $738,808,
available to offset future taxable income through 2019. The Company
established valuation allowances equal to the full amount of the
deferred tax assets due to the uncertainty of the utilization of the
operating losses in future periods.
The provision for income taxes at September 30, 2002 consisted of
the following:
State tax expense $ 639
========
NOTE 10- STOCKHOLDERS' EQUITY (DEFICIT)
COMMON STOCK
The Company is authorized to issue up to 40,000,000 shares of common
stock, $0.001 par value per share (See Note 16). Prior to the
Merger, 2,596,000 shares (includes 51,000 issuable pursuant to
outstanding warrants) of common stock were issued and outstanding.
At the closing of the Merger, 1,272,500 shares of common stock were
cancelled and an aggregate of 10,478,476 shares of common stock were
issued in connection with the Merger. Accordingly, following the
Merger, an aggregate of 11,801,976 shares of common stock of the
Company were issued and outstanding.
The Company issued 250,000 additional shares in June 2003 for legal
services rendered to bring the total issued and outstanding shares
to 12,051,976. The value of the issuance of the 250,000 shares was
$250, the fair value of the stock at the time (par value).
PREFERRED STOCK
The Company has 5,000,000 shares of preferred stock, $0.001 par
value per share, authorized, and none have been issued.
F-14
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 11- INTANGIBLE ASSETS
In December 2000, Spiderfuel acquired The Strategy Factory, Inc., a
Texas software development corporation for $1,500,000. In
consideration of the assets acquired, Spiderfuel issued 750,000
shares of its common stock to the former stockholders of The
Strategy Factory, Inc. At December 31, 2001, Spiderfuel's management
determined that the unamortized amount of the intangible assets was
impaired in accordance with FASB 142, and $608,870 of the
unamortized balance of the intellectual property was charged to
expense. The balance of $782,800 remained on the condensed
consolidated balance sheet until a further impairment loss of
$532,800 which brought the intangible asset balance down to $250,000
was recorded by Management at September 30, 2003. Management of the
Company believes that this balance is reflective of the value of the
software developed by The Strategy Factory, Inc., and the customers
utilizing such software.
NOTE 12- ASSET PURCHASE AGREEMENT - SPIDERFUEL
On May 22, 2002, Spiderfuel entered into an Asset Purchase Agreement
with CIC. Pursuant to such agreement, Spiderfuel sold a majority of
its assets, including its accounts receivable, fixed assets and all
of its intangible assets that it owned the rights to, and CIC also
assumed a portion of the liabilities that related to the operation
of Spiderfuel's business, including vendor payables and deferred
revenue relating to the contracts they had. At the time of this
transaction, it was determined that the fair value of the net assets
of Spiderfuel approximated the amount paid by CIC, and therefore, no
goodwill was recognized in the transaction.
NOTE 13- STOCK PURCHASE AGREEMENT - CLC
On May 29, 2002, CLC entered into a Stock Purchase Agreement with
CIGI, whereby CIGI acquired all of the capital stock in of CIGI in
exchange for shares of common stock of CIGI. Pursuant to such
agreement, CIGI acquired all the rights, title and interest in and
to the various products and properties owned by CLC. At the time of
this transaction, it was determined that the fair value of the net
assets of CLC was greater than the amount paid by CIGI, and
therefore, a negative goodwill amount was generated. As such,
according to accounting principles generally accepted in the United
States of America, CLC initially applied this amount against fixed
assets, other receivables and security deposits, and the balance was
then reflected as an extraordinary item for the gain on the
purchase.
NOTE 14- STOCK PURCHASE AGREEMENT - COMMAND INTERNET
On June 3, 2002, CIC entered into a Stock Purchase Agreement with
CIGI. Pursuant to this agreement, CIC exchanged all its issued and
outstanding stock for shares of CIGI, and therefore, became a
wholly-owned subsidiary of CIGI. Due to only a two week lapse
between CIC`s acquisition of Spiderfuel and CIGI's acquisition of
CIC, the fair value of CIC did not significantly change, and
therefore, the transaction netted on goodwill as the fair value was
considered identical to the acquisition price.
F-15
COMMAND INTERNATIONAL CORPORATION
(FORMERLY ALGIERS RESOURCES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
NOTE 15- GOING CONCERN
As shown in the accompanying condensed consolidated financial
statements, the Company incurred substantial net losses for the nine
months ended September 30, 2003. There is no guarantee whether the
Company will be able to generate enough revenue and/or raise capital
to support those operations. This raises substantial doubt about the
Company's ability to continue as a going concern.
Management of the Company believes that they can raise the
appropriate funds needed to support their business plan. The losses
sustained in the nine months ended September 30, 2003, are primarily
from the result of one-time impairment charges, and the reserve of
accounts receivable.
The condensed consolidated financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.
NOTE 16- SUBSEQUENT EVENT
On May 12, 2004, the Company sold to the Staffin Group
International, LLC ("Staffin") 100 shares of its wholly-owned
subsidiary, CLC, which constituted all of the issued and outstanding
capital stock of CLC. In consideration of the CLC shares, Staffin
surrendered 578, 936 shares of the Company, representing 100% of its
ownership in the Company.
On July 6, 2004, the Company amended its Articles of Incorporation
and increased the authorized number of its common stock from
40,000,000 to 100,000,000 and changed the par value per share from
$0.001 to $0.0001. In addition, the Company changed its name to Key
Command International Corp.
On August 17, 2004, the Company issued 85,000,000 sharers of common
stock to five investors for cash of $8,500.
F-16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR 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 Key Command International
Corp., formerly known as Command International Corporation and Algiers
Resources, Inc. (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.
GENERAL
The Company was formed on October 6, 1998, as a blind pool to seek, investigate,
and if such investigation warrants, consummate a merger or other business
combination, purchase of assets or other strategic transaction with a
corporation, partnership, limited liability company or other business entity
desiring the perceived advantages of becoming a publicly reporting and publicly
held corporation.
On April 26, 2003, pursuant to an Agreement and Plan of Merger dated as of March
20, 2003 (the "Merger Agreement"), by and among the Company, Algiers Merger Co.,
a Delaware corporation and wholly-owned subsidiary of the Company, and Command
International Acquisition Corporation, a Delaware corporation ("CIAC"), CIAC
merged with and into Algiers Merger Co., with Algiers Merger Co. continuing as
the surviving entity. As a result of such merger, Algiers Merger Co. changed its
corporate name to Command International Corporation and each issued and
outstanding share of common stock of CIAC was converted into one share of common
stock of the Company.
In connection with the Merger Agreement and pursuant to the Assignment and
Assumption Agreement dated as of March 20, 2003, by and between CIAC and the
Company, CIAC assigned to the Company all of its right, title and interest,
subject to any and all liabilities in connection therewith, to acquire all of
the issued and outstanding common stock of Command International Group Inc.
("CIGI") in exchange for shares of common stock of the Company under the
Agreement and Plan of Reorganization dated as of July 1, 2002, as amended as of
February 24, 2003, by and between CIAC, CIGI and stockholders of CIGI.
On July 7, 2003, Algiers Merger Co. merged with and into the Company, with the
Company continuing as the surviving entity and changed its name from Algiers
Resources, Inc. to Command International Corporation. As a result of the Merger,
CIGI became our wholly-owned subsidiary. CIGI is a provider of web-based and
2
LAN-based software solutions through its wholly-owned subsidiaries, Command Line
Corp., a New Jersey corporation ("CLC") and Command Internet Corp., a Delaware
corporation ("CIC"). The consolidated financial statements included in this
report include the accounts of CLC and CIC.
On May 12, 2004, the Company entered into a Settlement Agreement (the "Staffin
Settlement") with Staffin Group International, LLC, formerly known as Command
International Group, LLC ("Staffin") to resolve certain of the disputes under a
Stock Purchase Agreement dated March 18, 2002 between the Company and Staffin.
Pursuant to the Settlement Agreement, the Company gave to Staffin 100 shares of
common stock of CLC held by it, which constituted all of the issued and
outstanding capital stock of CLC, in exchange for Staffin's surrender of 578,936
shares of our common stock held by Staffin.
On July 6, 2004, the Company amended its Articles of Incorporation and:
o changed its corporate name to Key Command International Corp.,
o increased the authorized number of its common stock from 40,000,000
to 100,000,000, and
o changed the par value per share of its common stock from $0.001 to
$0.0001.
As a result of the Staffin Settlement, we no longer have an operating company.
We intend to seek to expand our business through acquisitions or mergers with
other entities. Any decision to make an acquisition or merge will be based upon
a variety of factors, including, among others, the purchase price and other
financial terms of the transaction, the business prospects of the target company
and the extent to which any acquisition/merger would enhance our prospects. To
the extent that we may finance an acquisition/merger with cash and/or equity
securities, any such issuance of equity securities would result in dilution to
the interests of our shareholders. Additionally, to the extent that we, or the
acquisition or merger candidate itself, issue debt securities in connection with
an acquisition, we may be subject to risks associated with incurring
indebtedness, including the risks of interest rate fluctuations and
insufficiency of cash flow to pay principal and interest. We presently have no
agreements, understandings or arrangements for any acquisitions or merger.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of the Company's financial condition and the results
of its operations are based on the Company's financial statements and the data
used to prepare them. The Company's financial statements have been prepared
based on accounting principles generally accepted in the United States of
America. On an on-going basis, we re-evaluate our judgments and estimates. These
estimates and judgments are based on historical experience and various other
assumptions that are believed to be reasonable under current business conditions
and circumstances. Actual results may differ from these estimates under
different assumptions or conditions. The Company believes the following critical
accounting policies affect more significant judgments and estimates in the
preparation of the consolidated financial statements.
3
In June 2001, the FASB issued Statement No. 142 "Goodwill and Other Intangible
Assets" ("SFAS 142"). SFAS 142 addresses financial accounting and reporting for
acquired goodwill and other intangible assets and supersedes APB Opinion No. 17,
Intangible Assets. It addresses how intangible assets that are acquired
individually or with a group of other assets (but not those acquired in a
business combination) should be accounted for in financial statements upon their
acquisition. SFAS 142 also addresses how goodwill and other intangible assets
should be accounted for after they have been initially recognized in the
financial statements. SFAS 142 has been considered when determining impairment
of intangible assets in certain transactions.
MATERIAL CHANGES IN FINANCIAL CONDITION AS OF SEPTEMBER 30, 2003 AS COMPARED
WITH DECEMBER 31, 2002.
At September 30, 2003, we had a working capital deficit of $510,907, as compared
with a deficit of $302,601 at December 31, 2002. The Company had cash on hand of
$38,563 at September 30, 2003, as compared with $1,814 at December 31, 2002. We
did not have sufficient capital on hand to fund our operations. The Company had
significantly paid down its working capital line from its cash flow and had a
balance due to its bank of $15,500 at September 30, 2003. Subsequent to yearend
it repaid the bank.
We have funded the business primarily through loans from officers, which totaled
$486,840 at September 30, 2003 as well as by working out payment arrangements
with accounts payable vendors. There was no commitment from officers to continue
to lend money to the Company and no further loans were made to the Company after
October 1, 2003. Following the discontinuance of operations in May 2004, the
Company sold 85 million shares, at $.0001 per share, to a group of five
investors including an entity affiliated with the Company's President on August
17, 2004.
As a result of the discontinuance of operations, the Company had $250,000 of
goodwill, net of impairment at September 30, 2003, which was written off at
December 31, 2003.
The Company had $484,302 of accounts payable and accrued expenses at September
30, 2003, compared with $196,626 at December 31, 2002. These payables relate
mainly to the operations of CIC which totaled $390,793. As of June 30, 2004,
theses payable increased to $538,208 of which $448,294 pertained to CIC.
At September 30, 2003, the Company had a retained earnings (deficit) of
($738,808) as compared with $56,226 at December 31, 2002.
For the nine-months ended September 30, 2003 ("Fiscal 2003 Period") the Company
had net cash provided by operating activities of $49,706, as compared with net
cash used in operating activities of $116,535 for the nine-months ended
September 30, 2002 ("Fiscal 2002 Period"). The net cash provided by operations
resulted primarily from a net loss of $772,737 for the Fiscal 2003 Period offset
by the impairment of an intangible asset of $532,800 an increase in accounts
payable and accrued expenses of $252,655, add-backs for the provision for bad
debts of $70,427 and depreciation of $20,987 along with a reduction of deferred
revenue of $52,622. This is compared to the net income of $48,188 in the Fiscal
2002 Period less the extraordinary gain on the merger between CLC and CIGI of
$122,816 and an increase in accounts receivable of $65,544.
4
The Company had net cash used in financing activities of $35,011 during the
Fiscal 2003 Period, as compared with net cash provided by in financing
activities of $101,995 during the Fiscal 2002 Period. During the Fiscal 2003
Period, the Company repaid the bank line of credit and officer loans, while
during the Fiscal 2002 Period it borrowed from its officers and the bank.
The Company is concentrating its efforts in finding potential merger partners
that share the same qualities as the Company, and similar business plans. The
Company has devoted substantially all of its efforts in this area. The Company
anticipates that with additional acquisitions and product enhancement that
positive earnings and increased cash flow will occur prior to the Company's year
end.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
NINE-MONTHS ENDED SEPTEMBER 30, 2003 AS COMPARED WITH THE NINE-MONTHS ENDED
SEPTEMBER 30, 2002.
Sales in the Fiscal 2003 Period were $640,036 as compared with $620,259 in the
Fiscal 2002 Period. Sales for the three months ended September 30, 2003
increased by $15,994 over the comparable period in 2002. Sales of enhancements
and upgrades to existing installed systems to a loyal ERP customer base in the
Fiscal 2002 Period decreased in the Fiscal 2003 Period as a result of the
Company not having sufficient working capital to support its operations. In
addition, the Company showed a 47.6% decrease in the rent as compared with
previous year due to consolidating the offices in Edison, New Jersey. Certain
administrative costs increased by $67,200 and professional fees increased by
$70,888 due to the merger between CIAC and the Company which was a non-operating
entity in the Fiscal 2002 Period. Professional fees resulted primarily from
accounting/auditing, legal and general administrative expenses relating to the
Company's filings with the SEC, as well as fees incurred in connection with the
Company's various merger transactions.
As a result of the foregoing total operating expenses increased by $182,095, or
27%, while the Company's loss before other expenses increased from $55,284 to
$217,602 primarily as a result of the increased professional fees and general
administration expenses related to the merger plus the write-off of
uncollectible accounts receivable totaling $70,427.
The Company had other expenses of $554,800 during the Fiscal 2003 Period, as
compared with other income of $104,319 in the Fiscal 2002 Period, primarily as a
result of the impairment of certain intangible assets acquired in 2001 with The
Strategy Factory, Inc. for $532,800.
As a result of the foregoing, the Company had a net loss of $772,737 for the
Fiscal 2003 Period, as compared with net income before income taxes of $48,188
in the Fiscal 2002 Period. The Company's net loss for the three months ended
September 30, 2003 was $682,679, as compared with a net loss of $22,202 for the
comparable period in 2002.
5
ITEM 3. CONTROL AND PROCEDURES.
As of the end of the period covered by this quarterly report, the Company's
President, acting as its principal executive officer and principal financial
officer, evaluated the effectiveness of the design of the Company's disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934. Based on that evaluation, the President
concluded that the Company's disclosure controls and procedures were effective,
in all material respects, to ensure that the information required to be
disclosed in the reports the Company files and submits under the Exchange Act is
recorded, processed, summarized and reported as and when required.
There have been no significant changes (including corrective actions with
regards to significant deficiencies and material weaknesses) in the Company's
internal controls or in other factors subsequent to the date the Company carried
out its evaluation that could significantly affect these controls.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no pending legal proceedings against the Company or for which the
Company is a party, other than routine litigation incidental to the Company's
business, nor are there any legal proceedings which terminated during the
quarter ended September 30, 2003.
ITEM 2. CHANGES IN SECURITIES - RECENT SALES OF UNREGISTERED SECURITIES
On or about June 30, 2003, the Company issued 250,000 shares of it common stock
to its counsel at such time for legal services rendered. The shares were issued
in a transaction exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act") pursuant to Section 4(2) of the
Securities Act.
On July 15, 2003, the Company issued an aggregate of 51,000 shares of it common
stock to seven individuals in connection with the cashless exercise of a
warrant. The shares were issued in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 3(a)(9) of the Securities
Act.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 1, 2003, the Company filed an Information Statement (the "Statement")
in accordance with the requirements of Section 14(f) of the Securities Exchange
Act of 1934, as amended, and Rule 14f-1 promulgated thereunder, with the
Securities and Exchange Commission. The Statement was furnished by the Company
to all stockholders of record on April 7, 2003 to inform such stockholders that
the Company had entered into an Agreement and Plan of Merger, dated as of March
20, 2003 with Algiers Merger Co., a Delaware corporation and a wholly owned
subsidiary of the Company and Command International Acquisition Corporation, a
Delaware corporation ("CIAC"), whereby CIAC merged with and into Algiers Merger
Co., with Algiers Merger Co. continuing as the surviving entity. As a result of
such merger, Algiers Merger Co. changed its corporate name to Command
International Corporation (now known as Key Command International Corp.) and
each issued and outstanding share of common stock of CIAC was converted into one
share of common stock of the Company. As a result of the Merger, there was a
change in control of the Company. No stockholder action was requested or taken,
and no proxies were being solicited in connection with the Statement.
6
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS
Exhibit Number Description
- -------------- -----------
31.1* Certification of Robert Fallah, as Chief Executive
Officer and Chief Financial Officer, pursuant to
Exchange Act Rule 13a-14(a).
32.2* Certification of Robert Fallah, as Chief Executive
Officer and Chief Financial Officer, pursuant to Section
1350 of the Sarbanes-Oxley Act of 2002.
- ---------
* Filed with this report
(B) REPORTS ON FORM 8-K
An amended Current Report on Form 8-K/A dated April 26, 2003 was filed
with the Securities and Exchange Commission on July 10, 2004, reporting
financial statements under Item 7 to amend its Form 8-K, also dated April 26,
2003 and filed on May 12, 2003, as well as to report a change in registrant's
certifying accountant under Item 4 and other events under Item 5.
7
SIGNATURE
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KEY COMMAND INTERNATIONAL CORP.
Date: March 16, 2005 BY: /s/ Robert Fallah
-------------------------------
Robert Fallah, Chief Executive
Officer and Chief Financial
Officer (Principal Executive
Officer and Principal Financial
Officer
8