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 March 31, 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 [ ]
State the number of shares outstanding of each of the Issuer's classes
of common equity as of the latest practicable date: At May 12, 2005,
there were 500,001 shares of the Registrant's Common Stock
outstanding.
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 March 31, 2005, and the
results of its operations and changes in its financial position from
November 17, 1999, through March 31, 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.
2
Cygni Investments, Inc.
(A Development Stage Company)
Balance Sheets
March December
31, 2005 31, 2004
----------- -----------
(Unaudited)
Assets
Total Current Assets $ - $ -
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable $ 26,461 $ 24,337
Interest Payable 10,378 9,591
Note Payable - Related Party 28,037 28,037
---------- ----------
Total Current Liabilities 64,876 61,965
Stockholders' Equity
Common Stock 100,000,000 Shares
Authorized at $.001 Par Value;
500,001 Shares Issued and Outstanding 500 500
Additional Paid in Capital 9,500 9,500
Accumulated Deficit During Development Stage (74,876) (71,965)
---------- ----------
Total Stockholders' Equity (Deficit) (64,876) (61,965)
---------- ----------
Total Liabilities and Stockholders' Equity $ - $ -
========== ==========
The accompanying notes are an integral part of these financial statements.
3
Cygni Investments, Inc.
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the Period
November
17, 1999
For the Three Months Ended (Inception)
March March to March
31, 2005 31, 2004 31, 2005
----------- ----------- -----------
Revenue $ - $ - $ -
---------- ---------- ----------
Expenses
General & Administrative 2,124 4,210 64,251
---------- ---------- ----------
Total Expenses 2,124 4,210 64,251
---------- ---------- ----------
Income (Loss)
from Operations (2,124) 4,210 (64,251)
Other Income (Expenses)
Interest Expense (787) (541) (10,625)
---------- ---------- ----------
Total Other Income (Expenses) (787) (541) (10,625)
---------- ---------- ----------
Income (Loss) Before Taxes (2,911) (4,751) (74,876)
Taxes - - -
---------- ---------- ----------
Net Income (Loss) $ (2,911) $ (4,751) $ (74,876)
========== ========== ==========
Loss Per
Common Share $ (0.01) $ (0.01)
Weighted Average
Outstanding Shares 500,001 500,001
The accompanying notes are an integral part of these financial statements.
4
Cygni Investments, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the Period
November
For the Three Months Ended 17, 1999
March March (Inception)
31, 2005 31, 2004 31, 2004
---------- ---------- ----------
Cash Flows from Operating Activities
Net Income (Loss) $ (2,911) $ (4,751) $ (74,876)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
Operating Activities:
Stock Issued for Services - - 2,285
Increase in Accounts Payable - 4,210 24,337
Increase in Interest Payable 2,911 541 12,502
--------- --------- ---------
Net Cash Provided (Used) by
Operating Activities - - (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 - - 28,037
--------- --------- ---------
Net Cash Provided (Used) by
Financing Activities - - 35,752
--------- --------- ---------
Increase (Decrease) in Cash - - -
Cash, Beginning of Period - - -
--------- --------- ---------
Cash, End of Period $ - $ - $ -
========= ========= =========
Supplemental Cash Flow Information
Interest $ - $ - $ -
Income Taxes - - -
The accompanying notes are an integral part of these financial statements.
5
Cygni Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 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.
6
Cygni Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 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 March 31, 2005 and
earlier years; accordingly, no deferred tax liabilities have been
recognized for all years.
The Company has cumulative net operating loss carryforwards over
$74,000 at March 31, 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 March 31, 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 officers and/or directors are shareholders of the
Company. The notes are unsecured, bear an interest rate of 10% per
annum and are due and payable on demand. At March 31, 2005, the
accrued interest associated with the various notes was $10,378.
March 31, December 31,
The Company has the following note payable obligations: 2005 2004
----------- ------------
Related party notes payable due on demand,
accruing interest at a rate of 10% per annum $ 28,037 $ 31,563
--------- ---------
Totals $ 28,037 $ 31,563
Less Current Maturities (28,037) (31,563)
--------- ---------
Total Long-Term Notes Payable $ - $ -
========= =========
Following are maturities of long-term debt for each of the next five
years:
Year Amount
---------- --------
2005 $ 28,037
2006 -
2007 -
2008 -
2009 -
Thereafter -
-------
Total $ 28,037
=======
7
Cygni Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 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 - REVERSE STOCK SPLIT
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 sharheolders 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 are
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.
8
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
9
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.
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 March 31, 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.
10
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A special meeting of shareholders was held on February 8, 2005,
to vote upon a proposal to reverse split the outstanding shares of
common stock of the company at the rate of one share for each two
shares outstanding. At the special meeting, shareholders owning
626,250 shares, or approximately 63% of the total outstanding shares
on such date, approved the reverse split. No shares were voted
against the proposal or were withheld from voting, and there were no
abstentions or broker no-votes as to this proposal. The reverse stock
split became effective on March 21, 2005.
ITEM 6. EXHIBITS
(a) 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: May 16, 2005 By: /s/ Carl Suter
Carl Suter, President and
Treasurer (Principal Executive
Officer and Principal Financial
and Accounting Officer)
11