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 June 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 [ ]
State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At August 9, 2005, there
were 500,001 shares of the Registrant's Common Stock outstanding.
PART I
ITEM 1. FINANCIAL STATEMENT
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 June 30, 2005, and the results of its
operations and changes in its financial position from November 17, 1999,
through June 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.
2
Cygni Investments, Inc.
(A Development Stage Company)
Balance Sheet
June December
30, 2005 31, 2004
----------- ------------
(Unaudited)
Assets
Current Assets $ - $ -
---------- ----------
Total Assets $ - $ -
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable $ 30,937 $ 20,811
Interest Payable 11,167 9,591
Note Payable - Related Party 31,563 31,563
---------- -----------
Total Current Liabilities 73,667 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 (83,667) (71,965)
---------- -----------
Total Stockholders' Equity (Deficit) (73,667) (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 For the Six Months Ended (Inception)
June 30, June 30, June 30, June 30, to June 30,
2005 2004 2005 2004 2005
---------- ---------- ---------- ---------- ----------
Revenue $ - $ - $ - $ - $ -
Expenses
General & Administrative 8,002 1,150 10,125 5,360 72,253
--------- --------- --------- --------- ---------
Total Expenses 8,002 1,150 10,125 5,360 72,253
--------- --------- --------- --------- ---------
Income (Loss) from Operations (8,002) (1,150) (10,125) (5,360) (72,253)
Other Income (Expenses)
Interest Expense (789) (614) (1,576) (1,155) (11,414)
--------- --------- --------- --------- ---------
Total Other Income (Expenses) (789) (614) (1,576) (1,155) (11,414)
--------- --------- --------- --------- ---------
Net Income (Loss)
Before Taxes (8,791) (1,764) (11,701) (6,515) (83,667)
Taxes - - - - -
--------- --------- --------- --------- ---------
Net Income (Loss) $ (8,791) $ (1,764) $ (11,701) $ (6,515) $ (83,667)
========= ========= ========= ========= =========
Loss per Common Share $ (.02) $ (.00) $ (.02) $ (.01)
Weighted Average
Outstanding Shares 500,001 500,001 500,001 500,001
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
17, 1999
For the Six Months Ended (Inception)
June June to June
30, 2005 30, 2004 30, 2005
---------- ---------- ----------
Cash Flows from Operating Activities
Net Income (Loss) $ (11,702) $ (6,515) $ (83,667)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
Operating Activities:
Stock Issued for Services - - 2,285
Increase in Accounts Payable 10,126 3,365 34,463
Increase in Interest Payable 1,576 1,155 11,167
--------- --------- ---------
Net Cash Provided (Used) by
Operating Activities - (1,995) (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 - 1,995 28,037
--------- --------- ---------
Net Cash Provided (Used) by
Financing Activities - 1,995 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 Financial Statements
June 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.
6
Cygni Investments, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 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 June 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 $83,667
at June 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 June 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; three to a company that is
a shareholder of the company and four to a company whose President is a
shareholder of the Company. The notes are unsecured, bear an interest
rate of 10% per annum and are due and payable on demand. At June 30, 2005,
the accrued interest associated with the various notes was $11,167.
June 30, 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 -
Thereafter -
-------
Total $ 28,037
=======
7
Cygni Investments, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 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 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
9
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.
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 June 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.
10
PART II
OTHER INFORMATION
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: August 11, 2005 By: /s/ Carl Suter
Carl Suter, President and Treasurer
(Principal Executive Officer and
Principal Financial and Accounting
Officer)
11