UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2007
[ ] 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
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
Par Value $.001
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 filing requirements for the past 90 days.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
Check whether the registrant is a large accelerated filer, and accelerated
filer, a non-accelerated filer, or a smaller reporting company (as defined in
Rule 12b-2 of the Exchange Act).
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the Registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). [X]
State issuer's revenues for its most recent fiscal year: $ -0-
The aggregate market value of the voting stock held by non-affiliates of the
registrant (401,000 shares) as of April 2, 2008, was $801, computed by
reference to the price at which the stock was originally sold by the
registrant. The aggregate market value of the voting stock held by
non-affiliates of the registrant computed by using the closing sale price has
been indeterminable within the past 60 days since there was no public market
for the stock during that period.
State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At April 2, 2008, there
were 500,001 shares of the Registrant's Common Stock outstanding.
Documents Incorporated by Reference: None
2
TABLE OF CONTENTS
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 1. BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 1A. RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ITEM 1B. UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . 7
ITEM 2. PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . 7
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS . . . . . . . 7
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES . . . . . . . . . . . . . 7
ITEM 6. SECLECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . 8
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION . . . . . 8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . .10
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . .10
ITEM 9A. CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . .11
ITEM 9B. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .11
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE . . . . . .12
ITEM 11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . .13
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . .14
ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE . . . . . . . . . . . . . . . . . . . . . . .15
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . . .16
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . . .17
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
3
PART I
ITEM 1. BUSINESS
History and Organization
Cygni Investments, Inc. (the "Company") was incorporated under the laws
of the State of Nevada on November 17, 1999. The Company has conducted no
activities since its inception except in connection with the filing of a
registration statement on Form 10-SB on July 26, 2000. The registration
statement became effective on September 24, 2000.
Proposed Business
The Company is seeking potential business acquisitions or opportunities
to enter into in an effort to commence business operations. The Company does
not propose to restrict its search for a business opportunity to any
particular industry or geographical area and may, therefore, engage in
essentially any business in any industry. The Company has unrestricted
discretion in seeking and participating in a business opportunity.
The Company's Board of Directors, which consists of a single individual,
Carl T. Suter, shall make the initial determination whether to complete any
such venture; it is unlikely the Board of Directors will submit final
approval of any proposed transaction to the shareholders, unless required by
state corporate law. In connection with such approval by the shareholders,
the Company would provide disclosure documentation to its shareholders as
required under Section 14 of the Securities Exchange Act of 1934, and the
rules and regulations promulgated thereunder.
The selection of a business opportunity in which to participate is
complex and risky. Additionally, as the Company has only limited resources
available to it, it may be difficult to find good opportunities. There can
be no assurance that the Company will be able to identify and acquire any
business opportunity based on management's business judgment.
The Company has not begun negotiations with potential business ventures,
or has not entered into any definitive agreement or arrangement. Management
decided to file its Registration Statement on a voluntary basis before
seeking a business venture. Management believes that being a reporting
company may increase the likelihood that existing business ventures may be
willing to negotiate with the Company. The Company also intends to seek
quotation of its Common Stock on the Pink Sheets or the OTC Bulletin Board.
In order to have stock quoted on the OTC Bulletin Board, a company must be
subject to the reporting requirements of the 1934 Act, either by virtue of
filing a registration statement on Form 10 or Form 10-SB, or by filing a
registration statement under the 1933 Act. The Company anticipates that it
would voluntarily file periodic reports with the Securities and Exchange
Commission, in the event its obligation to file such reports is terminated
under the Securities Exchange Act of 1934, if the Common Stock of the Company
were quoted on the OTC Bulletin Board.
4
In connection with the application for quotation of the Company's Common
Stock on the Pink Sheets or the OTC Bulletin Board, management intends to
seek a broker-dealer to become the initial market maker for the Company's
Common Stock and to submit the application to the Pink Sheets or the OTC
Bulletin Board. There have been no preliminary discussions or understandings
between the Company, or anyone acting on its behalf, and any market maker
regarding such application or the participation of any such market maker in
the future trading market for the Company's Common Stock. Management intends
to contact broker-dealers who make markets in Pink Sheet or Bulletin Board
companies until one agrees to make the application. There is no assurance
that the Company will be successful in locating such a broker-dealer, or that
the application, if submitted, would be approved. The Company does not
intend to use outside consultants to obtain market makers. In addition, the
Company does not intend to use any of its shareholders to obtain market
makers.
Management intends to consider a number of factors prior to making any
final decision as to whether to participate in any specific business
endeavor, none of which may be determinative or provide any assurance of
success. These may include, but will not be limited to, an analysis of the
quality of the entity's management personnel; the anticipated acceptability
of any new products or marketing concepts; the merit of technological
changes; its present financial condition, projected growth potential and
available technical, financial and managerial resources; its working capital,
history of operations and future prospects; the nature of its present and
expected competition; the quality and experience of its management services
and the depth of its management; its potential for further research,
development or exploration; risk factors specifically related to its business
operations; its potential for growth, expansion and profit; the perceived
public recognition or acceptance of its products, services, trademarks and
name identification; and numerous other factors which are difficult, if not
impossible, to properly or accurately analyze, let alone describe or
identify, without referring to specific objective criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development stage, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products
or services may yet need to be established, and with no past track record,
the profitability of any such entity will be unproven and cannot be predicted
with any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis
or verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
5
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of its director, executive officers and
stockholders, professional advisors, broker dealers in securities, venture
capital personnel, members of the financial community, attorneys, and others
who may present unsolicited proposals. In certain cases, the Company may
agree to pay a finder's fee or to otherwise compensate the persons who submit
a potential business endeavor in which the Company eventually participates.
Such persons may include the Company's director, executive officers,
beneficial owners or their affiliates. In this event, such fees may become a
factor in negotiations regarding a potential acquisition and, accordingly,
may present a conflict of interest for such individuals.
The Company's director and executive officers have not used any
particular consultants, advisors or finders on a regular basis to locate
potential business opportunities.
The possibility exists that the Company may acquire or merge with a
business or company in which the Company's executive officers, director,
beneficial owners or their affiliates may have an ownership interest.
Current Company policy does not prohibit such transactions. Because no such
transaction is currently contemplated, it is impossible to estimate the
potential pecuniary benefits to these persons.
Although it currently has no plans to do so, depending on the nature and
extent of services rendered, the Company may compensate members of management
in the future for services that they may perform for the Company. Because
the Company currently has extremely limited resources, and is unlikely to
have any significant resources until it has completed a merger or
acquisition, management expects that any such compensation would take the
form of an issuance of the Company's stock to these persons; this would have
the effect of further diluting the holdings of the Company's other
stockholders. However, due to the minimal amount of time devoted to
management by any person other than the Company's current sole director and
executive officers, there are no preliminary agreements or understandings
with respect to management compensation. Although it is not prohibited by
statute or its Articles of Incorporation, the Company has no plans to borrow
funds and use the proceeds to make payment to its management, promoters or
affiliates.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers,
ranging from a small amount to as much as $250,000. These fees are usually
divided among promoters or founders, after deduction of legal, accounting and
other related expenses, and it is not unusual for a portion of these fees to
be paid to members of management or to principal stockholders as
consideration for their agreement to retire a portion of the shares of Common
Stock owned by them. However, management does not presently anticipate
actively negotiating or otherwise consenting to the purchase of all or any
portion of its Common Stock as a condition to, or in connection with, a
proposed merger or acquisition. In the event that such fees are paid, they
may become a factor in negotiations regarding any potential acquisition by
the Company and, accordingly, may present a conflict of interest for such
individuals.
6
The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no
specific business and may acquire or participate in a business opportunity
based on the decision of management. The risks faced by the Company are
further increased as a result of its lack of resources and its inability to
provide a prospective business opportunity with significant capital.
The Company has had no employees since its inception and does not intend
to employ anyone in the future, unless its present business operations were
to change. The Company is not paying salaries or other forms of compensation
to its present officers and director for their time and effort. Unless
otherwise agreed to by the Company, the Company does intend to reimburse its
officers and director for out-of-pocket expenses.
ITEM 1A. RISK FACTORS
As a smaller reporting company, we have elected not to provide the
disclosure required by this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Because we are neither an accelerated filer nor a large accelerated
filer, we have elected not to provide the disclosure required by this item.
ITEM 2. PROPERTIES
The Company's administrative offices are located at 3857 Birch Street,
#606, Newport Beach, California 92660, which are the offices of Carl Suter,
the president and sole director of the Company. The office space is
furnished at no cost to the Company by Mr. Suter and may be shared by other
unrelated companies.
ITEM 3. LEGAL PROCEEDINGS
No legal proceedings are reportable pursuant to this item.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during
the fourth quarter of the fiscal year ended December 31, 2007.
PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
There is no established trading market for the Common Stock of the
Company.
7
None of the common shares are subject to outstanding options or
warrants, nor are there any other outstanding securities convertible into
shares of Common Stock. Of the 500,001 outstanding common shares, all have
been held for at least one year. The Company is aware that the staff of the
Securities and Exchange Commission has taken the position that Rule 144 would
not be available for shares issued at a time during which an issuer was a
blank check issuer and that these shares could only be resold through a
registered offering. Management has determined that if such position were to
apply to the shares issued in the organization of the Company, it would agree
to register, at no cost to the selling shareholders, the resale of such
shares for these parties. The Company has expressly granted piggy-back
registration rights to register 24,750 shares issued to counsel for the
Company. The Company has not proposed to publicly offer any shares of Common
Stock.
At April 2, 2008, the Company had 20 shareholders of record. The
Company has appointed Interwest Transfer Company, Inc., 1981 East 4800 South,
Suite 100, Salt Lake City, UT 84117, to act as its transfer agent.
Since its inception, the Company has not paid any dividends on its
Common Stock and the Company does not anticipate that it will pay dividends
in the foreseeable future.
The Company has not adopted any equity compensation plans.
During the year ended December 31, 2007, no securities were sold by the
Company.
There were no purchases made during the fourth quarter ended
December 31, 2007, by or on behalf of the Company or any affiliated purchaser
of shares or other units of any class of the Company's common stock.
ITEM 6. SELECTED FINANCIAL DATA
As a smaller reporting company, we have elected not to provide the
disclosure required by this item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company has not commenced development of any business. 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 will submit the proposal to the shareholders for final approval.
8
The original shareholders contributed a total of $7,715 in cash and
$2,285 in services as capital contributions for stock of the Company.
Rigel Funds Management, Ltd., an entity of which Eric C. Bronk, a
shareholder of the Company, is a director, loaned $15,330 to the Company at
its inception for operating expenses. Rigel has loaned an additional $2,924
to the Company for operating expenses.
Cygni Capital LLC, a limited liability company of which Mr. Bronk is the
managing member and president, has loaned a total of $9,025 to the Company
for operating expenses.
Procyon Corporation, a corporation of which Jason Daggett, a
shareholder, is the president, has loaned $4,283 to the Company for operating
expenses.
Each of these loans is evidenced by one or more promissory notes which
are due and payable upon demand and have interest rates of 10%. The
accumulated interest to December 31, 2007, is $19,055. If the company is
unable to find a suitable business by the time the notes are called due, it
is anticipated that the Company would try to renegotiate the term of the
note. See "Item 13. Certain Relationships and Related Transactions."
Management estimates that the cash requirements for the year ending
December 31, 2008, will be approximately $5,000, if no change in operations
occurs during the year. These funds will be used to prepare and file the
periodic reports required under the Exchange Act. Management anticipates
that the needed funds will be loaned to or credit extended to the Company on
the same or similar terms as those of other loans and extensions to the
Company. There is no agreement with any of the related parties already
extending credit to the Company and no assurance that all or a portion of
these funds will be forwarded to the Company. If these companies are
unwilling or unable to extend credit for such funds to the Company,
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 the 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,
9
will be profitable. If and when the Company locates a business opportunity,
management of the Company will give consideration to the dollar amount of
that entity's profitable operations and the adequacy of its working capital
in determining the terms and conditions under which the Company would
consummate such an acquisition. Potential business opportunities, no matter
which form they may take, will most likely result in substantial dilution for
the Company's shareholders due to the likely issuance of stock to acquire
such an opportunity.
Off-Balance Sheet Arrangements
There are currently no off-balance sheet arrangements. Until the
Company is able to locate a potential business for acquisition or business
prospect to merge with, there will likely not be any arrangements.
ITEM 7A. QUANITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we have elected not to provide the
disclosure required by this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Company are set forth immediately
following the signature page of this annual report. The financial statements
of the company have not been audited in reliance upon Rule 3-11 of Regulation
S-X, but have been completed my management. The company maintains that it
meets the requirements of this rule and provides the following specific
information:
(a) Its gross receipts from all sources for the fiscal year covered in
the financial statements were not in excess of $100,000;
(b) the Company had not purchased or sold any of its stock, granted any
options therefor, or levied assessments upon any outstanding stock;
(c) expenditures for all purposes for the fiscal year were not in
excess of $100,000;
(d) there was no material change in the business of the Company
occurring during the fiscal year, including any bankruptcy,
reorganization, readjustment or succession or any material
acquisition or disposition of plants, mines, mining equipment, mine
rights, or leases; and
(e) the shares of the Company are not listed upon any exchange and it
is not subject to any government authority which requires the
furnishing to it or publication of audited financial statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
No information is reportable pursuant to this item.
10
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The principal executive officer and principal financial officer, Carl
Suter, has concluded, based on his evaluation, as of the end of the period
covered by this report, that the Company's disclosure controls and procedures
(as defined in Rule 13a-15(e) under the Exchange Act) are (1) effective to
ensure that material information required to be disclosed by us in reports
filed or submitted by us under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the rules and
forms of the Securities and Exchange Commission, and (2) effective to ensure
that information required to be disclosed by us in such reports filed or
submitted by the Company under the Exchange Act is accumulated and
communicated to management of the Company, including the principal executive
officer, to allow timely decisions regarding required disclosure.
An unavoidable weakness in disclosure controls and procedures would be
that the principal executive officer and principal financial officer are the
same individual, not allowing for checks and balances. Since the Company is
a shell company it does not feel that this has a material effect on the
accuracy and completeness of our financial reporting and disclosure included
in this Annual Report on Form 10-K.
Internal Control Over Financial Reporting
There were no changes in the Company's internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred
during the most recent quarter that has materially affected, or is 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 the Company's controls will
succeed in achieving their stated goals under all potential future
conditions.
This annual report does not include an attestation report of the
company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by
the company's registered public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission that permit the company to provide
only management's report in this annual report.
ITEM 9B. OTHER INFORMATION
No information is reportable pursuant to this item.
11
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth as of April 2, 2008, the name, age, and
position of the executive officers and sole director of the Company and the
term of office of such director:
Name Age Position(s) Director Since
---- --- ----------- --------------
Carl Suter 73 Director, President & November 1999
Treasurer
Lynn Carlson 53 Vice-President & Secretary --
Directors are elected for a term of one year and until their successors
are elected and qualified. Annual meetings of the stockholders, for the
selection of directors to succeed those whose terms expire, are to be held at
such time each year as designated by the Board of Directors. The Board of
Directors has not selected a date for the next annual meeting of
shareholders. Officers of the Company are elected by the Board of Directors,
which is required to consider that subject at its first meeting after every
annual meeting of stockholders. Each officer holds his office until his
successor is elected and qualified or until his earlier resignation or
removal.
Set forth below is certain biographical information regarding the
Company's current executive officers and sole director:
CARL T. SUTER has been the president and treasurer of the Company since
its inception in November 1999. He has been President and Chairman of
Continental American Resources, Inc., a Nevada based investment banking firm,
since 1980. Over the past twenty years Mr. Suter has provided management
assistance and arranged financing for companies in a variety of industries,
including solar energy, oil and gas, mining, direct marketing, mail order,
consumer products, telecommunications, Internet commerce, and Internet
telephony. He has maintained a business relationship and stock ownership
interest in a number of these companies. Mr. Suter received a Bachelor of
Science degree in Industrial Engineering from Arizona State University in
1961.
LYNN CARLSON has been the secretary and vice-president of the Company
since its inception in November 1999. She has worked for Cygni Capital LLC,
a financial consulting firm, since November 1998 as an administrative
assistant and account executive.
Management devotes only nominal time to the activities of the Company.
If the Company is able to locate a suitable new business venture, it is
anticipated that Mr. Suter will devote substantially all of his time to
completing the acquisition.
There are no other employees who are expected to make a significant
contribution to the business and there are no intentions to employ anyone
until business operations change.
12
There are no family relationships between any of the officers and the
director or persons nominated to become directors or executive officers.
The entire board of directors of the Company is currently acting as the
audit committee. There is no financial expert currently on the audit
committee as there is no current activity in the Company.
There are no established procedures for security holders to recommend
nominees for the board of directors.
Other Public Shell Activities
Mr. Suter has not been involved as a director or executive officer of
other companies that may be deemed to be "blank check" companies, and has not
been involved in any blank check public offerings.
Code of Ethics
The Company has not adopted a code of ethics that applies to the
Company's principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
because it has not commenced development of its business.
ITEM 11. EXECUTIVE COMPENSATION
There has been no compensation awarded to, earned by, or paid to any of
the executive officers of the Company during the years ended December 31,
2007, 2006 and 2005.
The Company has no employment or compensation agreements or arrangements
with either of its officers.
Directors are permitted to receive fixed fees and other compensation for
their services as directors, as determined by the Board of Directors. The
Board of Directors has not adopted any policy in regard to the payment of
fees or other compensation to directors, and no fees or compensation have
been paid to, or accrued by, the present director.
13
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information furnished by current
management concerning the ownership of Common Stock of the Company as of
April 2, 2008, of (i) each person who is known to the Company to be the
beneficial owner of more than 5 percent of the Common Stock; (ii) all
directors and executive officers; and (iii) directors and executive officers
of the Company as a group:
Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Ownership (1) of Class
------------------- ------------- --------
Carl T. Suter 39,750 7.95%
4070 Cassia Lane
Yorba Linda, CA 92886
Lynn Carlson -0- -0-
3857 Birch St., #606
Newport Beach, CA 92660
Executive Officers and 39,750 7.95%
Directors as a Group
(2 Persons)
Eric Bronk 59,750(2) 11.95%
3151 Airway Avenue
Suite P-3
Costa Mesa, CA 92626
Baldwin Investments Ltd. 49,750 9.95%
99-101 Regent St.
First Floor
London W1R 7HB UK
Fleming Securities 49,750 9.95%
Suites 1601-1603
Hollywood Rd.
Hong Kong
Starling Securities Ltd. 49,750 9.95%
Suite 2 B
Mansion House
143 Main St.
Gibraltar
14
(1) Unless otherwise indicated, this column reflects amounts as to
which the beneficial owner has sole voting power and sole
investment power.
(2) Of the shares beneficially owned by Mr. Bronk, 20,000 are owned
directly by Suter GC Trust, a trust for which Mr. Bronk is the
trustee. While Mr. Bronk disclaims any interest in these shares,
he is deemed to share beneficial ownership of such shares with this
entity.
The Company is seeking potential business acquisitions or opportunities.
(See "Item 1. Description of Business.") It is likely that such a
transaction would result in a change of control of the Company, by virtue of
issuing a controlling number of shares in the transaction, change of
management, or otherwise.
At December 31, 2007, the Company had no compensation plan under which
equity securities of the Company were authorized for issuance.
ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE
On February 4, 2000, Rigel Funds Management, Ltd., a corporation of
which Mr. Bronk, a shareholder of the Company, is a director, loaned $15,330
to the Company. The promissory note bears 10% interest per annum and was
originally due on or before February 4, 2001. The note has been extended to
be due and payable upon demand. Rigel has loaned additional funds to the
Company in the amount of $2,305 on June 14, 2002, and in the amount of $619
on June 1, 2003. Both additional promissory notes bear 10% interest and are
due and payable upon demand.
On December 31, 2002, the Company issued a promissory note in the amount
of $3,504 to Cygni Capital, LLC, a limited liability company of which Eric
Bronk, a shareholder of the Company, is the managing member and president,
for operating funds loaned throughout the previous year. The promissory note
bears 10% interest per annum and is due and payable upon demand. Cygni has
continued to forward additional operating funds to the Company for which the
following promissory notes have been issued: $1,220 on December 31, 2003;
$475 on March 31, 2004; $300 on June 30, 2004; and $3,526 on December 31,
2004. All of the notes bear 10% interest and are due and payable upon demand.
On December 31, 2003, the Company issued a promissory note in the amount
of $4,283 to Procyon Corporation, a corporation of which Jason Dagget, a
shareholder of the Company, is President, for operating expenses. The
promissory note bears 10% interest per annum and is due and payable upon
demand.
Other Public Shell Activities
Mr. Bronk, one of our founders, is involved as a director or executive
officer, or shareholder, of another company that may be deemed to be a "blank
check" company, but has not been involved in any blank check public
offerings. The following is a brief description of his involvement in the
other company:
15
* Alnilam Corporation. Mr. Bronk was a founder of this entity which
was incorporated on May 10, 2000, and has been the sole director,
President and Treasurer since December 2006. He beneficially owns
59,750 shares, or approximately 11.95%, of the outstanding stock of
this entity. Alnilam has no current business operations and is
seeking a business opportunity to commence operations.
The selection of a business opportunity for each of these entities,
including the Company, may create a conflict of interest in determining to
which of these entities to present the opportunity.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees billed for professional services rendered by the
Company's principal accountant for the audit of the Company's annual
financial statements, review of financial statements included in the
quarterly reports and other fees that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements for the
fiscal years ended December 31, 2007 and 2006, were $-0- and $-0-,
respectively. The Company did not audit the financials for the years ended
December 31, 2007 and 2006.
Audit-Related Fees
The aggregate fees billed for assurance and related services by the
Company's principal accountant that are reasonably related to the performance
of the audit or review of the financial statements, other than those
previously reported in this Item 14, for the fiscal years ended December 31,
2007 and 2006, were $-0- and $-0-, respectively.
Tax Fees
The aggregate fees billed for professional services rendered by the
Company's principal accountant for tax compliance, tax advice and tax
planning for the fiscal years ended December 31, 2007 and 2006, were $-0- and
$342, respectively. These fees related to the preparation of federal income
and state franchise tax returns.
All Other Fees
The aggregate fees billed for professional services rendered by the
Company's principal accountant for other services for the fiscal years ended
December 31, 2007 and 2006 were $250 and $565, respectively. These fees
related to the preparation of accounting reports and schedules for the
Company.
Audit Committee
The Company's Board of Directors functions as its audit committee. All
of the services described above in this Item 14 for the year ended
December 31, 2007, were approved by the Board of Directors.
16
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following financial statements are included as part of this report:
Balance Sheets for the years ended December 31, 2007 and 2006
Statements of Operations for the years ended December 31, 2007 and
2006, and for the period from inception, November 17, 1999, to
December 31, 2007
Statements of Stockholders' Equity for the period from inception,
November 17, 1999, to December 31, 2007
Statements of Cash Flows for the years ended December 31, 2007 and
2006, and for the period from inception, November 17, 1999, to
December 31, 2007
The following exhibits are included as part of this report:
Incorporated by Reference
----------------------------------
Exhibit Exhibit Filing Filed
Number Description Form File No. Exhibit Date Herewith
- ------- ----------- ------ -------- ------- ------ --------
3.1 Articles of Incorporation 10-SB 000-31165 3.1 July 26,
filed November 17, 1999 2000
3.2 Current Bylaws 10-SB 000-31165 3.2 July 26,
2000
4.1 Form of Common Stock Certificate 10-SB 000-31165 4.1 July 26,
2000
10.1 Promissory Note dated February 4, 10-KSB 000-31165 10.1 April 1,
2002, to Rigel Funds Management, Ltd. 2002
10.2 Promissory Note dated November 15, 10-KSB 000-31165 10.2 April 1,
2001, to Cygni Capital LLC 2002
10.3 Promissory Note dated June 14, 10-KSB 000-31165 10.3 March 31,
2002, to Rigel Funds Management 2003
10.4 Promissory Note dated December 31, 10-KSB 000-31165 10.4 March 31,
2002, to Cygni Capital LLC 2003
10.5 Promissory Note dated December 31, 10-KSB 000-31165 10.5 March 31,
2003, to Procyon Corporation 2004
10.6 Promissory Note dated December 31, 10-QSB 000-31165 10.6 August 16,
2003, to Cygni Capital LLC 2004
10.7 Promissory Note dated March 31, 10-QSB 000-31165 10.7 August 16,
2004, to Cygni Capital LLC 2004
17
10.8 Promissory Note dated June 30, 10-QSB 000-31165 10.8 August 16,
2004, to Cygni Capital LLC 2004
10.9 Promissory Note dated December 31, 10-KSB 000-31165 10.9 March 31,
2004, to Cygni Capital LLC 2005
31.1 Rule 13a-14(a) Certification by X
Principal Executive Officer
31.2 Rule 13a-14(a) Certification by X
Principal Financial Officer
32.1 Section 1350 Certification of X
Principal Executive Officer and
Principal Financial Officer
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Cygni Investments, Inc.
Date: April 15, 2008 /s/ Carl Suter
By: Carl Suter, President and
Treasurer (Chief Executive, Chief
Financial & Principal Accounting
Officer)
In accordance with the Exchange Act, this report has been signed below
by the following person on behalf of the registrant and in the capacities and
on the dates indicated.
Date: April 15, 2008 /s/ Carl Suter
Carl Suter, Sole Director
18
Cygni Investments, Inc.
(A Development Stage Company)
Financial Statements
December 31, 2007
and
December 31, 2006
(Unaudited)
Cygni Investments, Inc.
(A Development Stage Company)
Balance Sheets
(Unaudited)
December December
31, 2007 31, 2006
---------- ----------
Assets
Current Assets
Cash $ - $ -
--------- ---------
Total Current Assets $ - $ -
========= =========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable $ 40,669 $ 35,847
Interest Payable 19,055 15,899
Note Payable - Related Party 31,563 31,563
--------- ---------
Total Current Liabilities 91,287 83,309
Stockholders' Equity
Common Stock 100,000,000 Shares Authorized
at $.001 Par Value; 500,001 Shares Issued &
Outstanding, Retroactively Restated 500 500
Additional Paid in Capital 9,500 9,500
Accumulated Deficit During Development Stage (101,287) (93,309)
--------- ---------
Total Stockholders' Equity (Deficit) (91,287) (83,309)
--------- ---------
Total Liabilities and Stockholders' Equity $ - $ -
========= =========
The accompanying notes are an integral part of these financial statements.
F-1
Cygni Investments, Inc.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
(Inception)
November
17, 1999 to
December, December December
31, 2007 31, 2006 31, 2007
---------- ---------- ----------
Revenue $ - $ - $ -
--------- --------- ---------
Expenses
General & Administrative 4,822 10,348 81,983
--------- --------- ---------
Total Expenses 4,822 10,348 81,983
--------- --------- ---------
Income (Loss) From Operations (4,822) (10,348) (81,983)
Other Income (Expenses)
Interest Expense (3,156) (3,156) (19,304)
--------- --------- ---------
Total Other Income (Expenses) (3,156) (3,156) (19,304)
--------- --------- ---------
Income (Loss) Before Taxes (7,978) (13,504) (101,287)
Taxes - - -
--------- --------- ---------
Net (Loss) $ (7,978) $ (13,504) $ (101,287)
========= ========= =========
Loss Per Common Share $ (.02) $ (.03)
Weighted Average Outstanding Shares 500,001 500,001
The accompanying notes are an integral part of these financial statements.
F-2
Cygni Investments, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
From November 17, 1999 (Inception) through December 31, 2007
(Unaudited)
Accumulated
Deficit
Additional During the
Common Stock Paid In Development
Shares Amount Capital Stage
---------- ---------- ---------- ----------
Balance, November 17, 1999 - $ - $ - $ -
Net Loss for the Period Ended
December 31, 1999 - - - -
--------- --------- --------- ---------
Balance, December 31, 1999 - - - -
Shares Issued for Cash
at $.01 per Share 385,750 386 7,329 -
Shares Issued for Services
at $.01 Per Share 114,250 114 2,171 -
Rounding Adjustment 1 - - -
Net Loss for the Year Ended
December 31, 2000 - - - (18,996)
--------- --------- --------- ---------
Balance, December 31, 2000 500,001 500 9,500 (18,996)
Net Loss for the Year Ended
December 31, 2001 - - - (9,400)
--------- --------- --------- ---------
Balance, December 31, 2001 500,001 500 9,500 (28,396)
Net Loss for the Year Ended
December 31, 2002 - - - (11,457)
--------- --------- --------- ---------
Balance, December 31, 2002 500,001 500 9,500 (39,853)
Net Loss for the Year Ended
December 31, 2003 - - - (11,308)
--------- --------- --------- ---------
Balance, December 31, 2003 500,001 500 9,500 (51,161)
Net Loss for the Year Ended
December 31, 2004 - - - (20,804)
--------- --------- --------- ---------
Balance, December 31, 2004 500,001 $ 500 $ 9,500 $ (71,965)
Net Loss for the Year Ended
December 31, 2005 - - - (7,840)
--------- --------- --------- ---------
Balance, December 31, 2005 500,001 $ 500 $ 9,500 $ (79,805)
Net Loss for the Year Ended
December 31, 2006 - - - (13,504)
--------- --------- --------- ---------
Balance, December 31, 2006 500,001 $ 500 $ 9,500 $ (93,309)
Net Loss for the Year Ended
December 31, 2007 - - - (7,978)
--------- --------- --------- ---------
Balance, December 31, 2007 500,001 $ 500 $ 9,500 $ (101,287)
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
F-3
Cygni Investments, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
(Inception) to
December December December
31, 2007 31, 2006 31, 2007
---------- ---------- ----------
Cash Flows from Operating Activities
Net Loss $ (7,978) $ (13,504) $ (101,287)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Stock Issued for Services - - 2,285
Increase (Decrease) in Accounts Payable 4,822 10,348 40,669
Increase (Decrease) in Interest Payable 3,156 3,156 19,055
--------- --------- ---------
Net Cash Provided by
Operating Activities - - (39,278)
Cash Flows from Investing Activities - - -
--------- --------- ---------
Net Cash Provided by
Investing Activities - - -
Cash Flows from Financing Activities
Issuance of Common Stock for Cash - - 7,715
Proceeds from Notes Payable - - 31,563
--------- --------- ---------
Net Cash Provided by
Financing Activities - - 39,278
--------- --------- ---------
Net 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.
F-4
Cygni Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2007
(Unaudited)
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 as defined by
Statement of Financial Accounting Standards (SFAS) No. 7.
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.
Fair Value of Financial Instruments - The fair value of the Company's cash
and cash equivalents, accounts payable and accrued liabilities approximate
carrying value based on their effective interest rates compared to current
market prices.
F-5
Cygni Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2007
(Unaudited)
Net Earnings (Loss) Per Share of Common Stock - The computation of
earning (loss) per share of common stock is based on the weighted average
number of shares outstanding at the date of the financial statements.
For the Years Ended
December 31,
2007 2006
Basic Earnings per share: -------- --------
Income (loss) (numerator) $ (7,978) $ (13,504)
Shares (demoninator) 500,001 500,001
Per share amount $ (.03) $ (.03)
NOTE 3 - NEW TECHNICAL PRONOUNCEMENTS
In September 2006, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 157, Fair Value Measurements, or SFAS 157, which defines fair value,
establishes a framework for measuring fair value and requires additional
disclosures about fair value measurements. SFAS 157 is effective for fiscal
years beginning after November 15, 2007, with early adoption permitted; in
November 2007, the FASB agreed to defer the effective date of SFAS 157 for
one year for all nonfinancial assets and nonfinancial liabilities, except for
those items that are recognized or disclosed at fair value in the financial
statements on a recurring basis. Generally, the provisions of this
statement should be applied prospectively as of the beginning of the fiscal
year in which this statement is initially applied. We have determined that
the adoption of SFAS 157 will not have a material effect on our financial
statements.
In February 2007, FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - including an amendment of FASB
Statement 115", ("SFAS 159"). This statement provides companies with an
option to report selected financial assets and liabilities at fair value.
This statement is effective for fiscal years beginning after November 15,
2007, with early adoption permitted. We have determined that the adoption
of SFAS 159 will not have a material affect on our financial position,
results of operations, cash flows or financial statement disclosures.
In December 2007, the FASB issued FAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements - an amendment of ARB No. 51". FAS No. 160
establishes accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. It
clarifies that a noncontrolling interest in a subsidiary is an ownership
interest in the consolidated entity that should be reported as equity in the
consolidated financial statements. FAS No. 160 is effective for the Company
in its fiscal year beginning January 1, 2009. We have determined that the
adoption of SFAS 157 will not have a material effect on our financial
statements.
F-6
Cygni Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2007
(Unaudited)
NOTE 3 - NEW TECHNICAL PRONOUNCEMENTS (continued)
In December 2007, the FASB issued FAS No. 141 R "Business Combinations".
FAS No. 141R establishes principles and requirements for how the acquirer of
a business recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed and any noncontrolling
interest in the acquiree. FAS No. 141R also provides guidance for
recognizing and measuring the goodwill acquired in a business combination
and determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of a business
combination. FAS No. 141R is effective for the Company in its fiscal year
beginning January 1, 2009. While the Company has not yet evaluated this
statement for the impact, if any, that FAS No. 141R will have on its
financial position and results of operations, the Company will be required
to expense costs related to any acquisitions after September 30, 2009.
NOTE 4 - 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.
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 December 31, 2007, and earlier years;
accordingly, no deferred tax liabilities have been recognized for all years.
F-7
Cygni Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2007
(Unaudited)
NOTE 4 - INCOME TAXES (continued)
The Company has cumulative net operating loss carryforwards of approximately
$101,000 at December 31, 2007. 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
December 31, 2007, have been offset by valuation reserves in the same
amount. The net operating losses begin to expire in 2019.
The deferred tax asset and the valuation account is as follows at
December 31, 2007 and 2006:
December 31,
2007 2006
-------- --------
Deferred tax asset:
Deferred noncurrent tax asset $ 15,193 $ 13,950
------- -------
Valuation allowance (15,193) (13,950)
------- -------
Total - -
======= =======
The components of Income Tax expense are as follows:
December 31,
2007 2006
-------- --------
Current Federal Tax - -
Current State Tax - -
Change in NOL benefit (1,243) (2,159)
Change in Allowance 1,243 2,159
------- -------
$ - $ -
======= =======
NOTE 5 - 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 December 31, 2007, the accrued interest
associated with the various notes was $19,055.
F-8
Cygni Investments, Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2007
(Unaudited)
NOTE 5 - NOTE PAYABLE RELATED PARTY (continued)
December 31, December 31,
The Company has the following note payable obligations: 2007 2006
------------ ------------
Related party notes payable due on demand,
accruing interest at a rate of 10% per annum $ 31,563 $ 31,563
--------- ---------
Totals $ 31,563 $ 31,563
Less Current Maturities (31,563) (31,563)
--------- ---------
Total Long-Term Notes Payable $ - $ -
========= =========
Following are maturities of long-term debt for each of the next five
years:
Year Amount
---------- --------
2008 $ 31,563
2009 -
2010 -
2011 -
2012 -
Thereafter -
-------
Total $ 31,563
=======
NOTE 6 - 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.
F-9