UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X)QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002
( )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: 000-49954
Maximum Dynamics, Inc.
----------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1556886
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2 North Cascade Avenue, Suite 1100, Colorado Springs, Colorado 80903
- ---------------------------------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
(719) 338-7743
--------------
(Registrant's Telephone Number, Including Area Code)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date. As of November 19, 2002 there were
9,550,000 shares of the issuer's no par value common stock issued and
outstanding.
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FORM 10-QSB
3RD QUARTER
MAXIMUM DYNAMICS, INC
(A Development Stage Company)
INDEX
Page
-----
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed balance sheet, September 30, 2002 (unaudited)..................3
Condensed statements of operations, three and nine months ended
September 30, 2002 and 2001 (unaudited), and August 23, 2000
(inception) through September 30, 2002 (unaudited)....................4
Condensed statements of cash flows, nine months ended September 30,
2002 and 2001 (unaudited), and August 23, 2000 (inception)
through September 30, 2002 (unaudited)................................5
Notes to condensed financial statements (unaudited)......................6
2
MAXIMUM DYNAMICS, INC.
(A DEVELOPMENT STAGE COMPANY)
Condensed Balance Sheet
(Unaudited)
Septemeber 30, 2002
Assets
Cash.............................................................. $ 1,071
Equipment, net of accumulated depreciation of $1,267.............. 3,800
License rights, net of accumulated amortization of $14,667........ 25,333
-----------
$ 30,204
============
Liabilities and Shareholders' Equity
Liabilities:
Accounts payable and accrued liabilities...................... $ 6,502
-----------
Total liabilities............................... 6,502
------------
Shareholders' equity:
Preferred stock............................................... ---
Common stock.................................................. 213,000
Additional paid-in capital.................................... 324,775
Deficit accumulated during development stage.................. (514,073
------------
Total shareholders' equity.................... 23,702
------------
$ 30,204
============
See accompanying notes to condensed financial statements
3
MAXIMUM DYNAMICS, INC.
(A DEVELOPMENT STAGE COMPANY)
Condensed Statements of Operations
(Unaudited)
August 23,
Three Months Ended Nine Months Ended 2000
September 30, September 30, (Inception)
-------------------------------- ------------------------------- Through
September 30,
2002 2001 2002 2001 2002
------------- ----------------- --------------- ------------- ---------------
$ -- $ -- 28,000 $ -- $ 28,000.
Service revenue................................ ------------- ----------------- --------------- ------------- ---------------
Operating expenses:
Stock-based compensation:
Employee services....................... -- -- -- -- 100,000
Consulting services.................... -- -- -- -- 33,000
Contributed services (Note B).............. 28,750 45,000. 139,275 135,000 319,275
Contributed rent (Note B).................. 750 750. 1,500 2,250 5,500
Rent....................................... -- -- 3,500 -- 3,500
Consulting, related parties (Note B)....... -- -- 17,600 -- 17,600
Consulting, other.......................... -- -- 18,085 -- 18,085
Professional fees.......................... 5,752 -- 19,279 -- 19,279
Marketing.................................. -- -- 9,000 -- 9,000
Depreciation and amortization.............. 2,422b 2,000. 7,267 6,000 15,934
Other general and administrative costs..... 500 -- 800 -- 900
------------- ----------------- --------------- ------------- ---------------
Total operating expenses... 38,174 47,750. 216,306 143,250 542,073
------------- ----------------- --------------- ------------- ---------------
Loss before income taxes... (38,174) (47,750) (188,306) (143,250) (514,073)
Income tax provision (Note C).............. -- -- -- -- --
------------- ----------------- --------------- ------------- ---------------
Net loss................... $ (38,174) $ (47,750) $ (188,306) $ (143,250) $ (514,073)
============= ================= =============== ============= ===============
Basic and diluted loss per share............... $ (0.00) (0.01) $ (0.02) (0.02)
============= ================= =============== =============
Weighted average common shares outstanding........ 9,550,000 8,650,000. 9,550,000 8,650,000
============= ================= =============== =============
See accompanying notes to condensed financial statements
4
MAXIMUM DYNAMICS, INC.
(A DEVELOPMENT STAGE COMPANY)
Condensed Statements of Cash Flows
(Unaudited)
August 23,
Nine Months Ended 2000
September 30, (Inception)
---------------------------------------- Through
September 30,
2002 2001 2002
------------------- ------------------ -------------------
Net cash (used in)
operating activities................. $ (33,762) $ -- $ (33,862)
------------------- ------------------ -------------------
Cash flows from investing activities:
Purchases of equipment.................................... (5,067) -- (5,067)
------------------- ------------------ -------------------
Net cash (used in)
investing activities................. (5,067) -- (5,067)
------------------- ------------------ -------------------
Cash flows from financing activities:
Working capital advances, net............................. (100) -- --
Proceeds from issuance of common stock (Note D)........... 40,000 -- 40,000
------------------- ------------------ -------------------
Net cash provided by
financing activities................. 39,900 -- 40,000
------------------- ------------------ -------------------
Net change in cash................... 1,071 -- 1,071
Cash, beginning of period..................................... -- -- --
------------------- ------------------ -------------------
Cash, end of period........................................... $ 1,071 $ -- $ 1,071
Supplemental disclosure of cash flow information:
Income taxes.............................................. $ -- $ -- $ --
=================== ================== ===================
Interest.................................................. $ -- $ -- $ --
=================== ================== ===================
Non-cash financing activities:
Common stock issued in exchange for
offering costs......................................... $ 5,000 $ -- $ 5,000
=================== ================== ===================
Common stock issued in exchange for
license rights......................................... $ -- $ -- $ 40,000
=================== ================== ===================
See accompanying notes to condensed financial statements
5
MAXIMUM DYNAMICS, INC.
(A Development Stage Company)
Notes to Condensed Financial Statements
Unaudited
Note A: Basis of presentation
The financial statements presented herein have been prepared by the Company in
accordance with the accounting policies in its Form SB-2 with financial
statements dated through March 31, 2002, and should be read in conjunction with
the notes thereto.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
The Company is in the development stage in accordance with Statements of
Financial Accounting Standards (SFAS) No. 7 "Accounting and Reporting by
Development Stage Enterprises". As of September 30, 2002, the Company has
devoted substantially all of its efforts to financial planning, raising capital,
developing markets and performing on a ten-month contract secured in December
2001.
Financial data presented herein are unaudited.
Note B: Related party transactions
An officer contributed office space to the Company from inception through March
2002 and for the three months ended September 30, 2002. The office space was
valued at $250 per month based on the market rate in the local area and is
included in the accompanying financial statements as contributed rent expense
with a corresponding credit to additional paid-in capital.
On January 2, 2002, an officer advanced the Company $500 to open a bank account.
The Company repaid the advance in March 2002.
Three officers contributed software programming, business development and
administrative services to the Company from January 1, 2001 through September
30, 2002. The time and effort was recorded in the accompanying financial
statements based on the prevailing rates for such services, which ranged from
$50 to $100 per hour based on the level of services performed. The services are
reported as contributed services with a corresponding credit to additional
paid-in capital.
Note C: Income taxes
The Company records its income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes". The Company incurred net operating losses during
the nine months ended September 30, 2002 resulting in a deferred tax asset,
which was fully allowed for; therefore, the net benefit and expense resulted in
$-0- income taxes.
6
MAXIMUM DYNAMICS, INC.
(A Development Stage Company)
Notes to Condensed Financial Statements
Unaudited
Note D: Shareholder's equity
During January 2002, the Company conducted a private placement offering of its
common stock. The Company closed the offering after selling 800,000 shares of
its no par value common stock for $.05 per share pursuant to an exemption from
registration claimed under sections 3(b) and 4(2) of the Securities Act of 1933,
as amended, and Rule 506 of Regulation D promulgated thereunder. The Company
relied upon exemptions from registration believed by it to be available under
federal and state securities laws in connection with the offering. The shares
were sold through the Company's officers and directors. The Company received
proceeds from the offering totaling $40,000.
In addition, the Company issued 100,000 shares of its common stock in exchange
for legal services related to the Company's private placement offering. The
transaction was valued at $.05 per share. As a result, the Company recognized
offering costs totaling $5,000 in the accompanying financial statements.
Note E: Subsequent event
On October 8, 2002, the Company entered into an Asset Purchase Agreement (the
"Agreement") with Barrington Gap, Inc. ("BGI"), a Colorado corporation. In
accordance with the Agreement, BGI sold its Internet marketing software,
software development, maintenance and customer contracts, and other proprietary
knowledge used in the Company's operations to the Company in exchange for
consideration totaling $100,000. The $100,000 consisted of the extinguishment of
a $47,000 liability owed by BGI to the Company under a subcontract agreement,
and 1,060,000 shares of the Company's common stock valued at $53,000 ($.05 per
share).
The following unaudited pro forma condensed balance sheet gives effect to the
acquisition of BGI's assets as if it had occurred on September 30, 2002. The
unaudited pro forma financial information should be read in conjunction with the
separate audited financial statements and notes thereto of each of the companies
(the Company's audited financial statements are included in its annual report of
Form 10-KSB) included in the pro forma.
7
MAXIMUM DYNAMICS, INC.
(A Development Stage Company)
Notes to Condensed Financial Statements
Unaudited
PRO FORMA CONDENSED BALANCE SHEET
September 30, 2002
Unaudited
Pro Forma
Maximum Barrington ---------------------------------------
Dynamics Gap Adjustments Combined
-------------- --------------- --------------- --------------
Cash..................................... $ 1,071 $ - $ - $ 1,071
Due from Barrington Gap.................. - - - A,B -
Property and equipment, net.............. 3,800 38,210 - 42,010
License rights, net...................... 25,333 - - 25,333
Internet marketing software, net......... - 24,306 37,484 B 61,790
-------------- --------------- --------------- --------------
Total Assets........................ $ 30,204 $ 62,516 $ 37,484 $ 130,204
============== =============== =============== ==============
Accounts payable and accruals............ $6,502 $3,500 $ (3,500) B $ 6,502
Due to Maximum Dynamics.................. - 47,000 (47,000) A -
Due to officer........................... - 10,560 (10,560) B -
Line of credit........................... - 29,977 (29,977) B -
-------------- --------------- --------------- --------------
Total Liabilities................... 6,502 91,037 (91,037) 6,502
-------------- --------------- --------------- --------------
Common stock............................. 213,000 79,712 (26,712) A,B 266,000
Additional paid-in capital............... 324,775 51,475 (51,475) B 324,775
Retained deficit......................... (514,073) (159,708) 206,708 B (467,073)
-------------- --------------- --------------- --------------
Total Equity........................ 23,702 (28,521) 128,521 123,702
-------------- --------------- --------------- --------------
Total Liabilities and Equity........ $ 30,204 $ 62,516 $ 37,484 $ 130,204
============== =============== =============== ==============
Pro forma adjustments - Balance Sheet
A. Adjustment to record the $47,000 receivable due from BGI is not
recorded on the Company's accompanying unaudited, condensed
financial statements; the Company's accounting policy is to
recognize receivables and related revenue only after services are
provided and collection is probable;
B. Adjustment to record the acquisition of property, equipment, and
Internet marketing software in exchange for the cancellation of
the receivable owed by BGI and the issuance of the Company's common
stock;
C. Adjustment to eliminate unwanted liabilities that were retained by the
seller and not acquired by the Company.
The following unaudited pro forma condensed statements of operations give effect
to the acquisition of BGI's assets as if it had occurred at the beginning of the
periods presented. The unaudited pro forma condensed statements of operations
are not necessarily indicative of results of operations had the acquisition
occurred at the beginning of the periods presented nor of results to be expected
in the future.
8
MAXIMUM DYNAMICS, INC.
(A Development Stage Company)
Notes to Condensed Financial Statements
Unaudited
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2002
Unaudited
Pro Forma
Maximum Barrington --------------------------------------
Dynamics Gap Adjustments Combined
-------------- -------------- --------------- ----------------
Sales........................................... $ 28,000 $ 186,483 $ (28,000) A $ 186,483
Cost of sales................................... - (88,642) 75,000 A (13,642)
Operating expenses.............................. (216,306) (211,493) (6,698) B (434,497)
Non-operating expenses.......................... - (1,873) - (1,873)
-------------- -------------- --------------- ----------------
Net loss........................................ $ (188,306) $ (115,525) $ 40,302 $ (263,529)
============== ============== =============== ================
Net loss per share - basic and diluted......... $ (0.02) $ (0.01) $ (0.02)
============== ============== ================
Basic and diluted common shares
outstanding.................................. 9,550,000 9,531,792 10,610,000
============== ============== ================
Pro forma adjustments - 2002 Statement of Operations
A. Adjustment to remove the revenue recognized by the Company and
expenses recognized by BGI related to the sub-contract
agreement between the two parties;
B. To record the increase in amortization expense related to the
increased value of the Internet marketing software
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2001
Unaudited
Pro Forma
Maximum Barrington --------------------------------------
Dynamics Gap Adjustments Combined
-------------- -------------- --------------- ----------------
Sales........................................... $ - $ 15,851 $ - $ 15,851
Cost of sales................................... - (2,350) - (2,350)
Operating expenses.............................. (191,000) (49,834) (1,489) A (242,323)
Non-operating expenses.......................... - - - -
-------------- -------------- --------------- ----------------
Net loss........................................ $ (191,000) $ (36,333) $ (1,489) $ (228,822)
============== ============== =============== ================
Net loss per share - basic and diluted.......... $ (0.02) $ (0.01) $ (0.02)
============== ============== ================
Basic and diluted common shares
outstanding.................................. 8,651,282 7,032,179 9,711,282
============== ============== ================
Pro forma adjustments - 2001 Statement of Operations
A. Adjustment to record the increase in amortization expense
related to the increased value of the Internet marketing
software
9
MAXIMUM DYNAMICS, INC.
(A Development Stage Company)
Notes to Condensed Financial Statements
Unaudited
The unaudited pro forma condensed financial information does not show any
adjustments for a change in the income tax benefit as the total pro forma
benefit for income taxes would be offset by any valuation allowance due to any
deferred tax asset derived from net operating losses. The valuation allowance
offsets the net deferred tax asset for which there is no assurance of recovery.
10
Item 2. Management's Discussion and Plan of Operation
This following information specifies certain forward-looking statements of
management of the company. Forward-looking statements are statements that
estimate the happening of future events are not based on historical fact.
Forward-looking statements may be identified by the use of forward-looking
terminology, such as "may", "shall", "will", "could", "expect", "estimate",
"anticipate", "predict", "probable", "possible", "should", "continue", or
similar terms, variations of those terms or the negative of those terms. The
forward-looking statements specified in the following information have been
compiled by our management on the basis of assumptions made by management and
considered by management to be reasonable. Our future operating results,
however, are impossible to predict and no representation, guaranty, or warranty
is to be inferred from those forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in
the following information represent estimates of future events and are subject
to uncertainty as to possible changes in economic, legislative, industry, and
other circumstances. As a result, the identification and interpretation of data
and other information and their use in developing and selecting assumptions from
and among reasonable alternatives require the exercise of judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially
from anticipated or projected results, and, accordingly, no opinion is expressed
on the achievability of those forward-looking statements. No assurance can be
given that any of the assumptions relating to the forward-looking statements
specified in the following information are accurate, and we assume no obligation
to update any such forward-looking statements.
We are a development stage company and were incorporated in Colorado on August
23, 2000. We are engaged in the business of designing and selling custom
software packages for the institutional financial community. In August 2000, we
secured a five-year exclusive license of a software system from Europa Global,
Inc. in exchange for 2,000,000 shares of common stock as an upfront payment for
the five-year exclusive license of the software system. We have the right of
first refusal to renew the license or acquire the technology after the five-year
period is over. Europa Global, Inc. initially developed the software system
before licensing it to us, where we continued development of the software under
the name Datalus.
Datalus is web-based software for investment fund managers that we believe
offers fund managers three critical value propositions: lower overhead,
computation and tracking, and security/control. First, we believe that Datalus
will be able to significantly reduce overhead by generating statements instantly
as opposed to paying accountants for one to two months. We expect that the
system is able to compute the statements and calculate the assets, along with
redemptions and any compensation to sponsors and/or agents. We anticipate that
our web-based software also will provide customers on-line access to their
accounts 24 hours, seven days a week. Lastly, we believe that the software has
numerous security features built into it. Therefore, we expect that our software
will enable fund managers to outsource their entire client side management to
anyone in the world who has Internet access while sill maintaining control and
security.
Liquidity and Capital Resources. We have cash of $1,071 as of September 30,
2002. Our total current assets were approximately $30,204 as of September 30,
2002. Of that total, $3,800 was represented by net equipment and we also had
license rights of approximately $25,333, net of accumulated amortization of
$14,667. As of September 30, 2002, we have received payment for four months of
service under our ten-month contract with Barrington Gap, Inc., with six months
of service remaining unpaid for. Although Barrington Gap, Inc.'s current payment
has not yet been made, our management expects to acquire the assets of
Barrington Gap, Inc., in exchange for the $47,000 owed. Additionally, our
officers are committed to paying our expenses to enable us to continue
operations for at least the next twelve months. Therefore, we believe that our
available cash is sufficient to pay our day-to-day expenditures.
6
Our total current liabilities were approximately $6,502 as of September 30,
2002. Accounts payable and accrued liabilities represent all of our total
liabilities. Other than those liabilities, we do not have any material
commitments for capital expenditures.
Results of Operations.
For the three month period ending September 30, 2002, compared to the same
period ending September 30, 2001.
Revenues. We have realized no revenues from services that we provided during the
three months ended September 30, 2002. Our services were provided to a related
party, Barrington Gap, Inc. We did not generate any revenues during the three
month period ended September 30, 2001. Therefore, unless we expand our
operations, we anticipate that we will not be able to generate revenues from
other sources during our current fiscal year.
Operating Expenses. For the three months ended September 30, 2002, our total
expenses were approximately $38,174. These expenses were represented by $28,750
for contributed services, $750 for contributed rent, $5,752 for professional
fees and $2,422 for depreciation and amortization. We experienced a net loss of
$38,174 for the three month period ended September 30, 2002, This is in
comparison to the same period ended September 30, 2001, during which our total
expenses were $47,750. Of this amount, $45,000 was represented by contributed
services, along with $750 in contributed rent and $2,000 in depreciation and
amortization. For the three month period ended September 30, 2001, we
experienced a net loss of $47,750. The decrease for the period ended September
30, 2002 was primarily due to lower amount of consulting expenses we incurred
during that quarter.
For the nine month period ending September 30, 2002, compared to the same period
ending September 30, 2001.
Revenues. We have realized revenues of approximately $28,000 from services that
we provided during the nine months ended September 30, 2002. Our services were
provided to a related party, Barrington Gap, Inc. We did not generate any
revenues during the nine month period ended September 30, 2001. We must expand
our operations in order to generate revenues from other sources during our
current fiscal year.
Operating Expenses. For the nine months ended September 30, 2002, our total
expenses were approximately $216,306. These expenses were represented primarily
by $139,275 for contributed services, $3,500 for rent, $17,600 for consulting
paid to related parties, $18,085 in other consulting fees, $19,279 for
professional fees, $9,000 for marketing, and $7,267 for depreciation and
amortization. We experienced a net loss of $188,306 for the nine month period
ended September 30, 2002, This is in comparison to the same period ended
September 30, 2001, during which our total expenses were $143,250. Of this
amount, $135,000 was represented by contributed services, along with $2,250 in
contributed rent and $6,000 in depreciation and amortization. For the nine month
period ended September 30, 2001, we experienced a net loss of $143,250. The
increase for the period ended September 30, 2002 was primarily due to consulting
expenses we incurred during that quarter.
Our Plan of Operations for the Next Twelve Months. We have generated $28,000 in
revenues since our inception on August 23, 2000. Our revenues are the result of
services provided to our first customer, Barrington Gap, Inc., under a 10-month
contract for a total $75,000 that began in December 2001. There is $47,000
remaining due on that contract, which we anticipate extinguishing in exchange
for acquiring the assets of Barrington Gap, Inc., as described below.
As of September 30, 2002, we had $1,071 in cash. We believe that we will have
sufficient financial resources to meet our obligations for the twelve month
period following September 30, 2002, because our officers are committed to
paying our expenses at least through that period. We will not compensate our
management until such time as our revenues have increased to a level that will
accommodate paying their salaries.
7
We anticipate that our expenditures will vary with the number of customers that
we engage and the level of revenue that those contracts generate. If we increase
the level of our operations by engaging additional clients, we anticipate that
our revenues will increase, enabling us to compensate our management. Therefore,
we anticipate that our burn rate will remain at about $1,500 per month. For that
reason, we anticipate that even though our cash of $1,071 as of September 30,
2002 is not sufficient to sustain our burn rate of $1,500 per month, we will be
able to continue our operations through June 2003 because our officers are
committed to continue funding our operations for at least the next twelve
months.
Our most important milestone over the next twelve months will be securing at
least three customer agreements, which our management believes would generate
approximately $250,000 in revenues and would be sufficient to cover our
operating costs for our fiscal year 2002. If we are not able to secure at least
three customer agreements, then our revenues will be lower than $250,000, and we
intend to adjust our operating expenses downward accordingly. If we are not able
to secure any additional customer agreements, we anticipate operating at our
current level of activity and in our estimation, our burn rate will remain
constant.
If we are able to secure at least three customers, then our management estimates
that the main expense will be software commercialization expenses of
approximately $6,000, which will be covered by increased revenue from those
additional customers. We believe that we will not need to incur this software
expense until and unless we can secure additional customer agreements. However,
there can be no assurance that we will be successful in securing these customers
with our current resources or at all. If we are not able to secure additional
customers or do not receive payments for the remainder of our contract with
Barrington Gap, Inc., we anticipate that we will need to seek additional sources
of financing or cease our operations.
If we are unsuccessful in securing customers, we may have to turn to other
sources of financing, which could further dilute the ownership of current
shareholders. If we are unsuccessful in obtaining further financing, we could be
unable to continue operations.
We do not anticipate that there will be any significant changes in the number of
employees or expenditures for software development, hedge fund administration
service costs, or equipment from what is discussed in this prospectus. There can
be no assurance, however, that conditions will not change forcing us to make
changes to any of our plan of operations or business strategies.
8
Item 3. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. We maintain controls and
procedures designed to ensure that information required to be disclosed in the
reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission. Based upon
their evaluation of those controls and procedures performed within 90 days of
the filing date of this report, our chief executive officer and the principal
financial officer concluded that our disclosure controls and procedures were
adequate.
(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of those controls by the chief
executive officer and principal financial officer.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
- --------------------------
None.
Item 2. Changes in Securities.
- ------------------------------
None.
Item 3. Defaults Upon Senior Securities
- ----------------------------------------
None.
Item 4. Submission of Matters to Vote of Security Holders
- ----------------------------------------------------------
None.
Item 5. Other Information
- ---------------------------
On October 8, 2002, we entered into an Asset Purchase Agreement (the
"Agreement") with Barrington Gap, Inc. ("BGI"), a Colorado corporation. In
accordance with the Agreement, BGI is to sell its Internet marketing software,
software development, maintenance and customer contracts, and other proprietary
knowledge used in our operations to us in exchange for consideration totaling
$100,000. The $100,000 will consist of the extinguishment of a $47,000 liability
owed by BGI to the Company under a subcontract agreement, and 1,060,000 shares
of our common stock valued at $53,000 ($.05 per share). The Agreement will not
be consummated until approval by our shareholders at an upcoming shareholder
meeting.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
None.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned in the City of Colorado Springs, Colorado, on November 19, 2002.
Maximum Dynamics, Inc.
By: /s/ Eric R. Majors
--------------------------------------------
Eric R. Majors
Its: Chief Executive Officer and Chief
Financial Officer
10
CERTIFICATIONS
- --------------
I, Eric R. Majors, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Maximum Dynamics,
Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 19, 2002
Eric R. Majors
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Eric R. Majors
Chief Executive Officer and
Chief Financial Officer