U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2006
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[ ] Transition Report under Section 13 or 15(d)of the Exchange Act For the
Transition Period from ________ to ___________
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Commission file number: 333-76242
Eaton Laboratories, Inc.
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(Name of small business issuer in its charter)
Nevada 45-0487463
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 N. Rainbow, Suite 300, Las Vegas, NV 89107
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(Address of principal executive offices)
(702) 221-1953
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(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act) Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
Yes [X] No [ ] N/A
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Number of shares of common stock outstanding as of May 10, 2006: 10,873,750
shares common stock
Number of shares of preferred stock outstanding as of May 10, 2006: None
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements................................. 3
Report of Independent Registered Public Accounting Firm 4
Balance Sheet (unaudited)............................ 5
Statements of Operations (unaudited)................. 6
Statements of Cash Flows (unaudited)................. 7
Notes to Financial Statements........................ 8-9
Item 2. Management's Discussion and Analysis of Plan
of Operation........................................ 10
Item 3. Controls and Procedures................................ 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................... 16
Item 2. Changes in Securities and Use of Proceeds............ 16
Item 3. Defaults upon Senior Securities...................... 16
Item 4. Submission of Matters to a Vote
of Security Holders................................. 16
Item 5. Other Information..................................... 16
Item 6. Exhibits and Reports on Form 8-K...................... 16
Signatures...................................................... 17
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
As prescribed by item 310 of Regulation S-B, the independent auditor has
reviewed these unaudited interim financial statements of the registrant
for the three months ended March 31, 2006. The financial statements
reflect all adjustments which are, in the opinion of management, necessary
to a fair statement of the results for the interim period presented. The
unaudited financial statements of registrant for the three months ended
March 31, 2006, follow.
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MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
Report of Independent Registered Public Accounting Firm
Eaton Laboratories, Inc.
500 N Rainbow Blvd., Suite 300
Las Vegas, NV 89107
We have reviewed the accompanying balance sheet of Eaton Laboratories Inc. (A
Development Stage Company), as of March 31, 2006, and the related statements
of income, retained earnings, and cash flows for the three months then ended,
in accordance with the standards of the Public Company Accounting Oversight
Board (United States). All information included in these financial
statements is the representation of the management of Eaton Laboratories Inc.
(A Development Stage Company).
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial statements in order for them to be in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has no established source of revenue and no
operations. This raises substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from this uncertainty.
/s/ Moore & Associates, Chartered
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Moore & Associates, Chartered
Las Vegas, Nevada
May 9, 2006
2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NEVADA 89146
(702) 253-7511 Fax: (702)253-7501
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Eaton Laboratories, Inc.
(A Development Stage Company)
Balance Sheets
Balance Sheet
(Unaudited)
March 31, December 31,
2006 2005
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Assets
Current assets:
Cash and equivalents $ 73 $ 248
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Total current assets 73 248
$ 73 $ 248
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Liabilities and Stockholders' Equity
Current liabilities: $ 5,000 $ 5,000
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Total current liabilities 5,000 5,000
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Stockholders' equity:
Common stock, $0.001 par value, 80,000,000
shares authorized, 10,873,750 shares
issued and outstanding 10,873 10,873
Additional paid-in capital 386,626 386,626
(Deficit) accumulated during development
stage (402,426) (402,251)
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(4,927) (4,752)
$ 73 $ 248
============= =============
The accompanying notes are an integral part of these financial statements.
5
Eaton Laboratories, Inc.
(A Development Stage Company)
Statements of Operations
(Unaudited)
Statements of Operations
February 2, 2000
For the Quarter ending (inception) to
March 31, March 31, March 31,
2006 2005 2006
------------ ------------ ----------------
Revenue $ - $ - $ -
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Expenses:
General administrative expenses 175 30 107,783
R & D Expenses 294,825
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Total expenses 175 30 402,608
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Interest Income - - 182
Net (loss) $ (175) $ (30) $ (402,426)
============ ============ ================
Weighted average number of
common shares outstanding 10,873,750 10,873,750
============ ============
Net (loss) per share $ (0) $ (0)
============ ============
The accompanying notes are an integral part of these financial statements.
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Eaton Laboratories, Inc.
(A Development Stage Company)
Statements of Cash Flow
(Unaudited)
Statements of Cash Flow
February 2, 2000
Qtr. ending Qtr. ending (inception) to
March 31, March 31, March 31,
2006 2006 2006
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Cash flows from operating
activities
Net (loss) $ (175) $ (30) $ (402,426)
Adjustments to reconcile net
(loss) to net cash (used) by
operating activities:
Increase in accounts
payable - related party - - 5,000
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Net cash (used) by operating
activities (175) (30) (397,426)
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Cash flows from investing
activities - - -
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-
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Net cash by investing activities -
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Cash flows from financing activities
Issuance of common stock 10,873
Donated capital - 386,626
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Net cash provided by financing
activities - - 397,499
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Net increase (decrease) in cash (175) (30) 73
Cash - beginning 248 369 -
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Cash - ending $ 73 $ 339 $ 73
============ ============ ================
Supplemental disclosures:
Interest paid $ - $ - $ -
============ ============ ================
Income taxes paid $ - $ - $ -
============ ============ ================
The accompanying notes are an integral part of these financial statements.
7
Eaton Laboratories, Inc.
Notes to Financial Statements
Note 1 - Basis of Presentation
The interim financial statements included herein, presented in accordance
with United States generally accepted accounting principles and stated
in US dollars, 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.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these
consolidated interim financial statements be read in conjunction with the
financial statements of the Company for the year ended December 31, 2005 and
notes thereto included in the Company's Form 10-KSB annual report. The Company
follows the same accounting policies in the preparation of interim reports.
Results of operations for the interim periods may not be indicative of annual
results.
Note 2 - Going concern
These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business. As at March 31, 2005, the Company
has recognized no revenues and has accumulated operating losses of
approximately $(402,426) since inception. The Company's ability to continue
as a going concern is contingent upon the successful completion of additional
financing arrangements and its ability to achieve and maintain profitable
operations. Management plans to raise equity capital to finance the operating
and capital requirements of the Company. Amounts raised will be used to
further development of the Company's products, to provide financing for
marketing and promotion, to secure additional property and equipment, and for
other working capital purposes. While the Company is expending its best
efforts to achieve the above plans, there is no assurance that any such
activity will generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
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Eaton Laboratories, Inc.
Notes to Financial Statements
Note 3 - Related party transactions
The Company does not lease or rent any property. Office services are provided
without charge by a major shareholder. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business activities
and may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Eaton Laboratories, Inc. ("Eaton" or "ETLB") was incorporated under the laws of
the State of Nevada on February 2, 2002, under the name Eaton Laboratories, Inc.
On April 14, 2006, Eaton Laboratories and Pinoak, Inc. ("Pinoak") a Nevada
corporation entered into an Acquisition Agreement and Plan of Merger (the
"Merger Agreement") whereby Eaton has acquired all the outstanding shares of
common stock of Pinoak from its sole stockholder in an exchange for $4,000 cash
in a transaction where Eaton is the successor corporation. The Merger was
approved by the unanimous consent of the Board of Directors of Eaton and Pinoak
on April 14, 2006.
Pursuant to Rule 12g-3(g) of the General Rules and Regulations of the Securities
and Exchange Commission, Eaton is the successor issuer to Pinoak for reporting
purposes under the Securities Exchange Act of 1934, as amended (the "Act").
The purpose of this transaction was for Eaton to succeed to the registration
status of Pinoak under the Exchange Act pursuant to Rule 12g-3. Pinoak, a
reporting company was not engaged in any business. It was incorporated for the
purpose of becoming a fully reporting shell company and subsequently finding a
merger candidate. The sole Eaton director and officer became the director and
officer of the Surviving Corporation. The sole director and officer of Pinoak
resigned. Pursuant to the Acquisition Agreement and Plan of Merger the
Articles and By-laws of Eaton become the Articles and By-Laws of the Surviving
Corporation.
EATON LABORATORIES BUSINESS
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Eaton Laboratories is a developmental stage which plans to produce generic
pharmaceutical products, through contract laboratories and contract
manufacturing facilities, for pharmaceutical products that have lost their
innovator patent(s). The company plans to distribute any future pharmaceutical
product(s) into the marketplace through drug wholesalers, chain pharmacies and
State Medicaid programs.
There are few generic pharmaceutical companies who target the lower volume
brand name products that have lost their patent. It is the goal of Eaton
Laboratories, Inc. to identify these smaller volume products, and with little
overhead, find a contract laboratory and manufacturer who can adhere to FDA
guidelines to replicate these products.
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Eaton is developing a generic pharmaceutical product. The formulation and
manufacturing process has been completed, at this point the Company needs to
produce a full manufacturing batch and conduct patient studies before it can
submit its Abbreviated New Drug Application ("ANDA") to the Food and Drug
Administration ("FDA"). Once Eaton obtains sufficient funding, which it may
not obtain, the Company will need approximately 6-months to complete a full
scale manufacturing batch, by utilizing the services of a contract manufactures
followed by comparative human testing. Once this data has been tabulated, the
Company can submit an ANDA to the FDA. FDA approval to market this product
could take an additional twelve to eighteen months. Therefore, Eaton does not
expect to generate any revenues for at least two years.
The Company has generated no revenues for the first Quarter ending March 31,
2006 with a loss of $175 for the same period. As of March 31, 2006, the
Company had an accumulated deficit of $(402,426) dollars. There can be no
assurances that the Company can achieve or sustain profitability or that the
Company's operating losses will not increase in the future.
Management is currently exploring various business strategies to build its
business. The analysis of new business opportunities and evaluating
new business strategies will be undertaken by or under the supervision of the
Company's sole Officer. In analyzing prospective businesses opportunities,
management will consider, to the extent applicable, the available technical,
financial and managerial resources of any given business venture. Management
will also consider the nature of present and expected competition; potential
advances in research and development or exploration; the potential for growth
and expansion; the likelihood of sustaining a profit within given time frames;
the perceived public recognition or acceptance of products, services, trade
or service marks; name identification; and other relevant factors.
Going Concern - The Company experienced operating losses, since its inception
on February 2, 2000 through the period ended March 31, 2006. The financial
statements have been prepared assuming the Company will continue to operate as
a going concern which contemplates the realization of assets and the settlement
of liabilities in the normal course of business. No adjustment has been made
to the recorded amount of assets or the recorded amount or classification of
liabilities which would be required if the Company were unable to continue its
operations. (See Financial Footnote 2)
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Results of Operations
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During the three month period ended March 31, 2006, the Company did not
generate any revenues. In addition, the Company does not expect to generate
any profit for the next year.
Since the Company's inception on February 2, 2000 through the period ended March
31, 2006, the Company generated no revenues. During the three months ended
March 31, 2006, the Company had a net loss of $(175) as compared to a net loss
of $(30) for the same period last year. These expenses represented general and
administrative expenses. Since the Company's inception, on February 2, 2000,
the Company experienced a net lost $(402,426).
Plan of Operation
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Management does not believe that the Company will be able to generate
any significant profit during the coming year, as the company builds its
business base in the execution of its business plan. Management
believes developmental and marketing costs will most likely exceed any
anticipated revenues for the coming year.
Eaton Laboratories is a developmental stage which plans to produce generic
pharmaceutical products, through contract laboratories and contract
manufacturing facilities, for pharmaceutical products that have lost their
innovator patent(s).
Management believes the Company can sustain itself for the next twelve months.
Management has agreed to keep the Company funded at its own expense, in other
words, management is not seeking reimbursement for expenses paid.
The Company's need for capital may change dramatically if it moves
forward in producing a manufacturing batch of its generic pharmaceutical
products or it acquires an interest in a business opportunity. In the event
the Company requires additional funds, the Company will have to seek
loans or equity placements to cover such cash needs. There is no
assurance additional capital will be available to the Company on
acceptable terms.
12
Liquidity and Capital Resources
As of March 31, 2006, the Company's current liabilities exceeded its current
assets by $4,927.
As of March 31, 2006, the Company has 10,873,750 shares of common stock
issued and outstanding.
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations.
These limitations have adversely affected the Company's ability to obtain
certain projects and pursue additional business. Without realization of
additional capital, it would be unlikely for the Company to continue as a
going concern. In order for the Company to remain a Going Concern it will
need to find additional capital. Additional working capital may be sought
through additional debt or equity private placements, additional notes
payable to banks or related parties (officers, directors or stockholders),
or from other available funding sources at market rates of interest, or a
combination of these. The ability to raise necessary financing will depend
on many factors, including the nature and prospects of any business to be
acquired and the economic and market conditions prevailing at the time
financing is sought. No assurances can be given that any necessary financing
can be obtained on terms favorable to the Company, or at all.
As a result of our the Company's current limited available cash, no officer
or director received compensation through the three months ended March 31,
2006. No officer or director received stock options or other non-cash
compensation since the Company's inception through March 31, 2006. The
Company no longer has any employment agreements in place with its officers.
Nor does the Company owe its officers any accrued compensation, as the
Officers agreed to work for company at no cost, until the company can
become profitable on a consistent Quarter-to-Quarter basis.
The Company has no material commitments for capital expenditures nor does it
foresee the need for such expenditures over the next year.
13
Market Information
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Eaton Laboratories' common stock is traded on the Pink Sheets (National
Quotation Bureau) under the symbol "ETLB." There is a limited market
for ETLB shares.
(a) There is currently no Common Stock which is subject to outstanding
options or warrants to purchase, or securities convertible into, the
Company's common stock.
(b) There is currently no common stock of the Company which could be sold
under Rule 144 under the Securities Act of 1933 as amended or that the
registrant has agreed to register for sale by security holders.
(c) The Company did not repurchase any of its shares during the fiscal year
covered by this report.
Dividends
- ---------
Holders of common stock are entitled to receive such dividends as the board of
directors may from time to time declare out of funds legally available for the
payment of dividends. No dividends have been paid on our common stock, and we
do not anticipate paying any dividends on our common stock in the foreseeable
future.
Forward-Looking Statements
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This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of
the Company's business and operations, and other such matters are forward-
looking statements. These statements are based on certain assumptions and
analyses made by the Company in light of its experience and its perception
of historical trends, current conditions and expected future developments as
well as other factors it believes are appropriate in the circumstances.
However, whether actual results or developments will conform with the
Company's expectations and predictions is subject to a number of risks and
uncertainties, general economic market and business conditions; the business
opportunities (or lack thereof) that may be presented to and pursued by the
Company; changes in laws or regulation; and other factors, most of which
are beyond the control of the Company.
14
This Form 10-QSB contains statements that constitute "forward-looking
statements." These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," "will," or similar
terms. These statements appear in a number of places in this Registration and
include statements regarding the intent, belief or current expectations of
the Company, its directors or its officers with respect to, among other
things: (i) trends affecting the Company's financial condition or results of
operations for its limited history; (ii) the Company's business and growth
strategies; and, (iii) the Company's financing plans. Investors are
cautioned that any such forward-looking statements are not guarantees of
future performance and involve significant risks and uncertainties, and that
actual results may differ materially from those projected in the forward-
looking statements as a result of various factors. Factors that could
adversely affect actual results and performance include, among others, the
Company's limited operating history, potential fluctuations in quarterly
operating results and expenses, government regulation, technological change
and competition.
Consequently, all of the forward-looking statements made in this Form 10-QSB
are qualified by these cautionary statements and there can be no assurance
that the actual results or developments anticipated by the Company will be
realized or, even if substantially realized, that they will have the expected
consequence to or effects on the Company or its business or operations. The
Company assumes no obligations to update any such forward-looking statements.
Item 3. Controls and Procedures
As of the end of the period covered by this report, the Company conducted an
evaluation, under the supervision and with the participation of the principal
executive officer and principal financial officer, of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act")). Based on this
evaluation, the principal executive officer and principal financial officer
concluded that the Company's disclosure controls and procedures are effective
to ensure that information required to be disclosed by the Company in reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms. There was no change in the Company's
internal control over financial reporting during the Company's most recently
completed fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.
15
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not a party to any legal proceedings.
ITEM 2. Changes in Securities and Use of Proceeds
None.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
During the quarter ended March 31, 2006, the majority shareholders and board
of directors of the Company approved the purchase of Pinoak, Inc., a fully
reporting Company. On April 14, 2006, Eaton Laboratories, Inc. acquired all
the outstanding shares of common stock of Pinoak, Inc. from its sole
stockholder in an exchange for $4,000 cash in a transaction where Eaton
Laboratories is the successor corporation. The Pinoak shares were subsequently
cancelled.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit
Number Title of Document
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31.1 Certifications of the President pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certifications of President pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
16
b) Subsequent Reports on Form 8-K
The Company filed a Current Report on April 12, 2006, pursuant to Item 4.01
("Changes in Registrant's Certifying Accountant"); and Item 9.01 ("Exhibit").
The Company filed a Current Report on April 17, 2006, pursuant to Item 1.01
("Entry into a Material Definitive Agreement"); Item 2.01 ("Completion of
Acquisition or Disposition"); Item 5.01 ("Changes in Control of Registrant");
Item 5.02 ("Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers"); Item 5.03 ("Amendments to Articles of
Incorporation or Bylaws; Change in Fiscal Year"); Item 5.06. ("Change in Shell
Company Status"); Item 8.01 ("Other Events"); and Item 9.01 ("Financials
Statements, Pro Forma Financial Information and Exhibits ") entitled the
acquisition of Pinoak, Inc.
The Company filed an amended Current Report on April 18, 2006,
pursuant to Item 1.01 ("Entry into a Material Definitive Agreement");
Item 2.01 ("Completion of Acquisition or
Disposition"); Item 5.01 ("Changes in Control of Registrant");
Item 5.02 ("Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers"); Item 5.03 ("Amendments to Articles of
Incorporation or Bylaws; Change in Fiscal Year"); Item 5.06. ("Change in Shell
Company Status"); Item 8.01 ("Other Events"); and Item 9.01 ("Financials
Statements, Pro Forma Financial Information and Exhibits ") entitled the
acquisition of Pinoak, Inc.
The Company filed a Current Report on April 20, 2006, pursuant to Item 5.03
("Amendments to Articles of Incorporation or Bylaws") and Item 9.01
("Exhibits"), entitled Articles of Merger.
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 hereunto duly authorized.
Eaton Laboratories, Inc.
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Registrant
By: /s/ T. J. Jesky
--------------------------------
Name: T. J. Jesky
Title: Preident/Director
Dated: May 10, 2006
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17