UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
FUTRONIX GROUP, INC.
Formerly FourthCai, Inc.
(Name of Small Business Issuer)
March 31, 2002 0-29943
(For the Quarter Ended) (Commission File Number)
Nevada 86-0979534
(State of Incorporation) (I.R.S. Employer Identification Number)
1760S. Dimensions Terrace, Homasassa, FL 34448
Address of Principal Executive Offices Including Zip Code)
(352) 628-1900
(Issuers Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the registrant was required to file such reports), and (2) has been
subject to filing requirements for the past 90 days. [X] YES [ ] NO
Number of shares outstanding of each of the issuer's classes of common equity,
as of May 12, 2001: 5,040,000
Transitional Small Business Disclosure Format: [ ] Yes [X] No
FUTRONIX, GROUP, INC.
INDEX
Page
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Balance Sheet at March 31, 2002 3
Statement of Operations for the three months ended
March 31, 2002 and March 31, 2001 4
Statement of Stockholders' Equity for the three months
ended March 31, 2002 and 2001 5
Statement of Cash Flows for the three months ended
March 31, 2002 and March 31, 2001 6
Notes to Financial Statements 7
Item 2 - Management's Discussion and Analysis 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities and Use of Proceeds 10
Item 3. Default Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FOURTHCAI, INC.
A PREDECESSOR OF FUTRONIX GROUP, INC.
Balance Sheet
March 31, 2002
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ --
-------
Current Assets --
-------
Total Assets $ --
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Management fees payable $ --
-------
Total Liabilities --
Stockholders' Equity
Common Stock - $0.0001 par value, authorized 100,000,000
shares, issued and outstanding 5,040,000 504
Additional paid in capital 3,096
Accumulated Deficit (3,300)
-------
Total Stockholders' Equity --
-------
Total Liabilities and Stockholders' Equity $ --
=======
The accompanying notes are an integral part of these financial statements.
3
FOURTHCAI, INC.
A PREDECESSOR OF FUTRONIX GROUP, INC.
Statement of Operations
for the three months ended March 31, 2002 and 2001
(unaudited)
For the three months ended March 31,
------------------------------------
2002 2001
----------- -----------
Revenue $ -- $ --
Expenses
Administrative costs 300 300
----------- -----------
Net (Loss) $ (300) $ (300)
=========== ===========
Loss per common share $ 0.00 $ 0.00
=========== ===========
Weighted average shares outstanding 5,040,000 5,040,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
FOURTHCAI, INC.
A PREDECESSOR OF FUTRONIX GROUP, INC.
Statement of Stockholders' Equity
for the three months ended March 31, 2002 and 2001
(unaudited)
Common Stock
-------------------- Paid in Accumulated
Shares Amount Capital Deficit Total
------ ------ ------- ------- -----
Balance at January 1, 2001 5,040,000 $ 504 $1,596 $(2,100) $ --
Donated capital 300 300
Net (Loss) (300) (300)
----------- ----- ------ ------- -------
Balance at Match 31, 2001 5,040,000 $ 504 $1,896 $(2,400) $ --
=========== ===== ====== ======= =======
Balance January 1, 2002 5,040,000 $ 504 $2,796 $(3,300) $ --
Donated capital 300 300
Net (Loss) (300) (300)
----------- ----- ------ ------- -------
Balance at March 31, 2002 5,040,000 $ 504 $3,096 $(3,600) $ --
=========== ===== ====== ======= =======
The accompanying notes are an integral part of these financial statements.
5
FOURTHCAI, INC.
A PREDECESSOR OF FUTRONIX GROUP, INC.
Statement of Cash Flows
for the three months ended March 31, 2002 and 2001
(unaudited)
For the three months ended March 31,
------------------------------------
2002 2001
------- -------
Loss from operations $ (300) $ (300)
Net cash (used) by operations (300) (300)
------- -------
Increase in accounts payable -- --
------- -------
Net cash (used) by operating activities -- --
------- -------
Net increase/(decrease) in cash and cash equivalents -- --
------- -------
Cash and cash equivalents at beginning of period -- --
------- -------
Cash and cash equivalents at end of period $ -- $ --
======= =======
The accompanying notes are an integral part of these financial statements.
6
FOURTHCAI, INC.
A PREDECESSOR OF FUTRONIX GROUP, INC.
Notes to Financial Statement
for the three months ended March 31, 2002 and 2001
(unaudited)
STATEMENT OF INFORMATION FURNISHED
The accompanying financial statements have been prepared in accordance with Form
10-QSB instructions and in the opinion of management contain all adjustments
(consisting of only normal and recurring accruals) necessary to present fairly
the financial position as of March 31, 2002. These results have been determined
on the basis of generally accepted accounting principles and have been audited
by our independent auditor.
NOTE 1 - THE COMPANY
FourthCAI, Inc. (the "Company") was incorporated in the state of Nevada on
September 3, 1999. The Company has had no operations since incorporation,
however, has incurred certain costs related to organization and administration.
Legal services were provided to the Company in exchange for stock of the
Company. This transaction was based on the out-of-pocket costs for the provider
and recorded by the Company as $500. These organization costs have been expensed
as incurred. For tax purposes, these organizational expenses are being amortized
over 60 months. Administrative costs allocated to the Company for the period
from inception to March 31, 2002 aggregated $3,600.
NOTE 2 - STOCKHOLDERS' EQUITY
The Company has 100,000,000 shares of $0.0001 par value stock authorized and
5,040,000 shares outstanding at March 31, 2002 and 2001.
NOTE 3 - SUBSEQUENT EVENT - MERGER
On April 9, 2002, FourthCAI, Inc. cancelled upon surrender 4,340,000 shares of
common stock outstanding and entered into a merger with Futronix Group, Inc.,
whereupon Futronix received 9,299,500 shares of common stock of FourthCAI, Inc.
Concurrently, the Company changed its name to Futronix Group, Inc. This
transaction will be accounted for as a reverse acquisition in which Furtonix
Group, Inc. acquires the interests of FourthCAI, Inc.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
MANAGEMENT'S PLAN OF OPERATION
During the next twelve months the registrant intends to locate, analyze, acquire
or merge with a targeted company. The registrant will continue to solicit
targeted companies through the utilization of contacts in business and
professional communities. The registrant intends to solicit directly or may
engage consultants or advisors to assist it in reaching its objective. Payment
will be made to these consultants and advisors if a successful acquisition or
merger occurs because of their efforts. The payment may consist of cash or some
stock in the surviving entity or a combination of both.
The satisfaction of the registrant's cash requirements for the next twelve
months will be met in that Corporate Architects, Inc., the registrant's
principal shareholder, has agreed to advance to the Company the additional funds
needed for operations and those amounts designated for costs associated with a
search for and completion of an acquisition. The principal shareholder has no
expectation of reimbursement of the funds advanced unless the new owners of the
Company decide to pay all or a portion thereof. A limit as to the minimum or
maximum amounts advanced by the principal shareholder has not been set. The
registrant will not borrow funds to pay management, agents, consultants,
advisors or promoters. The Company will not merge with, acquire or purchase
assets of an entity in which the Company's officers, directors or shareholders
or any affiliate or agent hold an equity position or is an officer or director.
The Company's business plan is to locate certain companies that may wish to
merge with the registrant in some fashion. This targeted company would desire
the perceived advantages of a merger with a public, reporting company. The
perceived advantages may enhance the company's ability to attract investment,
utilize securities for acquisition, provide liquidity and numerous other
benefits. No particular industry has been identified nor is this search confined
to a specific geographical area. It is not anticipated by management that the
Company will be able to participate in any more than one merger because of its
limited assets and resources.
The registrant may merge or acquire a company in early stage development needing
additional capital to launch new products, increase marketing or improve
quality. The utilization of the public market may be beneficial in raising the
required capital.
The registrant does not have nor will it acquire capital to supply targeted
companies. It is the position of management that it can present to the candidate
the opportunity to acquire controlling interest in a public company without the
substantial costs, both in time and money, of an initial public offering.
Management has performed only limited research in this area.
The officer and director of the registrant will undertake the responsibility of
finding and analyzing new business opportunities. He will perform this task
individually and possibly with the help of other consultants and agents. The
agents or consultants will not receive a cash fee from the registrant said fee
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will have to be assumed by the target company. The officer is experienced in the
analysis of companies and will be able to determine the existence of the primary
requirements of a good business structure consisting of financial, management,
products, distribution, need for further research and development, growth
potential and other material requirements. The registrant will have total
discretion in determining the type of company best suited for a business
combination.
The registrant will be subject to all the reporting requirements of the
Securities Exchange Act. Said Act requires, among other things, that a reporting
company file its audited financial statements. The registrant will not merge or
acquire a company that does not have or will not have audited financials within
a reasonable period of time, to meet the requirements of the Exchange Act. If
the merger candidate is unable to produce audited financial statements within
sixty days from the filing of the 8-K announcing the consummation of the merger
or said financial statements fail to comply with the Exchange Act, the closing
documents will provide for the dissolution of the transaction.
A target company may want to establish a public trading market for its
securities. It may desire to avoid what it perceives to be an adverse
consequence of undertaking its own public offering. It is possible to meet this
objective by entering into a transaction with the registrant. The adverse
consequences may be perceived to be, loss of control, substantial expense and
loss of time attempting to conclude an underwriting or the inability to retain
an underwriter with acceptable terms
A business candidate may have pre-existing agreements with outside advisors,
attorneys and accountants and the continuation of those agreements may be
required before the candidate will agree to close a transaction with the
registrant. These existing agreements may be a factor in the determination by
the registrant to go forward.
The conclusion of a business transaction will most likely result in the present
shareholders no longer being in control of the registrant. Management of the
registrant probably will not have the expertise in the business of the new
entity, which will result in the resignation of the present management.
The acquisition or merger usually results in the issuance of restricted
securities as consideration. If the negotiations resulted in the requirement for
registered securities to be issued, the surviving company would have to bear the
burden of registering the shares. There can be no assurance that these newly
registered shares would be sold into the market depressing the market value.
A merger with another company will significantly dilute the percentage of
ownership the present shareholders now enjoy. The amount of dilution will depend
on the number of shares issued which in turn could depend on the assets and
liabilities of the merging company. This is not to say that other factors may
not enter into this determination.
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PART II OTHER INFORMATION
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any litigation and to its knowledge, no action,
suit or proceedings against it has been threatened by any person or entity.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
There was one report filed on Form 8-K dated April 16, 2002 indicating a
change of name, address and control and an Agreement and Plan of Reorganization.
Said 8-K is incorporated by reference
10
SIGNATURE
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.
FOURTHCAI, INC.
May 20, 2002 /s/ Nevin Jenkins
---------------------------------------
Nevin Jenkins, President and
Principal Executive Officer
May 20, 2002 /s/ Tom Smith
---------------------------------------
Tome Smith, Chief Financial Officer,
Principal Financial Officer
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