UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter ended June 30, 2008
OR
[ ] 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 333-148920
FREIGHT MANAGEMENT CORP.
(Exact name of registrant as specified in its charter)
Nevada 75-3254381
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 200, 8275 Eastern Ave Las Vegas, NV, 89123
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 702-938-0496
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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. Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" 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). Yes [X] No [ ]
Number of shares outstanding of the registrant's class of common stock as of
July 21, 2008: 5,060,000
Authorized share capital of the registrant: 50,000,000 common shares, par value
of $0.001
The Company recorded $nil sales revenue for the three months ended June 30,
2008.
FORWARD-LOOKING STATEMENTS
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS PREDICTIONS, PROJECTIONS AND OTHER
STATEMENTS ABOUT THE FUTURE THAT ARE INTENDED TO BE "FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED (COLLECTIVELY, "FORWARD-LOOKING STATEMENTS"). FORWARD-LOOKING STATEMENTS
INVOLVE RISKS AND UNCERTAINTIES. A NUMBER OF IMPORTANT FACTORS COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
STATEMENTS. IN ASSESSING FORWARD-LOOKING STATEMENTS CONTAINED IN THIS QUARTERLY
REPORT ON FORM 10-Q, READERS ARE URGED TO READ CAREFULLY ALL CAUTIONARY
STATEMENTS - INCLUDING THOSE CONTAINED IN OTHER SECTIONS OF THIS QUARTERLY
REPORT ON FORM 10-Q. AMONG SAID RISKS AND UNCERTAINTIES IS THE RISK THAT THE
COMPANY WILL NOT SUCCESSFULLY EXECUTE ITS BUSINESS PLAN, THAT ITS MANAGEMENT IS
ADEQUATE TO CARRY OUT ITS BUSINESS PLAN AND THAT THERE WILL BE ADEQUATE CAPITAL
OR THEY MAY BE UNSUCCESSUFL FOR TECHNICAL, ECONOMIC OR OTHER REASONS.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Page Number
-----------
Balance Sheets................................................. 3
Statements of Operations....................................... 4
Statement of Stockholder's Equity.............................. 5
Statements of Cash Flows....................................... 6
Notes to the Financial Statements............................. 7
2
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
BALANCE SHEETS
June 30, December 31,
2008 2007
-------- --------
(unaudited)
ASSETS
Current assets
Cash and bank accounts $ 17,740 $ 60,208
Deposit 150 150
-------- --------
Total current assets 17,890 60,358
Website, net of accumulated amortization (Note 7) 3,223 3,889
-------- --------
Total assets $ 21,113 $ 64,247
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 1,200 $ 4,003
Due to director (Note 5) 820 820
-------- --------
Total current liabilities 2,020 4,823
-------- --------
Stockholders' equity (Note 4,5)
Authorized:
75,000,000 common shares
Par value $0.001
Issued and outstanding:
5,060,000 common shares 5,060 5,060
Additional paid-in capital 55,940 55,940
Deficit accumulated during the development stage (41,907) (1,576)
-------- --------
Total stockholders' equity 19,093 59,424
-------- --------
Total liabilities and stockholders' equity $ 21,113 $ 64,247
======== ========
The accompanying notes are an integral part of these financial statements.
3
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(unaudited)
Date of
Incorporation on
3 Months Ended 6 Months Ended September 17, 2007 to
June 30, June 30, June 30,
2008 2008 2008
---------- ---------- ----------
REVENUE $ -- $ -- $ --
---------- ---------- ----------
OPERATING EXPENSES
Amortization 333 666 777
Database and website based application development 11,000 18,550 18,550
General & Administrative 3,702 21,115 21,760
Organization -- -- 820
---------- ---------- ----------
Loss before income taxes (15,035) (40,331) (41,907)
Provision for income taxes -- -- --
---------- ---------- ----------
Net loss $ (15,035) $ (40,331) $ (41,907)
========== ========== ==========
Basic and diluted loss per Common share (1) -- --
Weighted average number of common shares
outstanding (Note 4) 5,060,000 5,060,000
========== ==========
- ----------
(1) less than $0.01
The accompanying notes are an integral part of these financial statements.
4
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(unaudited)
Deficit
Accumulated
Common Stock Additional During the Total
-------------------- Paid in Development Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Inception, September 17, 2007 -- $ -- $ -- $ -- $ --
Initial capitalization, sale of
common stock to Directors on
September 17, 2007 4,000,000 4,000 4,000 8,000
Private placement closed
December 31, 2007 1,060,000 1,060 51,940 53,000
Net loss for the period -- -- -- (1,576) (1,576)
--------- --------- --------- --------- ---------
Balance December 31, 2007 5,060,000 $ 5,060 $ 55,940 $ (1,576) $ 59,424
Net loss for the period -- -- -- (40,331) (40,331)
--------- --------- --------- --------- ---------
Balance June 30, 2008 5,060,000 $ 5,060 $ 55,940 $ (41,907) $ 19,093
========= ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
5
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(unaudited)
Date of
Incorporation on
6 Months Ended September 17, 2007 to
June 30, June 30,
2008 2008
-------- --------
OPERATING ACTIVITIES
Net loss for the period $(40,331) $(41,907)
Adjustments To Reconcile Net Loss To Net Cash
Used in Operating Activities
Amortization expense 666 777
Changes in operating assets and liabilities:
Deposit -- (150)
Accounts payable and accrued liabilities (2,803) 1,200
Due to director -- 820
-------- --------
Net cash used by operating activities (42,468) (39,260)
-------- --------
INVESTING ACTIVITIES
Website -- (4,000)
-------- --------
Net cash used by investing activities -- (4,000)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of common stock -- 61,000
-------- --------
Net cash provided by financing activities -- 61,000
-------- --------
(Decrease) increase in cash during the period (42,468) 17,740
Cash, beginning of the period 60,208 --
-------- --------
Cash, end of the period $ 17,740 $ 17,740
======== ========
Supplemental disclosure with respect to cash flows:
Cash paid for income taxes $ -- $ --
Cash paid for interest $ -- $ --
The accompanying notes are an integral part of these financial statements.
6
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
(unaudited)
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
The Company was originally incorporated under the laws of the state of Nevada on
September 17, 2007. The Company has limited operations and in accordance with
SFAS #7, is considered a development stage company, and has had no revenues from
operations to date.
Initial operations have included organization, capital formation, target market
identification, new product development and marketing plans. Management is
planning to complete development and then market an integrated website for
planning and analyzing shipping logistics to prospective clients. See Note 5.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
The relevant accounting policies and procedures are listed below. The company
has adopted a December 31 year end.
ACCOUNTING BASIS
The basis is generally accepted accounting principles.
EARNINGS PER SHARE
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective its inception.
The basic earnings (loss) per share is calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares during the year. The diluted earnings (loss) per share is calculated by
dividing the Company's net income (loss) available to common shareholders by the
diluted weighted average number of shares outstanding during the year. The
diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted as of the first of the year for any potentially
dilutive debt or equity.
The Company has not issued any options or warrants or similar securities since
inception.
7
FREIGHT MANAGMENT CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
(unaudited)
NOTE 2. (CONTINUED)
DIVIDENDS
The Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturity of three
months or less when purchased to be cash equivalents.
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carryforwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion of all of the deferred
tax assets will be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of enactment.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
8
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
(unaudited)
NOTE 2. (CONTINUED)
WEBSITE COSTS
Website costs consist of software development costs, which represent capitalized
costs of design, configuration, coding, installation and testing of the
Company's website up to its initial implementation. Upon implementation in
December 2007, the asset is being amortized to expense over its estimated useful
life of three years using the straight-line method. Ongoing website
post-implementation costs of operation, including training and application
maintenance, will be charged to expense as incurred. See Note 7.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates, among other
things, the realization of assets and satisfaction of liabilities in the normal
course of business. The Company has net losses for the period from inception to
June 30, 2008 of $41,907. The Company intends to fund operations through sales
and equity financing arrangements, which may be insufficient to fund its capital
expenditures, working capital and other cash requirements through the next
fiscal year ending December 31, 2008.
The ability of the Company to emerge from the development stage is dependent
upon the Company's successful efforts to raise sufficient capital and then
attaining profitable operations. In response to these problems, management has
planned the following actions:
* The Company has filed and cleared a Registration Statement with the
SEC and its common shares are quoted for trading on the OTCBB.
* Management intends to raise additional funds through public or private
placement offerings.
* Management is currently completing development of its proposed
internet/web based product to generate sales. There can be no
assurances, however, that management's expectations of future sales
will be realized.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
9
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
(unaudited)
NOTE 4. STOCKHOLDERS' EQUITY
AUTHORIZED
The Company is authorized to issue 75,000,000 shares of $0.001 par value common
stock. All common stock shares have equal voting rights, are non-assessable and
have one vote per share. Voting rights are not cumulative and, therefore, the
holders of more than 50% of the common stock could, if they choose to do so,
elect all of the directors of the Company.
ISSUED AND OUTSTANDING
On September 17, 2007 (inception), the Company issued 4,000,000 shares of its
common stock to its Directors for cash of $8,000. See Note 5.
On December 31, 2007, the Company closed a private placement for 1,060,000
common shares at a price of $0.05 per share, or an aggregate of $53,000. The
Company accepted subscriptions from 39 offshore non-affiliated investors.
NOTE 5. RELATED PARTY TRANSACTIONS
The Company's neither owns nor leases any real or personal property. The
Company's Directors provides office space free of charge. 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.
The amount due to a director of $820 has no repayment terms, is unsecured
without interest and is for reimbursement of company incorporation expenses. The
company plans to pay the amount within the next 12 months.
On February 26, 2007 (inception), the Company issued 4,000,000 shares of its
common stock to its Directors for cash of $8,000. See Note 4.
10
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
(unaudited)
NOTE 6. INCOME TAXES
Net deferred tax assets are $nil. Realization of deferred tax assets is
dependent upon sufficient future taxable income during the period that
deductible temporary differences and carry-forwards are expected to be available
to reduce taxable income. As the achievement of required future taxable income
is uncertain, the Company recorded a 100% valuation allowance. Management
believes it is likely that any deferred tax assets will not be realized.
As of December 31, 2007, the Company has a net operating loss carry forward of
approximately $1,576, which will expire 20 years from the date the loss was
incurred.
NOTE 7. WEBSITE
Accumulated
Cost amortization Net book value
---- ------------ --------------
Website costs $4,000 $777 $3,223
====== ==== ======
Website costs are amortized on a straight line basis over 3 years, its estimated
useful life.
NOTE 8. OPERATING LEASES AND OTHER COMMITMENTS:
The Company currently has no operating lease commitments or any other
commitments.
11
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
GENERAL OVERVIEW
Freight Management Corp. was incorporated on September 17, 2007, in the State of
Nevada. Our principal executive offices are located Suite 200, 8275 Eastern
Avenue, Las Vegas, NV, 89123. Our telephone number is (702) 938-0496. As of the
date of this prospectus, we are a development stage company with no revenue and
limited operations to date.
Our company's business is focused on the development and commercialization of an
internet based, intelligent online system for business owners, freight
forwarders, junior employees in the shipping/freight industry and business
people in the export/import industry who require assistance with their freight
and shipping related queries. We have named our system FRINFO, or Freight
Information. Our planned system will utilize a comprehensive database to provide
our prospective customers with customized, specific professional advice and
solutions to their related shipping queries and issues. FRINFO will successfully
enable the generation of online real time solutions and advice to questions
submitted by the customers, and guide them to the most optimum logistics
solutions, which would potentially include lower freight rates, best trade
routes and the most ideal transportation means/mode. When completed, it will
also include tabular sections for frequently asked questions (FAQ's) and their
related answers, as well as industry related terms, abbreviations, and widely
used terminology. On completion of successful development and testing, this
software will ultimately be made available online to potential customers on our
website at: www.freightmanagementcorp.com
Any business owner who trades internationally, or between countries, will
readily recognize the challenges they face when negotiating with shipping lines
to transport their cargos between two different countries, the lack of
information from various shipping lines and alternatives, and complicated
terminology. Additionally, shippers/manufacturers new to the business, those
with new products, or those selling into new markets do not completely
understand the shipping/freight process and face difficulties finding the best
and most trusted shipping mode to move their goods. The learning process creates
frustration and consumes valuable time as they try to obtain a clear picture of
all shipping logistics. Junior shipping/freight industry employees are typically
overwhelmed with the vast terminology during their first few months on the job,
and lack a reliable unified source that can provide trusted answers to address
their queries. Employees also face the problem of understanding the complicated
documentation and physical processes involved in the global shipping industry
(eg: shipping declarations, custom procedures and clearance, stevedoring,
loading, and transportation).
We believe a venue like the Internet to address these challenges is long
overdue. Users will potentially be able to source reliable information from
their own offices and develop timely freight plans that suit their needs at a
reasonable cost. FRINFO is being developed to use Artificial Intelligence (AI).
The customer will be prompted to enter his/her question using an online form.
FRINFO will then recognize and detect certain keywords in the customers input
and searches its smart knowledge center for relevant answers related to the
keywords generated. After creating a list of results, FRINFO will combine
keywords using a state of the art matrix engineering system to eliminate
non-related results. It will then provide a solution that is most related to the
customer's original query.
FRINFO would also recommend to the customer further readings, which would match
the nature of the request, for example:
- Regulations of importing goods into the USA
- Quota system for importing cotton products into the USA
- Customs/Brokerage hints & potential contacts
12
When developed, FRINFO will consist of the following major components:
* THE SMART KNOWLEDGE CENTER - this databank will act as the core of
FRINFO and will contain all of our shipping related data, articles,
link and information related to the shipping/freight sector. This
databank will be updated on regular basis.
* THE KEYWORD RECOGNITION SOFTWARE - this module will be based on AI
architecture. FRINFO will recognize the MAJOR keywords in the user
inputs and search the smart knowledge center for the recognized
keywords. The software will split the user input into keywords, and
will recognize the major keywords and eliminate un-related text from
the user input.
* THE MATRIX ENGINEERING SYSTEM - this will be the engineering logic
that FRINFO utilizes to combine keywords and to eliminate any
un-desired results from the search results, listing only the most
accurate and related answers to the users.
We currently have no revenues or customers for our services. We anticipate that
final commercial version of FRINFO will not be ready for commercial use for at
least 8-10 months from the date hereof. We may offer service in BETA TESTING
mode once the website is completed in approximately 6 months. We plan on earning
revenues through customer subscriptions to our service and we will target
freight forwarders, exporters and importers operating in the USA and the Middle
East, which will serve as our initial target market. Customers will subscribe to
our online service by paying a monthly, quarterly, semi-annual, or annual fees.
During their subscription periods, customers can post unlimited number of
questions and achieve specific responses. We have not yet fixed our pricing
structure and will need to determine our charges initially as the software
develops, and revise them regularly to attract a wider base of customers in our
targeted markets. Our future marketing strategy will include expansion plans to
provide our services to European and Asian markets, but this will require
further development of our intelligent system in some local languages.
At this stage in our development, there can be no assurance that we will be
successful in generating revenues from our subscription based online system or
that prospective customers seeking shipping advise will be receptive to using
our service.
Since incorporation, we have not made any significant purchases or sale of
assets, nor have we been involved in any mergers, acquisitions or
consolidations. Freight Management has never declared bankruptcy, has never been
in receivership, and has never been involved in any legal action or proceedings.
PLAN OF OPERATION
The following discussion of the plan of operation, financial condition, results
of operations, cash flows and changes in financial position of our Company
should be read in conjunction with our most recent financial statements and
notes appearing elsewhere in this Form 10-Q; and our S-1 A/2 filed on February
25, 2008.
We are a development stage company with very limited operations to date, no
revenue, very limited financial backing and few assets. Our plan of operation
over the next 12 months is to complete development, testing and market our
intelligent online system which we have named FRINFO, and make it available to
business owners, freight forwarders, and any other users requiring logistical
and planning tools and information for the shipping/freight industry
Our overall goal is to become a recognized market leader in providing online,
customized planning and logistical solutions in the freight/shipping business.
During the first stages of our company's growth, our officers and directors will
be responsible for executing the business plan at no charge. Since we intend to
operate with very limited administrative support, the officers and directors
will continue to be responsible for administering the company for at least the
first year of operations. Management has no intention at this time to hire
additional employees during the first year of operations. Due to limited
financial resources, each of the management team will dedicate between 25 - 30
hours per week, to ensure all operations are executed.
During the second quarter, Mr. Abotaleb continued to work with our software
development contractor on system specifications, proposed application
requirements and the design of the application to handle the needs. We spent
13
$4,000 on our contractor in the second quarter.This process is expected to be an
ongoing interactive process for the next several months.
We also hired a company to develop our brochures and a corporate marketing video
for $7,000 out of our total marketing budget of $12,000. These costs were
originally budgeted for the 4th quarter of our plan but we decided that these
materials should be ready prior to our launch.
RESULTS OF OPERATIONS
Our company posted losses of $15,035 for the second quarter and $40,331 for the
six months ended June 30, 2008. Comparisons are not meaningful as our company
was incorporated on September 17, 2007. From inception to June 30, 2008 we have
incurred losses of $41,907. The principal component of our losses for the six
months ended June 30, 2008 included general and administrative costs of $21,115,
database and application development costs of $18,550 and amortization of our
website of $666. General and administrative expenses include costs for our
registration statement of approximately $16,100, which is slightly under budget
to date.
LIQUIDITY AND CASH RESOURCES
At June 30, 2008, we had working capital of $15,870 compared to $55,535 at
December 31, 2007. We presently have a budgeted shortfall for our 12 month plan
of operations of approximately $40,000.
Because we have not generated any revenue from our business, and we are at least
9-10 months away from being in a position to generate revenues, we will need to
raise additional funds for the future development of our business and to respond
to unanticipated requirements or expenses. We believe our current cash balances
will be extinguished by the third quarter of 2008, provided we do not have any
unanticipated expenses. We do not currently have any arrangements for financing
and we can provide no assurance to investors we will be able to find such
financing. There can be no assurance that additional financing will be available
to us, or on terms that are acceptable. Consequently, we may not be able to
proceed with our intended business plans or complete the development and
commercialization of our product.
If we fail to generate sufficient net revenues, we will need to raise additional
capital to continue our operations thereafter. We cannot guarantee that
additional funding will be available on favorable terms, if at all. Any
shortfall will effect our ability to expand or even continue our operations. We
cannot guarantee that additional funding will be available on favorable terms,
if at all.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our business is not currently subject to market risk. All of our business is
currently conducted in US dollars, which is our functional currency. We have no
debt and are not subject to any interest rate risk.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the 1934 Act, as of the end of the period
covered by this quarterly report, being the fiscal quarter ended June 30, 2008,
we have carried out an evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures. This evaluation was carried
out under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer. Based upon
the results of that evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that, as of the end of the period covered by this
quarterly report, our disclosure controls and procedures were effective and
provide reasonable assurance that material information related to our company is
recorded, processed and reported in a timely manner.
14
Our management, with the participation of our Chief Executive Officer and Chief
Financial Officer, is responsible for the design of internal controls over
financial reporting. The fundamental issue is to ensure all transactions are
properly authorized and identified and entered into a well-designed, robust and
clearly understood system on a timely basis to minimize risk of inaccuracy,
failure to fairly reflect transactions, failure to fairly record transactions
necessary to present financial statements in accordance with the U.S. GAAP,
unauthorized receipts and expenditures or the inability to provide assurance
that unauthorized acquisitions or dispositions of assets can be detected. The
small size of our company makes the identification and authorization process
relatively simple and efficient and a process for reviewing internal controls
over financial reporting has been developed. To the extent possible given our
company's small size, the internal control procedures provide for separation of
duties for handling, approving and coding invoices, entering transactions into
the accounts, writing checks and requests for wire transfers. As of June 30,
2008, our Chief Executive Officer and Chief Financial Officer conclude that our
system of internal controls is adequate and comparable to those of issuers of a
similar size and nature. There were no significant changes to our internal
controls or in other factors that could significantly affect these controls
during the most recent quarter ended June 30, 2008, including any significant
deficiencies or material weaknesses of internal controls that would require
corrective action.
MANAGEMENT'S REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal
control over our financial reporting. Our system of internal control over
financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with the U.S. GAAP. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
INHERENT LIMITATIONS OF INTERNAL CONTROLS
Our internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with the U.S. GAAP.
Our internal control over financial reporting includes those policies and
procedures that:
* pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our
assets;
* provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with the U.S. GAAP, and that our receipts and expenditures are being
made only in accordance with authorizations of our management and
directors; and
* provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of our assets that
could have a material effect on the financial statements.
Management does not expect that our internal controls will prevent or detect all
errors and all fraud. A control system, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of internal controls
can provide absolute assurance that all control issues and instances of fraud,
if any, have been detected. Also, any evaluation of the effectiveness of
controls in future periods are subject to the risk that those internal controls
may become inadequate because of changes in business conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
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
None.
ITEM 5. OTHER INFORMATION
On May 21, 2008 our common shares were made eligible for trading on the OTCBB
with the trading symbol "FGGT".
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Pursuant to Rule 601 of Regulation SK, the following exhibits are included
herein or incorporated by reference.
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation*
3.2 By-laws*
31.1 Certification of CEO Pursuant to 18 U.S.C. ss. 1350, Section 302
31.2 Certification of CFO Pursuant to 18 U.S.C. ss. 1350, Section 302
32.1 Certification Pursuant to 18 U.S.C. ss.1350, Section 906
32.2 Certification Pursuant to 18 U.S.C. ss. 1350, Section 906
- ----------
* Incorporated by reference to our S-1 A/2 and SB-2 Registration Statement,
File Number 333-148920
(b) Reports on Form 8-K
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 21st day of July,
2008.
FREIGHT MANAGEMENT CORP.
Date: July 21, 2008 By: /s/ Ibrahim Abotaleb
------------------------------------------
Name: Ibrahim Abotaleb
Title: President/CEO, Principal Executive Officer
Date: July 21, 2008 By: /s/ Gerald Lewis
------------------------------------------
Name: Gerald Lewis
Title: Secretary Treasurer, Principal Financial
and Accounting Officer
17