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 March 31, 2009
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: 000-53127
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
April 30, 2009: 5,060,000
Authorized share capital of the registrant: 75,000,000 common shares, par value
of $0.001
The Company recorded $nil sales revenue for the three months ended March 31,
2009.
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
Statements of Stockholders' Deficit.......................... 5
Statements of Cash Flows..................................... 6
Notes to the Financial Statements............................ 7
2
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
BALANCE SHEETS
March 31, December 31,
2009 2008
-------- --------
(unaudited)
ASSETS
Current assets
Cash and bank accounts $ 1,568 $ 2,905
Deposit 150 150
-------- --------
Total current assets 1,718 3,055
Website, net of accumulated amortization (Note 7) 2,224 2,557
-------- --------
Total assets $ 3,942 $ 5,612
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities $ 3,050 $ 8
Due to director (Note 5) 5,220 3,320
-------- --------
Total current liabilities 8,270 3,328
-------- --------
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 (65,328) (58,716)
-------- --------
Total stockholders' deficit (4,328) 2,284
-------- --------
Total liabilities and stockholders' deficit $ 3,942 $ 5,612
======== ========
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
3 Months 3 Months Incorporation on
Ended Ended September 17, 2007 to
March 31, March 31, March 31,
2009 2008 2009
---------- ---------- ----------
REVENUE $ -- $ -- $ --
---------- ---------- ----------
OPERATING EXPENSES
Amortization 333 333 1,776
Database development costs -- 7,550 30,250
General & administrative 6,279 17,413 32,482
Organization -- -- 820
---------- ---------- ----------
Loss before income taxes (6,612) (25,296) (65,328)
Provision for income taxes -- -- --
---------- ---------- ----------
Net loss $ (6,612) $ (25,296) $ (65,328)
========== ========== ==========
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' DEFICIT
(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 year -- -- -- (57,140) (57,140)
--------- ------- ------- -------- --------
Balance December 31, 2008 5,060,000 $ 5,060 $55,940 $(58,716) $ 2,284
Net loss for the period -- -- -- (6,612) (6,612)
--------- ------- ------- -------- --------
Balance March 31, 2009 5,060,000 $ 5,060 $55,940 $(65,328) $ (4,328)
========= ======= ======= ======== ========
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
3 Months 3 Months Incorporation on
Ended Ended September 17, 2007 to
March 31, March 31, March 31,
2009 2008 2009
-------- -------- --------
OPERATING ACTIVITIES
Net loss for the period $ (6,612) $(25,296) $(65,328)
Adjustments To Reconcile Net Loss To Net
Cash Used In Operating Activities
Amortization expense 333 333 1,776
Changes in operating assets and liabilities:
Deposit -- -- (150)
Accounts payable and accrued liabilities 3,042 (2,995) 3,050
Due to director 1,900 -- 5,220
-------- -------- --------
Net cash used in operating activities (1,337) (27,958) (55,432)
-------- -------- --------
INVESTING ACTIVITIES
Website -- -- (4,000)
-------- -------- --------
Net cash used in 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 (1,337) (27,958) 1,568
Cash, beginning of the period 2,905 60,208 --
-------- -------- --------
Cash, end of the period $ 1,568 $ 32,250 $ 1,568
======== ======== ========
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
March 31, 2009
(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
attempting to obtain additional financing 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 MANAGEMENT CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
(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 AND BANK ACCOUNTS
The Company's bank account is not FDIC insured.
FOREIGN CURRENCY TRANSLATION
The Company has adopted the US dollar as its functional and reporting currency
because all of its transactions are denominated in US currency
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
8
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
(unaudited)
NOTE 2. (CONTINUED)
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
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
March 31, 2009 of $65,328. 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, 2009.
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 cleared a Registration Statement with the SEC and
obtained a trading symbol to trade its common shares on the OTCBB.
* Management intends to raise additional funds through public or private
placement O 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.
9
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
(unaudited)
NOTE 3. (CONTINUED)
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.
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 $5,220 has no repayment terms, is unsecured
without interest and is for reimbursement of company incorporation and general
operating expenses. The company plans to pay the amount within the next 12
months, if it has sufficient cash to do so.
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 4.
10
FREIGHT MANAGEMENT CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
(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, 2008, the Company has a net operating loss carry forward of
approximately $58,716, of which $1,576 will expire by December 31, 2027 and the
balance of $57,140 by December 31, 2028.
The Company has not filed its federal tax returns since inception.
NOTE 7. WEBSITE
Accumulated Net book
Cost amortization value
---- ------------ -----
Website costs $4,000 $1,776 $2,224
====== ====== ======
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. We are a
development stage company with no revenue and limited operations to date. Our
common stock is quoted on the OTC Bulletin Board under the symbol "FGGT".
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.
Subsequent to our incorporation, we have focused our operations on the
development 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 the system "FRINFO, or
Freight Information". The system was planned to utilize a comprehensive database
to provide prospective customers with customized, specific professional advice
and solutions to their related shipping queries and issues. When completed and
tested, FRINFO would 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, we are planning that
the software will ultimately be made available online to potential customers on
our website at: www.freightmanagementcorp.com
We currently have no revenues or customers for our services. 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.
As of the date hereof, we have not been successful in raising the additional
funding necessary to continue with our business plan. Historically, we have been
able to raise a limited amount of capital through private placements of our
common stock, but we are uncertain about our continued ability to raise funds
privately. The recent credit crisis has only made our situation more difficult,
because investors who were historically receptive to startup situations have
become almost nonexistent in this current environment. Without further loans
from our directors, we only have sufficient funds to continue with our business
in a maintenance mode for the next 1-2 months. We believe that a commercial
version of FRINFO requires an additional $30-35,000 in cash for additional
development costs and at least 3-6 months to complete development. As of the
date hereof, we still need to complete development of a second tier intelligence
discipline for FRINFO to ensure that client driven queries are answered
correctly. We also need to design and build database enhancement tools, and
software for predictive modeling and statistical analysis of queries prior to
actual release.
As a result of this difficult environment and our lack of cash to continue with
our business, our directors have been analyzing the various alternatives
available to our company to ensure our survival and to preserve our
shareholder's investment in our common shares. This analysis has included
sourcing additional forms of financing to continue our business as is, or
mergers and/or acquisitions which would likely involve a change of business. Our
preference is to raise additional, suitable financing to continue with business,
but at this stage in our operations, we believe either course is acceptable, as
our operations have not been profitable and our future prospects for our
business are not good without further significant financing.
12
POTENTIAL MERGERS AND ACQUISITIONS
Concurrent with efforts to find suitable financing for our business, we are also
focusing on analyzing potential business opportunities with more established
business entities for merger or acquisition with our company. In certain
instances, a target business may wish to become a subsidiary of our company or
may wish to contribute assets to our company rather than merge. We anticipate
that any new acquisition or business opportunities by our company will require
additional financing. There can be no assurance, however, that we will be able
to acquire the financing necessary to enable us to pursue our plan of operation.
If our company requires additional financing and we are unable to acquire such
funds, our business may fail.
In implementing a structure for a particular business acquisition or
opportunity, we may become a party to a merger, consolidation, reorganization,
joint venture, or licensing agreement with another corporation or entity. We may
also acquire stock or assets of an existing business. Upon the consummation of a
transaction, it is likely that our present management will no longer be in
control of our company and our existing business will close down. In addition,
it is likely that our officers and directors will, as part of the terms of the
acquisition transaction, resign and be replaced by one or more new officers and
directors.
We anticipate that the selection of a business opportunity in which to
participate will be complex and without certainty of success. Management
believes that there are numerous firms in various industries seeking the
perceived benefits of being a publicly registered corporation. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex.
We may seek a business opportunity with entities who have recently commenced
operations, or entities who wish to utilize the public marketplace in order to
raise additional capital in order to expand business development activities, to
develop a new product or service, or for other corporate purposes. We may
acquire assets and establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
Mr. Abotaleb is undertaking the search for and analysis of new business
opportunities. He is not a professional business analyst. In seeking or
analyzing prospective business opportunities, Mr. Abotaleb may utilize the
services of outside consultants or advisors. At this stage, we can provide no
assurance that we will be able to locate compatible business opportunities, what
additional financing we will require to complete a combination or merger with
another business opportunity, or whether the opportunity's operations will be
profitable. Further, we believe that our company may have more difficulties
raising capital for our existing business than for a new business opportunity.
We have held preliminary negotiations with prospective business entities but
have not entered into any formal written agreements for a business combination
or opportunity. If any such agreement is reached, we intend to disclose such an
agreement by filing a current report on Form 8-K with the Securities and
Exchange Commission.
If we are unable to secure adequate capital to continue our business or
alternatively, complete a merger or acquisition, our shareholders will lose some
or all of their investment and our business will likely fail.
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 10K for December 31, 2008,
filed on edgar on February 17, 2009.
We are a development stage company with very limited operations to date, no
revenue, very limited financial backing and few assets. Our immediate priority
is to either secure suitable financing to continue with our existing business or
change our business and conclude a merger, acquisition or combination with a
business prospect. This is critical to to ensure our survival and to preserve
our shareholder's investment in our common shares. At this stage in our
operations, we believe either course is acceptable, as our operations have not
13
been profitable and our company will fail without further significant financing.
We currently have a small working capital deficiency including what we owe to
our director. Our director has indicated that he is willing to lend our company
minimum funds to enable us meet our statutory corporate and reporting
obligations for the next 12 months through unsecured, no interest loans.
We believe we require a minimum of $70,000 in additional financing to continue
and commercially develop our existing business over the next 12 months,
including $30-35,000 of development costs to complete our proposed product.
Concurrent with our search for additional financing for our existing business,
we are also actively seeking business opportunities with established business
entities for the merger of a target business with our company. In certain
instances, a target business may wish to become a subsidiary of our company or
may wish to contribute assets to our company rather than merge. We anticipate
that any new acquisition or business opportunities by our company will require
additional financing and that we will close our existing business. There can be
no assurance, however, that we will be able to acquire the financing necessary
to enable us to pursue this new plan. If our company requires additional
financing and we are unable to acquire such funds, our business may fail.
We may seek a business opportunity with entities who have recently commenced
operations, or entities who wish to utilize the public marketplace in order to
raise additional capital in order to expand business development activities, to
develop a new product or service, or for other corporate purposes. We may
acquire assets and establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
At this stage, we cannot quantify what additional financing we will require to
complete a combination or merger with another business opportunity, or whether
the opportunity's operations will be profitable.
RESULTS OF OPERATIONS
Our company posted losses of $6,612 for the 3 months ended March 31, 2009
compared to $25,296 for the comparable period. From inception to March 31, 2009
we have incurred losses of $65,328. The principal components of our losses for
the 3 months ended March 31, 2009 included general and administrative costs of
$6,279 and amortization of our website of $333. During the comparable period in
2008, we incurred $7,550 for FRINFO software development costs, $17,413 for
general & administrative expense and $333 for website amortization.
LIQUIDITY AND CASH RESOURCES
At March 31, 2009 we had a working capital deficiency of $1,332. This does not
include $5,220 owed to our director, who has indicated that the amount is
repayable within the next 12 months only if there is sufficient cash to do so.
On the same basis, this compares to working capital of $3,047 at December 31,
2008. At March 31, 2009 we had $1,568 in cash.
Because we have little remaining cash and have not generated any revenue from
our business, we need to raise additional funds for the future development of
our business and to respond to unanticipated requirements or expenses, or to
fund the identification, evaluation and combination or merger with a suitable
business opportunity.
Other than limited loans from our director to continue with our statutory
requirements for the next 12 months, 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 and our business will then
likely fail.
14
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We believe 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
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
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 the
assets of the company;
* Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with accounting principles generally accepted in the United States of
America and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and
directors of the company; and
* Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. 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. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
As of March 31, 2009 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described below. This
was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board was the lack of a functioning audit committee due to
a lack of a majority of independent members and a lack of a majority of outside
directors on our board of directors, resulting in ineffective oversight in the
establishment and monitoring of required internal controls and procedures. This
material weakness was identified by our Chief Executive Officer in connection
with the review of our financial statements as of March 31, 2009.
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Management believes that the lack of a functioning audit committee and the lack
of a majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures, which could result in a material misstatement in our
financial statements in future periods.
This quarterly report does not include an attestation report of the
Corporation's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Corporation's registered public accounting firm pursuant to temporary rules of
the SEC that permit the Corporation to provide only the management's report in
this quarterly report.
MANAGEMENT'S REMEDIATION INITIATIVES
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated a plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management.
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board. While we are actively seeking outside members, including
candidates with accounting experience, we cannot provide any assurance that we
will be successful. Given the size of our company, lack of revenues and current
lack of financing to continue with our business, it is unlikely that anyone will
agree to join our Board until general economic conditions and our own business
prospects improve significantly.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
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
None.
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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.
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 30th day of April,
2009.
FREIGHT MANAGEMENT CORP.
Date: April 30, 2009 By: /s/ Ibrahim Abotaleb
----------------------------------------------
Name: Ibrahim Abotaleb
Title: President/CEO, Principal Executive Officer
Date: April 30, 2009 By: /s/ Gerald Lewis
----------------------------------------------
Name: Gerald Lewis
Title: Secretary Treasurer, Principal Financial
and Accounting Officer
17