UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For quarterly period ended September 30, 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 000-53640
SEAOSPA, INC.
(Exact name of registrant as specified in its charter)
Nevada 26-1548693
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3 Ha'hishtadrut St. Suite #6, Kiryat Yam, Israel 29056
(Address of principal executive offices) (Zip Code)
Telephone: +1 (877) 841-5343
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)
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 checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition 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]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X ] No [ ]
There were 4,869,918 shares of common stock $0.0001 par value per share,
outstanding on November 9, 2009.
TABLE OF CONTENTS
Page
----
PART I. Financial Information:
Item 1. Financial Statements 3
Balance Sheets
Statement of Operations
Statement of Stockholder's Equity
Statement of Cash Flows
Notes to Financial Statements September 30, 2009
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
Item 4/4T. Controls and Procedures 13
PART II. Other Information:
Item 1. Legal Proceedings 14
Item 1A. Risk Factors 14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits 14
Signatures 15
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SEAOSPA INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
SEPTEMBER 30, 2009
September 30, December 31,
2009 2008
-------- --------
(Unaudited) (Audited)
ASSETS
Current Assets
Cash in bank $ 35,270 $ 49,228
-------- --------
Total current assets 35,270 49,228
-------- --------
Total Assets $ 35,270 $ 49,228
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 10,000 $ --
-------- --------
Total current liabilities 10,000 --
-------- --------
Stockholders' Equity
Preferred Stock, par value $0.0001 per share,
50,000,000 shares authorized, none outstanding
Common Stock, par value $0.0001 per share,
100,000,000 shares authorized, 4,869,918 shares
issued and outstanding 487 487
Additional paid-in capital 56,511 56,511
(Deficit) accumulated during the development stage (31,728) (7,770)
-------- --------
Total stockholders' equity 25,270 49,228
-------- --------
Total Liabilities and Stockholders' Equity $ 35,270 $ 49,228
======== ========
The Accompanying Notes Are an Integral Part of these Financial Statements
3
SEAOSPA, INC.
(A DEVELOPMENT STAEGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended November 2, 2007
Septmeber 30, September 30, (Inception) To
--------------------------- ---------------------------- September 30,
2009 2008 2009 2008 2009
----------- ----------- ----------- ----------- -----------
Sales $ -- $ 2,476 $ -- $ 2,476 $ 2,476
Cost of Goods Sold -- 1,775 -- 1,775 1775
----------- ----------- ----------- ----------- -----------
Gross Profit -- 701 -- 701 701
Operating Expenses
Legal fees -- -- 3,500 1,587 10,629
Filing Fees 220 -- 1,924 -- 2,214
General and Administrative 12,091 102 12,534 164 12,686
Organization Cost -- -- -- -- 900
Accounting Cost 1,500 -- 6,000 -- 6,000
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 13,811 102 23,958 1,751 32,429
----------- ----------- ----------- ----------- -----------
Loss before income taxes (13,811) 599 (23,958 (1,050) (31,728)
----------- ----------- ----------- ----------- -----------
Provision for Income Taxes -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net (Loss) $ (13,811) $ 599 $ (23,958 $ (1,050) $ (31,728)
=========== =========== =========== =========== ===========
Basic and Diluted (Loss)
per Common Shares a a a a
----------- ----------- ----------- -----------
Weighted Average Number
of Common shares 4,869,918 3,000,000 4,869,918 3,000,000
----------- ----------- ----------- -----------
- ----------
a = Less than ($0.01) per share
The Accompanying Notes Are an Integral Part of these Financial Statements
4
SEAOSPA, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
Common Stock
--------------------- Paid in Accumulated Total
Shares Amount Capital Deficit Equity
------ ------ ------- ------- ------
# $ $ $ $
Inception November 2, 2007
Common stock issued to Directors 3,000,000 300 600 900
for cash November 2, 2007
@ $0.0003 per share
Net loss for the year (900) (900)
---------- ------ ------- -------- --------
Balance, December 31, 2007 3,000,000 300 600 (900) --
Private placement closed on 1,869,918 187 55,911 56,098
November 20, 2008 @ 0.03 per share
Net loss for the year (6,870) (6,870)
---------- ------ ------- -------- --------
Balance, December 31, 2008 4,869,918 487 56,511 (7,770) 49,228
Net loss for the period (23,958) (23,958)
---------- ------ ------- -------- --------
BALANCE, SEPTEMBER 30, 2009 4,869,918 487 56,511 (31,728) 25,270
========== ====== ======= ======== ========
The Accompanying Notes Are an Integral Part of these Financial Statements
5
SEAOSPA, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended November 2, 2007
September 30, (Inception) To
--------------------------- September 30,
2009 2008 2009
-------- -------- --------
OPERATING ACTIVITIES
Net (Loss) $(23,958) $ (1,050) $(31,728)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities -- -- --
Accounts receivable - Director -- (2,476)
Accounts payable and accrued liabilities 10,000 -- 10,000
Net Cash (Used) by Operating Activities (13,958) (3,526) (21,728)
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from issuance of common stock $ -- $ 49,102 $ 56,998
-------- -------- --------
Cash Provided by Financing Activities -- 49,102 56,998
-------- -------- --------
Net Increase (Decrease) in Cash (13,958) 45,576 35,270
Cash, Beginning of Period 49,228 -- --
-------- -------- --------
Cash, End of Period $ 35,270 $ 45,576 $ 35,270
======== ======== ========
The Accompanying Notes Are an Integral Part of these Financial Statements
6
SEAOSPA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was incorporated under the laws of the state of Nevada on November
2, 2007. The Company has limited operations and in accordance with SFAS #7, is
considered a development stage company and has not yet realized any revenues
from its planned operations.
The business plan of the Company is to purchase and distribute Dead Sea skin and
hair care products from Israel. At this stage, the only operations are the
development of our website and business plan. As a development stage enterprise,
the Company discloses the deficit accumulated during the development stage and
the cumulative statements of operations and cash flows from inception to the
current balance sheet date.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
UNAUDITED INTERIM FINANCIAL STATEMENTS
The interim financial statements of the Company as of September 30, 2009, and
for the periods ended, and cumulative from inception, are unaudited. However, in
the opinion of management, the interim financial statements include all
adjustments, consisting of only normal recurring adjustments, necessary to
present fairly the Company's financial position as of September 30, 2009, and
the results of its operations and its cash flows for the periods ended September
30, 2009, and cumulative from inception. These results are not necessarily
indicative of the results expected for the calendar year ending December 31,
2009. The accompanying financial statements and notes thereto do not reflect all
disclosures required under accounting principles generally accepted in the
United States. Refer to the Company's audited financial statements as of
December 31, 2008, filed with the SEC, for additional information, including
significant accounting policies.
BASIS OF ACCOUNTING
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31 fiscal year end.
EARNINGS PER SHARE
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share" ("SFAS No.
128"), 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 November 2, 2007
(inception).
Basic earnings (loss) per share amounts are computed by dividing the net income
(loss) by the weighted average number of common shares outstanding. Diluted
earnings (loss) per share are the same as basic earnings (loss) per share due to
the lack of dilutive items in the Company.
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturity of three
months or less when purchased to be cash equivalents.
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of the Company's financial instruments, consisting of
accounts payable and accrued liabilities, approximates their fair value due to
the short-term maturity of such instruments. Unless otherwise noted, it is
management's opinion that the Company is not exposed to significant interest,
currency or credit risks arising from these financial statements.
7
REVENUE RECOGNITION
The Company recognizes revenues when delivery of goods or completion of services
has occurred provided there is persuasive evidence of an agreement, acceptance
has been approved by its customers, the fee is fixed or determinable based on
the completion of stated terms and conditions, and collection of any related
receivable is probable.
COST OF SALES
Cost of sales consists of merchandise and shipping costs,
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). A deferred tax
asset or liability is recorded for all temporary differences between financial
and tax reporting and net operating loss carry forwards. 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 or all of the deferred
tax assets will not 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.
SOFTWARE DEVELOPMENT COSTS
Software development costs represent capitalized costs of design, configuration,
coding, installation and testing of the Company's website up to its initial
implementation. Upon implementation, the asset will be 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.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2009, the FASB issued SFAS No. 166 "Accounting for Transfers of
Financial Assets--an amendment of FASB Statement No. 140" ("SFAS 166"). SFAS 166
improves the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor's continuing
involvement, if any, in transferred financial assets. SFAS 166 is effective as
of the beginning of each reporting entity's first annual reporting period that
begins after November 15, 2009, for interim periods within that first annual
reporting period and for interim and annual reporting periods thereafter. The
Company does not expect that the adoption of this standard will have a material
impact on the Company's financial statements.
In June 2009, the FASB issued SFAS No. 167 "Amendments to FASB Interpretation
No. 46(R)" ("SFAS 167"). SFAS 167 improves financial reporting by enterprises
involved with variable interest entities and addresses (1) the effects on
certain provisions of FASB Interpretation No. 46 (revised December 2003),
"Consolidation of Variable Interest Entities", as a result of the elimination of
the qualifying special-purpose entity concept in SFAS 166 and (2) constituent
concerns about the application of certain key provisions of Interpretation
46(R), including those in which the accounting and disclosures under the
Interpretation do not always provide timely and useful information about an
enterprise's involvement in a variable interest entity. SFAS 167 is effective as
of the beginning of each reporting entity's first annual reporting period that
begins after November 15, 2009, for interim periods within that first annual
reporting period, and for interim and annual reporting periods thereafter. The
Company does not expect that the adoption of this standard will have a material
impact on the Company's financial statements.
In June 2009, the FASB issued SFAS No. 168 "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles--a
replacement of FASB Statement No. 162". The FASB Accounting Standards
Codification ("Codification") will be the single source of authoritative
nongovernmental U.S. generally accepted accounting principles. Rules and
interpretive releases of the SEC under authority of federal securities laws are
8
also sources of authoritative GAAP for SEC registrants. SFAS 168 is effective
for interim and annual periods ending after September 15, 2009. All existing
accounting standards are superseded as described in SFAS 168. All other
accounting literature not included in the Codification is non-authoritative. The
Company does not expect that the adoption of this standard will have a material
impact on the Company's financial statements.
On May 28, 2009, the Financial Accounting Standards Board issued Subsequent
Events ("SFAS No. 165"). SFAS No. 165 provides guidance on management's
assessment of subsequent events and requires additional disclosure about the
timing of management's assessment of subsequent events. SFAS No. 165 does not
significantly change the accounting requirements for the reporting of subsequent
events. SFAS No. 165 is effective for interim or annual financial periods ending
after June 15, 2009.
In April 2009, the FASB issued FSP No. FAS 157-4, "Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly" ("FSP FAS 157-4").
FSP FAS 157-4 provides guidance on estimating fair value when market activity
has decreased and on identifying transactions that are not orderly.
Additionally, entities are required to disclose in interim and annual periods
the inputs and valuation techniques used to measure fair value. This FSP is
effective for interim and annual periods ending after June 15, 2009.
SUBSEQUENT EVENTS
The Company evaluated events occurring between the balance sheet date and
November 15, 2009, the date the financial statements were issued.
NOTE 3. ADVERTISING
The Company's policy regarding advertising is to expense advertising when
incurred. The Company had not incurred any advertising expense as of September
30, 2009.
NOTE 4. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has net losses for the
period from November 2, 2007 (inception) to September 30, 2009 of $31,728. This
condition raises substantial doubt about the Company's ability to continue as a
going concern. The Company's continuation as a going concern is dependent on its
ability to meet its obligations, to obtain additional financing as may be
required and ultimately to attain profitability. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Management is planning to raise additional funds through debt or equity
offerings. There can be no assurance that debt or equity financing will be
available to the Company on acceptable terms or at all, and there is no
guarantee that the Company will be successful in these efforts.
NOTE 5. RELATED PARTY TRANSACTIONS
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.
As described in Note 8, on November 2, 2007, the Company issued 3,000,000 common
shares to its directors for cash, valued at $0.0003 per share or $900.
NOTE 6. INCOME TAXES
The Company uses the liability method, where deferred tax assets and liabilities
are determined based on the expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities for financial
and income tax reporting purposes. During fiscal 2008, the Company incurred net
losses and, therefore, has no tax liability. The net deferred tax asset
generated by the loss carry-forward has been fully reserved. The cumulative net
operating loss carry-forward is $31,728 at September 30, 2009, and will expire
in the year 2029.
9
As at September 30, 2009, deferred tax assets consisted of the following:
Net operating losses $ 7,297
Less: valuation allowance (7,297)
-------
Net deferred tax asset $ --
=======
NOTE 7. NET OPERATING LOSSES
As of September 30, 2009, the Company has a net operating loss carry-forward of
approximately $31,728, which will expire 20 years from the date the loss was
incurred.
NOTE 8. STOCKHOLDERS' EQUITY
AUTHORIZED
The Company is authorized to issue 100,000,000 shares of $0.0001 par value
common stock and 50,000,000 shares of preferred stock, par value $0.0001. 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
For transactions other than those involving employee's stock, issuances are in
accordance with paragraph 8 of SFAS 123, where issuances shall be accounted for
based on the fair value of the consideration received. Transactions with
employee's stock issuance are in accordance with paragraphs (16-44) of SFAS 123,
where issuances shall be accounted for based on the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is the more reliable measure.
On November 2, 2007, the Company issued 3,000,000 common shares to its directors
for cash, valued at $0.0003 per share or $900.
From inception (November 2, 2007) until the year ended December 31, 2008, the
Company accepted subscriptions for 1,869,918 shares of common stock from 40
investors pursuant to a series of private placement transactions which closed on
November 20, 2008. The private placements were not subject to any minimum
investment, and were priced at $0.03 per share, for aggregate gross proceeds of
approximately $56,098. The Company accepted the subscriptions on November 20,
2008.
The Company has commenced an activity to submit a Registration Statement on Form
S-1 to the Securities and Exchange Commission ("SEC") to register 1,869,918 of
its outstanding shares of common stock on behalf of selling stockholders. The
Company will not receive any of the proceeds of this registration activity once
the shares of common stock are sold. The Registration Statement was declared
effective April 20, 2009.
NOTE 9. CONCENTRATION OF CREDIT RISK
The Company's cash and cash equivalents are invested in a major bank in Israel
and are not insured. Management believes that the financial institution that
holds the Company's investments is financially sound and accordingly, minimal
credit risk exists with respect to these investments.
NOTE 10. COMMITMENTS
On January 22, 2009, the Company entered into a Transfer Agent Agreement with
Island Capital Management, LLC dba Island Stock Transfer for services. Under the
Agreement, the Company agreed to pay to Island Stock Transfer fees amounting to
$10,000 for a 12 months Premier Services Plan.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
This quarterly report on Form 10-Q contains certain forward-looking statements.
Forward-looking statements may include our statements regarding our goals,
beliefs, strategies, objectives, plans, including product and service
developments, future financial conditions, results or projections or current
expectations. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential" or "continue," the negative of
such terms, or other comparable terminology. Such forward-looking statements
appear in this Item 2 - "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and include statements regarding our
expectations regarding our short - and long-term capital requirements and our
business plan and estimated expenses for the coming 12 months. These statements
are subject to known and unknown risks, uncertainties, assumptions and other
factors that may cause actual results to be materially different from those
contemplated by the forward-looking statements. The business and operations of
SeaOspa, Inc. are subject to substantial risks, which increase the uncertainty
inherent in the forward-looking statements contained in this report. We
undertake no obligation to release publicly the result of any revision to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
Further information on potential factors that could affect our business is
described under the heading "Risks Related To Our Business" in "Risk Factors" in
our registration statement on Form S-1 (File no. 333-157175), which was declared
effective on April 20, 2009. Readers are also urged to carefully review and
consider the various disclosures we have made in this report.
OVERVIEW
We are an early stage company with limited operations and no, or minimal,
revenues from our business operations. We were incorporated under the laws of
the state of Nevada on November 2, 2007. We are engaged in the marketing of skin
care, hair care and body treatment products. Currently we are focusing on
marketing of Dead Sea products from Israel. The Company operates its own retail
online store where we sell our products direct to consumers at www.seaospa.com.
We intend to open and operate an eBay store in addition to our own online store
within the next twelve months. Our target market is adults of 18 years of age
and up.
We have two executive officers who also serve as our directors. Mr. Terner, our
President, Treasurer and a Director, resides in Israel. He has fourteen years of
experience marketing and distributing Dead Sea products from Israel in Romania.
Mr. Yossi Benitah, our Secretary and a Director, resides in Israel. He has
thirty years of experience as an entrepreneur operating an electrical services
company in Israel. Neither of our officers lives in Nevada, the state of our
incorporation, or the United States.
From November 2, 2007 (inception) to September 30, 2009, we have incurred
accumulated net losses of $31,728. Our auditors have issued a going concern
opinion. This means that our auditors believe there is substantial doubt as to
whether we can continue as an ongoing business for the next twelve months.
PLAN OF OPERATIONS
Our officers and directors, are responsible for all planning, developing and
operational duties, and will continue to do so throughout the early stages of
our growth. We have no intention of hiring employees until the business has been
successfully launched and we have sufficient, reliable revenue from operations.
Our officers and directors are planning to do whatever work is required until
our business to the point of having positive cash flow.
Our main objective:
* Continue to promote our online retail store. This process is expected
to be an ongoing process.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2008 AND NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 2008 AND CUMULATIVE FROM INCEPTION (NOVEMBER 2, 2007)
TO SEPTEMBER 30, 2009
During the three months ended September 30, 2009, we incurred operating expenses
of $13,811, an increase of $13,709 from the period three months ended September
11
30, 2008. Operating expenses increased during the period ended September 30,
2009 from the comparative period due to an overall increase in our activity and
increased expenses as a result of being a reporting company. Significant
elements include:
* General and Administrative expenses of $12,091, which is an increase
from $102 during the three months ended September 30, 2008. The fees
are associated with bank charges and Accounts Payable to Island Stock
Transfer based on the transfer agent agreement.
* Accounting cost of $1,500, which is an increase from $0 during the
three months ended September 30, 2008. The cost is associated with
review of financial statements for the period ended September 30,
2009.
During the nine months ended September 30, 2009, we incurred operating expenses
of $23,958, an increase of $22,207 from the period nine months ended September
30, 2008. Significant elements include:
* Legal fees of $3,500, which is an increase from $1,587 during the nine
months ended September 30, 2008. The fees are associated with the S1
Registration Statement.
* Accounting costs of $6,000, which is an increase from $0 during the
nine months ended September 30, 2008. The cost is associated with
audit and review of financial statements.
* Filing fees of $1,924, which is an increase from $0 during the nine
months ended September 30, 2008. The fees are associated with
Edgarizing and filing the reports with the SEC.
* General and Administrative expenses of $12,534, which is an increase
from $164 during the nine months ended September 30, 2008. The fees
are associated with bank charges and Accounts Payable to Island Stock
Transfer based on the transfer agent agreement.
NET LOSS
We incurred a net loss of $13,811 for the three months ended September 30, 2009,
compared to a net profit of $599 for the three months ended September 30, 2008
and $23,958 for the nine months ended September 30, 2009, compared to a net loss
of $1,050 for the nine months ended September 30, 2008. During the period from
November 2, 2007 (date of inception) through September 30, 2009, we incurred a
net loss of $31,728.
Since inception, we have sold 4,869,918 shares of common stock.
LIQUIDITY AND CAPITAL RESOURCES
To date, we have had negative cash flows from operations and we have been
dependent on sales of our equity securities to meet our cash requirements. We
expect this to continue for the foreseeable future. We anticipate that we will
have negative cash flows from operations in the next twelve month period.
As of September 30, 2009, we had cash of $35,270, representing a net decrease in
cash of $13,958 since December 31, 2008.
Cash generated by financing activities during the nine months ended September
30, 2009 amounted to $0. Cash used in operating activities amounted to $13,958,
mainly resulting from a net loss of $23,958 and adjusted by accounts payable of
$10,000. Cash generated by financing activities during the nine months ended
September 30, 2008 amounted to $49,102 and related to proceeds from issuance of
common stock. Cash used in operating activities during the nine months ended
September 30, 2008 amounted to $3,526, represented by a net loss of $1,050 and
offset by accounts receivable to Director by $2,476.
How long SeaOspa will be able to satisfy its cash requirements depends on how
quickly our company can generate revenue and how much revenue can be generated.
We estimate that our current cash balances will be extinguished prior to the end
of first fiscal quarter of 2010 provided we do not have any unanticipated
expenses. Although there can be no assurance at present, we plan to be in a
position to generate revenues prior to the end of the year. We must generate at
least $20,410 in revenues in order to fund all expenditures under our 12-months
budget.
If we fail to generate sufficient revenues, we will need to raise additional
funds for the future development of our business, or to respond to unanticipated
requirements or 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.
12
There are also no plans or expectations to purchase or sell any significant
equipment in the first year of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4T. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as
amended, (the "1934 Act") as of the end of the period covered by this quarterly
report, being the fiscal quarter ended September 30, 2009, 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 the material
information related to our Company required to be disclosed in the reports that
we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms, and
that such information is accumulated and communicated to management to allow
timely decisions on required disclosure.
There were no changes in our internal control over financial reporting
identified in connection with the evaluation described above during the period
covered by this report that has materially affected or is reasonably likely to
materially affect our internal controls over financial reporting.
13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY 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.
ITEM 6. EXHIBITS
Pursuant to Item 601 of Regulation S-K, the following exhibits are included
herein.
Exhibit Description
- ------- -----------
31.1 Certification of Principal Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Principal Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
14
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, thereunto duly authorized.
SEAOSPA, INC.
(the Registrant)
Date: November 9, 2009 By: /s/ Yakov Terner
----------------------------------------
Name: Yakov Terner
Title: President, Treasurer and Director
Date: November 9, 2009 By: /s/ Yossi Benitah
----------------------------------------
Name: Yossi Benitah
Title: Secretary and Director
15