UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended October 31, 2009
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
QUUIBUS TECHNOLOGY, INC.
(Exact name of registrant as specified in charter)
Nevada 333-147323 45-0560329
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
114 West Magnolia St., #400-136
Bellingham, WA 98225
(Address of principal executive offices)
(360) 392-2830
(Registrant's Telephone Number, including Area Code)
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirement for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of December 15, 2009, 2,525,000 shares of the issuer's common stock, $0.001
par value, were outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
INDEX
Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Item 2. Management's Discussion and Analysis or Plan of Operation 19
Item 3. Quantitative and Qualitative Disclosures about Market Risk 21
Item 4. Controls and Procedures 21
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits 22
Signature 22
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(UNAUDITED)
Financial Statements-
Balance Sheets as of October 31, 2009, and July 31, 2009................. 4
Statements of Operations for the Three Months Ended
October 31, 2009, and 2008, and Cumulative from Inception.............. 5
Statements of Cash Flows for the Nine Months Ended
October 31, 2009, and 2008, and Cumulative from Inception.............. 6
Notes to Interim Financial Statements October 31, 2009, and 2008......... 7
3
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS (NOTE 2)
AS OF OCTOBER 31, 2009, AND JULY 31, 2009
(Unaudited)
October 31, July 31,
2009 2009
-------- --------
ASSETS
CURRENT ASSETS:
Cash in bank $ 6,493 $ 138
-------- --------
Total current assets 6,493 138
-------- --------
TOTAL ASSETS $ 6,493 $ 138
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - Trade $ 6,474 $ 4,705
Accrued liabilities 2,280 3,500
Due to shareholder 9,760 1,000
-------- --------
Total current liabilities 18,514 9,205
-------- --------
Total liabilities 18,514 9,205
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, par value $0.001 per share; 20,000,000 shares
authorized; 2,525,000 shares issued and outstanding in 2009 2,525 2,525
Additional paid-in capital 50,700 50,700
(Deficit) accumulated during the development stage (65,246) (62,292)
-------- --------
Total stockholders' equity (12,021) (9,067)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,493 $ 138
======== ========
The accompanying notes to financial statements
are an integral part of these balance sheets.
4
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (NOTE 2)
FOR THE THREE MONTHS ENDED OCTOBER 31, 2009, AND 2008,
AND CUMULATIVE FROM INCEPTION (MARCH 28, 2007)
THROUGH OCTOBER 31, 2009
(Unaudited)
Three Months Ended
October 31, Cumulative
--------------------------------- From
2009 2008 Inception
----------- ----------- -----------
REVENUES $ -- $ -- $ --
----------- ----------- -----------
EXPENSES:
General and administrative-
Legal fees - Other -- -- 18,191
Transfer agent fees 300 300 14,269
Audit fees 2,250 1,500 19,750
SEC filing fees -- -- 8,775
Office rent 360 360 3,241
Legal fees - Incorporation fees -- -- 475
Bank fees 44 35 457
Office supplies -- -- 88
----------- ----------- -----------
Total general and administrative expenses 2,954 2,195 65,246
----------- ----------- -----------
(LOSS) FROM OPERATIONS (2,954) (2,195) (65,246)
OTHER INCOME (EXPENSE) -- -- --
PROVISION FOR INCOME TAXES -- -- --
----------- ----------- -----------
NET (LOSS) $ (2,954) $ (2,195) $ (65,246)
=========== =========== ===========
(LOSS) PER COMMON SHARE:
(Loss) per common share - Basic and Diluted $ (0.00) $ (0.00)
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 2,525,000 2,525,000
=========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
5
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (NOTE 2)
FOR THE THREE MONTHS ENDED OCTOBER 31, 2009, AND 2008,
AND CUMULATIVE FROM INCEPTION (MARCH 28, 2007)
THROUGH OCTOBER 31, 2009
(Unaudited)
Three Months Ended
October 31, Cumulative
---------------------------- From
2009 2008 Inception
-------- -------- ---------
OPERATING ACTIVITIES:
Net (loss) $ (2,954) $ (2,195) $(65,246)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Expenses incurred by officer and Director -- -- 475
Changes in net liabilities-
Accounts payable - Trade 1,769 -- 6,474
Accrued liabilities (1,220) (140) 2,280
-------- -------- --------
NET CASH (USED IN) OPERATING ACTIVITIES (2,405) (2,335) (56,017)
-------- -------- --------
INVESTING ACTIVITIES:
Cash provided by investing activities -- -- --
-------- -------- --------
NET CASH PROVIDED BY INVESTING ACTIVITIES -- -- --
-------- -------- --------
FINANCING ACTIVITIES:
Issuance of common stock for cash -- -- 66,500
Proceeds from shareholder loan 8,760 -- 9,760
Deferred offering costs -- -- (13,750)
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 8,760 -- 62,510
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 6,355 (2,335) 6,493
-------- --------
CASH - BEGINNING OF PERIOD 138 14,949 --
-------- -------- --------
CASH - END OF PERIOD $ 6,493 $ 12,614 $ 6,493
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ -- $ -- $ --
======== ======== ========
Income taxes $ -- $ -- $ --
======== ======== ========
During the year ended July 31, 2008, an officer, Director, and shareholder of
the Company forgave the Company of a related party debt in the amount of $475.
The accompanying notes to financial statements
are an integral part of these statements.
6
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND ORGANIZATION
Quuibus Technology, Inc. ("Quuibus" or the "Company") is a Nevada corporation in
the development stage. The Company was incorporated under the laws of the State
of Nevada on March 28, 2007. The business plan of Quuibus is focused on
developing and offering a server-based software product for the creation of
wireless communities. Quuibus intends to enable service providers,
organizations, and individuals to deploy wireless networks and to sell
subscriptions to access such networks to end-users. The Company's goal is to
provide end-users with the ability to roam across Quuibus-powered wireless
networks. The accompanying financial statements of Quuibus were prepared from
the accounts of the Company under the accrual basis of accounting.
In addition, Quuibus commenced a capital formation activity to effect a
Registration Statement on Form SB-2 with the Securities and Exchange Commission,
and raise capital of up to $60,000 from a self-underwritten offering of
1,200,000 shares of newly issued common stock in the public markets. The
Registration Statement on Form SB-2 was filed with the SEC on November 13, 2007,
and declared effective on November 21, 2007. On February 18, 2008, Quuibus
completed an offering of its registered common stock as explained in Note 3.
UNAUDITED INTERIM FINANCIAL STATEMENTS
The interim financial statements of Quuibus have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information, and with the instructions for Securities and
Exchange Commission Form 10-Q under Regulation S-X. They do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. Therefore, these financial
statements should be read in conjunction with the Company's audited financial
statements and notes thereto for the year ended July 31, 2009, included in
Quuibus's Annual Report on Form 10-KSB filed on November 13, 2009, with the SEC.
The accompanying interim financial statements included herein are unaudited.
However, they contain all normal recurring accruals and adjustments that, in the
opinion of management, are necessary to present fairly the Company's financial
position as of October 31, 2009, and July 31, 2009, and the results of its
operations and cash flows for the three months ended October 31, 2009, and 2008,
and cumulative from inception. The results of operations for the three months
ended October 31, 2009, are not necessarily indicative of the results to be
expected for future quarters or the year ending July 31, 2010.
7
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
CASH AND CASH EQUIVALENTS
For purposes of reporting within the statements of cash flows, the Company
considers all cash on hand, cash accounts not subject to withdrawal restrictions
or penalties, and all highly liquid debt instruments purchased with a maturity
of three months or less to be cash and cash equivalents.
REVENUE RECOGNITION
The Company is in the development stage and has yet to realize revenues from
operations. Once the Company has commenced operations, it will recognize
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.
LOSS PER COMMON SHARE
Basic loss per share is computed by dividing the net loss attributable to the
common stockholders by the weighted average number of shares of common stock
outstanding during the period. Diluted loss per share is computed similar to
basic loss per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive. There were no dilutive financial instruments issued or outstanding
during the three-month periods ended October 31, 2009, and 2008.
INCOME TAXES
The Company accounts for income taxes pursuant to SFAS No. 109, "ACCOUNTING FOR
INCOME TAXES" ("SFAS No. 109"). Under SFAS No. 109, deferred tax assets and
liabilities are determined based on temporary differences between the bases of
certain assets and liabilities for income tax and financial reporting purposes.
The deferred tax assets and liabilities are classified according to the
financial statement classification of the assets and liabilities generating the
differences.
The Company maintains a valuation allowance with respect to deferred tax assets.
The Company establishes a valuation allowance based upon the potential
likelihood of realizing the deferred tax asset and taking into consideration the
Company's financial position and results of operations for the current period.
Future realization of the deferred tax benefit depends on the existence of
sufficient taxable income within the carryforward period under the Federal tax
laws.
8
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
Changes in circumstances, such as the Company generating taxable income, could
cause a change in judgment about the realizability of the related deferred tax
asset. Any change in the valuation allowance will be included in income in the
year of the change in estimate.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company estimates the fair value of financial instruments using the
available market information and valuation methods. Considerable judgment is
required in estimating fair value. Accordingly, the estimates of fair value may
not be indicative of the amounts the Company could realize in a current market
exchange. As of October 31, 2009, and July 31, 2009, the carrying value of the
Company's financial instruments approximated fair value due to the short-term
nature and maturity of these instruments.
DEFERRED OFFERING COSTS
The Company defers as other assets the direct incremental costs of raising
capital until such time as the offering is completed. At the time of the
completion of the offering, the costs are charged against the capital raised.
Should the offering be terminated, deferred offering costs are charged to
operations during the period in which the offering is terminated. For the year
ended July 31, 2008, the Company offset $13,750 in deferred offering costs to
additional paid-in capital.
COMMON STOCK REGISTRATION EXPENSES
The Company considers incremental costs and expenses related to the registration
of equity securities with the SEC, whether by contractual arrangement as of a
certain date or by demand, to be unrelated to original issuance transactions. As
such, subsequent registration costs and expenses are reflected in the
accompanying financial statements as general and administrative expenses, and
are expensed as incurred.
SUBSEQUENT EVENTS
The management of the Company performs a review and evaluation of subsequent
events following the end of each quarterly and annual financial period. For the
three months ended October 31, 2009, the review and evaluation of subsequent
events for proper accrual and disclosure was completed through December 6, 2009,
which was the date the financial statements were available to be issued.
9
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
ESTIMATES
The financial statements are prepared on the basis of accounting principles
generally accepted in the United States of America. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of October 31, 2009, and July 31, 2009, and expenses
for the three months ended October 31, 2009, and 2008, and cumulative from
inception. Actual results could differ from those estimates made by management.
(2) DEVELOPMENT STAGE ACTIVITIES AND GOING CONCERN
The Company is currently in the development stage and has engaged in limited
operations. Initial operations through October 31, 2009, include capital
formation activities, organization, target market identification, and marketing
plans. The business plan of the Company is focused on developing and offering a
server-based software product for the creation of wireless communities. The
Company intends to enable service providers, organizations, and individuals to
deploy wireless networks and to sell subscriptions to access such networks to
end-users. The Company's goal is to provide end-users with the ability to roam
across Quuibus-powered wireless networks.
During the period from March 28, 2007, through October 31, 2009, the Company was
incorporated and issued 1,600,000 shares to its Directors for cash proceeds of
$20,000. In addition, the Company commenced a capital formation activity to
effect a Registration Statement on Form SB-2 with the SEC, and raise capital of
up to $60,000 from a self-underwritten offering of 1,200,000 shares of newly
issued common stock in the public markets. The Registration Statement on Form
SB-2 was filed with the SEC on November 13, 2007, and declared effective on
November 21, 2007. On February 18, 2008, the Company completed an offering of
its registered common stock as explained in Note 3. The Company also intends to
conduct additional capital formation activities through the issuance of its
common stock and to further conduct its operations.
While management of the Company believes that the Company will be successful in
its planned operating activities, there can be no assurance that it will be able
to be successful in the development of its product, sale of its planned product,
and services that will generate sufficient revenues to sustain its operations.
10
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The Company has
incurred an operating loss since inception and has no revenues to offset its
operating costs. These and other factors raise substantial doubt about Quuibus'
ability to continue as a going concern. The accompanying financial statements do
not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the Company to
continue as a going concern.
(3) COMMON STOCK
The Company is authorized to issue 20,000,000 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.
On July 6, 2007, the Company issued 1,600,000 shares of common stock to its
Directors at a price of $0.0125 per share for cash proceeds of $20,000.
In addition, in 2007, the Company commenced a capital formation activity to
effect a Registration Statement on Form SB-2 with the SEC, and raise capital of
up to $60,000 from a self-underwritten offering of 1,200,000 shares of newly
issued common stock at a price of $0.05 per share in the public markets. The
Registration Statement on Form SB-2 was filed with the SEC on November 13, 2007,
and declared effective on November 21, 2007. On February 18, 2008, the Company
completed the self-underwritten offering of 925,000 shares of its registered
common stock, par value of $0.001 per share, at an offering price of $0.05 per
share for proceeds of $46,500.
11
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
(4) INCOME TAXES
The provision (benefit) for income taxes for the three months ended October 31,
2009, and 2008, was as follows (assuming a 15 percent effective tax rate):
Three Months Three Months
Ended Ended
October 31, October 31,
2009 2008
-------- --------
Current Tax Provision:
Federal-
Taxable income $ -- $ --
-------- --------
Total current tax provision $ -- $ --
======== ========
Deferred Tax Provision:
Federal-
Loss carryforwards $ 443 $ 330
Change in valuation allowance (443) (330)
-------- --------
Total deferred tax provision $ -- $ --
======== ========
The Company had deferred income tax assets as of October 31, 2009, and July 31,
2009, as follows:
October 31, July 31,
2009 2009
-------- --------
Loss carryforwards $ 9,786 $ 9,343
Less - Valuation allowance (9,786) (9,343)
-------- --------
Total net deferred tax assets $ -- $ --
======== ========
The Company provided a valuation allowance equal to the deferred income tax
assets for the three months ended October 31, 2009, and 2008, because it is not
presently known whether future taxable income will be sufficient to utilize the
loss carryforwards.
As of October 31, 2009, the Company had approximately $65,246 (July 31, 2009 -
$62,292) in tax loss carryforwards that can be utilized in future periods to
reduce taxable income, and begin to expire in the year 2027.
12
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
(5) RELATED PARTY TRANSACTIONS
During the year ended July 31, 2008, an officer, Director, and stockholder of
the Company personally paid for expenses on behalf of the Company in the amount
of $475. As of July 31, 2008, this individual forgave the Company of this debt.
As of October 31, 2009, an officer, Director and stockholder of the Company had
loaned $9,760 (July 31, 2009- $1,000) to the Company for working capital
purposes. The loan is unsecured, non-interest bearing, and has no specific terms
for repayment
(6) RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, the FASB issued FASB Statement No. 161, "DISCLOSURES ABOUT
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - AN AMENDMENT OF FASB STATEMENT
133" ("SFAS No. 161"). SFAS No. 161 enhances required disclosures regarding
derivatives and hedging activities, including enhanced disclosures regarding
how: (a) an entity uses derivative instruments; (b) derivative instruments and
related hedged items are accounted for under FASB No. 133, "ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES"; and (c) derivative instruments
and related hedged items affect an entity's financial position, financial
performance, and cash flows. Specifically, SFAS No. 161 requires:
- disclosure of the objectives for using derivative instruments in terms
of underlying risk and accounting designation;
- disclosure of the fair values of derivative instruments and their
gains and losses in a tabular format;
- disclosure of information about credit-risk-related contingent
features; and
- cross-reference from the derivative footnote to other footnotes in
which derivative-related information is disclosed.
SFAS No. 161 is effective for fiscal years and interim periods beginning after
November 15, 2008. Earlier application is encouraged. The management of the
Company does not expect the adoption of this pronouncement to have a material
impact on its financial statements.
In May 2008, the FASB issued FASB Statement No. 162, "THE HIERARCHY OF GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES" ("SFAS No. 162"). SFAS No. 162 is intended to
improve financial reporting by identifying a consistent framework, or hierarchy,
for selecting accounting principles to be used in preparing financial statements
that are presented in conformity with U.S. generally accepted accounting
principles ("GAAP") for nongovernmental entities.
13
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
Prior to the issuance of SFAS No. 162, GAAP hierarchy was defined in the
American Institute of Certified Public Accountants ("AICPA") Statement on
Auditing Standards, "THE MEANING OF PRESENT FAIRLY IN CONFORMITY WITH GENERALLY
ACCEPT ACCOUNTING Principles" ("SAS No. 69"). SAS No. 69 has been criticized
because it is directed to the auditor rather than the entity. SFAS No. 162
addresses these issues by establishing that the GAAP hierarchy should be
directed to entities because it is the entity (not the auditor) that is
responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP.
The sources of accounting principles that are generally accepted are categorized
in descending order as follows:
a) FASB Statements of the Financial Accounting Standards Board and
Interpretations, FASB Statement No. 133 Implementation Issues, FASB
Staff Positions, and American Institute of Certified Public
Accountants (AICPA) Accounting Research Bulletins and Accounting
Principles Board Opinions that are not superseded by actions of the
FASB.
b) FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry
Audit and Accounting Guides and Statements of Position.
c) AICPA Accounting Standards Executive Committee Practice Bulletins that
have been cleared by the FASB, consensus positions of the FASB
Emerging Issues Task Force (EITF), and the Topics discussed in
Appendix D of EITF Abstracts (EITF D-Topics).
d) Implementation guides (Q&As) published by the FASB staff, AICPA
Accounting Interpretations, AICPA Industry Audit and Accounting Guides
and Statements of Position not cleared by the FASB, and practices that
are widely recognized and prevalent either generally or in the
industry.
SFAS No. 162 is effective 60 days following the SEC's approval of the Public
Company Accounting Oversight Board amendment to its authoritative literature. It
is only effective for nongovernmental entities; therefore, the GAAP hierarchy
will remain in SAS No. 69 for state and local governmental entities and federal
governmental entities. The management of the Company does not expect the
adoption of this pronouncement to have a material impact on its financial
statements.
14
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
In May 2008, the FASB issued FASB Statement No. 163, "ACCOUNTING FOR FINANCIAL
GUARANTEE INSURANCE CONTRACTS" ("SFAS No. 163"). SFAS No. 163 clarifies how FASB
Statement No. 60, "ACCOUNTING AND REPORTING BY INSURANCE ENTERPRISES" ("SFAS No.
60"), applies to financial guarantee insurance contracts issued by insurance
enterprises, including the recognition and measurement of premium revenue and
claim liabilities. It also requires expanded disclosures about financial
guarantee insurance contracts.
The accounting and disclosure requirements of SFAS No. 163 are intended to
improve the comparability and quality of information provided to users of
financial statements by creating consistency. Diversity exists in practice in
accounting for financial guarantee insurance contracts by insurance enterprises
under SFAS No. 60, "ACCOUNTING AND REPORTING BY INSURANCE ENTERPRISES." That
diversity results in inconsistencies in the recognition and measurement of claim
liabilities because of differing views about when a loss has been incurred under
FASB Statement No. 5, "ACCOUNTING FOR CONTINGENCIES" ("SFAS No. 5"). SFAS No.
163 requires that an insurance enterprise recognize a claim liability prior to
an event of default when there is evidence that credit deterioration has
occurred in an insured financial obligation. It also requires disclosure about
(a) the risk-management activities used by an insurance enterprise to evaluate
credit deterioration in its insured financial obligations and (b) the insurance
enterprise's surveillance or watch list.
SFAS No. 163 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and all interim periods within those fiscal
years, except for disclosures about the insurance enterprise's risk-management
activities. Disclosures about the insurance enterprise's risk-management
activities are effective the first period beginning after issuance of SFAS No.
163. Except for those disclosures, earlier application is not permitted. The
management of the Company does not expect the adoption of this pronouncement to
have material impact on its financial statements.
15
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
On May 22, 2009, the FASB issued FASB Statement No. 164, "NOT-FOR-PROFIT
ENTITIES: MERGERS AND ACQUISITIONS" ("SFAS No. 164"). SFAS No. 164 is intended
to improve the relevance, representational faithfulness, and comparability of
the information that a not-for-profit entity provides in its financial reports
about a combination with one or more other not-for-profit entities, businesses,
or nonprofit activities. To accomplish that, this Statement establishes
principles and requirements for how a not-for-profit entity:
a. Determines whether a combination is a merger or an acquisition.
b. Applies the carryover method in accounting for a merger.
c. Applies the acquisition method in accounting for an acquisition,
including determining which of the combining entities is the acquirer.
d. Determines what information to disclose to enable users of financial
statements to evaluate the nature and financial effects of a merger or
an acquisition.
This Statement also improves the information a not-for-profit entity provides
about goodwill and other intangible assets after an acquisition by amending FASB
Statement No. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS," to make it fully
applicable to not-for-profit entities.
SFAS No. 164 is effective for mergers occurring on or after December 15, 2009,
and acquisitions for which the acquisition date is on or after the beginning of
the first annual reporting period beginning on or after December 15, 2009. Early
application is prohibited. The management of the Company does not expect the
adoption of this pronouncement to have material impact on its financial
statements.
On May 28, 2009, the FASB issued FASB Statement No. 165, "SUBSEQUENT EVENTS"
("SFAS No. 165"). FASB No. 165 establishes general standards of accounting for
and disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. Specifically,
FASB No. 165 provides:
1. The period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may occur
for potential recognition or disclosure in the financial statements.
2. The circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its financial
statements.
3. The disclosures that an entity should make about events or
transactions that occurred after the balance sheet date.
In accordance with this Statement, an entity should apply the requirements to
interim or annual financial periods ending after June 15, 2009. The management
of the Company does not expect the adoption of this pronouncement to have
material impact on its financial statements.
16
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
On June 9, 2009, the FASB issued FASB Statement No. 166, "ACCOUNTING FOR
TRANSFERS OF FINANCIAL ASSETS- AN AMENDMENT OF FASB STATEMENT NO. 140" ("SFAS
No. 166"). SFAS No. 166 revises the derecognization provision of SFAS No. 140
"ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENT
OF LIABILITIES" and will require entities to provide more information about
sales of securitized financial assets and similar transactions, particularly if
the seller retains some risk with respect to the assets. It also eliminates the
concept of a "qualifying special-purpose entity."
This statement is effective for financial asset transfers occurring after the
beginning of an entity's first fiscal year that begins after November 15, 2009.
The management of the Company does not expect the adoption of this pronouncement
to have a material impact on its financial statements.
In June 2009, the FASB issued FASB Statement 167 "AMENDMENTS TO FASB
INTERPRETATION NO. 46(R)" (SFAS No. 167"). SFAS No. 167 amends certain
requirements of FASB Interpretation No. 46(R), "CONSOLIDATION OF VARIABLE
INTEREST ENTITIES" to improve financial reporting by companies involved with
variable interest entities and to provide additional disclosures about the
involvement with variable interest entities and any significant changes in risk
exposure due to that involvement. A reporting entity will be required to
disclose how its involvement with a variable interest entity affects the
reporting entity's financial statements.
This Statement shall be effective as of the beginning of each reporting entity's
first annual reporting period that begins after November 15, 2009. The
management of the Company does not expect the adoption of this pronouncement to
have a material impact on its financial statements.
In June 2009, the FASB issued FASB Statement No. 168, "THE FASB ACCOUNTING
STANDARDS CODIFICATION AND THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES - A REPLACEMENT OF FASB STATEMENT NO. 162" ("SFAS No. 168"). SFAS No.
168 establishes the FASB Accounting Standards Codification (the "Codification")
to become the single official source of authoritative, nongovernmental U.S.
generally accepted accounting principles (GAAP). The Codification did not change
GAAP, but reorganizes the literature.
SFAS No. 168 is effective for interim and annual periods ending after September
15, 2009. The management of the Company does not expect the adoption of this
pronouncement to have a material impact on its financial statements.
17
QUUIBUS TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009, AND 2008
(Unaudited)
(7) SUBSEQUENT EVENTS
On November 26, 2009, Mr. Yavuz Konur resigned as Chief Technical Officer and a
Director of the Company.
On November 26, 2009, Mr. Hossein Mohseni resigned as the President, Secretary,
Treasurer, and a Director of the Company.
On the same date, the Company appointed Mr. Glyn R. Garner as the President,
Secretary, Treasurer, and a Director of the Company.
18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This report on Form 10-Q contains forward-looking statements that involve risks
and uncertainties. You should not place undue reliance on these forward-looking
statements. Our actual results could differ materially from those anticipated in
the forward-looking statements for many reasons, including the risks described
in this report, our registration statement on Form SB-2 and other filings we
make from time to time with the Securities and Exchange Commission. Although we
believe the expectations reflected in the forward-looking statements are
reasonable, they relate only to events as of the date on which the statements
are made. We do not intend to update any of the forward-looking statements after
the date of this report to conform these statements to actual results or to
changes in our expectations, except as required by law.
This discussion and analysis should be read in conjunction with the unaudited
interim financial statements and notes thereto included in this report and the
audited financials in our registration statement on Form 10K for the year ended
July 31, 2009.
OVERVIEW
We are a development stage company with limited operations and no revenues from
our business operations. Our auditors have issued a going concern opinion. This
means that our auditors believe there is substantial doubt that we can continue
as an on-going business for the next twelve months. We do not anticipate that we
will generate significant revenues until we have completed the development of
our software and marketing plan to generate customers. Accordingly, we must
raise cash from sources other than our operations in order to implement our
marketing plan.
In our management's opinion, there is a need for wireless network services
enabling the creation of wireless communities. We are focused on developing an
authentication and billing software product, and offering a wireless networking
service for the creation of wireless communities. We intend to enable service
providers, organizations, and individuals to deploy wireless networks, and to
sell subscriptions to end-users to access such wireless networks. Our goal is to
provide users with the ability to roam across Quuibus-powered wireless networks.
A user with a Quuibus account will be able to connect through and roam across
any of our partner wireless networks, similar to the way cellular phone
companies allow their customers to roam across different networks.
To meet our need for cash, we have raised money from the sale of shares which we
registered through a public offering which became effective on November 21,
2007. In addition to the 1,600,000 shares of our common stock which we have sold
to our directors, we sold 925,000 shares of our common stock through this
offering, which generated $46,500 in gross proceeds. We believe that this will
allow us to begin our product development, market our website, and remain in
business for twelve months. If we are unable to generate revenues after the
twelve months for any reason, or if we are unable to make a reasonable profit
after twelve months, we may have to suspend or cease operations. At the present
time, we have not made any arrangements to raise additional cash. Because we
raised less than the maximum amount and need additional funds, we may seek to
obtain additional funds through a second public offering, private placement of
securities, or loans.
PLAN OF OPERATION
Our specific goal is to develop our software product and to execute our
marketing plan. First, we plan to develop and deploy a software product that
allows the authentication of wireless users seeking to use the internet.
Our software product will be composed of two elements, a server-based software
product that authorizes subscribers to access the internet and that performs
automated billing, and a client-based software product that resides at a
wireless access point to police (enable or deny) access based on instructions
from the server.
19
After development of our authentication and billing software product, we plan to
commence marketing of our wireless networking service on a subscription basis.
We will deploy a server side server in order to perform authentication and
billing. Billing will be done exclusively through Paypal. In addition, we will
use Paypal to compensate partners and resellers. Our billing and payment system
will be completely automated which will keep operational costs to a minimum.
Our customers will gain access to the internet through a network of wireless
access points that are deployed by our partners. These wireless access devices
will be radius compliant as to be able to communicate with our server.
When a wireless user tries to access the internet through one of our partner's
wireless access devices, he will be forwarded to a web page that asks him to
enter his user name and password, or, if he is not a customer, to subscribe to
the service. If the wireless subscriber elects to subscribe to the service, the
owner of the access point will receive a one-time fee for such subscription.
If the credential supplied by the user is correct, then the user will be allowed
access to the internet. The number of times a customer accesses the network will
be logged into our database and will be used to calculate our partners'
compensation.
We intend to offer yearly, monthly, and daily plans. The price of each of these
plans will vary between countries since there are variations in the cost of
delivering the service between countries as well as different income levels
among the users and differences in the availability of competitive services. Our
subscribers will be able to roam (I.E, connect to the internet) across our
network.
We plan to develop and deploy the backend software that is necessary to manage
customer access to the network. We will not deploy the wireless access devices,
but will rely on our partners to do so. We intend to test a variety of wireless
devices and will establish a list of supported devices. Our web site will be the
venue where partners will access their account information, find information
about the service, and sign up to be partners. We will maximize automation,
thereby significantly decreasing operational costs.
RESULTS OF OPERATIONS
During the period from March 28, 2007 (date of inception) through October 31,
2009, we incurred a net loss of $65,246. This loss consisted primarily of
incorporation costs, professional fees and administrative expenses. Since
inception, we have sold 2,525,000 shares of common stock.
PURCHASE OR SALE OF EQUIPMENT
We do not expect to purchase or sell any plant or significant equipment.
REVENUES
We had no revenues for the period from March 28, 2007 (date of inception)
through October 31, 2009.
LIQUIDITY AND CAPITAL RESOURCES
Our balance sheet as of October 31, 2009, reflects assets of $6,493. Cash and
cash equivalents from inception to date have been insufficient to provide the
working capital necessary to operate to date.
We anticipate generating losses and, therefore, may be unable to continue
operations in the future. If we require additional capital, we would have to
issue debt or equity or enter into a strategic arrangement with a third party.
There can be no assurance that additional capital will be available to us. We
currently have no agreements, arrangements or understandings with any person to
obtain funds through bank loans, lines of credit, or any other sources.
20
GOING CONCERN CONSIDERATION
Our independent auditors included an explanatory paragraph in their report on
the accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.
Due to this doubt about our ability to continue as a going concern, management
is open to new business opportunities which may prove more profitable to the
shareholders of the Company. Historically, we have been able to raise a limited
amount of capital through private placements of our equity stock, but we are
uncertain about our continued ability to raise funds privately. Further, we
believe that our company may have difficulties raising capital until we locate a
prospective business opportunity through which we can pursue our plan of
operation. If we are unable to secure adequate capital to continue our
acquisition efforts, our business may fail and our stockholders may lose some or
all of their investment.
Should our original business plan fail, 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 can provide no assurance that we will be
able to locate compatible business opportunities.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
ITEM 3. QUANITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES:
Our management evaluated, with the participation of our Chief Executive Officer
and Chief Financial Officer, the effectiveness of the design and operation of
our disclosure controls and procedures as of the end of the period covered by
this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief
Executive Officer and our Chief Financial Officer have concluded that our
disclosure controls and procedures are effective to ensure that information we
are required to disclose in reports that we file or submit under the Securities
Exchange Act of 1934 (i) is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission rules and
forms, and (ii) is accumulated and communicated to our management, including our
Chief Executive Officer and our Chief Financial Officer, as appropriate, to
allow timely decisions regarding required disclosure. Our disclosure controls
and procedures are designed to provide reasonable assurance that such
information is accumulated and communicated to our management. Our disclosure
controls and procedures include components of our internal control over
financial reporting. Management's assessment of the effectiveness of our
internal control over financial reporting is expressed at the level of
reasonable assurance that the control system, no matter how well designed and
operated, can provide only reasonable, but not absolute, assurance that the
control system's objectives will be met.
21
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING:
There were no changes in our internal control over financial reporting that
occurred during our last fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We may be involved from time to time in ordinary litigation, negotiation and
settlement matters that will not have a material effect on our operations or
finances. We are not aware of any pending or threatened litigation against us or
our officers and directors in their capacity as such that could have a material
impact on our operations or finances.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation (included as Exhibit 3.1 to the Form
SB-2 filed November 13, 2007, and incorporated herein by
reference).
3.2 By-laws (included as Exhibit 3.2 to the Form SB-2 filed November
13, 2007, and incorporated herein by reference).
31 Certification of the Chief Executive and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Officers pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
22
SIGNATURE
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: December 15, 2009 QUUIBUS TECHNOLOGY, INC.
By: /s/ Hossein Khakbaz Mohseni
-----------------------------------------------
Name: Hossein Khakbaz Mohseni
Title: President, Secretary, Treasurer and Director
In accordance with the requirements of the Securities Act of 1933, this
Registration statement was signed by the following persons in the capacities and
on the dates stated:
Date: December 15, 2009 /s/ Hossein Khakbaz Mohseni
-------------------------------------------
Name: Hossein Khakbaz Mohseni
Title: President, Secretary, Treasurer and
Director
(Principal Financial and Executive Officer)
Date: December 15, 2009 /s/ Yavuz Konur
-------------------------------------------
Name: Yavuz Konur
Title: Chief Technical Officer and Director
23