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 quarterly period ended December 31, 2010
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number 333-169085
ADVANCED CELLULAR, INC.
(Exact name of registrant as specified in its charter)
Nevada 42-1771506
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
5348 Vegas Dr.
Las Vegas NV 89108
(Address of principal executive offices)(Zip code)
Tel: 888-284-3821
Fax: +1 (888) 353-8842
(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 [ ] No [X]
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]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No []
The issuer has 10,000,000 shares of common stock outstanding as of February 2,
2011.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
Balance Sheets as of December 31, 2010 (Unaudited) and June 30, 2010 3
Statements of Operations for the Three and Six Months Ended
December 31, 2010, and from May 4, 2010 (Inception) through
December 31, 2010 (Unaudited) 4
Statements of Cash Flows for the Six Months Ended December 31, 2010,
and from May 4, 2010 (Inception) through December 31, 2010 (Unaudited) 5
Statement of Stockholders' Equity 6
Notes to the Financial Statements (Unaudited) 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 11
ITEM 3. QUANTATATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 13
ITEM 4. 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 IN SENIOR SECURITIES 14
ITEM 4. REMOVED AND RESERVED 14
ITEM 5. OTHER INFORMATION 14
ITEM 6. EXHIBITS 14
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ADVANCED CELLULAR, INC.
(A Development Stage Company)
BALANCE SHEETS
December 31, June 30,
2010 2010
-------- --------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash $ 9,612 $ 20,020
Deferred offering costs 8,370 --
-------- --------
Total Current Assets 17,982 20,020
-------- --------
Total Assets $ 17,982 $ 20,020
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,320 $ --
Loans payable - director -- 682
-------- --------
Total Current Liabilities 1,320 682
-------- --------
Total Liabilities 1,320 682
-------- --------
Stockholders' Equity:
Preferred Stock, 50,000,000 shares authorized, par value $0.0001,
no shares issued and outstanding -- --
Common Stock, 100,000,000 shares authorized, par value $0.0001,
10,000,000 shares issued and outstanding 1,000 1,000
Additional paid in capital 19,000 19,000
Deficit accumulated during the development stage (3,338) (662)
-------- --------
Total Stockholders' Equity 16,662 19,338
-------- --------
Total Liabilities and Stockholders' Equity $ 17,982 $ 20,020
======== ========
The accompanying notes are an integral part of these financial statements.
3
ADVANCED CELLULAR, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
Three Months Six Months May 4, 2010
Ended Ended (Inception) to
December 31, December 31, December 31,
2010 2010 2010
------------ ------------ ------------
Revenue $ -- $ -- $ --
Expenses:
Organization cost -- -- 662
General and administrative 1,090 2,676 2,676
------------ ------------ ------------
Total expenses 1,090 2,676 3,338
Loss before income taxes (1,090) (2,676) (3,338)
Provision for Income Taxes -- -- --
------------ ------------ ------------
Net Loss $ (1,090) $ (2,676) $ (3,338)
============ ============ ============
Basic and Diluted
Loss per Common Share a a
============ ============
Weighted Average Number of
Common Shares 10,000,000 10,000,000
============ ============
- ----------
a = Less than ($0.01) per share
The accompanying notes are an integral part of these financial statements.
4
ADVANCED CELLULAR, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDER'S EQUITY
(unaudited)
Deficit
Accumulated
Common Stock Additional During the
------------------- Paid in Development Total
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
INCEPTION MAY 4, 2010 -- $ -- $ -- $ -- $ --
Common stock issued to directors
for cash ($0.002 per share) 10,000,000 1,000 19,000 -- 20,000
Net loss for the period -- -- -- (662) (662)
---------- ------ ------- ------- -------
BALANCE JUNE 30, 2010 10,000,000 1,000 19,000 (662) 19,338
Net loss for the period -- -- -- (1,586) (1,586)
---------- ------ ------- ------- -------
BALANCE SEPTEMBER 30, 2010 10,000,000 1,000 19,000 (2,248) 17,752
Net loss for the period -- -- -- (1,090) (1,090)
---------- ------ ------- ------- -------
BALANCE DECEMBER 31, 2010 10,000,000 $1,000 $19,000 $(3,338) $16,662
========== ====== ======= ======= =======
The accompanying notes are an integral part of these financial statements.
5
ADVANCED CELLULAR, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative
Six Months May 4, 2010
Ended (Inception) to
December 31, December 31,
2010 2010
-------- --------
OPERATING ACTIVITIES
Net loss $ (2,676) $ (3,338)
Adjustments To Reconcile Net Loss To Net Cash
Used By Operating Activities
Increase in accounts payable 1,320 1,320
-------- --------
Net cash used by operating activities (1,356) (2,018)
-------- --------
INVESTING ACTIVITIES
Net cash used by investing activities -- --
-------- --------
FINANCING ACTIVITIES
Net repayment of loans - director (682) --
Payment of deferred offering costs (8,370) (8,370)
Proceeds from issuance of common stock -- 20,000
-------- --------
Net cash provided by (used in) financing activities (9,052) 11,630
-------- --------
Net Increase (Decrease) in Cash (10,408) 9,612
Cash, Beginning of Period 20,020 --
-------- --------
Cash, End of Period $ 9,612 $ 9,612
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ -- $ --
======== ========
Income taxes $ -- $ --
======== ========
The accompanying notes are an integral part of these financial statements.
6
ADVANCED CELLULAR, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
The Company was incorporated under the laws of the state of Nevada on May 4,
2010. The Company has limited operations, is considered a development stage
company and has not yet realized any revenues from its planned operations.
Subsequent to our incorporation, we have been in the process of establishing
ourselves as a company that will focus its operations on developing and
commercializing a performance management system that will be used by cellular
network operators. We have named our system AdvancedPM.
NOTE 2. BASIS OF PRESENTATION
The accompanying unaudited condensed interim financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules and regulations of the United States
Securities and Exchange Commission ("SEC") for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
The financial information as of June 30, 2010 is derived from the audited
financial statements presented in the Company's Form S-1/A filed with SEC on
December 3, 2010. The unaudited condensed interim financial statements should be
read in conjunction with the Company's Form S-1/A, which contains the audited
financial statements and notes thereto.
Certain information or footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted, pursuant to the
rules and regulations of the Securities and Exchange Commission for interim
financial reporting. Accordingly, they do not include all the information and
footnotes necessary for a comprehensive presentation of financial position,
results of operations, or cash flows. It is management's opinion, however, that
all material adjustments (consisting of normal recurring adjustments) have been
made which are necessary for a fair financial statement presentation. The
interim results for the period ended December 31, 2010 are not necessarily
indicative of results for the full fiscal year.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
DEVELOPMENT STAGE
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.
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.
EARNINGS PER SHARE
The basic earnings (loss) per share is calculated by dividing our 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
7
our net loss attributable 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 for
any potentially dilutive debt or equity.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturity of three
months or less when purchased to be cash equivalents.
DEFERRED OFFERING COSTS
Costs directly related to the issuance of common stock are capitalized when
incurred and reclassed to equity at the time proceeds from the sale of common
stock are received.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of the Company's financial instruments, consisting of
accounts payable and loans from director approximate 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 instruments.
INCOME TAXES
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.
When required, the Company records a liability for unrecognized tax positions,
defined as the aggregate tax effect of differences between positions taken on
tax returns and the benefits recognized in the financial statements. Tax
positions are measured at the largest amount of benefit that is greater than
fifty percent likely of being realized upon ultimate settlement. No tax benefits
are recognized for positions that do not meet this threshold. The Company has no
uncertain tax positions that require the Company to record a liability. The
Company's tax years ended June 30, 2010 and 2011 remain subject to examination
by Federal and state jurisdictions.
The Company recognizes penalties and interest associated with tax matters as
part of the income tax provision and includes accrued interest and penalties
with the related tax liability in the balance sheet. No provision for income
taxes was required in any of the periods presented in the accompanying
statements of operations because of net operating loss carryforwards generated
by the Company.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
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"),
codified in FASB ASC 820-10-65, which provides additional guidance for
estimating fair value in accordance with ASC 820-10 when the volume and level of
activity for an asset or liability have significantly decreased. ASC 820-10-65
also includes guidance on identifying circumstances that indicate a transaction
is not orderly. The adoption of ASC 820-10-65 did not have an impact on the
Company's results of operations or financial condition.
In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165")
codified in FASB ASC 855-10-05, which provides guidance to establish general
standards of accounting for and disclosures of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. FASB ASC 855-10-05 also requires entities to disclose the date
through which subsequent events were evaluated as well as the rationale for why
that date was selected. FASB ASC 855-10-05 is effective for interim and annual
8
periods ending after June 15, 2009. FASB ASC 855-10-05 requires that public
entities evaluate subsequent events through the date that the financial
statements are issued.
In June 2009, the Financial Accounting Standards Board (FASB) issued guidance
now codified as FASB Accounting Standards Codification (ASC) Topic 105,
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES," as the single source of
authoritative non-governmental U.S. GAAP. FASB ASC Topic 105 does not change
current U.S. GAAP, but is intended to simplify user access to all authoritative
U.S. GAAP by providing all authoritative literature related to a particular
topic in one place. All existing accounting standard documents will be
superseded and all other accounting literature not included in the FASB
Codification will be considered non-authoritative. These provisions of FASB ASC
Topic 105 were effective for interim and annual periods ending after September
15, 2009 and, accordingly, were effective for the Company for the current fiscal
reporting period. The adoption of this pronouncement did not have an impact on
the Company's business, financial condition or results of operations, but will
impact the Company's financial reporting process by eliminating all references
to pre-codification standards. On the effective date of FASB ASC Topic 105, the
Codification superseded all then-existing non-SEC accounting and reporting
standards, and all other non-grandfathered non-SEC accounting literature not
included in the Codification became non-authoritative.
In January 2010, the Financial Accounting Standards Board ("FASB") issued
updated guidance to amend the disclosure requirements related to recurring and
nonrecurring fair value measurements. This update requires new disclosures on
significant transfers of assets and liabilities between Level 1 and Level 2 of
the fair value hierarchy (including the reasons for these transfers) and the
reasons for any transfers in or out of Level 3. This update also requires a
reconciliation of recurring Level 3 measurements about purchases, sales,
issuances and settlements on a gross basis. In addition to these new disclosure
requirements, this update clarifies certain existing disclosure requirements.
For example, this update clarifies that reporting entities are required to
provide fair value measurement disclosures for each class of assets and
liabilities rather than each major category of assets and liabilities. This
update also clarifies the requirement for entities to disclose information about
both the valuation techniques and inputs used in estimating Level 2 and Level 3
fair value measurements. This update will become effective for the Company with
the interim and annual reporting period beginning January 1, 2010, except for
the requirement to provide the Level 3 activity of purchases, sales, issuances,
and settlements on a gross basis, which will become effective for the Company
with the interim and annual reporting period beginning January 1, 2011. The
Company will not be required to provide the amended disclosures for any previous
periods presented for comparative purposes. Other than requiring additional
disclosures, adoption of this update will not have a material effect on the
Company's financial statements.
In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation
No. 46(R)" ("SFAS 167"), codified as FASB ASC 810-10, which modifies how a
company determines when an entity that is insufficiently capitalized or is not
controlled through voting (or similar rights) should be consolidated. FASB ASC
810-10 clarifies that the determination of whether a company is required to
consolidate an entity is based on, among other things, an entity's purpose and
design and a company's ability to direct the activities of the entity that most
significantly impact the entity's economic performance. FASB ASC 810-10 requires
an ongoing reassessment of whether a company is the primary beneficiary of a
variable interest entity. FASB ASC 810-10 also requires additional disclosures
about a company's involvement in variable interest entities and any significant
changes in risk exposure due to that involvement. FASB ASC 810-10 is effective
for fiscal years beginning after November 15, 2009. The adoption of FASB ASC
810-10 did not have an impact on the Company's financial condition, results of
operations or cash flows.
NOTE 4. 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. As of December 31, 2010, 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 $3,338 and will expire 20
years from the date the loss was incurred.
9
NOTE 5. STOCKHOLDER'S EQUITY
The Company has commenced a capital formation activity by filing a Registration
Statement on Form S-1 to the SEC to register and sell in a self-directed
offering 6,000,000 shares at an offering price of $0.01 per share for proceeds
of up to $60,000.
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
On May 4, 2010, the Company issued 10,000,000 shares of common stock to its
directors for cash consideration of $20,000.
NOTE 6. RELATED PARTY TRANSACTIONS
The sole officer and director of the Company is 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.
NOTE 7. 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 inception (May 4, 2010) to December 31, 2010 of $3,338. 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 is no guarantee that the Company will be successful in these
efforts.
NOTE 8. LOANS PAYABLE RELATED PARTY
In May 2010, the Company's director advanced a total of $682 to the Company. The
advances, which were repaid on September 28, 2010, were non-interest bearing and
unsecured.
NOTE 9. CONCENTRATIONS OF RISKS
The Company's operations are subject to significant risk and uncertainties
including financial, operational, technological, and regulatory risks including
the potential risk of business failure. See Note 7 regarding going concern
matters.
NOTE 10. PROPERTY
The Company does not own or rent any property. We currently maintain our
corporate office at 17- 5348 Vegas Dr., Las Vegas, NV 89108 USA. This location
is a virtual office that we maintain with EastBiz.com, Inc. which provides us
with a mailing address for communications. This service is provided by
EastBiz.com for $99.00 per year, plus we maintain a reserve that Eastbiz.com
will use for payment of postage. This reserve account will be supplemented as
needed. We may terminate the lease arrangement upon 30-days' written notice to
INC Management. Our executive officer, Mr. Nir Eliyahu does not work from this
location, but operates from his respective residence in Israel at no charge to
us.
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
Advanced Cellular, 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 Company" in
Part I, Item 1, "Risk Factors" in our registration statement on Form S-1/A filed
with the SEC on December 3, 2010. Readers are also urged to carefully review and
consider the various disclosures we have made in this report.
OVERVIEW
Advanced Cellular, Inc. ("Advanced", "us", "we" and "our") was incorporated on
May 4, 2010 in the State of Nevada. We are a development stage company, and to
date have not earned any revenue and currently do not have any significant
assets. Our corporate offices are located at 5348 Vegas Drive, Las Vegas, Nevada
89108. Our telephone number is (888) 284-3821 and our fax number is (888)
353-8842. We do not have any subsidiaries.
We established for the purpose of developing and commercializing a performance
management system for use by cellular operators. We have named our system
AdvancedPM.
To date we have not yet started the development of our system, AdvancedPM. There
is no assurance that once developed it will perform in the manner described or
will include all of our planned features.
Once developed, we expect our planned system to enable cellular operators to
analyze and optimize their cellular network performance. Common cellular network
equipment records different events during voice calls or data calls. These call
events are being stored in a dedicated database. Each cellular manufacturer has
its own unique database structure to store the call events. Cellular operators
have to monitor the call events in order to evaluate and improve their cellular
network performance. Key Performance Indicators (KPIs) are the significant
measurements used to track the cellular network performance against the cellular
operator's objectives. These KPIs are being calculated to summarize the call
events; the major KPIs are pre-specified and common for every cellular
manufacture with respect to the specific technology. Analyzing the KPIs enables
the operator a real-time monitoring, trend performance tracking and a drill-down
into network element level. Our planned system will present the KPIs in a
browser based, parameter driven, dynamic report generation, flexible report
scheduling capabilities and Support a wide variety of export formats including
PDF, HTML, CSV, XLS, RTF, and Image.
Our goal is to help small cellular operators monitor their network and enable
them to improve their network using an off-the-shelf product with a minimum
customization which will lead to minimal cost. We plan to generate revenues from
the sale of our AdvancedPM system to cellular network operators, at an
additional cost we plan to offer support and maintenance service.
11
Once developed, we expect AdvancedPM to provide radio access network status
management, performance analysis and support the following capabilities:
* Monitor real-time system performance and not only the element status.
* Display the performance trend enabling to identify problems which
missed by the manual process.
* Geographic map display enable analyzing the data over detailed maps,
streets, satellite photo, topographical.
* Export detailed daily reports for engineers and high level of
management.
* Increase engineering efficiency and automatically identifying issues
that impact network quality.
* Assess current deployment and decide regarding requirement for new
deployment or expansion.
In order to use our planned system, prospective cellular network operators will
be required to send us the cellular network manufacture data sheets with regards
to performance collection and database specification, and then we will need to
integrate the cellular network manufacture database with AdvancedPM.
Once developed, we expect AdvancePM to support multi-user environment through
high speed and secure access across the Intranet or the Internet. The user will
be able to access the reports directly without no client application using
simple to access web reports to improve the information sharing across the
organization. Reporting capabilities include exporting to a common PC
application format such as Microsoft Excel, PDF, JPG. Reporting and Monitoring
include geographic map display enable analyzing the data over detailed street
maps, satellite photo and topographical maps.
We have commenced only limited operations, primarily focused on organizational
matters and efforts related to this Offering. Our performance management system
is currently in the development stage and is not ready for commercial sale.
At this stage in our development, there can be no assurance that we will be
successful in generating revenues from our performance management system or that
cellular operators seeking for performance management system will be receptive
to using our service.
Our auditors have issued an audit opinion which includes a statement describing
their doubts about whether we will continue as a going concern. Our financial
status creates substantial doubt whether we will continue as a going concern.
Investors should note that we have not generated any revenues to date, we do not
yet have any products available for sale, and we do not have a fully operational
valid working prototype of our proposed product.
As of December 31, 2010, our company has $9,612 of cash and will need to raise
additional capital within the next twelve months. The company has no full time
employees and our current officer/director intends to devote approximately five
hours per week to our business activities.
RESULTS OF OPERATIONS - THREE AND SIX MONTHS ENDED DECEMBER 31, 2010
During the three and six months ended December 31, 2010, we incurred operating
expenses of $1,090 and $2,676, respectively. Our operating expenses consisted
primarily of a management fee of $1,000 paid to our chief executive officer,
$1,070 of research and consulting fees and $444 of professional fees related to
filings with the SEC.
12
NET LOSS
We incurred net losses during the three and six months ended December 31, 2010
of $1,090 and $2,676, respectively.
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 situation 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 December 31, 2010, we had cash of $9,612 representing a net decrease in
cash of $10,408 since June 30, 2010.
During the six months ended December 31, 2010, we used $1,356 of cash in
operations for the operating expenses described above, offset by a $1,320
increase in accounts payable.
During the six months ended December 31, 2010, we used $9,052 for financing
activities consisting of $8,370 of deferred offering costs and repayment of a
loan from our director in the amount of $682.
Because we have not generated any revenue from our business, we will need to
raise additional funds for the future development of our business and to respond
to unanticipated requirements or expenses. There can be no assurance that
additional financing will be available to us, or on terms that are acceptable.
Consequently, we may not be able to proceed with our intended business plans or
complete the development and commercialization of our product.
If we fail to generate sufficient net revenues, we will need to raise additional
capital to continue our operations thereafter. We cannot guarantee that
additional funding will be available on favorable terms, if at all. Any
shortfall will affect our ability to expand or even continue our operations. We
cannot guarantee that additional funding will be available on favorable terms,
if at all.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4/4T. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As required by Rule 13a-15/15d-15 under the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), as of December 31, 2010, we have carried out an
evaluation of the effectiveness of the design and operation of our Company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of our Company's management, our
President (Principal Executive Officer) and Treasurer (Principal Accounting
Officer). Based upon the results of that evaluation, our management has
concluded that, as of December 31, 2010, our Company's disclosure controls and
procedures were effective and provide reasonable assurance that 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.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting
identified in connection with the evaluation described above during the quarter
ended December 31, 2010 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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. REMOVED AND RESERVED.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS
(a) Pursuant to Rule 601 of Regulation SK, the following exhibits are included
herein or incorporated by reference.
Exhibit
Number Description
- ------ -----------
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
14
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.
ADVANCED CELLULAR, INC.
By: /s/ Nir Eliyahu
--------------------------------------------------------------------
Nir Eliyahu
President, Chief Executive Officer, Chief Financial Officer, Director
(Principal Executive Officer, Principal Financial Officer, Principal
Accounting Officer)
February 2, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By: /s/ Nir Eliyahu
---------------------------------------------------------------------
Nir Eliyahu
President, Chief Executive Officer, Chief Financial Officer, Director
(Principal Executive Officer, Principal Financial Officer, Principal
Accounting Officer)
February 2, 2011
15