UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from to
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Commission File Number: 000-50454
Digiblue Media, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 75-3016844
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
2175, rue de la Montagne, Suite 311, Montreal, Quebec, Canada H3G 1Z8
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(Address of principal executive offices) (Zip Code)
514.886.6557
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(Registrant's Telephone Number, Including Area Code)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date. As of May 20, 2004, there were
10,350,000 shares of the issuer's $.001 par value common stock issued and
outstanding.
1
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
MARCH 31, 2004
CONTENTS
Financial Statements:
Balance Sheet as of March 31, 2004 3
Statements of operations for the three-months ended March 31, 2003 and 2004
and for the period from the Company's inception (December 10,
2001) through March 31, 2004 4
Statements of cash flows for the three-months ended March 31, 2003 and 2004
and for the period from the Company's inception (December 10,
2001) through March 31, 2004 5
Notes to unaudited financial statements 6
2
DIGIBLUE MEDIA, INC.
(dba NEVADA DIGIBLUE MEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
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MARCH 31,
2004
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(UNAUDITED)
ASSETS
Current asset
Cash $ 194,028
Property and Equipment
Computer equipment 2,508
Less: accumulated depreciation (1,463)
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1,045
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Total Assets $ 195,073
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Legal fees payable $ 31,331
Accounting and auditing fees payable 9,862
Other payables and accrued expenses 82,660
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Total Current Liabilities 123,853
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 50,000,000
shares authorized, 10,350,000 shares issued and
outstanding as of March 31, 2004 10,350
Additional paid-in capital 220,150
Deficit accumulated during the development stage (159,280)
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Total Stockholders' Equity 71,220
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Total Liabilities and Stockholders' Equity $ 195,073
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3
DIGIBLUE MEDIA, INC.
(dba NEVADA DIGIBLUE MEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
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FROM INCEPTION
FOR THE THREE MONTHS ENDED (DECEMBER 10, 2001
MARCH 31, THROUGH
2003 2004 MARCH 31, 2004
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(UNAUDITED) (UNAUDITED) (UNAUDITED)
REVENUE FROM RELATED PARTY $ 13,800 $ - $ 53,500
COSTS AND EXPENSES
Contract costs 4,870 43,000 53,460
Selling and administrative costs 14,560 53,816 159,320
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19,430 96,816 212,780
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NET LOSS $ (5,630) $ (96,816) $ (159,280)
============== =============== ======================
Net loss per common shares
Net loss per common share outstanding -
basic and dilutive $ (0.00) $ (0.01)
============== ===============
Weighted average shares outstanding 4,350,000 9,983,407
============== ===============
4
DIGIBLUE MEDIA, INC.
(dba NEVADA DIGIBLUE MEDIA, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
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FROM INCEPTION
FOR THE THREE MONTHS ENDED (DECEMBER 10, 2001
MARCH 31, THROUGH
2003 2004 MARCH 31, 2004
----------------- --------------- --------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
Cash flows from operating activities:
Net loss $ (5,630) $ (96,816) $ (159,280)
----------------- --------------- --------------------
Adjustments to reconcile net loss
to net cash provided by (used in) operations
Bad debt expense 8,250 16,500
Depreciation 209 209 1,463
Issuance of common stock services 1,500 - 9,000
Donated services and rent - 1,500 1,500
(Increase) decrease in assets:
(Increase) in accounts and other receivables (4,930) - (16,500)
Increase (decrease) in liabilities:
Increase in accounts payable and accrued expenses 15,746 79,046 123,853
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Net cash provided by (used in) operating activities 6,895 (7,811) (23,464)
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Cash flows from investing activities:
Purchase of equipment - - (2,508)
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Net cash used in investing activities - - (2,508)
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Cash flows from financing activities:
Proceeds from issuance of common stock - 200,000 220,000
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Net cash provided by financing activities - 200,000 220,000
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Net increase in cash 6,895 192,189 194,028
Cash balance - Beginning of period 15,143 1,839 -
----------------- --------------- --------------------
Cash balance - End of period $ 22,038 $ 194,028 $ 194,028
================= =============== ====================
Supplemental disclosures:
Interest pad $ - $ - $ -
================= =============== ====================
Income taxes paid $ - $ - $ -
================= =============== ====================
5
DIGIBLUE MEDIA, INC.
(dba Nevada Digiblue Media, Inc.)
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
NATURE OF BUSINESS
Digiblue Media, Inc. (the "Company") is currently a development stage
company under the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 7 and was incorporated under the laws of the State
of Nevada on December 10, 2001. The Company plans to design and develop
specialized software programs for potential customers.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
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.
However, the Company has no established source of revenue. This matter
raises substantial doubt about the Company's ability to continue as a
going concern. These financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset
amounts, or amounts and classification of liabilities that might be
necessary should the Company be unable to continue as a going concern.
Management plans to take the following steps that it believes will be
sufficient to provide the Company with the ability to continue in
existence: Management intends to continue to raise additional financing
through debt and equity financing or other means and develop customer
relations to complete its business plan.
INTERIM PERIOD
In the opinion of the Company's management, the accompanying unaudited
financial statements of the Company contain all adjustments (consisting of
normal recurring accruals) necessary to present fairly the financial
position of the Company as of March 31, 2004, and the results of its
operations and cash flows for the three-month periods ended March 31, 2004
and 2003. The operating results of the Company on a quarterly basis may
not be indicative of operating results for the full year.
The accompanying unaudited financial statements are presented in
accordance with the requirements for Form 10-QSB and Article 10 of
Regulation S-X and Regulation S-B. Accordingly, they do not include all
the disclosures normally required by generally accepted accounting
principles. Reference should be made to the Digiblue Media, Inc.'s Form
10-KSB for the year ended December 31, 2003, for additional disclosures
including a summary of the Company's accounting policies, which have not
significantly changed
6
FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of cash and cash equivalents, none of which are
held for trading, accounts receivable, accounts payable and accrued
expenses approximate their carrying value because of the short term
maturity of these instruments or the stated interest rates are indicative
of market interest rates.
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 revenues and expenses during the reported periods. Actual
results could materially differ from those estimates.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all
highly liquid investments purchased with original maturities of three
months or less to be cash equivalents.
CONCENTRATION OF CREDIT RISK
The Company primarily transacts its business with one financial
institution. The amount on deposit in that one institution exceeded
$100,000 federally insured limit at March 31, 2004.
PROPERTY AND EQUIPMENT
Computer equipment is valued at cost. Depreciation is being provided by
use of straight-line over the estimated useful life of three years.
7
STOCK-BASED COMPENSATION
SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but
does not require, companies to record compensation cost for stock-based
employee compensation plans at fair value. The Company has chosen to
continue to account for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations.
Accordingly, compensation expense for stock options is measured as the
excess, if any, of the quoted market price of the Company's common stock
(at the date of the grant), less the amount an employee must pay to
acquire the stock.
REVENUE RECOGNITION
The Company's only source of revenue was under a contract with a
shareholder of the Company to create a software program. It was the only
contract for the Company since inception. Revenue under this contract was
recognized on the percentage-of-completion method measured by the portion
of the total contract or job cost expended to date to the estimated total
cost to complete. Contract costs include all direct labor, subcontract
costs and indirect payroll costs. Contract costs in excess of billings are
presented as cost and estimated earnings in excess of billings on
uncompleted contracts. Selling, general and administrative costs are
charged to expense as incurred.
During the first quarter of 2004, the Company incurred difficulty in
providing services relating to the contract and was released from
providing any additional services thereon. In consideration for this
release, the Company is required to pay the shareholder $43,000. The
payment was made in April 2004.
INCOME TAXES
The Company accounts for income taxes under SFAS 109, "Accounting for
Income Taxes." Under the asset and liability method of SFAS 109, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statements carrying
amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under SFAS 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period the enactment occurs. A valuation
allowance is provided for certain deferred tax assets if it is more likely
than not that the Company will not realize tax assets through future
operations.
Through March 31, 2004, the Company experienced net operating losses
totaling $159,280 that can be carried forward to offset future taxable
income through the year 2024. The net operating losses generated a
deferred tax asset of approximately $25,000, which was adjusted by the
Company to zero as the Company does not know if it will ever benefit from
these loss carry forwards.
BASIS AND DILUTED LOSS PER SHARE
In accordance with SFAS No. 128, "Earnings Per Share," the basic loss per
common share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding.
Diluted loss per common share is computed similar to basic loss per common
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. As of March 31, 2004, the Company had no outstanding stock
options or common stock equivalents that could be converted into shares of
Company's common stock.
8
NEW ACCOUNTING PRONOUNCEMENTS
In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" (an interpretation of Accounting Research
Bulletin (ARB) No. 51, Consolidated Financial Statements). Interpretation
46 addresses consolidation by business enterprises of entities to which
the usual condition of consolidation described in ARB-51 does not apply.
The Interpretation changes the criteria by which one company includes
another entity in its consolidated financial statements. The general
requirement to consolidate under ARB-51 is based on the presumption that
an enterprise's financial statements should include all of the entities in
which it has a controlling financial interest (i.e., majority voting
interest). Interpretation 46 requires a variable interest entity to be
consolidated by a company that does not have a majority voting interest,
but nevertheless, is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a majority of
the entity's residual returns or both. A company that consolidates a
variable interest entity is called the primary beneficiary of that entity.
In December 2003 the FASB concluded to revise certain elements of FIN 46,
primarily to clarify the required accounting for interests in variable
interest entities. FIN-46R replaces FIN-46, that was issued in January
2003. FIN-46R exempts certain entities from its requirements and provides
for special effective dates for entities that have fully or partially
applied FIN-46 as of December 24, 2003. In certain situations, entities
have the option of applying or continuing to apply FIN-46 for a short
period of time before applying FIN-46R. In general, for all entities that
were previously considered special purpose entities, FIN 46 should be
applied in periods ending after December 15, 2003. Otherwise, FIN 46 is to
be applied for registrants who file under Regulation SX in periods ending
after March 15, 2004, and for registrants who file under Regulation SB, in
periods ending after December 15, 2004. The Company does not expect the
adoption to have a material impact on the Company's financial position or
results of operations.
In December 2003, the FASB issued a revised SFAS No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits" which
replaces the previously issued Statement. The revised Statement increases
the existing disclosures for defined benefit pension plans and other
defined benefit postretirement plans. However, it does not change the
measurement or recognition of those plans as required under SFAS No. 87,
"Employers' Accounting for Pensions," SFAS No. 88, "Employers' Accounting
for Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits," and SFAS No. 106,"Employers' Accounting for
Postretirement Benefits Other Than Pensions." Specifically, the revised
Statement requires companies to provide additional disclosures about
pension plan assets, benefit obligations, cash flows, and benefit costs of
defined benefit pension plans and other defined benefit postretirement
plans. Also, companies are required to provide a breakdown of plan assets
by category, such as debt, equity and real estate, and to provide certain
expected rates of return and target allocation percentages for these asset
categories. The Company has implemented this pronouncement and has
concluded that the adoption has no material impact to the financial
statements.
During April 2003, the FASB issued SFAS 149 - "Amendment of Statement 133
on Derivative Instruments and Hedging Activities," effective for contracts
entered into or modified after June 30, 2003, except as stated below and
for hedging relationships designated after June 30, 2003. In addition,
except as stated below, all provisions of this Statement should be applied
prospectively. The provisions of this Statement that relate to Statement
133 Implementation Issues that have been effective for fiscal quarters
that began prior to June 15, 2003, should continue to be applied in
accordance with their respective effective dates. In addition, paragraphs
7(a) and 23(a), which relate to forward purchases or sales of when issued
securities or other securities that do not yet exist, should be applied to
both existing contracts and new contracts entered into after June 30,
2003. The Company has implemented this pronouncement and has concluded
that the adoption has no material impact to the financial statements.
During May 2003, the FASB issued SFAS 150 - "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity," effective for financial instruments entered into or modified
after May 31, 2003, and otherwise is effective for public entities at the
beginning of the first interim period beginning after June 15, 2003. This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a freestanding financial
instrument that is within its scope as a liability (or an asset in some
circumstances). Many of those instruments were previously classified as
equity. Some of the provisions of this Statement are consistent with the
current definition of liabilities in FASB Concepts Statement No. 6,
Elements of Financial Statements. The Company has implemented this
pronouncement and has concluded that the adoption has no material impact
to the financial statements.
9
RECLASSIFICATIONS
Certain amounts in the 2003 financial statements have been reclassified to
conform to the 2004 presentation.
NOTE 2 - STOCKHOLDERS' EQUITY
The Company is authorized to issue 55,000,000 shares of stock with
5,000,000 shares designated as preferred stock, par value of $0.001, and
50,000,0000 shares designated as common stock, par value of $0.001
PREFERRED STOCK
Preferred Stock, any series, shall have the powers, preferences, rights,
qualifications, limitations and restrictions as fixed by the Company's
Board of Directors in its sole discretion. As of March 31, 2004, the
Company's Board of Directors has not issued any Preferred Stock.
COMMON STOCK
In January 2004, the Company issued 6,000,000 shares of its common stock
in exchange for receiving $200,000.
STOCK SPLIT
The Company declared a 3 for 1 stock split effective as of January 6,
2004. The financial statements reflected herein have all been restated
to give effect to the stock split as if it occurred at the beginning of
each period presented.
Note 3 - Subsequent Event
On April 20, 2004, the Company entered into an agreement to acquire all
of the outstanding stock of Oled Systems, Inc., a privately-held New
Brunswick corporation ("Oled"), for $50,000. Oled has the right to
acquire Nova-Plasma, Inc. a Canadian Corporation, which is involved in
information technologies and telecommunications using nanomaterials and
devices.
10
ITEM 2. PLAN OF OPERATION
THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF
MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT
ESTIMATE THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY, SUCH AS "MAY", "SHALL", "COULD", "EXPECT", "ESTIMATE",
"ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR
SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE
FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN
COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND
CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS,
HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY
IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.
THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN
THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT
TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND
OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA
AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM
AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE
EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY
FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED
ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. WE CANNOT GUARANTY
THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED
IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE
ANY SUCH FORWARD-LOOKING STATEMENTS.
CRITICAL ACCOUNTING POLICY AND ESTIMATES. Our Management's Discussion and
Analysis of Financial Condition and Results of Operations section discusses our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. On an on-going basis, management evaluates
its estimates and judgments, including those related to revenue recognition,
accrued expenses, financing operations, and contingencies and litigation.
Management bases its estimates and judgments on historical experience and on
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying value of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions. The most significant accounting estimates inherent in
the preparation of our financial statements include estimates as to the
appropriate carrying value of certain assets and liabilities which are not
readily apparent from other sources. These accounting policies are described at
relevant sections in this discussion and analysis and in the notes to the
financial statements included in our Quarterly Report on Form 10-QSB for the
period ended March 31, 2004.
Until our new management joined us during the period ending March 31, 2004, we
were a software development and design company in the development stage that
specialized in providing customized software applications to small businesses
and entrepreneurs. Our change in management is described below. In addition, on
April 20, 2004, we entered into an agreement with Oled Systems, Inc., a
privately held New Brunswick corporation ("Oled") and its sole shareholder to
acquire all the outstanding shares of Oled in exchange for $50,000. Oled has the
right to acquire Nova-Plasma Inc., a Canadian corporation, ("NPI") a company
involved in information technologies and telecommunications using nanomaterials
& devices.
11
We hope to exercise that right to acquire NPI and operate its business, which
encompasses the development and manufacture of organic light emitting diode
displays. NPI was founded in 2001 by three researchers affiliated with the Ecole
Polytechnique of Montreal, and is establishing itself as a provider of
ultra-high barrier technology to the flat panel display (FPD) industry. Since
its inception, NPI has received an investment by Polyvalor and has three patent
pending technologies as part of its intellectual property portfolio. In
addition, NPI has begun establishing relationships with companies in the FPD
industry, including polymer film and component suppliers and display
manufacturers.
Although the FPD market today is dominated by liquid crystal displays (LCDs), in
the estimation of our management, the next major innovation is the use of
organic light emitting diode (OLED) displays. Our management believes that the
advantages offered by OLED displays are that they do not require backlight, and
are lighter, thinner, bringer and consume less power than LCD displays, and can
be cheaper to produce, have a faster response time, a better viewing angle and
can be produced using flexible transparent polymers instead of glass.
Our management believes that there is a great potential market available by
utilizing NPI's technology, which is anticipated to allow for the manufacture of
low-cost, lightweight, unbreakable and bendable display screens on flexible
transparent plastic substrates instead of glass screens currently in use. Upon
concluding the acquisition of NPI, we hope to adopt and operate its business as
described above.
LIQUIDITY AND CAPITAL RESOURCES. Our total assets were $195,073 as of March 31,
2004, which consisted of cash of $194,028 and property and equipment with a net
value of $1,463. In January 2004, we issued 6,000,000 shares of our common stock
sold pursuant to our Registration Statement on Form SB-2 in exchange for
receiving $200,000. Our registration statement was declared effective in
November 2003. We believe that our available cash is sufficient to pay our
day-to-day expenditures.
Our current liabilities as of March 31, 2004 totaled $123,853 of which $31,331
is owed for legal services, $9,862 is owed to our previous auditors, $43,000 is
due on the settlement of our software development agreement and $38,360 pertains
to accrued compensation. We had no other liabilities and no long-term
commitments or contingencies at March 31, 2004. From May 2002, we have had only
one client, who is a shareholder of the Company. We had difficulty in providing
services relating to the contract and we were released from it the consideration
for paying the Client $43,000 as discussed above. The payment was made in April
2004.
FOR THE THREE MONTHS ENDED MARCH 31, 2004.
RESULTS OF OPERATIONS.
REVENUE. We have realized no revenues for the three months ended March 31, 2004,
in comparison to the $13,800 we generated from a related party for the three
months ended March 31, 2003.
OPERATING EXPENSES. For the three months ended March 31, 2004, our total costs
were $96,816, of which we had $43,000 in contract costs and $53,816 in general
and administrative expenses. Our net loss for the three months ended March 31,
2004 was also $96,816. This is in comparison to our operating costs of $19,430
for the three months ended March 31, 2003, which were represented by $4,870 in
contract costs and $14,560 in general and administrative expenses. Our net loss
for the three months ended March 31, 2004 was $5,630. Because we did not
generate revenues for the three months ended March 31, 2004, we experienced a
greater net loss than the same period ending in 2003. We anticipate that we will
continue to incur significant general and administrative expenses, but hope to
continue generating income after acquiring the business of NPI as described
above.
12
OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS. From our inception on December
10, 2001 through March 31, 2004, we generated revenues of $53,500 from a related
party. We hope to generate revenues in the next twelve months after acquiring
and beginning to operate the business of NPI as described herein. On April 20,
2004, we entered into an agreement with Oled Systems, Inc., a privately held New
Brunswick corporation ("Oled") and its sole shareholder to acquire all the
outstanding shares of Oled in exchange for $50,000. Oled has the right to
acquire NPI, a Canadian corporation, a company involved in information
technologies and telecommunications using nanomaterials & devices.
Otherwise, we anticipate that we will use the balance of the funds raised in
January 2004 and revenues generated to develop this business, fund marketing
activities and for working capital. Our failure to do so will hinder our ability
to increase the size of our operations and generate additional revenues. If we
are not able to generate additional revenues that cover our estimated operating
costs, our business may ultimately fail.
We have cash of $194,028 as of March 31, 2004. In the opinion of management,
available funds will satisfy our working capital requirements to operate at our
current level of activity for the next twelve months. Our forecast for the
period for which our financial resources will be adequate to support our
operations involves risks and uncertainties and actual results could fail as a
result of a number of factors.
We are not currently conducting any research and development activities, other
than the development of our website. We do not anticipate conducting such
activities in the near future, though upon the acquisition of NPI, we may
undertake additional research and development activities. In the event that we
expand acquire NPI, then we may need to hire additional employees or independent
contractors as well as purchase or lease additional equipment. Our management
believes that we do not require the services of independent contractors to
operate at our current level of activity. However, if our level of operations
increases beyond the level that our current staff can provide, then we may need
to supplement our staff in this manner.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. We maintain controls and
procedures designed to ensure that information required to be disclosed in the
reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission. Based upon
their evaluation of those controls and procedures performed as of March 31,
2004, our chief executive officer and the principal financial officer concluded
that our disclosure controls and procedures were adequate.
(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of those controls by the chief
executive officer and principal financial officer.
13
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
We declared a 3 for 1 stock split effective as of January 6, 2004, resulting in
10,350,000 shares issued and outstanding.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
31. Rule 13a-14(a)/15d-14(a) Certifications.
32. Section 1350 Certifications.
(b) Reports on Form 8-K
1. On January 9, 2004, we filed a report on Form 8-K containing Item 5, Other
Events, regarding the sale of 2,000,000 shares of our pre-split shares of
common stock pursuant to our registration statement on Form SB-2 in exchange
for $200,000. Subsequent to that sale, we effected 3 for 1 stock split of
our common stock, which resulted in 10,350,000 shares of our issued and
outstanding common stock.
2. On January 21, 2004 we filed a report on Form 8-K containing Item 5, Other
Events, to report that on January 14, 2004, Brian Eddo, our secretary,
resigned that position, though he retained his position as our director.
Alain Houle was appointed as our secretary on the same date. At the time,
Mr. Houle owned 46,000 shares of our common stock, which comprised 0.4% of
our total issued and outstanding shares.
3. Subsequent to the period covered by this report, we filed Reports on Form
8-K regarding these matters:
a. On April 14, 2004 we filed a report containing Item 1, Change in
Control, to report that on April 6, 2004, Alain Houle, our
secretary, purchased all the shares owned by Brian Eddo, one of
our directors and former president, and all the shares owned by
Tamara Woody, one of our directors and former treasurer. At that
time, Mr. Eddo and Ms. Woody resigned as officers. Mr. Houle was
then appointed as president, treasurer and a director, and Luce
Trudel was appointed as our secretary. As a result of these
transactions, Mr. Houle beneficially owns 3,799,000 shares, which
comprises 36.8% of our total issued and outstanding shares. We
also reported our new address in that report.
b. On April 22, 2004 we filed a report containing Item 5, Other
Events, to report that on April 20, 2004, we entered into an
agreement with Oled Systems, Inc., a privately held New Brunswick
corporation ("Oled") and its sole shareholder to acquire all the
outstanding shares of Oled in exchange for $50,000. Oled has the
right to acquire Nova-Plasma Inc., a Canadian corporation,
("NPI") a company involved in information technologies and
telecommunications using nanomaterials & devices. We hope to
exercise that right to acquire NPI and operate its business.
c. On April 27, 2004 we filed a report containing Item 6,
Resignation of Directors to report that the resignations of our
former directors, Brian Eddo and Tamara Woody became effective,
as did the appointment of Luce Trudel as a director. These
resignations are not the result of any disagreement with us on
any matter relating to our operations, policies or practices.
Copies of their resignations were filed as exhibits.
d. On May 18, 2004 we filed a report containing Item 4, Change in
Accountant, to report that effective May 12, 2004, we dismissed
Stonefield Josephson, Inc. and engaged Jonathon P. Reuben, CPA to
act as our independent chartered accountants.
14
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Digiblue Media, Inc.
May 20, 2004 By: /s/ Alain Houle
------------------------------
Alain Houle, President and
Chief Executive Officer