U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[x] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended September 30, 2008
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[ ] Transition Report under Section 13 or 15(d)of the Exchange Act For the
Transition Period from ________ to ___________
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Commission File Number: 0-28847
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FORMCAP CORP.
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(Name of small business issuer in its charter)
Nevada 1006772219
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 West Liberty Street, Suite 880, Reno, NV 89501
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(Address of principal executive officers, including Zip Code)
1-775-322-0626
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(Issuer's Telephone Number)
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Indicate by check 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 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
requirements for the past 90 days. YES (X) NO ( )
Indicate by check mark whether the registrant is a large accelerated filer,
and small reporting company. See definitions of "large accelerated filer,"
"accelerated filer," and "small reporting company" in Rule 12B-2 of the
Exchange Act. (Check one):
Large accelerated filer ( ) Accelerated filer (X)
Non-accelerated filer ( ) Smaller reporting company ( )
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 13b-2 of the Securities Exchange Act) Yes (X) No ( )
As of October 16, 2008, 160,998,545 shares of the registrant's common stock
were outstanding.
FORMCAP CORP.
FORM 10-Q
September 30, 2008
TABLE OF CONTENTS
PART 1 - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
Balance Sheet as at September 30, 2008 and
December 31, 2007 1
Statement of Operations for 9 months ended
September 30, 2008 and 2007 2
Statement of Cash Flows for 9 months ended
September 30, 2008 and 2007 3
Notes to the Financial Statements 4-13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
Item 4. Controls and Procedures 15
PART 2 - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 1A. Risk Factors 15
Item 2. Unregistered Sales of Equity Securities and Use
Of Proceeds 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits, Signatures and Certification 16
CERTIFICATION 17-20
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
These financial statements have not been reviewed or audited by our
independent auditors
Balance Sheet
(Unaudited)
(U.S. Dollars)
Balance Sheet
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As at As at
September 30, December 31,
AS AT 2008 2007
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Assets
Current Assets
Cash $ 425 2,799
Prepaid Expenses - 2,700
Other Assets 4,000 -
Promissory Notes 150,000 150,000
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$ 154,425 155,499
=============================================================================
Liabilities
Current Liabilities
Accounts payable $ 103,064 23,349
Royalty and license fees
payable (Note 7) 135,000 135,000
Advances from related parties
(Note 5 & 6) 615,160 634,470
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Total liabilities $ 853,224 792,819
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Stockholders' Equity (Deficiency)
Preferred stock, $0.001 par
value, Authorized
50,000,000 shares - -
Common stock, $0.001 par value
Authorized 200,000,000 shares
160,998,545 shares issued and
Outstanding, June 2008
(160,498,545 shares issued and
outstanding, December 2007 $ 160,999 160,499
Additional paid-in capital 6,329,653 6,324,653
Deficit (7,189,451) (7,122,472)
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Total stockholders' deficit $ (698,799) (637,320)
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Total liabilities and
Stockholders' deficit $ 154,425 155,499
=============================================================================
The accompanying notes are an integral part of the financial statements.
1
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Statement of Operations and Deficit
For the 9 months period ended September 30, 2008
(Unaudited)
(U.S. Dollars)
Statement of Operations and Deficit
9 Months 9 Months
Period Ended Period Ended
September 30, September 30,
2008 2007
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Revenue - -
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Expenses
General and
administrative $ 2,345 -
Consulting fee 45,000 -
Transfer agent fees 1,634 -
Accounting fees 18,000 -
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Total operating expenses$ $ 66,979 -
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Net loss for the year $ (66,979) 0.00
=============================================================================
Net loss per Common
Share - Basic and
Diluted (0.00) 0.00
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Weighted average number
of shares outstanding 160,998,545 42,709,162
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The accompanying notes are an integral part of the financial statements.
2
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows For The 9 Months Period Ended September 30, 2008
(Unaudited)
(U.S. Dollars)
Statement of Cash Flows
9 Months 9 Months
Period Ended Period Ended
September 30, September 30,
2008 2007
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Cash Flows (Used In) Provided By :
Operating Activities
Net Loss $ (66,979) -
Adjustments to reconcile
net loss to net cash used
in operating activities - -
Accounts payable 79,715 -
Prepaid expenses 2,700 -
Other assets (4,000) -
Related party payables (19,310) -
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(7,874) -
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Investing Activities - -
Financing Activities
Shares Capital 5,500 -
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Increase/(Decrease) in Cash (2,374) -
Cash, beginning 2,799 242
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Cash, ending $ 425 242
=============================================================================
The accompanying notes are an integral part of the financial statements.
3
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
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1. General Organization And Business
Form Cap Corp. ( the "Company" or "Form Cap" ) was incorporated in the State
of Florida on April 10, 1991, under the name of Aarden-Bryn Enterprises, Inc.
The Company become a foreign registrant in the State of Nevada on December
24, 1998, and became qualified to transact business in the State of Nevada.
Since its incorporation, the Company has changed its name several times. On
August 27, 1998 the Company changed its name to Corbett's Cool Clear Water,
Inc., on October 26, 1998 to Canadian Cool Clear Water, Inc., on February
11, 1999 to Canadian Cool Clear WTAA, Inc., on September 24, 1999 to
WTAA International, Inc., on December 6, 2001 to Gravitas International,
Inc., and finally to its current name, Form Cap Corp. on October 12, 2007.
On September 18, 2007, the Company merged the Florida jurisdiction and the
Nevada jurisdiction into one Nevada jurisdiction.
The Company's financial statements are prepared using generally accepted
accounting principles in the United States of America applicable to a going
concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern. The ability of the
Company to continue as a going concern is dependent on the Company obtaining
adequate capital to fund operating losses until it becomes profitable. If
the Company is unable to obtain adequate capital, it could be forced to cease
operations.
In order to continue as a going concern, the Company will need, among other
things, additional capital resources. Management's plans to obtain such
resources for the Company include (1) obtaining capital from management and
significant shareholders sufficient to meet its minimal operating expenses,
and (2) seeking out and completing a merger with an existing operating
company. However, management cannot provide any assurances that the Company
will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent
upon its ability to successfully accomplish the plans described in the
preceding paragraph and eventually secure other sources of financing
and attain profitable operations. The accompanying financial statements do
not include any adjustments that might be necessary if the Company is unable
to continue as a going concern.
The Company has no operation since November of 2003 and the Company's
ability to continue as a going concern is dependent on successful future
operations and obtaining the necessary debt and equity financing for future
acquisition. In accordance with SFAS No. 7 the Company is considered to be
in the development stage.
As of September 30, 2008 the Company had an accumulated deficit of
$7,189,451 and a loss of $66,979 for the 9 months period ended September 30,
2008. There was no revenue for the period ended September 30, 2008.
4
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
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2. Summary Of Significant Accounting Policies
(a) Use Of Estimates
In preparing financial statements in conformity with accounting
principles generally accepted in the United States of America (
US GAAP ), management is required to make estimates and
assumptions that affect the reported amounts of assets and
liabilities, the 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.
(b) Impairment Of Long Lived Assets
The Company reviews the carrying value of long-lived assets for
impairment whenever events and circumstances indicate that the
carrying value of an asset may not be recoverable and exceeds its
fair value. An impairment loss is recognized as the amount by
which the carrying amount of a long-lived asset exceeds its fair
value. The factors considered by management in performing this
assessment include operating results, trends, and prospects, as
well as the effects of obsolescence, demand, competition and other
economic factors. As at September 30, 2008 the Company has no long-
lived assets.
(c) Stock Issued In Exchange For Services
The valuation of common stock issued in exchange for services is
valued at an estimated fair market value as determined by officers
and directors of the Company based upon other sales and issuances of the
Company's common stock within the same general time period.
(d) Stock-based Compensation
For years ended December 31, 2002 and prior, the Company
applied APB Opinion 25, Accounting for Stock Issued to
Employees, and related interpretations in accounting for its stock
options granted to employees. Effective January 1, 2003 the
Company adopted the provision of SFAS 123 recommending the
fair value-based methodology for measuring compensation costs.
(e) Income Taxes
The Company use the asset and liability approach in its method
of accounting for income taxes. This requires the recognition of
deferred tax liabilities and assets for expected future tax
consequences of temporary differences between the carrying amounts
and the tax basis of assets and liabilities. A valuation allowance
against deferred tax assets is recorded if, based on weighted
available evidence, it is more likely than not that some or all of
the deferred tax assets will not be realized.
5
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
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2. Significant Accounting Policies ( Continued )
(f) Foreign Currency Translation
The Company uses the current method of foreign currency translation.
The Company's reporting currency is the US dollar. Assets and
liabilities recorded in functional currencies other than US dollars are
translated into US dollars at the year-end rate of exchange. Revenue
and expenses are translated at the weighted-average exchange rates
for the year. The resulting translation adjustments are charged as an
expense. Gains or losses from foreign currency transactions are
included in the earnings of the current period.
(g) Loss Per Share
Loss per share computations are based on the weighted average
number of common shares outstanding during the period. Common
share equivalents consisting of stock options and warrants are
not considered in the computation because their effect would be anti-
dilutive.
3. Stockholders' Equity
In June 1998, the Company issued 1,667 free trading common shares to 25
Founding shareholders for a total consideration of $500.
In June 1998, the Company issued 65,000 restricted common shares to three
shareholders in consideration of $4,500. These shares were issued under Reg.
D 504 and were affixed with a "144" legend and became free trading in June,
2000.
In December 1998 the Company issued 533,333 common shares by way of an
Initial Offering Memorandum to eight investors in exchange for $8,000. Two
shareholders were affiliates under this Offering and their share were issued
with the appropriate restrictions. All other investors in the Offering
received free trading shares.
In January 1999, the Company issued 1,467 restricted common shares by way of
a private placement under Reg. D. 504 to one investor in exchange for
$66,000 or $45.00 per share which proceeds were proceeds intended to fund
the Company's immediate working capital needs.
In April of 1999, the Company issued 6,732 restricted common shares by way of
a private placement under Reg. D. 504 to two investors in exchange for
$125,224 or $18.75 per share which proceeds were proceeds intended to fund
the Company's immediate working capital needs.
6
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
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3. Stockholders' Equity (Continued)
In May 1999, the Company issued 3,704 restricted common shares by way of a
private placement under Reg. S. to one investor in exchange for $75,000
or $20.25 per share which proceeds were proceeds intended to fund the
Company's immediate working capital needs.
In July 1999, the Company issued 2,222 restricted common shares by way of a
private placement under Reg. S. to one investor in exchange for $50,000
or $22.50 per share which proceeds were proceeds intended to fund the
Company's immediate working capital needs.
In September 1999, the Company issued 38,890 restricted common shares of
the Company by way of a private placement under Reg. S. to one investor
in exchange for $350,000 or $9.00 per share which proceeds were proceeds
intended to fund the Company's immediate working capital needs. As part of
the offering price, the accredited investor also received 6,667 Share
Purchase Warrants convertible into an equivalent number of share of the
Company's Common Stock from the date of Investment to September 2000, at a
strike price of $10.65 per share. A finder's fee in the amount of $40,000 was
paid in connection with this private placement.
In May 1999, the Company issued 16,667 restricted common shares of the
Company under Reg. S. to an employee in consideration for services rendered
to the Company.
In December 1999, the Company issued an aggregate of 9,506 restricted common
shares of the Company by wary of a private placement under Reg. S. to one
investor in exchange for $100,000 or $10.50 per share which proceeds were
proceeds intended to fund the Company' s immediate working capital needs. As
part of the offering price, the accredited investor also received 4,762
Share Purchase Warrants convertible into an equivalent number of shares of
the Company's Common Stock from the date of Investment to December 2000, at a
strike price of $12.75. A finder's fee in the amount of $15,000 was paid
in connection to this private placement.
In December 1999, the Company issued an aggregate of 16,667 restricted common
shares of the Company to a Director under Reg. S. in consideration for
services rendered to the Company.
In February, 2000 the Company issued 16,667 restricted shares under Reg. S to
a director in consideration for services rendered to the Company.
7
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
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3. Stockholders' Equity (Continued)
In May 2000, the Company completed a private placement under Reg. S.
whereby it issued an aggregate of 49,261 restricted common shares of the
Company's Common Stock in exchange for $150,000 or $3.045 per share, which
intended to fund the Company's immediate working capital needs. As part of
the offering price, the accredited investors also received 49,261
Share Purchase Warrants convertible into an equivalent number of
shares of the Company's Common Stock from the date of the private
placement Agreement to May 9, 2001, at a strike price per share equal to 54%
of the closing bid for the Company's stock on the last trading day preceding
the date of execution of the Agreement; and, from May 1, 2001 to April
30,2002, at a strike price per share equal to 140% of the closing bid for the
Company's stock on the last trading day preceding the date of execution of
the Agreement.
In May 2000, the Company completed a debt conversion under Reg. S. whereby
it issued an aggregate of 100,548 restricted shares of the Company's Common
Stock in exchange for $205, 117 or $2.04 per share, which proceeds were
intended to fund the Company's immediate working capital needs. As part of
the offering price, the accredited investors also received 100,548 Share
Purchase Warrants convertible into an equivalent number of shares of
the Company's Common Stock from the date of the private placement
Agreement to May, 2001, at a strike price per share equal to 40% of the
closing bid for the Company's stock on the last trading preceding the date of
execution of the Agreement; and , from May 30, 2001 to April 30, 2002, at
a strike price per share equal to 140% of the closing bid for the
Company's stock on the last trading day preceding the date of execution of
the Agreement.
In May 2000, the Company completed a debt conversion under Reg. S. whereby it
issued an aggregate of 61,010 restricted shares of the Company's Common Stock
in exchange for $183,031, or $3.00 per share, which proceeds were intended to
fund the Company's immediate working capital needs. As part of the
offering price, the accredited investors also received 61,010 Shares
Purchase Warrants convertible into share equal of 58% of the closing bid for
the Company's stock on the last trading day preceding the date
of execution of the Agreement; and, from May 30, 2001 to April 30, 2002,
at a strike price per share equal to 140% of the closing bid for the
Company's stock on the last trading day preceding the date of execution of
the Agreement.
In November 2000, the Company completed a private placement under Reg.
S. Whereby it issued an aggregate of 41,667 restricted shares of the
Company's Common Stock in exchange for $150,000 or $3.60 per share, which
intended to fund the Company's immediate working capital needs. As part of
the offering price, the accredited investors also received 41,667 Share
Purchase Warrants convertible into an equivalent number of shares of the
Company's Common Stock from the date of the private placement Agreement to
October 30, 2001, at a strike price per share equal to 100% of the closing
bid for the Company's stock on the last trading preceding the date of
execution of the Agreement; and, from December 1,2001 to January 31, 2003, at
a strike price per share equal to 140% of the closing bid for the Company's
stock on the last trading preceding the date of execution of the Agreement.
8
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
- -----------------------------------------------------------------------------
3. Stockholders' Equity (Continued)
In November 2000, the Company completed a private placement under Reg.
S. whereby it issued an aggregate of 50,000 restricted shares of the
Company's Common Stock in exchange for $180,000 or $3.60 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
As part of the offering price, the accredited investors also received
50,000 Share Purchase Warrants convertible into an equivalent number of
shares of the Company's Common Stock from the date of the private
placement Agreement to November 30, 2001, at a strike price per share equal
to 100% of the closing bid for the Company's stock on the last trading
day preceding the date of execution of the Agreement; and, from December
1, 2001 to January 31, 2003, at a strike price per share equal to 140% of the
closing bid for the Company's stock on the last trading day preceding the
date of execution of the Agreement.
In December 2000, the Company completed a private placement under Reg. S.
whereby it issued an aggregate of 200,000 restricted shares of the
Company's Common Stock in exchange for $300,000 or $1.50 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
As part of the offering price, the accredited investors also received
200,000 Share Purchase Warrants convertible into an equivalent number of
shares of the Company's Common Stock from the date of the private
placement Agreement to December 29, 2001, at a strike price per share
equal to 100% of the closing bid for the Company's stock on the last
trading day preceding the date of execution of the Agreement; and, from
January 1, 2002 to February 28, 2003, at a strike price per share equal to
140% of the closing bid for the Company's stock on the last trading day
preceding the date of execution of the Agreement.
In January 2001, the Company completed a private placement under Reg. S.
whereby it issued an aggregate of 3,400,000 restricted shares of the
Company's Common Stock in exchange for $340,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
As part of the offering price, the accredited investors also received
3,400,000 Share Purchase Warrants convertible into an equivalent number of
shares of the Company's Common Stock from the date of the private
placement Agreement to March 14, 2002, an amount of money per share equal to
100% of the closing bid for the Company's stock on the last trading
day preceding the date of execution of the Agreement; and, from April 1,
2002 to May 31, 2003, an amount of money per share equal to 140% of the
closing bid for the Company's stock on the last trading day preceding the
date of execution of the Agreement.
In April 2001, the Company completed a private placement under Reg. D Section
504 whereby it issued an aggregate of 500,000 restricted shares of the
Company's Common Stock in exchange for $50,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
9
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
- -----------------------------------------------------------------------------
3. Stockholders' Equity (Continued)
In April 2001, the Company completed a private placement under Reg.
S. whereby it issued an aggregate of 500,000 restricted shares of the
Company's Common Stock in exchange for $50,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg.
S. whereby it issued an aggregate of 500,000 restricted shares of the
Company's Common Stock in exchange for $50,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. D Section
504 whereby it issued an aggregate of 750,000 restricted shares of the
Company's Common Stock in exchange for $75,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. D Section
504 whereby it issued an aggregate of 750,000 restricted shares of the
Company's Common Stock in exchange for $75,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. D Section
504 whereby it issued an aggregate of 750,000 restricted shares of the
Company's Common Stock in exchange for $75,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. D Section
504 whereby it issued an aggregate of 750,000 restricted shares of the
Company's Common Stock in exchange for $75,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. S whereby
it issued an aggregate of 750,000 restricted shares of the Company's Common
Stock in exchange for $75,000 or $0.10 per share, which proceeds were
intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. S whereby
it issued an aggregate of 750,000 restricted shares of the Company's Common
Stock in exchange for $75,000 or $0.10 per share, which proceeds were
intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. S whereby
it issued an aggregate of 750,000 restricted shares of the Company's Common
Stock in exchange for $75,000 or $0.10 per share, which proceeds were
intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. S whereby
it issued an aggregate of 110,000 restricted shares of the Company's Common
Stock in exchange for $11,000 or $0.10 per share, which proceeds were
intended to fund the Company's immediate working capital needs.
10
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
- -----------------------------------------------------------------------------
3. Stockholders' Equity (Continued)
In April 2001, the Company completed a private placement under Reg. S Section
46 whereby it issued an aggregate of 750,000 restricted shares of the
Company's Common Stock in exchange for $75,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. S whereby
it issued an aggregate of 750,000 restricted shares of the Company's Common
Stock in exchange for $75,000 or $0.10 per share, which proceeds were
intended to fund the Company's immediate working capital needs.
In April 2001, the Company completed a private placement under Reg. D Section
504 whereby it issued an aggregate of 100,000 restricted shares of the
Company's Common Stock in exchange for $10,000 or $0.10 per share, which
proceeds were intended to fund the Company's immediate working capital needs.
In April 2001, the Company issued 200,000 shares in the Common Stock of the
Company to directors under Reg. D Section 504 for the obligations underlying
Subscription Agreements dated January, 1999 wherein the directors had
subscribed for 20,000 Preferred Shares, but the Preferred Shares were not
subsequently designated. Conversion of the Preferred Shares did not require
additional consideration, and the shares issued in satisfaction of the
issuance of obligation were without additional consideration. The 200,000
common shares so issued was the same number into which the Preferred Shares
could have been exchanged, had the Designation been made.
In May 2001, the Company completed a private placement under Reg. S whereby
it issued an aggregate of 750,000 restricted shares of the Company's Common
Stock in exchange for $75,000 or $0.10 per share, which proceeds were
intended to fund the Company's immediate working capital needs.
In May 2001, the Company completed a private placement under Reg. S whereby
it issued an aggregate of 200,000 restricted shares of the Company's Common
Stock in exchange for $20,000 or $0.10 per share, which proceeds were
intended to fund the Company's immediate working capital needs.
In May 2001, the Company completed a private placement under Reg. S whereby
it issued an aggregate of 200,000 restricted shares of the Company's Common
Stock in exchange for $20,000 or $0.10 per share, which proceeds were
intended to fund the Company's immediate working capital needs.
In November 2001, the Company issued 500,000 shares in the Common Stock of
the Company under Reg. D Section 4(6) to 100% of outstanding shares of
Evolution Marketing Systems inc. As part of the offering price, the
shareholders also received 250,000 Shares Purchase Warrants convertible into
an equivalent number of shares of the Company's Common Stock from the date of
the private placement.
11
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
- -----------------------------------------------------------------------------
3. Stockholders' Equity (Continued)
In 2003 the Company sold 108,868 common shares of stock for $16,330 and also
raised $486,000 through the issuance of common stock and exercise of stock
options. In April 2003, Jupiter Capital Ventures, Inc., and Jupiter Financial
Services agreed to allow the Company to convert the outstanding debts owing
to each of the companies into equity in the Company. The debt consists of a
combination of expenses incurred by Jupiter Capital on behalf of the
Company, advances loaned to the Company by Jupiter, and services rendered
to the Company as stipulated by consulting agreements of Jupiter Capital
Ventures, Inc., and Jupiter Financial Services, Inc., and total $765,531.
In January 2004, the Company entered into an agreement with related parties
to convert debt of $50,000 with the issuance of 150,000 free trading shares
of the Company.
In March 11, 2005, there are options outstanding held by William Mckay
in the amount 6,155,310 and options outstanding held by Jupiter Capital
Ventures, Inc., all of which options having been granted pursuant to a
stock for debt agreement dated April 14, 2003 and all of the options
exercisable at a price of $0.00. Pursuant to Mckay S-8 Option the holder
hereby surrenders this option and the Company hereby resolved to issue
6,155,310 common shares of the Company to Mckay and pursuant to Jupiter 144
Option the holder hereby surrenders this option and the Company
hereby resolved to issued 1,500,000 common shares of the Company to Jupiter
Capital Ventures, Inc.
In April 11, 2005, the Company entered into an agreement with Jupiter Capital
Ventures, Inc., to convert $100,000 of outstanding debts in exchange for
10,000,000 common shares of the Company.
In August 30, 2007, $57,000 of related parties debt of the Company was
settled through the issuance of 57,000,000 common restrictive shares and on
October 12, 2007 the Company had authorized a reverse stock split of 200 to
1 of all of the issued and outstanding common stock. On October 24, 2007,
$100,000 of related parties debt of the Company was settled through the
issuance of 10,000,000 common restrictive shares in accordance to Rule
144 (k) under the Securities Act of 1933.
In October 16, 2007, 150,000,000 common restrictive shares were issued at
par value with 75,000,000 each to Ecom Capital and Porto Velho Investments
on promissory notes to the Company.
In May 8, 2008, 500,000 common restrictive shares were issued at par value
under private placement in accordance to Rule 144 under the Securities Act
of 1933.
12
FORM CAP CORP
(FORMERLY: GRAVITAS INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes To The Financial Statements
September 30, 2008
(Unaudited)
(U.S. Dollars)
- -----------------------------------------------------------------------------
4. Share Capital
Amend the Company's authorized share capital
On September 7, 2007 the authorized shares capital was increased as follows:-
Authorized preferred stock consist of 50,000,000 shares having a par value of
$0.001 per share
Authorized common stock consist of 200,000,000 shares having a par value of
$0.001 per share
Article IV of the Company's Articles of Incorporation will be amended to read
as follows:
The capital stock of this corporation shall consist of 200,000,000 shares of
common stock having a par value of $0.001 per share and 50,000,000 shares of
preferred stock with a par value of $0.001 per share
5. Advances From Related Party
At September 30, 2008, $615,160 was due to several individuals and corporations
related to the Company. These amounts bear no interest and are due on
demand, the Company recorded no imputed interest on these borrowings.
6. Related Party Transactions
In August 30, 2007, $57,000 of related parties debt of the Company was
settled through the issuance of 57,000,000 common restrictive shares and
on October 24, 2007, $100,000 of related parties debt of the Company was
settled through the issuance of 10,000,000 common restrictive shares in
accordance to Rule 144 (k) under the Securities Act of 1933.
7. License Agreement
As of December 31, 2004, the Company had $135,000 in outstanding license
and royalty fees payable. The Company is in default in these agreements and
is currently negotiating settlements of these liabilities as it is no longer
in this line of business.
8. Income Taxes
The Company provides for income taxes under Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes. SFAS No. 109
requires the use of an asset and liability approach in accounting for income
taxes. Deferred tax assets and liabilities are recorded based on the
differences between the financial statement and tax bases of assets and
liabilities and the tax rates in effect currently.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely
than not that some or all of the deferred tax assets will not be realized. In
the Company's opinion, it is uncertain whether they will generate sufficient
taxable income in the future to fully utilize the net deferred tax asset.
At September 30, 2008, the Company had deficits accumulated during the
development stage of $7,189,451 available to offset future taxable income.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of the results of operations and the
Company's financial position should be read in conjunction with the audited
financial statements and accompanying notes.
This Quarterly Reports contain various forward-looking statements and
information, including (but not limited to) under the caption "Management's
Discussion and Analysis or Plan of Operation" that are based on management's
beliefs as well as assumptions made by and information currently available to
management, including statements regarding future economic performance and
financial condition, liquidity and capital resources and management's plan
and objectives. When used in this document, the words "expect," "anticipate,"
"estimate," " believe," and similar expressions are intended to identify
forward-looking statements. Such statements are subject to various risks and
uncertainties that could cause actual results to vary materially from those
stated. Should one or more of these risks or uncertainties materialize or
should underlying assumptions prove incorrect actual results may vary
materially from those anticipated, estimated, expected or projected. Some
important factors that could cause actual results or outcomes to differ
materially from those discussed in the forward-looking statements include,
but are not limited to the following: our limited operating history; history
of losses; competition; our ability to manage growth and integration; risks
of technological change; competition for customers; pricing and
transportation of products; marketing relationships with third party
suppliers; our ability to protect our intellectual property rights; economic
and political factors; risk of technological change; market acceptance of our
products, our ability to raise capital, ability to secure licenses,
uncertainty regarding infringing intellectual property rights of others;
security risks and the other risks and uncertainties described under. All
such factors are difficult to predict, contain uncertainties that may
materially affect actual results, and are beyond our control.
OVERVIEW
The Company has been in the process of identifying and discussing strategic
merger or acquisitions. The Company will need to raise substantial
additional capital to fund this strategy. The Company is seeking such
additional funds through private equity or debt financing. There can be no
assurance that such funding will be available on acceptable terms. The
Company's continued existence as a going concern is ultimately dependent upon
its ability to secure additional funding. The Company has no lines of credit
available at this time.
OPERATION
The Company has not been active since November 2003. The losses for the 9
months ended September 30, 2008 was $66,979 for consulting, accounting,
filing, general and administrative expenses. There were no revenue for
those periods stated above.
ITEM 3 - QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company at present does not engage in any business activities thus will not
be subjected to any quantitative or qualitative influences to market risk.
14
ITEM 4 - CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the Company conducted an
evaluation, under the supervision and with the participation of the principal
executive officer and the principal financial officer, of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based
on this evaluation, the principal executive officer and principal financial
officer concluded that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company
in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms.
There was no change in the Company's internal control over financial
reporting during the Company's most recently completed fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
PART 2. - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Neither the Company nor any of its officers, directors or greater than 10%
beneficial shareholders are involved in any litigation or legal proceedings
involving the business of the Company.
ITEM 1A - RISK FACTORS
The Company at present does not engage in any business activities thus will
not be subjected to any risk.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In May 8, 2008, 500,000 common restrictive shares was issued at par value under
private placement in accordance to Rule 144 under the Securities Act of 1933.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
None
15
ITEM 6 - EXHIBITS
Exhibit Number Exhibit Description
31.01 Certification of Principal Executive Officer pursuant to
Rule 13a-14(a) of the Securities Exchange Act and Section
302 of the Sarbanes-Oxley Act of 2002.
31.02 Certification of Principal Accounting Officer pursuant to
Rule 13a-14(a) of the Securities Exchange Act and Section
302 of the Sarbanes-Oxley Act of 2002.
32.01 Certification of Principal Executive Officer pursuant to
18 U.S.C. Section 1350, adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.*
32.02 Certification of Principal Accounting Officer pursuant to
18 U.S.C. Section 1350, adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.*
* These certificates accompany FormCap Corp Quarterly Report on Form 10-Q;
They are not deemed "filed" with the Securities and Exchange Commission and
are not to be incorporated by reference in any filing of FormCap Corp under
the Securities Act of 1933, or the Securities Exchange Act of 1934, whether
made before or after the date hereof and irrespective of any general
incorporation language in any filings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
October 17, 2008
FormCap Corp.
/s/ Jeffrey Dashefsky
------------------------------------
Jeffrey Dashefsky
Director and Chief Executive Officer
/s/ Michael Lee
------------------------------------
Michael Lee
Chief Accounting Officer
16