UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
AMENDMENT 2
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended March 31, 2009
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from to
Commission file number 000-26493
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EXTENSIONS, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0390251
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(State or other jurisdiction of (I. R. S. Employer Identification No.)
incorporation or organization)
770 South Post Oak Lane, Suite 330, Houston, TX 77056
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (832) 487- 8689
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n/a
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
rule 12b-2 of the Exchange Act). Yes [ ] No [x]
The number of shares of the registrant's common stock outstanding as of March
31, 2009 was 889,619,940 shares.
EXTENSIONS, INC.
----------------
INDEX TO THE
QUARTERLY REPORT ON FORM 10-Q
PAGE
NUMBER
- ---------- ---------------------------------------------------- --------
PART I. FINANCIAL INFORMATION F-3
Item 1. Financial Statements (Unaudited) F-3
Condensed Consolidated Balance Sheets - March 31,
2009 (unaudited) and December 31, 2008 F-3
Condensed Consolidated Statements of Operations -
(unaudited) - For the three and nine months ended
March 31, 2009 and 2008 and for the period from
inception (February 19, 1997) to March 31, 2009 F-4
Condensed Consolidated Statement of Cash Flows -
(unaudited) - For the three months ended March 31,
2009 and 2008 and for the period from inception
(February 19, 1997) to March 31, 2009 F-5
Notes to unaudited Condensed Consolidated Financial
Statements F-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About
Market Risks 9
Item 4. Controls and Procedures 9
PART II. OTHER INFORMATION 10
Item 1. Legal Proceedings 10
Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds 10
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits 11
Page 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EXTENSIONS, INC.
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(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
March 31, December 31
ASSETS 2009 2008
- ----------------------------------------- ----------- -------------
Current Assets
Cash $ 14,868 $ 17,950
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Total Current Assets 14,868 17,950
Other Assets - Website 110,000 100,000
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Total Assets $ 124,868 $ 117,950
LIABILITIES & STOCKHOLDERS' DEFICIT
- -----------------------------------------
Current Liabilities
Advances from related party $ 100,754 $ 72,254
Notes payable 10,000 10,000
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Total Current Liabilities 110,754 82,254
=========== =============
Stockholders' Equity
Common Shares:
Authorized shares 1,000,000,000,
0.0001 par value: 889,619,940
shares outstanding at March 31,
2009 and December 31, 2008 88,961 88,961
Preferred Shares
Authorized Shares 5,000,000,
0.001 par value: 2,000,000 shares
outstanding at March 31, 2009 and
December 31, 2008 2,000 2,000
Additional paid-in Capital 280,621 280,621
Deficit accumulated during
development stage (357,468) (335,886)
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Total Stockholders' Equity 14,114 35,696
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Total Liabilities & Stockholders' Equity 124,868 $ 117,950
=========== =============
See accompanying notes to financial statements
F-3
EXTENSIONS, INC.
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(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF LOSS
From Inception
(February 19,
For the Three Months 1997) Through
Ended March 31, March 31,
2009 2008 2009
------------- ------------ ----------------
REVENUES $ 0 $ 0 $ 0
EXPENSES
Administrative Expense 21,582 26,529 222,914
Impairment Loss - 50,000 111,254
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Total Expenses 21,582 76,529 213,491
LOSS FROM OPERATION NET LOSS
Loss on Sale of Marketable
Securities $ - $ - $ 23,300
NET LOSS $ (21,582) $ (76,529) $ (357,468)
------------- ------------ ----------------
(LOSS) PER SHARE $ (0.00002) $ (0.00136)
============= ============
WEIGHTED AVERAGE
SHARES OUTSTANDING 889,619,940 82,374,853
============= ============
See accompanying notes to financial statements
F-4
EXTENSIONS, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
From Inception
For the Three Months (February 19,
Ended March 31, 1997) through
2009 2008 March 31, 2009
---------- --------- ---------------
CASH FLOWS FROM OPERATIONS
Net Income (Loss) (21,582) (76,529) (357,468)
Adjustments to reconcile net loss
to cash used in operating activities:
Common stock issued for royalty
payments and services 56,144
Non cash expense-impairment loss 0 50,000 61,253
Loss from sale of marketable securities 0 - 23,300
---------- --------- ---------------
Net Cash Used By Operating Activities (21,582) 26,529 (216,771)
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds from sale of marketable
securities 31,954 0 31,954
Investments in intangible assets (10,000) 0 (10,000)
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Net cash used in investing activities (10,000) 0 21,954
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of notes payable 0 0 10,000
Advances from related party 28,500 0 45,500
Proceeds from issuance of common
stock 0 7,500 154,185
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Net cash provided from financing
activities 0 7,500 209,685
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Net increase (Decrease) in cash (3,082) (19,029) 14,868
Cash at beginning of period 17,950 20,976 0
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Cash at end of period $ 14,868 $ 1,947 $ 14,868
========== ========= ===============
Supplemental cash flow information
Stock issued for accounts payable $ 0 $ 0 $ 50,000
Marketable securities contributed
by related party $ 0 $ 1 $ 55,254
Stock issued for intangible assets $ 0 $ 0 $ 100,000
========== ========= ===============
See accompanying notes to financial statements
F-5
EXTENSIONS, INC.
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(A Development Stage Company)
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2009
GENERAL
The interim financial statements are prepared pursuant to the requirements for
reporting on Form 10-Q. The December 31, 2008 balance sheet data was derived
from audited financial statements but does not include all disclosures required
by generally accepted accounting principles. The interim financial statements
and notes thereto should be read in conjunction with the financial statements
and notes included in the Company's Form 10-K for the year ended December 31,
2008. In the opinion of management, the interim financial statements reflect
all adjustments of a normal recurring nature necessary for a fair statement of
the results for the interim periods presented.
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN
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The accompanying financial statements have been prepared on the basis of
accounting principles applicable to a "going concern", which assume that the
company will continue in operation for at least one year and will be able to
realize its assets and discharge its liabilities in the normal course of
operations.
Several conditions and events cast doubt about the company's ability to continue
as a "going concern". The company incurred indeterminate net losses prior to
October 1, 2003, has a liquidity problem, and requires additional financing in
order to finance its business activities on an ongoing basis. The company is
actively pursuing alternative financing and has had discussions with various
third parties, although no firm commitments have been obtained. The company's
future capital requirements will depend on numerous factors including, but not
limited to, continued progress in finding a merger candidate and the pursuit of
business opportunities.
These financial statements do not reflect adjustments that would be necessary if
the company were unable to continue as a "going concern". While management
believes that the actions already taken or planned, will mitigate the adverse
conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial statements, there can be
no assurance that these actions will be successful. If the company were unable
to continue as a "going concern", then substantial adjustments would be
necessary to the carrying values of assets, the reported amounts of its
liabilities, the reported revenues and expenses, and the balance sheet
classifications used.
Organization and Basis of Presentation
The company was incorporated under the laws of the State of Nevada on February
19, 1997 under the name of Millennium National Events, Inc. The company's name
was changed in August 2007 to Extensions, Inc. The company ceased all operating
activities during the period from October 1, 2003 to December 31, 2005 and was
considered dormant. Since October 6, 2006, the company has been in the
development stage, and has not commenced planned principal operations. The
company also was delinquent on its filing with the Secretary of State for Nevada
and as a result was not a corporation in good standing until October 30, 2006.
The company's common shares are listed for trading on the Pink Sheets under the
symbol EXTI.
F-6
Prior to approximately October 1, 2003, Millennium National Events, Inc. was an
operating company with its common shares listed for trading on the OTCBB market.
The company failed to remain current on its SEC filing requirements and as a
result was demoted to the Pink Sheets. Subsequently, the Company ceased all
business operations and has been dormant since approximately October 1, 2003.
During the same period, all the Company's officers and directors ceased acting
on behalf of the Company and abandoned their obligations to the Company and its
shareholders. As a result, the Company was considered to be dormant from
October 1, 2003 to December 31, 2005.
On August 18, 2006, a complaint was filed in the Superior Court for Washoe
County, Nevada seeking the appointment for custodian for the Company under
Nevada Revised Statutes 78.347(2). On October 6, 2006, a Custodian was
appointed to the Company who commenced an investigation of the assets,
management, business, condition and liabilities of the Company.
As a result of the investigation by the Custodian, a report was prepared and
filed with the Court, finding that there were no apparent assets, liabilities,
or business of the company existing or enforceable, that there were 27,300,000
common shares and no preferred shares issued and outstanding and that the
company was in revoked status under Nevada law. The accompanying financial
statements were prepared on the basis of that investigation, as approved by the
Court.
In the event that any liabilities, liens, judgments, warrants, options, or other
claims against the Company arise, these will be recorded when discovered.
Nature of Business
The company is developing several social support networks developed off an
intellectual property platform including our cancer social support network which
will be an interactive online community dedicated to serving the specific needs
of cancer patients, and their family, friends and caregivers. The site when
completed will allow cancer patients the ability to research their disease and
assist in finding, organizing and managing their own cancer support network.
The goal of these support networks is to assist the cancer patient in conserving
needed energy by lightening the burden associated with their own daily trials
and tribulations, with the hope that the energy conserved can be leveraged into
a higher level of patient activity and a stronger determination to fight the
disease. The primary components of our cancer social support network will be
content, community, and Micro Support Networks, (MSN's) each of which serves as
a gateway and complementary resource to the other.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
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This summary of accounting policies for Extensions, Inc. (a development stage
company) is presented to assist in understanding the Company's financial
statements. The accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
F-7
The preparation of financial statements is conformity with generally accepted
accounting principles required management to make estimates and assumptions that
effect 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 reporting period.
Actual results could differ from those estimates.
Loss Per Share
Basic loss per share has been computed by dividing the loss for the year
applicable to the common stockholders by the weighted average number of common
shares outstanding during the years.
Concentration of Credit Risk
The company has no significant off-balance sheet concentrations of credit risk
such as foreign exchange contracts, options contracts or other foreign hedging
arrangements.
NOTE 3 - INCOME TAXES
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The company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting for Income Taxes". SFAS No. 109 requires recognition of deferred
income tax assets and liabilities for the expected future income tax
consequences, based on enacted tax laws, of temporary differences between the
financial reporting and tax bases of assets and liabilities.
NOTE 4 - DEVELOPMENT STAGE COMPANY
- ----------------------------------
The Company has not begun principal operations and as is common with a
development stage company, the company has had recurring losses during its
development stage. The company's financial statements are prepared using
generally accepted accounting principals applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, the company does not have significant cash
or other material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a going
concern. In the interim, shareholders of the company have committed to meeting
its minimal operating expenses.
NOTE 5 - COMMITMENTS
- -----------------------
As of January 1, 2006 all activities of the company have been conducted by
corporate officers from either their homes or business offices. Currently,
there are no outstanding debts owed by the company for the use of these
facilities and there are no commitments for future use of the facilities.
NOTE 6 - COMMON STOCK
- ---------------------
Prior to December 31, 2005, the company issued 27,300,000 shares of common stock
for cash and other consideration.
NOTE 7 - SUBSEQUENT EVENTS
- --------------------------
None.
F-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
We currently fund our operations primarily through funds raised through
private placements completed and the limited conversion of vendor invoices for
stock. On October 30, 2008 we sold 100,000 shares of common stock to one of our
directors for $50,000. The shares were issued at $0.50 per share.
On September 26, 2008, the Company issued 6,144 shares of its common stock
for payment of an invoice in the amount of $6,144. The shares were converted at
$1.00 per share.
We may determine it is appropriate to raise additional capital for working
capital and general corporate purposes. If we need, or elect, to obtain
additional debt or equity financing, but there can be no assurance that
additional financing will be available on reasonable terms, if at all. Without
additional financing, we have insufficient funds to carry out our business plan
for the next twelve months.
RESULTS OF OPERATIONS:
Our financial statements for the quarters ended March 31, 2009 and March
31, 2008 reflect minimal business activities. We had no revenue for either
period. For the quarter ended March 31, 2009, we had operating expenses of
$21,582. This compares with expenses of $76,529 during the same period in 2008.
We attribute this to an extraordinary $50,000 expense for impairment loss
incurred in 2008.
ITEM 3. QUANTITIVE AND QUALITIVE DISCLOSURE ABOUT MARKET RISK
None
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures (as defined in the
Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) designed to ensure
that information required to be disclosed in reports filed or submitted under
the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by
the Company in its reports that it files or submits under the Exchange Act is
accumulated and communicated to the Company's management, including its
principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.
The Company's management, with the participation of its chief executive
officer who at that time was also its chief financial officer, evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined in
the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as of March
31, 2009. Based on that evaluation, the Company's chief executive / financial
concluded that,
Page 9
Company's disclosure controls and procedures were not effective at a reasonable
assurance level, due to the identification of one or more material weaknesses.
MANAGEMENT'S REMEDIATION PLAN
Management determined that a material weakness existed due to a lack of an
adequate number of personnel in the accounting department. This weakness was
first identified in 2007, and additional resources were hired to perform
controls and to aid in the timeliness of the financial statement closing process
leading to the correct preparation, review, presentation of and disclosures in
the Company's consolidated statements. However, the Company was unable to retain
the additional resources through the entirety of 2008 and again has hired
temporary contractors to help perform certain accounting functions, until
management can employ a more permanent solution. The Company cannot assure that,
as circumstances change, any additional material weakness will not be
identified.
The Company believes that the Company's disclosure controls and procedures,
including the Company's internal control over financial reporting, have further
improved due to the intensified review of all accounting and financial
transactions by the board of directors and the changes described above. The
Company has hired certain resources in the accounting and finance departments
and it will make additional changes in the future, as it deems necessary. The
Company cannot assure that, as circumstances change, any additional material
weakness will not be identified.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
As noted above, during 2008 management and the board of directors
intensified its review of all accounting and financial transactions as a further
effort to strengthen internal control over financial reporting, as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act. In addition, we have
hired additional temporary financial personnel to assist with our financial
reporting duties. These actions, in addition to the other actions taken in the
previous two years, lead us to conclude that our internal controls as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act have improved substantially
but are still subject to one or more material weaknesses.
There were no other changes in the Company's internal control over
financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act, during the quarter ended March 31, 2009 that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None.
Page 10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
a) Exhibits
EXHIBIT
NO DESCRIPTION
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31.1 Certification Pursuant to 18 USC, Section 1350 as adopted Pursuant to
Section 302 of the Sarbanes Oxley Act of 2002
31.2 Certification Pursuant to 18 USC, Section 1350 as adopted Pursuant to
Section 302 of the Sarbanes Oxley Act of 2002
32.1 Certification Pursuant to 18 USC Section 1350 as adopted Pursuant to
Section 906 of the Sarbanes Oxley Act of 2002
32.2 Certification Pursuant to 18 USC Section 1350 as adopted Pursuant to
Section 906 of the Sarbanes Oxley Act of 2002
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
EXTENSIONS, INC.
Date: September 30, 2009 By: /s/ Crawford Shaw
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Crawford Shaw
Principal Executive Officer
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