**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C.  20549**

 

**FORM 10-Q**

 

 

| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------|

 

For the fiscal quarter ended:  **January 31, 2006**

 

| [ | ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT |
|---|---|----------------------------------------------------------------------------|

 

For the transition period from **________** to **________**

 

Commission file number**:****000-29475**

 

**RUDY 45**

 (Name of small business issuer in its charter)

 

 

|                                             **NEVADA**                                         |                               **88-0491630**                         |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (State or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (I.R.S. Employer Identification No.)                                                                                                                                                                                                                                                                                                               |  
 

 

**2633 Lincoln Boulevard, Suite 117, Santa Monica, California**

                **90405-4656**        

 

(Address of principal executive offices)

(Zip Code)

 
 

**(310) 452-3206**

(Issuer’s telephone number)

 

Indicate by check whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes [  

]  No x

 

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 outstanding of the registrant’s common stock, par value $0.001 per share, as of March 13, 2006:  59,974 shares.

 

 

 

 

 

 

**TABLE OF CONTENTS**

 

Page

 

 

PART I

FINANCIAL INFORMATION

 

 

Item 1

Financial Statements

1

 

 

Item 2

Management’s Discussion and Analysis of Financial

 

Condition and Results of Operations

2

 

 

Item 3

Quantitative and Qualitative Disclosures about Market Risk

5

 

 

Item 4

Controls and Procedures

6

 

 

PART II

OTHER INFORMATION

 

 

Item 1

Legal Proceedings

7

 

 

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

7

 

 

Item 3

Defaults upon Senior Securities

7

 

 

Item 4

Submission of Matters to a Vote of Security Holders

7

 

 

Item 5

Other Information

7

 

 

Item 6

Exhibits

8

 

 

 

i

 

 

 

**PART I:  FINANCIAL INFORMATION**

 

**ITEM 1:  FINANCIAL STATEMENTS**

 

 

**INDEX TO FINANCIAL STATEMENTS**

 

 

 

Page

 

 

Condensed Balance Sheets as of January 31, 2006 and 2005

F-1

 

 

Condensed Statements of Operations for the three and six months ended January 31, 2006 and 2005

F-2

 

 

Condensed Statements of Cash Flows for the six months ended January 31, 2006 and 2005

F-3

 

 

Notes to Condensed Financial Statements

F-4

 

 

 

 

 

 

1

 

 

 

 

**RUDY 45**

**CONDENSED BALANCE SHEETS**

**(UNAUDITED)**

 

 

 

 

 

 

 

 

 

 

January 31, 2006

 

 

January 31, 2005

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

$

-

 

$

1,935

Total current assets

 

-   

 

 

1,935

Property and equipment, net

 

7,538

 

 

-   

Total assets

$

7,538

 

$

1,935

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued liabilities

$

71,962

 

$

55,832

 

Notes Payable

 

104,700

 

 

-   

Total current liabilities

 

176,662

 

 

55,832

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value,

 

 

 

 

 

 

25,000,000 shares authorized at January 31, 2005,

 

 

 

 

 

 

none issued or outstanding

 

-   

 

 

-   

 

50,000,000 shares authorized at January 31, 2006,

 

 

 

 

 

 

none issued or outstanding

 

-   

 

 

-   

 

Common stock, $0.001 par value, 

 

 

 

 

 

 

500,000,000 authorized, 16,229 shares * 

 

 

 

 

 

 

issued and outstanding at January 31, 2005

 

 

 

 

16

 

950,000,000 shares authorized, 59,974 shares*

 

 

 

 

 

 

issued and outstanding at January 31, 2006

 

63

 

 

 

 

Additional paid-in capital, net

 

3,504,554

 

 

2,574,829

 

Stock subscription receivable

 

-   

 

 

(44,850)

 

Accumulated deficit

 

(3,673,741)

 

 

(2,583,892)

Total stockholders' equity

 

(169,124)

 

 

(53,897)

Total liabilities and stockholders' equity

$

7,538

 

$

1,935

 

 

 

 

 

 

 

*

Reflects effect of 1450:1 reverse stock split declared September 26, 2005.

 

 

 

See accompanying notes to the financial statements

 

F-1

 

 

 

 

**RUDY 45**

**CONDENSED STATEMENTS OF OPERATIONS**

**(UNAUDITED)**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

Three Months

 

 

Six Months

 

Six Months

 

 

 

Ended January 31,

 

Ended January 31,

 

 

Ended January 31,

 

Ended January 31,

 

 

 

2006

 

2005

 

 

2006

 

2005

Net sales

$

-   

$ 

-   

 

$ 

-   

$ 

-   

Cost of good sold

 

-   

 

-   

 

 

-   

 

-   

Gross profit

 

-   

 

-   

 

 

-   

 

-   

Selling, general and administrative expenses

 

139,925

 

406,300

 

 

265,504

 

406,300

Operating loss

 

(139,925)

 

(406,300)

 

 

(265,504)

 

(406,300)

 

 

 

 

 

 

 

 

 

 

 

Other (expense) income

 

 

 

 

 

 

 

 

 

Loss from continuing operations 

 

 

 

 

 

 

 

 

 

 

before income taxes

 

(139,925)

 

(406,300)

 

 

(265,504)

 

(406,300)

Income tax provision

 

 

 

 

 

 

 

 

 

Net loss

 

(139,925)

 

(406,300)

 

 

(265,504)

 

(406,300)

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

Basic

$

(2.62)

$ 

(30.37)

 

$ 

(4.97)

$ 

(33.28)

 

Diluted

$

(2.62)

$ 

(30.37)

 

$ 

(4.97)

$ 

(33.28)

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

53,467

 

13,377

 

 

53,467

 

12,208

 

Diluted

 

53,467

 

13,377

 

 

53,467

 

12,208

 

 

 

 

See accompanying notes to the financial statements

 

F-2

 

 

 

 

**RUDY 45**

**CONDENSED STATEMENTS OF CASH FLOWS**

**(UNAUDITED)**

 

 

 

 

 

 

 

 

 

 

 

 

Six  Months Ended

 

 

Six  Months Ended

 

 

 **

 **

January 31,

 

 

January 31,

 

 

 

 

2006

 

 

2005

CASH FLOW FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

$

(265,504)

 

$

(406,300)

 

Adjustments to reconcile net loss to net

 

 

 

 

cash used in operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

354

 

 

-   

 

 

Issuance of common stock for services

 

5,550

 

 

393,210

 

Changes in operating assets and liabilities:

 

 

 

 

 

Other assets

 

 

 

 

-   

 

 

Accounts payable and accrued liabilities

 

53,361

 

 

100

 

 

Due to related party

 

-   

 

 

-   

Net cash used in operating activities

 

(206,239)

 

 

(12,990)

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Purchase of property and equipment

(1,868)

 

 

-   

Net cash used in investing activities

 

(1,868)

 

 

-   

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from issuance of common stock, net

76,523

 

 

14,925

 

Proceeds from notes payable

 

104,700

 

 

-   

Net cash provided by financing activities

181,223

 

 

14,925

Net increase (decrease) in cash and cash equivalents

(26,884)

 

 

1,935

Cash at beginning of period

 

26,884

 

 

-   

Cash at end of period

$

-   

 

$

1,935

 

 

 

Please see the notes to the financial statements for information on non-cash investing and financing activities.

 

 

See accompanying notes to the financial statements

 

F-3

 

**RUDY 45**

**NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**

**For the three and six months ended January 31, 2006 and 2005**

 

 

 

**1. ORGANIZATION AND BASIS OF PRESENTATION**

 

***Organization***

 

Malahat Energy Corporation ("Malahat") is a Nevada corporation that was formed on July 26, 1994.  Malahat operated a development stage enterprise and was engaged in the development of BioFuel systems to convert organic waste material into an economical, synthesized fuel gas for energy consumption.  Malahat completed a reverse merger with a publicly traded "Shell" company (see below) in May 2001 and was quoted on the Over the Counter Bulletin Board under the symbol "MAHT".

 

On August 30, 2004, Malahat’s board of directors approved a plan of reorganization (the “Malahat Reorg”) pursuant to which the Company transferred substantially all of its assets and liabilities, except for liabilities of approximately $70,000, to its wholly owned subsidiary, Malahat Services Corporation (“MSC”).  In connection with the plan of reorganization, all of MSC outstanding stock was distributed to the Malahat’s existing stockholders.  See note 3 for more information.

 

On  August  30,  2004  and  in  connection  with  a  stock  purchase  agreement, shareholders  owning 10,581,875 shares of common stock (7,278 common shares giving effect to the reverse stock split described below), which represented 66% of the outstanding  stock  agreed  to sell their shares to new investors for $85,000 in cash.  In connection with the foregoing, the officers and directors of Malahat resigned on August 30, 2004 and representatives of the new investors assumed those positions.

 

On December 22, 2004, it was approved by the stockholders to amend Article I, Name of Company; Malahat changed its name to PHC Holdings, and elected to become a Business Development Company or “BDC” under the Investment Company Act of 1940, as amended (the “1940 Act").   As of July 31, 2005, the Company traded on the "pink sheets"  under  the  name  PHC  Holdings  and  under  the  symbol  "PHCD."  Also, it was approved by the shareholders to amend Article IV, Authorized Capital Stock; increasing its authorized common stock to 500,000,000 shares, each with a par value of $0.001 per share; and increasing its authorized preferred stock to 25,000,000 shares, each with a par value of $0.001 per share, with the rights, preferences, privileges and restrictions granted to or imposed upon the preferred stock to be determined by the board of directors.

 

On August 10, 2005, it was approved by stockholders to amend Article IV, Authorized Capital Stock, of the Articles of Incorporation, increasing the total authorized common stock to 950,000,000 shares, each with a par value of $0.001 per share (“Common Stock”) and 50,000,000 shares of Preferred Stock each with a par value of $0.001, (“Preferred Stock”).  The rights, preferences, privileges and restrictions granted to or imposed upon the Preferred Stock will be determined by the Board of Directors.

 

On September 12, 2005, the board of directors received authorization from the stockholders to amend the articles of incorporation for Article 1, Name of Company; changing the company’s name from PHC Holdings to Rudy 45 (the “Company”); and to implement a 1450:1 reverse stock split of the Company’s common stock effective September 26, 2005.  The Company’s shareholders record reflects on such date 86,963,207 issued and outstanding shares before the reverse stock split and 59,975 after the reverse stock split.  The Company now trades under the symbol “RDYF.”

 

***Nature of Business***

 

Subsequent to the name change and electing to be a BDC, the Company will be continuously seeking operating private profitable entities in which to invest in and offer management skills.  A BDC is defined and regulated by the Investment Company Act of 1940 ("1940 Act"). A BDC must be organized in the United States for the purpose of investing in or lending to primarily private companies and making managerial assistance available to them.  A BDC may use capital provided by public shareholders and from other sources to invest in long-term, private investments in businesses.  A BDC provides shareholders the ability to retain the liquidity of a publicly traded stock, while sharing in the possible benefits, if any, of investing in primarily privately owned companies.

 

The Company is authorized to issue up to $5,000,000 in value of securities without registration of said securities under the Securities Act of 1933; in reliance on the exemption provided by Rule 602(a) of Regulation E under the 33 Act.  Through January 31, 2006, the Company has raised net proceeds of approximately $602,000 against this limit.

 

 

F-4

 

**RUDY 45**

**NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**

**For the three and six months ended January 31, 2006 and 2005**

 

 

 

***Basis of Presentation***

 

The interim unaudited condensed financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.  The unaudited condensed financial statements should, therefore, be read in conjunction with the consolidated financial statements and notes thereto in the Form 10-KSB annual report of the Company for the year ended July 31, 2005.  In the opinion of management, all adjustments (which consist of normal and recurring adjustments) considerednecessary for a fair presentation have been included.  The results of operations for the three month period ended October 31, 2005 are not necessarily indicative of the results that may be expected for the entire fiscal year.

 

The accompanying financial statements have been prepared assuming that the Company continues as a going concern which contemplates the realization of assets and settlement of liabilities in the normal course of business. Malahat has been in the development stage since it began operations on July 26, 1994, and did not generate any revenues from its principal operations and there is no assurance of any future revenues.  As of August 30, 2004 Malahat reorganized with its subsidiary (see Note 3) and changed its name to PHC Holdings and subsequently to Rudy 45. The Company elected to become a BDC on December 22, 2004 and has not generated any revenues and there is no assurance of any future revenues. Further, the Company has limited or no prior history as a BDC.  As of January 31, 2006 and 2005, the Company had an accumulated deficit of approximately $3,674,000 and $2,584,000; negativeworking capital of approximately $177,000 and $54,000.

 

The Company will require substantial additional capital for continuing BDC administration, compliance requirements and the implementation of the business plan as a BDC.  There can be no assurance that the Company will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to the Company.

 

Failure to secure such financing or to  raise  additional  equity  capital  may  result in the Company depleting its available  funds  and  not  being  able  to  pay  for  its  obligations.

 

These circumstances, among others, raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

**2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

The significant accounting policies presented below are designed to assist in understanding the Company’s financial statements.  Such financial statements and accompanying notes are the representation of the Company’s management, who are responsible for their integrity and objectivity.  These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying financial statements.

 

***Basis of Presentation***

 

As a result of the reorganization and spin-off of our wholly owned subsidiary, the accompanying financial statements as of January 31, 2006 are not consolidated and only include the accounts of Rudy 45.  

 

***Risks and Uncertainties***

 

The Company has a limited operating history. The Company has not yet generated any revenue from its business operations. As a new operating entity, the Company faces risks and uncertainties relating to its ability to successfully implement its strategy. Among other things, these risks include the ability to develop and sustain revenue growth; managing expanding operations; competition; attracting, retaining and motivating qualified personnel; and maintaining and developing new strategic relationships. The Company has limited or no prior history as a BDC.  The Company may be subject to the risks associated with an emerging business, including the potential risks of business failure.

 

F-5

 

**RUDY 45**

**NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**

**For the three and six months ended January 31, 2006 and 2005**

 

 

 

***Use of Estimates***

 

The Company prepares its financial statements in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Significant estimates made by management include, among others, realizability of long-lived assets and estimates for the deferred income tax valuation allowance.  Actual results could differ from those estimates.

 

***Fair Values of Financial Instruments***

 

Statement of Financial Accounting Standards ("SFAS") No. 107 "Disclosures about Fair Value of Financial Instruments" requires disclosure of fair value information about financial instruments when it is practicable to estimate that value.  Management believes that the carrying amounts of the Company's financial instruments, consisting of cash and accounts payable and accrued liabilities, approximate their fair value at January 31, 2006, due to their short-term nature.  

 

***Cash Equivalents***

 

The Company considers all highly liquid temporary cash investments with original maturities of three months or less to be cash equivalents.  The Company had no cash equivalents at January 31, 2006.                                                                                                                          

 

***Property and Equipment***

 

Property and equipment are stated at cost, less accumulated depreciation and amortization.  Depreciation is provided using the straight-line method over the estimated useful lives of the related assets.  Maintenance and repairs are expensed as incurred, and betterments are capitalized.  Upon the sale or retirement of depreciable assets, the accounts are relieved of the related costs and accumulated depreciation, and any resulting gain or loss is included in operations.

 

***Long-Lived Assets***

 

SFAS No. 144, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of."  SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets.  SFAS 144 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.  If the cost basis of a long-lived asset is greater than the projected future undiscounted net cash flows from such asset, an impairment loss is recognized. Impairment losses are calculated as the difference between the cost basis of an asset and its estimated fair value.  As of October 31, 2005, no impairment indicators were noted.

 

***Revenue Recognition***

 

As a BDC, the Company intends to recognize revenues from its portfolio companies based on investment income, the appreciation or impairment associated with its investment in such companies. There were no revenues for the six months ended January 31, 2006 and 2005. 

 

***Income Taxes***

 

The Company follows SFAS No. 109 ("SFAS 109"), "Accounting for Income Taxes" for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the consolidated financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized.  Future changes in such valuation allowance are included in the provision for income taxes in the period of change.

 

 

F-6

 

**RUDY 45**

**NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**

**For the three and six months ended January 31, 2006 and 2005**

 

 

 

***Stock-Based Compensation***

 

The Financial Accounting Standards Board ("FASB") issued SFAS No. 123 ("SFAS 123"), “Accounting for Stock-Based Compensation."  This standard, if fully adopted, changes the method of accounting for employee stock-based compensation plans to the fair value based method. For stock options and warrants, fair value is determined using an option pricing model that takes into account the stock price at the grant date, the exercise price, the expected life of the option or warrant and the annual rate of quarterly dividends. Compensation expense, if any, is recognized over the applicable service period, which is usually the vesting period.

 

The adoption of the accounting methodology of SFAS 123 is optional and the Company has elected to continue accounting for stock-based compensation issued to employees using APB 25; however, pro forma disclosures, as if the Company adopted the cost recognition requirements under SFAS 123, are required to be presented.

 

 

The Company has no stock-based compensation plans as of January 31, 2006 or 2005.

 

***Basic and Diluted Loss per Common Share***

 

The Company follows SFAS No. 128 ("SFAS 128"), "Earnings per Share."  Under SFAS 128, basic earnings per share is computed by dividing income available to common shareholders by the weighted-average  number of common shares assumed to be outstanding  during  the  period of computation.  Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive (there were no additional potential common shares as of October 31, 2005 and 2004, respectively).  Pro forma per share data has been computed using the weighted average number of common shares outstanding during the periods.  Because the Company has incurred net losses, basic and diluted losses per share are thesame as additional potential common shares would be anti-dilutive (See Note 5).

 

***Recently Issued Accounting Pronouncements***

 

In December 2004, the FASB issued SFAS No. 123-R, "Share-Based Payment," which requires that the compensation costs relating to share-based payment transactions (including the cost of all employee stock options) be recognized in the financial statements. That cost will be measured based on the estimated fair value of the equity or liability instruments issued. SFAS No. 123-R covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.  SFAS No. 123-R replaces SFAS No. 123, and supersedes APB Opinion No. 25.  The adoption of SFAS 123-R did not have a material impact on the Company's financial statements.

 

In December 2004, the FASB issued SFAS No. 153 ("SFAS 153"), "Exchanges of Nonmonetary Assets, an Amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions."  The amendments made by SFAS 153 are based on the principle that exchanges of nonmonetary assets should be measured using the estimated fair value of the assets exchanged.  SFAS 153 eliminates the narrow exception for nonmonetary exchanges of similar productive assets, and replaces it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance.  A nonmonetary exchange has "commercial substance" if the future cash flows of the entity are expected to change significantly as a result of the transaction. This pronouncement is effective for nonmonetary exchanges in fiscal periods beginning after June 15, 2005. The adoption of SFAS 153 did not have a material impact on theCompany’s financial statements.

 

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections,” which replaces APB Opinion No. 20 and FASB Statement No. 3. This pronouncement applies to all voluntary changes in accounting principle, and revises the requirements for accounting for and reporting a change in accounting principle.  SFAS No. 154 requires retrospective application to prior periods' financial statements of a voluntary change in accounting principle, unless it is impracticable to do so. This pronouncement also requires that a change in the method of depreciation, amortization, or depletion for long-lived, non-financial assets be accounted for as a change in accounting estimate that is affected by a change in accounting principle.  SFAS No. 154 retains many provisions of APB Opinion 20 without change, including those related to reporting a change in accounting estimate, a change inthe reporting entity, and correction of an error. The pronouncement also carries forward the provisions of SFAS No. 3 which govern reporting accounting changes in interim financial statements. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.  The Statement does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of SFAS No. 154. The adoption of SFAS 154 did not have a material impact on the Company's financial statements.

 

F-7

 

**RUDY 45**

**NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**

**For the three and six months ended January 31, 2006 and 2005**

 

 

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.

 

**3.  MALAHAT REORGANIZATION**

 

On  August 30, 2004, Malahat’s board of directors approved a plan of reorganization (the “Malahat Reorg”) pursuant to which the Company transferred fixed and other assets approximating $18,000 and accounts payable and accrued liabilities and due to related party approximating $175,000 to its wholly owned subsidiary, Malahat Services Corporation (“MSC”).  In connection with the plan of reorganization, all of the MSC outstanding stock was distributed to the Malahat’s existing stockholders.  The reorganization was accounted using the historical carrying amounts of assets and liabilities distributed and reflected against paid in capital.  The assets and liabilities and results of operations of the net assets distributed to the former stockholders have been reflected in the accompanying financial statements as discontinued operations.  The net effect oftransferring such assets and liabilities plus accumulated other comprehensive income resulted in an increase to additional paid-in capital of approximately $182,000.

 

Additionally, stockholders owning 10,581,875 shares of common stock (7,278 common shares giving effect to the reverse stock split described below), which represented 66% of the Company’s outstanding stock agreed to sell their shares to new investors.  In connection with the foregoing, the officers and directors of Malahat resigned on August 30, 2004 and representatives of the new investors assumed those positions.

 

**4.  NOTES PAYABLE**

 

During the three months ended January 31, 2006, the Company entered into notes payable for $48,000 from potential investors which subscribed to stock in October 2005.  The notes bear interest at 10% per annum and are payable by April, 2006, (see Note 5, Common Stock Subscribed).

 

During the three months ended January 31, 2006, the Company entered into notes payable for $56,700, bearing interest at 10% per annum and payable by April, 2006.

 

**5.  EQUITY TRANSACTIONS**

 

***Preferred Stock***

 

The Company is authorized effective December 22, 2004 to issue up to 25,000,000 shares of preferred stock at $0.001 par value, with all rights, preferences, privileges and restrictions granted to or imposed upon the preferred stock determined by the board of directors.   The authorized number of preferred shares was increased to 50,000,000 on August 10, 2005.

 

***Common Stock***

 

The Company is authorized effective December 22, 2004 to issue up to 500,000,000 shares of common stock at $0.001 par value. The authorized number of common shares was increased to 950,000,000 on August 10, 2005.  On September 12, 2005, the Company implemented a 1450:1 reverse stock split.  The Company’s records reflect on such date 59,975 issued and outstanding common shares before the reverse stock split and 61,505 common shares after the reverse stock split.  Accordingly, during the three months ended October 31, 2005, the Company issued 18,719,500 common shares (representing 12,910 shares giving effect to the reverse stock split declared September 2005).

 

During the months ended October 31, 2005, the Company entered into agreements pursuant to which we sold 11,379 shares of common stock for an aggregate of $28,750**in net proceeds.   

 

During the three months ended October 31 2005, the Company issued 1,531 shares of common stock in exchange for services provided by certain consultants.  Such shares were valued at $5,550 (estimated to be the fair value based on private placement sales on or about the issuance date).    

 

 

F-8

 

**RUDY 45**

**NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**

**For the three and six months ended January 31, 2006 and 2005**

 

 

 

***Common Stock Subscribed***

 

During the three months ended October 31, 2005, the Company entered into subscription agreements pursuant to which several individuals agreed to purchase 55,552 shares of common stock for an aggregate of $95,773**in net proceeds.

 

During the three months ended January 31, 2006, the Board of Directors declined the issuance of stock subscribed as of October 31, 2005, (see above).  The Company discussed the Directors action with the investors, with the following results; two prior investors applied $63,227 as paid in capital towards prior purchases of common stock, the remaining investors agreed to accept notes payable for $48,000 received by the Company, (see Note 4).   

 

**6.  INCOME/LOSS PER COMMON SHARE**

 

The following is a reconciliation of the numerators and denominators of the basic and diluted income/loss per common share computations for the six months ended January 31, 2006 and 2005:

 

 

 

2006

 

2005

Numerator for basic and diluted income (loss)

 

 

per common share:

 

 

 

 

Net (loss) income attributed to common shareholders

$                      (265,505)

 

$                      (406,300)

Denominator for basic and diluted income (loss)

 

 

per common share:

 

 

 

 

Weighted average number of common shares outstanding

53,467

 

12,208

Basic and diluted (loss) income per common share

$                            (4.97)

 

$                          (33.28)

 

 

**7.  COMMITMENTS AND CONTINGENCIES**

 

***General***

 

The Company's commitments and contingencies include the usual obligations of a BDC in the normal course of business.  In the opinion of management, these matters are not expected to have a material adverse effect on the Company's financial position and results of operations. 

 

***Regulatory Compliance***

 

As a BDC, the Company operates in a highly regulated environment and must comply with the requirements of the 1940 Act.  The Company endeavors to be in compliance with the requirements of the Act as part of its investment strategy and oversight functions.  Whereas compliance with such laws and regulations requires interpretation, the Company believes it is in compliance with such requirements at January 31, 2006.  However, no assurances can be given that such requirements will not change or that differing interpretations could result in non-compliance or that such matters, if they arise, will be insignificant to the Company's financial position or results of operations.

 

***Legal***

 

Currently, the Company is not a party to any pending legal proceedings.

 

***Letter of Intent***

 

On September 23, 2005, the Company entered into a Letter of Intent to acquire all of the outstanding stock of Rudy International Marketing, Ltd. (“RIM”) in exchange for shares of the Company’s restricted common stock.  As of January 31, 2006 the Company is no longer actively pursuing this endeavor. 

 

F-9

 

 

 

 

**ITEM 2:  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

***Forward-Looking Statements***

 

Historical results and trends should not be taken as an indication of future operations.  Management's  statements  contained  in  this  report  that are not historical  facts  are  forward-looking statements within the meaning of Section 27A  of  the  Securities  Act  and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Actual results may differ materially from those included in the forward-looking statements.  The Company intends such forward-looking  statements  to  be  covered  by  the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act  of  1995,  and  is  including this statement for purposes of complying with those  safe-harbor  provisions.  Forward-looking  statements, which are based on certain  assumptions  and  describe future plans, strategies and expectations of the Company, aregenerally identifiable by use of the words "believe," "expect," "anticipate,"  "estimate,"  "project,"  "prospects," or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect  on  the operations and future prospects of the Company on a consolidated basis  include, but are not limited to: changes in economic conditions generally in the United States of America and the other countries in which the Company operates,  legislative/regulatory  changes, the political climate in the foreign countries  in  which the Company operates, the availability of capital, interest rates,  competition,  and  generally accepted accounting principles. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Company and its business; includingadditional factors that could materially  affect  the  Company's financial results, are included herein and in the  Company's  other  filings  with  the  Securities  and  Exchange Commission.

 

The following discussion and analysis should be read in conjunction with the financial statements and notes to financial statements included elsewhere in this quarterly report on Form 10-Q.  This report and the financial statements and  notes  to  financial  statements  contain forward-looking statements, which generally  include the plans and objectives of management for future operations, including  plans  and objectives relating to future economic performance and our current  beliefs  regarding  revenues  we  might  earn  if  we are successful in implementing our business strategies.  The Company does not undertake to update, revise or correct any forward-looking statements.

 

***Results of Operations for the three months ended January 31, 2006 and 2005***

 

For the three months ended January 31, 2006, the Company incurred a net loss of approximately $140,000.  The Company had no revenues and expended approximately $115,000 on consulting and professional fees and approximately $71,000 on general and administrative expenses.  For the six months ended January 31, 2005 the Company incurred a net loss of approximately $406,000.  The Company had no revenues and expended approximately $401,000 on consulting fees and approximately $5,000 on general and administrative expenses.  The loss per common share (calculated giving effect to the 1450:1 reverse stock split declared September 2005) was $2.62 for the six months ended January 31, 2006, as compared to a loss per share of $30.37 for the six months ended January 31, 2005.

 

***Results of Operations for the six months ended January 31, 2006 and 2005***

 

For the six months ended January 31, 2006, the Company incurred a net loss of approximately $266,000.  The Company had no revenues and expended approximately $195,000 on consulting and professional fees and approximately $25,000 on general and administrative expenses.  For the three months ended January 31, 2005 the Company incurred a net loss of approximately $406,000.  The Company had no revenues and expended approximately $401,000 on consulting fees and approximately $5,000 on general and administrative expenses.  The loss per common share (calculated giving effect to the 1450:1 reverse stock split declared September 2005) was $4.97 for the three months ended January 31, 2006, as compared to a loss per share of $33.28 for the three months ended January 31, 2005.

 

***Liquidity and Capital Resources***

 

*Capital Resources*

 

 

At January 31, 2006 and 2005, the Company had negative working capital of $177,000 and $54,000.

 

*Liquidity*

 

During the six months ended January 31, 2006, net cash decreased by approximately $27,000.  Cash inflows of approximately $181,000 were from financing activities; proceeds from the sale of common stock and the issuance of notes payable.  Cash outflows during this period was principally the result of cash used by continuing operations to fund the operating losses of approximately $260,000 (net of 

 

2

 

 

 

depreciation and issuance of common stock for services), and $53,000 of accounts payable increases.  Cash outflows from investing activities consisted of approximately $1,900 used to purchase property and equipment.

 

During the six months ended January 31, 2005, net cash increased by approximately $2,000.   Cash inflows of approximately $15,000 were from proceeds from the sale of common stock.  Cash outflows during this period were principally the result of cash used by continuing operations to fund the operating losses of approximately $13,000 (net of depreciation and issuance of common stock for services).  

 

We have limited or no prior history as a BDC. Further, we will require substantial additional funding for continuing BDC administration, compliance requirements and the implementation of the business plan as a BDC.  There can be no assurance that the Company will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to the Company.  These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern.  The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result the Company be unable to continue as a going concern.

 

The Company intends to invest in companies that focus on providing marketing and promotional services.  We will seek to leverage the combined talents of our experienced management team to invest in those companies and to enhance shareholder value.

 

A business development company is defined and regulated by the Investment Company Act of 1940 (“1940 Act”).  A business development company must be organized in the United States for the purpose of investing in or lending to primarily private companies and making managerial assistance available to them.  A business development company may use capital provided by public shareholders and from other sources to invest in long-term, private investments in businesses.  A business development company provides shareholders the ability to retain the liquidity of a publicly traded stock, while sharing in the possible benefits, if any, of investing in primarily privately owned companies.

 

The Company is authorized to issue up to $5,000,000 in value of securities without registration of said securities under the Securities Act of 1933; in reliance on the exemption provided by Rule 602(a) of Regulation E under the 33 Act.  Through January 31, 2006, the Company has raised approximately $602,000 proceeds against this limit.  

 

Failure to secure additional financing or to raise additional equity capital may result in the Company depleting its available funds and not be able to pay its obligations.  These circumstances, among others, raise substantial doubt about the Company’s ability to continue as a going concern.  The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

We currently anticipate that our cash requirements will be approximately $300,000 for the remainder of this fiscal year. There are no capital expenditures planned for the remainder of this fiscal year.

 

***Critical Accounting Policies***

 

*Valuation of Investments*

 

We will determine the value of each investment in our portfolio on a quarterly basis, and changes in value result in unrealized gains or losses being recognized. At January 31, 2006, we have no portfolio investments; consequently, our total assets did not include portfolio investments recorded at fair value. Value, as defined  in  Section  2(a)(41) of the Investment Company Act of 1940, is (i) the market  price for  those  securities  for  which  a market quotation is readily available  and  (ii)  for  all  other  securities  and  assets, fair value is as determined  in good faith by the board of directors. Since there is typically no readily  ascertainable  market  value  for  the investments in our portfolio, we expect to value substantially all of our portfolio investments at fair value as determined in  good  faith  by  the board of directors pursuant to a valuation policy and aconsistently  applied  valuation process. Because of the inherent uncertainty of determining the fair value of investments that do not have a readily ascertainable market value, the fair value of our investments determined in good faith by the board of directors may differ significantly from the values that would have been used had a ready market existed for the investments, and the differences could be material.

 

There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make.  Unlike banks, we are not permitted to provide a general reserve for anticipated loan losses.   Instead, we are required to specifically value each individual investment on a quarterly basis.  We will record unrealized depreciation on investments when we 

 

3

 

 

 

believe that an investment has become impaired, including where collection of a loan or realization of an equity security is doubtful, or when the enterprise value of the company does not currently support the cost of our debt or equity investment.  Conversely,  we  will  record  unrealized appreciation if we believe that the underlying portfolio company has appreciated in  value  and,  therefore,  our  equity security has also appreciated in value. Changes in fair value are recorded in the statements of operations as "Gain / Loss on investments in portfolio companies."

 

***Securities Issued for Services***

 

For the six months ended January 31, 2006 we issued 1,531 common shares in payment of services, to reduce our obligation and to avoid using our cash resources.  Such shares were valued at $5,550 (estimated to be the fair value based on private placement sales on or about the issuance date).  These shares were issued as restricted shares of the Company.   

 

***Recently Issued Accounting Pronouncements***

 

In  December  2004, the FASB issued SFAS No. 123-R, "Share-Based Payment," which requires  that  the  compensation  costs  relating  to  share-based  payment transactions (including the cost of all employee stock options) be recognized in the financial statements. That cost will be measured based on the estimated fair value of the equity or liability instruments issued. SFAS No. 123-R covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.  SFAS No.  123-R replaces SFAS No. 123, and supersedes APB Opinion No. 25. Small Business Issuers are required to apply SFAS No.  123-R in the first annual reporting period that begins after December 15, 2005. The adoption of SFAS 123-R is not expected to have a material impact on the Company's financial statements.

 

In  December  2004,  the  FASB  issued  SFAS No. 153 ("SFAS 153"), "Exchanges of No monetary  Assets,  an  Amendment  of  APB  Opinion No. 29, Accounting for Nonmonetary Transactions."  The amendments made by SFAS 153 are based on the principle that exchanges of nonmonetary assets should be measured using the estimated fair value of the assets exchanged. SFAS 153 eliminates the narrow exception for nonmonetary exchanges of similar productive assets, and replaces it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance.  A nonmonetary exchange has "commercial substance" if the future cash flows of the entity are expected to change significantly as a result of the transaction. This pronouncement is effective for nonmonetary exchanges in fiscal periods beginning after June 15, 2005. The adoption of SFAS 153 did not have a material impact on theCompany’s financial statements. 

 

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections,” which replaces APB Opinion No. 20 and FASB Statement No. 3.  This pronouncement applies to all voluntary changes in accounting principle, and revises the requirements for accounting for and reporting a change in accounting principle.  SFAS No. 154 requires retrospective application to prior periods' financial statements of a voluntary change in accounting principle, unless it is impracticable to do so. This pronouncement also requires that a change in the method of depreciation, amortization, or depletion for long-lived, non-financial assets be accounted for as a change in accounting estimate that is affected by a change in accounting principle.  SFAS No. 154 retains many provisions of APB Opinion 20 without change, including those related to reporting a change in accounting estimate, a change inthe reporting entity, and correction of an error. The pronouncement also carries forward the provisions of SFAS No. 3 which govern reporting accounting changes in interim financial statements. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.  The Statement does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of SFAS No. 154.  The adoption of SFAS No. 154 did not have a material impact on the Company's financial statements.

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

 

 

4

 

 

 

 

**ITEM 3:  QUANTITATIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK**

 

The Company’s business activities contain elements of risk.  Company management considers the principal types of risk to be valuations of investments in portfolio companies and fluctuations in interest rates.  We consider the management of risk essential to conducting our business.  Accordingly, our risk management systems and procedures are designed to identify and analyze our risks, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs.

 

As a BDC, we plan to invest in liquid securities including debt and equity securities of primarily private companies.  Our investments are generally subject to restrictions on resale and generally have no established trading market.  Our policy is to value our investments at fair value.  There is no single standard for determining fair value in good faith.  As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for each type of investment.

 

The board of directors determines fair value to be the amount for which an investment could be exchanged in an orderly disposition over a reasonable period of time between willing parties other than in a forced or liquidation sale.  The Company’s valuation policy considers the fact that no ready market exists for substantially all of the securities in which the Company invests.  The Company's valuation policy is intended to provide a consistent basis for determining the fair value of the portfolio.  The Company will record unrealized depreciation on investments when the Company believes that an equity security is doubtful or when the enterprise value of the company does not currently support the cost of the Company’s debt or equity investment.  Conversely, the Company will record unrealized appreciation if it determines that the underlying portfolio company has appreciated invalue and, therefore, the Company's equity security has also appreciated in value.  The values of any investments in public securities are determined using quoted market prices discounted for restrictions on resale.  Without a  readily ascertainable market value and because of the inherent uncertainty of valuation, the fair value of the Company's investments in its portfolio companies, determined in good faith by the board of directors, may differ significantly from the values that would have been used had a ready market existed for the investments and the differences could be material.

 

In addition, the illiquidity of the Company's existing investments may adversely affect its ability to dispose of debt and equity securities at times when it may be otherwise advantageous for the Company to liquidate such investments.  In addition, if the Company was forced to immediately liquidate some or all of the investments in the portfolio companies, the proceeds of such liquidation may be significantly less than the current value of such investments.

 

Because the Company may borrow money to make investments, the Company's net investment income before net realized and unrealized gains or losses, or net investment income, is dependent upon the difference between the rates at which the Company borrows funds and the rate at which the Company invests these funds.  As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on the Company's net investment income.  In periods of rising interest rates, the Company's cost of funds would increase, which would reduce the Company's net investment income.  The Company may use a combination of long-term and short-term borrowings and equity capital to finance its investing activities.

 

 

5

 

 

 

 

**ITEM 4:  CONTROLS AND PROCEDURES**

 

***Evaluation of Controls and Procedures***

 

The Company’s board of directors and management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act as of a date (the "Evaluation Date"), within 90 days prior to filing the Company's January 31, 2006 Form 10-Q.  Based upon that evaluation, the Company's board of directors and management, including the CEO and CFO, concluded that, as of  January 31, 2006, the Company's disclosure controls and procedures were not effective in alerting management on a timely basis to material Company information that would be required to be included in our periodic filings with the SEC.  However, the board of directors and management have now taken specific steps to correct these matters.

 

***Changes in Internal Control over Financial Reporting***

 

There were no significant changes made in the Company's internal controls over financial reporting, during the three and six months ended January 31, 2006, that have materially affected, or are reasonably likely to materially affect, these internal controls.  Thus, no corrective actions, with regard to significant deficiencies or material weaknesses, were necessary. 

 

***Limitations on the Effectiveness of Internal Controls***

 

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error.  An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error ormistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

 

 

6

 

 

 

 

**PART II:  OTHER INFORMATION**

 

**ITEM 1:  LEGAL PROCEEDINGS**.

 

 

Currently, the Company is not a party to any pending legal proceedings.

 

 

**ITEM 2:  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

 

 

None.

 

 

**ITEM 3:  DEFAULTS UPON SENIOR SECURITIES**

 

 

None.

 

 

**ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**.

 

On August 10, 2005, it was approved by shareholders to amend Article IV, Authorized Capital Stock, of the Company’s Articles of Incorporation, increasing the total authorized common stock to 950,000,000 shares, each with a par value of $0.001 per share (“Common Stock”) and 50,000,000 shares of Preferred Stock each with a par value of $0.001, (“Preferred Stock”).  The rights, preferences, privileges and restrictions granted to or imposed upon the Preferred Stock will be determined by the Board of Directors.  This amendment was approved by the required vote of shareholders in accordance with the corporation’s law of the state of Nevada.

 

On September 12, 2005, the board of directors received authorization from the shareholders to amend the articles of incorporation for Article 1, Company Name; changing the Company’s name to Rudy 45; and to implement a 1450:1 reverse stock split of the Company’s common stock effective September 26, 2005.  The Company’s shareholders record reflects on such date 86,963,207 issued and outstanding shares before the reverse stock split and 59,975 after the reverse stock split.

 

**ITEM 5:  OTHER INFORMATION**

 

 

None

 

 

 

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**ITEM 6:  EXHIBITS**

 

Exhibit No.

Description

----------------

----------------------

 

Exhibit 3.1

Certificate of Existence with Status in Good Standing of the Registrant, dated December 8, 2004, as an exhibit to Form 10-KSB filed on November 15, 2005.

 

Exhibit 3.2

Certificate of Amendment to the Articles of Incorporation of the Registrant, dated December 22, 2004, as an exhibit to Form 10-KSB filed on November 15, 2005.

 

Exhibit 3.3

By-Laws of the Registrant, as an exhibit to Form 10-KSB filed on November 15, 2005.

 

Exhibit 3.4

Certificate of Existence with Status in Good Standing of the Registrant, dated January 20, 2005, as an exhibit to Form 10-KSB filed on November 15, 2005.

 

Exhibit 3.5

Amended List of Officers, Directors and Resident Agent of the Registrant, dated March 7, 2005, as an exhibit to Form 10-KSB filed on November 15, 2005.

 

Exhibit 3.6

Certificate of Amendment to the Articles of Incorporation of the Registrant, dated August 15, 2005, as an exhibit to Form 10-KSB filed on November 15, 2005.

 

Exhibit 3.7

Certificate of Amendment to the Articles of Incorporation of the Registrant, dated September 14, 2005, as an exhibit to Form 10-KSB filed on November 15, 2005.

 

Exhibit 31.1*

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

 

Exhibit 31.2*

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

 

Exhibit 32*

Certification of Chief Executive Officer and Chief Financial Officer  pursuant to Section 906 of the Sarbanes-Oxley Act.

 

-----------------------

*  

Filed herewith

 

 

 

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SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

**Rudy 45**

 

 

By:

/s/ pearl asencio                                  

Date:  March 15, 2006

 

Pearl Asencio

 
 

Chief Executive Officer,

 
 

Chief Financial Officer and

 
 

Principal Accounting Officer

 
 

 

 

 

 

**EXHIBIT INDEX**

 

Exhibit 31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

 

Exhibit 31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

 

Exhibit 32

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.

 

 

 

 

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