**FORM 10-QSB**

 

**SECURITIES AND EXCHANGECOMMISSION**

 

**WASHINGTON,DC 20549**

 

**ý****        QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**ForQuarter Ended July 31, 2005**

 

**OR**

 

**o****        TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For theTransition Period from          to         **

 

**Commissionfile number  0-3338**

 

**ARBOR ENTECH CORPORATION**

(Exact Name of Registrant asSpecified in its Charter)

 
| **Delaware**                             | ** ** | **22-2335094**       |
|------------------------------------------|------------|----------------------|
| (State or  other Jurisdiction of         |       | (IRS  Employer       |
| Incorporation  or Organization)          |       | Identification  No.) |
|                                     |       |                 |
| **PO Box  656, Tuxedo Park, New York**   | ** ** | **10987**            |
| (Address of  Principal Executive Office) |       | (Zip Code)           |

 

**(201) 782-9237**

(Registrant’s telephone numberincluding area code)

 

Indicate by check mark whether the Registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the Registrant was required to file such reports) and (2) has beensubject to such filing requirements for the past 90 days.

 

Yes   ý   No   o

 

Indicate by check mark whether the registrant is a shell company (asdefined in Rule 12b-2 of the Exchange Act). Yes   ý   No   o

 

The number of shares of Registrant’s Common Stock, $0.001 par value,outstanding as of September 13, 2005, was 7,050,540 shares.

 

 

----

 

ARBOR ENTECH CORPORATION ANDSUBSIDIARY

 

INDEX

 
| PART 1 - FINANCIAL INFORMATION |                                                                                        |
|-------------------------------------|---------------------------------------------------------------------------------------------|
|                                |                                                                                        |   |
| Item 1                              | Financial Statements (unaudited)                                                            |   |
|                                |                                                                                        |   |
|                                | Condensed  Balance Sheet                                                                    |   |
|                                | -  July 31, 2005                                                                       |   |
|                                |                                                                                        |   |
|                                | Condensed Statements of Operations                                                          |   |
|                                | - Three months ended July 31, 2005 and 2004                                            |   |
|                                |                                                                                        |   |
|                                | Condensed Statements of Cash Flows                                                          |   |
|                                | - Three months ended June 31, 2005 and 2004                                            |   |
|                                |                                                                                        |   |
|                                | Notes to Condensed Financial Statements                                                     |   |
|                                |                                                                                        |   |
| Item 2                              | Management’s  Discussion and Analysis of Financial Condition and Results of Operations |   |
|                                |                                                                                        |   |
| Item 3                              | Controls and Procedures                                                                     |   |
|                                |                                                                                        |   |
| PART II  - OTHER INFORMATION   |                                                                                        |
|                                |                                                                                        |   |
| SIGNATURES                          |                                                                                        |

 

2

----

 

**PART I.  FINANCIALINFORMATION**

 

**Item 1.****                                             FinancialStatements**

 

The accompanying financial statements areunaudited for the interim periods, but include all adjustments (consisting onlyof normal recurring accruals), which we consider necessary for the fairpresentation of results for the three months ended July 31, 2005.

 

Moreover, these financial statements do notpurport to contain complete disclosure in conformity with U.S. generallyaccepted accounting principles and should be read in conjunction with ouraudited financial statements at, and for the fiscal year ended April 30,2005.

 

The results reflected for the three monthsended July 31, 2005 are not necessarily indicative of the results for theentire fiscal year.

 

3

----

 

## ARBORENTECH CORPORATION

CONDENSED BALANCE SHEET

JULY 31,2005

(Unaudited)

 
| ASSETS                                                                                                 |   |       |    |
|--------------------------------------------------------------------------------------------------------|--------|------------|---------|
|                                                                                                   |   |       |    |
| Current  Assets:                                                                                       |   |       |    |
| Cash and  Cash Equivalents                                                                             |   | $          | 495,342 |   |
| Deferred  Taxes                                                                                        |   | 81,762     |    |
| Prepaid  Expenses                                                                                      |   | 1,643      |    |
|                                                                                                   |   |       |    |
| Total  Current Assets                                                                                  |   | 578,747    |    |
|                                                                                                   |   |       |    |
| Total Assets                                                                                           |   | $          | 578,747 |   |
|                                                                                                   |   |       |    |
| LIABILITIES  AND STOCKHOLDERS’ EQUITY                                                             |   |       |    |
|                                                                                                   |   |       |    |
| Current  Liabilities:                                                                                  |   |       |    |
|                                                                                                   |   |       |    |
| Accounts  Payable and Accrued Liabilities                                                              |   | $          | 16,882  |   |
| Deferred  Taxes                                                                                        |   | 81,762     |    |
|                                                                                                   |   |       |    |
| Total  Current Liabilities                                                                             |   | 98,644     |    |
|                                                                                                   |   |       |    |
| Commitments and Contingencies                                                                          |   |       |    |
|                                                                                                   |   |       |    |
| Stockholders’ Equity:                                                                             |   |       |    |
| Common  Stock, $.001 Par Value; Authorized 10,000,000 Shares; Issued and Outstanding 7,050,540  Shares |   | 7,050      |    |
| Additional  Paid-In Capital                                                                            |   | 2,365,441  |    |
| Retained  Earnings (Deficit)                                                                           |   | (1,892,388 | )       |
|                                                                                                   |   |       |    |
| Total  Stockholders’ Equity                                                                       |   | 480,103    |    |
|                                                                                                   |   |       |    |
|                                                                                                   |   | $          | 578,747 |   |

 

The accompanying notes are an integral part of the financialstatements.

 

4

----

 

ARBOR ENTECHCORPORATION

CONDENSED STATEMENT OF OPERATIONS

(Unaudited)

 
| ** **                                    | ** ** | **Quarter Ended** | ** ** |
|-----------------------------------------------|------------|-------------------|------------|
| ** **                                    | ** ** | **July 31,** | ** ** |
| ** **                                    | ** ** | **2005**          | ** ** | **2004** | ** ** |
|                                          |       |              |       |   |   |
| Net Sales                                     |       | $                 | —     |   | $ | — |   |
|                                          |       |              |       |   |   |
| Costs and Expenses:                           |       |              |       |   |   |
| Selling,  General and Administrative Expenses |       | 4,722             |       | 11,948 |   |
|                                          |       | 4,722             |       | 11,948 |   |
|                                          |       |              |       |   |   |
| Loss from Operations                          |       | (4,722            | )          | (11,948 | ) |
|                                          |       |              |       |   |   |
| Other Income:                                 |       |              |       |   |   |
| Interest  Income                              |       | 302               |       | 280 |   |
| Other                                         |       | 15                |       | 22 |   |
|                                          |       | 317               |       | 302 |   |
|                                          |       |              |       |   |   |
| Net Loss                                      |       | $                 | (4,405     | ) | $ | (11,646 | ) |
|                                          |       |              |       |   |   |
| Loss Per Common Share – Basic            |       | $                 | (.00       | ) | $ | (.00 | ) |
|                                          |       |              |       |   |   |
| Weighted Average Shares Outstanding           |       | 7,050,540         |       | 7,050,540 |   |

 

The accompanying notes are an integral part of the financialstatements.

 

5

----

 

ARBOR ENTECHCORPORATION

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)

 
| ** **                                                                     | ** ** | **Quarter Ended** | ** ** |
|--------------------------------------------------------------------------------|------------|-------------------|------------|
| ** **                                                                     | ** ** | **July 31,** | ** ** |
| ** **                                                                     | ** ** | **2005**          | ** ** | **2004** | ** ** |
|                                                                           |       |              |       |   |   |
| Cash Flows from Operating Activities:                                          |       |              |       |   |   |
| Net Loss                                                                       |       | $                 | (4,405     | ) | $ | (11,646 | ) |
| Adjustments  to Reconcile Net Loss to Net Cash (Used) in Operating Activities: |       |              |       |   |   |
| Depreciation                                                                   |       | —            |       | 287 |   |
| Changes in  Operating Assets and Liabilities:                                  |       |              |       |   |   |
| Decrease in  Miscellaneous Receivable                                          |       | 826               |       | — |   |
| Decrease in  Prepaid Expenses                                                  |       | 599               |       | — |   |
| (Decrease)  in Accounts Payable and Accrued Liabilities                        |       | (338              | )          | (6,526 | ) |
|                                                                           |       |              |       |   |   |
| Total  Adjustments                                                             |       | 1,087             |       | (6,239 | ) |
|                                                                           |       |              |       |   |   |
| Net Cash (Used) in Operating Activities                                        |       | (3,318            | )          | (17,885 | ) |
|                                                                           |       |              |       |   |   |
| Cash Flows from Investing Activities:                                          |       |              |       |   |   |
| Proceeds  from Receivable from Sale of Real Property                           |       | 213,589           |       | — |   |
|                                                                           |       |              |       |   |   |
| Net Cash Provided by Investing Activities                                      |       | 213,589           |       | — |   |
|                                                                           |       |              |       |   |   |
| Cash Flows from Financing Activities:                                          |       |              |       |   |   |
| Proceeds of  Loans to Related Parties                                          |       | —            |       | 1,019,850 |   |
| Dividends  Paid                                                                |       | —            |       | (1,057,694 | ) |
|                                                                           |       |              |       |   |   |
| Net Cash (Used) in Financing Activities                                        |       | —            |       | (37,844 | ) |
|                                                                           |       |              |       |   |   |
| Increase (Decrease) in Cash and Cash  Equivalents                              |       | 210,271           |       | (55,729 | ) |
|                                                                           |       |              |       |   |   |
| Cash and Cash Equivalents – Beginning of  Period                          |       | 285,071           |       | 365,128 |   |
|                                                                           |       |              |       |   |   |
| Cash and Cash Equivalents – End of Period                                 |       | $                 | 495,342    |   | $ | 309,399 |   |
|                                                                           |       |              |       |   |   |
| Supplemental Cash Flow Information:                                            |       |              |       |   |   |
| Cash Paid  for Interest                                                        |       | $                 | —     |   | $ | — |   |
|                                                                           |       |              |       |   |   |
| Cash Paid  for Income Taxes                                                    |       | $                 | —     |   | $ | — |   |

 

The accompanying notes are an integral part of the financialstatements.

 

6

----

 

## ARBORENTECH CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 -                                               UnauditedInterim Financial Statement

 

In the opinion ofthe Company’s management, the accompanying unaudited condensed financialstatements contain all adjustments (consisting of only normal recurringadjustments) necessary to present fairly the information set forththerein.  These financial statements arecondensed and therefore do not include all of the information and footnotesrequired by accounting principles generally accepted in the United States ofAmerica for complete financial statements.

 

Results of operations for interim periods arenot necessarily indicative of the results of operations for a full year.

 

NOTE 2 -                                               Commitmentsand Contingencies

 

Line of Credit

 

The Company had arevolving credit facility with its Secretary/Treasurer, secured by a mortgageof the Company’s real property located in Tioga County, Pennsylvania.  This revolving line of credit provided forthe extension of credit in the aggregate principal amount of $100,000 withinterest at 11% per annum.  Principal andinterest are payable on demand.  Therewas no outstanding balance due at July 31, 2005 on this creditfacility.  The credit facility wasterminated in July 2005.

 

NOTE 3 -                                               DiscontinuedOperations

 

On July 20, 2005 the Company closed onthe sale of real property located in Tioga County, Pennsylvania pursuant to acontract entered into on April 15, 2005. The Company recognized a gain of $185,820 for the sale during the yearended April 30, 2005.

 

NOTE 4 -                                               RelatedParty Transactions

 

Included in accounts payable and accruedliabilities is $5,000 owed to an officer of the Company for accounting andadministrative services.

 

7

----

 

**Item 2.**

MANAGEMENT’SDISCUSSION AND ANALYSIS OF

FINANCIALCONDITION AND RESULTS OF OPERATIONS

 

**CAUTIONARY NOTICE REGARDING FORWARD-LOOKINGSTATEMENTS**

 

Statements contained in this report which arenot historical fact are “forward-looking statements” that involve variousimportant assumptions, risks, uncertainties and other factors that  could cause our actual results to differmaterially from those expressed in such forward-looking statements. Theseimportant factors include, without  limitation, competitive factors andpricing pressures, changes in legal and regulatory  requirements, technological change ordifficulties, product development risks, commercialization  and trade difficulties and general economicconditions, as well as other risks previously disclosed  in our securities filings and press releases.

 

Theseforward-looking statements often can be identified by the use of predictive,future-tense or forward-looking terminology, such as “believes,” “anticipates,”“expects,” “estimates,” “plans,” “may,” or similar terms.

 

**Plan of Operation**

 

We were a wood productscompany that had been in business since 1980. Our business fluctuated over theyears. We were almost wholly dependent on sales to The Home Depot, Inc. Asdiscussed below in “Discontinued Operations,” on September 2, 2003, wediscontinued our wood products business.

 

At present, we our seekingother business opportunities, but there can be no assurance that suchopportunities will be identified, engaged in, or result in any profits. Unlessand until we find a business opportunity, we believe that we can satisfy ourcash requirements over the next 12 months. As of July 31, 2005, we hadcash and cash equivalents of $495,342 and working capital of $480,103. Wecurrently have no employees. Mr. Shefts, one of our three officers,devotes a small portion of his time to us. Since the sale of our real estate, we have no principal executiveoffice.  We utilize a mailing address inTuxedo Park, New York and we utilize a telephone number at Mr. Shefts’Office.

 

**Quarter ended July 31, 2005 compared to the quarter ended July 31,2004**

 

Since we discontinued ourwood products business, there were no sales from continuing operations duringthe quarter ended July 31, 2005 or 2004.

 

Selling, general andadministrative expenses were $4,722 for the quarter ended July 31, 2005, adecrease of $7,226 over selling, general and administrative expenses of $11,948for the quarter ended July 31, 2004. The decrease in selling, general andadministrative expenses is a result of a decrease in expenses (insurance andreal estate taxes) related to real property that we sold in April 2005.  As we had no revenues other than de minimisinterest income  andno other expenses, our net loss decreased from $11,646 for the quarter ended July 31,2004 to $4,405 for the quarter ended July 31, 2005.

 

8

----

 

DiscontinuedOperations

 

On September 2, 2003,we informed Home Depot that we would no longer do business with that companydue to increased difficulties in transacting business with Home Depot on aprofitable basis.  We stated to HomeDeport that these difficulties included Home Depot’s prohibition against priceincreases despite increases in our costs of production, a diminution in theHome Depot territories we were allowed to sell product to, and Home Depot’sdemands regarding returns of ordered products that we were unwilling to accedeto for economic reasons.  As a result, onSeptember 2, 2003, we discontinued our wood products business.

 

**Liquidity and capital resources**

 

In periods prior to thosediscussed above, our working capital requirements were met primarily from salesgenerated by our discontinued wood products business. At July 31, 2005, wehad working capital of approximately $480,103.

 

As at July 31, 2005, wehad cash and cash equivalents of approximately $495,342, which represented85.6% of total assets. We believe we have adequate working capital to fund ouroperations for at least the next 12 months unless and until we find a businessopportunity.

 

Off-BalanceSheet Transactions

 

We do not have anytransactions, agreements or other contractual arrangements that constituteoff-balance sheet arrangements.

 

Application Of Critical Accounting Policies

 

Our financial statements andaccompanying notes are prepared in accordance with accounting principlesgenerally accepted in the United States of America. Preparing financialstatements requires management to make estimates and assumptions that affectthe reported amounts of assets, liabilities, revenue, and expenses. Theseestimates and assumptions are affected by management’s application ofaccounting policies. Critical accounting policies for use ofestimates, accounting for stock-based compensation and environmentalremediation costs.

 

**Item 3.**    CONTROLS AND PROCEDURES

 

(a) Evaluation of Disclosure Controls and Procedures

 

The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and15d-15(e) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”).  This term refers to the controlsand procedures of a company that are designed to ensure that informationrequired to be disclosed by a company in the reports that it files under theExchange Act is recorded, processed, summarized, and reported within therequired time periods.  Our ChiefExecutive Officer and our Chief Financial Officer have evaluated the effectivenessof our disclosure controls and

 

9

----

 

procedures as ofthe end of the period covered by this quarterly report.  They have concluded that, as of that date,our disclosure controls an procedures were  effective  at ensuring  that  required information  will  be disclosed on a timely basis in our reportsfiled under the Exchange Act.

 

(b) Changes in Internal Control over Financial Reporting

 

No change in our internal control over financial  reporting (as defined in Rules 13a-15(f) and  15d-15(f)  under theExchange  Act)  occurred during the period covered by this report that has materiallyaffected,  or is reasonably likely tomaterially affect, our internal control over financial reporting

 

10

----

 

**PART  II  — OTHER INFORMATION**

 

Item 1                LegalProceedings

 

-  None

 

Item 2                UnregisteredSales of Equity Securities and Use of Proceeds

 

-  None

 

Item 3                DefaultsUpon Senior Securities

 

-  None

 

Item 4                Submissionof Matters to a Vote of Securities’ Holders

 

-  None

 

Item 5                OtherInformation

 

-  None

 

Item 6                Exhibits

 
| 31.1 | Certification of Harvey Houtkin, Chief Executive Officer, pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002.                          |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.2 | Certification of Mark Shefts, Chief Financial Officer, pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002.                             |
| 32.1 | Certification of Harvey Houtkin, Chief Executive Officer, pursuant to  Sections 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. |
| 32.2 | Certification of Mark Shefts, Chief Financial Officer, pursuant to  Sections 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.    |

 

11

----

 

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 theundersigned, thereunto duly authorized.

 
|                          |   | ARBOR ENTECH CORPORATION |
|-------------------------------|--------|--------------------------|
|                          |   |                     |   |
|                          |   |                     |   |
| Date: September 16, 2005 | By:    | s/ Mark  Shefts          |   |   |
|                          |   | Mark Shefts              |   |
|                          |   | Chief Financial Officer  |   |
|                          |   | Chief Accounting Officer |   |
|                               |        |                          |  |  |

 

12

----