**FORM 10-QSB**

 

**SECURITIES AND EXCHANGECOMMISSION**

**WASHINGTON,DC 20549**

 

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

 

**ForQuarter Ended October 31, 2005**

 

**OR**

 

**o****        TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 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  Incorporation or Organization) |       | (IRS  Employer  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 December 12, 2005, was 7,050,540 shares.

 

 

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ARBOR ENTECH CORPORATION ANDSUBSIDIARY

 

INDEX

 
| PART 1 - FINANCIAL INFORMATION |                                                                                                 |
|-------------------------------------|------------------------------------------------------------------------------------------------------|
|                                |                                                                                                 |   |
| Item 1                              | Financial Statements (unaudited)                                                                     |   |
|                                |                                                                                                 |   |
|                                | Condensed  Balance Sheet - October 31, 2005                                                |   |
|                                |                                                                                                 |   |
|                                | Condensed Statements of Operations - Three and Six months ended October 31,  2005 and 2004 |   |
|                                |                                                                                                 |   |
|                                | Condensed Statements of Cash Flows - Six months ended October 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                          |                                                                                                 |

 

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**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 and six months ended October 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 October 31, 2005 are not necessarily indicative of the results forthe entire fiscal year.

 

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ARBOR ENTECHCORPORATION

CONDENSED BALANCE SHEET

OCTOBER 31,2005

(Unaudited)

 
| ASSETS                                                                                                 |   |       |    |
|--------------------------------------------------------------------------------------------------------|--------|------------|---------|
| Current  Assets:                                                                                       |   |       |    |
| Cash and  Cash Equivalents                                                                             |   | $          | 484,497 |   |
| Prepaid  Expenses                                                                                      |   | 711        |    |
|                                                                                                   |   |       |    |
| Total  Current Assets                                                                                  |   | 485,208    |    |
|                                                                                                   |   |       |    |
| Total Assets                                                                                           |   | $          | 485,208 |   |
|                                                                                                   |   |       |    |
| LIABILITIES  AND STOCKHOLDERS’ EQUITY                                                             |   |       |    |
|                                                                                                   |   |       |    |
| Current  Liabilities:                                                                                  |   |       |    |
| Accounts  Payable and Accrued Liabilities                                                              |   | $          | 15,333  |   |
|                                                                                                   |   |       |    |
| Total  Current Liabilities                                                                             |   | 15,333     |    |
|                                                                                                   |   |       |    |
| 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)                                                                           |   | (1,902,616 | )       |
|                                                                                                   |   |       |    |
| Total  Stockholders’ Equity                                                                       |   | 469,875    |    |
|                                                                                                   |   |       |    |
|                                                                                                   |   | $          | 485,208 |   |

 

The accompanying notes are an integral part of the financialstatements.

 

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ARBOR ENTECHCORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 
| ** **                                    | ** ** | **Three Months Ended  October 31,** | ** ** | **Six Months Ended  October 31,** | ** ** |
|-----------------------------------------------|------------|------------------------------------------|------------|----------------------------------------|------------|
| ** **                                    | ** ** | **2005**                                 | ** ** | **2004**                               | ** ** | **2005** | ** ** | **2004** | ** ** |
|                                          |       |                                     |       |                                   |       |   |   |   |   |
| Net Sales                                     |       | $                                        | —     |                                   | $          | — |   | $ | — |   | $ | — |   |
|                                          |       |                                     |       |                                   |       |   |   |   |   |
| Costs and  Expenses:                          |       |                                     |       |                                   |       |   |   |   |   |
| Selling,  General and Administrative Expenses |       | 10,719                                   |       | 7,804                                  |       | 15,441 |   | 19,752 |   |
|                                          |       | 10,719                                   |       | 7,804                                  |       | 15,441 |   | 19,752 |   |
|                                          |       |                                     |       |                                   |       |   |   |   |   |
| Loss from  Operations                         |       | (10,719                                  | )          | (7,804                                 | )          | (15,441 | ) | (19,752 | ) |
|                                          |       |                                     |       |                                   |       |   |   |   |   |
| Other  Income:                                |       |                                     |       |                                   |       |   |   |   |   |
| Interest                                      |       | 491                                      |       | 262                                    |       | 793 |   | 542 |   |
| Other                                         |       | —                                   |       | —                                 |       | 15 |   | 22 |   |
|                                          |       | 491                                      |       | 262                                    |       | 808 |   | 564 |   |
|                                          |       |                                     |       |                                   |       |   |   |   |   |
| Net Loss                                      |       | $                                        | (10,228    | )                                      | $          | (7,542 | ) | $ | (14,633 | ) | $ | (19,188 | ) |
|                                          |       |                                     |       |                                   |       |   |   |   |   |
| Loss Per  Common Share – Basic           |       | $                                        | (.00       | )                                      | $          | (.00 | ) | $ | (.00 | ) | $ | (.00 | ) |
|                                          |       |                                     |       |                                   |       |   |   |   |   |
| Weighted  Average Shares Outstanding          |       | 7,050,540                                |       | 7,050,540                              |       | 7,050,540 |   | 7,050,540 |   |

 

The accompanying notes are an integral part of the financialstatements.

 

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ARBOR ENTECHCORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 
| ** **                                                                                               | ** ** | **Six Months Ended  October 31,** | ** ** |
|----------------------------------------------------------------------------------------------------------|------------|----------------------------------------|------------|
| ** **                                                                                               | ** ** | **2005**                               | ** ** | **2004** | ** ** |
| Cash Flows  from Operating Activities:                                                                   |       |                                   |       |   |   |
| (Loss) from  Continuing Operations                                                                       |       | $                                      | (14,633    | ) | $ | (19,188 | ) |
| Adjustments  to Reconcile (Loss) from Continuing Operations to Net Cash (Used) in  Operating Activities: |       |                                   |       |   |   |
| Depreciation                                                                                             |       | —                                 |       | 575 |   |
| Decrease in  Deferred Tax Assets                                                                         |       | 81,762                                 |       | — |   |
| Decrease in  Deferred Tax Liabilities                                                                    |       | (81,762                                | )          | — |   |
| Changes in  Operating Assets and Liabilities:                                                            |       |                                   |       |   |   |
| Decrease in  Miscellaneous Receivable                                                                    |       | 826                                    |       | — |   |
| Decrease in  Prepaid Expenses                                                                            |       | 1,531                                  |       | — |   |
| (Decrease)  in Accounts Payable and Accrued Liabilities                                                  |       | (1,887                                 | )          | (15,776 | ) |
|                                                                                                     |       |                                   |       |   |   |
| Total  Adjustments                                                                                       |       | 470                                    |       | (15,201 | ) |
|                                                                                                     |       |                                   |       |   |   |
| Net Cash  (Used) in Operating Activities                                                                 |       | (14,163                                | )          | (34,389 | ) |
|                                                                                                     |       |                                   |       |   |   |
| 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                                                        |       | 199,426                                |       | (72,233 | ) |
|                                                                                                     |       |                                   |       |   |   |
| Cash and  Cash Equivalents – Beginning of Period                                                    |       | 285,071                                |       | 365,128 |   |
|                                                                                                     |       |                                   |       |   |   |
| Cash and  Cash Equivalents – End of Period                                                          |       | $                                      | 484,497    |   | $ | 292,895 |   |
|                                                                                                     |       |                                   |       |   |   |
| Supplemental  Disclosures of Cash Flow Information:                                                      |       |                                   |       |   |   |
| Cash Paid  for Interest                                                                                  |       | $                                      | —     |   | $ | — |   |
|                                                                                                     |       |                                   |       |   |   |
| Cash Paid  for Income Taxes                                                                              |       | $                                      | —     |   | $ | — |   |

 

The accompanying notes are an integral part of the financialstatements.

 

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ARBOR ENTECHCORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 -                                               UnauditedInterim Financial Statement

 

In the opinion of the Company’s management,the accompanying unaudited condensed financial statements contain alladjustments (consisting of only normal recurring adjustments) necessary topresent fairly the information set forth therein.  These financial statements are condensed andtherefore do not include all of the information and footnotes required byaccounting principles generally accepted in the United States of America forcomplete financial statements.

 

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

 

NOTE 2 -                                               DiscontinuedOperations – Sale of Real Property

 

On July 20, 2005 the Company closed on thesale 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 on the sale during the yearended April 30, 2005.  The proceedswere collected in July 2005.

 

NOTE 3 -                                               RelatedParty Transactions

 

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

 

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**Item 2.****                                   Management’sDiscussion And Analysis Of Financial Condition And Results Of Operations**

 

**CAUTIONARYNOTICE REGARDING FORWARD-LOOKING STATEMENTS**

 

Statements contained in this report which arenot historical fact are “forward-looking statements” that involve variousimportant assumptions, risks, uncertainties and other factors that could causeour actual results to differ materially from those expressed in suchforward-looking statements. These important factors include, withoutlimitation, competitive factors and pricing pressures, changes in legal andregulatory requirements, technological change or difficulties, productdevelopment risks, commercialization and trade difficulties and generaleconomic conditions, as well as other risks previously disclosed in oursecurities 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 October 31, 2005, we hadcash and cash equivalents of $484,497 and working capital of $469,875. 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 October 31, 2005 compared to the quarter ended October 31,2004**

 

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

 

Selling, general andadministrative expenses were $10,719 for the quarter ended October 31,2005, an increase of $2,915 over selling, general and administrative expensesof $7,804 for the quarter ended October 31, 2004. The increase in selling,general and administrative expenses is primarily a result of increases inprofessional and filing fees.  As we hadno revenues and only de minimis interest income and no other expenses, our netloss increased from $7,542 for the quarter ended October 31, 2004 to$10,228 for the quarter ended October 31, 2005.

 

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**Six months ended October 31, 2005 compared to the six months endedOctober 31, 2004**

 

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

 

Selling, general andadministrative expenses were $15,441 for the six months ended October 31,2005, a decrease of $4,311 over selling, general and administrative expenses of$19,752 for the six months ended October 31, 2004. The decrease inselling, general and administrative expenses is primarily a result of adecrease in expenses (insurance and real estate taxes) related to real propertythat we sold in April 2005 offset by increases in professional and filingfees.  As we had no revenues other thande minimis interest income and no other expenses, our net loss decreased from$19,188 for the six months ended October 31, 2004 to $14,633 for the sixmonths ended October 31, 2005.

 

**Discontinued Operations**

 

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 October 31, 2005,we had working capital of $469,875.

 

As at October 31, 2005,we had cash and cash equivalents of $484,497, which represented 99.9% of totalassets. We believe we have adequate working capital to fund our operations forat least the next 12 months unless and until we find a business opportunity.

 

Off-BalanceSheet Transactions

 

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

 

Application Of CriticalAccounting 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

 

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affected by management’s application ofaccounting policies. Critical accounting policies for use of estimates,accounting for stock-based compensation and environmental remediation costs.

 

**Item 3.**           CONTROLSAND 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 theeffectiveness of our disclosure controls and procedures as of the end of theperiod covered by this quarterly report. They have concluded that, as of that date, our disclosure controls anprocedures were effective at ensuring that required information will bedisclosed on a timely basis in our reports filed under the Exchange Act.

 

(b) Changes in Internal Control over Financial Reporting

 

No change in our internal control over financial reporting (as definedin Rules 13a-15(f)  and 15d-15(f)  under the Exchange Act)occurred during the period covered by this report that has materially affected,or is reasonably likely to materially affect, our internal control overfinancial reporting

 

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**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     Certificationof Harvey Houtkin, Chief Executive Officer, pursuant to Section 302 of theSarbanes-Oxley Act of 2002.

31.2     Certificationof Mark Shefts, Chief Financial Officer, pursuant to Section 302 of theSarbanes-Oxley Act of 2002.

32.1     Certificationof Harvey Houtkin, Chief Executive Officer, pursuant to Sections 906 of theSarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

32.2     Certificationof Mark Shefts, Chief Financial Officer, pursuant to Sections 906 of theSarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

 

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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: December 15, 2005 | By:    | /s/Mark Shefts           |   |
|                         |   | Mark Shefts              |
|                         |   | Chief Financial Officer  |
|                         |   | Chief Accounting Officer |

 

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