Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 30, 2010 and 2009 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 & Note 8 to the financial statements, the Company is a shell company as defined in Rule 12b-2 of the Exchange Act. The Company realized a net loss of $103,350 for the year ended April 30, 2010 along with an accumulated deficit of $4,153,853 as of April 30, 2010. The Company’s current business is to pursue a business combination through acquisition, or merger with, an existing company. The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, locate and complete a merger with another company and ultimately achieve profitable operations. No assurances can be given that the Company will be successful in locating or negotiating with any target company. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The weighted-average number of common shares outstanding for computing basic EPS for the years ended April 30, 2010 and 2009 were 97,976,342 and 97,872,933, respectively.
As of April 30, 2010, the Company recognizes compensation cost based upon the fair value of stock options at the grant date using the Black-Scholes pricing model.
During the years ended April 30, 2010 and 2009, the Company did not issue any shares for services nor did the Company issue any options as stock based compensation to any officers, directors, or non-employees.
In June 2009, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162,” (“SFAS 168”). SFAS 168 establishes the FASB Accounting Standards Codification (“Codification”) as the source of authoritative generally accepted accounting principles (“GAAP”) for nongovernmental entities. The Codification does not change GAAP. Instead, it takes the thousands of individual pronouncements that currently comprise GAAP and reorganizes them into approximately ninety accounting topics, and displays all topics using a consistent structure. Contents in each topic are further organized first by subtopic, then section and finally paragraph. The paragraph level is the only level that contains substantive content. Citing particular content in the Codification involves specifying the unique numeric path to the content through the topic, subtopic, section and paragraph structure. FASB suggests that all citations begin with “FASB ASC,” where ASC stands for Accounting Standards Codification. Changes to the ASC subsequent to June 30, 2009 are referred to as Accounting Standards Updates (“ASU”).
In conjunction with the issuance of SFAS 168, the FASB also issued its first Accounting Standards Update No. 2009-1, “Topic 105 -Generally Accepted Accounting Principles” (“ASU 2009-1”) which includes SFAS 168 in its entirety as a transition to the ASC. ASU 2009-1 is effective for interim and annual periods ending after September 15, 2009 and will not have an impact on the Company’s financial position or results of operations but will change the referencing system for accounting standards.
As of April 30, 2010, all citations to the various SFAS’ have been eliminated and will be replaced with FASB ASC as suggested by the FASB in future interim and annual financial statements.
During the year ended April 30, 2008, in association with the change of control, management of the Company made the decision to divest the division related to the sale of ATM machines known as Quick Pay. The Company obtained an appraisal for Quick Pay which resulted in an approximate value of $50,000.
As of April 30, 2010 and 2009, the authorized common stock of the Company consists of 100,000,000 shares of common stock with a par value of $0.01 and 2,000,000 shares of preferred stock with a par value of $0.01 and 8,000,000 shares of preferred stock with a par value of $0.001.
For the year ended April 30, 2010 and 2009, the rent expense was zero.
As of April 30, 2010, the Company had a federal net operating loss carryforward of approximately $258,834, which expires through 2030. This carryforward may be limited in the future upon change in control of the Company and in accordance with the provisions under Internal Revenue Code Section 381.
In assessing the recovery of the deferred tax assets, management of the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management of the Company considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result, management of the Company determined it was more likely than not the deferred tax assets would not be realized as of April 30, 2010, and recorded a full valuation allowance.
There were no other options granted or exercised by the directors and executive officers outstanding as of April 30, 2010.
The following is a schedule of the activity relating to the Company's warrants.
The following table summarizes information about the Company's common stock warrants outstanding as of April 30, 2010.
As of April 30, 2010, the common stock equivalents of the Company exceeded the total common stock available for issuance by approximately 144,472,933 common shares.
As of April 30, 2010, the Company’s Chief Executive Officer, Alan P. Donenfeld, as a beneficial owner for securities held by Paragon Capital LP, holds warrants that are exercisable into 135,000,000 common shares of the Company.
As of April 30, 2010, if Mr. Donenfeld and Paragon Capital, LP exercise the warrants that have been granted, they would be required to pay $775,000, except for a cashless exercise provision. At the sole discretion of the warrant holder, there is a cashless exercise provision within the warrant agreements as filed as attachments to Form 8-K with the SEC.
Unless and until there is enough authorized common stock available to cover all common stock equivalents, Mr. Donenfeld and Paragon Capital LP will not exercise any of their 135,000,000 warrants. Pursuant to the agreement with Mr. Goldsmith on March 8, 2010, the exercise period for the warrants that Mr. Goldsmith holds has been extended to April 2012.
As of April 30, 2010 and 2009, the Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.
As of April 30, 2010, the Company is a shell company as defined in Rule 12b-2 of the Exchange Act. The Company’s current business is to pursue a business combination through acquisition, or merger with, an existing company. The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, locate and complete a merger with another company and ultimately achieve profitable operations. No assurances can be given that the Company will be successful in locating or negotiating with any target company
For the year ended April 30, 2010, the Company reported a net loss of $103,350 and has reported an accumulated deficit of $4,158,853.
As of July 26, 2010, the date the financial statements were available to be issued, there are no subsequent events that are required to be recorded or disclosed in the accompanying financial statements as of and for the year ended April 30, 2010.