10QSB 1 mar10q.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2006 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ______ to ______. Commission File Number 0-22934 Animal Cloning Sciences, Inc. (Exact Name of Small Business Issuer as specified in its Charter)
Washington 91-1268870 (State or other Jurisdiction of I.R. S. Employer Incorporation or Organization Identification Number 69930 Highway 111, Ste 100 Rancho Mirage, CA 92270 (Address of principal executive offices) (Zip Code)
(760) 219-2776 (Issuer's telephone number) Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No X Indicate the number of shares outstanding of each of the issuer's classes of Common Equity, as of the latest practicable date. Common Stock, no par value 142,894 Title of Class Number of Shares Outstanding at May 15, 2006 GENERAL COMMENTS For the past several years, Animal Cloning was actively working with the United States Department of Agriculture to obtain approval to import frozen equine embryos for the purpose of cloning horses. During this period of time, the Company was also actively pursuing a joint venture operation with an Italian research company who would create embryos, freeze and export to the Company for implanting into Animal Cloning's mares. The Department of Agriculture had ensured the Company that they would grant a permit for importing these frozen embryos. Animal Cloning encountered several delays in securing permits for importing these embryos. We continued our development efforts based on the assurances from the Department of Agriculture that they would eventually grant permits to the Company for importing frozen equine embryos. The Department of Agriculture informed Animal Cloning during the early part of 2003 that the permits would not be forthcoming, and, they further advised us that they had just passed a regulation forbidding the importation of animal embryos into the United States. As a result of these happenings, Animal Cloning discontinued its cloning efforts and closed its equine operations. In view of these latest actions by the Government, the Company sold its Ranch Operations and Equine Cloning activities in the 3rd quarter 2003 and ceased all its operations. Since that period, the Company has been actively seeking a merger with an active operating entity. The Company re-entered the Development Stage effective with ceasing all of its operating activities on September 3, 2003. The only activities that occurred since the close of operations are the incurrence of fees associated with maintaining our status as a public reporting company (audit, legal, and filing fees, etc.), and the incurrence of interest expense on an outstanding loan payable to a related party (see Note 2 to the attached financial statements). . . . Part I. FINANCIAL INFORMATION Item 1. Financial Statements. Animal Cloning Sciences, Inc. [A Development Stage Company] UNAUDITED CONDENSED BALANCE SHEET March 31, 2006 March. 31, 2006 ASSETS CURRENT ASSETS: Cash $ -0- ---------- Total current assets $ -0- ---------- TOTAL ASSETS $ -0- ========== LIABILITIES & SHAREHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable $ 6,500 ? Due to related party 3,375 Accrued salaries (Note 4) 645,000 ---------- TOTAL CURRENT LIABILITIES 654,875 LONG-TERM LIABILITIES: (Note 3) Notes payable 150,000 Accrued interest ? related party 30,000 TOTAL LONG-TERM LIABILITIES 180,000 ---------- TOTAL LIABILITIES $ 834,875 SHAREHOLDERS' DEFICIT Preferred stock, no par value: 2,000,000 shares authorized; issued and outstanding $ -0- Common stock, no par value: 100,000,000 shares authorized; 142,894 issued and outstanding 11,990,765 Retained earnings(accum deficit) <12,797,015> Deficit accumulated since Re-entering development stage <28,625> ---------- TOTAL SHAREHOLDERS'DEFICIT $ < 834,875> ---------- TOTAL LIABILITIES and STOCKHOLDERS? DEFICIT $ -0- ==========
The accompanying notes are an integral part of these unaudited condensed financial statements. Animal Cloning Sciences, Inc. [A Development Stage Company] UNAUDITED CONDENSED STATEMENT OF OPERATIONS Since
Re-entering Development Stage On Three Months Ended Sept 3, 2003 March 31, Through 2006 2005 Mar 31, 2006 Revenues $ -0- $ -0- $ -0- ------ ------ -------- EXPENSES General and administrative 3,000 800 9,875 ------ ------ -------- Total Expenses 3,000 800 9,875 ------ ------ -------- Loss from Oper. <3,000> < 800> < 9,875> Other expense Interest expense 1,875 1,875 18,750 ------ ------ -------- Net loss $< 4,875> $<2,675> $<28,625> ====== ====== ======== Per share information: ---------------------- Basic(loss) per common share Continuing operations $<0.04> $<0.02> ----- ---- Basic weighted Avg. number common shares outstanding 142,894 142,894 ======= =======
The accompanying notes are an integral part of these unaudited condensed financial statements Animal Cloning Sciences, Inc. [A Development Stage Company] UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
Since Re-entering Three Months Ended Development Stage On March 31, Sept. 3, 2003 Through 2006 2005 March 31, 2006 $ $ $ NET LOSS FROM: Current operations $< 4,875> $<2,675> $<28,625> Changes in operating assets and liabilities: Increase in accounts payable 3,000 700 6,500 Increase in accounts payable ? related parties -0- 100 3,375 Incr/(Decr) accrued Interest ? related party 1,875 1,875 18,750 ------ ------ ------ Net cash provided(used) From Oper -0- -0- -0- ------ ------ ------ Net cash provided(used) by Financing activities -0- -0- -0- ------ ------ ------ Net cash provided(used)by Investing activities -0- -0- -0- ------ ------ ------ TOTAL NET INCREASE(DECREASE)CASH -0- -0- -0- CASH, BEGINNING OF PERIOD -0- -0- -0- ------ ------ ------ CASH, END OF PERIOD $ -0- $ -0- $ -0- ====== ====== ====== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Income Taxes paid: -0- -0- -0- Interest Paid: -0- -0- -0- SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING & FINANCING ACTIVITIES: -None
The accompanying notes are an integral part of these unaudited condensed financial statements. Animal Cloning Sciences, Inc. [A Development Stage Company] UNAUDITED CONDENSED NOTES TO THE FINANCIAL STATEMENTS For the Three Months Ended March 31, 2006 GENERAL: The unaudited condensed financial statements of Animal Cloning Sciences, Inc. included herein, have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Although certain information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America has been condensed or omitted, Animal Cloning Sciences believes that the disclosures are adequate to make the information presented not misleading. The unaudited condensed financial statements for the three months ended March 31, 2006 should be read in conjunction with the financial statements and notes thereto included in this report, and the Annual Report on Form 10-KSB for the year ended December 31, 2005. The unaudited condensed financial statements included herein reflect all normal recurring adjustments that, in the opinion of management, are necessary for fair presentation. The results for the interim period are not necessarily indicative of trends or of results to be expected for a full year. Note 1 - NATURE OF ORGANIZATION Animal Cloning Sciences, Inc. (the Company) was organized in Washington on August 16, 1984 as a holding company involved in the cloning of horses. Because of adverse rulings from the U.S. Department of Agriculture in refusing to grant licenses for importing animal embryos into the United States, the Company discontinued its operations and its cloning efforts and sold its ranch facilities during the third quarter of 2003. The results of these transactions were reported in Form 10- QSB for the quarter ending September 30, 2003, and Form 10-KSB for the year ended December 31, 2003. As of September 3, 2003, the Company is considered to have re-entered the development stage, in accordance with SFAS 7, "Accounting and Reporting by Development Stage Enterprises." Since 2003, the Company has neither generated revenues nor conducted any operations. The Company's only activity is the incurrence of general and administrative expenses to maintain its status as a reporting company with the SEC. The Company's current business plan is to locate a suitable candidate for merger or acquisition. Animal Cloning Sciences, Inc. [A Development Stage Company] UNAUDITED CONDENSED NOTES TO THE FINANCIAL STATEMENTS For the Three Months Ended March 31, 2006 Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the accompanying financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Equivalents For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. No cash was paid for interest or income taxes during the years ended December 31, 2005 or 2004. Loss Per Common Share SFAS 128, "Earnings per Share," requires a dual presentation of earnings per share-basic and diluted. Basic loss per common share is computed by dividing the net loss for the period by the weighted average shares outstanding. The Company's convertible debt (Note 4) is a potentially dilutive security, but does not impact the computation of fully diluted EPS because its effect would be antidilutive. Accordingly, basic and diluted losses per share are the same. Income Taxes Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the recorded book basis and tax basis of assets and liabilities for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income and tax credits that are available to offset future federal income taxes. NOTE 3 - RELATED PARTY TRANSACTIONS In March 2002, the Company entered into a $150,000 convertible promissory note with an entity affiliated with the Company's CEO. The note is convertible at a rate of $.05 per share at the option of the holder for a total of 3,000,000 shares of common stock. Annual interest of 5% is accrued on the principal quarterly. If not sooner converted into common stock, the principal and interest are due March 1, 2007. At March 31, 2006, the Company had accrued $30,000 in interest. Current quarter interest expense was $1,875. The Company's officers and directors have resolved to provide for Animal Cloning Sciences, Inc. [A Development Stage Company] UNAUDITED CONDENSED NOTES TO THE FINANCIAL STATEMENTS For the Three Months Ended March 31, 2006 NOTE 3 - RELATED PARTY TRANSACTIONS (continued) various expenses incurred by the Company at minimal or no cost until such time that a merger candidate is found. These expenses consist of, but are not limited to, accounting, filing requirements, and management services. A total of $3,375 payable to officers and directors had been accrued at March 31, 2006. NOTE 4 - COMMITMENTS AND CONTINGENCIES During the period of 1995 through 2003 and in accordance with compensation agreements then in effect, the Company's president and CEO had accumulated $1,020,000 in accrued salaries, of which $645,000 was still payable at March 31, 2006. NOTE 5 - GOING CONCERN The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplated continuation of the Company as a going concern. However, the Company has no ongoing operations and has current liabilities in excess of current assets. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through sales of its common stock or through a possible business combination with another company. There is no assurance that the Company will be successful in raising this additional capital or in establishing profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Item 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Company has not commenced operations and has negative working capital of approximately $650,000. Capital and Source of Liquidity. The Company does not expect to purchase any plant or significant equipment over the next twelve months. Other than incidental costs that pertain to maintaining the Company's legal and SEC registration, there are no major cash requirements. For the three months ended March 31, 2006 and 2005, the Company did not pursue any investing activities. Results of Operations. For the three months ended March 31, 2006 and 2005, the Company did not earn any revenues from operations. The Company incurred general and administrative expenses of $3,000 and $800 for the three months ended March 31, 2006 and 2005, respectively, along with interest expense of $1,875 during each of the quarters ended March 31, 2006 and 2005. Item 3. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, under the supervision and with the participation of our chief executive officer and chief financial officer, conducted an evaluation of our "disclosure controls and procedures" (as defined in Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-14(c)) within 90 days of the filing date of this quarterly report on Form 10QSB (the "Evaluation Date"). Based on their evaluation, our chief executive officer and chief financial officer have concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that all material information required to be filed in this quarterly report on Form 10QSB has been made known to them in a timely fashion. . . . 9 Changes in Internal Controls There have been no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls or in other factors that could significantly affect these controls subsequent to the Evaluation Date set forth above. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None Item 2. CHANGES IN SECURITIES None Item 3. DEFAULTS UPON SENIOR SECURITIES None Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None Item 5. OTHER INFORMATION None Item 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibits The following exhibits are filed herewith: 31.1 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended. 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Reports on Form 8-K On May 8, 2006, the Company filed a Form 8-K indicating the replacement of its prior auditor, Pritchett, Siler & Hardy, PC, with Child, Van Wagoner & Bradshaw, PLLC, of Kaysville, Utah due to fee disputes. The Company had no disagreements with its prior auditor regarding accounting policies, financial statement disclosure, or audit scope, and its prior auditor did not issue any reports during the prior 2 fiscal years containing an adverse opinion, disclaimer, or qualified opinion due to uncertainty, scope, or accounting principles. 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 the undersigned thereunto duly authorized. Date: May 15, 2006 By: /s/Dempsey K. Mork (Chief Executive Officer and duly authorized officer/director) CERTIFICATIONS Exhibit 31.1 I, Dempsey Mork, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Asian Financial, Inc. 2. Based on my knowledge, the quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and we have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; (d) disclosed in this report any change in the registrant?s internal control over financial reporting that occurred during the registrant?s most recent fiscal quarter (the registrant?s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant?s internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and (6) The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 15, 2006 /s/Dempsey Mork --------------------------- Dempsey Mork President, Chief Executive Officer, Director Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Asian Financial, Inc. (the "Company") on Form 10-QSB for the period ending March 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dempsey Mork, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/Dempsey Mork ------------------------------ Dempsey Mork President, Chief Executive Officer, Director May 15, 2006