10QSB 1 tenqsb.txt 10QSB FOR PERIOD ENDING 03-31-2003 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 OR [ ] 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 0-29049 QUIET TIGER, INC. (formerly FAN ENERGY INC.) ------------------------------------------------------ (Exact name of registrant as specified in its charter) Nevada 77-0140428 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 668 N. 44'th Street, Suite 248 , Phoenix, Arizona 85008 --------------------------------------------------- (Address of principal executive offices (zip code)) (602) 267-7500 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the last 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 the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Class Outstanding at March 31, 2003 ------------------------------ ----------------------------- Common Stock, par value $0.001 55,432,778 ================================================================================ 1 QUIET TIGER, INC. INDEX TO FORM 10-Q Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheet as of March 31, 2003 ...................... 3 Consolidated Statements of Operation for the three months ended March 31, 2003 and 2002 ........................................ 4 Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2003 and 2002 ...................5 Consolidated Statements of Cash Flow for the three months ended March 31, 2003 and 2002 ........................................ 6 Notes to Financial Statements ........................................ 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ................................. 11 Item 3. Controls and Procedures ....................................... 14 PART II. OTHER INFORMATION Item 1. Legal Proceedings ............................................... 15 Item 2. Changes in Securities ........................................... 15 Item 3. Defaults Upon Senior Securities ................................. 15 Item 4. Submissions of Matters to a Vote of Security Holders ............ 15 Item 5. Other Information ............................................... 16 Item 6. Exhibits and Reports on Form 8-K ................................ 16 Signatures .................................................................. 16 2 QUIET TIGER, INC. CONSOLIDATED BALANCE SHEET ( A Development Stage Company) UNAUDITED At March 31, 2003 ASSETS ------ CURRENT ASSETS: Cash $ 1,108 OTHER ASSETS: Equipment & leasehold improvements-net 1,000,000 Intellectual property 674,629 -------------------------- Total assets $ 1,675,737 ========================== LIABILITIES CURRENT Accounts payable $ 50,357 Due to affiliates 344,251 Debenture payable 5,000 Accrued interest 52 -------------------------- Total current liabilities 399,660 -------------------------- STOCKHOLDERS' EQUITY Preferred stock, $.001 par value, 50,000,000 shares authorized, none issued Common stock, $.001 par value, 350,000,000 shares 55,433 authorized, 55,432,778 issued and outstanding Additional paid-in capital 7,408,951 Additional paid-in capital stock options 100,500 Treasury stock - (Deficit) accumulated during the development stage (6,288,807) -------------------------- Total stockholders' equity 1,276,077 -------------------------- Total liabilities and stockholders' equity $ 1,675,737 ========================== See accompanying notes to these consolidated financial statements. 3 QUIET TIGER, INC. (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATION FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 UNAUDITED
Cumulative Three months ended amounts from March 31, January 1,1997 to 2003 2002 March 31, 2003 -------------------------------- ------------------- REVENUES Floppy disk sales - - 56,094 -------------------------------- ------------------- Total Revenue - - 56,094 COST OF SALES Cost of floppy disk sales - - 52,265 -------------------------------- ------------------- Total Cost of Sales - - 52,265 Gross Profit - - 3,829 OPERATIING EXPENSES Impairment on equipment - - 3,033,309 General and administrative 100,624 89,892 1,124,186 Depreciation - 622 17,092 -------------------------------- ------------------- Total Operating Expenses 100,624 90,514 4,174,587 OTHER (INCOME) EXPENSE Interest expense - - 8,978 Interest revenue - (8,250) (48,266) -------------------------------- ------------------- Total Non-Operating expenses - (8,250) (39,288) (Loss) income from continuing (100,624) (82,264) (4,131,470) operations DISCONTINUED OPERATION Loss (income) from discontinued - - 508,220 operation, net Loss from impairment of assets - - 1,557,702 on discontinued operation Loss on disposal of discontinued - - 91,415 operation, net ---------------------------------------------------- Loss from discontinued operations - - 2,157,337 ==================================================== Net (Loss) (100,624) (82,264) (6,288,807) (LOSS) INCOME PER SHARE: (Loss) per share from continuing (0.00) (0.00) operation (Loss) per share from discontinued (0.00) (0.00) operation (Loss) per share (0.00) (0.00) WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 45,646,576 22,048,940 ================================
See accompanying notes to these consolidated financial statements. 4 QUIET TIGER, INC. ( A Development Stage Company) CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 UNAUDITED
(Deficit) Common Stock Additional Accumulated ---------------------- During Paid-In Development Treasury Stock Shares Amount Capital Stage Stock Options Total ---------------------------------------------------------------------------------- Balance at December 31, 2001 22,048,940 $20,178 $6,552,827 ($2,727,117) ($75,777) $100,500 $ 3,870,611 Net (Loss) for the quarter ended March 31, 2002 (82,264) (82,264) ---------------------------------------------------------------------------------- Balance at March 31, 2002 22,048,940 20,178 6,552,827 (2,809,381) (75,777) 100,500 3,788,347 ================================================================================== Balance December 31, 2002 44,961,109 44,961 7,312,923 (6,188,183) - 100,500 1,270,201 ---------------------------------------------------------------------------------- Shares purchased in private placement 265,957 265 4,735 5,000 Shares issued for services 10,150,000 10,150 91,350 101,500 Shares issued in rounding for forward split 55,712 57 (57) 0 Net (Loss) for the quarter ended March 31, 2003 (100,624) (100,624) ---------------------------------------------------------------------------------- Balance at March 31, 2003 55,432,778 55,433 7,408,951 (6,288,807) - 100,500 1,276,077 ================================================================================== See accompanying notes to these consolidated financial statements.
5 FAN ENERGY INC. (A Devlopment Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 UNAUDITED
Three Months Ended Cumulative from March 31, Jan. 1, 1997 ------------------------------- (Inception ) to 2003 2002 Mar. 31, 2003 -------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income for the period $(100,624) $(82,264) $(6,188,183) Adjustments to reconcile net cash used by operations: (Income) loss from discontinued operation, net 508,220 Impairment of assets on discontinued operation 1,557,702 Loss on sale of discontinued operation 91,415 Impairment of equipment 3,033,309 Depreciation 622 17,092 Fair value of stock options issued 102,832 Common stock issued for services 101,500 432,594 Treasury stock received for interest (50,114) Forgiveness of payable by officer/director 22,000 Changes in assets and liabilities: (Increase)/decrease in receivable from affiliates (8,250) (Increase)/decrease in equipment (32,000) (Increase)/decrease in prepaid expenses Increase/(decrease) in accounts payable (58,570) 23,752 104,591 Increase/(decrease) in payable to affiliates 48,750 66,140 275,141 Increase in accrued interest payable 52 -------------------------------------------------- Net cash (used) by operating activities (8,892) - (125,401) -------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for equipment & tenant improvements (168,402) -------------------------------------------------- Net cash (used) in investing activities - - (168,402) -------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from exercise of common stock warrants 413,000 Proceeds from sale of common stock 5,000 1,800,000 Cash paid for offering costs (60,780) Proceeds from sale of common stock under note 50,000 Proceeds from sale of debenture 5,000 -------------------------------------------------- Net cash (used) in financing activities 10,000 - 2,202,220 -------------------------------------------------- 6 FAN ENERGY INC. (A Devlopment Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 UNAUDITED -continued- Cash provided (used) from discontinued operations - - (1,908,417) Net Increase (decrease) in cash 1,108 - - Cash at beginning of period - - - -------------------------------------------------- Cash at end of period 1,108 - - ================================================== SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES Issuance of common stock for equipment 3,850,000 Acquisition of 25,259 common shares of treasury stock in 75,777 sale of discontinued operations Acquisition of 1,871,260 treasury stock shares in 600,000 cancellation of note receivable Acquisition of 156,297 treasury stock shares in 50,114 cancellation of interest on note receivable Issuance of common stock for intellectual property 674,629 Cancellation of 392,628 treasury shares (125,891) Cancellation of 1,871,260 treasury shares (600,000) See accompanying notes to these consolidated financial statements.
7 QUIET TIGER, INC. (formerly Fan Energy Inc.) (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2003 The unaudited financial statements included herein were prepared from the records of the Company in accordance with Generally Accepted Accounting Principles. These financial statements reflect all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results of operations and financial position for the interim periods. Such financial statements generally conform to the presentation reflected in the Company's Forms 10-QSB and 10-KSB filed under its previous name of Fan Energy Inc. with the Securities and Exchange Commission for the year ended December 31, 2002. The current interim period reported herein should be read in conjunction with the Company's Form 10-KSB subject to independent audit at the end of the year. A majority of the shareholders of record on January 21, 2003 voted to amend the Articles of Incorporation of the Registrant to change the name of the Company to Quiet Tiger, Inc. and to change the authorized common shares to 350,000,000 and the authorized preferred shares to 50,000,000 as described in an information statement filed on Form 14C with the Securities and Exchange Commission on January 22, 2003. The Registrant filed with the Secretary of State of Nevada a Certificate of Amended Articles of Incorporation on February 18, 2003. On approximately February 20, 2003 the trading symbol of the Registrant was changed to QTIG. As shown in the accompanying financial statements, the Company had a net loss of $100,624 for the three months ended March 31, 2003. It has incurred an accumulated deficit of $6,288,807 and has a deficit in working capital of approximately $398,552 as of March 31, 2003. The ability of the Company to continue as a going concern is dependent on obtaining additional capital and financing and operating at a profitable level. The Company intends to seek additional capital either through debt or equity offerings, or a combination thereof, and to seek acquisitions which will generate sales volume with operating margins sufficient to achieve profitability. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The independent auditor's report on the financial statements for the year ended December 31, 2002 expressed substantial doubt about the ability of the Company to continue as a going-concern. The results of operations for the three months ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. EQUIPMENT On January 8, 2001, the Company acquired plant, equipment and other assets, including specialized manufacturing equipment, manufacturing set-ups, real estate lease, fixtures and related equipment and other property with an estimated fair value of approximately $4.0 million. In consideration for the acquisition of the assets, the Company issued 12,007,258 shares of its restricted common stock to the sellers. In determining the amount of the Company's consideration for the assets, the parties estimated the present fair market value of all such assets to be equivalent to approximately $.32 per share issued. 8 On May 3, 2002, the equipment and other assets were revalued at the original estimated fair value of approximately $.32 per share. At December 31, 2002, the Company believed that the equipments net realizable market value approximated $1,000,000 and impaired the carrying value of the equipment and other assets for $ 3,033,309. The equipment is currently idle in a storage facility waiting to be put to productive use. DEPRECIATION METHOD FOR MEDIA PRODUCTION EQUIPMENT The method of computing depreciation on its disk media production equipment is on a unit of production method in order to match the depreciated cost of the asset to the revenue produced by it. The equipment is currently in a storage facility which is rented on a month to month basis. INTELLECTUAL PROPERTY On May 3, 2002, a change of control of Registrant occurred. On that date Registrant closed the Asset Purchase Agreement with Project 1000, Inc., a Nevada corporation, ("P1"), pursuant to which Registrant acquired the seller's "Digital Content Cloaking Technology(TM)", known as MediaCloQ(TM) or MediaMaker(TM), ("Technology"). MediaCloQ(TM) is a technology where alterations are introduced in the control area of a CD to thwart illegal copying or ripping of optical media using a personal computer. This control area is present on any IEC 90608 Redbook compliant CD and is completely separated from the actual audio recorded on the medium. Since the information in the control area is not used by a typical stereo CD player, the alterations have virtually no effect on the playability of the CD in regular audio equipment. CDROM drives used in computers however, are not able to read a CD without the proper control information and therefore will not be able to read or copy the disc. Since the audio content is stored separately, MediaCloQ(TM) does not have any effect on the original audio quality. The Technology includes, but is not limited to, all commercial and non-commercial applications, all present and future versions and all documentation, intellectual and other property rights and derivatives thereof that is required to the development of current and future versions. The Technology was capitalized by the Registrant at the cost-basis of P1. The Registrant accounts for research and development costs in accordance with several accounting pronouncements, including SFAS 2, Accounting for Research and Development Costs, and SFAS 86, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed. SFAS 86 specifies that costs incurred internally in creating a computer software product should be charged to expense when incurred as research and development until technological feasibility has been established for the product. Once technological feasibility is established, all software costs should be capitalized until the product is available for general release to customers. Judgment is required in determining when the technological feasibility of a product is established. The Registrant believes that technological feasibility for its Technology was reached through a test marketing program of P1 which indicated that the product had substantive commerciality. As consideration for the acquisition of the assets, Registrant issued 23,837,710 restricted shares of Registrant's $0.001 par value common stock to seller. P1 is a wholly-owned subsidiary of SunnComm, Inc., a publicly-owned and traded corporation. The shares of Registrant's common stock issued to P1 at the time of the acquisition approximated 53% of Registrant's issued and outstanding common stock following the transaction. At March 31, 2003, P1 owned approximately 41% of the Registrant's issued and outstanding common stock. 9 None of the assets acquired by Registrant constituted plant, equipment or other physical property, as the assets acquired consisted solely of proprietary intellectual property and related intangible assets. Registrant intends to commercialize the intellectual property acquired by licensing certain rights to third parties and by including certain aspects of the technology with products which Registrant may market in the future. Upon completion of the Digital Content Cloaking Technology(TM) for marketing purposes, the company will amortize its capitalized development costs over the estimated useful life of the asset. Debenture Payable On February 12, 2003 the Company issued a debenture for $25,000 of which $5,000 was received as of March 31, 2003. The debenture accrues interest at 10% per annum and matures in a balloon payment with interest on February 11, 2004. Upon the demand of the Holder, this Debenture shall be automatically converted into shares of the Corporation's common stock at $.01 per share. Stockholders' Equity During the first quarter of 2003, the Company issued 150,000 restricted common shares as payment in full to the to a consultant for work performed on a business plan during 2001 at a deemed valued of $1,500. Also during the first quarter of 2003, the Company issued 10,000,000 unrestricted common shares to a consultant under its S-8 plan at a deemed value of $100,000 for due diligence work and contract negotiations pertaining to acquisition candidates. The deemed value of the all shares issued were determined based upon the trading value of the Company's common stock at the time of the issuance of the stock. Related Party Transactions On January 9, 2003, P1 transferred 1,200,000 of its restricted common shares to a director of the Registrant in a private financing transaction for its parent SunnComm. At March 31, 2003, P1 owned approximately 41% of all outstanding shares of the Registrant. Subsequent Events During April 2003, the Company determined a plan of sale for the disc manufacturing equipment and all related assets. The Company is currently seeking potential buyers for the equipment. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE COMPANY'S EXPECTATIONS, BELIEFS, INTENTIONS OR FUTURE STRATEGIES THAT ARE SIGNIFIED BY THE WORDS "EXPECTS", "ANTICIPATES", "INTENDS", "BELIEVES", OR SIMILAR LANGUAGE. SUCH FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, THE SEEKING OF REVENUE PRODUCING ACQUISITIONS, THE DEVELOPMENT PLANS FOR THE TECHNOLOGIES OF THE COMPANY, TRENDS IN THE RESULTS OF THE COMPANY'S DEVELOPMENT, ANTICIPATED DEVELOPMENT PLANS, OPERATING EXPENSES AND THE COMPANY'S ANTICIPATED CAPITAL REQUIREMENTS AND CAPITAL RESOURCES. THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS, UNCERTAINTIES AND OTHER FACTORS. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT ARE BASED ON INFORMATION AVAILABLE TO THE COMPANY ON THE DATE HEREOF AND SPEAK ONLY AS OF THE DATE HEREOF. THE FACTORS DISCUSSED BELOW UNDER "FORWARD-LOOKING STATEMENTS" AND ELSEWHERE IN THIS QUARTERLY REPORT ON FORM 10-QSB ARE AMONG THOSE FACTORS THAT IN SOME CASES HAVE AFFECTED THE COMPANY'S RESULTS AND COULD CAUSE THE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. IN ADDITION, THE FOLLOWING DISCUSSION IS INTENDED TO PROVIDE AN ANALYSIS OF THE COMPANY'S FINANCIAL CONDITION AND PLAN OF OPERATION AND SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S FINANCIAL STATEMENTS AND THE NOTES THERETO. General: On February 20, 2003, the Company effected a name change and a new CUSIP number. The name was changed from Fan Energy Inc. to Quiet Tiger Inc. The name change was approved by a majority of the shareholders of the Company on January 21, 2003 as described in a definitive Form 14C as filed with the Securities and Exchange Commission on January 21, 2003. On December 24, 2001, the Company effected a share consolidation of one new common share for each fifteen pre-consolidated shares. On June 28, 2002, the Company effected a forward stock split of 9.3563 shares for 1 share. All of the common authorized and issued shares were affected by the consolidation of December 24, 2001 and forward stock split of June 28, 2002. All share amounts in this Form 10-KSB for the year ended December 31, 2002 have been adjusted to include the post reverse of December 24, 2001 and post forward stock split of June 28, 2002 unless otherwise indicated. Originally formed as an Idaho corporation in the early 1900s, the Company's predecessor was not successful in the exploration of mining properties. In 1988 the predecessor was merged into a newly-formed Nevada corporation as Eastern Star Mining, Inc. and it was inactive thereafter, with no assets or liabilities through the end of 1996. In early 1997 the corporation was reactivated when the holder of a majority of the outstanding common stock transferred control of the inactive corporation. The transferee elected new directors and officers and caused the Company to effect a 10-into-1 reverse stock split. Thereafter, the Company raised capital through the sale of its securities and acquired an interest in its oil and gas properties for cash and common stock. 11 The name of the corporation was changed to Fan Energy Inc. in December 1997. The Company conducted no business activities until 1998 when it participated in drilling oil and gas wells. In 1999 the Company received its first revenue from the production from the wells in which it owned an interest. During the year 2000, the Company continued operating as an independent energy company engaged in the exploration and acquisition of crude oil and natural gas reserves. On December 1, 2001, the Company sold all of its oil and gas interests to a director for 236,331 shares of its own restricted common stock at a deemed value of $75,777 and discontinued its oil and gas exploration business. On January 8, 2001, the Company acquired plant, equipment and other assets, including specialized manufacturing equipment, manufacturing set-ups, real estate lease, fixtures and related equipment and other property with an estimated fair value of at least $3.8 million from four independent sellers. In consideration for the acquisition of the assets, the Company issued 12,007,252 shares of its restricted common stock to the sellers. The equipment valuation was determined by a discounted cash flow of projected operating income using a maximum cost of funds of 20% per annum. This was further supported by an independent expert's valuation opinion of the replacement value of the equipment. In determining the amount of Company's consideration for the assets, the parties estimated the present fair market value of all such assets to be equivalent to approximately $.32 per share issued. Also on January 8, 2001, the Company sold 2,027,198 shares of restricted common stock to one of the sellers for $650,000, of which $600,000 was paid by the a secured note. The assets acquired by the Company constituted plant, equipment and other physical property intended to be used in the manufacture of 3.5 inch micro floppy disks. None of the assets were previously used in such a business by the sellers. On May 3, 2002, the Company acquired from Project 1000 Inc. "P1", a wholly owned subsidiary of SunnComm Technologies, Inc., "Digital Content Cloaking Technology(TM)", known as MediaCloQ or MediaMaker ("P1 Technology"), which is a Set of methodologies that are designed to work together to thwart illegal copying Or ripping of optical media that complies to IEC 90608 Redbook standards. Each Of the methodologies used is meant to work toward defeating the various software products currently available on the market today that are used for the purpose of making illegal copies of CDs or of individual audio tracks. The Assets include, but are not limited to, P1's proprietary property which includes all English and foreign language, all commercial and non-commercial, and all present and future versions thereof, and all required and/or relevant P1 Documentation, Intellectual Property Rights and other proprietary rights therein, and Derivatives thereof that is required and/or relevant to the development of current and future versions. The Company issued 23,837,710 restricted common shares to P1 for the P1 Technology resulting in a change of control of the Company. The P1 Technology was recorded by the Company at P1's cost. Results of Operations: Comparison of Quarter Ended March 31, 2003 and 2002 The Company has not generated any significant revenue from operations during the first three months of 2003 or since its inception. Management's objective during the first quarter of 2003 was to obtain orders for the floppy disk manufacturing plant in order to attract investment capital and to register a consultants stock compensation plan in a registration statement on Form S-8 in order to assist in structuring the Company, performing due diligence and negotiating agreements with potential acquisition candidates. 12 On January 30, 2003 the Company filed a consultants stock compensation plan in a registration statement on Form S-8 authorizing the issuance of 10,000,000 shares of common stock. During the first quarter of 2003, the Company issued all 10,000,000 shares of common stock to a consultant for assist in structuring the Company, performing due diligence and negotiating agreements with potential acquisition candidates. During the first quarter of 2003, the Company mutually agreed to terminate negotiations with Technology Alliance Group, L.L.C. and seek other potential acquisitions. The Company's agreement with Mr. Atwell requires the Company to pay him $50,000 each quarter for consulting services similar to those having been previously rendered until the end of the year. The Company is currently renegotiating the agreement with Mr. Atwell. During the first quarter of 2003 the Company incurred $100,624 in general and administrative expenses which was primarily comprised of accrued compensation expense of $48,750 to its officers and $50,000 in consulting fees which were paid for with 5,000,000 shares under the registered S-8 plan. During the entire first quarter of 2002, the Company had no cash and approximately $307,568 in current payables of which $ 229,518 were owed to affiliates. It incurred $89,892 in general and administrative expenses seeking a potential acquisition candidate and paying the overhead for its floppy disk manufacturing plant. Liquidity and Capital Resources: At December 31, 2002 the Company had no cash and $ 404,428 in current payables of which $295,501 was owed to affiliates. At March 31, 2003 the Company had approximately $ 1,108 in cash and $ 399,660 in current payables of which $344,251 was owed to affiliates. Although the company could probably settle its debt to affiliates for restricted common stock, it would have approximately $55,409 in debt remaining. During the first quarter of 2003, the Company raised $5,000 in cash from a private placement of two individuals for 265,957 restricted common shares and $5,000 in cash from the issuance of a convertible debenture. The debenture accrues interest at 10% per annum and matures with a balloon payment with principal and interest on February 11, 2004. Upon the demand of the Holder, this Debenture shall be automatically converted into Shares of the Corporation's common stock at $.01 per share. The Company reduced its accounts payable by $58,570 by issuing 5,000,000 common shares under the consultants stock compensation plan in a registration statement on Form S-8 and 150,000 restricted common shares to a consultant that performed services pertaining to the preparation of a business plan. The Company increased amounts due to affiliates during the first quarter by $48,750 for officer salaries. The Company incurred $52 of interest expense on its debenture outstanding of $5,000 at March 31, 2003. 13 The Company believes that it has sufficient capital and resources to support operations through the remainder of 2003. It anticipates that the capital requirements for the balance of the period ending December 31, 2003 will require that additional cash be raised from external sources. It believes that this requirement will be met by cash equity and debt investments. Subsequent Events: During April 2003, the Company determined a plan of sale for the disc manufacturing equipment and all related assets. The Company is currently seeking potential buyers for the equipment. Forward Looking Statements: Certain statements made in this report on Form 10-QSB are "forward looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results implied by such forward looking statements. Although the Company believes that the expectations reflected in such forward looking statements are based upon reasonable assumptions, the Company's actual results could differ materially from those set forth in the forward looking statements. Certain factors that might cause such a difference might include: the failure of the registrants efforts to secure additional equity capital, the inability to successfully execute the revised business plan, the success or failure to implement the management to operate possible acquisitions profitably, and the registrant's planned marketing, public relations and promotional campaigns. Risk Factors: The Company continues to be subject to a number of risk factors, including the uncertainty of developing a commercial application for its intellectual property, the ability of management to successfully acquire and manage revenue generating operating companies profitably, the need for additional funds, competition, technological obsolescence and the difficulties faced by development stage companies in general. ITEM 3: CONTROLS AND PROCEDURES a) Disclosure controls and procedures . Within 90 days before filing this report, an evaluation was performed under the supervision and with the participation of the Company's management, including the CEO and CFO, of the effectiveness of the design and operation of its disclosure controls and procedures. Based on that evaluation , the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of the date of the evaluation. (b) Internal controls. Since the date of the evaluation described above, there have not been any significant changes in the Company's internal accounting controls or in other factors that could significantly affect those controls. 14 PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There are no legal proceedings against the Company and the Company is unaware of any proceedings contemplated against it. ITEM 2. CHANGES IN SECURITIES On January 1, 2003 the Company agreed to issue an additional 55,712 common shares to a brokerage firm requiring more shares for shareholders of the Company as result of the forward split from the previous year. On January 14, 2003 the Company issued 265,957 restricted common shares to two accredited investors for $5,000 in cash. The shares were issued under Section 4(2) of the 1933 Securities Act. On January 14, 2003 the Company issued 150,000 restricted common shares to a consultant that prepared a business plan valued at $1,500 for the Company during 2002. The shares were issued under Section 4(2) of the 1933 Securities Act. On January 24, 2003 the Company issued 5,000,000 unrestricted shares and on February 19, 2003 an additional 5,000,000 unrestricted shares under its S-8 plan to an individual at a deemed value of $100,000 for assisting in structuring the Company, performing due diligence and negotiating agreements with potential acquisition candidates. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On January 22, 2003, the Company filed a Definitive Information Statement pursuant to Section 14C of the Securities Exchange Act of 1934 as filed in Exhibit 22.1. The Registrant's Board of Directors unanimously approved the following amendments to the company's articles of incorporation: (a) increase the authorized shares of common stock of the Company to 350,000,000; (b) increase the authorized preferred shares of the Company to 50,000,000;and, (c) change the name of the Company to Quiet Tiger Inc.; and, The Registrant has received the consent of a majority of the outstanding shares of its common stock from shareholders of record at the close of business on January 21, 2003 for these amendments. A Schedule 14C Definitive Information Statement was filed with the Securities and Exchange Commission on January 22, 2003 and thereafter mailed to shareholders of record from whom the Registrant did not seek consent. The filing of a Certificate of Amendment of Articles of Incorporation with the Nevada Secretary of State, which put into effect these changes, was done on February 18, 2003. 15 ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 22.1 Definitive Information Statement pursuant to Section 14C of the Securities Exchange Act of 1934,filed January 22, 2003 incorporated herein by reference. 23.1 Consent of the O'Neal Law firm dated January 28, 2003 pertaining to the Year a consultants stock compensation plan as filed on Form S-8 Registration Statement under the Securities Act of 1933 filed January 30, 2003 incorporated herein by reference. 99.1 Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K Not applicable. 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. QUIET TIGER, INC. Signatures Title Date ---------- ----- ---- /s/ Wade P. Carrigan Chief Executive Officer May 15, 2003 ------------------------ Wade P. Carrigan /s/ Albert A. Golusin Chief Financial Officer May 15, 2003 ------------------------ Albert A. Golusin 16 Exhibit 99.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER 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 Quiet Tiger, Inc. (the "Company") on Form 10-QSB for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Wade P. Carrigan, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. IN WITNESS WHEREOF, the undersigned has executed this certification as of the 15th day of May, 2003. /s/ Wade P. Carrigan ----------------------------- Wade P. Carrigan Chief Executive Officer QUARTERLY CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Wade P. Carrigan, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Quiet Tiger, Inc.; 2. Based on my knowledge, this 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a. designed such disclosure controls and procedures 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; 17 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; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): 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 officer 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. IN WITNESS WHEREOF, the undersigned has executed this certification as of the 15th day of May 2003. /s/ Wade P. Carrigan ----------------------------- Wade P. Carrigan Chief Executive Officer 18 Exhibit 99.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER 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 Quiet Tiger, Inc. (the "Company") on Form 10-QSB for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Albert Golusin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. IN WITNESS WHEREOF, the undersigned has executed this certification as of the 15th day of May 2003. /s/ Albert Golusin ----------------------------- Albert Golusin Chief Financial Officer QUARTERLY CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Albert Golusin, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Quiet Tiger,Inc.; 2. Based on my knowledge, this 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a. designed such disclosure controls and procedures 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 19 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; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): 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 officer 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. IN WITNESS WHEREOF, the undersigned has executed this certification as of the 15th day of May, 2003. /s/ Albert Golusin ----------------------------- Albert Golusin Chief Financial Officer 20