10-Q 1 v114718_10q.htm Unassociated Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
 
FORM 10-Q
_______________
 
o
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2008
 
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ______to______.
 
 4309, INC.
(Exact name of registrant as specified in Charter
 
DELAWARE
 
000-51885
 
 
(State or other jurisdiction of
incorporation or organization)
 
(Commission File No.)
 
(IRS Employee Identification No.)

3707 E. Southern Ave. Suite 1087-Box 1080
Mesa, AZ 85206
 (Address of Principal Executive Offices)
 _______________
 
 
(480) 246-8030
 (Issuer Telephone number)
_______________
 
 (Former Name or Former Address if Changed Since Last Report)
 
Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes x  No o 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):
 
Large Accelerated Filer o     Accelerated Filer o     Non-Accelerated Filer o     Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.
Yes x  No  o
 
State the number of shares outstanding of each of the issuer’s classes of common equity, as of May 12, 2008: please update
 
 
 

 

4309, INC.
(a development state company)
FORM 10-Q
March 31, 2008

TABLE OF CONTENTS
 
PART I - FINANCIAL STATEMENTS
Item 1.  
Balance Sheet
F-1
 
Statement of Operations and Retained Deficit
F-2
 
Statement of Stockholders Equity
F-3
 
Cash Flow Statement
F-4
 
Notes to the Financial Statements
F-5
Item 2.  
Management’s Discussion and Analysis of Financial Condition and Results of Operation or Plan of Operation
2
Item 3.  
Quantitative and Qualitative Disclosures About Market Risk
2
Item 4T.  
Controls and Procedures
2
 
 
 
PART II -OTHER INFORMATION
Item 1.  
Legal Proceedings.
4
Item 1A.
Risk Factors
4
Item 2.  
Unregistered Sales of Equity Securities and Use of Proceeds.
4
Item 3.  
Defaults Upon Senior Securities.
4
Item 4.  
Submission of Matters to a Vote of Security Holders.
Item 5.  
Other Information.
4
Item 6.  
Exhibits
4
 
 
5
SIGNATURES
 


4309, Inc.
(a development stage company)

FINANCIAL STATEMENTS

AS OF MARCH 31, 2008

4309, Inc.
(a development stage company)
Financial Statements Table of Contents

Page #
   
Balance Sheet
F-1
   
Statement of Operations and Retained Deficit
F-2
   
Statement of Stockholders Equity
F-3
 
 
Cash Flow Statement
F-4
   
Notes to the Financial Statements
F-5
 


Part I. FINANCIAL STATEMENTS

4309, Inc.
(a development stage company)
BALANCE SHEET
As of March 31, 2008 and December 31, 2007


 
   
3/31/2008
   
12/31/2007
 
 ASSETS
             
               
CURRENT ASSETS 
             
               
Cash
 
$
10,897
 
$
8,437
 
               
Total Current Assets
   
10,897
   
8,437
 
               
TOTAL ASSETS
 
$
10,897
 
$
8,437
 
               
LIABILITIES AND STOCKHOLDERS' EQUITY
             
               
CURRENT LIABILITIES
             
               
Accrued Expenses
 
$
4,154
 
$
3,793
 
               
Total Current Liabilities
   
4,154
   
3,793
 
               
               
LONG-TERM LIABILITIES
             
               
Accrrued Interest
 
$
7,881.00
 
$
5,303
 
Shareholder Loan
 
$
2,500
 
$
2,500
 
Note Payable
 
$
110,000
 
$
62,000
 
               
Total Long-term Liabilities
   
120,381
   
69,803
 
               
TOTAL LIABILITIES
 
$
124,535
 
$
73,596
 
               
STOCKHOLDERS' EQUITY
             
               
Preferred Stock - Par value $0.001; Authorized: 10,000,000 None issues and outstanding
 
$
-
 
$
-
 
               
Common Stock - Par value $0.001; Authorized: 100,000,000 Issued and Outstanding: 100,000
   
100
   
100
 
               
Additional Paid-In Capital
   
-
   
-
 
Accumulated Deficit
   
(65,259
)
 
(65,259
)
               
Total Stockholders' Equity
   
(65,159
)
 
(65,159
)
               
TOTAL LIABILITIES AND EQUITY
 
$
59,376
 
$
8,437
 

The accompanying notes are an integral part of these financial statements.

F-1


4309, Inc.
(a development stage company)
STATEMENT OF OPERATIONS
For the nine months ending March 31, 2008 and 2007
from inception (December 9, 2005) through March 31, 2008

   
3 MONTHS
 
3 MONTHS
 
FROM
 
   
ENDING
 
ENDING
 
INCEPTION
 
   
3/31/2008
 
3/31/2007
 
TO 03/31/2008
 
               
REVENUE
 
$
-
 
$
-
 
$
-
 
                     
COST OF SERVICES
   
-
   
-
   
-
 
                     
GROSS PROFIT OR (LOSS)
   
-
   
-
   
-
 
                     
GENERAL AND ADMINISTRATIVE EXPENSES
   
48,480
   
250
   
113,739
 
                     
NET INCOME (LOSS)
   
(48,480
)
 
(250
)
 
(113,739
)
                     
ACCUMULATED DEFICIT, BEGINNING BALANCE
   
(65,259
)
 
(1,850
)
 
-
 
ACCUMULATED DEFICIT, ENDING BALANCE
 
$
(113,739
)
$
(2,100
)
$
(113,739
)
                     
Earnings (loss) per share
   
(0.48
)
 
(0.00
)
     
                     
Weighted average number of common shares
   
100,000
   
100,000
       
 

 
The accompanying notes are an integral part of these financial statements.

F-2


4309, Inc.
(a development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
From inception (December 9, 2005) through March 31, 2008

       
COMMON
 
ACCUM.
 
TOTAL
 
   
SHARES
 
STOCK
 
DEFICIT
 
EQUITY
 
                   
Stock issued on acceptance of incorporation expenses December 9, 2005
   
100,000
 
$
100
       
$
100
 
                           
Net Income (Loss)
                   
(400
)
 
(400
)
                           
Total, December 31, 2005
   
100,000
 
$
100
 
$
(400
)
$
(300
)
                           
Net Income (Loss)
               
(1,450
)
 
(1,450
)
     
   
   
   
   
   
   
   
 
                           
Total, December 31, 2006
   
100,000
 
$
100
 
$
(1,850
)
$
(1,750
)
                           
Net Income (Loss)
                   
(63,409
)
 
(63,409
)
                           
Total, December 31, 2007
   
100,000
   
100
 
$
(65,259
)
$
(65,159
)
                           
Net Income (Loss)
   
 
   
 
   
(48,480
)
 
(48,480
)
                           
Total, March 31, 2008
   
100,000
   
100
 
$
(113,739
)
$
(113,639
)


The accompanying notes are an integral part of these financial statements.

F-3


4309, Inc.
(a development stage company)
STATEMENTS OF CASH FLOWS
For the three months ending March 31, 2008 and 2007
from inception (December 9, 2005) through March 31, 2008

   
3 MONTHS
 
3 MONTHS
 
FROM
 
   
ENDING
 
ENDING
 
INCEPTION
 
 
 
3/31/2008
 
3/31/2007
 
TO 03/31/2008
 
CASH FLOWS FROM OPERATING ACTIVITIES 
                   
                     
Net income (loss)
 
$
(48,480
)
$
(250
)
$
(113,739
)
                     
Stock issued as compensation
   
-
   
-
   
100
 
Increase (Decrease) in Accrued Expenses
   
2,579
   
250
   
11,675
 
                     
Total adjustments to net income
   
2,579
   
250
   
11,775
 
                     
Net cash provided by (used in) operating activities
   
(45,901
)
 
-
   
(101,964
)
                     
CASH FLOWS FROM INVESTING ACTIVITIES
                   
                     
None
   
-
   
-
   
-
 
 
                   
Net cash flows provided by (used in) investing activities
   
-
   
-
   
-
 
                     
CASH FLOWS FROM FINANCING ACTIVITIES
                   
                     
Proceeds from capital contributions
   
48,000
   
-
   
110,000
 
Proceeds from stock issuance
   
-
   
-
   
-
 
                     
CASH RECONCILIATION
                   
                     
Net increase (decrease) in cash
   
2,460
   
-
   
10,897
 
Cash - beginning balance
   
8,437
   
-
   
-
 
                     
CASH BALANCE - END OF PERIOD
 
$
10,897
 
$
-
 
$
10,897
 

The accompanying notes are an integral part of these financial statements.

F-4

 
4309, Inc.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS

1. Summary of significant accounting policies:

Industry:

4309, Inc. (the Company), a Company incorporated in the state of Delaware as of December 9, 2005 plans to locate and negotiate with a business entity for the combination of that target company with The Company. The combination will normally take the form of a merger, stock-for-stock exchange or stock- for-assets exchange. In most instances the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that The Company will be successful in locating or negotiating with any target company.

The Company has been formed to provide a method for a foreign or domestic private company to become a reporting ("public") company whose securities are qualified for trading in the United States secondary market.

The Company has adopted its fiscal year end to be December 31.

Results of Operations and Ongoing Entity:

The Company is considered to be an ongoing entity for accounting purposes; however, there is substantial doubt as to the Company's ability to continue as a going concern. The Company's shareholders fund any shortfalls in The Company's cash flow on a day to day basis during the time period that The Company is in the development stage.

Liquidity and Capital Resources:

In addition to the stockholder funding capital shortfalls; The Company anticipates interested investors that intend to fund the Company's growth once a business is located.

Cash and Cash Equivalents:

The Company considers cash on hand and amounts on deposit with financial institutions which have original maturities of three months or less to be cash and cash equivalents.

Basis of Accounting:

The Company's financial statements are prepared in accordance with U.S. generally accepted accounting principles.
 
Income Taxes:

The Company utilizes the asset and liability method to measure and record deferred income tax assets and liabilities. Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when in the opinion of management; it is more likely than not that some portion or all of the deferred tax assets will not be realized. At this time, The Company has set up an allowance for deferred taxes as there is no company history to indicate the usage of deferred tax assets and liabilities.

F-5



Fair Value of Financial Instruments:

The Company's financial instruments may include cash and cash equivalents, short-term investments, accounts receivable, accounts payable and liabilities to banks and shareholders. The carrying amount of long-term debt to banks and others approximates fair value based on interest rates that are currently available to The Company for issuance of debt with similar terms and remaining maturities. The carrying amounts of other financial instruments approximate their fair value because of short-term maturities.

Concentrations of Credit Risk:

Financial instruments which potentially expose The Company to concentrations of credit risk consist principally of operating demand deposit accounts. The Company's policy is to place its operating demand deposit accounts with high credit quality financial institutions. At this time The Company has no deposits that are at risk.

2. Related Party Transactions and Going Concern:

The Company's financial statements have been presented on the basis that it is a going concern in the development stage, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. There can be no assurance these activities will be successful. At this time The Company has not identified the business in which it wishes to engage.

The Company's shareholder funds The Company's activities while The Company takes steps to locate and negotiate with a business entity for combination. As of March 31, 2008 $2,500.00 in stockholder loans payable was used as operating expenses and recorded in accounts payable and expenses.


Accounts receivable and Customer deposits do not exist at this time and therefore have no allowances accounted for or disclosures made.

4. Use of Estimates:

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenue and expenses. Management has no reason to make estimates at this time.

5. Revenue and Cost Recognition:

The Company uses the accrual basis of accounting in accordance with generally accepted accounting principles for financial statement reporting.

6. Accrued Expenses:

Accrued expenses consist of accrued tax, professional and office costs during this stage of the business.

7. Operating Lease Agreements:

The Company has no agreements at this time.
 
F-6


8. Demand Note Payable:

On August 1, 2007 the Company entered into a multiple advance note with 4309 Acquisition Trust whereby the Company may borrow up to $500,000. The terms allow interest set to be accrued at the applicable federal rate as given by the Internal Revenue Service. At March 31, 2008 the Company had a principal balance owed in the amount of $110,000 plus accrued interest.
 
9. Stockholder's Equity:

Preferred stock includes 10,000,000 shares authorized at a par value of $0.001, of which none are issued or outstanding.

Common Stock includes 100,000,000 shares authorized at a par value of $0.001, of which 100,000 have been issued for the amount of $100 on December 31, 2005 in acceptance of the incorporation expenses for the Company.

10. Required Cash Flow Disclosure for Interest and Taxes Paid:

The company has paid no amounts for federal income taxes and interest. The Company issued 100,000 common shares of stock to its sole shareholder in acceptance of the incorporation expenses for The Company.
 
11. Earnings Per Share:

Basic earnings per share ("EPS") is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period as required by the Financial Accounting Standards Board (FASB) under Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Shares". Diluted EPS reflects the potential dilution of securities that could share in the earnings.

12. Income Taxes:

The Company has available net operating loss carryforwards for financial statement and federal income tax purposes. These loss carryforwards expire if not used within 20 years from the year generated.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. These losses may be limited by the Internal Revenue Service when there is a change of control of the Company. Significant components of the Company's deferred tax liabilities and assets as of March 31, 2008 are as follows:

Deferred tax assets:  
     
Federal net operating loss  
 
$
17,061
 
State net operating loss  
   
5,687
 
   
     
Total deferred tax assets   
   
22,748
 
Less valuation allowance  
   
(22,748
)
   
     
 
 
$
 

The Company has provided a 100% valuation allowance on the deferred tax assets at March 31, 2008 to reduce such asset to zero, since there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted.

F-7

 
The reconciliation of the effective income tax rate to the federal statutory rate for the periods ended March 31, 2008 and March 31, 2007 is as follows:
 
     
 
2008
 
2007
 
Federal income tax rate  
   
(15.0
)%
 
(15.0)
%
State tax, net of federal benefit  
   
(5.0)
%
 
(5.0
)%
Increase in valuation allowance  
   
20.0
%
 
20.0
%
   
         
Effective income tax rate  
   
0.0
%
 
0.0
%
 
13. Changes in Control of Registrant:
 
On July 24, 2007 (the "Effective Date"), a total of 100,000 shares, or 100%, of the issued and outstanding common stock of the Company changed hands in a personal transaction. In a change of control of a Company with net operating loss carryforwards there may be limitations in the amounts the Company can carryforward.

F-8


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Plan of Operation
 
The Registrant is continuing its efforts to locate a merger Candidate for the purpose of a merger. It is possible that the registrant will be successful in locating such a merger candidate and closing such merger. However, if the registrant cannot effect a non-cash acquisition, the registrant may have to raise funds from a private offering of its securities under Rule 506 of Regulation D. There is no assurance the registrant would obtain any such equity funding.
 
Results of Operation
 
The Company did not have any operating income from inception (December 9, 2005) through March 31, 2008, the Company recognized a net loss of $113,739 through March 31, 2008. Some general and administrative expenses from inception were accrued. Expenses from inception were comprised of costs mainly associated with legal, accounting and office.
 
Liquidity and Capital Resources
 
At March 31, 2008 the Company had no capital resources and will rely upon the issuance of common stock, loans and additional capital contributions from shareholders to fund administrative expenses pending acquisition of an operating company.
 
Management anticipates seeking out a target company through solicitation. Such solicitation may include newspaper or magazine advertisements, mailings and other distributions to law firms, accounting firms, investment bankers, financial advisors and similar persons, the use of one or more World Wide Web sites and similar methods. No estimate can be made as to the number of persons who will be contacted or solicited. Management may engage in such solicitation directly or may employ one or more other entities to conduct or assist in such solicitation. Management and its affiliates will pay referral fees to consultants and others who refer target businesses for mergers into public companies in which management and its affiliates have an interest. Payments are made if a business combination occurs, and may consist of cash or a portion of the stock in the Company retained by management and its affiliates, or both.
 
Paul Poetter will supervise the search for target companies as potential candidates for a business combination. Paul Poetter will pay, as his own expenses, any costs he incurs in supervising the search for a target company. Paul Poetter may enter into agreements with other consultants to assist in locating a target company and may share stock received by it or cash resulting from the sale of its securities with such other consultants. Paul Poetter controls us and therefore has the authority to enter into any agreement binding us. Paul Poetter as our sole officer, director and only shareholder can authorize any such agreement binding us.

Item 3.  Quantitative and Qualitative Disclosures about Market Risks

We conduct our business in United States dollars. Our market risk is limited to the United States domestic, economic and regulatory factors.

Item 4T. Controls and Procedures
 
 Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CAO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CAO, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Controls over Financial Reporting

Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of consolidated financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.  There has been no change in the Company’s internal control over financial reporting during the quarter ended March 31, 2008 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

2

 
The Company’s management, including the Company’s CEO and CAO, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of March 31, 2008.
 
3

  
PART II - OTHER INFORMATION

Item 1  Legal Proceedings.
 
Currently we are not aware of any litigation pending or threatened by or against the Company.

Item 1A  Risk Factors

None

 Item 2  Unregistered Sales of Equity Securities and Use of Proceeds
 
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 of Form 8-K.
 
(a)           Exhibits
 
31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002
 
32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002
 
(b)           Reports of Form 8-K  
 
On January 8, 2008, we filed a Form 8-K with the SEC based on the change in auditor.


4


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
4309, Co
Date: May 15, 2008 
By 
/s/ Paul Poetter
     
 
 
Paul Poetter
 
 
President/ Director
 
5