10-Q 1 f10q0909_4301.htm QUARTERLY REPORT FOR THE PERIOD ENDING 09/09 f10q0909_4301.htm
 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
 
FORM 10-Q
_______________
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2009
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ______to______.
 
4301, Inc.
(Exact name of registrant as specified in Charter
 
Delaware
 
000-51877
 
22-3719169
(State or other jurisdiction of
incorporation or organization)
 
(Commission File No.)
 
(IRS Employee
Identification No.)

 19800 MacArthur Blvd., Irvine, CA 92612
 (Address of Principal Executive Offices)
 _______________
 
949-757-4180
 (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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨
 
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 October 26, 2009: 100,000 shares of common stock.
 


 
 
4301, Inc..
FORM 10-Q
September 30, 2009
INDEX
 
 
 
PART I-- FINANCIAL INFORMATION

Item 1.
Financial Statements
F-1
Item 2.
Management’s Discussion and Analysis of Financial Condition
1
Item 3
Quantitative and Qualitative Disclosures About Market Risk
2
Item 4T.
Control and Procedures
2
 
PART II-- OTHER INFORMATION
 
Item 1
Legal Proceedings
3
Item 1A.
Risk Factors
3
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
3
Item 3.
Defaults Upon Senior Securities
3
Item 4.
Submission of Matters to a Vote of Security Holders
3
Item 5.
Other Information
3
Item 6.
Exhibits and Reports on Form 8-K
3
 
SIGNATURE
 
 

 
 
Item 1. Financial Information
 
4301, Inc.
(a development stage company)

FINANCIAL STATEMENTS
 
AS OF SEPTEMBER 30, 2009



4301, Inc.
(a development stage company)
Financial Statements Table of Contents
 

FINANCIAL STATEMENTS
Page #
   
   
         Balance Sheet
F-1
   
         Statement of Operations and Retained Deficit
F-2/F-3
   
         Statement of Stockholders Equity
F-4
   
         Cash Flow Statement
F-5
   
         Notes to the Financial Statements
F-6

 

 
 
4301, Inc.
 
(a development stage company)
 
BALANCE SHEETS
 
As of September 30, 2009 and December 31, 2008
 
   
ASSETS
 
             
CURRENT ASSETS
 
9/30/2009
   
12/31/2008
 
             
    Cash
  $ -     $ -  
                 
       Total Current Assets
    -       -  
                 
       TOTAL ASSETS
  $ -     $ -  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
                 
CURRENT LIABILITIES
               
                 
    Accrued Expenses
  $ 9,100     $ 7,500  
                 
       Total Current Liabilities
    9,100       7,500  
                 
       TOTAL LIABILITIES
  $ 9,100     $ 7,500  
                 
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
    (9,200 )     (7,600 )
                 
       Total Stockholders' Equity
    (9,100 )     (7,500 )
                 
       TOTAL LIABILITIES AND EQUITY
  $ -     $ -  
                 
 
The accompanying notes are an integral part of these financial statements.
 
 
F-1

 
4301, Inc.
 
(a development stage company)
 
STATEMENTS OF OPERATIONS
 
For the nine months ending September 30, 2009 and 2008 and
 
from inception (December 9, 2005) through September 30, 2009
 
                   
                   
   
9 MONTHS
   
9 MONTHS
   
FROM
 
   
ENDING
   
ENDING
   
INCEPTION
 
   
9/30/2009
   
9/30/2008
   
TO 09/30/09
 
                   
REVENUE
  $ -     $ -     $ -  
                         
COST OF SERVICES
    -       -       -  
                         
GROSS PROFIT OR (LOSS)
    -       -       -  
                         
GENERAL AND ADMINISTRATIVE EXPENSES
    1,600       1,500       9,200  
                         
NET INCOME (LOSS)
    (1,600 )     (1,500 )     (9,200 )
                         
ACCUMULATED DEFICIT, BEGINNING BALANCE
    (7,600 )     (4,350 )     -  
                         
ACCUMULATED DEFICIT, ENDING BALANCE
  $ (9,200 )   $ (5,850 )   $ (9,200 )
                         
                         
Earnings (loss) per share
  $ (0.02 )   $ (0.02 )        
                         
                         
Weighted average number of common shares
    100,000       100,000          
                         
                         
 
The accompanying notes are an integral part of these financial statements.
 
F-2

 
4301, Inc.
 
(a development stage company)
 
STATEMENTS OF OPERATIONS
 
For the three months ending September 30, 2009 and 2008
 
             
             
   
3 MONTHS
   
3 MONTHS
 
   
ENDING
   
ENDING
 
   
9/30/2009
   
9/30/2008
 
             
REVENUE
  $ -     $ -  
                 
COST OF SERVICES
    -       -  
                 
GROSS PROFIT OR (LOSS)
    -       -  
                 
GENERAL AND ADMINISTRATIVE EXPENSES
    600       500  
                 
NET INCOME (LOSS)
    (600 )     (500 )
                 
ACCUMULATED DEFICIT, BEGINNING BALANCE
    (8,600 )     (5,350 )
                 
ACCUMULATED DEFICIT, ENDING BALANCE
  $ (9,200 )   $ (5,850 )
                 
                 
                 
 
The accompanying notes are an integral part of these financial statements.
 
 
F-3

 
4301, Inc.
 
(a development stage company)
 
STATEMENT OF STOCKHOLDERS' EQUITY
 
From inception (December 9, 2005) through September 30, 2009
 
                         
                         
                         
         
COMMON
   
ACCUM.
   
TOTAL
 
   
SHARES
   
STOCK
   
DEFICIT
   
EQUITY
 
                         
Stock issued on acceptance
    100,000     $ 100     $ -     $ 100  
     of incorporation expenses
                               
     December 9, 2005
                               
                                 
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)
                    (2,500 )     (2,500 )
                                 
                                 
Total, December 31, 2007
    100,000       100       (4,350 )     (4,250 )
                                 
Net Income (Loss)
                    (3,250 )     (3,250 )
                                 
                                 
Total, December 31, 2008
    100,000     $ 100     $ (7,600 )   $ (7,500 )
                                 
Net Income (Loss)
                    (1,600 )     (1,600 )
                                 
                                 
Total, September 30, 2009
    100,000     $ 100     $ (9,200 )   $ (9,100 )
                                 
                                 
The accompanying notes are an integral part of these financial statements.
 
F-4

 
4301, Inc.
 
(a development stage company)
 
STATEMENTS OF CASH FLOWS
 
For the nine months ending September 30, 2009 and 2008 and
 
from inception (December 9, 2005) through September 30, 2009
 
                   
                   
   
9 MONTHS
   
9 MONTHS
   
FROM
 
   
ENDING
   
ENDING
   
INCEPTION
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
9/30/2009
   
9/30/2008
   
TO 9/30/09
 
                   
    Net income (loss)
  $ (1,600 )   $ (1,500 )   $ (9,200 )
                         
    Stock issued as compensation
    -       -       100  
    Increase (Decrease) in Accrued Expenses
    1,600       1,500       9,100  
                         
       Total adjustments to net income
    1,600       1,500       9,200  
                         
    Net cash provided by (used in) operating activities
    -       -       -  
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
                         
    None
    -       -       -  
                         
    Net cash flows provided by (used in) investing activities
    -       -       -  
                         
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
                         
    None
    -       -       -  
                         
    Net cash flows provided by (used in) financing activities
    -       -       -  
                         
CASH RECONCILIATION
                       
                         
    Net increase (decrease) in cash
    -       -       -  
    Cash - beginning balance
    -       -       -  
                         
CASH BALANCE - END OF PERIOD
  $ -     $ -     $ -  
                         
                         
The accompanying notes are an integral part of these financial statements.
 
 
F-5

 
4301, Inc.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS

1.   Summary of significant accounting policies:

Industry:

4301, 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.

F-6


 
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 bases 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.

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 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. At this time The Company has not identified the business that it wishes to engage in.

The Company's shareholder funds The Company's activities while The Company takes steps to locate and negotiate with a business entity for combination; however, there can be no assurance these activities will be successful.

3.   Accounts Receivable and Customer Deposits:

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

F-7


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 legal, accounting and office costs during this stage of the business.

7.   Operating Lease Agreements:

The Company has no agreements at this time.

8.   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.

9.   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.

10.  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.
 
F-8

 
11.  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. The Company's management has decided a valuation allowance is necessary to reduce any tax benefits because the available benefits are more likely than not to expire before they can be used.  These net operating losses expire as the following, $400 at 2025, $1,450 at 2026, $2,500 at 2027, $3,250 at 2028 and $1,600 at 2029.

The Company has available net operating loss carry-forwards for financial statement and federal income tax purposes. These loss carry-forwards expire if not used within 20 years from the year generated. The Company's management has decided a valuation allowance is necessary to reduce any tax benefits because the available benefits are more likely than not to expire before they can be used.
 
The Company's management determines if a valuation allowance is necessary to reduce any tax benefits when the available benefits are more likely than not to expire before they can be used.  The tax based net operating losses create tax benefits in the amount of $1,840 from inception through September 30, 2009.

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. Significant components of the Company's deferred tax liabilities and assets as of September 30, 2009 are as follows:
 
Deferred tax assets:
     
Federal net operating loss
  $ 1,380  
State net operating loss        
    460  
         
Total Deferred Tax Asset
    1,840  
Less valuation allowance
    (1,840 )
      0  
 
The reconciliation of the effective income tax rate to the federal statutory rate is as follows:

Federal income tax rate
    15.0 %
State tax, net of federal benefit
    5.0 %
Increase in valuation allowance
    (20.0 %)
         
Effective income tax rate
    0.0 %
 
12.  Subsequent Events:

None known at this time.
 
 
F-9


 
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 through September 30, 2009.  For the nine months ended September 30, 2009, the registrant recognized a net loss of $1,600 and for the period from inception through September 30, 2009, the registrant recognized net loss of $9,200.  Some general and administrative expenses during the quarter were accrued.  Expenses for the quarter were comprised of costs mainly associated with legal, accounting and office.
 
Liquidity and Capital Resources
 
At September 30, 2009, the Company had no capital resources and will rely upon the issuance of common stock and additional capital contributions from shareholders to fund administrative expenses pending acquisition of an operating company.
 
Critical Accounting Policies
 
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
 
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements.
 
1

 
Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is subject to certain market risks, including changes in interest rates and currency exchange rates.  The Company does not undertake any specific actions to limit those exposures.

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 September 30, 2009 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
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 September 30, 2009.

This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this quarterly report.

 
 
2

 
PART II - OTHER INFORMATION
 
 
Item 1. Legal Proceedings.
 
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

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  
 
              None. 
 
 
3

 

 
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.
 
 
4301, INC.
   
Date: October 26, 2009
By:  
/s/ Yusuke Matsuo
   
Yusuke Matsuo
   
Chief Executive Officer,
Chief Financial Officer 

 

4