10-Q 1 angstrom10q051608.htm ANGSTROM TECHNOLOGIES FORM 10-Q CC Filed by Filing Services Canada Inc. 403-717-3898



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q

(Mark One)

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

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: 000-51163

ANGSTROM MICROSYSTEMS CORP.

(Exact name of registrant as specified in its charter)

Nevada

N/A

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

25 Drydock Avenue, 7th Floor, Boston MA

02210

(Address of principal executive offices)

(Zip Code)

617-695-0137

(Registrant’s telephone number, including area code)

ANGSTROM TECHNOLOGIES CORP.
228 Bonis Avenue, #PH3, Scarborough, ON  Canada M1T 3W4

(Former name, former address and former fiscal year, if changed since last report


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes [X]  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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer

 [  ]

 

Accelerated filer

 [  ]

Non-accelerated filer

 [  ]

(Do not check if a smaller reporting company)

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 [  ] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:


Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes [  ]  No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS:


Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  16,052,000  shares of common stock issued and outstanding as of May 14, 2008








PART I FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

This quarterly report contains forward-looking statements.  These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risks and Uncertainties”, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.  Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.  As used in this quarterly report, the terms “we”, “us”, “our”, and “Angstrom” mean Angstrom Microsystems Corp., unless the context clearly requires otherwise.





ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Interim Consolidated Balance Sheets (Unaudited)


    March 31,   December 31,  
    2008     2007  
ASSETS       
   Current assets       
   Cash  300   $ 11,674  
   Prepaid and other assets    40,822     6,782  
  41,122   $ 18,456  
LIABILITIES       
   Current liabilities       
   Accounts payable and accrued liabilities  88,731   $ 43,669  
   Due to shareholder    141,903     169,754  
    230,634     213,423  
SHAREHOLDERS’ DEFICIENCY       
   Authorized:       
   150,000,000 common voting stock with a par value of $0.001 per share       
   Issued:       
   16,052,000 common shares (December 31, 2007 – 13,952,000 common       
shares)    16,052   13,952  
   Additional paid-in capital    160,978   90,998  
   Funds advanced for units subscribed    -   18,080  
   Accumulated other comprehensive income (loss)    (766 (766
   Deficit accumulated during the exploration stage    (365,776   (317,231
    (189,512   (194,967
  41,122   $ 18,456  



Going Concern

Subsequent  Events





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










ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Interim Consolidated Statements of Operations

For the Three Months Ended March 31, 2008 and 2007

(Unaudited)


          

  Three Months Ended  
    March 31,  
    2008     2007  
Revenue  $   -   -  
Expenses       
   Bank charges and interest  321     63  
   Management fees  10,500     1,500  
   Office and general (recovered)  (4,355   -  
   Professional fees  35,592     5,868  
   Regulatory fees    6,487     3,053  
    48,545     10,484  
Net loss for the period  $ (48,545 (10,484
Basic and diluted loss per common share  $ (0.00 (0.00
Weighted average number of common shares outstanding  15,359,692   10,628,454  

 

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



ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Interim Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2008 and 2007

(Unaudited)

(Unaudited)

       

    Three Months Ended  
      March 31,  
     2008     2007  
Cash flow from operating activities         
   Net loss for the period  (48,545 (10,484
   Item not affecting cash:         
   Gain on foreign exchange     (99   -  
     (48,644   (10,484
Changes in non-cash working capital          
           Prepaid expenses and other assets     (34,040   5,000  
           Accounts payable and accrued liabilities     45,161     (23,194
     (37,523   (28,678
Cash flow from financing activities          
   (Repayments to)advances from shareholders     (27,851   33,082  
   Net cash proceeds from issue of common shares     54,000     -  
     26,149     33,082  
Effect of Foreign Exchange Rate Changes     -     362  
Increase (decrease) in cash    (11,374   4,766  
Cash, beginning of period    11,674     6,769  
Cash, end of period  300   11,535  
Supplemental Information:         
Interest paid  $  -   $  -  
Income taxes paid  $  -   $  -  

 

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






ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Interim Consolidated Statement of Shareholders’ Deficiency

Period from January 1, 2007 to March 31, 2008

(Unaudited)

 

            Accumulated  
    Common Shares         Other    
      Additional  Units   Accumulated  Comprehensive  
  Shares  Amount  Paid-In Capital   Subscribed   Deficit    Income (Loss)    Total  
    $  $  $   $   $   $  
Balance, December 31, 2006  13,952,000  13,952  90,998  -   (177,777 (766 (73,593
Funds received for units subscribed  18,080   -   -   18,080  
Net loss  -   (139,454 -   (139,454
Balance, December 31, 2007  13,952,000  13,952  90,998  18,040   (317,231 (766 (194,967
Stock issued for cash at $0.001  2,100,000  2,100  69,980  (18,080 -   -   54,000  
Net loss  -   (48,545 -   (48,545
Balance, March 31, 2008  16,052,000  16,052  160,978  -   (365,776 (766 (189,512

 

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




ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Notes to Interim Consolidated Financial Statements

March 31, 2008

(Unaudited)



1.

EXPLORATION STAGE COMPANY AND GOING CONCERN



Angstrom Technologies Corp. (formerly Sanford Exploration, Inc.) (the “Company” or “Angstrom”) was incorporated in the state of Nevada, U.S.A. on February 24, 2005.  The Company’s mineral exploration operations were conducted by its wholly owned subsidiary, Sanford Exploration (Canada), Inc., which was incorporated in the Province of British Columbia, Canada on March 14, 2005.  The Company was an Exploration Stage Company, as defined by Statement of Financial Accounting Standard ("SFAS") No.7, "Accounting and Reporting by Development Stage Enterprises" and cumulative since inception disclosures included in the consolidated financial statements through December 31, 2007.  As a result in the change of business described below, the Company is no longer considered a development stage company and as such, all disclosure required under SFAS No. 7 have been discontinued.  


During the third quarter of 2007, the Company announced its intention to divest of its mineral development business and engage exclusively in software development and computer technology.  In connection with this announcement, the Company gave notice to the Assignor to terminate the option agreement.  To facilitate this change of business, on February 1, 2008, Angstrom Technologies Corp. (“ATC”), a Nevada company, was incorporated as a wholly-owned subsidiary of the Company.  Effective February 19, 2008, ATC exchanged all of its outstanding shares for one common share of the Company and the combined entity was continued under the name Angstrom Technologies Corp.

As a result of an acquisition more fully described in note 7(a), the Company changed its name to Angstrom Microsystems Corp. effective April 21, 2008.

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of operations.  The Company has not generated revenue since inception, has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future.  The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, confirmation of the Company's interests in the underlying properties, and the attainment of profitable operations.  As at March 31, 2008, the Company has accumulated losses of $365,776 since inception and has a working capital deficiency of $189,512.  These factors raise substantial doubt regarding the Company's ability to continue as a going concern.  These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.



2.

SIGNIFICANT ACCOUNTING POLICIES



Basis of presentation


The unaudited consolidated financial information furnished herein reflects all adjustments, which, in the opinion of management, are necessary to fairly state the Company's financial position and the results of its operations for the periods presented.  This report on Form 10-Q should be read in conjunction with the Company's Form 10-K for the fiscal year ended December 31, 2007. The Company assumes that the users of the financial information herein have read or have access to the audited consolidated financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context.  Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company's Form 10-K for the fiscal year ended December 31, 2007, has been omitted. The results of operations for the three-month period ended March 31, 2008 are not necessarily indicative of results for the entire year ending December 31, 2008.

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in US dollars.  The Company's fiscal year-end is December 31.

The consolidated financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:







ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Notes to Interim Consolidated Financial Statements

March 31, 2008

(Unaudited)



2.

SIGNIFICANT ACCOUNTING POLICIES - continued



Principles of Consolidation


The consolidated financial statements include the accounts and operations of Angstrom Technologies Corp. (formerly Sanford Exploration, Inc.) and its wholly owned subsidiary Sanford Exploration (Canada), Inc. All inter-company accounts and transactions have been eliminated on consolidation.


Uses of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Financial statement items subject to significant judgment include expense accruals, as well as income taxes and loss contingencies.  Actual results could differ from those estimates.


Mineral Property Costs

The Company had been in the exploration stage since its inception on February 24, 2005 through its change of business on February 1, 2008, and did not realized any revenues from its planned operations.  It was primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02, "Whether Mineral Rights Are Tangible or Intangible Assets."  The Company assesses the carrying costs for impairment under SFAS 144, "Accounting for Impairment or Disposal of Long Lived Assets," at each fiscal quarter end.  When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property are capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.


Long-lived Assets

In accordance with the Financial Accounting Standards Board ("FASB") SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment.  The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset.  Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.


Regulatory Matters


The Company and its mineral property interest are subject to a variety of federal, provincial and state regulations governing land use, health, safety and environmental matters.  The Company’s management believes it has been in substantial compliance with all such regulations






ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Notes To Interim Consolidated Financial Statements

March 31, 2008

(Unaudited)



2.

SIGNIFICANT ACCOUNTING POLICIES - continued



Cash and Cash Equivalents


The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents.  At March 31, 2008 and December 31, 2007, the Company had no cash equivalents.


Foreign Currency Translation


Gains and losses arising upon settlement of foreign currency denominated transactions or balances are included in the determination of income.  The Company’s functional currency is the U.S. dollar.  Transactions in foreign currency are translated into U.S. dollars in accordance with the SFAS No. 52 as follows:


i.

monetary items at the rate prevailing at the balance sheet date;

ii.

non-monetary items at the historical exchange rate;

iii.

revenue and expenses at the average rate in effect during the applicable accounting period.


Translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders deficiency.


Financial Instruments

The carrying values of the Company’s financial instruments, which comprise cash, accounts payable and accrued liabilities and due to shareholder, approximate their fair values due to the immediate or short-term maturity of these instruments.  Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.


Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not.   The Company has adopted SFAS No. 109, "Accounting for Income Taxes," as of its inception.  Pursuant to SFAS No. 109, the Company is required to compute tax asset benefits for net operating losses carried forward.  The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will be able to utilize the net operating losses carried forward in future years.

Basic and Diluted Loss Per Share

The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share."  The standard requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares outstanding during the period.  Diluted EPS gives effect to all dilutive potential common shares outstanding during the reporting period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of convertible debt, stock options or warrants.  Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.  Basic and diluted loss per share is computed using the weighted average number of common shares outstanding.  Diluted EPS and the weighted average number of common shares exclude all dilutive potential shares since their effect would be anti-dilutive.  At March 31, 2008 and December 31, 2007, the Company has no stock equivalents that were anti-dilutive and excluded from the loss per share calculation.








ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Notes to Interim Consolidated Financial Statements

March 31, 2008

(Unaudited)



2.

SIGNIFICANT ACCOUNTING POLICIES - continued



Stock-based Compensation

Prior to January 1, 2006, the Company accounted for stock-based awards under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," using the intrinsic value method of accounting, under which compensation expense was only recognized if the exercise price of the Company's employee stock options was less than the market price of the underlying common stock on the date of grant.  Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R) "Share Based Payments," using the modified retrospective transition method.  The Company had not issued any stock options or share based payments prior to January 1, 2006.  Accordingly, there was no effect on the Company's reported loss from operations, cash flows or loss per share as a result of adopting SFAS No. 123(R).


Advertising Costs

Advertising costs are expensed as incurred.  No advertising costs have been incurred by the Company to date.


Revenue Recognition


The Company recognizes revenue in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 101,"Revenue Recognition in Financial Statements" ("SAB 101") as modified by SEC Staff Accounting Bulletin No.104. Under SAB 101, revenue is recognized at the point of passage to the customer of title and risk of loss, there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured.


Comprehensive Income


The Company has adopted SFAS No. 130, "Reporting Comprehensive Income," which establishes standards for reporting and the display of comprehensive income, its components and accumulated balances.  Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners or distributions to owners.  Among other disclosures, SFAS No. 130 requires that all items that are required to be recognized under the current accounting standards as a component of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements.  Comprehensive income (loss) is displayed in the statement of shareholders' equity and in the balance sheet as a component of shareholders' equity.


Recent Accounting Pronouncements


In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statements No. 109 ("FIN 48").  FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a two-step method of first evaluating whether a tax position has met a more likely than not recognition threshold and, second, measuring that tax position to determine the amount of benefit to be recognized in the financial statements.  FIN 48 provides guidance on the presentation of such positions within a classified statement of financial position as well as on derecognition, interest and penalties, accounting in interim periods, disclosure, and transition.  FIN 48 is effective for fiscal years beginning after December 15, 2006.  The adoption of this statement did not have a material effect on the Company's reported financial position or results of operations.




.









ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Notes to Interim Consolidated Financial Statements

March 31, 2008

(Unaudited)



2.

SIGNIFICANT ACCOUNTING POLICIES - continued



Recent Accounting Pronouncements (continued)


In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (“FAS 157”).  The objective of FAS 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements.  FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.  FAS 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements.  The provisions of FAS 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007.  In November 2007, the FASB announced an option to defer implementation of some of the requirements of this standard for certain non-financial assets and liabilities.


Beginning January 1, 2008, the Company partially applied FAS 157 as allowed by FASB Staff Position (“FSP”) 157-2, which delayed the effective date of FAS 157 for nonfinancial assets and liabilities. As of January 1, 2008 the Company has applied the provisions of FAS 157 to its financial instruments and the impact was not material.  Under FSP 157-2, the Company will be required to apply FAS 157 to its nonfinancial assets and liabilities beginning January 1, 2009. Management is currently reviewing the applicability of FAS 157 to the Company’s nonfinancial assets and liabilities and the potential impact that application will have on its consolidated statements.


In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115."  This statement permits entities to choose to measure many financial instruments and certain other items at fair value.  Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option.  However, the amendment to SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007.  Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157.  As of January 1, 2008, the Company has applied the provisions of FAS 159 to its financial instruments and the impact was not material


In December 2007, the FASB issued Statement No. 141(R), Business Combinations (“FAS 141R”), replacing FAS 141, Business Combinations (“FAS 141”).  This statement retains the fundamental requirements in FAS 141 that the acquisition method of accounting (which FAS 141 termed the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination.  This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.  This Statement clarifies that acquirers are required to expense costs related to any acquisitions.  FAS 141R will apply prospectively to business combinations for which the acquisition date is on or after fiscal years beginning December 15, 2008.  Early adoption is prohibited.  The Company has not yet evaluated the impact, if any, that FAS 141R will have on its financial statements.  Determination of the ultimate effect of this statement will depend on the Company’s structure at the date of adoption.






ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Notes to Interim Consolidated Financial Statements

March 31, 2008

(Unaudited)



2.

SIGNIFICANT ACCOUNTING POLICIES - continued



Recent Accounting Pronouncements (continued)


In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — An Amendment of ARB No. 51 (“FAS 160”).  FAS 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.  Specifically, this statement requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the parent’s equity.  The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement.  FAS 160 clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest.  In addition, this statement requires that a parent recognize a gain or loss in net income

when a subsidiary is deconsolidated.  Such gain or loss will be measured using the fair value of the noncontrolling equity investment on the deconsolidation date.  FAS 160 also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest.  FAS 160 is effective for fiscal years beginning on or after December 15, 2008, with retrospective presentation and disclosure for all periods presented.  Early adoption is prohibited.  The Company currently has no entities or arrangements that will be affected by the adoption of FAS 160. However, determination of the ultimate effect of this pronouncement will depend on the Company’s structure at the date of adoption.



3.

MINERAL EXPLORATION PROPERTY



By an Assignment Agreement dated August 15, 2005, the Assignor assigned, transferred and set over to the Company all rights, title, interest and benefits held by or granted to the Assignor in and to a purchase and sale agreement dated December 10, 2004, whereby the Assignor acquired an option to purchase a 100% interest in 11 unpatented mineral claims.  The 11 mineral claims cover a total of 1,800 acres (728 hectares) located in the south end of Gillies Limit Township in the Larder Lake Mining Division of the Province of Ontario, Canada.


The Company assumed and agreed to perform all obligations of the Assignor under the purchase and sale agreement as follows


i.

$5,000 CDN payment to the Optionor upon execution of the agreement (paid by the Assignor);


ii.

The Company shall pay the Optionor a further total of $50,000 CDN within three (3) months after the shares of the Company begin trading to the public on any stock exchange or quotation system in North America after the filing of a prospectus or registration statement, as applicable (trading date);


iii.

The Company performed and recorded $10,000 CDN of assessment work on the mineral claims due in August 2005 and, at its option, shall perform such assessment work so as to keep the relevant mining claims and interests subject to the option provided for herein in good standing;





ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Notes to Interim Consolidated Financial Statements

March 31, 2008

(Unaudited)



3.

MINERAL EXPLORATION PROPERTY - continued



iv.

Upon completion of all payments and obligations, the Optionor shall transfer a 100% interest in the mineral claims to the Company and the Company shall, thereupon, grant the Optionor a net smelter return royalty (“royalty”), subject to, at the Optionee’s discretion, the option of buying back up to 2% of the 3% royalty by paying $500,000 CDN to retire each such 0.5% portion of the royalty.  The Company shall have a first right of refusal on the remaining 1% royalty held by the Optionor.  The royalty or any part of it shall not be assignable without the consent of the Company (not to be unreasonably withheld), and any such assignment shall be subject to the buy-back and right of first refusal described above provided that the first 2% portion assigned shall be subject to the buy back.


Effective August 5, 2007, the Company gave notice to termination the option agreement including a release payment of $20,603.  This has been accepted by the assignor and a release was granted on October 30, 2007.



4.

COMMON STOCK TRANSACTIONS



Private Placements


In January 2008, the Company closed a non-brokered private placement for 1,500,000 units at $0.04 per unit, each unit comprising one common share and one common share purchase warrant, for net proceeds of $54,000.  Each share purchase warrant allows the unit holder to purchase one common share for $0.06 on or before January 25, 2010.  

         

Funds Advanced for Units Subscribed


On December 22, 2007, the Company entered into a subscription agreement to issue 600,000 units at $0.04 per unit, each unit comprising one common share and one common share purchase warrant, for net proceeds of $18,080.  Each share purchase warrant entitles the unit holder to purchase one common share for $0.06 on or before December 22, 2009.  The units were issued January 2008.


Common Stock Split


On February 1, 2008, the Board of Directors approved a stock split on a basis of two new common shares for one old common share of the Company such that the authorized share capital of Sanford was increased from 75,000,000 to 150,000,000 and the corresponding issued and outstanding common shares increased from 8,026,000 to 16,052,000.  Pursuant to SAB Topic 4c, all common share information presented in the accompanying consolidated financial statements and the notes thereto is retroactively presented on a post-conversion basis, including all share amounts and per share prices.





















ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Notes to Interim Consolidated Financial Statements

March 31, 2008

(Unaudited)



5.

INCOME TAXES



a)

Provision for Income Taxes - Current


The difference between the actual income tax recovery and the expected corporate income tax recovery relates to losses not recognized.  The following table summarizes the differences from the statutory rate of approximately 34% (2006 – 34%) to the Company’s current tax provision recorded.



Three Months Ended

Three Months Ended

March 31,

March 31,

2008

2007



Loss before recovery of income taxes

$ (48,545)

$ (10,484)



Expected income tax recovery at statutory rates

(16,505)

(3,565)

Increase in valuation allowance with respect to

  current period loss

16,505

3,565


Provision for income taxes - current

$           -  

$          -  



b)

Deferred Income Taxes


The approximate tax effects of each type of temporary difference that gives rise to the Company’s deferred income tax assets and liabilities are as follows:



Three Months Ended

Year Ended

March 31,

December 31,

2008

2007



Non-capital losses

$ 83,000

$   67,000

  

Mineral properties

-  

42,000


Deferred income tax asset before valuation allowance

83,000

109,000

Valuation allowance

(83,000)

(109,000)


$           -  

$            -  



Tax Loss Carry-Forwards


At March 31, 2008, the Company had approximately $173,000 of unclaimed development and exploration expenditures and $190,000 of non-capital losses carried forward available to reduce future taxable income at various dates through 2027


6.

RELATED PARTY TRANSACTIONS AND BALANCES



(a)

The Company entered into an agreement with a director to serve the Company and its subsidiary as an executive officer.  In consideration, the Company has agreed to pay $500 U.S. per month. The agreement may be terminated by the director by giving 30 days written notice or by the Company at any time with 30 days written notice. Termination of the agreement by the Company requires the Company to make no other payments except for outstanding amounts of salary and expenses.   Management fees of $0 were incurred for the three months ended March 31, 2008 (2007 - $1,500).











ANGSTROM TECHNOLOGIES CORP.

(Formerly Sanford Exploration, Inc.)

Notes to Interim Consolidated Financial Statements

March 31, 2008

(Unaudited)




6.

RELATED PARTY TRANSACTIONS AND BALANCES - continued



The Company entered into an agreement with a director to serve the Company and its subsidiary as an executive officer. The executive will not be compensated for the performance of these services until such a time as the Company begins to earn revenue.  The agreement may be terminated by the director by giving 30 days written notice or by the Company at any time with 30 days written notice.  Termination of the agreement by the Company requires the Company to make no other payments except for outstanding amounts of salary and expenses.

.

Both contracts were terminated in September 2007 and, effective October 11, 2007, the director resigned.


(b)

The Company entered into a one-year agreement commencing October 1, 2007 with a director to serve the Company and its subsidiary as an executive officer.  In consideration, the Company has agreed to pay $36,000 U.S. per annum and a travel allowance of $500 U.S. per month.  Management fees of $9,000 and a travel allowance of $1,500 were charged for the three months ended March 31, 2008 (2007 - $0).


(c)

The Company incurred costs associated with the issuance of shares in the amount of $6,000 for the three months ended March 31, 2008 (2007 - $0) from a Company related to a director of Angstrom.


(d)     

The Company received advances from a shareholder who is also a director. The advance is non-interest bearing, unsecured and without specific terms of repayment.


The value of transactions with related parties is based on the exchange amounts, representing the amounts established and agreed on by the related parties.


7.

SUBSEQUENT EVENTS



(a)

Pursuant to a Letter of Agreement signed February 20, 2008 and effective April 8, 2008, the Company formed Angstrom Acquisition Corp. (the “Subsidiary”), a wholly-owned subsidiary which acquired all of the issued and outstanding shares of Angstrom Microsystems Inc. (“AMI”), a software and computer technology business located in Boston, Massachusetts, in exchange for 6,927,816 common shares of the Subsidiary.  The value attributed to the common shares (being $277,113) was based on the share price of the most recent private placement completed in January 2008.  For accounting purposes, the acquisition is considered a purchase by the Company.  The estimated fair value of the assets and liabilities assumed on the acquisition date are as follows


Total assets       $     143,140

Total liabilities    (2,935,177)


Deficiency        $ (2,792,037)


(b)    

In April 2008, Angstrom closed several private placements totaling 1,250,000 units at a price of $1.00 per unit for net proceeds of $1,106,000.  Each unit comprised one common share of the Company and one-half share purchase warrant. One full purchase warrant is required to acquire one additional share at a price of $0.12 per share for a period of two years from the closing date.


(c)     

On April 8, 2008, the Board of Directors adopted an Incentive Stock Option Plan (the “Plan”).  Under the Plan, options to acquire shares of common stock of the Company may be granted to directors, officers, consultants and employees of AMI.  A total of 10,000,000 shares of common stock are authorized for issuance under the Plan.  In accordance with the acquisition noted in (a) above, the Company granted 734,470 options at an exercise price of $0.20 expiring 24 months after issuance.











ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Background

On March 27, 2008, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Angstrom Microsystems Inc. (“AMI”) and Angstrom Acquisition Corp. (“Angstrom Sub”), a private Delaware corporation formed for the purpose of acquiring all of the outstanding shares of AMI thereby merging Angstrom Sub and resulting in “Angstrom Microsystems Inc.” being a direct, wholly-owned subsidiary of Angstrom. Under the terms of the Merger Agreement we agreed, among other things, to  issue up to 6,927,816 shares of our common stock to the shareholders of AMI on a basis of 1.1 Angstrom shares for each 1 AMI share held.  Effective April 9, 2008, we closed our acquisition of AMI and Angstrom Sub was merged into AMI with AMI being the sole surviving entity under the name “Angstrom Microsystems Inc.” and ATC being the sole shareholder of the surviving entity.


Following the completion of the acquisition of AMI, we are now engaged in the business of software development and computer technology.   We specialize in Green computing solutions, providing blade servers and workstations uniquely designed for the energy-hungry datacenter sector. Angstrom provides software-based acceleration to significantly reduce the number of machines required to perform a given task. Angstrom combines this technology with novel cooling techniques to further reduce energy consumption in the datacenter. Fewer machines for the same performance coupled with less cooling power required per machine results in a more energy-efficient datacenter.


Over the next twelve months, we plan to continue development of our software and hardware products.  In addition, we intend to expand our sales force by direct hiring and/or strategic acquisitions.  Angstrom plans to continue building its Green computing brand and market it at tradeshows, publications and through partners.   We anticipate that we will have to raise additional funds through private placements of our equity securities and/or debt financing to complete our business plan. There is no assurance that the financing will be completed as planned or at all. We have not been successful raising the funding necessary to proceed with our business plan. Further, we believe that our company may have difficulties raising capital until we locate a prospective business opportunity through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail.

Recent Corporate Developments

Since the end of our fiscal year ended December 31, 2007, we have experienced the following significant corporate developments:

1.

On February 19, 2008, we effected a two (2) for one (1) stock split of our authorized and issued and outstanding common stock. As a result, our authorized capital has increased from 75,000,000 shares of common stock with a par value of $0.001 to 150,000,000 shares of common stock with a par value of $0.001.

2.

On February 20, 2008, we entered into a letter of intent with Angstrom Microsystems Inc. (“AMI”) and all of the stockholders of AMI, for the purpose of acquiring all of the issued and outstanding shares of AMI. Pursuant to the terms of the Letter of Intent, subject to the entry into a definitive agreement between the parties, stockholders of AMI would receive 1.1 shares of our common stock for each AMI share held.  Subsequently on March 27, 2008, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with AMI and Angstrom Acquisition Corp. (“Angstrom Sub”), a private Delaware corporation formed for the purpose of acquiring all of the outstanding shares of AMI thereby merging Angstrom Sub and resulting in “Angstrom Microsystems Inc.” being a direct, wholly-owned subsidiary of Angstrom. Under the terms of the Merger Agreement we agreed to issue up to 6,927,816 shares of our common stock to the shareholders of AMI on a basis of 1.1 Angstrom shares  to  for each 1 AMI share held.  

3.

Following completion of all of the closing conditions of the Merger Agreement, on April 9, 2008, Angstrom Sub was merged into AMI with AMI being the sole surviving entity under the name “Angstrom Microsystems Inc.” and Angstrom Sub being the sole shareholder of the surviving entity.  Upon due delivery of an executed letter of transmittal, accredited investor certificate and old AMI share certificate, AMI stockholders shall receive up to an aggregate of 6,927,816 shares of our common stock representing approximately 30% of the issued and outstanding shares of the Company after issuance of the shares. Also in connection with the closing of the Merger Agreement, the Company issued 734,470 options to employees of AMI pursuant to the 2008 Incentive Stock Option Plan adopted by the Company at closing. Pursuant to the terms of the Merger Agreement, all of the shareholders of AMI which are to receive securities of Angstrom in connection with the merger agree to use their best efforts for a two year period following closing of the transaction (the “Lock-Up Period”), not to directly or indirectly offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any ATC shares acquired or acquirable by them pursuant to the Merger Agreement. ATC agreed following the Lock-Up Period that it will register the ATC shares  issued to the ATC shareholders upon request of at least 90% of the shareholders.

4.

Effective April 21, 2008, we changed our name from “Angstrom Technologies Corp.” to “Angstrom Microsystems Corp.”. The name change has been effected pursuant to a merger with our wholly owned subsidiary Angstrom Microsystems Corp. which was incorporated specifically for the purpose of changing our name. We have changed the name of our company to better reflect the proposed future direction and business of our company.  The name change became effective with the Over-the-Counter Bulletin Board on May 2, 2008 under the new stock symbol “AGMS”.

5.

Effective May 2, 2008, in accordance with the terms of the Merger Agreement, we appointed Lalit Jain, Nand Todi, and To-Hon Lam as members of our board of directors.  Also effective May 2, 2008, we appointed Lalit Jain as our President. Mr. Jain is presently our President, Chief Executive Officer and member of the board of directors. Alpha Pang remains as Chief Financial Officer, Secretary, Treasurer and member of the Board.

6.

During the quarter, we continued developing our next generation solutions based on feedback from our customers. We believe our cooling solutions  have several advantages including the use of non-conducting, non-toxic, environmentally friendly liquid in cooling our blade servers. Since the quarter end we have entered into an initial software deal for our accelerated computing solution with a licensing component for each unit sold and a marketing component. We plan to expand our software sales while developing software needed to address the key media markets over the remainder of the fiscal year.

7.

In April, 2008, the Company approved a private placement of up to 3,000,000 units at a price of $1.00 per unit, with each unit consisting of one share and one share purchase warrant entitling the holder to purchase an additional share at a price of $1.20.  Effective April 10, 2008 we closed the first tranche of the offering and issued 1,250,000 units to three subscribers at a price of $1.00 per unit.  The units were issued to the subscribers  pursuant to Regulation S of the Securities Act of 1933 on the basis that each subscriber represented that they were not a “US Person” as such term is defined in Regulation S. Proceeds of the offering were used to repay debt and for working capital purposes.  

Plan of Operation


Over the next twelve months, we plan to continue development of our software and hardware products.  In addition, we intend to expand our sales force by direct hiring and/or strategic acquisitions.  Angstrom plans to continue building its Green Computing brand and market it at tradeshows, publications and through partners.   


Cash Requirements


Over the next 12 months we anticipate that we will incur the following operating expenses:

 

 

 

 

Expense

 

Amount

 

Office space

$

140,000

 

Professional fees

$

250,000

 

Travel expenses

$

80,000

 

General and administrative

$

100,000

 

Employee Salaries

$

800,000

 

Marketing and Sales

$

960,000

 

Research and Development

$

1,000,000

 

Consulting Fees

$

450,000

 

Total

$

3,780,000 

 


Our estimated expenses over the next twelve months are approximately $3,780,000 and our cash position as at March 31, 2008 is $300.  We will need additional funds to meet our working capital requirements over the twelve month period ending March 31, 2009. Following the closing of our private placement of 1,250,000 units of our securities on April 10, 2008 we have raised an additional $1,250,000 for our operating expenses.  We anticipate that we will have to raise additional funds through private placements of our equity securities and/or debt financing to complete our business plan. There is no assurance that the financing will be completed as planned or at all.


Results of Operation


The following summary of our results of operations should be read in conjunction with our audited financial statements for the quarter ended March 31, 2008 which are included herein.  Our operating results for the quarters ended March 31, 2008 and 2007 are summarized as follows:


 

 

Three Months Ended
March 31, 2008

 

Three Months Ended
March 31, 2007

 

Percentage Increase/ (Decrease)

Revenue

$

Nil

$

Nil

 

N/A

Expenses

 

 

 

 

 

 

Bank Charges and interest

 

321

 

63

 

409.5%

Management fees

 

10,500

 

1,500

 

600%

Office and General (recovered)

 

(4,355)

 

-

 

(100%)

Professional fees

 

35,592

 

5,868

 

506.5%

Regulatory fees

 

6,487

 

3,053

 

112.5%

Net Loss

$

(48,545)

$

(10,484)

 

363%

Revenues

We have had no operating revenues since our inception on February 24, 2005 through to the period ended March 31, 2008.

Expenses

The increase in our general and administrative expenses for the period ended March 31, 2008 was primarily due to an increase in professional fees associated with the negotiation of and preparation of all documents related to our acquisition of Angstrom Microsystems Inc. during the quarter.

Liquidity and Capital Resources

Working Capital

 

 


March 31, 2008

 

December 31, 2007

Current Assets

$

41,122

$

18,456

Current Liabilities

 

230,634

 

213,423

Working Capital

$

(189,512)

$

(194,967)

Cash Flows

 

 

Three Months ended

March 31, 2008

 

Three Months ended

March 31, 2007

Cash flow from operating activities

$

(48,644)

$

10,484

Cash flow used in investing activities

 

-

 

-

Cash provided by financing activities

 

26,149

 

4,404

Foreign exchange effect on cash

 

-

 

362

Net increase (decrease) in cash

$

(11,374)

$

11,535

We had cash on hand of $300 and a working capital deficit of $189,512 as of March 31, 2008.  We anticipate that we will incur approximately $3,780,000  for operating expenses, including professional, legal and accounting expenses associated with our reporting requirements under the Exchange Act during the next 12 months.  Accordingly, we will need to obtain additional financing in order to complete our full business plan.

Cash Used In Operating Activities

Cash used in operating activities was funded by cash from financing activities.

Cash from Financing Activities

Cash generated by financing activities is attributable to the private placement financings of our common stock in December 2007 and advances from shareholders.

Going Concern

We have historically incurred losses and have incurred losses of $365,776 since inception.  Because of these historical losses, we will require additional working capital to develop our business operations.  We intend to raise additional working capital through private placements, public offerings, bank financing and/or advances from related parties or shareholder loans.

The continuation of our business is dependent upon obtaining further financing and achieving a break even or profitable level of operations.  The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current or future stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to either (i) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (ii) obtain additional financing through either private placements, public offerings and/or bank financing necessary to support our working capital requirements.  To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital.  No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us.  If adequate working capital is not available we may not increase our operations.

These conditions raise substantial doubt about our ability to continue as a going concern.  The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Application of Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

We have identified certain accounting policies, described below, that are most important to the understanding of our financial statements.

Uses of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Financial statement items subject to significant judgment include expense accruals, income taxes and loss contingencies.  Actual results could differ from those estimates.

Impairment of Long-lived Assets and Long-lived Assets to be Disposed of

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, our company reviews our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset.  If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Cash and Cash Equivalents

We consider all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents.  As at March 31, 2008, we had no cash equivalents.

Foreign Currency Translation

Gains and losses arising upon settlement of foreign currency denominated transactions or balances are included in the determination of income.  Our functional currency is the U.S. dollar.  Transactions in foreign currency are translated into U.S. dollars in accordance with the SFAS No. 52, Foreign Currency Translation, as follows:

(i)

monetary items at the rate prevailing at the balance sheet date;

(ii)

non-monetary items at the historical exchange rate;

(iii)

revenue and expenses at the average rate in effect during the applicable accounting period.

Reported in other comprehensive income (loss), a separate component of shareholders’ deficiency, are certain foreign currency translation adjustments.

Financial Instruments

The carrying values of the our company’s financial instruments, which comprise cash, accounts payable and accrued liabilities and due to shareholder, approximate their fair values due to the immediate or short-term maturity of these instruments.  The Company’s operations are in Canada which results in exposure to risks from changes in foreign currency rates and the degree of volatility of these rates.  We do not use derivative instruments to reduce our exposure to foreign currency risk.  Unless otherwise noted, it is management’s opinion that our company is not exposed to significant interest or credit risks in respect of its financial instruments.

Revenue Recognition

We recognize revenue in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (“SAB 101”), as modified by SEC Staff Accounting Bulletin No.104. Under SAB 101, revenue is recognized at the point of passage to the customer of title and risk of loss, there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured.  We have not generated revenue since inception.

Risks and Uncertainties

Technological change and evolving industry standards

The information technology industry is a fast developing industry and it’s characterized by rapidly changing technology, evolving industry standards, emerging competition and frequent introductions of new products and services.  If companies in the IT industry do not keep up with the most up-to-date technologies, they may find it difficult to compete with others who are able to keep abreast of the changes.  There is no assurance that the Company will continue to be able to do so in the future.  The Company’s business will be adversely affected if it is unable to successfully introduce new technology and enhancements and respond to rapid technology changes.

The Directors believe that the Company’s ability to compete successfully is also dependent upon the continued compatibility to its technology with products and architectures offered by other companies.  The introduction of new products or services by the Company or its competitors and any change in industry standards could cause customers to defer or cancel purchases of existing products and services, which may have a material adverse effect on the Company’s business, financial condition and results of operation.  In addition, services or technologies developed by others could render the Company’s services or technologies uncompetitive or obsolete.  While attention is paid to perceive changed in major trends in the market, the Company is still vulnerable to significant loss die to misinterpretation of market conditions.

Credit line risks

The Company requires credit line to compete deployments that are typically capital intensive.  The company may not be able to obtain these credit lines from banks or other financial resources.  The Company may not be able to accept orders in such cases, and thus can significantly and negatively affect the sales revenues or margins of the Company.  

Implementation of Business Plan may not be successful

The Directors expect that there will be a period of rapid growth in the future as a result of the implementation of the Business Plan.  This could place significant strain on the Company’s managerial, operational and financial resources.  To accommodate this growth, the Company must implement new or upgrade its existing operating and financial systems, procedures and controls.  Failure of the Company to manage its expansion or to obtain adequate financing in a timely manner may result in increased expenses or affect the implementation of the Business Plan and in turn slow down the pace of growth and affect the financial position and profitability of the Company.

Reliance on key management

The Company’s success is, to a substantial extent, attributable to the strategy and vision of its founder and the efforts of certain key members of its management team, in particular, Lalit Jain, CEO and President of Angstrom.  The details of the management team are set out in the section headed “Management Team” of this prospectus. In view of his knowledge and experience of the business of the Company, his continued involvement is important to the future prospects of the Company.  Should he cease to be involved in the Company’s business operations, the profitability of the Company may be adversely affected.

Risk of infringement of intellectual property by third parties

Mr. Jain has filed U.S. provisional patent applications that he intends to license to the Company.  At this point, the Company cannot guarantee whether these provisional patent applications will result in the issuance of a patent or patents.

The Company’s success partially depends on its ability to protect its proprietary technologies and processes.  The Company relies upon patents, copyrights, and trade secrets, laws and will also rely upon confidentiality and non-disclosure agreements and other measures to establish and protect its proprietary rights to its technologies, products and services.  Such protection may not be able to preclude competitors from infringing the Company’s intellectual property rights in its technologies, products and services.  Despite such precaution, it may be possible for a third party to copy or otherwise obtain and use such contents and technologies without the Company’s authorization, or to develop such technology independently.  There can also be no assurance that other companies will not obtain patents similar to or challenge the patents obtained by the Company.  In addition, policing unauthorized use of the Company’s proprietary contents and technology is difficult and there can be no assurance that the steps taken by the Company will prevent misappropriation or infringement of its rights.  In addition, legal proceedings may be necessary in the future to enforce the Company’s intellectual property rights, to protect its trade secrets and confidential information or to determine the validity and scope of the proprietary rights of others.  This could result in substantial costs and diversion of the Company’s resources and could have a material adverse effect on its business, financial condition and results of operations.  If a significant portion of the Company’s intellectual property is copies, reproduced or used without the Company’s authorization, the Company’s business may be adversely affected.

In developing the Company’s technologies, products and services, the Company has used various technologies or know-how which it believes are in the public domain, license to the Company or its otherwise has the right to use.  There can be no assurance, however, that third parties will not institute patent or other intellectual property infringement claims against the Company with respect to such technologies, products and services.

The Directors are not aware of any alleged claims of infringement of patents, copyrights or other intellectual property rights held by third parties in respect of the products manufactured by the Company. Thus, the Directors are not able to ascertain to the intellectual property of others. Intellectual property litigation is expensive and time consuming, and successful infringement claims against the Company may result in substantial monetary liability or disruption to the business of the Company.

Demand for technical and marketing personnel

The success of the Company’s operations lies in its ability to attract and retain employees with the appropriate technical expertise or business experience.  A shortage of key staff may reduce the Company’s ability to expand.

Size of competitors

The Company’s competitors are large and more well established – such as IBM, HP and Dell.  Marketing of such competitors or introduction of similar products, regardless of Company’s proven superiority in products, can result in a reduction of sales of Company’s products.  This may result in an adverse effect to the Company’s business.

We have a limited operating history and limited historical financial information upon which you may evaluate our performance.

We are in our early stages of development and face risks associated with a new company in a growth industry. We may not successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business to the point of having to cease operations and could impair the value of our common stock to the point investors may lose their entire investment. Even if we accomplish these objectives, we may not generate positive cash flows or the profits we anticipate in the future.

We will need substantial additional financing in the future to continue operations.

Our ability to continue present operations will be dependent upon our ability to obtain significant external funding. Additional sources of funding have not been established. We are exploring various financing alternatives.  There can be no assurance that we will be successful in securing such financing at acceptable terms, if at all. If adequate funds are not available from the foregoing sources, or if we determine it to otherwise be in our best interests, we may consider additional strategic financing options, including sales of assets.

We will rely on third-party suppliers and manufacturers to provide raw materials for and to produce our products, and we will have limited control over these suppliers and manufacturers and may not be able to obtain quality products on a timely basis or in sufficient quantity.

Substantially all of our products will be manufactured by unaffiliated manufacturers. We may not have any long-term contracts with our suppliers or manufacturing sources, and we expect to compete with other companies for raw materials, production and import quota capacity.

There can be no assurance that there will not be a significant disruption in the supply of raw materials from our intended sources or, in the event of a disruption, that we would be able to locate alternative suppliers of materials of comparable quality at an acceptable price, or at all. In addition, we cannot be certain that our unaffiliated manufacturers will be able to fill our orders in a timely manner. If we experience significant increased demand, or need to replace an existing manufacturer, there can be no assurance that additional supplies of raw materials or additional manufacturing capacity will be available when required on terms that are acceptable to us, or at all, or that any supplier or manufacturer would allocate sufficient capacity to us in order to meet our requirements. In addition, even if we are able to expand existing or find new manufacturing or raw material sources, we may encounter delays in production and added costs as a result of the time it takes to train our suppliers and manufacturers in our methods, products and quality control standards. Any delays, interruption or increased costs in the supply of raw materials or manufacture of our products could have an adverse effect on our ability to meet retail customer and consumer demand for our products and result in lower revenues and net income both in the short and long-term.

In addition, there can be no assurance that our suppliers and manufacturers will continue to provide raw materials and to manufacture products that are consistent with our standards. We may receive shipments of product that fail to conform to our quality control standards. In that event, unless we are able to obtain replacement products in a timely manner, we risk the loss of revenues resulting from the inability to sell those products and related increased administrative and shipping costs. In addition, because we do not control our manufacturers, products that fail to meet our standards or other unauthorized products could end up in the marketplace without our knowledge, which could harm our reputation in the marketplace.

We operate in a competitive industry and continue to be under the pressure of eroding gross profit margins, which could have a material adverse effect on our business.

The market for the products we intend to develop is very competitive and subject to rapid technological change. The prices for our intended products tend to decrease over their life cycle, which can result in decreased gross profit margins for us. There is also substantial and continuing pressure from customers to reduce their total cost for products. We expend substantial amounts on the value creation services required to remain competitive, retain existing business, and gain new customers, and we must evaluate the expense of those efforts against the impact of price and margin reductions.  If we are unable to effectively compete in our industry or are unable to maintain acceptable gross profit margins, our business could be materially adversely affected.

Products developed by us may be found to be defective and, as a result, warranty and/or product liability claims may be asserted against us, which may have a material adverse effect on the company.

We may face claims for damages as a result of defects or failures in our present or future products. Our ability to avoid liabilities, including consequential damages, may be limited as a result of differing factors, such as the inability to exclude such damages due to the laws of some of the countries where we do business. Our business could be materially adversely affected as a result of a significant quality or performance issue in the products developed by us, if we are required to pay for the damages that result.

Products developed by us require proprietary protection

We seek to protect our products through tradenames, trademarks, copyrights and licenses. Despite the efforts of the Company to protect and maintain its proprietary rights, there can be no assurance that the Company will be successful in doing so or that the Company’s competitors will not independently develop or patent products that are substantially equivalent or superior to the Company’s products.  

Infringement Could Lead to Costly Litigation and/or the Need to Enter into License Agreements, Which May Result in Increased Operating Expenses

Existing or future infringement claims by or against us may result in costly litigation or require us to license the proprietary rights of third parties, which could have a negative impact on our results of operations, liquidity and profitability.

We believe that our proprietary rights do not infringe upon the proprietary rights of others. As the number of titles in the industry increases, we believe that claims and lawsuits with respect to software infringement will also increase. From time to time, third parties have asserted that some of our titles infringed their proprietary rights. We have also asserted that third parties have likewise infringed our proprietary rights. These infringement claims have sometimes resulted in litigation by and against us. To date, none of these claims has negatively impacted our ability to develop, publish or distribute our software. We cannot guarantee that future infringement claims will not occur or that they will not negatively impact our ability to develop, publish or distribute our software.

Technology changes rapidly in our business and if we fail to anticipate or successfully implement new technologies or the manner in which people play our games, the quality, timeliness and competitiveness of our products and services will suffer.

Rapid technology changes in our industry require us to anticipate, sometimes years in advance, which technologies we must implement and take advantage of in order to make our products and services competitive in the market. Therefore, we usually start our product development with a range of technical development goals that we hope to be able to achieve. We may not be able to achieve these goals, or our competition may be able to achieve them more quickly and effectively than we can. In either case, our products and services may be technologically inferior to our competitors’, less appealing to consumers, or both. If we cannot achieve our technology goals within the original development schedule of our products and services, then we may delay their release until these technology goals can be achieved, which may delay or reduce revenue and increase our development expenses. Alternatively, we may increase the resources employed in research and development in an attempt to accelerate our development of new technologies, either to preserve our product or service launch schedule or to keep up with our competition, which would increase our development expenses.

From time to time we may become involved in other legal proceedings which could adversely affect us.

We are currently party to a number of legal proceedings listed below under the heading “Legal Proceedings”. There is no assurance that the outcome of our pending legal proceedings will be as expected and we could suffer significant losses due to any unfavourable judgments rendered in connection with the pending litigation. In addition we may become from time to time, subject to further legal proceedings, claims, litigation and government investigations or inquiries, which could be expensive, lengthy, and disruptive to normal business operations.  The outcome of any legal proceedings, claims, litigation, investigations or inquiries may be difficult to predict and could have a material adverse effect on our business, operating results, or financial condition.

Fluctuations in Quarterly Operating Results Lead to Unpredictability of Revenue and Earnings

The timing of the release of our hardware and software products can cause material quarterly revenue and earnings fluctuations. A significant portion of revenue in any quarter may be derived from sales of new products introduced in that quarter or shipped in the immediately preceding quarter. If we are unable to begin volume shipments of a significant new product during the scheduled quarter our revenue and earnings will be negatively affected in that period. In addition, because a majority of the unit sales for a product typically occur in the first thirty to one hundred twenty days following its introduction, revenue and earnings may increase significantly in a period in which a major product is introduced and may decline in the following period or in a period in which there are no major product introductions.

Quarterly operating results also may be materially impacted by factors, including the level of market acceptance or demand for products and the level of development and/or promotion expenses for a product. Consequently, if net revenue in a period is below expectations, our operating results and financial position in that period are likely to be negatively affected, as has occurred in the past.

Our common stock may be affected by limited trading volume and may fluctuate significantly.

There has been no public market for our common stock and there can be no assurance an active trading market for our common stock will develop. This could adversely affect our shareholders’ ability to sell our common stock in short time periods or possibly at all.  Our stock price could fluctuate significantly in the future based upon any number of factors such as: general stock market trends; announcements of developments related to our business; fluctuations in our operating results; announcements of technological innovations, new products or enhancements by us or our competitors; general conditions in the markets we serve; general conditions in the U.S. or world economy; developments in patents or other intellectual property rights; the performance of our eligible portfolio companies; and developments in our relationships with our customers and suppliers. Substantial fluctuations in our stock price could significantly reduce the price of our stock.

Our common stock is traded on the "Over-the-Counter Bulletin Board," which may make it more difficult for investors to resell their shares due to suitability requirements.

Our common stock is currently quoted for trading on Over the Counter Bulletin Board (OTCBB) where we expect it to remain in the foreseeable future.  Broker-dealers often decline to trade in OTCBB stocks given the market for such securities are often limited, the stocks are more volatile, and the risk to investors is greater. These factors may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of their shares. This could cause our stock price to decline.

Trading of our stock may be restricted by the SEC’s “Penny Stock” regulations which may limit a stockholder’s ability to buy and sell our stock.

The U.S. Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors.” The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of, our common stock.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4.  CONTROLS AND PROCEDURES.


Controls and Procedures


As of March 31, 2008, under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective.

 

Changes in Internal Control Over Financial Reporting


There were no changes in our internal controls over financial reporting during the quarter ended March 31, 2008 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.







PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

Other than as disclosed below, we know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


1.

Cooljag U.S.A. v. Angstrom Microsystems, Inc., Boston Municipal Court, docket number 07-01-CV -002041.  This is a default judgment against AMI in the amount of $14,997.74, exclusive of   interest and costs.


2.

Tester v. Angstrom Microsystems, Inc., San Diego County, Calif. Superior Court, Case No. 07-2007-00054558.  This is a default judgment against AMI  in San Diego County, Calif. Superior   Court in the amount of  $17,100  exclusive of interest and costs.


3.

Zip Ship, Inc. v. Angstrom Microsystems, Inc.  This is a consent judgment against the company in the amount of $8,106.66 arising from unpaid invoices.


4.

Integrated Dynamic Metals Corporation and J & J Machine Company, LLC v. Angstrom Microsystems, Inc. and Lalit Jain., Boston Municipal Court, C.A. No. 08 01 CV 000958.  The   suit is an action for goods and labor sold and delivered. The plaintiffs are demanding judgment in   the total amount of $16,678.02.


5.

Mercury Business Services, Inc. v. Angstrom Microsystems, Inc., Boston Municipal Court, C.A. No. 08 01 CV 001241.  The suit is an action for goods and labor sold and delivered. The plaintiff   is demanding judgment in the total amount of $4,684.74.


6.

DecisionOne Corp v. Angstrom Microsystems, Inc., Boston Municipal Court, C.A. No. 07 01 CV 6414.  The suit is an action for goods and labor sold and delivered. The plaintiff is demanding   judgment in the total amount of $6,770.54.

  

7.

Mike OConnell d/b/a K2 Logistics v. Angstrom Microsystems, Inc. and Lalit Jain, Boston Municipal Court, C.A. No. 08 05 SC 169.  The plaintiff seeks compensation for the provision of transportation services for under $2,000.


8.

Flextronics


Flextronics, through counsel, made a written demand for payment in the amount of $28,375.00 for unpaid invoices.  


9.

University of Utah  University of Utah, through its general counsel, made written demand on Angstrom claiming that on or about October 18, 2006, Angstrom received an erroneous double payment from the University in the amount of $14,100.00.


10.

AirTrans Logistics, Inc.

This vendor made demand on Angstrom for goods sold and delivered in the amount of $11,127.25.  Accordingly, by letter dated March 12, 2008, this vendor made demand on Angstrom for $10,627.25, and has threatened the institution of suit.

ITEM 1A.  RISK FACTORS

Not Applicable.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January 25, 2008, we closed a private placement of 2,100,000 units (post two for one forward split) at a purchase price of $0.04 per unit (post split), for gross proceeds of $84,000. Each unit consisted of one common share and one common share purchase warrant exercisable for a period of two years from closing at an exercise price of $0.06 (post-split). We issued all of the 2,100,000 units to three subscribers who represented to us that they were not “U.S. persons” (as that term is defined in Regulation S promulgated under the Securities Act of 1933) in reliance on the exemption from registration provided by Regulation S and/or Section 4(2) of the Securities Act of 1933.

In April, 2008, the Company approved a private placement of up to 3,000,000 units at a price of $1.00 per unit, with each unit consisting of one share and one share purchase warrant entitling the holder to purchase an additional share at a price of $1.20.  Effective April 10, 2008 we closed the first tranche of the offering and issued 1,250,000 units to three subscribers at a price of $1.00 per unit.  The units were issued to the subscribers  pursuant to Regulation S of the Securities Act of 1933 on the basis that each subscriber represented that they were not a “US Person” as such term is defined in Regulation S. Proceeds of the offering were used to repay debt and for working capital purposes.  

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.  SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

ITEM 5.  OTHER INFORMATION

None






- 4 -


ITEM 6.  EXHIBITS

Exhibits required by Item 601 of Regulation S-B

Exhibit
Number


Description

(3)

(i) Articles of Incorporation; and (ii) Bylaws

3.1

Articles of Incorporation (incorporated by reference from our Form SB-2 filed on November 8, 2006)

3.2

Bylaws (incorporated by reference from our Form SB-2 filed on November 8, 2006)

3.3

Articles of Merger filed with the Nevada Secretary of State on February 8, 2008, effective February 19, 2008 (incorporated by reference from our Current Report on Form 8-K filed on February 19, 2008)

3.4

Certificate of Change filed with the Nevada Secretary of State on February 8, 2008, effective February 19, 2008 (incorporated by reference from our Current Report on Form 8-K filed on February 19, 2008)

3.5

Articles of Merger filed with the Nevada Secretary of State on April 21, 2008 (incorporated by reference from our Current Report on Form 8-K filed on May 2, 2008)

4.1

Form of Warrant Certificate for Offering completed January 25, 2008 (incorporated by reference from our Form 8-K filed on February 1, 2008)

(10)

Material Contracts

10.1

Agreement between Raven Resources Inc. and Emporio Explorations Corp. (incorporated by reference from our Form SB-2 filed on November 8, 2006)

10.2

Agreement between Emporio Explorations Corp. and Sanford Exploration (Canada) Inc. (incorporated by reference from our Form SB-2 filed on November 8, 2006)

10.3

General Release dated November 2, 2007 from Raven Resources Inc. (incorporated by reference from our Form 10-QSB filed on November 29, 2007)

10.4

Letter of Intent dated February 20, 2008 among Angstrom Technologies Corp.,  Angstrom Microsystems Inc. and the shareholders of Angstrom Microsystems Inc. (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

10.5

Agreement and Plan of Merger dated March 27, 2008 between Angstrom Acquisition Corp.. Angstrom Technologies Corp. and Angstrom Microsystems Inc. (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

10.6

Engagement Agreement Between Angstrom Microsystems Inc., Harbour Capital Management Group (1999) Inc. and Harbour Capital Ventures West LLC dated August 8, 2007 (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

10.7

Jain Employment Agreement (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

10.8

2008 Incentive Stock Option Plan (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

10.9

Registration Rights Agreement (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

10.10

Lock-Up Agreement (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

10.11

Assignment Agreement between Harbour Capital Management Group (1999) Inc., ATC and AMI assigning Harbour Capital Agreements rights to ATC (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

10.12

Licence Agreement between Lalit Jain and Angstrom Microsystems Inc. licensing rights to provisional patents (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

10.13

Consulting Agreement between Angstrom Microsystems, Inc. and Keith Johnson dated April 5, 2007 (incorporated by reference from our Current Report on Form 8-K filed on April 15, 2008)

(14)

Code of Ethics

14.1*

Code of Business Conduct and Ethics (incorporated by reference from our Annual Report on Form 10-KSB filed on April 2, 2008)

(31)

Rule 13a-14(a)/15d-14(a) Certifications

31.1*

Section 302 Certification under Sarbanes-Oxley Act of 2002

31.2*

Section 302 Certification under Sarbanes-Oxley Act of 2002

(32)

Section 1350 Certifications

32.1*

Section 906 Certification under Sarbanes-Oxley Act of 2002

32.2*

Section 906 Certification under Sarbanes-Oxley Act of 2002

*Filed herewith






- 5 -


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.

ANGSTROM MICROSYSTEMS CORP.

/s/ Lalit Jain

Lalit Jain

President and Chief Executive Officer
(Principal Executive Officer)

May 16, 2008

/s/ Alpha Pang

Alpha Pang

Chief Financial Officer, Treasurer and Secretary

(Principal Financial Officer and Chief Accounting Officer)

May 16 2008