10-Q 1 f10q123109_xyberhome.htm QUARTERLY REPORT f10q123109_xyberhome.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 December 31, 2009
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ______to______.
 
Commission File No.: 000-52866
 
XYBERHOME, INC.
(Exact name of registrant as specified in Charter
 
Delaware
 
38-3794899
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employee Identification No.)

212 Carnegie Center, #206
Princeton, NJ 08540
 (Address of Principal Executive Offices)
 _______________
(609) 524-2560
 (Issuer Telephone number)
_______________
 
 (Former Name or Former Address if Changed Since Last Report)
 
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No ¨
 
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 February 16, 2010: 100,000 shares of common stock.
 
 

 
 
XYBERHOME, INC.
 
FORM 10-Q
 
December 31, 2009
 
INDEX
 
PART I-- FINANCIAL INFORMATION
 
Item 1.
Financial Statements
F-
Item 2.
Management’s Discussion and Analysis of Financial Condition
1
Item 3
Quantitative and Qualitative Disclosures About Market Risk
3
Item 4
Control and Procedures
3
 
PART II-- OTHER INFORMATION
 
Item 1
Legal Proceedings
4
Item 1A
Risk Factors
4
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
4
Item 3.
Defaults Upon Senior Securities
4
Item 4.
Submission of Matters to a Vote of Security Holders
4
Item 5.
Other Information
4
Item 6.
Exhibits
4
 
SIGNATURE
 
 

 
 
Item 1. Financial Information
 
 
XYBERHOME, INC.
(A DEVELOPMENT STAGE COMPANY)
 
FINANCIAL STATEMENTS
 
AS OF DECEMBER 31, 2009
 
 
FINANCIAL STATEMENTS
Page #
   
Independent Auditors Report F-1
   
Balance Sheet
F-2
   
Statement of Operations and Retained Deficit
F-3
   
Statement of Stockholders Equity
F-4
   
Cash Flow Statement
F-5
   
Notes to the Financial Statements
F-6
 
 


Gately & Associates, LLC


3551 W Lake Mary Blvd
Lake Mary, FL 32746
 
 
 
Report of Independent Registered Public Accounting Firm 
 
To the Board of Director and shareholders 
 
We have audited the accompanying balance sheet of XYBERHOME,INC. as of December 31, 2009 and 2008 and the related statement of operations, stockholders’ equity, and cash flows for the twelve months ended December 31, 2009 and 2008 and from inception (September 19, 2003) through the year then ended December 31, 2009. These financial statements are the responsibility of company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
 
We conducted our audit in accordance with standards of The Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly,  in all material respects, the financial position of XYBERHOME,INC. at December 31, 2009 and 2008 and the results of its operations and its cash flows for the twelve months ended December 31, 2009 and 2008 and from inception (September 19, 2003) through December 31, 2009 in conformity with U.S. Generally Accepted Accounting Principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
Gately & Associates, L.L.C.
 
Lake Mary, FL
 
February 9, 2010
 
 
F-1

 
Xyberhome, Inc.
 
(a development stage company)
 
BALANCE SHEETS
 
As of December 31, 2009 and September 30, 2009
 
             
ASSETS
 
             
CURRENT ASSETS
 
12/31/2009
   
9/30/2009
 
             
Cash
  $ 3,486     $ 3,368  
                 
       Total Current Assets
    3,486       3,368  
                 
FIXED ASSETS
               
                 
    Property & Equipment, Net
    1,292       1,391  
                 
       Total Fixed Assets
    1,292       1,391  
                 
       TOTAL ASSETS
  $ 4,778     $ 4,759  
                 
LIABILITIES AND STOCKHOLDER'S EQUITY
 
                 
CURRENT LIABILITIES
               
                 
    Accrued Expenses
  $ 1,225     $ 2,197  
    Shareholder Loans
    746,019       740,706  
                 
       Total Current Liabilities
    747,244       742,903  
                 
       TOTAL LIABILITIES
    747,244       742,903  
                 
STOCKHOLDER'S EQUITY
               
                 
    Preferred Stock - Par value $0.001
               
        Authorized: 50,000,000
               
        Issued & Outstanding: None
    -       -  
                 
    Common Stock - Par value $0.001;
               
        Authorized: 200,000,000
               
        Issued and Outstanding: 100,000
    100       100  
    Additional Paid-In Capital
    18,214       12,627  
    Accumulated Deficit
    (760,780 )     (750,871 )
                 
       Total Stockholder's Equity
    (742,466 )     (738,144 )
                 
       TOTAL LIABILITIES AND EQUITY
  $ 4,778     $ 4,759  
 
The accompanying notes are an integral part of these financial statements.
 
 
F-2

 
Xyberhome, Inc.
 
(a development stage company)
 
STATEMENT OF OPERATIONS
 
For the three months ending December 31, 2009 and 2008
 
And from inception (September 27, 2007) through December 31, 2009
 
                   
                   
   
3 months
   
3 months
       
   
ending
   
ending
   
FROM
 
   
12/31/2009
   
12/31/2008
   
INCEPTION
 
                   
REVENUE
  $ 102     $ -     $ 224  
                         
COST OF SERVICES
    -       -       -  
                         
GROSS PROFIT OR (LOSS)
    102       -       224  
                         
OPERATING EXPENSES:
                       
                         
     GENERAL AND ADMINISTRATIVE EXPENSES
    4,250       -       22,465  
                         
     DEPRECIATION
    99       -       231  
                         
     PROFESSIONAL FEES
    75       250       95,914  
                         
     STOCK COMPENSATION
    -       -       100  
                         
TOTAL OPERATING EXPENSES
    4,424       250       118,710  
                         
INTEREST EXPENSE
    5,587       -       15,465  
                         
RESEARCH AND DEVELOPMENT
    -       -       626,829  
                         
NET INCOME (LOSS)
    (9,909 )     (250 )     (760,780 )
                         
ACCUMULATED DEFICIT, BEGINNING BALANCE
    (750,871 )     (2,850 )     -  
                         
ACCUMULATED DEFICIT, ENDING BALANCE
  $ (760,780 )   $ (3,100 )   $ (760,780 )
                         
                         
Earnings (loss) per share
  $ (0.099 )   $ (0.003 )   $ (7.608 )
                         
Weighted average number of common shares
    100,000       100,000       100,000  
 
The accompanying notes are an integral part of these financial statements.
 
 
F-3

 
Xyberhome, Inc.
 
(a development stage company)
 
STATEMENT OF STOCKHOLDERS' EQUITY
 
From inception (September 27, 2007) through December 31, 2009
 
                               
         
COMMON
   
PAID
   
ACCUM.
   
TOTAL
 
   
SHARES
   
STOCK
   
IN CAPITAL
   
DEFICIT
   
EQUITY
 
                               
Stock issued on acceptance
                             
of incorporation expenses
                             
September 27, 2007
    100,000     $ 100     $ -     $ -     $ 100  
                                         
Net Loss
                            (600 )     (600 )
                                         
                                         
Total, September 30, 2007
    100,000       100       -       (600 )     (500 )
                                         
Net Loss
                            (2,250 )     (2,250 )
                                         
                                         
Total, September 30, 2008
    100,000       100       -       (2,850 )     (2,750 )
                                         
In-kind Contribution
                    12,627       -       12,627  
                                         
Net Loss
                            (748,021 )     (748,021 )
                                         
                                         
Total, September 30, 2009
    100,000     $ 100     $ 12,627     $ (750,871 )   $ (738,144 )
                                         
In-kind Contribution
                    5,587       -       5,587  
                                         
Net Loss
                            (9,909 )     (9,909 )
                                         
                                         
Total, December 31, 2009
    100,000     $ 100     $ 18,214     $ (760,780 )   $ (742,466 )
 
The accompanying notes are an integral part of these financial statements.
 
 
F-4

 
Xyberhome, Inc.
 
(a development stage company)
 
STATEMENTS OF CASH FLOWS
 
For the three months ending December 31, 2009 and 2008
 
From inception (September 27, 2007) through December 31, 2009
 
                   
   
3 months
   
3 months
       
   
ending
   
ending
   
FROM
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
12/31/2009
   
12/31/2008
   
INCEPTION
 
                   
    Net income (loss)
  $ (9,909 )   $ (250 )   $ (760,780 )
                         
    In-kind Contribution
    5,587       -       18,214  
    Depreciation
    99       -       231  
    Stock issued as compensation
    -       -       100  
    Increase (Decrease) in Accrued Expenses
    (971 )     250       1,226  
                         
       Total adjustments to net income
    4,715       250       19,771  
                         
    Net cash provided by (used in) operating activities
    (5,194 )     -       (741,009 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
                         
    Office Equipment
    -       -       (1,523 )
 
                       
    Net cash flows provided by (used in) investing activities
    -       -       (1,523 )
                         
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
                         
    Shareholder advances
    5,312       -       746,018  
                         
    Net cash flows provided by (used in) financing activities
    5,312       -       746,018  
                         
CASH RECONCILIATION
                       
                         
    Net increase (decrease) in cash
    118       -       3,486  
    Cash - beginning balance
    3,368       -       -  
                         
CASH BALANCE - END OF PERIOD
  $ 3,486     $ -     $ 3,486  
 
The accompanying notes are an integral part of these financial statements.
 
 
F-5


 
XYBERHOME, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS

1 - NOTE
NATURE OF OPERATIONS

Xyberhome, Inc.  (“Company,” fka Expedite 3, Inc.), a development stage company, was incorporated on September 27, 2007 under the laws of the State of Delaware. Xyberhome, Inc. is an online company that specializes in a unique offering of Xyberhome , a novel and proprietary tool that connects you with the World Wide Web and will let you share its excitement with others. It is the add-on that provides cluster tabs for Firefox 1.1.1.

Initial operations have included organization and incorporation, target market identification, marketing plans, and capital formation. A substantial portion of the Company’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace.

The Company has adopted its fiscal year end to be September 30.
 
2 - NOTE
SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation

 The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Development Stage Company

The Company is a development stage company.  Even though the Company has recognized minimal revenue, it is still devoting substantially all of its efforts on establishing the business, and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
 
Cash Equivalents
 
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
 

F-6

 
 
Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 financial statements as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.


Recent Re-codified Accounting Standards

The Financial Accounting Standards Board (FASB) took Accounting Standard Pronouncements and EITFs and codified them into the FASB Accounting Standards Codification.  The Company also uses as reference SEC rules, regulations, interpretive releases, and SEC staff guidance.

In June 2003, the Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-8934 on June 26, 2008. Commencing with the Company’s Annual Report for the fiscal year ended September 30, 2009, the Company is required to include a report of management on the Company’s internal control over financial reporting. The internal control report must include a statement of management’s responsibility for establishing and maintaining adequate internal control over financial reporting for the Company; of management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of year-end; of the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting; and that the Company’s independent accounting firm has issued an attestation report on management’s assessment of the Company’s internal control over financial reporting, which report is also required to be filed as part of the Annual Report on Form 10-K.
 
3 - NOTE
GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.  As reflected in the accompanying financial statements, the Company had a deficit accumulated during the development stage of $760,780, a net loss and net cash used in operations of $9,909 and $5,194 for the three months ended December 31, 2009, respectively. These conditions raise substantial doubt about its ability to continue as a going concern.

 
F-7


 
While the Company is attempting to produce sufficient sales, the Company’s cash position may not be sufficient to support the Company’s daily operations. While the Company believes in the viability of its strategy to produce sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern.
 
4 - NOTE
PROPERTY & EQUIPMENT

Long lived assets, including property and equipment and certain intangible assets to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.  Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values.  Measurement of an impairment loss is based on the fair value of the asset.  Long-lived assets and certain identifiable intangibles to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
 
Property and Equipment are first recorded at cost.  Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets as follows:
 
 
Computer equipment 3 years
Vehicles                         5 years
Furniture and fixtures                          7 years
Plant and plant machinery 15 years
Office and industrial buildings 25 years
                   
 
Maintenance and repairs, as incurred, are charged to expense.  Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts; gain or loss on the disposition thereof is included as income.
 
5 - NOTE
ACCOUNTS PAYABLE & ACCRUED EXPENSES
 
Accounts payable and accrued expenses consist of trade payables from normal operations of the business.
 
 
F-8

 

6 - NOTE
STOCKHOLDERS’ EQUITY

Preferred Stock

The Company has authorized 50,000,000 preferred shares of stock with a par value of $0.001.  There are no preferred shares issued and outstanding.

Common stock

Common Stock includes 200,000,000 shares authorized at a par value of $0.001, of which 100,000 have been issued for the amount of $100 on September 27, 2007 in acceptance of the incorporation expenses for the Company.

On December 17, 2008, Mr. Myers purchased a total of 100,000 shares of common stock of the company from then the President and Chairman of the Board of Directors of the Company, for an aggregate price of $30,000 in cash, all of which was paid from Mr. Myers personal fund.
 
7 - NOTE
RELATED PARTY TRANSACTIONS
 
From inception through December 31, 2009, the Company borrowed $746,018 from primary shareholder.  All notes are demand notes carrying a 3% interest rate.  As of December 31, 2009, the principal balance due on the demand notes was $746,018 and $5,587 in interest was accrued and recorded as in-kind contribution.
 
8 - NOTE
INCOME TAXES

No provision was made for federal income tax since the Company has significant net operating losses. From inception to December 31, 2009, the Company had an operating loss of $760,780. The net operating loss carry forwards may be used to reduce taxable income through the years 2027 to 2029. The availability of the Company’s net operating loss carry-forwards are subject to limitation if there is a 50% or more positive change in the ownership of the Company’s stock. The provision for income taxes consists of the federal and state minimum tax imposed on corporations.

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 December 31, 2009 are as follows:
 
 
F-9


 
Deferred tax assets:
     
Federal net operating loss
 
$
 114,117
 
State net operating loss
   
   38,039
 
         
Total deferred tax assets
   
 152,156
 
Less valuation allowance
 
 (
 152,156
)
         
   
$
      --
 

The Company has provided a 100% valuation allowance on the deferred tax assets at December 31, 2009 to reduce such asset to zero, since there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted.
 
The reconciliation of the effective income tax rate to the federal statutory rate for the periods ended December 31, 2009 and 2008 is as follows:
 
   
 2009
 
2008
 
           
Federal income tax rate
   
(15.0
%)
 
(15.0
%)
State tax, net of federal benefit
   
(5.0
%)
 
(5.0
%)
Increase in valuation allowance
   
20.0
%
 
20.0
%
               
Effective income tax rate
   
0.0
%
 
0.0
%


9 - NOTE
REQUIRED CASH FLOW DISCLOSURE FOR NON-CASH ITEMS, INTEREST AND TAXES PAID
 
The Company has made no cash payments for interest or income taxes. A related party pays expenses on behalf of the Company which are recorded as non-cash in-kind contributions to equity.
 
10 - NOTE
EMPLOYMENT CONTRACT & INCENTIVE COMMITMENTS
 
The Company has no employment contracts and incentive commitments.
 
11 - NOTE
CONTINGENT LIABILITIES
 
Currently the Company has not identified any contingent liabilities that may be due.
 
12 - NOTE
SUBSEQUENT EVENTS

None known at this time.
 
 
F-10

 
 
Item 2.     Management’s Discussion and Analysis or Plan of Operation
    
The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.
 
Overview

We were incorporated in the state of Delaware as of September 27, 2007 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.

Plan of Operation

We are continuing our efforts to locate a merger candidate for the purpose of a merger. It is possible that we will be successful in locating such a merger candidate and closing such merger. However, if we cannot effect a non-cash acquisition, we may have to raise funds from a private offering of our securities under Rule 506 of Regulation D. There is no assurance we would obtain any such equity funding.

Results of Operation

We have had $224 in revenue since inception.  For the three months ended December 31, 2009, we incurred a net loss of $(9,909) and since inception we have incurred a net loss of $(760,780). Expenses from inception were comprised of costs mainly associated with legal, accounting and office expense.

Liquidity and Capital Resources

As of December 31, 2009, we 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.  However, our shareholders are under no obligation to provide such funding.

Management anticipates seeking out a target company through solicitation. Such solicitation may include newspaper or magazine advertisements, mailings and other distributions to law firms, accounting firms, investment bankers, financial advisors and similar persons, the use of one or more World Wide Web sites and similar methods. No estimate can be made as to the number of persons who will be contacted or solicited. Management may engage in such solicitation directly or may employ one or more other entities to conduct or assist in such solicitation. Management and its affiliates will pay referral fees to consultants and others who refer target businesses for mergers into public companies in which management and its affiliates have an interest. Payments are made if a business combination occurs, and may consist of cash or a portion of the stock in the Company retained by management and its affiliates, or both.

As reflected in the accompanying financial statements, as a company in its development stage with no operations, we have generated a net loss of $760,780 from inception, and used no cash in operations for the period from September 27, 2007 (inception) to December 31, 2009. This raises substantial doubt as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for us to continue as a going concern.

Malcolm Myers is supervising the search for target companies as potential candidates for a business combination. Mr. Myers will pay, at his own expense, any costs he incurs in supervising the search for a target company. Mr. Myers may enter into agreements with other consultants to assist in locating a target company and may share stock received by it or cash resulting from the sale of its securities with such other consultants. Mr. Myers is our sole shareholder. Therefore, he has the ability to control all matters submitted to the shareholder for approval, including, without limitation, the election and removal of directors and the approval of any merger and consolidation or sale of all or substantially all of the assets.
 
Critical Accounting Policies

We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application.
 
 
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Income Taxes

We utilize 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.

Development Stage Company

We are a development stage company as defined by Statement of Financial Accounting Standards No. 7“Accountingand Reporting by Development Stage Enterprises” (“SFAS No. 7”).  We have recognized no revenue, are still devoting substantially all of its efforts on establishing the business and our planned principal operations have not commenced. All losses accumulated since inception have been considered as part of our development stage activities.
 
Revenue Recognition

We started to generate revenues. We follow the guidance of the Securities and Exchange Commission’s Staff Accounting Bulletin 104 (“SAB No. 104”) for revenue recognition. We will recognize revenue when we are realized or realizable and earned less estimated future doubtful accounts. We consider revenue realized or realizable and earned when we have persuasive evidence of an arrangement that the services have been rendered to the customer, the sales price is fixed or determinable, and collectability is reasonably assured.
 
Recent Pronouncements
 
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements.  SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 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 SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.
 
In February 2007, the Financial Accounting Standards Board (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, “Fair Value Measurements”. The adoption of this statement is not expected to have a material effect on the Company's financial statements.
 
 
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In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”.  This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners.  SFAS No. 160 affects those entities that have an outstanding non-controlling interest in one or more subsidiaries or that deconsolidate a subsidiary.  SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.
 
In March 2008, the FASB issued FASB Statement No. 161 “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133” (“SFAS No. 161”), which changes the disclosure requirements for derivative instruments and hedging activities.  Pursuant to SFAS No.161, Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.  SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. SFAS No. 161 encourages but does not require disclosures for earlier periods presented for comparative purposes at initial adoption.  In years after initial adoption, this Statement requires comparative disclosures only for periods subsequent to initial adoption.   The adoption of SFAS No. 161 is not expected to have a material impact on the financial results of the Company.

Off Balance Sheet Transactions

None.
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4.  Controls and Procedures

Management's disclosure on internal control over financial reporting

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness, as of December 31, 2009, of the design and operation of our disclosure controls and procedures, as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e).  Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports 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 our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

There were no change in our internal control over financial reporting during the fiscal quarter ended December 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
 
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PART II - OTHER INFORMATION
 
 
Item 1. Legal Proceedings.
 
Currently we are not aware of any litigation pending or threatened by or against us.

Item 1A. Risk Factors

Not applicable.
 
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
 
(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
 
 
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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.
 
Signature
 
Title
Date
       
/s/ Malcolm Myers
 
President,
February 16, 2010
Malcolm Myers
 
Chief Executive Officer,
Principal Financial Officer
 
 
 
 
 
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