Quarterly Report — Small Business — Form 10-QSB Filing Table of Contents
Document/ExhibitDescriptionPagesSize 1: 10QSB Quarterly Report for the Period Ending 12/07 HTML 174K
2: EX-31.1 Certification of Sheila Hunter Pursuant to 18 HTML 14K
U.S.C. Section 1350 as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act
of 2002.
3: EX-32.1 Certification of Sheila Hunter Pursuant to 18 HTML 9K
U.S.C. Section 1350 as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act
of 2002.
10QSB — Quarterly Report for the Period Ending 12/07
(Exact
name of small business issuer as specified in its charter)
______________
Delaware
(State
or other jurisdiction of
incorporation
or organization)
(I.R.S.
Employer Identification No.)
212
Carnegie Center #206 Princeton, NJ
08540
(Address
of principal executive offices)
(Zip
Code)
(609)
524-2560
(Issuer’s
telephone number)
Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2)has been
subject to such filing requirements for the past 90 days. Yes x No
Check
whether the registrant has filed all documents and reports required to be filed
by Sections 12, 13, or 15(d) of the Exchange Act subsequent to the distribution
of securities under a plan confirmed by a court. Yes No 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
State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of February 12, 2008: 100,000 shares of common stock.
Transitional
Small Business Disclosure Format (check one): Yes o No x
TABLE
OF CONTENTS
PART
I – FINANCIAL INFORMATION
Item
1. Financial Information
Item
2. Management’s Discussion and Analysis or Plan of
Operation
Item
3. Controls and Procedures
PART
II -OTHER INFORMATION
Item
1. Legal Proceedings.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
Item
3. Defaults Upon Senior Securities.
Item
4. Submission of Matters to a Vote of Security
Holders.
Net
cash provided by (used in) operating activities
-
-
CASH FLOWS FROM
INVESTING ACTIVITIES
None
-
-
Net
cash flows provided by (used in) investing activities
-
-
CASH FLOWS FROM
FINANCING ACTIVITIES
None
-
-
Net
cash flows provided by (used in) financing activities
-
-
CASH
RECONCILIATION
Net
increase (decrease) in cash
-
-
Cash -
beginning balance
-
-
CASH BALANCE - END OF
PERIOD
$
-
$
-
The
accompanying notes are an integral part of these financial
statements.
F-4
EXPEDITE
2, INC.
(a
development stage company)
NOTES
TO FINANCIAL STATEMENTS
1. Summary
of significant accounting policies:
Industry:
Expedite
2, Inc. (the Company), a Company incorporated in the state of Delaware as of
September 27, 2007 plans to locate and negotiate with a business entity for the
combination of that target company with The Company. The combination will
normally take the form of a merger, stock-for-stock exchange or stock-
for-assets exchange. In most instances the target company will wish to structure
the business combination to be within the definition of a tax-free
reorganization under Section 351 or Section 368 of the Internal Revenue Code of
1986, as amended. No assurances can be given that The Company will be successful
in locating or negotiating with any target company.
The
Company has been formed to provide a method for a foreign or domestic private
company to become a reporting ("public") company whose securities are qualified
for trading in the United States secondary market.
The
Company has adopted its fiscal year end to be September 30.
Results
of Operations and Ongoing Entity:
The
Company is considered to be an ongoing entity for accounting purposes;
however, there is substantial doubt as to the Company’s ability to
continue as a going concern. The Company's shareholders fund any
shortfalls in The Company's cash flow on a day to day basis during
the time period that The Company is in the development
stage.
Liquidity
and Capital Resources:
In
addition to the stockholder funding capital shortfalls; The Company anticipates
interested investors that intend to fund the Company's growth once a business is
located.
Cash
and Cash Equivalents:
The
Company considers cash on hand and amounts on deposit with
financial institutions which have original maturities of three months
or less to be cash and cash equivalents.
Basis
of Accounting:
The
Company's financial statements are prepared in accordance with U.S.
generally accepted accounting principles.
F-5
Income
Taxes:
The
Company utilizes the asset and liability method to measure and
record deferred income tax assets and liabilities.
Deferred tax assets and liabilities reflect the future income tax effects of
temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and are measured
using enacted tax rates that apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Deferred tax
assets are reduced by a valuation allowance when in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. At this time, The Company has set up an allowance for
deferred taxes as there is no company history to indicate the usage of deferred
tax assets and liabilities.
The
income tax payable that was accrued for the year ended September 31, 2007
was offset by the Company’s net operating loss carry-forward
therefore the provisions for income tax in the income statement is $0. The
Company has net operating loss carry-forwards that were derived solely from
operating losses. These amounts can be carried forward to be used to offset
future income for tax purposes for a period of 20 years for each year’s loss.
The accounting for these losses derives a deferred tax asset for the period
ended December 31, 2007 of $220. No provision was made for federal income tax
since the Company has significant net operating losses. From inception through
December 31, 2007, the Company incurred net operating losses for tax purposes of
approximately $1,100. 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, 2007 are as
follows:
Deferred
tax assets:
Federal
net operating loss
$
165
State
net operating loss
55
Total
deferred tax assets
220
Less
valuation allowance
(220
)
$
--
The
Company has provided a 100% valuation allowance on the deferred tax assets at
December 31, 2007 to reduce such asset to zero, since there is no assurance that
the Company will generate future taxable income to utilize such asset.
Management will review this valuation allowance requirement periodically and
make adjustments as warranted.
F-6
The
reconciliation of the effective income tax rate to the federal statutory rate
for the period ended December 31, 2007 is as follows:
2007
Federal
income tax rate
(15.0
%)
State
tax, net of federal benefit
(5.0
%)
Increase
in valuation allowance
20.0
%
Effective
income tax rate
0.0
%
Fair
Value of Financial Instruments:
The
Company's financial instruments may include cash and cash
equivalents, short-term investments, accounts receivable, accounts
payable and liabilities to banks and shareholders. The carrying
amount of long-term debt to banks approximates fair value based on
interest rates that are currently available to The Company for
issuance of debt with similar terms and remaining maturities. The
carrying amounts of other financial instruments approximate their
fair value because of short-term maturities.
Concentrations
of Credit Risk:
Financial
instruments which potentially expose The Company to concentrations of
credit risk consist principally of operating demand deposit accounts.
The Company's policy is to place its operating demand deposit
accounts with high credit quality financial institutions. At this
time The Company has no deposits that are at risk.
2. Related
Party Transactions and Going Concern:
The
Company's financial statements have been presented on the basis that it is a
going concern in the development stage, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. At
this time The Company has not identified the business that it wishes to engage
in.
The
Company's shareholder funds The Company's activities while The Company takes
steps to locate and negotiate with a business entity for combination; however,
there can be no assurance these activities will be successful.
3. Accounts
Receivable and Customer Deposits:
Accounts
receivable and Customer deposits do not exist at this time and therefore have no
allowances accounted for or disclosures made.
F-7
4. Use
of Estimates:
Management
uses estimates and assumptions in preparing these financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenue and
expenses. Management has no reason to make estimates at this time.
5. Revenue
and Cost Recognition:
The
Company uses the accrual basis of accounting in accordance with generally
accepted accounting principles for financial statement reporting.
6. Accrued
Expenses:
Accrued
expenses consist of accrued legal, accounting and office costs during this stage
of the business.
7. Operating
Lease Agreements:
The
Company has no agreements at this time.
8. Stockholder's
Equity:
Preferred
stock includes 50,000,000 shares authorized at a par value of
$0.001, of which none are issued or outstanding.
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.
9. Required
Cash Flow Disclosure for Interest and Taxes Paid:
The
company has paid no amounts for federal income taxes and interest. The Company
issued 100,000 common shares of stock to its sole shareholder in acceptance of
the incorporation expenses for the Company.
10. Earnings
Per Share:
Basic
earnings per share ("EPS") is computed by dividing earnings available to common
shareholders by the weighted-average number of common shares outstanding for the
period as required by the Financial Accounting Standards Board (FASB) under
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Shares". Diluted EPS reflects the potential dilution of securities that could
share in the earnings.
F-8
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.
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
not had any operating income since inception, September 27, 2007. For the six
months ended December 31, 2007 we incurred a net loss of $500. Expenses from
inception were comprised of costs mainly associated with legal, accounting and
office expense.
Liquidity and Capital
Resources
At
December 31, 2007, 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, the Company is in the
development stage with no operations and has a net loss of $1,100 from
inception, and used no cash in operations for the period from September 27,2007(inception) to December 31, 2007. This raises substantial doubt about its
ability to continue as a going concern. The ability of the Company to continue
as a going concern is dependent on the Company's ability to raise additional
capital and implement its business plan. 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 actions presently being taken to obtain additional funding and
implement its strategic plans provide the opportunity for the Company to
continue as a going concern
Sheila
Hunter will supervise the search for target companies as potential candidates
for a business combination. Sheila Hunter will pay, at her own expense, any
costs she incurs in supervising the search for a target company. Sheila Hunter
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. Sheila Hunter controls us and
therefore has the authority to enter into any agreement binding us. Sheila
Hunter as our sole officer, director and only shareholder can authorize any such
agreement binding us.
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.
The
Company accounts for income taxes under the Statement of Financial Accounting
Standards No. 109, “Accounting
for Income Taxes” (“SFAS 109”). Under SFAS 109, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under
SFAS 109, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment
date.
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.
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 noncontrolling
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 noncontrolling
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 noncontrolling
owners. SFAS No. 160 affects those entities that have an outstanding
noncontrolling 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.
ITEM
3.
CONTROLS
AND PROCEDURES
Evaluation of disclosure
controls and procedures
Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2007. Based
on this evaluation, our principal executive officer and principal financial
officers have concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in the
reports we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms and that our disclosure and controls are
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our principal executive and principal
financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
Changes in internal
controls
There
were no changes (including corrective actions with regard to significant
deficiencies or material weaknesses) in our internal controls over financial
reporting that occurred during the quarter ended December 31, 2007 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
PART
II – OTHER INFORMATION
ITEM
1.
LEGAL
PROCEEDINGS.
We are
currently not a party to any pending legal proceedings and no such actions by,
or to the best of its knowledge, against us have been threatened.
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.
No matter
was submitted during the quarter ending December 31, 2007, covered by this
report to a vote of our shareholders, through the solicitation of proxies or
otherwise.
ITEM
5.
OTHER
INFORMATION.
None
ITEM
6.
EXHIBITS
AND REPORTS OF FORM 8-K.
(a)
Reports
on Form 8-K and Form 8K-A
None
(b)
Exhibits
Exhibit Number
Exhibit Title
31.1
Certification
of Sheila Hunter pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification
of Sheila Hunter pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, there unto duly
authorized.
