(Former
name, former address and former fiscal year, if changed since last
report)
Check
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 issuer was required to file such reports),
and
(2) has been subject to such filing requirements for the past 90 days [X] Yes
[
] No
State
the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date: 3,785,183 common shares as of June 30,2005
Transitional
Small Business Disclosure Format (check one): Yes [ ] No [X]
Condensed
Statements of Operations for the nine and three months ended June30, 2005
and 2004;
(c)
Condensed
Statements of Cash Flow for the nine and three months ended June30, 2005
and 2004;
(d)
Notes
to Condensed Financial Statements.
These
unaudited financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-QSB. In the opinion
of
management, all adjustments considered necessary for a fair presentation have
been included. Operating results for the interim period ended June 30, 2005
are
not necessarily indicative of the results that can be expected for the full
year.
3
NETCHOICE,
INC.
(FORMERLY
ENVIRONMENTAL MONITORING AND TESTING
CORPORATION)
The
condensed unaudited interim financial statements included herein have been
prepared, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. The condensed financial statements and notes are
presented as permitted on Form 10-QSB and do not contain information included
in
the Company’s annual statements and notes. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed financial
statements be read in conjunction with the September 30, 2004 audited financial
statements and the accompanying notes thereto. While management believes
the
procedures followed in preparing these condensed financial statements are
reasonable, the accuracy of the amounts are in some respects dependent upon
the
facts that will exist, and procedures that will be accomplished by the Company
later in the year.
These
condensed unaudited financial statements reflect all adjustments, including
normal recurring adjustments which, in the opinion of management, are necessary
to present fairly the operations and cash flows for the periods
presented.
The
Company was incorporated on May 10, 1998, under the laws of the State of
Delaware. The business purpose of the Company was originally to engage in
environmental monitoring and testing. However, on December 31, 2001, the
Company
liquidated its operating assets and currently has no operations. The Company
has
adopted a fiscal year ending September 30.
The
Company filed a Form 8-K with the Securities and Exchange Commission requesting
a name change for the Company. The Company has changed its name to Netchoice,
Inc., effective February 3, 2005.
F
-
4
NETCHOICE,
INC.
(FORMERLY
ENVIRONMENTAL MONITORING AND TESTING CORPORATION)
NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
NOTE
2 -
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to
make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures 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.
Cash
and Cash Equivalents
The
Company considers all highly liquid debt instruments and other short-term
investments with an initial maturity of three months or less to be cash
equivalents.
Income
Taxes
The
income tax benefit is computed on the pretax loss based on the current tax
law.
Deferred income taxes are recognized for the tax consequences in future years
of
differences between the tax basis of assets and liabilities and their financial
reporting amounts at each year-end based on enacted tax laws and statutory
tax
rates. The Company has not established a provision due to the losses
sustained.
Earnings
(Loss) Per Share of Common Stock
Historical
net (loss) per common share is computed using the weighted average number
of
common shares outstanding. Diluted earnings per share (EPS) include additional
dilution from common stock equivalents, such as stock issuable pursuant to
the
exercise of stock options and warrants. Common stock equivalents were not
included in the computation of diluted earnings per share when the Company
reported a loss because to do so would be antidilutive for periods
presented.
F
-
5
NETCHOICE,
INC.
(FORMERLY
ENVIRONMENTAL MONITORING AND TESTING CORPORATION)
NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
NOTE
2
-
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
Reclassifications
Certain
amounts for the nine and three months ended June 30, 2005 and 2004, respectively
have been reclassified to conform to the presentation of the nine and three
months ended June 30, 2005 and 2004 amounts. The reclassifications have no
effect on net income for the nine and three months ended June 30, 2005 and
2004,
respectively.
NOTE
3
-
STOCKHOLDERS’
EQUITY (DEFICIT)
On
December 3, 2004, the Company increased the authorized number of shares of
common stock from 30,000,000 shares to 90,000,000 shares and also changing
the
par value from $0.01 to $0.001.
As
of
December 31, 2004, there were 90,000,000 shares authorized and 6,184,000
shares
issued and 3,785,183 shares outstanding of the Company’s common stock with a par
value of $0.001.
Preferred
Stock
On
December 3, 2004the Company changed the number of Preferred Stock from one
class of stock consisting of 10,000,000 shares with a par value of $0.01
to
three separate series of preferred stock and changing the par value to $0.001.
They are as follows:
Preferred
Stock Series A
990,000
shares with a par value of $0.001 per share, participating, voting and
convertible with a liquidation value of $1,000 each.
F
-
7
NETCHOICE,
INC.
(FORMERLY
ENVIRONMENTAL MONITORING AND TESTING CORPORATION)
NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
9,000,000
shares with a par value of $0.001 per share, participating; voting and
convertible with a liquidation value of $3 each.
Preferred
Stock Series C
10,000
shares with a par value of $0.001 per share, with a liquidation value of
$10
each.
All
preferred stock series A, B and C are convertible to 4,000 common shares
as well
as 4,000 votes for each share held. In addition, in all cases, the holders
of
the Preferred Stock C will vote cumulatively at least fifty one percent (51%)
of
all votes cast regardless of the amount of series C shares issued, at any
meeting of shareholders or any major issue put before the Company for voting
of
shareholders.
NOTE
4
-
INCOME
TAXES
There
was
no income tax benefit recognized at June 30, 2005 and 2004.
The
net
deferred tax assets in the accompanying balance sheet include benefit of
utilizing net operating losses of approximately $2,071,000 (at June 30, 2005),
however due to the uncertainty of utilizing the net operating losses, an
offsetting valuation allowance has been established.
NOTE
5
-
COMMITMENT
AND CONTINGENCY
Included
in the accounts payable and accrued expenses is an accrual of $3,000
representing the fair market of value of stock to be issued to former directors
of the Company.
F
-
8
NETCHOICE,
INC.
(FORMERLY
ENVIRONMENTAL MONITORING AND TESTING CORPORATION)
NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
As
shown
in the accompanying condensed financial statements, the Company incurred
substantial net losses for the nine and three months ended June 30, 2005
and
2004 and for the years ended September 30, 2004 and 2003, respectively. There
is
no guarantee whether the Company will be able to generate enough revenue
and/or
raise capital to support those operations. This raises substantial doubt
about
the Company’s ability to continue as a going concern. Management believes the
Company’s capital requirement will depend on many factors, including the success
of the Company to raise money. The Company continues to search for acquisition
candidates to fund operations. The condensed financial statements do not
include
any adjustments that might result from the outcome of these
uncertaintie
Historical
results and trends should not be taken as indicative of future operations.
Management’s statements contained in this report that are not historical facts
are forward-looking statements within the meaning of Section 27A of
the
Securities Act of 1933, as amended, and Section 21E of the Securities and
Exchange Act of 1934 (the “Exchange Act”), as amended. Actual results may differ
materially from those included in the forward-looking statements. The Company
intends such forward-looking statements to be covered by the safe-harbor
provisions for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995, and is including this statement for purposes
of
complying with those safe-harbor provisions. Forward-looking statements, which
are based on certain assumptions and describe future plans, strategies and
expectations of the Company, are generally identifiable by use of the
words “believe,”“expect,”“intend,”“anticipate,”“estimate,”“project,”“prospects,”
or similar expressions. The Company’s ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which
could have a material adverse affect on the operations and future prospects
of
the Company on a consolidated basis include, but are not limited to: changes
in
economic conditions, legislative/regulatory changes, availability of capital,
interest rates, competition, and generally accepted accounting principles.
These
risks and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements. Further
information concerning the Company and its business, including additional
factors that could materially affect the Company’s financial results, is
included herein and in the Company’s other filings with the SEC.
Management’s
Discussion and Analysis or Plan of Operation
Overview
The
Company had no sales, operations or income for the quarter ending June 30,2005.
The Company is in the process of reorganizing at the present moment and there
are no plans to operate until the reorganization is completed. Management said
it is expected that the reorganization will be completed this year.
The
Company was incorporated on May 10, 1998, under the laws of the State of
Delaware under the original name Environmental Monitoring & Testing
Corporation. The business purpose of the Company was originally to engage in
environmental monitoring and testing. However, on December 31, 2001, the Company
liquidated its operating assets and currently has no operations. The Company
has
adopted a fiscal year ending September 30. The Company has changed its corporate
name to Netchoice, Inc. effective February 3, 2005
Plan
of Operation
We
intend
to devote substantially all of our time identifying a merger or acquisition
candidate and consummating a merger or acquisition transaction thereafter.
In
the event we identify an acceptable merger or acquisition candidate, we intend
to effect the transaction utilizing any combination of our common stock, cash
on
hand, or marketable securities, or other funding sources available to us. Until
we identify a suitable merger or acquisition candidate, we intend to offer
consulting services to businesses engaged in or otherwise servicing the
environmental industry.
4
Results
of Operations
Revenues
were $0 for the nine months ended June 30, 2005, as compared to $0 for the
nine
months ended June 30, 2004.
Operating
expenses for the nine months ended March 31, 2005 were $11,250 compared to
$26,407 for the nine months ended June 30, 2004. This decrease was due to the
fact that the Company reduced its professional fees.
Loss
from
operations for the nine months ended June 30, 2005 was $11,250 compared to
$26,407 for the nine months ended June 30, 2004.
Interest
expense was $0 and $0 for the nine months ended June 30, 2005 and 2004,
respectively.
Net
loss
applicable to Common Stock was $11,250 for the nine months ended June 30, 2005,
compared to $26,407 for the nine months ended June 30, 2004.
Liquidity
And Capital Resources
The
Company continues to experience losses from operations and is primarily
dependent on outside sources of funding to continue its operations.
At
June30, 2005, the Company's cash and cash equivalents on hand were $0. Management
recognizes that the Company has a continuing need to raise capital to fund
its
daily operations and research and development activities.
Obligations
are being met on a month-to-month basis as cash becomes available. There can
be
no assurances that the Company's present flow of cash will be sufficient to
meet
current and future obligations. The Company has incurred losses since its
inception, and continues to require additional capital to fund operations and
development. As such, the Company's ability to pay its already incurred
obligations is mostly dependent on the Company achieving its sales goal or
raising additional capital in the form of equity or debt.
The
Company's short-term and long-term liquidity requirements are expected to result
from working capital needs to retire existing trade liabilities and to pay
other
operating expenses. Although the Company cannot accurately predict the precise
timing of its future capital expenditures, the Company estimates that it will
need to expend over $25,000, primarily for general and administrative and
operating expenses, within the next twelve months.
Fiscal
2005 Plan of Operation
The
company’s strategy to satisfy its cash requirements currently include a plan to
borrow funds from its director and officer. The Company believes that it can
borrow sufficient funds to meet its current cash needs. The Company currently
has no plans to conduct any research and development, to purchase or sell any
significant equipment or to make any significant changes in its number of
employees.
We
carried out an evaluation of the effectiveness of the design and operation
of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of June 30, 2005. This evaluation was carried out
under the supervision and with the participation of our Chief Executive Officer
and Chief Financial Officer, Ms. Patricia Wiate. Based upon that evaluation,
our
Chief Executive Officer and Chief Financial Officer concluded that, as of June30, 2005, our disclosure controls and procedures are effective. There have
been
no significant changes in our internal controls over financial reporting during
the quarter ended June 30, 2005 that have materially affected or are reasonably
likely to materially affect such controls.
Disclosure
controls and procedures are controls and other procedures that are designed
to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in
our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
Limitations
on the Effectiveness of Internal Controls
Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud
and
material error. An internal control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of
the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud,
if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of
two
or more people, or by management override of the internal control. The design
of
any system of controls also is based in part upon certain assumptions about
the
likelihood of future events, and there can be no assurance that any design
will
succeed in achieving its stated goals under all potential future conditions.
Over time, control may become inadequate because of changes in conditions,
or
the degree of compliance with the policies or procedures may deteriorate.
We
are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.
Item
2. Unregistered Sales of Equity
Securities and Use of Proceeds
No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended June30,2005.
In
accordance with the requirements of the Securities and Exchange Act of 1934,
the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
