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EX-32 - EXHIBIT 32.1 - Sino United Worldwide Consolidated Ltd.exhibit321.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM 10-Q


QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2009



GATEWAY CERTIFICATIONS, INC.


Commission File Number: 333-144228



       

Nevada

 

20-5548974

 

 

 

(State of organization)

 

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



 35 Meadow Street

Suite 308

Brooklyn, NY 11206

________________________________________

(Address of principal executive offices)


(718) 336-3922

_________________________________________________

Registrant’s telephone number, including area code


Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o

 

Accelerated Filer o

 

Non-Accelerated Filer o (Do not check if a smaller reporting company)

 

Smaller Reporting Company þ


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]    No [X]


As of November 6, 2009, there were 8,343,000 outstanding shares of the registrant's common stock, $.001 par value per share.











TABLE OF CONTENTS

_________________





PART I - FINANCIAL INFORMATION


ITEM 1.       

FINANCIAL STATEMENTS

ITEM 2.       

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

ITEM 3.       

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4.      

CONTROLS AND PROCEDURES



PART II – OTHER INFORMATION



ITEM 1.

LEGAL PROCEEDINGS

ITEM 1A

RISK FACTORS

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5.

OTHER INFORMATION

ITEM 6.

EXHIBITS


SIGNATURES





PART I – FINANCIAL INFORMATION


ITEM  1.  FINANCIAL STATEMENTS


GATEWAY CERTIFICATIONS, INC.

(A Development Stage Company)

CONDENSED BALANCE SHEETS

(Unaudited)

SEPTEMBER 30, 2009 AND DECEMBER 31, 2008


 

 

September 30, 2009

 

December 31, 2008

ASSETS

 

 

 

 

  

 

 

 

 

Current assets

 

 

 

 

 Cash

 

 $                          383 

 

 $                          383 

Total current assets

 

                             383 

 

                             383 

  

 

 

 

 

Equipment, net of accumulated depreciation

 

                             711 

 

                             999 

of $1,184 and $896, respectively

 

 

 

 

  

 

 

 

 

Total assets

 

 $                       1,094 

 

 $                       1,382 

  

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

  

 

 

 

 

Current liabilities

 

 

 

 

   Current portion of shareholder loans

 

                          2,000 

 

                          1,250 

   Shareholder demand notes payable

 

                          1,000 

 

                          1,000 

   Unearned revenue

 

                               - 

 

                          2,000 

   Accounts payable

 

                               - 

 

                               94 

   Loan interest payable

 

                             660 

 

                             117 

Franchise tax payable

 

                               - 

 

                             710 

Deposit

 

                               50 

 

                               50 

Commission payable

 

                          1,740 

 

                          1,200 

Professional fees payable

 

                        10,437 

 

                          6,423 

Total current liabilities

 

                      15,887 

 

                     12,844 

  

 

 

 

 






Long-Term Liabilities

 

 

 

 

   Shareholder loans

 

                          8,000 

 

                          1,750 

Total long-term liabilities

 

                          8,000 

 

                          1,750 

  

 

 

 

 

Total liabilities

 

                        23,887 

 

                        14,594 

  

 

 

 

 

Stockholders' deficit

 

 

 

 

Common stock $.001 par value, 50,000,000 shares

 

 

 

 

authorized, 8,343,000 shares issued and outstanding

 

                          8,343 

 

                          8,343 

Additional paid in capital

 

                        41,507 

 

                        41,507 

Deficit accumulated during the development stage

 

                      (72,643)

 

                       (63,062)

Total stockholders' deficit

 

                      (22,793)

 

                       (13,212)

  

 

 

 

 

Total liabilities and stockholders' deficit

 

 $                       1,094 

 

 $                       1,382 

  

 

 

 

 






























See accompanying notes to condensed financial statements






GATEWAY CERTIFICATIONS, INC.

(A Development Stage Company)

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months and Nine Months ended September 30, 2009 and September 30, 2008 and for

the period from August 30, 2006 (inception) to September 30, 2009


 

 Three Months

 Nine Months

 

Cumulative From Inception

 

 Ended

 Ended

 

(August 30, 2006)  to

 

 September 30,  

 September 30,  

 

 September 30,  

 

2009

 

2008

2009

 

2008

 

2009

Revenue    

 

 

 

 

 

 

 

 

Consulting income

 $             300 

 

$                  - 

$            3,800 

 

 $             2,500 

 

 $                      9,800 

Commission expense

        90 

 

                - 

                  540 

 

                750 

 

                                      1,740 

Net revenue

                210 

 

                   - 

              3,260 

 

             1,750 

 

                                      8,060 

 

  

 

 

 

 

 

 

 

General and administrative expenses

 

 

 

 

 

 

 

 

Organization costs

                     - 

 

                    - 

                   - 

 

                     - 

 

                                         752 

Advertising and promotion

               20 

 

               822 

                   20 

 

             2,458 

 

                                      3,823 

Computer and internet expense

               - 

 

              156 

                   10 

 

                726 

 

                                      2,107 

Depreciation expense

         96 

 

                 96 

                 288 

 

                288 

 

                                      1,184 

Filing fees, dues and subscriptions

           - 

 

                94 

                 694 

 

             1,734 

 

                                      7,723 

Legal fees

                     - 

 

                    - 

        - 

 

                     - 

 

                                      1,000 

Outside services

                     - 

 

                    - 

                      - 

 

                     - 

 

                                      1,200 

Office expense

                220 

 

                 43 

                 288 

 

                683 

 

                                      4,813 

Rent expense

             - 

 

            1,943 

                      - 

 

           10,221 

 

                                    21,782 

Telephone expense

                341 

 

             306 

              1,059 

 

           1,013 

 

                                      3,902 

Professional fees

           2,200 

 

            1,630 

              9,975 

 

             7,730 

 

                                    30,970 

Other expense

                352 

 

            - 

                 412 

 

                127 

 

                                         752 

Franchise taxes

 

               150 

                      - 

 

                150 

 

                                      1,760 

Total general and administrative expenses

         3,229 

 

            5,240 

            12,746 

 

           25,130 

 

                                    81,768 

  

  

 

 

 

 

 

 

 

  

  

 

 

 

 

 

 

 

Loss from operations

  (3,019)

 

      (5,240)

             (9,486)

 

          (23,380)

 

                                   (73,708)

Other income/(expense)

 

 

 

 

 

 

 

 






Miscellaneous income

 

 

                   - 

                 447 

 

                   - 

 

                                      1,970 

Interest expense

             (206)

 

                (60)

                (542)

 

                 (60)

 

                                        (905)

Total other income/(expense)

              (206)

 

               (60)

                  (95)

 

                 (60)

 

                                      1,065 

  

 

 

 

 

 

 

 

 

Net (loss) before income taxes

          (3,225)

 

           (5,300)

             (9,581)

 

          (23,440)

 

                                   (72,643)

  

 

 

 

 

 

 

 

 

Federal income tax expense

                     - 

 

                    - 

                      - 

 

                     - 

 

                                              - 

  

 

 

 

 

 

 

 

 

Net (loss)

 $        (3,225)

 

$         (5,300)

 $          (9,581)

 

 $       (23,440)

 

 $                                (72,643)

  

 

 

 

 

 

 

 

 

Net loss per common shares outstanding

 $      (0.0004)

 

 $      (0.0006)

 $        (0.0011)

 

 $       (0.0028)

 

 

  

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic and diluted

8,343,000 

 

    8,343,000 

  8,343,000 

 

 8,343,000 

 

   

  

 

 

 

 

 

 

 

 

























See accompanying notes to condensed financial statements










GATEWAY CERTIFICATIONS, INC.

(A Development Stage Company)

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months ended September 30, 2009 and September 30, 2008 and for the

period from August 30, 2006 (inception) to September 30, 2009


 

   

 

Cumulative From Inception

 

   

 

(August 30, 2006)  to

 

 September 30,  

 

September 30,

Cash flows from operating activities

2009

 

2008

 

2009

Net loss

 $                   (9,581)

 

 $                   (23,440)

 

 $                                        (72,643)

Adjustments to reconcile net (loss) to net

 

 

 

 

 

cash used in operating activities

 

 

 

 

 

Depreciation

                          288 

 

                             288 

 

                                               1,184 

Outside services in exchange for common stock

                             - 

 

                               - 

 

                                               1,200 

Increase/(decrease) in:

 

 

 

 

 

Unearned revenue

                      (2,000)

 

                          2,000 

 

                                                    - 

Accounts payable

                             - 

 

                             308 

 

                                                    - 

Franchise tax payable

                         (710)

 

                           (450)

 

                                                    - 

Deposit

                             - 

 

                               50 

 

                                                    50 

Commission payable

                          540 

 

                             750 

 

                                               1,740 

   Loan interest payable

                          543 

 

                               60 

 

                                                  660 

Professional fees payable

                       3,920 

 

                             115 

 

                                             10,437 

Net cash used in operating activities

                      (7,000)

 

                      (20,319)

 

                                  (57,372)

  

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from issuance of common stock

                             - 

 

                               - 

 

                                             46,755 

Proceeds from shareholder demand notes payable

                             - 

 

                             500 

 

                                               1,000 

Proceeds from shareholder loans

                       7,000 

 

                          2,000 

 

                                             10,000 

Net cash from financing activities

                       7,000 

 

                          2,500 

 

                                             57,755 

   

 

 

 

 

 

Net (decrease) in cash

                             - 

 

                      (17,819)

 

                                                  383 

  

 

 

 

 

 

Cash, beginning of period

                          383 

 

                        18,019 

 

                                                    - 






  

 

 

 

 

 

Cash, end of period

 $                       383 

 

 $                          200 

 

                                       $          383 

  

 

 

 

 

 

Supplemental disclosure of Cash Flows information cash paid for:

 

 

 

 

  

 

 

 

 

 

Interest

                               - 

 

                                 - 

 

                                    $              246 

    

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

During the period ended December 31, 2006, equipment with a value of $1,895 was contributed to the Company in

exchange for common stock.  This contribution and related issuance of common stock has been excluded from the

condensed statements of cash flows presented.

 

 

 

 

 

  

 

 

 

 

 





























See accompanying notes to condensed financial statements










GATEWAY CERTIFICATIONS, INC.

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2009



1.

Basis of Presentation

The accompanying unaudited interim condensed financial statements of Gateway Certifications, Inc. and the information for Form 10-Q have been prepared in accordance with the rules of the Securities and Exchange Commission, and do not include all of the information and note disclosures required by generally accepted accounting principles, and should be read in conjunction with the audited financial statements and notes thereto also contained in Gateway Certifications, Inc. Form 10-K.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.  The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.  Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financials statements as reported in Form 10-K have been omitted.  We had negative working capital of $15,504 and an accumulated deficit of $72,643 incurred through September 30, 2009.  There is substantial uncertainty we will continue operations in which case you could lose your investment.  The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business.  As such we may have to cease operations and investors could lose their entire investment.  We have evaluated the impact of the subsequent events on the interim consolidated financial statements through the time of filing this Quarterly Report on Form 10-Q on November 11, 2009.

2.

Basic and Diluted Net (Loss) Per Share


The basic net (loss) per common share is computed by dividing the net (loss) by the weighted average number of common shares outstanding.  Diluted net (loss) per common share is not computed since it would be anti-dilutive.


3.

Shareholder Loans Payable


On June 19, 2008, the Company and Lawrence Williams, Jr., an officer of the Company, entered into an unsecured promissory note for the amount of $1,000 loaned by Mr. Williams to the Company (“Williams Loan”). Interest shall accrue on the principal amount of this note at a rate of eight percent (8%) per annum. The Company shall pay the Williams Loan in twelve (12) quarterly installments of approximately $83 payable each on the last day of each quarter with the first such installment on December 31, 2008 until the principal and interest have been paid in full.  The outstanding principal and accrued interest on Williams Loan is due June 30, 2013. The balance due on this loan as of September 30, 2009 is $1,000.


On July 23, 2008, the Company and Kwajo Sarfoh entered into an unsecured promissory note for the amount of $1,000 loaned by Mr. Sarfoh to the Company (“Sarfoh Loan”). Interest shall accrue on the principal amount of this note at a rate of eight percent (8%) per annum. The Company shall pay the Sarfoh Loan in twelve (12) quarterly installments of approximately $83 payable each on the last day of each quarter with the first such installment on December 31, 2008 until the principal and interest have been paid in full.  The outstanding principal and accrued interest on Sarfoh Loan is due June 30, 2013. The balance due on this loan as of September 30, 2009 is $1,000.


On October 3, 2008, the Company and Lawrence Williams, Jr., an officer of the Company, entered into an unsecured promissory note for the amount of $1,000 loaned by Mr. Williams to the Company (“Williams Loan 2”). Interest shall accrue on the principal amount of this note at a rate of eight percent (8%) per annum. The Company shall pay the Williams Loan in twelve (12) quarterly installments of approximately $83 payable each on the last day of each quarter with the first such installment on December 31, 2008 until the principal and interest have been paid in full.  The outstanding principal and accrued interest on Williams Loan is due no later than June 30, 2013.  The balance due on this loan as of September 30, 2009 is $1,000.


On February 27, 2009, pursuant to the terms of the Credit Agreement and Note, Mr. Sarfoh loaned the Company $7,000 for working capital (refer to Note 5). A commercial promissory note was issued (“Note”) providing with respect to the Loan a maturity date of June 30, 2013 and interest accruing on the principal balance outstanding from time to time at an annual rate of eight percent (8%). All outstanding principal and unpaid interest under the Note and all other amounts due and payable under this Note shall become automatically due and payable, without demand or notice, on June 30, 2013. The Note shall be prepayable without premium or penalty. The balance due on this loan as of September 30, 2009 is $7,000.








The following is a schedule of long-term debt maturities of these obligations as of September 30, 2009:


Period ending:

September 30, 2010

$2,000

September 30, 2011

  1,000

September 30, 2012

         0

September 30, 2013

  7,000

Total

             $ 10,000


4.

Shareholder Demand Note Payable


On July 29, 2008, Kwajo Sarfoh, secretary of the Company, loaned the Company $500 (“Sarfoh Demand Loan”). Interest shall accrue on the principal amount of the note at a rate of eight percent (8%) per annum. The Company shall pay the Sarfoh Demand Loan with accrued interest on demand, but no later than July 29, 2013.


On December 12, 2008, Michael Belton, Stockholder of the Company, loaned the Company $500 (“Belton Demand Loan”). Interest shall accrue on the principal amount of the note at a rate of eight percent (8%) per annum. The Company shall pay the Belton Demand Loan with accrued interest on demand, but no later than December 12, 2013.


5.

Shareholder Loan Credit Agreements


On November 15, 2008, our board of directors determined that it was in the best interests of the Company to issue a commercial note, whereby the Company would enter into credit agreements with the majority stockholders Mr. Sarfoh and Mr. Belton (collectively referred to as “Creditors”) to obtain credit for working capital and other general business purposes (“Credit Agreements”). Pursuant to the terms of the Credit Agreements, the Creditors agreed to extend credit to the Company in the amount of up to $17,000, with Mr. Sarfoh and Mr. Belton entering into separate Credit Agreements of $11,000 and $6,000, respectively.


In consideration for the credit extensions (“Loans”), the Company executed and delivered in favor of Creditors a commercial promissory note (“Note”) providing with respect to the Loans a maturity date of June 30, 2013 and interest accruing on the principal balance outstanding from time to time at an annual rate of eight percent (8%) payable. All outstanding principal and unpaid interest under the Note and all other amounts due and payable under this Note shall become automatically due and payable, without demand or notice, on June 30, 2013. The Note shall be prepayable without premium or penalty. The documents representing the terms of the Loans have been filed as exhibits to the Company’s most recent Form 10-K.


On February 27, 2009, pursuant to the terms of the Credit Agreement and Note, Mr. Sarfoh loaned the Company $7,000 for working capital.  Refer to Note 3.


6.

Recent Accounting Pronouncements


In July 2009, the FASB, in an effort to codify all authoritative accounting guidance related to a particular topic in a single place, issued Statement of Financial Account Standards No. 168, "The FASB Accounting Standard Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (“SFAS No. 168”).  It replaces the U.S. generally accepted accounting principles ("U.S. GAAP") hierarchy created by Statement of Financial Accounting Standards No. 162, "The Hierarchy of Generally Accepted Accounting Principles," by establishing only two levels of generally accepted accounting principles: authoritative and non authoritative. All authoritative guidance will carry the same level of authority. The statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009.  The adoption of SFAS No. 168 had no material effect on our operations. In May 2009 the Financial Accounting Standards Board (“FASB”) issued a new standard pertaining to subsequent events that defined the period after the balance sheet date during which a reporting entity shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements and the circumstances under which a company shall recognize events or transactions occurring after the balance sheet date in its financial statements.  This standard also requires a company to disclose the date through which subsequent events have been evaluated for recognition or disclosure in the financial statements.  We have reflected the recognition and disclosure requirements of this standard in this Form 10-Q.


ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


The following discussion should be read in conjunction with our unaudited financial statements and the notes thereto.










Forward-Looking Statements


This quarterly report contains forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words "believe," "anticipate," "expect," "estimate," “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management's current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that we desire to effect; Securities and Exchange Commission regulations which affect trading in the securities of "penny stocks,"; and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this report on Form 10-Q, including, without limitation, the information set forth under the heading “Management’s Discussion and Analysis or Plan of Operation" identifies important additional factors that could materially adversely affect actual results and performance. You are urged to carefully consider these factors. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement.


Overview and Plan of Operation

 

A brief history and recent developments

 

Gateway Certifications, Inc. (“Gateway” or the “Company”) was incorporated on August 30, 2006 and became a reporting public company in July 2007. We are headquartered in Brooklyn. Our principal executive offices are located at 35 Meadow Street, Brooklyn, NY 11206, and our telephone number is (718) 336-3922. Our website address is www.gcertifications.com.


In company with federal agencies and private organizations, Gateway recognizes the historical lack of access that women, minorities and other qualifying individuals have had to the resources needed to develop their small businesses.


How we generate revenue


The Company was formed to provide certification services to women-owned, minority-owned and other qualified businesses  (collectively referred to as “Minority Businesses”) that seek Minority Business Enterprises certification (MBE), Women’s Business Enterprise certification (WBE), Disadvantaged Business Enterprise (DBE) certification, 8(a) and or SDB designation and various State, City and private sector certifications (collectively referred to as “Certifications Programs”).


Once successfully certified in one or more Certification Programs, the Company then assists Minority Businesses to leverage and utilize their certification status to procure and secure business relationships and available opportunities for the delivery or provision of their goods and/or services to public and private corporations, federal, state and local agencies. We connect Minority Businesses with opportunities based on their business, capacity, expertise and strategic goals.


Although federal, state, city and local government agencies and public and private corporations do not and can not guarantee any specific amount of business a certified Minority Business, once certified, Minority Businesses achieve preferential access to bid for contracts for goods or services that are related to their respective business concerns.

 

Results of Operations for the Nine Months Ended September 30, 2009 Compared to the Nine Months Ended September 30, 2008


Our certification and supplier diversity consulting income during the nine months ended September 30, 2009 resulted in net revenues of $3,260 as compared to the nine months ended September 30, 2008 where we had $1,750 in net revenues. This was an increase of $1,510, or 86%. The increase in certification and supplier diversity consulting income was due to the fact that we were able to recognize revenue for services rendered for certification and supplier diversity consulting services for the period.


General and administrative expenses for the nine months ended September 30, 2009 were $12,746.  This was a decrease of $12,384, or 49%, as compared to general and administrative expenses of $25,130 for the nine months ended September 30, 2008.  During the nine months ended September 30, 2009, we incurred professional services fees in the amount of $9,975, filing fees, dues and subscription costs of $694, telephone expenses of $1,059, office expenses of $288, depreciation expenses of $288, computer and internet expenses of $10, advertising and promotion expense of $20, and other miscellaneous operating expenses amounting to $412.


Depreciation expense for the nine months ended September 30, 2009 was $288. This is an increase of $0, or 0%, as compared to depreciation expense of $288 for the nine months ended September 30, 2008.





We had net loss of $9,581 (or basic and diluted loss per share of $0.0011) for the nine months ended September 30, 2009, as compared to a net loss of $23,440 (or basic and diluted loss per share of $0.0028) for the nine months ended September 30, 2008.  The decrease in net loss was primarily due to the fact that we no longer incur rent expense.


Liquidity and Capital Resources


We had total assets of $1,094 as of September 30, 2009. This consisted of total current assets of $383 and equipment of $711 net of $1,184 of accumulated depreciation. This was a decrease of $288, or 21%, as compared to total assets of $1,382 for the period ended December 31, 2008.


We had negative working capital of $15,504 as of September 30, 2009.


We had total liabilities of $23,887 as of September 30, 2009, which consisted of current liabilities of $15,887 and long term liabilities related to shareholder loans of $8,000. This was an increase of $9,293, or 64%, as compared to total liabilities of $14,594 for the period ended December 31, 2008.


We had an accumulated deficit of $72,643 as of September 30, 2009. This was an increase of $9,581, or 15%, as compared to an accumulated deficit of $63,062 for the period ended December 31, 2008.


We had net cash used in operating activities of $7,000 for the nine months ended September 30, 2009. The net cash used in operating activities for the nine months ended September 30, 2008 was $20,319. This was a decrease of $13,319, or 66%.


We had $7,000 in net cash provided by financing activities for the nine months ended September 30, 2009, as compared to $2,500 for the nine months ended September 30, 2008, which consisted solely of a shareholder loan pursuant to terms of a Credit Agreement and Note entered into by the Company and a majority shareholder.   


We have no specific commitments for any future capital expenditures.  However, we will continue to incur normal operating expenses and routine fees and expenses incident to our reporting duties as a public company. Our cash requirements for the next three months are relatively modest, principally, office and professional expenses.


Unless we receive additional capital, we will only be able to pay our future debts and meet operating expenses by conducting profitable operations or otherwise generating positive cash flow. As a practical matter, we are unlikely to generate positive cash flow by any means other than successful and profitable operations.  Management and the shareholders are not obligated to provide any further funding. Notwithstanding, on November 15, 2008, our board of directors determined that it was in the best interests of the Company to issue a commercial note, whereby the Company would enter into credit agreements with the majority stockholders Mr. Sarfoh and Mr. Belton (collectively referred to as “Creditors”) to obtain credit for working capital and other general business purposes (“Credit Agreement”). Pursuant to the terms of the Credit Agreement, Creditors are willing to extend credit to the Company in the amount of up to $17,000.


In consideration for the credit extensions (“Loans”), the Company executed and delivered in favor of Creditors a commercial promissory note (“Note”) providing with respect to the Loans a maturity date of June 30, 2013 and interest accruing on the principal balance outstanding from time to time at an annual rate of eight percent (8%) payable. All outstanding principal and unpaid interest under the Note and all other amounts due and payable under this Note shall become automatically due and payable, without demand or notice, on June 30, 2013. The Note shall be prepayable without premium or penalty.


Outside of the Loans, we do not have any other identified sources of additional capital. There can be no assurance that additional capital will be available to us, or that, if available, it will be on terms satisfactory to us. Any additional financing may involve dilution to our shareholders. In the alternative, additional funds may be provided from cash flow in excess of that needed to finance our day-to-day operations, although we may never generate this excess cash flow. If we do not raise additional capital or generate additional funds, implementation of our plans for growth will be delayed. If necessary we may withdraw from certain growth strategies to conserve cash for continued operations.


We have no intention of borrowing money to reimburse or pay commissions to any of our officers, directors or shareholders or their affiliates. Other than as presented in our registration statement on Form SB-2, there currently are no plans to sell additional securities to raise capital, although sales of securities may be necessary to obtain needed funds.

 







Should the Company lack available funding, severe consequences could occur, including among others:


·

failure to make timely filings with the SEC as required by the Exchange Act, which also probably would result in suspension of trading or quotation in our stock and could result in fines and penalties to us under the Exchange Act;

·

inability to pay legal and accounting fees and other operating expenses; or

·

curtailing or eliminating our ability to continue operations;


Off-Balance Sheet Arrangements


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.


ITEM 3.      

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


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


ITEM 4.  

CONTROLS AND PROCEDURES


Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report (the “Evaluation Date”), has concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required  disclosure, and (ii) is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.


We plan to improve our internal control over financial reporting in an effort to remediate these deficiencies through improved supervision of our accounting processes. These deficiencies have been disclosed to our board of directors. We believe that this effort is sufficient to fully remedy these deficiencies and we are continuing our efforts to improve and strengthen our control processes and procedures. Our Chief Executive Officer, Chief Financial Officer and director will continue to work with our auditors and other outside advisors to ensure that our controls and procedures are adequate and effective.

 

Changes in Internal Control Over Financial Reporting


There were no changes in the Company’s internal control over financial reporting that occurred during the most recent quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting for that period.



PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS


There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.


ITEM 1A.

RISK FACTORS


As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.








ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES


Except as may have previously been disclosed on our registration statement on Form SB-2, a current report on Form 8-K or a quarterly report on Form 10-Q, we have not sold any of our securities in a private placement transaction or otherwise during the past three years.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES


Not applicable.


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

 

No matters were submitted to a vote or for the written consent of security shareholders, through the solicitation of proxies or otherwise, during the nine months ended September 30, 2009 and no meeting of shareholders was held.

 

ITEM 5.  OTHER INFORMATION


Not applicable.


ITEM 6.  EXHIBITS


Exhibit No.

 

Description

  

 

  

31.1

 

Certification of Principal Executive Officer and Principal Financial Officer filed pursuant to Section 302 of

the Sarbanes-Oxley Act of 2002.

   

 

   

32.1

 

Certification of Principal Executive Officer and Principal Financial Officer furnished 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 the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


 

 

   

   

GATEWAY CERTIFICATIONS, INC.

   
 

 
 

 
   

Date: November 11, 2009

By:  

/s/ Lawrence Williams, Jr.

 


Lawrence Williams, Jr.

 

 Chief Executive Officer and Principal Accounting Officer