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EX-32.1 - Alchemical Capital Corp. | ex322.htm |
EX-31.1 - Alchemical Capital Corp. | ex311.htm |
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 10-Q
þ
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the quarterly period ended
September 30, 2009
OR
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 number 0-53347
ALCHEMICAL
CAPITAL CORP.
(Exact
name of registrant as specified in its charter)
Florida | 26-2814324 | |
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
Number)
|
1560
Calais Drive
Miami
Beach, Florida
|
33141
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(831)
325-4194
(Issuer’s
telephone number, including area code)
Not
applicable
(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 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 þ No o
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 o No þ
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
definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” 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
(Do not
check if a smaller reporting company)
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes þ No o
State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date.
Class
|
Outstanding
at October 20, 2009
|
|
Common
Stock, no par value per share
|
3,000,000
shares
|
-1-
ALCHEMICAL CAPITAL
CORP.
TABLE OF CONTENTS
PAGE
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3
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3
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3
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4
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5
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6
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9 | |
12 | |
12 | |
14 | |
14 | |
15 | |
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-2-
Item
1. Financial Statements
(A
DEVELOPMENT STAGE COMPANY)
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||||||||
BALANCE
SHEETS
|
||||||||
ASSETS
|
||||||||
September 30, 2009 |
December
31, 2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
CURRENT
ASSETS:
|
||||||||
Cash
& equivalents
|
$ | - | $ | - | ||||
Total
Assets
|
$ | - | $ | - | ||||
LIABILITIES AND SHAREHOLDERS'
DEFICIENCY
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable & accrued expenses
|
$ | 2,375 | $ | 2,500 | ||||
Loan
from shareholder
|
17,132 | 6,093 | ||||||
Total
Liabilities
|
19,507 | 8,593 | ||||||
SHAREHOLDERS'
DEFICIENCY
|
||||||||
Common
stock (no par value, 100,000,000 shares authorized;
|
||||||||
3,000,000
issued and outstanding)
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3,000 | 3,000 | ||||||
Deficit
accumulated during the development stage
|
(22,507 | ) | (11,593 | ) | ||||
$ | (19,507 | ) | $ | (8,593 | ) | |||
Total
Liabilities and Shareholders' Deficiency
|
$ | - | $ | - | ||||
-3-
(A
DEVELOPMENT STAGE COMPANY)
|
||||||||||||||||
STATEMENTS
OF OPERATIONS
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Cumulative from June 16, 2008 (Inception) to September 30, 2009 | ||||||||||||||||
For
the three month period
|
For
the nine month period
|
For
the three month period
|
||||||||||||||
ended
September 30, 2009
|
ended
September 30, 2009
|
ended
September 30, 2008
|
||||||||||||||
Revenue:
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Expenses:
|
||||||||||||||||
General
and Administrative
|
(2,795 | ) | (13,414 | ) | (1,335 | ) | (22,507 | ) | ||||||||
Net
loss
|
$ | (2,795 | ) | $ | (13,414 | ) | $ | (1,335 | ) | $ | (22,507 | ) | ||||
Basic
and diluted net loss per share
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Weighted
average number of shares used in calculating
|
||||||||||||||||
basic
and diluted net loss per share
|
3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | ||||||||||||
-4-
ALCHEMICAL
CAPITAL CORP.
|
||||||||
(A
DEVELOPMENT STAGE COMPANY)
|
||||||||
STATEMENTS
OF CASH FLOWS
|
||||||||
(Unaudited)
|
||||||||
Cumulative from June 16, 2008 (Inception) to September 30, 2009 | ||||||||
For
the nine month period
|
||||||||
ended
September 30, 2009
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
loss
|
$ | (13,414 | ) | $ | (22,507 | ) | ||
Increase
in accounts payable
|
11,985 | 11,985 | ||||||
Net
cash used in operating activities
|
(1,429 | ) | (10,522 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds
from loan from related party
|
1,429 | 7,522 | ||||||
Proceeds
from issuance of common stock
|
- | 3,000 | ||||||
Net
cash provided by financing activities
|
1,429 | 10,522 | ||||||
NET
INCREASE IN CASH & CASH EQUIVALENTS
|
- | - | ||||||
CASH
& CASH EQUIVALENTS, BEGINNING BALANCE
|
- | - | ||||||
CASH
& CASH EQUIVALENTS, ENDING BALANCE
|
$ | - | $ | - | ||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
NONCASH
INVESTING AND FINANCING TRANSACTIONS
|
||||||||
Taxes
paid
|
$ | - | $ | - | ||||
Interest
paid
|
$ | - | $ | - | ||||
-5-
ALCHEMICAL
CAPITAL CORP.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
Note
1 – Basis of Presentation
The
accompanying unaudited interim financial statements have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission for the presentation of interim financial information, but do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. The audited
financial statements for the period June 16, 2008 (Inception) through December
31, 2008 were filed on March 31, 2009 with the Securities and Exchange
Commission and are hereby referenced. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the
three and nine month periods ended September 30, 2009 and for the period ended
June 16, 2008 (Inception) through September 30, 2009 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2009.
Note
2 - Accounting Policies and Operations
Organization
Alchemical
Capital Corp. (the “Company”), a development stage company, was incorporated in
Florida on June 16, 2008. The Company intends to serve as a vehicle
to effect an asset acquisition, merger, exchange of capital stock or other type
of business combination with a domestic or foreign business. At October 20,
2009, the Company had not yet commenced any formal business operations and all
activity to date has related to the Company formation, capital stock issuance
and professional fees with regard to filings with the Securities and Exchange
Commission and identification of businesses. The Company’s fiscal year ends on
December 31st.
Cash
and Cash Equivalents
The
Company considers all highly liquid debt instruments with original maturities of
three months or less to be cash equivalents.
Earnings
Per Share
The
Company computes earnings per share in accordance with Statement of Accounting
Standards No. 128, “Earnings per Share” (“SFAS No. 128”). Under the provisions
of SFAS No. 128, basic earnings per share is computed by dividing the net income
(loss) for the period by the weighted average number of common shares
outstanding during the period. Diluted earnings per share is computed by
dividing the net income (loss) for the period by the weighted average number of
common and potentially dilutive common shares outstanding during the
period. There were no potentially dilutive common shares outstanding
during the period.
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 certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Fair
Value of Financial Instruments
The
Company considers that the carrying amount of financial instruments, including
accounts payable, approximates fair value because of the short maturity of these
instruments.
-6-
Recent
Accounting Pronouncements
In
June 2009, FASB approved the FASB Accounting Standards Codification (“the
Codification”) as the single source of authoritative nongovernmental GAAP. All
existing accounting standard documents, such as FASB, American Institute of
Certified Public Accountants, Emerging Issues Task Force and other related
literature, excluding guidance from the Securities and Exchange Commission
(“SEC”), have been superseded by the Codification. All other non-grandfathered,
non-SEC accounting literature not included in the Codification has become
nonauthoritative. The Codification did not change GAAP, but instead introduced a
new structure that combines all authoritative standards into a comprehensive,
topically organized online database. The Codification is effective for interim
or annual periods ending after September 15, 2009, and impacts the
Company’s financial statements as all future references to authoritative
accounting literature will be referenced in accordance with the Codification.
There have been no changes to the content of the Company’s financial statements
or disclosures as a result of implementing the Codification during the quarter
ended September 30, 2009. As a result of the Company’s
implementation of the Codification during the quarter ended September 30, 2009,
previous references to new accounting standards and literature are no longer
applicable. In the current quarter financial statements, the Company will
provide reference to both new and old guidance to assist in understanding the
impacts of recently adopted accounting literature, particularly for guidance
adopted since the beginning of the current fiscal year but prior to the
Codification.
SFAS
No. 165 established general standards of accounting for and disclosure of
events that occur after the balance sheet date, but before the financial
statements are issued or available to be issued (“subsequent events”). An entity
is required to disclose the date through which subsequent events have been
evaluated and the basis for that date. For public entities, this is the date the
financial statements are issued. SFAS No. 165 does not apply to subsequent
events or transactions that are within the scope of other GAAP and did not
result in significant changes in the subsequent events reported by the Company.
SFAS No. 165 became effective for interim or annual periods ending after
June 15, 2009 and did not impact the Company’s financial statements. The
Company evaluated for subsequent events through the issuance date of the
Company’s financial statements. No recognized or non-recognized subsequent
events were noted.
FSP SFAS
No. 142-3 amended the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under previously issued goodwill and intangible
assets topics. This change was intended to improve the consistency between the
useful life of a recognized intangible asset and the period of expected cash
flows used to measure the fair value of the asset under topics related to
business combinations and other GAAP. The requirement for determining useful
lives must be applied prospectively to intangible assets acquired after the
effective date and the disclosure requirements must be applied prospectively to
all intangible assets recognized as of, and subsequent to, the effective date.
FSP SFAS No. 142-3 became effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the
Company’s financial statements.
SFAS
No. 160 changed the accounting and reporting for minority interests such
that they will be recharacterized as noncontrolling interests and classified as
a component of equity. SFAS No. 160 became effective for fiscal years
beginning after December 15, 2008 with early application prohibited. The
Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer
records an intangible asset when the purchase price of a noncontrolling interest
exceeds the book value at the time of buyout. Any excess or shortfall for
buyouts of noncontrolling interests in mature restaurants is recognized as an
adjustment to additional paid-in capital in stockholders’ equity. Any shortfall
resulting from the early buyout of noncontrolling interests will continue to be
recognized as a benefit in partner investment expense up to the initial amount
recognized at the time of buy-in. Additionally, operating losses can be
allocated to noncontrolling interests even when such allocation results in a
deficit balance (i.e.,
book value can go negative). The Company presents noncontrolling
interests (previously shown as minority interest) as a component of equity on
its consolidated balance sheets. Minority interest expense is no longer
separately reported as a reduction to net income on the consolidated income
statement, but is instead shown below net income under the heading “net income
attributable to noncontrolling interests.” The adoption of SFAS No. 160 did
not have any other material impact on the Company’s financial
statements.
SFAS
No. 167 amends FASB Interpretation No. 46(R) “Consolidation of
Variable Interest Entities regarding certain guidance for determining whether an
entity is a variable interest entity and modifies the methods allowed for
determining the primary beneficiary of a variable interest entity. The
amendments include: (1) the elimination of the exemption for qualifying
special purpose entities, (2) a new approach for determining who should
consolidate a variable-interest entity, and (3) changes to when it is
necessary to reassess who should consolidate a variable-interest entity. SFAS
No. 167 is effective for the first annual reporting period beginning after
November 15, 2009, with earlier adoption prohibited. The Company will adopt
SFAS No. 167 in fiscal 2010 and does not anticipate any material impact on
the Company’s financial statements.
Management
does not believe that any other recently issued, but not yet effective,
accounting standards or pronouncements, if currently adopted, would have a
material effect on the Company’s financial statements.
Going
Concern
The
Company’s financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has not yet established an
ongoing source of revenues sufficient to cover its operating costs and allow it
to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the
Company is unable to obtain adequate capital, it could be forced to cease
operations. The accompanying financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
-7-
Management’s
Plan to Continue as a Going Concern
The
Company has met its historical working capital requirements from the sale of its
capital shares. In order to continue as a going concern, the Company
will need, among other things, additional capital
resources. Management’s plans to obtain such resources for the
Company include (1) obtaining capital from the sale of the equity, (2) loans
from Narayan Capital Funding Corp. to meet its general and administrative
expenses, and (3) seeking out and completing a merger with an existing operating
company. However, management cannot provide any assurance that the
Company will be successful in accomplishing any of its plans.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. In order to minimize the financial burden on the Company,
Narayan Capital Funding Corp., the Company’s majority shareholder, has agreed to
provide non-interest bearing demand loans to the Company to pay the Company’s
annual audit fees, filing costs, legal fees and other costs as long as the Board
of Directors of the Company and Narayan Capital Funding Corp. deem it
necessary. The Company will account for each such payment as a demand
loan and, accordingly, be recorded as a current liability on the Company’s
books. There can be no assurance that such financial support shall be
ongoing or available on terms or conditions acceptable to the
Company.
Development
Stage Risk
Since its
inception, the Company has been dependent upon the receipt of capital investment
to fund its continuing activities. In addition to the normal risks associated
with a new business venture, there can be no assurance that the Company's
business plan will be successfully executed. Our ability to execute our business
plan will depend on our ability to obtain additional financing and achieve a
profitable level of operations. There can be no assurance that sufficient
financing will be obtained. Further, we cannot give any assurance
that we will generate substantial revenues or that our business operations will
prove to be profitable.
Loans
From Shareholder
The loans
from Narayan Capital Funding Corp., the majority shareholder, in the amount of
$17,132 are non-interest bearing demand loans, which were approved by the Board
of Directors of the Company during the period from June 16, 2008 (Inception)
through September 30, 2009.
Note
3 – Shareholders’ Equity
On June
16, 2008, the Company issued 3,000,000 shares of common stock to its initial
shareholder in exchange for $3,000 in cash.
-8-
Item
2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
The
following discussion and analysis should be read in conjunction with our
financial statements, including the notes thereto, appearing in this Form 10-Q
and in our Annual Report on Form 10-K for the fiscal year ended December 31,
2008 filed on March 31, 2009 with the Securities and Exchange Commission and are
hereby referenced.
The
statements in this report include forward-looking statements. These
forward-looking statements are based on our management’s current expectations
and beliefs and involve numerous risks and uncertainties that could cause actual
results to differ materially from expectations. You should not rely
upon these forward-looking statements as predictions of future events because we
cannot assure you that the events or circumstances reflected in these statements
will be achieved or will occur. You can identify a forward-looking
statement by the use of the forward-terminology, including words such as “may”,
“will”, “believes”, “anticipates”, “estimates”, “expects”, “continues”,
“should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the
negative of these words and phrases or other variations of these words and
phrases or comparable terminology. These forward-looking statements
relate to, among other things: our sales, results of operations and anticipated
cash flows; capital expenditures; depreciation and amortization expenses; sales,
general and administrative expenses; our ability to maintain and develop
relationship with our existing and potential future customers; and,
our ability to maintain a level of investment that is required to remain
competitive. Many factors could cause our actual results to differ
materially from those projected in these forward-looking statements, including,
but not limited to: variability of our revenues and financial performance; risks
associated with technological changes; the acceptance of our products in the
marketplace by existing and potential customers; disruption of operations or
increases in expenses due to our involvement with litigation or caused by civil
or political unrest or other catastrophic events; general economic conditions,
government mandates and conditions in the gaming/entertainment industry in
particular; and, the continued employment of our key personnel and other risks
associated with competition.
For
a discussion of the factors that could cause actual results to differ
materially from the forward-looking statements see the “Liquidity and
Capital Resources” section under “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in this item of this report
and the other risks and uncertainties that are set forth elsewhere in this
report or detailed in our other Securities and Exchange Commission reports
and filings. We believe it is important to communicate our
expectations. However, our management disclaims any obligation to update
any forward-looking statements whether as a result of new information,
future events or otherwise.
|
Overview
Alchemical
Capital Corp., a Florida corporation (the “Company”, “us”, “we” and “our”), is a
development stage company conducting no business operations, other than our
efforts to effect a business combination with a target business that desires to
utilize our status as a reporting corporation under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), which we consider to have significant
growth potential. To date, we have neither engaged in any operations
nor generated any revenue. We have not generated any cash flows from
operations. We cannot predict to what extent our liquidity and
capital resources will be diminished prior to the consummation of a business
combination or whether our capital will be further depleted by the operating
losses, if any, of the target business with which we may effectuate a business
combination. The continuation of our business is dependent upon our ability to
obtain adequate financing arrangements, effectuate a business combination and,
ultimately, engage in future profitable operations.
Presently,
we are not in a position to meet our cash requirements for the next 12 months,
as we do not have any cash. From inception, our shareholders have
committed to make loans to us on an as needed basis. There are no
further commitments, agreements or understandings of any kind with respect to
any loans or advances to be made on our behalf.
Prior to
the occurrence of a business combination, we may be required to raise capital
through the sale or issuance of additional securities or obtain borrowings or
advances from third party sources in order to ensure that we can pay our
operating expenses. It is also possible that a business combination
might not occur during the next 12 months, if at all. In the event we
are unable to pay our operating expenses prior to the effectuation of a business
combination, we may cease operations and a business combination may not
occur.
Going
Concern
Our
financial statements have been prepared on the basis of accounting principles
applicable to a going concern. As a result, they do not include adjustments that
would be necessary if we were unable to continue as a going concern and would
therefore be obligated to realize assets and discharge our liabilities other
than in the normal course of operations. As reflected in the
accompanying financial statements, the Company is in the development stage with
no operations or revenues, has used cash flows in operations of $10,522 from
inception of June 16, 2008 to September 30, 2009 and has an accumulated deficit
of $22,507 through September 30, 2009. This raises substantial doubt about our
ability to continue as a going concern, as expressed by our auditors in its
opinion on our financial statements included in this report. 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.
-9-
We have
not yet established any source of revenues sufficient to cover our operating
costs and allow us to continue as a going concern. Our ability to continue
as a going concern is dependent on us obtaining adequate capital or loans to
fund operating losses until we become profitable. If we are unable to
obtain adequate capital or loans, we could be forced to cease operations.
There can be no assurance that we will operate at a profit or additional debt or
equity financing will be available, or if available, can be obtained on
satisfactory terms.
Critical
Accounting Policies and Estimates
A summary
of significant accounting policies is provided in Note 2 to our financial
statements included in our filing on Form 10-K with the Securities and Exchange
Commission on March 31, 2009. Our sole officer and director believes
that the application of these policies on a consistent basis enables the Company
to provide useful and reliable financial information about the Company's
operating results and financial condition.
The
preparation of financial statements in conformity with generally accepted
accounting principles requires our sole officer and director 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 and the reported amounts of revenues and expenses during the
reporting period. Actual results will differ from those estimates.
Plan
of Operation
The
Company was incorporated in Florida on June 16, 2008. We intend to
serve as a vehicle to effect an acquisition, merger, exchange of capital stock
or other type of business combination with a domestic or foreign
business. Since our inception, we had not commenced any formal
business operations and all activity to date has related to the Company’s
formation, capital stock issuance, professional fees with regard to the subject
matter of the filings with the Securities and Exchange Commission and
identification of businesses.
Summary of Consolidated
Condensed Results of Operations
Any
measurement and comparison of revenues and expenses from continuing operations
should not be considered necessarily indicative or interpolated as the trend to
forecast our future revenues and results of operations.
Results
for the Nine Months Ended September 30, 2009
Revenues. The Company’s
revenues for the nine months ended September 30, 2009 were $0. No
revenues occurred during these periods, because no there were no
sales.
Cost of
Revenues. The Company’s cost of revenues for the nine months
ended September 30, 2009 were $0. There was not cost of revenues,
because no sales were made by the Company.
Gross Profit/Loss. The
Company’s gross profit/loss for the nine months ended September 30, 2009 was
$0. No gross profit/loss occurred during these periods, because no
there were no sales.
General and Administrative
Expenses. General and administrative expenses for the nine months ended
September 30, 2009 were $13,414. General and administrative expenses
consisted primarily of professional service fees.
Net Loss. Net loss for the
nine months ended September 30, 2009 was $13,414. The net loss for
the nine months ended September 30, 2009 was primarily related to general and
administrative expenses and no revenues for the periods indicated.
As of the
nine months ended September 30, 2009, we had an accumulated deficit of
$22,507.
Results
for the Quarter Ended September 30, 2009
Revenues. The Company’s
revenues for the three months ended September 30, 2009 were $0. No
revenues occurred during these periods, because no there were no
sales.
Cost of
Revenues. The Company’s cost of revenues for the three months
ended September 30, 2009 were $0. There was not cost of revenues,
because no sales were made by the Company.
-10-
Gross Profit/Loss. The
Company’s gross profit/loss for the three months ended September 30, 2009 was
$0. No gross profit/loss occurred during these periods, because no
there were no sales.
General and Administrative
Expenses. General and administrative expenses for the three months ended
September 30, 2009 were $2,795. General and administrative expenses consisted
primarily of professional service fees.
Net Loss. Net loss for the
three months ended September 30, 2009 was $2,795. The net loss for
the three months ended September 30, 2009 was primarily related to general and
administrative expenses and no revenues for the periods indicated.
Impact
of Inflation
We
believe that the rate of inflation has had negligible effect on our
operations. We believe we can absorb most, if not all, increased
non-controlled operating costs by increasing sales prices, whenever deemed
necessary and by operating our Company in the most efficient manner
possible.
Liquidity
and Capital Resources
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.
Since its inception, the Company has been funded by its founders and through its
initial public offering.
As of
September 30, 2009, total current assets were $0. As of December 31,
2008, total current assets were $0.
As of
September 30, 2009, total current liabilities were $19,507, which consisted of
accounts payable in the amount of $2,375 and a shareholder loan in the amount of
$17,132. As of December 31, 2008, total current liabilities were
$8,593, which consisted of accounts payable in the amount of $2,500 and a
shareholder loan in the amount of $6,093. We had negative net working
capital of $19,507 as of September 30, 2009, compared to negative net working
capital of $8,593 as of December 31, 2008.
During
the nine months ended September 30, 2009, operating activities used cash of
$1,429. During the three months ended September 30, 2009, operating
activities used cash of $320. The cash used by operating activities
was due primarily to general and administrative expenses. All of the
cash was provided by a shareholder loan, which was the Company’s sole source of
cash for the three and nine month periods ended September 30, 2009.
Intangible
Assets
There
were no intangible assets during the three and nine month periods ended
September 30, 2009 and from the period June 16, 2008 (inception) through
September 30, 2009.
Material
Commitments
There
were no material commitments during the three and nine month periods ended
September 30, 2009 and from the period June 16, 2008 (inception) through
September 30, 2009.
Off-Balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements or any anticipate entering into any
off-balance 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 are material to investors.
Recent
Accounting Pronouncements
In
June 2009, FASB approved the FASB Accounting Standards Codification (“the
Codification”) as the single source of authoritative nongovernmental GAAP. All
existing accounting standard documents, such as FASB, American Institute of
Certified Public Accountants, Emerging Issues Task Force and other related
literature, excluding guidance from the Securities and Exchange Commission
(“SEC”), have been superseded by the Codification. All other non-grandfathered,
non-SEC accounting literature not included in the Codification has become
nonauthoritative. The Codification did not change GAAP, but instead introduced a
new structure that combines all authoritative standards into a comprehensive,
topically organized online database. The Codification is effective for interim
or annual periods ending after September 15, 2009, and impacts the
Company’s financial statements as all future references to authoritative
accounting literature will be referenced in accordance with the Codification.
There have been no changes to the content of the Company’s financial statements
or disclosures as a result of implementing the Codification during the quarter
ended September 30, 2009. As a result of the Company’s
implementation of the Codification during the quarter ended September 30, 2009,
previous references to new accounting standards and literature are no longer
applicable. In the current quarter financial statements, the Company will
provide reference to both new and old guidance to assist in understanding the
impacts of recently adopted accounting literature, particularly for guidance
adopted since the beginning of the current fiscal year but prior to the
Codification.
-11-
SFAS
No. 165 established general standards of accounting for and disclosure of
events that occur after the balance sheet date, but before the financial
statements are issued or available to be issued (“subsequent events”). An entity
is required to disclose the date through which subsequent events have been
evaluated and the basis for that date. For public entities, this is the date the
financial statements are issued. SFAS No. 165 does not apply to subsequent
events or transactions that are within the scope of other GAAP and did not
result in significant changes in the subsequent events reported by the Company.
SFAS No. 165 became effective for interim or annual periods ending after
June 15, 2009 and did not impact the Company’s financial statements. The
Company evaluated for subsequent events through the issuance date of the
Company’s financial statements. No recognized or non-recognized subsequent
events were noted.
FSP SFAS
No. 142-3 amended the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under previously issued goodwill and intangible
assets topics. This change was intended to improve the consistency between the
useful life of a recognized intangible asset and the period of expected cash
flows used to measure the fair value of the asset under topics related to
business combinations and other GAAP. The requirement for determining useful
lives must be applied prospectively to intangible assets acquired after the
effective date and the disclosure requirements must be applied prospectively to
all intangible assets recognized as of, and subsequent to, the effective date.
FSP SFAS No. 142-3 became effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the
Company’s financial statements.
SFAS
No. 160 changed the accounting and reporting for minority interests such
that they will be recharacterized as noncontrolling interests and classified as
a component of equity. SFAS No. 160 became effective for fiscal years
beginning after December 15, 2008 with early application prohibited. The
Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer
records an intangible asset when the purchase price of a noncontrolling interest
exceeds the book value at the time of buyout. Any excess or shortfall for
buyouts of noncontrolling interests in mature restaurants is recognized as an
adjustment to additional paid-in capital in stockholders’ equity. Any shortfall
resulting from the early buyout of noncontrolling interests will continue to be
recognized as a benefit in partner investment expense up to the initial amount
recognized at the time of buy-in. Additionally, operating losses can be
allocated to noncontrolling interests even when such allocation results in a
deficit balance (i.e.,
book value can go negative). The Company presents noncontrolling
interests (previously shown as minority interest) as a component of equity on
its consolidated balance sheets. Minority interest expense is no longer
separately reported as a reduction to net income on the consolidated income
statement, but is instead shown below net income under the heading “net income
attributable to noncontrolling interests.” The adoption of SFAS No. 160 did
not have any other material impact on the Company’s financial
statements.
SFAS
No. 167 amends FASB Interpretation No. 46(R) “Consolidation of
Variable Interest Entities regarding certain guidance for determining whether an
entity is a variable interest entity and modifies the methods allowed for
determining the primary beneficiary of a variable interest entity. The
amendments include: (1) the elimination of the exemption for qualifying
special purpose entities, (2) a new approach for determining who should
consolidate a variable-interest entity, and (3) changes to when it is
necessary to reassess who should consolidate a variable-interest entity. SFAS
No. 167 is effective for the first annual reporting period beginning after
November 15, 2009, with earlier adoption prohibited. The Company will adopt
SFAS No. 167 in fiscal 2010 and does not anticipate any material impact on
the Company’s financial statements.
Management
does not believe that any other recently issued, but not yet effective,
accounting standards or pronouncements, if currently adopted, would have a
material effect on the Company’s financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We have
not utilized any derivative financial instruments such as futures contracts,
options and swaps, forward foreign exchange contracts or interest rate swaps and
futures. We believe that adequate controls are in place to monitor any hedging
activities. We do not currently have any sales or own assets and
operate facilities in countries outside the United States and, consequently, we
are not effected by foreign currency fluctuations or exchange rate
changes. Overall, we believe that our exposure to interest rate risk
and foreign currency exchange rate changes is not material to our financial
condition or results of operations.
Item
4. Controls and Procedures
We
maintain disclosure controls and procedures that are designed to ensure that the
information required to be disclosed in the reports that we file 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 such information is accumulated and communicated to our management,
including our President and Treasurer, as appropriate, to allow timely decisions
regarding required disclosures. In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can only provide
reasonable assurance of achieving the desired control objectives, and in
reaching a reasonable level of assurance, management necessarily was required to
apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures.
As
required by SEC Rule 13a-15(b), we carried out an evaluation, under the
supervision and with the participation of our management, including our
President and Treasurer, of the effectiveness of the design and operation of our
disclosure controls and procedures as of the end of our first fiscal quarter
covered by this report. Based on the foregoing, our President and Treasurer
concluded that our disclosure controls and procedures were effective at the
reasonable assurance level.
There has
been no change in our internal controls over financial reporting during our
first fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal controls over financial reporting.
-12-
Management’s
Report on Internal Control over Financial Reporting
The
management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting. Internal control
over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated
under the Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the Company’s principal executive and financial officers and
effected by the Company’s board of directors, management and other personnel, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and
procedures that:
·
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
Company;
|
·
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company
are being made only in accordance with authorizations of management and
directors of the Company; and
|
·
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that
could have a material effect on the financial
statements.
|
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
The
Company’s management assessed the effectiveness of the Company’s internal
control over financial reporting as of September 30, 2009. In making
this assessment, the Company’s management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in
Internal Control-Integrated Framework. The COSO framework is based
upon five integrated components of control: control environment, risk
assessment, control activities, information and communications and ongoing
monitoring.
Based on
the assessment performed, management has concluded that the Company’s internal
control over financial reporting is effective and provides reasonable assurance
regarding the reliability of its financial reporting and the preparation of its
financial statements as of September 30, 2009 in accordance with generally
accepted accounting principles. Further, management has not
identified any material weaknesses in internal control over financial reporting
as of September 30, 2009.
This
quarterly report does not include an attestation report of the Company’s
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management’s report in this annual report.
/s/
Robert Papiri
President,
Secretary, Treasurer and Director
-13-
PART
II OTHER INFORMATION
Item
6. Exhibits
(a) Exhibits
-14-
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
ALCHEMICAL
CAPITAL CORP.
DATE: November
12,
2009 By: /s/ Robert
Papiri
Robert
Papiri
President,
Secretary and Treasurer
(Principal
Accounting Officer and Authorized Officer)
-15-
Alchemical
Capital Corp.
Index to
Exhibits
Exhibit
Number Description