Praxsyn Corp - FORM 10-Q - March 16, 2010

Attached files

file	filename
EX-31.2 - Praxsyn Corp	v177546_ex31-2.htm
EX-32.2 - Praxsyn Corp	v177546_ex32-2.htm
EX-32.1 - Praxsyn Corp	v177546_ex32-1.htm
EX-31.1 - Praxsyn Corp	v177546_ex31-1.htm

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended January 31, 2010

-OR-

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities And Exchange Act of 1934 for the transaction period from_________ to________

Commission File Number 333-130446

American Antiquities, Inc.

(Exact name of registrant as specified in its charter)

Illinois	20-3191557
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization	Identification Number)

2531 Jackson Road, Suite 177
Ann Arbor, Michigan	48103
(Address of principal executive offices,	Zip Code)

734-645-8546

(Registrant's telephone number, including area code)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

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

Yes ¨ No x

The number of outstanding shares of the registrant's common stock, January 31, 2010: Common Stock - 14,980,500

PART I — FINANCIAL INFORMATION

American Antiquities, Inc.

Item 1. Financial Statements

AMERICAN ANTIQUITIES INCORPORATED

(A Development Stage Company)

Condensed Balance Sheets

	January 31,			October 31,
	2010			2009
	(Unaudited)			(Derived
				from audited
				statements)
Assets

Cash	$	3,366		$	4,107
Office equipment, net of accumulated depreciation of $4,546 and $4,187, respectively		267			626

	$	3,633		$	4,733

Liabilities and Shareholders’ Equity (Deficit)

Liabilities:
Indebtedness to related parties (Note 2)	$	66,350		$	42,350
Total liabilities		66,350			42,350

Shareholders’ equity (deficit):
Preferred stock, $.001 par value; 10,000,000 shares authorized,
-0- and -0- shares issued and outstanding, respectively		—			—
Common stock, $.001 par value; 100,000,000 shares authorized,
14,980,500 and 9,980,500 shares issued and outstanding, respectively		14,981			12,981
Additional paid-in capital		866,894			862,894
Deficit accumulated during development stage		(944,592	)		(913,492	)

Total shareholders’ equity (deficit)		(62,717	)		(37,617	)

	$	3,633		$	4,733

See accompanying notes to condensed, unaudited financial statements

F-1

AMERICAN ANTIQUITIES INCORPORATED

(A Development Stage Company)

Condensed Statements of Operations

(Unaudited)

							June 6, 2005
							(Inception)
	For The Three Months Ended						Through
	January 31,						January 31,
	2010			2009			2010

Commission income	$	—		$	—		$	56,520

Operating expenses:
Contributed services (Note 2)		—			—			24,100
Rent (Note 2)		—			—			9,520
Officer compensation		24,000			—			102,000
Professional fees		6,628			1,680			50,921
Stock-based compensation (Note 2)		—			—			741,000
Other general and administrative expenses		472			4,208			72,248

Operating loss		(31,100	)		(5,888	)		(943,269	)

Non-operating income (expense):
Interest income		—			—			177
Interest expense (Note 2)		—			—			(1,500	)

Loss before income taxes		(31,100	)		(5,888	)		(944,592	)

Income tax provision (Note 4)		—			—			—

Net loss	$	(31,100	)	$	(5,888	)	$	(944,592	)

Basic and diluted loss per share	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding		12,980,500			9,980,500

See accompanying notes to condensed, unaudited financial statements

F-2

AMERICAN ANTIQUITIES INCORPORATED

(A Development Stage Company)

Statement of Changes in Shareholders' Equity (Deficit)

(Unaudited)

									Deficit
									Accumulated
							Additional		During
	Common Stock						Paid-In		Development
	Shares			Par Value			Capital		Stage			Total

Balance, June 6, 2005 (inception)		—		$	—		$	—	$	—		$	—

October 2005, common stock sold to founders and insiders, $.0012 (post-split) per share (Note 2)		32,500,000			32,500			6,500		—			39,000
Services contributed by officers/directors (Note 2)		—			—			530		—			530
Net loss		—			—			—		(1,205	)		(1,205	)

Balance, October 31, 2005		32,500,000			32,500			7,030		(1,205	)		38,325

Services contributed by officers/directors (Note 2)		—			—			3,240		—			3,240
Net loss		—			—			—		(16,660	)		(16,660	)

Balance, October 31, 2006		32,500,000			32,500			10,270		(17,865	)		24,905

November 2006 to March 2007, common stock sold pursuant to Form SB-2 registered offering at $.05 (post-split) per share, less $36,250 of offering costs (Note 3)		1,980,500			1,981			60,794		—			62,775
May 2007, cancellation of officers' common shares (Note 2)		(24,500,000	)		(24,500	)		24,500		—			—
Services contributed by officers/directors (Note 2)		—			—			20,330		—			20,330
Net loss		—			—			—		(76,252	)		(76,252	)

Balance, October 31, 2007		9,980,500			9,981			115,894		(94,117	)		31,758

Net loss		—			—			—		(15,750	)		(15,750	)

Balance, October 31, 2008		9,980,500			9,981			115,894		(109,867	)		16,008

October 2009, common stock issued as payment for related party advances (Note 2)		3,000,000			3,000			747,000		—			750,000
Net loss		—			—			—		(803,625	)		(803,625	)

Balance, October 31, 2009		12,980,500			12,981			862,894		(913,492	)		(37,617	)

March 2010, common stock sold to a related party (unaudited) (Note 2)		2,000,000			2,000			4,000		—			6,000
Net loss (unaudited)		—			—			—		(31,100	)		(31,100	)

Balance, January 31, 2010 (unaudited)		14,980,500		$	14,981		$	866,894	$	(944,592	)	$	(62,717	)

See accompanying notes to condensed, unaudited financial statements

F-3

AMERICAN ANTIQUITIES INCORPORATED

(A Development Stage Company)

Condensed Statements of Cash Flows

(Unaudited)

							June 6, 2005
							(Inception)
	For The Three Months Ended						Through
	January 31,						January 31,
	2010			2009			2010
Net cash used in operating activities		(6,741	)		(5,487	)		(108,596	)

Cash flows from investing activities:
Equipment purchases		—			—			(4,813	)
Net cash used in investing activities		—			—			(4,813	)

Cash flows from financing activities:
Proceeds from sale of common stock		6,000			—			144,025
Proceeds from related party advances		—			—			9,000
Deferred offering costs		—			—			(36,250	)
Net cash provided by financing activities		6,000			—			116,775

Net change in cash		(741	)		(5,487	)		3,366

Cash, beginning of period		4,107			16,128			—

Cash, end of period	$	3,366		$	10,641		$	3,366

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	—		$	—		$	—
Interest	$	—		$	—		$	1,500
Non cash investing and financing transactions:
Common stock issued to repay related party advances (Note 2)	$	—		$	—		$	9,000

See accompanying notes to condensed, unaudited financial statements

F-4

AMERICAN ANTIQUITIES INCORPORATED

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

(1)	Basis of Presentation

The condensed financial statements presented herein have been prepared by the Company (“we”, “us”, “our”) in accordance with the accounting policies in our audited financial statements for the year ended October 31, 2009 as filed in our Form 10-K and should be read in conjunction with the notes thereto. We are in the development stage in accordance with Accounting Standards Codification 915.

In the opinion of management, the accompanying condensed financial statements contain all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim periods presented. Certain information and footnote disclosures, normally included in the financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted. The results of operations presented for the three months ended January 31, 2010 are not necessarily indicative of the results to be expected for the year.

Interim financial data presented herein are unaudited.

(2)	Related Party Transactions

During the three months ended January 2010, we sold 2,000,000 shares of our common stock to a relative of one our officers for $6,000, or $.003 per share.

During the year ended October 31, 2009, a relative of one of our officers loaned us $9,000 under the terms of a promissory note. The note does not carry an interest rate and matures on December 31, 2009. On October 28, 2009, we issued 3 million shares of our restricted common stock as payment for the entire promissory note, or $.003 per share. On the transaction date, the quoted market value of our common stock was $.25 per share. As a result, we recognized stock-based compensation totaling $741,000 for the year ended October 31, 2009.

During June 2009, our Board of Directors approved two-year employment contracts for our CEO and CFO. Each officer receives a salary of $4,000 per month commencing June 1, 2009. As of January 31, 2010, we owed the officers $64,000 which is included in the accompanying financial statements as “indebtedness to related parties”.

During the period from December 1, 2008 through June 30, 2008, we rented office space from our president at a rate of $946 per month. Rent expense totaled $6,620 for the year ended October 31, 2008.

On September 15, 2006, we issued a promissory note to an officer in exchange for $8,500. The note included an interest payment of $1,500. The note was payable once we broke escrow on our initial public offering (see Note 3), or 12 months from the date of the note, whichever came first. As of October 31, 2006, $188 of the $1,500 interest charge was accrued and recorded as interest expense. We repaid the $8,500 note and $1,500 of interest expense during December 2006.

In June 2005, our Board of Directors approved the payment of $50 per month to both our president and treasurer for the use of office space. The office rentals ended in October 2007; however, as of July 31, 2009, we still owed the two officers a total of $2,350 for office rent, which is included in the accompanying financial statements as “indebtedness to related parties”.

Our president and treasurer each contributed services for the years ended October 31, 2007 and 2006, and the period from June 6, 2005 (inception) through October 31, 2005. The services were valued at $20,330, $3,240 and $530, respectively, based upon the terms of an employment agreement approved by the Board of Directors but not executed as of October 31, 2007. The contributed services are included in the accompanying financial statements as “contributed services” with a corresponding credit to “additional paid-in capital”. There were no contributed services since October 31, 2007.

AMERICAN ANTIQUITIES INCORPORATED

(A Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

During the period from inception through October 31, 2005, our treasurer paid incorporation fees totaling $175 on our behalf and advanced us $100 to open a bank account. These amounts were repaid during the year ended October 31, 2006.

During October 2005, we sold 12,500,000 (post-split) shares of our common stock to our president for $15,000, or $.0012 (post-split) per share. On May 14, 2007, our president voluntarily surrendered 9,500,000 (post-split) of the shares back to the Company for cancellation. The shares were surrendered following discussions with our market maker in order to increase our public float to approximately 20 percent.

During October 2005, we sold 12,500,000 (post-split) shares of our common stock to our treasurer for $15,000, or $.0012 (post-split) per share. On May 14, 2007, our treasurer voluntarily surrendered 9,500,000 (post-split) of the shares back to the Company for cancellation. The shares were surrendered following discussions with our market maker in order to increase our public float to approximately 20 percent.

During October 2005, we sold 7,500,000 (post-split) shares of our common stock to a relative of our treasurer for $9,000, or $.0012 (post-split) per share. On May 14, 2007, this individual voluntarily surrendered 5,500,000 (post-split) of the shares back to the Company for cancellation. The shares were surrendered following discussions with our market maker in order to increase our public float to approximately 20 percent.

(3)	Shareholders’ Equity

During the period from November 2006 through March 2007, we sold 1,980,500 shares of our common stock at a price of $.05 per share for net proceeds of $62,775 after deducting $36,250 of offering costs. The offering was made pursuant to our SB-2 registration statement that became effective on August 11, 2006. All sales were conducted through our officers and directors.

During May 2007, we declared a 5 for 1 forward split of our common stock to shareholders of record at the close of business on May 20, 2007. The number of shares issued on May 20, 2007 totaled 7,984,400 and increased the number of common shares outstanding to 9,980,500. Shares issued prior to May 20, 2007 have been retroactively restated to reflect the impact of the stock split.

(4)	Income Taxes

We incurred net operating losses during all periods presented resulting in a deferred tax asset, which was fully allowed for; therefore, the net benefit and expense resulted in $-0- income taxes.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Trends and Uncertainties

For the three months ended January 31, 2010 and 2009, American Antiquities did not pursue any investing activities.

For the three months ended January 31, 2010, American Antiquities received the proceeds from the sale of 2,000,000 shares of common stock of $6,000 resulting in net cash provided by financing activities of $6,000.

At January 31, 2010, American Antiquities had $3,366 cash available.

Our internal and external sources of liquidity have included the issuance of common shares for cash, goods and services and cash generated from advances from related parties. We are currently not aware of any trends that are reasonably likely to have a material impact on our liquidity.

We will rely on revenues, additional sales of common shares, issuances of common shares for services and advances from our officers and directors to fund our current operations.

In the event we are not successful in financing our operations, it may take considerably longer to successfully establish a market for our products, delay our ability to establish a market, or we may not be successful at all.

Results of Operations

For the three months ended January 31, 2010, we did not receive any revenue and had operating expenses of $31,100. Of this amount, $24,000 was related to office compensation. Comparatively, for the three months ended January 31, 2009, we did not receive any revenue and had operating expenses of $5,888. For the three months ended January 31, 2010 and 2009, these expenses consisted of professional fees of $6,628 and $1,680, respectively and other general and administrative expenses of $472 and $4,208, respectively.

Plan of Operation

American Antiquities has experienced a net loss of $(31,100) and $(5,888) during its development stage for the three months ended January 31, 2010 and 2009.

We only have sufficient cash on hand to meet funding requirements for the next three to six months. We will have to seek alternative funding through advances from our officers and directors, or debt or equity financing in the next twelve months that could result in increased dilution to the shareholders. No specific terms of possible equity or debt financing have been determined or pursued. If less than the maximum offering amount is obtained, officers and directors have verbally agreed to advance any funds necessary to pay offering expenses not covered by the proceeds received at each level of funding. The advances are to be repaid when sufficient revenues are obtained.

Management will pursue the following milestones in order to successfully complete our business plan.

Milestone	Steps	Timeline

1. Develop customer marketing plan	We plan to develop a database of collectors, dealers and museums who seek to add to and/or dispose of their collections.

We anticipate initial marketing costs of $9,500 to create a database of contacts and to send direct mail marketing campaigns to those contacts. This database will allow us to perform targeted follow-ups and help to market future items to buyers as well as to assist us in finding new sellers. After initial contact with potential customers, we will identify their specific needs and determine how we are able to serve them in the most appropriate manner.

2. Implement Sales Strategy		We estimate the annual costs of these activities will be approximately $4,000. We will develop print advertisements and internet based media advertisements.

3. Establish Procedures		We plan to develop a centralized system to audit sales and receipts of consigned items, accounts payable, accounts receivable, inventory and payroll. We estimate the cost of this activity to be approximately $1,000. Most of the funds will be used to purchase software to perform these functions.

4. Development of Website		If the volume warrants, we will initiate our own internet website. This would be done to advertise our auctions and to solicit new customers.

We are currently working on completing milestone 1. No one milestone needs to be complete to pursue any other milestone.

As funds from advances, private funding and future revenues allow, we will continue ongoing operations which include:

- making purchases for resale and to resell such items at trade shows, retail outlets or through internet websites

- accepting consignments for sale and resell at trade shows, to customers through mailing lists, retail outlets or through the internet

- making purchases for auction and sell through live auctions on Ebay, Yahoo, TIAS or other web applications;

- accepting consignments for auction and sell on online auctions;

and

- attending trade shows and make exhibits.

The costs and expenses involved in pursuing our ongoing operations are variable and will be based on market conditions. There is no way to determine specific costs in advance.

We anticipate developing our plan for the next twelve months using a combination of minimum proceeds from advances and private funding and the cash flow generated from future sales and commissions.

Recent Accounting Pronouncements

In May 2009, the FASB issued ASC 855-10, Subsequent Events. This standard establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, the Statement defines: (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. ASC 855-10 is effective for fiscal years and interim periods ending after June 15, 2009. Adoption of this standard as of June 30, 2009 had no impact on the Company’s financial position or results of operations. The Company’s management has reviewed events occurring through March 9, 2010, the date the interim financial statements were issued, and no subsequent events require disclosure.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We do not consider the effects of interest rate movements to be a material risk to our financial condition. We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4T. Controls and Procedures

During the three months ended July 31, 2009, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of July 31, 2009. Based on this evaluation, our chief executive officer and chief principal financial officers have concluded such controls and procedures to be effective as of July 31, 2009 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings. None.

Item 1A. Risk Factors. Not applicable to small reporting company

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information. None.

Item 6. Exhibits

Exhibit 31 - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32 - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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.

Dated: March 15, 2009

American Antiquities, Inc.

By	/s/ Joseph A. Merkel
	Joseph A. Merkel
	CEO and Director

Praxsyn Corp - FORM 10-Q - March 16, 2010

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Praxsyn Corp Reports