Attached files
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EX-31.1 - CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT OF 2002 - XYBERHOME, INC. | f10q0310ex31i_xyberhome.htm |
EX-32.1 - CERTIFICATIONS PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT OF 2002 - XYBERHOME, INC. | f10q0310ex32i_xyberhome.htm |
EX-32.2 - CERTIFICATIONS PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT OF 2002 - XYBERHOME, INC. | f10q0310ex32ii_xyberhome.htm |
EX-31.2 - CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT OF 2002 - XYBERHOME, INC. | f10q0310ex31ii_xyberhome.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 10-Q
_______________
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended March 31, 2010
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ______to______.
Commission File No.: 000-52866
XYBERHOME, INC.
(Exact name of registrant as specified in Charter
Delaware
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38-3794899
|
|
(State or other jurisdiction of
incorporation or organization)
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(IRS Employee Identification No.)
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212 Carnegie Center, #206
Princeton, NJ 08540
(Address of Principal Executive Offices)
_______________
(609) 524-2560
(Issuer Telephone number)
_______________
(Former Name or Former Address if Changed Since Last Report)
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 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 o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” 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
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes x No o
State the number of shares outstanding of each of the issuer’s classes of common equity, as of May 14 2010: 1,100,000 shares of common stock.
XYBERHOME, INC.
FORM 10-Q
March 31, 2010
INDEX
PART I-- FINANCIAL INFORMATION
Item 1.
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Financial Statements
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F-
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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1
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Item 3
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Quantitative and Qualitative Disclosures About Market Risk
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3
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Item 4
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Controls and Procedures
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3
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PART II-- OTHER INFORMATION
Item 1
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Legal Proceedings
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4
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Item 1A
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Risk Factors
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4
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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4
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Item 3.
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Defaults Upon Senior Securities
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4
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Item 4.
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Removed & Reserved
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4
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Item 5.
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Other Information
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4
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Item 6.
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Exhibits
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4
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SIGNATURE
Item 1. Financial Information
XYBERHOME, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF MARCH 31, 2010
Xyberhome, Inc.
(a development stage company)
Financial Statements Table of Contents
FINANCIAL STATEMENTS
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Page #
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Balance Sheet
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F-1
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Statement of Operations and Retained Deficit
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F-2-3
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Statement of Stockholders Equity
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F-4
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Cash Flow Statement
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F-5
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Notes to the Financial Statements
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F-6
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F-
Xyberhome, Inc.
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||||||||
(a development stage company)
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||||||||
BALANCE SHEETS
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||||||||
As of March 31, 2010 and September 30, 2009
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||||||||
ASSETS
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||||||||
CURRENT ASSETS
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3/31/2010
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9/30/2009
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||||||
Cash
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$ | 185,953 | $ | 3,368 | ||||
Total Current Assets
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185,953 | 3,368 | ||||||
FIXED ASSETS
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||||||||
Property & Equipment, Net
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1,193 | 1,391 | ||||||
Total Fixed Assets
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1,193 | 1,391 | ||||||
TOTAL ASSETS
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$ | 187,146 | $ | 4,759 | ||||
LIABILITIES AND STOCKHOLDER'S EQUITY
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||||||||
CURRENT LIABILITIES
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||||||||
Accrued Expenses
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$ | 450 | $ | 2,197 | ||||
Loans Payable
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949,647 | 740,706 | ||||||
Total Current Liabilities
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950,097 | 742,903 | ||||||
TOTAL LIABILITIES
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950,097 | 742,903 | ||||||
STOCKHOLDER'S EQUITY
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||||||||
Preferred Stock - Par value $0.001
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||||||||
Authorized: 50,000,000
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||||||||
Issued & Outstanding: None
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- | - | ||||||
Common Stock - Par value $0.001;
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||||||||
Authorized: 200,000,000
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||||||||
Issued and Outstanding: 1,100,000 and 100,000
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1,100 | 100 | ||||||
Additional Paid-In Capital
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23,837 | 12,627 | ||||||
Accumulated Deficit
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(787,888 | ) | (750,871 | ) | ||||
Total Stockholder's Equity
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(762,951 | ) | (738,144 | ) | ||||
TOTAL LIABILITIES AND EQUITY
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$ | 187,146 | $ | 4,759 |
The accompanying notes are an integral part of these financial statements.
F-1
Xyberhome, Inc.
|
||||||||||||
(a development stage company)
|
||||||||||||
STATEMENT OF OPERATIONS
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||||||||||||
For the six months ending March 31, 2010 and 2009
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||||||||||||
and from inception (September 27, 2007) through March 31, 2010
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||||||||||||
6 months
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6 months
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|||||||||||
ending
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ending
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FROM
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||||||||||
3/31/2010
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3/31/2009
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INCEPTION
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||||||||||
REVENUE
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$ | 102 | $ | - | $ | 224 | ||||||
COST OF SERVICES
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- | - | - | |||||||||
GROSS PROFIT OR (LOSS)
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102 | - | 224 | |||||||||
OPERATING EXPENSES:
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||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
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22,548 | 1,476 | 40,763 | |||||||||
DEPRECIATION
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198 | - | 330 | |||||||||
PROFESSIONAL FEES
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897 | 1,378 | 96,736 | |||||||||
STOCK COMPENSATION
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1,000 | - | 1,100 | |||||||||
TOTAL OPERATING EXPENSES
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24,643 | 2,854 | 138,929 | |||||||||
INTEREST EXPENSE
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11,538 | 1,485 | 21,416 | |||||||||
RESEARCH AND DEVELOPMENT
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938 | 305,970 | 627,767 | |||||||||
NET INCOME (LOSS)
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(37,017 | ) | (310,309 | ) | (787,888 | ) | ||||||
ACCUMULATED DEFICIT, BEGINNING BALANCE
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(750,871 | ) | (2,850 | ) | - | |||||||
ACCUMULATED DEFICIT, ENDING BALANCE
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$ | (787,888 | ) | $ | (313,159 | ) | $ | (787,888 | ) | |||
Earnings (loss) per share
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$ | (0.063 | ) | $ | (3.103 | ) | $ | (3.996 | ) | |||
Weighted average number of common shares
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589,011 | 100,000 | 197,162 | |||||||||
The accompanying notes are an integral part of these financial statements.
|
||||||||||||
F-2
Xyberhome, Inc.
|
||||||||||||
(a development stage company)
|
||||||||||||
STATEMENT OF OPERATIONS
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||||||||||||
For the three months ending March 31, 2010 and 2009
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||||||||||||
3 months
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3 months
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|||||||||||
ending
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ending
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|||||||||||
3/31/2010
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3/31/2009
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|||||||||||
REVENUE
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$ | - | $ | - | ||||||||
COST OF SERVICES
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- | - | ||||||||||
GROSS PROFIT OR (LOSS)
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- | - | ||||||||||
OPERATING EXPENSES:
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||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
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18,298 | 1,476 | ||||||||||
DEPRECIATION
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99 | - | ||||||||||
PROFESSIONAL FEES
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822 | 1,128 | ||||||||||
STOCK COMPENSATION
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1,000 | - | ||||||||||
TOTAL OPERATING EXPENSES
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20,219 | 2,604 | ||||||||||
INTEREST EXPENSE
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5,951 | 1,485 | ||||||||||
RESEARCH AND DEVELOPMENT
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938 | 305,970 | ||||||||||
NET INCOME (LOSS)
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(27,108 | ) | (310,059 | ) | ||||||||
ACCUMULATED DEFICIT, BEGINNING BALANCE
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(760,780 | ) | (3,100 | ) | ||||||||
ACCUMULATED DEFICIT, ENDING BALANCE
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$ | (787,888 | ) | $ | (313,159 | ) |
The accompanying notes are an integral part of these financial statements.
F-3
Xyberhome, Inc.
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||||||||||||||||||||
(a development stage company)
|
||||||||||||||||||||
STATEMENT OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
From inception (September 27, 2007) through March 31, 2010
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||||||||||||||||||||
COMMON
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PAID
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ACCUM.
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TOTAL
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|||||||||||||||||
SHARES
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STOCK
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IN CAPITAL
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DEFICIT
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EQUITY
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||||||||||||||||
Stock issued on acceptance
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||||||||||||||||||||
of incorporation expenses on
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||||||||||||||||||||
September 27, 2007
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100,000 | $ | 100 | $ | - | $ | - | $ | 100 | |||||||||||
Net Loss
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(600 | ) | (600 | ) | ||||||||||||||||
Total, September 30, 2007
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100,000 | 100 | - | (600 | ) | (500 | ) | |||||||||||||
Net Loss
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(2,250 | ) | (2,250 | ) | ||||||||||||||||
Total, September 30, 2008
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100,000 | 100 | - | (2,850 | ) | (2,750 | ) | |||||||||||||
In-kind Contribution
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12,627 | - | 12,627 | |||||||||||||||||
Net Loss
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(748,021 | ) | (748,021 | ) | ||||||||||||||||
Total, September 30, 2009
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100,000 | 100 | 12,627 | (750,871 | ) | (738,144 | ) | |||||||||||||
In-kind Contribution
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11,210 | - | 11,210 | |||||||||||||||||
Stock issued for compensation on
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||||||||||||||||||||
January 1, 2010 at $0.001 per share
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1,000,000 | 1,000 | - | - | 1,000 | |||||||||||||||
Net Loss
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(37,017 | ) | (37,017 | ) | ||||||||||||||||
Total, March 31, 2010
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1,100,000 | $ | 1,100 | $ | 23,837 | $ | (787,888 | ) | $ | (762,951 | ) |
The accompanying notes are an integral part of these financial statements.
F-4
Xyberhome, Inc.
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||||||||||||
(a development stage company)
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||||||||||||
STATEMENTS OF CASH FLOWS
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||||||||||||
For the six months ending March 31, 2010 and 2009
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||||||||||||
From inception (September 27, 2007) through March 31, 2010
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||||||||||||
6 months
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6 months
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|||||||||||
ending
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ending
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FROM
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||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
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3/31/2010
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3/31/2009
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INCEPTION
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|||||||||
Net income (loss)
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$ | (37,017 | ) | $ | (310,309 | ) | $ | (787,888 | ) | |||
In-kind Contribution
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11,210 | 4,235 | 23,837 | |||||||||
Depreciation
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198 | - | 330 | |||||||||
Stock issued as compensation
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1,000 | - | 1,100 | |||||||||
Increase (Decrease) in Accrued Expenses
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(1,747 | ) | (2,797 | ) | 450 | |||||||
Total adjustments to net income
|
10,661 | 1,438 | 25,717 | |||||||||
Net cash provided by (used in) operating activities
|
(26,356 | ) | (308,871 | ) | (762,171 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Office Equipment
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- | - | (1,523 | ) | ||||||||
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||||||||||||
Net cash flows provided by (used in) investing activities
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- | - | (1,523 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
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||||||||||||
Cash received/(paid) from loans payable
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208,941 | 373,348 | 949,647 | |||||||||
Net cash flows provided by (used in) financing activities
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208,941 | 373,348 | 949,647 | |||||||||
CASH RECONCILIATION
|
||||||||||||
Net increase (decrease) in cash
|
182,585 | 64,477 | 185,953 | |||||||||
Cash - beginning balance
|
3,368 | - | - | |||||||||
CASH BALANCE - END OF PERIOD
|
$ | 185,953 | $ | 64,477 | $ | 185,953 |
The accompanying notes are an integral part of these financial statements.
F-5
XYBERHOME, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1
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NATURE OF OPERATIONS
|
Xyberhome, Inc. (“Company,” fka Expedite 3, Inc.), a development stage company, was incorporated on September 27, 2007 under the laws of the State of Delaware.
Xyberhome, Inc. is an online company that specializes in a unique offering of Xyberhome , a novel and proprietary tool that connects you with the World Wide Web and will let you share its excitement with others. It is the add-on that provides cluster tabs for Firefox 1.1.1.
Initial operations have included organization and incorporation, target market identification, marketing plans, and capital formation. A substantial portion of the Company’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace.
The Company has adopted its fiscal year end to be September 30.
NOTE 2
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SUMMARY OF ACCOUNTING POLICIES
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Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Development Stage Company
The Company is a development stage company. Even though the Company has recognized minimal revenue, it is still devoting substantially all of its efforts on establishing the business, and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management 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 as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Recent Re-codified Accounting Standards
The Financial Accounting Standards Board (FASB) took Accounting Standard Pronouncements and EITFs and codified them into the FASB Accounting Standards Codification. The Company also uses as reference SEC rules, regulations, interpretive releases, and SEC staff guidance.
F-6
In June 2003, the Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-8934 on June 26, 2008. Commencing with the Company’s Annual Report for the fiscal year ended September 30, 2010, the Company is required to include a report of management on the Company’s internal control over financial reporting. The internal control report must include a statement of management’s responsibility for establishing and maintaining adequate internal control over financial reporting for the Company; of management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of year-end; of the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting; and that the Company’s independent accounting firm has issued an attestation report on management’s assessment of the Company’s internal control over financial reporting, which report is also required to be filed as part of the Annual Report on Form 10-K.
NOTE 3
|
GOING CONCERN
|
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company had a deficit accumulated during the development stage of $787,888, a net loss and net cash used in operations of $37,017 and $26,356 for the six months ended March 31, 2010, respectively. These conditions raise substantial doubt about its ability to continue as a going concern.
While the Company is attempting to produce sufficient sales, the Company’s cash position may not be sufficient to support the Company’s daily operations. While the Company believes in the viability of its strategy to produce sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern.
NOTE 4
|
PROPERTY & EQUIPMENT
|
Long lived assets, including property and equipment and certain intangible assets to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets and certain identifiable intangibles to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
Property and Equipment are first recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets as follows:
Computer equipment | 3 years |
Vehicles | 5 years |
Furniture and fixtures | 7 years |
Plant and plant machinery | 15 years |
Office and industrial buildings | 25 years |
Maintenance and repairs, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts; gain or loss on the disposition thereof is included as income.
NOTE 5
|
ACCOUNTS PAYABLE & ACCRUED EXPENSES
|
Accounts payable and accrued expenses consist of trade payables from normal operations of the business.
F-7
NOTE 6
|
STOCKHOLDERS’ EQUITY
|
Preferred Stock
The Company has authorized 50,000,000 preferred shares of stock with a par value of $0.001. There are no preferred shares issued and outstanding.
Common stock
Common Stock includes 200,000,000 shares authorized at a par value of $0.001, of which 100,000 have been issued for the amount of $100 on September 27, 2007 in acceptance of the incorporation expenses for the Company.
On December 17, 2008, Mr. Myers purchased a total of 100,000 shares of common stock of the company from then the President and Chairman of the Board of Directors of the Company, for an aggregate price of $30,000 in cash, all of which was paid from Mr. Myers personal fund.
On January 1, 2010, the Company issued 1,000,000 shares of common stock to the director of the Company as compensation in the amount of $1,000, or $0.001 per share.
NOTE 7
|
RELATED PARTY TRANSACTIONS
|
From inception through March 3, 2010, the Company borrowed $949,319 from primary shareholder and related party individual.
All shareholder loans are demand notes carrying a 3% interest rate. As of March 31, 2010, the principal balance due on the demand notes was $749,319 and $11,210 in interest was accrued and recorded as in-kind contribution.
All other notes are 1-year term notes carrying a 10% interest rate. As of March 31, 2010, the principal balance due on the term notes was $200,000 and $329 in interest was accrued.
NOTE 8
|
INCOME TAXES
|
No provision was made for federal income tax since the Company has significant net operating losses. From inception to March 31, 2010, the Company had an operating loss of $787,888. The net operating loss carry forwards may be used to reduce taxable income through the years 2027 to 2030. The availability of the Company’s net operating loss carry-forwards are subject to limitation if there is a 50% or more positive change in the ownership of the Company’s stock. The provision for income taxes consists of the federal and state minimum tax imposed on corporations.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets as of March 31, 2010 are as follows:
Deferred tax assets:
|
||||
Federal net operating loss
|
$
|
118,183
|
||
State net operating loss
|
39,394
|
|||
Total deferred tax assets
|
157,577
|
|||
Less valuation allowance
|
|
(157,577
|
)
|
|
$
|
--
|
F-8
The Company has provided a 100% valuation allowance on the deferred tax assets at March 31, 2010 to reduce such asset to zero, since there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted.
The reconciliation of the effective income tax rate to the federal statutory rate for the periods ended March 31, 2010 and 2009 is as follows:
2010
|
2009
|
|||||||
Federal income tax rate
|
(15.0 | %) | (15.0 | %) | ||||
State tax, net of federal benefit
|
(5.0 | %) | (5.0 | %) | ||||
Increase in valuation allowance
|
20.0 | % | 20.0 | % | ||||
Effective income tax rate
|
0.0 | % | 0.0 | % |
NOTE 9
|
REQUIRED CASH FLOW DISCLOSURE FOR NON-CASH ITEMS, INTEREST AND TAXES PAID
|
The Company has made no cash payments for interest or income taxes. A related party paid some expenses on behalf of the Company which were recorded as non-cash in-kind contributions to equity.
NOTE 10
|
EMPLOYMENT CONTRACT & INCENTIVE COMMITMENTS
|
On March 16, 2010, the Company entered into an employment agreement with its officer - CEO (“Employee”) for a term of one year from the date of signing. The Employee should be paid a minimum of $6,000 per month and should be paid monthly. Either the Company or the Employee can terminate the Employment Agreement without cause upon thirty (30) days’ notice to the other party.
On March 26, 2010, the Company entered into an employment agreement with its officer - CTO (“Employee”) for a term of one year from the date of signing. The Employee should be paid a minimum of $6,500 per month and should be paid monthly. Either the Company or the Employee can terminate the Employment Agreement without cause upon thirty (30) days’ notice to the other party.
NOTE 11
|
CONTINGENT LIABILITIES
|
Currently the Company has not identified any contingent liabilities that may be due.
NOTE 12
|
SUBSEQUENT EVENTS
|
None known at this time.
F-9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and plan of operations together with our financial statements and related notes appearing elsewhere in this Quarterly Report. Various statements have been made in this Quarterly Report on Form 10-Q that may constitute “forward-looking statements”. Forward-looking statements may also be made in Eco Building International’s other reports filed with or furnished to the United States Securities and Exchange Commission (the “SEC”) and in other documents. In addition, from time to time, Eco Building International through its management may make oral forward-looking statements. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements. The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely” and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Eco Building International undertakes no obligation to update or revise any forward-looking statements.
Overview
We are a development stage company, incorporated on September 27, 2007 under the laws of the State of Delaware, engaged in software development and browser applications. As of the date hereof, we have launched two products “Xyberhome” and “Clustertabs.” Our software products were initially designed to be applied in compatible with the Firefox browser.
Initial operations have included organization and incorporation, target market identification, marketing plans, and capital formation. A substantial portion of our activities has involved developing a business plan and establishing contacts and visibility in the marketplace.
Plan of Operation
In 2009, we focused our efforts on testing and stabilizing our products, which was completed successfully. In 2010, we intend to focus on public relations and marketing. We have a medium and long-term road map which incorporates both further development and public awareness through targeted public relations and marketing.
Results of Operation
We have had $224 in revenue since inception. For the six months ended March 31, 2010, we incurred a net loss of $(37,017) and since inception we have incurred a net loss of $787,888. Expenses from inception were comprised of costs mainly associated with legal, accounting and office expense.
Liquidity and Capital Resources
We had a deficit accumulated during the development stage of $787,888, a net loss and net cash used in operations of $37,017 and $26,356 for the six months ended March 31, 2010, respectively. As a result, our independent auditor raised substantial doubt about our ability to continue as a going concern.
While we are attempting to produce sufficient sales, our cash position may not be sufficient to support our daily operations. While we believe in the viability of our strategy to produce sales volume and in our ability to raise additional funds, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to further implement our business plan and generate sufficient revenues. Our management believes that the actions presently being taken to further implement our business plan and generate revenues provide the opportunity for us to continue as a going concern.
Critical Accounting Policies
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
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Income Taxes
We utilize asset and liability method to measure and record deferred income tax assets and liabilities. Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Development Stage Company
The Company is a development stage company. Even though the Company has recognized minimal revenue, it is still devoting substantially all of its efforts on establishing the business, and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management 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 as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Recent Pronouncements
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.
In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities” applies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, “Fair Value Measurements”. The adoption of this statement is not expected to have a material effect on the Company's financial statements.
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In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”. This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. SFAS No. 160 affects those entities that have an outstanding non-controlling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.
In March 2008, the FASB issued FASB Statement No. 161 “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133” (“SFAS No. 161”), which changes the disclosure requirements for derivative instruments and hedging activities. Pursuant to SFAS No.161, Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. SFAS No. 161 encourages but does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In years after initial adoption, this Statement requires comparative disclosures only for periods subsequent to initial adoption. The adoption of SFAS No. 161 is not expected to have a material impact on the financial results of the Company.
Off Balance Sheet Transactions
None.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 4. Controls and Procedures
Management's disclosure on internal control over financial reporting
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness, as of March 31, 2010, of the design and operation of our disclosure controls and procedures, as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting
There were no change in our internal control over financial reporting during the fiscal quarter ended March 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Currently we are not aware of any litigation pending or threatened by or against us.
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On January 1, 2010, we issued a total of 1,000,000 shares of our common stock at par value $0.001 per share to Mr. Myers, our director, as compensation for his services rendered.
Item 3. Defaults Upon Senior Securities.
None
Item 4. (Removed & Reserved)
Item 5. Other Information.
On March 16, 2010, with the written consent of our sole shareholder, Joel Duerr and Netannel Jacobsson were removed from our board of directors.
On March 16, 2010, with the written consent of our board of directors, Joel Duerr and Iser Steinmetz were removed from all the office positions that they held in our company, and John Rafuse was appointed as our Chief Executive Officer.
On March 26, 2010, with the written consent of our board of directors, Aaron Greengrass was appointed as our Chief Technical Officer.
Item 6. Exhibits
(a)
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Exhibits
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31.1 Certification of Chief Executive Officer, pursuant to Section 302 of Sarbanes-Oxley Act of 2002
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31.2 Certification of Chief Financial Officer, pursuant to Section 302 of Sarbanes-Oxley Act of 2002
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32.1 Certification of Chief Executive Officer, pursuant to Section 906 of Sarbanes-Oxley Act of 2002
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32.1 Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Signature
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Title
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Date
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/s/ John Rafuse
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Chief Executive Officer,
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May 18, 2010
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John Rafuse
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/s/ Malcolm Myers
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Chief Financial Officer
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May 18, 2010
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Malcolm Myers
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