Rx Technologies Corp. - FORM 10-Q

Attached files

file	filename
EX-31 - RULE 13A-14(A)/15D-14(A) CERTIFICATION - Rx Technologies Corp.	ex_31-2.htm
EX-32 - SECTION 1350 CERTIFICATION - Rx Technologies Corp.	ex_32-1.htm
EX-32 - SECTION 1350 CERTIFICATION - Rx Technologies Corp.	ex_32-2.htm
EX-31 - RULE 13A-14(A)/15D-14(A) CERTIFICATION - Rx Technologies Corp.	ex_31-1.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, 2010


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 333-156942

Rx Technologies Corp.

(Exact name of registrant as specified in its charter)

Florida

26-3891952

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

7076 Spyglass Avenue

Parkland, Florida

33076

(Address of principal executive offices)

(Zip Code)

(954) 599-3672

(Registrant’s telephone number, including area code)

___________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 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. 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 o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Outstanding at October 15, 2010
Preferred Stock, $0.001 Common Stock, $0.001		0 47,221,850 shares

RX TECHNOLOGIES CORP.

TABLE OF CONTENTS


		PAGE

Part I Financial Information		3

Item 1. Financial Statements		3

Condensed Balance Sheets at September 30, 2010 (unaudited) and December 31, 2009 (audited)		3

Condensed Statements of Operations for the three and nine months ended September 30, 2010 and 2009 and the cumulative period from November 15, 2008 (inception) through September 30, 2010		4

Statement of Shareholders' Equity from November 15, 2008 (inception) through September 30, 2010		5

Condensed Statements of Cash Flows at September 30, 2010		6

Notes to Condensed Financial Statements		7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		12

Item 3. Quantitative and Qualitative Disclosures About Market Risk		15

Item 4T. Controls and Procedures		15

Part II Other Information		16

Item 1. Legal Proceeding.		16

Item 1A. Risk Factors.		16

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		16

Item 3. Defaults Upon Senior Securities.		16

Item 4. (Removed and Reserved).		16

Item 5. Other Information.		16

Item 6. Exhibits		16

Signatures		17

RX TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED BALANCE SHEET


ASSETS
	Unaudited			Audited
	September 30, 2010			December 31, 2009
CURRENT ASSETS:
Cash and equivalents	$	100		$	—
Inventory		1,000			2,000
Total Current Assets		1,100			2,000

OTHER ASSETS:
Intellectual assets
Gift Card Digest Website, net		2,334			3,834
Rx Technologies		37,222			—
Total Other Assets		39,556			3,834

Total Assets	$	40,656		$	5,834

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Accounts payable	$	—		$	—
Accrued expenses		3,000			500
Loans to related parties		13,625			1,625
Total Liabilities		16,625			2,125

STOCKHOLDERS' EQUITY (DEFICIT):
Preferred Stock, par value $.001; 10,000,000 shares authorized; 0 issued and outstanding at Septermber 30, 2010 and December 31, 2009		—			—
Common stock, par value $.001; 500,000,000 shares authorized; 47,221,850 shares issued and outstanding at Septermber 30, 2010; 10,000,000 shares issued and outstanding as of December 31, 2009		47,222			10,000
Additional paid in capital		9,000			9,000
Deficit accumulated during the development stage		(32,191	)		(15,291	)
Total Stockholders' Equity		24,031			3,709

Total Liabilities and Stockholders' Equity	$	40,656		$	5,834

RX TECHNOLOGIES, CORP.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED STATEMENTS OF OPERATIONS

For the Period November 15, 2008 (inception) through September 30, 2010

(Unaudited)


													Cumulative from
	For the three			For the three			For the nine			For the nine			November 15, 2008
	months ended			months ended			months ended			months ended			(inception) thru
	September 30, 2010			September 30, 2009			September 30, 2010			September 30, 2009			September 30, 2010

Net Sales	$	—		$	—		$	—		$	—		$	—

Cost of Sales		—			—			—			—			—

Gross Profit		—			—			—			—			—

Operating Expenses:
Legal and Accounting		500			500			8,500			3,000			19,125
Depreciation and Amortization		500			500			1,500			1,500			3,666
General and Administrative		500			500			6,900			1,500			9,400

Total Operating Expenses		1,500			1,500			16,900			6,000			32,191

Operating Loss		(1,500	)		(1,500	)		(16,900	)		(6,000	)		(32,191	)

Other income/expenses:
Total Other Income/ (Expenses)		—			—			—			—			—

Net (loss) before Income Taxes		(1,500	)		(1,500	)		(16,900	)		(6,000	)		(32,191	)

Provision for Income Taxes		—			—			—			—			—

Net (loss)	$	(1,500	)	$	(1,500	)	$	(16,900	)	$	(6,000	)	$	(32,191	)

Basic and diluted net loss per common share		**			**			**			**

Weighted average number of common shares outstanding		47,221,850			9,000,000			30,678,806			9,000,000

** - Less than $0.01 per share

RX TECHNOLOGIES, CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

From November 15, 2008 (inception) through September 30, 2010

(Unaudited)


				Additional		Accumulated			Total
	Common Stock			Paid-in		(Deficit) During			Shareholders'
	Shares	Amount		Capital		Development Stage			Equity/(Deficit)

Balance at November 15, 2008 (date of inception)	—	$	—	$	—	$	—		$	—

Common stock issued, Par Value of $0.001	9,000,000		9,000		—		—			9,000

Net (loss) for the year ended December 31, 2008	—		—		—		(3,166	)		(3,166	)

Balance at December 31, 2008	9,000,000		9,000		—		(3,166	)		5,834

Common stock issued on October 18, 2009 (pursuant to Form S-1 which became effective May 21, 2009 - $0.01/share)	1,000,000		1,000		9,000		—			10,000

Net (loss) for year ending December 31, 2009	—		—		—		(12,125	)		(12,125	)

Balance at December 31, 2009	10,000,000		10,000		9,000		(15,291	)		3,709

Common stock issued on April 30, 2010 for Rx Technologies/Intellectual Property	37,221,850		37,222		—		—			37,222

Net Loss for nine (9) months ending September 30, 2010	—		—		—		(16,900	)		(16,900	)

Balance at September 30, 2010	47,221,850	$	47,222	$	9,000	$	(32,191	)	$	24,031

RX TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED STATEMENTS OF CASH FLOWS

For the Period November 15, 2008 (inception) through Septermber 30, 2010

(Unaudited)


							Cumulative from
							November 15, 2008
	For the nine			For the nine			(Inception)
	months ended			months ended			through
	Septermber 30, 2010			Septermber 30, 2009			Septermber 30, 2010
OPERATING ACTIVITIES:
Net loss	$	(16,900	)	$	(6,000	)	$	(32,191	)
Adjustments to reconcile net loss to net cash used in operating activities:
Increase in amortization		1,500			1,500			3,666
Issuance of common stock for services

Changes in operating assets and liabilities:
(Increase)/Decrease in inventory		—			—			(2,000	)
Increase/(Decrease) in accounts payable					2,000			—
Increase/(Decrease) in accrued expenses		2,500			—			3,000
Acquisition of intellectual property		—			—			(6,000	)

Net cash used in operating activities		(12,900	)		(2,500	)		(33,525	)

FINANCING ACTIVITIES:
Issuance of common stock for cash		—			—			19,000
Increase in accrued interest payable		—			—			—
Repayment of related party loan payable		—			—			(6,000	)
Proceeds from related party loan payable		13,000			2,500			20,625

Net cash provided by (used in) financing activities		13,000			2,500			33,625

NET INCREASE IN CASH		100			—			100

CASH BEGINNING BALANCE		—			—			—

CASH ENDING BALANCE	$	100		$	—		$	100

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Taxes paid	$	—		$	—		$	—
Interest paid	$	—		$	—		$	—

NON-CASH TRANSACTIONS AFFECTING OPERATING, AND FINANCING ACTIVITIES:
Issuance of common stock for purchase of intellectual property	$	37,222		$	—		$	37,222
Repayment of related party loan with gift card inventory	$	1,000		$	—		$	1,000

RX TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

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 November 15, 2008 (Inception) through December 31, 2009 and the year ended December 31, 2008 were filed on April 8, 2010 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 nine months ended September 30, 2010 and for the period November 15, 2008 (Inception) through September 30, 2010 are not necessarily indicative of the results that may be expected for the year ended December 31, 2010.

NOTE 2 - DESCRIPTION OF BUSINESS AND DEVELOPMENT STAGE RISK

Description of Business

RX TECHNOLOGIES CORP. ("THE COMPANY") is a development stage company, incorporated in the State of Florida on November 15, 2008. The company is currently developing in two (2) primary areas as follows:

RxTC database processes

The RxTC database is for prescription drug databases. The RxTC solutions is a secure, easy-to-use and minimum cost service for confronting prescription drug abuse and diversion. The RxTC solution is a comprehensive secure validation, monitoring and reporting procedure integrated with a visual identification verification system. The process immediately prevents “doctor shopping,” individuals going to more than one physician at a time to obtain prescription drugs. By deploying the RxTC solution, patient’s identities can be verified and validated. Physicians and pharmacists will immediately have live, real-time data available for scrutiny and could receive important alerts and valid dispensing histories. Secondary verification at the point of dispensing could further eliminate the potential for fraud and other more serious crimes.

The Website - GiftCardDigest

The website ("www.giftcarddigest.com") under development, is designed to sell individual gift cards consisting of over 100 separate and distinct merchants. Our basic concept is an offering of over 100 gift cards so the customer can select from various alternatives for their gift card purchases having the feature of customer service and free standard shipping. We anticipate that our customers will have a good experience because of the consolidated approach of purchasing an assortment of distinct and separate gift cards using our web site to consolidate substantially all their gift card purchases.

We commenced our initial public offering on May 21, 2009, pursuant to that certain Registration Statement on Form S-1 (Commission File No. 333-156942), which was declared effective by the Securities and Exchange Commission on that date. We registered 3,000,000 shares of Common Stock for sale by the Company for an aggregate offering price of $30,000. We sold 1,000,000 shares of Common Stock in the offering. The offering provided proceeds to us in the amount of $10,000.

On April 28, 2010, we filed Amended and Restated Articles of Incorporation with the Secretary of State of Florida which:


	·	changed the name of the corporation to Rx Technologies Corp.,
	·	increased the number of authorized shares of common stock from 100,000,000 shares to 500,000,000 shares and fixed a par value of $0.001 per share,
	·	authorized a class of 10,000,000 shares of blank check preferred stock, par value $0.001 per share, and
	·	included indemnification provisions customary under Florida law, as well as election not to be governed by the provisions of the Florida Business Corporation Act governing affiliated transactions and an election to be governed by the provisions related to control share acquisitions.

RX TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

On April 30, 2010, we entered into an Intellectual Property Agreement with Mr. Evan Brovenick, the developer and owner of the RxTC database processes for prescription drug databases. Pursuant to this agreement, the Company acquired solely the intellectual property and related rights. The total consideration for the intellectual property purchased was the issuance of 37,221,850 common shares of our company. The issued common shares were allocated, in part, to certain other associates involved with facilitating the development of the intellectual property as defined in the Intellectual Property Agreement.

As of September 30, 2010, we had an accumulated deficit of ($32,191). Our auditors have raised substantial doubt as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. There can be no assurance that we will operate at a profit or such additional financing will be available, or if available, can be obtained on satisfactory terms.

Our principal executive office is located at 7076 Spyglass Avenue, Parkland, FL 33076. Our telephone number is (954) 599-3672. Our fiscal year ends on December 31.

Basis of Presentation

The accompanying condensed financial statements have been prepared by the Company. The Company’s financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

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.

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 and loans from officers, directors and stockholders. 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 obtaining capital from the sale of shares of common stock of the Company and/or financing from independent third parties. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

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.

RX TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. The Company has no cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Inventories

Inventories are valued at the lower of cost or market on a first-in, first-out (FIFO) basis, and include finished goods. Inventories consist of various gift cards having various denominations at cost.

Intellectual Properties

The company accounts for its two (2) primary intellectual properties at lower cost to market value and amortize over the useful life of the asset.

Revenue Recognition

The Company recognizes revenue when:


	·	Persuasive evidence of an arrangement exists;
	·	Shipment has occurred;
	·	Price is fixed or determinable; and
	·	Collectability is reasonably assured.

The Company closely follows the provisions of Accounting Standards Codification (“ASC”) 605, Revenue Recognition, which includes the guidelines of Staff Accounting Bulletin No. 104 as described above. For the period from November 15, 2008 (inception) to September 30, 2010, the Company recognized no revenues.

Earnings (Loss) Per Share

The Company computes earnings per share in accordance with ASC 260 “Earnings per Share” which was previously 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.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which was previously Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

RX TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

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.

Share Based Payments

(included in ASC 718 “Compensation-Stock Compensation”)

In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees or independent contractors are required to provide services. Share-based compensation arrangements include stock options and warrants, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005, the SEC issued Staff Accounting Bulletin No. 107, or “SAB 107”. SAB 107 expresses views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provides the staff's views regarding the valuation of share-based payment arrangements for public companies. SFAS No. 123(R) permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123(R). Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123.

Effective commencing on the year ended December 31, 2008; the Company has fully adopted the provisions of SFAS No. 123(R) and related interpretations as provided by SAB 107. As such, compensation cost is measured on the date of grant as the fair value of the share-based payments. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

Recent Accounting Pronouncements

The company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

Subsequent Events

We evaluated subsequent events through the date and time our financial statements were available on October 7, 2010.

NOTE 4 - EQUITY TRANSACTIONS

On November 15, 2008, the Company issued 9,000,000 shares of common stock to Tammi Shnider, our sole officer and director for $9,000 at $0.001. We believe that the issuance of the shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2).

On October 18, 2009, the company issued 1,000,000 shares of common stock to 39 investors in accordance with Form S-1 (commission file #333-156942) for cash and consideration of $10,000.

On April 30, 2010, the company issued 37,221,850 shares of common stock in accordance with the Intellectual Property Agreement to nine (9) individuals. We believe that the issuance of the shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2).

RX TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

NOTE 5 - CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”). At September 30, 2010, the Company had no amounts in excess of the FDIC insured limit.

NOTE 6 - RELATED PARTY TRANSACTIONS

On November 15, 2008, the company issued 9,000,000 shares to Tammi Shnider, its former sole shareholder and officer and director for the amount of $9,000.

From time to time, the company borrows from its officers, directors and stockholders. At September 30, 2010, the company owed $13,625 to Steven Adelstein, the father of Tammi Shnider and present stockholder and at December 31, 2009, the company owed $1,625. There are no signed or executed agreements between the parties and the company and therefore there are no assurances that said related parties will advance funds in the future.

On November 15, 2008, the company entered into an agreement to acquire the intellectual property (www.giftcarddigest.com) for $6,000 including all rights, title and interest.

On April 30, 2010, the company acquired intellectual property (RxTC Database) for $37,222 including all rights, title and interest.

The Company does not lease or rent any property. Office space and services are provided without charge by Steven Adelstein, stockholder. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein.

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.

NOTE 7 - INTELLECTUAL PROPERTY

The Company has capitalized costs in acquiring intellectual properties which consisted of the following at September 30, 2010:


	September 30, 2010

Web site costs (www.giftcarddigest.com)	$	6,000
Accumulated Amortization		(3,666	)
Web site costs, Net		2,334
Intellectual Property – RxTC Database		37,222
Total	$	39,556

The Company begins amortizing intellectual property costs, using the straight-line method over the estimated useful life of 3 years, once it was put into service. At September 30, 2010, the website (“www.giftcard digest.com”) was put into service November, 2008 and RxTC Database has not been put in service and therefore amortization has not commenced.

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 condensed 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, 2009 filed on April 8, 2010 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

The website ("www.giftcarddigest.com"), under development, is designed to sell individual gift cards consisting of over 100 separate and distinct merchants. Our basic concept is an offering of over 100 gift cards so the customer can select from various alternatives for their gift card purchases having the feature of customer service and free standard shipping.

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 revenues, has used cash flows in operations of $33,525 from inception of November 15, 2008 to September 30, 2010 and has an accumulated deficit of ($32,191) through September 30, 2010.

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.

We have not yet established an ongoing 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 to fund operating losses until we become profitable. If we are unable to obtain adequate capital, 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

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. On an on-going basis, management evaluates these estimates and assumptions, including but not limited to those related to revenue recognition and the impairment of long-lived assets, goodwill and other intangible assets. Management bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Stock Compensation

(included in ASC 718 “Compensation-Stock Compensation”)

The Company adopted SFAS No. 123R, Share-Based Payment (“SFAS 123R”) which requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The Company accounts for stock-based compensation arrangements with nonemployees in accordance with the Emerging Issues Task Force Abstract No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services. The Company records the expense of such services to employees and non employees based on the estimated fair value of the equity instrument using the Black-Scholes pricing model.

Revenue Recognition

(included in ASC 605 “Revenue Recognition”)

The Company recognizes revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements’ and No. 104, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

Product sales and shipping revenues, net of promotional discounts, rebates, and return allowances, are recorded when the products are shipped and title passes to customers. Retail sales to customers are made pursuant to a sales contract that provides for transfer of both title and risk of loss upon our delivery to the carrier. Return allowances, which reduce product revenue, are estimated using historical experience. Revenue from product sales and services rendered is recorded net of sales taxes. Amounts received in advance for subscription services, are deferred and recognized as revenue over the subscription term.

Outlook

The most important metric by which we judge the Company’s performance now and in the near term is top line sales growth. Our current commitment to develop and deliver quality products means that, for the near future, bottom line profitability will be a poor indicator of our success.

Since investors are certain to be the primary, near term source of liquidity to support our development and marketing efforts, our liquidity will be driven by our ability to attract repeat investments from current shareholders and to find new ones. This in turn may be materially impacted by the general investment climate.

Our primary marketing challenge for the coming 12 months is to achieve market awareness through our intellectual properties (www.giftcarddigest.com and RxTC Database) currently under development and anticipated to be completed for beta testing in mid 2011. Additionally, management is seeking new acquisitions to complement existing products.

Revenues

As our revenues commence, we plan to invest in marketing and sales by increasing the number of direct sales throughout our web portal to build brand awareness. We expect that in the future, marketing and sales expenses will increase in absolute dollars commencing in the third quarter of 2011 when our intellectual properties has been further developed. We do not expect our revenues to commence significantly until late 2011.

General and Administrative Expenses

We expect that general and administrative expenses associated with executive compensation will increase in the future. Although our current president, chief financial officer and sole director have foregone full salary payments during the initial stages of the business, we are anticipated to commence revenues in late 2011. In addition, we believe in the 2011 fiscal year that the compensation packages required to attract the senior executives the Company requires to execute against its business plan will increase our total general and administrative expenses.

Results for the Nine Months Ended September 30, 2010 and September 30, 2009

Revenues. The Company’s revenues for the nine months ended September 30, 2010 and 2009 were $0. From inception through September 30, 2010, the company had no revenues.

Legal and Accounting Expenses. Legal and Accounting expenses for the nine months ended September 30, 2010 were $8,500as compared to $3,000 for the nine months ended September 30, 2009. The Legal and Accounting fees in the 2010 included fees for the filing of Form S-1 with the Securities and Exchange Commission and 2009 are for the normal and recurring fees relating to filings with the Securities and Exchange Commission.

General and Administrative Expenses. General and administrative expenses for the nine months ended September 30, 2010 were $6,900compared to $1,500for the nine months ended September 30, 2009. The general and administrative expenses for both 2010 included fees for the filing of Form S-1 with the Securities and Exchange Commission and 2009 are for the normal and recurring fees.

Net Loss. Net loss for the nine months ended September 30, 2010 was ($16,900) as compared to ($6,000) for the nine months ended September 30, 2009.

Results for the Three Months Ended September 30, 2010 and September 30, 2009

Revenues. The Company’s revenues for the three months ended September 30, 2010 and 2009 were $0. From inception through September 30, 2010, the company had no revenues.

Legal and Accounting Expenses. Legal and Accounting expenses for the three months ended September 30, 2010 were $500as compared to $500 for the three months ended September 30, 2009. The Legal and Accounting fees in the 2010 and 2009 are for the normal and recurring fees relating to filings with the Securities and Exchange Commission.

General and Administrative Expenses. General and administrative expenses for the three months ended September 30, 2010 were $500compared to $500for the three months ended September 30, 2009. The general and administrative expenses for both 2010 and 2009 are for the normal and recurring fees.

Net Loss. Net loss for the three months ended September 30, 2010 was ($1,500) as compared to ($1,500) for the three months ended September 30, 2009.

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

Liquidity is the ability of a company to generate sufficient amounts of cash to meet its need for cash. Since its inception, the Company has been funded by its founders with loans and through its initial public offering. At September 30, 2010, we had a working capital deficit of ($15,525) and an accumulated deficit of ($32,191), as compared to a working capital deficit of ($125) and an accumulated deficit of ($15,291) at December 31, 2009. Our working capital needs are currently being met by the sale of common shares and advances from related parties.

As of September 30, 2010 and December 31, 2009, total current assets were $1,100and $2,000 respectively.

As of September 30, 2010, total current liabilities were $16,625 consisting of $13,625 of loans to related parties and $3,000 of accrued expenses. As of December 31, 2009, total current liabilities were $2,125, which consisted of $500 of accrued expenses and $1,625 of loans to related parties.

During the nine months ended September 30, 2010 and September 30, 2009, operating activities used cash of $12,900 and $2,500 respectively. The cash used by operating activities for both periods was primarily due to legal, accounting, and general and administrative expenses.

Cash flows from financing activities including loans from related parties and cash generated through the company’s initial public offering represented the Company’s principal source of cash since November 15, 2008 (inception) through September 30, 2010.

Material Commitments

None

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.

Recently Issued Accounting Pronouncements

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable for a smaller reporting company.

Item 4T. 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 Securities Exchange Act of 1934 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 our principal financial and accounting officer, 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 our principal financial and accounting officer 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 our principal financial and accounting officer 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 the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2009.

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

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits

(a) Exhibits.


Exhibit No.	Description

31.1	Rule 13a-14(a)/15d-14(a) certification of Principal Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) certification of Principal accounting officer
32.1	Section 1350 certification of Chief Executive Officer
32.2	Section 1350 certification of Principal accounting and financial officer

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.



	RX TECHNOLOGIES CORP.

Dated: October 15, 2010	By:	/s/ Michael McManus
	Michael McManus,
	President and Principal Executive Officer

Rx Technologies Corp. - FORM 10-Q - October 18, 2010

Attached files

Rx Technologies Corp. Reports