Attached files
file | filename |
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EX-32.1 - AVRA Surgical Robotics, Inc. | v201492_ex32-1.htm |
EX-32.2 - AVRA Surgical Robotics, Inc. | v201492_ex32-2.htm |
EX-31.2 - AVRA Surgical Robotics, Inc. | v201492_ex31-2.htm |
EX-31.1 - AVRA Surgical Robotics, Inc. | v201492_ex31-1.htm |
FORM
10-Q
U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the
quarterly period ended September 30, 2010
OR
¨
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 000-52330
RFG Acquisition II
Inc.
(Exact
name of registrant as specified in its charter)
Delaware
|
32-2277305
|
|
(State
or other jurisdiction
|
(I.R.S.
Employer Identification Number)
|
|
of
incorporation or organization)
|
c/o RainMaker Financial
Group Inc., 650 Warrenville Road, Suite 103, Lisle, Illinois
60532
(Address
of principal executive offices)
(312)
896-8292
(Registrant’s
telephone number, including area code)
No
change
(Former
name, former address and former fiscal year, if changed since last
report)
Indicate by check mark 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 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 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 ¨ No ¨
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company. See definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act. (Check one):
Large
accelerated filer ¨
|
Accelerated
filer
¨
|
|
Non-accelerated
filer ¨
|
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 x No ¨.
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Sections
12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. Yes ¨ No ¨.
APPLICABLE
ONLY TO CORPORATE ISSUERS:
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date: 2,500,000 shares of common stock,
par value $.0001 per share, outstanding as of November 10, 2010.
RFG
ACQUISITION II INC.
-
INDEX -
Page
|
||
PART
I – FINANCIAL INFORMATION:
|
||
Item
1.
|
Financial
Statements:
|
|
Balance
Sheets as of September 30, 2010 (Unaudited) and December 31,
2009
|
1
|
|
Statements
of Operations (Unaudited) for the Three Months Ended September
30,
|
2
|
|
2010
and 2009, for the Nine Months Ended September 30, 2010 and 2009 and
for
|
||
the
Period from August 29, 2006 (Inception) through September 30,
2010
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||
Statement
of Stockholders’ Equity/(Deficiency) for the Period August 29,
2006
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3
|
|
(Inception)
through September 30, 2010 (Unaudited)
|
||
Statements
of Cash Flows (Unaudited) for the Nine Months Ended September
30,
|
4
|
|
2010,
for the Nine Months Ended September 30, 2009 and for the
Period
|
||
August
29, 2006 (Inception) through September 30, 2010
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||
Notes
to Financial Statements
|
5
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and
|
9
|
Results
of Operations
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||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
12
|
Item
4.
|
Controls
and Procedures
|
12
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PART II – OTHER
INFORMATION:
|
||
Item
1.
|
Legal
Proceedings
|
12
|
Item
1A.
|
Risk
Factors
|
13
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
13
|
Item
3.
|
Defaults
Upon Senior Securities
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13
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Item
4.
|
Removed
and Reserved
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13
|
Item
5.
|
Other
Information
|
13
|
Item
6.
|
Exhibits
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13
|
Signatures
|
14
|
PART I – FINANCIAL
INFORMATION
Item
1. Financial Statements.
RFG
ACQUISITION II INC.
(A
Development Stage Company)
Balance
Sheets
September 30,
2010
(Unaudited)
|
December 31,
2009
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
|
$ | 878 | $ | 1,281 | ||||
Prepaid
expenses
|
1,875 | - | ||||||
Total
Assets
|
$ | 2,753 | $ | 1,281 | ||||
Liabilities
and Stockholders’ Equity/(Deficiency)
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable and accrued expenses
|
$ | - | $ | 155 | ||||
Long
Term Liabilities
|
||||||||
Loan
payable – stockholders
|
109,010 | 87,010 | ||||||
Accrued
interest payable
|
11,719 | 8,272 | ||||||
Total
Long Term Liabilities
|
120,729 | 95,282 | ||||||
Total
Liabilities
|
120,729 | 95,437 | ||||||
Stockholders’
Equity/(Deficiency)
|
||||||||
Preferred
stock, $.0001 par value; 10,000,000 shares authorized; none issued and
outstanding
|
- | - | ||||||
Common
stock, $.0001 par value; 100,000,000 shares authorized; 2,500,000 shares
issued and outstanding as of September 30, 2010 and December 31,
2009
|
250 | 250 | ||||||
Additional
paid-in capital
|
29,750 | 29,750 | ||||||
Deficit
accumulated during the development stage
|
(147,976 | ) | (124,156 | ) | ||||
Total
Stockholders’ Equity/(Deficiency)
|
(117,976 | ) | (94,156 | ) | ||||
Total
Liabilities and Stockholders’ Equity/(Deficiency)
|
$ | 2,753 | $ | 1,281 |
See
notes to financial statements.
1
RFG
ACQUISITION II INC.
(A
Development Stage Company)
Statements
of Operations
(Unaudited)
For the
Period
|
||||||||||||||||||||
For the Three
Months
Ended
|
For the Three
Months
Ended
|
For the Nine
Months
Ended
|
For the Nine
Months
Ended
|
August 29,
2006
(Inception)
Through
|
||||||||||||||||
September
30,
2010
|
September
30,
2009
|
September
30,
2010
|
September
30,
2009
|
September
30,
2010
|
||||||||||||||||
Revenues
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
General
and administrative expenses
|
5,249 | 5,404 | 20,373 | 20,943 | 136,257 | |||||||||||||||
(Loss)
before other expenses
|
(5,249 | ) | (5,404 | ) | (20,373 | ) | (20,943 | ) | (136,257 | ) | ||||||||||
Interest
expense
|
1,241 | 928 | 3,447 | 2,511 | 11,719 | |||||||||||||||
Net
(Loss)
|
$ | (6,490 | ) | $ | (6,332 | ) | $ | (23,820 | ) | $ | (23,454 | ) | $ | (147,976 | ) | |||||
Basic
and Diluted (Loss) Per Share
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
Weighted
Average Number of Common Shares Outstanding
|
2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 |
See
notes to financial statements.
2
RFG
ACQUISITION II INC.
(A
Development Stage Company)
Statement
of Stockholders’ Equity/(Deficiency)
For
the Period August 29, 2006 (Inception) Through September 30, 2010
(Deficit)
Accumulated
|
||||||||||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Additional
|
During
the
|
Stockholders’
|
||||||||||||||||||||||||||||
Subscription
|
Paid-in
|
Development
|
Equity/
|
|||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Receivable
|
Capital
|
Stage
|
(Deficiency)
|
|||||||||||||||||||||||||
August
29, 2006 - common stock subscription
|
- | $ | - | 2,500,000 | $ | 250 | $ | (250 | ) | $ | - | $ | - | $ | - | |||||||||||||||||
August
31, 2006 – contributed capital
|
- | - | - | - | 250 | 29,750 | - | 30,000 | ||||||||||||||||||||||||
Net
(loss)
|
- | - | - | - | - | - | (28,511 | ) | (28,511 | ) | ||||||||||||||||||||||
Balance
at December 31, 2006
|
- | - | 2,500,000 | 250 | - | 29,750 | (28,511 | ) | 1,489 | |||||||||||||||||||||||
Net
(loss)
|
- | - | - | - | - | - | (34,932 | ) | (34,932 | ) | ||||||||||||||||||||||
Balance
at December 31, 2007
|
- | - | 2,500,000 | 250 | - | 29,750 | (63,443 | ) | (33,443 | ) | ||||||||||||||||||||||
Net
(loss)
|
- | - | - | - | - | - | (30,801 | ) | (30,801 | ) | ||||||||||||||||||||||
Balance
at December 31, 2008
|
- | - | 2,500,000 | 250 | - | 29,750 | (94,244 | ) | (64,244 | ) | ||||||||||||||||||||||
Net
(loss)
|
- | - | - | - | - | - | (29,912 | ) | (29,912 | ) | ||||||||||||||||||||||
Balance
at December 31, 2009
|
- | - | 2,500,000 | 250 | - | 29,750 | (124,156 | ) | (94,156 | ) | ||||||||||||||||||||||
Net
(loss) (Unaudited)
|
- | - | - | - | - | - | (23,820 | ) | (23,820 | ) | ||||||||||||||||||||||
Balance
at September 30, 2010 (Unaudited)
|
- | $ | - | 2,500,000 | $ | 250 | $ | - | $ | 29,750 | $ | (147,976 | ) | $ | (117,976 | ) |
See
notes to financial statements.
3
RFG
ACQUISITION II INC.
(A
Development Stage Company)
Statements
of Cash Flows
(Unaudited)
For the Period
|
||||||||||||
August 29, 2006
|
||||||||||||
For the Nine
Months Ended
|
For the Nine
Months Ended
|
(Inception)
Through
|
||||||||||
September 30,
2010
|
September 30,
2009
|
September 30,
2010
|
||||||||||
Cash
Flows from Operating Activities
|
||||||||||||
Net
(loss)
|
$ | (23,820 | ) | $ | (23,454 | ) | $ | (147,976 | ) | |||
Adjustments
to reconcile net (loss) to net cash used in operating
activities:
|
||||||||||||
Increase
in prepaid expenses
|
(1,875 | ) | (1,875 | ) | (1,875 | ) | ||||||
(Decrease)
in accounts payable and accrued expenses
|
(155 | ) | (575 | ) | - | |||||||
Increase
in accrued interest
|
3,447 | 2,511 | 11,719 | |||||||||
Net
cash (used in) operating activities
|
(22,403 | ) | (23,393 | ) | (138,132 | ) | ||||||
Cash
Flows from Financing Activities
|
||||||||||||
Proceeds
from issuance of common stock
|
- | - | 30,000 | |||||||||
Proceeds
from stockholder loans
|
22,000 | 23,000 | 109,010 | |||||||||
Net
cash provided by financing activities
|
22,000 | 23,000 | 139,010 | |||||||||
Net
Increase (Decrease) in Cash
|
(403 | ) | (393 | ) | 878 | |||||||
Cash
at beginning of period
|
1,281 | 623 | - | |||||||||
Cash
at end of period
|
$ | 878 | $ | 230 | $ | 878 |
See
notes to financial statements.
4
RFG
ACQUISITION II INC.
(A
Development Stage Company)
Notes
to Financial Statements
September
30, 2010
NOTE
1 - ORGANIZATION
AND BUSINESS:
RFG
Acquisition II Inc., a Development Stage Company, (the “Company”) was
incorporated in the state of Delaware on August 29, 2006 with the objective to
acquire, or merge with, an operating business.
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly traded corporation and, to a lesser extent, desires to
employ the Company’s funds in its business. The Company’s principal
business objective over the next twelve months and beyond will be to achieve
long-term growth potential through a combination with a business rather than
immediate short-term earnings. The Company will not restrict its
potential target companies to any specific business, industry or geographical
location. The analysis of business opportunities will be undertaken
by, or under the supervision of, the officers and directors of the
Company.
NOTE
2 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES:
(a)
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 amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the balance sheet and
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
|
(b)
|
Cash
Equivalents:
|
The
Company considers highly liquid financial instruments purchased with a maturity
of three months or less to be cash equivalents. There are no cash
equivalents at the balance sheet date.
|
(c)
|
Income
Taxes:
|
The
Company utilizes the liability method of accounting for income
taxes. Under the liability method deferred tax assets and liabilities
are determined based on the differences between financial reporting basis and
the tax basis of the assets and liabilities and are measured using enacted tax
rates and laws that will be in effect, when the differences are expected to
reverse. An allowance against deferred tax assets is recognized, when
it is more likely than not, that such tax benefits will not be
realized.
The
Company recognizes the financial statement benefit of an uncertain tax position
only after considering the probability that a tax authority would sustain the
position in an examination. For tax positions meeting a "more-likely-than-not"
threshold, the amount recognized in the financial statements is the benefit
expected to be realized upon settlement with the tax authority. For tax
positions not meeting the threshold, no financial statement benefit is
recognized. The Company recognizes interest and penalties, if any, related
to uncertain tax positions in income tax expense. As of September 30,
2010, the Company is unaware of any uncertain tax positions.
5
RFG
ACQUISITION II INC.
(A
Development Stage Company)
Notes
to Financial Statements
September
30, 2010
NOTE
2 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
|
(d)
|
Fair
Value of Financial Instruments:
|
The
Company adopted the Financial Accounting Standards Board Fair Value
Measurements, as it applies to its financial statements. This
standard defines fair value, outlines a framework for measuring fair value, and
details the required disclosures about fair value measurements.
Fair
value is defined as the price that would be received to sell an asset, or paid
to transfer a liability, in an orderly transaction between market participants
at the measurement date in the principal or most advantageous
market. The standard establishes a hierarchy in determining the fair
value of an asset or liability. The fair value hierarchy has three
levels of inputs, both observable and unobservable. The standard
requires the utilization of the lowest possible level of input to determine fair
value. Level 1 inputs include quoted market prices in an active
market for identical assets or liabilities. Level 2 inputs are market
data, other than Level 1, that are observable either directly or
indirectly. Level 2 inputs include quoted market prices for similar
assets or liabilities, quoted market prices in an inactive market, and other
observable information that can be corroborated by market data. Level
3 inputs are unobservable and corroborated by little or no market
data.
The
carrying value of current assets and liabilities approximates fair value due to
the short period of time to maturity. The carrying amount of loan payable to
stockholders approximates their fair value, using level three inputs, as the
current interest rate on said instruments approximates current market rates on
similar instruments.
|
(e)
|
Loss
per Common Share:
|
Basic
loss per share is calculated using the weighted-average number of common shares
outstanding during each reporting period. Diluted loss per share
includes potentially dilutive securities such as outstanding options and
warrants, using various methods such as the treasury stock or modified treasury
stock method in the determination of dilutive shares outstanding during each
reporting period. The Company does not have any potentially dilutive
instruments.
NOTE
3 -
|
The
accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the
recoverability of assets and the satisfaction of liabilities in the normal
course of business. The Company has incurred a net loss from inception of
approximately $148,000, which, among other factors, raises substantial
doubt about the Company’s ability to continue as a going concern. The
ability of the Company to continue as a going concern is dependent upon
management’s plan to find a suitable acquisition or merger candidate,
raise additional capital from the sale of stock, receive additional
loans from its stockholders, and ultimately, income from operations. The
accompanying financial statements do not include any adjustments that
might be required should the Company be unable to recover the value of its
assets or satisfy its
liabilities.
|
6
RFG
ACQUISITION II INC.
(A
Development Stage Company)
Notes
to Financial Statements
September
30, 2010
NOTE
4 - COMMON
STOCK:
The
Company is authorized to issue one hundred million (100,000,000) shares of
common stock. On August 29, 2006 the Company sold two million five
hundred thousand (2,500,000) shares of common stock to two investors for $250,
which was paid on August 31, 2006. These shareholders also
contributed an additional amount of $29,750, for total cash consideration of
$30,000
NOTE
5 - PREFERRED
STOCK:
The
Company is authorized to issue ten million (10,000,000) shares of $.0001 par
value preferred stock with designations, voting and other rights and preferences
as may be determined from time to time by the Board of Directors of the
Company.
NOTE
6 - INCOME
TAXES:
As of
September 30, 2010, the Company has net operating loss carryforwards of
approximately $148,000 to reduce future federal and state taxable income through
2029.
The
Company has approximately $41,000 and $29,000 in deferred tax assets at
September 30, 2010 and 2009, respectively, resulting from net operating loss
carryforwards. At September 30, 2010 and 2009, a valuation allowance
has been recorded to fully offset these deferred tax assets because the future
realization of the related income tax benefits is uncertain. The
difference between the statutory tax rate of 34% and the effective tax rate of
0% is due to the surtax exemption and the valuation allowance.
The
Company currently has no federal or state tax examinations in progress nor has
it had any federal or state examinations since its inception. All of
the Company’s tax years are subject to federal and state tax
examination.
NOTE
7 - LOAN
PAYABLE STOCKHOLDERS:
On
November 20, 2006, the Company entered into formal line of credit agreements
with its two stockholders. The agreements provided the Company with
revolving credit lines up to an aggregate maximum of $12,510. The
agreements were amended on February 26, 2007 to increase the maximum aggregate
principal amount to $30,000. On June 1, 2007, the agreements were
amended to increase the rate of interest from 4.75% to the prime rate of
interest, as reported in the Wall Street Journal, plus 1.0% per
annum. In addition, the default rate of interest was changed from
10.0% to the prime rate of interest, as reported in the Wall Street Journal,
plus 6.0% per annum. On September 24, 2007, the agreements were
amended to increase the maximum aggregate principal amount to
$50,000. On June 20, 2008, the agreements were amended to increase
the maximum aggregate principal amount to $100,000. On March 5, 2010,
the agreements were amended to increase the maximum aggregate principal amount
to $200,000. This maximum principal amount may be further amended from time
to time. Interest on outstanding loans is calculated based on actual
days outstanding and a 360 day year. Outstanding principal and
accrued interest is to be repaid in full upon the earlier of the completion of a
merger or December 31, 2013. At September 30, 2010, the balance
outstanding under these agreements is $109,010 plus accrued interest of
$11,719.
7
RFG
ACQUISITION II INC.
(A
Development Stage Company)
Notes
to Financial Statements
September
30, 2010
NOTE
8 - RELATED
PARTY TRANSACTIONS:
The
Company utilizes the office space and equipment of its management at no
cost. Management estimates such amounts to be
immaterial.
NOTE
9 - BASIS
OF PRESENTATION FOR INTERIM FINANCIAL STATEMENTS:
The
accompanying Interim Financial Statements have been prepared in accordance with
accounting principles generally accepted for interim financial statement
presentation and in accordance with the instructions to Regulation
S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for complete financial statement presentation. In
the opinion of management, all adjustments for a fair statement of the results
of operations and financial position for the interim period presented have been
included. All such adjustments are of a normal recurring
nature. This financial information should be read in conjunction with
the Financial Statements and notes thereto included in the Company’s Form 10-K
for the fiscal year ended December 31, 2009.
NOTE
10 - RECENT
ACCOUNTING PRONOUNCEMENTS:
Management
does not believe that any recently issued, but not yet effective accounting
pronouncements, if adopted, would have a material effect on the accompanying
financial statements.
8
Item
2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations.
Forward
Looking Statement Notice
Certain
statements made in this Quarterly Report on Form 10-Q are “forward-looking
statements” (within the meaning of the Private Securities Litigation Reform Act
of 1995) in regard to the plans and objectives of management for future
operations. Such statements involve known and unknown risks, uncertainties and
other factors that may cause actual results, performance or achievements of RFG
Acquisition II Inc. (“we”, “us”, “our” or the “Company”) to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. The forward-looking statements
included herein are based on current expectations that involve numerous risks
and uncertainties. The Company's plans and objectives are based, in part, on
assumptions involving the continued expansion of business. Assumptions relating
to the foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. Although the Company believes its assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could prove inaccurate and, therefore, there can be no assurance the
forward-looking statements included in this Quarterly Report will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.
Description
of Business
The
Company was incorporated in the State of Delaware on August 29, 2006 (Inception)
and maintains its principal executive office at c/o RainMaker Financial Group
Inc., 650 Warrenville Road, Suite 103, Lisle, Illinois 60532. Since inception,
the Company has been engaged in organizational efforts and obtaining initial
financing. The Company was formed as a vehicle to pursue a business
combination through the acquisition of, or merger with, an operating
business. The Company filed a Registration Statement on Form 10-SB
with the U.S. Securities and Exchange Commission (the “SEC”) on November 22,
2006, and since its effectiveness, the Company has focused its efforts to
identify a possible business combination.
The
Company, based on proposed business activities, is a “blank check” company. The
SEC defines those companies as "any development stage company that is issuing a
penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and that has no specific business
plan or purpose, or has indicated that its business plan is to merge with an
unidentified company or companies." Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in their
respective jurisdictions. The Company is also a “shell company,” defined in Rule
12b-2 under the Exchange Act as a company with no or nominal assets (other than
cash) and no or nominal operations. Management does not intend to undertake any
efforts to cause a market to develop in our securities, either debt or equity,
until we have successfully concluded a business combination. The Company intends
to comply with the periodic reporting requirements of the Exchange Act for so
long as we are subject to those requirements.
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. The Company’s principal business objective
for the next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with an operating business. The Company will not
restrict its potential candidate target companies to any specific business,
industry or geographical location and, thus, may acquire any type of
business.
9
The Company currently does not engage
in any business activities that provide cash flow. During the next
twelve months we anticipate incurring costs related to:
|
(i)
|
filing
Exchange Act reports, and
|
|
(ii)
|
investigating,
analyzing and consummating an
acquisition.
|
We
believe we will be able to meet these costs through use of funds in our
treasury, through deferral of fees by certain service providers and additional
amounts, as necessary, to be loaned to or invested in us by our stockholders,
management or other investors. As of the date of the period covered by this
report, the Company has $878 in its treasury. There are no assurances that the
Company will be able to secure any additional funding as needed. Currently,
however our ability to continue as a going concern is dependent upon our ability
to generate future profitable operations and/or to obtain the necessary
financing to meet our obligations and repay our liabilities arising from normal
business operations when they come due. Our ability to continue as a going
concern is also dependant on our ability to find a suitable target company and
enter into a possible reverse merger with such company. Management’s plan
includes obtaining additional funds by equity financing through a reverse merger
transaction and/or related party advances, however there is no assurance of
additional funding being available.
The Company may consider acquiring a
business which has recently commenced operations, is a developing company in
need of additional funds for expansion into new products or markets, is seeking
to develop a new product or service, or is an established business which may be
experiencing financial or operating difficulties and is in need of additional
capital. In the alternative, a business combination may involve the acquisition
of, or merger with, a company which does not need substantial additional capital
but which desires to establish a public trading market for its shares while
avoiding, among other things, the time delays, significant expense, and loss of
voting control which may occur in a public offering.
Since our
Registration Statement on Form 10-SB went effective, our management has had
contact and discussions with representatives of other entities regarding a
business combination with us. Any target business that is selected may be a
financially unstable company or an entity in its early stages of development or
growth, including entities without established records of sales or earnings. In
that event, we will be subject to numerous risks inherent in the business and
operations of financially unstable and early stage or potential emerging growth
companies. In addition, we may effect a business combination with an entity in
an industry characterized by a high level of risk, and, although our management
will endeavor to evaluate the risks inherent in a particular target business,
there can be no assurance that we will properly ascertain or assess all
significant risks. Our management anticipates that it will likely be able to
effect only one business combination, due primarily to our limited financing and
the dilution of interest for present and prospective stockholders, which is
likely to occur as a result of our management’s plan to offer a controlling
interest to a target business in order to achieve a tax-free reorganization.
This lack of diversification should be considered a substantial risk in
investing in us, because it will not permit us to offset potential losses from
one venture against gains from another.
The Company anticipates that the
selection of a business combination will be complex and extremely risky. Because
of general economic conditions, rapid technological advances being made in some
industries and shortages of available capital, our management believes that
there are numerous firms seeking even the limited additional capital which we
will have and/or the perceived benefits of becoming a publicly traded
corporation. Such perceived benefits of becoming a publicly traded corporation
include, among other things, facilitating or improving the terms on which
additional equity financing may be obtained, providing liquidity for the
principals of and investors in a business, creating a means for providing
incentive stock options or similar benefits to key employees, and offering
greater flexibility in structuring acquisitions, joint ventures and the like
through the issuance of stock. Potentially available business combinations may
occur in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
10
Liquidity
and Capital Resources
As of September 30, 2010, the Company
had current assets equal to $2,753, comprised of cash and prepaid expenses. This
compares with current assets of $1,281, comprised exclusively of cash, as of
December 31, 2009. The Company had no current liabilities as of September 30,
2010. This compares to the Company’s current liabilities as of December 31, 2009
of $155, comprised exclusively of accounts payable and accrued
expenses. The Company’s long term liabilities as of September 30,
2010 equal $120,729, comprised of loans payable to stockholders and accrued
interest payable. This compares to the Company’s long term
liabilities as of December 31, 2009 of $95,282 comprised of loans payable to
stockholders and accrued interest payable. The Company can provide no
assurance that it can continue to satisfy its cash requirements for at least the
next twelve months.
The following is a summary of the
Company’s cash flows provided by (used in) operating, investing, and financing
activities for the nine months ended September 30, 2010, for the nine months
ended September 30, 2009 and for the period from August 29, 2006 (Inception)
through September 30, 2010:
For the
Nine Months
Ended
September 30,
2010
|
For the
Nine Months
Ended
September 30,
2009
|
For the Period from
August 29, 2006
(Inception) through
September 30, 2010
|
||||||||||
Net
cash (used in) operating activities
|
$ | (22,403 | ) | $ | (23,393 | ) | $ | (138,132 | ) | |||
Net
cash (used in) investing activities
|
$ | - | $ | - | $ | - | ||||||
Net
cash provided by financing activities
|
$ | 22,000 | $ | 23,000 | $ | 139,010 | ||||||
Net
increase/(decrease) in cash
|
$ | (403 | ) | $ | (393 | ) | $ | 878 |
The
Company has nominal assets and has generated no revenues since inception. The
Company is also dependent upon the receipt of capital investment or other
financing to fund its ongoing operations and to execute its business plan of
seeking a combination with a private operating company. In addition, the Company
is dependent upon certain related parties to provide continued funding and
capital resources. If continued funding and capital resources are unavailable at
reasonable terms, the Company may not be able to implement its plan of
operations.
Results
of Operations
The
Company has not conducted any active operations since inception, except for its
efforts to locate suitable acquisition candidates. No revenue has been
generated by the Company from August 29, 2006 (inception) through September 30,
2010. It is unlikely the Company will have any revenues unless it is
able to effect an acquisition or merger with an operating company, of which
there can be no assurance. The Company’s plan of operation for the
next twelve months shall be to continue its efforts to locate suitable
acquisition candidates.
For the
three and nine months ended September 30, 2010, the Company had a net loss of
$6,490 and $23,820, respectively, consisting of general and administrative
expenses comprised of legal, accounting, audit and other professional service
fees incurred in relation to the filing of the Company’s Quarterly and Annual
Reports on Form 10-Q and Form 10-K and interest expense. This compares with a
net loss of $6,332 and $23,454, respectively, for the three and nine months
ended September 30, 2009, consisting of general and administrative expenses
comprised of legal, accounting, audit and other professional service fees
incurred in relation to the filing of the Company’s Quarterly and Annual Reports
on Form 10-Q and Form 10-K and interest expense.
11
For the
period from August 29, 2006 (inception) through September 30, 2010, the Company
had a net loss of $147,976 consisting of (i) $136,257 of general and
administrative expenses comprised of legal, accounting, audit and other
professional service fees incurred in relation to the formation of the Company,
the filing of the Company’s Registration Statement on Form 10-SB in November of
2006, the filing of the Company’s Quarterly Reports on Form 10-QSB and Form 10-Q
and the filing of the Company’s Annual Reports on Form 10-KSB, and Form
10-K and (ii) $11,719 of interest expense.
Off-Balance
Sheet Arrangements
The Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company’s financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to
investors.
Contractual
Obligations
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
this information.
Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
information required by this Item.
Item
4. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
We maintain disclosure controls and
procedures that are designed to ensure that information required to be disclosed
in our reports filed pursuant to the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules,
regulations and related forms, and that such information is accumulated and
communicated to our principal executive officer and principal financial officer,
as appropriate, to allow timely decisions regarding required
disclosure.
As of September 30, 2010, we carried
out an evaluation, under the supervision and with the participation of our
principal executive officer and our principal financial officer of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on this evaluation, our principal executive officer and our
principal financial officer concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this
report.
Changes
in Internal Controls
There have been no changes in our
internal controls over financial reporting during the quarter ended September
30, 2010 that have materially affected or are reasonably likely to materially
affect our internal controls.
PART II — OTHER
INFORMATION
Item
1. Legal Proceedings.
There are
presently no material pending legal proceedings to which the Company, any of its
subsidiaries, any executive officer, any owner of record or beneficially of more
than five percent of any class of voting securities is a party or as to which
any of its property is subject, and no such proceedings are known to the
Registrant to be threatened or contemplated against it.
12
Item
1A. Risk Factors.
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
information required by this Item.
Item
2. Unregistered Sales of Equity Securities 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
required by Item 601 of Regulation S-K.
Exhibit
|
Description
|
|
*3.1
|
Certificate
of Incorporation, as filed with the Delaware Secretary of State on August
29, 2006.
|
|
*3.2
|
By-Laws.
|
|
31.1
|
Certification
of the Company’s Principal Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly
Report on Form 10-Q for the quarter ended September 30,
2010.
|
|
31.2
|
Certification
of the Company’s Principal Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly
Report on Form 10-Q for the quarter ended September 30,
2010.
|
|
32.1
|
Certification
of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification
of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
*
|
Filed
as an exhibit to the Company’s Registration Statement on Form 10-SB, as
filed with the SEC on November 22, 2006 and incorporated herein by this
reference.
|
13
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.
RFG
ACQUISITION II INC.
|
||
Dated:
November 10, 2010
|
By:
|
/s/ Richard F. Beston,
Jr.
|
Richard
F. Beston, Jr.
|
||
President
and Director
|
||
Principal
Executive Officer
|
||
Dated:
November 10, 2010
|
By:
|
/s/ David W. Matre
|
David
W. Matre
|
||
Chief
Financial Officer
|
||
Principal
Financial Officer
|
||
Principal
Accounting Officer
|
14