Attached files

file filename
EX-32 - SECTION 906 CERTIFICATION - UPD HOLDING CORP.ex_32.htm
EX-31 - SECTION 302 CERTIFICATION - UPD HOLDING CORP.ex_31.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


  X  

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended December 31, 2010


___

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT 


For the transition period from _______________ to _______________


Commission File number 001-10320


Tempco, Inc.

(Exact name of small business issuer as specified in its charter)


Nevada

13-3465289

(State or other jurisdiction of

(I.R.S. Employer

incorporation of organization)

Identification No.)


7625 East Via Del Reposo, Scottsdale, AZ 85258

(Address of principal executive offices)


(480) 272-8745

(Issuer's telephone number)


_________________________________________________________________

(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 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 Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)   Yes  ___     No    X  


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 the definitions of “large accelerated filer,” “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act.


 

Large accelerated filer ___

Accelerated Filer ___

 

Non-accelerated filer ___
(Do not check if a smaller reporting company)

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 ___


APPLICABLE ONLY TO CORPORATE ISSUERS


As of January 12, 2011 the issuer had 11,490,016 shares of Common Stock outstanding, par value $.005 per share.




TABLE OF CONTENTS

 

PAGE

 

 

 

PART I - FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements.

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of December 31, 2010 (unaudited) and June 30, 2010

 

3

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended
December 31, 2010 and 2009

 

4

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended
December 31, 2010 and 2009

 

5

 

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

6

 

 

 

 

Item 2.

Management’s Discussion and Analysis or Plan of Operation

 

7

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

8

 

 

 

 

Item 4.

Controls and Procedures

 

8

 

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

9

 

 

 

 

Item 1A.

Risk Factors

 

9

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

9

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

9

 

 

 

 

Item 4.

Removed and Reserved

 

9

 

 

 

 

Item 5.

Other information

 

9

 

 

 

 

Item 6.

Exhibits

 

9

 

 

 

Signatures

 

10


2



PART I - FINANCIAL INFORMATION


Item 1. Financial Statements


TEMPCO, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


 

 

December 31,

 

June 30,

 

 

 

2010

 

2010

 

 

 

 

 

 

 

 

 

ASSETS

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

70,099

 

$

114,779

 

Prepaid expenses

 

 

3,452

 

 

9,824

 

 

 

 

 

 

 

 

 

Total current assets

 

 

73,551

 

 

124,603

 

 

 

 

 

 

 

 

 

Total Assets

 

$

73,551

 

$

124,603

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

7,406

 

$

3,638

 

Accrued liabilities

 

 

50

 

 

397

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

7,456

 

 

4,035

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

7,456

 

 

4,035

 

 

 

 

 

 

 

 

 

Commitments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity (deficit):

 

 

 

 

 

 

 

Common stock, $.005 par value 50,000,000 authorized;
11,490,016 issued and outstanding

 

 

89,845

 

 

89,845

 

Additional paid in capital

 

 

11,619,885

 

 

11,619,885

 

Accumulated deficit prior to reentering the development stage

 

 

(11,160,829

)

 

(11,160,829

)

Deficit accumulated in the development stage

 

 

(482,806

)

 

(428,333

)

 

 

 

 

 

 

 

 

Total stockholders' equity (deficit)

 

 

66,095

 

 

120,568

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity (deficit)

 

$

73,551

 

$

124,603

 


The Accompanying Notes are an Integral Part of the Financial Statements


3



TEMPCO, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative Since

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reentering the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development Stage,

 

 

 

Three Months Ended

 

Six Months Ended

 

February 5, 2008 to

 

 

 

December 31,

 

December 31,

 

December 31,

 

 

 

2010

 

2009

 

2010

 

2009

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

11,484

 

$

14,547

 

$

36,523

 

$

35,925

 

$

330,454

 

Directors fees

 

 

9,000

 

 

9,000

 

 

18,000

 

 

18,000

 

 

175,320

 

Operating loss

 

 

20,484

 

 

23,547

 

 

54,523

 

 

53,925

 

 

505,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from operations

 

 

(20,484

)

 

(23,547

)

 

(54,523

)

 

(53,925

)

 

(505,774

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

(424

)

Interest income

 

 

40

 

 

163

 

 

100

 

 

391

 

 

23,542

 

 

 

 

40

 

 

163

 

 

100

 

 

391

 

 

23,118

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

50

 

 

50

 

 

50

 

 

50

 

 

150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

 (20,494

)

$

 (23,434

)

$

 (54,473

)

$

 (53,584

)

$

 (482,806

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average common shares outstanding

 

 

11,490,016

 

 

11,390,881

 

 

11,490,016

 

 

11,390,881

 

 

 

 


The Accompanying Notes are an Integral Part of the Financial Statements


4



TEMPCO, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



 

 

 

 

 

 

 

 

Cumulative Since

 

 

 

 

 

 

 

 

 

Reentering the

 

 

 

 

 

 

 

 

 

Development Stage,

 

 

 

Six Months Ended

 

February 5, 2008 to

 

 

 

December 31,

 

December 31,

 

 

 

2010

 

2009

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net income

 

$

 (54,473

)

$

 (53,584

)

 

(482,806

)

Adjustments to reconcile net income to net cash provided (used)
by operating activities:

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

 

87,900

 

Loss on settlement of note receivable and accrued interest

 

 

 

 

 

 

69,750

 

Accrued interest receivable

 

 

 

 

 

 

(14,750

)

Changes in Assets and Liabilities:

 

 

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

6,372

 

 

6,372

 

 

(16,451

)

Accounts payable

 

 

3,768

 

 

 

 

7,406

 

Accrued liabiliites

 

 

(347

 

 

 

50

 

Net cash used by operating activities

 

 

(44,680

)

 

(47,212

)

 

(348,901

)

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Collection of note receivable

 

 

 

 

 

 

145,000

 

Net cash provided by investing activities

 

 

 

 

 

 

145,000

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

 

 

 

 

 

225,000

 

Proceeds from exercise of option

 

 

 

 

 

 

9,000

 

Net cash used by financing activities

 

 

 

 

 

 

234,000

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(44,680

)

 

(47,212

)

 

30,099

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of year

 

 

114,779

 

 

213,943

 

 

40,000

 

Cash and cash equivalents at end of period

 

$

70,099

 

$

166,731

 

$

70,099

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

 

$

 

$

100

 

Cash paid for interest

 

$

 

$

 

$

424

 


The Accompanying Notes are an Integral Part of the Financial Statements


5



TEMPCO, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Note A - Basis of Presentation and Interim Consolidated Financial Statements


Tempco, Inc. was incorporated in Nevada in June 1988 as Richard Barrie Fragrances, Inc. Over the years, the Company changed its name several times, most recently to Tempco, Inc. on February 4, 2008. The consolidated financial statements include the accounts of Tempco, Inc. and its wholly-owned subsidiaries (collectively, the “Company”), NETtime Solutions, Inc. an Arizona corporation, and Net Edge Devices, LLC, an Arizona Limited Liability Company. All intercompany accounts and transactions have been eliminated in consolidation.


The accompanying unaudited condensed consolidated financial statements of Tempco, Inc. and subsidiaries have been prepared in accordance with generally accepted accounting principles (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission, and are unaudited.  Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented have been made.  The results for the three month period ended December 31, 2010, may not be indicative of the results for the entire year.  These financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2010.  


The preparation of financial statements in conformity with GAAP 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 and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ materially from these estimates.


Note B - Income (Loss) Per Share:


Basic income (loss) per share of common stock is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the period.  


Diluted income (loss) per share is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period.  Dilutive securities are options and warrants that are freely exercisable into common stock at less than the prevailing market price. Dilutive securities are not included in the weighted average number of shares when inclusion would increase the earnings per share or decrease the loss per share.  For the three and six months ended December 31, 2010 and 2009, no securities were included in weighted average shares outstanding as the effect would be anti-dilutive.


Note C - Recent Accounting Pronouncements


The Company has implemented all new relevant accounting pronouncements that are in effect through the date of these financial statements. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


Note D - Going Concern


At December 31, 2010 the Company does not engage in any business activities that provide cash flow. We have approximately $70,000 in cash and cash equivalents. We do not believe this will be sufficient to fund the costs of investigating and analyzing a suitable business combination or to fund general and administrative expenses for the next 12 months. We will have to seek additional funds. No assurance can be given that we will be able to raise additional capital, when needed or at all, or that such capital, if available, will be on acceptable terms. The financial statements do not contain any adjustments that might result from these uncertainties. 


Note E - Subsequent Events


The Company has evaluated events that occurred subsequent to December 31, 2010 and through the date the financial statements were issued. Management concluded that no subsequent events required disclosure in these financial statements.


6



Item 2. Management’s Discussion and Analysis of Financial Condition and Plan of Operation.


Overview


This quarterly report on Form 10-Q covers the quarterly period ended December 31, 2010.  The Company has no operating business and is, in effect, a “shell” company with no significant liabilities and minimal cash.  Our management team and board of directors currently are looking for a private company that it can merge with or acquire and that has an operating business that will help increase shareholder value.  Your review of this quarterly report should be read with the above facts in mind.   


Current Business Strategy


The Board has determined to maintain the Company as a public “shell” corporation, which will seek suitable business combination opportunities.  The Board believes that a business combination with an operating company has the potential to create greater value for the Company’s stockholders than a liquidation or similar distribution.


Critical Accounting Policies


Our significant accounting policies are described in the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended June 30, 2010.  


Effect of Status as a “Shell” Company


Because we are a shell company as defined under the Rules of the Securities and Exchange Commission, we are disqualified from using a short form of registration statement (S-8) for the issuance of employee stock options. Furthermore, holders of restricted securities issued while we were or are a shell company may not re-sell them pursuant to SEC Rule 144 for a period of one year after we cease to be a shell and have filed the necessary report with the SEC to that effect.


Plan of Operation


The Company’s current business objective is to locate suitable business combination opportunities. The Company does not currently engage in any business activities that provide cash flow. As of December 31, 2010, we have approximately $70,000 in cash and cash equivalents. We do not believe this will be sufficient to fund the costs of investigating and analyzing a suitable business combination or to fund general and administrative expenses for the next 12 months. We will have to seek additional funds.


During the next 12 months we anticipate incurring costs related to:


 

(i)

Filing of Exchange Act reports;

 

 

 

 

(ii)

Officer and director’s salaries and rent; and

 

 

 

 

(iii)

Consummating an acquisition.


We believe we will be able to meet these costs through use of existing cash and cash equivalents or additional amounts, as necessary, to be loaned by or invested in us by our stockholders, management or other investors. However, no assurance can be given that we will be able to raise additional capital, when needed or at all, or that such capital, if available, will be on acceptable terms. In the absence of obtaining additional financing, the Company may be unable to fund its operations.  Accordingly, the Company’s financial condition could require that the Company seek the protection of applicable reorganization laws in order to avoid or delay actions by third parties, which could materially adversely affect, interrupt or cause the cessation of the Company’s operations. As a result, the Company’s independent registered public accounting firm has issued a going concern opinion on the consolidated financial statements of the Company for the fiscal year ended June 30, 2010.


7



Prior to consummating a business combination transaction, we do not anticipate:


 

(i)

Any expenditures for research and development;

 

 

 

 

(ii)

Any expenditures or cash receipts for the purchase or sale of any property plant or equipment; or

 

 

 

 

(iii)

Any significant change in the number of employees.


General and Administrative Expenses


For the three and six months ended December 31, 2010 we have recorded general and administrative expenses of $11,484 and $36,523, as compared to $14,547 and $35,925 for the same periods of the prior fiscal year. Our general and administrative expenses in the current and prior fiscal year consist primarily of legal and accounting fees, and other costs associated with maintaining the company as a publicly traded entity. Our general and administrative expenses from the date of reentering the development stage (February 5, 2008) through December 31, 2010 were $330,454.


Net Loss


For the three and six months ended December 31, 2010, we have reflected net loss of $20,494 and $54,473, respectively as compared to $23,434 and $53,584 of the same period of the prior fiscal year. Our net loss from the date of reentering the development stage (February 5, 2008) through December 31, 2010 was $482,806.


Off-balance sheet arrangements


We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.


Item 3. Quantitative and Qualitative Disclosures About Market Risk


Market risk generally represents the risk that losses may occur in the values of financial instruments as a result of movements in interest rates, foreign currency exchange rates and commodity prices. We do not have foreign currency exchange rate or commodity price market risk.


Interest Rate Risk—From time to time we temporarily invest our excess cash in interest-bearing securities issued by high-quality issuers. We monitor risk exposure to monies invested in securities in our financial institutions. Due to the short time the investments are outstanding and their general liquidity, these instruments are classified as cash equivalents in our condensed consolidated balance sheets and do not represent a material interest rate risk.


Item 4. Controls and Procedures.


Evaluation of Disclosure Controls and Procedures. Our principal executive and financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a — 15e and 15d — 15e) as of the quarter ended December 31, 2010 (the “Evaluation Date”), has concluded that, as of such date, our disclosure controls and procedures were effective.


Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


8



FORWARD-LOOKING INFORMATION


The statements contained in this Quarterly Report on Form 10-Q that are not historical fact are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  The forward-looking statements contained herein are based on current expectations that involve a number of risks and uncertainties.  These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties.  Investors are cautioned that these forward-looking statements that are not historical facts are only predictions.  No assurances can be given that the future results indicated, whether expressed or implied, will be achieved. Because of the number and range of assumptions underlying the Company’s projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond the reasonable control of the Company, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this report.  These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information.  Therefore, the actual experience of the Company and the results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected.  The inclusion of projections and other forward-looking statements should not be regarded as a representation by the Company or any other person that these estimates and projections will be realized, and actual results may vary materially.  There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate.


PART II - OTHER INFORMATION


Item 1. Legal Proceedings.


As of the date of this report, the Company is not currently involved in any legal proceedings.


Item 1A. Risk Factors


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


None.

 

Item 3. Defaults Upon Senior Securities


None.


Item 4. Removed and Reserved


None.


Item 5. Other information


None.


Item 6. Exhibits


(a)         The following exhibits are filed herewith pursuant to Item 601 of Regulation S-K.


31         Section 302 Certification of Chief Executive and Financial Officer


32         Section 906 Certification


9



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.


TEMPCO, INC.


Dated:  February 3, 2011

By  /s/ Stanley L. Schloz

Stanley L. Schloz

President and Chief Executive and Financial Officer


10