Attached files
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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[X]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED: March 31, 2011
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM TO __________
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Commission File Number 000-52546
Oldwebsites.com, Inc.
(Name of Small business Issuer in its charter)
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Utah
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98-0212805
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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4804 Skycrest Park Cove Salt Lake City, Utah
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84108
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801-531-0404
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(Address of principal executive offices)
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(Zip Code)
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(Issuer's telephone number)
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www.oldwebsites.com
(Web Address)
(Copies to:)
Steve Taylor, 4804 Skycrest Park Cove Salt Lake City, Utah, 84108 801 578-3283
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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:
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Large Accelerated Filer ( )
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Accelerated Filer ( )
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Non-Accelerated Filer ( )
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Smaller Reporting Company ( x )
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act: Yes ( x ) No ( )
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest applicable date: May 13, 2011 - 7,909,345 common shares
OLDWEBSITES.COM, INC.
FORM 10-Q
QUARTER ENDED March 31, 2011
TABLE OF CONTENTS
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Page
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PART I – FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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Condensed Balance Sheets – March 31, 2011 and December 31, 2010 (Unaudited)
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3
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Condensed Statements of Operations for the Three Months Ended March 31, 2011 and 2010 (Unaudited)
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4
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Condensed Statements of Cash Flows for the Three Months Ended March 31, 2011 and 2010 (Unaudited)
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5
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Notes to Condensed Financial Statements (Unaudited)
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6
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4T.
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Controls and Procedures
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PART II – OTHER INFORMATION
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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12
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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12
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Item 3.
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Default Upon Senior Securities
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12
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Item 4.
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Submission of Matters to a Vote of Security Holders
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12
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Item 5.
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Other Information
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12
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Item 6.
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Exhibits
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12
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Signatures
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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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OLDWEBSITES.COM, INC
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CONDENSED BALANCE SHEETS
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(Unaudited)
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March 31,
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Decemeber 31,
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2011
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2010
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ASSETS
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Current Assets
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Cash
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$ | 370 | $ | 371 | ||||
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Total Assets
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370 | 371 | ||||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current Liabilities
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Accrued expenses
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13,455 | 12,257 | ||||||
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Loan payable to related party
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29,400 | 28,300 | ||||||
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Total Current Liabilities
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42,855 | 40,557 | ||||||
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Stockholders' Deficit
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Common shares - $0.00 par value; 150,000,000 shares
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authorized; 7,909,345 shares issued and outstanding, respectively
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131,927 | 131,927 | ||||||
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Additional paid-in capital
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46,000 | 46,000 | ||||||
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Accumulated deficit
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(220,412 | ) | (218,113 | ) | ||||
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Total Stockholders' Deficit
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(42,485 | ) | (40,186 | ) | ||||
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Total Liabilities and Stockholders' Deficit
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$ | 370 | $ | 371 | ||||
See the accompanying notes to the condensed unaudited financial statements.
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OLDWEBSITES.COM, INC
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CONDENSED STATEMENTS OF OPERATIONS
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(Unaudited)
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For The Three Months
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Ended March 31,
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2011
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2010
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Sales
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$ | - | $ | - | ||||
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Selling, general and administrative expenses
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2,299 | 3,646 | ||||||
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Net Loss
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$ | (2,299 | ) | $ | (3,646 | ) | ||
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Basic and Diluted Loss Per Common Share
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$ | - | $ | - | ||||
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Weighted-Average Common Shares Outstanding
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7,909,345 | 7,909,345 | ||||||
See the accompanying notes to the condensed unaudited financial statements.
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OLDWEBSITES.COM, INC
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CONDENSED STATEMENTS OF CASH FLOWS
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(Unaudited)
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'For the Three Months Ended March 31,
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2011
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2010
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Cash Flows From Operating Activities
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Net loss
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$ | (2,299 | ) | $ | (3,646 | ) | ||
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Changes in assets and liabilities:
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Accrued expenses
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1,198 | (350 | ) | |||||
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Net Cash Used in Operating Activities
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(1,101 | ) | (3,996 | ) | ||||
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Cash Flows From Investing Activities
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- | - | ||||||
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Cash Flows From Financing Activities
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Cash proceeds from loan payable to related party
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1,100 | 3,000 | ||||||
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Cash Flows Provided by Financing Activities
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1,100 | 3,000 | ||||||
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Net Change in Cash
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(1 | ) | (996 | ) | ||||
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Cash at Beginning of Period
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371 | 1,536 | ||||||
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Cash at End of Period
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$ | 370 | $ | 540 | ||||
See the accompanying notes to the condensed unaudited financial statements.
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OLDWEBSITES.COM, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1–ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations – Oldwebsites.com, Inc. ("the Company") is a Utah corporation originally incorporated on August 26, 1999 as Fiberglass.com, Inc.
Fiberglass.com, Inc. had traditionally been focused on the composite materials industry with its Business-to-Business online portal. Management identified that a category of used items that was a growing commodity that could be bought or sold was old websites and domain names. On July 8, 2003, Fiberglass.com, Inc. created, within its portal business, a custom exchange to buy and sell old websites, www.oldwebsites.com. On February 16, 2007, the name of the Company was changed from Fiberglass.com, Inc. to Oldwebsites.com, Inc.
The Company then turned its focus to the operation and further development of this exchange while still continuing with its portal services for the composite materials industry as a secondary line of business.
At the Annual Meeting of Shareholders held on November 25, 2009, the shareholders unanimously approved the sale of the intangible assets of the Company to Cooksmill NetSystems Inc. These intangible assets, which were comprised of twenty-four websites with a zero basis, were sold in exchange for the debt owed to Cooksmill NetSystems Inc. of $46,000 in lieu of cash payment. As the operations of the Company consisted solely of these intangible assets the divestiture of the intangible assets of the Company discontinued all of the operations within Oldwebsites.com. As Cooksmill NetSystems, Inc. is a related party; the gain on sale/forgiveness of debt was recorded as additional paid-in capital as a shareholder contribution.
Basis of Presentation — The accompanying condensed financial statements have been prepared by Oldwebsites.com, Inc. and are unaudited. In the opinion of management, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation in accordance with accounting principles generally accepted in the United States of America.
The accompanying unaudited interim financial statements have been condensed pursuant to the rules and regulations of the Securities and Exchange Commission; therefore, certain information and disclosures generally included in financial statements have been condensed or omitted. The financial position and results of operations of the interim periods presented are not necessarily indicative of the results to be expected for the year ended December 31, 2011.
Business Condition - The Company has accumulated deficits, negative cash flows from operations and losses since inception. This situation raises substantial doubt about its ability to continue as a going concern. The Company believed that the shift in the focus of the operations would be sufficient to fund its ongoing operations but this was not realized. The Company was unsuccessful in these efforts and discontinued its operations with the sale of its intangible assets on November 30, 2009. The Board of Directors has discussed an orderly dissolution of the company in the event the Company is unable to continue as a going concern due to the lack of operations and inability to obtain financing or merger/acquisition candidates. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
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NOTE 2–RELATED PARTY TRANSACTIONS
As of March 31, 2011, the Company has received advances of $29,400 from Cooksmill NetSystems, Inc. These funds were advanced to the Company for payment of expenses such as legal and accounting within normal payment terms.
This advance is due on demand and bears no interest.
Cooksmill NetSystems, Inc. is a wholly owned subsidiary of Inter-Continental Recycling Inc. Inter-Continental Recycling Inc. is the majority shareholder of the Company, an entity controlled by Mr. Paul Roszel, a Director of the Company, and his immediate family including James Roszel, the President and Chief Executive Officer of the Company.
NOTE 3–STOCKHOLDERS’ EQUITY
The Company is authorized to issue 150,000,000 common shares with no par value.
NOTE 4–BASIC AND DILUTED LOSS PER COMMON SHARE
At March 31, 2011 and 2010, the Company had no common stock equivalents outstanding.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this Section and elsewhere in this Form 10-Q regarding matters that are not historical facts are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. All statements that address operating performance, events or developments that management expects or anticipates to occur in the future, including statements relating to sales and earnings growth or statements expressing general optimism about future operating results, are forward-looking statements. The forward-looking statements are based on management's current views and assumptions regarding future events and operating performance. Many factors could cause actual results to differ materially from estimates contained in management's forward-looking statements. The differences may be caused by a variety of factors, including but not limited to adverse economic conditions, competitive pressures, inadequate capital, unexpected costs, lower revenues, net income and forecasts, the possibility of fluctuation and volatility of our operating results and financial condition, inability to carry out marketing and sales plans and loss of key executives, among other things.
Overview
The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and notes related thereto, included elsewhere in this report.
Results of Operations
Organization and Nature of Operations — Oldwebsites.com, Inc., formerly Fiberglass.com, operated an exchange for buying and selling old web sites and domain names. The Company anticipated capturing revenue by charging a percentage of the value of the web sites or domain names sold in the exchange. On February 16, 2007, the Company changed its name from Fiberglass.com, Inc. to Oldwebsites.com, Inc.
Oldwebsites.com, Inc. offered services to grow organic and natural search traffic to the web sites listed in the exchange. The Company believed that the true value of a web site was in the traffic it generated. Websites that utilized the exchange would be monetized using the services available to the Company.
The Company's marketing strategy was designed to strengthen and increase traffic to the websites listed in the oldwebsites.com exchange.
At a board meeting held on September 24, 2009, the Board of Directors decided that due to the economic downturn, and as no websites had been sold through the exchange, that the Company could no longer sustain the business plan of the development of websites with a 3 to 5 year time sale horizon. As the Company had accumulated deficits, negative cash flows from operations, and losses since inception the Company could no longer sustain these operations as a going concern.
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The only revenue being recorded by the Company was from an affiliate marketing agreement with Cooksmill NetSystems, Inc. Cooksmill NetSystems, Inc. paid the Company (the “Affiliate”) a commission on net pay-per-lead sales generated by customers referred by the Company’s web sites.
As the Company could no longer be sustained as a going concern, the Board of Directors recommended discontinuing the operations within Oldwebsites.com, Inc.
Since May 2008, the Company had received accumulative working capital loan proceeds from Cooksmill NetSystems, Inc. the major shareholder of the Company. Cooksmill NetSystems Inc. is an entity controlled by Mr. Paul Roszel, a Director of the Company and his immediate family, including James Roszel, the President, Chief Executive Officer and a Director of the Company. This loan was to allow the Company to pay for expenses. This loan is due on demand and bears no interest. At that time, the Company had no other external debt.
The Company recommended that Cooksmill NetSystems, Inc, acquire all of the intangible assets of the Company, which were comprised of twenty-four websites with a zero basis, for the debt owed to Cooksmill NetSystems Inc. as of November 30, 2009 of $46,000 in lieu of cash payment. The Company did not have any cash in order to pay this debt and did not anticipate having the cash in the future to retire this debt. As Cooksmill NetSystems, Inc. is a related party; the gain on sale/forgiveness of debt was recorded as additional paid-in capital as a shareholder contribution.
As the intangible assets of the Company had nominal value the sale price and form of consideration was determined by the recommendation of the Board of Directors in order to dispose of the intangible assets of the Company, discontinue the ongoing losses occurring, and eliminate the debt owed by the Company. The Board of Directors due to a conflict of interest engaged in no negotiations of this proposed divestiture.
The acquisition of all of the intangible assets of Oldwebsites.com, Inc. by Cooksmill NetSystems Inc. would benefit the shareholders of the Company in that this would retire the debt owed to Cooksmill NetSystems Inc., as of November 30, 2009, it would discontinue the continuing losses of the Company, and would position the Company to be more attractive for potential transactions including, but not limited to, corporate merger or acquisition. At this time the Company has not entered into any potential transactions related to corporate merger or acquisition.
At the Annual Meeting of Shareholders held on November 25, 2009, the shareholders unanimously approved the sale of the Company’s intangible assets to Cooksmill NetSystems Inc. As the operations of the Company consisted solely of the intangible assets comprised of the twenty-four websites, the divestiture of the intangible assets of the Company discontinued all of the operations within Oldwebsites.com.
The completion date of this transaction was at the end of the business day on November 30, 2009.
The shareholders of the Company did not receive any consideration as a result of the sale. There was no impact from the sale of the intangible assets on the ownership of the Company. In our view this will not have any federal income tax consequences to the shareholders.
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Discontinuing the operations within the Company did not affect its classification as a shell company. The stock of the Company continues to be publicly traded. The stock of the Company will continue to have a market and be traded on the Over The Counter Bulletin Board (OTCBB).
With the sale of the intangible assets, the Company no longer has any operations or future revenues, and is actively pursuing potential transactions including, but not limited to, financings, corporate merger or acquisition.
Business Condition - The Company has an accumulated deficit, negative cash flows from operations and losses since inception. This situation raised substantial doubt about its ability to continue as a going concern. The Company believed that the shift in the focus of the operations would be sufficient to fund its ongoing operations but this was not realized. The Company was unsuccessful in these efforts and discontinued its operations with the sale of its intangible assets on November 30, 2009. The Board of Directors has discussed an orderly dissolution of the company in the event the company is unable to continue as a going concern due to the lack of operations and inability to obtain financing or merger/acquisition candidates.
Sales Revenues
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For the Three Months Ended
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2011
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2010
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Sales Revenues
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$ | - | $ | - | ||||
With the sale of the intangible assets, the Company no longer has any operations or revenues.
Operating Expenses
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For the Three Months Ended
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March 31,
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General and Administrative Expenses
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$ | 2,299 | $ | 3,646 | ||||
With the sale of the intangible assets, the Company no longer has any operations. As such, the expenses now being incurred by the Company are the costs associated with maintaining its position as a reporting company with the United States Securities and Exchange Commission.
As the Company no longer has any revenues in order to generate cash flow, the Company has received advances of $29,400 from Cooksmill NetSystems Inc. to pay for expenses. Expenses incurred during the first quarter of 2011 where: Office and Administrative Charges of $165, Legal and Accounting of $2,000, and Bank Charges of $34. These funds were advanced so that the Company could pay for these expenses incurred. The Company anticipates that Cooksmill NetSystems Inc., if required, will provide additional funds; however, there is no assurance that future funds will be loaned. This loan is due on demand and bears no interest.
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Net Loss
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For the Three Months Ended
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Net Loss
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$ | (2,299 | ) | $ | (3,646 | ) | ||
As discussed above, with the sale of the intangible assets, the Company no longer has any operations to offset the expense of maintaining its position as a reporting company. Therefore, these costs incur a direct loss in the Company while it actively pursues potential transactions including, but not limited to, financings, corporate merger or acquisition.
Liquidity and Capital Resources
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March 31,
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December 31,
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Cash on Hand
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$ | 370 | $ | 371 | ||||
The Company’s cash position recorded at March 31, 2010 of $370 has decreased from the December 31, 2009 cash position of $371.
This reduction in cash is the direct result of the Company having no operations while incurring the expenses mentioned above.
As of March 31, 2011, the Company has received working capital loan proceeds of $29,400, from Cooksmill NetSystems Inc. to enable the Company to pay for its expenses. The Company anticipates that Cooksmill NetSystems Inc., if required, will provide additional funds, however, there is no assurance that future funds will be loaned. This loan is due on demand and bears no interest.
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, as defined by Regulation S-K Item 305(e).
ITEM 4T. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls: We evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. This evaluation (the “disclosure controls evaluation”) was done under the supervision and with the participation of management, including our chief executive officer (“CEO”) and chief financial officer (“CFO”). Rules adopted by the SEC require that in this section of our Quarterly Report on Form 10-Q we present the conclusions of the CEO and the CFO about the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report based on the disclosure controls evaluation.
Objective of Controls: Our disclosure controls and procedures are designed so that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives, and management necessarily is required to use its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures
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Management’s Report on Internal Control over Financial Reporting: Based upon the disclosure controls evaluation, our CEO and CFO have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that the foregoing objectives are achieved.
Changes in Internal Control over Financial Reporting: There were no changes in our internal control over financial reporting during the quarter ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
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. DEFAULT UPON SENIOR SECURITIES
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
a) Exhibits.
Exhibit 3.1 (a) – Articles of Incorporation - August 26, 1999
Exhibit 3.1 (b) – Articles of Incorporation - December 28, 2006
Exhibit 3.1 (c) -Amendment of Name Change
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Exhibit 31.1 - Certification of the President and Director pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2 - Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1 - Certification of the President and Director pursuant to U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2 – Certification of the Chief Financial Officer pursuant to U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K.
None
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Oldwebsites.com, Inc
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May 13, 2011
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/s/ James Roszel
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James Roszel, President
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May 13, 2011
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/s/ Richard Ivanovick
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Richard Ivanovick, C.A., Chief Financial and
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Accounting Officer
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