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EX-32 - EXHIBIT 32 - Biolog, Incexhibit32.htm
EX-31 - EXHIBIT 31 - Biolog, Incexhibit31.htm

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q/A


Amendment No. 1


(Mark One)


[ X ]                 QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011



[   ]                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to


 

000-53696

(Commission File No.)


BIOLOG, INC.

(Exact name of registrant as specified in its charter)`



 

 

Utah

87-0279370

(State or other jurisdiction of

Incorporation or organization)

(I.R.S. Employer

Indemnification No.)


123 Parker Avenue, Liverpool, NY 13088

(Address of principal executive offices)     (Zip Code)


Registrant’s telephone number, including area code (315) 560-5505


Indicate by check mark whether 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.   ( X )  Yes  ( )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 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                 

Smaller reporting company     ( X)


Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)     ( )Yes    ( X)  No   


The number of shares of common stock, $.001 par value per share, of the registrant that is outstanding as of March 31, 2011 is 40,436,710 shares.





 


















 

 

 

BIOLOG, INC.

MARCH 31, 2011

 

 

 

PART I – FINANCIAL INFORMATION

Page

Item 1.

Financial Statements

 

 

(Unaudited) Balance Sheets

  As of March 31, 2011

  As of December 31, 2010

3

 

(Unaudited) Statements of Operations

 For the three months ended March 31, 2011 and March 31, 2010

 For the cumulative period from February 18, 1927(Date of
Inception)  to March 31, 2011

4

 

(Unaudited) Statements of Cash Flows

  For the three months ended March 31, 2011 and March 31, 2010                                        

  For the cumulative period from February 18, 1927 (Date of
 Inception) to March 31, 2011                                                   

5

 

(Unaudited) Notes to Financial Statements                                                                                                                                                               

6-10

Item 2.

Management’s Discussion and Analysis or Plan of Operation

11

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

20

Item 4.

Controls and Procedures

21

 

 

 

 

PART II – OTHER INFORMATION

 

Item 1.

Legal Proceedings   

23

Item1A.           

Risk Factors

23

Item 2.

Unregistered Sale of Equity Securities and Use of Proceeds

29

Item 3.

Defaults Upon Senior Securities

29

Item 4.

Removed and Reserved

29

Item 5.

Other Information

29

Item 6.

Exhibits

30

 

 

 

 

SIGNATURES

31





 



2





























PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS   


 

 

 

 

 

BIOLOG, INC.
(A Development Stage Company)
BALANCE SHEETS

(Unaudited)

 

 

 

March 31,

 

December 31,

 

 

2011

 

2010

ASSETS

 

 

 

 

Cash

 

 $                177

 

 $                  28

Accounts Receivable

 

                   102

 

                   315

Total Current Assets

 

                   279

 

                   343

 

 

 

 

 

Property and Equipment:

 

 

 

 

Payphone Equipment

 

                5,000

 

                5,000

Less Accumulated Depreciation

 

                 (583)

 

                  (333)

Net Property and Equipment

 

                4,417

 

                4,667

 

 

 

 

 

  Total Assets

 

 $             4,696

 

 $             5,010

 

 

 

 

 

LIABILITIES & EQUITY

 

 

 

 

  Current Liabilities:

 

 

 

 

  Accounts Payable

 

              39,955

 

              35,581

  Accounts Payable - related parties

 

                6,900

 

                5,800

  Convertible notes - related parties

 

              26,900

 

              20,488

  Interest Payable

 

                2,005

 

                1,575

 

 

 

 

 

  Total Liabilities

 

              75,760

 

              63,444

 

 

 

 

 

  Stockholders' Deficit

 

 

 

 

   Preferred Stock, par value $.001, 10,000,000
  shares Authorized 0 shares Issued and
  Outstanding March 31, 2011 and December 31,
  2010

 

                        -

 

                        -

   Common Stock, par value $.001, 100,000,000
  shares Authorized,  40,436,710 shares Issued and
  Outstanding March 31, 2011 and December 31,
  2010

 

              40,440

 

              40,440

  Additional Paid-In Capital

 

              (2,123)

 

               (2,123)

  Deficit Accumulated During the Development
 Stage

 

          (109,381)

 

             (96,751)



 

 

 

 

 

 

 

 

 

 

  Total Stockholder's Deficit

 

            (71,064)

 

             (58,434)

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT

 

 $             4,696

 

 $             5,010


3





BIOLOG, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)

 

 

 

 

 

 

Cumulative Since

 

 

For the Three Months Ended

 

February 18, 1927

 

 

March 31,

 

(Date of Inception) to

 

 

2011

 

2010

 

March 31, 2011

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

  Income

 

 $               1,650

 

 $                       -

 

 $                   3,823

  Cost of Services

 

                (1,715)

 

                          -

 

                     (4,418)

 

 

 

 

 

 

 

Gross Margin

 

                     (65)

 

                          -

 

                       (595)

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

  Accounting and bookkeeping

 

                  6,100

 

                   5,900

 

                    33,100

  Consulting

 

                         -

 

                          -

 

                    32,000

  Other General and administrative expenses

 

                  6,035

 

                   1,812

 

                    40,646

 

 

 

 

 

 

 

Total Operating Expenses

 

                12,135

 

                   7,712

 

                  105,746

 

 

 

 

 

 

 

Operating Loss

 

              (12,200)

 

                 (7,712)

 

                 (106,341)

 

 

 

 

 

 

 

Other  Expense

 

 

 

 

 

 

Interest Expense

 

                   (430)

 

                    (225)

 

                     (3,040)

 

 

 

 

 

 

 

  Loss Before Income Taxes

 

              (12,630)

 

                 (7,937)

 

                 (109,381)

 

 

 

 

 

 

 

 Income Tax Provision

 

                         -

 

                          -

 

                             -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net Loss

 

 $           (12,630)

 

 $              (7,937)

 

 $             (109,381)

 

 

 

 

 

 

 

 Basic & Diluted Loss per Common Share

 

$              (0.00) 

 

$               (0.00) 

 

 

 

 

 

 

 

 

 

 Weighted Average Common Shares

 

 

 

 

 

 

 Outstanding

 

         40,436,710

 

           32,999,903

 

 

 

 

 

 

 

 

 


 

4





























 

 

 

 

 

 

 

 

BIOLOG, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)

 

 

 

 

 

 

Cumulative Since

 

 

For the Three Months Ended

 

February 18, 1927

 

 

March 31,

 

(Date of Inception) to

 

 

2011

 

2010

 

March 31, 2011

CASH FLOWS FROM OPERATING

 

 

 

 

 

 

ACTIVITIES:

 

 $            (12,630)

 

 $              (7,937)

 

 $                        (109,381)

Net Loss

 

 

 

 

 

 

 Adjustments to reconcile net loss to net cash

 

 

 

 

 

 

 used in operating activities:

 

 

 

 

 

 

Common stock issued for services

 

                         -

 

                         -

 

                              32,000

 Depreciation and Amortization

 

                     250

 

                         -

 

                                  583

    Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts Payable

 

                  4,374

 

                     942

 

                              39,955

Accounts Payable - Related Party

 

                  1,100

 

                     900

 

                                6,900

Accounts Receivable

 

                     213

 

                         -

 

                                (102)

Interest Payable

 

                     430

 

                     225

 

                                2,005

Net Cash Used in Operating Activities

 

                 (6,263)

 

                 (5,870)

 

                             (28,040)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING

 

 

 

 

 

 

  Proceeds from convertible notes - related parties

 

                  6,412

 

                  5,870

 

                              26,900

  Proceeds from shareholder advances

 

                         -

 

                         -

 

                                1,317

Net Cash Provided by Financing Activities

 

                  6,412

 

                  5,870

 

                              28,217

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Decrease) Increase in Cash

 

                     149

 

                         -

 

                                  177

Cash at Beginning of Period

 

                      28

 

                         -

 

                                      -

 

 

 

 

 

 

 

Cash at End of Period

 

 $                  177

 

 $                      -

 

 $                                177

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

Interest

 

 $                      -

 

 $                      -

 

 $                                    -

Franchise Taxes

 

 $                      -

 

 $                      -

 

 $                                    -

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

 

 

Common stock issued for shareholder advances

 

 $                      -

 

 $                      -

 

 $                             1,317

Common stock issued for services

 

 $                      -

 

 $                      -

 

 $                           32,000

Common stock issued for equipment

 

 $                      -

 

 $                      -

 

 $                             5,000

Accounts payable converted to convertible notes

 

 $                      -

 

 $                      -

 

 $                           22,800

Convertible notes and accrued interest cancelled, converted to accounts payable

 $                      -

 

 $             23,834

 

 $                           23,834




5





























BIOLOG, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Biolog, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with Biolog’s audited 2010 annual financial statements and notes thereto filed on Form 10-K with the SEC. In the opinion of management, all adjustments, consisting of normal reoccurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods present have been reflected herein. The results of operation for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure required in Biolog’s fiscal 2010 financial statements have been omitted.

Forward Stock split

On November 2, 2010, our stockholders approved an amendment to our articles of incorporation to effect a 10 for 1 forward stock split (the “Forward Split”) of our common stock, $.001 par value per share. The effective date of the reverse split was November 2, 2010 and has been retroactively reflected in the accompanying financial statements. Upon effectiveness of the Forward Split, each stockholder received ten shares of common stock for every one shares of common stock owned and outstanding as of the record date. Any fractional share as a result of the Forward Split has been dropped.  The Forward Split does not affect the number of shares of common stock authorized for issuance. All share and per share information has been retroactively adjusted to reflect the forward stock split.

Nature of Business

The Company is primarily in the business of providing the use of outdoor payphones, and providing telecommunication services.

Revenue Recognition

The Company derives its revenue from the sources described below, which includes dial-around revenues, coin collections, and local payphone customer revenue for telephone service.

Coin revenues are recorded in an equal amount to the coins collected.  Local service revenue is realized on the date the payphone customer is invoiced for telecommunication services, these are monthly charges for payphone service for local customers. Dial Around revenues are earned when a customer uses the Company’s payphone to gain access to a different long distance carrier than is already programmed into the phone. The Dial Around revenue is recognized when the billing and collection agent of the Company, APCC, calculates and compensates the Company for the use of the payphone on a quarterly basis by billing the actual party’s long distance carrier that received the calls.  The date of the Dial Around revenue recognition is determined when this compensation is collected and deposited into the Company’s bank account.



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The Company recognizes revenues in accordance with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, "Revenue Recognition."  SAB 104 clarifies application of U. S. generally accepted accounting principles to revenue transactions.  The Company recognizes revenue when the earnings process is complete.  That is, when the arrangements of the goods are documented, the pricing becomes final and collectability is reasonably assured. An allowance for bad debt is provided based on estimated losses. For revenue received in advance for goods, the Company records a current liability classified as either deferred revenue or customer deposits. As of March 31, 2011, there was no deferred revenue.

Allowance for Doubtful Accounts

The Company recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. Bad debt reserves are maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position.  If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. As of March 31, 2011, the Company has determined an allowance for doubtful accounts is not necessary.

Accounts Receivable

Accounts Receivable consists of Local Service revenue and APCC Dial Around revenue. The Accounts Receivable was $315 as of December 31, 2010 and $102 as of March 31, 2011.

Fixed Assets

Fixed assets are stated at cost. On September 1, 2010, Amanda Godin, the previous President of Biolog contributed payphone equipment valued at $5,000 in exchange for common stock. Depreciation expense for the year ended December 31, 2010 was $333. As of March 31, 2011 the total depreciation was $583.  Depreciation and amortization are computed using the straight-line method of the estimated economic useful lives of the related assets as follows:


 

 

 

 

Asset

 

 

Rate

Payphone Equipment            

 

$ 5,000.00

5 years

Depreciation for three months ended March 31, 2011                                        

 

$(250.00)

 

Accumulated Depreciation for the year ended December 31, 2010                                        

 

$(333.00)

 

Net Value of Equipment as of March 31, 2011     

 

$ 4,417.00

 


Upon sale or other disposition of property and equipment, the cost and related accumulated depreciation or amortization are removed from the accounts and any gain or loss is included in the determination of
income or loss. Expenditures for maintenance and repairs are charged to expense as incurred.  Major overhauls and betterments are capitalized and depreciated over their estimated economic useful lives.



7





Maintenance and repairs are charged to operations; betterments are capitalized.  The cost of property sold or otherwise disposed of and the accumulated depreciation thereon are eliminated from the property and related accumulated depreciation accounts, and any resulting gain or loss is credited or charged to income.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared on the basis of accounting principles applicable to a “going concern”, which assume that Biolog will continue in operation for at least one year and will be able to realize its assets and discharge its liabilities in the normal course of operations.

Several conditions and events cast substantial doubt about Biolog’s ability to continue as a going concern.  Biolog has incurred net losses of for the period from (inception), February 18, 1927 to March 31, 2011, has had limited revenues and requires additional financing in order to finance its business activities on an ongoing basis.  Biolog’s future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities. Biolog is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained.  In the interim, shareholders of Biolog have committed to meeting its minimal operating expenses.  

Management believes that actions presently being taken to revise Biolog’s operating and financial requirements provide them with the opportunity to continue as a going concern.

These financial statements do not reflect adjustments that would be necessary if Biolog were unable to continue as a going concern.  While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the “going concern” assumption used in preparing these financial statements, there can be no assurance that these actions will be successful.  If Biolog were unable to continue as a “going concern,” then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported revenues and expenses, and the balance sheet classifications used.

NOTE 3 – RELATED PARTY TRANSACTIONS

In 2010 and 2011, Biolog received advances from Joseph Passalaqua and these amounts were reclassified as a Convertible Notes Payable. In 2011 Biolog received loans from Mary Passalaqua and Cobalt Blue LLC of which Mary Passalaqua is President and these amounts were classified as a Convertible Notes Payable. The unpaid balance under these Notes shall be convertible at the option of the Holder into the shares of the Maker’s Common Stock at any time prior to the earlier repayment in full of this Note or the Maturity Date, upon Maker’s receipt of written notice by Holder.  The price per share of Maker’s Common Stock into which such unpaid balance may be converted shall be $.001. The notes bear interest at 8% per annum. As of March 31, 2011, Biolog currently owes $26,900 on principal of all Convertible Notes held to Related Parties, with interest accrued of $2,005.



8

 

























 


On September 1, 2010, Amanda Godin, the previous President of Biolog, contributed payphone equipment to the Company, valued at $5,000 in exchange for the issuance of 3,000,000 shares of common stock with a par value of $0.001.

As of March 31, 2011, Biolog has incurred a liability to Lyboldt-Daly in the amount of $6,900. Lyboldt-Daly completed the bookkeeping and internal accounting for Biolog, Inc.  Joseph Passalaqua is President of Lyboldt-Daly and a majority shareholder in Biolog, Inc.

As of March 31, 2011, all activities of Biolog have been conducted by corporate officers from either their homes or business offices.  Currently, there are no outstanding debts owed by Biolog for the use of these facilities and there are no commitments for future use of the facilities.

NOTE 4 - CONVERTIBLE NOTES PAYABLE

In previous years prior and including 2008, Biolog incurred a liability to Fidelity Stock Transfer in the amount of $15,170. In 2009, this amount was reclassified as a Convertible Note Payable. The note was bearing interest at 18% per annum in the form of monthly fees billed by Fidelity Stock Transfer Company. In 2009, the fees for additional services from Fidelity totaling $7,630 were added to the principal balance of the convertible note. On January 1, 2010, Biolog cancelled the principal of the Convertible note, $22,800 and the accrued interest on the Convertible note, $1,034 and $23,834 was reclassified as an account payable.  As of March 31, 2011, $34,947 is currently owed to Fidelity Stock Transfer Company as a current liability in accounts payable

As of December 31, 2010, Biolog incurred liabilities to Joseph Passalaqua in the amount of $ 20,488.  , these amounts were reclassified as a Convertible Notes Payable. The notes bear simple interest at 8% per annum. As of December 31, 2010, Biolog owed Joseph Passalaqua $20,488 on principal on these notes, with interest accrued of $1,575. In 2011 $75 was reclassified as a Convertible Note Payable to Cobalt Blue LLC.  As of March 31, 2011, Biolog currently owes Joseph Passalaqua $20,413 in principal these notes, with interest accrued of $1,982.

As of March 31, 2011, Biolog incurred liabilities to Cobalt Blue LCC, of which Mary Passalaqua is the Presdient, in the amount of $ 1,487.  The notes bear simple interest at 8% per annum., Biolog currently owes Cobalt Blue LLC $1,487 in principal these notes, with interest accrued of $17.

As of March 31, 2011, Biolog incurred liabilities to Mary Passalaqua in the amount of $5,000.  The notes bear simple interest at 8% per annum. Biolog currently owes Mary Passalaqua $5,000 in principal these notes, with interest accrued of $6.

The above notes are convertible into common stock of Biolog at a rate of $0.001. Biolog evaluated the convertible portion of the above debt at issuances under ASC 815-20 and ASC 815-40 for consideration of classification as a liability and derivative and determined both were not applicable. Biolog then evaluated the convertible portion under ASC 470-20-05 and ASC 470-20-30 for consideration of beneficial conversion feature and determined none existed.





9




























NOTE 5 – COMMON STOCK TRANSACTIONS

On November 2, 2010, Biolog had a resolution and amended the Articles of Incorporation to include a 10/1 forward stock split, with all fractional shares being dropped. The record date of the reverse split was November 2, 2010, with the effect being retroactive back to inception.

As of December 31, 2010 Biolog has 100,000,000 shares of common stock authorized at $0.001 par value  per share and 40,436,710 shares of common stock issued and outstanding.

NOTE 6 – PREFERRED STOCK TRANSACTIONS

As of December 31, 2010, Biolog had 0 shares of preferred stock authorized and outstanding.

As of March 31, 2011 Biolog had 10,000,000 shares of preferred stock authorized at $0.001 and 0 shares of preferred stock issued and outstanding.






10




























ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Forward Looking Statements

 

This Form 10-Q/A contains forward-looking statements (rather than historical facts) that involve risks and uncertainties. You can identify these statements by the use of forward-looking words such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue” or other similar words. Such forward-looking statements discuss our current expectations of future results of operations or financial condition.  However, there may be events in the future that we are unable to accurately predict or control and there may be risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements, which could have a material adverse effect on our business, operating results and financial condition.  The forward-looking statements included herein are only made as of the date of the filing of this Form 10-Q/A , and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

 

BASIS OF PRESENTATION

 

The unaudited financial statements of Biolog Inc., a Utah corporation (“Biolog,” the “Company,” “our” or “we”), should be read in conjunction with the notes thereto. In the opinion of management, the unaudited financial statements presented herein reflect all adjustments (consisting only of normal recurring adjustments) necessary for fair presentation.  Interim results are not necessarily indicative of results to be expected for the entire year.

 

We prepare our financial statements in accordance with U.S. generally accepted accounting principals, which require that management make estimates and assumptions that affect reported amounts.  Actual results could differ from these estimates.


DESCRIPTION OF BUSINESS


Corporate History

 

We were incorporated under the name “National Treasure Mines Company” on February 18, 1927 under the laws of the State of Utah.  Our original purpose was to engage in, carry on and conduct a general mining business in the State of Utah.  


On October 31, 1986, we approved the merger and reorganization between our Company and Roskamp Manley Associates Inc., a California corporation (“RMA”), resulting in RMA becoming our wholly owned subsidiary.  RMA remained our wholly owned subsidiary until when it was unable to remain in good standing and did not reinstate its business charter in California, resulting in the dissolution of RMA.


On December 18, 1986, we filed an Amended Articles of Incorporation and changed the name of the Company to “N.T.M. Inc.”


On June 29, 1994, we completed the acquisition of Larson # 11-28 and Zadow # 23-34, two wells in Radcliff and Mission Canyon in the State of Montana.  After discovering after the acquisition that these wells were non-performing, we disposed of such assets.  Because we were unable to achieve our intended purpose, we ceased operations and became dormant in 1995, at which time we did not have any assets or liabilities.



11





























We remained in this condition until we filed an Application for Reinstatement with the Utah Secretary of State on November 4, 2004. On December 15, 2004, we filed an Amended and Restated Articles of Incorporation, under which we changed our name to “Biolog, Inc.” Since 2004, we have not commenced any operations.


On January 22, 2009, we filed an Application of Reinstatement with the Utah Secretary of State.


On February 17, 2009, we adopted an Amendment to the Amended and Restated Articles of Incorporation that vacated all of the previous Articles of Incorporation in their entirety, effective retroactively, and filed such Amendment on April 20, 2009 with the Utah Secretary of State.


On February 17, 2009, our stockholders approved a 1 for 100 reverse stock split (the “Reverse Split”) of our common stock, and the filing of an amendment to our Amended and Restated Articles of Incorporation to reflect the Reverse Split. The effective date of the Reverse Split was April 20, 2009. Upon effectiveness of the Reverse Split, each stockholder received one share of common stock for every 100 shares of common stock owned and outstanding as of the record date. The Reverse Split did not affect the number of shares of common stock authorized for issuance.


On September 1, 2010, the Company acquired payphone equipment from Amanda Godin, the President of Biolog Inc., in exchange for 3,000,000 shares of common stock and has commenced business operations by providing the use of outdoor payphones, and providing telecommunication services.

On November 2, 2010, the Company had a resolution and amended the Articles of Incorporation to include a 10/1 forward stock split, with all fractional shares being dropped. The record date of the forward split was November 2, 2010, with the effect being retroactive back to inception. The Forward Split did not affect the number of shares of common stock authorized for issuance.


BUISNESS PLAN


Our current principal business activity is to seek a suitable candidate to consummate an acquisition, merger or other suitable business combination method. More specifically, we are seeking the consummation of a merger, acquisition or other business combination transaction with a privately owned entity seeking to become a publicly owned entity. As a “reporting company,” we may be more attractive to a private target because our common stock is eligible to be quoted on the OTC Bulletin Board.  However, there is no assurance that we will be quoted on the OTC Bulletin Board.  

 

It is the intent of management and our significant stockholder, Joseph Passalaqua to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity.  

However, there is no legal obligation for either management or our significant stockholder, Joseph Passalaqua to provide additional future funding. Should this pledge fail to provide financing and we have not identified any alternative sources of funding.  There will be substantial doubt about our ability to continue as a going concern.

     

Our need for capital may change dramatically because of any business acquisition or combination transaction.  There can be no assurance that we will identify any such business, product, technology or company suitable for acquisition in the future.  Further, there can be no assurance that we will be successful in consummating any acquisition on favorable terms or that we will be able to profitably manage the business, product, technology or company we acquire.




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As a "reporting company," we may be more attractive to a private acquisition target because our common stock is eligible to be quoted on the OTC Bulletin Board although there is no assurance it will be quoted.  As a result of filing this registration statement, we will be obligated to file with the Securities and Exchange Commission (the "Commission") certain periodic reports, including an annual report containing audited financial statements.  We anticipate that we will continue to file such reports as required under the Exchange Act.

 

On June 10, 2009, we filed a Registration Statement on Form 10SB , or the “Registration Statement”, with the Securities and Exchange Commission, or the SEC,  to register our common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The Registration Statement went effective in 60 days by operation of law on  August 10, 2009, or the Effective Date.  Since the Effective Date of the Registration Statement, we have become a reporting company under the Securities Exchange Act and are responsible for preparing and filing periodic and current reports under the Exchange Act with the SEC.

 

Any person or entity may read and copy our reports with the Securities and Exchange Commission at the SEC's Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Room by calling the SEC toll free at 1-800-SEC-0330. The SEC also maintains an Internet site at http://www.sec.gov where reports, proxies and informational statements on public companies may be viewed by the public.


SERVICES AND PRODUCTS

 

We own, operate and manage privately owned public payphones in the County of Delaware, State of New York. As of December 31, 2010, we own, operate, and manage 25 payphones.  The Company does not have any long-term agreements with the customers of these payphones and they may terminate their contract at will.  We may pay site owners a commission based on a flat monthly rate or on a percentage of sales. Some of the businesses include, but are not limited to, retail stores, convenience stores, bars, restaurants, gas stations, colleges and hospitals. In the alternative, our agreement with business owners may be to provide the telecommunications services without the payment of any commissions.


The local telephone switch controls the traditional payphone technology. The local switch does not provide any services in the payphone that can benefit the owner of the phone. When we purchase phones from other companies, they come with "smart card" payphone technology. These phones have a circuit board with improved technology. The “smart card” technology allows us to determine the operational status of the payphone. It also tells us when the coins in the phone have to be collected, the number and types of calls that have been made from each phone, as well as other helpful information that helps us provide better service to our payphone using public. This upgrade of the phones reduces the number and frequency of service visits due to outages and other payphone-related problems and, in turn, reduces the maintenance costs. Other companies manufacture the components of the payphones for the industry, including Universal Communications and TCI, which provides handsets, key pads, totalizers, and relays.


Payphone users can circumvent the usual payment method and avoid inserting a coin by using an access code or 800 number provided by a long distance carrier. These “dial-around” numbers, while convenient for users, leave payphone service providers uncompensated for the call made. The Federal Communications Commission, or the FCC, as instructed by Congress in the Telecommunications Act of 1996, created regulations to ensure that payphone service providers receive compensation for these “dial-around” calls.



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The FCC requires the sellers of long distance toll free services to pay the payphone owner $0.494 cents per call. These funds are remitted quarterly through a service provided by the American Public Communication Council (APCC).


Our installed payphone base generates revenue from two principal sources: coin-calls and non-coin calls.


Coin calls:

 

Coin calls represent calls paid for by customers who deposit coins into the payphones. Coin call revenue is recorded as the actual amount of coins collected from the payphones.

 

Non-Coin calls:

 

Non-coin revenue includes commissions from operator service telecommunications companies and a “dial-around” commission of $0.494 per call that the FCC requires sellers of long distance toll free services to pay payphone owners. The commissions for operator services are paid 45 days in arrears. These funds are remitted quarterly through a service provided by the American Public Communication Council (APCC). 


Seasonality

 

Our revenues from payphone operation are affected by seasonal variations, geographic distribution of payphones and type of location. Because we operate in the northeastern part of the country with many of the payphones located outdoor, weather patterns affect our revenue streams. Revenues drop off significantly during winter and conversely show an increase in the spring and summer. Revenues are generally lowest in the first quarter and highest in the third quarter.


Significant Customers

 

We do not rely on a major customer for our revenue. We have a variety of small single businesses as well as some small chain stores that we service. We do not believe that we would suffer dramatically if any one customer or small chain decided to stop using our phones.


Significant Vendors


We must buy dial tone for each payphone from the local exchange carrier. As long as we pay the carrier bill, it is required to provide a dial tone. As a regulated utility, the exchange carrier may not refuse to provide us service. Alternate service exists in certain areas where Verizon competitors are located. We use alternate local service providers when we can get a better price for the service. We use long distance providers on all the payphones.


Intellectual Property


The phones that we purchase from other companies contain "smart card" payphone technology that was developed by Quortec, the founder and manufacturer of the “smart cards. The “smart card” includes a circuit board with improved technology that allows us to determine on a preset time basis the operational status of the payphone. The technology informs us when the coins in the phone have to be collected, the number and types of calls that have been made from each phone, as well as other helpful information that helps us provide better service to our payphone using public. This upgrade of the phones reduces the number and frequency of service visits due to outages and other payphone-related problems and, in turn, reduces the maintenance costs.  Other companies manufacture the components of the payphones for the industry including Universal Communications and TCI, which provides handsets, key pads, totalizers, and relays.



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We do not own any patents or trademarks. Companies in the telecommunications industry and other industries in which we compete own large numbers of patents, copyrights and trademarks and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. As we face increasing competition, the possibility of intellectual property claims against us grows. We might not be able to withstand any third-party claims or rights against their use.


Government Regulation:


We are subject to varying degrees of regulation by federal, state, local and foreign regulators. The implementation, modification, interpretation and enforcement of these laws and regulations vary and can limit our ability to provide many of our services. Our ability to compete in our target markets depends, in part, upon favorable regulatory conditions and the favorable interpretations of existing laws and regulations.


FCC Regulation and Interstate Rates :

 

Our services are subject to the jurisdiction of the Federal Communications Commission (FCC) with respect to interstate telecommunications services and other matters for which the FCC has jurisdiction under the Communications Act of 1934, as amended.

 

Payphone users can circumvent the usual payment method and avoid inserting a coin by using an access code or 800 number provided by a long distance carrier. These “dial-around” numbers, while convenient for users, leave payphone service providers uncompensated for the call made. The Federal Communications Commission, as instructed by Congress in the Telecommunications Act of 1996, created regulations to ensure that payphone service providers receive compensation for these “dial-around” calls.


The FCC requires the sellers of long distance toll free services to pay the payphone owner $0.494 cents per call. These funds are remitted quarterly through a service provided by the American Public Communication Council (APCC).  If the FCC regulation requiring sellers of long distance toll free services to pay payphone owners $0.494 per call is reduced or repealed, it could have a negative effect upon our revenue stream. We have no control over what rules and regulations the state and federal regulatory agencies require us to follow now or in the future. It is possible for future regulations to be so financially demanding that they cause us to go out of business. We are not aware of any proposed regulations or changes to any existing regulations.    


Telecommunications Act of 1996

 

The Telecommunications Act of 1996, regulatory and judicial actions and the development of new technologies, products and services have created opportunities for alternative telecommunication service providers, many of which are subject to fewer regulatory constraints. We are unable to predict definitively the impact that the ongoing changes in the telecommunications industry will ultimately have on our business, results of operations or financial condition. The financial impact will depend on several factors, including the timing, extent and success of competition in our markets, the timing and outcome of various regulatory proceedings and any appeals, and the timing, extent and success of our pursuit of new opportunities resulting from the Telecommunications Act of 1996 and technological advances.



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Research and Development


We have not expended any money in the last two fiscal years on research and development activities.


Employees


The company does not have any employees.  Joseph Passalaqua is our President and Chief Executive Officer and Garry McHenry is our Secretary and Chief Financial Officer, neither of whom have employment agreements.


Any person or entity may read and copy our reports with the Commission at the Commission’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Room by calling the Commission toll free at 1-800-SEC-0330. The Commission also maintains an Internet site at http://www.sec.gov where reports, proxies and other disclosure statements on public companies may be viewed by the public.


GOING CONCERN QUALIFICATION

 

Several conditions and events cast substantial doubt about the Company’s ability to continue as a going concern.  The Company has incurred net losses of approximately $(109,381) for the period from February 18, 1927 to March 31, 2011, has limited revenues and requires additional financing in order to finance its business activities on an ongoing basis.  The Company’s future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained.  In the interim, shareholders of the Company have committed to meeting its minimal operating expenses.  Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide them with the opportunity to continue as a going concern. At December 31, 2010, we had $28 cash on hand, $315 in accounts receivable and a deficit accumulated during the development stage of $(96,751). At March 31, 2011, we had $177 cash on hand, $102 in accounts receivable and a deficit accumulated during the development stage of $(109,381).  See “Liquidity and Capital Resources.”


CRITICAL ACCOUNTING POLICIES & ESTIMATES


The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. However, future events are subject to change, and the best estimates and judgments routinely require adjustment. The amounts of assets and liabilities reported in our balance sheet, and the amounts of revenues and expenses reported for each of our fiscal periods, are affected by estimates and assumptions which are used for, but not limited to, the accounting for allowance for doubtful accounts, goodwill and intangible asset impairments, restructurings, inventory and income taxes. Actual results could differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of our consolidated financial statements.  




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Revenue Recognition Policies


The Company recognizes revenues in accordance with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, "Revenue Recognition."  SAB 104 clarifies application of U. S. generally accepted accounting principles to revenue transactions. As of the year ended December 31, 2010, there was no deferred revenue. The Company derives its primary revenue from the sources described below, which includes dial-around revenues, operator service revenue, coin collections, telephone equipment repairs, and sales. Other revenue generated by the company includes sales commissions.


The Dial Around revenue is recognized when the billing and collection agent of the Company, APCC, calculates and compensates the Company for the use of the payphone on a quarterly basis by billing the actual party’s long distance carrier that received the calls.  The date of the Dial Around revenue recognition is determined when this compensation is collected and deposited into the Company’s bank account.


The Operator Service revenue is recognized when the collection agents of the Company, Legacy Long Distance and US Intercom calculates and compensates the Company for the use of operator services on a monthly basis. The date of the Operator Service revenue recognition is determined when this compensation is collected and deposited into the Company’s bank account.


Coin revenues are recorded in an equal amount to the coins collected.


Revenues on commissions, telephone equipment and sales are realized when the services are provided and payment for such services is deemed certain.


Off- Balance Sheet Arrangements


We did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.


Cash and Cash Equivalents


For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of 90 days or less to be cash equivalents to the extent the funds are not being held for investment purposes .


COSTS RELATED TO OUR OPERATION


The principal costs related to the ongoing operation of our payphones include telecommunication costs, commissions and depreciation. Telecommunication expenses consist of payments made by us to local exchange carriers and long distance carriers for access to and use of their telecommunications networks and service and maintenance costs. Commission expense represents payments to owners or operators of the premises at which a payphone is located.


LIQUIDITY AND CAPITAL RESOURCES

  

It is the belief of management that sufficient working capital necessary to support and preserve the integrity of the corporate entity will be present. However, there is no legal obligation for either



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management or significant stockholders to provide additional future funding.  Should this pledge fail to provide financing, we have not identified any alternative sources. Consequently, there is substantial doubt about our ability to continue as a going concern.

     

We have no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the location of a merger or acquisition candidate.  Accordingly, there can be no assurance that sufficient funds will be available to us to allow us to cover the expenses related to such activities.

    

Our need for capital may change dramatically because of any business acquisition or combination transaction.  There can be no assurance that we will identify any such business, product, technology or company suitable for acquisition in the future.  Further, there can be no assurance that we will be successful in consummating any acquisition on favorable terms or that we will be able to profitably manage the business, product, technology or company we acquire.

     

Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we might seek to compensate providers of services by issuances of stock in lieu of cash.


At December 31, 2010, we had $28 cash on hand and an accumulated deficit of $96,751.  As of March 31, 2011, we had $177 cash on hand and an accumulated deficit of $109,381. Our primary source of liquidity for the current quarter has been from loans from related parties.  This includes Joseph C. Passalaqua, the President and principal stockholder, Mary Passalaqua spouse of Joseph Passalaqua, and Cobalt Blue LLC of which Mary Passalaqua is President. As of March 31, 2011 we have convertible notes payable to Joseph C. Passalaqua, Mary Passalaqua, and Cobalt Blue LLC in the amount of $26,900 These notes bear a simple interest rate of 8% per annum and are payable upon demand. As of March 31, 2011 the accrued interest on these notes is $2,005.


Net cash used in operating activities was $6,263 during the three months ended March 31, 2011 .

 

Net cash provided by investing activities was $0 during the three months ended March 31, 2011 .


Net cash provided by financing activities was $6,412 during the three months ended March 31, 2011.


To date, we have had minimal revenues; and we require additional financing in order to finance our business activities on an ongoing basis.  Our future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities. We are actively pursuing alternative financing and have had discussions with various third parties, although no firm commitments have been obtained to date.  In the interim, shareholders of the Company have committed to meet our minimal operating expenses.  We believe that actions presently being taken to revise our operating and financial requirements provide them with the opportunity to continue as a “going concern,” although no assurances can be given.


NET LOSS FROM OPERATIONS

 

The Company had a net loss of $(109,381) for the period from February 18, 1927(inception) through March 31, 2011. The company had net loss of $(12,630) for the three months March 31, 2011 as compared to a net loss of $(7,937) for the three months ended March 31, 2010.


CASH FLOW


Our primary source of liquidity has been cash from shareholder loans.



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WORKING CAPTIAL

 

We had total current assets of $343 and total current liabilities of $63,444, which resulted in working capital deficit of $(63,101) as of December 31, 2010.  The Company had total current assets of $279 and total current liabilities of $75,760 resulting in a working capital deficit of $(75,481) as of March 31, 2011.  


FOR THE THREE MONTHS ENDED MARHC 31, 2011 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2010

 

REVENUES

 

Our total revenue increased by $1,650, from $0 for the three months ended March 31, 2010 to $1,650 for the three months ended March 31, 2011.


Our coin call revenue was $0 for the three months ended March 31, 2010 and $189 for the three months ended March 31, 2011.


Our non-coin call revenue, or commission income, which is comprised primarily of “dial around” revenue, star 88 commission revenue and operator service revenue was $0 for the three months ended March 31, 2010 and $81 for the three months ended March 31, 2011. The FCC requires the sellers of long distance toll free services to pay the payphone owner $0.494 cents per “dial-around” call. These funds are remitted quarterly through a service provided by the American Public Communication Council (APCC).


Our local service revenue which is comprised primarily of service for payphone customers was $0 for the three months ended March 31, 2010 and $1,380 for the three months ended March 31, 2011. This is the revenue from monthly invoices billed to payphone customers in which the Company owns the payphone and provides service to operate the payphone on the premises. As of March 31, 2011 six customers made up the local service revenue:


Addison Place Apartments, Addison, New York

Delaware County Building & Maint. Department, Delaware, New York

Delhi Central School District, Delhi, New York

Morningstar Foods, Delhi, New York

SUNY Delhi, Delhi, New York

Town of Meredith, Meredale, New York


COST OF SALES


Our overall cost of services increased by $1,715, from $0 in the three months ended March 31, 2010, to $1,715 in the three months ended March 31, 2011.  The principal costs related to the ongoing operation of our payphones will include telecommunication costs, commission expense and depreciation.


Telecommunication costs consist of payments made by us to local exchange carriers and long distance carriers for access to and use of their telecommunications networks and service and maintenance costs.


Commission expense represents payments to owners or operators of the premises at which a payphone is located and APCC commission fees related to “dial-around” processing.




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Depreciation expense is the quarterly depreciation of the payphone equipment, which is valued at $5,000.  The company uses the straight line method, with a useful life of 5 years with $0 salvage value.  The payphone equipment was acquired by the company on September 1, 2010.


Telecommunication costs were $0 in the three months ended March 31, 2010 and $1,412 in the three months ended March 31, 2011.  Commissions were $0 in the three months ended March 31, 2010 and $53 in the three months ended March 31, 2011.  Depreciation expense was $0 in the three months ended March 31, 2010 and $250 in the three months ended March 31, 2011.


OPERATION AND ADMINISTRATIVE EXPENSES

 

Operating expenses increased by $4,693, from $7,937 in the three months ended March 31, 2010 to $12,630 in the three months ended March 31, 2011.  Operating expenses primarily consist of general and administrative expenses (G&A) and professional fees. G&A expenses, made up primarily of office expenses and outside services consisting of stock transfer fees and filing fees, increased by $4,223, from $1,812 in the three months ended March 31, 2010 to $6,035 three months ended March 31, 2011. Professional fees, made up of accounting, bookkeeping, and legal fees increased by $4,223, from $5,900 in the three months ended March 31, 2010 to $6,035 in the three months ended March 31, 2011.  These are fees we pay to accountants and attorneys throughout the year for performing various tasks. The bulk of the increase in expense was due to the Company’s accounting fees in 2011, when comparing the same period in 2010. Our expenses to date are largely due to professional fees that include accounting and legal fees.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are and will continue to be an insignificant participant in the business of seeking mergers with and acquisitions of business entities.  A large number of established and well-financed entities, including venture capital firms, are active in mergers and acquisitions of companies.  Nearly all such entities have significantly greater financial resources, technical expertise and managerial capabilities than us and, consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination.  Moreover, we will also compete in seeking merger or acquisition candidates with other public companies, some of which may also have funds available for use by an acquisition candidate.


Market Price

     

There is no current trading market for our Common Stock and there has been no trading market to date.  There is no assurance that a trading market will ever develop or, if such a market does develop, that it will continue.


Options, Warranties and Other Equity Items

     

There  are  no  outstanding  options  or  warrants  to  purchase,  nor  any securities convertible into, shares of our Common Stock.  Additionally, there are no shares of Common Stock that could be sold pursuant to Rule 144 under the Securities Act or that we had agreed to register under the Securities Act for sale by security holders.  Further, there are no shares of Common Stock of the Company being, or proposed to be, publicly offered by the Company.





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ITEM 4.     CONTROLS AND PROCEDURES 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

For purposes of this Item 4, the term disclosure controls and procedures means controls and other procedures of the Company (i) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (15 U.S.C. 78a  et seq. and hereinafter the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “Commission”), and (ii) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures do not yet comply with the requirements in (i) and (ii) above.  

Our Chief Executive Officer and Chief Financial Officer have reviewed the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) as of the end of the period covered by this report and have concluded that (i) the Company’s disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Commission, and that (ii) the Company’s controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

There was no change in our internal control over financial reporting identified in connection with our evaluation that occurred during our last quarter (our fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of Company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, our internal control over financial reporting does not provide assurance that a misstatement of our financial statements would be prevented or detected.





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Subsequent to filing on April 7, 2011 our Annual Report on Form 10-K for the year ended December 31, 2010 with the Commission, management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management has concluded that the Company’s internal controls over financial reporting are not effective because as noted in the Annual Report, we have limited resources available. As we obtain additional funding and employ additional personnel, we will implement programs recommended by the Treadway Commission to ensure the proper segregation of duties and reporting channels.

Our independent public accountant, MaloneBailey, LLP, has not conducted an audit of our controls and procedures regarding internal control over financial reporting. Consequently, MaloneBailey, LLP expresses no opinion with regards to the effectiveness or implementation of our controls and procedures with regards to internal control over financial reporting.

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS

The Company's management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.





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PART II.   OTHER INFORMATION


  ITEM 1. LEGAL PROCEEDINGS

Not Applicable.  There are no legal proceedings that are required to be disclosed in accordance with Item 103 of Regulation S-K.

  ITEM 1A.  RISK FACTORS

Our business and plan of operation is subject to numerous risk factors, including, but not limited to, the following:

Our limited operating history makes its potential difficult to assess.

We have limited assets and financial resources.  We will, in all likelihood, continue to sustain operating expenses without corresponding revenue, at least until the consummation of a business combination.  This will most likely result in the Company incurring a net operating loss, which will increase continuously until we can consummate a business combination with a target company.  There is no assurance that we can identify such a target company and consummate such a business combination.

We have no agreement for a business combination and no minimum requirements for a business combination.

We have no current arrangement, agreement or understanding with respect to engaging in a business combination with a specific entity. There can be no assurance that we will  be  successful  in  identifying  and evaluating   suitable business  opportunities or in concluding a business combination.  No particular industry or specific business within an industry has been selected for a target company.  We have not established a specific length of operating history or a specified level of earnings, assets, net worth or other criteria which we will require a target company to have achieved, or without which we would not consider a business combination with such business entity. Accordingly, we may enter into a business combination with a business entity having no significant operating history, losses, limited or no potential for immediate earnings, limited assets, negative net worth or other negative characteristics.  There is no assurance that we will be able to negotiate a business combination on terms favorable to us.

There is no assurance of success or profitability of the Company.

  There is no assurance that we will acquire a favorable business opportunity.   Even if we should become involved in a business opportunity, there is no assurance that we will generate revenue or profits, or that the market price of our outstanding shares will be increased thereby.  The type of business to be acquired may be one that desires to avoid effecting  its  own  public  offering  and  the  accompanying  expense,  delays, uncertainties and federal and state requirements which purport to protect investors.  Because of our limited capital, it is more likely than not that any acquisition by the Company will involve other parties whose primary interest is the acquisition of control of a publicly traded company.  Moreover, any business opportunity acquired may be currently unprofitable or present other negative factors.




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We may not be able to diversify its business.

 Because we have limited financial resources, it is unlikely that we will be able to diversify our acquisitions or operations.  Our probable inability to diversify our activities into more than one area will subject us to economic fluctuations within a particular business or industry and therefore increase the risks associated with our operations.

We have limited officers and directors.

  Because management consists of only three persons, while seeking a business combination, Joseph Passalaqua, the President of the Company, Garry McHenry, the Secretary of the Company, and Devon Nish, the Director of the Company, will be the only individuals responsible in conducting the day-to-day operations of the Company.  We do not benefit from having access to multiple judgments that a greater number of directors or officers would provide, and we will rely completely on the judgment of our two officers and one director when selecting a target company.  Mr. Passalaqua, Mr. McHenry, and Mr. Nish anticipate devoting only a limited amount of time per month to the business of the Company.  Mr. Passalaqua, Mr. McHenry, and Mr. Nish have not entered into a written employment agreement with the Company and they are not expected to do so. We do not anticipate obtaining key man life insurance on Mr. Passalaqua, Mr. McHenry, or Mr. Nish. The loss of the services of Mr. Passalaqua, Mr. McHenry, and Mr. Nish would adversely affect development of our business and our likelihood of continuing operations.

We depend on management and management's participation is limited.

 We will be entirely dependent upon the experience of our officers and directors in seeking, investigating, and acquiring a business and in making decisions regarding our operations.  It is possible that, from time to time, the inability of such persons to devote their full time attention to the Company will cause the Company to lose an opportunity.

Conflicts of interest exist between the Company and its management.

Certain conflicts of interest exist between the Company and its officers and directors.  They have other business interests to which they currently devote attention, and are expected to continue to do so. As a result, conflicts of interest may arise that can be resolved only through their exercise of judgment in a manner that is consistent with their fiduciary duties to the Company.

 It is anticipated that our principal stockholders may actively negotiate or otherwise consent to the purchase of a portion of their common stock as a condition to, or in connection with, a proposed merger or acquisition transaction.  In this process, our principal stockholders may consider their own personal pecuniary benefit rather than the best interest of other Company shareholders.  Depending upon the nature of a proposed transaction, Company stockholders other than the principal stockholders may not be afforded the opportunity to approve or consent to a particular transaction.





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We may need additional financing.

We have very limited funds, and such funds, may not be adequate to take advantage of any available business opportunities.  Even if our currently available funds prove to be sufficient to pay for our operations until we are able to acquire an interest in, or complete a transaction with, a business opportunity, such funds will clearly not be sufficient to enable it to exploit the opportunity. Thus, the ultimate success of the Company will depend, in part, upon our availability to raise additional capital. In the event that we require modest amounts of additional capital to fund our operations until we are able to complete a business acquisition or transaction, such funds, are expected to be provided by the principal shareholders.  However, we have not investigated the availability, source, or terms that might govern the acquisition of the additional capital, which is expected to be required in order to exploit a business opportunity, and will not do so until we have determined the level of need for such additional financing.  There is no assurance that additional capital will be available from any source or, if available, that it can be obtained on terms acceptable to the Company.  If not available, our operations will be limited to those that can be financed with our modest capital.

We may need to depend upon outside advisors.

  To supplement the business experience of our officers and directors, we may be required to employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors. The selection of any such advisors will be made by our officers, without any input by shareholders. Furthermore, it is anticipated that such persons may be engaged on an as needed basis without a continuing fiduciary or other obligation to the Company. In the event the officers and directors of the Company consider it necessary  to hire outside advisors, they may elect to hire persons who are affiliates, if those affiliates are able to provide the required services.

We may have significant competition for business opportunities and combinations and may be at a competitive disadvantage in completing a business combination.

We are and will continue to be an insignificant participant in the business of seeking mergers with and acquisitions of business entities.  A large number of established and well-financed entities, including venture capital firms are active in mergers and acquisitions of companies.  Nearly all such entities have significantly greater financial resources, technical expertise and managerial capabilities than us and, consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination.  Moreover, we will also compete in seeking merger or acquisition candidates with other public shell companies, some of which may also have funds available for use by an acquisition candidate.

The reporting requirements imposed upon us may delay or preclude our ability to enter into a business combination.

Pursuant to the requirements of Section 13 of the Exchange Act, we are required to provide certain information about significant acquisitions including audited financial statements of the acquired company.  Because we are a shell company, these audited financial statements must be furnished within four business days   following the effective   date of a business combination.   Obtaining   audited   financial   statements   are the economic responsibility of the target company.  The additional time and costs that may be incurred by some potential target companies to prepare such financial statements may significantly delay or essentially preclude consummation of an otherwise desirable acquisition by us.  Acquisition prospects that do not have or are unable to obtain the required audited statements may not be appropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.  Notwithstanding a target company’s agreement to obtain audited financial statements within the required time frame, such audited financials may not be available to us at the time of effecting a business combination. In cases where audited financials are unavailable, we will have to rely upon un-audited information that has not been verified by outside auditors in making our decision to engage in a transaction with the business entity.  This risk increases the prospect that a business combination with such a business entity might prove to be an unfavorable one for us.


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We lack market research and a marketing organization.

 We have neither conducted, nor have others made available to it, market research indicating that demand exists for the transactions contemplated by the Company.  In the event demand exists for a transaction of the type contemplated  by  the  Company,  there  is no  assurance  the  Company  will  be successful in completing any such business combination.

We do not have any long term contracts with our customers and the contracts that are in place may be terminated at will.

We do not have any long-term agreements with the customers of our payphones and they may terminate our contract to operate at will.  Therefore, there is no continuity to our business.  Although we are trying to expand our customer base, our efforts are still in the preliminary stages.  If we lose our current customers and do not have any potential new customers at the time of such termination, our results of operations and financial condition will be adversely affected.

Our business is seasonal.

Our revenues from payphone operation are affected by seasonal variations, geographic distribution of payphones and type of location. Because we operate in the northeastern part of the country with many of the payphones located outdoor, weather patterns affect our revenue streams. Revenues drop off significantly during winter and conversely show an increase in the spring and summer. Revenues are generally lowest in the first quarter and highest in the third quarter.  If we do not adequately budget our resources to get us through the low revenue periods, we may not have the resources to operate our business during such periods.

We do not own any intellectual property.

We do not own any patents or trademarks. Companies in the telecommunications industry and other industries in which we compete own large numbers of patents, copyrights and trademarks.  Such companies are know to frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. As we face increasing competition, the possibility of intellectual property claims against us grows. We might not be able to withstand any third-party claims or rights against their use.



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Government regulations may change or be added that may adversely affect our ability to conduct, or how we conduct, our business.

We are subject to varying degrees of regulation by federal, state, local and foreign regulators. The implementation, modification, interpretation and enforcement of these laws and regulations vary and can limit our ability to provide many of our services. Our ability to compete in our target markets depends, in part, upon favorable regulatory conditions and the favorable interpretations of existing laws and regulations.

In addition, while the FCC currently requires the sellers of long distance toll free services to pay us $0.494 cents per call, such regulations may be reduced in scope or effect or repealed, which would have a negative effect upon our revenue stream. We have no control over what rules and regulations the state and federal regulatory agencies require us to follow now or in the future. It is possible for future regulations to be so financially demanding that they cause us to go out of business.

Further, the Telecommunications Act of 1996, regulatory and judicial actions and the development of new technologies, products and services have created opportunities for alternative telecommunication service providers, many of which are subject to fewer regulatory constraints. We are unable to predict definitively the impact that the ongoing changes in the telecommunications industry will ultimately have on our business, results of operations or financial condition. The financial impact will depend on several factors, including the timing, extent and success of competition in our markets, the timing and outcome of various regulatory proceedings and any appeals, and the timing, extent and success of our pursuit of new opportunities resulting from the Telecommunications Act of 1996 and technological advances.

It is probable that there will be a change in control of the Company and/or management.

In conjunction with completion of a business acquisition, it is anticipated that we will issue an amount of our authorized, but un-issued common stock that represents the greater majority of the voting power and equity of the Company, which will, in all likelihood, result in stockholders of a target company obtaining a controlling interest in the Company.  As a condition of the business combination agreement, the current stockholder(s) of the Company may agree to sell or transfer all or a portion of our common stock he/they own(s) so to  provide  the  target  company  with  all or  majority  control.  The resulting change in control of the Company will likely result in removal of the present officers and directors of the Company and a corresponding reduction in or elimination of his/their participation in the future affairs of the Company.

Stockholders will likely suffer a dilution of the value of their shares upon a business combination.

 A business combination normally will involve the issuance of a significant number of additional shares.  Depending upon the value of the assets acquired in such business combination, the per-share value of our common stock may increase or decrease, perhaps significantly.

No public market exists and no public market may develop for the Company’s common stock.



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There is currently no public market for our common stock, and no assurance can be given that a market will develop or that a shareholder ever will be able to liquidate his investment without considerable delay, if at all. If a market should develop, the price may be highly volatile.  Factors such as those discussed in this "Risk Factors” section may have a significant impact upon the market price of the securities offered hereby.  Owing to the low price of  the  securities,   many  brokerage  firms  may  not  be  willing  to  effect transactions in the securities.  Even if a purchaser finds a broker willing to effect a transaction in these securities,   the combination of brokerage commissions, state transfer taxes, if any, and any other selling costs may exceed the sales proceeds.

Registration of shares of the Company's common stock may be required for resale.

It is the Commission's position that securities issued by a "shell" company such as Biolog, Inc., cannot be sold under the exemption from registration provided by Rule 144 promulgated under the Securities Act of 1933 (the "Act"), but must be registered under the Securities Act of 1933. Accordingly, the securities sold to our affiliates may have to be registered under the Act prior to resale.  Any other   securities  issued  to  individuals in  the  capacity  of  management, affiliates,  control persons and promoters may also have to be registered  prior to resale and shall be issued with appropriate  restricted legend to reflect the registration requirements.

There may be restrictions imposed by states on the sale of common stock by investors.

Because the securities registered hereunder have not been registered for resale under the Blue Sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware, that there may be significant state Blue Sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities.  Accordingly, investors should consider the secondary market for our securities to be a limited one.

We may be subject to additional risks because of doing business in a foreign country.

We may effectuate a business combination with a merger target whose business operations or even headquarters, place of formation or primary place of business are located outside the United States of America.  In such event, we may face the significant additional risks associated with doing business in that country. In addition to the language barriers, different presentations of financial information, different business practices, and other cultural differences and barriers that may make it difficult to evaluate such a merger target, ongoing business risks result from the international political situation, uncertain legal systems and applications of law, prejudice against foreigners,   corrupt practices, uncertain economic policies and potential political and economic instability that may be exacerbated in various foreign countries.

The consummation of a business combination may subject us and our stockholders to federal and state taxes.

  Federal and state tax consequences will, in all likelihood, be major considerations in any business combination that we may undertake. Currently, such transactions may be structured to result in tax-free treatment to both companies, pursuant  to  various  federal  and  state  tax provisions.  We intend to structure any business combination so as to minimize the federal and state tax consequences to both the Company and the target entity; however, there can be no assurance that such business combination will meet the statutory requirements of a tax-free reorganization or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes, which may have an adverse effect on both parties to the transaction.



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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


On February 12, 2009, 506,925 shares of Common Stock were issued to Joseph Passalaqua in exchange for forgiveness of a $1,317 advance.  

On February 17, 2009, Biolog had a resolution and amended the Articles of Incorporation to include a 100:1 reverse stock split, with all fractional shares being dropped. The record date of the reverse split was May 28, 2009, with the effect being retroactive back to inception.

On May 29, 2009 Biolog issued 32,000,000 shares of common stock valued at $32,000 for services rendered to Officer, Directors, and Consultants of Biolog.

On September 1, 2010 Biolog issued 3,000,000 shares of common stock valued at $5,000 for equipment contributed by the Company’s President, Amanda Godin.

On November 2, 2010   319,562,320 shares of common stock were surrendered to Biolog by the following shareholders:

- 54,000,000 shares of common stock were surrendered to the Company by Amanda Godin

- 27,000,000 shares of common stock were surrendered to the Company by Garry McHenry

- 27,000,000 shares of common stock were surrendered to the Company by Kevin Kopaunik

- 27,000,000 shares of common stock were surrendered to the Company by Devon Nish

- 184,562,320 shares of common stock were surrendered to the Company by Joseph Passalaqua


On November 2, 2010, Biolog had a resolution and amended the Articles of Incorporation to include a 10/1 forward stock split, with all fractional shares being dropped. The record date of the reverse split was November 2, 2010, with the effect being retroactive back to inception.

As of the year ended December 31, 2010 and quarter ended March 31, 2011, Biolog has 100,000,000 shares of common stock authorized at $0.001 par value per share and 40,436,710 shares of common stock issued and outstanding.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

We have not defaulted on any senior securities.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

There is no other information that should be disclosed.



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ITEM 6.  EXHBITS


 

 

Exhibit Number

Description

 

 

*3.1

Articles of Amendment to Articles of Incorporation (Profit) (incorporated by reference from Form 10 filed June 10, 2009)*

 

 

*3.2

By-laws (incorporated by reference from Form 10 filed June 10, 2009)*

 

 

*3.3

Certificate for Renewal and Revival of Charter*

 

 

*10.1

Asset Contribution Agreement, dated as of October 18, 2010, between the Company and Amanda Godin (incorporated by reference from Form 8-K filed October 19, 2010)*

 

 

31.1

Certification of the Principal Executive Officer of Registrant pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

 

 

31.2

Certification of the Principal Financial Officer  of Registrant pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

 

 

32.1

Certification of the Principal Executive Officer of Registrant 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 Principal Financial Officer  of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


*Previously submitted and incorporated by reference herein.






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SIGNATURES


Pursuant to the requirements of Section 12 of the Securities Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.


BIOLOG, INC.


Date:  July 13, 2011





By: /s/ Joseph C. Passalaqua

Name: Joseph C. Passalaqua

Title: President; Principal Executive Officer





                                             

By: /s/ Garry McHenry

Name: Garry McHenry

Title: Secretary; Principal Financial Officer





By: /s/ Devon Nish

Name: Devon Nish

Title: Director
















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