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EXCEL - IDEA: XBRL DOCUMENT - XFormity Technologies, Inc. | Financial_Report.xls |
EX-31 - CERTIFICATION - XFormity Technologies, Inc. | xfm_ex31.htm |
EX-32 - CERTIFICATION - XFormity Technologies, Inc. | xfm_ex32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2013
OR
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission file number: 0-23391
XFORMITY TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Colorado | 84-1434313 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
2005 Keats Lane, Highland Park, IL 60035
(Address of principal executive offices, including zip code)
Issuer's Telephone No., including area code: 847 579 0770
Indicate by check mark whether Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No X
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X ]
Smaller reporting company X
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No
The number of shares outstanding of the Issuers Common stock, $0.0001 par value, at July 29, 2013 is 53,756,553.
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XFormity Technologies, Inc. and Subsidiary
(A Development Stage Company)Consolidated Balance Sheets
| March 31, |
| June 30, | ||||
| 2013 |
| 2012 | ||||
| ASSETS | (Unaudited) |
| (Unaudited) | |||
| Current Assets |
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| Cash and cash equivalents | $ 53,518 |
| $ - | |||
| Assets from discontinued operations | - |
| 306,818 | |||
| Total current assets | 53,518 |
| - | |||
| Assets held for sale long term | - |
| - | |||
| Total Assets | $ 53,518 |
| $ 306,818 | |||
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| LIABILITIES AND STOCKHOLDERS DEFICIT |
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| Current Liabilities |
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| Convertible debentures related parties | $ - |
| $ - | |||
| Convertible debentures | - |
| - | |||
| Accounts payable | - |
| - | |||
| Accrued expenses | - |
| - | |||
| Liabilities associated with assets held for sale - current | - |
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| Total Current Liabilities | - |
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| Liabilities associated with assets held for sale long term | - |
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| Total liabilities from discontinued operations | 0 |
| 1,926,342 | |||
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| Stockholders' Deficit: |
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| Preferred stock, $0.01 par value, 100,000,000 shares authorized, zero issued and outstanding at March 31, 2013 and June 30, 2012 |
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| Common stock, $0.0001 par value, 125,000,000 shares authorized, 53,756,553 shares issued and outstanding at March 31, 2013 and June 30, 2012 | 5,376 |
| 5,376 | |||
| Additional paid-in capital | 6,943,116 |
| 6,933,117 | |||
| Accumulated deficit | (6,894,974) |
| (8,558,017) | |||
| Total Stockholders' Equity (Deficit) | 53,518 |
| (1,619,524) | |||
| Total Liabilities and Stockholders' Equity | $ 53,518 |
| $ 306,818 |
The accompanying notes are an integral part of these consolidated financial statements.
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XFormity Technologies, Inc. and Subsidiary
(A Development Stage Company) Consolidated Statements of Operations
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||
| Three Months Ended March 31, | Nine Months Ended March 31, | From Date of Inception of development stage (August 1, 2012) to March 31, 2013 | ||||||
| 2013 | 2012 | 2013 | 2012 |
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Expenses |
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General and administrative | 24,817 | - | 98,453 | - | 98,453 | ||||
Loss from operations | (24,817) | - | (98,453) | - |
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Loss from continuing operations | (24,817) | - | (98,453) | - | (98,453) | ||||
Gain from discontinued operations | 1,739,706 | 175,891 | 1,853,426 | - | - | ||||
Income (loss) from discontinued operations | (29,899) | (29,380) | (91,934) | (97,290) | - | ||||
Net Income/(loss) | $ 1,684,990 | $ 146,511 | $ 1,663,039 | $ (97,290) | (98,453) | ||||
(Net loss per share from continuing operations | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
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Net income/(loss) per share from discontinued operations | $ (0.03) | $ (0.00) | $ (0.03) | $ (0.00) | |||||
Net Income (loss) per share basic and diluted | $ 0.03 |
$ (0.00) | $ 0.03 | $ (0.00) | |||||
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Weighted average number of shares basic and diluted | 53,756,553 | 51,931,553 | 53,756,553 | 53,548,264 | |||||
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The accompanying notes are an integral part of these consolidated financial statements.
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XFormity Technologies, Inc. and Subsidiary
(A Development Stage Company)
Consolidated Statements of Cash Flows
| (Unaudited) |
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| Nine Months Ended March 31, | From Date of Inception of development stage (August 1, 2012) to March 31, 2013 |
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| 2013 | 2012 |
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Operating activities: |
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Discontinued Operations |
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Net income (loss) | $ 1,761,492 | $ (97,290) |
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Depreciation | 17,206 | 8,156 |
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Gain on sale of license | (300,000) | - |
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Amortization of debt discount | - | 206,747 |
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Non-cash transactions for: |
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Debt forgiveness |
| (240,083) |
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Changes in: |
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Security Deposit | 8,707 | - |
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Convertible Debenture | (1,206,764) | - |
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Accounts receivable | 196,318 | 5,415 |
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Prepaid expenses | 8,839 | (6,822) |
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Accounts Payable | (157,121) | 17,786 |
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Accrued expenses | (393,656) | 112,735 |
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Deferred revenue | (31,753) | 2,202 |
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Deferred credits | (137,050) | (9,285) |
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Net cash used from discontinued operations | (237,782) | (439) |
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Investing activities: |
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Proceeds from sale of license | 300,000 | - |
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Net cash provided from investing activities | 300,000 | - |
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The accompanying notes are an integral part of these consolidated financial statements
CONTINUED ON FOLLOWING PAGE
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CONTINUED FROM PREVIOUS PAGE
XFormity Technologies, Inc. and Subsidiary
(A Development Stage Company)
Consolidated Statements of Cash Flows
| (Unaudited) |
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| Nine Months Ended March 31, | From Date of Inception of development stage (August 1, 2012) to March 31, 2013 |
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| 2013 | 2012 |
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Financing activities: |
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Net cash provided from financing activities | - | - |
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Increase (decrease) in cash from discontinued operations | (66,218) | (439) |
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Cash and cash equivalents, beginning of period | 85,753 | 56,625 |
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Cash and cash equivalents August 1, 2012 and June 30, 2012 respectively | 151,971 | 56,186 | 151,971 |
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Continuing Operations |
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Net income (loss) | $ (98,453) | $ - | $ (98,453) |
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Cash decrease from continuing operations | (98,453) | - | - |
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Cash and cash equivalents, end of period | $ 53,518 | $ 56,186 | $ 53,518 |
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Supplemental disclosure of non-cash financing and investing activities | - | - |
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The accompanying notes are an integral part of these consolidated financial statements.
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XFormity Technologies, Inc. and Subsidiary
Notes to Consolidated Financial Statements
March 31, 2013
(Unaudited)
Note 1 Organization and Nature of Business.
The reporting entity in this form 10-Q is XFormity Technologies, Inc. (a Colorado Corporation) ("XFormity" or the "Company") and includes the operations of XFormity, Inc. (a Texas Corporation) (XFM), the wholly owned subsidiary of the Company. XFormity formerly provided technology and services to multi-unit business operators. The Companys core products were hosted Business Intelligence (BI), Balanced Scorecard and Benchmarking solutions. These solutions helped customers with operational data analysis, trend reporting, issue identification and tracking. The Company provided data integration and management services that feed the BI and Scorecard solution with data from many key data sources. The Companys solutions were provided to customers as a hosted (software-as-a-service) model, which allows the Company to rapidly configure and implement solutions for new customers in an affordable, cost-effective manner.
As noted below in Note 2, the Company executed an Asset Sale and Purchase Agreement effective August 1, 2012 (APA) which would have resulted in the disposition of all material operations including all current revenue streams for the Company. The APA terminated without consummation effective March 29, 2013 due to the Companys inability to obtain the approval of its shareholders in accordance with applicable legal requirements. Due to that failure, the holders of the Companys outstanding senior secured debentures (Debentures) demanded that the Company convey its assets to the Indenture Trustee exercising the rights of the Debenture holders under a Trust Indenture pursuant to their senior secured rights. Accordingly, effective April 1, 2013, the Company executed with the Indenture Trustee an Agreement to Accept Collateral in Satisfaction of Obligations (the Collateral Satisfaction Agreement), conveying substantially all of the Companys assets to the Indenture Trustee in satisfaction of the Debentures.
The Company is now a shell company and intends to seek another business combination or merger.
Note 2 Discontinued Operations.
In August, 2012, the Company executed and delivered the following agreements with Altametrics XFormity, LLC (Altametrics):
1.
Asset Sale and Purchase Agreement effective August 1, 2012 (APA)
2.
Escrow Agreement
3.
License Agreement
4.
Management agreement.
Under the terms of the APA, Altametrics agreed to purchase substantially all of the Companys assets in consideration of $1,300,000. Of the total purchase price, $650,000 has been deposited into escrow with the Companys stock transfer agent, Corporate Stock Transfer, Inc., as Escrow Agent under the terms of an Escrow Agreement. Consummation of the APA is subject to several material conditions precedent, including the approval of the Companys shareholders. Pending consummation of the APA, the Company entered into two additional agreements with Altametrics: a Management Agreement pursuant
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to which Altametrics agreed to serve as Business Manager of the Companys operations effective August 1, 2012; and a License Agreement pursuant to which, in consideration of a one-time license fee in the amount of $300,000, the Company granted to Altametrics a non-exclusive license to use the Companys intellectual property rights. The entire proceeds of $300,000 was recorded as a gain with the transaction as the Company had no related asset on the balance sheet at the time of the sale, and had no further obligations related to the disposition.
Effective July 31, 2012, all of the Companys senior secured convertible debentures (Debentures) in the aggregate principal amount of approximately $1.2 million matured and became due and payable in full. As a result, the Company is in default under the Debentures; and a majority in interest of the Debenture holders have served upon the Company a notice of default and a further notice that the Debenture holders would not agree to a further extension of the Debentures. The Debenture holders have a senior security interest in all of the tangible and intangible assets of the Company and could foreclose on those assets at any time. In the event the Company was unable to secure the approval of its shareholders to the APA, the Debenture holders executed a back-up Asset Purchase Agreement with Altametrics pursuant to which they agreed to foreclose on the Companys assets under their senior security interest and convey those assets to Altametrics for the same consideration, to wit: $1.3 million.
The APA was terminated on March 29, 2013, due to the Companys inability to obtain the approval of its shareholders. As a result, the Debenture holders demanded that the Company convey all of its assets to the Indenture Trustee and, effective April 1, 2013, the Company and the Indenture Trustee executed an Agreement to Accept Collateral in Satisfaction of Obligations pursuant to which the Company conveyed its assets to the Indenture Trustee in satisfaction of the Debentures. The Indenture Trustee subsequently reconveyed the assets to Altametrics under the back-up APA.
As a result of the foregoing transactions, effective August 1, 2012, the Companys assets, other than its cash and cash equivalents, have been eliminated. For further information on the results from discontinued operations see managements discussion and analysis of the revenues and expenses relating to the discontinued operation.
Note 3 Basis of Financial Statement Presentation.
The accompanying unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been consolidated or omitted in accordance with such rules and regulations. The information furnished in the interim consolidated financial statements includes normal recurring adjustments and reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of such consolidated financial statements.
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operation, financial position or cash flow.
Although management believes the disclosures and information presented are adequate to not make the information misleading, it is suggested that these interim consolidated financial statements be read in conjunction with the Company's most recent audited financial statements and notes thereto included in its June 30, 2012 Annual Report on Form 10-K.
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and
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liquidation of liabilities in the normal course of business. The ability of the Company to continue as a going concern is dependent on the Company; (1) to obtain adequate capital from outside sources, or (2) to fund itself through profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Note 4 Going Concern
As shown in the accompanying consolidated financial statements, the Company has incurred an accumulated deficit of $6,894,974 and has limited working capital of $53,518 as of March 31, 2013. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Note 5 Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is computed for financial statement purposes using accelerated methods over a five year estimated useful life of the assets. Accumulated depreciation at June 30, 2012 was $185,742. The property and equipment at March 31, 2013 was part of the sale of the discontinued operations.
Note 6 Deferred Credits
In January 2006, the Board of Directors, agreed to offer then seven major customers, (consortium members) the following options in exchange for any further billing credits: (1) a right to receive $150,000 in billing credits applied against their monthly business intelligence software billings at a rate of 25% of the billings commencing July 1, 2006, or (2) a right to receive an additional 833,333 shares of the Companys common stock per consortium member. These shares would be in addition to the shares issued to consortium members in exchange for their original $100,000 investment in fiscal 2004.
Only two consortium members elected option (1), one commencing January 1, 2006, and the other commencing July 1, 2006. The deferred credits at March 31, 2013 have been eliminated due to the discontinuation of business operations.
Note 7 Accounts Payable
Accounts payable represents balances due to trade creditors and fees for professional services incurred for legal and audit services. The accounts payable at March 31, 2013 were part of the sale of the discontinued operations.
Note 8 Accrued Expenses
Accrued expenses other than as reflected herein are part of the liabilities associated with assets held for sale.
| March 31 | June 30, |
| 2013 | 2012 |
Accrued interest on convertible debentures | $304,239 | $244,441 |
The accrued expenses at March 31, 2013 were part of the sale of the discontinued operations.
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Note 9 Convertible Debentures
Effective July 31, 2012, all of the Companys senior secured convertible debentures (Debentures) in the aggregate principal amount of approximately $1.2 million matured and became due and payable in full. As a result, the Company is in default under the Debentures; and a majority in interest of the Debenture holders have served upon the Company a notice of default and a further notice that the Debenture holders would not agree to a further extension of the Debentures. The Debenture holders had a senior security interest in all of the tangible and intangible assets of the Company and could foreclose on those assets at any time. Effective April 1, 2013, the Company and the Indenture Trustee entered into the Collateral Satisfaction Agreement conveying the Companys assets in satisfaction of the obligations under the Debentures.
Note 10 Derivative Liabilities
The Companys warrants and its Convertible Notes have reset provisions to the exercise price and conversion price if the Company issues equity or other derivatives at a price less than the exercise price set forth in such warrants and notes. This ratchet provision resulted in a derivative liability in our financial statements that was evaluated at zero at June 30, 2012 and March 31, 2013 by an independent consultant. The derivative liabilities at March 31, 2013 were part of the sale of the discontinued operations.
Note 11 Earnings per Share
Basic earnings per share are calculated based on the weighted-average number of outstanding common shares. As of March 31, 2013, the Company had 53,756,553 shares outstanding. The convertible debentures, options, and warrants have a strike price equal to or in excess of the market price, $0.0024 at March 31, 2013, and are considered not in the money, they are excluded from the calculation of diluted earnings per share due to their anti-dilutive effect.
Note 12 Income Taxes
As of July 1, 2007, the Company adopted the current accounting guidance for the Accounting for Uncertainty in Income Taxes, which seeks to reduce the diversity in practice associated with the accounting and reporting for uncertainty in income tax positions. The Company believes it does not have any uncertain tax positions taken or expected to be taken in its income tax returns.
At March 31, 2013, the Company had net operating loss carry-forwards approximating $15,100,000 that expire in 2017 through 2028. The carry-forward losses and the related deferred tax benefit are significantly limited by the provisions of Internal Revenue Code Section 382. The Companys taxable losses have created a deferred tax benefit of approximately $1,963,000 that is fully reserved.
Note 13 Related Party Transactions
Of the total 9% convertible debentures issued through March 31, 2013, related parties held $906,682. The Collateral Satisfaction Agreement resulted in the satisfaction of all amounts due under the Debentures, including accrued and unpaid interest.
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Effective April 1, 2013, the Company conveyed its assets to the Debenture holders under the Collateral Satisfaction Agreement. The holders of a majority in interest of the Debentures were officers and directors of the Company.
Note 14 Commitments and Contingencies
The lease obligations were part of the liabilities associated with assets held for sale. The Company entered into a 65 month net lease at its Dallas, Texas office, commencing June 1, 2008, with rent approximating $4,300 per month. The Company also had a month-to-month lease for $700 per month at its Northbrook, Illinois office that was terminated as of August 31, 2012. Effective August 1, 2012, Altametrics assumed the Companys obligations under the leases pursuant to the Management Agreement described elsewhere in this Report.
Note 15 Subsequent Events
Effective April 1, 2013, the Company executed and delivered the Collateral Satisfaction Agreement, effectively divesting of all operating assets and becoming a shell company.
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ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS |
Forward Looking Statements
When used in this Quarterly Report on Form 10-Q, in documents incorporated herein and elsewhere by us from time to time, the words "believes," "anticipates," "expects" and similar expressions are intended to identify forward-looking statements concerning our business operations, economic performance and financial condition, including in particular, our business strategy and means to implement the strategy, our objectives, the amount of future capital expenditures required, the likelihood of our success in developing and introducing new products and expanding the business, and the timing of the introduction of new and modified products or services. These forward looking statements are based on a number of assumptions and estimates which are inherently subject to significant risks and uncertainties, many of which are beyond our control and reflect future business decisions which are subject to change.
A variety of factors could cause actual results to differ materially from those expected in our forward-looking statements, including those set forth from time to time in our press releases and reports and other filings made with the Securities and Exchange Commission. We caution that such factors are not exclusive. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly release the results of any revisions of such forward-looking statements that may be made to reflect events or circumstances after the date hereof, or thereof, as the case may be, or to reflect the occurrence of unanticipated events.
OPERATING PLAN
The Company believes it can offer owners of potential merger or acquisition candidates the opportunity to acquire a controlling ownership interest in a public company at substantially less cost than is required to conduct an initial public offering. The target company will, however, incur significant post-merger or acquisition registration costs in the event target company shareholders wish to offer a portion of their shares for subsequent sale. Further, while target company shareholders will receive "restricted securities" in any merger or acquisition transaction, those restricted securities will represent, if a trading market develops for our common stock, ownership in a "publicly-traded" as opposed to a "privately-held" company. The Company also believes target company shareholders may benefit in obtaining a greater ownership percentage in us remaining after a merger or acquisition than may be the case in the event a target company offered its shares directly for sale to the public. Nevertheless, our officers and directors have not conducted market research and are not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for target company shareholders.
The Company expects to concentrate primarily on the identification and evaluation of prospective merger or acquisition "target" entities, including private companies, partnerships or sole proprietorships. The Company does not intend to act as a general or limited partner in connection with partnerships we may merge with or acquire nor have we identified any particular area of interest within which we will concentrate our efforts.
The Company contemplates that it will seek to merge with or acquire a target company with either assets or earnings, or both, and that preliminary evaluations undertaken by us will assist in identifying possible target companies. The Company has not established a specific level of earnings or assets below which it would not consider a merger or acquisition with a target company. Moreover, we may identify a target
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company, which is generating losses, which it will seek to acquire or merge with us. The merger with or acquisition of a target company that is generating losses or which has negative shareholders' equity may have a material adverse affect on the price of our common stock, if a public trading market develops.
You should note, however, that our independent accountants audit report for the fiscal year ended June 30, 2012 contains a qualification and explanatory language that due to our recurring losses from operations and net capital deficiency, substantial doubts exist about our ability to continue as a going concern.
RESULTS OF OPERATIONS
Since the Company has disposed substantially all of its business operations at April 1, 2013, we have adopted a discontinued operations presentation in respect of our e-business software operations. Our continuing operations are, on an interim basis, limited to maintaining our public company disclosure obligations and evaluating business opportunities.
REVENUE AND COST OF REVENUE. All revenues and costs of revenue related to discontinued operations. Accordingly, the Company has not recognized any revenue associated with continuing operations in either the three and nine months ended March 31, 2013 or the comparative period.
RESEARCH AND DEVELOPMENT AND SALES AND MARKETING EXPENSES. All research and development, and sales and marketing expenses related to discontinued operations. Accordingly, the Company did not incur any such expenses associated with continuing operations in either the three and nine months ended March 31, 2013 or the comparative period.
GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expense includes professional fees, investor relations costs and contractor fees associated with meeting our public reporting obligations. Such expenses were $24,817 and $98,453 in the three months and nine months ended March 31, 2013.. Contractor fees and other expenses increased, primarily because the ordinary administrative functions of the company which were previously addressed by staff as part of continuing operations are now contracted out. The Company expects that operating expenses will continue at approximately the levels experienced in the quarter ended March 31, 2013 for the foreseeable future.
LOSS FROM DISCONTINUED OPERATIONS: The results of discontinued operations represent the majority of our operating activities. The results of discontinued operations in the current fiscal period are for the period from July 1, 2012 to March 31, 2013, as the operations had been discontinued on August 1, 2012 and were sold on April 1, 2013 (the date of the disposition under the Collateral Satisfaction Agreement). The results of discontinued operations for the comparative period are for the period July 1, 2012 to March 31, 2012.
LIQUIDITY AND CAPITAL RESOURCES
The Company's independent auditor's report states that our consolidated financial statements for the year ending June 30, 2012 have been prepared assuming that the Company will continue as a going concern. Following the disposition of its business assets, the Company believes that it has sufficient cash reserves to meet its operating obligations for at least six months.
In the nine months ended March 31, 2013, net cash of $300,000 was provided by investing activities.
In the nine months ended March 31, 2013 and 2012, there were no net cash flows from financing activities.
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As of March 31, 2013, there were no contractual capital commitments outstanding.
The Company incurred operating losses and negative cash flows from operations in each quarter since it commenced operations. As of March 31, 2013 there was an accumulated deficit of $6,894,974. Apart from interest earned on short-term investments, there are currently no sources of revenue. Expenses are limited to the cost of maintaining our public company disclosure obligations and expenses incurred to review new business opportunities.
In the event that future operating cash flows do not meet all our cash requirements, the Company will need additional financing. Should the Company need additional financing through debt or equity placements, there is no assurance that such financing will be available, if at all, at terms acceptable to the Company. If additional funds are raised by the issuance of equity securities, stockholders may experience dilution of their ownership interest and these securities may have rights senior to those of the holders of the common stock. If additional funds are raised by the issuance of debt, the Company may be subject to certain limitations on our operations, including limitations on the payment of dividends. If adequate funds are not available or are not available on acceptable terms, the Company may be unable to take advantage of acquisition opportunities, which could have a materially adverse effect on its financial condition and results of operations.
The Company does not expect to generate operating earnings in the foreseeable future since, following the Collateral Satisfaction Agreement, it does not have any revenue generating operations. It will likely incur losses and the losses may increase. If a new business venture is not found, the Company is unlikely to achieve or sustain profitability, which would have a materially adverse effect on our financial condition and results of operations. Even if the Company achieved or maintains profitability, it may not sustain or increase profitability on a quarterly or annual basis in the future.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management has evaluated, under the supervision and with the participation of our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative
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to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Changes in Internal Control over Financial Reporting
In addition, our management with the participation of our Principal Executive Officer and Principal Financial Officer have determined that no change in our internal control over financial reporting occurred during or subsequent to the quarter ended March 31, 2013 that has materially affected, or is (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
None
Item 1A Risk Factors
None
Item 2 Unregistered Sales of Securities and Use of Proceeds
None
ITEM 3 Defaults upon Senior Securities
None, except as previously reported.
ITEM 4 Mine Safety Disclosures
Not applicable.
ITEM 5 Other information
None
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ITEM 6 Exhibits
| Exhibits |
31. | Certification* |
32. | Certification pursuant to USC Section 1350* |
101.INS |
| XBRL Instance Document** |
101.SCH |
| XBRL Schema Document** |
101.CAL |
| XBRL Calculation Linkbase Document** |
101.LAB |
| XBRL Label Linkbase Document** |
101.PRE |
| XBRL Presentation Linkbase Document** |
101.DEF |
| XBRL Definition Linkbase Document** |
*
filed herewith
**
furnished, not filed
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report to be signed on its behalf by the undersigned, thereunto duly authorized.
| XFormity Technologies, Inc. |
|
|
Date: July 31, 2013 | /s/ Sheldon Drobny |
|
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