UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

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

EXCHANGE ACT OF 1934

 

For the Quarter ended September 30, 2016

 

Commission File Number: 333-141929

 

CYBERSPACE VITA, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		14-1982491
(State of organization)		(I.R.S. Employer Identification No.)

 

41 Ulua Place

Haiku, HI 96708

(Address of principal executive offices)

 

(310) 396-1691

Registrant’s telephone number, including area code

 

 

Former address if changed since last report

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months 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 and 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) [X] 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]
				(Do not check if a smaller reporting company

 

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

 

Securities registered under Section 12(g) of the Exchange Act:

 

Common Stock $.001 par value

 

There were 247,550 shares of common stock outstanding as of November 14, 2016.

 

 

 

TABLE OF CONTENTS

 

 

		PART I - FINANCIAL INFORMATION
ITEM 1.		INTERIM FINANCIAL STATEMENTS	3
ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION	8
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	10
ITEM 4.		CONTROLS AND PROCEDURES	10
		PART II - OTHER INFORMATION
ITEM 1.		LEGAL PROCEEDINGS	11
ITEM 1A		RISK FACTORS	11
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES	11
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES	11
ITEM 4.		MINE SAFETY DISCLOSURES	11
ITEM 5.		OTHER INFORMATION	11
ITEM 6.		EXHIBITS	12
SIGNATURES			13

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. INTERIM FINANCIAL STATEMENTS

 

CYBERSPACE VITA, INC.

Balance Sheets

(Unaudited)

 

		September 30, 2016				December 31, 2015
ASSETS
TOTAL ASSETS		$	0			$	0
LIABILITIES & STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable		$	4,656			$	5,256
Accrued interest – related party			114,646				94,360
Notes payable – related party			480,636				434,369
Total current liabilities and liabilities			599,938				533,985
Stockholders’ deficit
Preferred stock, par value $0.001, 10,000,000 shares authorized, no shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively			—				—
Common stock, par value $0.001, 100,000,000 shares authorized, 247,550 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively			248				248
Additional paid-in capital			44,030				44,030
Accumulated Deficit			(644,216	)			(578,263	)
Total stockholders’ deficit			(599,938	)			(533,985	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	0			$	0

 

See accompanying notes to financial statements.

 

 

CYBERSPACE VITA, INC.

Condensed Statements of Operations

(Unaudited)

 

		Three Months ended September 30								Nine Months ended September 30
		2016				2015				2016				2015
Revenues		$	-			$	-			$	-			$	-
Operating expenses			-				-				-				-
Professional fees			2,340				2,420				10,960				10,130
Management Fees-related party			10,000				10,000				30,000				30,000
General and administrative			1,496				1,487				4,707				4,530
Operating Loss		$	(13,836	)		$	(13,907	)		$	(45,667	)		$	(44,660	)
Other expenses
Interest expense—related party			7,014				6,099				20,286				17,558
Net Loss		$	(20,850	)		$	(20,006	)		$	(65,953	)		$	(62,218	)
Basic loss per share		$	(0.08	)		$	(0.08	)		$	(0.27	)		$	(0.25	)
Weighted average number of common shares outstanding - basic			247,550				247,550				247,550				247,550

 

See accompanying notes to financial statements

 

 

CYBERSPACE VITA, INC.

Condensed Statements of Cash Flows

(Unaudited)

 

		Nine Months ended September 30,
		2016				2015
Cash flows from operating activities
Net loss		$	(65,953	)		$	(62,218	)
Adjustments to reconcile net loss to net cash used in operating activities:
Increase in accounts payable			(600	)			5,980
Increase in accrued interest- related party			20,286				17,558
Net cash used in operating activities			(46,267	)			(38,680	)
Cash flows relating to financing activities
Proceeds from shareholder loans			46,267				38,680
Net cash provided by financing activities			46,267				38,680
Net increase (decrease) in cash			-				-
Cash at beginning of period			-				-
Cash at end of period		$	-			$	-
Supplemental cash flow information			-				-
Cash paid during period for interest			-				-
Cash paid during period for income taxes			-				-
Cash contributed from cancellation of common stock		$	-			$	-

 

See accompanying notes to financial statements

 

 

CYBERSPACE VITA, INC.

Notes to Financial Statements

September 30, 2016

(Unaudited)

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the financial statements and footnotes thereto included in the Form 10-K for the year ended December 31, 2015.

 

Business description

 

The Company was incorporated under the laws of the State of Nevada on November 7, 2006.

 

The Company has raised certain capital in an attempt to commence operation, however it has not done so. The Company’s current business plan is to explore potential targets for a business combination with the Company through a purchase of assets, share purchase or exchange, merger or similar type of transaction. As we have not yet commenced principal operations we consider ourselves a shell company.

 

As used in these Notes to the Financial Statements, the terms the “Company”, “we”, “us”, “our” and similar terms refer to Cyberspace Vita, Inc.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

A. USE OF ESTIMATES

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

B. NEW ACCOUNTING PRONOUNCEMENTS

 

From time to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.

 

 

CYBERSPACE VITA, INC.

Notes to Financial Statements

September 30, 2016

(Unaudited)

 

NOTE 3. GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $644,216 during the period of November 7, 2006 (inception) to September 30, 2016 and has a stockholders’ deficit of $599,938 as of September 30, 2016. These conditions, among others, raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on working capital advances being provided by the Company’s majority shareholder for its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. There is no assurance that the working capital advances will continue in the future nor that Company will be successful in raising additional funds through other sources.

 

NOTE 4. RELATED PARTY TRANSACTIONS

 

At September 30, 2016, the Company had loans and notes outstanding from a shareholder in the aggregate amount of $480,636, which bears interest at 6% per annum and represents amounts loaned to the Company to pay the Company’s operating expenses. On December 31, 2015, the Payee under the Note and the Company agreed to extend the maturity date of the Note to December 31, 2016. Interest expense for the three months ended September 30, 2016 was $7,014.

 

Effective as of May 5, 2008, the Company entered into a Services Agreement with Fountainhead Capital Management Limited (“FHM”), a shareholder who holds approximately 80.8% of the Company’s issued and outstanding common stock. The original term of the Services Agreement was one year (and it has been extended to the end of fiscal year 2016) and the Company is obligated to pay FHM a quarterly fee in the amount of $10,000, in cash or in kind, on the first day of each calendar quarter commencing May 5, 2008. Total fees paid to FHM for the three months ended September 30, 2016 was $10,000.

 

NOTE 5. INCOME TAXES

 

As a result of historical net operating losses, the Company currently provides a full valuation allowance against its net deferred tax assets which consist of net operating loss carry forwards.

 

As of September 30, 2016, the Company does not have any accrued interest or penalties related to uncertain tax positions. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. The Company does not have any interest or penalties related to uncertain tax positions in income tax expense for the three months ended September 30, 2016 and 2015. The tax years 2012–2015 remain open to examination by the major taxing jurisdictions to which the Company is subject.

 

NOTE 6. SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date the financial statements were available to be issued. Based on this evaluation, the Company has identified no reportable subsequent events.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

 

The following discussion should be read in conjunction with our unaudited financial statements and the notes thereto.

 

Forward-Looking Statements

 

This quarterly report contains forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words “believe,” “anticipate,” “expect,” “estimate,” “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management’s current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that we desire to effect; Securities and Exchange Commission regulations which affect trading in the securities of “penny stocks”; and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this registration statement, including, without limitation, the information set forth under the heading “Management’s Discussion and Analysis and Plan of Operation -- Risk Factors” identifies important additional factors that could materially adversely affect actual results and performance. You are urged to carefully consider these factors. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement.

 

Overview

 

We are presently a shell company (as defined in Rule 12b-2 of the Exchange Act) whose plan of operation over the next twelve months is to seek and, if possible, acquire an operating business or valuable assets by entering into a business combination. We will not be restricted in our search for business combination candidates to any particular geographical area, industry or industry segment, and may enter into a combination with a private business engaged in any line of business, including service, finance, mining, manufacturing, real estate, oil and gas, distribution, transportation, medical, communications, high technology, biotechnology or any other. Management’s discretion is, as a practical matter, unlimited in the selection of a combination candidate. Management will seek combination candidates in the United States and other countries, as available time and resources permit, through existing associations and by word of mouth. This plan of operation has been adopted in order to attempt to create value for our shareholders. For further information on our plan of operation and business, see PART I, Item 1 of our Annual Report on Form 10-K for the fiscal year ending 2015.

 

Plan of Operation

 

We do not intend to do any product research or development. We do not expect to buy or sell any real estate, plant or equipment except as such a purchase might occur by way of a business combination that is structured as an asset purchase, and no such asset purchase currently is anticipated. Similarly, we do not expect to add additional employees or any full-time employees except as a result of completing a business combination, and any such employees likely will be persons already then employed by the company acquired.

 

From inception, the Company’s business plan was to construct an e-commerce website by which we intended to engage in the sale of vitamins on the Internet. The Company has now discontinued its prior business and changed its business plan. The Company’s business plan now consists of exploring potential targets for a business combination through the purchase of assets, share purchase or exchange, merger or similar type of transaction. We anticipate no operations unless and until we complete a business combination as described above.

 

CRITICAL ACCOUNTING POLICIES

 

The methods, estimates and judgments we use in applying our accounting policies have a significant impact on the results we report in our financial statements, which we discuss under the heading “Results of Operations” following this section of our Plan of Operation. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Due to the life cycle stage of our Company every balance sheet account has inherent estimates.

 

 

RESULTS OF OPERATIONS

 

Three Months Ended September 30, 2016 Compared to September 30, 2015

 

The following table summarizes the results of our operations during the three months ended September 30, 2016 and 2015, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current 3-month period to the prior 3-month period:

 

Line Item		9/30/2016 (unaudited)				9/30/2015 (unaudited)				Increase/ (Decrease				Percentage Increase/ Decrease
Revenues			—				—				—				—
Operating expenses			13,836				13,907				(71	)			(0.5	%)
Net loss			(20,850	)			(20,006	)			(844	)			4.2	%
Loss per share of common stock		$	(0.08	)		$	(0.08	)		$	0.00				0.0	%

 

We recorded a net loss of $20,850 for the three months ended September 30, 2016 as compared with a net loss of $20,006 for the three months ended September 30, 2015.

 

Nine Months Ended September 30, 2016 Compared to September 30, 2015

 

The following table summarizes the results of our operations during the nine months ended September 30, 2016 and 2015, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current 9-month period to the prior 9-month period:

 

Line Item		9/30/2016 (unaudited)				9/30/2015 (unaudited)				Increase/ (Decrease				Percentage Increase/ Decrease
Revenues			—				—				—				—
Operating expenses			45,667				44,660				1,007				2.3	%
Net loss			(65,953	)			(62,218	)			(3,735	)			6.0	%
Loss per share of common stock		$	(0.27	)		$	(0.25	)		($	0.02	)			8.0	%

 

We recorded a net loss of $65,953 for the nine months ended September 30, 2016 as compared with a net loss of $62,218 for the nine months ended September 30, 2015.

 

 

LIQUIDITY AND CAPITAL RESOURCES

 

We have financed our operations during the quarter through proceeds from a loan from a shareholder in the amount of $16,962.

 

We had $0 cash on hand as of September 30, 2016 compared to $0 as of September 30, 2015. We will continue to need additional cash during the following twelve months and these needs will coincide with the cash demands resulting from implementing our business plan and remaining current with our Securities and Exchange Commission filings. There is no assurance that we will be able to obtain additional capital as required, or obtain the capital on acceptable terms and conditions.

 

Going Concern

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has not begun generating revenue, has experienced recurring net operating losses, had a net loss of $20,850 for the three months ended September 30, 2016, and a working capital deficiency of $599,938 at September 30, 2016. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. We will need to raise funds or implement our business plan to continue operations.

 

Off-Balance Sheet Arrangements

 

We do 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.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2016. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are not designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes.

 

 

Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our “internal control over financial reporting” (as defined in Rule 13a-15(f) under the Securities Exchange Act) that occurred during the period covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.

 

ITEM 1A. RISK FACTORS.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

 

Except as may have previously been disclosed on a current report on Form 8-K or a quarterly report on Form 10-Q, we have not sold any of our securities in a private placement transaction or otherwise during the past three years.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 

ITEM 6. EXHIBITS

 

Exhibit No.		Description
31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101 SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101 LAB		XBRL Extension Labels Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

 

 

SIGNATURES

 

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

	CYBERSPACE VITA, INC.
Date: November 14, 2016	By:	/s/ Alexander Diener
		Alexander Diener
		Director, CEO, President and Treasurer (Principal Executive and Financial Officer)