See notes to financial statements.
FCCC, INC. | |
| |
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY | |
(Dollars in thousands, except share data) | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Common Stock | | | Paid-in | | | Accumulated | | | Total | |
| | Shares | | | Amount | | | Capital | | | Deficit | | | | |
| | | | | | | | | | | | | | | |
Balance, March 31, 2007 (audited) | | | 1,423,382 | | | $ | 712 | | | $ | 9,330 | | | $ | (8,441 | ) | | $ | 1,601 | |
| | | | | | | | | | | | | | | | | | | | |
Net loss - Year ended March 31, 2008 (audited) | | | - | | | | - | | | | - | | | | (12 | ) | | | (12 | ) |
| | | | | | | | | | | | | | | | | | | | |
Exercise of Stock Options – September 2007 | | | 28,000 | | | | 14 | | | | 9 | | | | - | | | | 23 | |
| | | | | | | | | | | | | | | | | | | | |
Balance, March 31, 2008 (audited) | | | 1,451,382 | | | $ | 726 | | | $ | 9,339 | | | $ | (8,453 | ) | | $ | 1,612 | |
| | | | | | | | | | | | | | | | | | | | |
Exercise of Warrants | | | 109,640 | | | | 55 | | | | (55 | ) | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | |
Net loss – Year ended March 31, 2009 (audited) | | | - | | | | | | | | - | | | | (51 | ) | | | (51 | ) |
| | | | | | | | | | | | | | | | | | | | |
Balance, March 31, 2009 (audited) | | | 1,561,022 | | | $ | 781 | | | $ | 9,284 | | | $ | (8,504 | ) | | $ | 1,561 | |
| | | | | | | | | | | | | | | | | | | | |
Net Loss – Year Ended March 31, 2010 (audited) | | | - | | | | - | | | | - | | | | (73 | ) | | | (73 | ) |
| | | | | | | | | | | | | | | | | | | | |
Cash Distribution – August 2009 | | | - | | | | - | | | | (1,249 | ) | | | - | | | | (1,249 | ) |
| | | | | | | | | | | | | | | | | | | | |
Balance, March 31, 2010 (audited) | | | 1,561,022 | | | $ | 781 | | | $ | 8,035 | | | $ | (8,577 | ) | | $ | 239 | |
| | | | | | | | | | | | | | | | | | | | |
Net loss – Nine months ended December 31, 2010 (unaudited) | | | - | | | | - | | | | - | | | $ | (54 | ) | | $ | (54 | ) |
| | | | | | | | | | | | | | | | | | | | |
Balance – December 31, 2010 (unaudited) | | | 1,561,022 | | | $ | 781 | | | $ | 8,035 | | | $ | (8,631 | ) | | $ | 185 | |
|
STATEMENTS OF CASH FLOWS |
(Dollars in thousands) |
(unaudited) |
|
| | Three Months Ended June 30, | |
| | 2011 | | | 2010 | |
| | | | | | |
Cash Flows from Operating Activities: | | | | | | |
Loss from operations | | $ | (13 | ) | | $ | (15 | ) |
| | | | | | | | |
Net Loss | | | (13 | ) | | | (15 | ) |
| | | | | | | | |
Adjustments to reconcile net loss to cash used in operating activities: | | | | | | | | |
Changes in assets and liabilities: | | | | | | | | |
Accounts payable and accrued expenses | | | 1 | | | | 1 | |
| | | | | | | | |
Net cash used in operating activities | | | (12 | ) | | | (14 | ) |
| | | | | | | | |
| | | | | | | | |
Net decrease in cash and cash equivalents | | | (12 | ) | | | (14 | ) |
Cash and cash equivalents, beginning of period | | | 179 | | | | 250 | |
Cash and cash equivalents, end of period | | $ | 167 | | | $ | 236 | |
See notes to financial statements.
| |
| |
STATEMENTS OF CASH FLOWS | |
(Dollars in thousands) | |
(unaudited) | |
| |
| | Nine Months Ended December 31, | |
| | 2010 | | | 2009 | |
| | | | | | |
Cash Flows from Operating Activities: | | | | | | |
| | | | | | |
Net Loss | | $ | (54 | ) | | $ | (52 | ) |
| | | | | | | | |
Adjustments to reconcile net loss to cash used in operating activities: | | | | | | | | |
Changes in assets and liabilities: | | | | | | | | |
Accrued interest receivable | | | - | | | | 2 | |
Accounts payable and accrued expenses | | | (1 | ) | | | (6 | ) |
| | | | | | | | |
Net cash used in operating activities | | | (55 | ) | | | (56 | ) |
| | | | | | | | |
Cash Flows From Investing Activities: | | | - | | | | - | |
| | | | | | | | |
Cash Flows From Financing Activities: | | | | | | | | |
Cash Distribution – August 2009 | | | - | | | | (1,249 | ) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Net changes in cash and cash equivalents | | | (55 | ) | | | (1,305 | ) |
Cash and cash equivalents, beginning of period | | | 250 | | | | 1,572 | |
Cash and cash equivalents, end of period | | $ | 195 | | | $ | 267 | |
| | | | | | | | |
Supplemental cash flow disclosures: | | | | | | | | |
Cash payments of interest | | $ | - | | | $ | - | |
Cash payments of income taxes | | $ | - | | | $ | 5 | |
See notes to financial statements.
FCCC, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (Unaudited) (Unaudited)
December 31, 2010
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements of FCCC, Inc. (the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X, promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair representation have been included herein. Operating results are not necessarily indicative of the results which may be expected for the year ending March 31, 20112012 or other future periods. For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2010.2011.
NOTE B - RELATED PARTY TRANSACTIONS
The Company currently has one executive officer, who has a consulting arrangement with the Company. Specifically, on July 1, 2003, the Company and Mr. Bernard Zimmerman, currently the President, Chief Executive Officer and Principal Financial Officer of the Company, entered into a Consulting Agreement (the “Zimmerman Consulting Agreement”) which provided for monthly payments of $2,000 to Mr. Zimmerman or his affiliate plus reasonable and necessary out-of-pocket expenses. Upon the expiration of the Zimmerman Consulting Agreement on July 1, 2006, the Board of Directors authorized the extension of the Zimmerman Consulting Agreement, on a month-to-month basis. Management of the Company expects to use consultants, attorneys and accountants as necessary, and it is not expected that FCCC will have any full-time or other employees, except as may be the result of completing a transaction.
NOTE C – NEW PRONOUNCEMENTS AND SHARE BASED AWARDS
Recently Issued Accounting Pronouncements:
In January 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-01, Accounting for Distributions to Shareholders with Components of Stock and Cash-a consensus of the FASB Emerging Issues Task Force,(Topic 505). This Accounting Standards Update clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in EPS prospectively and is not a stock dividend for purposes of applying Topics 505 and 260 (Equity and Earning Per Share). The Company is currently evaluating the impact of ASU 2010-01 on the Company’s financial stateme nts.
In June 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-01, Topic 105 — Generally Accepted Accounting Principles — amendments based on Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. This ASU reflected the issuance of FASB Statement No. 168. This Accounting Standards Update amends the FASB Accounting Standards Codification for the issuance of FASB Statement No. 168, The FASB Accounting Standards Codification ™ and the Hierarchy of Generally Accepted Accounting Principles. This Accountin g Standards Update includes Statement 168 in its entirety, including the accounting standards update instructions contained in Appendix B of the Statement. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. The Codification is effective for interim and annual periods ending after September 15, 2009, and as of the effective date, all existing accounting standard documents will be superseded. The Codification is effective for the Company in the second quarter of 2009, and accordingly, our Quarterly Report on Form 10-Q for the quarter ending September 30, 2009 and all subsequent public filings will reference the Codification as the sole source of authoritative literature.statements.
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Earnings Per Common Share:
The Company follows FASB ASC 260 (formerly, SFAS No. 128), “Earnings Per Share”. ASC 260 simplifies the standards for computing earnings per share (EPS) and makes them comparable to international EPS standards. Basic EPS is based on the weighted average number of common shares outstanding for the period, excluding the effects of any potentially dilutive securities. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period.
Basic and diluted loss per common share was calculated using the following number of shares for the ninethree months ended December 31:June 30,:
| | 2010 | | 2009 |
| | | | |
| Weighted average number of common shares outstanding | 1,561,022 | | 1,561,022 |
| | 2011 | | | 2010 | |
| | | | | | |
Weighted average number of common shares outstanding | | | 1,561,022 | | | | 1,561,022 | |
Share Based Awards:
The company adopted “Share-Based Payment” FASB ASC 718 (formerly, FAS 123(R)), ASC 718 requires expense for all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. For the Company, this statement was effective as of April 1, 2006. The Company adopted the modified prospective method, under which compensation cost is recognized beginning with the effective date. The modified prospective method recognizes compensation cost based on the requirements of ASC 718 for all share-based payments granted after the effective date and, based on the requirements of ASC 718, for all awards granted to employees prior to the effective date that remain unvested on the effective date. The Company does not expect to record any significant expenses under ASC 718 for options currently outstanding. However, the amount of expense recorded under ASC 718 will depend upon the number of options granted in the future and their valuation.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
FORWARD-LOOKING STATEMENTS
This quarterly report and other reports issued by the Company, including reports filed with the Securities and Exchange Commission, may contain “forward-looking” statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that deal with future results, plans or performances. In addition, the Company’s management may make such statements orally, to the media, or to securities analysts, investors or others. Accordingly, forward-looking statements deal with matters that do not relate strictly to historical facts. The Company’s future results may differ materially from historical performance and forward-looking statements about the Company’s expected financial results or other plans are subject to a number of risks and uncertainties. This section and other sections of this quarterly report may include factors that could materially and adversely impact the Company’s financial condition and results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company undertakes no obligation to revise or update any forward-looking statements after the date hereof.
ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
The Company has limited operations and is actively seeking merger, reverse merger, acquisition or business combination opportunities with an operating business or other financial transaction opportunities. Until a transaction is effectuated, the Company does not expect to have significant operations. Accordingly, during such period, the Company does not expect to achieve sufficient income to offset its operating expenses, resulting in operating losses requiring the Company to use and thereby reduce its cash balance. For further information on the Company’s plan of operation and business, see Item 1, Current Business. Until the Company completes a merger, reverse merger or other financial transaction, and unless interest rates increase dramatically, the Company expects to continue to incur a loss of between $ 15,000$15,000 to $20,000$18,000 per quarter.
During the quarter ended December 31, 2010,June 30, 2011, the Company had a loss from operations of $(19,000)$(13,000). The loss is attributable to the operational and administrative expenses incurred during the quarter less minimal interest income earned. During the quarter ended December 31, 2009,June 30, 2010, the loss from operations was $(18,000)$(15,000). The loss was approximately the same in both periods.
During the nine months ended December 31, 2010 the Company had a loss from operations of ($54,000) compared to a loss in the same period of 2009 of ($47,000). The increaseddecreased loss in the current quarter is primarily due to a decrease in interest income received duelesser amounts expended with respect to lower rates on invested funds and less funds available for investment due to the cash distribution of $1,249,000 in August 2009.reverse merger activities.
Stockholder’s equity as of December 31, 2010June 30, 2011 was $185,000$155,000 as compared to $239,000$168,000 at March 31, 2010.2011. The decrease is attributable to the net loss incurred by the Company during the nine months ended December 31, 2010.quarter.
The Company had cash on hand at December 31, 2010June 30, 2011 of $195,000$167,000 as compared to $250,000$179,000 at March 31, 2010.2011. The decrease in cash on hand is primarily due to losses sustained by the Company in the current nine months ended December 31, 2010. The Company used approximately $1,249,000 of cash on hand at June 30, 2009 to pay the special cash distribution on August 7, 2009 (See “Recent Developments” – Page 1).quarter.
The Company does not have any arrangements with banks or financial institutions with respect to the availability of financing in the future.
The payment of any cash distribution is subject to the discretion of the Company’s Board of Directors. At this time the Company has no plans to pay any additional cash distributions in the foreseeable future.
SUBSEQUENT EVENTS
The Company has evaluated events that occurred subsequent to December 31, 2010,June 30, 2011, through the financial statement issue date of February 4, July 29, 2011 and determined that there were no recordable or reportable subsequent events.
PLAN OF OPERATION
As noted above, the Company has limited operations. The Company plans to continue as a public entity and continues to seek merger, acquisition and business combination opportunities with an operating business or other appropriate financial transactions. Until such an acquisition or business combination is effectuated, the Company does not expect to have significant operations. Accordingly, during such period, the Company does not expect to achieve sufficient income to offset its operating expenses, which will create operating losses requiring the Company to use and thereby reduce its cash on hand. See Analysis of Operations and Financial Condition (see page 9).
ITEM 3. CONTROLS AND PROCEDURES.
Report of Management on Internal Controls Over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal controls over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal controls over financial reporting is a process designed by, or under the supervision of, the Company’s Chief Executive Officer, who is also the Company’s Chief Financial Officer, to provide reasonable assurance to the Company’s Board of Directors regarding the reliability of financial reporting and the preparation and fair presentation of published financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Internal controls over financial reporting including those policies and procedures that (1 )(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the Company’s transactions and dispositions of the Company’s assets; (2) provide reasonable assurances that the Company’s transactions are recorded as necessary to permit preparation of the Company’s financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.
The Company’s management assessed the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2010June 30, 2011 and for the fiscal year ended March 31, 20102011 and concluded that such internal controls are effective. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Controls – Integrated Framework.
This report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal controls over financial reporting pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this report.
During the Company’s third fiscal quarter ended December 31, 2010 and during the fiscal year ended March 31, 2010, there were no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.