|
(A Development Stage Company) |
| | | | | | | | |
Condensed Balance Sheets |
Report of Independent Registered Public Accounting Firm | | | | | | |
| | March 31, | | | December 31, | |
| | 2009 | | | 2008 | |
| | (Unaudited) | | | | |
Assets | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | $ | 7,408 | | | $ | 7,508 | |
Total assets | | $ | 7,408 | | | $ | 7,508 | |
| | | | | | | | |
Liabilities and stockholders' equity (deficit) | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable and accrued expenses | | $ | 9,413 | | | $ | 6,108 | |
Total liabilities | | | 9,413 | | | | 6,108 | |
| | | | | | | | |
Stockholders' equity (deficit) | | | | | | | | |
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; | | | | | | | | |
no shares issued and outstanding | | | - | | | | - | |
Common stock, $0.0001 par value; 100,000,000 shares authorized; | | | | | | | | |
5,000,000 shares issued and outstanding | | | 500 | | | | 500 | |
Additional paid-in capital | | | 49,500 | | | | 49,500 | |
Deficit accumulated during the development stage | | | (52,005 | ) | | | (48,600 | ) |
Total stockholders' equity (deficit) | | | (2,005 | ) | | | 1,400 | |
Total liabilities and stockholders' equity (deficit) | | $ | 7,408 | | | $ | 7,508 | |
The Board of Directors
Zeta Acquisition Corp. I
(A Development Stage Company)
We have reviewed the accompanying condensed balance sheet of Zeta Acquisition Corp. I (a development stage company) as of September 30, 2008 and the related condensed statements of operations for the three-month and nine-month periods ended September 30, 2008 and the condensed statements of cash flows for the three-month and nine-month periods then ended. These condensed financial statements are the responsibility of the Company's management.
We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards of the Public Company Accounting Oversight Board (United States), the balance sheet of Zeta Acquisition Corp. I (a development stage company) as of December 31, 2007, and the related statements of operations, stockholder's equity and cash flows for the period from November 16, 2007 (inception) to December 31, 2007 (not presented herein); and in our report dated January 24, 2008, we expressed an unqualified opinion on those financial statements.
/s/ LWBJ, LLP
West Des Moines, Iowa
November 4, 2008
ZETA ACQUISITION CORP. I
(A Development Stage Company)
Condensed Balance Sheets
ZETA ACQUISITION CORP. I |
(A Development Stage Company) |
| | | | | | | | | | | |
Condensed Statements of Operations |
(Unaudited) |
| | September 30, | | December 31, | |
| | 2008 | | 2007 | |
Assets | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 9,284 | | $ | 39,268 | |
Prepaid expenses | | | 3,000 | | | - | |
Total assets | | $ | 12,284 | | $ | 39,268 | |
| | | | | | | |
Liabilities and stockholders' equity | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable and accrued expenses | | $ | 1,776 | | $ | 4,250 | |
Total liabilities | | | 1,776 | | | 4,250 | |
| | | | | | | |
Stockholders' equity | | | | | | | |
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; | | | | | | | |
no shares issued and outstanding | | | - | | | - | |
Common stock, $0.0001 par value; 100,000,000 shares authorized; | | | | | | | |
5,000,000 shares issued and outstanding | | | 500 | | | 500 | |
Additional paid-in capital | | | 49,500 | | | 49,500 | |
Deficit accumulated during the development stage | | | (39,492 | ) | | (14,982 | ) |
Total stockholders' equity | | | 10,508 | | | 35,018 | |
Total liabilities and stockholders' equity | | $ | 12,284 | | $ | 39,268 | |
| | | | | | | Cumulative | |
| | | | | | | Period From | |
| | | | | November 16, 2007 | |
| Three | | Three | | (Inception) | |
| Months Ended | | Months Ended | | Through | |
| March 31, 2009 | | March 31, 2008 | | March 31, 2009 | |
Operating expenses: | | | | | | | | | |
Formation costs | | $ | - | | | $ | 5,050 | | | $ | 15,648 | |
General and administrative | | | 3,405 | | | | 4,029 | | | | 36,357 | |
Net loss | | $ | (3,405 | ) | | $ | (9,079 | ) | | $ | (52,005 | ) |
| | | | | | | | | | | | |
Net loss per basic and diluted common share | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.01 | ) |
| | | | | | | | | | | | |
Weighted-average number of common shares outstanding | | | 5,000,000 | | | | 5,000,000 | | | | 4,720,559 | |
See independent accountants' review report and accompanying notes. |
ZETA ACQUISITION CORP. I
(A Development Stage Company)ZETA ACQUISITION CORP. I |
(A Development Stage Company) |
| | | | | | | | | | | |
Condensed Statements of Cash Flows |
(Unaudited) |
Condensed Statements of Operations
(Unaudited)
| | | | | | Cumulative | |
| | | | | | Period From | |
| | Three | | Nine | | November 16, 2007 | |
| | Months Ended | | Months Ended | | (Inception) Through | |
| | September 30, 2008 | | September 30, 2008 | | September 30, 2008 | |
Operating expenses: | | | | | | | | | | |
Formation costs | | $ | - | | $ | 5,050 | | $ | 15,648 | |
General and administrative | | | 4,188 | | | 19,460 | | | 23,844 | |
Net loss | | $ | (4,188 | ) | $ | (24,510 | ) | $ | (39,492 | ) |
| | | | | | | | | | |
Net loss per basic and diluted common share | | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) |
| | | | | | | | | | |
Weighted-average number of common shares outstanding | | | 5,000,000 | | | 5,000,000 | | | 4,561,129 | |
| | | | | | | | Cumulative | |
| | | | | | | | Period From | |
| | | | | | | | November 16, 2007 | |
| | Three | | | Three | | | (Inception) | |
| | Months Ended | | | Months Ended | | | Through | |
| | March 31, 2009 | | | March 31, 2008 | | | March 31, 2009 | |
Operating activities | | | | | | | | | |
Net loss | | $ | (3,405 | ) | | $ | (9,079 | ) | | $ | (52,005 | ) |
Adjustments to reconcile net loss to net cash | | | | | | | | | | | | |
used in operating activities: | | | | | | | | | | | | |
Increase (decrease) in accrued expenses | | | 3,305 | | | | (2,250 | ) | | | 9,413 | |
Net cash used in operating activities | | | (100 | ) | | | (11,329 | ) | | | (42,592 | ) |
| | | | | | | | | | | | |
Financing activities | | | | | | | | | | | | |
Proceeds from note payable, stockholder | | | - | | | | - | | | | 10,000 | |
Payments on note payable, stockholder | | | - | | | | - | | | | (10,000 | ) |
Proceeds from issuance of common stock | | | - | | | | - | | | | 50,000 | |
Net cash provided by financing activities | | | - | | | | - | | | | 50,000 | |
Net increase (decrease) in cash and cash equivalents | | | (100 | ) | | | (11,329 | ) | | | 7,408 | |
| | | | | | | | | | | | |
Cash and cash equivalents at beginning of period | | | 7,508 | | | | 39,268 | | | | - | |
Cash and cash equivalents at end of period | | $ | 7,408 | | | $ | 27,939 | | | $ | 7,408 | |
See independent accountants' review report and accompanying notes. |
ZETA ACQUISITION CORP. I
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
| | | | | | Cumulative | |
| | | | | | Period From | |
| | Three | | Nine | | November 16, 2007 | |
| | Months Ended | | Months Ended | | (Inception) Through | |
| | September 30, 2008 | | September 30, 2008 | | September 30, 2008 | |
Operating activities | | | | | | | | | | |
Net loss | | $ | (4,188 | ) | $ | (24,510 | ) | $ | (39,492 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | |
Decrease (increase) in prepaid expenses | | | 1,500 | | | (3,000 | ) | | (3,000 | ) |
Increase (decrease) in accounts payable and accrued expenses | | | (224 | ) | | (2,474 | ) | | 1,776 | |
Net cash used in operating activities | | | (2,912 | ) | | (29,984 | ) | | (40,716 | ) |
| | | | | | | | | | |
Financing activities | | | | | | | | | | |
Proceeds from note payable, stockholder | | | - | | | - | | | 10,000 | |
Payments on note payable, stockholder | | | - | | | - | | | (10,000 | ) |
Proceeds from issuance of common stock | | | - | | | - | | | 50,000 | |
Net cash provided by financing activities | | | - | | | - | | | 50,000 | |
Net increase (decrease) in cash and cash equivalents | | | (2,912 | ) | | (29,984 | ) | | 9,284 | |
| | | | | | | | | | |
Cash and cash equivalents at beginning of period | | | 12,196 | | | 39,268 | | | - | |
Cash and cash equivalents at end of period | | $ | 9,284 | | $ | 9,284 | | $ | 9,284 | |
See independent accountants' review report and accompanying notes.
ZETA ACQUISITION CORP. I
(A Development Stage Company)
Notes to Condensed Financial Statements
(Unaudited)
September 30, 2008March 31, 2009
1.Nature of Operations and Significant Accounting Policies
Nature of Operations
Zeta Acquisition Corp. I (the "Company") was incorporated under the laws of the State of Delaware on November 16, 2007. The Company is a new enterprise in the development stage as defined by Statement of Financial Accounting Standards ("SFAS") No. 7, Accounting and Reporting by Development Stage Enterprise. The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company's principal business objective for the next twelve (12) months and beyond will be to achieve long-term growth potential through a combination with a business. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
Liquidity
Since its inception, the Company has generated no revenues and has incurred a net loss of $39,492.$52,005. Since inception, the Company has been dependent upon the receipt of capital investment or other financing to fund its continuing activities. The Company has not identified any business combination and therefore, cannot ascertain with any degree of certainty the capital requirements for any particular transaction. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. The accompanying financial statements have been presented on the basis of the continuation of the Company as a going concern and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain 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 revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three (3) months or less to be cash equivalents.
ZETA ACQUISITION CORP. I
(A Development Stage Company)
Notes to Condensed Financial Statements (continued)
(Unaudited)
1.Nature of Operations and Significant Accounting Policies (continued)
Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes,, which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.
In June 2006, the Financial Accounting Standards Board ("FASB") issued interpretation No. 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements in accordance with SFAS No. 109. FIN 48 prescribed that a company should use a more likely-than-not recognition threshold based on the technical merits of the tax position taken. Tax positions that meet the more likely-than-not threshold should be measured in order to determine the tax benefit to be recognized in the financial statements. FIN 48 was effective for the fiscal year beginning January 1, 2007. The Company has reviewed FIN 48 and believes it has no uncertainties with regard to its tax positions. Should uncertainties arise, the Company shall adopt a tax position that is more likely-than-not that the tax position will be sustained upon examination.
Fair Value of Financial Instruments
Pursuant to SFAS No. 107, Disclosures About Fair Value of Financial Instruments, the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of September 30, 2008.March 31, 2009. The Company considers the carrying value of cash and cash equivalents to approximate fair value due to its short maturity.
Net Loss Per Share
Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. The Company currently has no dilutive securities and as such, basic and diluted loss per share are the same for all periods presented.
Interim Financial Statements
The unaudited interim financial information included in this report reflects normal recurring adjustments that management believes are necessary for a fair statement of the results of operations, financial position, and cash flows for the periods presented. This interim information should be read in conjunction with the financial statements and accompanying notes contained in the Company'sCompany’s Form 10-KSB10-K filed February 1, 2008.March 31, 2009.
ZETA ACQUISITION CORP. I
(A Development Stage Company)
Notes to Condensed Financial Statements (continued)
(Unaudited)
1. Nature of Operations and Significant Accounting Policies (continued)
Interim Financial Statements (continued)
The results of operations for the three months and nine months ended September 30, 2008March 31, 2009 are not necessarily indicative of the results to be expected for other interim periods or the full year.
Recently Issued Accounting Pronouncements
Management does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company'sCompany’s results of operations, financial position or cash flow.
ZETA ACQUISITION CORP. I
(A Development Stage Company)
Notes to Condensed Financial Statements (continued)
(Unaudited)
2.Note Payable, Stockholder
The Company issued an unsecured promissory note to a stockholder and officer of the Company in the amount of $10,000. The note was non-interest bearing and was repaid from the proceeds of the sale of common stock.
The Company is authorized to issue 10,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors.
The Company is authorized to issue 100,000,000 shares of common stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. During December 2007, the Company issued 5,000,000 shares of its common stock pursuant to a private placement for $50,000.
The Company has approximately $5,900$7,800 in gross deferred tax assets at September 30, 2008March 31, 2009 resulting from capitalized formation costs. A valuation allowance has been recorded to fully offset these deferred tax assets as the future realization of the related income tax benefit is uncertain.
The Company utilizes the office space and equipment of an officer and director at no cost on a month-to-month basis. Management estimates such amounts to be di minimis.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward Looking Statement Notice
Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) in regard to the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Zeta Acquisition Corp. I (“we”, “us”, “our” or the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.
Description of Business
The Company was incorporated in the State of Delaware on November 16, 2007 and maintains its principal executive office at 4737 North Ocean Drive,666 Walnut Street, Suite 207, Lauderdale by the Sea, FL 33308.2116, Des Moines, Iowa 50309. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. The Company filed a registration statement on Form 10-SB with the U.S. Securities and Exchange Commission (the “SEC”) on February 1, 2008, and since its effectiveness, the Company has focused its efforts to identify a possible business combination.
The Company, based on proposed business activities, is a “blank check” company. The SEC defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange Act 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. The Company is also a “shell company,” defined in Rule 12b-2 under the Exchange Act as a company with no or nominal assets (other than cash) and no or nominal operations. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.
The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with an operating business. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The Company currently does not engage in any business activities that provide cash flow. During the next twelve months we anticipate incurring costs related to:
(i)filing Exchange Act reports, and
(ii)investigating, analyzing and consummating an acquisition.
We believe we will be able to meet these costs through use of funds in our treasury, through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.
The Company may consider acquiring a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
Since our Registration Statement on Form 10-SB went effective, our management has had contact and discussions with representatives of other entities regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
The Company anticipates that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
Liquidity and Capital Resources
As of September 30, 2008,March 31, 2009, the Company had assets equal to $12,284,$7,408, comprised of cash and cash equivalents, and prepaid expenses.equivalents. This compares with assets of $39,268$7,508, comprised of cash and cash equivalents as of December 31, 2007.2008. The Company’s current liabilities as of September 30, 2008March 31, 2009 totaled $1,776,$9,413, comprised accounts payable and accrued expenses. This compares with liabilities of $4,250,$6,108, comprised of accounts payable and accrued expenses, as of December 31, 2007.2008. The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.
The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the ninethree months ended September 30,March 31, 2009 and 2008 and for the Cumulative period from November 16, 2007(Inception)2007 (Inception) to September 30, 2008:March 31, 2009:
| | Three Months Ended September 30, 2008 | | Nine Months Ended September 30, 2008 | | For the Cumulative Period from November 16, 2007 (Inception) to September 30, 2008 | | | Three Months Ended March 31, 2009 | | | Three Months Ended March 31, 2008 | | | For the Cumulative Period from November 16, 2007 (Inception) to March 31, 2009 | |
Net Cash (Used in) Operating Activities | | $ | (2,912 | ) | $ | (29,984 | ) | $ | (40,716 | ) | | $ | (100 | ) | | $ | (11,329 | ) | | $ | (42,592 | ) |
Net Cash (Used in) Investing Activities | | $ | - | | $ | - | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
Net Cash Provided by Financing Activities | | $ | - | | $ | - | | $ | 50,000 | | | $ | - | | | $ | - | | | $ | 50,000 | |
Net Increase (decrease) in Cash and Cash Equivalents | | $ | (2,912 | ) | $ | (29,984 | ) | $ | 9,284 | | | $ | (100 | ) | | $ | (11,329 | ) | | $ | 7,408 | |
The Company has nominal assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.
The Company has not conducted any active operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company from November 16, 2007 (Inception) to September 30, 2008.March 31, 2009. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management's assertion that these circumstances may hinder the Company's ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
(a) Exhibits required by Item 601 of Regulation S-K.