EVOLUTIONARY GENOMICS, INC. - Quarter Report: 2015 September (Form 10-Q)

Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 000-54129

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FONA, INC.

(Exact name of small business issuer as specified in its charter)


Nevada		41-1683548
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1026 Anaconda Drive, Castle Rock, CO 80108

(Address of principal executive offices including zip code)

(303) 900-8666

(Issuer's telephone number)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ 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 ¨

(Do not check if smaller reporting company)

Smaller reporting company þ

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No ¨

As of September 30, 2015, the Registrant had 7,894,111 shares of common stock, $.001 par value.

FONA, INC.

INDEX


	Page Number

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	1

Balance Sheets as of September 30, 2015 (unaudited) and December 31, 2014	2

Statements of Operations, Three and Nine Months ended September 30, 2015 and 2014 (unaudited)	3

Statements of Cash Flows, Nine Months ended September 30, 2015 and 2014 (unaudited)	4

Notes to Financial Statements	5

Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations	7

Item 3. Quantitative and Qualitative Disclosures about Market Risk	8

Item 4. Controls and Procedures	8

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	9

Item 1A. Risk Factors	9

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	9

Item 3. Defaults Upon Senior Securities	9

Item 4. Mine Safety Disclosures.	9

Item 5. Other Information	9

Item 6. Exhibits	9

PART I. FINANCIAL STATEMENTS

ITEM 1.

FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by Fona, Inc., without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position of the Company as of September 30, 2015 and 2014 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2014 audited financial statements. The results of operations for these interim periods are not necessarily indicative of the results for the entire year.

FONA, INC.

BALANCE SHEETS


	September 30,			December 31,
	2015			2014
	(Unaudited)			(See note 1)
ASSETS

Current Assets:
Cash	$	—		$	—
Prepaid Expenses		5,000			—
Total Current Assets		5,000			—
TOTAL ASSETS	$	5,000		$	—

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current Liabilities:

Accounts payable		—			—
Accounts payable, related party		45,947			13,672
Total Current Liabilities		45,947			13,672

TOTAL LIABILITIES		45,947			13,672

Commitments and contingencies
(Notes 1, 2, 4 and 5)

Stockholders' (Deficit)
Preferred Stock, $.001 par value 20,000,000 shares authorized; No shares issued and outstanding		—			—
Common stock, $.001 par value 780,000,000 shares authorized, 7,894,111 issued and outstanding		7,894			7,894
Additional paid-in capital		1,312,323			1,312,323
Accumulated (Deficit)		(1,361,164	)		(1,333,889	)

TOTAL STOCKHOLDERS' EQUITY OR (DEFICIT)		(40,947	)		(13,672	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY OR (DEFICIT)	$	5,000		$	—

The accompanying notes are an integral part of the financial statements.

FONA, INC.

STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014

Revenue	$	—		$	—		$	—		$	—

Expenses:
Accounting and audit fees		2,935			4,689			12,545			9,889
Attorney fees		—			500			—			2,114
Transfer agent fees		1,075			402			1,525			1,317
Filing Fees		5,802			3,581			8,205			5,192
General corporate fees		—			—			—			750
Exchange fees		2,500			—			5,000			—
Other		—			10			—			20
Total Expenses		12,312			9,182			27,275			19,282

Net Operating (Loss)		(12,312	)		(9,182	)		(27,275	)		(19,282	)

Other Expenses:
Interest Expense		—			—			—			2,636
Total Other Expenses		—			—			—			2,636

Net Other (Expense)		—			—			—			(2,636	)

Net (Loss)	$	(12,312	)	$	(9,182	)	$	(27,275	)	$	(21,918	)

Per Share	$	Nil		$	Nil		$	Nil		$	Nil

Weighted Average Shares Outstanding		7,894,111			7,894,111			7,894,111			7,894,111

The accompanying notes are an integral part of the financial statements.

FONA, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended September 30,
	2015			2014

Cash Flows from Operating Activities:
Net Income (Loss)	$	(27,275	)	$	(21,918	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non cash interest		—			2,636
(Decrease) in accounts payable and accrued expenses		—			(1,650	)
(Increase) Decrease in prepaid expenses		(5,000	)		250
Net Cash (Used in) Operating Activities		(32,275	)		(20,682	)

Cash Flows from Investing Activities		—			—

Cash Flows from Financing Activities:
Advance from related party		32,275			20,061
Net Cash Provided by Financing Activities		32,275			20,061

Increase (decrease) in Cash		—			(621	)

Cash, Beginning of Period		—			641

Cash, End of Period	$	—		$	20

Interest Paid	$	—		$	—

Income Taxes Paid	$	—		$	—

Supplemental Disclosure of Non-Cash Transactions:
Conversion of debt to paid in capital	$	—			88,002

The accompanying notes are an integral part of the financial statements.

FONA, INC.

NOTES TO FINANCIAL STATEMENTS

September, 30 2015 (Unaudited)

(1) Unaudited Financial Statements

The balance sheet as of September 30, 2015, the statements of operations for the three months and nine months ended September 30, 2015 and 2014 and the statements of cash flows for the nine months ended September 30, 2015 and 2014 have been prepared by Fona, Inc. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures, normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted as allowed by such rules and regulations, and the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial position at September 30, 2015 and for all periods presented, have been made.

It is suggested that these statements be read in conjunction with the December 31, 2014 audited financial statements and the accompanying notes included in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission.

(2) Basis of Presentation

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern. However, the Company has no active business operations and has negative working capital and stockholders’ deficits, which raise substantial doubt about its ability to continue as a going concern.

In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financial requirements, raise additional capital, and the success of its future operations. The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company has previously financed its operations primarily through cash advances from related parties. A related party advanced the Company $32,275 during the nine months ended September 30, 2015 and the balance due to that related party was $45,947 as of September 30, 2015.

Management has opted to resume the filing of Securities and Exchange Commission (SEC) reporting documentation and then to seek a business combination. Management believes that this plan provides an opportunity for the Company to continue as a going concern.

(3) Common Stock

Pursuant to the Articles of Incorporation as amended, the Company is authorized to issue 780,000,000 common shares with $.001 par value. As of September 30, 2015, there were 7,894,111 shares of common stock issued and outstanding.

(4) Related Party Transactions

For the nine months ended September 30, 2015, Evolutionary Genomics, Inc., the majority shareholder of the Company as of September 30, 2015, advanced $32,275 in payment of expenses on behalf of the Company.

The Company uses the offices of its President for its mailing address and minimal office facility needs for no consideration. No provision for these costs has been provided since it has been determined that they are immaterial.

FONA, INC.

NOTES TO FINANCIAL STATEMENTS

September 30, 2015 (Unaudited)

(5) Amended and Restated Agreement and Plan of Merger

On June 6, 2014, Evolutionary Genomics, EG I, Fona, Fona Merger Sub, Inc., and Fona Merger Sub, LLC entered into a merger agreement as amended by the Amended and Restated Agreement and Plan of Merger dated March 2, 2015, pursuant to which, subject to certain conditions, Fona Merger Sub, Inc. will merge with Evolutionary Genomics and Fona Merger Sub, LLC will merge with EG I, with each Evolutionary Genomics and EG I surviving as wholly-owned subsidiaries of Fona. Pursuant to the terms of the merger agreement, at the effective time of the Mergers, the Company shall cause to be paid or issued to stockholders of record of Evolutionary Genomics as of the effective time of the Mergers, 308,821,675 newly issued shares of Fona’s common stock and 47,323,188 shares of newly issued Fona common stock to the members of EG I. The closing of the Mergers shall occur on or before December 31, 2015, unless earlier terminated. Evolutionary Genomics and EG I may at any time mutually agree to change the method of effecting the Mergers, including entering into an appropriate amendment to the merger agreement.

The merger agreement contains customary representations and warranties of Evolutionary Genomics, EG I, Fona, and Fona’s subsidiaries. The merger agreement also contains customary covenants and agreements, including, without limitation, covenants relating to the conduct of Fona’s business between the date of signing of the merger agreement and closing date. Notwithstanding the limitations in the merger agreement, each of Evolutionary Genomics, EG I and Fona retain the right to engage in discussions or negotiations regarding alternative acquisition proposals to the extent necessary to fulfill the fiduciary duties of their respective boards of directors to their stockholders, subject to certain requirements. The Mergers are intended to be a transaction or transactions described in Section 351 of the Internal Revenue Code (the “Code”).

On September 11, 2015, the Company’s S-4 registration statement was declared effective. At its annual meeting of stockholders on September 30, 2015, the Company’s stockholders approved a one-for-60.8826484 reverse stock split effective for shareholders of record as of October 12, 2015.

(6) Subsequent Events

The Company has evaluated events subsequent to September 30, 2015 and through the date the financial statements were available to be issued, to assess the need for potential recognition or disclosure in this report. No events were noted that require recognition or disclosure in the financial statements.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Caution Regarding Forward-Looking Information

Certain statements contained in this quarterly filing, including, without limitation, statements containing the words "believes", "anticipates", "expects", “intend”, “estimate”, “plan” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the Merger Agreement, our business operations following consummation of the Mergers, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include changes in local, regional, national or global political, economic, business, competitive, market (supply and demand) and regulatory conditions relating to our expected business operations after consummation of the Mergers. Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

The Company generated no revenues during the period ended September 30, 2015, and management does not anticipate any revenues until following the conclusion of a merger or acquisition, if any, as contemplated by the Company's business plan.

The Company has limited capital. The Company anticipates operational costs will be limited until such time as significant evaluation work is undertaken regarding prospective mergers or acquisitions. It is the belief of management that sufficient working capital necessary to support and preserve the integrity of the corporate entity will be available. However, there is no legal obligation for management to provide additional future funding. The Company has not identified any alternative sources for capital; consequently, there is substantial doubt about the Company’s ability to continue as a going concern.

At September 30, 2015, the Company had no material commitments for capital expenditures.

The completion of the Mergers are subject to the satisfaction or waiver of certain closing conditions, including, without limitation, (i) the approval and adoption by the EG stockholders and EG I members of the merger agreement, (ii) the issuance of the Merger consideration in connection with the consummation of the Mergers, (iii) the effectiveness of a joint proxy statement/prospectus included in Fona’s registration statement on Form S-4, (iv) holders of either securities in Evolutionary Genomics and EG I shall not be entitled to dissenters’ or appraisal rights, (v) absence of certain orders or regulations prohibiting the consummation of the Mergers, (vi) the effectiveness of a one-for-60.8826484 reverse split of the Common Stock (no fractional shares will be issued or cash in lieu of shares; fractional shares will be rounded up or down to the nearest whole number), and (vii) the approval or consent of any governmental authorities and third parties with respect to the transactions contemplated by the merger agreement. On June 6, 2014, Evolutionary Genomics, Inc. (“EG”), EG I, LLC (“EG I”) and Fona, Inc. (“Fona”), Fona Merger Sub, Inc. (“Sub”) and Fona Merger Sub, LLC (“Sub LLC”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to certain conditions, Sub will merge with EG and Sub LLC will merge with EG I, with each EG and EG I surviving as wholly-owned subsidiaries of Fona (the “Mergers”).

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required by smaller reporting companies.

ITEM 4.

CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of the Company’s management, including the principal executive officer and principal financial officer, as of the end of the period covered by this report, the Company conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act. The Company’s disclosure controls and procedures are designed to provide reasonable assurance that the information required to be included in the Company’s reports to the Commission is recorded, processed, summarized and reported within the time periods specified in Commission rules and forms and to provide reasonable assurance that such information 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. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the period covered by this report, the Company’s disclosure controls and procedures are not effective at these reasonable assurance levels for the reasons stated below.

Our internal control system is designed to provide reasonable cost-effective assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. There is no assurance that our disclosure controls or our internal controls over financial reporting can prevent all errors. An internal control system, no matter how well designed and operated, has inherent limitations, including the possibility of human error. Because of the inherent limitations in a cost-effective control system, misstatements due to error may occur and not be detected. We monitor our disclosure controls and internal controls and make modifications as we believe appropriate given our financial resources and limited level of activities. Our intent in this regard is that our disclosure controls and our internal controls will improve as systems change and conditions warrant.

(b) Changes in internal controls.

Our Certifying Officers have indicated that there were no changes in our internal controls over financial reporting or other factors during the nine months ending September 30, 2015, that could significantly affect such controls subsequent to the date of his evaluation, and there were no such control actions with regard to significant deficiencies and material weaknesses.

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None.

ITEM 1A.

RISK FACTORS

Not required by smaller reporting companies.

ITEM 2.

UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

None during the nine month period covered by this report.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS


31.1		Rule 13a-14(a)/15d-14(a) Certification

31.2		Rule 13a-14(a)/15d-14(a) Certification

32.1		Section 1350 Certification

32.2		Section 1350 Certification

101		XBRL Interactive Data File**

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** Attached as Exhibit 101 to this report are the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows, and (iv) related notes to these financial statements.

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.


	FONA, INC.


BY:	/s/ Steve B Warnecke
	Steve B Warnecke
	Chief Executive Officer and Chief Financial Officer
	October 6, 2015