FBC Holding, Inc. - Quarter Report: 2009 April (Form 10-Q)
UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly
period ended April 30,
2009
o 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 000-52854
WAVE
URANIUM HOLDING
(Exact
name of registrant as specified in its charter)
|
Nevada
|
71-1026782
|
|
|
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
5348 Vegas Drive, Suite 228,
Las Vegas, NV
(Address of principal executive
offices)
(702)
939-8029
(Registrant’s telephone number,
including area code)
______________________________________________________
(Former
name, former address and former fiscal year, if changed since last
report)
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 o
|
Accelerated
filer o
|
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
Indicate by check
mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or such shorter period that the registrant was required to submit and post such
files. Yes ¨ No ¨
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 (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 x No ¨
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes ¨ No x
As of June 19, 2009
the Company had 276,794 shares of its common stock, par value $0.001,
outstanding.
WAVE
URANIUM HOLDING
FORM
10-Q
For
the Quarterly Period Ended April 30, 2009
|
Part
I
|
||
|
Item
1.
|
F-1
|
|
|
Item
2.
|
3
|
|
|
Item
3.
|
6
|
|
|
Item
4T
|
6
|
|
|
Part
II
|
||
|
Item
1.
|
7
|
|
|
Item
1A
|
7
|
|
|
Item
2.
|
7
|
|
|
Item
3.
|
7
|
|
|
Item
4.
|
7
|
|
|
Item
5.
|
7
|
|
|
Item
6.
|
7
|
|
|
8
|
2
(A
Development Stage Company)
CONSOLIDATED
BALANCE SHEETS
|
April
30, 2009
|
July
31, 2008
|
|||||||
|
ASSETS
|
||||||||
|
Current
Assets
|
||||||||
|
Cash
|
$ | - | $ | 234,189 | ||||
|
Deferred
Finance Charge
|
- | 50,000 | ||||||
|
Total Current
Assets
|
- | 284,189 | ||||||
|
Capital
Assets - Net
|
- | 1,062 | ||||||
| - | 1062 | |||||||
|
Total
Assets
|
$ | - | $ | 285,251 | ||||
|
LIABILITIES
AND STOCKHOLDERS EQUITY
|
||||||||
|
Current
Liabilities
|
||||||||
|
Accounts
Payable
|
$ | - | $ | 6,510 | ||||
|
Bank
Overdraft
|
71 | |||||||
|
Accrued
Interest
|
155,466 | 53,212 | ||||||
|
Current
Portion of Debt Discount
|
(571,044 | ) | (961,167 | ) | ||||
|
Current
Portion of Notes Payable
|
1,722,500 | 964,940 | ||||||
|
Total Current
Liabilities
|
1,306,993 | 63,495 | ||||||
|
Long Term
Liabilities
|
||||||||
|
Debt
Discount
|
(168,403 | ) | ||||||
|
Long Term
Debt
|
- | 717,560 | ||||||
|
Equity
Obligations
|
- | 1,249,500 | ||||||
|
Total Long
Term Debt
|
- | 1,798,657 | ||||||
|
Total
Liabilities
|
1,306,993 | 1,862,152 | ||||||
|
Stockholders
Equity
|
||||||||
|
Common Stock
.001 Par Value;
|
||||||||
|
150,000,000
authorized
|
||||||||
|
276,794 (2009)
and 483,733 (2008) Shares
|
||||||||
|
issued and
outstanding
|
277 | 250 | ||||||
|
Preferred
Stock .001 Par Value
|
||||||||
|
5,000,000
authorized
|
||||||||
|
0 issued and
outstanding
|
||||||||
|
Additional
paid in capital
|
3,987,290 | 2,723,049 | ||||||
|
Defitcit
Accumlated during the development stage
|
(5,294,560 | ) | (4,300,200 | ) | ||||
|
Total
Stockholders Equity
|
(1,306,993 | ) | (1,576,901 | ) | ||||
|
Total
Liabilities and Stockholders Equity
|
$ | - | $ | 285,251 | ||||
See notes
accompanying to the consolidated financial statements
F-1
WAVE
URANIUM HOLDINGS
(A
Development Stage Company)
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
May
30, 2006
|
||||||||||||||||
|
Ended
|
Ended
|
Ended
|
Ended
|
(Inception)
through
|
||||||||||||||||
|
April
30, 2009
|
April
30, 2008
|
April
30, 2009
|
April
30, 2008
|
April
30, 2009
|
||||||||||||||||
|
Revenue
|
$ | - | $ | - | $ | - | ||||||||||||||
|
Expenses
|
||||||||||||||||||||
|
General
Selling and Adminstrative
|
39,755 | 661,682 | 218,519 | 952,226 | 1,489,359 | |||||||||||||||
|
Depreciation
|
- | 1,462 | - | 1,889 | ||||||||||||||||
|
Warrant
Expense
|
- | - | - | 740,840 | 861,694 | |||||||||||||||
|
Bank
Charges
|
- | 313 | 299 | 567 | 1,257 | |||||||||||||||
|
Land Claim
Fees
|
- | 60,000 | 63,875 | 491,582 | 597,957 | |||||||||||||||
|
Non Cash
Compensation
|
855,000 | 855,000 | 855,000 | |||||||||||||||||
|
Amortization
of Deferred Finance Charges
|
- | 6,250 | 25,000 | 6,250 | 50,000 | |||||||||||||||
|
Impairment of
Goodwill
|
266,667 | |||||||||||||||||||
|
Other
Expenses
|
312,500 | 380,351 | 1,450 | |||||||||||||||||
| 39,755 | 1,895,745 | 309,155 | 3,426,816 | 4,125,273 | ||||||||||||||||
|
Gain(Loss) on
Operations
|
(39,755 | ) | (1,895,745 | ) | (309,155 | ) | (3,426,816 | ) | (4,125,273 | ) | ||||||||||
|
Other Income
(expense)
|
||||||||||||||||||||
|
Amortization
of Debt Discount
|
- | (114,776 | ) | (582,950 | ) | (114,776 | ) | (1,015,880 | ) | |||||||||||
|
Interest
Expense
|
(34,317 | ) | (15,481 | ) | (102,255 | ) | (31,963 | ) | (169,000 | ) | ||||||||||
| (34,317 | ) | (130,257 | ) | (685,205 | ) | (146,739 | ) | (1,184,880 | ) | |||||||||||
|
Net
Income (Loss) before provision for income tax
|
(74,072 | ) | (2,026,002 | ) | (994,360 | ) | (3,573,555 | ) | (5,310,153 | ) | ||||||||||
|
Provision for
income tax
|
- | - | - | |||||||||||||||||
|
Net
Income(Loss) from Continuing Operations
|
(74,072 | ) | (2,026,002 | ) | (994,360 | ) | (3,573,555 | ) | (5,310,153 | ) | ||||||||||
|
Discontinued
Operations: Gain (Loss) from discontinued operations (including
gain on disposal in 2007 of $28,553) - net of
tax
|
- | - | 15,593 | |||||||||||||||||
|
Net
Income (Loss)
|
$ | (74,072 | ) | $ | (2,026,002 | ) | $ | (994,360 | ) | $ | (3,573,555 | ) | $ | (5,294,560 | ) | |||||
|
Net
Income(Loss) per share
|
||||||||||||||||||||
|
Basic
and Fully Diluted, From:
|
||||||||||||||||||||
|
Continuing
operations
|
$ | (0.27 | ) | $ | (8.32 | ) | $ | (3.81 | ) | $ | (15.46 | ) | ||||||||
|
Discontinuted
operations
|
- | - | - | - | ||||||||||||||||
|
Combined
|
$ | (0.27 | ) | $ | (8.32 | ) | $ | (3.81 | ) | $ | (15.46 | ) | ||||||||
|
Weighted
Average Number of Common Shares
|
273,423 | 243,644 | 261,300 | 231,128 | ||||||||||||||||
See notes
accompanying to the consolidated financial statements
F-2
WAVE
URANIUM HOLDINGS
(A
Development Stage Company)
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
Nine
Months
|
Nine
Months
|
May
30, 2006
|
||||||||||
|
Ended
|
Ended
|
(Inception)
through
|
||||||||||
|
April
30, 2009
|
April
30, 2008
|
April
30, 2009
|
||||||||||
|
Cash
flow from operating Activity:
|
||||||||||||
| Operating activity from continuing operations | ||||||||||||
| Net Loss | $ | (994,360 | ) | $ | (3,573,555 | ) | $ | (5,294,560 | ) | |||
|
Less:
(Income) loss from discontinued Operations
|
- | (15,657 | ) | |||||||||
|
Net
loss from continuing operations
|
(994,360 | ) | (3,573,555 | ) | (5,310,217 | ) | ||||||
|
Adustments:
|
||||||||||||
|
Stock issued
for services
|
15,100 | 1,595,840 | 1,774,294 | |||||||||
|
Impairment of
goodwill
|
- | 266,667 | ||||||||||
|
Amortization
- debt discount
|
558,781 | 990,880 | ||||||||||
|
Depreciation
|
1,462 | 1,804 | 1,816 | |||||||||
|
Changes in
assets & liabilities from
|
||||||||||||
|
continuing
operations
|
||||||||||||
|
Deferred
Financing Fees
|
50,000 | (75,000 | ) | (50,000 | ) | |||||||
|
Deposits
|
||||||||||||
|
Prepaids
|
- | |||||||||||
|
Accounts
Payable
|
(6,510 | ) | (90 | ) | ||||||||
|
Accrued
Expenses
|
101,983 | 30,010 | 156,266 | |||||||||
|
Other
|
(262 | ) | 121,027 | (762 | ) | |||||||
|
Due Related
Parties
|
2,121 | |||||||||||
|
Cash
flow from operating activities
|
||||||||||||
|
by
continuing operations
|
(273,806 | ) | (1,899,964 | ) | (2,168,935 | ) | ||||||
|
Cash
Flow from investing activities
|
||||||||||||
|
Purchase of
fixed assets
|
(400 | ) | (3,221 | ) | (2,259 | ) | ||||||
|
Net
cash provided by (used for) from investing
activities
|
(400 | ) | (3,221 | ) | (2,259 | ) | ||||||
|
Cash
Flow from Financing activities
|
||||||||||||
|
Notes payable
- borrowings
|
40,000 | 2056567 | 1,804,091 | |||||||||
|
Notes payable
- payments
|
(8,547 | ) | ||||||||||
|
Issuance of
stock
|
17 | 323,085 | 375,650 | |||||||||
|
Net
cash provided by (used for) from financing
activities
|
40,017 | 2,379,652 | 2,171,194 | |||||||||
|
Net cash used
in continuing operations
|
(234,189 | ) | 476,467 | - | ||||||||
|
Cash
Flow from discontinued operations
|
- | |||||||||||
|
Net change in
cash
|
(234,189 | ) | 476,467 | - | ||||||||
|
Beginning
cash
|
234,189 | 3,997 | - | |||||||||
|
Ending
cash
|
$ | - | $ | 480,464 | $ | - | ||||||
|
Schedule of Non-Cash
Investing and Financing Activities
|
|
In 2007 the
Company issued 40,000,005 shares for all the shares in a private
corporation valued at $266,667.
|
|
In 2008
lendors to the Company converted $386,653 of notes payable and accrued
interest into 1,068,805 shares of common
stock.
|
|
Supplemental
Disclosures
|
||||||||||||
|
Cash Paid
For:
|
||||||||||||
|
Interest
|
$ | - | $ | - | $ | - | ||||||
|
Income
Taxes
|
$ | - | $ | - | $ | - | ||||||
See notes
accompanying to the consolidated financial statements
F-3
WAVE
URANIUM HOLDING
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
April
30, 2009
(1) Summary
of Significant Accounting Policies
Basis
of Presentation.
The accompanying
unaudited consolidated financial statements of Wave
Uranium Holding, (the "Company") have been prepared in
accordance with generally accepted accounting principles (GAAP) for interim financial
information and Item 310(b) of Regulation S-B. They do not include all of the
information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting
only
of normal recurring adjustments) considered necessary for a fair presentation have
been included.
The results of
operations for the periods presented are not necessarily indicative of the
results to be expected for the full year. For further information, refer
to the financial statements of the Company as of July 31, 2008, including notes
thereto included in the Company's Form 10-KSB.
Nature of
Operations
The overarching
objectives of Wave Uranium Holdings (“Wave”, the “Company”) are to acquire land
positions in areas of significant uranium resource potential by a systematic and
rational screening process, then explore and develop those properties to produce
uranium ore. Wave recognizes two key components to a productive exploration
program, 1) geologic models that can be tested by drilling and developed into
predictive tools, and 2) effective database management. Geologic models (of
sandstone-type deposits, for example) involve a combination of sedimentology of
the host rock, mineralogic indicators of alteration history, paleohydrologic
constraints, and much more. These models, or guiding concepts, must be grounded
in actual data and fact, requiring effective feedback from an appropriately
structured information management system if they are to be applied on a regional
basis. Sound decisions on land acquisitions, disposition of held properties, and
subsurface targeting are fundamentally dependent on the vision of the
exploration geologist and his/her ability to process essential information that
can be massive in scope and content. Wave seeks to minimize the financial burden
of land acquisitions from external parties, choosing instead to develop
exploration plays in-house.
Development
Stage Company
The Company is in
the development stage and has not yet realized any revenues from its planned
operations. The Company's business plan is to evaluate structure and complete a
merger with, or acquisition of, prospects consisting of private companies,
partnerships or sole proprietorships.
Based upon the
Company's business plan, it is a development stage enterprise. Accordingly, the
Company presents its financial statements in conformity with the accounting
principles generally accepted in the United States of America that apply in
establishing operating enterprises. As a development stage enterprise, the
Company discloses the deficit accumulated during the development stage and the
cumulative statements of operations and cash flows from inception to the current
balance sheet date.
Consolidation
The consolidated
financial statements include the accounts of the Company and its wholly owned
subsidiaries. All intercompany accounts and balances have been eliminated in
consolidation.
Cash and Cash
Equivalents
The Company
considers all highly liquid investments with an original maturity of three
months or less to be cash equivalents.
Property, Equipment and
Depreciation
Property and
equipment are stated at cost. Depreciation is calculated using the straight-line
method over the estimated useful lives of the assets of three to seven
years.
F-4
Net Income (Loss) per Common
Share
The Company
calculates net income (loss) per share as required by Statement of Financial
Accounting Standards ("SFAS") 128, "Earnings per Share." Basic earnings (loss)
per share is calculated by dividing net income (loss) by the weighted average
number of common shares outstanding for the period. Diluted earnings (loss) per
share is calculated by dividing net income (loss) by the weighted average number
of common shares and dilutive common stock equivalents outstanding. During the
periods when they would be anti-dilutive, common stock equivalents, if any, are
not considered in the computation.
Fair
Value of Financial Instruments
SFAS 107,
"Disclosures About Fair Value of Financial Instruments," requires disclosure of
fair value information about financial instruments. Fair value estimates
discussed herein are based upon certain market assumptions and pertinent
information available to management as of April 30, 2009.
The respective
carrying value of certain on-balance-sheet financial instruments approximate
their fair values. These financial instruments include cash, restricted cash,
trade accounts receivables, accounts payable, accrued expenses, notes payable
and due to investors. Fair values were assumed to approximate carrying values
for these financial instruments since they are short term in nature and their
carrying amounts approximate fair value or they are receivable or payable on
demand. The carrying value of the Company's long-term debt, notes payable and
due to investors approximates fair values of similar debt
instruments.
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 estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.
Note 2: Stock-Based
Compensation
The Company
accounts for stock based compensation in accordance with SFAS 123, "Accounting
for Stock-Based Compensation." The provisions of SFAS 123 allow companies to
either expense the estimated fair value of stock options or to continue to
follow the intrinsic value method set forth in Accounting Principles Board
Opinion 25, "Accounting for Stock Issued to Employees" ("APB 25") but disclose
the pro forma effects on net income (loss) had the fair value of the options
been expensed.
In
December 2004, the FASB issued SFAS 123 (revised 2004) “Share-Based Payment”.
This Statement requires that the cost resulting from all share-based
transactions be recorded in the financial statements. The Statement establishes
fair value as the measurement objective in accounting for share-based payment
arrangements and requires all entities to apply a fair-value-based measurement
in accounting for share-based payment transactions with employees. The Statement
also establishes fair value as the measurement objective for transactions in
which an entity acquires goods or services from non-employees in share-based
payment transactions. The Statement replaces SFAS 123 “Accounting for
Stock-Based Compensation” and supersedes APB Opinion No. 25 “Accounting for
Stock Issued to Employees”. The provisions of this Statement were effective for
the Company beginning with its fiscal year ended December 31, 2006. Stock-based
awards to non-employees are accounted for whichever is more reliably measurable
in accordance with the provisions of the FASB issued SFAS 123 (revised 2004)
“Share-Based Payment” and Emerging Issues Task Force (“EITF”) Issue No. 96-18,
Accounting for Equity Instruments That Are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods and Services.
F-5
Forward
Stock Split
On July 30th, 2007
the Company’s board of directors authorized a 15 for 1 forward stock
split.
The total
authorized shares was increased to 150,000,000 and the authorized preferred
stock was increased to 5,000,000. The financial statements were cast with the
forward stock split included.
All references to
the number of shares and per share amounts in the financial statements are
presented on a post- split basis.
Reverse
Stock Split
On
November 1, 2008 the Company and shareholders authorized a 300 to 1 reverse
stock split. The financials reflect the split.
Reclassifications
Certain items
previously reported in the prior year have been reclassified to conform to
current year presentation.
Note 3: New
Pronouncements
SFAS 155 -
"Accounting for Certain Hybrid Financial Instruments--an amendment of FASB
Statements No. 133 and 140" This Statement, issued in February 2006, amends FASB
Statements No. 133, "Accounting for Derivative Instruments and Hedging
Activities", and No. 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities". This Statement resolves issues
addressed in Statement 133 Implementation Issue No. D1, "Application of
Statement 133 to Beneficial Interests in Securitized Financial
Assets."
This
Statement:
a.
Permits fair value remeasurement for any hybrid financial instrument that
contains an embedded derivative that otherwise would require
bifurcation
b. Clarifies which
interest-only strips and principal-only strips are not subject to the
requirements of Statement 133
c. Establishes a
requirement to evaluate interests in securitized financial assets to identify
interests that are freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring
bifurcation
d. Clarifies that
concentrations of credit risk in the form of subordination are not embedded
derivatives
e. Amends Statement
140 to eliminate the prohibition on a qualifying special-purpose entity from
holding a derivative financial instrument that pertains to a beneficial interest
other than another derivative financial instrument.
This Statement is
effective for the Company for all financial instruments acquired or issued after
the beginning of our fiscal year beginning January 1, 2007.
The fair value
election provided for in paragraph 4(c) of this Statement may also be applied
upon adoption of this Statement for hybrid financial instruments that had been
bifurcated under paragraph 12 of Statement 133 prior to the adoption of this
Statement. Earlier adoption is permitted as of the beginning of our fiscal year,
provided we have not yet issued financial statements, including financial
statements for any interim period, for that fiscal year. Provisions of this
Statement may be applied to instruments that we hold at the date of adoption on
an instrument-by-instrument basis.
The Company is
currently reviewing the effects of adoption of this statement but it is not
expected to have a material impact on our financial statements.
SFAS 156 -
"Accounting for Servicing of Financial Assets--an amendment of FASB Statement
No. 140"
F-6
This Statement,
issued in March 2006, amends FASB Statement No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities", with
respect to the accounting for separately recognized servicing assets and
servicing liabilities. This Statement:
1.
Requires an entity to recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering into a
servicing contract in certain situations.
2. Requires all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value, if practicable.
3. Permits an
entity to choose either the amortization method or the fair value measurement
method for each class of separately recognized servicing assets and servicing
liabilities.
4. At its initial
adoption, permits a one-time reclassification of available-for-sale securities
to trading securities by entities with recognized servicing rights, without
calling into question the treatment of other available-for-sale securities under
Statement 115, provided that the available-for-sale securities are identified in
some manner as offsetting the entity's exposure to changes in fair value of
servicing assets or servicing liabilities that a servicer elects to subsequently
measure at fair value.
5. Requires
separate presentation of servicing assets and servicing liabilities subsequently
measured at fair value in the statement of financial position and additional
disclosures for all separately recognized servicing assets and servicing
liabilities.
Adoption of this
Statement is required as of the beginning of the first fiscal year that begins
after September 15, 2006. The adoption of this statement is not expected to have
a material impact on our financial statements.
In
September 2006, the FASB issued Statement No. 157, "Fair Value Measurements".
This Statement defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles and expands disclosure about
fair value measurement. The implementation of this guidance is not expected to
have any impact on the Company's financial statements.
In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 158, "Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
No. 87, 106, and 132(R)" ("SFAS No. 158"). SFAS No. 158 requires companies to
recognize a net liability or asset and an offsetting adjustment to accumulated
other comprehensive income to report the funded status of defined benefit
pension and other postretirement benefit plans. SFAS No. 158 requires
prospective application, recognition and disclosure requirements effective for
the Company's fiscal year ending December 31, 2007. Additionally, SFAS No. 158
requires companies to measure plan assets and obligations at their year-end
balance sheet date. This requirement is effective for the Company's fiscal year
ending December 31, 2009. The Company does not expect that it will have a
material impact on its financial statements.
SFAS 159 - ‘The
Fair Value Option for Financial Assets and Financial Liabilities—Including an
amendment of FASB Statement No. 115’
F-7
In
February 2007, the FASB issued Financial Accounting
Standard No. 159 'The Fair
Value Option for Financial Assets and Financial Liabilities—Including an
amendment of FASB Statement No. 115' or SFAS 159. This Statement permits
entities to choose to measure many financial instruments and certain other items
at fair value. Most of the provisions of this Statement apply only to entities
that elect the fair value option.
The following are
eligible items for the measurement option established by this
Statement:
1.
Recognized financial assets and financial liabilities except:
|
a.
|
An investment
in a subsidiary that the entity is required to
consolidate
|
|
b.
|
An interest
in a variable interest entity that the entity is required to
consolidate
|
|
c.
|
Employers’
and plans’ obligations (or assets representing net overfunded positions)
for pension benefits,
other postretirement benefits (including health care and life insurance
benefits), post employment benefits, employee stock option and stock
purchase plans, and other forms of deferred compensation
arrangements.
|
|
d.
|
Financial
assets and financial liabilities recognized under leases as defined in
FASB Statement No. 13, 'Accounting for
Leases.'
|
|
e.
|
Deposit
liabilities, withdrawable on demand, of banks, savings and loan
associations, credit unions, and other similar depository
institutions
|
|
f.
|
Financial
instruments that are, in whole or in part, classified by the issuer as a
component of shareholder’s equity (including “temporary equity”). An
example is a convertible debt security with a noncontingent beneficial
conversion feature.
|
2. Firm commitments
that would otherwise not be recognized at inception and that involve only
financial instruments
3. Nonfinancial
insurance contracts and warranties that the insurer can settle by paying a third
party to provide those goods or services
4. Host financial
instruments resulting from separation of an embedded nonfinancial derivative
instrument from a nonfinancial hybrid instrument.
F-8
The fair value
option:
1.
May be applied instrument by instrument, with a few exceptions, such as
investments otherwise accounted for by the equity method
2. Is irrevocable
(unless a new election date occurs)
3.
Is applied only to entire instruments and not to portions of
instruments.
The Statement is
effective as of the beginning of an entity’s first fiscal year that begins after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FASB Statement No. 157, 'Fair Value Measurements'. We
have not yet determined what effect, if any, adoption of this Statement will
have on our financial position or results of operations.
In
September 2006, the United States Securities and Exchange Commission ("SEC") SAB
No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements." This SAB provides guidance
on the consideration of the effects of prior year misstatements in quantifying
current year misstatements for the purpose of a materiality assessment. SAB 108
establishes an approach that requires quantification of financial statement
errors based on the effects of each of the company's balance sheet and statement
of operations financial statements and the related financial statement
disclosures. The SAB permits existing public companies to record the cumulative
effect of initially applying this approach in the first year ending after
November 15, 2006 by recording the necessary correcting adjustments to the
carrying values of assets and liabilities as of the beginning of that year with
the offsetting adjustment recorded to the opening balance of retained earnings.
Additionally, the use of the cumulative effect transition method requires
detailed disclosure of the nature and amount of each individual error being
corrected through the cumulative adjustment and how and when it arose. The
Company is currently evaluating the impact, if any, that SAB 108 may have on the
Company's results of operations or financial position.
In July 2006, the
FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income
Taxes-an interpretation of FASB Statement No. 109." This Interpretation
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. This Interpretation also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. The Interpretation is effective for fiscal
years beginning after December 15, 2006 and the Company is currently evaluating
the impact, if any, that FASB No. 48 may have on the Company's results of
operations or financial position.
F-9
EITF 00-19-2,
"Accounting for Registration Payment Arrangements".
In
December 2006, the FASB issued Staff Position FSP EITF 00-19-2, "Accounting for
Registration Payment Arrangements". This statement is effective for existing
registration payment arrangements as of January 1, 2007, with earlier
application permitted in previously-unissued financial statements. As discussed
in Note 9 and as permitted by the FSP, we adopted the provisions of this FSP in
our fourth quarter of 2006, resulting in reclassification of certain of our
outstanding warrants from derivative instrument liabilities to
equity.
(4) Basis
of Reporting
The Company's
financial statements are presented on a going concern basis, which contemplates the
realization of assets and satisfaction of liabilities in the normal course of
business.
The Company has
experienced a significant loss from operations as a result of its investment
necessary to achieve its operating plan, which is long-range in nature. For the
quarter ended April 30, 2009, the Company incurred a net loss of $
74,062.
The Company's
ability to continue as a going concern is contingent upon its ability to attain
profitable operations and secure financing. In addition, the Company's ability
to continue as a going concern must be considered in light of the problems,
expenses and complications frequently encountered by entrance into established markets
and the competitive environment in which the Company operates.
The Company is
pursuing equity financing for its operations. Failure to secure such financing or
to raise additional capital or borrow additional funds may result in the
Company depleting its available funds and not being able pay its obligations.
The financial
statements do not include any adjustments to reflect the possible future effects on
the recoverability and classification of assets or the amounts and classification
of liabilities that may result from the possible inability of the Company to
continue as a going concern.
(5) Notes
Payable
During the year
ended July 31, 2008 the company converted a total of 374,082 of its notes
payable in to common stock. The Company converted the notes at $0.35,
as such the Company issued 1,068,000 shares of its common stock. To
date, January 31 ,2008 the Company has $120,000 total notes payable. If the
Company obtains equity financing the notes become due.
F-10
(6) Long
Term Debt
On
March 20, 2008, Wave Uranium Holding (the “Company”) entered into a securities
purchase agreement (the “Agreement”) with accredited investors (the “Investors”)
pursuant to which the Investors purchased an aggregate principal amount of
$1,562,500 of 8% Original Issue Discount Senior Secured Convertible Debentures
for an aggregate purchase price of $1,250,000 (the “Debentures”). The Debentures
bear interest at 8% and mature twenty-four months from the date of issuance. The
Debentures will be convertible at the option of the holder at any time into
shares of common stock, at an initial conversion price equal to $0.25 (“Initial
Conversion Price”).
In
connection with the Agreement, each Investor received a warrant to purchase such
number of shares of common stock equal to their subscription amount divided by
the Initial Conversion Price (“Warrants”). Each Warrant is exercisable for a
period of five years from the date of issuance at an initial exercise price of
$0.30. The investors may exercise the Warrants on a cashless basis if the shares
of common stock underlying the Warrants are not then registered pursuant to an
effective registration statement. In the event the Investors exercise the
Warrants on a cashless basis, then we will not receive any
proceeds.
The conversion
price of the Debentures and the exercise price of the Warrants are subject to
full ratchet and anti-dilution adjustment for subsequent lower price issuances
by the Company, as well as customary adjustments provisions for stock splits,
stock dividends, recapitalizations and the like.
The full principal
amount of the Debentures is due upon default under the terms of Debentures.
Beginning on the seven (7) month anniversary of the closing of the Debentures
and continuing on the same day of each successive month thereafter, the Company
must prepay 1/18th of the
aggregate face amount of the Debentures, plus all accrued interest thereon,
either in cash or in common stock, at the option of the Company. If the
Debenture is prepaid in shares of common stock, the conversion price of such
shares shall be equal to the lesser of (i) the conversion price then in effect
and (ii) 80% of the average of the three (3) closing bid prices for the 20
consecutive trading days ending on the trading day that is immediately prior to
the applicable redemption date. Notwithstanding the foregoing, the Company’s
right to prepay the Debentures in shares of common stock on each prepayment date
is subject to, among other things, the following conditions: (i) that a
registration statement must be effective on such prepayment date and available
for use by the Investors (ii) the shares to be issued are registered with the
Securities and Exchange Commission and (iii) the aggregate number of shares to
be issued under any monthly redemption amount is less than 20% of the total
dollar trading volume of the Company’s common stock for the 20 trading days
prior to the applicable monthly redemption date.
At any time after
the effectiveness of the registration statement described below, the Company
may, upon written notice, redeem the Debentures in cash at 115% of the then
outstanding principal amount of the Debentures provided, among other things,
that (i) the volume weighted average price (“VWAP”) for any 20 consecutive
trading days exceeds $0.50, (ii) a registration statement must be effective on
such redemption date and available for use by the Investors and (iii) the
Company has satisfied all conditions under the transaction
documents.
Each of the
Investors have contractually agreed to restrict their ability to exercise the
Warrants and convert the Debentures such that the number of shares of the
Company common stock held by each of them and their affiliates after such
conversion or exercise does not exceed 4.99% of the Company’s then issued and
outstanding shares of common stock.
F-11
The Company is
obligated to file a registration statement registering the resale of shares of
(i) the Common Stock issuable upon conversion of the Debentures, (ii) the Common
Stock issuable upon exercise of the Warrants, and (iii) the shares of common
stock issuable as payment of interest on the Debenture. If the registration
statement is not filed within 45 days from the final closing, or declared
effective within 105 days thereafter (120 days if the registration statement
receives a review by the SEC), the Company is obligated to pay the investors
certain fees in the amount of 2% of the total purchase price of the Debentures,
per month, and the obligations may be deemed to be in default.
Additionally the
company has shown the current portion of the debt in current liabilities, also
the company has discounted the note under the interest method and will amortize
the debt discount over the life of the loan. During the quarter ended
October 31, 2008 the company amortized $315, 957 of the debt
discount.
On
March 20th the
Company received a bridge note of $40,000. The note is payable June
17, 2009 and carries a 10% per annum interest rate. In Conjunction
with the note the maker agreed to convert all warrants in the prior financing to
16,668 shares of common stock.
(7) Stockholders'
Equity
As
of July 31, 2008, the Company issued 4,003, 805 shares of common stock for
consulting services and conversions of the notes payable (see notes
payable). On September 28, 2007 the Company received
75,000,000 shares of common stock from a shareholder. The board of
director’s of the Company met and subsequently cancelled the
shares. As of July 31, 2008 there are 75,037,810 shares of common
stock issued and outstanding. During the quarter ended October 31,
2008 the Company issued 3,000,000 shares to a consultant. As of April
30, 2009 there are 274,767 shares outstanding (reverse stock split
reflected).
(8) Earnings
Per Share
The Company
calculates net income (loss) per share as required by Statement of Financial
Accounting Standards (SFAS) 128, "Earnings per Share." Basic earnings
(loss)
per share is calculated by dividing net income (loss) by the weighted
average number of
common shares outstanding for the period. Diluted earnings (loss) per share is
calculated by dividing net income (loss) by the weighted average number of
common shares and dilutive common stock equivalents outstanding. During
periods when they would be anti-dilutive common stock
equivalents, if
any, are not considered in the computation.
F-12
Forward
Looking Statements
This Management's
Discussion and Analysis of Financial Condition and Results of Operations of Wave
Uranium Holding (the “Company”, “we”, “us” or “our”) includes a number of
forward-looking statements that reflect Management's current views with respect
to future events and financial performance. You can identify these statements by
forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,”
“estimate” and “continue,” or similar words. Those statements include statements
regarding the intent, belief or current expectations of the Company and members
of its management team as well as the assumptions on which such statements are
based. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risk and
uncertainties, and that actual results may differ materially from those
contemplated by such forward-looking statements.
Readers are urged
to carefully review and consider the various disclosures made by us in this
report and in our other reports filed with the Securities and Exchange
Commission. Important factors currently known to Management could cause actual
results to differ materially from those in forward-looking statements. We
undertake no obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events or changes
in the future operating results over time. We believe that its assumptions are
based upon reasonable data derived from and known about our business and
operations and the business and operations of the Company. No assurances are
made that actual results of operations or the results of our future activities
will not differ materially from its assumptions. Factors that could cause
differences include, but are not limited to, expected market demand for the
Company’s services, fluctuations in pricing for materials, and
competition.
Introduction
We
were originally organized under the name Iron Link Ltd. on May 31, 2006 to test
and develop IPTV based ethnic media services. We raised $48,192 in a registered
public offering from the sale of 100,400 shares of common stock, but expended
these funds without being able to attain revenues. In June 2007 we lacked the
cash to further develop our business and had negative stockholders’ equity.
Management agreed to sell its 250,000 shares of common stock to Norman Meier on
June 18, 2007, and the IPTV assets were disposed of. Concurrently with the sale
of shares, and immediately prior to the disposal of the IPTV assets, we issued
133,333 shares of common stock to Norman Meier to acquire Wave Uranium, a Nevada
corporation (“Wave Sub”). On June 22, 2007 we amended our Articles of
Incorporation to change our name to Wave Uranium Holding. On July 13, 2007 the
Articles of Incorporation were further amended to increase the number of
authorized shares of common stock from 75 million to 145 million and to
authorize the issuance of 5 million shares of preferred stock. On July 31, 2007
our Board approved resolutions to increase our authorized common stock to 150
million and we effected a 15 for 1 forward split of our common
stock. On September 26, 2007, Mr. Meier cancelled the 250,000 shares
he had acquired from former management, resulting in 233,734 shares outstanding.
On November 20, 2008, we effected a 300-to-1 reverse split of our common
stock.
Since June 2007 we
have been developing our business plan and have acquired numerous uranium claims
in Utah and Arizona and State mineral leases in Utah.
At
the time of the reorganization and restructuring, Wave Sub had never engaged in
business and had no business at that time, but intended to enter the uranium
exploration and development business.
As of the date of
this report, due to a lack of working capital, we intend to sell our leasehold
interests and pursue a business combination through the acquisition of, or
merger with, another entity. There is no assurance the Company will succeed in
carrying out such plans.
3
Results
of Operations for the three and nine months ended April 31, 2009 and
2008
Lack
of Revenue
Since our inception
on May 30, 2006 to April 30, 2009, we had not yet earned any revenues. As of
April 30, 2009, we have an accumulated deficit is $5,294,560. Our auditor's
report, dated October 25, 2008, included in our July 31, 2008 year-end financial
statements contains an additional explanatory paragraph which identifies issues
that raise substantial doubt about our ability to continue as a going concern.
Our financial statements do not include any adjustment that might result from
the outcome of this uncertainty.
Expenses
Our total operating
expenses for the three and nine months ended April 30, 2009 were $39,755 and
$309,155, respectively, compared to $1,895,745 and $3,426,816 and for the three
and nine months ended April 30, 2008, respectively. The Company reduced its
operating expenses due to a lack of working capital.
As a result of the
foregoing we incurred a net operating loss of $39,755 and $309,155 for the three
and nine months ended April 30, 2009, respectively, compared to a net operating
loss of $1,895,745 and $3,426,816 for the three and nine months ended April 30,
2008, respectively.
Net
Losses
For the three and
nine months ended April 30, 2009 we incurred a net loss of $74,072 and $994,360,
respectively, compared to a net loss of $2,026,002 and $3,573,555 for the three
and nine months ended April 30, 2009, respectively. The decrease in net loss was
primarily attributable to the Company reducing its operating expenses due to a
lack of working capital.
Plan
of Operations
As of the date of
this report, due to a lack of working capital, we intend to sell our leasehold
interests and pursue a business combination through the acquisition of, or
merger with, another entity. There is no assurance the company will succeed in
carrying out such plans.
Liquidity
and Capital Resources
As
of April 30, 2009 we had a cash balance of $0 and a working capital deficit of
$1,306,993. As of April 30, 2009 our total assets were $0 and our total
liabilities were $1,306,993.
On March 19, 2009,
the Company issued and sold promissory notes in the aggregate principal amount
of $40,000 to accredited investors. The notes have a maturity date of June 17,
2009 and are convertible into shares of common stock of the Company at a
conversion price of $0.10 per share. The Company used the proceeds to repay
certain obligations while it pursues a sale of its leasehold interests and a
business combination transaction.
4
Off-Balance
Sheet Arrangements
We
have no significant 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
stockholders.
Inflation
The effect of
inflation on our revenue and operating results was not significant.
Product
Research and Development
We
do not anticipate spending any material amounts in connection with product
research and development activities during the next twelve months.
Critical
Accounting Policies
Our financial
statements are impacted by the accounting policies used and the estimates and
assumptions made by management during their preparation. A complete summary of
these policies is included in the notes to our consolidated financial
statements. We have identified below the accounting policies that are of
particular importance in the presentation of our financial position, results of
operations and cash flows and which require the application of significant
judgment by management.
Net
Income (Loss) per Common Share
We
calculate net income (loss) per share as required by Statement of Financial
Accounting Standards ("SFAS") 128, "Earnings per Share." Basic earnings (loss)
per share is calculated by dividing net income (loss) by the weighted average
number of common shares outstanding for the period. Diluted earnings (loss) per
share is calculated by dividing net income (loss) by the weighted average number
of common shares and dilutive common stock equivalents outstanding. During the
periods when they would be anti-dilutive, common stock equivalents, if any, are
not considered in the computation.
5
Cash
and Cash Equivalents
We
consider all highly liquid investments with an original maturity of three months
or less to be cash equivalents.
Property,
Equipment and Depreciation
Our property and
equipment are stated at cost. Depreciation is calculated using the straight-line
method over the estimated useful lives of the assets of three to seven
years.
N/A
As
required by Rule 13a-15 under the Exchange Act, we carried out an evaluation of
the effectiveness of the design and operation of our disclosure controls and
procedures as of April 30, 2009. This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer. Upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures are
effective in timely alerting management to material information relating to us
required to be included in our periodic SEC filings.
Changes
in internal controls
During our fiscal
quarter ended April 30, 2009, there were no changes in our internal control over
financial reporting that have materially affected, or are reasonably likely to
affect, our internal control over financial reporting.
6
PART
II – OTHER INFORMATION
We
are not currently party to any legal proceedings.
Not
applicable.
None.
Interest and
amortization payments on our 8% Original Issue Discount Senior Secured
Convertible Debentures (“Debentures”), issued in March 2008 in the aggregate
face amount of $1,562,500, are due and payable monthly commencing on October 1,
2008. No payment on the Debentures has been made to date. Approximately $310,000
in interest and amortization is due and unpaid on the Debentures as of the date
of the filing of this report.
None.
None.
Exhibits
|
4.1
|
Form of Note
(filed as exhibit to 8-K filed on March 24, 2009 and incorporated herein
by reference).
|
|
31.1
|
|
|
32.1
|
7
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
WAVE
URANIUM HOLDING
|
|
|
Date: June
22, 2009
|
By: /s/
Christopher J. LeClerc
Christopher
J. LeClerc
Chief
Executive Officer, Chief Financial Officer and Director
(Principal
Executive Officer, Principal Financial Officer and Principal Accounting
Officer)
|
8