FCCC INC - Quarter Report: 2010 June (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
________________
FORM
10-Q
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(Mark
One)
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[X]
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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FOR
THE QUARTERLY PERIOD ENDED JUNE 30, 2010
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OR
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[
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the transition period from _______________ to
_______________
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Commission
File number: 811-0969
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FCCC,
INC.
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(Exact name of small business
issuer as specified in its charter)
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Connecticut
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06-0759497
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(State or other
jurisdiction
of incorporation or
organization)
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(I.R.S. Employer Identification
No.)
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200
Connecticut Avenue, Norwalk, Connecticut 06854
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(Address of principal executive
offices)
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(203)
855-7700
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(Issuer’s telephone
number)
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n/a
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(Former name, former address
and former fiscal year, if changed since last
report)
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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 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 (ss.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
[ ] No [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.
Yes
[X] No [ ]
The
number of shares outstanding of the issuer’s Common Stock, as of July 31, 2010,
was: 1,561,022
Transitional
Small Business Format: Yes [ ] No [X]
FCCC,
INC.
FORM
10-Q
INDEX
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Page
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ITEM
1.
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RECENT
DEVELOPMENTS AND FINANCIAL STATEMENTS
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1
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Balance
Sheets
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2
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Statements
of Operations
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3
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Statements
of Changes in Stockholders’ Equity
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4
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Statements
of Cash Flows
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5
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Notes
to Condensed Financial Statements
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6-7
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ITEM
2.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
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8-9
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ITEM
3.
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CONTROLS
AND PROCEDURES
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9
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SIGNATURES
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10
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EXHIBIT
INDEX
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11
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EXHIBITS
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ii
ITEM
1. RECENT DEVELOPMENTS AND FINANCIAL STATEMENTS.
The Board
of Directors of “the Company” declared a Special Cash Distribution on July 10,
2009, to all stockholders of record as of July 24, 2009, of $0.80 per share in
cash, of the Company’s outstanding Common Stock. The distribution was
effectuated on or about August 7, 2009 (the “Distribution Date”). The
amount of the total distribution was approximately $1,249,000.
After the
payment of this special distribution, FCCC, Inc. had cash funds on September 30,
2009 of approximately $284,000 and will continue to seek opportunities,
including, without limitation, a merger, reverse merger, acquisition or other
financial transaction with an operating business. The
cash funds of the company at fiscal year end March 31, 2010 were $250,000 and at
June 30, 2010 were $236,000.
Lawrence
Yurdin and Martin Cohen, members of the Board of Directors of the Company,
tendered their resignations as directors by letters dated June 30, 2009 and July
1, 2009, respectively. The letters were held in escrow and the
resignations became effective on the Distribution Date (August 7, 2009) and they
are no longer associated with the Company, other than as
shareholders.
1
FCCC, INC.
BALANCE
SHEETS
(Dollars in thousands,
except share data)
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June
30,
2010
(Unaudited)
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March
31,
2010
(Audited)
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ASSETS
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Current
assets:
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Cash
and cash equivalents
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$ | 236 | $ | 250 | ||||
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Total
current assets
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236 | 250 | ||||||
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Other
assets
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1 | 1 | ||||||
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TOTAL
ASSETS
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$ | 237 | $ | 251 | ||||
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LIABILITIES
AND STOCKHOLDERS’ EQUITY
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Current
liabilities:
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Accounts
payable and other accrued expenses
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$ | 13 | $ | 12 | ||||
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Total
current liabilities
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13 | 12 | ||||||
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Commitments
and contingencies
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- | - | ||||||
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TOTAL
LIABILITIES
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$ | 13 | $ | 12 | ||||
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Stockholders’
equity:
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Common
stock, no par value, stated value $.50 per share,
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authorized
22,000,000 shares, issued and outstanding
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1,561,022
shares at June 30, 2010 and March 31, 2010
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781 | 781 | ||||||
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Additional
paid-in capital
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8,035 | 8,035 | ||||||
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Accumulated
deficit
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(8,592 | ) | (8,577 | ) | ||||
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Total
stockholders’ equity
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224 | 239 | ||||||
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TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 237 | $ | 251 | ||||
See notes to financial
statements.
2
FCCC,
INC.
STATEMENTS
OF OPERATIONS
(Unaudited)
(Dollars in thousands,
except share data)
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Three
Months Ended June 30,
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2010
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2009
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Income:
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Interest
income
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$ | 1 | $ | 5 | ||||
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Total
income
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1 | 5 | ||||||
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Expense:
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Operating
and administrative expenses
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13 | 13 | ||||||
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Legal
expenses
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3 | 3 | ||||||
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Total
expense
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16 | 16 | ||||||
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Loss
before income taxes
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(15 | ) | (11 | ) | ||||
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Income
tax expense
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- | - | ||||||
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Net
Loss
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$ | (15 | ) | $ | (11 | ) | ||
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Basic
and Diluted loss per share
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$ | (0.01 | ) | $ | (0.01 | ) | ||
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Weighted
average common shares outstanding:
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Basic
and Diluted
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1,561,022 | 1,561,022 | ||||||
See notes to financial
statements.
3
FCCC,
INC.
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY
(Dollars in thousands,
except share data)
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Common
Stock
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Paid-in
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Accumulated
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Total
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Shares
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Amount
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Capital
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Deficit
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Balance,
March 31, 2007 (audited)
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1,423,382 | $ | 712 | $ | 9,330 | $ | (8,441 | ) | $ | 1,601 | ||||||||||
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Net
loss - Year ended
March
31, 2008 (audited)
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- | - | - | (12 | ) | (12 | ) | |||||||||||||
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Exercise
of Stock Options –
September
2007
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28,000 | 14 | 9 | - | 23 | |||||||||||||||
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Balance, March
31, 2008 (audited)
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1,451,382 | $ | 726 | $ | 9,339 | $ | (8,453 | ) | $ | 1,612 | ||||||||||
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Exercise
of Warrants
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109,640 | 55 | (55 | ) | - | - | ||||||||||||||
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Net
loss – Year ended
March
31, 2009 (audited)
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- | - | - | (51 | ) | (51 | ) | |||||||||||||
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Balance,
March 31, 2009 (audited)
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1,561,022 | $ | 781 | $ | 9,284 | $ | (8,504 | ) | $ | 1,561 | ||||||||||
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Net
Loss – Year Ended
March
31, 2010 (audited)
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- | - | - | (73 | ) | (73 | ) | |||||||||||||
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Cash
Distribution – August 2009
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- | - | (1,249 | ) | - | (1,249 | ) | |||||||||||||
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Balance,
March 31, 2010 (audited)
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1,561,022 | $ | 781 | $ | 8,035 | $ | (8,577 | ) | $ | 239 | ||||||||||
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Net
loss – Three months ended
June
30, 2010 (unaudited)
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- | - | - | $ | (15 | ) | $ | (15 | ) | |||||||||||
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Balance
– June 30, 2010
(unaudited)
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1,561,022 | $ | 781 | $ | 8,035 | $ | (8,592 | ) | $ | 224 | ||||||||||
See notes to financial
statements.
4
FCCC, INC
STATEMENTS
OF CASH FLOWS
(Dollars in
thousands)
(unaudited)
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Three
Months Ended June 30,
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2010
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2009
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Cash
Flows from Operating Activities:
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Loss
from operations
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$ | (15 | ) | $ | (11 | ) | ||
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Net
Loss
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(15 | ) | (11 | ) | ||||
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Adjustments
to reconcile net loss to cash used in operating
activities:
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Changes
in assets and liabilities:
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Accrued
interest receivable
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- | 2 | ||||||
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Accounts
payable and accrued expenses
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1 | (5 | ) | |||||
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Net
cash used in operating activities
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(14 | ) | (14 | ) | ||||
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Cash
Flows From Investing Activities:
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- | - | ||||||
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Cash
Flows From Financing Activities:
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- | - | ||||||
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Net
decrease in cash and cash equivalents
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(14 | ) | (14 | ) | ||||
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Cash
and cash equivalents, beginning of period
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250 | 1,572 | ||||||
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Cash
and cash equivalents, end of period
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$ | 236 | $ | 1,558 | ||||
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Supplemental
cash flow disclosures:
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Cash
payments of interest
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$ | - | $ | - | ||||
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Cash
payments of income taxes
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$ | - | $ | - | ||||
See notes to financial
statements.
5
FCCC,
INC.
NOTE
A - BASIS OF PRESENTATION
The
accompanying unaudited condensed financial statements of FCCC, Inc. (the
“Company”), have been prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) for interim
financial information and with the instructions to Form 10-Q and Article 10-01
of Regulation S-X, promulgated by the Securities and Exchange
Commission. Accordingly, they do not include all of the information
and notes required by GAAP for complete financial statements.
In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair representation have been included herein.
Operating results are not necessarily indicative of the results which may be
expected for the year ending March 31, 2011 or other future periods. For further
information, refer to the financial statements and notes thereto included in the
Company’s Annual Report on Form 10-K for the fiscal year ended March 31,
2010.
NOTE
B - RELATED PARTY TRANSACTIONS
The
Company currently has one executive officer, who has a consulting arrangement
with the Company. Specifically, on July 1, 2003, the Company and Mr.
Bernard Zimmerman, currently the President, Chief Executive Officer and
Principal Financial Officer of the Company, entered into a Consulting Agreement
(the “Zimmerman Consulting Agreement”) which provided for monthly payments of
$2,000 to Mr. Zimmerman or his affiliate plus reasonable and necessary
out-of-pocket expenses. Upon the expiration of the Zimmerman
Consulting Agreement on July 1, 2006, the Board of Directors authorized the
extension of the Zimmerman Consulting Agreement, on a month-to-month
basis. Management of the Company expects to use consultants,
attorneys and accountants as necessary, and it is not expected that FCCC will
have any full-time or other employees, except as may be the result of completing
a transaction.
NOTE
C – EXERCISE OF WARRANTS
In April
2008 and May 2008, respectively, all outstanding Warrants (200,000) were
exercised through the cashless exercise provisions of the Warrants resulting in
53,500 and 56,140 common shares being issued to Bernard Zimmerman, President and
Martin Cohen, a former Director of the Company, respectively, or their
affiliates.
NOTE
D – NEW PRONOUNCEMENTS AND SHARE BASED AWARDS
Recently Issued Accounting
Pronouncements:
In
January 2010, the FASB issued Accounting Standards Update (“ASU”)
No. 2010-01, Accounting
for Distributions to Shareholders with Components of Stock and Cash-a consensus
of the FASB Emerging Issues Task Force,(Topic 505). This Accounting
Standards Update clarifies that the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a potential
limitation on the total amount of cash that all shareholders can elect to
receive in the aggregate is considered a share issuance that is reflected in EPS
prospectively and is not a stock dividend for purposes of applying Topics 505
and 260 (Equity and Earning Per Share). The Company is currently evaluating the
impact of ASU 2010-01 on the Company’s financial statements.
6
In
June 2009, the FASB issued Accounting Standards Update (“ASU”)
No. 2009-01, Topic 105 —
Generally Accepted Accounting Principles — amendments based on Statement of
Financial Accounting Standards No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles.
This ASU reflected the issuance of FASB Statement No. 168. This
Accounting Standards Update amends the FASB Accounting Standards Codification
for the issuance of FASB Statement No. 168, The FASB Accounting Standards
Codification ™ and the
Hierarchy of Generally Accepted Accounting Principles. This Accounting
Standards Update includes Statement 168 in its entirety, including the
accounting standards update instructions contained in Appendix B of the
Statement. The Codification does not change current U.S. GAAP, but is intended
to simplify user access to all authoritative U.S. GAAP by providing all the
authoritative literature related to a particular topic in one place. The
Codification is effective for interim and annual periods ending after
September 15, 2009, and as of the effective date, all existing accounting
standard documents will be superseded. The Codification is effective for the
Company in the second quarter of 2009, and accordingly, our Quarterly Report on
Form 10-Q for the quarter ending September 30, 2009 and all subsequent
public filings will reference the Codification as the sole source of
authoritative literature.
The
Company has implemented all new accounting pronouncements that are in effect and
that may impact its financial statements and does not believe that there are any
other new accounting pronouncements that have been issued that might have a
material impact on its financial position or results of operations.
Earnings Per Common
Share:
The
Company follows FASB ASC 260 (formerly, SFAS No. 128), “Earnings Per Share”. ASC
260 simplifies the standards for computing earnings per share (EPS)
and makes them comparable to international EPS standards. Basic EPS is based on
the weighted average number of common shares outstanding for the period,
excluding the effects of any potentially dilutive securities. Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted. Net income (loss)
per share is calculated by dividing net income (loss) by the weighted average
number of common shares outstanding during the period.
Basic and
diluted loss per common share was calculated using the following number of
shares for the three months ended June 30,:
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2010
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2009
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Weighted
average number of common shares outstanding
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1,561,022
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1,561,022
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Share Based
Awards:
The
company adopted “Share-Based
Payment” FASB ASC 718 (formerly, FAS 123(R)), ASC 718 requires expense
for all share-based payments to employees, including grants of employee stock
options, to be recognized in the income statement based on their fair
values. Pro forma disclosure is no longer an
alternative. For the Company, this statement was effective as of
April 1, 2006. The Company adopted the modified prospective method,
under which compensation cost is recognized beginning with the effective
date. The modified prospective method recognizes compensation cost
based on the requirements of ASC 718 for all share-based payments granted after
the effective date and, based on the requirements of ASC 718, for all awards
granted to employees prior to the effective date that remain unvested on the
effective date. The Company does not expect to record any significant
expenses under ASC 718 for options currently outstanding. However,
the amount of expense recorded under ASC 718 will depend upon the number of
options granted in the future and their valuation.
7
FORWARD-LOOKING
STATEMENTS
This
quarterly report and other reports issued by the Company, including reports
filed with the Securities and Exchange Commission, may contain “forward-looking”
statements, within the meaning of the Private Securities Litigation Reform Act
of 1995, that deal with future results, plans or performances. In addition, the
Company’s management may make such statements orally, to the media, or to
securities analysts, investors or others. Accordingly, forward-looking
statements deal with matters that do not relate strictly to historical facts.
The Company’s future results may differ materially from historical performance
and forward-looking statements about the Company’s expected financial results or
other plans are subject to a number of risks and uncertainties. This section and
other sections of this quarterly report may include factors that could
materially and adversely impact the Company’s financial condition and results of
operations. Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of actual results.
The Company undertakes no obligation to revise or update any forward-looking
statements after the date hereof.
ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
The
Company has limited operations and is actively seeking merger, reverse merger,
acquisition or business combination opportunities with an operating business or
other financial transaction opportunities. Until a transaction is effectuated,
the Company does not expect to have significant operations. Accordingly, during
such period, the Company does not expect to achieve sufficient income to offset
its operating expenses, resulting in operating losses requiring the Company to
use and thereby reduce its cash balance. For further information on
the Company’s plan of operation and business, see Item 1, Current
Business. Until the Company completes a merger, reverse merger or
other financial transaction, and unless interest rates increase dramatically,
the Company expects to continue to incur a loss of between $15,000 to $20,000
per quarter.
During
the quarter ended June 30, 2010, the Company had a loss from operations of
$(15,000). The loss is attributable to the operational and
administrative expenses incurred during the quarter less interest income earned.
During the quarter ended June 30, 2009, the loss from operations was
$(11,000). The increased loss in the current quarter is primarily due
to a decrease in interest income received due to lower rates on invested funds
and less funds available for investment due to the cash distribution of
$1,249,000 in August 2009.
Stockholder’s
equity as of June 30, 2010 was $224,000 as compared to $239,000 at March 31,
2010. The decrease is attributable to the net loss incurred by the Company
during the quarter.
The
Company had cash on hand at June 30, 2010 of $236,000 as compared to $250,000 at
March 31, 2010. The decrease in cash on hand is due to losses
sustained by the Company in the current quarter. The Company used
approximately $1,249,000 of cash on hand at June 30, 2009 to pay the special
cash distribution on August 7, 2009 (See “Recent Developments” – Pages 1 and
2).
The
Company does not have any arrangements with banks or financial institutions with
respect to the availability of financing in the future.
The
payment of any cash distribution is subject to the discretion of the Company’s
Board of Directors. At this time the Company has no plans to pay any
additional cash distributions in the foreseeable future.
SUBSEQUENT
EVENTS
The
Company has evaluated events that occurred subsequent to June 30, 2010, through
the financial statement issue date of
August 6,
2010 and determined that there were no recordable or reportable subsequent
events.
8
PLAN
OF OPERATION
As noted
above, the Company has limited operations. The Company plans to continue as a
public entity and continues to seek merger, acquisition and business combination
opportunities with an operating business or other appropriate financial
transactions. Until such an acquisition or business combination is effectuated,
the Company does not expect to have significant operations. Accordingly, during
such period, the Company does not expect to achieve sufficient income to offset
its operating expenses, which will create operating losses requiring the Company
to use and thereby reduce its cash on hand.
Report of
Management on Internal Controls Over Financial Reporting
The
Company’s management is responsible for establishing and maintaining adequate
internal controls over financial reporting, as defined in Rule 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934. Our internal
controls over financial reporting is a process designed by, or under the
supervision of, the Company’s Chief Executive Officer, who is also the Company’s
Chief Financial Officer, to provide reasonable assurance to the Company’s Board
of Directors regarding the reliability of financial reporting and the
preparation and fair presentation of published financial statements in
accordance with accounting principles generally accepted in the United States of
America (“GAAP”). Internal controls over financial reporting
including those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the Company’s
transactions and dispositions of the Company’s assets; (2) provide reasonable
assurances that the Company’s transactions are recorded as necessary to permit
preparation of the Company’s financial statements in accordance with GAAP, and
that receipts and expenditures are being made only in accordance with
authorizations of the Company’s management and directors; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that could have a
material effect on the Company’s financial statements.
The
Company’s management assessed the effectiveness of the Company’s internal
controls over financial reporting as of June 30, 2010 and for the fiscal year
ended March 31, 2010 and concluded that such internal controls are
effective. In making this assessment, management used the criteria
set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway
Commission in Internal Controls – Integrated Framework.
9
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned duly authorized.
| FCCC, INC. | ||
| By: |  |
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| Name: Bernard Zimmerman | ||
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Title:
President, Chief Executive Officer and
Principal
Financial Officer
|
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Dated: August
6, 2010
10
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Exhibit
No.
|
Description
|
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Certificate
of the Principal Executive and Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|
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Certificate
of the Principal Executive and Principal Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
|
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11