FCCC INC - Quarter Report: 2013 December (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 DECEMBER 31, 2013 | |
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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 _______________ | |
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 o
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 x No o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes x No o
The number of shares outstanding of the issuer’s Common Stock, as of December 31, 2013, was: 1,561,022
Transitional Small Business Format: Yes o No x
FCCC, INC.
FORM 10-Q
INDEX
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Page (s)
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| PART I. | FINANCIAL INFORMATION | ||||
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Item 1.
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Condensed Financial Statements
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Condensed Balance Sheets
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3 | ||||
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Condensed Statements of Operations
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4-5 | ||||
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Condensed Statements of Cash Flows
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6 | ||||
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Condensed Notes to The Financial Statements
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7-8 | ||||
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Item 1(b)
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Unresolved Staff Comments
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9 | |||
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Item 2.
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Management’s Discussion and Analysis or Plan of Financial Condition and Results of Operations
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9 | |||
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Item 3.
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Controls and Procedures
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10-11 | |||
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Item 4.
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Plan of Operation
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11 | |||
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PART II.
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OTHER INFORMATION
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Item 1.
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Mine Safety Disclosures
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11 | |||
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Item 2.
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Signatures
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12 | |||
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Item 3.
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Exhibit Index
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13 | |||
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EXHIBITS
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ITEM 1. CONDENSED FINANCIAL STATEMENTS
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CONDENSED BALANCE SHEETS
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(Dollars in thousands, except share data)
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December 31,
2013
(Unaudited)
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March 31,
2013
(Audited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 50 | $ | 79 | ||||
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Total current assets
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50 | 79 | ||||||
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Other assets
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1 | 1 | ||||||
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TOTAL ASSETS
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$ | 51 | $ | 80 | ||||
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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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$ | 9 | $ | 9 | ||||
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Total current liabilities
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9 | 9 | ||||||
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Commitments and contingencies
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- | - | ||||||
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TOTAL LIABILITIES
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9 | 9 | ||||||
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Stockholders’ equity:
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Common stock, no par value,
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authorized 22,000,000 shares, issued and outstanding
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1,561,022 shares at December 31, 2013 and March 31, 2013
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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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(8,774 | ) | (8,745 | ) | ||||
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Total stockholders’ equity
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42 | 71 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 51 | $ | 80 | ||||
See condensed notes to the financial statements
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| FCCC, INC. |
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CONDENSED STATEMENTS OF OPERATIONS
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(Unaudited)
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(Dollars in thousands, except share data)
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Nine Months Ended
December 31,
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2013
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2012
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Income:
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Interest income
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$ | (a | )- | $ | 1 | |||
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Total income
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- | 1 | ||||||
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Expense:
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Operating and administrative expenses
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23 | 23 | ||||||
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Legal expenses
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6 | 6 | ||||||
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Total expense
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29 | 29 | ||||||
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Loss before income taxes
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$ | (29 | ) | $ | (28 | ) | ||
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Income tax expense
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- | - | ||||||
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Net Loss
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$ | (29 | ) | $ | (28 | ) | ||
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Basic and Diluted loss per share
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$ | (0.02 | ) | $ | (0.02 | ) | ||
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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 | ||||||
(a) Less than $1,000.
See condensed notes to the financial statements
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| FCCC, INC. |
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CONDENSED STATEMENTS OF OPERATIONS
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(Unaudited)
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(Dollars in thousands, except share data)
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Three Months Ended
December 31,
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2013
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2012
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Income:
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Interest income
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$ | (a | )- | $ | (a | )- | ||
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Total income
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- | - | ||||||
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Expense:
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Operating and administrative expenses
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11 | 8 | ||||||
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Legal expenses
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2 | 2 | ||||||
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Total expense
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13 | 10 | ||||||
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Loss before income taxes
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$ | (13 | ) | $ | (10 | ) | ||
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Income tax expense
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- | - | ||||||
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Net Loss
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$ | (13 | ) | $ | (10 | ) | ||
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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 | ||||||
(a) Less than $1,000.
See condensed notes to the financial statements
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| FCCC, INC. |
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CONDENSED STATEMENTS OF CASH FLOWS
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(Dollars in thousands)
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(unaudited)
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Nine Months Ended
December 31,
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2013
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2012
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Cash Flows from Operating Activities:
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Net Loss
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$ | (29 | ) | $ | (28 | ) | ||
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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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Accounts payable and accrued expenses
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- | (1 | ) | |||||
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Net cash used in operating activities
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(29 | ) | (29 | ) | ||||
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Net decrease in cash and cash equivalents
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(29 | ) | (29 | ) | ||||
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Cash and cash equivalents, beginning of period
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79 | 117 | ||||||
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Cash and cash equivalents, end of period
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$ | 50 | $ | 88 | ||||
See condensed notes to the financial statements
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FCCC, INC.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
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, 2014 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, 2013.
NOTE B - RELATED PARTY TRANSACTIONS
Employees and Consultants
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. Effective August 1, 2011, Mr. Zimmerman reduced his monthly fee to $1,500 per month. Effective April 1, 2012, Mr. Zimmerman has offered and agreed to accept no continuing monthly consulting fees. Upon the completion of a transaction, the Board of Directors and others involved in such transaction will evaluate any fee payable to Mr. Zimmerman for his services. Upon the expiration of the Zimmerman Consulting Agreement on July 1, 2006, the Board of Directors authorized the extension of the Zimmerman Consulting Agreement, on a month-to-month basis. Management of the Company expects to use consultants, attorneys and accountants as necessary, and it is not expected that FCCC will have any full-time or other employees, except as may be the result of completing a transaction.
NOTE C - NEW PRONOUNCEMENTS AND SHARE BASED AWARDS
Recently Issued Accounting Pronouncements:
The FASB has issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.
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NOTE C - NEW PRONOUNCEMENTS AND SHARE BASED AWARDS (Continued)
Recently Issued Accounting Pronouncements (Continued):
The FASB has issued Accounting Standards Update (ASU) No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments to the FASB Accounting Standards Codification (Codification) in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Coinciding with the release of ASU No. 2011-11, the IASB has issued Disclosures - Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7). This amendment requires disclosures about the offsetting of financial assets and financial liabilities common to those in ASU No. 2011-11. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.
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 “Earnings Per Share”. 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 and nine months ended December 31, 2013 and December 31, 2012:
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2013
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2012
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Weighted average number of common shares outstanding
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1,561,022 | 1,561,022 | ||||||
NOTE D - SUBSEQUENT EVENTS
The Company has evaluated events that occurred subsequent to December 31, 2013, and determined the following:
On January 6, 2014 the Company filed a Form 8-K concerning a Change of Accountants.
On January 13, 2014 the Company filed a Form 8-K/A to correct the date of change in the Company’s Accountants.
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ITEM 1 (B). UNRESOLVED STAFF COMMENTS.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
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. 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 approximately $10,000 to $15,000 per quarter.
During the quarter ended December 31, 2013, the Company had a loss from operations of $(13,000). The loss is attributable to the operational and administrative expenses incurred during the quarter less minimal interest income earned. During the quarter ended December 31, 2012, the loss from operations was $(10,000). The small increase in the loss in the current quarter and nine months is primarily due to additional amounts expended with respect to reverse merger activities and fees paid to the Company’s professionals on all levels.
During the nine months ended December 31, 2013 the Company had a loss from operations of $(29,000) compared to a loss from operations in the nine months ended December 31, 2012 of $(28,000). In both nine months periods the Company had minimal interest income. The loss was similar in both periods ended December 31.
Stockholders’ equity as of December 31, 2013 was $42,000 as compared to $71,000 at March 31, 2013. The decrease is attributable to the net loss incurred by the Company during the nine months ended December 31, 2013.
The Company had cash on hand at December 31, 2013 of $50,000 as compared to $79,000 at March 31, 2013. The decrease in cash on hand is primarily due to losses sustained by the Company in the nine months ended December 31, 2013.
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.
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Evaluation of Disclosure Controls and Procedures
The Company’s Chief Executive Officer who is also the Chief Financial Officer, after evaluating the effectiveness of the Company’s “disclosure controls and procedures” (as defined in Sections 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of the period reported in this annual report (the “Evaluation Date”), concluded that the Company’s disclosure controls and procedures were effective and designed to ensure that material information relating to the Company is accumulated and would be made known to them by others as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Controls
The Company does not believe that there are significant deficiencies in the design or operation of its internal controls that could adversely affect its ability to record, process, summarize and report financial data. Although there were no significant changes in the Company’s internal controls or in other factors that could significantly affect those controls subsequent to the Evaluation Date, the Company’s senior management, in conjunction with its Board of Directors, continuously reviews overall company policies and improves documentation of important financial reporting and internal control matters. The Company is committed to continuously improving the state of its internal controls, corporate governance and financial reporting.
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.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
The Company’s management assessed the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2013 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 1992 Framework.
This quarterly report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal controls over financial reporting pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this report.
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ITEM 3. CONTROLS AND PROCEDURES. (Continued)
Changes in internal controls over financial reporting
During the Company’s third fiscal quarter and nine months ended December 31, 2013, there were no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 4. PLAN OF OPERATION
As noted above, the Company has limited operations. The Company plans to continue as a public entity and continues to seek merger, acquisition and business combination opportunities with an operating business or other appropriate financial transactions. Until such an acquisition or business combination is effectuated, the Company does not expect to have significant operations. Accordingly, during such period, the Company does not expect to achieve sufficient income to offset its operating expenses, which will create operating losses requiring the Company to use and thereby reduce its cash on hand. See Analysis of Operations and Financial Condition (Page 9).
PART II. OTHER INFORMATION
ITEM 1. MINE SAFETY DISCLOSURES.
Not Applicable
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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. | |||
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Dated: February 7, 2014
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| Name: | Bernard Zimmerman | ||
| Title: | President, Chief Executive Officer and | ||
| Principal Financial Officer | |||
12
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Exhibit No.
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Description
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31.1
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Certificate of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certificate of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS **
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XBRL Instance Document
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101.SCH **
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XBRL Taxonomy Extension Schema Document
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101.CAL **
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF **
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB **
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE **
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XBRL Taxonomy Extension Presentation Linkbase Document
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__________________
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
13