IIOT-OXYS, Inc. - Quarter Report: 2015 June (Form 10-Q)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

 [x] Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended June 30, 2015

-OR-

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities And Exchange Act of 1934 for the transaction period from _________ to________

Commission File Number      000-50773

Gotham Capital Holdings, Inc.

(Exact name of Registrant in its charter)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [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 (section 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 large accelerated filer, an accelerated filer, a non-accelerate filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act):

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Large accelerated filer     [  ]		Non-accelerated filer               [  ]
Accelerated filer              [  ]		Smaller reporting company     [X]

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 outstanding shares of the registrant's common stock, August 14, 2015:  Common Stock – 5,266,075

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GOTHAM CAPITAL HOLDINGS, INC.

FORM 10-Q

INDEX

PART 1 – FINANCIAL INFORMATION

Item 1.  Financial Statements		Page
Balance Sheets at June 30, 2015 (Unaudited)  and December 31, 2014		4
Statements of Operations for the three and six months ended June 30, 2015 and 2014 (Unaudited)		5
Statements of Cash Flows for the six months ended June 30, 2015 and 2014 (Unaudited)		6
Notes to Financial Statements (Unaudited)		7
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3.  Quantitative and Qualitative Disclosure About Market Risk		12
Item 4.  Controls and Procedures		12

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings		14
Item 1A. Risk Factors		14
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds		14
Item 3.  Defaults Upon Senior Securities		14
Item 4.  Mine Safety Disclosure		14
Item 5.  Other Information		14
Item 6.  Exhibits		14
SIGNATURES		15

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GOTHAM CAPITAL HOLDINGS, INC.

(F/K/A CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION)

BALANCE SHEETS

All shares issued and outstanding for all periods reflect the 1-for-2 reverse split, which was effective May 18, 2015.

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

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GOTHAM CAPITAL HOLDINGS, INC.

(F/K/A CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION)

STATEMENTS OF OPERATIONS

(UNAUDITED)

All shares issued and outstanding for all periods reflect the 1-for-2 reverse split, which was effective May 18, 2015

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

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GOTHAM CAPITAL HOLDINGS, INC.

(F/K/A CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION)

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014

(UNAUDITED)

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

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GOTHAM CAPITAL HOLDINGS, INC.

(F/K/A CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2015 AND 2014

(UNAUDITED)

1.

THE COMPANY

Gotham Capital Holdings, Inc. (F/K/A Creative Beauty Supply of New Jersey Corporation) (the “Company”) was incorporated in the State of New Jersey on October 1, 2003.  It was formed pursuant to a resolution of the board of directors of Creative Beauty Supply, Inc., (“CBS”) as a wholly-owned subsidiary of that company, a publicly traded New Jersey corporation.  On January 1, 2004, the assets and liabilities of CBS were contributed at book value to the Company, and this subsidiary was then spun-off by CBS to its stockholders. 

The Company’s current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into the Company.  In certain instances, a target company may wish to become a subsidiary of the Company or wish to contribute assets to the Company rather than merge.

No assurance can be given that the Company will be successful in identifying or negotiating with any target company.  The Company provides a means for a foreign or domestic private company to become a reporting (public) company whose securities would be qualified for trading in the United States secondary market.

The Board of Directors of the Company adopted resolutions to amend their Articles of Incorporation to increase the authorized shares to 200,000,000 (See note 3), to amend their Articles of Incorporation to change the Company’s name to Gotham Capital Holdings, Inc., and to authorize a 1-for-2 reverse split of all outstanding common shares. The corporate actions became effective as of May 18, 2015.  On April 1, 2015, the Company entered into a Securities Purchase Agreement with Gotham Capital, Inc. and certain Gotham Capital, Inc. shareholders which will result in a change of control of the Company upon execution of the agreement.  After the change of control, the Company will pursue new lines of business.

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2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statement Presentation

The December 31, 2014 balance sheet data was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles.  In the opinion of management, the accompanying unaudited financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of the Company as of June 30, 2015, its results of operations for the three and six months ended June 30, 2015 and 2014 and its cash flows for the six months ended June 30, 2015 and 2014.

The statements of operations for the three and six months ended June 30, 2015 and 2014 are not necessarily indicative of the results for the full year.

While the Company believes that the disclosures presented are adequate to make the information not misleading, these financial statements should be read in conjunction with the financial statements and accompanying notes included in the Company’s annual Report on Form 10-K for the year ended December 31, 2014.

Loss Per Share

The Company computes loss per share in accordance with FASB ASC 260, “ ” Earnings Per Share”. Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding, Diluted earnings per share reflects the potential dilution that could occur if securities or other agreements to issue common stock were exercised or converted into common stock.  Diluted earnings per share is computed based upon the weighted average number of common shares and dilutive common equivalent shares outstanding, which includes convertible debentures, stock options and warrants.  There were no dilutive common stock equivalents for all periods presented.

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments.

Recently Issued Accounting Standards

Management does not believe that any recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.

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3. STOCKHOLDERS’ EQUITY

Effective May 18, 2015, the Company increased the authorized shares to 200,000,000.  190,000,000 shares shall be designated common stock and have a par value of $0.001 per share.  10 million shares shall be designated preferred stock and have a par value of $0.001 per share.  The Company also recorded a 1-for-2 reverse split of all outstanding common shares

  4 .

SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of this filing.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These statements include those concerning the following:  Our intentions, beliefs and expectations regarding the fair value of all assets and liabilities recorded; our strategies; growth opportunities; product development and introduction relating to new and existing products; the enterprise market and related opportunities; competition and competitive advantages and disadvantages; industry standards and compatibility of our products; relationships with our employees; our facilities, operating lease and our ability to secure additional space; cash dividends; excess inventory, our expenses; interest and other income; our beliefs and expectations about our future success and results; our operating results; our belief that our cash and cash equivalents will be sufficient to satisfy our anticipated cash requirements, our expectations regarding our revenues and customers; investments and interest rates.  These statements are subject to risk and uncertainties that could cause actual results and events to differ materially.

The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q.

Critical Accounting Policies

The financial statements and accompanying footnotes included in this report has been prepared in accordance with accounting principles generally accepted in the United States with certain amounts based on management’s best estimates and judgments. To determine appropriate carrying values of assets and liabilities that are not readily available from other sources, management uses assumptions based on historical results and other factors they believe are reasonable.  Actual results could differ from those estimates.

Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2014.  There have been no material changes to our critical accounting policies as of and for the six months ended June 30, 2015.

Trends and Uncertainties

There are no material commitments for capital expenditure at this time.  There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on our limited operations. There are no known causes for any material changes from period to period in one or more line items of the Company’s financial statements.

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Liquidity and Capital Resources

At June 30, 2015, Gotham Capital Holdings, Inc. (F/K/A Creative Beauty Supply of New Jersey Corporation) (the “Company”) had a cash balance of $62,431, which represents a $25,648 decrease from the $88,079 balance at December 31, 2014.  This decrease was primarily the result of cash used to satisfy the requirements of a reporting company.  The Company’s working capital balance at June 30, 2015 was $49,215, as compared to a December 31, 2014 balance of $60,213.

For the six months ended June 30, 2015, we incurred a net loss of $10,998.  We had the following adjustments to reconcile net loss to net cash used in operating activities: we had a decrease of $10,550 due to accounts payable and a decrease of $4,100 due to accrued expenses.  As a result, we had net cash used in operating activities of $25,648 for the six months ended June 30, 2015.

For the six months ended June 30, 2014, we incurred a net loss of $11,031.  We had the following adjustments to reconcile net loss to net cash used in operating activities: we had a decrease of $4,600 due to accounts payable and a decrease of $3,770 due to accrued expenses.  As a result, we had net cash used in operating activities of $19,401 for the six months ended June 30, 2014.

For the six months ended June 30, 2015 and 2014, there were no investing or financing activities.

The Company is undergoing a merger with Gotham Capital, Inc. Under this plan of merger, the Company will be acquiring Gotham Capital, Inc. in a reverse acquisition transaction and will be the surviving entity, and the shareholders of Gotham Capital, Inc. will own a controlling interest in the surviving entity. The Company changed its name to Gotham Capital Holdings, Inc.  The Company also underwent a 1-for-2 reverse split of its common shares. Management has considered these actions to be in the best interests of the shareholders, and will improve the marketability of the Company’s common stock.  The corporate actions became effective as of May 18, 2015.  

Results of Operations for the Six Months Ended June 30, 2015 compared to the Six Months Ended June 30, 2014.

For the six months ended June 30, 2015, we did not earn any revenues. We incurred professional fees of $9,965 and miscellaneous expenses of $1,082. We earned interest income of $49. As a result we incurred a net loss of $10,998 for the six months ended June 30, 2015.

Comparatively, for the six months ended June 30, 2014, we did not earn any revenues. We incurred professional fees of $10,569 and miscellaneous expenses of $550. We earned interest income of $88. As a result, we incurred a net loss of $11,031 for the six months ended June 30, 2014.

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The Company incurred a net loss of $10,998 in the current six month period versus a net loss of $11,031 in the prior comparative period. Operating expenses were incurred primarily to enable the Company to satisfy the requirements of a reporting company.

During the current and prior comparative period, the Company did not record an income tax benefit due to the uncertainty associated with the Company’s ability to utilize the deferred tax assets.

Results of Operations for the Three Months Ended June 30, 2015 compared to the Three Months Ended June 30, 2014.

For the three months ended June 30, 2015, we did not earn any revenues. We incurred professional fees of $4,725 and miscellaneous expense of $131. We earned interest income of $18. As a result we incurred a net loss of $4,838 for the three months ended June 30, 2015.

Comparatively, for the three months ended June 30, 2014, we did not earn any revenues. We incurred professional fees of $4,856 and miscellaneous expenses of $ 0 . We earned interest income of $37. As a result, we incurred a net loss of $4,819 for the three months ended June 30, 2014.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not applicable for a smaller reporting company.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that the information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We performed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2015.  Based on the existence of the material weakness in internal control over financial reporting discussed in our Form 10-K for the year ended December 31, 2014, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were not effective as of June 30, 2015 to provide such reasonable assurances.

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We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud.  Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.  Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs.  Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any.  The design of disclosure controls and procedures is also based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

Remediation Plan for Material Weaknesses

At such time that it is economically feasible, we will aggressively recruit experienced professionals to ensure that we can maintain adequate segregation of duties and be able to ensure that all necessary disclosures are reported in our filings with the Securities and Exchange Commission.  Although we believe that this corrective step will enable management to conclude that the internal controls over our financial reporting are effective when the staff is hired and trained, we cannot assure you these steps will be sufficient.  We may be required to expend additional resources to identify, assess, and correct any additional weaknesses in internal control.

Changes in Internal Control over Financial Reporting

During the three months ended June 30, 2015, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.   Legal Proceedings  

None

Item 1A.  Risk Factors

Not applicable for smaller reporting company.

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

None

Item 3.   Defaults Upon Senior Securities

None

Item 4.  Mine Safety Disclosures

Not Applicable

Item 5.   Other Information

None

Item 6.   Exhibits

Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**   XBRL Instance Document

101.SCH**   XBRL Taxonomy Extension Schema Document

101.CAL**   XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**   XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**   XBRL Taxonomy Extension Label Linkbase Document

101.PRE**   XBRL Taxonomy Extension Presentation Linkbase Document

*  Filed herewith

**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.

 

 

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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 thereunto duly authorized.

Dated: August 14, 2015

GOTHAM CAPITAL HOLDINGS, INC.

By:     /s/Carmine Catizone

Carmine Catizone,

Chief Executive Officer

/s/Daniel Generelli

Daniel Generelli,

Chief Financial Officer

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