Kallo Inc. - Quarter Report: 2009 September (Form 10-Q)

pci10q093009.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009

OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-53183

PRINTING COMPONENTS INC.

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

2795 Barton Street, East

Unit 5

Hamilton, Ontario

Canada L8E 2J8

(Address of principal executive offices, including zip code.)

(905) 578-3232

(Registrant’s telephone number, including area code)

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 last 90 days. YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

	Large Accelerated Filer	[ ]		Accelerated Filer	[ ]
	Non-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 [ ]

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 16,721,502 as of November 5, 2009.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PRINTING COMPONENTS INC
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS

					September 30, 2009		December 31, 2008
					(unaudited)
		ASSETS
Current assets:
Cash and cash equivalents				$	131	$	629
	Total Current Assets				131		629
Fixed assets, net (Note 5)					7,316		9,674

	TOTAL ASSETS			$	7,447	$	10,303

			LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accrued liabilities - other				$	6,796	$	4,500
Accrued officers' salaries					150,000		150,000
Due to officer/shareholder					41,780		-

	Total Current liabilities				198,576		154,500


Shareholders' Deficiency (Note 2)
Preferred Stock, $0.00001 par value,
none issued and outstanding					-		-
Common Stock, $0.00001 par value, 100,000,000 shares authorized
16,721,502 shares issued and outstanding at
September 30, 2009 and December 31, 2008					167		167
Paid-In-Capital					172,508		172,508

Deficit Accumulated during the Development Stage					(363,804)		(316,872)

Total Shareholders' Deficit					(191,129)		(144,197)

	TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT			$	7,447	$	10,303


SEE ACCOMPANYING CONDENSED NOTES TO FINANCIAL STATEMENTS F-1

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PRINTING COMPONENTS INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)

											December 12
		Three Months		Three Months			Nine Months		Nine Months		2006
		Ended		Ended			Ended		Ended		(inception) to
		September 30,		September 30,			September 30,		September 30,		September 30,
		2009		2008			2009		2008		2009

Revenue:	$	-	$	-		$	-	$	-	$	15,887
Cost of Sales:		-		-			-		5,245		12,840
Gross Profit (Loss)		-		-			-		(5,245)		3,047


General and administrative expenses		21,721		18,385			46,932		54,927		366,851

Net Loss	$	(21,721)	$	(18,385)		$	(46,932)	$	(60,172)	$	(363,804)

Basic and diluted net loss per share	$	-	$	-		$	-	$	-

Weighted average shares used in calculating
Basic and diluted net loss per share		16,721,502			16,721,502		16,721,502		16,721,502


SEE ACCOMPANYING CONDENSED NOTES TO FINANCIAL STATEMENTS F-2

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PRINTING COMPONENTS INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)

							December 12, 2006
			Nine Months Ended		Nine Months Ended		(inception) to
			September 30, 2009		September 30, 2008		September 30, 2009

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(46,932)	$	(60,172)	$	(363,804)
Adjustments to reconcile net income to cash used
By operating activities
	Depreciation		2,358		2,358		6,058
Changes in operating assets and liabilities
	Decrease in accounts receivable		-		8,087		-
	Increase/(decrease) in accounts payable		2,296		(6,212)		156,796
	Decrease/(increase) in inventory		-		5,245		-
NET CASH USED BY OPERATING ACTIVITIES			(42,278)		(50,694)		(200,950)

CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of fixed assets		-		-		(13,374)
CASH USED BY INVESTING ACTIVITIES			-		-		(13,374)

CASH FLOWS FROM FINANCING ACTIVITIES
	Officers advances (repayments)		41,780		(31,240)		41,780
	Proceeds from sale of common stock		-		-		172,675
CASH PROVIDED BY FINANCING ACTIVITIES			41,780		(31,240)		214,455

NET INCREASE (DECREASE) IN CASH			(498)		(81,934)		131

CASH
Cash - Beginning of period			629		87,375		-
Cash - End of period		$	131	$	5,441	$	131

Supplemental Disclosure of Cash Flow Information
	Taxes paid	$	-	$	-	$	-
	Interest paid	$	-	$	-	$	-


SEE ACCOMPANYING CONDENSED NOTES TO FINANCIAL STATEMENTS F-3

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PRINTING COMPENTS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

September 30, 2009

(UNAUDITED)

NOTE 1 – ACCOUNTING POLICES AND OPERATIONS

ORGANIZATION

Printing Components Inc. (the "Company"), a development stage company, was incorporated in Nevada on December 12, 2006. The Company offers media, inks, printing and graphic design services to the large format digital printing industry. At September 30, 2009, the Company has commenced business operations. The Company’s fiscal year ends on December 31st.

RECENT ACCOUNTING PRONOUNCMENTS

The Company does not expect the adoption of recent accounting pronouncements to have a material impact on its financial condition or results of operations.

GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The amounts of assets and liabilities in the financial statements do not purport to represent realizable or settlement values. However, the Company has incurred an operating loss. Such loss may impair its ability to obtain additional financing.

This factor raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do no include any adjustments that might result from the outcome of this uncertainty. The Company has met its historical working capital requirements from sale of capital shares. Owners of the share, in order not to burden the Company, have agreed to provide funding to the Company to pay its annual audit fees, filing costs and legal fees as long as the board of directors deems it necessary. However, there can be no assurance that such financial support shall be ongoing or available on terms or conditions acceptable to the Company.

INTERIM FINANCAIL INFORMATION

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in its Form 10K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal 2008 as reported in the Form 10-K, have been omitted.

F-4

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PRINTING COMPENTS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

September 30, 2009

(UNAUDITED)

NOTE 2 – RELATED PARTY TRANSACTIONS

A shareholder/officer has provided funding to pay for the initial operating expenses of the Company. The amount of $41,780 was provided to the company in supporting company’s operation for the nine months of the year 2009.

NOTE 3 – DUE TO SHAREHOLDER

Amounts due to shareholder are non-interest bearing and have no definite terms of repayment.

F-5

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

This section of the report includes a number of forward-looking statements that reflect out current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Our auditors have issued a going concern opinion. This means that our auditors believe there is substance doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay out bills. This is because we have not generated substantial revenues and do not anticipate generating on-going revenue until we complete the development of our website and engage suppliers and customers to buy out products. Our only other source for cash at this time is investments by others in our company. Accordingly, we have raised a total of $172,625 in gross proceeds from our initial public offering and a December 28, 2007 share sale. We are using the proceeds to implement our project.

We have opened our office, purchased furniture and computers, installed phone lines and acquired finished goods for resale and made sales in the amount of $15,887. Suppliers have been contacted and initial inventory has been purchased at cost allowing for resale at reasonable margins. We have negotiated with our suppliers delivery timetable which minimizes the amount of inventory required on hand to meet sales demand.

Plan of Operation

Our specific goal is to profitably introduce a comprehensive supply of products on our internet website to the printing industry. We are presently interviewing people with a background in graphics and computer programming. Once a suitable candidate is selected we will begin programming and designing the site providing us better control of the content and design of the site. This candidate once selected will start part time for the first 90 days and phase into a full time position.

By attending Trade Shows, we are able to observe firsthand which new products are introduced and the interest generated by print shop owner/operators in the printing industry. Each show we attend provides us the opportunity to meet personally with key management of small and medium size manufacturers to discuss the opportunity of marketing and distributing their products on a non-exclusive basis. This will prove to be a valuable tool for providing us with a current list of suppliers, key management contacts, and an insight into upcoming products being released to the industry. We can also ascertain what the manufacturers deem to be key advantages of their products.

Once this information is complied, we will enter it into our database: contact person, date we met, location of the meeting and product used. This information can then be tailored to create a personalized approach for e-mailing, telemarketing, direct mailing and/or personal visits. Where possible, we would like to offer products and services by direct link to their website.

Limited operating history; need for additional capital

There is no historical financial information about us upon which to base an evaluation of our performance. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price increases in services and products.

To become profitable and competitive, we have to locate and negotiate agreements with manufacturers to offer their products for sale to us at pricing that will enable us to establish and sell the products to our clientele.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand out operations. Equity financing could result in additional dilution to existing shareholders.

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Results of operations

From Inception on December 12, 2006 to September 30, 2009

During the year 2007, we incorporated the company, hired the attorney and the auditor and began to negotiate contracts and sell product.

During the year 2009, we have continued with negotiating with suppliers and sourcing products. Our loss since inception is $363,804. We have started our proposed business operations ,and we have completed our public offering and completed a subsequent share offering.

Since inception, we sold 5,000,000 pre-dividend shares of common stock to our officers and directors for $50; 490,500 pre-dividend shares of common stock at $0.25 per share for $122,625; and, 83,334 pre-dividend shares of common stock at $0.60 per share for $50,000.

Over the past year, we attended several trade shows establishing contacts with many manufactures through out the USA, working closely with an agent who has developed similar relationships.

Our research found a demand for third party high quality inks and demand for refillable ink cartridges for large format printers.

Liquidity and capital resources

As of the date of this report, we have generated $15,887 in revenues from our business operations.

In December 2006, we issued 5,000,000 pre-dividend shares of common stock pursuant to the exemption contained in Reg. S of the Securities Act of 1933. This was accounted for as a sale of common stock.

On June 25, 2007, we completed our public offering of 490,500 shares of pre-dividend common stock at an offering price of $0.25 per share. We raised $122,625.

On December 28, 2007, we sold 83,334 restricted pre-dividend shares of the Company common stock pursuant to the exemption contained in Reg. S of the Securities Act of 1933, as amended at an offering price of $0.60 per share we raised $50,000.

A stock dividend was declared on February 11, 2008, wherein two additional common shares were issued for each one common share issued and outstanding as at February 25, 2008.

As of September 30, 2009, our total assets were $7,447 in cash, fixed assets and our total liabilities were $198,576 comprised of $6,796 in accrued liabilities and $191,780 in accrued officer salaries and other amounts due to officer and shareholders.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter September 30, 2009 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 6.

EXHIBITS.

The following documents are included herein:

Exhibit No.	Document Description
31.1	Certification of Principal Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on this 11th day of November, 2009.

	PRINTING COMPONENTS INC.

	BY:	VINCE LEITAO
		Vince Leitao President, Principal Executive Officer, and a member of the Board of Directors.

	BY:	VINOD GANDHI
		Vinod Gandhi Treasurer, Principal Financial Officer, Principal Accounting Officer and a member of the Board of Directors.

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EXHIBIT INDEX

Exhibit No.	Document Description
31.1	Certification of Principal Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

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