LFTD PARTNERS INC. - Quarter Report: 2007 December (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-QSB
x
|
Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934 for the quarterly period ended December 31,
2007
|
Or
|
__
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Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934.
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000-51230
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(Commission
File No.)
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ACQUIRED
SALES CORP.
(name
of small business issuer in its charter)
Nevada
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87-0479286
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
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31
N. Suffolk Lane, Lake Forest, Illinois
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60045
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(Address
of principal executive offices)
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(Zip
Code)
|
Issuer’s
telephone number: (847)
404-1964
Indicate
by check mark whether the registrant is an accelerated filer (as defined in
Rule
12b-2 of the Exchange Act). Yes [ ] No [ X
]
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") 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 is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [ X ] No
[ ]
The
number of outstanding common stock, $0.001 par value, as of February 14, 2008
was 5,832,482 shares.[Missing Graphic Reference]
Part
I – Financial Information
Item
1. Financial Statements
ACQUIRED
SALES CORP.
(a
development stage enterprise)
FINANCIAL
STATEMENTS
December
31, 2007
ACQUIRED
SALES, CORP.
(a
development stage enterprise)
INDEX
TO
FINANCIAL STATEMENTS
Page | |
Balance
Sheets, December 31, 2007 (unaudited) and September 31,
2007
|
1
|
Unaudited
Statements of Operations for the Three Months Ended December 31,
2007 and
2006, and for the
|
|
Period
from May 27, 2004 (Date of Inception of the Development Stage)
through
December 31, 2007
|
2
|
Unaudited
Statements of Cash Flows for the Three Months Ended December 31,
2007 and
2006 and for the
|
|
Period
from May 27, 2004 (Date of Inception of the Development Stage)
through
December 31, 2007
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3
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Notes
to Unaudited Financial Statements
|
4
|
ACQUIRED
SALES
CORP.
|
||||||||
(a
development stage
enterprise)
|
||||||||
Balance
Sheets
|
||||||||
December
31,
|
September
30,
|
|||||||
2007
|
2007
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
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$ | 18,829 | $ | 23,933 | ||||
Prepaid
expense
|
125 | 14,374 | ||||||
TOTAL
ASSETS
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$ | 18,954 | $ | 38,307 | ||||
LIABILITIES
AND STOCKHOLDERS'
EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
payable
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$ | 4,788 | $ | 3,681 | ||||
Total
Current
Liabilities
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4,788 | 3,681 | ||||||
Stockholders'
Equity:
|
||||||||
Preferred
stock, $0.001 par value,
10,000,000 shares
|
||||||||
authorized,
no shares issued and
outstanding
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- | - | ||||||
Common
stock, $0.001 par value,
50,000,000 shares
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||||||||
authorized,
5,832,482 shares
issued and outstanding
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5,833 | 5,833 | ||||||
Additional
paid-in
capital
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145,967 | 145,967 | ||||||
Deficit
accumulated prior to the
development stage
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(69,151 | ) | (69,151 | ) | ||||
Deficit
accumulated during the
development stage
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(68,483 | ) | (48,023 | ) | ||||
Total
Stockholders'
Equity
|
14,166 | 34,626 | ||||||
TOTAL
LIABILITIES AND
STOCKHOLDERS' EQUITY
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$ | 18,954 | $ | 38,307 | ||||
See
accompanying notes to the
financial statements.
|
ACQUIRED
SALES
CORP.
|
||||||||||||
(a
development stage
enterprise)
|
||||||||||||
Unaudited
Statements of
Operations
|
||||||||||||
For
the
Period
|
||||||||||||
May
27,
2004
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||||||||||||
(Date
of
Inception
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||||||||||||
For
the Three Months
Ended
|
of
the
Development
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|||||||||||
December
31,
|
Stage)
through
|
|||||||||||
2007
|
2006
|
December
31,
2007
|
||||||||||
EXPENSES:
|
||||||||||||
General
and
administrative
|
$ | (20,460 | ) | $ | (1,272 | ) | $ | (122,796 | ) | |||
OTHER
INCOME AND
EXPENSE:
|
||||||||||||
Waiver
of tax liability
penalty
|
- | - | 60,364 | |||||||||
Interest
expense
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- | (1,196 | ) | (6,051 | ) | |||||||
TOTAL
OTHER INCOME
(EXPENSE)
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- | (1,196 | ) | 54,313 | ||||||||
NET
LOSS
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$ | (20,460 | ) | $ | (2,468 | ) | $ | (68,483 | ) | |||
Basic
and Diluted Loss per
Share
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||
Basic
and Diluted
Weighted-average
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||||||||||||
Common
Shares
Outstanding
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5,832,482 | 4,665,985 | ||||||||||
See
accompanying notes to the
condensed financial statements.
|
ACQUIRED
SALES
CORP.
|
||||||||||||
(a
development stage
enterprise)
|
||||||||||||
Unaudited
Statements of Cash
Flows
|
||||||||||||
For
the
Period
|
||||||||||||
May
27,
2004
|
||||||||||||
(Date
of
Inception
|
||||||||||||
For
the Three Months
Ended
|
of
the
Development
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|||||||||||
December
31,
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Stage)
through
|
|||||||||||
2007
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2006
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December
31,
2007
|
||||||||||
Cash
Flows from Operating
Activities:
|
||||||||||||
Net
loss
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$ | (20,460 | ) | $ | (2,468 | ) | $ | (68,483 | ) | |||
Adjustments
to reconcile net loss
to net cash
|
||||||||||||
used
in operating
activities:
|
||||||||||||
Expenses
paid by capital
contributed by officer
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- | - | 20 | |||||||||
Waiver
of tax liability
penalty
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- | (60,364 | ) | |||||||||
Issuance
of warrants for
services
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- | - | 11,970 | |||||||||
Changes
in assets and
liabilities:
|
||||||||||||
Prepaid
expense
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14,249 | - | (125 | ) | ||||||||
Accounts
payable
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1,108 | (8,063 | ) | 4,788 | ||||||||
Payroll
tax penalties and accrued
interest
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- | 758 | (8,787 | ) | ||||||||
Accrued
interest on note
payable
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- | 438 | - | |||||||||
Net
Cash Used by Operating
Activities
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(5,103 | ) | (9,335 | ) | (120,981 | ) | ||||||
Cash
Flows from Financing
Activities:
|
||||||||||||
Proceeds
from issuance of note
payable to
|
||||||||||||
related
party
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- | 100,000 | 195,000 | |||||||||
Payment
of principal on note
payable to
|
||||||||||||
related
party
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- | (95,000 | ) | (95,000 | ) | |||||||
Proceeds
from issuance of common
stock
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- | - | 40,000 | |||||||||
Redemption
of common
stock
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- | - | (190 | ) | ||||||||
Net
Cash Provided by Financing
Activities:
|
- | 5,000 | 139,810 | |||||||||
Net
Increase (Decrease) in
Cash
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(5,103 | ) | (4,335 | ) | 18,829 | |||||||
Cash
at beginning of
Period
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23,932 | 6,492 | - | |||||||||
Cash
at End of
Period
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$ | 18,829 | $ | 2,157 | $ | 18,829 | ||||||
Supplemental
Schedule of Noncash
Investing
|
||||||||||||
and
Financing
Transactions
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||||||||||||
Conversion
of $100,000 note
payable to related
|
||||||||||||
party
into 1,166,497 shares of
common stock
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$ | - | $ | - | $ | 100,000 | ||||||
See
accompanying notes to the
financial statements.
|
Acquired
Sales Corp.
(a
development stage enterprise)
Notes
to Unaudited Financial Statements
Note
1: Basis of Presentation
The
accompanying unaudited financial
statements of Acquired
Sales Corp. (the
“Company”)
were prepared pursuant to the rules
and regulations of the United States Securities and Exchange Commission.
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally
accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations.
Management of the Company (“Management”)
believes that the following
disclosures are adequate to make the information presented not
misleading.
These financial statements should be
read in conjunction with the audited financial statements and the notes thereto
for the year ended
September 30, 2007 included
in the Company’s
Form 10-KSBreport.
These
unaudited financial statements
reflect all adjustments,
consisting only of normal recurring adjustments that, in the opinion of
Management, are necessary to present fairly the financial position and results
of operations of the Company for the periods presented. Operating results
for
the three monthsended
December
31, 2007, are not necessarily
indicative
of the results that may be expected for the year ending September 30,
2008.
Note
2: Organization and Summary of Significant Accounting Policies
Acquired
Sales Corp. (the “Company”) was incorporated under the laws of the State of
Nevada on January 2, 1986. In August 2001, the Company ceased all of its
prior
operations and remained dormant from then until May 27, 2004 when it began
new
development stage activities.
Development
stage
enterprise– The Company is a development stage enterprise and has not
engaged in any operations that have generated any revenue. The Company’s efforts
have been devoted primarily to raising capital, borrowing funds and attempting
to enter into a reverse acquisition with an operating entity.
Use
of estimates–
These financial statements are prepared in conformity with accounting
principles
generally accepted in the United States of America and require that management
make estimates and assumptions that affect the reported amounts of assets
and
liabilities and the disclosure of contingent assets and liabilities. The
use of
estimates and assumptions may also affect the reported amounts of revenues
and
expenses. Actual results could differ from those estimates or
assumptions.
Basic
and diluted loss per
share of common stock– Basic loss per share is computed by dividing the
net loss by the weighted average number of common shares outstanding during
the
period. Diluted loss per share is computed by dividing the net loss by the
weighted average number of common shares outstanding and dilutive potential
common shares, if the exercise of outstanding warrants had occurred. There
were
175,000 warrants outstanding at December 31, 2007 that were excluded from
the
calculation of diluted loss per share.
Business
condition–
The Company’s financial statements have been prepared using accounting
principles generally accepted n the United States of America applicable to
a
going concern, which contemplates the realization of assets and liquidation
of
liabilities in the normal course of business. During the year ended September
30, 2007, the Company realized a gain as a result of the forgiveness of an
accrued liability and received proceeds from the issuance of a note payable
to a
related party that was converted into common stock in the amount of $100,000;
however, no revenue was generated from operations. During this same period
the
Company used $82,559 of cash in its operating activities. These conditions
raise
substantial doubt about the Company’s ability to continue as a going concern.
The accompanying financial statements do not include any adjustments that
might
result from the outcome of this uncertainty. The Company's ability to meet
its
ongoing financial requirements is dependent on management being able to obtain
additional equity and/or debt financing, the realization of which is not
assured. In addition, the Company is dependent on management being willing
to
continue to serve without monetary remunerations.
Note
2 – Letter agreement and warrants
Effective
as of August 2007, the Company entered into a Letter Agreement with a private
merchant bank to provide certain services related to the identification,
evaluation and financing of potential acquisitions by the Company. Pursuant
to
the Letter Agreement, which terminated on December 31, 2007, the Company
paid on
August 2, 2007, a one-time $20,000 fee and prepaid accountable expenses of
$10,000. During the three months ended December 31, 2007, the remaining $12,000
one-time fee and $2,374 of the accountable expenses were charged to expense.
In
addition, the Company issued warrants exercisable for 175,000 shares of common
stock at $0.10 per share. The Company valued these warrants at $11,970 using
the
Black-Scholes option pricing model and charged this amount to expense during
the
year ended September 31, 2007. Under certain conditions and events, the Company
may become obligated to make additional cash payments of six percent of the
gross proceeds of an equity investment and three percent of the gross proceeds
of a debt investment received by the Company and two percent of the
consideration received by the Company as a transactional fee. The Company
may
also be required to issue additional warrants exercisable at the same price
as
shares being issued in an equity investment.
Item
2. Management's
Discussion and
Analysis or Plan of Operation.
Results
of Operations
Three
months Ended December
31, 2007 compared with Three months Ended December 31, 2006
No
operating revenues were generated during the three months ended December 31,
2007 and December 31, 2006. Operating expenses increased by $19,188 to $20,460
for the three months ended December 31, 2007. The increased operating expenses
resulted principally from increased professional fees paid in 2007 as compared
with 2006. The Company's net loss increased by $17,992 to $20,460 for the three
months ended December 31, 2007 compared to $2,468 for the three months ended
December 31, 2006.
Liquidity
and Capital Resources
At
December 31, 2007, we had cash and cash equivalents of $18,829, compared to
$6,492 at December 31, 2006. Our decreased cash balance as of December 31,
2007
is largely attributable to the lack of revenues while facing capital demands
to
meet general and administrative expenses, including accounting, legal and audit
fees in connection with maintaining our public status as we search for business
opportunities. During the period, we also paid $14,374 in fees and expenses
to a
merchant bank that we hired to identify and evaluate potential acquisitions
by
us.
Proceeds
from private
offerings, loans and/or revenues will be needed for us to survive as a going
concern for the next 12 months. However, there can be no assurance
whatsoever that any such proceeds from private offerings, loans and/or revenues
will be available to us, and at the present time we have no commitments from
any
person or entity to fund our ongoing operations which are
unprofitable.
Prospective
shareholders should understand that several factors govern whether any
forward-looking statement contained herein will be or can be achieved. Any
one
of those factors could cause actual results to differ materially from those
projected herein. These forward-looking statements include plans and objectives
of management for future operations, including plans and objectives relating
to
the products and the future economic performance of the Company. Assumptions
relating to the foregoing involve judgments with respect to, among other things,
future economic, competitive and market conditions, future business decisions,
and the time and money required to successfully complete development projects,
all of which are difficult or impossible to predict accurately and many of
which
are beyond the control of the Company. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of those assumptions could prove inaccurate and, therefore,
there can be no assurance that the results contemplated in any of the
forward-looking statements contained herein will be realized. Based on actual
experience and business development, the company may alter its marketing,
capital expenditure plans or other budgets, which may in turn affect the
company’s results of operations. In light of the significant uncertainties
inherent in the forward-looking statements included therein, the inclusion
of
any such statement should not be regarded as a representation by the Company
or
any other person that the objectives or plans of the company will be
achieved.
Item
3. Controls and Procedures
Within 90 days prior to the date of filing of this report, we carried out an
evaluation, under the supervision and with the participation of our officer
serving as both our Chief Executive Officer/Chief Financial Officer, of the
design and operation of our disclosure controls and procedures.
Based
on
this evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures are effective for the
gathering, analyzing and disclosing the information we are required to disclose
in the reports we file under the Securities Exchange Act of 1934, within
the time periods specified in the SEC's rules and forms. There have been no
significant changes in our internal controls or in other factors that could
significantly affect internal controls subsequent to the date of this
evaluation.
Our management does not expect that our disclosure controls or internal controls
over financial reporting will prevent all errors or all instances of fraud.
A
control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the control system's objectives
will
be
met. Further, the design of a control system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control
issues and instances of fraud, if any, within our company have been detected.
These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Because of the inherent limitation of a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings
The
Company currently
is not party to any material legal proceedings.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
We
did not sell any
of our securities during the three month period ended December 31,
2007.
|
Item
6. Exhibits and Reports on Form 8-K.
|
|
(a)
|
Exhibits
(filed with this report unless indicated below)
|
Exhibit
31.1
|
Certification
of principal executive officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, as amended, as adopted pursuant
to
Section 302 of the Sarbanes-Oxley Act of 2002
|
Exhibit
31.2
|
Certification
of principal financial officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, as amended, as adopted pursuant
to
Section 302 of the Sarbanes-Oxley Act of 2002
|
Exhibit
32.1
|
Certification
of principal executive officer pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Exhibit
32.2
|
Certification
of principal financial officer pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
(b)
|
Reports
on Form 8-K.
|
No
reports on Form 8-K were filed by the Company during the three months ended
December 31, 2007.
SIGNATURES
In
accordance with the requirements of
the Exchange Act, the Registrant caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
ACQUIRED
SALES CORP.
Dated: February
14,
2008
By:
/s/ Gerard M.
Jacobs
Gerard
M. Jacobs, Chief Executive
Officer
(Principal
Executive
Officer)
By:
/s/ Gerard M.
Jacobs
Gerard
M.
Jacobs,
(Principal
Financial Officer)