LFTD PARTNERS INC. - Quarter Report: 2009 December (Form 10-Q)

acq10q2162010.htm

FORM 10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2009

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 000-52102

Acquired Sales Corp.

(Exact name of registrant as specified in its charter)

Nevada	87-40479286
(State or other jurisdiction	(I.R.S. Employer Identification Number)
of incorporation or organization)

31 N. Suffolk Lane, Lake Forest, Illinois 60045

(Address of principal executive offices)

(847) 404-1964

(Registrant’s telephone number, including area code)

n/a

(Former name, former address and former fiscal year, if changed since last report)

Indicate by checkmark whether the registrant (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  No x.

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 (§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 x

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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer 

Accelerated Filer 

Non-Accelerated Filer 

(Do not check if a smaller

reporting company)

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 

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common units, as of the latest practicable date: 5,832,482 shares of common stock, par value $.001 per share, outstanding as of February 15, 2010.

Transitional Small Business Disclosure Format (Check one): Yes o No x.

ACQUIRED SALES CORP.

- INDEX -

		Page(s)
PART I – FINANCIAL INFORMATION:

Item 1.	Condensed Financial Statements (unaudited):

	Condensed Balance Sheets as of December 31, 2009 and September 30, 2008	F-1

	Unaudited Condensed Statements of Operations for the Three Months Ended December 31, 2009 and 2008, and for the Period from May 27, 2004 (Date of Inception of the Development Stage) through December 31, 2009	F-2

	Unaudited Condensed Statements of Cash Flows for the Three Months Ended December 31, 2009 and 2008 and for the Period from May 27, 2004 (Date of Inception of the Development Stage) through December 31, 2009	F-3

	Notes to Condensed Financial Statements	F-4 – F-5

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3

Item 4A(T).	Controls and Procedures	3

PART II – OTHER INFORMATION:

Item 1.	Legal Proceedings	4

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4

Item 3.	Defaults Upon Senior Securities	4

Item 4.	Submission of Matters to a Vote of Security Holders	4

Item 5.	Other Information	4

Item 6.	Exhibits	4

Signatures		5

Item 1. Financial Statements

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

The results for the period ended December 31, 2009 are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission for the period ended September 30, 2009.

ACQUIRED SALES CORP.

(a development stage enterprise)

INDEX TO FINANCIAL STATEMENTS

	Page

Unaudited Condensed Balance Sheets, December 31, 2009 and September 30, 2009	F-1

Unaudited Condensed Statements of Operations for the Three Months Ended December 31, 2009 and 2008 and for the Period from May 27, 2004 (Date of Inception of the Development Stage) through December 31, 2009	F-2

Unaudited Condensed Statements of Cash Flows for the Three Months Ended December 31, 2009 and 2008 and for the Period from May 27, 2004 (Date of Inception of the Development Stage) through December 31, 2009	F-3

Notes to Unaudited Condensed Financial Statements	F-4 – F-5

ACQUIRED SALES CORP.
(a development stage enterprise)
Unaudited Condensed Balance Sheets

	December 31,			September 30,
	2009			2009
ASSETS
Current Assets:
Cash	$	6,323		$	12
Prepaid expense		19			25
TOTAL ASSETS	$	6,342		$	37

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	4,264		$	2,371
Note payable - related party		20,000			10,000
Note interest payable - related party		-			82
Total Current Liabilities		24,264			12,453

Stockholders' Deficit:
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding		-			-
Common stock, $0.001 par value, 50,000,000 shares
authorized, 5,832,482 shares issued and outstanding		5,833			5,833
Additional paid-in capital		145,967			145,967
Deficit accumulated prior to the development stage		(69,151	)		(69,151	)
Deficit accumulated during the development stage		(100,571	)		(95,065	)
Total Stockholders' Deficit		(17,922	)		(12,416	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	6,342		$	37

See accompanying notes to the financial statements.

F-1

ACQUIRED SALES CORP.
(a development stage enterprise)
Unaudited Condensed Statements of Operations

							For the period
							May 27, 2004
							(Date of Inception
	For the Three Months Ended						of the Development
	December 31,						Stage) through
	2009			2008			December 31, 2009

Expenses:
General and administrative	$	(5,099	)	$	(5,836	)	$	(153,710	)
Waiver of tax liability penalty		-			-			60,364
Interest		(407	)		-			(7,225	)
Net Loss	$	(5,506	)	$	(5,836	)	$	(100,571	)

Basic and diluted loss per share	$	(0.00	)	$	(0.00	)

Basic and diluted weighted average
common shares outstanding		5,832,482			5,832,482

See accompanying notes to the financial statements.

F-2

ACQUIRED SALES CORP.
(a development stage enterprise)
Unaudited Condensed Statements of Cash Flows

							For the period
							May 27, 2004
							(Date of Inception
	For the Three Months Ended						of the Development
	December 31,						Stage) through
	2009			2008			December 31, 2009

Cash Flows from Operating Activities:
Net loss	$	(5,506	)	$	(5,836	)	$	(100,571	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Expenses paid by capital contributed by officer		-			-			20
Waiver of tax liability penalty		-			-			(60,364	)
Issuance of warrants for services		-			-			11,970
Changes in assets and liabilities:
Prepaid expense		6			-			(19	)
Accounts payable		1,893			5,275			4,264
Note interest payable - related party		(82	)		-			-
Payroll tax penalties and accrued interest		-			-			(8,787	)
Net Cash Used by Operating Activities		(3,689	)		(561	)		(153,487	)

Cash Flows from Financing Activities:
Proceeds from issuance of note payable to
related party		10,000			-			215,000
Payment of principal on note payable to
related party		-			-			(95,000	)
Proceeds from issuance of common stock		-			-			40,000
Redemption of common stock		-			-			(190	)
Net Cash Provided by Financing Activities:		10,000			-			159,810

Net Increase (Decrease) in Cash		6,311			(561	)		6,323
Cash at beginning of period		12			670			-

Cash at End of Period	$	6,323		$	109		$	6,323

Supplemental Cash Flow Information
Cash paid for interest	$	478		$	-

See accompanying notes to the financial statements.

F-3

Acquired Sales Corp.

(a development stage enterprise)

Notes to Unaudited Condensed Financial Statements

Note 1: Basis of Presentation

The accompanying unaudited condensed 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, 2009 included in the Company’s Form 10-K report.

These unaudited condensed 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 months ended December 31, 2009, are not necessarily indicative of the results that may be expected for the year ending September 30, 2010 or for any other period.

Note 2: Organization and Summary of Significant Accounting Policies

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 unaudited condensed financial statements are prepared in conformity with accounting principles generally accepted in the United States of America which 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 (if any occur in the future) 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 periods. 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. There were 175,000 warrants outstanding at December 31, 2009 and 2008 that were excluded from the calculation of diluted loss per share because they were anti-dilutive.

Business condition – The Company’s financial statements have been prepared using accounting principles generally accepted in 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 three months ended December 31, 2009, the Company had no revenue, had a net loss of $5,506, and use $3,689 of cash in its operating activities. During this same period the Company received $10,000 from the issuance of an unsecured note payable to a related party. The accompanying financial statements do not include any adjustments that might result if the Company were to no longer be a going concern. 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.

F-4

Acquired Sales Corp.

(a development stage enterprise)

Notes to Unaudited Condensed Financial Statements (continued)

Note 3 – 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, the merchant fulfilled their obligation to provide services on December 31, 2007. Under the terms of the agreement, the Company paid a one-time $20,000 fee and prepaid accountable expenses of $10,000. 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 August 2007 at $11,970 using the Black-Scholes option pricing model with the following assumptions: 150% volatility; risk free interest rate of 6.25%; 0% yield; and 3.0 year estimated life and charged this amount to expense. 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.

Note 4 – Note Payable to Related Party

During January 2009 and again in November 2009, the Company issued an unsecured demand promissory note to the spouse of one of the directors, who is also the current sole officer of the Company, in the amounts of $10,000 each. These notes bear interest at 10% per annum. During the three months ended December 31, 2009, the Company incurred interest expense of $396 and made cash payments of $478 for interest. At December 31, 2009, at total of $20,000 was due and no interest was accrued and unpaid.

F-5

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

Forward Looking Statement Notice

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Acquired Sales Corp. (“we”, “us”, “our” or the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, 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 its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

The Company is presently operating as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

Results of Operations

For the three months ending December 31, 2009, the Company had no revenues and incurred general and administrative expenses of $5,099.

For the period from inception of our new developmental stage (May 27, 2004) through December 31, 2009, the Company had no activities that produced revenues from operations and has had a net loss of $(153,487) since inception of its new developmental stage and $(5,099) in the three months ended December 31, 2009. These losses are primarily due to legal, accounting, audit and other professional service fees incurred in relation to corporate governance and SEC-related compliance matters.

Liquidity and Capital Resources

As of December 31, 2009, the Company had assets equal to $6,342 comprised nearly exclusively of cash. The Company had current liabilities of $24,264 as of December 31, 2009. On January 30, 2009 and again in November 2009, the Company issued an unsecured demand promissory note to the spouse of one of the directors, who is also the current sole officer of the Company. The principal amount of the notes is $10,000 each and bear interest at 10% per annum. During the three months ended December 31, 2009, the Company incurred interest expense of $396 and made cash payments of $478 for interest. At December 31, 2009, at total of $20,000 was due and no interest was accrued and unpaid.

The following is a summary of the Company's cash flows from operating, investing, and financing activities:

For the Cumulative Period from Inception of our new developmental stage (May 27, 2004) through December 31, 2009.

				For the period
				May 27, 2004
				(Date of Inception
	Three Months			of the Development
	Ended			Stage) through
	December 31, 2009			December 31, 2009

Net Cash (Used) by Operating Activities	$	(3,689	)	$	(153,487	)
Net Cash (Used) by Investing Activities	$	-		$	-
Net Cash (Used) Provided by Financing Activities:	$	10,000		$	159,810
Net Increase (Decrease) in Cash	$	6,311		$	6,323

The Company has nominal assets and has generated no revenues since inception of our new developmental stage. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.

Plan of Operations

The Company currently does not engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with money in our treasury.

During the next twelve months we anticipate incurring costs related to:

(i)

filing of reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and

(ii)

consummating an acquisition.

We believe we will be able to meet these costs through use of funds in our treasury, through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors. However, no such loans or investments have yet been arranged, and the willingness of our stockholders, management or other investors to make such loans or investments, or on reasonable terms, cannot be guaranteed.

The Company may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

Since the commencement of our new developmental stage, our officers and directors have had limited contact or discussions with representatives of other entities regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

The Company anticipates that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

The United States and North American economies are currently undergoing profound recessions that are negatively affecting our ability to identify, assess, negotiate and finance a potential acquisition. We cannot predict when this recessionary period will end or when the climate for effectively executing our business plan will improve.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

Item 4A(T). CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2009. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the period ended December 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

To the best knowledge of the officers and directors, the Company is not a party to any legal proceeding or litigation.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None.

Item 3. Defaults Upon Senior Securities. None.

Item 4. Submission of Matters to a Vote of Security Holders. None.

Item 5. Other Information. None.

Item 6. Exhibits. (filed with this report unless indicated below)

Exhibit 3.1* Articles of Incorporation Dated December 12, 1985

Exhibit 3.2* Amended Articles of Incorporation Dated July 1992

Exhibit 3.3* Amended Articles of Incorporation Dated November 1996

Exhibit 3.4* Amended Articles of Incorporation Dated June 1999

Exhibit 3.5* Amended Articles of Incorporation Dated January 25, 2006

Exhibit 3.6* Amended Bylaws

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

*	Filed as an exhibit to the Company's Registration Statement on Form 10-SB, as filed with the SEC on March 23, 2007, and incorporated herein by this reference.

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.

Dated: February 15, 2010
	ACQUIRED SALES CORP.

	By:	/s/ Gerard M. Jacobs
		Gerard M. Jacobs
		President