Neon Bloom, Inc. - Quarter Report: 2009 June (Form 10-Q)

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FORM 10-Q

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þ		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	for the quarterly period ended  June 30, 2009

o		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from _______________________ to ________________

Nevada		20-8018146
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (do not check if a smaller reporting company)	Smaller reporting company þ

	Page
PART I FINANCIAL INFORMATION	3
Item 1.   Financial Statements	3
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.   Quantitative and Qualitative Disclosures about Market Risk	13
Item 4T. Controls and Procedures	13
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.    Submission of Matters to a Vote of Security Holders	14
Item 5.    Other Information	14
Item 6.    Exhibits	14

 

Item 1.

Financial Statements

	Page
Condensed Consolidated Balance Sheets as of June 30, 2009 (Unaudited) and December 31, 2008	4
Condensed Consolidated Statements of Operations for the Six Months Ended June 30, 2009 and 2008 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008 (Unaudited)	6
Notes to Condensed Consolidated Financial Statement (Unaudited)	7

 

			June 30, 2009				December 31, 2008
Assets			(Unaudited)
Current assets
Cash			$	47,059			$	225,767
Accounts receivable				206,716				367,074
Inventory				390,698				186,516
Prepaid and other current assets				12,668				17,650
Total current assets				657,141				797,007
Property and equipment, net				40,277				47,943
Other assets				4,200				-
Total assets			$	701,618			$	844,950
Liabilities and Stockholders' (Deficit)
Current liabilities
Line of credit			$	48,264			$	48,340
Accounts payable				467,363				379,693
Other accrued expenses				303,737				236,060
Customer deposits				283,431				447,202
Notes payable				181,115				212,751
Legal settlement				384,000				384,000
Due related party				250,153				232,304
Officer loans				39,461				39,461
Total current liabilities				1,957,524				1,979,811
Long-term liabilities
Notes payable				109,181				24,811
Officer advances				369,375				369,375
Total liabilities				2,436,080				2,373,997
Commitments and Contingencies				-				-
Stockholders' (deficit)
Preferred stock - $0.001 par value; 1,000,000 shares
authorized; zero shares issued and outstanding				-				-
Common stock - $0.001 par value; 50,000,000 shares
authorized; 8,052,040 shares issued and outstanding				8,052				8,046
Paid in capital				1,393,498				1,388,503
Accumulated deficit				(3,136,012	)			(2,925,596	)
				(1,734,462	)			(1,529,047	)
Total liabilities and stockholder's (deficit)			$	701,618			$	844,950
The accompanying notes are an integral part of the financial statements

		2009				2008
Cash flows from operating activities
Net income (loss)		$	(210,416	)		$	487,503
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation			12,541				6,819
Amortization of debt discount			39,829				-
Accrued interest			4,218				1,446
Change in accounts receivable			160,358				(156,363	)
Change in inventory			(204,182	)			(26,977	)
Changes in prepaid expenses			4,982				26,102
Change in other assets			(4,200	)
Change in amounts due to related party			17,849				43,060
Change in customer deposits			(163,771	)			97,997
Change in accounts payable			87,670				(24,733	)
Change in accrued expenses			67,677				-
Change in Legal Settlement			-				(566,154	)
Net cash used in operating activities			(187,445	)			(111,300	)
Cash Flows from investing activities
Purchase of property and equipment			(4,875	)			-
Net cash used in investing activities			(4,875	)			-
Cash flows from financing activities
Proceeds from subscription receivable			-				63,020
Proceeds from notes payable			100,000				95,211
Principal payments on notes payable			(88,982	)			(85,988	)
Proceeds from line of credit			-				16,315
Payments on officer notes			-				(2,425	)
Payments   on line of credit			(76	)			-
Net cash provided by financing activities			10,942				86,133
Foreign exchange rates effect on cash			2,670				-
Increase (decrease) in cash			(178,708	)			(25,167	)
Cash, beginning of period			225,767				70,314
Cash, end of period		$	47,059			$	45,147
Cash paid for
Interest		$	21,890			$	4,247
Income taxes			-				-
Non Cash Investing and Financing Activities:
Issuance of  5,322 shares of common stock with promissory notes			5,000
Issuance of  3,750 shares of common stock with promissory notes							9,263
Issuance of  15,000 warrants with promissory notes							21,150
The accompanying notes are an integral part of the financial statements

		Six months ended June 30,
Region		2009				2008
United States			89	%			53	%
Europe			11	%			47	%
Total:			100	%			100	%

 

		2009
Costs incurred this period		$	365,755
Estimated contract profit this period			109,111
Less: billings to date			(552,075	)
Billings in excess of costs for this period		$	(77,209	)

		Total
		Amount				Current
Unsecured note payable to a financial institution in a foreign country; 12.4% per annum; monthly payments of $242		$	751			$	751
Secured note payable to a financial institution; 10% interest per annum; monthly payments of $756 to 2012; collateralized by an automobile			30,238				9,827
Unsecured promissory note agreements, less unamortized discount of $7,196 in 2009; effective interest rates range approximately 2.99% - 6.24%			247,182				158,412
Unsecured note payable to an individual;  interest at  7%			12,125				12,125
		$	290,296			$	181,115

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The main users of the equipment are the United States Air Force, US Navy and defense-aerospace companies.

		Six Months ended
		June 30,
		2009				2008
Revenues			100	%			100	%
Cost of Goods Sold			-70	%			-59	%
Gross Profit			30	%			41	%
Operating Expenses:
General and Administrative			-40	%			-48	%
Total Operating Expenses			-40	%			-48	%
Other Income (Expenses)			-.03	%			59	%
Income (Loss) before Taxes			-13	%			52	%
Net income (loss)			-13	%			52	%

Net (loss) income. Net Loss for the six months ended June 30, 2009 amounted to $210,416 as compared to a net income of $487,503 for the same period during 2008.  The 2008 income was attributable to a one time recovery of a contingent loss in the amount of $556,154 in the six months ended June 30, 2008.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4T.

Controls and Procedures

Item 1.

Legal Proceedings.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Item 3.

Default upon Senior Securities.

Item 4.

Submission of Matters to a Vote of Security Holders.

Item 5.

Other Information.

Item 6.

Exhibits

No.	Exhibit
4.1	Form of uncollateralized promissory note
4.2	Form of uncollateralized promissory note extension
31.1	Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

	Phoenix International Ventures, Inc.
	(Registrant)
August 11, 2009	By:	/s/ Zahir Teja
		Zahir Teja
		President and Chief Executive Officer

August 11, 2009	By:	/s/ Neev Nissenson
		Neev Nissenson
		Chief Financial Officer (principal financial and accounting officer)

INDEX TO EXHIBITS