YUMMIES INC - Quarter Report: 2010 June (Form 10-Q)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(x )QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2010
( )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 000-32361
YUMMIES, INC.
(Exact name of registrant as specified in charter)
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Nevada
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87-0615629
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(State or other jurisdiction of
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(I.R.S.
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Employer incorporation or organization)
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Identification No.)
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1981 East Murray Holiday Rd, Salt Lake City, Utah
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84117
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(Address of principal executive offices)
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(Zip Code)
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801-272-9294
Registrant’s telephone number, including area code
___________________________________
(Former name, former address, and former fiscal year, if changed since last report.)
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 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 (§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 checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Se the definitions of “large accelerated filer”, ”accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act
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Large Accelerated Filer [ ]
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Accelerated Filer [ ]
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Non-Accelerated filer [ ]
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Smaller Reporting Company [ x ]
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [X] No [ ]
1
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date
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Class
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Outstanding as of August 1, 2010
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Common Stock, $0.001
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2,505,000
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2
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INDEX
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Page
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Number
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PART I.
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ITEM 1.
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Financial Statements (unaudited)
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4
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Balance Sheets
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5
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June 30, 2010 and September 30, 2009
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Statements of Operations
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For the three and nine months ended June 30, 2010 and 2009 and the period June 10, 1998 to June 30, 2010
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6
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Statements of Cash Flows
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For the nine months ended June 30, 2010 and 2009 and the period June 10, 1998 to June 30, 2010
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7
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Notes to Financial Statements
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8
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ITEM 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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14
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ITEM 3.
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Quantitative and Qualitative Disclosures about Market Risk
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15
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ITEM 4T.
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Controls and Procedures
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15
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PART II.
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ITEM 6.
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Exhibits and Reports on 8K
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16
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Signatures
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16
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3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets of Yummies, Inc. (development stage company) at June 30, 2010 and September 30, 2009, and the related statements of operations for the three and nine months ended June 30, 2010 and 2009 and the period June 10, 1998 to June 30, 2010 , and statements of cash flows for the nine months ended June 30, 2010 and 2009 and the period June 10, 1998 to June 30, 2010.
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YUMMIES, INC.
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(A Development Stage Company)
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BALANCE SHEETS
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JUNE 30, 2010 AND SEPTEMBER 30, 2009
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June 30,
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September 30,
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2010
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2009
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Assets
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Current Assets:
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Cash
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$ | 136 | $ | 5,057 | ||||||
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Total current assets
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136 | 5,057 | ||||||||
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Total Assets
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$ | 136 | $ | 5,057 | ||||||
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Liabilities and Stockholders’ Deficit
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Current Liabilities:
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Accounts payable
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$ | 3,150 | $ | 4,100 | ||||||
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Interest payable
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780 | 552 | ||||||||
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Interest payable, stockholders
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3,019 | 2,059 | ||||||||
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Notes payable
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3,774 | 3,774 | ||||||||
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Notes payable, stockholders
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16,000 | 16,000 | ||||||||
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Total current liabilities
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26,723 | 26,485 | ||||||||
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Stockholders’ Deficit:
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Common stock, $.001 par value
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50,000,000 shares authorized,
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2,505,000 issued and outstanding
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2,505 | 2,505 | ||||||||
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Additional paid-in capital
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12,227 | 11,987 | ||||||||
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Deficit accumulated during the development stage
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(41,319 | ) | (35,920 | ) | ||||||
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Total Stockholders’ Deficit
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(26,587 | ) | (21,428 | ) | ||||||
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Total Liabilities and Stockholders’ Deficit
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$ | 136 | $ | 5,057 | ||||||
The accompanying notes are an integral
part of the financial statements.
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YUMMIES, INC.
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(A Development Stage Company)
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STATEMENTS OF OPERATIONS
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For the
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Period
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For the
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For the
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For the
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For the
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June 10, 1998
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Three Months
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Three Months
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Nine Months
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Nine Months
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(Inception)
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Ended
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Ended
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Ended
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Ended
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Through
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June 30,
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June 30,
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June 30,
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June 30,
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June 30,
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2010
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2009
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2010
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2009
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2010
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Revenues
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$ | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||||
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Expenses, general and administrative
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845 | 2,200 | 4,211 | 5,417 | 37,521 | ||||||||||||||||
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Operating loss
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(845 | ) | (2,200 | ) | (4,211 | ) | (5,417 | ) | (37,521 | ) | |||||||||||
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Other income (expense)
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Interest expense
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(396 | ) | (286 | ) | (1,187 | ) | (810 | ) | (3,798 | ) | |||||||||||
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Net loss
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$ | (1,241 | ) | $ | (2,486 | ) | $ | (5,398 | ) | $ | (6,227 | ) | $ | (41,319 | ) | ||||||
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Net loss per share
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$ | -- | $ | -- | $ | -- | $ | -- | $ | (.02 | ) | ||||||||||
The accompanying notes are an integral
part of the financial statements.
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YUMMIES, INC.
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(A Development Stage Company)
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STATEMENTS OF CASH FLOWS
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For the
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period
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For the
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For the
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June 10, 1998
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Nine Months
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Nine Months
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(Inception)
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Ended
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Ended
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Through
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June 30,
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June 30,
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June 30,
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2010
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2009
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2010
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Cash flows from operating activities:
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Net loss
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$ | (5,398 | ) | $ | (6,227 | ) | $ | (41,319 | ) | ||||
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Adjustment to reconcile net loss to cash provided by operating activities:
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Expenses paid directly by shareholder
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240 | -- | 2,703 | ||||||||||
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Increase (decrease) in accounts payable and interest payable
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237 | 109 | 6,949 | ||||||||||
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Accounts payable converted into note payable
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-- | 1,670 | 3,774 | ||||||||||
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Net cash used by operating activities
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(4,921 | ) | (4,448 | ) | (27,893 | ) | |||||||
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Cash flows from investing activities:
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-- | -- | -- | ||||||||||
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Cash flows from financing activities:
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Issuance of common stock
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-- | -- | 12,029 | ||||||||||
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Proceeds from note payable
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-- | 5,000 | 16,000 | ||||||||||
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Net cash provided by financing activities
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-- | 5,000 | 28,029 | ||||||||||
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Net increase (decrease) in cash
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(4,921 | ) | 522 | 136 | |||||||||
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Cash, beginning of period
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5,057 | 4,778 | -- | ||||||||||
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Cash, end of period
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$ | 136 | $ | 5,330 | $ | 136 | |||||||
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Interest paid
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$ | -- | $ | -- | $ | -- | |||||||
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Income taxes paid
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$ | -- | $ | -- | $ | -- | |||||||
The accompanying notes are an integral
part of the financial statements.
7
YUMMIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. Summary of Business and Significant Accounting Policies
a. Summary of Business
The Company was incorporated under the laws of the State of Nevada on June 10, 1998. The Company is seeking business opportunities. The Company has not commenced principal operations and is considered a “Development Stage Company” as defined by the Financial Accounting Standards Board Statement No. 7.
b. Cash Flows
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash or cash equivalents.
c. Net Loss Per Share
The net loss per share calculation is based on the weighted average number of shares outstanding during the period.
d. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
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e.
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Financial Instruments
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Statement of Financial Accounting Standards (“SFAS”) No. 107, “Disclosure About Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. The carrying amount of the Company’s cash, accounts payable, interest payable and notes payable approximates their estimated fair values due to the short-term maturities of those financial instruments.
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Notes to Financial Statements – Continued
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f.
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Income Taxes
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The Company accounts for income taxes using the asset and liability method in accordance with SFAS No. 109, “Accounting for Income Taxes.” Deferred tax asset and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measure using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized against deferred tax assets when it is more likely than not that the assets will not be realized.
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In May 2007, the FASB issued Staff Position FIN 48-1, “Definition of Settlement in FASB Interpretation No. 48” (“FSP FIN 48-1”), which amends FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (“FIN 48,” together with FSP FIN 48-1 referred as “FIN 48, as amended”). As of January 1, 2009, we adopted the provisions of FIN 48, as amended, which clarify the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN 48, as amended, prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position an entity takes or expects to take in a tax return. To recognize a tax position, the tax position must be more-likely-than-not sustainable upon examination by the relevant taxing authority, and the relevant measurement of the position must be the largest amount of benefit that we would more than 50% likely realize upon settlement. We would recognize the benefit of a position in the interim reporting period during which it meets the threshold, unless we effectively settle it earlier through examination, negotiation, or litigation or the applicable statute of limitations period expires.
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Notes to Financial Statements – Continued
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The Company did not recognize any additional liability for unrecognized tax benefit as a result of the implementation. As of June 30, 2010, the Company did not increase or decrease liability for unrecognized tax benefit related to tax positions in prior period nor did the company increase its liability for any uncertain tax positions in the current year. Furthermore, there were no adjustments to the liability or lapse of statute of limitation or settlements with taxing authorities.
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The Company expects resolution of unrecognized tax benefits, if created would occur while the 100% valuation allowance of deferred tax assets is maintained; therefore, the Company does not expect to have any unrecognized tax benefits that, if recognized, would affect its effective income tax rate.
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The Company will recognize interest and penalty related to unrecognized tax benefits and penalties as income tax expense. As of June 30, 2010, the Company has not recognized any liabilities for penalty or interest as the Company does not have any liability for unrecognized tax benefits.
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2. Notes Payable
On January 10, 2007 and May 22, 2009, the Company converted $2,105 and $1,669 of accounts payable from its transfer agent into a one-year notes payable. The note balance of $3,774 at June 30, 2010 and September 30, 2009, bears interest at 8% and both principal and accrued interest are convertible into common stock at $.025 per share. The first note payable was due on January 10, 2008. The second note payable was due May 22, 2010.
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Notes to Financial Statements – Continued
3. Notes Payable, Stockholders
Stockholder notes payable consist of the following at June 30, 2010 and September 30, 2009:
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June 30,
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September 30,
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2010
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2009
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Note payable to an individual, also a stockholder of the Company, interest is being charged at 8% the note is unsecured and due on February 9, 2008. The note principal and accrued interest is convertible into common stock at $.025 per share.
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$ | 6,000 | $ | 6,000 | ||||
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Notes payable to an individual also a stockholder and director of the Company, interest is being charged at 8%, the notes are unsecured and due on January 10, 2009 and May 29, 2010, respectively. The notes principal and accrued interest is convertible into common stock at $.025 per share
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10,000 | 10,000 | ||||||
| $ | 16,000 | $ | 16,000 | |||||
4. Issuance of Common Stock
On August 13, 1998, the Company issued 1,000,000 shares of its $.001 par value common stock for an aggregate price of $1,000.
In February 1999, pursuant to Rule 504 of Regulation D of the Securities and Exchange Commission, the Company sold 17,500 shares of its common stock at a price of $1.00 per share. Costs of $6,471 associated directly with the offering were offset against the proceeds.
On December 15, 2000, an officer and stockholder of the Company returned 600,000 shares of common stock to authorized but unissued shares.
On February 5, 2001, the Company authorized a 6 for 1 forward split. The stock split has been accounted for retroactively in the accompanying financial statements.
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Notes to Financial Statements – Continued
5. Warrants and Options
No options or warrants are outstanding to acquire the Company’s common stock.
6. Income Taxes
The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling $35,920 that may be offset against future federal income taxes. If not used, the carryforwards will expire between 2022 and 2029. Due to the Company being in the development stage and incurring net operating losses, a valuation allowance has been provided to reduce the deferred tax assets from the net operating losses to zero. Therefore, there are no tax benefits recognized in the accompanying statement of operations.
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7.
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Going Concern
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As shown in the accompanying financial statements, the Company incurred a net loss of $5,398 during the nine months ended June 30, 2010 and accumulated losses of $41,319 since inception at June 10, 1998. The Company=s current liabilities exceed its current assets by $26,587 at June 30, 2010. These factors create an uncertainty as to the Company=s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the success of raising additional capital through the issuance of common stock and the ability to generate sufficient operating revenue. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
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Notes to Financial Statements – Continued
8. Fair Value Measurement
We adopted SFAS No. 157 “Fair Value Measurements,” (“SFAS 157”) effective October 1, 2008 for financial assets and liabilities measured on a recurring basis. On February 6, 2008, the FASB deferred the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. SFAS 157 defines fair value, establishes a framework for measuring fair value and generally accepted accounting principles and expands disclosures about fair value measurements. This standard applies in situation where other accounting pronouncements either permit or require fair value measurements. SFAS 157 does not require any new fair value measurements.
Fair value is defined in SFAS 157 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are to be considered from the perspective of a market participant that holds the asset or owes the liability. SFAS 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The standard describes three levels of inputs that may be used to measure fair value:
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Level 1:
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Quoted prices in active markets for identical or similar assets and liabilities.
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Level 2:
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Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
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Level 3:
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Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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13
Notes to Financial Statements – Continued
The carrying amount of the Company’s financial assets and liabilities, including cash, accounts payable, interest payable and notes payable approximate fair value, without being discounted, due to the short-term maturities during which these amounts are outstanding.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Company’s management is seeking and intends to acquire interests in various business opportunities which, in the opinion of management, will provide a profit to the Company but it does not have the working capital to be successful in this effort. The Company is not currently engaging in any substantive business activity and has no plans to engage in any such activity in the foreseeable future. In its present form, the Company may be deemed to be a vehicle to acquire or merge with a business or company. The Company does not intend to restrict its search to any particular business or industry, and the areas in which it will seek out acquisitions, reorganizations or mergers may include, but will not be limited to, the fields of high technology, manufacturing, natural resources, service, research and development, communications, transportation, insurance, brokerage, finance and all medically related fields, among others. Although the Company has had discussions with various parties as to possible acquisitions, no definitive agreements have been reached with any such party, at this time.
Three and Nine month Period Ended June 30, 2010 and 2009
The Company did not generate any revenue during the three months ended June 30, 2010 and 2009.
General and administrative expenses were $845 and $4,211 for the three and nine months, respectively, ended June 30, 2010, compared to general and administrative expenses of $2,200 and $5,417, respectively, for the same period in 2009. Interest expense was $396 and $1,187, respectively, for the three and nine months ended June 30, 2010 compared to $286 and $810 for the same period in 2009. Expenses were largely due to accounting, legal and other professional costs. As a result of the foregoing, the Company realized net losses of $1,241 and $5,398 for the three and nine months, respectively, ended June 30, 2010 compared to $2,486 and $6,227 for the same period in 2009. The Company’s net loss is attributable to a lack of business, ongoing professional costs associated with preparing the Company’s public reports, and timing differences.
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Liquidity and Capital Resources
At June 30, 2010, assets consisted of $136 in cash. Liabilities consisted of $3,150 in accounts payable, $3,799 in accrued interest, a note payable of $3,774, and a $16,000 note payable to a stockholder, for total liabilities of $26,723, leaving the Company without any working capital.
Since 2008, the Company has borrowed money from two stockholders of the Company. At June 30, 2010 the outstanding balance is $16,000. The notes are unsecured, bear interest at 8% and are convertible into common stock at $.025 per share.
Currently, the Company has no material commitments for capital expenditures. Management anticipates that operating expenses for the next twelve months will be approximately $5,000 to $7,000. Management understands that it does not have sufficient cash to meet its immediate operational needs and will require additional capital to cover ongoing operating expenses. Management may attempt to raise additional capital for its current operational needs through loans from its officers or shareholders, debt financing, equity financing or a combination of financing options. However, there are no existing understandings, commitments or agreements for such an infusion; nor can there be assurances to that effect.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Required by smaller reporting companies.
ITEM 4T. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our president/chief financial officer, carried out an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of our last fiscal quarter, June 30, 2010, (the "Evaluation Date"). Based upon that evaluation, our president/chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including our president and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter (ended June 30, 2010) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
15
PART 2 - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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Exhibit 31.1
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Rule 13a-14(a)/15d-14(a) Certification.
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Exhibit 32.1
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Certification by the Chief Executive Officer/Acting Chief Financial Officer Relating to a Periodic Report Containing Financial Statements.*
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(b) Reports on Form 8-K.
There were no reports filed on Form 8-K during the period covered by this report.
* The Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
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 there unto duly authorized.
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Yummies, Inc.
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[Registrant]
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S/ Susan Santage
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Susan Santage, President & Treasurer
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August 12, 2010
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16