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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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


For the Quarterly Period Ended March 31, 2005



Commission file number: 1-3952

SIBONEY CORPORATION
(Exact name of registrant as specified in its charter)

Maryland
  
73-0629975
(State or other jurisdiction of
  
(I.R.S. Employer I.D. No.)
incorporation or organization)
    

325 North Kirkwood Road, Suite 300, St. Louis, MO 63122
(Address of principal executive offices)
(Zip Code)

314-822-3163
(Registrant’s telephone number, including area code)


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 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 an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Title of class of
  
Number of shares outstanding
common stock
  
as of the date of this report
Common stock, par value
  
17,345,419
$.10 per share
    
 
 


INDEX
    
     
PART I   FINANCIAL INFORMATION
    
     
Item 1.   Unaudited Financial Statements
  
 
     
 
 
 3
     
 
 
 4
     
 
 
 5
     
 
 
 6
     
 
 7
     
 
 
 9
     
 
 
13
     
 
13
     
   
     
Item 1. Legal Proceedings
  
14
     
 
14
     
 
16
     
 
16
     
 
17


 
2
 

ITEM 1. UNAUDITED FINANCIAL STATEMENTS
          
PART I - FINANCIAL INFORMATION
  
 
Assets
  
   
March 31,
  
December 31,
 
   
2005 (Unaudited)
 
2004
 
Current Assets
          
Cash
  
$
236,154
  
$
686,642
  
Accounts receivable
   
1,357,615
   
1,379,006
 
Inventories
   
347,543
   
314,947
 
Refundable income taxes
    
700,769
   
620,769
 
Prepaid expenses
   
174,033
   
164,305
 
Deferred tax asset
    
185,600
   
116,000
 
           
Total Current Assets
    
3,001,714
   
3,281,669
 
           
Property and Equipment, Net
   
395,751
   
432,500
 
           
Goodwill, Net
    
1,045,015
   
1,045,015
 
           
Other Assets
   
1,774,292
   
1,627,648
 
           
Total Assets
  
$
6,216,772
  
$
6,386,832
  
           
           
Liabilities And Stockholders’ Equity
           
Current Liabilities
          
Notes payable
  
$
450,000
  
$
6,771
  
Current portion of capitalized lease obligation
    
25,917
   
25,686
 
Accounts payable
    
199,003
   
173,660
 
Accrued bonuses
    
52,566
   
88,677
 
Accrued commissions
    
68,483
   
36,817
 
Accrued vacation
    
87,223
   
87,223
 
Accrued royalties
    
102,150
   
311,886
 
Accrued severance
    
273,885
   
―
 
Other accrued expenses
    
95,808
   
48,093
 
Accrued litigation liability
    
100,000
   
100,000
 
Total Current Liabilities
    
1,455,035
   
878,813
 
           
           
Long-Term Liabilities
          
Long-term litigation liability
    
100,000
   
100,000
 
Capitalized lease obligation
    
4,593
   
11,116
 
Deferred tax liability
    
7,600
   
360,000
 
Total Long-Term Liabilities
    
112,193
   
471,116
 
           
Commitments and Contingencies (Note 5)
          
           
Stockholders’ Equity
          
Common stock:
          
Authorized 100,000,000 shares at $0.10 par value; issued and
          
outstanding 17,345,419 at March 31, 2005 and 17,407,919 at
         
December 31, 2004
    
1,734,542
   
1,740,792
 
Retained earnings
   
2,915,002
   
3,296,111
 
Total Stockholders’ Equity
    
4,649,544
   
5,036,903
 
           
Total Liabilities and Stockholders’ Equity
  
$
6,216,772
  
$
6,386,832
  
           
Note: The balance sheet at December 31, 2004 has been derived from the audited financial statements at that date.
See accompanying notes to unaudited consolidated financial statements.
              


3
 
SIBONEY CORPORATION AND SUBSIDIARIES
  
 
           
   
For The Three Months Ended March 31,
  
   
2005
 
2004
 
           
Revenues
  
$
1,773,875
  
$
2,656,853
  
           
Cost of Product Sales
    
443,153
   
536,239
 
           
Selling, General and Administrative Expenses
    
2,192,322
   
1,754,306
 
           
Income (Loss) From Operations
    
(861,600
)
  
366,308
 
           
Other Income (Expense)
         
Interest expense, net
    
(2,691