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 September 30, 2009
TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-137293
Cold Gin Corporation
(Exact name of small business issuer as specified in its charter)
Delaware 7941 20-8560967
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(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification
incorporation Code Number)
or organization)
215 Dino Drive
Ann Arbor, MI 48103
734-686-0137
(734) 686-0137
(Registrants telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the last 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No
The number of shares of Common Stock, $0.001 par value, outstanding on
Septermer 30, 2009 was 1,360,000 shares.
Transitional Small Business Disclosure Format (check one): Yes No x
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
Our financial statements included in this Form 10-Q are as follows: | |
Balance Sheets as of September 30 , 2009 (unaudited) and December 31, 2008 (audited); | |
Statements of Operations for the three months and nine months ended September 30, 2009 and 2008, and for the Period from Inception (August 7, 2006) to September 30, 2009 (unaudited); | |
| Statement of Stockholders Deficit from Inception (August 7, 2006) to September 30, 2009 (unaudited); |
Statements of Cash Flows for the nine months ended September 30, 2009 and 2008, and for the Period from Inception (August 7, 2006) to September 30, 2009 (unaudited); | |
Notes to Financial Statements; |
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim periods ended September 30, 2009 are not necessarily indicative of the results that can be expected for the full year.
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COLD GIN CORPORATION |
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(A DEVELOPMENT STAGE ENTERPRISE) |
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BALANCE SHEETS |
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| SEPTEMBER 30, | DECEMBER |
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| 2009 | 31, 2008 |
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| (UNAUDITED) | (AUDITED) |
ASSETS |
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Current |
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Cash |
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| $ 15 | $ 17,956 |
Subscription receivable |
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| - | - | |
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TOTAL ASSETS |
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| $ 15 | $ 17,956 | |
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LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||||
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Current Liabilities | ||||||||
Accounts payable |
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| $ 2,750 | $ 5,250 | |
Due to affiliate |
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| 110 | - | |
Notes payable - related party |
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| 11,775 | 7,420 | ||
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Total Liabilities |
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| 14,635 | 12,670 | |
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STOCKHOLDERS' DEFICIT |
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SHARE CAPITAL |
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Common shares, 50,000,000 authorized, par value $0.001 |
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- issued and outstanding, 1,360,000(December 31, 2008 -1,360,000) |
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| 1,360 | 1,360 | ||||
Preferred stock, 1,000,000 shares authorized, par value $0.01 |
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- issued and outstanding, nil |
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| - | - | ||
Additional paid-in capital |
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| 51,490 | 51,490 | |
Deficit accumulated during development stage |
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| (67,470) | (47,564) | |||
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Total Stockholders' Deficit |
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| (14,620) | 5,286 | ||
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
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| $ 15 | $ 17,956 |
The accompanying notes are an integral part of these financial statements COLD GIN CORPORATION |
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(A DEVELOPMENT STAGE ENTERPRISE) |
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STATEMENTS OF OPERATIONS |
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(UNAUDITED) |
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| INCEPTION |
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| (AUGUST 7, |
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| THREE MONTHS ENDED | NINE MONTHS ENDED | 2006) TO | ||
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| SEPTEMBER 30, | SEPTEMBER 30, | SEPTEMBER | ||
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| 2009 | 2008 | 2009 | 2008 | 30, 2009 |
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REVENUE |
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| $ - | $ - | $ - | $ - | $ - |
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OPERATING EXPENSES |
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Selling, general and administrative |
| 1,360 | 3,992 | 19,906 | 15,754 | 67,470 | ||
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Total Operating Expenses |
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| 1,360 | 3,992 | 19,906 | 15,754 | 67,470 | |
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NET LOSS |
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| $ (1,360) | $ (3,992) | $ (19,906) | $ (15,754) | $ (67,470) |
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Weighted Average Number of Common Shares | 1,360,000 | 930,348 | 1,360,000 | 882,909 |
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Net Loss Per Share - Basic and Fully Diluted | $ (0.00) | $ (0.00) | $ (0.01) | $ (0.02) |
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COLD GIN CORPORATION |
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(A DEVELOPMENT STAGE COMPANY) |
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STATEMENT OF STOCKHOLDERS' DEFICIT |
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FROM INCEPTION (AUGUST 7, 2006) TO SEPTEMBER 30, 2009 |
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(UNAUDITED) |
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| DEFICIT |
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| ACCUM'D |
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| ADDITIONAL | DURING |
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| COMMON STOCK | PAID-IN | DEVELOPMENT |
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| SHARES | AMOUNT | CAPITAL | STAGE | TOTAL | |||||||||
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Balance - August 7, 2006 |
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| - | $ - | $ - | $ - | $ - | ||||||||||
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Common stock issued |
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| 850,000 | 850 | 1,000 | - | 1,850 | ||||||||||
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Net loss - December 31, 2006 |
| - | - | - | (1,750) | (1,750) | |||||||||||
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Balance - December 31, 2006 |
| 850,000 | 850 | 1,000 | (1,750) | 100 | |||||||||||
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Net loss - December 31, 2007 |
| - | - | - | (2,382) | (2,382) | |||||||||||
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Balance - December 31, 2007 |
| 850,000 | 850 | 1,000 | (4,132) | (2,282) | |||||||||||
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Shares issued for cash |
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| 500,000 | 500 | 49,500 | - | 50,000 | ||||||||||
Shares issued for services |
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| 10,000 | 10 | 990 | - | 1,000 | ||||||||||
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Net loss - December 31, 2008 |
| - | - | - | (43,432) | (43,432) | |||||||||||
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Balance - December 31, 2008 |
| 1,360,000 | $ 1,360 | $ 51,490 | $ (47,564) | $ 5,286 | |||||||||||
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Net loss - September 30, 2009 |
| - | - | - | (19,906) | (19,906) | |||||||||||
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Balance - September 30, 2009 |
| 1,360,000 | $ 1,360 | $ 51,490 | $ (67,470) | $ (14,620) | |||||||||||
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COLD GIN CORPORATION |
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(A DEVELOPMENT STAGE ENTERPRISE) |
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STATEMENTS OF CASH FLOWS |
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(UNAUDITED) |
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| INCEPTION | |||||||||
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| (AUGUST 7, | |||||||||
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| NINE MONTHS ENDED | 2006) TO | ||||||||||
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| SEPTEMBER 30, | SEPTEMBER | ||||||||||
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| 2009 | 2008 | 30, 2009 | |||||||||
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss |
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| $ (19,906) | $ (15,754) | $ (67,470) | |||||||||
Stock issued for services rendered |
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| - | 1,000 | 2,750 | |||||||||||
Changes in assets and liabilities |
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Accounts payable |
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| (2,500) | - | 2,750 | ||||||||||
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NET CASH FLOWS USED IN OPERATING ACTIVITIES |
| (22,406) | (14,754) | (61,970) | |||||||||||||
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Share capital issued |
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| - | 9,800 | 50,100 | ||||||||||
Advance from affiliate |
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| 110 | - | 110 | ||||||||||
Proceeds from notes payable |
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| 4,355 | 4,920 | 11,775 | |||||||||||
NET CASH FLOWS FROM(USED IN) FINANCING ACTIVITIES | 4,465 | 14,720 | 61,985 | ||||||||||||||
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Net Change In Cash |
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| (17,941) | (34) | 15 | ||||||||||
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Cash and Cash Equivalents - beginning of period |
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| 17,956 | 218 | - | ||||||||||||
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Cash and Cash Equivalents - end of period |
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| $ 15 | 184 | $ 15 | ||||||||||||
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SUPPLEMENTARY INFORMATION |
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Interest paid |
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| $ 224 | $ - | $ 224 | |||||||||
Income taxes paid |
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| $ - | $ - | $ - | ||||||||||
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COLD GIN CORPORATION
A Development Stage Company
NOTES INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
| (a) | Organization and Business: |
COLD GIN CORPORATION. (the Company) was incorporated in the State of Delaware on August 7, 2006 for the purpose of raising capital that is intended to be used in connection with its business plans which may include a possible merger, acquisition or other business combination with an operating business.
The Company is currently in the development stage. All activities of the Company to date relate to its organization, initial funding and share issuances.
| (b) | Basis of Presentation: |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. At the balance sheet date, the Company has a stockholders deficiency and a deficit accumulated during the development stage. Management plans to issue more shares of common stock in order to raise funds.
The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. In the opinion of management, these interim financial statements include all adjustments necessary in order to make them not misleading.
| (c) | Use of Estimates: |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
| (d) | Cash and Cash Equivalents: |
For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
COLD GIN CORPORATION
(A Development Stage Company
NOTES INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
(e) | Income Taxes: |
The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.
Any deferred tax asset is considered immaterial and has been fully offset by a valuation allowance because at this time the Company believes that it is more likely than not that the future tax benefit will not be realized as the Company has no current operations.
| (f) | Loss per Common Share: |
Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments.
| (g) | Fair Value of Financial Instruments: |
The carrying value of cash, accounts payable and notes payable approximate their fair value due to the short period of these instruments.
(h) Stock Based Compensation:
SFAS No. 123, "Accounting for Stock-Based Compensation," establishes and encourages the use of the fair value based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. The statement also permits companies to elect to continue using the current intrinsic value accounting method specified in Accounting Principles Board ("APB")
COLD GIN CORPORATION
(A Development Stage Company
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
(h) Stock Based Compensation (continued):
Opinion No. 25, "Accounting for Stock Issued to Employees," to account for stock-based compensation. The Company has elected to use the intrinsic value based method and has disclosed the pro forma effect of using the fair value based method to account for its stock-based compensation issued to employees. For options granted to employees where the exercise price is less than the fair value of the stock at the date of grant, the Company recognizes an expense in accordance with APB 25. For non-employee stock based compensation the Company recognizes an expense in accordance with SFAS No. 123 and values the equity securities based on the fair value of the security on the date of grant. For stock-based awards the value is based on the market value for the stock on the date of grant and if the stock has restrictions as to transferability a discount is provided for lack of tradability. Stock option awards are valued using the Black-Scholes option-pricing model.
(i) Comprehensive Income:
The Company has adopted SFAS No. 130, "Reporting Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Examples of items to be included in comprehensive income, which are excluded from net income, include foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. Comprehensive income (loss) is not presented in the Company's financial statements since there is no difference between net loss and comprehensive loss in any period presented.
NOTE 2 - CAPITAL STOCK
The total number of shares of capital stock which the Company shall have authority to issue is 51,000,000 shares consisting of 50,000,000 common shares with a par value of $.001 and 1,000,000 Series A Preferred shares with a par value $0.01. Series A Preferred shares have not yet been issued. On August 9, 2006, the Company issued 10,000 common shares for $100. Additionally the Company issued a total of 840,000 common shares for services rendered by the Companys executives for a total value of $1,750.
For the quarter ended June 30, 2008, the company issued 45,000 common shares for $4,500 and issued an additional 10,000 common shares for legal services totaling $1,000.
COLD GIN CORPORATION
(A Development Stage Company
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
NOTE 2 - CAPITAL STOCK (continued)
For the quarter ended September 30, 2008, the company issued 53,000 shares for $5,300.
For the quarter ended December 31, 2008 the Company issued for cash of $50,000 a total of 500,000 shares of common stock.
Holders of shares of common stock shall be entitled to cast one vote for each share held at all stockholders' meetings for all purposes, including the election of directors. The common stock does not have cumulative voting rights.
No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.
NOTE 3 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In April 2009, the Financial Accounting Standards Board (FASB) issued guidance for accounting for assets acquired and liabilities assumed in a business combination that arise from contingencies. This guidance modified earlier guidance to provide that contingent assets acquired or liabilities assumed in a business combination be recorded at fair value if the acquisition-date fair value can be determined during the measurement period. If not, such items would be recognized at the acquisition date if they meet the recognition requirements under GAAP for accounting for contingencies. In periods after the acquisition date, an acquirer shall account for contingent assets and liabilities that were not recognized at the acquisition date in accordance with other applicable GAAP, as appropriate. Items not recognized as part of the acquisition but recognized subsequently would be reflected in that subsequent periods income. This guidance, which was effective for the Company when issued, has no impact on the Companys current financial statements, but will apply to any future acquisitions.
In April 2009, the FASB issued guidance concerning interim disclosures about fair value of financial instruments requiring publicly traded companies to provide disclosure about the fair value of financial instruments whenever interim summarized financial information is reported. Previously, disclosures about the fair value of financial instruments were only required on an annual basis. Disclosure shall include the method(s) and significant assumptions used to estimate the fair value of financial instruments and shall describe changes in method(s) and significant assumptions, if any, during the period. This guidance was effective for interim and annual periods ending after June 15, 2009, and, as such, the Company began including this disclosure with its second quarter 2009 financial statements.
COLD GIN CORPORATION
(A Development Stage Company
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
NOTE 3 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (continued)
In May 2009, the FASB issued guidance regarding the disclosure of subsequent events. This guidance made no changes to current accounting but added required disclosures regarding the date through which the Company has evaluated subsequent events and whether that evaluation date is the date of financial statement issuance or the date the financial statements were available to be issued. This guidance was effective for interim and annual periods ending after June 15, 2009.
In June 2009, the FASB issued guidance changing the approach used to determine the primary beneficiary of a variable interest entity. The guidance requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity, amends previous guidance for determining whether an entity is a variable interest entity, and adds as a reconsideration event any change in facts and circumstances where the holders of the equity investment at risk, as a group, lose the power to direct the activities of the entity that most significantly impact the entitys economic performance. In addition, the revised guidance requires enhanced disclosures regarding an enterprises involvement in a variable interest entity. The new guidance is effective for the Company beginning January 1, 2010 and is not expected to have a material impact on the Companys financial statements.
NOTE 4 NOTE PAYABLE RELATED PARTY
The Company has received various loans from Peter Klamka, a shareholder totaling $11,775. The amount still outstanding is unsecured, due on demand, and bears interest at a rate of 8% per annum beginning January 2, 2008. The balance of the note can be converted into common shares at any time at a conversion price of $.08 per share.
NOTE 5 INCOME TAXES
For the nine months ended September 30, 2009, the Company has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $67,470 as at September 30, 2009, and will expire beginning in the year 2026.
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
COLD GIN CORPORATION
(A Development Stage Company
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
NOTE 5 INCOME TAXES(continued)
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Deferred tax asset attributable to |
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Net operating loss carryover |
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| $ 22,940 | $ 6,761 | ||
Valuation allowance |
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| (22,940) | (6,761) | |
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Net deferred tax asset |
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| $ - | $ - | |
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NOTE 6 GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company incurred losses of $67,470 since its inception, has negative working capital, and has not yet produced revenues from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern. Management anticipates that it will be able to raise additional working capital through the issuance of stock and through additional loans from investors.
The ability of the Company to continue as a going concern is dependent upon the Companys ability to attain a satisfactory level of profitability and obtain suitable and adequate financing. There can be no assurance that management's plan will be successful.
NOTE 7 SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to September 30, 2009 through November 16, 2009 and has determined that it does not have any material subsequent events to disclose in these financial statements.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words may, could, estimate, intend, continue, believe, expect or anticipate or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:
increased competitive pressures from existing competitors and new entrants;
our ability to raise adequate working capital;
deterioration in general or regional economic conditions;
adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
loss of customers or sales weakness;
inability to achieve sales levels or other operating results;
the unavailability of funds for capital expenditures; and
operational inefficiencies.
For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see Factors That May Affect Our Results of Operations in this document.
Item 2. Plan of Operations.
The following discussion and analysis should be read in conjunction with our financial statements and the notes thereto contained elsewhere in this filing.
Background Overview
COLD GIN CORPORATION. (the Company) was incorporated in the State of Delaware on August 7, 2006 developing of online opportunities in the field of mixed martial arts. We intend to build online communities and Internet retail outlets focused on the field of mixed martial arts which is also known as extreme fighting or ultimate fighting. Our first website, MMAonly, (www.mmaonly.com.) began operations in January 2007. We also own the domain names www.mmachicks.com and www.mmalocker.com but we have not launched websites at those domains yet.
Since our inception through September 30, 2009, we have not generated any revenues and have incurred a net loss of $67,470. Until January 2007, our only business activity was the formation of our corporate entity, creation of our business model, and analyzing the viability of our business, which included the development of our initial website. We anticipate the commencement of generating revenues in the next twelve months, of which we can provide no assurance. The capital raised in our offering has been budgeted to cover the costs associated with advertising on the Internet to draw attention to our website, costs associated with website enhancements, and covering various filing fees and transfer agent fees to complete our early money raise through our S-1 offering. We believe that advertising revenues and small amounts of equity will be sufficient to support the limited costs associated with our initial ongoing operations for the next twelve months. There can be no assurance that the actual expenses incurred will not materially exceed our estimates or that cash flow from listing fees will be adequate to maintain our business. As a result, our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditors report to the financial statements included in the registration statement.
Plan of Operation
We are attempting to build out www.mmaonly.com into a leading destination on the Internet for fans and athletes interested in mixed martial arts. Our principal goal is to earn
revenues by uniting readers and advertisers. In order to generate revenues during the next twelve months, we must:
1. Enhance our existing website We believe that using the Internet for a consumer information facility, online destination, and online retail establishment will provide us a base for operating our company. We registered the domain name www.mmaonly.com and have developed a preliminary website, where we expect to expand the site to be more comprehensive. We have begun construction on the preliminary aspects of our website, and intend to have a fully developed website during the Fourth quarter of 2009. We currently show MMA videos on our site.
2. Develop and implement a marketing plan Once we establish our presence on the Internet, we intend to devote our efforts to developing and implementing a plan to market our services to businesses. In order to promote our company and attract customers, we plan to advertise via the Internet in the form of banner ads, link sharing programs and search engine placements. We expect to generate some revenues from our MMA content offerings during the Fourth quarter of 2009, however, during the fourth quarter of 2009 we expect to formalize and implement a marketing scheme.
3. Develop and implement a comprehensive consumer information website We intend to create an online news source regarding mixed martial arts. Initially, we intend to allow users to post articles and news about their favorite MMA athletes and events. We also intend to display press releases and formal news items from other Internet sources our site. We also intend to create user forums to allow discussions related to mixes martial arts.
Satisfaction of our cash obligations for the next 12 months. Our plan of operation has provided for us to: (i) develop a business plan, and (ii) establish a comprehensive website capable of attracting advertisers as soon as practical. We have accomplished the goal of developing our business plan and deploying a limited operational website capable of providing a method of displaying advertising and interesting content. We do not have sufficient cash to enable us to complete our website development, which is an integral part of our operations. We have prepared our S2-1 offering to provide the basic minimum amount of funds to provide sufficient cash for the next 12 months. If we are unsuccessful in generating the cash set forth in our offering, we will be forced into curtailing the expenditures required to complete the website, until such time as we are able to either raise the cash required privately or launch another offering. Our sole officer and director, Mr. Joffe has agreed to continue his part time work until such time as there are either sufficient funds from operations, or alternatively, that funds are available through private placements or another offering in the future. If we were to not receive any additional funds, including the funds from our offering, we could not continue in business for the next 12 months. However, we would not be in a position to
complete the website as set forth in our business plan, or provide any significant advertisement for our customers, thus we would not anticipate any significant revenues. Since our website is operational, we can conduct business and earn revenues.
Summary of any product research and development that we will perform for the term of the plan. We do not anticipate performing any significant product research and development under our plan of operation. In lieu of product research and development we anticipate maintaining control over our advertising, especially on the Internet, to assist us in determining the allocation of our limited advertising dollars. Additionally, we are researching the various software packages available which can be manipulated to our needs.
Expected purchase or sale of plant and significant equipment. We do not anticipate the purchase or sale of any plant or significant equipment, as such items are not required by us at this time or in the next 12 months.
Significant changes in number of employees. The number of employees required to operate our business is currently one part time individual. After we complete the current offering and have commenced our advertising program, and word of mouth advertising, and at the end of the initial 12 month period, our plan of operation anticipates our requiring additional capital to hire at least on additional employee
Liquidity and Capital Resources
Cash will be increasing primarily due to the receipt of funds from our offering to offset our near term cash equivalents. Since inception, we have financed our cash flow requirements through issuance of common stock or loans from affiliates. As we expand our activities, we may continue to experience net negative cash flows from operations, pending receipt of sales revenues. Additionally we anticipate obtaining additional financing to fund operations through common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital.
We anticipate that we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, continually develop and upgrade our website, provide national and regional industry participants with an effective, efficient and accessible website on which to promote their products and services through the Internet, respond to competitive developments, and attract, retain
and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.
FACTORS THAT MAY AFFECT OUR FUTURE OPERATING RESULTS
We are a development stage company organized in August 2006 and have recently commenced operations, which makes an evaluation of us extremely difficult. At this stage of our business operations, even with our good faith efforts, we may never become profitable or generate any significant amount of revenues, thus potential investors have a high probability of losing their investment. Our auditors have substantial doubt about our ability to continue as a going concern. Additionally, our auditors report reflects the fact that the ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately the achievement of significant operating revenues. If we are unable to continue as a going concern, you will lose your investment.
We were incorporated in August 2006 as a Delaware corporation. As a result of our start-up operations we have; (i) generated no revenues, (ii) accumulated deficits of $67,470 for the period from inception to September 30 , 2009, and (iii) we have incurred losses of $43,432 and $19,906 for the year ended December 31, 2008 and nine months ended September 30, 2009 respectively, and have been focused on organizational and start-up activities, business plan development, and website design since we incorporated. Although we have established a website and commenced showing content related to mixed martial arts, there is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. Our future operating results will depend on many factors, including our ability to raise adequate working capital, demand for our service, the level of our competition and our ability to attract and maintain key management and employees. Additionally, our auditors report reflects that the ability of Cold Gin to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues.
Because of competitive pressures from competitors with more resources, Cold Gin may fail to implement its business model profitably.
The business of sports entertainment and mixed martial arts on the Internet is highly fragmented and extremely competitive. There are numerous competitors offering similar services. The market for customers is intensely competitive and such competition is expected to continue to increase. There are no substantial barriers to entry in this market and we believe that our ability to compete depends upon many factors within and beyond our control, including the timing and market acceptance of new solutions and enhancements to existing solutions developed by us, our competitors, and their advisors.
Many of our existing and potential competitors have longer operating histories in the Internet market, greater name recognition, larger customer bases, established technology driven websites, and significantly greater financial, technical and marketing resources than we do. As a result, they will be able to respond more quickly to new or emerging advertising techniques, technologies, and changes in customer requirements, or to devote greater resources to the development, promotion and marketing of their listing and advertising services than we can. Such competitors are able to undertake more extensive marketing campaigns for their services, adopt more aggressive pricing policies and make more attractive offers to potential employees, and strategic advertising partners.
We will require additional financing in order to implement our business plan. In the event we are unable to acquire additional financing, we may not be able to implement our business plan resulting in a loss of revenues and ultimately the loss of your investment.
Due to our start-up nature, we will have to incur the costs of advertising which is intended to generate revenue from advertisers, in addition to hiring new employees and commencing additional marketing activities for our services. To fully implement our business plan we will require substantial additional funding. Our S-1 offering, if successful, will only enable us to commence securing advertising clients, and will assist us in further developing our initial business operations, including the enhancement of our website; however will not be sufficient to allow us to expand our business meaningfully. Additionally, since the net offering proceeds have been earmarked for advertising expenses, some website development fees, and minimal working capital, we will not be capitalized sufficiently to hire or pay employees.
We will need to raise additional funds to expand our operations. We plan to raise additional funds through private placements, registered offerings, debt financing or other sources to maintain and expand our operations. Adequate funds for this purpose on terms favorable to us may not be available, and if available, on terms significantly more adverse to us than are manageable. Without new funding, we may be only partially successful or completely unsuccessful in implementing our business plan, and our stockholders will lose part or all of their investment.
As a result of our deficiency in working capital at June 30, 2009 and other factors, our auditors have included a paragraph in their report regarding substantial doubt about our ability to continue as a going concern.
There is no current public market for our common stock; therefore you may be unable to sell your securities at any time, for any reason, and at any price, resulting in a loss of your investment.
As of the date of this filing, there is no public market for our common stock. Although we plan, in the future, to contact an authorized OTC Bulletin Board market maker for sponsorship of our securities on the Over-the-Counter Bulletin Board, there can be no assurance that our attempts to do so will be successful. Furthermore, if our securities are not quoted on the OTC Bulletin Board, or elsewhere, there can be no assurance that a market will develop for the common stock or that a market in the common stock will be maintained. As a result of the foregoing, investors may be unable to liquidate their investment for any reason.
Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Cold Gin; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Cold Gin are being made only in accordance with authorizations of management and directors of Cold Gin, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Cold Gin s assets that could have a material effect on the financial statements.
We have one individual performing the functions of all officers and directors. This individual is responsible for monitoring and ensuring compliance with our internal control procedures. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our 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. Controls and Procedures.
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, Eric Joffe our Chief Executive Officer and Principal Accounting Officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, Mr. Joffe, our Chief Executive Officer and Principal Accounting Officer, concluded that our disclosure controls and procedures are effective in timely alerting him to material information required to be included in our periodic SEC filings. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
It should be noted, however, that no matter how well designed and operated, a control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems (including faulty judgments in decision making or breakdowns resulting from simple errors or mistakes), there can be no assurance that any design will succeed in achieving its stated goals under all potential conditions. Additionally, controls can be circumvented by individual acts, collusion or by management override of the controls in place.
PART II OTHER INFORMATION
Item 1.
Legal Proceedings.
None.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Use of Proceeds From Sales of Registered Securities
Our Registration Statement on Form S-1 (File No. 08685409), related to our initial public offering, was declared effective by the SEC on March 21, 2008. A total of 500,000 shares of our Common Stock were registered with the SEC with an aggregate offering price of $50,000. All of these shares were registered on our behalf. As of September 30, 2009 we have sold 500,000 shares for $50,000.
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 and Reports on Form 8-K.
Exhibits
Incorporated by reference
Exhibit
number
Exhibit description
Filed
herewith
Form
Period
ending
Exhibit
Filing date
Articles of Incorporation of Cold Gin Inc.
S-1
S-1
4
Instrument defining the rights of security holders:
S-1
S-1
S-1
Certification pursuant to Section 302 of the Sarbanes-Oxley Act
X
Certification pursuant to Section 906 of the Sarbanes-Oxley Act
X
13
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, thereunto duly authorized.
COLD GIN, INC.
(Registrant)
By:/s/ Eric Joffe
Eric Joffe, President &
Chief Executive Officer (On behalf of
the registrant and as principal accounting
officer)
Date: November 16, 2009
Exhibit 31.1
CERTIFICATIONS
I, Eric Joffe, Chief Executive and Principal Accounting Officer of Cold Gin Corp., certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of Cold Gin Corp.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4.
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
evaluated the effectiveness of the small business issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)
disclosed in this report any changes in the small business issuers internal control over financial reporting that occurred during the small business issuers most recent fiscal quarter (the small business issuers fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuers internal control over financial reporting; and
5.
I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuers auditors and the audit committee of small business issuers board of directors (or persons performing the equivalent functions):
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuers ability to record, process, summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuers internal control over financial reporting.
November 16, 2009
/s/ Eric Joffe
Eric Joffe, Principal Executive Officer and
Principal Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Cold Gin Corp. (the Company) on Form 10-Q for the quarter ending September 30, 2009 as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
(1)
The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: November 16, 2009 | By: /s/ Eric Joffe
|
| Principal Executive Officer and |
| Principal Financial Officer |