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EX-32.1 - CERTIFICATION - Zentric, Inc.ex321.htm
EX-31.1 - CERTIFICATION - Zentric, Inc.ex311.htm



 

 

 

 

 

U.S. 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 September 30, 2009


o

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


For the transition period from


Commission File No.  333-140236

 

CONSTANT ENVIRONMENT, INC., INC.

(Exact name of small business issuer as specified in its charter)

 

Nevada

  

 (State or other jurisdiction of  Incorporation or organization)

(I.R.S. Employer Identification No.)


1310 Contour Drive

Mississauga, Ontario, Canada, L5H 1B2

(Address of Principal Executive Offices)


(416) 728-1540

 (Issuer’s telephone number)


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


Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o


Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15 (d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court.  Yes o  No x


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

 

Large Accelerated Filer o     Accelerated Filer o     Non-Accelerated Filer o     Smaller Reporting Company x



State the number of shares outstanding of each of the issuer’s classes of common equity, as of November 13, 2009:  48,878,000 shares of common stock.


Transitional Small Business Disclosure Format    Yes o  No x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

x Yes     o No


 

 

 

 



1






 

TABLE OF CONTENTS



PART I FINANCIAL INFORMATION


Item 1.

Financial Statements

3

Item 2.

Management’s Discussion and Analysis of Financial Condition

8

Item 3

Quantitative and Qualitative Disclosures About Market Risk

12

Item 4T.

Control and Procedures

12


PART II-- OTHER INFORMATION


 Item 1

Legal Proceedings

13

 Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

13

 Item 3.

Defaults Upon Senior Securities

13

 Item 4.

Submission of Matters to a Vote of Security Holders

13

 Item 5.

Other Information

13

 Item 6.

Exhibits and Reports on Form 8-K

13


 




2





 


CONSTANT ENVIRONMENT, INC.

(A Development Stage Company)

 

BALANCE SHEETS


(Unaudited)

 

  

  

September 30, 2009

(Unaudited)

  

  

 December 31, 2008

 

  

ASSETS

  

 

  

  

 

  

Current Assets

  

 

  

  

 

  

    Cash

  

$

4,785

  

  

$

3,215

  

  Total Assets

  

$

4,785

  

  

$

3,215

  

  

  

  

  

  

  

  

  

  

LIABILITIES AND STOCKHOLDERS' DEFICIT

  

  

  

  

  

  

  

  

Current Liabilities

  

  

  

  

  

  

  

  

Advances from shareholder

  

$

21,561

  

  

$

6,000

  

Accounts payable and accrued liabilities

 

 

4,606

 

 

 

-

 

Note payable – related party, net of discount of $1,450

and $0 at September 30, 2009 and December 31, 2008 respectively

 

 

88,550

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total Liabilities

  

  

114,717

  

  

  

6,000

  

  

  

  

  

  

  

  

  

  

Stockholders' (Deficit) Equity

  

  

  

  

  

  

  

  

Common stock, $.001 par value, 400,000,000 shares authorized, 48,878,000

and 48,718,000 issued and outstanding as of September 30, 2009 and

December 31, 2008, respectively

  

  

48,878

  

  

  

48,718

  

Additional paid-in capital

  

  

(23,488)

  

  

  

(26,503)

  

Deficit accumulated during the development stage

  

  

(135,322

)

  

  

(25,000

)

  

  

  

  

  

  

  

  

  

  Total Stockholders' Deficit

  

  

(109,932)

  

  

  

(2,785

)

  

  

  

  

  

  

  

  

  

  Total Liabilities and Stockholders' Deficit

  

$

4,785

  

  

$

3,215

  


 


The accompanying notes are an integral part to these financial statements.





3







 

CONSTANT ENVIRONMENT, INC.

 

 

 

 

 

 

 

(A Development Stage Company)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTH

SEPTEMBER 30, 2009 AND FOR THE PERIOD JULY 21, 2008 (INCEPTION) THROUGH SEPTEMBER 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2009

 

 

Nine Months Ended September 30, 2009

 

For the Period From Inception (July 21, 2008) to September 30, 2008

 

For the Period From Inception (July 21, 2008) to September 30, 2009

REVENUE

 $

                          -   

  

 $

                            -   

 $

                                 -   

 $

                                    -   

EXPENSES

 

 

 

 

 

 

 

 

 

 

Consulting and sub-contracting

 

                   67,000

 

 

                    67,000

 

                          15,000

 

                            82,000

 

Professional fees

 

                   21,466

 

 

                    39,688

 

                            1,000

 

                            49,188

 

 Interest expense

 

                     2,494

 

 

                      3,634

 

                                 -   

 

                              4,054

 

Bank charges

 

                          -   

 

 

                            -   

 

                                 -   

 

                                   80

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 $

                 (90,960)

  

 $

                (110,322)

 $

                        (16,000)

 $

                         (135,322)

 

 

 

 

 

 

 

 

 

 

 

 

LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED

 $

                          -   

 

 $

                            -   

 $

                                 -   

 $

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED

 

            48,769,282

 

 

             48,749,648

 

                   46,173,006

 

 





The accompanying notes are an integral part to these financial statements.





4





 

CONSTANT ENVIRONMENT, INC.

 

 

 

 

 

 

 

 

 

(A Development Stage Company)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2009 AND PERIOD FROM

JULY, 21 (INCEPTION) TO SEPTEMBER 30, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Nine Months Ended September 30, 2009

 

 

For the Period From Inception (July 21, 2008) to September 30, 2008

 

For the Period From Inception (July 21, 2008) to September 30, 2009

Net loss

 

 

 $

             (110,322)

 

 $

                       (16,000)

 $

                      (135,322)

 

 

 

 

 

 

 

 

 

 

 

Adjustment to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Common stock issued for services

 

 

 

                        -   

 

 

                         15,000

 

                          15,000

 

Imputed interest on advance from shareholder

 

 

 

                   1,575

 

 

 

 

                            1,995

 

Amortization on note discount

 

 

 

                      150

 

 

                                -   

 

                               150

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

 

4,605

 

 

                                - 

 

4,605

NET CASH USED IN OPERATING ACTIVITIES

 

 

 $

             (103,992)

 

 $

                         (1,000)

 $

                      (113,572)

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Common shares issued for cash

 

 

 

                        -   

 

 

                           3,500

 

                            6,795

 

Advances from related party

 

 

 

15,562

 

 

6,000

 

21,562

 

Borrowings on debt – related party

 

 

 

               90,000

 

 

-                           

 

                        90,000

 

Deferred Offering Costs

 

 

 

-

 

 

                         (8,500)

 

-

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES

 

               105,562

 

 

                           1,000

 

                        118,357

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH

 

 

 

                   1,570

 

 

                                - 

 

                            4,785

 

 

 

 

 

 

 

 

 

 

 

CASH, BEGINNING OF PERIOD

 

 

 

                   3,215

 

 

                                -   

 

                                 -   

 

 

 

 

 

 

 

 

 

 

 

CASH, END OF PERIOD

 

 

 $

                   4,785

 

 $

                                - 

 $

                            4,785

 

 

 



The accompanying notes are an integral part to these financial statements.





5





 

CONSTANT ENVIRONMENT, INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

 

 

1.

ORGANIZATION AND BASIS OF PRESENTATION

 

Constant Environment, Inc. (the "Company"), was incorporated on July 21, 2008, under the laws of the State of Nevada as an early stage product and services company that provides microclimate systems to specialty markets, who have a need to protect and preserve rare and/or valuable items.  Not all information and footnotes are included in these condensed unaudited financial statements, these notes should be read in conjunction with our S-1 registration statement and audited financial statements.  


Recently Adopted Accounting Pronouncements


Effective June 30, 2009, the Company adopted a new accounting standard issued by the FASB related to the disclosure requirements of the fair value of the financial instruments. This standard expands the disclosure requirements of fair value (including the methods and significant assumptions used to estimate fair value) of certain financial instruments to interim period financial statements that were previously only required to be disclosed in financial statements for annual periods. In accordance with this standard, the disclosure requirements have been applied on a prospective basis and did not have a material impact on the Company’s financial statements.


In June 2009, the Financial Accounting Standards Board ("FASB") established the FASB Accounting Standards Codification ( the "Codification") as the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP.  Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.  The introduction of the Codification does not change GAAP and other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the our consolidated financial statements.


Recently Issued Accounting Standards


In August 2009, the FASB issued an amendment to the accounting standards related to the measurement of liabilities that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard is effective for the Company on October 1, 2009. The Company does not expect the impact of its adoption to be material to its financial statements.


In October 2009, the FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective for the Company on January 1, 2011.


In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the product’s essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective for the Company on January 1, 2011.











6





CONSTANT ENVIRONMENT, INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

 

2.

GOING CONCERN

  

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business.  The Company has had limited revenues and has an accumulated deficit which raises substantial doubt about the Company's ability to continue as a going concern.  The financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company's ability to continue as a going concern is contingent upon its ability to complete public equity financing and generate profitable operations in the future.  Management's plan in this regard is to secure additional funds through equity financing and through loans made by the Company's stockholders.

 

4. STOCKHOLDERS’ EQUITY


On July 15, 2009, the Company's board of directors declared a four-for-one forward stock split on the shares of the Company's common stock. Each shareholder of record on August 6, 2009 received four additional shares of common stock for each share of common stock then held. The Company retained the current par value of $0.001 per share for all shares of common stock. All references in the financial statements to the number of shares outstanding, per share amounts, common stock, additional paid-in capital and stock option data of the Company's common stock have been restated retroactively to reflect the effect of the stock split for all periods presented.


On July 27, 2009 we entered into a Loan Agreement with a shareholder wherein they agreed to loan us $20,000 and received 20,000 shares of our common stock.


On August 7, 2009 we entered into a Loan Agreement with a shareholder wherein they agreed to loan us $50,000 and received 100,000 shares of our common stock.


On August 15, 2009 the Company entered into a Loan Agreement with a shareholder wherein he agreed to loan the Company $20,000 and receive 40,000 shares of the Company's common stock.


Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company's ability to pay dividends on its common stock. The Company has not declared any dividends since incorporation. 


5. RELATED PARTY TRANSACTIONS


Related party transactions are in the normal course of operations and are recorded at amounts established and agreed between the related parties. Related party transactions not disclosed elsewhere in these consolidated financial statements are as follows:


The Company has received cash advances of $15,562 and $21,562 for the nine months ended September 30, 2009 and from inception to September 30, 2009, respectively from a director and shareholder.


Interest has been imputed at 10% resulting in interest expense of $1,575 and $1,995 for the nine months ended September 30, 2009 and from inception to September 30, 2009 respectively.  


As seen in Note 6 below, the company received loan from shareholders of $90,000 during the nine month ended September 30, 2009.


6. NOTE PAYABLE


During the nine months ended September 30, 2009, the Company issued the following notes:


On July 27, 2009 we entered into a Loan Agreement with a shareholder wherein they agreed to loan us $20,000 bearing 15% interest rate and due in one year.  As an incentive to providing the loan to the company, 20,000 shares of common stock was issued at a value of $.01 per share resulting in a discount of $200 which is being amortized using straight-line during the term of the loan.   






7





CONSTANT ENVIRONMENT, INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2009


On August 7, 2009 we entered into a Loan Agreement with a shareholder wherein they agreed to loan us $50,000 bearing 15% interest rate and due in two year.  As an incentive to providing the loan to the company, 100,000 shares of common stock was issued at a value of $.01 per share resulting in a discount of $1,000 which is being amortized using straight-line during the term of the loan.    


On August 15, 2009 we entered into a Loan Agreement with a shareholder wherein they agreed to loan us $20,000 bearing 15% interest rate and due in one year.  As an incentive to providing the loan to the company, 40,000 shares of common stock was issued at a value of $.01 per share resulting in a discount of $400 which is being amortized using straight-line during the term of the loan.    



7. SUPPLEMENTAL CASH FLOW INFORMATION


No interest or taxes were paid by the Company for the nine months ended September 30, 2009 and from inception to September 30, 2009.


8. SUBSEQUENT EVENTS


There were no subsequent events through November 15, 2009



8





 

Management's Discussion and Analysis

Forward-Looking Statements


The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, the Financial Statements of the Company and Notes thereto included elsewhere in this Report.  Historical results and percentage relationships among any amounts in these financial statements are not necessarily indicative of trends in operating results for any future period.  The statements, which are not historical facts contained in this Report, including this Plan of Operations, and Notes to the Financial Statements, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements are based on currently available operating, financial and competitive information, and are subject to various risks and uncertainties.  Future events and the Company's actual results may differ materially from the results reflected in these forward-looking statements.  Factors that might cause such a difference include, but are not limited to, dependence on existing and future key strategic and strategic end-user customers, limited ability to establish new strategic relationships, ability to sustain and manage growth, variability of operating results, the Company's expansion and development of new service lines, marketing and other business development initiatives, the commencement of new engagements, competition in the industry, general economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the service requirements of its clients, the potential liability with respect to actions taken by its existing and past employees, risks associated with international sales, and other risks described herein and in the Company's other SEC filings.  Dollar amounts are in US dollars unless otherwise stated.


Constant Environment, Inc. (the "Company"), was incorporated on July 21, 2008, under the laws of the State of Nevada as an early stage product and services company that provides microclimate systems to specialty markets, who have a need to protect and preserve rare and/or valuable items.  


PLAN OF OPERATIONS

 

The information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operation contains “forward looking statements.” Actual results may materially differ from those projected in the forward looking statements as a result of certain risks and uncertainties set forth in this report. Although our management believes that the assumptions made and expectations reflected in the forward looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be materially different from the expectations expressed in this Registration Statement. The following discussion should be read in conjunction with the audited Consolidated Financial Statements and related Notes included in Item 1.

 

Proposed Milestones to Implement Business Operations:


Our plan of operations for the twelve months following the date of this registration statement is to complete the following objectives within the time period specified, subject to the availability of adequate capital as outlined below:


ONLINE PRODUCT AND SERVICE ORIGINATION


We are in the process of completing the website. The domain name “Constantenvironment.com” has been secured and a website designed contracted. We are delayed in the completion and expecting now a 4th quarter completion timeframe.


 The estimated cost for completing our website is budgeted at $10,000 over the next twelve months. We will be utilizing it to pursue the following market tactics in order to generate leads for our online services:


o  

Registering with Internet search engines to ensure our company’s services appear in prime locations when online searches for networking, Microclimate (and micro climate), as well as Controlled Environment, and Indoor climate (and other combinations of those) when they are made;

o  

Forming strategic alliances that will generate additional leads from companies offering complementary services;

o  

Providing top quality services to encourage referrals, and using our CEO’s existing social network within the microclimate industry;

o  

Placing banner advertisements on microclimate related web sites which is designed to bring new qualified visitor/customers directly to the web site. We have approached, but not negotiated or contracted with any additional advertisers who will advertise on our web site during the second quarter of 2009;

o  

Linking with existing microclimate sites that will allow users to click and immediately be connected to our company’s web site.

 

We plan to assemble the products in house with the technical assistance of Micro Climate Technology for small quantity orders. For larger quantity orders, we plan to outsource the manufacturing to OEM manufacturers.


Our ability to develop organization strength will be severely limited if we raise no or nominal funds. During the next twelve



9





months, we anticipate hiring four additional salaried full-time employees, a number of commissioned full-time employees and no part-time employees. The full-time employees would consist of: 1 administrator at $25,000 per year, 2 Sales people at $40,000 per year, plus commission, and 1 technical person at $55,000 per year. We may utilize the services of staffing and recruiting firms. We may also employ individuals whose sole responsibility will be to identify and recruit qualified technical microclimate specialists. We have budgeted $20,000 over the next twelve months for employee recruiting and training.


Completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. If we are unable to generate sufficient revenues, we may be unable to proceed with our plan of operations. Even without significant revenues within the next twelve months, we still anticipate being able to continue with our present activities, however we may require financing to potentially achieve our goal of profit, revenue and growth. We are seeking equity financing for a total of $250,000-$500,000 to cover our administrative expenses, marketing and expansion. We anticipate that any such financing will be through the sale of shares of our common stock at prices based upon our trading market once such market develops. If we are not able to obtain financing of at least $250,000 it will have a significant impact on our liquidity and ability to proceed with our business expansion plans.

 

We anticipate that our operational, general and administrative expenses for the next 12 months will total $440,920. The estimated breakdown is as follows:

 


 

Web Development

$

10,000

 

Legal/Accounting

$

15,000

 

Upgraded Computer systems

$

12,500

 

Telecommunications/DSL

$

900

 

Employee recruitment and training

$

30,000

 

General Administrative

 

 

 

 Advertising

$

50,000

 

 Automotive

$

10,000

 

 Deprecation expense

$

1,270

 

 Employee benefits

$

1,500

 

 Entertainment

$

9,000

 

 Insurance

$

8,000

 

 Office salaries

$

180,000.00

 

 Office supplies

$

7,000

 

 Professional expense

$

8,000

 

 Rent

$

30,000

 

 Repairs & Maintenance

$

1,500

 

 Taxes

$

6,250

 

 Telephone

$

6,000

 

 Travel

$

50,000

 

 Utilities

$

4,000

 

 Total General Administrative

$

372,520

 

 

 

 

 

 Total Expenses

$

440,920

 

 

 

 

 

 

The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and status of our business plan. We plan to focus our sales initially in Canada then expand internationally.


In the event we are not successful in generating sufficient revenue, additional funds may be required and we would then not be able to proceed with our business plan for the development and marketing of our core products and services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we could incur operating losses in the foreseeable future. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit from our advertising and new products to cover our operating expenses.




10





Employees


Presently our two officers are contributing their services without payment and certain consultants have accepted shares for services.

 

In the future, we plan to hire five full time employees and two part-time employees. From time to time, we may employ additional independent contractors to support our development, marketing, sales, support and administrative organization. We also intend to hire 2 sales/marketing staff, 1 administrative assistant, and 2 microclimate technicians. Competition for qualified personnel in the industry in which we compete is intense. We believe that our future success will depend in part on our continued ability to attract, hire or acquire and retain qualified employees.


  

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009


The Company did not generate any revenues for the three and nine months ended September 30, 2009.


Professional fees include legal and accounting fees and filing fees. Professional fees for the three and nine months ended September 30, 2009 was $21,466 and $39,688 respectively.


Consulting and subcontracting fees for the three and nine months ended September 30, 2009 was $67,000.


Interest expense for the three and nine months ended September 30, 2009 was $2,494 and $3,634 respectively.


Net loss for the three and nine months ended September 30, 2009 was $90,960 and $110,322 respectively. The loss was primarily due to the consulting fees, professional fees and interest expenses.


Loss per share was $0.00 for the period ended September 30, 2009.


There were no services contributed by shareholder or bank charges expenses for the three and nine months ended September 30, 2009.


LIQUIDITY AND CAPITAL RESOURCES


As of September 30, 2009, we had a working capital deficiency of $109,932, which represented a working capital decrease of $107,147 as compared to the working capital deficiency position of $2,785 as of December 31, 2008. The decrease is mainly due to the increase of our notes. We did not raise any cash from issuance of common stock.


Cash flows used in operating activities for the nine month period ended September 30, 2009 was ($103,992).


Cash flows used in financing activities for the nine month period ended September 30, 2009 was $105,562, which was due to loans.


On July 27, 2009 the Company entered into a Loan Agreement with a shareholder wherein they agreed to loan the Company $20,000 and will receive 5,000 shares of the Company’s common stock.


On August 7, 2009 the Company entered into a Loan Agreement with a shareholder wherein they agree to loan the Company $50,000 and will received 100,000 shares of the Company’s common stock.  


On August 15, 2009 the Company entered into a Loan Agreement with a shareholder wherein they agreed to loan the Company $20,000 and will receive 40,000 shares of the Company's common stock.



GOING CONCERN


Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited financial statements for the period ended December 31, 2008, our independent registered accountants included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

  

 

 



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CRITICAL ACCOUNTING POLICIES AND ESTIMATES


Our most critical accounting policies, which are those that require significant judgment, include: income taxes and revenue recognition. In-depth descriptions of these can be found in our Annual Report on Form S-1 for the fiscal year ended December 31, 2008. There have been no material changes in our existing accounting policies from the disclosures included in our 2008 Annual Report on Form S-1.


OFF-BALANCE SHEET ARRANGEMENTS


We do not have any off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.


 

Item 3.    Quantitative and Qualitative Disclosures about Market Risks


We conduct our business in United States dollars. Our market risk is limited to the United States domestic, economic and regulatory factors.


Item 4T. Controls and Procedures

 

Management's evaluation of disclosure controls and procedures


We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)).  Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were ineffective ensuring that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.


Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.  Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. We performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this quarterly report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.



Changes in Internal Controls


There was no change in our internal controls over financial reporting identified in connection with the requisite evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

 



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PART II – OTHER INFORMATION

 

Item 1.   Legal Proceedings.

 

None

 

Item 2.    Changes in Securities.

 

None

 

Item 3.   Defaults Upon Senior Securities.

 

None

 

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

 

None.

 

Item 5.   Other Information

 

None

 

Item 6. Exhibits and Reports on Form 8-K

 

 (A)            Exhibits

 

31.1  

Certification Pursuant to 18 U.S.C Section 1350, As adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

  

  

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

(B)  Reports on Form 8-K

None.



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SIGNATURES

 

In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

 


  

CONSTANT ENVIRONMENT, INC.

  

Registrant

  

  

Date: November 15, 2009

By: /s/ Jeff Mak

  

Jeff Mak

  

President, Chief Executive Officer,

Principal Accounting Officer and Director

 




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