Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: September 30, 2009
Commission file number 333-143236
TECHNISCAN, INC.
(Exact name of registrant as specified in its charter)
Delaware 27-1093363
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3216 South Highland Drive
Salt Lake City, Utah 84106
(Address of principal executive offices)
(801) 521-0444
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do Not Check if a Smaller Reporting Company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
As of November 12, 2009, the registrant had 9,000,000 shares of common stock,
$0.001 par value, issued and outstanding.
ITEM 1. FINANCIAL STATEMENTS
TechniScan, Inc.
(Formerly Castillo, Inc.)
(A Development Stage Company)
Balance Sheet (Unaudited)
--------------------------------------------------------------------------------
As of As of
September 30, December 31,
2009 2008
-------- --------
ASSETS
CURRENT ASSETS
Cash $ 447 $ 3,886
-------- --------
TOTAL CURRENT ASSETS 447 3,886
OTHER ASSETS
Organizational Costs 300 300
Deposits -- 2,145
-------- --------
TOTAL OTHER ASSETS 300 2,445
-------- --------
TOTAL ASSETS $ 747 $ 6,331
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 13,200 $ 4,200
Loan from Director 33,165 27,145
-------- --------
TOTAL CURRENT LIABILITIES 46,365 31,345
TOTAL LIABILITIES 46,365 31,345
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 50,000,000 shares
authorized; 9,000,000 shares issued and outstanding as of
September 30, 2009 and December 31, 2008 respectively 9,000 9,000
Additional paid-in capital 18,000 18,000
Deficit accumulated during Development stage (72,618) (52,014)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (45,618) (25,014)
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 747 $ 6,331
======== ========
See Notes to Financial Statements
2
TechniScan, Inc.
(Formerly Castillo, Inc.)
(A Development Stage Company)
Statement of Operations (Unaudited)
--------------------------------------------------------------------------------
February 2, 2007
Three Months Three Months Nine Months Nine Months (inception)
Ended Ended Ended Ended through
September 30, September 30, September 30, September 30, September 30,
2009 2008 2009 2008 2009
---------- ---------- ---------- ---------- ----------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
TOTAL REVENUES -- -- -- -- --
GENERAL & ADMINISTRATIVE EXPENSES 8,840 5,065 20,605 18,368 72,618
---------- ---------- ---------- ---------- ----------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES (8,840) (5,065) (20,605) (18,368) (72,618)
---------- ---------- ---------- ---------- ----------
NET LOSS $ (8,840) $ (5,065) $ (20,605) $ (18,368) $ (72,618)
========== ========== ========== ========== ==========
BASIC EARNINGS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 9,000,000 9,000,000 9,000,000 9,000,000
========== ========== ========== ==========
See Notes to Financial Statements
3
TechniScan, Inc.
(Formerly Castillo, Inc.)
(A Development Stage Company)
Statement of Cash Flows (Unaudited)
--------------------------------------------------------------------------------
February 2, 2007
Nine Months Nine Months (inception)
Ended Ended through
September 30, September 30, September 30,
2009 2008 2009
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(20,605) $(18,368) $(72,618)
Adjustments to reconcile net loss to net cash
used in operating activities:
Changes in operating assets and liabilities:
Increase in Deposits -- -- (300)
Decrease in Organization Costs 2,145 -- --
Increase in Accounts Payable 9,000 1,600 13,200
Increase in Loan from Director 6,020 16,500 33,165
-------- -------- --------
NET CASH USED IN OPERATING ACTIVITIES (3,440) (268) (26,553)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock -- -- 9,000
Additional paid-in capital -- -- 18,000
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES -- -- 27,000
-------- -------- --------
NET INCREASE (DECREASE) IN CASH (3,440) (268) 447
CASH AT BEGINNING OF PERIOD 3,887 3,519 --
-------- -------- --------
CASH AT END OF PERIOD $ 447 $ 3,251 $ 447
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
See Notes to Financial Statements
4
TechniScan, Inc.
(Formerly Castillo, Inc.)
Notes to Financial Statements
September 30, 2009
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
TechniScan, Inc. (the "Company") was incorporated in the State of Nevada on
February 2, 2007 as Castillo, Inc. The Company is a medical device company
engaged in the development and commercialization of an automated breast
ultrasound imaging system.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q. Therefore, they do not
include all information and notes necessary for a complete presentation of
financial position, results of operations, cash flows, and stockholders'
equity in conformity with U.S. generally accepted accounting principles.
Except as disclosed herein, there has been no material change in the
information disclosed in the notes to the condensed consolidated financial
statements included in the Company's annual report on Form 10-K for the
year ended December 31, 2008. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations
and financial position have been included and all such adjustments are of a
normal recurring nature. Operating results for the three months and nine
months ended September 30, 2009 are not necessarily indicative of the
results that can be expected for the year ending December 31, 2009.
B. DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by FASB ASC 915,
"DEVELOPMENT STAGE ENTITIES." The Company is devoting substantially all of
its present efforts to establishing a viable business. All losses
accumulated since inception has been considered as part of the Company's
development stage activities.
C. FISCAL PERIODS
The Company's fiscal year end is December 31.
D. USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in banks, money market funds, and
certificates of term deposits with maturities of less than three months
from inception, which are readily convertible to known amounts of cash and
which, in the opinion of management, are subject to an insignificant risk
of loss in value. The Company had $447 in cash and cash equivalents at
September 30, 2009.
F. START-UP COSTS
In accordance with the American Institute of Certified Public Accountants
Statement of Position 98-5, "REPORTING ON THE COSTS OF START-UP
ACTIVITIES", the Company expenses all costs incurred in connection with the
start-up and organization of the Company.
5
TechniScan, Inc.
(Formerly Castillo, Inc.)
Notes to Financial Statements
September 30, 2009
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
G. FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS
The Company has adopted Statement of Financial Accounting Standards
("SFAS") Number 119, "Disclosure About Derivative Financial Instruments and
Fair Value of Financial Instruments." The carrying amount of accrued
liabilities approximates its fair value because of the short maturity of
this item. Certain fair value estimates may be subject to and involve,
uncertainties and matters of significant judgement, and, therefore, cannot
be determined with precision. Changes in assumptions could significantly
affect these estimates. The Company does not hold or issue financial
instruments for trading purposes, nor does it utilize derivative
instruments in the management of its foreign exchange, commodity price or
interest rate market risks.
H. SEGMENTED REPORTING
SFAS Number 131, "Disclosure About Segments of an Enterprise and Related
Information", changed the way public companies report information about
segments of their business in their quarterly reports issued to
shareholders. It also requires entity-wide disclosures about the products
and services an entity provides, the material countries in which it holds
assets and reports revenues and its major customers. The company plans to
open and operate its retail establishments in Mexico.
I. FEDERAL INCOME TAXES
Deferred income taxes are reported for timing differences between items of
income or expense reported in the financial statements and those reported
for income tax purposes in accordance with SFAS Number 109, "ACCOUNTING FOR
INCOME TAXES", which requires the use of the asset/liability method of
accounting for income taxes. Deferred income taxes and tax benefits are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases, and for tax loss and credit
carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The
Company provides for deferred taxes for the estimated future tax effects
attributable to temporary differences and carryforwards when realization is
more likely than not.
J. EARNINGS (LOSS) PER SHARE
The Company has adopted Financial Accounting Standards Board ("FASB")
Statement Number 128, "Earnings per Share," ("EPS") which requires
presentation of basic and diluted EPS on the face of the income statement
for all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. In the accompanying financial statements, basic earnings
(loss) per share is computed by dividing net income/loss by the weighted
average number of shares of common stock outstanding during the period.
6
TechniScan, Inc.
(Formerly Castillo, Inc.)
Notes to Financial Statements
September 30, 2009
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
K. STOCK-BASED COMPENSATION
The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 123(R), "SHARE-BASED PAYMENT", which establishes
accounting for equity instruments exchanged for employee services. Under
the provisions of SFAS 123(R), stock-based compensation cost is measured at
the grant date, based on the calculated fair value of the award, and is
recognized as an expense over the employees' requisite service period
(generally the vesting period of the equity grant). The Company accounts
for share-based payments to non-employees, in accordance with SFAS 123 (as
originally issued) and Emerging Issues Task force Issue No 96-18,
"ACCOUNTING FOR EQUITY INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES
FOR ACQUIRING, OR IN CONJUNCTION WITH SELLING, GOODS OR SERVICES".
L. COMPREHENSIVE INCOME (LOSS)
SFAS No. 130, "Reporting Comprehensive Income", establishes standards for
reporting and display of comprehensive income and its components in a full
set of general-purpose financial statements. For the period ended September
30, 2009, the Company had no items of other comprehensive income.
Therefore, net loss equals comprehensive loss for the period ended
September 30, 2009.
M. REVENUE RECOGNITION
The Company recognizes revenue from the sale of products in accordance with
the Securities and Exchange Commission Staff Accounting Bulletin No. 104
("SAB 104"), "Revenue Recognition in Financial Statements." Revenue will
consist of retail sales income and will be recognized only when all of the
following criteria have been met:
(i) Evidence of a retail sales ticket exists;
(ii) Delivery has occurred; and
(iii) Revenue is reasonably assured.
NOTE 3 - CAPITAL STOCK
A) AUTHORIZED STOCK:
The Company has authorized 50,000,000 common shares with a par value of
$0.001 per share. Each common share entitles the holder to one vote, in
person or proxy, on any matter on which action of the stockholder of the
corporation is sought.
7
TechniScan, Inc.
(Formerly Castillo, Inc.)
Notes to Financial Statements
September 30, 2009
--------------------------------------------------------------------------------
NOTE 3 - CAPITAL STOCK (continued)
B) SHARE ISSUANCE:
From inception of the Company (February 2, 2007) to September 30, 2009, the
Company issued 9,000,000 common shares at $0.003 per share for total
proceeds of $27,000 being $9,000 for par value shares and $18,000 for
additional paid in capital. 3,000,000 shares were issued to the director
and officer of the Company and 6,000,000 shares were issued to 36
un-affiliated investors pursuant to a SB-2 Registration Statement.
NOTE 4 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the
realization of assets and the liquidation of liabilities in the normal
course of business. As at September 30, 2009, the Company has an
accumulated deficit of $72,619, working capital of $447 and has earned no
revenues since inception. The Company intends to fund operations through
equity financing arrangements, which may be insufficient to fund its
capital expenditures, working capital and other cash requirements.
These factors, among others, raise substantial doubt about the Company's
ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
NOTE 5 - INCOME TAXES
The Company has incurred operating losses of $72,619, which, if utilized,
will begin to expire in 2028. Future tax benefits, which may arise as a
result of these losses, have not been recognized in these financial
statements, and have been off set by a valuation allowance.
Details of future income tax assets are as follows:
September 30, 2009
------------------
Future income tax assets:
Net operating loss (from inception to
September 30, 2009) $ 72,619
Statutory tax rate (combined federal and state) 24,690
--------
Non-capital tax loss 24,690
Valuation allowance (24,690)
--------
$ --
========
The potential future tax benefits of these losses have not been recognized
in these financial statements due to uncertainty of their realization. When
the future utilization of some portion of the carryforwards is determined
not to be "more likely than not," a valuation allowance is provided to
reduce the recorded tax benefits from such assets.
8
TechniScan, Inc.
(Formerly Castillo, Inc.)
Notes to Financial Statements
September 30, 2009
--------------------------------------------------------------------------------
NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position, or cash flow.
As new accounting pronouncements are issued, the Company will adopt those
that are applicable under the circumstances.
NOTE 7 - RELATED PARTY TRANSACTIONS
Until September 30, 2009, Ms. Ochoa received a monthly management fee from
the Company of $500. While the company was in its organizational phase, Ms.
Ochoa advanced funds to the company to pay for costs incurred by it. These
funds were interest free. The balance due Ms. Ochoa was $33,165 on
September 30, 2009.
NOTE 8 - SUBSEQUENT EVENT
On October 9, 2009, the registrant TechniScan, Inc. (known as Castillo,
Inc. until the consummation of the Merger (as defined below)) (the
"Company") completed an acquisition of TechniScan, Inc., a privately held
company incorporated in the State of Utah ("TechniScan Utah") pursuant to
an Agreement and Plan of Merger, dated as of October 9, 2009, by and among
TechniScan Utah, the Company, TechniScan Acquisition, Inc., a Utah
corporation and wholly-owned subsidiary of the Company ("TechniScan
Acquisition") and Emilia Ochoa (the "Merger Agreement").
The Merger Agreement provides for the merger of TechniScan Acquisition with
and into TechniScan Utah, with TechniScan Utah continuing as the surviving
entity in the merger and a wholly-owned subsidiary of the Company (the
"Merger"). Immediately after completion of the Merger, TechniScan Utah was
merged with and into the Company (the "Subsidiary Merger").
Under the terms of the Merger Agreement, at the closing of the Merger:
* all of the issued and outstanding shares of common stock of TechniScan
Utah (other than dissenting shares, if any) were cancelled and each
share of common stock of TechniScan Utah was converted into and
exchanged for the right to receive one validly issued, fully paid and
nonassessable share of common stock in the Company,
* all outstanding options to purchase shares of TechniScan Utah common
stock were cancelled and each option was converted into an option to
purchase the equivalent number of the Company's common stock, pursuant
to the terms of the Employee Stock Option Plan of the Company,
* all of the issued and outstanding shares of common stock of TechniScan
Acquisition were converted into and represent the right to receive
validly issued, fully paid and nonassessable shares of TechniScan
Utah's common stock.
9
TechniScan, Inc.
(Formerly Castillo, Inc.)
Notes to Financial Statements
September 30, 2009
--------------------------------------------------------------------------------
NOTE 8 - SUBSEQUENT EVENT (continued)
On September 21, 2009, TechniScan Utah entered into a Purchase and Sale
Agreement with Ms. Ochoa whereby TechniScan Utah agreed to purchase from
Ms. Ochoa, the Company's sole officer and director prior to the completion
of the Merger, 3,000,000 shares of the common stock of the Company owned of
record by Ms. Ochoa for $65,000. Closing on this purchase and sale occurred
on October 9, 2009, immediately prior to the completion of the Merger, and
pursuant to the Merger all of the shares purchased by TechniScan Utah were
canceled and retired and ceased to exist, and no consideration was
delivered to TechniScan Utah in exchange therefor.
At the closing of the Merger, the shares of common stock of TechniScan Utah
issued and outstanding were converted into and exchanged for the right to
receive an aggregate of 76,824,535 shares of common stock of the Company,
par value $.001 per share. At the closing of the Merger, all outstanding
options to purchase shares of TechniScan Utah's common stock were converted
into 12,284,778 options to purchase the equivalent number of the Company's
common stock. As a result of the Merger, and immediately following the
closing, the former shareholders of TechniScan Utah own approximately 92%
of the issued and outstanding common stock of the Company and approximately
93% of the Company on a fully diluted basis (consisting of 83,824,535
shares of common stock and options to purchase 12,284,778 shares of common
stock).
Each holder of a share of common stock of the Company is entitled to one
vote per share. The shares of the Company's common stock issued to
TechniScan Utah's shareholders as part of the Merger were not registered
under the Securities Act of 1933, as amended (the "Securities Act"). These
shares may not be sold or offered for sale except as permitted under Rule
144 or another exception promulgated under the Securities Act. Prior to the
Merger, the Company was a publicly traded shell company and as such, shares
of the Company's common stock issued to TechniScan Utah's shareholders as
part of the Merger are not eligible for resale under the Securities Act
without registration, for a period of at least one year following the
filing of this report.
In connection with the consummation of the Merger, the Company changed its
name from "Castillo, Inc." to "TechniScan, Inc." The Company's common stock
is quoted on the Over-the-Counter Bulletin Board, or the OTC Bulletin
Board, under the symbol "CLLO.OB," which the Company expects to change in
connection with the name change.
Upon the closing of the Merger, Ms. Ochoa, our sole officer and director
prior to the Merger, resigned from each of her positions effective
immediately. Following Ms. Ochoa's resignation and pursuant to the Merger
Agreement, David C. Robinson was appointed Chief Executive Officer and
Chief Financial Officer of the Company and Barry K. Hanover was appointed
Chief Operating Officer of the Company. Upon the closing of the Merger, the
Board of Directors of the Company consists of five directors, Mr. Robinson,
Kenneth G. Hungerford II, Richard J. Stanley, Gerald A. Richardson and
Cheryl D. Cook. Mr. Hungerford was appointed as Chairman of the Board of
the Company. As a result of the Merger, the Company is now headquartered in
Salt Lake City, Utah.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Management's Discussion and Analysis of Financial Condition and Results of
Operations contains various "forward looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, regarding future
events or the future financial performance of TechniScan, Inc. (the "Company")
that involve risks and uncertainties. Certain statements included in this Form
10-Q, including, without limitation, statements related to anticipated cash flow
sources and uses, and words including but not limited to "anticipates",
"believes", "plans", "expects", "future" and similar statements or expressions,
identify forward looking statements. Any forward-looking statements herein are
subject to certain risks and uncertainties in the Company's business and any
changes in current accounting rules, all of which may be beyond the control of
the Company.
Forward-looking statements involve risks, uncertainties and other factors, which
may cause our actual results, performance or achievements to be materially
different from those expressed or implied by such forward-looking statements.
Factors and risks that could affect our results and achievements and cause them
to materially differ from those contained in the forward-looking statements
include those identified in the section titled "Risk Factors" in the Company's
Annual Report on Form 10-K for the year ended December 31, 2008, as well as
other factors that we are currently unable to identify or quantify, but that may
exist in the future.
In addition, the foregoing factors may affect generally our business, results of
operations and financial position. Forward-looking statements speak only as of
the date the statement was made. We do not undertake and specifically decline
any obligation to update any forward-looking statements, except as required by
law.
BUSINESS
Our business was formed to offer market and sell fragrance based products in
Mexico. During the past year, we have witnessed a dramatic reduction in investor
and lender willingness to provide funding throughout the world. We are also
experiencing increased levels of resistance to our inquiries for new sources of
financing. We need to generate additional funding beyond that provided in the
past by our director.
Management determined it was in the best interests of the Company and its
shareholders to consider other potential business opportunities that could
include changing our business plan, acquiring an existing business with
sufficient liquidity, or merging with another company.
On October 9, 2009, the registrant TechniScan, Inc. (formerly known as Castillo,
Inc.) completed an acquisition of TechniScan, Inc., a privately held company
incorporated in the State of Utah ("TechniScan Utah") pursuant to an Agreement
and Plan of Merger, dated as of October 9, 2009, by and among TechniScan Utah,
Castillo, Inc. (as the Company was known at that time), TechniScan Acquisition,
Inc., a Utah corporation and wholly-owned subsidiary of the Company and Emilia
Ochoa (the "Merger Agreement").
The Company reported this event on a Form 8-K, which was filed with the SEC on
October 16, 2009. The disclosure included the financial statements of
TechniScan Utah, pro-forma financial statements of the entities as if the
transaction had occurred as of June 20, 2009, and disclosures regarding
TechniScan Utah.
11
RESULTS OF OPERATIONS
We have generated no revenues since inception and have incurred $72,618 in
expenses from inception through September 30, 2009. We incurred $8,840 and
$5,065 in expenses for the three months ended September 30, 2009 and 2008,
respectively. These costs consisted of general and administrative expenses. We
incurred $20,605 and $18,368 in expenses for the nine months ended September 30,
2009 and 2008, respectively. These costs consisted of general and administrative
expenses.
Management determined it was in the best interests of the Company and its
shareholders to consider other potential business opportunities that could
include changing our business plan, acquiring an existing business with
sufficient cash flows, or merging with another company. On October 9, 2009, the
Company entered into the Merger Agreement.
The following table provides selected financial data about the Company for the
three months ended September 30, 2009.
As of
September 30,
Balance Sheet Data: 2009
------------------- --------
Cash $ 447
Total assets $ 747
Total liabilities $ 46,365
Stockholders' deficit $(45,618)
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at September 30, 2009 was $447. We believe our existing cash
balance plus loans from our director will be sufficient to fund our minor level
of operations until we consummate a potential business opportunity, or for the
next year if needed. Our director loaned the company a total of $30,765 as of
September 30, 2009 and will continue to loan the company funds on a month by
month basis as needed. In the event our director does not provide such funding,
or we are unable to secure adequate capital, our business will likely fail,
cease operations, and investors will likely lose their money. We are a
development stage company and have generated no revenue to date.
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 position, changes in
financial position, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to the Company.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position, or cash flow.
As new accounting pronouncements are issued, the Company will adopt those that
are applicable under the circumstances.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This disclosure is not required for smaller reporting companies.
12
ITEM 4T. CONTROLS AND PROCEDURES
Our management team, including our principal executive officer and our principal
financial officer, evaluated the effectiveness of the design and operation of
our disclosure controls and procedures as such term is defined under Rule
13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), as of the last day of the fiscal period covered by this
report, September 30, 2009. The term DISCLOSURE CONTROLS AND PROCEDURES means
our controls and other procedures that are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is accumulated and communicated to
management, including our principal executive officer and principal financial
officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. Based on this evaluation, our principal
executive officer and our principal financial officer concluded that our
disclosure controls and procedures were effective as of September 30, 2009.
Our principal executive officer and our principal financial officer are
responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act Rules 13a-15(f).
Our principal executive officer and our principal financial officer are required
to base their assessment of the effectiveness of our internal control over
financial reporting on a suitable, recognized control framework, such as the
framework developed by the Committee of Sponsoring Organizations (COSO). The
COSO framework, published in INTERNAL CONTROL-INTEGRATED FRAMEWORK, is known as
the COSO Report. Our principal executive officer and our principal financial
officer, have chosen the COSO framework on which to base their assessment. Based
on this evaluation, our principal executive officer and our principal financial
officer concluded that our internal control over financial reporting was
effective as of September 30, 2009.
During the three months ended September 30, 2009, there was no change in our
internal control over financial reporting (as such term is defined in Rule
13a-15(f) under the Exchange Act) that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives. Furthermore, smaller reporting companies face
additional limitations. Smaller reporting companies employ fewer individuals and
find it difficult to properly segregate duties. Often, one or two individuals
control every aspect of the Company's operation and are in a position to
override any system of internal control. Additionally, smaller reporting
companies tend to utilize general accounting software packages that lack a
rigorous set of software controls.
It should be noted that any system of controls, however well designed and
operated, can provide only reasonable and not absolute assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of certain
events. Because of these and other inherent limitations of control systems,
there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions, regardless of how remote.
13
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The information called for by this item is incorporated herein by reference to
the Company's Definitive Information Statement on Schedule 14C filed with the
SEC on September 18, 2009.
ITEM 6. EXHIBITS.
The following exhibits are filed as part of or incorporated by reference in this
report.
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation filed with the Secretary of State of
the State of Delaware (Incorporated by reference to Exhibit 3.1
of the Current Report on Form 8-K filed on October 16, 2009 (File
No. 333-143236))
3.2 Bylaws (Incorporated by reference to Exhibit 3.2 of the Current
Report on Form 8-K filed on October 16, 2009 (File No.
333-143236))
22.1 Published Report Regarding Matters Submitted to Vote of Security
Holders (Incorporated by reference to the Definitive Information
Statement on Schedule 14C filed on September 18, 2009 (File No.
333-143236))
31.1 Chief Executive Officer's Certification required under Section
302 of Sarbanes-Oxley Act of 2002
31.2 Chief Financial Officer's Certification required under Section
302 of Sarbanes-Oxley Act of 2002
32.1 Chief Executive Officer's and Chief Financial Officer's
Certification required under Section 906 of Sarbanes-Oxley Act of
2002
14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TECHNISCAN, INC.
November 16, 2009 By: /s/ David C. Robinson
-----------------------------------
David C. Robinson
Chief Executive Officer
(Principal Executive Officer)
November 16, 2009 By: /s/ Steven K. Passey
-----------------------------------
Steven K. Passey
Chief Financial Officer
(Principal Financial Officer)
15
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation filed with the Secretary of State of
the State of Delaware
3.2 Bylaws
22.1 Published Report Regarding Matters Submitted to Vote of Security
Holders
31.1 Chief Executive Officer's Certification required under Section
302 of Sarbanes-Oxley Act of 2002
31.2 Chief Financial Officer's Certification required under Section
302 of Sarbanes-Oxley Act of 2002
32.1 Chief Executive Officer's and Chief Financial Officer's
Certification required under Section 906 of Sarbanes-Oxley Act of
200