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EX-32.1 - CERTIFICATION - CONCEPT DIGITAL INC /DE/ | f10q0607ex32i_conceptdig.htm |
EX-31.1 - CERTIFICATION - CONCEPT DIGITAL INC /DE/ | f10q0607ex31i_conceptdig.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_________________
FORM
1O-Q
_________________
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE
|
QUARTERLY
PERIOD ENDED June 30, 2007
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
Transition Period From ________ to _______
Commission
File No. 0-32029
_________________
CONCEPT
DIGITAL, INC.
(Exact
name of registrant as specified in its charter)
_________________
Delaware
|
22-3608370
|
|||
(State or Other
Jurisdiction of
Incorporation
or Organization)
|
(IRS
Employer Identification No.)
|
298
Fifth Avenue
New
York, NY 10001
(Address of Principal
Executive Offices)
(212)
564-1600
(Issuer’s
Telephone Number, Including Area Code)
Check
whether the Issuer (1) filed all reports required to be filed by Section 13 or
l5( d) of the Exchange Act during the past 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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes o No o
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 |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act. Yes ¨ No
x
State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date: 41,263,381 shares of common stock
were outstanding as of November 18, 2009.
CONCEPT
DIGITAL, INC.
FORM
10Q
FOR
THE QUARTERLY PERIOD ENDING JUNE 30, 2007
PART
I
|
FINANCIAL
INFORMATION
|
F-1 |
Item
1.
|
Consolidated
Financial Statements (Unaudited)
|
|
Consolidated
Balance Sheet (Unaudited)
|
||
Consolidated
Statements of Operations (Unaudited)
|
||
Consolidated
Statements of Cash Flows (Unaudited)
|
||
Notes
to Unaudited Consolidated Financial Statements
|
||
Item
2.
|
Management’s
Discussion and Analysis and Results of Operations
|
1 |
Item
3.
|
Quantitative
and Qualitative Disclosures
|
4 |
Item
4.
|
Controls
and Procedures
|
4 |
Part II
|
OTHER
INFORMATION
|
|
Item
1.
|
Legal
Proceedings
|
5 |
Item
1A.
|
Risk
Factors
|
5 |
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
5 |
Item
3.
|
Defaults
Upon Senior Securities
|
5 |
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
5 |
Item
5.
|
Other
Information
|
5 |
Item
6.
|
Exhibits
and Reports of Form 8-K
|
5 |
Signatures
|
6 |
PART
I - FINANCIAL INFORMATION
Forward-Looking
Statements
This Form
10-Q contains “forward-looking statements” relating to Concept Digital, Inc.
(the “Company”), which
represent the Company’s current expectations or beliefs including, but not
limited to, statements concerning the Company’s operations, performance,
financial condition and growth. For this purpose, any statements contained in
this Form 10-Q that are not statements of historical fact are forward-looking
statements. Without limiting the generality of the foregoing, words such as
“may”, “anticipation”, “intend”, “could”, “estimate”, or “continue” or the
negative or other comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, such as losses, dependence on management, variability
of quarterly results, and the ability of the Company to develop a growth
strategy and compete with other companies in its industry, certain of which are
beyond the Company’s control. Should one or more of these risks or uncertainties
materialize or should the underlying assumptions prove incorrect, actual
outcomes and results could differ materially from those indicated in the
forward-looking statements.
Any
forward-looking statement speaks only as of the date on which such statement is
made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time and it is not possible for
management to predict all of such factors, nor can it assess the impact of each
such factor on the business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements.
Item
1. Financial Statements:
BASIS OF
PRESENTATION
The
accompanying unaudited financial statements are presented in accordance with US
generally accepted accounting principles for interim financial information and
the instructions to Form 10-Q. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. The accompanying statements should be read in
conjunction with the audited financial statements for the year ended December
31, 2006. In the opinion of management, all adjustments (consisting only of
normal occurring accruals) considered necessary in order to make the financial
statements not misleading, have been included. Operating results for the
six months ended June 30, 2007 are not necessarily indicative of results that
may be expected for the year ending December 31, 2007. The financial statements
are presented on the accrual basis.
FINANCIAL
STATEMENTS AND EXHIBITS.
For the
information required by this Item, refer to the Index to Financial Statements
appearing on page F-1 of the registration statement.
CONCEPT
DIGITAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
CONSOLIDATED
FINANCIAL STATEMENTS
AS OF
JUNE 30, 2007 AND DECEMBER 31, 2006
AND FOR
THE SIX MONTHS ENDED JUNE 30,
2007 AND
2006 AND FOR THE PERIOD JANUARY 1,
2004
(COMMENCEMENT OF DEVELOPMENT
STAGE) TO
JUNE 30, 2007
CONCEPT
DIGITAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
Page(s) | |
Consolidated balance sheets | F-2 |
Consolidated statements of operations | F-3 |
Consolidated statements of cash flows | F-4 |
Notes to consolidated financial statements | F-5 |
F-1
CONCEPT
DIGITAL, INC. AND SUBSIDIARY
(A
Development Stage Company)
Consolidated
Balance Sheets
(Unaudited)
|
||||||||
June
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
|
$ | 199,961 | $ | 2,661 | ||||
Prepaid expenses
|
2,442 | 44,525 | ||||||
Total current
assets
|
202,403 | 47,186 | ||||||
TOTAL ASSETS
|
$ | 202,403 | $ | 47,186 | ||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts payable and accrued
expenses
|
$ | 148,520 | $ | 177,542 | ||||
Notes payable – related
party
|
736,086 | 493,086 | ||||||
Due to related
party
|
550 | 100 | ||||||
Total current
liabilities
|
885,156 | 670,728 | ||||||
STOCKHOLDERS’
DEFICIT:
|
||||||||
Common
stock, par value $.0001 per shares;
|
||||||||
50,000,000 shares authorized;
41,263,381 and
|
||||||||
39,683,381 shares issued and
outstanding, respectively
|
4,126 | 3,968 | ||||||
Additional paid-in
capital
|
1,488,060 | 1,488,060 | ||||||
Deficit accumulated during the
development stage
|
(2,174,939 | ) | (2,115,570 | ) | ||||
Total stockholders’
deficit
|
(682,753 | ) | (623,542 | ) | ||||
TOTAL LIABILITIES
AND
|
||||||||
STOCKHOLDERS’
DEFICIT
|
$ | 202,403 | $ | 47,186 |
The accompanying notes are an integral part of
these consolidated financial statements.
F-2
CONCEPT
DIGITAL, INC. AND SUBSIDIARY
(A
Development Stage Company)
Consolidated
Statements of Operations
(Unaudited)
|
||||||||||||||||||||
For
the Period
|
||||||||||||||||||||
January
1, 2004
|
||||||||||||||||||||
(Unaudited)
Six Months Ended
|
(Unaudited)
Three Months Ended
|
(commencement
of
development stage) to
|
||||||||||||||||||
June 30,
|
June 30,
|
June
30,
|
||||||||||||||||||
2007
|
2006
|
2007
|
2006
|
2007
|
||||||||||||||||
Development
stage revenues
|
- | $ | 748 | - | - | $ | 5,917 | |||||||||||||
Cost
of services
|
- | 15 | - | - | 1,504 | |||||||||||||||
- | 733 | - | - | 4,413 | ||||||||||||||||
Development
stage expenses
|
||||||||||||||||||||
Accounting
|
$ | 38,934 | 15,114 | $ | 13,469 | $ | 10,173 | 148,103 | ||||||||||||
Legal
|
5,621 | 5,000 | 4,421 | 5,000 | 14,976 | |||||||||||||||
Management fee
|
- | 4,500 | - | 2,250 | 32,500 | |||||||||||||||
Office
|
636 | 686 | 424 | 131 | 7,980 | |||||||||||||||
Transfer agent
fees
|
1,250 | 450 | 225 | 225 | 6,031 | |||||||||||||||
TOTAL
DEVELOPMENT STAGE EXPENSES
|
46,441 | 25,750 | 18,539 | 17,779 | 209,590 | |||||||||||||||
Loss
from operations
|
(46,441 | ) | (25,017 | ) | (18,539 | ) | (17,779 | ) | (205,177 | ) | ||||||||||
Corporate
taxes
|
(228 | ) | (227 | ) | (114 | ) | (113 | ) | (1,719 | ) | ||||||||||
Interest
expense
|
(12,700 | ) | (8,138 | ) | (7,083 | ) | (4,310 | ) | (59,635 | ) | ||||||||||
NET
LOSS
|
$ | (59,369 | ) | $ | (33,382 | ) | $ | (25,736 | ) | $ | (22,202 | ) | $ | (266,531 | ) | |||||
NET
LOSS PER COMMON SHARE
|
||||||||||||||||||||
Basic and
dilutes
|
$ | (0.0015 | ) | $ | (0.0003 | ) | $ | (0.0006 | ) | $ | (0.0003 | ) | ||||||||
Weighted-average
number of common
|
||||||||||||||||||||
shares
outstanding
|
39,709,569 | 39,683,381 | 39,735,469 | 39,683,381 |
The accompanying notes are an integral part of
these consolidated financial statements.
F-3
CONCEPT
DIGITAL, INC. AND SUBSIDIARY
(A
Development Stage Company)
Consolidated
Statements of Cash Flows
(Unaudited) | ||||||||||||
For the Period | ||||||||||||
January 1, 2004 | ||||||||||||
(Unaudited)
Six Months Ended
|
(commencement
of
development
stageto
|
|||||||||||
June 30, | June 30, | |||||||||||
2007 | 2006 | 2007 | ||||||||||
OPERATING
ACTIVITIES:
|
||||||||||||
Net loss
|
$ | (59,369 | ) | $ | (33,382 | ) | $ | (266,531 | ) | |||
Adjustment to reconcile net loss
to net cash
|
||||||||||||
used in operating
activities:
|
||||||||||||
Decrease (increase) in accounts
receivable
|
||||||||||||
- related
parties
|
- | - | 14,028 | |||||||||
Decrease (increase)in prepaid
expenses
|
42,083 | (29,701 | ) | 107 | ||||||||
(Decrease) increase in accounts
payable
|
(28,572 | ) | (27,332 | ) | (46,572 | ) | ||||||
(Decrease) increase in accounts
payable
|
||||||||||||
- related
parties
|
- | (38,567 | ) | 75,243 | ||||||||
Net cash (used in) operating
activities
|
(45,858 | ) | (128,982 | ) | (223,725 | ) | ||||||
FINANCING
ACTIVITIES:
|
||||||||||||
Payments on loans payable –
related party
|
(140,000 | ) | (110,000 | ) | (250,000 | ) | ||||||
Proceeds from loans payable –
related party
|
383,000 | 290,000 | 673,000 | |||||||||
Proceeds from issuance of common
stock
|
158 | - | 158 | |||||||||
Net cash provided by financing
activities
|
243,158 | 180,000 | 423,158 | |||||||||
Increase
in cash
|
197,300 | 51,018 | 199,433 | |||||||||
Cash
at beginning of period
|
2,661 | 1,683 | 528 | |||||||||
Cash
at end of period
|
$ | 199,961 | $ | 52,701 | $ | 199,961 | ||||||
Supplemental
cash flow information::
|
||||||||||||
Interest paid
|
$ | 1,795 | $ | 44,715 | $ | 46,510 | ||||||
Income taxes paid
|
$ | - | $ | - | $ | 126 |
The accompanying notes are an integral part of
these consolidated financial statements.
F-4
CONCEPT
DIGITAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
1.
|
ORGANIZATION
AND SIGNIFICANT ACCOUNTING POLICIES
|
Interim
Financial Information - The unaudited condensed consolidated financial
statements have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. The
information furnished herein reflects all adjustments (consisting of normal
recurring accruals and adjustments) which are, in the opinion of management,
necessary to fairly present the operating results for the respective
periods. Certain information and footnote disclosures normally
presented in annual consolidated financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been omitted pursuant to such rules and regulations. The
condensed consolidated financial statements should be read in conjunction with
the description of business and management’s plan of operations, contained in
the Company’s Annual Report on Form 10-K for the year ended December 31,
2006 The results of operations for the six months June 30, 2007 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2007 or for any future period. In the opinion of
management, the accompanying consolidated financial statements of Concept
Digital, Inc., contains all adjustments necessary to present fairly the
Company’s financial position as of June 30, 2007 and December 31, 2006, the
statements of operations for the six and three months ended June 30, 2007 and
2006 and the statements of cash flows for the six months ended June 30, 2007 and
2006.
The
results of operations for the six and three months ended June 30, 2007 and June
30, 2006 are not necessarily indicative of the results to be expected for the
full year.
The
accounting policies followed by the Company are set forth in Note 3 to the
Company’s financial statements included in its Annual Report on Form 10-K for
the year ended December 31, 2006.
2.
|
RELATED
PARTIES
|
The loan
payable of $16,953 which bears interest at 6% per annum is due to Atlas Equity
Group, Inc., an entity related to the Company through common
ownership. The note matured in May 2002 and is convertible into
730,468 shares of common stock at the discretion of the Company. As
of May 7, 2002 the loan was in default. The payee has allowed the
loan to continue as a demand loan accruing interest at 6% per
annum. At June 30, 2007 the entire balance of the note was
outstanding.
In June
2006, the Company entered into a promissory note agreement totaling $290,000,
which bears interest at 7% per annum and is due to Cool Mobile LLC, an entity
related to the Company through common ownership. The note is due 90
days after demand by the holder. In addition, the loan has been
guaranteed by an officer and major shareholder of the Company up to
$250,000. At June 30, 2007, the balance on the outstanding note was
$150,000.
F-5
CONCEPT
DIGITAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On May
10, 2007, the Company entered into a promissory note agreement totaling $35,000,
which bears interest at 12%, per annum on demand from its founder, Joe
Douek.
The loan
payable of $383,000 which bears interest at 8.5%, per annum is due to Elliot
Sasho, an individual who is a shareholder of the Company. The note is
due and payable within two years. In addition, 795,000 shares of the
Company’s common stock were issued as additional consideration in making the
loan. These shares were valued at $79, the value of the most recent
sale of the Company’s common stock, and were expensed as incurred as additional
interest on the note. As of June 30, 2007, the balance on the loan is
$383,000.
The
remaining loan payable to an entity related through common ownership totaling
$186,133 is a result of the transfer of cash collected on unearned warranty
fees, which were assigned to the related party which is fulfilling the warranty
obligations.
3.
|
DEVELOPMENT
STAGE OPERATIONS AND GOING CONCERN
MATTERS
|
The
Company’s activities have been devoted to developing a business plan, and
raising capital for future operations and administrative
functions. The ability of the Company to achieve its business
objectives is contingent upon its success in raising additional capital until
adequate revenues are realized from operations.
The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. As shown in the financial statements, losses
(date of inception) to June 30, 2007 aggregated $(2,174,939). The
Company’s cash flow requirements during this period have been met by
contributions of capital and debt financing. No assurance can be given that
these sources of financing will continue to be available. If the Company is
unable to generate profits, or unable to obtain additional funds for its working
capital needs, it may have to cease operations.
The
financial statements do not include any adjustments relating to the
recoverability and classification of assets or liabilities that might be
necessary should the Company be unable to continue as a going
concern.
4.
|
ADDITIONAL
STOCK ISSUANCE
|
In June
2007, The Company 795,000 shares of its common stock for director services
rendered. The shares were valued at $79, the value of the most recent
sale of its common stock, and was expensed as incurred.
F-6
Item
2. Management’s Discussion and Analysis
The
following plan of operation provides information which management believes is
relevant to an assessment and understanding of our results of operations and
financial condition. The discussion should be read along with our
consolidated financial statements and notes thereto. Concept Digital
Inc. is a development – stage company. Because the Company has not
generated any revenue, it intends to report its plan of operation
below.
The
following discussion and analysis contains forward-looking statements, which
involve risks and uncertainties. The Company’s actual results may
differ significantly from the results, expectations and plans discussed in these
forward-looking statements.
The
Company’s operations have been devoted primarily to developing a business plan
and raising capital for future operations and administrative
functions. The Company intends to grow through internal development,
strategic alliances, and acquisitions of existing businesses. Because
of uncertainties surrounding its development, the Company anticipates incurring
development stage losses in the foreseeable future. The ability of
the Company to achieve its business objectives is contingent upon its success in
raising additional capital until adequate revenues are realized from
operations.
The
accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As reflected in the
consolidated financial statements, losses from June 15, 1999 (date of inception)
through June 30, 2007 aggregated $(2,174,939) and raise substantial doubt about
the Company’s ability to continue as a going concern. The Company’s
cash flow requirements during this period have been met by contributions of
capital and debt financing, primarily from related parties. The
Company anticipates that financing will be required until such time that the
Company has been able to develop its own business or find an appropriate merger
candidate. Currently, the Company can not determine when either will
occur and as such the Company will need to obtain financing to cover its costs
for the foreseeable future. No assurance can be given that these
sources of financing will continue to be available. If the Company is
unable to generate profits, or unable to obtain additional funds for its working
capital needs, it may have to cease operations.
CRITICAL
ACCOUNTING POLICIES
Our
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States, which require our
management to make estimates that affect the amounts of revenues, expenses,
assets and liabilities reported. The following are critical accounting policies
which are important to the portrayal of our financial condition and results of
operations and which require some of management’s most difficult, subjective and
complex judgments. The accounting for these matters involves the making of
estimates based on current facts, circumstances and assumptions which could
change in a manner that would materially affect management’s future estimates
with respect to such matters. Accordingly, future reported financial conditions
and results could differ materially from financial conditions and results
reported based on management’s current estimates.
Income
taxes:
The
Company utilizes Statement of Financial Standards (“SFAS”) No. 109, “Accounting
for Income Taxes”, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
included in financial statements or tax returns. Under this method,
deferred income taxes are recognized for the tax consequences in future years of
differences between the tax basis of assets and liabilities and their financial
reporting amounts at each period based on enacted tax laws and statutory tax
rates applicable to the period in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be
realized. The accompanying consolidated financial statements have no
provision for deferred assets or liabilities.
1
Results
of Operations
THE SIX
MONTHS ENDED JUNE 30, 2007 AND JUNE 30, 2006
Development
stage loss during the six months ended June 30, 2007 was ($59,369) as compared
to development stage loss during the six months ended June 30, 2006 was
($33,382).
Expenses
for the six months ended June 30, 2007 were primarily transfer agent fees
($1,250), accounting and legal services ($44,555) and interest expense
($12,700).
Expenses
for the six months ended June 30, 2006 were primarily accounting and legal fees
($20,114), management fees ($4,500) and interest ($8,138).
THE THREE
MONTHS ENDED JUNE 30, 2007 AND JUNE 30, 2006
Development
stage loss during the three months ended June 30, 2007 was ($25,736) as compared
to development stage loss during the three months ended June 30, 2006 was
$($22,202).
Expenses
for the three months ended June 30, 2007 were primarily accounting and legal
services ($17,890) and interest expense ($7,083).
Expenses
for the three months ended June 30, 2006 were primarily management fees
($2,250), accounting and legal expense ($15,173) and interest expense
($4,310).
PERIOD
FROM JANUARY 1, 2004 (COMMENCEMENT OF DEVELOPMENT STAGE) THROUGH JUNE 30,
2007
Net
losses since commencement of the development stage have amounted to
($266,531). These expenses were primarily interest expense ($59,635),
office expenses ($7,980), and professional fees such as legal ($14,976) and
accounting ($148,103).
Liquidity
and Capital Resources
Despite
capital contributions and loans from a related party, the Company continues to
experience cash flow shortages that have slowed the Company’s
growth.
The
Company has primarily financed its activities from issuance of common stock of
the Company and from loans from Joseph Douek, (the Company’s majority
shareholder) and other entities controlled by Mr. Douek. A
significant portion of the funds raised from loans from related and third
parties has been used to cover working capital needs.
2
For the
six months ended June 30, 2007 and June 30, 2006, we had a net loss of ($59,369)
and ($33,382) respectively. Our accumulated deficit since the date of
inception is ($2,174,939). Such accumulated losses have resulted
primarily from costs incurred in the development of the website, salary and
various professional fees.
In June
1999, the Company issued 22,000,000 common shares to the founder, in
consideration for management services valued at $0.10. Joseph Douek
is deemed to be a founder and affiliate of the Company.
In
November 1999 and December 1999, the Company entered into a private offering of
securities pursuant to Regulation D, Rule 504, promulgated by the Securities Act
of 1933. Common stock was offered to accredited and non-accredited
investors for cash consideration of $.10 per share. 8,350,260 shares
were issued to several unaffiliated investors and the Company received net
proceeds totaling approximately $786,000. That offering is now
closed.
In
November 1999, the Company issued 1,600,000 common shares in exchange for
equipment at $.07 share to Douek Holdings Ltd., a company controlled by the
Company’s majority stockholder.
In
December 1999, The Company issued 350,000 common shares for services performed
which was valued at $35,000.
In
February 2000, the Company entered into a private offering of securities
pursuant to Regulation D, Rule 504, promulgated by the Securities Act of
1933. Common stock was offered to accredited and non-accredited
investors for cash consideration of $.10 per share. 200,000 shares
were issued to several unaffiliated investors and the Company received net
proceeds totaling approximately $20,000. That offering is now
closed.
In May
through October 2000, the Company entered into a private offering of securities
pursuant to Regulation D, Rule 504, promulgated by the Securities Act of
1933. Common stock was offered to accredited and non-accredited
investors for cash consideration of $.12 per share. 850,000 shares
were issued to several unaffiliated investors. The Company received
net proceeds totaling approximately $102,000. That offering is now
closed.
In
December 2000, The Company issued 505,000 common shares for compensation of
services valued at $51,000.
In
December 2000, 200,000 options were exercised at $.10 per share, receiving
$20,000 in proceeds.
In March
2001, the Company exchanged 800,143 common shares for monies loaned by an
affiliate of CDI and the Company recognized a loss of $71,000.
In June
2001, the Company issued 195,000 common shares in exchange of an advance by
unaffiliated individual and the Company recognized a loss of
$17,000.
In June
2001, the Company granted as compensation for services, stock options to
purchase 300,000 shares of the Company’s common stock at an exercise price of
$.12 per share.
3
In
September 2001, a company controlled by the Company’s majority stockholder,
exchanged for 1,500,000 shares of the Company’s common stock (valued at
$180,000) agreed to fund substantially all current sales, marketing and
administrative expenses for one year. This was being amortized
through September 30, 2002 and the unamortized balance was included as a
component of the capital deficiency.
In
September 2001, 100,000 common shares were issued in exchange for services
rendered valued at $12,000.
On
September 26, 2001, Photo America, Inc. merged with Concept Digital, Inc.
(“CDI”) a publicly traded development stage enterprise that had 3,032,978 shares
of common stock outstanding prior to the merger. Pursuant to the
merger agreement, the Company acquired all of the outstanding common stock of
Photo America, Inc. in exchange for 36,650,403 shares of CDI common
stock. The merger has been accounted for as a recapitalization by
Photo America, Inc. The equity accounts of PAI have been restated to
give effect to the CDI shares issued by the PAI shareholder.
In
September 2001, the Company granted as compensation for services, stock options
to purchase 300,000 shares of the Company’s common stock at an exercise price of
$.12 per share.
On May
10, 2007, the Company entered into a promissory note agreement totaling $35,000,
which bears interest at 12%, per annum on demand from its founder, Joe
Douek.
The loan
payable of $383,000 which bears interest at 8.5%, per annum is due to Elliot
Sasho, an individual who is a shareholder of the Company. The note is
due and payable within two years. In addition, 795,000 shares of the
Company’s common stock were issued as additional consideration in making the
loan. These shares were valued at $79, the value of the most recent
sale of the Company’s common stock, and were expensed as incurred as additional
interest on the note. As of June 30, 2007, the balance on the loan is
$383,000.
The
Company continues to experience cash flow shortages and anticipates this
continuing through the foreseeable future. Management believes that
additional funding will be necessary in order for it to continue as a going
concern. The Company is investigating several forms of private debt
and/or equity financing, although there can be no assurances that the Company
will be successful in procuring such financing or that it will be available on
terms acceptable to the Company.
Item
3. Quantitative and Qualitative Disclosures
About Market Risk
The
Company is subject to certain market risks, including changes in interest rates
and currency exchange rates. The Company does not undertake any specific
actions to limit those exposures
Item
4. Controls and Procedures.
Evaluation
of disclosure controls and procedures
Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (Exchange Act). Based on this evaluation, our
principal executive officer and principal financial officer have concluded that
our disclosure controls and procedures are effective to ensure that information
required to be disclosed by us in the reports we file or submit under the
Exchange Act is recorded, processed, summarized, and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms
and that our disclosure and controls 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 accumulated and communicated to our management, including our
principal executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
Changes
in internal controls
There
were no changes (including corrective actions with regard to significant
deficiencies or material weaknesses) in our internal controls over financial
reporting that occurred during the quarter ended June 30, 2007 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
4
PART
IIOTHER INFORMATION
Item 1. Legal
Proceedings
None.
Item
2. Unregistered Sales of
Equity Securities and Use of Proceeds
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
(a) Exhibits
31.1
Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002
32.1 Certification pursuant to Section 906 of Sarbanes Oxley Act of
2002
5
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Concept
Digital, Inc.
|
|||
Date:
November 20, 2009
|
By:
|
/s/ Joseph
Douek
|
|
Joseph
Douek
|
|||
Chief
Executive Officer
|
|||
Date:
November 20, 2009
|
By:
|
/s/ Joseph
Douek
|
|
Joseph
Douek
|
|||
Chief
Financial Officer
|
|||
6