Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
(I.R.S. Employer Identification No.)
Check
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.
Check
if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in part III
of this Form 10-K or any amendment to this Form 10-K. [ X ]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer or a small reporting
company. See definition of “large accelerated filer”,
“accelerated filer” and “small reporting
company” in Rule 12b-2 of the Securities Exchange Act of 1934.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Small reporting company [ X ]
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
The
aggregate market value of the voting stock held by non-affiliates of
the registrant as of December 7, 2009 was $ 89,716 based on a last sale
price of $.10 per share as of December 7, 2009.
The number of shares outstanding of the issuer's classes of Common Stock as of December 7, 2009
When
used in this Form 10-K, the words "expects," "anticipates," "estimates"
and similar expressions are intended to identify forward-looking
statements. Such statements are subject to risks and uncertainties,
including those set forth below under "Risks and Uncertainties," that
could cause actual results to differ materially from those projected.
These forward-looking statements speak only as of the date hereof.
Animal Cloning Sciences expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in
the Company's expectations with regard thereto or any change in events,
conditions or circumstances on which any statement is based. This
discussion should be read together with the financial statements and
other financial information included in this Form 10-K. Readers should
carefully review the risk factors described in other
documents the Company files from time to time
with the Securities and Exchange Commission,
including the Quarterly Reports on Form 10-Q to be filed
by the Company subsequent to this Annual Report on Form 10-K and
any Current Reports on Form 8-K filed by the Company.
Bancorp
Energy, Inc. was incorporated on August 16, 1984 in the state of
Washington under the name Gold Valley, Inc. Successively, the Company
amended its Articles of Incorporation to change its name to Development
Bancorp, Ltd. Imatel Holdings, Ovvio Better Life and Animal Cloning
Sciences, Inc., reflecting the Company's activities in various
industries.
On
November 14, 2000, the Company changed its name to Animal Cloning
Sciences, Inc. to reflect the direction of the firm's efforts. The
Company had been conducting research on cloning horses and evaluating
license agreements to distribute equine DNA for equine clones. The
Company was focusing its research on a cloning method that would lend
itself to commercialization of equine cloning.
In
early 2003, the Company was informed by the USDA that its license to
import frozen embryos, which was expected to be issued, would not be
forthcoming because of concerns arising due to the tragic events
occurring on September 11, 2001. As a result, the Company ceased its
efforts at cloning and disposed of assets used for cloning in the third
quarter of 2003. For full details on these matters, please refer to the
Company's Form 10-QSB for the quarter ended September 30, 2003, and
Form 10-KSB for the year ended December 31, 2003. The Company changed
its name in 2007 to Bancorp Energy, Inc. in connection with a proposed
acquisition which did not close.
As
of September 3, 2003, the Company is considered to have re-entered the
development stage. Since 2003, the Company has neither generated
revenues nor conducted any operations. The Company's only activity is
the incurrence of general and administrative expenses to maintain its
status as a reporting company with the SEC. The Company's current
business plan is to locate a suitable candidate for merger or
acquisition.
The Company has no employees. The officers of the Company do not work exclusively for the Company.
The
Company's only subsidiary, Societe Financiere de Distribution, Geneva,
SA, was dissolved with the liquidation of the Company's cloning assets
during the quarter ended September 30, 2003.
We
are seeking an acquisition at this time. We have no business or assets.
There can be no assurance as to when, if ever, we will locate a
suitable acquisition candidate. The particular business opportunity
will be selected by management without input from shareholders.
Penny Stock rules could make it hard to resell your shares.
The
Penny Stock rules apply to the trading of our stock. Animal
Cloning Sciences's common stock does not meet the listing requirements
for any trading market other than the OTC Bulletin Board.
Consequently, the liquidity of Animal Cloning Sciences's
securities could be impaired, not only in the number of
securities which could be bought and sold, but also through delays in
the timing of transactions, reduction in security analysts' and the
news media's coverage of Animal Cloning Sciences, and lower prices for
Animal Cloning Sciences's securities than might otherwise be attained.
In
addition, the "penny stock" rules limit trading of
securities not traded on NASDAQ or a recognized stock exchange,
or securities which do not trade at a price of $5.00 or
higher, in that brokers making trades in those securities must
make a special suitability determination for purchasers of the
security, and obtain the purchaser's consent prior to sale. The
application of these rules may make it difficult for shareholders to
resell their shares.
We have no unresolved staff comments.
We share use of an office provided without charge by Dempsey Mork, our Chief Executive Officer.
Not Applicable.
No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended December 31, 2008.
Our
common stock trades on the Pinksheets.com under the symbol ANML.
Quotations and trades are sporadic, and there has not been an
established trading market for the common stock for more than two
years. As of December 31, 2008, there were 142,894 common shares
and no preferred shares issued and outstanding.
As of December 31, 2008, there were approximately 166 record holders of Company common stock.
The
Company has not paid any dividends on its common stock. The
Company currently intends to retain any earnings for use in its
business, and therefore does not anticipate paying cash dividends in
the foreseeable future.
None.
(f) Company repurchases of common stock during the years ended December 31, 2008 and 2007.
As a smaller reporting company we are not required to respond to this item.
The
following discussion regarding the financial statements of the Company
should be read in conjunction with the financial statements and notes
thereto included in this Form 10-K and the prior reports for fiscal
year 2008.
No
significant business activity was conducted by the Company during the
fiscal year 2008. As a result, no income was earned by the Company in
2007 and there was no cash at the end of the year.
The
primary activity of the Company will involve seeking merger or
acquisition candidates it can acquire or with whom it can merge. The
Company has not selected any company for acquisition or merger and does
not intend to limit potential acquisition candidates to any particular
field or industry, but does retain the right to limit acquisition or
merger candidates, if it so chooses, to a particular field or industry.
Our
prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in their early stages
of development, particularly companies in new and rapidly evolving
markets. We will encounter various risks in implementing and executing
our business strategy. We can provide no assurance that we will be
successful in addressing such risks, and the failure to do so could
have a material adverse effect on our business.
The
Company does not intend to make any loans to any prospective merger or
acquisition candidate, or to any unaffiliated third parties.
The
officers and directors of the Company are currently involved in other
activities and will devote only a portion of their time to the specific
business affairs of the Company until such time as a merger or
acquisition candidate has been determined. At such a time, they expect
to spend the necessary time and effort to investigate and finalize any
merger or acquisition.
The
Company intends to structure a merger or acquisition in such manner as
to minimize federal and state tax consequences to the Company and the
target company.
During
the third quarter of 2003, the Company sold its ranch and equine
cloning facilities, which were originally purchased during the first
quarter of 2002 through the issuance of its note payable and the
assumption of long-term debt. The Company has not engaged in any
investing activities since then. We have no sources of capital other
than shareholder loans.
The
Company has not engaged in any material operations or had any
operations during the past two fiscal years. In 2008 and 2007, the
Company generated no revenues, and incurred interest expenses of $7,500
and $7,500, respectively. Substantially all of our debt represents
loans and advances from related parties.
We
do not expect to purchase any significant equipment for the foreseeable
future. We have no off-balance sheet obligations and no contractual
liabilities.
We do not expect any significant changes in the number of employees in the next twelve months.
We
do not currently provide any services and have not generated any
revenues, and we do not expect to generate revenues for the foreseeable
future, nor do we anticipate incurring any significant expenses.
Therefore, we will continue to operate on a minimal budget. Any
expenses incurred will be paid for by our officers and directors and
reimbursed once a merger or acquisition transaction takes place and we
start generating cash flows. We intend to limit our operations to
seeking merger and acquisition candidates, and don't believe it is
necessary to raise any additional funds during the next twelve months.
Animal Cloning Sciences' financial statements are appended to the end of this report and include the following:
Statements
of Income for the years ended December 31, 2008 and 2007 and the period
since re-entering the developmental stage (September 30, 2003) to
December 31, 2008
Statements
of Cash Flows for the years ended December 31, 2008 and 2007 and
the period since re-entering the developmental stage (September
30, 2003) to December 31, 2008
Statement
of Stockholders’ Deficit for the period since re-entering
the developmental stage (September 30, 2003) to December 31, 2008
Notes to Financial Statements.
On
August 1, 2009, we terminated our relationship with Child, Van
Wagoner & Bradshaw, PLLC (“CVB”), the principal
accountant previously engaged to audit the Company’s financial
statements. The Company’s board of directors approved the
dismissal of CVB. The registrant reported in a Form 8-K in 2006
that it had engaged CVB as its independent auditor; however, it appears
that CVB was not engaged to perform any accounting or auditing services
for the registrant. From appointment of CVB through August 1, 2009,
the date of termination, the Company had no disagreements with
CVB with respect to accounting or auditing issues of the type discussed
in Item 304(a)(iv) of Regulation S-K. Had there been any
disagreements that were not resolved to their satisfaction, such
disagreements would have caused CVB to make reference in connection
with their opinion to the subject matter of the disagreement. In
addition, during that time there were no reportable events (as defined
in Item 304(a)(1)(iv) of Regulation S-K).
During
the fiscal year ending December 31, 2008, including the subsequent
interim periods since engagement through August 1, 2009, the date of
CVB’s termination, the Company (or anyone on its behalf) did not
consult with any other accounting firm regarding any of the accounting
or auditing concerns stated in Item 304(a)(2) of Regulation S-K. Since
there were no disagreements or reportable events (as defined in Item
304(a)(2) of Regulation S-K), the Company did not consult any other
firm in respect to these matters during the time periods detailed
herein.
The
Company provided CVB with a copy of the Form 8-K reporting this change.
The Company requested that CVB furnish the Company with a letter to the
Securities and Exchange Commission stating whether CVB agreed with the
above statements.
On
August 1, 2009 the Registrant engaged the Black Wing Group, LLC as its
new independent. Prior to the engagement of Black Wing Group.
LLC, the Company did not consult with Black Wing Group, LLC on the
application of accounting principles to any specific transaction nor
the type of audit opinion that might be rendered on the Company's
financial statements.
Item 9T.
We
maintain disclosure controls and procedures designed to
ensure that information required to be disclosed in our
reports filed under the Securities Exchange Act of 1934, as
amended (the Exchange Act), is recorded, processed,
summarized, and reported accurately, in accordance with U.S. Generally
Accepted Accounting Principles and within the required time
periods, and that such information is
accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow for timely decisions
regarding disclosure.
As
of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our
disclosure and procedures (as defined in Exchange Act Rule 13a-15(e)
and 15d-15(e)). Based upon that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that as of the end of the
period covered by this Annual Report on Form 10-K our disclosure
controls and procedures were effective to enable us to accurately
record, process, summarize and report certain information required to
be included in the Company’s periodic SEC filings within the
required time periods, and to accumulate and communicate to our
management, including the Chief Executive Officer and Chief Financial
Officer, to allow timely decisions regarding required disclosure.
There
were no changes in our internal control over financial reporting that
occurred during the most recent fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
This
annual report does not include an attestation report of the
Company’s registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company
to provide only management’s report in this Annual Report.
The
members of the Board of Directors of the Company serve until the next
annual meeting of stockholders, or until their successors have been
elected. No annual meeting has been set. The names and positions of the
present directors and officers of the Company are set forth below:
| |
|
|
|
Name
|
Age
|
Position
|
|
Dempsey K. Mork
|
65
|
Chief Executive Officer and Director
|
|
Riccardo Mortara
|
58
|
President and Director
|
|
Darren J. Holm
|
42
|
Secretary & Chief Financial Officer and Director
|
Business Experience of Directors/Executive Officers:
Riccardo
Mortara has been President and a Director of the Company since June
1993. Mr. Mortara is the managing director of Societe Financiere du
Seujet, Geneva, Switzerland, a company which provides portfolio
management and financial services to banks, corporations, and high net-
worth individuals primarily in Europe. Between the years of 1984 and
1991, Mr. Mortara was a director of a Geneva private portfolio
management company in which he still is a co-owner. Mr. Mortara
currently serves on the boards of five financial services companies,
and 2 publicly traded companies: Mediticnic, Inc. and Space Launches,
Inc.
Dempsey
K. Mork has been the Chief Financial Officer and a Director of the
Company since December 1992 and was President from December 1992 to
June 1993. Mr. Mork is now Chief Executive Officer and Director of the
Company. Mr. Mork's background includes corporate development, mergers
& acquisitions, and financial services, and he has been active in
these fields for the past 25 years. Mr. Mork is also an
officer/director of Magellan Capital Corporation, Knickerbocker Capital
Corporation, China Holdings, Inc., Apex Capital, Asian Financial, and
North Star Ventures.
Darren
J. Holm is currently Secretary & Chief Financial Officer of the
Company. His educational background includes Ambulance and Emergency
Care, Georgian College through 1984; A.S. EMS Systems Management at
Davenport University through December 1985, A.S. Respiratory Care
through June 1988, and,. Business experience includes 13 years with
Springs Ambulance/American Medical Response as Paramedic/Field Training
Officer; three years as Medical Division Manager with Desert Airlines,
(an aero medical transport company); and, two years with Air Service
International as General Manager.
Significant Employees
The Company has no employees who are not executive officers.
Audit Committee Financial Expert
Animal
Cloning Sciences does not have either an Audit Committee or a
financial expert on the Board of Directors. The Board of
Directors believes that obtaining the services of an audit committee
financial expert is not economically rational at this time in light of
the costs associated with identifying and retaining
an individual who would qualify as an
audit committee financial expert, the limited scope of our
operations and the relative simplicity of our
financial statements and accounting procedures .
Section 16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act
requires Animal Cloning Sciences's officers,
directors and persons who own more than ten percent
of a registered class of our equity securities to file reports of
ownership and changes in ownership with the SEC.
Officers, directors and ten percent stockholders are required by
regulation to furnish Animal Cloning Sciences with copies
of all Section 16(a) forms they file. During the year
ended December 31, 2007, Animal Cloning Sciences believes that Dempsey
Mork and Riccardo Mortara failed to file the reports required by
Section 16(a) of the Exchange Act, including Forms
3, 4 and 5. Based on representations submitted
by such people. Animal Cloning Sciences does not believe that
such individuals purchased or sold any Animal Cloning Sciences Common
Stock during 2008.
Item 11.
EXECUTIVE COMPENSATION
During
the period of 1995 through 2003 and in accordance with compensation
agreements then in effect, Mr. Riccardo Mortara and Mr. Dempsey Mork
(the Officers) had accumulated $1,020,000 in accrued salaries. As of
December 31, 2007, $645,000 was still owed to the Officers. To date, no
additional compensation has been provided to the officers and
directors. There are currently no standard arrangements pursuant to
which the Company's directors are compensated for any services provided
as director. No additional amounts are payable to the Company's
officers or directors for committee participation, special assignments,
or other services rendered in the normal course of business.
Animal Cloning Sciences has no long term incentive plans other than the plans described above.
Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information relating to the beneficial
ownership of Company common stock as of the date of this report by (i)
each person known by Animal Cloning Sciences to be the beneficial owner
of more than 5% of the outstanding shares of common stock (ii) each of
Animal Cloning Sciences's directors and executive officers, and (iii)
all officers and directors as a group. Unless otherwise noted
below, Animal Cloning Sciences believes that all persons named in the
table have sole voting and investment power with respect to all shares
of common stock beneficially owned by them. For purposes hereof,
a person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options or the conversion of convertible
securities. Each beneficial owner's percentage ownership is
determined by assuming that any warrants, options or convertible
securities that are held by such person (but not those held by any
other person) and which are exercisable within 60 days from the date
hereof, have been exercised.
Name and Address
Common Stock
Percentage
Dempsey K. Mork(1)
13,629
9.5%
Chief Executive Officer
and Director
Riccardo Mortara, President(1)
24,207
17.0%
and Director
Darrell J. Holm(1)
--
--
Chief Financial Officer
Robert J. Filiatreaux
7,928
5.5%
77545 Chillon
La Quinta, CA 92253
All officers and directors
as a group (3 persons)
37,836
26.5%
(1) The address of this person is c/o the Company.
Item 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
In
March 2002, the Company entered into a $150,000 convertible promissory
note with an entity affiliated with the Company's CEO. The note is
convertible at a rate of $.05 per share at the option of the holder for
a total of 3,000,000 shares of common stock. Interest of 5% is accrued
on the principal quarterly. If not sooner converted into common stock,
the principal and interest are due March 1, 2010. At December 31, 2008
the Company had accrued $35,625 in interest. Current year interest
expense was $7,500.
The
Company's officers and directors have resolved to provide for various
expenses incurred by the Company with only minimal repayment due at the
time a merger or acquisition is effected and cash flows are available.
These expenses consist of, but are not limited to accounting, filing
requirements, and management services. At December 31, 2007, the
Company had accumulated $3,375 in such fees payable to its officers and
directors.
Certain
conflicts of interest now exist and will continue to exist between the
Company and its officers and directors due to the fact that each has
other business interests to which he devotes his primary attention.
Each officer and director may continue to do so notwithstanding the
fact that management time should be devoted to the business of the
Company. No procedures have been adopted to resolve such conflicts of
interest.
Item 14 Principal Accountant Fees and Services.
Audit Fees
During
the period covering the fiscal years ended December 31,
2008, our principal accounting firm The
Blackwing Group was paid audit fees of $2,000 for audit and review
services performed in 2008. For fiscal 2007 we paid The Blackwing Group
LLC $2,000 for audit and review services.
Audit Committees pre-approval policies and procedures
We
do not have an audit committee. Our engagement of Blackwing Group
LLC, as our independent registered public accounting firm, was approved
by the Board of Directors. No services described in Item 9(e)(2)
through 9(e)(4) of Schedule 14A were performed by our auditors.
PART IV
Item 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits. The following exhibits of the Company are included herein. No schedules are required.
3.1
Articles of Incorporation(1)
3.2
Bylaws(1)
3.3
Amendment to Articles of Incorporation changing name to Development Bancorp, Ltd.(1)
3.4
Amendment
to Articles of Incorporation changing name to IMATEL
Holdings,
Inc.(2)
31.1
Certifications of Chief Executive and Financial Officer Pursuant to Exchange Act Rule 13a-14(a)(3).
32.1
Certifications of Chief Executive and Financial Officer pursuant to 18 U.S.C. Section 1350(3).
(1)
Incorporated by reference to the Company's Registration Statement on Form 10-SB, file no. 0-22934.
(2)
Incorporated by reference to the Company's Annual report on Form 10-KSB for the year ended December 31, 1997
(3)
Filed herewith.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on December
14, 2009.
BANCORP ENERGY, INC.
By:/s/ Dempsey K. Mork
Dempsey K. Mork
Chief Executive Officer
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the
Registrant and in the capacities on December 14, 2009.
By:/s/Dempsey K. Mork
Chief Executive Officer and Director
Dempsey K. Mork
(principal executive officer)
By:/s/Darren J. Holm
Chief Financial Officer
Darren J. Holm
(principal accounting and financial officer)
By:/s/Riccardo Mortara
President and Director
Riccardo Mortara
2
THE BLACKWING GROUP, LLC
18921G E VALLEY VIEW PARKWAY #325
INDEPENDENCE, MO 64055
816-813-0098
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Animal Cloning Sciences, Inc. (A Development Stage Company)
78365 Hwy 111 Ste 382
La Quinta, CA 92253
We
have audited the accompanying balance sheets of Animal Cloning
Sciences, Inc. (A Development Stage Company) as of December 31, 2008
and 2007, and the related statements of income and changes in
member’s equity, and cash flows for the period then ended.
These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We
conducted my audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting. Accordingly,
we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In
our opinion, such financial statements present fairly, in all material
respects, the financial position of Animal Cloning Sciences, Inc. (A
Development Stage Company) as of December 31, 2008 and 2007, and the
results of its operations and its cash flows for the period then ended
in conformity with accounting principles generally accepted in the
United States of America.
The
accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company faces competition from existing
companies with considerably more financial resources and business
connections. These conditions raise substantial doubt about its ability
to continue as a going concern.
The Blackwing Group, LLC
Issuing Office: Independence, MO
September 29, 2009
3
ANIMAL CLONING SCIENCES, INC.
(A Development Stage Company)
Condensed Balance Sheets
ASSETS
As of
As of
December 31,
December 31,
2008
2007
Current Assets
$
--
$
--
Total assets
$
--
$
--
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable
$
3,500
$
3,500
Due to related party
3,375
3,375
Accrued salaries -officers/directors
645,000
645,000
Total current liabilities
651,875
651,875
LONG-TERM LIABILITIES
Convertible note payable - related party
150,000
150,000
Accrued interest - related party
50,625
43,125
Total long-term liabilities
200,625
193,125
Stockholders’ Equity (note B)
Preferred stock, no par value; 2,000,000
shares authorized; no shares issued and outstanding
--
--
Common stock, no par value; 100,000,000
shares authorized; 142,894
shares issued and outstanding
11,990,765
11,990,765
Additional paid in Capital
(12,797,015)
(12,797,015)
Retained Earnings (Accumulated Deficit)
(46,250)
(38,750)
Total Stockholders' Equity
(852,500)
(845,000)
Total Liabilities and Stockholders' Equity
$
--
$
--
The accompanying notes are an integral part of the financial statements.
ANIMAL CLONING SCIENCES, INC.
(A Development Stage Company)
INCOME STATEMENTS
(Unaudited)
SINCE
RE-ENTERING
THE
DEVELOPMENT
STAGE
FOR THE THREE
FOR THE THREE
SEPT. 3, 2003,
MONTHS ENDED
MONTHS ENDED
THROUGH
DECEMBER 31,
DECEMBER 31,
MARCH 31
2008
2007
2008
INCOME
Revenues
$
--
$
--
$
--
OPERATING EXPENSES
General and administrative
--
--
6,875
Total operating expenses
--
--
6,875
OTHER INCOME (LOSS)
Interest expense
(7,500)
(7,500)
(39,375)
NET INCOME (LOSS)
$
(7,500)
$
(7,500)
$
(46,250)
PER SHARE INFORMATION:
Net Income (Loss) per share
142,894 shares issued
$
(0.05)
$
(0.05)
Basic weighted average
number common stock
shares outstanding
142,894
142,894
Diluted (loss) per
common share
$
(0.00)
$
(0.00)
Diluted weighted average
number common stock
shares outstanding
142,894
142,894
The accompanying notes are an integral part of these financial statements.
4
ANIMAL CLONING SCIENCES, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
SINCE
RE-ENTERING
THE
DEVELOPMENT
FOR THE THREE
FOR THE THREE
STAGE
MONTHS ENDED
MONTHS ENDED
(Sept. 3, 2003)
March 31,
MARCH 31,
through
2009
2008
March 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
(7,500)
(7,500)
(46,250)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation
--
--
--
(Increase) decrease in:
Accounts Receivable
--
--
--
Increase (decrease) in:
Accounts Payable
--
--
3,500
Due to Related Parties
--
--
3,375
Accrued Interest Payable
7,500
7,500
39,375
Accrued Salaries - Officers/Directors
--
--
--
Net cash provided (used) by operating activities
--
--
--
CASH FLOWS FROM INVESTING ACTIVITES:
Fixes Asset Additions
Net cash (used) by investing activities
--
--
--
CASH FLOWS FROM FINANCING ACTIVITIES:
Convertible Note - Related Party
--
--
--
Capital Contributions
--
--
--
Net cash(Used) by financing activities
--
--
--
Net increase (decrease) in cash
--
--
--
Cash, at beginning of period
--
--
--
Cash, at end of period
$
--
$
--
$
--
The accompanying notes are an integral part of these financial statements.
5
ANIMAL CLONING SCIENCES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
ACCUMULATED FOR THE PERIOD FROM DATE OF REENTERING
DEVELOPMENT STAGE ON SEPTEMBER 3, 2003
(Unaudited)
Deficit
Accumulated
Total
Number of
Additional
During the
Stockholders'
Common
Dollar
Paid-In
Retained
Development
Equity
Shares
Value
Capital
Deficit
Stage
(Deficit)
Balance as of September 3, 2003
142,825
11,990,765
--
(12,797,015)
--
(806,250)
Net Loss for the period from December 31, 2003
--
--
--
--
(1,875)
(1,875)
Balance as of December 31, 2003
142,825
11,990,765
--
(12,797,015)
(1,875)
(808,125)
10-to-1 reverse stock split
2-24-2004 rounding
69
--
--
--
--
--
Shares issued 2/24/04
25,415,000
--
--
--
--
--
Shares issued 3/4/04
2,400,000
--
--
--
--
--
Shares Cancelled - 4/7/04
(27,815,000)
--
--
--
--
--
Net Loss for the period from December 31, 2004
--
--
--
--
(9,375)
(9,375)
Balance as of December 31, 2004
142,894
11,990,765
--
(12,797,015)
(11,250)
(817,500)
Net Loss for the period from December 31, 2005
--
--
--
--
(12,500)
--
Balance as of December 31, 2005
142,894
11,990,765
--
(12,797,015)
(23,750)
(817,500)
Net Loss for the period from December 31, 2006
--
--
--
--
(7,500)
(7,500)
Balance as of December 31, 2006
142,894
11,990,765
--
(12,797,015)
(31,250)
(825,000)
Net Loss for the period from December 31, 2007
--
--
--
--
(7,500)
(7,500)
Balance as of December 31, 2007
142,894
11,990,765
--
(12,797,015)
(38,750)
(832,500)
Net Loss for the period from December 31, 2008
--
--
--
--
(7,500)
(7,500)
Balance as of December 31, 2008
142,894
11,990,765
--
(12,797,015)
(46,250)
(840,000)
The accompanying notes are an integral part of these financial statements.
6
ANIMAL CLONING SCIENCES, INC. (A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDING DECEMBER 31, 2008 AND 2007
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A
summary of significant accounting policies of Animal Cloning Sciences,
Inc. (A Development Stage Company) (the Company) is presented to assist
in understanding the Company’s financial statements. The
accounting policies presented in these footnotes conform to accounting
principles generally accepted in the United States of America and have
been consistently applied in the preparation of the accompanying
financial statements. These financial statements and notes are
representations of the Company’s management who are responsible
for their integrity and objectivity. The Company has not realized
revenues from its planned principal business purpose and is considered
to be in its development state in accordance with SFAS 7, “Accounting and Reporting by Development State Enterprises.”
The
condensed consolidated financial statements of Animal Cloning Sciences,
Inc. have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. The condensed consolidated
financial statements included herein reflect all normal recurring
adjustments that in the opinion of management are necessary for fair
presentation. The Company has not commenced operations and has no
working capital.
Organization, Nature of Business and Trade Name
Animal
Cloning Sciences, Inc. (the Company) was organized in Washington on
August 16, 1984 as a holding company involved in the cloning of horses.
Because of adverse rulings from the U.S. Department of Agriculture in
refusing to grant licenses for importing animal embryos into the United
States, the Company discontinued its operations and its cloning efforts
and sold its ranch facilities during the third quarter of 2003. The
results of these transactions were reported in Form 10-QSB for the
quarter ending September 30, 2003, and Form 10-KSB for the year ended
December 31, 2003.
As
of September 3, 2003, the Company is considered to have re-entered the
development stage, in accordance with SFAS 7, "Accounting and Reporting
by Development Stage Enterprises." Since 2003, the Company has neither
generated revenues nor conducted any operations. The Company's only
activity is the incurrence of general and administrative expenses to
maintain its status as a reporting company with the SEC. The Company's
current business plan is to locate a suitable candidate for merger or
acquisition.
The
primary activity of the Company currently involves seeking a company or
companies that it can acquire or with whom it can merge. The Company
has not selected any company as an acquisition target or merger partner
and does not intend to limit potential candidates to particular field
or industry, but does retain the right to limit candidates, if it so
chooses, to a particular field or industry. The Company is currently
investigating various opportunities as a merger candidate. Currently,
the Company has entered into discussions with several small to medium
size companies that are looking for merger opportunities.
Basis of Presentation
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that effect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reported period. Actual results could differ from those estimates.
Management further acknowledges that it is solely responsible for
adopting sound accounting practices, establishing and maintaining a
system of internal accounting control and preventing and detecting
fraud.
ANIMAL CLONING SCIENCES, INC. (A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDING DECEMBER 31, 2008 AND 2007
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation - continued
The
Company’s system of internal accounting control is designed to
assure, among other items, that (1) recorded transactions are valid;
(2) all valid transactions are recorded and (3) transactions are
recorded in the period in a timely manner to produce financial
statements which present fairly the financial condition, results of
operations and cash flows of the company for the respective periods
being presented.
Property and Equipment
Property
and equipment are carried at cost. Expenditures for maintenance and
repairs are charged against operations. Renewals and betterments that
materially extend the life of the assets are capitalized. When assets
are retired or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts, and any resulting gain or
loss is reflected in income for the period.
Depreciation
is computed for financial statement purposes on a straight-line basis
over estimated useful lives of the related assets. The estimated useful
lives of depreciable assets are:
Estimated
Useful Lives
Office Equipment
5-10 years
Copier
5-7 years
Vehicles
5-10 years
For
federal income tax purposes, depreciation is computed under the
modified accelerated cost recovery system. For audit purposes,
depreciation is computed under the straight-line method.
Cash and Cash Equivalents
For
purposes of the statement of cash flows, the Company considers all
short-term debt securities purchased with maturity of three months or
less to be cash equivalents.
Revenue and Cost Recognition
The
Company has been in the developmental stage since inception and has no
operations since reentering the development stage. The Company
currently does not have a means for generating revenue. Revenue and
Cost Recognition procedures will be implemented based on the type of
company acquired in a merger or acquisition.
7
ANIMAL CLONING SCIENCES, INC. (A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDING DECEMBER 31, 2008 AND 2007
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cost of Goods Sold
Since
the Company is still in the development state formal application of
certain procedures have not been implemented. Generally, job costs
include all direct materials, and labor costs and those indirect costs
related to development and maintenance of the website. Selling, general
and administrative costs are charged to expense as incurred. However,
Cost of Goods Sold procedures will be dependent on the industry that
the identified merger or acquisition candidate is in.
Advertising
Advertising
expenses related to specific jobs are allocated and classified as costs
of goods sold. Advertising expenses not related to specific jobs are
recorded as general and administrative expenses.
Use of Estimates
The
preparation of financial statements in accounting principles generally
accepted in the United States of America 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 amounts of
revenues and expenses during the reporting period. A change in
managements’ estimates or assumptions could have a material
impact on Animal Cloning Sciences, Inc.’s financial condition and
results of operations during the period in which such changes occurred.
Actual results could differ from those estimates. Animal Cloning
Sciences, Inc.’s financial statements reflect all adjustments
that management believes are necessary for the fair presentation of
their financial condition and results of operations for the periods
presented.
Capital stock
The
Company’s articles initially authorized the Company to issue a
total of 102,000,000 (One Hundred Two Million) shares of stock,
consisting of 2,000,000 (Two Million) shares of preferred stock and
100,000,000 (One Hundred Thousand) shares of common stock, both with no
stated par value.
Income Taxes
Income
taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred
taxes related primarily to differences between the recorded book basis
and tax basis of assets and liabilities for financial and income tax
reporting. The deferred tax assets and liabilities represent the future
tax return consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are recovered or
settled. Deferred taxes are also recognized for operating losses that
are available to offset future taxable income and tax credits that are
available to offset future federal income taxes.
8
ANIMAL CLONING SCIENCES, INC. (A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDING DECEMBER 31, 2008 AND 2007
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Loss Per Common Share
SFAS
128, "Earnings per Share," requires a dual presentation of earnings per
share-basic and diluted. Basic loss per common share is computed by
dividing the net loss for the period by the weighted average shares
outstanding. The Company's convertible debt (Note C) is a potentially
dilutive security, but does not impact the computation of fully diluted
EPS because its effect would be anti-dilutive. Accordingly, basic and
diluted losses per share are the same.
Recently Issued Accounting Pronouncements
In December of 2002, the FASB issued SFAS 148, “Accounting
for Stock-Based Compensation – Transition and Disclosure –
An Amendment of FASB Statement No. 123.” SFAS 148
provides alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee
compensation. In addition, the statement amends the disclosure
requirements of Statement No. 123 to require prominent disclosures in
both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the
method used on reported results.
In
September 2007, the FASB issued SFAS No. 158 (SFAS No. 158), which
amends SFAS No. 87, 88, 106 and 132(R). Post application of SFAS 158,
an employer should continue to apply the provision in Statements 87,
88, and 106 in measuring plan assets and benefit obligations as of the
date of its statement of financial position and in determining the
amount of net periodic benefit cost. SFAS 158 requires amounts to be
recognized as the funded status of a benefit plan, which is,
the difference between plan assets at fair value and the benefit obligation.
SFAS
158 further requires recognition of gains/losses and prior service
costs or credits not recognized pursuant to SFAS No. 87 or SFAS No.
106. Additionally, the measurement date is to be the date of the
employer’s fiscal year-end.
SFAS
No. 158 requires disclosure in the financial statements effects from
delayed recognition of gains/losses, prior service costs or credits,
and transition assets or obligations. SFAS No. 158 is effective for
years ending after December 15, 2007 for employers with publicly traded
equity securities and as of the end of the fiscal year ended after June
15, 2008 for employers without publicly traded equity securities. We do
not expect the adoption of SFAS No. 158 to have a material impact on
our consolidated financial position, results of operations or cash
flows.
In
February 2008, the FASB issued Statement No. 159 (FASB No. 159), The
Fair Value Option for Financial Assets and Financial Liabilities,
including an amendment of FASB Statement No. 115. FASB No. 159 permits
companies to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be
measured at fair value and establishes presentation and disclosure
requirements designed to facilitate comparisons between companies that
choose different measurement attributes for similar types of assets and
liabilities.
9
ANIMAL CLONING SCIENCES, INC. (A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDING DECEMBER 31, 2008 AND 2007
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recently Issued Accounting Pronouncements (continued)
The
provisions of FASB No. 159 become effective as of the beginning of our
2009 fiscal year. We do not expect that the adoption of FASB No. 159
will have a material impact on our financial condition, results of
operations or cash flows.
In
May 2009, the FASB issued FAS 1
65 , “
Subsequent Events ”
.
This pronouncement establishes standards for accounting for and disclosing subsequent events ( events
which occur after the balance sheet date but before financial
statements are issued or are available to be issued). FAS 165 requires
and entity to disclose the date subsequent events were evaluated and
whether that evaluation took place on the date financial statements
were issued or were available to be issued. It is effective for interim
and annual periods ending after June 15, 2009. The adoption of
FAS 1
65
did not have a material impact on
the Company’s financial condition or results of operation.
In
June 200
9 , the FASB issued FAS 1
66 , “
Accounting for Transfers of Financial Assets ”
an amendment of FAS 140. FAS 140 is intended to improve the relevance,
representational faithfulness, and comparability of the information
that a reporting entity provides in its financial statements about a
transfer of financial assets: the effects of a transfer on its
financial position, financial performance , and cash flows: and a
transferor’s continuing involvement, if any, in transferred
financial assets. This statement must be applied as of the beginning of
each reporting entity’s first annual reporting period that
begins after November 15, 2009. The Company does not expect the
adoption of FAS 1
66 to have an impact on the Company’s results of operations, financial condition or cash flows.
In
June 200
9 , the FASB issued FAS 1
67 , “
Amendments to FASB Interpretation No. 46(R) ”
. FAS 167 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities,
as a result of the elimination of the qualifying special-purpose entity
concept in FAS 166, and (2) constituent concerns about the application
of certain key provisions of Interpretation 46(R), including those in
which the accounting and disclosures under the Interpretation do not
always provided timely and useful information about an
enterprise’s involvement in a variable interest entity.
This
statement must be applied as of the beginning of each reporting
entity’s first annual reporting period that begins after November
15, 2009. The Company does not expect the adoption of FAS 1
67 to have an impact on the Company’s results of operations, financial condition or cash flows.
10
ANIMAL CLONING SCIENCES, INC. (A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDING DECEMBER 31, 2008 AND 2007
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recently Issued Accounting Pronouncements (continued)
In
June 200
9 , the FASB issued FAS 1
68 , “
The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles ” .
FAS 168 will become the source of authoritative U.S. generally accepted
accounting principles (GAAP) recognized by the FASB to be applied by
nongovernmental entities. 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. On the effective date of this Statement, the Codification
will supersede all then-existing non-SEC accounting and reporting
standards. All other nongrandfathered non-SEC accounting literature not
included in the Codification will become nonauthoritative. This
statement is effective for financial statements issued for interim and
annual periods ending after September 15, 2009.The Company does not
expect the adoption of FAS 1
68 to have an impact on the Company’s results of operations, financial condition or cash flows.
Other
accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a
future date and are not expected to have a material impact on the
financial statements upon adoption.
None
of the above new pronouncements has current application to the Company,
but may be applicable to the Company’s future financial reporting.
NOTE B – GOING CONCERN
Under
the going concern assumption, an entity is ordinarily viewed as
continuing in business for the foreseeable future with neither the
intention nor the necessity of liquidation, ceasing trading, or seeking
protection from creditors pursuant to laws or regulations.
Accordingly,
assets and liabilities are recorded on the basis that the entity will
be able to realize its assets and discharge its liabilities in the
normal course of business.
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of
America, which contemplate continuation of the Company as a going
concern. However, the Company has no on-going operations and has
current liabilities in excess of current assets. These factors raise
substantial doubt about the ability of the Company to continue as a
going concern. In this regard, management is proposing to raise any
necessary additional funds not provided by operations through loans or
through sale of its common stock or through a possible business
combination with another entity. There is no assurance that the Company
will be successful in raising this additional capital or in
establishing profitable operations. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
11
ANIMAL CLONING SCIENCES, INC. (A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDING DECEMBER 31, 2008 AND 2007
NOTE B – GOING CONCERN - continued
Management
expects to seek potential business opportunity from all known sources
but will rely principally on personal contacts of its officers and
directors as well as indirect associations between them and other
business and professional people. It is not presently anticipated that
the Company will engage professional firms specializing in business
acquisitions or reorganizations. Management, while not especially
experienced in matters relating to the new business of the Company,
will rely upon their own efforts and, to a much lesser extent, the
efforts of the Company’s shareholders, in accomplishing the
business purposes of the Company.
The
officers and directors of the company have paid all expenses related to
the activities of seeking other business opportunities and performing
all functions necessary for the required SEC filings for this company
with the understanding that these expenses will not be reimbursed by
the company due to the fact that this is not the only company they are
performing these services for.
NOTE C - RELATED PARTY TRANSACTIONS
In
March 2002, the Company entered into a $150,000 convertible promissory
note with an entity affiliated with the Company's CEO. The note is
convertible at a rate of $.05 per share at the option of the holder for
a total of 3,000,000 shares of common stock. Interest of 5% is accrued
on the principal quarterly. If not sooner converted into common stock,
the principal and interest are due March 1, 2010. At December 31, 2008,
the Company had accrued $50,625 in interest. Current year interest
expense was $7,500.
The
Company's officers and directors have resolved to provide for various
expenses incurred by the Company at a minimal cost until such time that
a merger candidate is found. These expenses consist of, but are not
limited to, accounting, filing requirements, and management services.
The costs of these services were $0 and $1,500 during 2008 and 2007,
respectively, for a total of $3,000 payable to officers and directors
at December 31, 2008.
NOTE D - STOCKHOLDERS' EQUITY
Preferred Stock
During
February 2004, the Company's shareholders voted to increase the number
of authorized shares from 1,000,000 to 2,000,000. The Company has not
issued any preferred stock since inception. The rights for preferred
stock not designated as Class A or B will be determined by the Board of
Directors prior to issuance.
Class A Preferred Stock.
The
Company has designated 1,500 shares of no par value Class A preferred
stock. Class A shareholders are not entitled to receive dividends, but
are entitled to elect two-thirds of the directors of the Company.
Class B Convertible Preferred Stock.
The Company has designated 110,000 shares of no par value convertible
ANIMAL CLONING SCIENCES, INC. (A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDING DECEMBER 31, 2008 AND 2007
NOTE D - STOCKHOLDERS' EQUITY (continued)
Class B preferred stock.
Class
B shareholders are entitled to receive dividends in a manner similar to
common shareholders when declared by the board of directors. Each Class
B share is convertible into one share of common stock at the option of
the shareholder, provided that the market price for the Company's
common stock is at or above $4.50 per share.
Common Stock.
During
February 2004, the Company's shareholders voted to increase the number
of shares authorized from 50,000,000 per their articles of
incorporation to 100,000,000.
On
February 24, 2004, the Company effected a 10-to-1 reverse split on its
common stock. The financial statements, for all periods presented have
been restated to reflect the stock split.
During
February and March 2004, the Company issued 27,815,000 shares of its
common stock for the cancellation of salaries payable to officers, the
cancellation of a note payable of $150,000, and 100% of the stock of a
company with which it was merging. However, during April 2004, the
Company reversed the transaction and cancelled the 27,815,000 shares of
its previously issued stock for the attempted merger and reduction of
liabilities.
NOTE E - INCOME TAXES
The
Company accounts for income taxes in accordance with SFAS 109,
"Accounting for Income Taxes." SFAS 109 requires the Company to provide
a net deferred tax asset/liability equal to the expected future tax
benefit/expense of temporary reporting differences between book and tax
accounting methods and any available operating loss or tax credit
carryforwards. At December 31, 2006, the Company has available unused
operating loss carryforwards of approximately $1,337,500, which may be
applied against future taxable income and which expire in various years
through 2026.
The
amount of and ultimate realization of the benefits from the deferred
tax assets for income tax purposes is dependent, in part, upon the tax
laws in effect, the future earnings of the Company, and other future
events, the effect of which cannot be determined. Because of the
uncertainty surrounding the realization of the deferred tax assets, the
Company has established a valuation allowance equal to their tax effect
and, therefore, no deferred tax asset has been recognized for the net
operating loss carryforwards.
NOTE E - INCOME TAXES
The
net deferred tax asset, which is based on an effective tax rate of 34%
and consists mainly of net operating loss carryforwards and accrued
compensation expense, is approximately $470,675 as of December 31,
2008. It has been fully offset with a valuation allowance, which
increased by $2,550 during 2008.
12
ANIMAL CLONING SCIENCES, INC. (A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS ENDING DECEMBER 31, 2008 AND 2007
NOTE F - COMMITMENTS AND CONTINGENCIES
During
the period of 1995 through 2003 and in accordance with compensation
agreements then in effect, the Company's president and CEO had
accumulated $1,020,000 in accrued salaries, of which $645,000 was st
13
