Attached files
file | filename |
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EX-32.1 - Rackwise, Inc. | v196366_ex32-1.htm |
EX-31.1 - Rackwise, Inc. | v196366_ex31-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
|
For the
quarterly period ended July 31, 2010
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 Number: 333-163172
CAHABA
PHARMACEUTICALS, INC.
(Exact
name of small business issuer as specified in its charter)
Nevada
|
26-3439890
|
|
(State
of incorporation)
|
(IRS
Employer Identification No.)
|
|
2670
Towne Village Drive
Duluth,
Georgia 30097
|
||
(Address
of principal executive offices)
|
||
678.428.6026
|
||
(Issuer’s
telephone number)
|
||
MIB
Digital, Inc.
(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 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. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” 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
|
|||
(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 o
Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date. 85,000,018 shares of common
stock are issued and outstanding as of September 9, 2010.
CAHABA
PHARMACEUTICALS, INC.
FORM
10-Q
FOR
THE QUARTERLY PERIOD ENDED JULY 31, 2010
TABLE
OF CONTENTS
PAGE
|
||
PART
I - FINANCIAL INFORMATION
|
||
Item
1.
|
Financial
Statements.
|
|
Balance
Sheets at July 31, 2010 (unaudited) and October 31, 2009
|
5
|
|
Statements
of Operations
|
6
|
|
Statements
of Stockholders' Equity (Deficiency)
|
7
|
|
Statements
of Cash Flows
|
8
|
|
Notes
to Financial Statements (unaudited)
|
9
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
13
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk.
|
15
|
Item
4.
|
Controls
and Procedures.
|
15
|
PART
II - OTHER INFORMATION
|
||
Item
1.
|
Legal
Proceedings.
|
17
|
Item
1A.
|
Risk
Factors.
|
17
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
17
|
Item
3.
|
Defaults
Upon Senior Securities.
|
17
|
Item
4.
|
(Removed
and Reserved).
|
17
|
Item
5.
|
Other
Information.
|
17
|
Item
6.
|
Exhibits.
|
17
|
2
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain
statements in this report contain or may contain forward-looking statements.
These statements, identified by words such as "plan", "anticipate", "believe",
"estimate", "should", "expect" and similar expressions include our expectations
and objectives regarding our future financial position, operating results and
business strategy. These statements are subject to known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward – looking statements. These
forward-looking statements were based on various factors and were derived
utilizing numerous assumptions and other factors that could cause our actual
results to differ materially from those in the forward-looking statements. These
factors include, but are not limited to, our ability to secure suitable
financing to continue with our existing business or change our business and
conclude a merger, acquisition or combination with a business prospect,
economic, political and market conditions and fluctuations, government and
industry regulation, interest rate risk, U.S. and global competition, and other
factors. Most of these factors are difficult to predict accurately and are
generally beyond our control. You should consider the areas of risk described in
connection with any forward-looking statements that may be made herein. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this report. Readers should carefully review
this report in its entirety, including but not limited to our financial
statements and the notes thereto and the risks described in our Registration
Statement on Form S-1 as filed with the Securities and Exchange Commission (the
“SEC”) and declared effective on March 5, 2010. We advise you to carefully
review the reports and documents we file from time to time with the SEC,
particularly our quarterly reports on Form 10-Q and our current reports on Form
8-K. Except for our ongoing obligations to disclose material information under
the Federal securities laws, we undertake no obligation to release publicly any
revisions to any forward-looking statements, to report events or to report the
occurrence of unanticipated events.
OTHER
PERTINENT INFORMATION
When used
in this report, the terms, "we," the "Company," "our," and "us" refers to Cahaba
Pharmaceuticals, Inc.
3
PART
I - FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
|
|
Balance
Sheets at July 31, 2010 (unaudited) and October 31, 2009
|
5
|
Statements
of Operations
|
6
|
Statements
of Stockholders' Equity (Deficiency)
|
7
|
Statements
of Cash Flows
|
8
|
Notes
to Financial Statements (unaudited)
|
9
|
4
CAHABA
PHARMACEUTICALS, INC.
(A
Development Stage Company)
BALANCE
SHEET
31-Jul
|
As of
|
|||||||
2010
|
October 31,
|
|||||||
Unaudited
|
2009
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 8,198 | $ | 5,421 | ||||
Total
current assets
|
8,198 | 5,421 | ||||||
TOTAL
ASSETS
|
$ | 8,198 | $ | 5,421 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY)
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
Payable and Accrued Liabilities
|
650 | - | ||||||
Total
liabilities
|
650 | - | ||||||
STOCKHOLDERS'
EQUITY (DEFICIENCY)
|
||||||||
Capital
Stock
|
||||||||
Authorized:
|
||||||||
250,000,000
common shares, $0.0001 par value
|
||||||||
Issued
and outstanding shares:
|
||||||||
10,200,000
and 9,000,000 shares issued and outstanding at July 31, 2010 and October
31, 2009, respectively
|
$ | 1,020 | $ | 900 | ||||
Additional
paid-in capital
|
19,980 | 8,100 | ||||||
Deficit
accumulated during the development stage
|
(13,452 | ) | (3,579 | ) | ||||
Total
Stockholders' Equity (Deficiency)
|
7,548 | 5,421 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 8,198 | $ | 5,421 |
The
accompanying notes are an integral part of these financial
statements.
5
CAHABA
PHARMACEUTICALS, INC.
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS
For the Period
|
||||||||||||
from Inception
|
||||||||||||
Three Months
|
Nine Months
|
September 23,
|
||||||||||
Ended
|
Ended
|
2009 to
|
||||||||||
31-Jul
|
31-Jul
|
31-Jul
|
||||||||||
2010
|
2010
|
2010
|
||||||||||
REVENUES
|
$ | 0 | $ | 0 | $ | 0 | ||||||
EXPENSES
|
||||||||||||
General
& Administrative
|
$ | 1,926 | $ | 9,873 | $ | 13,452 | ||||||
Loss
Before Income Taxes
|
$ | (1,926 | ) | $ | (9,873 | ) | $ | (13,452 | ) | |||
Provision
for Income Taxes
|
0 | 0 | 0 | |||||||||
Net
Loss
|
$ | (1,926 | ) | $ | (9,873 | ) | $ | (13,452 | ) | |||
PER
SHARE DATA:
|
||||||||||||
Basic
and diluted loss per common share
|
$ | (0.000 | ) | $ | (0.001 | ) | ||||||
Weighted
Average Common shares outstanding
|
10,200,000 | 9,567,033 |
The
accompanying notes are an integral part of these financial
statements.
6
CAHABA
PHARMACEUTICALS, INC.
(A
Development Stage Company)
STATEMENTS
OF STOCKHOLDERS’ EQUITY (DEFICIT)
Accumulated
|
||||||||||||||||||||
Additional
|
During the
|
|||||||||||||||||||
Common Stock
|
Paid-in
|
Development
|
||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||
Inception
-September 23, 2009
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Common
shares issued to Founder for cash at $0.001 per share (par
value $0.0001) on 9/23/2009
|
9,000,000 | 900 | 8,100 | - | 9,000 | |||||||||||||||
Loss
for the period from inception on September 23, 2009 to October 31,
2009
|
- | - | - | (3,579 | ) | (3,579 | ) | |||||||||||||
- | ||||||||||||||||||||
Balance
- October 31, 2009
|
9,000,000 | 900 | 8,100 | (3,579 | ) | 5,421 | ||||||||||||||
Loss
for the quarter ended Jan 31, 2010
|
(1,600 | ) | (1,600 | ) | ||||||||||||||||
Balance
- January 31, 2010
|
9,000,000 | 900 | 8,100 | (5,179 | ) | 3,821 | ||||||||||||||
Private
placement of 1,200,000 common shares ($0.0001 par value) on March 25, 2010
@ $0.01 per share
|
1,200,000 | 120 | 11,880 | 12,000 | ||||||||||||||||
Loss
for the quarter ended April 30, 2010
|
(6,347 | ) | (6,347 | ) | ||||||||||||||||
Balance
|
10,200,000 | 1,020 | 19,980 | (11,526 | ) | 9,474 | ||||||||||||||
Loss
for the quarter ended July 31, 2010
|
(1,926 | ) | (1,926 | ) | ||||||||||||||||
Balance
|
10,200,000 | 1,020 | 19,980 | (13,452 | ) | 7,548 |
The
accompanying notes are an integral part of these financial
statements.
7
CAHABA
PHARMACEUTICALS, INC.
(A
Development Stage Company)
STATEMENTS
CASH FLOWS
For the Period
|
||||||||
from Inception
|
||||||||
Nine Months
|
September 23,
|
|||||||
Ended
|
2009 to
|
|||||||
31-Jul
|
31-Jul
|
|||||||
2010
|
2010
|
|||||||
OPERATING
ACTIVITIES
|
||||||||
Loss
for the period
|
$ | (9,873 | ) | (13,452 | ) | |||
Changes
in Operating Assets and Liabilities:
|
||||||||
(Increase)
decrease in prepaid expenses
|
||||||||
Increase
(decrease) in accounts payable
|
650 | 650 | ||||||
Increase
(decrease) in accrued liabilities
|
||||||||
Net
cash used in operating activities
|
(9,223 | ) | (12,802 | ) | ||||
INVESTING
ACTIVITIES
|
||||||||
Net
cash used in investing activities
|
||||||||
FINANCING
ACTIVITIES
|
||||||||
Common
stock issued for cash
|
120 | 1,020 | ||||||
Additional
Paid in Capital
|
11,880 | 19,980 | ||||||
Net
cash provided by financing activities
|
12,000 | 21,000 | ||||||
INCREASE
IN CASH AND CASH EQUIVALENTS
|
2,777 | 8,198 | ||||||
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
5,421 | 0 | ||||||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
8,198 | 8,198 | ||||||
Supplemental
Cash Flow Disclosures:
|
||||||||
Cash
paid for:
|
||||||||
Interest
expense
|
$ | - | $ | - | ||||
Income
taxes
|
$ | - | $ | - |
The
accompanying notes are an integral part of these financial
statements.
8
CAHABA
PHARMACEUTICALS, INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
(JULY
31, 2010)
NOTE 1. GENERAL
ORGANIZATION AND BUSINESS
Cahaba
Pharmaceuticals, Inc. (“Cahaba” or the “Company”) is a development stage
company, incorporated under the name MIB Digital, Inc., in the State of Florida
on September 23, 2009, to develop and operate an advertising and subscription
supported content management platform capable of delivering video, audio and
related advanced multimedia programming to broadband, Internet Protocol
television (IPTV) and a wide variety of wireless mobile devices ranging from low
cost mobile telephones to wireless-enabled Portable Digital Assistants (PDAs).
On August 24, 2010 the Company was re-incorporated in Nevada and changed its
name to Cahaba Pharmaceuticals, Inc. See note 3 below for additional
information.
Through
July 31, 2010 the Company was in the development stage and has not carried on
any significant operations and has generated no revenues. The Company has
incurred losses since inception aggregating $13,452. The accompanying financial
statements have been prepared assuming that the Company will continue as a going
concern. These matters, among others, raise substantial doubt about the ability
of the Company to continue as a going concern. These financial statements do not
include any adjustments to the amounts and classification of assets and
liabilities that may be necessary should the Company be unable to continue as a
going concern.
NOTE 2. SUMMARY
OF SIGNIFICANT ACCOUNTING PRACTICES
Accounting
Basis
The
Company is currently a development stage enterprise reporting under the
provisions of Accounting Standards Codification ("ASC") 915 "Development Stage
Entities", which was previously Statement of Financial Accounting Standards
("SFAS") No. 7.
The
accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles in the United States of America
for interim financial information and with the instructions to Form 10-Q and
Regulation S-X. Accordingly, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included and such
adjustments are of a normal recurring nature. These financial statements should
be read in conjunction with the financial statements for the year ended October
31, 2009 and notes thereto and other pertinent information contained in our Form
S-1/A as filed with the Securities and Exchange Commission (the
"SEC").
The
results of operations for the three and nine month period ending July 31, 2010
are not necessarily indicative of the results for the full fiscal year ending
October 31, 2010.
9
Cash and Cash
Equivalents
Cash and
cash equivalents are reported in the balance sheet at cost, which approximates
fair value. For the purpose of the financial statements cash
equivalents include all highly liquid investments with maturity of three months
or less.
Earnings (Loss) per
Share
The basic
earnings (loss) per share are calculated by dividing the Company's net income
available to common shareholders by the weighted average number of common shares
outstanding during the year. The diluted earnings (loss) per share are
calculated by dividing the Company's net income (loss) available to common
shareholders by the diluted weighted average number of shares outstanding during
the year. The diluted weighted average number of shares outstanding is the basic
weighted number of shares adjusted as of the first of the year for any
potentially dilutive debt or equity. There are no diluted shares outstanding for
any periods reported.
Dividends
The
Company has not adopted any policy regarding payment of dividends. No dividends
have been paid during the periods shown, and none are contemplated in the near
future.
Income
Taxes
The
Company adopted FASB ASC 740, Income Taxes, at its
inception. Deferred tax assets and liabilities 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. Deferred tax assets, including tax loss and credit
carryforwards, 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 effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. Deferred income tax expense represents
the change during the period in the deferred tax assets and deferred tax
liabilities. The components of the deferred tax assets and liabilities are
individually classified as current and non-current based on their
characteristics. Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. No deferred tax assets or
liabilities were recognized as of July 31, 2010.
Advertising
The
Company will expense advertising as incurred. The cost of advertising since
inception has been $0.00.
Use of
Estimates
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 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 revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
Revenue and Cost
Recognition
The
Company has no current source of revenue; therefore the Company has not yet
adopted any policy regarding the recognition of revenue or
cost.
10
Property
The
Company does not own any real estate or other properties. The Company's office
is located 2670 Towne Village Dr., Duluth GA 30097. Our contact number is
678-428-6026. The business office is located at the home of Scott Hughes, the
CEO of the Company at no charge to the Company.
Recently Issued Accounting
Pronouncements
The
Company has adopted all recently issued accounting pronouncements. The adoption
of the accounting pronouncements, including those not yet effective, is not
anticipated to have a material effect on the financial position or results of
operations of the Company.
NOTE
3. SUBSEQUENT EVENTS
On August
24, 2010, pursuant to our agreement and plan of merger with our special purpose
wholly-owned subsidiary Cahaba Pharmaceuticals, Inc., a Nevada corporation, we
merged with and into Cahaba Pharmaceuticals with Cahaba Pharmaceuticals as the
surviving corporation. The purpose of the merger was to re-domicile
the Company from Florida to Nevada, to change its name and to effect a
recapitalization. Cahaba Pharmaceuticals was incorporated on August
20, 2010 for the sole purpose of effecting the merger, with an authorized
capital stock of 300,000,000 shares of common stock, par value $0.001 per share,
and 10,000,000 shares of “blank check” preferred stock, par value $0.001 per
share.
The
merger was approved on August 23, 2010, by written consent of the Company’s
board of directors and by the written consent of the holder of a majority of the
Company’s outstanding shares. No meeting of stockholders of the
Company was required under Florida law.
In the
merger, each share of the common stock, par value $0.0001 per share, of the
Company was automatically converted into eight and one-third (8⅓) shares of
Cahaba Pharmaceuticals’ common stock, par value $0.001 per share (subject to
statutory appraisal rights of stockholders whose consent to the merger was not
obtained). (Share and per share numbers of the Company’s common stock
in this report have not been retroactively adjusted to reflect this
recapitalization.) Immediately after the merger all of the
outstanding common stock of the Company were cancelled and represent only the
right to receive shares of Cahaba Pharmaceuticals or to exercise appraisal
rights.
The
effects of the merger were as follows:
|
1.
|
The
Company was renamed “Cahaba Pharmaceuticals, Inc.” That is, by
operation of the merger, Cahaba Pharmaceuticals is the surviving
corporation and successor in interest to the
Company.
|
|
2.
|
The
Company was re-domiciled in Nevada. That is, Cahaba
Pharmaceuticals, as successor to the Company as a result of the merger, is
a Nevada corporation.
|
|
3.
|
The
authorized capital stock of the Company was increased to 300,000,000
shares of common stock and 10,000,000 shares of “blank check” preferred
stock. That is, by operation of the merger the authorized
capital stock of Cahaba Pharmaceuticals became the combined entity’s
authorized capital stock.
|
4.
|
The
10,200,000 shares of the Company’s common stock outstanding prior to the
merger were converted into 85,000,000 shares of common stock (subject to
rounding up for fractional shares) of Cahaba Pharmaceuticals; the
outstanding capital stock of Cahaba Pharmaceuticals following the merger
was 85,000,018 shares of common stock and no shares of preferred
stock.
|
11
|
5.
|
The
directors of the Company immediately preceding the merger became the
directors of Cahaba Pharmaceuticals on and after the effectiveness of the
merger, and the officers of the Company immediately preceding the merger
became the officers of Cahaba Pharmaceuticals on and after the
effectiveness of the merger.
|
The
merger does not result in any change in the business, management, location of
principal executive offices, assets, liabilities, net worth, accounting
practices or control of the Company.
Cahaba
Pharmaceuticals, as the successor registrant, will continue to file reports
under Section 15(d) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
We have
evaluated events and transactions that occurred subsequent to July 31, 2010
through Sept 8, 2010, the date the financial statements were issued, for
potential recognition or disclosure in the accompanying financial
statements. Other than the disclosures above, we did not identify any
events or transactions that should be recognized or disclosed in the
accompanying financial statements.
NOTE
4. STOCKHOLDERS’ EQUITY
On
September 23, 2009, the Company issued 9,000,000 of its $0.0001 par value common
stock for $9,000 cash to the founders of the Company. The issuance of the shares
was made to the sole officer and director of the Company and an individual who
is a sophisticated and accredited investor, therefore, the issuance was exempt
from registration of the Securities Act of 1933 by reason of Section 4 (2) of
that Act.
On March
25, 2010, the company issued 1,200,000 shares of common stock to 24 investors in
accordance with Form S-1 (commission file #333-163172) for cash and
consideration of $12,000.
12
ITEM
2.
|
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Overview
Cahaba
Pharmaceuticals, Inc. is a development stage company and was incorporated under
the name MIB Digital, Inc., in Florida on September 23, 2009, to develop and
operate an advertising and subscription supported content management platform.
As of the date of this report, the Company has no operations and in accordance
with SFAS #7 is considered to be in the development stage.
Recent
Developments
On August
24, 2010, pursuant to our agreement and plan of merger with our special purpose
wholly-owned subsidiary Cahaba Pharmaceuticals, Inc., a Nevada corporation, we
merged with and into Cahaba Pharmaceuticals with Cahaba Pharmaceuticals as the
surviving corporation. The purpose of the merger was to re-domicile
the Company from Florida to Nevada, to change its name and to effect a
recapitalization. Cahaba Pharmaceuticals was incorporated on August
20, 2010 for the sole purpose of effecting the merger, with an authorized
capital stock of 300,000,000 shares of common stock, par value $0.001 per share,
and 10,000,000 shares of “blank check” preferred stock, par value $0.001 per
share.
The
merger was approved on August 23, 2010, by written consent of the Company’s
board of directors and by the written consent of the holder of a majority of the
Company’s outstanding shares. No meeting of stockholders of the
Company was required under Florida law.
In the
merger, each share of the common stock, par value $0.0001 per share, of the
Company was automatically converted into eight and one-third (8⅓) shares of
Cahaba Pharmaceuticals’ common stock, par value $0.001 per share (subject to
statutory appraisal rights of stockholders whose consent to the merger was not
obtained). (Share and per share numbers of the Company’s common stock
in this report have not been adjusted to reflect this
recapitalization.) Immediately after the merger all of the outstanding
common stock of the Company were cancelled and represent only the right to
receive shares of Cahaba Pharmaceuticals or to exercise appraisal
rights.
The
effects of the merger were as follows:
|
1.
|
The
Company was renamed “Cahaba Pharmaceuticals, Inc.” That is, by
operation of the merger, Cahaba Pharmaceuticals is the surviving
corporation and successor in interest to the
Company.
|
|
2.
|
The
Company was re-domiciled in Nevada. That is, Cahaba
Pharmaceuticals, as successor to the Company as a result of the merger, is
a Nevada corporation.
|
|
3.
|
The
authorized capital stock of the Company was increased to 300,000,000
shares of common stock and 10,000,000 shares of “blank check” preferred
stock. That is, by operation of the merger the authorized
capital stock of Cahaba Pharmaceuticals became the combined entity’s
authorized capital stock.
|
|
4.
|
The
10,200,000 shares of the Company’s common stock outstanding prior to the
merger were converted into 85,000,000 shares of common stock (subject to
rounding up for fractional shares) of Cahaba Pharmaceuticals; the
outstanding capital stock of Cahaba Pharmaceuticals following the merger
was 85,000,018 shares of common stock and no shares of preferred
stock.
|
13
|
5.
|
The
directors of the Company immediately preceding the merger became the
directors of Cahaba Pharmaceuticals on and after the effectiveness of the
merger, and the officers of the Company immediately preceding the merger
became the officers of Cahaba Pharmaceuticals on and after the
effectiveness of the merger.
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The
merger does not result in any change in the business, management, location of
principal executive offices, assets, liabilities, net worth, accounting
practices or control of the Company.
Cahaba
Pharmaceuticals, as the successor registrant, will continue to file reports
under Section 15(d) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
The Company
is currently engaged in discussions with Cahaba Pharmaceuticals, LLC, a
privately held Delaware limited liability company (“Cahaba LLC”), regarding a
possible business combination involving the two companies. At this
stage, no definitive terms have been agreed to, and neither party is currently
bound to proceed with a transaction. With the permission of Cahaba
LLC, we have changed our name to facilitate these discussions. If the
parties determine not to proceed with a business combination, the registrant
will change its name back to MIB Digital, Inc., or adopt another
name.
Results
of Operations
The
following discussion should be read in conjunction with the accompanying
financial statements and the Company's S-1 and amended S-1/As. Results for
interim periods may not be indicative of results for the full year.
During
the first three months of the Company’s 2009 fiscal year we focused on preparing
the documentation required to be filed with the Securities and Exchange
Commission (SEC) and with the Financial Industry Regulatory Authority (FINRA).
On November 18, 2009 the Company filed a Registration Statement on Form S-1 and
subsequently filed S-1/A amendments with the SEC. The Registration Statement was
declared effective as of March 5, 2010
The
Company has not generated any revenue during the period from September 23, 2009
(inception) through July 31, 2010.
Total
expenses for the nine (9) months ended July 31, 2010 were $9,873, resulting in
an operating loss for the period of $9,873. Basic and diluted loss per share was
$.001 for the nine (9) months ending July 31, 2010.
Expenses
were comprised of general and administrative expenses and consisted primarily of
filing and professional fees, office expenses and bookkeeping for the nine (9)
months ending July 31, 2010.
Total
expenses for the three (3) months ended July 31, 2010 were $1,926 resulting in
an operating loss for the period of $1,926. Basic and diluted loss per share was
$.000 for the three (3) months ending July 31, 2010.
Expenses
were comprised of general and administrative expenses and consisted primarily of
filing and professional fees, office expenses and bookkeeping for the three (3)
months ending July 31, 2010.
Accounts
payable at July 31, 2010 was $650.
14
Liquidity
and Capital Resources
From
September 23, 2009 (inception) through July 31, 2010, our assets have consisted
solely of cash and cash equivalents. At July 31, 2010 we had cash and
cash equivalents in the amount of $8,198, as compared to $5,421 at October 31,
2009.
Cash used
in operating activities for the nine (9) month period ended July 31, 2010 was
$9,223 and $12,802 for the period from September 23, 2009 (inception) through
July 31, 2010.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not
applicable to a smaller reporting company.
ITEM
4. CONTROLS AND PROCEDURES
Management's Report on
Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934, as amended, as a process designed by, or under the supervision of,
the company's principal executive and principal financial officers and effected
by the company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
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·
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Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
company;
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|
·
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Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America and that
receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company;
and
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|
·
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Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company's assets that
could have a material effect on the financial
statements.
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Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Because of the inherent
imitations of internal controls, there is a risk that material misstatements may
not be prevented or detected on a timely basis by internal control over
financial reporting. However, these inherent limitations are known features of
the financial reporting process. Therefore, it is possible to design into the
process safeguards to reduce, though not eliminate, this risk.
15
As of
July 31, 2010 management assessed the effectiveness of our internal control over
financial reporting based on the criteria for effective internal control over
financial reporting established in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO")
and SEC guidance on conducting such assessments. Based on that evaluation, they
concluded that, during the period covered by this report, such internal controls
and procedures were not effective to detect the inappropriate application of US
GAAP rules as more fully described below. This was due to deficiencies that
existed in the design or operation of our internal controls over financial
reporting that adversely affected our internal controls and that may be
considered to be material weaknesses.
The
matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Chief Executive Officer in connection with the review of our financial
statements as of July 31, 2010.
Management
believes that the material weaknesses set forth in items (2) and (3) above did
not have an effect on our financial results. However, management believes that
the lack of a functioning audit committee and the lack of a majority of outside
directors on our board of directors results in ineffective oversight in the
establishment and monitoring of required internal controls and procedures, which
could result in a material misstatement in our financial statements in future
periods.
Management's Remediation
Initiatives
In an
effort to remediate the identified material weaknesses and other deficiencies
and enhance our internal controls, we have initiated, or plan to initiate, the
following series of measures:
We will
create a position to segregate duties consistent with control objectives and
will increase our personnel resources and technical accounting expertise within
the accounting function when funds are available to us. And, we plan to appoint
one or more outside directors to our board of directors who shall be appointed
to an audit committee resulting in a fully functioning audit committee that will
undertake the oversight in the establishment and monitoring of required internal
controls and procedures, such as reviewing and approving estimates and
assumptions made by management, when funds are available to us.
Management
believes that the appointment of one or more outside directors, who shall be
appointed to a fully functioning audit committee, will remedy the lack of a
functioning audit committee and the lack of a majority of outside directors on
our board.
We
anticipate that these initiatives will be at least partially, if not fully,
implemented by July 31, 2011. Additionally, we plan to test our updated controls
and remediate our deficiencies by January 31, 2011.
Changes in internal controls
over financial reporting
There was
no change in our internal controls over financial reporting that occurred during
the period covered by this report, which has materially affected, or is
reasonably likely to materially affect, our internal controls over financial
reporting.
16
PART
II - OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS.
None.
ITEM
1A. RISK FACTORS.
Not
applicable to a smaller reporting company.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.
None,
other than as previously reported.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM
4. (REMOVED AND RESERVED)
None.
ITEM
5. OTHER INFORMATION.
None.
ITEM
6. EXHIBITS.
Exhibit No.
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Description
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||
3.2
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Articles
of Incorporation of Cahaba Pharmaceuticals, Inc. (1)
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||
3.3
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Certificate
of Merger of MIB Digital, Inc., with and into Cahaba Pharmaceuticals, Inc.
(1)
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||
10.1
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Agreement
and Plan of Merger between MIB Digital, Inc., and Cahaba Pharmaceuticals,
Inc. (1)
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||
31.1
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Rule
13(a)-14(a)/15(d)-14(a) Certification of principal executive, financial
and accounting officer
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||
32.1
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Section
1350 Certification of principal executive, financial and accounting
officer
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(1)
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Incorporated
by reference, numbered as indicated above, from the registrant’s Form 8-K
filed with the Securities and Exchange Commission on August 30,
2010
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17
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Date: September
10, 2010
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CAHABA
PHARMACEUTICALS, INC.
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||
By:
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/s/ Scott
Hughes
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||
Name:
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Scott
Hughes
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||
Title:
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President,
Secretary, Treasurer, Principal Executive Officer, Principal Financial and
Accounting Officer and Sole Director Chief Executive Officer and Chief
Financial
Officer
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18