Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2011
OR
|_| 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 333-170477
ACROBOO, INC.
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(Exact name of registrant as specified in its charter)
Nevada 27-3074682
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3000 Bayport Drive, Suite 250, Tampa, Florida 33607
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(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (813) 637-6900
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 |_| No |X|
Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of
the Exchange Act (Check one).
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller Reporting Company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes |X| No |_|
As of May 18, 2011, the registrant had 1,602,096 shares of its $0.001 par
value Common Stock issued and outstanding.
Table of Contents
AcroBoo, Inc.
Index to Form 10-Q
For the Quarterly Period Ended March 31, 2011
Part I. Financial Information
Page
Item 1. Financial Statements
Balance Sheets as of March 31, 2011 and September 30, 2010 3
Statements of Operations for the three and six months
ended March 31, 2011 and from Inception (June 14, 2010) to
March 31, 2011 4
Statements of Cash Flows for the six months ended March 31, 2011
and from Inception (June 14, 2010) to March 31, 2011 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 17
Item 4. Controls and Procedures 17
Part II Other Information
Item 1. Legal Proceedings 21
Item 1A. Risk Factors 21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21
Item 3. Defaults Upon Senior Securities 21
Item 4. Submission of Matters to a Vote of Security Holders 21
Item 5. Other Information 21
Item 6. Exhibits 22
Signatures 23
2
Part I. Financial Information
Item 1. Financial Statements
AcroBoo, Inc.
(A Development Stage Company)
Balance Sheets
March 31, September 30,
2011 2010
(Unaudited) (Audited)
------------- -------------
Assets
Current assets:
Cash and equivalents $ - $ -
------------- -------------
Total current assets - -
Total assets $ - $ -
============= =============
Liabilities and Stockholders' Deficit
Current liabilities:
Accrued expense and accounts payable 1,750 1,500
------------- -------------
Total current liabilities 1,750 1,500
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Total liabilities 1,750 1,500
------------- -------------
Stockholders' deficit:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, none issued and
outstanding - -
Common stock, $0.001 par value, 70,000,000
shares authorized, none issued and outstanding - -
Additional paid-in capital 4,575 3,075
Deficit accumulated during development
stage (6,325) (4,575)
------------- -------------
Total stockholders' deficit (1,750) (1,500)
------------- -------------
Total liabilities and stockholders' deficit $ - $ -
============= =============
The accompanying notes are an integral part of these financial statements.
3
AcroBoo, Inc.
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the three For the six Inception
months ended months ended (June 14, 2010)
March 31, March 31, March 31,
2011 2011 2011
---------------- ---------------- ----------------
Revenue $ - $ - $ -
---------------- ---------------- ----------------
Expenses:
Organizational costs 1,750 1,750 6,325
---------------- ---------------- ----------------
Total expenses 1,750 1,750 6,325
---------------- ---------------- ----------------
Net loss $ (1,750) $ (1,750) $ (6,325)
================ ================ ================
Weighted average number
of common shares
outstanding 0 0
================ ================
Net loss per share $ (0.00) $ (0.00)
================ ================
The accompanying notes are an integral part of these financial statements.
4
AcroBoo, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the six Inception
months ended (June 14, 2010)
March 31, to March 31,
2011 2011
---------------- ----------------
Cash flows from operating activities:
Net loss $ (1,750) $ (6,325)
Adjustments to reconcile net loss to net cash used
by operating activities:
Increase(decrease) in:
Accounts payable and accrued
expense 250 1,750
---------------- ----------------
Net cash used by operating activities (1,500) (4,575)
---------------- ----------------
Cash flows from financing activities:
Contributed capital 1,500 4,575
---------------- ----------------
Net cash provided by financing activities 1,500 4,575
---------------- ----------------
Net increase (decrease) in cash - -
Cash - beginning of the period - -
---------------- ----------------
Cash - end of the period $ - $ -
================ ================
Supplemental disclosures:
Interest paid $ - $ -
================ ================
Income taxes paid $ - $ -
================ ================
The accompanying notes are an integral part of these financial statements.
5
AcroBoo, Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2011
(Unaudited)
NOTE 1 - FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at March 31, 2011 and for
all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It
is suggested that these financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
September 30, 2010 audited financial statements filed therewith along with
the amended S-1 registration statement. Operating results for the six
months ended March 31, 2011 are not necessarily indicative of the
results that may be expected for the year ending September 30, 2011. The
Company is a development stage company, as defined in FASB ASC 915
"Development Stage Entities."
NOTE 2 - GOING CONCERN
These financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. The Company has an
accumulated deficit since inception of $6,325. The Company has not generated
any revenues to date, and its ability to continue as a going concern is
contingent upon the successful completion of additional financing
arrangements and its ability to achieve and maintain profitable operations.
Management plans to raise equity capital to finance the operating and capital
requirements of the Company. Amounts raised will be used for further
development of the Company's products, to provide financing for marketing and
promotion and for other working capital purposes. While the Company is
putting forth its best efforts to achieve the above plans, there is no
assurance that any such activity will generate funds that will be available
for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments relating to the recoverability and classification of recorded
asset amounts, or amounts and classification of liabilities that might result
from this uncertainty.
6
AcroBoo, Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2011
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
The relevant accounting policies are listed below.
Basis of Accounting
-------------------
The basis is United States generally accepted accounting principles.
Cash and Cash Equivalents
-------------------------
The Company considers all short-term investments with a maturity of three
months or less at the date of purchase to be cash and cash equivalents.
Use of Estimates
----------------
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of
the financial statements and revenues and expenses during the reported
period. Actual results could differ from those estimates.
Advertising
-----------
Advertising costs are expensed when incurred. The Company has not incurred
any advertising expenses since inception.
Income Taxes
------------
The provision for income taxes is the total of the current taxes payable
and the net of the change in the deferred income taxes. Provision is made
for the deferred income taxes where differences exist between the period
in which transactions affect current taxable income and the period in
which they enter into the determination of net income in the
financial statements.
Year end
--------
The Company's fiscal year-end is September 30.
7
AcroBoo, Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2011
(Unaudited)
Recent Accounting Pronouncements
--------------------------------
The Company's management has evaluated all the recently issued accounting
pronouncements through the filing date of these financial statements and does
not believe that any of these pronouncements will have a material impact on
the Company's financial position and results of operations.
NOTE 4 - Stockholders' Deficit
The Company is authorized to issue 70,000,000 shares of its $0.001 par value
common stock and 5,000,000 shares of its $0.001 par value preferred stock.
There have been no issuances of common or preferred stock.
On June 14, 2010, a director of the Company contributed capital of $325
for incorporating fees. Such contribution is not expected to be repaid.
On July 21, 2010, a director of the Company contributed capital of
$2,750 for audit fees. Such contribution is not expected to be repaid.
On October 28, 2010, a director of the Company contributed capital of
$1,500 for audit fees. Such contribution is not expected to be repaid.
NOTE 5. Related Party Transactions
The Company does not lease or rent any property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 6. Subsequent Event
On November 9, 2010, the Company filed a Registration Statement with the
U.S. Securities and Exchange Commission ("SEC") on Form S-1. The
Registration became effective on April 7, 2011. Jagged Peak (the former
parent corporation) shareholders received one (1) share of AcroBoo common
stock for every ten (10) shares of Jagged Peak owned on May 10, 2011 the
record date for a total of 1,602,096 shares of Common Stock issued and
outstanding.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information
The Company may from time to time make written or oral "forward-looking
statements" including statements contained in this report and in other
communications by the Company, which are made in good faith by the Company
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include statements of the Company's plans,
objectives, expectations, estimates and intentions, which are subject to
change based on various important factors (some of which are beyond the
Company's control). The following factors, in addition to others not listed,
could cause the Company's actual results to differ materially from those
expressed in forward looking statements: the strength of the domestic and
local economies in which the Company conducts operations, the impact of
current uncertainties in global economic conditions and the ongoing financial
crisis affecting the domestic and foreign banking system and financial
markets, including the impact on the Company's suppliers and customers,
changes in client needs and consumer spending habits, the impact of
competition and technological change on the Company, the Company's ability to
manage its growth effectively, including its ability to successfully integrate
any business which it might acquire, and currency fluctuations. All forward-
looking statements in this report are based upon information available to the
Company on the date of this report. The Company undertakes no obligation to
publicly update or revise any forward-looking statement, whether as a result
of new information, future events, or otherwise, except as required by law.
Critical Accounting Policies
----------------------------
There have been no material changes to our critical accounting policies and
estimates from the information provided in "Management's Discussion and
Analysis of Financial Condition and Results of Operations", included in
our Registration Statement on Form S-1 for the fiscal year ended
September 30, 2010.
9
Overview of Current Operations
------------------------------
Corporate History
-----------------
The Company was organized June 14, 2010 (Date of Inception) under the laws
of the State of Nevada, as AcroBoo, Inc. The Company was incorporated as a
subsidiary of Jagged Peak, a Nevada corporation.
AcroBoo, Inc. Business Plan
---------------------------
AcroBoo is an e-commerce and supply chain solutions and services provider.
Acroboo is built on an OMS software platform that empowers multi-national
corporations to successfully sell online and through other sales channels at
multiple distribution points. AcroBoo will offer products through different
websites, that includes, but is not limited to: sunglasses, camping
equipment, coffee products, home tools and lighting products. While managing
our own online stores, we were often approached by companies who needed help
establishing an online presence. We leverage our knowledge and
infrastructure to offer services to assist other retailers expand their
sales channel to the Web. Our services have evolved to include online
retailing, e-channel development, e-marketing, and brand protection
solutions. Management views these as important abilities in running an
on-line business and they are part of AcroBoo's operation to sell products
and protect its brands. AcroBoo on occasion plans to sell these services
to clients desiring to run an on-line business but does not have their own
in-house expertise. This is only expected to be a small portion of the
business in the beginning years as AcroBoo builds up the number of products
it sells on-line.
AcroBoo plans to search for new solutions that harness the power of the
Internet to help companies drive revenue and expand their business. The
company takes possession of inventory and generates most of its revenues
based on product sales or a percentage of the customers' sales. Management
expects a small percent of its revenues will be generated from licensing its
software products.
Sales and Marketing
-------------------
We plan to market our products and services through direct and indirect sales
channels. We will conduct our principal sales and marketing activities from
corporate headquarters. We plan to develop a network of agents who assist
in selling our products globally. We intend to utilize these and future
relationships with software and service organizations to enhance our sales
and marketing position. These independent distributors and resellers will
distribute our product lines domestically and in foreign countries. These
vendors typically sell their own consulting and systems integration services
in conjunction with licensing our products.
10
We support our sales activities by conducting a variety of marketing programs
including public relations, direct marketing, advertising, trade shows,
product seminars, user group conferences and ongoing customer communication
and industry analysts programs. We plan to participate in industry
conferences such as those organized by the Council of Supply Chain Management
Professionals and the Institute for Supply Management.
We also plan to engage in third-party software alliance programs with other
software vendors. These programs generally provide some type of assistance
for developing or marketing software products which are compatible with
products of the other party.
Licenses
--------
Management expects AcroBoo will earn a small percent of its revenue from fees
generated from licensing our software products. In consideration of the
payment of license fees, we may grant non-exclusive, nontransferable,
perpetual licenses, which are primarily business unit and user-specific and
geographically restricted. Our standard license agreement will contain
provisions designed to prevent disclosure and unauthorized use of our
software. In these agreements, we will warrant that our products will
function in accordance with the specifications set forth in our product
documentation.
The prices for our products are typically functions of the number of modules
licensed and the number of servers, users and sites for which the solution is
designed and deployed.
Customer Service and Support
----------------------------
We will provide the following services and support to our customers:
Training Support. We offer our customers a professional implementation
program that facilitates rapid implementation of our software products. We
will help customers define the nature of their project and subsequently
proceed through the implementation process. We will provide training for all
users and managers involved. We will first establish measurable financial
and logistical performance indicators and then evaluate them for conformance
during and after implementation. Additional services beyond implementation
can include post-implementation reviews and benchmarks to further enhance the
benefits to customers.
General Training Services. We will offer our customers post-delivery
professional services consisting primarily of implementation and training
services, for which we will charge on a daily basis. Customers that purchase
implementation services will receive assistance in integrating our solution
with existing software applications and databases.
11
Maintenance and Support Services. We will provide our customers with ongoing
product support services. Typically, we expect to enter into support or
maintenance contracts with customers for an initial one year term, with a
renewal for additional periods thereafter. Under these contracts, we will
provide telephone consulting, product updates and releases of new versions of
products previously purchased by the customer, as well as error reporting and
correction services. We will also provide ongoing support and maintenance
services through telephone, electronic mail and web-based support, using a
call logging and tracking system for quality assurance.
Competition
-----------
Our competitors are diverse and offer a variety of solutions directed at
various aspects of the supply chain, as well as the enterprise application
market as a whole. Our existing competitors include:
o Large application software vendors such as SAP, Oracle and Infor,
each of which offers sophisticated solutions that currently, or may
in the future, incorporate supply chain management modules, advanced
planning and scheduling, warehouse management, transportation or
collaboration software;
o Vendors focusing on the supply chain application software market; and
o Internal development efforts by corporate information technology companies.
To the extent such vendors develop or acquire systems with functionality
comparable to our products, their significant installed customer base, long-
standing customer relationships and ability to offer a broad solution could
provide a competitive advantage over our products.
We also expect to face additional competition as other established and
emerging companies enter the market for collaborative e-commerce and supply
chain management software and new products and technologies are introduced.
In addition, current and potential competitors have made and may continue to
make strategic acquisitions or establish cooperative relationships among
themselves or with third parties, thereby increasing the ability of their
products to address the needs of our prospective customers. Accordingly, it
is possible that new competitors or alliances among current and new
competitors may emerge and rapidly gain significant market share. Increased
competition could result in fewer customer orders, reduced gross margins and
loss of market share.
The principal competitive factors in the target markets in which we compete
include product functionality and quality, domain expertise, integration
technologies, product suite integration, breadth of products and related
services such as customer support, training and implementation services.
12
Many of our competitors and potential competitors have a broader worldwide
presence, longer operating histories, significantly greater financial,
technical, marketing and other resources, greater name recognition, and a
larger installed base of customers than we have. Some competitors have become
more aggressive with their prices, payment terms and issuance of contractual
implementation terms or guarantees. In order to be successful in the future,
we must continue to develop innovative software solutions and respond promptly
and effectively to technological change and competitors' innovations. We may
also have to lower prices or offer other favorable terms. Our competitors may
be able to respond more quickly to new or emerging technologies and changes in
customer requirements or devote greater resources to the development,
promotion and sale of their products.
We believe that our principal competitive advantages are our comprehensive,
integrated solutions, the ability of our solutions to generate business
benefits for our customers, our investment in product development, our domain
expertise, the ease of use of our software products, implementation services,
and our ability to deliver rapid return on investment for our customers.
Results of Operations for the six months ended March 31, 2011
-------------------------------------------------------------
We earned no revenues since our inception on June 14, 2010 through
March 31, 2011. We do not anticipate earning any significant revenues
within the next 24 months, and can provide no assurance that we will be
successful in developing any products.
For the period from inception through March 31, 2011, we generated no
income. Since our inception on June 14, 2010, we experienced a net loss of
$(6,325).Our loss was attributed to organizational expenses, audit and legal
fees. We anticipate our operating expenses will increase as we enhance our
operations. The increase will be attributed to professional fees to be
incurred in connection with maintaining our fully reporting requirements
with the U. S. Securities and Exchange Commission and building the
infrastructure of our business operations.
For the three months ending March 31, 2011, we experienced expenses of
$1,750 for organizational costs. For the six months ending March 31, 2011,
we experienced organizational costs of $1,750. In our September 30, 2010
year-end financials, our auditor issued an opinion that our financial
condition raises substantial doubt about the Company's ability to continue
as a going concern.
13
Revenues
--------
We generated no revenues for the period from inception (June 14, 2010)
through March 31, 2011. We do not anticipate generating any revenues
for at least 12 months.
Going Concern
-------------
The financial statements included with this quarterly report have
been prepared in accordance with generally accepted accounting principles
applicable to a going concern which contemplates the realization of assets
and the satisfaction of liabilities and commitments in the normal course of
business. As of March 31, 2011, the Company has not recognized any
revenues and has accumulated operating losses of approximately $6,325 since
inception. The Company's ability to continue as a going concern is
contingent upon the successful completion of additional financing
arrangements and its ability to achieve and maintain profitable operations.
Management plans to raise equity capital to finance the operating and
capital requirements of the Company. Amounts raised will be used for further
development of the Company's products, to provide financing for marketing
and promotion, to secure additional property and equipment, and for other
working capital purposes. While the Company is putting forth its best
efforts to achieve the above plans, there is no assurance that any such
activity will generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. Our financial statements do not include any
adjustments that might arise from this uncertainty.
Summary of any product research and development that we will perform for the
term of our plan of operation.
----------------------------------------------------------------------------
Our future success depends in part upon our ability to respond to changing
customer requirements, develop and introduce new or enhanced products, and
keep pace with technological developments and emerging industry standards.
We focus our development efforts on several areas, including, but not
limited to, enhancing operability of our products across distributed and
changing heterogeneous hardware platforms, operating systems and relational
databases, and adding functionality to existing products. These
development efforts will continue to focus on deploying applications within
a multi-tiered ERP and supply chain environment, including the Internet.
Expected purchase or sale of plant and significant equipment.
-------------------------------------------------------------
We do not anticipate the purchase or sale of any plant or significant
equipment; as such items are not required by us at this time.
14
Significant changes in the number of employees.
-----------------------------------------------
As of March 31, 2011, we did not have any employees. We are dependent
upon our sole officer and a director for our future business development.
As our operations expand we anticipate the need to hire additional employees,
consultants and professionals; however, the exact number is not quantifiable
at this time.
Liquidity and Capital Resources
-------------------------------
Our balance sheet as of March 31, 2011 reflects no assets and $1,750 in current
liabilities. Cash and cash equivalents from inception to date have
been sufficient to provide the operating capital necessary to operate to date.
A critical component of our operating plan impacting our continued existence
is the ability to obtain additional capital through additional equity and/or
debt financing.
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations. These
limitations have adversely affected the Company's ability to obtain certain
projects and pursue additional business. Without realization of additional
capital, it would be unlikely for the Company to continue as a going concern.
In order for the Company to remain a Going Concern it will need to find
additional capital. Additional working capital may be sought through
additional debt or equity private placements, additional notes payable to
banks or related parties (officers, directors or stockholders), or from other
available funding sources at market rates of interest, or a combination of
these. The ability to raise necessary financing will depend on many factors,
including the nature and prospects of any business to be acquired and the
economic and market conditions prevailing at the time financing is sought.
No assurances can be given that any necessary financing can be obtained on
terms favorable to the Company, or at all.
Our sole officer/director has agreed to contribute funds to the operations
of the Company, in order to keep it fully reporting for the next twelve
(12) months, without seeking reimbursement for funds contributed.
As a result of the Company's current limited available cash, no officer or
director received compensation through the quarter ended March 31, 2011.
The Company has no employment agreements in place with its officers.
15
AcroBoo, Inc. Funding Requirements
----------------------------------
AcroBoo, Inc. needs funding to fully execute its business plan. AcroBoo,
Inc. will require at least $3,000,000 to build its infrastructure, market
its services and build a client base.
If AcroBoo raises less then $3,000,000, AcroBoo still can build its
infrastructure, but to a smaller degree. Limited funding will not preclude
AcroBoo from moving forward with its business plan. Once the business begins
to operate and generate sales, management expects accounts receivable
balances and thus a significant amount of working capital will not be
necessary until the Company desires to expand the products (increase in
inventory).
Future funding could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or
amortization expenses related to goodwill and other intangible assets, which
could materially adversely affect the Company's business, results of
operations and financial condition. Any future acquisitions of other
businesses, technologies, services or product(s) might require the Company to
obtain additional equity or debt financing, which might not be available on
terms favorable to the Company, or at all, and such financing, if available,
might be dilutive.
Off-Balance Sheet Arrangements
------------------------------
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material
to investors.
Critical Accounting Policies and Estimates
------------------------------------------
Revenue Recognition: We recognize revenue from product sales once all of the
following criteria for revenue recognition have been met: pervasive evidence
that an agreement exists; the services have been rendered; the fee is fixed
and determinable and not subject to refund or adjustment; and collection of
the amount due is reasonable assured.
New Accounting Standards
------------------------
Management has evaluated recently issued accounting pronouncements through
May 24, 2010 and concluded that they will not have a material effect on the
financial statements as of March 31, 2011.
16
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4T. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
------------------------------------------------
Our disclosure controls and procedures, as defined in Rule 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are designed to ensure that information required to be
disclosed in reports filed or submitted under the Exchange Act is recorded,
processed, summarized, and reported within the time periods specified in
rules and forms adopted by the SEC, and that such information is accumulated
and communicated to management, including the Chief Executive Officer and
the Chief Financial Officer, to allow timely decisions regarding required
disclosures.
Management, with the participation of the Chief Executive Officer and the
Chief Financial Officer, who is also the sole member of our Board of
Directors, has evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this report. Based
on such evaluation, the Chief Executive Officer and the Chief Financial
Officer concluded that, our disclosure controls and procedures were not
effective. Our disclosure controls and procedures were not effective because
of the "material weaknesses" described below under "Management's report on
internal control over financial reporting," which are in the process of being
remediated as described below under "Management Plan to Remediate Material
Weaknesses."
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, as defined in rules promulgated under the Exchange Act, is a
process designed by, or under the supervision of, our Chief Executive Officer
and Chief Financial Officer and affected by our 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 GAAP. Internal control
over financial reporting includes those policies and procedures that:
o pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of our assets;
o provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that
our receipts and expenditures are being made only in accordance with
authorizations of our management and our Board of Directors; and
17
o provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on our financial statements
Because of its inherent limitations, a system of internal control over
financial reporting can provide only reasonable, not absolute, assurance
that the objectives of the control system are met and may not prevent or
detect misstatements. Internal control over financial reporting is a process
that involves human diligence and compliance and is subject to lapses in
judgment and breakdowns resulting from human failures. Internal control
over financial reporting also can be circumvented by collusion or improper
override. Because of such limitations, 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, and it is possible to
design into the process safeguards to reduce, though not eliminate, this
risk. Further, over time control may become inadequate because of changes in
conditions or the degree of compliance with the policies or procedures may
deteriorate.
Our management assessed the effectiveness of our internal control over
financial reporting as of March 31, 2011. In making its assessment,
management used the criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO"). Based on its assessment, management has
concluded that we had certain control deficiencies described below that
constituted material weaknesses in our internal controls over financial
reporting. As a result, our internal control over financial reporting was
not effective as of March 31, 2011.
A "material weakness" is defined under SEC rules as a deficiency, or a
combination of deficiencies, in internal control over financial reporting
such that there is a reasonable possibility that a material misstatement of
a company's annual or interim financial statements will not be prevented or
detected on a timely basis by the company's internal controls. As a result
of management's review of the investigation issues and results, and other
internal reviews and evaluations that were completed after the end of
quarter related to the preparation of management's report on internal
controls over financial reporting required for this quarterly report on
Form 10-Q, management concluded that we had material weaknesses in our
control environment and financial reporting process consisting of the
following:
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;
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We do not believe the material weaknesses described above caused any
meaningful or significant misreporting of our financial condition and results
of operations for the fiscal year ended September 30, 2010. 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 Plan to Remediate Material Weaknesses
------------------------------------------------
Management is pursuing the implementation of corrective measures to address
the material weaknesses described below. 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.
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 who 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.
We believe the remediation measures described above will remediate the
material weaknesses we have identified and strengthen our internal control
over financial reporting. We are committed to continuing to improve our
internal control processes and will continue to diligently and vigorously
review our financial reporting controls and procedures. As we continue to
evaluate and work to improve our internal control over financial reporting,
we may determine to take additional measures to address control deficiencies
or determine to modify, or in appropriate circumstances not to complete,
certain of the remediation measures described above.
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Changes in Internal Control over Financial Reporting
----------------------------------------------------
There were no changes in our internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
during the most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
This quarterly report does not include an attestation report of the
Corporation's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation
by the Corporation's registered public accounting firm pursuant to temporary
rules of the SEC that permit the Corporation to provide only the management's
report in this quarterly report.
(c) 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, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
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PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
We are not presently a party to any material litigation, nor to the knowledge
of management is any litigation threatened against us, which may materially
affect us.
Item 1A - Risk Factors
See Risk Factors set forth the Company's Registration Statement on Form S-1
for the fiscal year ended September 30, 2010 and the discussion in Item 1,
above, under " Liquidity and Capital Resources."
Item 2 -- Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
None.
Item 5 -- Other Information
On November 9, 2010, the Company filed a Registration Statement with the
U.S. Securities and Exchange Commission ("SEC") on Form S-1. The
Registration became effective on April 7, 2011. Jagged Peak (the former
parent corporation) shareholders received one (1) share of AcroBoo common
stock for every ten (10) shares of Jagged Peak owned on May 10, 2011 the
record date for a total of 1,602,096 shares of Common Stock issued and
outstanding.
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Item 6 -- Exhibits
Incorporated by reference
-------------------------
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
------------------------------------------------------------------------------
3.1 Articles of Incorporation, S-1 9/30/10 3.1 11/09/10
as currently in effect
------------------------------------------------------------------------------
3.2 Bylaws S-1 9/30/10 3.2 11/09/10
as currently in effect
------------------------------------------------------------------------------
31.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
------------------------------------------------------------------------------
32.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
------------------------------------------------------------------------------
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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.
AcroBoo, Inc.
-------------
Registrant
Date: May 18, 2011 By: /s/ Dan Furlong
------------ -------------------
Dan Furlong
President
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