KOGETO, INC. - FORM 10-Q - February 3, 2014

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - KOGETO, INC.	Financial_Report.xls
EX-31.1 - CERTIFICATION - KOGETO, INC.	neau_ex311.htm
EX-32.1 - CERTIFICATION - KOGETO, INC.	neau_ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 2013

¨	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: 000-51997

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

NEVADA		65-0637308
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

2174 HEWLETT AVENUE, SUITE 206

MERRICK, NY 11566

(Address of Principal Executive Offices)

(Zip Code)

(516) 377-6311

(Registrant’s Telephone Number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

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 ¨ No x

The number of shares outstanding of the Registrant’s common stock as of January 9, 2014 was 10,554,017 shares.

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

FORM 10-Q

March 31, 2013

TABLE OF CONTENTS

PART I— FINANCIAL INFORMATION

Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 4T.	Controls and Procedures	10

PART II— OTHER INFORMATION

Item 1.	Legal Proceedings	10
Item 1A.	Risk Factors	10
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10
Item 3.	Defaults Upon Senior Securities	11
Item 4.	Removed and Reserved	11
Item 5.	Other Information	11
Item 6.	Exhibits	12

SIGNATURES		13

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

The financial statements of Northeast Automotive Holdings, Inc. (the "Company"), included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission. Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company as included in the Company's Form 10-K for the year ended December 31, 2012.

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

	March 31,		December 31,
	2013		2012
ASSETS
Current Assets:
Cash	$	140	$	304
Total Current Assets		140		304

Equipment, net		253		336
Other assets		3,966		3,967

TOTAL ASSETS	$	4,359	$	4,607

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Note payable to bank	$	100,000	$	100,000
Due to stockholders		67,338		64,938
Accrued expenses		18,750		14,200
Payroll taxes withheld and accrued		-		-
Total Current Liabilities		186,088		179,138


Stockholders' deficit
Preferred stock, 0.0001 par value, 10,000,000 shares authorized, none and 10,000,000 issued and outstanding as of March 31, 2013 and December 31, 2012, respectively		-		1,000
Common stock, .001 par value, 300,000,000 shares authorized, 10,554,017 and 554,017 shares issued and outstanding March 31, 2013 and December 31, 2012, respectively		10,554		554
Capital Stock to be issued (500,000 Shares)		20,000		20,000
Additional Paid in Capital		3,548,363		3,556,363
Retained Deficit		(3,757,470		(3,751,272	)
		(180,553		(173,355	)
Less: Treasury stock (6,667 common shares)		(1,176		(1,176	)
Total Stockholders' Deficit		(181,729		(174,531	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	4,359	$	4,607

See Notes to Unaudited Financial Statements

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months			Three Months
	Ended			Ended
	March 31,			March 31,
	2013			2012


Net sales	$	-		$	-

Cost of sales		-			-

Gross profit		-			-

Operating expenses:
Officers salaries		-			-
Selling, general and administrative		7,198			6,659
Total operating expenses		7,198			6,659

Interest expense		-			-

Profit (loss) from operations		(7,198	)		(6,659	)

Income taxes		-			-

Net profit (loss)	$	(7,198	)	$	(6,659	)

Net income (loss) per share basic and diluted	$	(0.00	)	$	(0.01	)

Weighted average number of shares outstanding		10,554,017			554,017

See Notes to Unaudited Financial Statements

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months			Three Months
	Ended			Ended
	March 31, 2013			March 31, 2012

CASH FLOWS FROM OPERATING ACTIVITIES:
Net profit (loss)	$	(7,198	)	$	(6,659	)
Adjustments to reconcile net profit (loss) to net cash used by operating activities:
Depreciation and amortization		84			1,256
Changes in operating assets and liabilities:
(Increase) decrease in inventory		-			-
(Increase) decrease in other assets		-			-
Increase (decrease) in customer deposits payable		-			-
Increase (decrease) in accrued expenses		4,550			(5,500	)
Increase (decrease) in payroll taxes		-			(1,273	)

Total adjustments		4,634			(5,517	)
CASH PROVIDED (USED) BY OPERATING ACTIVITIES		(2,564	)		(12,176	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of stockholder loans		2,400			8,664
Repayment of stockholders loan		-			-
Repayments of demand loans		-			-
		-			-
CASH PROVIDED (USED) BY FINANCING ACTIVITIES		2,400			8,664

NET INCREASE (DECREASE) IN CASH		(164	)		(3,512	)

CASH
Beginning of year		304			5,395

End of period	$	140		$	1,883

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Income tax payments	$	-		$	-
Interest payments	$	-		$	-

See Notes to Unaudited Financial Statements.

NORTHEAST AUTOMOTIVE HOLDINGS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Through May 2011, the Company bought used automobiles at auctions, then repaired, cleaned, transported and resold them wholesale throughout the United States.

BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

The accompanying interim financial statements of Northeast Automotive Holdings, Inc. are unaudited. However, in the opinion of management, the interim data includes all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results for the interim period. The results of operations for the period ended March 31, 2013 are not necessarily indicative of the operating results for the entire year.

Going Concern

The financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has working capital of ($185,949) at March 31, 2013 and an accumulated deficit of ($3,707,470) since inception.

While the Company is attempting to produce sufficient revenues, the Company's cash position may not be enough to support the Company's daily operations. Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate sufficient revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 2 – NOTES AND LOANS PAYABLE

	March 31,		December 31,
	2013		2012
Line of credit - On October 4, 2004, the Company was approved for a line of credit of $975,000, as an inventory financing ("Floor Plan") loan with interest set at 2% above the Wall Street Journal Prime rate. The agreement requires any advances to be repaid for a vehicle on the earliest of forty eight (48) hours from the time of sale or within twenty four (24) hours from the time the Company receives payment by or on behalf of the purchase of such vehicle or demand. The agreement is personally guaranteed by the officers and their respective spouses. The collateral for the loan is any vehicle owned by the Company.	$	-		-

Note payable bank - note payable to bank due February 2007, is an open line of credit interest payable monthly at 1% over the prime rate, secured by a lien on all of the Company's assets and personally guaranteed by the officers. Interest is paid monthly on account.		100,000		100,000

Due to stockholders - The stockholder loans are unsecured, pay interest at 9% per annum, are subordinated to the bank loan and have no specific terms of repayment.		67,338		64,938
	$	167,338	$	164,938

NOTE 3 - CONVERSION OF SERIES A PREFERRED STOCK

As of January 1, 2013, pursuant to the terms of the Certificate of Designation of the Company’s Series A Preferred Stock, all 10,000,000 issued and outstanding shares of Series A Preferred Stock were automatically converted into 10,000,000 shares of the Company’s common stock.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis addresses material changes in the results of operations and financial condition of Northeast Automotive Holdings, Inc. and Subsidiaries (the “Company” or “we”) for the periods presented. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements, the related Notes to Consolidated Financial Statements and Management’s Discussion and Analysis of Results of Operations and Financial Condition included in the Company’s Form 10-K for the fiscal year ended December 31, 2012, the unaudited interim Condensed Consolidated Financial Statements and related Notes included in Item 1 of this Report on Form 10-Q (“Form 10-Q”) and the Company’s other SEC filings and public disclosures.

This Form 10-Q may contain “forward-looking statements”. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about the Company’s market opportunities, strategies, competition and expected activities and expenditures, and at times may be identified by the use of words such as “may”, “will”, “could”, “should”, “would”, “project”, “believe”, “anticipate”, “expect”, “plan”, “estimate”, “forecast”, “potential”, “intend”, “continue” and variations of these words or comparable words. Forward-looking statements inherently involve risks and uncertainties. Accordingly, actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risks described below under “Risk Factors” in Part II, Item 1A. The Company undertakes no obligation to update any forward-looking statements for revisions or changes after the date of this Form 10-Q.

Overview

We are a wholesale automobile sales company which seeks to exploit the inefficiencies and geographic differences in the used vehicle market by purchasing high quality, late model used vehicles from dealers and institutional sellers in Northeastern states and transporting the vehicles for resale in the Pacific Northwest. We are involved only in the wholesale purchase and sale of vehicles acting as a middleman between various dealer and institutional sellers and dealer purchasers. We generally sell our vehicles only through established third-party auctions which act as a marketplace for used vehicles. We thus help align institutional used vehicle sellers and wholesale buyers over a wide geographic area.

Adopted Accounting Principles

Recent Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

For the Three Months Ended March 31, 2013 and March 31, 2012

Revenues

Revenue for the three month period ended March 31, 2013 were $-0- reflecting no increase or a decrease as compared to revenues for the three month period ended March 31, 2012 which were also $-0-. In the three month period ended March 31, 2013 and March 31, 2012, no vehicles were sold.

Cost of Sales and Gross Profit Margin

The Company's cost of sales is composed primarily of the cost of purchasing vehicles for resale. Cost of revenues was $-0- or 100% of net revenues during the three month periods ended March 31, 2013 and March 31, 2012. Thus, our gross margin was 0.0% for the three month periods ended March 31, 2013 and March 31, 2012.

Operating Expenses

Our operating expenses are comprised primarily of salaries, consulting fees and sales, general and administrative expenses.

Sale, General and Administrative

Sale, general and administrative (“SGA”) expenses are composed principally of commission, salaries of administrative personnel, fees for professional services and facilities expenses. These expenses were $7,198 for the three month period ended March 31, 2013 or 0.00% of net revenue as compared to $6,659 or 0.00% of net revenue for the comparable period in 2012, an increase in such expenses of $539 or 8.097% The increase in the ratio of SGA expenses to net revenue was primarily due to an increase in operating expenses.

Operating Gain (Loss)

Operating gain or loss is calculated as our revenues less all of our operating expenses. Our operating (loss) for the three month period ended March 31, 2013 was ($7,198) or (0.0%) of net revenue as compared to an operating loss of ($6,659) or (0.0%) of net revenue for comparable period in 2012, a decrease of $539. This decrease in operating income was primarily as a result of a decrease in gross revenues which was less than the increase of operating expense.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2013, we had cash and cash equivalents of $140 invested in standard bank checking accounts and highly liquid money market instruments. Such investments are subject to interest rate and credit risk. Such risks and a change in market interest rates would not be expected to have a material impact on our financial condition and/or results of operations. As of March 31, 2013, we had an outstanding balance of $100,000 on a bank revolving credit facility which bears interest at a variable rate equal to prime plus 1.0%.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) of our disclosure controls and procedures (as defined in Rules13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, the CEO concluded that our disclosure controls and procedures were not effective as of March 31, 2013 due to a lack of segregation of duties and an over reliance on consultants in the accounting and financial reporting process.

(b) Changes in Internal Controls Over Financial Reporting

There were no changes that occurred during the quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 1A. RISK FACTORS

Not required for smaller reporting companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. REMOVED AND RESERVED

Not applicable.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Principal Accounting Officer

32.1		Section 1350 Certifications of Chief Executive Officer and Principal Accounting Officer

101.INS **		XBRL Instance Document

101.SCH **		XBRL Taxonomy Extension Schema Document

101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **		XBRL Taxonomy Extension Label Linkbase Document

101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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.

	NORTHEAST AUTOMOTIVE HOLDINGS, INC.

Date: February 3, 2014	By:	/s/ William Solko
		William Solko, Chief Executive Officer

KOGETO, INC. - FORM 10-Q - February 3, 2014

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KOGETO, INC. Reports