UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X)QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from to
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Commission File Number: 000-28005
CobraTech International, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 88-0422028
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Suite 2300, 1066 West Hastings Street, Vancouver,
British Columbia, Canada V6E 3X2
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(Address of principal executive offices) (Zip Code)
(604) 608-1610
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(Registrant's Telephone Number, Including Area Code)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date. As of May 20, 2002 there were
24,200,030 shares of the issuer's $.001 par value common stock issued and
outstanding.
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Cobra Tech International, Inc.
(A Development Stage Company)
Balance Sheets
as of
March 31, 2002
and December 31, 2001
and
Statements of Operations
and
Cash Flows
for the Three Months Ending
March 31, 2002 and 2001,
and For the Period
March 30, 1999 (Inception) to March 31, 2002
2
TABLE OF CONTENTS
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Page
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Independent Accountant's Review Report 1
Balance Sheets 2
Statements of Operations 3
Statements of Cash Flows 4
Footnotes 5
3
Cobra Tech International, Inc.
(a Development Stage Company)
Balance Sheets
(unaudited)
March 31, December 31,
2002 2001
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Assets
Current assets:
Cash $ - $ 19
Loan to stockholder 9,511 9,511
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Total current assets 9,511 9,530
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$ 9,511 $ 9,530
===================== ====================
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable $ 27,233 $ 10,000
Loan from stockholder 17,375 12,375
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Total current liabilities 44,608 22,375
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Stockholders' Equity (Deficit):
Common stock, $0.001 par value, 25,000,000
shares authorized; 24,200,030 shares issued and
outstanding at 3/31/02 and 12/31/01, respectively 24,200 24,200
Additional paid-in capital 9,860 9,860
Treasury stock 10,000 10,000
(Deficit) accumulated during development stage (79,157) (56,905)
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(35,097) (12,845)
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$ 9,511 $ 9,530
===================== ====================
The accompanying notes are an integral part of these financial statements.
4
Cobra Tech International, Inc.
(a Development Stage Company)
Statements of Operations
(unaudited)
Three Months Ending March 30, 1999
March 31, (Inception) to
---------------------------------------- March 31,
2002 2001 2002
------------------- ----------------- ---------------------
Revenue $ - $ - $ -
------------------- ----------------- ---------------------
Expenses:
General and administrative expenses 22,252 - 54,797
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Total expenses 22,252 - 54,797
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Net (loss) $ (22,252) $ - $ (54,797)
=================== ================= =====================
Weighted average number of
common shares outstanding - basic and fully diluted 24,200,030 8,840,001
=================== =================
Net (loss) per share - basic and fully diluted $ (0.00) $ -
=================== =================
The accompanying notes are an integral part of these financial statements.
5
Cobra Tech International, Inc.
(a Development Stage Company)
Statements of Cash Flows
(unaudited)
Three Months Ending March 30, 1999
March 31, (Inception) to
---------------------------------------- March 31,
2002 2001 2002
----------------- ------------------- ---------------------
Cash flows from operating activities
Net (loss) $ (22,252) $ - $ (54,797)
Adjustments to reconcile net (loss) to
net cash (used) by operating activities:
Increase in accounts payable 17,233 27,233
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Net cash (used) by operating activities (5,019) - (27,564)
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Cash flows from investing activities - - -
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Cash flows from financing activities
Loan (to) from stockholder 5,000 7,864
Issuance of common stock - - 19,700
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Net cash provided by financing activities 5,000 - 27,564
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Net (decrease) in cash (19) - -
Cash - beginning 19 - -
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Cash - ending $ - $ - $ -
================= =================== =====================
Supplemental disclosures:
Interest paid $ - $ - $ -
================= =================== =====================
Income taxes paid $ - $ - $ -
================= =================== =====================
The accompanying notes are an integral part of these financial statements.
6
Cobra Tech International, Inc.
(a Development Stage Company)
Notes
Note 1 - Basis of presentation
The interim financial statements included herein, presented in accordance with
United States generally accepted accounting principles and stated in US dollars,
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these
interim financial statements be read in conjunction with the financial
statements of the Company for the year ended December 31, 2001 and notes thereto
included in the Company's Form 10-KSB. The Company follows the same accounting
policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of annual
results.
Note 2 - Going concern
The Company's financial statements have been prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Without realization of additional capital, it would be
unlikely for the Company to continue as a going concern. Because the Company
does not have any cash or other material other assets, nor does it have an
established source of revenue sufficient to cover its operating costs, the
shareholder/officers will continue advancing enough cash to cover the operating
costs of the Company. The advances do not bear any interest. Additionally, the
Company intends to sell additional shares of its $0.001 par value common stock
when it is listed on the NASDAQ bulletin board.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. These financial statements do not include any adjustments
that might arise from this uncertainty.
Note 3 - Subsequent events
On April 1, 2002 the Company executed a promissory note for $12,375 with the
Company's president that is due upon demand and bears no interest.
On April 2, 2002, the Company incorporated its wholly owned subsidiary, Meta
Source Acquisition Corporation (MSAC) and received 1,000 shares of MSAC in
exchange for services.
On April 12, 2002, the Company executed a promissory note for $25,000 with the
Company's president that is due on 6/30/02 and bears no interest.
On April 20, 2002, the Company executed a promissory note for $250,000 with Big
Plans Investment, Ltd. that is due on 4/20/03 with an interest rate of 8% per
annum.
On April 24, 2002, Meta Source Acquisition Corporation (MSAC), the Company's
wholly owned subsidiary, executed a merger agreement with MetaSource Systems,
Inc. (MSS). Pursuant to the terms of the merger agreement, the shareholders of
MSAC will receive shares on a one for one basis of the surviving corporation,
MSS. In addition, the shareholders of MSS will receive shares on a one for one
basis of the Company's common stock. But, if the net annual earnings for the
year ended December 31, 2001 of MSS is not equal or greater than $2,000,000 then
their shares will be reduced pro-rata by the number of shares equal to the total
shortfall. In addition, the Company promises to provide MSS with a bridge loan
of up to $250,000. On May 15, 2002, the Company executed a promissory note for
$30,000 with the Company's president that is due on 6/30/02 and bears no
interest.
7
Item 2. Management's Discussion and Plan of Operation
This following information specifies certain forward-looking statements of
management of the company. Forward-looking statements are statements that
estimate the happening of future events are not based on historical fact.
Forward-looking statements may be identified by the use of forward-looking
terminology, such as "may", "shall", "will", "could", "expect", "estimate",
"anticipate", "predict", "probable", "possible", "should", "continue", or
similar terms, variations of those terms or the negative of those terms. The
forward-looking statements specified in the following information have been
compiled by our management on the basis of assumptions made by management and
considered by management to be reasonable. Our future operating results,
however, are impossible to predict and no representation, guaranty, or warranty
is to be inferred from those forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in
the following information represent estimates of future events and are subject
to uncertainty as to possible changes in economic, legislative, industry, and
other circumstances. As a result, the identification and interpretation of data
and other information and their use in developing and selecting assumptions from
and among reasonable alternatives require the exercise of judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially
from anticipated or projected results, and, accordingly, no opinion is expressed
on the achievability of those forward-looking statements. No assurance can be
given that any of the assumptions relating to the forward-looking statements
specified in the following information are accurate, and we assume no obligation
to update any such forward-looking statements.
We were originally formed to create a western-themed resort facility with
entertainment, attractions and hotel rooms for overnight lodging, to be located
in the Southern California region of the United States. We intended to develop
this concept by doing the following: identifying land to build the project on;
conducting feasibility analysis on identified land; obtaining financing to
purchase the property; and attracting developers to build hotels, restaurants,
retail stores and attractions.
In April 2002, we entered into an agreement and plan of merger with MetaSource
Systems, Inc., a Delaware corporation. Pursuant to that agreement, Meta Source
Acquisition Corp., a Delaware corporation and our wholly-owned subsidiary, which
we recently formed, will merge with and into MetaSource Systems, Inc. The
agreement provides that shareholders of MetaSource Systems, Inc. will receive
shares of our common stock on a one for one basis. The agreement also provides
if the net annual earnings for the year ended December 31, 2001 of MetaSource
Systems, Inc. is not equal or greater than $2,000,000 then the shares issued to
the shareholders of MetaSource Systems, Inc. will be reduced pro-rata by the
number of shares equal to the total shortfall. The transaction is due to close
in May or June 2002. MetaSource Systems, Inc. is a software development firm,
which is currently looking to acquire other software development companies to
grow and expand its operations. We cannot guaranty that we will acquire or merge
with MetaSource Systems, Inc., or that in the event we acquire or merge with
MetaSource Systems, Inc., such acquisition or merger will increase the value of
our common stock.
Liquidity and Capital Resources. Our total current assets were $9,511 as of
March 31, 2002, which was represented solely be a loan to a stockholder. We had
no other assets as of March 31, 2002. We believe that Joe Cheung, our sole
officer, director and principal shareholder, will continue to pay our day-to-day
expenditures.
8
As of March 31, 2002, our total liabilities were $44,608, of which $27,233 was
represented by accounts payable, and $12,375 was represented by a loan from Mr.
Cheung. That note does not bear interest and is payable on demand. In April
2002, Mr. Cheung loaned us $25,000 to pay our expenses and provide us with
working capital. That note matures on June 30, 2002, and does not bear any
interest. Also in April 2002, Big Plans Investments Ltd. loaned us $250,000.
That note matures on April 20, 2003 and bears simple interest at the rate of 8%.
Pursuant to the terms of our agreement and plan of merger with MetaSource
Systems, Inc., we loaned those funds to MetaSource Systems, Inc. as bridge
financing. In May 2002, Mr. Cheung loaned us $30,000 to pay our expenses and
provide us with working capital. That note also matures on June 30, 2002, does
not bear interest and is payable on demand.
Results of Operations.
Revenue. We have not generated any revenues to date. We do not expect that we
will generate any significant revenues until such time as we complete the
acquisition of MetaSource Systems, Inc.
Operating Expenses. We have incurred expenses of approximately $22,252 for the
three month period ended March 31, 2002. Expenditures were primarily due to
costs incurred for professional fees, services and general and administrative
expenses. We anticipate that we will continue to incur significant professional,
general and administrative expenses with respect the acquisition of MetaSource
Systems, Inc.
Our Plan of Operation for the Next Twelve Months. Our plan of operation is
dependent on our ability to complete the acquisition of MetaSource Systems, Inc.
If we are unable to complete the acquisition of MetaSource Systems, Inc., then
we will look to acquire or merge with another entity. We cannot guaranty that we
will acquire or merge with MetaSource Systems, Inc, or that in the event we
acquire or merge with MetaSource Systems, Inc, such acquisition or merger will
increase the value of our common stock.
In the opinion of management, available funds will satisfy our working capital
requirements for the next twelve months. Our forecast for the period for which
our financial resources will be adequate to support our operations involves
risks and uncertainties and actual results could fail as a result of a number of
factors. We will need to raise additional capital to complete the acquisition of
MetaSource Systems, Inc. Such additional capital may be raised through public or
private financing as well as borrowings and other sources. We cannot guaranty
that additional funding will be available on favorable terms, if at all.
We are not currently conducting any research and development activities. We do
not anticipate conducting any other such activities in the next twelve months,
unless we complete the acquisition of MetaSource Systems, Inc. We do not
anticipate that we will purchase or sell any significant equipment in the next
six to twelve months unless we complete the acquisition of MetaSource Systems,
Inc. We do not anticipate that we will hire any employees in the next six to
twelve months, unless complete the acquisition of MetaSource Systems, Inc.
9
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
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None.
Item 2. Changes in Securities.
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None.
Item 3. Defaults Upon Senior Securities
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None.
Item 4. Submission of Matters to Vote of Security Holders
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None.
Item 5. Other Information
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None.
Item 6. Exhibits and Reports on Form 8-K
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1. Form 8-K filed on March 13, 2002 reported a change in control under Item 1, a
change of address under Item 5, and resignation of directors under Item 6.
10
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 in the City of Vancouver, British Columbia, Canada, on May 20, 2002.
CobraTech International, Inc.
By: /s/ Joe Cheung
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Joe Cheung
Its: President, Secretary, Treasurer and Director