SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended 0-28315
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June 30, 2004 Commission File No.
AZONIC CORPORATION
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(Exact name of Registrant as specified in its charter)
NEVADA 84-1517404
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(State or other jurisdiction of (I.R.S. Empl. Ident. No.)
incorporation or organization)
7 Dey Street, Suite 900, New York, New York 10007
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(Address of Principal Executive Offices) (Zip Code)
(212) 962-4400
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(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 such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
at least the past 90 days.
Yes X No
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The number of shares outstanding of each of the Registrant's classes of common
equity, as of August 17, 2004 are as follows:
Class of Securities Shares Outstanding
------------------------------ ------------------
Common Stock, $.001 par value 24,000,000
INDEX
Page of
Report
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PART I. FINANCIAL STATEMENTS
Item 1. Financial Statements.
Balance Sheets:
As of June 30, 2004 (Unaudited) and March 31, 2004 ................. F-1
Statements of Operations (Unaudited):
For the three months ended June 30, 2004, year ended
March 31, 2004 and Cumulative from inception (May 1, 1996)
through June 30, 2004................................................F-2
Statements of Cash Flows (Unaudited):
For the three months ended June 30, 2004, year ended
March 31, 2004 and Cumulative from inception (May 1, 1996)
through June 30, 2004................................................F-3
Statement of Changes in Stockholders' Equity (Unaudited):
From inception (May 1, 1996) through June 30, 2004...................F-4
Notes to Financial Statements (Unaudited) ...........................F-5
Item 2. Management's Discussion and Analysis or Plan of Operation.............10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K......................................12
Signatures............................................................12
2
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
AZONIC CORPORATION
(A Development Stage Company)
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
June 30 Mar. 31
2004 2004
--------- --------
Current Assets:
Cash $ -0- $7,500
Plant, Property and Equipment: -0- -0-
Other Assets -0- -0-
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TOTAL ASSETS $ -0- $7,500
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $11,787 $ 1,284
Notes payable - related party 25,853 25,102
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37,640 26,386
Stockholders' Equity:
Preferred Stock: 5,000,000 shares
Authorized; $.001 par value; -0- -0-
none issued and outstanding
Common Stock: 50,000,000 shares
Authorized; $.001 par value;
24,000,000 shares outstanding 24,000 24,000
Paid in Capital (deficit) (23,700) (23,700)
Deficit accumulated during
The development stage (37,940) (19,186)
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Total Stockholders' Equity (37,640) (18,886)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ -0- $7,500
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The accompanying notes are an integral part of the financial statements.
F-1
AZONIC CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Periods as Noted
(Unaudited) (Unaudited)
3 Months 3 Months May 1, 1996
Ended Ended (Inception) to
6-30-04 6-30-03 June 30, 2004
----------- ----------- --------------
Revenues: $ -0- $ -0- $ -0-
----------- ----------- --------------
Costs and Expenses:
Amortization -0- -0- 50
General and Administrative 18,754 1,500 37,890
----------- ------------ --------------
Net (Loss) from Operations (18,754) (1,500) (37,940)
Other Income (Expense) -0- -0- -0-
----------- ------------ --------------
Net (Loss) for the Period $(18,754) $ (1,500) $(37,940)
=========== ============ ==============
(Loss) per common share $ * $ * $ *
=========== ============ ==============
Weighted Average
Shares Outstanding 24,000,000 24,000,000 13,636,000
=========== ============= =============
* Less than ($.01) per share.
The accompanying notes are an integral part of the financial statements.
F-2
AZONIC CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Periods as Noted
(Unaudited) (Unaudited)
3 Months 3 Months May 1, 1996
Ended Ended (Inception) to
6-30-04 6-30-03 June 30, 2004
----------- ----------- --------------
Cash Flows from Operating Activities
Net loss $(18,754) $(1,500) $(37,940)
Adjustments to reconcile
net loss
To net cash provided
by operating activities
Amortization -0- -0- 50
Noncash services -0- -0- 250
Increase in
accounts payable 10,503 -0- 11,787
----------- ----------- --------------
Net cash used by operating
Activities (8,251) (1,500) (25,853)
Cash Flows from
Investing Activities -0- -0- -0-
Cash Flows from
Financing Activities
Shareholder contribution -0- 1,500 -0-
Increase in notes payable 751 25,853
----------- ----------- --------------
Net cash provided by
Financing activities 751 -0- 25,853
Net Increase (Decrease) (7,500) -0- -0-
Beginning Cash Balance -0- -0- -0-
----------- ----------- --------------
Cash Balance - End of Period $ -0- $ -0- $ -0-
=========== =========== ==============
Supplemental disclosure of noncash investing and financing activities:
Common Stock issued
for Organizational
costs & Services $ -0- $ -0- $ 300
=========== =========== ==============
The accompanying notes are an integral part of the financial statements.
F-3
AZONIC CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY For the
Period May 1, 1996 (Inception)
to June 30, 2004
Common Stock Deficit
---------------------------------- Accumulated
Paid-in from
Shares Amount (Deficit) Inception
----------- -------- --------- -----------
Balances May 1, 1996 -0- $ -0- $ -0- $ -0-
Common stock issued
For services & costs 4,000,000 4,000 (3,950)
Net Loss 3-31-97 -0- -0- -0- (9)
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Balance 3-31-97 4,000,000 4,000 (3,950) (9)
Net loss 3-31-98 -0- -0- -0- (10)
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Balance 3-31-98 4,000,000 4,000 (3,950) (19)
Net loss 3-31-99 -0- -0- -0- (31)
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Balance 3-31-99 4,000,000 4,000 (3,950) (50)
Common stock issued
For services 8-10-99 20,000,000 20,000 (19,750) -0-
Net loss 3-31-00 -0- -0- -0- (250)
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Balance 3-31-00 24,000,000 24,000 (23,700) (300)
Net Income 3-31-01 -0- -0- -0- -0-
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Balance 3-31-01 24,000,000 24,000 (23,700) (300)
Net Income 3-31-02 -0- -0- -0- -0-
---------- -------- --------- ----------
Balance 3-31-02 24,000,000 24,000 (23,700) (300)
Net Income 3-31-03 -0- -0- -0- -0-
---------- -------- --------- ----------
Balance 3-31-03 24,000,000 24,000 (23,700) (300)
Net Income 3-31-04 -0- -0- -0- (18,886)
---------- -------- --------- ----------
Balance 3-31-04 24,000,000 24,000 (23,700) (19,186)
Net income 6-30-04 -0- -0- -0- (18,754)
---------- -------- --------- ----------
Balance 6-30-04 24,000,000 24,000 (23,700) (37,540)
========== ======== ========= ==========
The accompanying notes are an integral part of the financial statements.
F-4
AZONIC CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)
June 30, 2004
NOTE 1: THE COMPANY
Organization and Nature of Operations-
The financial statements presented are those of Azonic Corporation. The Company
is a development stage company with no operations. The Company is developing a
Business Plan pursuing oppurtunities in the telecommunications area. Its
principal executive offices are located at 7 Dey Street, New York, New York
10005. Azonic was initially incorporated in the state of Colorado on May 1, 1996
as Grand Canyon Ventures Two, Incorporated. The Company changed its name to
Azonic Engineering Corporation on June 23, 1998. On November 12, 1999, it was
redomiciled to the State of Nevada by merging into its wholly-owned subsidiary,
Azonic Corporation, which now is the name of the Company. As a result of the
merger, the Company has changed the par value of its common stock to $.001. The
accompanying financial statements have been restated to reflect this change.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
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Condensed Financial Statements - The financial statements dated June 30, 2004
included herein have been prepared by Azonic Corporation (the "Company") without
audit,pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted as allowed by such rules
and regulations. The Company believes that the disclosures are adequate to make
the information presented not misleading. While management believes the
procedures followed in preparing these financial statements are reasonable, the
accuracy of the amounts are, in some respects, dependent upon the facts that
will exist, and procedures that will be accomplished by the Company in the
future.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual amounts could differ from those estimates.
F-5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Continued)
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Income Taxes - The Company provides for income taxes using the asset and
liability method as prescribed by Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes. Under the asset and liability method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amount of existing assets and liabilities and their respective tax
bases. Deferred tax assets 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. Under Statement 109, 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.
Income Taxes - As of June 30, 2004 the Company had a net operating loss
carryforward of $37,940, which expires in varying amounts from 2012 to 2015.
Generally, these operating losses are available to offset future federal and
state taxable income.
Loss per Common Share - Loss per common share is computed using the weighted
average number of common shares outstanding during each period.
Statement of Cash Flows - For purposes of the statement of cash flows, the
Company considers all highly liquid instruments with an original maturity of
three months or less to be cash equivalents.
Comprehensive Income - The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130 Reporting Comprehensive Income, effective April 1,
1998. SFAS No. 130 establishes standards for reporting comprehensive income and
its components (revenues, expenses, gains and losses). Components of
comprehensive income are net income and all other non-owner changes in equity.
SFAS No. 130 requires an enterprise to (a) classify items of other comprehensive
income by their nature in a financial statement, and (b) display the accumulated
balance of other comprehensive income separately from retained earnings and
additional paid-in capital in the equity section of a statement of financial
position. The Company has no items of comprehensive income at September 30,
2004.
NOTE 3: RELATED PARTY TRANSACTIONS
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The Company's corporate offices are located in the offices of is principal
stockholder, Infinity Capital Group, Inc. (hereinafter "Infinity") and that of
its President, CEO and Chairman of the Board Greg Laborde on a rent-free basis.
Furthermore, all legal and accounting costs with the exception of the work
prepared by the independent auditors are paid for and provided without charge to
the Company by SEC Attorneys, LLC of North Haven, Connecticut, a corporate
entity which provides such services to Infinity Capital Group, Inc, its
principal shareholder.
F-6
NOTE 4: STOCKHOLDERS' EQUITY
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Capital Structure - The Company was originally incorporated under Colorado law
on May 1, 1996, under the name of Grand Canyon Ventures Two, Incorporated. On
June 23, 1998, the Company amended its Articles of Incorporation and changed its
name to Azonic Engineering, Incorporated. On September 17, 1999, Azonic
Corporation was formed in Nevada. On November 12, 1999 Azonic Engineering,
Incorporated was merged into Azonic Corporation. The surviving capital structure
now consists of 55 million shares of $.001 par value stock, of which 50 million
shares are designated as common stock and 5 million shares are designated as
preferred stock. Stockholders' equity has been restated from inception to
conform to the current capital structure.
Preferred Stock - No shares of the Company's preferred stock have been issued as
of September 30, 2004. Dividends, voting rights and other terms, rights and
preferences have not been designated. The Company's board of directors may
establish these provisions from time to time.
Common Stock - 1,000,000 shares of common stock have been issued at $0.00005 in
exchange for services performed and costs advanced to organize the Company in
May 1996.
On August 10, 1999, the board of directors authorized the issuance of 5,000,000
shares of common stock at $0.00005 per share to the Company's president in
exchange for services valued at $250.
F-7
FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements and information
relating to Azonic that are based on the beliefs of its management as well as
assumptions made by and information currently available to its management. When
used in this report, the words "anticipate," "believe," "estimate," "expect,"
"intend," "plan" and similar expressions, as they relate to Azonic or its
management, are intended to identify forward-looking statements. These
statements reflect management's current view of Azonic concerning future events
and are subject to certain risks, uncertainties and assumptions, including among
many others: a general economic downturn; a downturn in the securities markets;
a general lack of interest for any reason in going public by means of
transactions involving public blank check companies; federal or state laws or
regulations having an adverse effect on blank check companies, Securities and
Exchange Commission regulations which affect trading in the securities of "penny
stocks," and other risks and uncertainties. Should any of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this report as
anticipated, estimated or expected. Readers should realize that Azonic is in the
development stage, with virtually no assets, and that for Azonic to succeed
requires that it either originate a successful business (for which it lacks the
funds) or acquire a successful business. Azonic's realization of its business
aims as stated herein will depend in the near future principally on the
successful completion of its acquisition of a business, as discussed below.
Item 2. Management's Discussion and Analysis or Plan of Operation.
BACKGROUND. Azonic was incorporated in the State of Colorado on May 1, 1996
as Grand Canyon Ventures Two, Incorporated. The Company changed its name to
Azonic Engineering Corporation on June 23, 1998. On November 12, 1999, it was
redomiciled to the State of Nevada by merging into its wholly owned subsidiary
Azonic Corporation ("Company"), a Nevada corporation, which now is the name of
the Company.
The Company is in the development stage in accordance with Financial
Accounting Standards Board Standard No. 7. The Company has not been operational,
other than described below, nor had revenues other than interest income since
its inception.
10
RESULTS OF OPERATIONS FOR QUARTER ENDED JUNE 30, 2004 COMPARED TO SAME QUARTER
IN 2003
The Company had no revenues during the first fiscal quarter in 2004 and
2003 - During the fiscal quarter ended June 30, 2004, Azonic incurred a net loss
of $18,754, due to expenses to pursue its business development, compared to the
fiscal quarter ended June 30, 2003, when Azonic incurred a net loss of $1,500.
The Company paid no rent or salaries and had no operations during the quarter.
The net loss per share was nominal in the period in 2004 and 2003.
LIQUIDITY and CAPITAL RESOURCES
The Company's corporate offices are located in the offices of is principal
stockholder, Infinity Capital Group, Inc. (hereinafter "Infinity") and that of
its President, CEO and Chairman of the Board Greg Laborde on a rent-free basis.
Furthermore, all legal and accounting costs with the exception of the work
prepared by Infinity Capital Group, Inc, the principal shareholder. Azonic had
minimal cash on hand at the end of the quarter and had no other assets to meet
ongoing expenses or debts that may accumulate. Since inception, Azonic has
accumulated a deficit (net loss) of $(37,940).
11
Azonic has no commitment for any capital expenditure. However, Azonic will
incur routine fees and expenses incident to its reporting duties as a public
company, and it will incur expenses developing its Business Plan and Azonic's
cash requirements for the next twelve months are relatively modest, principally
accounting expenses and other expenses relating to making filings required under
the Securities Exchange Act of 1934 (the "Exchange Act"), which should not
exceed $40,000 in the fiscal year ending March 31, 2005. Any travel, lodging or
other expenses which may arise related to finding, investigating and attempting
to complete a combination with one or more potential acquisitions could also
amount to thousands of dollars.
Azonic's current management and its counsel have informally agreed to
continue rendering services to Azonic and to not demand payment of sums owed
unless and until Azonic completes funding. The terms of any such payment
will have to be negotiated with the principals of any business acquired. The
existence and amounts of Azonic debt may make it more difficult to complete, or
prevent completion of, a desirable acquisition. In addition, offices are
provided to Azonic without charge.
Azonic will only be able to pay its future debts and meet operating
expenses by raising additional funds, acquiring a profitable company or
otherwise generating positive cash flow. As a practical matter, Azonic is
unlikely to generate positive cash flow by any means other than acquiring a
company with such cash flow. Azonic believes that management members or
shareholders will loan funds to Azonic as needed for operations prior to
completion of an acquisition. Management and the shareholders are not obligated
to provide funds to Azonic, however, and it is not certain they will always want
or be financially able to do so. Azonic shareholders and management members who
advance money to Azonic to cover operating expenses will expect to be
reimbursed, either by Azonic or by the company acquired, prior to or at the time
of completing a combination. Azonic has no intention of borrowing money to
reimburse or pay salaries to any Azonic officer, director or shareholder or
their affiliates. There currently are no plans to sell additional securities of
Azonic to raise capital, although sales of securities may be necessary to obtain
needed funds. Azonic's current management and its counsel have agreed to
continue their services to Azonic and to accrue sums owed them for services and
expenses and expect payment reimbursement only.
Should existing management or shareholders refuse to advance needed funds,
however, Azonic would be forced to turn to outside parties to either loan money
to Azonic or buy Azonic securities. There is no assurance whatever that Azonic
will be able at need to raise necessary funds from outside sources. Such a lack
of funds could result in severe consequences to Azonic, including among others:
(1) failure to make timely filings with the SEC as required by the Exchange Act,
which also probably would result in suspension of trading or quotation in
Azonic's stock and could result in fines and penalties to Azonic under the
Exchange Act;
12
or (2) inability to complete its business plan due to lack of funds to pay legal
and accounting fees and business-related expenses.
Item 3. Controls and Procedures
a. Evaluation of Disclosure Controls and Procedures:
Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported, within the time period
specified in the SEC's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in the reports filed under the Exchange Act
is accumulated and communicated to management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. As of the end of the period covered by this
report, the Company carried out an evaluation, under the supervision and with
the participation of the Company's management, including the Company's Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures. Based
upon and as of the date of that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed in
the reports the Company files and submits under the Exchange Act is recorded,
processed, summarized and reported as and when required.
b. Changes in Internal Control over Financial Reporting:
There were no changes in the Company's internal control over financial reporting
identified in connection with the Company evaluation of these controls as of the
end of the period covered by this report that could have significantly affected
those controls subsequent to the date of the evaluation referred to in the
previous paragraph, including any correction action with regard to significant
deficiencies and material weakness.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
13
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
(a)Exhibits - Exhibits 31 and 32 (Sarbanes-Oxley)
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report on Form 10-QSB to be signed on its behalf by the undersigned,
thereunto duly authorized.
DATED: August 17, 2004
AZONIC CORPORATION
By: /s/ Greg Laborde
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Greg Laborde, President
14