SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d)
Of the Securities Exchange Act of 1934
For Quarter Ended: June 30, 2007
Commission File Number: 000-25809
Siclone Industries, Inc.
(Exact name of registrant as specified in its charter)
State or other jurisdiction of incorporation or organization: Delaware
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IRS Employer Identification No.: 87-0426999
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378 North Main, #124; Layton, Utah 84041
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(Address of principal executive offices)
Registrant's telephone number including area code: (801) 497-9075
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Former Address, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or such shorter period that the registrant was
required to file such reports)
Yes X No
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and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
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Indicate by check mark whether the registrant is a shell company (as defined
Rule 12b-2 of the Exchange Act).
Yes X No
--- ----
175,074
(Number of shares of common stock the registrant
had outstanding at June 30, 2007)
PART I
ITEM 1 - FINANCIAL STATEMENTS
The condensed financial statements included herein 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.
In the opinion of the Company, all adjustments, consisting of only
normal recurring adjustments, necessary to present fairly the financial position
of the Company as of June 30, 2007 and the results of its operations and changes
in its financial position from December 31, 2006 through June 30, 2007 have been
made. The results of its operations for the interim periods are not necessarily
indicative of the results to be expected for the entire year.
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SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Balance Sheets
June 30, December 31,
2007 2006
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(Unaudited)
CURRENT ASSETS
Cash $ (6) $ 12
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Total Current Assets $ (6) $ 12
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 7,503 $ 3,000
Account payable - related
party 15,000 9,000
Notes Payable 62,373 55,223
Accrued interest payable 17,861 14,879
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Total Current Liabilities 102,737 82,102
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STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock; $.001 par value, 5,000,000 shares authorized,
0 issued and outstanding - -
Common Stock; $.001 Par Value ; 100,000,000 Shares Authorized;
175,074 Shares Issued and Outstanding June 30, 2007 and
December 31, 2006 175 175
Additional Paid-In Capital 607,328 607,328
Accumulated Deficit (710,246) (689,593)
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Total Stockholders' Equity (Deficit) (102,743) (82,090)
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Total Liabilities & Stockholders' Equity (Deficit) $ (6) $ 12
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The accompanying notes are an integral part of these financial statements.
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SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From Inception
(November 1,
For the Three Months Ended For the Six Months Ended 1985) through
June 30, June 30, June 30, June 30, June 30,
2007 2006 2007 2006 2007
------------- ------------ ------------ ---------- ------------
REVENUES $ - $ - $ - $ - $ -
------------- ------------ ------------ ---------- ------------
EXPENSES 8,955 7,458 20,653 12,289 710,246
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NET LOSS $ (8,955) $ (7,458) $ (20,653) $ (12,289) $ (710,246)
============= ============ ============ ========== ============
NET (LOSS) PER SHARE: $ (0.05) $ (0.04) $ (0.12) $ (0.07)
============= ============ ============ ==========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING
175,074 175,074 175,074 175,074
============= ============ ============ ==========
The accompanying notes are an integral part of these financial statements.
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SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From Inception
(November 1,
For the Six Months Ended 1985) through
June 30, June 30,
2007 2006 2007
------------ ------------ --------------
Cash Flows from Operating Activities:
Net (Loss) $ (20,653) $ (12,289) $(710,246)
Adjustments to Reconcile Net (Loss) to Net Cash used by Operating
Activities:
Common stock issued for services - - 50
Changes in Operating Assets and Liabilities:
Increase in accounts payable 7,503 7,334 19,503
Increase in accrued interest unrelated party 2,982 4,946 17,861
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Net Cash (Used) by Operating Activities (10,168) (9) (672,832)
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Cash Flows from Investing Activities: - - -
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Cash Flows from Financing Activities:
Proceeds from unrelated parties 7,150 - 25,961
Proceeds from related parties 3,000 - 39,412
Additional capital contributed - - 10,180
Stock offering costs - - (18,678)
Issuance of common stock for cash - - 615,951
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Net Cash Provided By Financing Activities 10,150 - 672,826
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Increase (Decrease) in Cash (18) (9) (6)
Cash, Beginning of Period 12 9 -
------------ ------------ --------------
Cash, End of Period $ (6) $ - $ (6)
============ ============ ==============
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Disclosures of Non-cash
Financing Activities:
Common stock issued for services $ - $ - $ 50
The accompanying notes are an integral part of these financial statements
5
SICLONE INDUSTRIES,, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2007 and December 31, 2006
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed financial statements have been prepared by
the Company 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 accounting principles generally
accepted in the United States of America have been condensed or omitted in
accordance with such rules and regulations. The information furnished in the
interim condensed financial statements include normal recurring adjustments and
reflects all adjustments, which, in the opinion of management, are necessary for
a fair presentation of such financial statements. Although management believes
the disclosures and information presented are adequate to make the information
not misleading, it is suggested that these interim condensed financial
statements be read in conjunction with the Company's most recent audited
financial statements and notes thereto included in its December 31, 2006 Annual
Report on Form 10-KSB of Siclone Industries, Inc. Operating results for the
six months ended June 30, 2007 are not necessarily indicative of the results
that may be expected for the period ending December 31, 2007.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going concern
which contemplates the realization of assets and liquidation of liabilities in
the normal course of business. The Company has not yet established an ongoing
source of revenues sufficient to cover its operating costs and allow it to
continue as a going concern. The ability of the Company to continue as a going
concern is dependent on the Company obtaining adequate capital to fund operating
losses until it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease operations.
In order to continue as a going concern, develop a reliable source of revenues,
and achieve a profitable level of operations the Company will need, among other
things, additional capital resources. Management's plans to continue as a going
concern include raising additional capital through sales of common stock.
However, management cannot provide any assurances that the Company will be
successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustment
that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 - SUBSEQUENT EVENTS
On July 5th, 2007 the Company changed its authorized common shares from
30,000,000 to 100,000,000. Also, on July 5th, 2007 the Company issued a reverse
split of its common stock on a basis of 1 for 136, however it did not reverse
any stock certificate that is currently less than 100 shares or reversing any
certificate more than 100 shares to an amount below 100 shares. This change
created a new symbol which is now SICL.
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
The following discussion highlights the Company's performance and it
should be read in conjunction with the financial statements (including related
notes) accompanying this Report. Certain statements contained herein may
constitute forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based on
management's current expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from those expectations due
to changes in global politics, economics, business, competitors, competition,
markets and regulatory factors. More information about these factors has been or
will be contained in the Company's filings with the Securities and Exchange
Commission.
Description of Business
Siclone Industries, Inc. was originally incorporated in Delaware on
November 1, 1985 as McKinnely Investments, Inc. The Company changed its name to
Accoline Industries, Inc. on November 5, 1986 and again changed its name to
Siclone Industries, Inc. on May 24, 1988.
The Company has not had active business operations since its inception
and is considered a development stage company.
The Company intends to seek, investigate, and if warranted, acquire an
interest in a business opportunity. It will not restrict its search to any
particular industry or geographical area and may, therefore, engage in
essentially any business in any industry. Its management has unrestricted
discretion in seeking and participating in a business opportunity, subject to
the availability of such opportunities, economic conditions and other factors.
The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise of
its business judgment. There is no assurance that it will be able to identify
and acquire any business opportunity which will ultimately prove to be
beneficial to the Company and its shareholders.
The Company's activities are subject to several significant risks which
arise primarily as a result of the fact that it has no specific business and may
acquire or participate in a business opportunity based on the decision of
management which will, in all probability, act without the consent, vote, or
approval of its shareholders.
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Plan of Operations
Management intends to actively seek business opportunities during the
next twelve months. If they identify a suitable business opportunity during the
year, the need for capital may change dramatically. Should the Company require
additional capital, it may seek additional advances from officers, sell common
stock or find other forms of debt financing. To date the Company has not pursued
any business opportunities and there can be no assurance that the management
will identify a business venture suitable for acquisition in the future. In
addition, it cannot assure that it will be successful in consummating any
acquisition on favorable terms or that it will be able to profitably manage any
business venture it acquires.
The current operating plan is to continue searching for potential
businesses, products, technologies and companies for acquisition and to handle
the administrative and reporting requirements of a public company.
Sources of Opportunities
The Company anticipates that business opportunities may arise from
various sources, including its officers and directors, professional advisers,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals.
The Company will seek potential business opportunities from all known
sources, but will rely principally on the personal contacts of its officers and
directors as well as indirect associations between them and other business and
professional people. Although management does not anticipate engaging
professional firms specializing in business acquisitions or reorganizations,
such firms may be retained if management deems it in the Company's best
interests. In some instances, the Company may publish notices or advertisements
seeking a potential business opportunity in financial or trade publications.
Criteria
The Company will not restrict its search to any particular business,
industry or geographical location. The Company may acquire or enter into a
business in any industry and in any stage of development. This may include a
business or opportunity involving a "start up" or new company. In seeking a
business venture, management's decision will not be controlled by an attempt to
take advantage of an anticipated or perceived appeal of a specific industry,
management group, or product or industry, but will be based upon the business
objective of seeking long-term capital appreciation in the real value of the
Company.
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; the history of
operations, if any; prospects for the future; the nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of the management; the potential for further research,
development or exploration; the potential for growth and expansion; the
potential for profit; the perceived public recognition or acceptance of
products, services, trade or service marks, name identification; and other
relevant factors.
Generally, management will analyze all available factors in the
circumstances and make a determination based upon a composite of available
facts, without reliance upon any single factor as controlling.
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Methods of Participation of Acquisition
Specific business opportunities will be reviewed and, on the basis of
that review, the legal structure or method of participation deemed by management
to be suitable will be selected. Such structures and methods may include, but
are not limited to, leases, purchase and sale agreements, licenses, joint
ventures, other contractual arrangements, and may involve a reorganization,
merger or consolidation transaction. The Company may act directly or indirectly
through an interest in a partnership, corporation, or other form of
organization.
Procedures
As part of the ongoing investigation of business opportunities,
officers and directors may meet personally with management and key personnel of
the firm sponsoring the business opportunity, visit and inspect material
facilities, obtain independent analysis or verification of certain information
provided, check references of management and key personnel, and conduct other
reasonable measures.
Management will generally request that it be provided with written
materials regarding the business opportunity containing such items as a
description of product, service and company history; management resumes;
financial information; available projections with related assumptions upon which
they are based; an explanation of proprietary products and services; evidence of
existing patents, trademarks or service marks or rights thereto; present and
proposed forms of compensation to management; a description of transactions
between the prospective entity and its affiliates; relevant analysis of risks
and competitive conditions; a financial plan of operation and estimated capital
requirements; and other information deemed relevant.
Competition
The Company expects to encounter substantial competition in its efforts
to acquire a business opportunity. The primary competition is from other
companies organized and funded for similar purposes, small venture capital
partnerships and corporations, small business investment companies and wealthy
individuals.
Employees
The Company does not currently have any employees. It relies upon the
efforts of its officers and directors to conduct its business.
Results of Operations for the Three-Month Period Ended June 30, 2007 and 2006
The Company has not generated any revenues since its inception on
November 1, 1985. Expenses for the three-month period ended June 30, 2007 were
$8,955 compared to expenses of $7,458, during the same period in 2006. Expenses
during both periods consisted mainly of accrued interest and professional, legal
and accounting costs related to the Company's public filings.
Results of Operations for the Six-Month Period Ended June 30, 2007 and 2006
Expenses for the six-month period ended June 30, 2007 were
$20,653 compared to expenses of $12,289, during the same period in 2006.
Expenses during both periods consisted mainly of accrued interest and
professional, legal and accounting costs related to the Company's public
filings.
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As a result of the foregoing factors, the Company realized a net loss
of $20,653 for the six-month period ended June 30, 2007, compared to a net loss
of $12,289 for the six-month period ended June 30, 2006.
Liquidity and Capital Resources
At June 30, 2007, the Company has minimal liquid assets and is
currently in the process of looking for business opportunities to merge with or
acquire. At a minimum, the Company will need to raise additional capital through
private funding to meet the financial needs of being a reporting company. Total
liabilities at June 30, 2007 were $102,737 consisting of $22,503 in accounts
payable, $62,373 in notes payable to an unrelated third party and $17,861 in
accrued interest.
In recent years the Company has relied on advances from the former
president to cover its operating costs. The Company has little or no operations
and no funds with which to develop operations. The Company is currently in the
process of seeking short term capital while it investigates business
opportunities to merge with or acquire. The Company currently has no agreement
or arrangement of merger or acquisition.
There is no guarantee that the Company will be successful in developing
any business opportunities or acquiring any operational capital. Any investment
in the Company would be a highly speculative investment and should only be made
by those investors who are capable of bearing the risk of losing the entire
value of their investment.
ITEM 3 - CONTROLS AND PROCEDURES.
(a) Evaluation of disclosure controls and procedures. The Company
maintains disclosure controls and procedures designed to ensure that information
required to be disclosed in the reports that the Company files or submits under
the Securities Exchange Act of 1934, is recorded, processed, summarized and
reported within the time period specified in the rules and forms of the
Securities and Exchange Commission. The Company's management including its
principal executive officer and its principal financial officer, based on their
evaluation of the Company's disclosure controls over financial reporting and
procedures (as defined in Exchange Act Rules 13a-14c)) in connection with the
Annual Report on Form 10-KSB as of December 31, 2006, have concluded that the
Company's disclosure controls over financial reporting and procedures are
adequate and effective as of June 30, 2007 for the purposes set forth in the
definition in Exchange Act rules.
(b) Changes in internal controls over financial reporting. There were
not any significant changes in the Company's internal controls over financial
reporting or in other factors that could materially affect or is reasonably
likely to materially affect, or significantly affect the Company's internal
controls subsequent to the date of their evaluation.
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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
ITEM 5. Other Information . . . . . . . . . . . . . . . . . . . . . None
ITEM 6. Exhibits and Reports on Form 8-K
1). The following exhibits are filed with this report:
31. Written statement of Chief Executive Officer and Chief
Financial Officer with respect to the compliance with Section 302 of the
Sarbanes-Oxley Act of 2002.
32. Written statement of Chief Executive Officer and Chief
Financial Officer with respect to the compliance with Section 13 (a) and 15(d)
of the Securities Exchange Act of 1934 and pursuant to the 19 U.S.C. 1350, as
adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002.
2). Form 8-K's filed during the period covered by this report:
None.
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 authorized officer.
Date: August 20, 2007 SICLONE INDUSTRIES, INC.
By /s/ Paul Adams
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