SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the nine months period ended September 30, 2008
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: 001-12571
FOCUS AFFILIATES, INC.
(Name of small business issuer in its charter)
Delaware 95-4467726
------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Empl. Ident. No.)
incorporation or organization)
3500 South Dupont Highway, County of Kent, City of Dover, Delaware 19901
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(Address of principal executive offices)(Zip Code)
1-800-346-4646
(Issuer's telephone number)
Indicate by check whether the issuer (1) filed all reports required to be
filed by Section 13 of 15(d) of the Exchange Act during the past 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, or a non-accelerated filer, or a small reporting
company. See definitions of "large accelerated filer,""accelerated filer,"
and "small reporting company" in Rule 12B-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [X]
Non-accelerated filer [ ] Smaller reporting company [ ]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 13b-2 of the Exchange Act) YES [X] NO [ ]
As of September 30, 2008, 638,508,112 shares of the registrant's common stock
were outstanding.
FOCUS AFFILIATES, INC.
FORM 10-Q
TABLE OF CONTENTS
PART 1 - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
Balance Sheet as at September 30, 2008 and December 31, 2007 1
Statement of Operations for 9 months ended
September 30, 2008 and 2007 2
Statement of Cash Flows for 9 months ended
September 30, 2008 and 2007 3
Notes to the Financial Statements 4-5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operation 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk 6
Item 4. Controls and Procedures 6-7
PART 2 - OTHER INFORMATION
Item 1. Legal Proceedings 7
Item 1A. Risk Factors 7
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits, Signatures and Certification 8
CERTIFICATION 9-12
FOCUS AFFILIATES, INC.
(FORMERLY: INTELLICEL CORP.)
(A Development Stage Company)
These financial statements have not been reviewed or audited by our
independent auditors
BALANCE SHEETS AS AT SEPTEMBER 30, 2008
(U.S. Dollars)
(Unaudited)
As at As at
September 30, December 31,
2008 2007
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Assets
Current Assets - -
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Total Assets $ - -
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Liabilities
Accounts payable to related party 1,045 -
Due to shareholders 25,000 -
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Total liabilities $ 26,045 -
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Stockholders' Equity
Common Stock, $0.001 par value
1,000,000,000 authorized
Issued and outstanding 638,508,112 Shares $ 638,508 638,508
Additional paid in capital (638,508) (638,508)
Deficit accumulated during development stage (26,045) -
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Total stockholders' equity (26,045) -
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Total Liabilities and Stockholders' Equity $ - -
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The accompanying notes are an integral part of these financial statements
1
FOCUS AFFILIATES, INC.
(FORMERLY: INTELLICEL CORP.)
(A Development Stage Company)
STATEMENT OF OPERATIONS FOR THE 9 MONTHS PERIOD ENDED SEPTEMBER 30, 2008
(U.S. Dollars)
(Unaudited)
3 Months Ended 9 Months Ended
September 30, September 30,
-------------------------- --------------------------
2008 2007 2008 2007
------------------------------------------------- --------------------------
Revenue $ - - - -
------------------------------------------------- --------------------------
Expenses
Office expenses 31 - 31 -
Filing expenses 171 - 1,014 -
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Total operating
expenses $ 202 - 1,045 -
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Net loss for
the period $ (202) - (1,045) -
================================================= ==========================
Net loss per Common
Share - Basic and
Diluted (0.00) (0.00) (0.00) (0.00)
------------------------------------------------- --------------------------
Weighted average
number of shares
outstanding 638,508,112 638,508,112 638,508,112 638,508,112
------------------------------------------------- --------------------------
The accompanying notes are an integral part of these financial statements
2
FOCUS AFFILIATES, INC.
(FORMERLY: INTELLICEL CORP.)
(A Development Stage Company)
STATEMENT OF CASH FLOWS FOR THE 9 MONTHS PERIOD ENDED SEPTEMBER 30, 2008
(U.S. Dollars)
(Unaudited)
9 Months Ended
September 30
----------------------------
2008 2007
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Cash Flows from Operating Activities
Net loss for the period $ (1,045) -
Accounts payable to related party 1,045
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- -
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Cash flows from Investing Activities - -
Cash flows from Financing Activities - -
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Net increase/(decrease) in cash and
cash equivalents $ - -
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Cash beginning of period - -
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Cash end of period $ - -
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The accompanying notes are an integral part of these financial statements
3
FOCUS AFFILIATES, INC.
(FORMERLY: INTELLICEL CORP.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
(U.S. Dollars)
(Unaudited)
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1 GENERAL COMPANY INFORMATION
Focus Affiliates, Inc. ( the Company ) is a Delaware corporation.
It was incorporated on March 1994 as Cellular Telecom Corporation and
subsequently changed its name to Intellicell Corp. in June 1996 and then to
Focus Affiliates, Inc. in October 1999.
The Company was reinstated on December 8, 2006 in the State of Delaware by
an incorporator. The Company has been dormant since 2001 and was reorganized
under new management in March 16, 2007 which will put the Company into the
Development Stage.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United
States. Because a precise determination of many assets and liabilities is
dependent upon future events the preparation of financial statements
for a period necessarily involves the use of estimates which have been made
using careful judgment.
The financial statements have, in management's opinion, been properly
prepared within reasonable limits of materiality within the framework of the
accounting policies summarized below :
(a) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash accounts, interest
bearing saving accounts and time certificates of deposit with a maturity of
three months or less when purchased.
(b) 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 disclosures 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 results could differ from those estimates.
(c) Foreign currencies
The functional currency of the Company is the United States dollar.
Transactions in foreign currencies are translated into United States
dollars at the rates in effect on the transaction date. Exchange gains
or losses arising on translation or settlement of foreign currency
denominated monetary items are included in the statement of operations.
4
FOCUS AFFILIATES, INC.
(FORMERLY: INTELLICEL CORP.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
(U.S. Dollars)
(Unaudited)
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Income taxes
The Company follows the asset and liability method of accounting for
income taxes. Under this method, current taxes are recognized for the
estimated income taxes payable for the current period.
Deferred income taxes are provided based on the estimated future tax
effects on temporary differences between financial statement carrying
amounts of assets and liabilities and their respective tax bases as well
as the benefit of losses available to be carried forward to future years
for tax purposes.
Deferred tax assets and liabilities are measured using enacted tax
rates that are expected to apply to taxable income in the years in which
those temporary differences are expected to be covered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates
is recognized in operations in the period that includes the enactment
date. A valuation allowance is recorded for deferred tax assets when it
is more likely than not that such deferred tax assets will not be realized.
(e) Loss per share
Loss per share computations are based on the weighted average
number of common shares outstanding during the period. Common share
equivalents consisting of stock options and warrants are not considered
in the computation because their effect would be anti-dilutive.
3. Stockholders' Equity
As of September 30, 2008 the Company has issued and outstanding common stock
of 638,508,112 shares of $0.001 par value.
4. Share Capital
Amend the Company's authorized share capital
On March 16, 2007 the authorized shares capital was increased as follows :-
Authorized common stock consist of 1,000,000,000 shares having a par value
of $0.001 per share
5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and
Results of Operations, as well as information contained in "Risk Factors" in
Part 2, Item 1A and elsewhere in this Quarterly Report on Form 10Q, contains
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. We intend that these forward-looking
statements be subject to the safe harbors created by those provisions.
Forward-looking statements are generally written in the future tense and/or
are preceded by words such as "will," "may," "should," "forecast," "could,"
"expect," "suggest," "believe," "anticipate," "intend," "plan," or other
similar words. These statements are not guarantees of future performance and
are subject to risks, uncertainties and other factors, many of which are
beyond our control, are difficult to predict and could cause actual results
to differ materially from those expressed or forecasted in the forward-
looking statements. These risks and uncertainties include, but are not
limited to, those described in "Risk Factors" and elsewhere in this report.
Forward-looking statements that were believed to be true at the time made may
ultimately prove to be incorrect or false.
COMPANY OVERVIEW
The Company has been in the process of identifying and discussing strategic
merger or acquisitions. The Company will need to raise substantial additional
capital to fund this strategy. The Company is seeking such additional funds
through private equity or debt financing. There can be no assurance that such
funding will be available on acceptable terms. The Company's continued
existence as a going concern is ultimately dependent upon its ability to
secure additional funding. The Company has no lines of credit available at
this time.
OPERATION
The Company has not been active since 2001. The losses for the 9 months
period ended September 30, 2008 was $1,045 for filing and office expenses.
There was no revenue for the 9 months period ended September 30, 2008.
ITEM 3 - QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company at present does not engage in any business activities thus will
not be subjected to any quantitative or qualitative influences to market
risk.
ITEM 4 - CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange
Act reports is recorded, processed and summarized and is reported within the
time periods specified in the SEC's rules and forms, and that such
information is accumulated and communicated to the Company's management,
including its Chief Executive Officer and Chief Financial, as appropriate, to
allow timely decisions regarding required disclosure. In designing and
evaluating the disclosure control procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired
control objectives, and management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible controls
and procedures.
6
ITEM 4 - CONTROLS AND PROCEDURES (continue)
As of the date of this report, the Company's management, including the
President ( principal executive officer ) and Chief Financial Officer,
carried out an evaluation of the effectiveness of the design and operation of
the Company's disclosure controls and procedures pursuant to Exchange Act
Rule 13a-14. Based upon the evaluation, the Company's President ( principal
executive officer ) and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in timely alerting them to
material information required to be included in the Company's periodic SEC
filings. There have been no significant changes in the Company's disclosure
controls and procedures or in other factors, which could significantly affect
disclosure controls subsequent to the date the Company's management carried
out its evaluation. During the period covered by this quarterly report on
Form 10 Q, there was no change in our internal control over financial
reporting ( as defined in Rule 13a - 15 ( f ) under the Exchange Act ) that
materially affected, or is reasonably likely to materially affect, out
internal control over financial reporting.
PART 2. - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Neither the Company nor any of its officers, directors or greater than 10%
beneficial shareholders are involved in any litigation or legal proceedings
involving the business of the Company.
ITEM 1A - RISK FACTORS
The Company at present does not engage in any business activities thus will
not be subjected to any risk.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
No unregistered securities were issued during the period covered by this
report.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
None
7
ITEM 6 - EXHIBITS
Exhibit Number Exhibit Description
31.01 Certification of Principal Executive Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act and Section 302 of
the Sarbanes-Oxley Act of 2002.
31.02 Certification of Principal Accounting Officer pursuant to
Rule 13a-14(a) of the Securities Exchange Act and Section 302
of the Sarbanes-Oxley Act of 2002.
32.01 Certification of Principal Executive Officer pursuant to 18
U.S.C. Section 1350, adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
32.02 Certification of Principal Accounting Officer pursuant to 18
U.S.C. Section 1350, adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
* These certificates accompany Focus Affiliates, Inc's Quarterly Report on
Form 10-Q; they are not deemed "filed" with the Securities and Exchange
Commission and are not to be incorporated by reference in any filing of Focus
Affiliates, Inc. under the Securities Act of 1933, or the Securities Exchange
Act of 1934, whether made before or after the date hereof and irrespective of
any general incorporation language in any filings.
Table of Contents
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.
October 17, 2008
Focus Affiliates, Inc.
/s/ Michael Burke
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Michael Burke
Director and Chief Executive Officer
/s/ Michael Lee
------------------------------------
Michael Lee
Chief Accounting Officer
8