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 June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from -------------- to --------------
Commission file number------------------
ICT Technologies, Inc.
------------------------------------
(Exact name of small business issuer
as specified in its charter)
Delaware 13-4070586
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
Joshua Shainberg
122 East 42nd Street, 17th Floor, New York, New York 10168
(212) 551-1085
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(Address and telephone number of principal executive offices,
principal place of business,
and name, address and telephone number of agent
for service of process)
Check whether the registrant filed all documents and reports required to be
filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. NA
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of September 29, 2000, the
Company there are 7,686,065 shares of common stock issued and outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
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ICT TECHNOLOGIES, INC.
JUNE 30, 2000 QUARTERLY REPORT ON FORM 10-QSB
TABLE OF CONTENTS
Page Number
Special Note Regarding Forward Looking Information..................... 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements........................................... 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................... 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 11
Item 2. Changes in Securities and Use of Proceeds...................... 11
Item 3. Defaults Upon Senior Securities................................ 11
Item 4. Submission of Matters to a Vote of Security Holders............ 11
Item 5. Other Information.............................................. 11
Item 6. Exhibits and Reports on Form 8-K............................... 11
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
To the extent that the information presented in this Quarterly Report on
Form 10-QSB for the quarter ended June 30, 2000 discusses financial projections,
information or expectations about our products or markets, or otherwise makes
statements about future events, such statements are forward- looking. We are
making these forward-looking statements in reliance on the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Although we
believe that the expectations reflected in these forward-looking statements are
based on reasonable assumptions, there are a number of risks and uncertainties
that could cause actual results to differ materially from such forward-looking
statements. These risks and uncertainties are described, among other places in
this Quarterly Report, in "Management's Discussion and Analysis of Financial
Condition and Results of Operations".
In addition, we disclaim any obligations to update any forward-looking
statements to reflect events or circumstances after the date of this Quarterly
Report. When considering such forward-looking statements, you should keep in
mind the risks referenced above and the other cautionary statements in this
Quarterly Report.
2
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PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
STATEMENTS
Balance Sheet as of June 30, 2000 and December 31, 1999...................... 4
Statement of Operations for the six months ended June 30, 2000 and 1999...... 5
Statement of Cash Flows for the six months ended June 30, 2000 and 1999...... 6
Statement of Stockholders' Equity for the six months ended June 30, 2000..... 7
Notes to Consolidated Financial Statements.................................. 8
3
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ICT TECHNOLOGIES, INC.
BALANCE SHEET
June 30,
December 31, 2000
1999 Unaudited
----------- ----------
Assets
Current assets
Cash $ 5,988 $ 2,131
Total current assets 5,988 2,131
Other assets
Equity investment 150,000 150,000
Total other assets 150,000 150,000
--------- --------
Total assets $155,988 $152,131
Liabilities and Stockholders' Equity
Current liabilities
Accrued expenses $ 12,000 $ 16,500
Officer loan payable 59,525 55,668
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Total current liabilities 71,525 72,168
Stockholders' equity
Common Stock authorized 10,000,000 shares, 7,686 7,686
$0.001 par value each. At December 31, 1999
and June 30, 2000, there are 7,686,025
and 7,686,025 shares outstanding respectively.
Additional paid in capital 1,168,110 1,168,110
Accumulated deficit (1,091,333) (1,095,833)
Total stockholders' equity 84,463 79,963
----------- ----------
Total liabilities and stockholders' equity $155,988 $152,131
----------- ----------
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ICT TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
Unaudited
For the six months ended
June 30, June 30,
1999 2000
-------
Revenue $-0- $-0-
Costs of goods sold -0- -0-
Gross profit -0- -0-
Operations:
General and administrative 27,323 4,500
Depreciation and amortization -0- -0-
Total expense 27,323 4,500
Loss from operations 27,323) (4,500)
Net income (loss) (27,323) $(4,500)
Net income (loss) per share -basic $ (0.00) $ (0.00)
Number of shares outstanding-basic 7,686,025 7,686,025
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ICT TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
Unaudited
For the six months ended
June 30, June 30,
1999 2000
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(27,323) $(4,500)
Accounts payable and accrued expenses 4,500 4,500
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TOTAL CASH FLOWS FROM OPERATIONS (22,823) -0-
CASH FLOWS FROM FINANCING ACTIVITIES
Officer loan payable 22,201 (3,857)
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 22,201 (3,857)
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE (DECREASE) IN CASH (622) (3,857)
CASH BALANCE BEGINNING OF PERIOD 622 5,988
CASH BALANCE END OF PERIOD $-0- $ 2,131
Supplemental disclosure of cash flow information
Cash paid for interest $-0- $-0-
Cash paid for income taxes $-0- $-0-
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ICT TECHNOLOGIES, INC.
STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
Common Stock Common Stock Additional Accumulated
Date paid in capital Deficit Total
<S> <C> <C> <C> <C> <C>
Balances December 31, 1998 7,686,025 $ 7,686 $1,168,110 $ (1,042,175) $ 133,621
Net loss (49,162) $(49,162)
Balances December 31, 1999 7,686,025 7,686 1,168,110 (1,091,333) $84,463
Unaudited
Net loss (4,500) (4,500)
Balances June 30, 2000 7,686,025 7,686 1,168,110 $ 1,095,833 $79,963
</TABLE>
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ICT TCHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE A--BASIS OF PRESENTATION The accompanying unaudited financial
statements have been prepared in accordance with generally accepted principles
for interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all necessary
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results of ICT Technologies,
Inc. (the "Company") for the six months ended June 30, 1999 and 2000 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2000.
NOTE B--EARNINGS PER SHARE
Basic loss per common share is computed by dividing the loss by the
weighted average number of common shares outstanding during the period. During
the six month periods through June 30, 2000, there were no dilutive securities
outstanding
NOTE C - INCOME TAXES
The Company provides for the tax effects of transactions reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any, represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of December 31, 1999 and June 30, 2000,
the Company had no material current tax liability, deferred tax assets, or
liabilities to impact on the Company's financial position because the deferred
tax asset related to the Company's net operating loss carry forward and was
fully offset by a valuation allowance. At June 30, 2000, the Company has net
operating loss carry forwards for income tax purposes of $1,095,833. These carry
forward losses are available to offset future taxable income, if any, and expire
in the year 2010. The components of the net deferred tax asset as of June 30,
2000 are as follows:
Deferred tax asset:
Net operating loss carry forward $ 372,583
Valuation allowance $(372,583)
Net deferred tax asset $ -0-
The Company recognized no income tax benefit from the loss generated for
the period from the date of inception to June 30, 2000. SFAS No. 109 requires
that a valuation allowance be provided if it is more likely than not that some
portion or all of a deferred tax asset will not be realized. The Company's
ability to realize benefit of its deferred tax asset will depend on the
generation of future taxable income. Because the Company has yet to recognize
significant revenue from the sale of its products, the Company believes that a
full valuation allowance should be provided.
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NOTE D - COMMITMENTS AND CONTINGENCIES
a. Lease agreements
The company occupies office space at the office of the President at 122
East 42nd Street, 17th Floor, New York, New York 10168 at a monthly rental of
$250.
b. Officer Compensation
For the period from inception, June 23, 1997, to June 30, 2000, the company
has accrued a minimal compensation of $500 per month as compensation to Mr.
Shainberg as consideration for services while the company is in the development
stage of development.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 1999 AND 2000
The following discussion relates to the results of our operations to date,
and our financial condition:
This prospectus contains forward looking statements relating to our
Company's future economic performance, plans and objectives of management for
future operations, projections of revenue mix and other financial items that are
based on the beliefs of, as well as assumptions made by and information
currently known to, our management. The words "expects, intends, believes,
anticipates, may, could, should" and similar expressions and variations thereof
are intended to identify forward-looking statements. The cautionary statements
set forth in this section are intended to emphasize that actual results may
differ materially from those contained in any forward looking statement.
Business activities.
The Company has been dormant since December 31, 1996 except for an equity
investment in the Frank Lettau Galleries, located in New York City. The Company
is in the process of expanding its business activities in the purchasing and
selling of art and antiques for its own account having learned the business as a
result of its business relationship with Frank Lettau Galleries.
During this period, management has continued to finance is activities
through the resources of management and has devoted the majority of its efforts
to initiating the Company's market plans to enter the business of purchasing art
and antiques, obtaining new customers for sale of consulting services,
developing sources of supply, developing and testing its marketing strategy and
finding a management team to begin the process of: completing its marketing
goals; furthering its marketing research and development for its products;
changing the state in which the Company was domiciled from the State of New York
to Delaware completing the documentation for the filing of Form 10 with the
Securities and Exchange Commission to become a fully reporting Company to the
SEC. These activities were funded by the Company's management and investments
from stockholders. The Company has not yet generated sufficient revenues during
its limited operating period of reorganization to fund its ongoing operating
expenses, or fund its marketing plans and product development activities.
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There can be no assurance that development of the marketing plans will be
completed and fully tested in a timely manner and within the budget constraints
of management and that the Company's marketing research will provide a
profitable path to utilize the Company's marketing plans. Further investments
into market design and implementation and development, marketing research as
defined in the Company's operating plan will significantly reduce the cost of
development, preparation, and processing of purchases and orders by enabling the
Company to effectively compete in this market place.
During this reorganization period, the Company has been financed through
officer's loans from Joshua Shainberg with the return of its partial investment
in the Frank Lettau Galleries.
Results of Operations for the six months ended June 30, 2000 as compared to
the six months ended June 30, 1999.
For the six months ended June 30, 2000, the Company generated net sales of
$-0- as compared to $-0-for the six months ended June 30, 1999. The Company's
cost of goods sold for the six months ended June 30, 2000 was $-0- as compared
to $-0- to for the six months ended June 30, 1999. The Company's gross profit on
sales was $-0-for the six months ended June 30, 2000 as compared to $-0-for the
six months ended June 30, 1999.
The Company's general and administrative costs aggregated approximately
$4,500 for the six months ended June 30, 2000 as compared to $27,323 for the six
months ended June 30, 1999 representing a decrease of $22,823. General and
administrative expenses for June 30, 2000 represent $1,500 in accrued salary for
Mr. Shainberg and and accrual of $750 for rent.
Liquidity and Capital Resources.
The Company increased cash from $2,131 at June 30, 2000 to a cash balance
of $5,988 at December 31, 1999. Working capital at June 30, 2000 was negative at
$70,037. For the six months ended June 30, 2000, working capital was provided by
management for the payment of expenses. At March 31, 2000, the Company continued
to be funded through officer loan balances aggregating $55,668. Management
believes that it will be able to fund the Company through the continuation of
the Company's reorganization process until the Company's Marketing strategy of
entering the art and antique business is in place.
Known trends, events or uncertainties that could be reasonably likely to
have a material adverse effect on the businesses of the Company and may thereby
materially impact the Company's short-term or long-term liquidity and/or net
sales, revenues or income from continuing operations are expected to be seasonal
and the continuation and availability of inventory from present and future
vendors at prices that will permit the Company to operate at and improved gross
profit levels; Federal Securities regulations that may effect the ability the
ability for the Company to complete its marketing strategy and a favorable
environment in which the Company will conduct its consulting activities.
Thereafter, if cash generated from operations is insufficient to satisfy
the Company's working capital and capital expenditure requirements, the Company
may be required to sell additional equity or debt securities or obtain
additional credit facilities. There can be no assurance that such financing, if
required, will be available on satisfactory terms, if at all.
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Year 2000 Issues
The Company has completed its assessment of Year 2000 compliance with
respect to its products that are currently being sold to customers and has
concluded that all significant products are compliant. As of June 30, 2000, the
Company did not experience any setback in operating plans resulting from a Year
2000 problem.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
All shares sold by the Issuer during the last three years have been
registered under the Securities Act of 1933.
ITEM 3. DEFAULTS IN 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
(a) Exhibits.
27 Financial Data Schedule
(b) Reports on Form 8-K.
None.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ICT TECHNOLOGIES, INC.
Dated: October 2, 2000
By: /s/ Joshua Shainberg
Joshua Shainberg, President and Director
Date: October 2, 2000
By: /s/ Bindiya Moorjani
Bindiya Moorjani Ph.D., Secretary, Treasurer and Director
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