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 September 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
--------------------------------------------------------------------------------
(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
------------------------------------------------------------
(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.
SEPTEMBER 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 September 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.
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed financial statements for the periods ended September 30, 1999
and 2000 included herein have been prepared by ICT Technologies, Inc., (the
"Company") without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "Commission"). In the opinion of
management, the statements include all adjustments necessary to present fairly
the financial position of the Company as of September 30, 2000, and the results
of operations and cash flows for the nine month periods ended September 30, 1999
and 2000.
The Company's results of operations during the nine months of the Company's
fiscal year are not necessarily indicative of the results to be expected for the
full fiscal year.
The financial statements included in this report should be read in
conjunction with the financial statements and notes thereto in the Company's
Annual Report on Form 10-KSB for the fiscal years ended December 31, 1999.
Balance Sheet as of September 30, 2000 and December 31, 1999............. 4
Statement of Operations for the nine months ended September 30, 2000
and fiscal year 1999............................................... 5
Statement of Cash Flows for the nine months ended September 30, 2000
and and fiscal year 1999........................................... 6
Statement of Stockholders' Equity for the nine months ended
September 30, 2000................................................ 7
Notes to Consolidated Financial Statements............................... 8
3
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ICT TECHNOLOGIES, INC.
BALANCE SHEET
September 30,
2000
December 31, 1999 Unaudited
----------------- --------------
Assets
Current assets
Cash $5,988 $ -0-
Total current assets 5,988 -0-
Other assets
Equity investment 150,000 150,000
Total other assets 150,000 150,000
Total assets $155,988 $150,000
======== ========
Liabilities and Stockholders' Equity
Current liabilities
Accrued expenses $ 12,000 $ 18,750
Officer loan payable 59,525 63,629
========= =========
Total current liabilities 71,525 82,379
Stockholders' equity
Common Stock authorized 10,000,000 7,686 7,686
shares, $0.001 par value each. At
December 31, 1999 and September 30,
2000, there are 7,686,025 and
7,686,025 shares outstanding
respectively.
Additional paid in capital 1,168,110 1,168,110
Deficit accumulated during the (1,091,333) (1,108,175)
development stage
Total stockholders' equity 84,463 67,621
Total liabilities and stockholders' $155,988 $150,000
equity
4
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ICT TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
Unaudited
For the nine For the nine
months ended months ended
September 30, September 30,
1999 2000
------------- -------------
Revenue $ -0- $ -0-
Costs of goods sold -0- -0-
Gross profit -0- -0-
Operations:
General and administrative 48,896 16,842
Depreciation and amortization -0- -0-
Total expense 48,896 16,842
Loss from operations (48,896) (16,842)
Net income (loss) $(48,896) $(16,842)
Net income (loss) per share-basic $(0.01) $(0.00)
Number of shares outstanding-basic 7,686,025 7,686,025
5
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ICT TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
Unaudited
For the For the
nine months ended nine months ended
September 30, September 30,
1999 2000
----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(48,896) $(16,842)
Adjustments to reconcile net loss to
cash used in operating activities
Shares issued for accrued salaries
Depreciation
Accounts payable and accrued expenses 6,000 6,750
---------- --------
TOTAL CASH FLOWS FROM OPERATIONS (42,896) (10,092)
CASH FLOWS FROM FINANCING ACTIVITIES
Officer loan payable 43,048 4,104
TOTAL CASH FLOWS FROM FINANCING 43,048 4,104
ACTIVITIES
TOTAL CASH FLOWS FROM INVESTING
ACTIVITIES
NET INCREASE (DECREASE) IN CASH (152) (5,988)
CASH BALANCE BEGINNING OF PERIOD 622 5,988
-------- --------
CASH BALANCE END OF PERIOD $ 744 $ -0-
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>
<CAPTION>
Deficit
accumulated
Additional paid- during developent
Date Common Stock Common Stock in capital stage Total
-------- ------------ ------------ ---------------- ----------------- ---------
<S> <C> <C> <C> <C> <C>
Balances December 7,686,025 $7,686 $1,168,110 (1,042,175) 133,621
31, 1998
Net loss $(49,162) $(49,162)
Balances December 7,686,025 7,686 $1,168,110 (1,091,333) $84,463
31, 1999
Unaudited
Net loss (16,842) (16,842)
Balances September 7,686,025 7,686 1,168,110 $(1,108,175) $67,621
30, 2000
</TABLE>
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ICT TCHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 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
nine months ended September 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 nine month periods through September 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 September 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 September 30, 2000, the Company has net operating loss carry forwards
for income tax purposes of $1,108,175. 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 September 30, 2000 are
as follows:
Deferred tax asset:
Net operating loss carry forward $ 376,780
Valuation allowance $(376,780)
-----------
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 September 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.
8
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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 September 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 NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000
The following discussion relates to the results of the Company's operations
to date, and our financial condition:
This report contains forward looking statements relating to the 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. 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
9
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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 nine months ended September 30, 2000 as
compared to the nine months ended September 30, 1999.
For the nine months ended September 30, 2000, the Company generated net
sales of $-0- as compared to $-0-for the nine months ended September 30, 1999.
The Company's cost of goods sold for the nine months ended September 30, 2000
was $-0- as compared to $-0- to for the nine months ended September 30, 1999.
The Company's gross profit on sales was $-0-for the nine months ended September
30, 2000 as compared to $-0-for the nine months ended September 30, 1999.
The Company's general and administrative costs aggregated approximately
$16,842 for the nine months ended September 30, 2000 as compared to $48,896 for
the nine months ended September 30, 1999 representing a decrease of $32,054.
General and administrative expenses for September 30, 2000 represent $2,000 in
accrued salary for Mr. Shainberg and and accrual of $1,000 for rent and office
expenses of $13,842.
Liquidity and Capital Resources.
The Company increased cash from $-0- at September 30, 2000 to a cash
balance of $5,988 at December 31, 1999. Working capital at September 30, 2000
was negative at $82,379. For the nine months ended September 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 $63,629. 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.
Year 2000 Issues
As of September 30, 2000, the Company did not experience any setback in
operating plans resulting from a Year 2000 problem.
10
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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.
11
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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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