UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MAY 31, 2010
Commission file number 333-138217
SOPAC CELLULAR SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
4438 Vesper Avenue, Suite 2
Sherman Oaks, CA 91403
(Address of principal executive offices, including zip code)
(949)355-4559
(Telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 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 last 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). YES [ ] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer, "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 1,700,000 shares as of July 12, 2010
ITEM 1. FINANCIAL STATEMENTS
SOPAC CELLULAR SOLUTIONS INC.
(A Development Stage Company)
Condensed Balance Sheet
(unaudited)
--------------------------------------------------------------------------------
As of As of
May 31, August 31,
2010 2009
-------- --------
ASSETS
CURRENT ASSETS
Cash $ -- $ 1,791
-------- --------
TOTAL CURRENT ASSETS -- 1,791
-------- --------
TOTAL ASSETS $ -- $ 1,791
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank Overdraft $ 12 $ --
Loan Payable - Related Party 6,380 --
Accounts Payable 2,190 326
-------- --------
TOTAL CURRENT LIABILITIES 8,582 326
-------- --------
TOTAL LIABILITIES 8,582 326
-------- --------
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 75,000,000 shares
authorized; 1,700,000 shares issued and outstanding
as of May 31, 2010 and August 31, 2009 1,700 1,700
Additional paid-in capital 38,300 38,300
Deficit accumulated during development stage (48,582) (38,535)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (8,582) 1,465
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ -- $ 1,791
======== ========
See Notes to Financial Statements
2
SOPAC CELLULAR SOLUTIONS INC.
(A Development Stage Company)
Condensed Statement of Operations
(unaudited)
--------------------------------------------------------------------------------
July 10, 2006
Three Months Three Months Nine Months Nine Months (inception)
Ended Ended Ended Ended through
May 31, May 31, May 31, May 31, May 31,
2010 2009 2010 2009 2008
----------- ----------- ----------- ----------- -----------
(restated) (restated)
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------- -----------
TOTAL REVENUES -- -- -- -- --
OPERATING EXPENSES
Professional Fees 1,750 1,500 6,750 7,500 27,500
General & Administrative Expenses 708 1,270 2,396 3,408 16,982
General & Administrative Expenses -
Related Party 300 300 900 900 4,100
----------- ----------- ----------- ----------- -----------
TOTAL OPERATING EXPENSES 2,758 3,070 10,046 11,808 48,582
Provision for Income Taxes -- -- -- -- --
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (2,758) $ (3,070) $ (10,046) $ (11,808) $ (48,582)
=========== =========== =========== =========== ===========
BASIC EARNING (LOSS) PER SHARE $ (0.00) $ (0.00) $ (0.01) $ (0.01)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,700,000 1,700,000 1,700,000 1,700,000
=========== =========== =========== ===========
See Notes to Financial Statements
3
SOPAC CELLULAR SOLUTIONS INC.
(A Development Stage Company)
Condensed Statement of Cash Flows
(unaudited)
--------------------------------------------------------------------------------
July 10, 2006
Nine Months Nine Months (inception)
Ended Ended through
May 31, May 31, May 31,
2010 2009 2010
-------- -------- --------
(restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(10,046) $(11,808) $(48,582)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Deposits -- (100) --
Accounts Payable 1,865 (118) 2,190
Bank Overdraft 12 -- 12
Expense Paid by Related Party 3,500 -- 3,500
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (4,670) (12,026) (42,880)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from Related Party 2,880 -- 2,880
Proceeds from issuance of common stock -- -- 40,000
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 2,880 -- 42,880
-------- -------- --------
NET INCREASE (DECREASE) IN CASH (1,790) (12,026) --
CASH AT BEGINNING OF PERIOD 1,790 16,979 --
-------- -------- --------
CASH AT END OF YEAR $ -- $ 4,953 $ --
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
See Notes to Financial Statements
4
SOPAC CELLULAR SOLUTIONS INC.
(A Development Stage Company)
Notes to Unaudited Condensed Interim Financial Statements
May 31, 2010
--------------------------------------------------------------------------------
NOTE 1. CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by SOPAC Solutions Inc.
(the "Company") without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the financial position, results of operations, and cash flows at May 31, 2010,
and for all periods presented herein, have been made.
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. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's August 31, 2009
audited financial statements. The results of operations for the period ended May
31, 2010 is not necessarily indicative of the operating results for the full
year.
NOTE 2. GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles 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, the Company will need, among other
things, additional capital resources. Management's plan is to obtain such
resources for the Company by obtaining capital from management and significant
shareholders sufficient to meet its minimal operating expenses and seeking
equity and/or debt financing. 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 adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS
The company has evaluated the recent accounting pronouncements issued through
July 15, 2010, and the Company does not expect that the effectiveness of any of
these changes will have a material impact on the Company's financial position,
or statements.
5
SOPAC CELLULAR SOLUTIONS INC.
(A Development Stage Company)
Notes to Unaudited Condensed Interim Financial Statements
May 31, 2010
--------------------------------------------------------------------------------
NOTE 4. BASIC EARNINGS PER SHARE
ASC No. 260, "Earnings Per Share", specifies the computation, presentation and
disclosure requirements for earnings (loss) per share for entities with publicly
held common stock. The Company has adopted the provisions of ASC No. 260.
Basic net loss per share amounts is computed by dividing the net loss by the
weighted average number of common shares outstanding. Diluted earnings per share
are the same as basic earnings per share due to the lack of dilutive items in
the Company.
NOTE 5. RESTATED FINANCIAL STATEMENTS
The Company has restated its financial statements for the nine months ended May
31, 2009, in conjunction with the PCAOB revocation of the registration of its
predecessor auditor. The Company had its financial statements re-audited by a
successor auditor during which it re-evaluated a transaction involving the
timing of an expense. As a result, the Company determined that a transaction
that was not recorded until the first quarter of last year was in fact accruable
to the year ended August 31, 2008. This adjustment resulted in a decrease of
$118 in expenses for the nine months ended May 31, 2009 as it relates to the
Statement of Operations and Statement of Cash Flows for the nine months ended
May 31, 2009. It was also determined that the rent expense included in the
General and Administrative expense should be broken out into a separate expense
line item entitled General and Administrative - Related Party. This adjustment
affects the Statements of Operations for both the three and nine month periods
ending May 31, 2009. Other than the presentation disclosure this adjustment did
not affect any other financial statement line item. The following is a
comparison of the summarized financial statements of the Company before and
after the restatement:
Three Months Ended Nine Months Ended
to May 31, 2009 to May 31, 2009
------------------------------ -------------------------------
Original Restated Change Original Restated Change
-------- -------- ------ -------- -------- ------
STATEMENT OF OPERATIONS
General and Administrative $ 1,570 $ 1,270 $ (300) $ 4,426 $ 3,408 $ (1,018)
General and Administrative - Related Party -- 300 300 -- 900 900
-------- -------- -------- -------- -------- --------
Total General & Administrative Expenses 1,570 1,570 -- 4,426 4,308 (118)
Net Income (Loss) $ (3,070) $ (3,070) -- $(11,926) $(11,808) $ 118
======== ======== ======== ======== ======== ========
STATEMENT OF CASH FLOWS
Net income (loss) $ -- $ -- $ -- $(11,926) $(11,808) $ 118
Accounts Payable -- -- -- -- (118) 118
NOTE 6. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through
July 15, 2010 and determined there are no items to disclose.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
Some of the statements contained in this Form 10-Q that are not historical facts
are "forward-looking statements" which can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Form 10-Q, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events.
All written forward-looking statements made in connection with this Form 10-Q
that are attributable to us, or persons acting on our behalf, are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.
RESULTS OF OPERATIONS
We are still in our development stage and have generated no revenues to date.
We incurred operating expenses of $2,758 for the three month period ended May
31, 2010. These expenses consisted of general operating expenses incurred in
connection with the day to day operation of our business and the preparation and
filing of our periodic reports.
Our net loss for the three months ended May 31, 2010 and 2009 was $2,758 and
$3,070, respectively, with no revenues for either period. Our net loss from
inception through May 31, 2010 was $48,582.
As of May 31, 2010, there is a total of $2,880 that is owed by the company to
Eric Ezra, the sole officer and director, for expenses that he has paid on
behalf of the company. The loan is interest free and payable on demand.
Cash provided by financing activities from inception through the period ended
May 31, 2010 was $40,000 resulting from the sale of common stock to our
director, Mr. Ezra E. Ezra, who purchased 1,000,000 shares of our Common Stock
at $0.005 per share on July 10, 2006 for proceeds of $5,000 and the sale of
700,000 shares at $0.05 pursuant to our SB-2 Registration Statement filed with
the SEC under file number 333-138217, which became effective on November 17,
2006. On April 10, 2007 the offering was completed for proceeds of $35,000.
Our auditors have expressed their doubt about our ability to continue as a going
concern unless we are able to generate profitable operations.
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LIQUIDITY AND CAPITAL RESOURCES
We had no cash at May 31, 2010, and there were outstanding liabilities of 8,582.
Our director has verbally agreed to loan the company funds to continue
operations in a limited scenario, but he has no legal obligation to do so. We
are a development stage company and have generated no revenue since inception to
May 31, 2010.
PLAN OF OPERATION
The company has not been successful in establishing partnerships with suppliers
such as Sprint/Nextel, AT&T and Verizon Wireless. Due to the economic conditions
over the past year, the Company has been unable to attain any level of success
despite the continued efforts of our director. We are now considering available
options to maximize shareholder value.
Our management has been analyzing various alternatives available to our company
to ensure our survival and to preserve our shareholder's investment in our
common shares. This analysis has included sourcing additional forms of financing
to continue our business as is and also looking for other opportunities
including business combinations. At this stage in our operations, we believe
either course is acceptable, as our operations have not been profitable and our
future prospects for our business are not good without further financing.
In implementing a structure for a particular business combination or
opportunity, we may become a party to a merger, consolidation, reorganization,
joint venture, or licensing agreement with another corporation or entity. We may
also acquire stock or assets of an existing business. At this stage, we can
provide no assurance that we will be able to raise funding to continue our
business as is or locate compatible business opportunities. We also cannot
estimate what additional financing we will require to complete a combination
with another business opportunity or whether if we are able to complete the
combination whether operations will be profitable.
Historically, we have been able to raise a limited amount of capital through
private placements of our equity stock, but we are uncertain about our continued
ability to raise funds privately. Further, we believe that our company may have
more difficulties raising capital for our existing operations than for a new
business opportunity. We have not entered into any formal written agreements for
a business combination or opportunity. If any such agreement is reached, we
intend to disclose such an agreement by filing a current report on Form 8-K with
the Securities and Exchange Commission.
If we are unable to secure adequate capital to continue our business or
alternatively, complete a combination or acquisition, our shareholders will lose
some or all of their investment and our business will likely fail.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
8
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Management maintains "disclosure controls and procedures," as such term is
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed in our Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission rules and forms, and that such information is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, an
evaluation was carried out by management, with the participation of the Chief
Executive Officer and the Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of May 31, 2010.
Based on that evaluation, management concluded, as of the end of the period
covered by this report, that our disclosure controls and procedures were
effective in recording, processing, summarizing, and reporting information
required to be disclosed, within the time periods specified in the Securities
and Exchange Commission's rules and forms.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
As of the end of the period covered by this report, there have been no changes
in SoPac Cellular Solutions' internal controls over financial reporting during
the quarter ended May 31, 2010, that materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting
subsequent to the date of management's last evaluation.
9
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
The following exhibits are included with this quarterly filing. Those marked
with an asterisk and required to be filed hereunder, are incorporated by
reference and can be found in their entirety in our original Form SB-2
Registration Statement, filed under SEC File Number 333-138217, at the SEC
website at www.sec.gov:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Sec. 302 Certification of Principal Executive Officer
31.2 Sec. 302 Certification of Principal Financial Officer
32.1 Sec. 906 Certification of Principal Executive Officer
32.2 Sec. 906 Certification of Principal Financial Officer
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on July 12, 2010.
Sopac Cellular Solutions, Inc.
/s/ Ezra E. Ezra
---------------------------------------------------------
By: Ezra E. Ezra
(Principal Executive Officer, Principal Financial Officer,
Principal Accounting Officer & Sole Director)
10