UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from ________ to __________
Commission file number: 000-28481
ANGLOTAJIK MINERALS INC.
------------------------------------------------------------------
(Exact name of small business as specified in its charter)
NEVADA 86-0891931
-------------------------------- -------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
11400 West Olympic Boulevard, Suite 200, Los Angeles, CA 90064
-----------------------------------------------------------------------
(Address of principal executive offices)
(310) 445-8819
----------------------------
(Issuer's telephone number)
13636 Ventura Blvd., #252, Sherman Oaks, California 91432
------------------------------------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
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 past 90 days. Yes |X| No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be file
by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by the court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Issued and outstanding as of April 30, 2003: 19,120,458 shares common
stock, $0.001 par value
Transitional Small Business Disclosure Format (Check one): Yes [ ] No |X|
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
The accompanying unaudited financial statements of Anglotajik Minerals, Inc.
(the "Company"), have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, these financial statements may not
include all of the information and disclosures required by generally accepted
accounting principles for complete financial statements. These financial
statements should be read in conjunction with the audited financial statements
and the notes thereto for the fiscal year ending December, 2003. In the opinion
of management, the accompanying unaudited financial statements contain all
adjustments necessary to fairly present the Company's financial position as of
March 31, 2004 and its results of operations and its cash flows for the three
months ended March 31, 2004.
ANGLOTAJIK MINERALS, INC.
FINANCIAL STATEMENTS
March 31, 2004
(Unaudited)
Anglotajik Minerals, Inc.
(A Company in the Exploration Stage)
Balance Sheets
(Unaudited)
March 31, December 31,
2004 2003
------------------ -----------------
ASSETS
Current Assets
Cash $ - $ 594
------------------ -----------------
Total current assets - 594
------------------ -----------------
Total assets $ - $ 594
================== =================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Bank overdraft $ 28,839 $ 28,343
Accounts payable 360,106 360,106
Accrued expenses 238,155 183,155
Interest payable 5,330 4,692
Note payable - related party 477,520 457,535
------------------ -----------------
Total current and total liabilities 1,109,950 1,033,831
------------------ -----------------
Stockholders' Deficit
Common stock, $.001 par value, 300,000,000 shares
authorized, 19,120,458 shares issued and outstanding 19,120 19,120
Additional paid-in capital 4,121,063 4,121,063
Deficit accumulated during the exploration stage (5,250,133) (5,173,420)
------------------ -----------------
Total Stockholders' Equity (1,109,950) (1,033,237)
------------------ -----------------
Total liabilities and stockholders' equity $ - $ 594
================== =================
The accompanying notes are an integral part of these financial statements.
Anglotajik Minerals, Inc.
(A Company in the Exploration Stage)
Statements of Operations
Cumulative
During the
Exploration For the Three For the Three
Stage Months Ended Months Ended
March 31, March 31, March 31,
2004 2004 2003
------------------ ----------------- ------------------
Revenue $ - $ - $ -
Operating Costs and Expenses
Operating and administrative expenses $ 5,096,984 $ 76,075 $ 326,408
Depreciation expense 5,562 - -
Amortization expense 16,500 - -
------------------ ----------------- ------------------
Total operating costs and expenses 5,119,046 76,075 326,408
Non-operating Income
Dividend income 1,212 - -
Gain on cancellation of contracts 90,604 - -
Loss on disposal of assets (59,641) - -
------------------ ----------------- ------------------
Total non-operating income 32,175 - -
------------------ ----------------- ------------------
Interest expense (163,262) (638) -
Net loss before income taxes (5,250,133) (76,713) (326,408)
------------------ ----------------- ------------------
Provision for income taxes - - -
------------------ ----------------- ------------------
Net loss $ (5,250,133) $ (76,713) $ (326,408)
================== ================= ==================
Loss per common share - basic $ (3.92) $ - $ (0.49)
================== ================= ==================
Weighted average common shares - basic 1,340,170 19,120,458 667,932
================== ================= ==================
The accompanying notes are an integral part of these financial statements.
Anglotajik Minerals, Inc.
(A Company in the Exploration Stage)
Statements of Cash Flows
(Unaudited)
Cumulative
During the
Exploration For the Three For the Three
Stage Months Ended Months Ended
March 31, March 31, March 31,
2004 2004 2003
------------------ ----------------- ------------------
Cash Flows from Operating Activities
Net loss $ (5,250,133) $ (76,713) $ (326,408)
Adjustments to reconcile net loss
to net cash used in operating activities:
Amortization and depreciation expenses 22,062 - -
Deferred compensation expense 400,000 - 20,000
Gain on cancellation of amortization (16,500) - -
Loss on disposal of assets 59,641 - -
Decrease in deposits 14,925 - -
Decrease in prepaid expense 796,250 - 261,333
Increase (decrease) in accounts payable 424,577 496 -
Increase (decrease) in related party payable 553,565 - 34,800
Increase (decrease) in wages payable 214,964 - -
Increase in interest payable 163,588 638 -
Increase in accrued expenses 95,918 55,000 5,784
Expenses paid by issuance of common stock
subscribed 45,000 - -
Expenses paid by issuance of common stock 1,125,378 - -
------------------ ----------------- ------------------
Net cash used in operating activities (1,350,765) (20,579) (4,491)
------------------ ----------------- ------------------
Cash Flows from Investing Activities
Deposits paid (14,925) - -
Purchase of fixed assets (65,203) - -
------------------ ----------------- ------------------
Net cash used in investing activities (80,128) - -
------------------ ----------------- ------------------
(CONTINUED)
The accompanying notes are an integral part of these financial statements.
Anglotajik Minerals, Inc.
(A Company in the Exploration Stage)
Statements of Cash Flows
(CONTINUED)
Cumulative
During the
Exploration For the Three For the Period
Stage Months Ended Months Ended
March 31, March 31, March 31,
2004 2004 2003
------------------ ----------------- -----------------
Cash Flows from Financing Activities
Proceeds received from issuance of stock $ 454,635 $ - $ -
Proceeds received from officer advances 113,171 19,985 -
Proceeds from bank overdraft 30,551 - -
Payment on bank overdraft (9,915) - -
Payment of officers advances (5,474) - -
Payment on line of credit (22,574) - -
Proceeds received from line of credit 870,499 - -
------------------ ----------------- -----------------
Net cash provided by financing activities 1,430,893 19,985 -
------------------ ----------------- -----------------
Net increase in cash - (594) (4,491)
Cash and cash equivalents at (Inception)
at March 31, 2004 and 2003 - 594 5,105
------------------ ----------------- -----------------
Cash and cash equivalents at
December 31, 2003 and 2002 $ - $ - $ 614
================== ================= =================
Supplementary Information
During the years ended December 31, 2003 and 2002, no amounts were paid for
either interest or income taxes.
On October 13, 2003, the company issued 1,000,000 common shares for legal
services valued at $370,000.
In August 2003 the company issued 16,999,984 common shares to shareholders in
exchange for interest payable of $150,519.
In July 2003 the Company issued 286,713 common shares to the President to
relieve an advance of $48,773 and set up a receivable of $51,227. Also in July
2003 a $100,000 signing bonus was paid via the issuance of 279,720 common
shares.
In May 2003 the Company issued 2,797 common shares in exchange for consulting
expenses of $13,500. Also in May 2003 the Company issued 13,986 common shares to
the President pursuant to a stock option agreement, to relieve $100,000 in
officer advances and consulting fees payable.
In April 2003 the mining rights contract and the related shares were cancelled.
In June 2002 the Company issued 20,797 shares of its common stock for consulting
services of $75,000.
Anglotajik Minerals, Inc.
(A Company in the Exploration Stage)
Notes to the Financial Statements
NOTE 1 - Summary of Significant Accounting Policies
a.Organization
Anglotajik Minerals, Inc. (the "Company") was incorporated in the State of
Nevada in August 1997, under the name Meximed Industries, Inc. In January
1999 the Company changed its name to Digital Video Display Technology
Corporation and in July 2001 to Iconet, Inc. With new management in the
middle of 2003 the company again changed its name to Anglotajik Minerals,
Inc. The Company is considered to be in the exploration stage as its
operations principally involve research and exploration, market analysis, and
other business planning activities, and no revenue has been generated from
its business activities.
These financial statements have been prepared assuming that the Company will
continue as a going concern. The Company is currently in the exploration
stage and existing cash and available credit are insufficient to fund the
Company's cash flow needs for the next year. The Company plans to raise
additional capital through private placements. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ
from those estimates.
b.Cash and cash equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents. As of December 31, 2003, and 2002, the Company held no
cash equivalents.
c.Fair Value of Financial Instruments
Unless otherwise indicated, the fair values of all reported assets and
liabilities which represent financial instruments (none of which are held for
trading purposes) approximate the carrying values of such amounts.
d.Provision for Income taxes
No provision for income taxes has been recorded due to net operating loss
carryforwards totaling over $5.2 million that will be offset against future
taxable income. Thes NOL carryforwards begin to expire in the year 2017. No
tax benefit has been reported in the financial statements because the Company
believes there is a 50% or greater chance the carryforward will expire
unused.
The deferred tax asset and the valuation account is as follows at March 31,
2004 and December 31, 2003:
March 31, December 31,
2004 2003
------------------ ------------------
Deferred tax asset:
Deferred noncurrent tax asset $ 1,837,547 $ 1,787,725
Valuation allowance (1,837,547) (1,787,725)
------------------ ------------------
Total - -
=================== ==================
e. 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 amounts reported in the financial statements and accompanying
notes. In these financial statements, assets, liabilities and earnings
involve extensive reliance on managements estimates. Actual results could
differ from those estimates.
f. Earning (loss) per share
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards (SFAS) No. 128 Earnings Per Share. Basic loss per share
for each period is computed by dividing net loss by the weighted average
number of shares of common stock outstanding during the period. Diluted loss
per share is computed in a manner consistent with that of basic loss per
share while giving effect to all potentially dilutive common shares that were
outstanding during the period. The number of additional shares is calculated
by assuming that outstanding stock options were exercised and that the
proceeds from such exercises were used to acquire shares of common stock at
the average market price during the reporting period. The weighted averages
for the years ended December 31, 2003, and 2002, and from inception reflect
the reverse stock split of 1:200 that was approved by the board of directors
in July 2001, the 1:143 reverse stock split effective July 16, 2003 and the
2:1 forward split on September 15, 2003.
NOTE 2 - New Technical Pronouncements
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of FAS 123. SFAS No. 148
amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide
alternative methods of transition for an entity that voluntarily changes to
the fair value based method of accounting for stock-based employee
compensation. It also amends the disclosure provisions of SFAS No. 123 to
require prominent disclosure about the effects on reported net income of an
entity's accounting policy decisions with respect to stock-based employee
compensation. This Statement also amends APB Opinion No. 28, Interim
Financial Reporting, to require disclosure about those effects in interim
financial information. SFAS No. 148 is effective for annual and interim
periods beginning after December 15, 2002. The adoption of the interim
disclosure provisions of SFAS No. 148 did not have an impact on the Company's
financial position, results of operations or cash flows. The Company is
currently evaluating whether to adopt the fair value based method of
accounting for stock-based employee compensation in accordance with SFAS No.
148 and its resulting impact on the Company's financial statements.
In January 2003, the Emerging Issues Task Force ("EITF") issued EITF Issue
No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables.
This consensus addresses certain aspects of accounting by a vendor for
arrangements under which it will perform multiple revenue-generating
activities, specifically, how to determine whether an arrangement involving
multiple deliverables contains more than one unit of accounting. EITF Issue
No. 00-21 is effective for revenue arrangements entered into in fiscal
periods beginning after June 15, 2003, or entities may elect to report the
change in accounting as a cumulative-effect adjustment. The adoption of EITF
Issue No. 00-21 did not have a material impact on the Company's financial
statements.
In January 2003, the FASB issued Interpretation ("FIN") No. 46, Consolidation
of Variable Interest Entities. Until this interpretation, a company generally
included another entity in its consolidated financial statements only if it
controlled the entity through voting interests. FIN No. 46 requires a
variable interest entity, as defined, to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable
interest entity's activities or entitled to receive a majority of the
entity's residual returns. FIN No. 46 is effective for reporting periods
ending after December 15, 2003. The adoption of FIN No. 46 did not have an
impact on the Company's financial statements.
In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities, which amends and clarifies
accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under
SFAS No. 133. SFAS No. 149 is effective for contracts entered into or
modified after June 30, 2003 and for hedging relationships designated after
June 30, 2003. The adoption of SFAS No. 149 will not have an impact on the
Company's financial statements.
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150
changes the accounting guidance for certain financial instruments that, under
previous guidance, could be classified as equity or "mezzanine" equity by now
requiring those instruments to be reported as liabilities. SFAS No. 150 also
requires disclosure relating to the terms of those instruments and settlement
alternatives. SFAS No. 150 is generally effective for all financial
instruments entered into or modified after May 31, 2003, and is otherwise
effective at the beginning of the first interim period beginning after June
15, 2003. The adoption of SFAS No. 150 did not have an impact on the
Company's financial statements.
In December 2003, the SEC issued SAB No. 104. SAB No. 104 revises or rescinds
portions of the interpretative guidance included in Topic 13 of the
codification of staff accounting bulletins in order to make this interpretive
guidance consistent with current authoritative accounting and auditing
guidance and SEC rules and regulations. It also rescinds the Revenue
Recognition in Financial Statements Frequently Asked Questions and Answers
document issued in conjunction with Topic 13. Selected portions of that
document have been incorporated into Topic 13. The adoption of SAB No. 104 in
December 2003 did not have an impact on the Company's financial position,
results of operations or cash flows.
NOTE 3 - Stock Options
The Company applies APB Opinion 25 and related interpretations in accounting
for its stock option plans. No compensation cost has been recognized during
the period ended March 31, 2004. Deferred compensation is recorded only when
the market price exceeds the option price at the grant date. Compensation is
recorded using the straight-line method over the vesting period.
In September 2001 the Company issued an option to purchase 13,986 shares of
common stock at $0.10 per share to a Director of the Company. The Company
accrued $400,000 in deferred compensation costs, as the option price at the
grant date was less than the market price. The option expires in September
2006. The compensation cost will be accrued over the vesting period.
Compensation costs of $0 and $280,000 were included in the statements of
operation for the period ended March 31, 2004 and the year ended December 31,
2003, respectively.
In September 2003 the Company issued an option to purchase 699,301 shares of
common stock at $0.21 per share to a Director of the Company. The Company did
not accrue any deferred compensation costs, as the option price was greater
that the market price on the date of grant. The option expires in July 2011.
Had compensation cost for the Company's stock-based compensation plan been
determined based on the fair value at the grant date for awards under those
plans consistent with the method of FASB Statement 123, the Company's net
loss and loss per share would have been increased to the pro forma amounts
indicated below:
March 31, December 31,
2004 2003
------------------ ------------------
Net loss:
As reported $ (76,713) $ 1,386,188
Pro forma $ (90,786) $ 1,388,380
Loss per share:
As reported $ - $ 0.17
Pro forma $ - $ 0.17
The Company has determined the pro-forma information as if the Company had
accounted for the stock option granted on July 1, 2003, under the fair value
method of SFAS 123. The Black-Scholes option-pricing model was used with a
risk free interest rate of 4.67% for March 31, 2004 and December 31, 2003;
dividend yield of 0.0% for March 31, 2004 and December 31, 2003; a volatility
factor of 214% and 182% for March 31, 2004 and December 31, 2003
respectively, and an expected life of 8 years. The fair value of the stock
options granted in July 2003 is $0.01 per share. If the Company had
recognized deferred compensation cost based on the fair value method, it
would have increased deferred compensation by $14,073 for the period ended
March 31, 2004 and $6,577 for the year ended December 31, 2003. It would also
have increased the compensation cost for the period ended March 31, 2004 by
$14,073 and for the year ended December 31, 2003 by $2,192.
NOTE 4 - Related Party Transactions
During the years ended December 31, 2003, and 2002, the Company charged
$37,500, and $276,084 respectively, to consulting expense, and $0 and
$80,000, respectively, to legal fees for services rendered by directors or
stockholders of the Company. Outstanding balances payable for consulting and
legal fees to these related parties were $450,465 and $481,065 at December
31, 2003, and 2002, respectively.
The President of Anglotajik Minerals, Inc. advanced the Company funds to
pay expenses. During the year ended December 31, 2003, travel and other
office expenses of $62,073 were paid by an officer.
In May 2003 the Company issued 13,986 shares of its common stock to the
officer pursuant to a stock option dated September 1, 2001. This issuance
relieved officer advances payable and consulting fees payable by $31,900 and
$68,100, respectively.
In July 2003 the Board of Directors authorized the issuance of 286,713
restricted common shares to the President to relieve the shareholder advance
of $48,773 and for a receivable of $51,227 from the President.
During the third quarter of 2003, the President was the only member of the
Board of Directors. In July 2003 the Company issued an option to purchase
699,301 shares of common stock at $0.21 per share to a Director of the
Company. Also in July 2003 a signing bonus of $100,000 was paid to the
President via the issuance of 279,720 shares of restricted common stock.
Wages payable to the President of $180,000 for 3rd and 4th quarter of 2003
and 1st quarter of 2004 were accrued.
During the year ended December 31, 2003, the Company issued a total of
16,999,984 common shares to each of the shareholders to whom interest was due
on the old line of credit. The issuance of these shares relieved the entire
outstanding payable of $150,519.
NOTE 5 - Stockholders' Equity
In July 2003 the Board of Directors authorized the issuance of 286,713
restricted common shares to the President in exchange for a shareholder
advance of $48,773 and a receivable from the President of $51,227. The
President is the only member of the Board of Directors. Also in July 2003 a
signing bonus of $100,000 was paid to the President via the issuance of
279,720 shares of restricted common stock.
In July 2003 a reverse stock split of 1:143 was authorized by the Board of
Directors, and the number of authorized shares was increased to 300 million.
The financial statements have been retroactively restated to reflect the
reverse stock split.
In August 2003 the Company issued 16,999,984 common shares to the
shareholders to whom interest was due on the line of credit. The issuance of
these shares relieved the entire outstanding payable of $150,519.
In September 2003 a 2:1 forward stock split was authorized by the Board of
Directors. The financial statements have been retroactively restated to
reflect the forward stock split.
On October 13, 2003 the board of directors authorized the issuance of
1,000,000 shares of restricted common stock to a law firm for services valued
at $370,000.
NOTE 6 - Commitments and Contingencies
There are various claims and lawsuits pending against the Company arising in
the normal course of the Company's business. Although the amount of liability
at December 31, 2003, cannot be ascertained, management is of the opinion
that any resulting liability will not materially affect the Company's
financial position.
Merrill Lynch Canada Inc., has filed suit against the Company regarding a
dispute related to the sale of its restricted common stock by an unrelated
third party to Merrill Lynch. At this time the Company does not know if it
will sustain a loss, or the amount of the loss.
The Company settled an action by a bank regarding an overdraft. The
settlement carried an interest rate of 9.0% and twelve monthly payments of
$3,321. The Company made three payments before defaulting on this settlement.
The amount due as of March 31, 2004 is $28,343. Related interest of $5,330
has also been accrued by the Company.
Item 2 - Management's Discussion and Analysis or Plan of Operation
NOTE: The following discussion and analysis should be read in conjunction with
the Company's Interim Financial Statements (unaudited) and the Notes to the
Financial Statements for the nine month period ended September 30, 2003.
Uncertainty as to Certain Accounts Payable
We have reviewed, and continue to review our corporate files, books and records,
but remain unable to conclusively identify a basis or certain amount of our
Accounts Payable and for the Related Parties Payable to previous management
carried on our books. We are continuing to attempt to locate invoices or other
documentation regarding those payables.
Three Months Ended March 31, 2004 versus 2003
Operating expenses for the period dropped significantly to $76,075 in 2004
compared to $326,408 for the comparable period in 2003, owing to extraordinary
legal fees incurred in the prior year period. As the company had no cash
resources, expenses were funded by issuance of common stock, by loans
subsequently settled by the issuance of our common stock, and by an increase in
the Related Party Payable account.
Plan of Operation
We currently have no cash or sources of cash to fund operations. We are
attempting to arrange an equity financing in the amount of $3,000,000 to
$6,000,000 to fund our proposed activities in mineral exploration in the
Republic of Tajikistan, although we have received no commitments as yet. Our
ability to continue in the mineral exploration business will depend upon our
success in raising capital through stock sales or some other means, of which we
cannot be certain.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
There are various claims and lawsuits pending against the Company arising in the
normal course of the Company's business. Although the amount of liability at
September 30, 2003, cannot be ascertained, management is of the opinion that any
resulting liability will not materially affect the Company's financial position.
See Note 6 to the Interim Financial Statements.
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
We filed the following Current Reports on Form 8-K during the period:
8-K February 13, 2004 Filed February 24, 2004
8-K/A February 13, 2004 Filed February 25, 2004
8-K/A February 13, 2004 Filed April 7, 2004
The following exhibits are filed herewith:
Ex. 31 Certification of CEO / CFO
Ex. 32 Certification of CEO / CFO
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.
ANGLOTAJIK MINERALS INC.
May 18, 2004 /s/ Matthew Markin
------------------ -----------------------------------------
Dated President, Acting Chief Financial Officer