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 AND EXCHANGE ACT OF 1934 |
FOR THE QUARTER ENDED JUNE 30, 2006
| ¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT |
COMMISSION FILE NUMBER: 0-27382
CAPITAL MARKETS TECHNOLOGIES, INC.
(Formerly Known as Fintech Group, Inc.; formerly known as Gentech Pharma, Inc.; formerly known as Netmaximizer.com, Inc. and formerly known as RLN Realty Associates, Inc.)
(Name of small business issuer as specified in its charter)
| FLORIDA | 65-0907899 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 200 South Michigan, 21st Floor CHICAGO, IL |
60604 | |
| (Address of principal executive offices) | (Zip Code) |
Issuer’s Telephone Number: (312) 533-0230
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 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 ¨ No x
APPLICABLE ONLY TO CORPORATE ISSUERS
COMMON STOCK, PAR VALUE $.001
(Title of each class)
Number of shares of the issuer’s common stock, par value $.001, outstanding as of November 14, 2007: 15,757,617 shares.
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes x No ¨
DOCUMENTS INCORPORATED BY REFERENCE: none
Transitional Small Business Disclosure Format YES ¨ NO x
CAPITAL MARKETS TECHNOLOGIES, INC.
INDEX TO FORM 10-QSB
| Page Number | ||||
| PART I – FINANCIAL INFORMATION | ||||
| Item 1. | Financial Statements | |||
| 3 | ||||
| Statements of Operations: |
||||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| 7 | ||||
| 8-9 | ||||
| Item 2. | Management Discussion & Analysis | 10-11 | ||
| Item 3. | Controls and Procedures | 11 | ||
| PART II – OTHER INFORMATION | ||||
| Item 1. | Legal Proceedings | 12 | ||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 12 | ||
| Item 3. | Defaults Upon Senior Securities | 12 | ||
| Item 4. | Submission of Matters to a Vote of Security Holders | 12 | ||
| Item 5. | Other Information | 12 | ||
| Item 6. | Exhibits | 12 | ||
2
CAPITAL MARKETS TECHNOLOGIES, INC.
(Development Stage Company)
BALANCE SHEET
As of June 30, 2006 and December 31, 2005
| June 30, 2006 |
Dec. 31 2005 |
|||||||
| ASSETS |
||||||||
| CURRENT ASSETS |
||||||||
| Cash |
$ | — | $ | — | ||||
| Total Current Assets |
— | $ | — | |||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY |
||||||||
| CURRENT LIABILITIES |
||||||||
| Notes and accrued interest payable |
$ | 64,692 | $ | 63,273 | ||||
| Account payable |
557,310 | 557,310 | ||||||
| Total Current Liabilities |
622,002 | 620,583 | ||||||
| STOCKHOLDERS’ DEFICIENCY |
||||||||
| Preferred stock |
||||||||
| 10,000,000 shares authorized at $.001 par value; none outstanding |
— | — | ||||||
| Common stock |
||||||||
| 250,000,000 shares authorized at $.001 par value; 81,117 shares issued and outstanding |
30,081 | 81 | ||||||
| Capital in excess of par value |
11,772,539 | 11,772,539 | ||||||
| Accumulated deficit during development stage |
(12,424,622 | ) | (12,390,203 | ) | ||||
| Total Stockholders’ Deficiency |
(622,002 | ) | (620,583 | ) | ||||
| $ | — | $ | — | |||||
The accompanying notes are an integral part of these financial statements.
3
CA PITAL MARKETS TECHNOLOGIES, INC.
(Development Stage Company)
STATEMENTS OF OPERATIONS
For the three months ended June 30, 2006 and 2005
| June 30, 2006 |
June 30, 2005 |
|||||||
| REVENUES |
$ | — | $ | — | ||||
| EXPENSES |
||||||||
| Administrative |
30,000 | — | ||||||
| 30,000 | — | |||||||
| NET OPERATING LOSS FROM OPERATIONS |
(30,000 | ) | — | |||||
| OTHER INCOME (LOSSES) |
||||||||
| Interest expense |
(709 | ) | (709 | ) | ||||
| NET LOSS |
$ | (30,709 | ) | $ | (709 | ) | ||
| NET LOSS PER COMMON SHARE |
||||||||
| Basic and diluted |
$ | (0.00 | ) | $ | (0.01 | ) | ||
| AVERAGE OUTSTANDING SHARES—stated in 1,000’s |
||||||||
| Basic |
30,081 | 81 | ||||||
The accompanying notes are an integral part of these financial statements.
4
CAPITAL MARKETS TECHNOLOGIES, INC.
(Development Stage Company)
STATEMENTS OF OPERATIONS
For the six months ended June 30, 2006 and 2005
| June 30, 2006 |
June 30, 2005 |
|||||||
| REVENUES |
$ | — | $ | — | ||||
| EXPENSES |
||||||||
| Administrative |
30,000 | — | ||||||
| 30,000 | — | |||||||
| NET OPERATING LOSS FROM OPERATIONS |
(30,000 | ) | — | |||||
| OTHER INCOME (LOSSES) |
||||||||
| Interest expense |
(1,419 | ) | (1,419 | ) | ||||
| NET LOSS |
$ | (31,419 | ) | $ | (1,419 | ) | ||
| NET LOSS PER COMMON SHARE |
||||||||
| Basic and diluted |
$ | (0.00 | ) | $ | (0.02 | ) | ||
| AVERAGE OUTSTANDING SHARES—stated in 1,000’s |
||||||||
| Basic |
30,081 | 81 | ||||||
The accompanying notes are an integral part of these financial statements.
5
CAPITAL MARKETS TECHNOLOGIES, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(Development Stage Company)
Period June 29, 1995 (date of inception) to June 30, 2006
| Common Stock | Capital in Par Value |
Accumulated Deficit |
||||||||||
| Shares | Amount | |||||||||||
| Balance June 29, 1995 |
— | $ | — | $ | — | $ | — | |||||
| Issuance of common stock for services |
6,000 | 6 | 4,994 | — | ||||||||
| Net loss for period ended December 31, 1995 |
— | — | — | (5,000 | ) | |||||||
| Net loss for year ended December 31, 1996 |
— | — | — | — | ||||||||
| Net loss for year ended December 31, 1997 |
— | — | — | — | ||||||||
| Net loss for year ended December 31, 1998 |
— | — | — | (900 | ) | |||||||
| Issuance of common stock for cash |
72,163 | 72 | 308,928 | — | ||||||||
| Issuance of common stock for services |
133 | — | 288,000 | |||||||||
| Options granted for services |
— | — | 6,466,293 | — | ||||||||
| Contributions to capital—expenses |
— | — | 174,000 | — | ||||||||
| Net loss for year ended December 31, 1999 |
— | — | — | (6,819,904 | ) | |||||||
| Issuance of common stock for services |
100 | — | 200,000 | — | ||||||||
| Amortize deferred compensation discount on note payable—related party |
— | — | 1,980,939 | — | ||||||||
| Net loss for year ended December 31, 2000 |
— | — | — | (3,323,139 | ) | |||||||
| Issuance of common stock for cash |
2,174 | 2 | 1,937,386 | — | ||||||||
| Issuance of common stock for expenses |
173 | — | 132,000 | — | ||||||||
| Issuance of common stock for cash |
374 | 1 | 279,999 | — | ||||||||
| Net loss for year ended December 31, 2001 |
— | — | — | (2,074,543 | ) | |||||||
| Net loss for year ended December 31, 2002 |
— | — | — | (106,444 | ) | |||||||
| Net loss for year ended December 31, 2003 |
— | — | — | (57,597 | ) | |||||||
| Net loss for year ended December 31, 2004 |
— | — | — | (2,838 | ) | |||||||
| Net loss for year ended December 31, 2005 |
— | — | — | (2,838 | ) | |||||||
| Balance December 31, 2005 |
81,117 | $ | 81 | $ | 11,772,539 | $ | (12,393,203 | ) | ||||
| Issuance of common stock for services |
30,000,000 | 30,000 | — | — | ||||||||
| Net loss for period ended June 30, 2006 |
— | — | — | (31,419 | ) | |||||||
| Balance June 30, 2006 |
30,081,117 | $ | 30,081 | $ | 11,791,979 | $ | (12,424,622 | ) | ||||
The accompanying notes are an integral part of these financial statements.
6
CAPITAL MARKETS TECHNOLOGIES, INC.
(Development Stage Company)
STATEMENT OF CASH FLOWS
For the six months ended June 30, 2006 and 2005
| June 30, 2006 |
June 30, 2005 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net loss |
$ | (31,419 | ) | $ | (1,419 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities |
||||||||
| Changes in current assets and liabilities |
1,419 | 1,419 | ||||||
| Issuance of stock for services |
30,000 | — | ||||||
| Net Cash Used in Operations |
— | — | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
| Purchase and transfer of equipment and web site |
— | — | ||||||
| Net Increase (Decrease) in Cash |
— | — | ||||||
| Cash at Beginning of Period |
— | — | ||||||
| Cash at End of Period |
$ | — | $ | — | ||||
The accompanying notes are an integral part of these financial statements
7
CAPITAL MARKETS TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
1. ORGANIZATION
The Company was incorporated under the laws of the State of Florida on June 29, 1995 with the name “RLN Realty Associates, Inc” with authorized common shares of 7,500 with a par value of $1.00. The Company had several name changes and authorized common share changes and on September 14, 2006 changed its name to “Fintech Group, Inc.” and changed its authorized common shares to 250,000,000 at a par value of $.001 and added authorized preferred shares of 10,000,000 at par value of $.001. The terms of the preferred shares have not been determined. On February 7, 2007 the name was changed to “Capital Markets Technologies, Inc.”
The principal business activity of the corporation was the development of an e-commerce web site and an e-commerce virtual department store. During 2001 the activity was discontinued and its remaining assets and related liabilities were transferred and the Company has remained inactive since that date.
The Company is a development stage company.
After 2001, the Company has been engaged in seeking viable business opportunities.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of accounting.
Dividend Policy
The Company has not adopted a policy regarding payment of dividends.
Income Taxes
The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.
On June 30, 2006, the Company did not have a net operating loss available for carry forward.
Financial Instruments
The carrying amounts of financial instruments are considered by management to be their estimated fair values due to their short term maturities.
Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report.
Concentration of Credit Risk
There are no financial instruments that potentially subject the Company to significant concentration of credit risks.
Revenue Recognition
Revenue will be recognized on the sale and delivery of a product or the completion of services provided.
8
CAPITAL MARKETS TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (continued)
Advertising and Market Development
The company expenses advertising and market development costs as incurred.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.
Other Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.
3. ACCOUNTS PAYABLE
The Statute of Limitations has run on a substantial part of the accounts payable.
4. CAPITAL STOCK
During 2006 the Company issued 30,000,000 restricted common shares for services to control parties.
On November 2, 2005 the Company completed a reverse common stock split of one share for 500 outstanding shares. This report has been prepared showing post split shares from inception.
5. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officers-directors have not acquired any shares of the Company’s outstanding common stock, however, control parties have acquired 30,000,000 shares during 2006.
6. GOING CONCERN
The Company does not have the necessary working capital to service its debt and for its planned activity, which raises substantial doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through settlement of its debt by the issuance of common shares, loans from related parties, and equity funding which will enable the Company to conduct operations for the coming year.
9
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Management’s discussion and analysis contains statements that are forward-looking and involve risks and uncertainties. Several factors could cause actual results to differ materially from those described in such forward-looking statements. This includes the Company’s ability to manage growth, involvement in litigation, competition, ongoing contractual relationships, dependence upon key personnel, changes in customer demand for product and services, and the adoption of new, or changes in, accounting policies, practices and estimates and the application of such policies, practices, and estimates, and federal and state governmental regulation.
The following financial data should be read in conjunction with the financial statements of Capital Markets Technologies, Inc. related notes and other financial information appearing elsewhere in this report.
OVERVIEW
Capital Markets Technologies, Inc. (formerly known as Fintech Group, Inc.; Gentech Pharma, Inc.; Netmaximizer.com, Inc.;) (“CMT”) was incorporated in the State of Florida on June 29, 1995 under the name “RLN Realty Associates, Inc.” During 2002, we closed our business operations due to lack of funding.
NET REVENUES
We have had no revenues since 2002 when we closed our business operations.
SELLING AND PROMOTION
We have had no selling and promotion expense since we closed our business operations.
OFFICE AND ADMINISTRATION
In 2002, we closed our business operations.
GAIN ON EXTINGUISHMENT OF DEBT
In 2002, we closed our business operations due to lack of funding
NET LOSS
Our net loss for the quarter ended June 30, 2006 was $31,419 as a result of interest expense and management services.
NET LOSS PER SHARE
Net loss per share was $0.00 for the six months ended June 30, 2006.
LIQUIDITY AND CAPITAL RESOURCES
The company closed our business operations due to lack of funding.
In the past we were an e-commerce department store that sold a wide variety of consumer goods to members of affinity groups, paying a commission on those sales to the affinity group. In 2002, we ceased our business operations due to lack of funding.
During 2006, we changed our name to Fintech Group, Inc. and subsequently to Capital Markets Technologies, Inc. to reflect our current focus. We are a financial technology solutions company providing innovative solutions to global financial institutions and major corporations. The company currently is operating in Chicago, and with its proposed acquisition of Simplex Consulting will operate out of London, England as well. We were founded initially to capitalize on the estimated US$30 billion financial technology market opportunity which management believes exists within Europe between 2007 – 2010. Our management has an aggressive acquisitions strategy focusing on companies which are well positioned to take advantage of the paradigm shift occurring in the financial technology markets under the European Union regulatory directives: MiFID (“Markets in Financial Instruments Directive”) and SEPA (Single Euro Payments Area”).
10
Other Considerations
There are numerous factors that affect the business and the results of its operations. Sources of these factors include general economic and business conditions, federal and state regulation of business activities, the level of demand for product services, the level and intensity of competition and the ability to develop new services based on new or evolving technology and the market’s acceptance of those new services, the Company’s ability to timely and effectively manage periodic product transitions, the services, customer and geographic sales mix of any particular period, and our ability to continue to improve our infrastructure including personnel and systems to keep pace with the Company’s anticipated rapid growth.
| Item 3. | Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Accounting Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Disclosure controls and procedures are the controls and other procedures that we designed to ensure that we record, process, summarize and report in a timely manner the information we must disclose in reports that we file with or submit to the Securities and Exchange Commission under the Exchange Act. Based on this evaluation, our Chief Executive Officer and our Chief Accounting Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control over Financial Reporting.
During the Quarter ended June 30, 2006, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules, regulations and related forms, and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
As of June 30, 2006, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
11
| Item 1. | Legal Proceedings. |
There are no material currently pending legal proceedings to which the Company is a party and, to the Company’s knowledge, no proceedings are contemplated against the Company.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
| • | The Company issued 30,000,000 restricted shares during April 2006 for $30,000 of management services performed. |
| Item 3. | Defaults Upon Senior Securities. |
There were no defaults upon senior securities during the period covered by this report.
| Item 4. | Submission of Matters to a Vote of Security Holders. |
No matters have been submitted to a vote of security holders during the period covered by this report.
| Item 5. | Other Information. |
There is no information with respect to which information is not otherwise called for by this form.
| Item 6. | Exhibits. |
| Exhibit No. | Description | |
| 31.1 | Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2006. | |
| 31.2 | Certification of the Company’s Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2006. | |
| 32.1 | Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. | |
| 32.2 | Certification of the Company’s Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. | |
12
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.
| CAPITAL MARKETS TECHNOLOGIES, INC. | ||||
| (Registrant) | ||||
| November 14, 2007 | By: | /s/ Hagop J. Bouroudjian | ||
| Hagop J. Bouroudjian | ||||
| CEO | ||||
| /s/ Pasquale Ceci | ||||
| Pasquale Ceci | ||||
| Principal Accounting Officer | ||||
13
CAPITAL MARKETS TECHNOLOGIES, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
| Exhibit | Description | |
| 31.1 | Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2006. | |
| 31.2 | Certification of the Company’s Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2006. | |
| 32.1 | Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. | |
| 32.2 | Certification of the Company’s Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. | |
14