UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission file number 333-141875
IGEN NETWORKS CORP.
NEVADA 20-5879021
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
8430 WEST LAKE MEAD BLVD.
SUITE 100, LAS VEGAS, NV 89128
(Address of principal executive offices)
(702) 308-9502
(Issuer's telephone number)
SYNC2 ENTERTAINMENT CORPORATION
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (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 [ ]
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" and "smaller
reporting company" in rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
As of October 31, 2009 the Company had 854,700 issued and outstanding shares of
common stock.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
PART I -- FINANCIAL INFORMATION
The accompanying interim unaudited financial statements of iGen Networks Corp.
(a Nevada corporation) are condensed and, therefore, do not include all
disclosures normally required by accounting principles generally accepted in the
United States of America. These statements should be read in conjunction with
the Company's most recent annual financial statements for the year ended
December 31, 2008 included in a Form 10-K filed with the U.S. Securities and
Exchange Commission ("SEC") on April 15, 2009. In the opinion of management, all
adjustments necessary for a fair presentation have been included in the
accompanying interim financial statements and consist of only normal recurring
adjustments. The results of operations presented in the accompanying interim
financial statements for the nine months ended September 30, 2009 are not
necessarily indicative of the operating results that may be expected for the
full year ending December 31, 2009.
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IGEN NETWORKS CORP.
(formerly SYNC2 ENTERTAINMENT CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
September 30, December 31,
2009 2008
--------- ---------
(unaudited)
ASSETS
Current Assets
Cash $ 33 $ 147
--------- ---------
Total current assets 33 147
--------- ---------
TOTAL ASSETS $ 33 $ 147
========= =========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 332,000 $ 32,911
--------- ---------
TOTAL LIABILITIES 332,000 32,911
--------- ---------
Stockholders' Equity (Deficit)
Capital stock:
375,000,000 common shares authorized, $0.001 par value;
854,700 common shares issued and outstanding at
September 30, 2009 and December 31, 2008 855 855
Additional paid-in capital 60,195 60,195
Deficit accumulated during the development stage (393,017) (93,814)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (331,967) (32,764)
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 33 $ 147
========= =========
The accompanying notes are an integral part of these financial statements.
3
IGEN NETWORKS CORP.
(formerly SYNC2 ENTERTAINMENT CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
Cumulative
Totals from
Three Months Ended Nine Months Ended Inception
September 30, September 30, (November 14, 2006) to
------------------------ ------------------------ September 30,
2009 2008 2009 2008 2009
--------- --------- --------- --------- ---------
REVENUES $ -- $ -- $ -- $ -- $ --
--------- --------- --------- --------- ---------
EXPENSES
Advertising expense -- -- -- -- 20,000
Business development -- -- 217,500 -- 217,500
Management services -- -- -- -- 32,089
Professional fees 2,000 6,540 49,500 19,818 118,472
Other general and administrative -- 3,891 32,203 3,901 4,956
--------- --------- --------- --------- ---------
Total expenses 2,000 10,431 299,203 23,719 393,017
--------- --------- --------- --------- ---------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARES $ (2,000) $ (10,431) $(299,203) $ (23,719) $(393,017)
========= ========= ========= ========= =========
NET INCOME (LOSS) PER BASIC AND
DILUTED SHARES $ 0.00 $ (0.01) $ (0.35) $ (0.03)
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 854,700 854,700 854,700 854,700
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
4
IGEN NETWORKS CORP.
(formerly SYNC2 ENTERTAINMENT CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Cumulative
Totals from
Nine Months Ended Inception
September 30, (November 14, 2006) to
----------------------------- September 30,
2009 2008 2009
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(299,203) $ (23,719) $(393,017)
Adjustments to reconcile net loss to net
cash provided by (used in) operations:
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses -- 2,500 --
Increase in accounts payable 299,089 10,983 332,000
--------- --------- ---------
NET CASH USED IN OPERATING ACTIVITIES (114) (10,236) (61,017)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -- -- --
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash -- -- 61,050
Proceeds received from notes payable - related parties -- -- 100
Payments made on notes payable - related parties -- -- (100)
--------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES -- -- 61,050
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (114) (10,236) 33
Cash at beginning of period 147 11,150 --
--------- --------- ---------
Cash at end of period $ 33 $ 914 $ 33
========= ========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ -- $ -- $ --
========= ========= =========
Cash paid for income taxes $ -- $ -- $ --
========= ========= =========
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
None
The accompanying notes are an integral part of these financial statements.
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IGEN NETWORKS CORP.
(formerly SYNC2 ENTERTAINMENT CORPORATION)
(A Development Stage Company)
Notes to Unaudited Financial Statements
September 30, 2009
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of iGen Networks Corp., a
development stage company, (the "Company") is presented to assist in
understanding the Company's financial statements. These accounting policies
conform to accounting principles generally accepted in the United States of
America and have been consistently applied in the preparation of the
accompanying financial statements. The Company has not realized revenues from
its planned principal business purpose and is considered to be in its
development stage in accordance with SFAS 7, "ACCOUNTING AND REPORTING BY
DEVELOPMENT STAGE ENTERPRISES."
BUSINESS ACTIVITY
The Company was incorporated in Nevada on November 14, 2006 to provide highly
qualified registered nurses from around the globe to healthcare organizations
throughout the USA and Canada, has been unsuccessful in this business and is now
developing business opportunities in web based internet advertising and
entertainment.
In the first quarter of 2009, the Company entered into an Asset Purchase
Agreement with Devlin eBusiness Architects, Inc., a Canadian corporation
("Devlin"). Under the terms of the Agreement, the Company was to purchase
substantially all of the property, assets and undertakings of the business
carried on by Devlin in Western Canada. Subsequently, in June of 2009, the
Company determined to not proceed with the Asset Purchase Agreement and resolved
to change its name to iGen Networks Corp to reflect its change in business
direction.
The Company has elected a fiscal year end of December 31st.
INCOME TAXES
The Company recognizes the tax effects of transactions in the year in which such
transactions enter into the determination of net income, regardless of when
reported for tax purposes. Deferred taxes are normally provided in the financial
statements under SFAS No. 109 to give effect to the resulting temporary
differences which may arise from differences in the bases of fixed assets,
depreciation methods, allowances, and start-up costs based on the income taxes
expected to be payable in future years. Operating loss carry forwards generated
during the period from November 14, 2006 (date of inception) through September
30, 2009 of $393,017 will begin to expire in 2025, and may be limited by the
provisions of Internal Revenue Code Section 382 and other provisions as to their
utilization. Deferred tax assets of approximately $137,000 have been completely
offset by a valuation allowance that increased by approximately $104,000 and
$4,700 during the nine months ended Seeptember 30, 2009 and 2008, respectively.
FOREIGN CURRENCY
Transactions and balances originally denominated in U.S. dollars are presented
at their original amounts. Transactions and balances in other currencies are
converted into U.S. dollars in accordance with Statement of Financial Accounting
Standards (SFAS) No. 52, "FOREIGN CURRENCY TRANSLATION," and exchange gains or
losses are included in determining net income or loss. There were no net gains
and losses resulting from foreign exchange transactions that are included in the
statements of operations during the period presented.
ESTIMATES
Preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The Company's periodic filings with the Securities and Exchange Commission
include, where applicable, disclosures of estimates, assumptions, uncertainties
and markets that could affect the financial statements and future operations of
the Company.
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CASH AND CASH EQUIVALENTS
For the purpose of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents. The Company had $33 in cash and cash equivalents at
September 30, 2009.
REVENUE RECOGNITION
Revenue will be recognized once the service is performed, persuasive evidence of
an agreement exists, the price is fixed or determinable, and collectability is
reasonably expected.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
No new pronouncements have current application to the Company.
NOTE 2. NET INCOME OR (LOSS) PER SHARE OF COMMON STOCK
The Company has adopted Financial Accounting Standards Board ("FASB") Statement
Number 128, "EARNINGS PER SHARE," ("EPS") which requires presentation of basic
and diluted EPS on the face of the statements of operations for all entities
with complex capital structures and requires a reconciliation of the numerator
and denominator of the basic EPS computation to the numerator and denominator of
the diluted EPS computation. In the accompanying financial statements, basic
earnings (loss) per share is computed by dividing net income/loss by the
weighted average number of shares of common stock outstanding during the period.
The following table sets forth the computation of basic and diluted earnings per
share:
Nine Months Ended September 30,
2009 2008
--------- ---------
Net loss $(299,203) $ (23,719)
--------- ---------
Weighted average common shares
outstanding (Basic) 854,700 854,700
Options -- --
Warrants -- --
--------- ---------
Weighted average common shares
outstanding (Diluted) 854,700 854,700
========= =========
Net loss per share (Basic and Diluted) $ (0.35) $ (0.03)
========= =========
The Company has no potentially dilutive securities, such as options or warrants,
currently issued and outstanding.
NOTE 3. STOCKHOLDERS' EQUITY
Upon incorporation in November 2006, the Company undertook a private offering of
852,500 shares of its common stock with an offering price of $0.02 per share for
$17,050 in cash. Also in November 2006, the Company issued 2,200 shares of its
common stock with an offering price of $20 per share for $44,000 in cash. The
funds raised from the two offerings totaled $61,050 and were used for start-up
and organizational costs of the Company.
On September 19, 2008 the Company amended its Articles of Incorporation thereby
increasing the number of authorized shares of common stock from 75,000,000 to
375,000,000.
Effective October 15, 2008, the Company forward split its issued common shares
on a 5 (five) new for 1 (one) old share basis (5 for 1). The forward split has
been retroactively applied to the accompanying financial statements for all
periods presented.
Effective June 30, 2009 the Company reverse split its issued common shares on a
1 (one) new for 100 (one hundred) old share basis (1 for 100). The reverse split
has been retroactively applied to the accompanying financial statements for all
periods presented.
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NOTE 4. GOING CONCERN CONSIDERATIONS
The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The Company is
currently in the development stage and has not generated revenues from its
planned business purpose. Realization of the assets of the Company is dependent
upon the Company's ability to meet its financial requirements through equity
financing and the success of future operations. These factors, among others,
raise substantial doubt about the Company's ability to continue as a going
concern. The accompanying financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This discussion contains forward-looking statements based upon current
expectations that involve risks and uncertainties, such as our plans,
objectives, expectations and intentions. Our actual results and the timing of
certain events could differ materially from those anticipated in these
forward-looking statements.
The business plan of the Company was to establish a market for the placement of
qualified registered nurses from abroad in medical offices and hospitals located
within the United States and Canada. The Company has been unsuccessful in this
endeavor, has abandoned its original plan, is actively pursuing business
opportunities in the entertainment industry and has begun the development of its
website to facilitate the development of the Company's new direction. The
Company intends to continue its endeavors in Web-based entertainment to attract
advertising revenue. We remain in the early stages of our business plan and have
earned no revenues to date. To better reflect our business direction, we changed
our name to iGen Networks Corp in the second quarter of 2009.
At September 30, 2009 the Company does not have day-to-day operations and does
not employ full or part-time staff. The Company pays fees for services to its
attorney, accountants, and transfer agent. It retains additional services such
as technology, website design and assistance in procedures necessary to
coordinate the legal, accounting and regulatory filings from its consultants. A
fee is paid for these services.
The Company will require additional cash, either from financing transactions or
operating activities, to meet its long-term goals. The long-term goals will be
to develop a corporate website and establish relationships with prospective
clients.
The Company estimates expenses over the next twelve months to complete the above
tasks to be $120,000. We have no commitments for capital expenditures. Since we
do not anticipate generating significant revenues over the next year, we intend
to depend upon equity financing through private placement offerings of our
common stock to fund the implementation of our business plan. Over the longer
term, two to five years, we expect to fund our operations through a combination
of revenues from the operation of our business and through additional equity
financing. To date, we have generated $0 revenue. In the process of carrying out
our business plan, we may determine that we cannot raise sufficient capital to
support our business on acceptable terms, or at all.
We will need additional capital to carry out our business plans. No commitments
to provide additional funds have been made by management or other stockholders
or investors. Accordingly, there can be no assurance that any additional funds
will be available on terms acceptable to us or at all.
For the nine months ended September 30, 2009 the Company has paid or accrued as
payable $40,000 in professional fees for legal and consulting fees for
development of the Company (2008: $19,818); $9,500 for accounting fees
associated with audited financials (2008: $0); $0 in advertising expenses (2008:
$0); $32,203 in other general administrative expenses (2008:$3,901) and $217,500
9
for business development (2008: $0). The business development costs are
comprised of the costs of consultants to review and analyze the Internet-based
Web marketing and entertainment business, with a focus on generating revenue
from advertising.
For the three months ended September 30, 2009 the Company has paid or accrued as
payable $0 in professional fees for legal and consulting fees for development of
the Company (2008: $0); $2,000 for accounting fees associated with audited
financials (2008: $6,540); $0 in advertising expenses (2008: $0); $0 in other
general administrative expenses (2008:$3,891) and $0 for business development
(2008: $0).
During the nine months ended September 30, 2009 the Company received $0
financing by way of equity or debt and accrued $332,000 in trade payables for
services provided to the Company and payable on demand. During the period of
inception (November 14, 2006) through September 30, 2009 the Company received
$61,050 in cash from the sale of its common stock, which it used on a short-term
basis to fund operations.
During the three months ended September 30, 2009 the Company received $0
financing by way of equity or debt and accrued $2,000 in trade payables for
services provided to the Company and payable on demand.
On a long-term basis we do not have sufficient cash to meet our needs and we
will require additional financing, either from financing transactions or
operating activities, to meet our goals over the next twelve months. There can
be no assurance that we will be able to obtain additional financing, either in
the form of debt or equity, or that, if such financing is obtained, it will be
sufficient for our needs or available to us on reasonable terms. In the event
that the Company is unable to obtain financing, the Company will seek joint
venture partners to assist in the development of its technology and products.
The Company has had no discussions with potential merger candidates and has no
knowledge of potential joint venture partners at this time. If we are able to
obtain additional financing or structure strategic relationships in order to
fund existing or future projects, existing shareholders will likely experience
further dilution of their percentage ownership of the Company by the issuance of
additional shares to investors under terms not yet negotiated.
The Company has a net loss and deficit accumulated during this development stage
to September 30, 2009 of $393,017.
ITEM 3. CONTROLS AND PROCEDURES
The management of iGen Networks Corp. is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act). The Company's
internal control system was designed to provide reasonable assurance to the
Company's management and Board of Directors regarding the preparation and fair
presentation of published financial statements in accordance with accounting
principles generally accepted in the U.S. and reliability of financial
reporting. All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
10
can provide only reasonable assurance with respect to financial statement
preparation and presentation.
Management maintains a comprehensive system of controls intended to ensure that
transactions are executed in accordance with management's authorization, assets
are safeguarded, and financial records are reliable. Management also takes steps
to ensure that information and communication flows are effective, and to monitor
performance, including performance of internal control procedures.
The Company's management assessed the effectiveness of its internal control over
financial reporting as of September 30, 2009 based on the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control-Integrated Framework. Based on this assessment, management
believes that, as of September 30, 2009, the Company's internal control over
financial reporting is effective.
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were effective such that the material
information required to be included in our Securities and Exchange Commission
reports is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms relating to our company, particularly during
the period when this report was being prepared.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No change since previous filing.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Options Granted Date Exercise Price Expiry Date
--------------- ---- -------------- -----------
-- -- -- --
Warrants Issued Date Exercise Price Expiry Date
--------------- ---- -------------- -----------
-- -- -- --
Common Stock Issued Date Consideration
------------------- ---- -------------
-- -- --
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
No change since previous filing.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No change since previous filing.
11
ITEM 5. OTHER INFORMATION
No change since previous filing
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No change since previous filing.
Exhibit No. Document Location
----------- -------- --------
3.1 Articles of Incorporation Previously Filed
3.2 Bylaws Previously Filed
31.1 Rule 13a-41(a)/15d-14(a) CEO Certificate Included
31.2 Rule 13a-41(a)/15d-14(a) CFO Certificate Included
32.1 Section 1350 Certification of CEO Included
32.2 Section 1350 Certification of CFO Included
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.
IGEN NETWORKS CORP.
November 16, 2009 /s/ James Fitzpatrick
----------------- ------------------------------------
Date James Fitzpatrick, President
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