U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
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[X]
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For
Fiscal Year Ended: September 30, 2008
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[
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______________ to _______________
Commission file number: 333-130197
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DELTRON, INC.
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(Exact name of registrant as specified in its
charter)
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Nevada
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86-1147933
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(State or other jurisdiction of incorporation or
organization)
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(IRS Employer Identification No.)
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Sabana Oeste, Restaurante Princessa
Marina,
200 Metros Oeste y 100 mts Norte,
Portón Verde, Frente SBC Computadoras,
San Jose,
Republica de Costa Rica
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(Address of principal executive
offices)
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Issuer's telephone number:
506-(8)853-2231
Securities registered under
Section 12(b) of the Act:
None
Securities registered under
Section 12(g) of the Act:
None
Indicate by
check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes
[ ]
No
[X]
Indicate by
check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Exchange Act. Yes
[ ]
No [X]
Indicate by
check mark whether the registrant (1) has 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[X]
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, or a smaller
reporting company. See the definitions of the “large accelerated filer,”
“accelerate filer,” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
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 ?
As of December 1, 2008, the
aggregate market value of the voting and non-voting common equity held by
non-affiliates, computed by reference to the price at which the common equity
was last sold, was $74,900, based on 3,745,000 shares held by non-affiliates at
the last sales price of $0.02.
As of December 1, 2008, there
were 5,545,000 shares of the registrant's common stock, par value $0.001, issued
and outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-K (e.g., Part I,
Part II, etc.) into which the document is incorporated: (1) any
annual report to security holders; (2) any proxy or information statement;
and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the
Securities Act of 1933, as amended (“Securities Act”).
Not Applicable.
2
TABLE
OF CONTENTS
Item
Number and Caption
Page
PART
I
-
4 -
Cautionary
statements regarding forward-looking information
-
4 -
ITEM
1.
BUSINESS
-
4 -
ITEM
1A.
RISK
FACTORS
-
8 -
ITEM
1B.
UNRESOLVED
STAFF COMMENTS
-
8 -
ITEM
2.
PROPERTIES
-
8 -
ITEM
3.
LEGAL
PROCEEDINGS
-
9 -
ITEM
4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
-
9 -
PART
II
-
9 -
ITEM
5.
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
- 9
-
ITEM
6.
SELECTED
FINANCIAL DATA
-
10 -
ITEM
7.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- 10 -
ITEM
7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- 14 -
ITEM
8.
FINANCIAL
STATEMENTS AND SUPPLEMENTAL DATA
15
ITEM
9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
28
ITEM
9A.[T]
CONTROLS
AND PROCEDURES
28
ITEM
9B.
OTHER
INFORMATION
29
PART
III
29
ITEM
10.
DIRECTORS,
EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE
29
ITEM
11.
EXECUTIVE
COMPENSATION
31
ITEM
12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
32
ITEM
13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND
34
ITEM
14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
34
PART
IV
36
ITEM
15.
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
36
3
PART I
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
INFORMATION
Except for
historical information, this report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements involve
risks and uncertainties, including, among other things, statements regarding our
business strategy, future revenues and anticipated costs and expenses.
Such forward-looking statements include, among others, those statements
including the words “expects,” “anticipates,” “intends,” “believes” and similar
language. Our actual results may differ significantly from those projected
in the forward-looking statements. Factors that might cause or contribute
to such differences include, but are not limited to, those discussed in the
sections “Business,” “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.” You should carefully
review the risks described in this Annual Report and in other documents we file
from time to time with the Securities and Exchange Commission. You are
cautioned not to place undue reliance on the forward-looking statements, which
speak only as of the date of this report. We undertake no obligation to
publicly release any revisions to the forward-looking statements or reflect
events or circumstances after the date of this document.
Although we
believe that the expectations reflected in these forward-looking statements are
based on reasonable assumptions, there are a number of risks and uncertainties
that could cause actual results to differ materially from such forward-looking
statements.
All references in
this Form 10-K to the “Company,” “Deltron,” “we,” “us” or “our” are to Deltron,
Inc.
ITEM
1. BUSINESS
General Information
Deltron, Inc. was
incorporated in the State of Nevada on September 14, 2005. We were formed
as a land development company
that intends
to construct rental housing units in Costa Rica. In March of 2006,
Deltron, Inc. purchased a property in San Isidro de Heredia, Costa Rica, which
we intend to develop. We raised $74,900 from our recent public offering,
and with this money we intend to finance the construction of two rental units on
this property. Deltron’s principal place of business and corporate offices
are located at Sabana Oeste, Restuarante Princessa Marina, 200 Metros Oeste, 100
Norte, Porton Verde, Frente SBC Computadoras, San Jose, Republic of Costa Rica,
telephone number 506-(8)853-2231. The office space is a 3,000 square foot
shared-office building in which Deltron has use of a 150 square foot office. Our
fiscal year end is September 30.
As of September 30,
2008 we had generated no revenues. We have been issued an opinion by our
auditor that raises substantial doubt about our ability to continue as a going
concern based on our current financial position, please refer to note 7 of our
financial statements.
We have a total of
100,000,000 authorized common shares with a par value of $0.001 per share and
5,545,000 common shares issued and outstanding as of September 30, 2008.
We completed a form
SB-2 Registration Statement under the Securities Act of 1933 registering
7,500,000 shares (minimum of 3,000,000) of our common stock in connection with
an offering of the 7,500,000 shares at a price of $0.02 per share. We closed the
offering on September 7, 2006 and raised a total of $74,900 on the issuance of
the 3,745,000 shares.
Business
Development
Deltron, Inc. has no
revenues and limited operations. We have sustained losses since inception,
September 14, 2005, to September 30, 2008, of $72,353, and rely solely upon the
sale of securities and loans from our corporate officers and directors for
funding.
Deltron, Inc.
incorporated Deltron Holdings Corporation S.A. “Deltron S.A.”) on November 17,
2005 in San Jose, Costa Rica, a company in which Deltron, Inc. owns 100% of the
shares. Deltron S.A. was used to purchase the property that we
currently have available for our development plans.
Deltron has never
declared bankruptcy, been in receivership, or involved in any kind of legal
proceeding. Deltron, its directors, officers, affiliates and promoters have not
and do not intend to enter into negotiations or discussions with representatives
or owners of any other businesses or companies regarding the possibility of an
acquisition or merger.
Principal
Products, Services and Their Markets
Deltron is a land
development company
that intends to
construct rental housing in Costa Rica. We will accomplish this goal by
developing a total of two (2), three-bedroom apartments. We will construct
the apartments on a property that we currently own in San Isidro de Heredia,
Costa Rica. On completion of the construction phase, we will offer these
apartments for rent to the public via word of mouth and classified advertising.
The property we
purchased, and the apartments that we intend to construct, will be owned by
Deltron S.A., a company incorporated in San Jose, Costa Rica, on November 17,
2005, the shares of which are 100% owned by Deltron, Inc. Upon the
closing of our most recent offering on September 9, 2006, we had raised a total
of $74,900 from the sale of 3,745,000 common shares, or approximately 50% of the
offering. In accordance with our prospectus dated June 16, 2006, we
believed this would enable us to build 2 apartments and rent them to the public.
However, we were
required to suspend the construction of the two apartments/housing units due to
lack of funds, as the cost of construction has significantly increased since our
original estimate in 2005. This is in large part due to the increase in
the price of construction materials, as well as a major increase in the cost of
labor due to the recent construction boom in Costa Rica and the resulting labor
shortage.
Our primary focus has
been to raise sufficient funding in order that we may construct a minimum of two
(2) three-bedroom apartments with the goal of renting them to middle-income
families in order to generate revenue. Provided that we are able to raise
additional funding, we anticipate that construction will take approximately 5
months. Since we are not sure when or if we are able to raise such funds,
at this time we do not know when we can expect to generate any revenues from
housing rentals, if at all.
If we are ultimately
successful in raising the funding and completing the constriction, the final
product will be competitive in both quality and affordability when compared to
similar housing offered by our competitors. However, we intend to
distinguish our rental units from the
5
competition by
providing features not found in many Costa Rican rental properties, such as
secured entry, hot water, modern fixtures, internet, cable, and telephone
access.
Deltron will provide
ongoing maintenance of the properties and apartments on a regular basis, and we
will make any repairs as needed, and all tenants will have twenty-four hour
telephone access to a property caretaker in case of emergency.
Competitive
Business Conditions and Strategy; Deltron’s Position in the Industry
Deltron intends to
establish itself as a competitive company in an already existing market.
Currently, there are many other corporate and private entities that offer
rental housing in Costa Rica. Most of these rental properties are offered
for lease by word of mouth or classified advertising.
The company’s
President, Dr. Randall Fernandez, a dentist and the owner of a property
renovations business, and Hilda Rivera a director and the Secretary of the
company as well as being a Costa Rican land developer, have found that there is
a high demand among the target market for quality rental housing of the kind
that Deltron intends to offer, particularly those that have access to modern
features such as hot water, internet, cablevision, and are located near public
transportation, schools and shopping.
Our strategic
approach is to offer “middle-class” housing to lower middle-income families.
Part of this will be achieved by constructing apartments with a small
frontage area and walkway, as well as a privately enclosed back yard.
The Company also
believes that because the housing will be new and contain modern features, it
will be more desirable to prospective tenants than many of the options offered
by our competitors.
Manicured
garden areas, hot water, cable, internet and telephone access are not common
features found in many lower-middle income housing units in Costa Rica, and we
contend that this will help to set us apart from the competition.
Important to our
business strategy is to find tenant families for each of the apartments
consisting of two employed adults with good standing credit histories and
previous rental references. We believe that the kind of rental housing we
intend to offer will create high market demand and enable us to be selective in
finding tenants whom are able to pay the rent.
The apartments will
be promoted and advertised in the classified section of local newspapers and by
word of mouth. We will also place a large sign on the front of the
property.
To date, we have not
entered into any negotiations with realtors who specialize in matching landlords
with tenants, but this will be an available option to Deltron should we decide
that it is a necessary or desired means of finding tenants.
Sales and
Distribution Methods
When and if
contracted, we will offer the apartments for rent via word of mouth and
classified newspaper advertisement on terms of renewable one-year lease
agreements. We will also require a one-month damage deposit from the
tenant, which will be refunded at the end of the lease
6
agreement – provided
that there is no damage to the apartment other than normal wear and tear, or
because of circumstances beyond the tenant’s control.
The tenant will be
responsible for paying the electricity, cable, internet, telephone and water
bills directly to the providers.
The rental agreements
between Deltron and the tenants will be written and executed by a Costa Rican
attorney.
Sources and
Availability of Products
Although construction
material prices have escalated in the recent past, construction companies and
building materials are plentiful in Costa Rica, and the market places for each
of these products and services are competitive. The success of Deltron’s
business plan relies heavily on finding a general contractor with whom we can
negotiate to construct the apartments on schedule and within budget.
Deltron, Inc will begin looking to hire a construction company to build
the apartment units once we have received sufficient funding. At this
time, we have not entered into any agreements with any construction firm.
Dependence on
one or a few major customers
Deltron’s business
plan is dependent upon finding tenants who will rent our apartments and make the
monthly payments. As such, we intend to rent each of the apartments to
families that consist of at least two working adults with credit histories and
references which we can verify are in good standing.
Housing is a major
need and commitment for a family, and we do not anticipate much difficulty in
collecting the monthly payments from the tenants.
Patents and
Trademarks
There are no aspects
of our business plan which require a patent, trademark, or product license.
We have not entered into any vendor agreements or contracts that give or
could give rise to any obligations or concessions.
Government and
Industry Regulation
In Costa Rica, there
are numerous government controls in place with reference to housing
construction, all of which revolve around the specifications of the
architectural plans.
In order to proceed
with the construction phase of our business plan, we are required by law to
submit the architectural plans for our project to the municipality for approval
before being granted a construction permit. The plans must be
approved by a licensed architect or civil engineer who is a member of the
College of Engineers and Architects of Costa Rica.
A complete set of
plans includes a design plan, site plan, distribution plan, elevation and
transversal and longitude perspectives, roof design and drainage, design of
footings and support beams, structural plans, electrical design, mechanical and
sanitary system design, as well as a plan that details the construction’s
interior finish.
7
We hired the services
of Tropical Design Group S.A., an architectural firm, who has completed the
design and aforementioned plans for two rental units to be built on the site
owned by Deltron. However, due to the increase in building costs, we have
cancelled our contracts with this firm. Eventually, those plans will need
to be presented to the City of San Isidro de Heredia for approval and issuance
of the building permits once we are ready to enter into the construction phase
of our business plan.
Research and
Development Activities and Costs
Deltron has spent no
time in the last two fiscal years on specialized research and development
activities, and has no plans to undertake any research or development in the
future.
Compliance with
Environmental Laws
The property which we
intend to build the two apartment units has been zoned for residential housing,
and there are no special environmental laws for building apartments on a
property in Costa Rica which is zoned for residential housing.
Subcontractors
At
this time we are not in any negotiations to hire the services of any
subcontractor(s).
In
the future, when we are ready to commence with the construction phase of our
business plan, we will hire a construction firm who will be directly responsible
for the hiring and supervision of any required subcontractors.
Employees
and Employment Agreements
At
present, we have no full-time employees. The company’s two officers will each
devote up to approximately 20 hours per week of their time to our operation. Our
officers and directors do not have employment agreements with us. We presently
do not have pension, health, annuity, insurance, stock options, profit sharing
or similar benefit plans; however, we may adopt plans in the future. There are
presently no personal benefits available to our officers and directors. Our
officers and directors will handle our administrative duties. Because our
officers and directors are inexperienced with construction, they will hire a
qualified person for the development of the property who will also supervise the
hiring of the labor for the construction.
ITEM
1A.
RISK
FACTORS
Not Applicable.
ITEM
1B.
UNRESOLVED
STAFF COMMENTS
Not Applicable.
8
ITEM
2.
PROPERTIES
Deltron’s principal
place of business and corporate offices is located at Sabana Oeste, Restuarante
Princessa Marina, 200 Metros Oeste, 100 Norte, Porton Verde, Frente SBC
Computadoras, San Jose, Republic of Costa Rica, the telephone number is
506-(8)853-2231. The office space is a 3,000 square foot shared-office
building in which Deltron has use of a 150 square foot office. We have no
intention of finding office space to rent during the development stage of the
company and we will operate from these premises for the time being. Since
we have been given access to office space free of charge, no rental agreement is
in place and we are subject to eviction without notice at any time.
Deltron currently
owns a 592 square meter lot in San Isidro de Heredia, Costa Rica.
This property was purchased for $40,657 on March 29, 2006, from an
un-affiliated third party, through our wholly-owned subsidiary Deltron Holding
Corporation S.A. The funds to purchase the property were loaned to Deltron
Holdings by Shawn Phillips, a director of our company. The balance is
non-interest bearing and there are no specific terms of repayment. When we
have sufficient revenue to maintain operations, being generated from the rental
of the proposed housing units, the Board of Directors will at that time address
terms of repayment to Mr. Phillips. In the event our business plan fails
and we are forced to sell the property, the loan would be repaid from the
proceeds of the sale.
Investment
Policies
The Company plans to
invest in certain real estate properties in Costa Rica, pursuant to its business
plan, for the building and subsequent renting of apartments in Costa Rica.
The Company does not have any limitations on the percentage of assets it
may invest in real estate holdings. Acquisition of real estate will be
done primarily for the purpose of generating income for the Company. The
Company will primarily seek undeveloped acreage in Costa Rica on which to build
the apartments. There are no limitations on the number of mortgages the
Company may have on any given piece of real estate.
ITEM
3.
LEGAL
PROCEEDINGS
Legal
Proceedings
In the ordinary
course of our business, we may from time to time become subject to routine
litigation or administrative proceedings which are incidental to our business.
We are not a party to nor are we aware of any existing, pending or
threatened lawsuits or other legal actions involving us.
ITEM
4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were
submitted to a vote of security holders, through the solicitation of proxies or
otherwise, during the fourth quarter of the fiscal year covered by this
report.
9
PART
II
ITEM
5.
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
Market
Information
“Bid” and ”ask”
prices for our common stock are quoted on the Over-The-Counter Bulletin Board
(the “OTCBB”) under the symbol “DTRO.OB”. However, our stock has never
traded.
As of December 15,
2008, we had 34 shareholders of record of our common stock.
Dividends
We have never
declared any cash dividends with respect to our common stock. Future
payment of dividends is within the discretion of our board of directors and will
depend on our earnings, capital requirements, financial condition and other
relevant factors. Although there are no material restrictions limiting, or
that are likely to limit, our ability to pay dividends on our common stock, we
presently intend to retain future earnings, if any, for use in our business and
have no present intention to pay cash dividends on our common stock.
Recent Sales of
Unregistered Securities
Not applicable.
ITEM
6.
SELECTED
FINANCIAL DATA
Not applicable.
ITEM
7.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of
Operations
We
are a development stage corporation. We have generated no revenues from
our business operations since inception and have incurred $
13,588
in
expenses for the year ended September 30, 2008.
The
following table provides selected financial data about our company for the year
ended September 30, 2008.
Balance Sheet Data
September
30, 2008
Cash
and cash equivalents
$
23,541
Total
assets
$
76,712
Total
liabilities
$
43,165
Shareholders’
equity
$
33,547
10
Net
cash provided by financing activities since inception through September 30, 2008
was $148,165, consisting of $105,900 raised from the sale of our common stock
and $42,265 advanced from a director and former officer of the company.
Plan
of Operation
We are a start-up,
development stage corporation and have not yet generated or realized any
revenues from our business operations. Our plan is to build housing in
Costa Rica and market the units for rent to local residents via classified
newspaper advertising and word of mouth.
In
its report on our September 30, 2008, audited financial statements, our auditors
expressed an opinion that there is substantial doubt about our availability to
continue as a going concern.
See
Note 7.
Our financial statements do not include any adjustments
that may result from the outcome of this uncertainty. We have been in the
development stage and have had no revenues since inception. For the period
from September 14, 2005 (inception) to September 30, 2008, we recorded a net
loss of $72,353. Our continuation as a going concern is dependent on
future events, including our ability to raise additional capital and to general
positive cash flows.
Accordingly,
we must raise sufficient capital from sources other than from the rental sales.
Our only other source for cash at this time is investments by others. We
must raise cash to implement our project and stay in business. We raised $74,900
from our public offering. Under this offering we sold 3,745,000 common shares at
$0.02 per share to independent shareholders, thus we have a total of 5,545,000
shares issued and outstanding. As of September 30, 2008, we had cash on hand of
$23,541. This probably will not enable us to fund operations for the next twelve
months, and we will have to rely on additional loans from our directors, a
second public offering, or a private placement of securities.
We
have used the above-mentioned funds to start to develop our property located in
San Jose, Costa Rica by hiring an architect who has completed the architectural
plans for the two units that we intend to build on our property and eventually
rent to the public.
However,
Deltron, Inc. and its wholly owned subsidiary, Deltron Holdings Corporation SA,
has cancelled its contract with the architects, Tropical Design Group, and
suspended negotiations with the construction firm, Trim Studios SA, in March of
2007 due to the increase in the cost of building materials and our lack of
funds.
In
September of 2008, Shawn Phillips resigned his positions as an officer of the
company and was replaced by Dr. Randall Fernandez. Dr. Fernandez owns a
business specializing in the refurbishing and renovating of damaged homes and
properties in Costa Rica and then reselling them. He is also the senior
partner of “Guevara y de la O” a dental clinic where he currently practices.
As
of the date of this writing, the construction phase of our plan has been placed
on hold until we are able to raise additional funds in order to complete
construction. If we are unable to complete the construction phase of
our plan due to lack of funding, we will cease operations until we raise more
money. If we cannot or do not raise more money, we will be forced to cease
operations entirely.
11
We
have no plans or expectations to acquire or sell any plant or significant
equipment during the next 12 months of operations, and do not intend to hire any
employees at this time.
The
development target for Deltron, Inc is to raise enough money within the next
twelve months of operations to construct two rental units on our property in San
Isidro de Heredia. At this time we do not know when we will be able to start
generating revenues for the company. Our success depends on being able to
finance the construction of the units, which will require us to raise more funds
in order to complete.
Management
has discussed the possibility of raising additional funds via additional loans
from our directors, or the sale of additional securities in order to complete
construction, but at this time no firm decision or commitments have been
made.
When and if we build
the apartments, we will advertise them for rent by way of classified newspaper
advertising, word of mouth, and a large billboard sign that we will erect in
front of the property. We feel that the location of the property, combined
with classified newspaper advertising and a billboard sign
placed in front of the lot will be an important
part to the success of our business development, acting as an effective way to
introduce Deltron and its product to the public. Our advertising will
focus on reasonably priced rental housing in a desirable area. Special
emphasis will be placed on the “modern” features that come with each apartment
including hot water, cable access, internet, and telephone access.
In order for us to
sustain our cash flow requirements over the next twelve months, we will most
likely require additional outside funding, like a second public offering, a
private placement of securities, or loans from our officers or others.
Equity financing could result in additional dilution to existing
shareholders.
If we are unable to
meet our needs for cash, then we may be unable to continue, develop, or expand
our operations.
The
development program for 2006 and 2007 consisted of purchasing a property for the
construction of our rental units and hiring an architect to design two
apartments. The architectural designs have been completed and have been
approved by the College of Architects and Engineers of Costa Rica (a requirement
before plans can be submitted to the city engineering department for approval
and issuance of the construction permits) and we have received the construction
permits from the city of San Isidro de Heredia. However, these
construction permits were never used and they expired in December of 2007.
As such, if we are able to raise enough funds to proceed with the
construction phase of our business plan, we will need to apply once again to the
city of San Isidro de Heredia for construction permits.
If
we are unable to complete any phase of construction because we do not have
enough money, we will cease operations until we raise more money. If we cannot
or do not raise more money, we will be forced to cease operations. If we cease
operations, we do not know what we will do and we do not have any plans to do
anything.
Any
construction done on the property over the course of the next 12 months would be
conducted by unaffiliated independent contractors that would be hired by Deltron
Holdings Corporation S.A. and/or Deltron, Inc. The independent contractors will
be responsible for the
12
construction,
contracting tradesmen and sub-contractors, as well as the hiring and supervision
of the labor required for the construction.
Limited
Operating History; Need for Additional Capital
There is no
historical financial information about us upon which to base an evaluation of
our performance. We are a development stage corporation and have not generated
any revenues from operations. We cannot guarantee we will be successful in our
business operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources,
possible delays in the development of our property, and possible cost overruns
due to price and cost increases in services and supplies.
To become profitable
and competitive, we will need to complete the construction of the apartments and
find tenants to rent our units and generate revenues from rental income.
We believe that the funds raised from our public offering may not be
sufficient enough for us to operate for the next 12 months, and that we will
need to raise more funds in order to continue our business.
We have no assurance
that future financing will be available to us on acceptable terms. If financing
is not available on satisfactory terms, we may be unable to continue, develop or
expand our operations. Equity financing could result in additional dilution to
existing shareholders. Currently, we have no financing plans.
Liquidity and
Capital Resources
To meet our need for
cash, we raised $74,900 from our public offering. However, it appears that
we have not raised enough money through the public offering in order to stay in
business and, there is a high probability that we will run out of money before
the construction of the two rental units which we intend to build is complete.
If that is the case, we will attempt to raise additional money by way of
loans from officers of the company, and/or sale of additional securities.
Additional equity financing would result in additional dilution to our
existing shareholders.
We have discussed
this matter with our officers and directors, and Mr. Phillips, a director and
former officer of the company, has agreed to advance funds as needed. However,
there is no written agreement with Mr. Phillips to this affect. The agreement is
entirely oral. Mr. Phillips has advanced $42,265 to date. At the present time,
we have not made any arrangements to raise additional cash. If we need
additional cash and cannot raise it, we will either have to suspend operations
until we do raise the cash, or cease operations entirely. The funds raised in
our public offering, together with the loans advanced, will probably not allow
the company to operate for the next 12 months. Other than as described in this
paragraph, we have no other financing plans.
Since inception of
the Company on September 14, 2005, to September 30, 2008, the Company has issued
5,545,000 common shares at $0.01 and $0.02 per share for total proceeds of
$105,900. This was accounted for as an acquisition of shares.
We received a $42,265
loan from Mr. Phillips, a director and former officer of the company. This
amount owed to Mr. Phillips is non-interest bearing, unsecured, and due on
demand.
13
As of the date of
this filing, we have yet to begin operations and therefore have not generated
any revenues.
As of September 30,
2008, our total assets were $76,712 and our total liabilities were $43,165.
Off-Balance
Sheet Arrangements
We have no
off-balance sheet arrangements.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
14
ITEM
8.
FINANCIAL
STATEMENTS AND SUPPLEMENTAL DATA
DELTRON, INC.
(A Development
Stage Company)
AUDITED
CONSOLIDATED
FINANCIAL
STATEMENTS
SEPTEMBER 30, 2008
and 2007
15
MOORE
& ASSOCIATES, CHARTERED
ACCOUNTANTS
AND ADVISORS
PCAOB
REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors
Deltron, Inc.
(A Development Stage Company)
We have audited the accompanying consolidated balance sheets of
Deltron, Inc. (A Development Stage Company) as of September 30, 2008 and 2007,
and the related consolidated statements of operations, stockholders’ equity and
cash flows for the years ended September 30, 2008, 2007 and since inception on
September 14, 2005 through September 30, 2008. These financial statements are
the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conduct our audits in accordance with standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Deltron, Inc. (A Development Stage Company) as of September 30, 2008 and 2007,
and the related consolidated statements of operations, stockholders’ equity and
cash flows for the years ended September 30, 2008, 2007 and since inception on
September 14, 2005 through September 30, 2008, in conformity with accounting
principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 7 to the financial statements, the Company had a working
capital defiency of $19,624 and an accumulated deficit of $72,353, which raises
substantial doubt about its ability to continue as a going concern.
Management’s plans concerning these matters are also described in Note 7.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Moore & Associates, Chartered
Moore & Associates, Chartered
Las Vegas, Nevada
December
12, 2008
6490 West Desert Inn Rd, Las Vegas, NV 89146 (702) 253-7499
Fax (702) 253-7501
16
Deltron, Inc.
(A Development Stage
Company)
Consolidated Balance Sheets
As of
September 30,
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
23,541
|
$
|
38,816
|
|
|
Prepaid expenses
|
|
-
|
|
-
|
|
|
|
Total current assets
|
|
23,541
|
|
38,816
|
|
|
|
|
|
|
|
|
|
Development
in progress
(Note 4)
|
|
|
|
|
|
|
Land
|
|
40,657
|
|
40,657
|
|
|
Development costs
|
|
12,514
|
|
12,514
|
|
|
|
|
|
53,171
|
|
53,171
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
$
|
76,712
|
$
|
91,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities
|
$
|
900
|
$
|
2,587
|
|
|
Due to
related party
(Note 5)
|
|
42,265
|
|
42,265
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
43,165
|
|
44,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Capital
Stock
(Note 3)
|
|
|
|
|
|
|
Authorized:
|
|
|
|
|
|
|
100,000,000 common
shares, $0.001 par value
|
|
|
|
|
|
|
Issued and outstanding:
|
|
|
|
|
|
|
5,545,000 common
shares
|
|
5,545
|
|
5,545
|
|
|
Additional paid-in capital
|
|
100,355
|
|
100,355
|
|
|
Deficit accumulated during the
development stage
|
|
(72,353)
|
|
(58,765)
|
|
Total Stockholders'
Equity
|
|
33,547
|
|
47,135
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
|
76,712
|
$
|
91,987
|
- The Accompanying
Notes Are An Integral Part Of These Financial Statements -
17
Deltron, Inc.
(A Development Stage
Company)
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inception
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(September
14,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005) to
|
|
|
|
|
|
|
|
|
Year Ended
September 30,
|
|
|
September
30,
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional fees
|
|
|
|
|
|
|
|
11,867
|
|
|
13,904
|
|
|
60,040
|
|
|
General and
administrative
|
|
|
|
|
|
|
|
1,721
|
|
|
2,264
|
|
|
12,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
|
|
|
|
|
|
|
13,588
|
|
|
16,168
|
|
|
72,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Before Income Taxes
|
|
|
|
|
|
|
|
(13,588)
|
|
|
(16,168)
|
|
|
(72,353)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Income Taxes
(Note
6)
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
|
|
|
|
|
$
|
(13,588)
|
|
$
|
(16,168)
|
|
$
|
(72,353)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Loss
per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share
|
|
|
|
|
|
|
$
|
(0.00)
|
|
$
|
(0.00)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Basic and
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
|
|
|
|
|
|
|
5,545,000
|
|
|
5,545,000
|
|
|
|
- The Accompanying
Notes Are An Integral Part Of These Financial Statements -
18
Deltron, Inc.
(A Development Stage
Company)
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
from
|
|
|
|
|
|
|
|
|
|
|
|
Inception
|
|
|
|
|
|
|
|
|
|
|
|
(September
14,
|
|
|
|
|
|
|
|
|
|
|
|
2005) to
|
|
|
|
|
|
Year Ended
September 30,
|
|
September
30,
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
|
$
|
(13,588)
|
|
$
|
(16,168)
|
|
$
|
(72,353)
|
|
|
Changes in Operating Assets and
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in prepaid
expenses
|
|
|
-
|
|
|
2,060
|
|
|
-
|
|
|
Increase (decrease) in accounts
payable and
|
|
|
|
|
|
|
|
|
|
|
|
accrued
liabilities
|
|
|
(1,687)
|
|
|
(3,253)
|
|
|
900
|
|
|
|
Net Cash Used in Operating
Activities
|
|
|
(15,275)
|
|
|
(17,361)
|
|
|
(71,453)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Development costs
|
|
|
-
|
|
|
(4,654)
|
|
|
(12,514)
|
|
|
Property purchased
|
|
|
-
|
|
|
-
|
|
|
(40,657)
|
|
|
|
Net Cash Used in Investing
Activities
|
|
|
-
|
|
|
(4,654)
|
|
|
(53,171)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Advances from (payments to)
related party
|
|
|
-
|
|
|
(500)
|
|
|
42,265
|
|
|
Common stock issued for
cash
|
|
|
-
|
|
|
-
|
|
|
105,900
|
|
|
|
Net Cash Provided by (used in)
Financing
|
|
|
|
|
|
|
|
|
|
|
|
|
Activities
|
|
|
-
|
|
|
(500)
|
|
|
148,165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN CASH
AND CASH
|
|
|
|
|
|
|
|
|
|
|
EQUIVALENTS
|
|
|
(15,275)
|
|
|
(22,515)
|
|
|
23,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT
BEGINNING
|
|
|
|
|
|
|
|
|
|
|
OF PERIOD
|
|
|
38,816
|
|
|
61,331
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT
END OF
|
|
|
|
|
|
|
|
|
|
|
PERIOD
|
|
$
|
23,541
|
|
$
|
38,816
|
|
$
|
23,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow
Disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
Income taxes
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- The Accompanying
Notes Are An Integral Part Of These Financial Statements -
20
Deltron, Inc.
(A Development Stage
Company)
Notes to Consolidated Financial Statements
September 30, 2008 and 2007
1.
Organization
and Description of Business
Deltron, Inc. (the “Company”) is a Nevada corporation incorporated
on September 14, 2005. It is based in San Jose, Costa Rica. The
Company incorporated a wholly owned subsidiary, Deltron Holdings Corporation
S.A., in San Jose, Costa Rica on November 17, 2005.
The
Company is a development stage company that intends to engage principally in the
acquisition and development of rental housing properties in the district of San
Isidro de Heredia, Costa Rica. To date, the Company’s activities have been
limited to its formation, the raising of equity capital and the acquisition and
development of property
(Note 4)
.
2.
Significant
Accounting Policies
Basis of Consolidation
These consolidated financial statements presented are those of the
Company and its wholly-owned subsidiary, Deltron Holdings Corporation S.A.
All intercompany balances and transactions have been eliminated.
Basis of Presentation
The accounting
and reporting policies of the Company conform to U.S. generally accepted
accounting principles (US GAAP) applicable to development stage companies.
Use of Estimates
The
preparation of financial statements in conformity with United States generally
accepted accounting principles 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 amount 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.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market
funds, and certificates of term deposits with maturities of less than three
months from date of purchase, which are readily convertible to known amounts of
cash and which, in the opinion of management, are subject to an insignificant
risk of loss in value. The Company had $23,541 and $38,816 in cash and cash
equivalents at September 30, 2008 and 2007, respectively.
Start-Up
Costs
In
accordance with the American Institute of Certified Public Accountant’s
Statement of Position 98-5, “
Reporting on the Costs of Start-up
Activities,
” the Company expenses all costs incurred in connection with the
start-up and organization of the Company.
21
Deltron, Inc.
(A Development Stage
Company)
Notes to Consolidated Financial Statements
September 30, 2008 and 2007
2.
Significant
Accounting Policies
– Continued
Fair Value of Financial Instruments and Derivative Financial
Instruments
The
Company has adopted Statement of Financial Accounting Standards (“SFAS”) Number
119,
“Disclosure About Derivative Financial Instruments and Fair Value of
Financial Instruments”.
The carrying amounts of cash and cash
equivalents, accounts payable and amount due to related party approximate their
fair values because of the short maturity of these items. Certain fair
value estimates may be subject to and involve, uncertainties and matters of
significant judgment, and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect these estimates.
The Company does not hold or issue financial instruments for trading
purposes, nor does it utilize derivative instruments in the management of its
foreign exchange, commodity price or interest rate market risks.
Segment Reporting
SFAS Number 131,
“Disclosure About Segments of an Enterprise
and Related Information”
, changed the way public companies report
information about segments of their business in their quarterly reports issued
to shareholders. It also requires entity-wide disclosures about the
products and services an entity provides, the material countries in which it
holds assets and reports revenues and its major customers. The Company
presently operates only in Costa Rica.
Risks and Uncertainties
The
Company operates in the real estate development and property rental industry
that is subject to significant risks and uncertainties, including financial,
operational, technological and other risks associated with operating a real
estate development and property rental business, including the potential risk of
business failure.
Earning (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 income statement 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
loss per common share is computed by dividing net loss by the weighted average
number of shares of common stock outstanding during the period.
The
Company has no potentially dilutive securities, such as options or warrants,
currently issued and outstanding.
Comprehensive Income (Loss)
SFAS No. 130, “Reporting Comprehensive Income”, establishes
standards for reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements. From inception
(September 14, 2005) to September 30, 2008, the Company had no items of other
comprehensive income. Therefore, net loss equals comprehensive loss from
inception (September 14, 2005) to September 30, 2008.
22
Deltron, Inc.
(A Development Stage
Company)
Notes to Consolidated Financial Statements
September 30, 2008 and 2007
2.
Significant
Accounting Policies
- Continued
Advertising
The
Company expenses its advertising as incurred. There has been no
advertising since inception.
Concentrations of Credit Risk
The
Company’s financial instruments that are exposed to concentrations of credit
risk primarily consist of its cash and cash equivalents and related party
payables. The Company places its cash and cash equivalents with financial
institutions of high credit worthiness. At times, its cash and cash
equivalents with a particular financial institution may exceed any applicable
government insurance limits. The Company’s management plans to assess the
financial strength and credit worthiness of any parties to which it extends
funds, and as such, it believes that any associated credit risk exposures are
limited.
Foreign Currency Translations
The
Company’s functional currency is the Costa Rican Colone. The Company’s reporting
currency is the U.S. dollar. All transactions initiated in Costa Rican
Colones are translated into U.S. dollars in accordance with SFAS No. 52 "Foreign
Currency Translation" as follows:
i)
Monetary assets and liabilities at the rate of exchange in effect
at the balance sheet date;
ii)
Equity at historical rates; and
iii)
Revenue and expense items at the average rate of exchange
prevailing during the period.
Adjustments arising from such translations are deferred until
realization and are included as a separate component of stockholders’ equity
(deficit) as a component of comprehensive income or (loss). Therefore,
translation adjustments are not included in determining net income (loss) but
reported as other comprehensive income (loss).
For foreign currency transactions, the Company translates these
amounts to the Company’s functional currency at the exchange rate effective on
the invoice date. If the exchange rate changes between the time of
purchase and the time actual payment is made, a foreign exchange transaction
gain or loss results which is included in determining net income (loss) for the
period. No significant realized exchange gains or losses were recorded since
September 14, 2005 (inception) to September 30, 2008.
Revenue Recognition
The
Company recognizes revenue from the sale of products and services in accordance
with the Securities and Exchange Commission Staff Accounting Bulletin No. 104
(“SAB 104”),
“Revenue Recognition in Financial Statements.”
Revenue
will consist of rental income and will be recognized only when all of the
following criteria have been met:
i)
Persuasive evidence for an agreement exists;
ii)
Delivery has occurred;
iii)
The
fee is fixed or determinable; and
iv)
Revenue is reasonably assured.
23
Deltron, Inc.
(A Development Stage
Company)
Notes to Consolidated Financial Statements
September 30, 2008 and 2007
2.
Significant
Accounting Policies - Continued
Recent Accounting Pronouncements
Recent accounting pronouncements that are listed below did and/or
are not currently expected to have a material effect on the Company’s financial
statements.
FASB Statements:
In
June 2008, the FASB issued FASB Staff Position EITF 03-6-1,
Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities,
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses
whether instruments granted in share-based payment transactions are
participating securities prior to vesting, and therefore need to be included in
the computation of earnings per share under the two-class method as described in
FASB Statement of Financial Accounting Standards No. 128, “Earnings per
Share.” FSP EITF 03-6-1 is effective for financial statements issued for fiscal
years beginning on or after December 15, 2008 and earlier adoption is
prohibited. We are not required to adopt FSP EITF 03-6-1; neither do we believe
that FSP EITF 03-6-1 would have material effect on our consolidated financial
position
and results of operations if adopted.
In May 2008, FASB
issued Financial Accounting Standards No. 163,
“Accounting for Financial
Guarantee Insurance Contracts - an interpretation of FASB Statement No. 60.”
Diversity exists in practice in accounting for financial guarantee insurance
contracts by insurance enterprises under FASB Statement No. 60, Accounting and
Reporting by Insurance Enterprises. That diversity results in inconsistencies in
the recognition and measurement of claim liabilities because of differing views
about when a loss has been incurred under FASB Statement No. 5, Accounting for
Contingencies. This Statement requires that an insurance enterprise recognize a
claim liability prior to an event of default (insured event) when there is
evidence that credit deterioration has occurred in an insured financial
obligation. This Statement also clarifies how Statement 60 applies to financial
guarantee insurance contracts, including the recognition and measurement to be
used to account for premium revenue and claim liabilities. Those clarifications
will increase comparability in financial reporting of financial guarantee
insurance contracts by insurance enterprises. This Statement requires expanded
disclosures about financial guarantee insurance contracts. The accounting and
disclosure requirements of the Statement will improve the quality of information
provided to users of financial statements. This Statement is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and all interim periods within those fiscal years.
In May 2008, FASB
issued Financial Accounting Standards No. 162,
“The Hierarchy of Generally
Accepted Accounting Principles.”
This Statement identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). This Statement is effective 60 days
following the SEC's approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles.
24
Deltron, Inc.
(A Development Stage
Company)
Notes to Consolidated Financial Statements
September 30, 2008 and 2007
2.
Significant
Accounting Policies
- Continued
New Accounting
Pronouncements
- Continued
In March 2008,
FASB issued Financial Accounting Standards No. 161,
“Disclosure about
Derivative Instruments and Hedging Activities - an amendment to FASB Statement
No. 133.”
The use and complexity of derivative instruments and hedging
activities have increased significantly over the past several years.
Constituents have expressed concerns that the existing disclosure requirements
in FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging
Activities”, do not provide adequate information about how derivative and
hedging activities affect an entity's financial position, financial performance,
and cash flows. Accordingly, this Statement requires enhanced disclosures about
an entity's derivative and hedging activities and thereby improves the
transparency of financial reporting. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008.
In December 2007,
FASB issued Financial Accounting Standards No. 160,
“Noncontrolling Interests
in Consolidated Financial Statements – an amendment of ARB No. 51.”
This
statement amends ARB No. 51 to improve the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards of the portion of equity in a subsidiary not attributable, directly or
indirectly, to a parent. SFAS 160 is effective for fiscal years, and
interim periods with those fiscal years, beginning on or after December 15, 2008
(that is, January 1, 2009, for entities with calendar year-ends).
In December 2007,
FASB issued a revision to Financial Accounting Standards No. 141 (revised 2007),
“Business Combinations.”
The objective of this Statement is to
improve the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial reports about a
business combination and its effects. This Statement applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008.
3.
Capital Stock
Authorized Stock
The
Company has authorized 100,000,000 common shares with a par value of $0.001 per
share. Each common share entitles the holder to one vote, in person or
proxy, on any matter on which action of the stockholder of the corporation is
sought.
Share Issuances
From inception of the Company (September 14, 2005) to September
30, 2008, the Company has issued 500,000 common shares at $0.01 per share and
5,045,000 common shares at $0.02 per share, resulting in total proceeds of
$105,900 and 5,545,000 common shares issued and outstanding at September 30,
2008. Of these shares, 400,000 were issued to a director of the Company,
400,000 were issued to a former director and officer, 1,000,000 were issued to
the spouse of a director of the Company, and 3,745,000 were issued to
independent investors.
25
Deltron, Inc.
(A Development Stage
Company)
Notes to Consolidated Financial Statements
September 30, 2008 and 2007
4.
Development in Progress
On
March 29, 2006, through the wholly-owned subsidiary Deltron Holdings Corporation
S.A., a property was purchased for $40,657. The funds to purchase the property
were loaned to Deltron Holdings Corporation S.A., by the President of the
Company. As at September 30, 2008, the Company has incurred development
costs of $12,514, relating primarily to architecture and construction permit
fees.
5.
Related Party Balances and Transactions
As
of September 30, 2008 and 2007, the Company was obligated to a director of the
Company, for a non-interest bearing demand loan with a balance of $42,265.
The Company plans to pay the loan back as cash flows become available.
Interest has not been imputed on these advances due to its immaterial
impact on the financial statements.
6.
Provision for 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 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. Minimal development stage deferred tax
assets arising as a result of net operating loss carryforwards have been offset
completely by a valuation allowance due to the uncertainty of their utilization
in future periods. Operating loss carryforwards generated during the period from
September 14, 2005 (date of inception) through September 30, 2008 of $72,353
will begin to expire in 2025. Accordingly, deferred tax assets of approximately
$25,300 were offset by the valuation allowance, which increased by $4,700 and
$5,600 during the year ended September 30, 2008 and 2007, respectively.
7.
Going Concern and Liquidity Considerations
The
accompanying unaudited consolidated financial statements have been prepared
assuming that the Company will continue as a going concern, which contemplates,
among other things, the realization of assets and satisfaction of liabilities in
the normal course of business. As at September 30, 2008, the Company had a
working capital deficiency of $19,624 and an accumulated deficit of $72,353.
The Company intends to fund operations through equity financing
arrangements, which may be insufficient to fund its capital expenditures,
working capital and other cash requirements for the year ending September 30,
2008.
The
ability of the Company to emerge from the development stage is dependent upon,
among other things, obtaining additional financing to continue operations,
and development of its business plan.
26
Deltron, Inc.
(A Development Stage
Company)
Notes to Consolidated Financial Statements
September 30, 2008 and 2007
7.
Going Concern and Liquidity Considerations
-
Continued
In
response to these problems, management intends to raise additional funds through
public or private placement offerings.
These factors, among others, raise substantial doubt about the
Company’s ability to continue as a going concern. The accompanying audited
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
27
ITEM
9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not applicable.
ITEM
9A.[T]
CONTROLS
AND PROCEDURES
Evaluation of Our
Disclosure Controls and Internal Controls
Under the supervision
and with the participation of our senior management, including our chief
executive officer and chief financial officer, we 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
Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the
period covered by this annual report (the “Evaluation Date”). Based on
this evaluation, our chief executive officer and chief financial officer
concluded as of the Evaluation Date that our disclosure controls and procedures
were effective such that the information relating to us, including our
consolidated subsidiaries, required to be disclosed in our Securities and
Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms, and (ii) is
accumulated and communicated to our management, including our chief executive
officer and chief financial officer, as appropriate to allow timely decisions
regarding required disclosure.
Management’s
Annual Report on Internal Control Over Financial Reporting.
Our
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes of accounting
principles generally accepted in the United States. Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance of achieving their control
objectives. In evaluating the effectiveness of our internal control over
financial reporting, our management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal
Control – Integrated Framework.
This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit us to provide only management’s report in this
annual report.
Officers’ Certifications
Appearing as exhibits
to this Annual Report are “Certifications” of our Chief Executive Officer and
Chief Financial Officer. The Certifications are required pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302
Certifications”). This section of the Annual Report contains information
concerning the Controls Evaluation referred to in the Section 302
28
Certification.
This information should be read in conjunction with the Section 302
Certifications for a more complete understanding of the topics presented.
Changes in Internal Control Over Financial Reporting
There have been no
changes in our internal control over financial reporting that occurred during
the quarter ended September 30, 2008 that have materially affected or are
reasonably likely to materially affect our internal control over financial
reporting.
ITEM
9B.
OTHER
INFORMATION
Not
applicable.
PART
III
ITEM
10.
DIRECTORS,
EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Executive
Officers, Directors and Key Employees
Directors serve until
the next annual meeting of the stockholders; until their successors are elected
or appointed and qualified, or until their prior resignation or removal.
Officers serve for such terms as determined by our board of directors.
Each officer holds office until such officer’s successor is elected or
appointed and qualified or until such officer’s earlier resignation or removal.
No family relationships exist between any of our present directors and
officers.
The following table
sets forth certain information, as of December 15, 2008, with respect to our
directors and executive officers.
|
|
|
|
|
Name and Address
|
Age
|
Positions
|
|
Randall Fernandez
Sabana Oeste, Restaurante Princessa Marina,
200 Metros Oeste y 100 mts Norte, Portón Verde,
Frente SBC Computadoras,
San José, República de Costa Rica
|
34
|
President, Chief Financial Officer, Treasurer and
member of the Board of Directors
|
|
Hilda Rivera
Sabana Oeste, Restaurante Princessa Marina,
200 Metros Oeste y 100 mts Norte, Portón Verde,
Frente SBC Computadoras,
San José, República de Costa Rica
|
42
|
Secretary and Member of the Board of
Directors
|
|
Shawn Phillips
Sabana Oeste, Restaurante Princessa Marina,
200 Metros Oeste y 100 mts Norte, Portón Verde,
Frente SBC Computadoras,
San José, República de Costa Rica
|
39
|
Member of the Board of
Directors
|
Randall Fernandez has
held the positions of President, CFO, Treasurer and a director since September
9, 2008. He is expected to hold said offices/positions until the next
annual meeting of our stockholders.
29
Hilda Rivera has been
a member of the Board of Directors since inception and was appointed to
Secretary on September 9, 2008. She is expected to hold said
Office/positions until the next annual meeting of our stockholders.
Shawn Phillips, as of
September 9, 2008, has resigned from his positions of President, CEO, CFO, and
Treasurer, positions he has held since inception and the position of Secretary
since February 5, 2007. He has been a member of the Board of Directors
since inception and he is expected to hold said position until the next annual
meeting of our stockholders.
Mr. Fernandez, Mr.
Phillips, and Ms. Rivera are our only officers, directors, promoters and control
persons.
Certain biographical
information of our directors and officers is set forth below.
Randall
Fernandez
Mr. Fernandez
graduated with a degree in Odontology from the Universidad Veritas de Costa Rica
in March of 2005.
From January 2003 to
March 2005, Mr. Fernandez has worked in the capacity as a dental Assistant in
the clinic “Guevara y de la O” in San Jose, Costa Rica. Since being
awarded his doctorate in dentistry in March of 2005, he has been working in the
capacity of Senior Partner of the “Guevara y de la O” dental clinic where he
currently practices.
Hilda
Rivera
Ms. Rivera is a Land
Developer and convenience store proprietor living in San Jose, Costa Rica.
In the last six years
Mrs. Rivera has developed six residential properties in Costa Rica which she
currently rents to the public.
Employment
Agreements
We have no formal
employment agreements with any of our employees.
Term of
Office
Our directors are
appointed for a period of one year or until such time as their replacements have
been elected by our shareholders. The officers of the Company are
appointed by our board of directors and hold office until their resignation or
removal.
Audit
Committee
We do not have a
standing audit committee, an audit committee financial expert, or any committee
or person performing a similar function. We currently have limited working
capital and no revenues. Management does not believe that it would be in
our best interests at this time
30
to retain independent
directors to sit on an audit committee. If we are able to raise sufficient
financing in the future, then we will likely seek out and retain independent
directors and form an audit, compensation committee and other applicable
committees.
Board of Directors
We do not pay our
Directors for attending board meetings. However, they are reimbursed for
expenses, if any, for attendance at meetings of the Board of Directors.
Our Board of Directors may designate from among its members an executive
committee and one or more other committees but has not done so to date. We
do not have a nominating committee or a nominating committee charter.
Further, we do not have a policy with regard to the consideration of any
director candidates recommended by security holders. To date this has not
been a problem as no security holders have made any such recommendations.
Members of the Board of Directors perform all functions that would
otherwise be performed by committees. Given the present size of our board
it is not practical for us to have committees. If we are able to grow our
business and increase our operations we intend to expand the size of our board
and allocate responsibilities accordingly.
Compliance with
Section 16(a) of the Exchange Act
Our common stock is
not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). Accordingly, our officers, directors and
principal shareholders are not subject to the beneficial ownership reporting
requirements of Section 16(a) of the Exchange Act.
Code of Ethics
In 2006 we adopted a
Code of Ethics that applies to all of our employees. A copy of our Code of
Ethics will be provided to any person requesting same without charge. To
request a copy of our Code of Ethics, please make written request to our
President c/o Deltron, Inc. at Sabana Oeste, Restaurante Princessa Marina, 200
Metros Oeste y 100 mts Norte, Portón Verde, Frente SBC Computadoras, San José,
República de Costa Rica.
ITEM
11.
EXECUTIVE
COMPENSATION
The following table
sets forth information concerning the total compensation paid or accrued by us
during the two fiscal years ended September 30, 2008 and 2007 to (i) all
individuals that served as our principal executive officer or acted in a similar
capacity for us at any time during the fiscal year ended September 30, 2008;
(ii) all individuals that served as our principal financial officer or acted in
a similar capacity for us at any time during the fiscal year ended September 30,
2008; and (iii) all individuals that served as executive officers of ours at any
time during the fiscal year ended September 30, 2008 that received annual
compensation during the fiscal year ended September 30, 2008 in excess of
$100,000.
31
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus ($)
|
|
Stock Awards ($)
|
|
Option Awards ($)
|
|
Non-
Equity Incentive
Plan Compen-sation ($)
|
|
Change in Pension Value
and
Non-
qualified
Deferred
Compen-sation
Earnings ($)
|
|
All
Other
Compen-sation ($)
|
|
Total ($)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shawn
Phillips,
(1)
Chief Executive and Financial Officer
|
|
2008
2007
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randall
Fernandez,
(2)
Chief Executive
Officer
|
|
2008
2007
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hilda
Rivera,
(3)
Secretary
|
|
2008
2007
|
|
1,000
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
0
0
|
|
1,000
0
|
(1)
Shawn
Phillips served as our President, Chief Executive Officer from inception until
June 9, 2008 and served as our Chief Financial Officer, Secretary and Treasurer
from October 18, 2007 to September 9, 2008.
(2)
Randall
Fernandez has served as our President, Chief Executive Officer, Chief Financial
Officer, Treasurer and as a Director from September 9, 2008 through the present.
(3)
Hilda
Rivera has served as our Secretary from September 9, 2008 and as a Director from
inception through the present.
We have not issued
any stock options or maintained any stock option or other incentive plans since
our inception. We have no plans in place and have never maintained any plans
that provide for the payment of retirement benefits or benefits that will be
paid primarily following retirement including, but not limited to, tax qualified
deferred benefit plans, supplemental executive retirement plans, tax-qualified
deferred contribution plans and nonqualified deferred contribution plans.
Similarly, we have no contracts, agreements, plans or arrangements, whether
written or unwritten, that provide for payments to the named executive officers
or any other persons following, or in connection with the resignation,
retirement or other termination of a named executive officer, or a change in
control of us or a change in a named executive officer’s responsibilities
following a change in control.
Compensation of
Directors
None of our directors
receive any compensation for serving as such, for serving on committees of the
board of directors or for special assignments. During the fiscal year ended
September 30, 2008 there were no other arrangements between us and our directors
that resulted in our making payments to any of our directors for any services
provided to us by them as directors.
32
ITEM
12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The following table
sets forth information with respect to the beneficial ownership of our common
stock known by us as of December 15, 2008 by:
·
each
person or entity known by us to be the beneficial owner of more than 5% of our
common stock;
·
each
of our directors;
·
each
of our executive officers; and
·
all
of our directors and executive officers as a group.
The percentages in
the table have been calculated on the basis of treating as outstanding for a
particular person, all shares of our common stock outstanding on such date and
all shares of our common stock issuable to such holder in the event of exercise
of outstanding options, warrants, rights or conversion privileges owned by such
person at said date which are exercisable within 60 days of December 15, 2008.
Except as otherwise indicated, the persons listed below have sole voting
and investment power with respect to all shares of our common stock owned by
them, except to the extent such power may be shared with a spouse.
|
|
|
|
|
|
Name and Address
of Beneficial Owner
|
Title of Class (1)
|
Shares of
Common Stock Beneficially Owned
(1)
|
Percentage
Ownership
(2)
|
|
Randall Fernandez
Sabana Oeste, Restaurante Princessa Marina,
200 Metros Oeste y 100 mts Norte, Portón Verde, Frente SBC Computadoras,
San José,
República de Costa Rica
|
Common Stock, par value
$0.001 per share
|
0
|
0%
|
|
Hilda Rivera
Sabana Oeste, Restaurante Princessa Marina, 200
Metros Oeste y 100 mts Norte, Portón Verde, Frente SBC Computadoras, San
José,
República de Costa Rica
|
Common Stock, par value
$0.001 per share
|
400,000
|
7.2%
|
|
Shawn Phillips
Sabana Oeste, Restaurante Princessa Marina,
200 Metros Oeste y 100 mts Norte, Portón Verde, Frente SBC Computadoras,
San José,
República de Costa Rica
|
Common Stock, par value
$0.001 per share
|
0
|
0%
|
|
All officers and directors
as a group (3 people)
|
|
400,000
|
7.2%
|
|
|
|
|
|
33
|
|
|
|
|
|
Fernando Porras
(1)
Sabana Oeste, Restaurante Princessa Marina, 200
Metros Oeste y 100 mts Norte, Portón Verde, Frente SBC Computadoras, San
José,
República de Costa Rica
|
Common Stock, par value
$0.001 per share
|
400,000
|
7.2%
|
|
Yoenia Proenza Sanfiel
(2)
Sabana Oeste, Restaurante Princessa Marina, 200
Metros Oeste y 100 mts Norte, Portón Verde, Frente SBC Computadoras, San
José,
República de Costa Rica
|
Common Stock, par value
$0.001 per share
|
1,000,000
|
18%
|
(1)
As
used herein, the term beneficial ownership with respect to a security is defined
by Rule 13d-3 under the Securities Exchange Act of 1934 as consisting of sole or
shared voting power (including the power to vote or direct the vote) and/or sole
or shared investment power (including the power to dispose or direct the
disposition of) with respect to the security through any contract, arrangement,
understanding, relationship or otherwise, including a right to acquire such
power(s) during the next 60 days.
(2)
There
were 5,545,000 shares of common stock issued and outstanding on December 15,
2008.
(3)
Mr.
Porras is the former Secretary and Director of the company. He resigned on
February 5, 2007.
(4)
Ms.
Yoenia Proenza Sanfiel is the wife of our Director, Shawn Phillips.
Securities
Authorized for Issuance Under Equity Compensation Plans
We have not adopted
any equity compensation plans since our inception.
ITEM
13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR
INDEPENDENCE
As at September 30,
2007, the Company owed Shawn Phillips, a director and former officer of the
company $42,265. This balance is non-interest bearing and is due on
demand.
Director
Independence
We do not currently
have a director who meets the standards of independence under the governance
guidelines and applicable NYSE listing standards, including the requirement that
each member is free of any relationship that would interfere with his or her
individual exercise of independent judgment.
34
ITEM
14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Audit
Fees
.
The aggregate fees
billed to us by our principal accountant for services rendered during the fiscal
years ended September 30, 2008 and 2007 are set forth in the table below:
|
|
|
|
|
Fee Category
|
Fiscal year ended
September 30, 2008
|
Fiscal year ended
September 30, 2007
|
|
|
|
|
|
Audit fees (1)
|
$ 6,250
|
$ 6,000
|
|
Audit-related fees (2)
|
0
|
0
|
|
Tax fees (3)
|
500
|
0
|
|
All other fees (4)
|
0
|
0
|
|
Total fees
|
$ 6,750
|
$ 6,000
|
(1)
Audit
fees consist of fees incurred for professional services rendered for the audit
of consolidated financial statements, for reviews of our interim consolidated
financial statements included in our quarterly reports on Form 10-Q/QSB and for
services that are normally provided in connection with statutory or regulatory
filings or engagements.
(2)
Audit-related
fees consist of fees billed for professional services that are reasonably
related to the performance of the audit or review of our consolidated financial
statements, but are not reported under “Audit fees.”
(3)
Tax
fees consist of fees billed for professional services relating to tax
compliance, tax planning, and tax advice.
(4)
All
other fees consist of fees billed for all other services.
Audit Committee’s
Pre-Approval Practice
.
We
do not have an audit committee. Our board of directors performs the
function of an audit committee. Section 10A(i) of the Securities Exchange
Act of 1934, as amended, prohibits our auditors from performing audit services
for us as well as any services not considered to be audit services unless such
services are pre-approved by our audit committee or, in cases where no such
committee exists, by our board of directors (in lieu of an audit committee) or
unless the services meet certain de minimis standards.
35
PART
IV
ITEM
15.
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
The following
exhibits are included as part of this report:
|
|
|
|
|
Exhibit
No.
|
|
Description
|
|
|
|
|
|
3.1
|
|
Articles
of Incorporation of Registrant
(1)
|
|
|
|
|
|
3.2
|
|
By-Laws
of Registrant
(1)
|
|
|
|
|
|
14.1
|
|
Code
of Ethics
(2)
|
|
|
|
|
|
21
|
|
List
of Subsidiaries
|
|
|
|
|
|
31.1
|
|
Rule
13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial
Officer
|
|
|
|
|
|
32.1
|
|
Rule
1350 Certification of Chief Executive and Financial
Officer
|
(1)
Filed
with the Securities and Exchange Commission on December 8, 2005 as an exhibit,
numbered as indicated above, to the Registrant’s registration statement on the
Registrant’s Registration Statement on Form SB-2 (file no. 333-130197), which
exhibit is incorporated herein by reference.
(2)
Filed
with the Securities and Exchange Commission on December 28, 2006 as an exhibit,
numbered as indicated above, to the Registrant’s Annual Report on Form 10-KSB
for the year ended September 30, 2006, which exhibit is incorporated herein by
reference.
* Filed herewith.
36