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| NXFI.OB > SEC Filings for NXFI.OB > Form 10-Q/A on 21-Aug-2009 | All Recent SEC Filings |
21-Aug-2009
Quarterly Report
The information contained in Item 2 contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Actual results
may materially differ from those projected in the forward-looking statements as
a result of certain risks and uncertainties set forth in this report. Although
management believes that the assumptions made and expectations reflected in the
forward-looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual results
will not be different from expectations expressed in this report.
We were incorporated in Nevada in August 2007 to conduct clinical trials for pharmaceuticals in dedicated sites throughout the Americas. Initially, we intend to introduce our services in Central America. This is being done primarily because the costs of drug development are significantly lower and the clinical quality is that of the US. We will sell our services to Pharmaceutical, Biotech and Medical Device companies that are primarily US based. Our principal executive office location and mailing address is 210 Walford Way Cary, NC 27519. Our telephone number is 919-414-1458.
We are establishing business relationships with preferred Clinical Research Organization's ("CRO's") who will source and package our services to their clients. Many pharmaceutical companies prefer large global companies that can provide a one-stop shop approach. Since what we do is only a sub segment of the client's total needs we will be a subcontractor should those CRO's find opportunities where our services can be of benefit to their clients.
We have not begun operations and to date we have not been able to commence operations due to a lack of capital. Due to our inability to obtain adequate financing and our inability to successfully implement our business plan, we believed it was necessary for us to cease operations and actively pursue a potential reverse merger candidate.
Based upon same, on April 6, 2009, we entered into a binding letter of intent with Next Fuel, Inc., a Delaware corporation. Pursuant to the terms of the Letter of Intent, we will commence the negotiation and preparation of a definitive share purchase agreement which shall contain customary representations, warranties and indemnities as agreed upon by us and Next Fuel, whereby we will complete a share purchase transaction on or before July 31, 2009, subject to certain conditions precedent to the closing of the Transaction including the requirement that Next Fuel has updated audited financial statements prior to Closing. Pursuant to the Letter of Intent, upon the closing of the Transaction, we will issue to Next Fuel a number of shares of common stock equal to approximately 75% of our outstanding shares.
Next Fuel was incorporated in the state of Delaware on June 23, 2008. The business of Next Fuel focuses on developing hydrogen technology that will offer a revolutionary solution that delivers hydrogen "on demand" or as needed by fuel cells to produce electricity.
In the event, we did not proceed with this transaction, we will attempt to raise funds so commence business operations based on our current business plan. The following would set forth such plan:
1. As we raise funds we would begin to implement our plan to provide clinical trial services throughout the Americas.
2. All business functions will be coordinated and managed by our two founders, including marketing, finance and operations. At such time as we have the resources, we intend to hire a part-time employee to facilitate with the acquisition of contracts and assist in targeted marketing implementation. The time commitment of the position will depend upon the aggressiveness of our product launch, but we believe it will require a minimum of $15,000 to hire the personnel needed to assist with our new business activity.
3. We intend to launch a targeted marketing campaign focusing on trade show participation, media promotions and public relations. We intend to support these marketing efforts through the development of high quality printed marketing materials and an attractive and informative trade and consumer website, wwwclinicaltrialsofamerica.com. We expect the total cost of the marketing program to range from $10,000 to $75,000. During this preliminary launch period, we also expect to invest between $1,000 and $5,000 in accounting and inventory management software.
4. Within 90-120 days of the initiation of our marketing campaign, we believe that we will begin to generate revenues from our marketing activities and targeted media approach.
Limited Operating History
We have not previously demonstrated that we will be able to expand our business through an increased investment in our product line and/or marketing efforts. We cannot guarantee that we will be successful in the merger set forth above or that the expansion efforts of our current business described in this report will be successful. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our new products and/or sales methods.
If financing is not available on satisfactory terms, we may be unable to continue expanding our operations. Equity financing will result in a dilution to existing shareholders.
Results of Operations
We did not have any operating income from inception through March 31, 2009. For the quarter ended March 31, 2009, we recognized a net loss of $ 70,048 and for the period from inception through March 31, 2009 we recognized a net loss of $ 316,110 . Expenses for the quarter were comprised of costs mainly associated with legal, accounting and office.
Capital Resources and Liquidity
As of March 31, 2009, we had $ 7,273 in cash and therefore we have limited capital resources and will rely upon the issuance of common stock and additional capital contributions from shareholders to fund administrative expenses. Cash and cash equivalents from inception to date have been sufficient to cover expenses involved in starting our business. We will require additional funds to continue to implement and expand our business plan during the next twelve months.
We currently do not have enough cash to satisfy our minimum cash requirements for the next twelve months. As reflected in the accompanying financial statements, we are in the development stage with no operations and have a net loss since inception of $ 316,110 and negative cash flows from operations of $ 302,419 for the period from August 14, 2007 (inception) to March 31, 2009. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement our business plan. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for us to continue as a going concern. Europa Capital has agreed to fund us, but there are no guarantees.
We are still pursuing this plan but to date we have not been able to raise additional funds through either debt or equity offerings. Without this additional cash we have been unable to pursue our plan of operations and commence generating revenue. We believe that we may not be able to raise the necessary funds to continue to pursue our business operations. As a result of the foregoing, we have recently begun to explore our options regarding the development of a new business plan and direction.
We are currently engaged in discussions with a company regarding the possibility of a reverse merger involving our company. As set forth above, on April 6, 2009, we entered into a binding letter of intent with Next Fuel, Inc., a Delaware corporation.
Recent Accounting Pronouncements
In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51". This statement improves 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 that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent's ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133" (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity's derivative instruments and hedging activities and their effects on the entity's financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. We are currently evaluating the disclosure implications of this statement.
In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles." SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with GAAP. The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The Board believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. SFAS 162 is effective 60 days following the SEC's approval of PCAOB Auditing Standard No. 6, Evaluating Consistency of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have a material impact on the Company's financial position.
In May 2008, the FASB issued SFAS 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. This results in inconsistencies in the recognition and measurement of claim liabilities. 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 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. The adoption of FASB 163 is not expected to have a material impact on the Company's financial position.
Critical Accounting Policies
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
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