- Quarterly Report (10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2010

 

¨   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

 

Commission File Number: 333-147979

 

CASEYCORP ENTERPRISES, INC.

(Exact name of small business issuer as specified in its charter)

Nevada (State of incorporation)

98-0523910  (IRS Employer ID Number)

410 Park Avenue, 15th Floor

New York, New York 10022

(Address of principal executive offices)

[phone]

(Issuer's telephone number)

 

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(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    x    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated 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  o No x

As of  May 14 , 2010, there were 45,000,000 shares of registrant’s common stock, par value $0.0001 per share outstanding.

 

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

¨  Yes   ¨  No

 

 

 

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TABLE OF CONTENTS

				Page
PART I
Item 1.		Financial Statements		3-7
Item 2.		Management’s Discussion and Analysis or Plan of Operations		8
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		9
Item 4T.		Controls and Procedures		9
PART II
Item 1.		Legal Proceedings		9
Item IA.		Risk Factors		10
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		10
Item 3.		Defaults Upon Senior Securities		10
Item 4.		Removed and Reserved		10
Item 5.		Other Information		10
Item 6.		Exhibits		10

 

 

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CASEYCORP ENTERPRISES INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		March 31,				December 31,
		2010				2009
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash		$	488,996			$	138,555
Accounts receivable			194,287				562,774
Prepaid expenses and other current assets			-				3,470
Total current assets			683,283				704,799
Property and equipment - net			40,954				12,884
Security deposits			10,075				10,075
Intangible assets - net			530,475				562,625
Goodwill			598,200				598,200
Total assets		$	1,862,987			$	1,888,583
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities		$	64,932			$	31,062
Accounts payable - related party			393,165				359,583
Income taxes payable			52,825				84,185
Loan payable, stockholder			37,857				68,432
Loan payable			4,500				4,500
Total current liabilities			553,279				547,762
LONG-TERM LIABILITIES
Deferred income taxes			127,258				140,118
Total liabilities			680,537				687,880
COMMITMENTS
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value;
5,000,000 shares authorized; none issued and outstanding			-				-
Common stock, $.0001 par value;
500,000,000 shares authorized; 45,000,000
issued and outstanding			4,500				4,500
Additional paid-in capital			1,135,888				1,135,888
Retained earnings			42,062				60,315
Total stockholders' equity			1,182,450				1,200,703
Total liabilities and stockholders' equity		$	1,862,987			$	1,888,583

See Notes to Condensed Consolidated Financial Statements.

 

 

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CASEYCORP ENTERPRISES INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months				Three Months
		Ended				Ended
		March 31,				March 31,
		2010				2009
		(Unaudited)				(Unaudited)
Revenues		$	12,411,430			$	-
Cost of sales			12,241,429				-
Gross profit			170,001				-
General and administrative expenses			200,333				4,550
Loss from operations			(30,332	)			(4,550	)
Interest expense			(90	)			(90	)
Loss before provision of tax benefits			(30,422	)			(4,640	)
Provision for income tax benefits			(12,169	)			-
Net loss		$	(18,253	)		$	(4,640	)
Basic and diluted loss per share:		$	0.00			$	0.00
Weighted average number of shares outstanding
Basic and diluted			45,000,000				22,416,667

See Notes to Condensed Consolidated Financial Statements.

 

 

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CASEYCORP ENTERPRISES INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Three Months				Three Months
		Ended				Ended
		March 31,				March 31,
		2010				2009
		(Unaudited)				(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(18,253	)		$	(4,640	)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Common stock issued for services rendered			-				250
Depreciation and amortization			34,672				-
Deferred income taxes			(12,860	)
(Increase) decrease in operating assets:
Accounts receivable			368,487				-
Prepaid expenses and other current assets			3,470				-
Increase (decrease) in operating liabilities:
Accounts payable			33,869				4,390
Accounts payable - related party			33,582				-
Income taxes payable			(31,359	)			-
Net cash provided by operating activities			411,608				-
CASH FLOWS FROM  INVESTING ACTIVITIES
Purchases of property and equipment			(30,592	)			-
Net cash used in investing activities			(30,592	)			-
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of stockholder loans			(30,575	)			-
Net cash used in financing activities			(30,575	)			-
INCREASE IN CASH			350,441				-
CASH - BEGINNING OF PERIOD			138,555				-
CASH - END OF PERIOD		$	488,996			$	-
Supplemental disclosures of cash flow information:
Cash paid for:
Interest		$	-			$	-
Taxes		$	32,000			$	-

 

See Notes to Condensed Consolidated Financial Statements.

 

 

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CASEYCORP ENTERPRISES, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

NOTE 1 – GENERAL

Caseycorp Enterprises, Inc. (the “Company”) was incorporated on February 21, 2007 under the laws of the State of Nevada. The Company originally planned to focus on developing and distributing advanced surveillance and security products.   On May 14, 2009, the Company acquired ESM Refiners, Inc. ("ESM") to enter into the business of being a wholesale buyer and seller of gold and diamonds. The Company acts as a middleman aggregating gold and diamonds, which is purchased primarily from retail jewelers (who have purchased gold from customers) and selling it to refiners. On October 2, 2009, the Company acquired all of the outstanding shares of EZSellGold.com, Inc. (“EZS”).  EZS is engaged in the business of purchasing gold and diamonds from consumers.

 

NOTE 2 – BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2010, are not necessarily indicative of the results that may be expected for the year ending December 31, 2010. These unaudited financial statements should be read in conjunction with the audited financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission on April 15, 2010.

NOTE 3 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS  

On January 1, 2010, the Company adopted the new provisions of Accounting Standards Update (ASU) No. 2010-06, “ Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements” (“ASU No. 2010-06”). ASU No. 2010-06 provides revised guidance on improving disclosures about valuation techniques and inputs to fair value measurements. The adoption of this standard had no effect on the financial statements of the Company.

 

In February 2010, the FASB issued ASU No. 2010-09, “ Subsequent Events (Topic 855), Amendments to Certain Recognition and Disclosure Requirements ” (“ASU No. 2010-09”).  This update provides amendments to FASB ASC 855, “ Subsequent Events ” to clarify certain recognition and disclosure requirements. The amendments in this update remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. The topic now includes the definition of SEC filer but removed the definitions of public entity. All of the amendments in this update are effective upon the issuance of the final update. The adoption of ASU No. 2010-09 did not have an effect on our consolidated financial statements.

 

Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements.

 

NOTE 4 - FAIR VALUE OF FINANCIAL INSTRUMENTS

Substantially all of the Company’s financial instruments, consisting primarily of cash, accounts receivable, accounts payable and accrued expenses and accounts payable – related party are carried at, or approximate, fair value because of their short-term nature.

 

NOTE 5 – BASIC AND DILUTED EARNINGS LOSS PER SHARE

Basic loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued and outstanding as of March 31, 2010 and 2009.

 

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NOTE 6 – ACCOUNTS PAYABLE – RELATED PARTY

On May 14, 2009, the Company entered into an exclusive purchasing agreement with Ed & Serge Gold and Diamond, Inc. (“ESGD”), an entity wholly-owned by one of the Company’s stockholders. Under the agreement, ESGD has agreed not to sell any gold and diamonds to any other party other than ESM. ESM retains the right, however, to purchase from other vendors. Under the agreement, ESGD has agreed to invoice the Company at cost plus .05% on daily sales of up to $250,000 and .025% of daily sales over on amounts over $250,000. The agreement is for five years and automatically renews for additional one year periods unless notified by either party. Substantially all of the merchandise purchased that were made by the Company for the three months ended March 31, 2010 was from ESGD.  

In addition, the Company shares space with ESDG and receives rent from ESDG on a month-to-month basis of $3,000.

At March 31, 2010, the Company owed ESGD $393,165.

 

NOTE 7 – LOANS PAYABLE - STOCKHOLDER

Loans payable – stockholder consist of non-interest bearing advances due on demand.

NOTE 8 – SALES AND MAJOR CUSTOMERS

One customer accounted for 94.25% of total revenues for the three months ended March 31, 2010.  At March 31, 2010, one customer accounted for 91% of accounts receivable.

 

 

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

As used in this Form 10-Q, references to the “CaseyCorp,” Company,” “we,” “our” or “us” refer to CaseyCorp Enterprises, Inc. unless the context otherwise indicates.

Forward-Looking Statements

The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include matters relating to the business and financial condition of any company we acquire. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Overview

The Company originally planned to focus on developing and distributing advanced surveillance and security products.   On May 14, 2009, the Company acquired ESM to enter into the business of being a wholesale buyer and seller of gold, diamonds and other precious metals.  The Company acts as a middleman aggregating the gold, diamonds and other precious metals, which are purchased primarily from retail jewelers (who have purchased the products from customers) and selling it to refiners at a mark up ranging from .75% to 1.1%.  On October 2, 2009, the Company acquired EZS which is engaged in the business of purchasing gold and diamonds from consumers.

Results of Operations

Revenues

Revenues for the three months ended March 31, 2010 were $12,411,430. We sold gold and other precious metals primarily to one refiner which accounted for 94.25% of total revenues for the period. The Company also sold diamonds in the amount of $226,000 to various dealers in the period. The Company had no revenues for the corresponding period in 2009.

Cost of Sales and Gross Profit

Our cost of sales represents the cost of purchasing precious metals and diamonds which we then aggregate and sell to refiners and other dealers.  Cost of sales for the three months ended March 31, 2010 was $12,241,429.  The gross profit for the period amounted to $170,001 or 1.4 % of revenue

General and Administrative

General and administrative expenses for the three months ended March 31, 2010 were $200,333 which is primarily rent, and payroll. In addition, general and administrative expenses include the amortization of the exclusive purchasing agreement in the amount of $32,150. General and administrative expenses for corresponding period in 2009 were $4,550 which were primarily professional fees incurred to enable the Company to satisfy the requirements of a reporting company.

Liquidity and Capital Resources

As of March 31, 2010, we had cash of $488,996.

Cash from operating activities amounted to $411,608 and was primarily related to the collections of accounts receivable.

Cash used by investing activities amounted to $30,592 and represented the purchase of various property and equipment.

Cash used by financing activities amounted to $30,575 and consisted of repayments of stockholder loans..

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Management believes that cash on hand, plus anticipated revenue will be sufficient to support our operations through the end of 2010 provided that, in the event that the Company shall acquire additional products or subsidiaries, we may require significant amounts of additional capital sooner than the end of 2010. In such a case, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or convertible debt securities could result in additional dilution to our stockholders. Incurring indebtedness would result in an increase in our fixed obligations and could result in borrowing covenants that would restrict our operations. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. If financing is not available when required or is not available on acceptable terms, we may be unable to develop or enhance our products or services, or, we may potentially not be able to continue business activities. Any of these events could have a material and adverse effect on our business, results of operations and financial condition.

The statement made above relating to the adequacy of our working capital is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. The statements that express the “belief,” “anticipation,” “plans,” “expectations,” “will” and similar expressions are intended to identify forward-looking statements.

 

Critical Accounting Policies and Estimates

 

Our discussion and analysis of its financial condition and results of operations are based upon its financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an on-going basis, we evaluate our estimates, including those related to bad debts, income taxes and contingencies and litigation.  We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

Not applicable.

ITEM 4T.  CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation required by Rule 13a-15(b) of the Securities Exchange Act of 1934 or the Exchange Act under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

 

Disclosure controls and procedures are designed with the objective of ensuring that (i) information required to be disclosed in an issuer's reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) information is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

The evaluation of our disclosure controls and procedures included a review of our objectives and processes and effect on the information generated for use in this Report. This type of evaluation is done quarterly so that the conclusions concerning the effectiveness of these controls can be reported in our periodic reports filed with the SEC. We intend to maintain these controls as processes that may be appropriately modified as circumstances warrant.

Based on their evaluation, our Principal Executive Officer and Principal Financial Officer has concluded that our disclosure controls and procedures are effective in timely alerting them to material information which is required to be included in our periodic reports filed with the SEC as of the filing of this Report.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the three months ended March 31, 2010.

 

PART II

OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

There are no pending legal proceedings to which the Company is a party or, to the Company’s knowledge, in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

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ITEM 1A.  RISKS FACTORS.

Not required of smaller reporting companies. 

 

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Unregistered Sales of Equity Securities

None.

Purchases of equity securities by the issuer and affiliated purchasers

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.  [REMOVED AND RESERVED.]

ITEM 5.  OTHER INFORMATION.

None

 

ITEM 6.  EXHIBITS.

Exhibit No.		Description
31.1		PEO and PFO certification required under Section 302 of the Sarbanes-Oxley Act of 2002
32.1		PEO and PFO certification required under Section 906 of the Sarbanes-Oxley Act of 2002

 

SIGNATURES

In accordance with to requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CASEYCORP ENTERPRISES, INC .
Dated: May 14, 2010		Eduard Musheyev
	By:	/s/ Eduard Musheyev
	Name:	Eduard Musheyev
	Title:	President, Chief Executive Officer,
		and Director (Principle Executive, Financial and Accounting Officer)

 

 

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