UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended: September 30, 2008
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _________ to __________
Commission file number: 000-52776
NEWTOWN LANE MARKETING, INCORPORATED
(Exact name of registrant as specified in its charter)
| Delaware | 20-3547231 |
| (State or other jurisdiction of | (IRS Employer |
| incorporation or organization) | Identification No.) |
47 School Avenue
Chatham, NJ 07928
(Address of principal executive offices)
973-635-4047
(Issuer’s telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated filer o | Accelerated filer o | |
| Non-accelerated filer o | Smaller reporting company x |
Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes x No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: There were a total of 1,320,755 shares of the issuer’s common stock, par value $.0001 per share, outstanding as of October 31, 2008.
NEWTOWN LANE MARKETING, INCORPORATED
TABLE OF CONTENTS
| PART I. | FINANCIAL INFORMATION | ||
| Page | |||
| ITEM 1. | FINANCIAL STATEMENTS | ||
| Balance Sheets as of September 30, 2008 and | |||
| March 31, 2008 (unaudited) | 3 | ||
| Statements of Expenses for the Periods Ended | |||
| September 30, 2008 and 2007(unaudited) | 4 | ||
| Statements of Changes in Stockholders’ Equity (Deficit) for the period | |||
| from September 26, 2005 (Date of Inception) to September 30, 2008 (unaudited) | 5 | ||
| Statements of Cash Flows for the periods Ended | |||
| September 30, 2008 and 2007 (unaudited) | 6 | ||
| NOTES TO FINANCIAL STATEMENTS (unaudited) | 7 | ||
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION | ||
| AND RESULTS OF OPERATION | 9 | ||
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 11 | |
| ITEM 4T. | CONTROLS AND PROCEDURES | 11 | |
| PART II | OTHER INFORMATION | ||
| ITEM 6. | EXHIBITS | 12 | |
| SIGNATURES | 13 | ||
FORWARD-LOOKING STATEMENTS
Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” regarding the plans and objectives of management for future operations and market trends and expectations. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving the continued expansion of our business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. The terms “we”, “our”, “us”, or any derivative thereof, as used herein refer to Newtown Lane Marketing, Incorporated, a Delaware corporation, and its predecessors.
2
PART I. – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
NEWTOWN LANE MARKETING, INCORPORATED
(A Development Stage Company)
BALANCE SHEETS
(unaudited)
| ASSETS | September 30, | March 31, | ||||||
| 2008 | 2008 | |||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 5,853 | $ | 28,972 | ||||
| TOTAL CURRENT ASSETS | $ | 5,853 | $ | 28,972 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued expenses | $ | 7,697 | $ | 14,222 | ||||
| TOTAL CURRENT LIABILITIES | 7,697 | 14,222 | ||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Preferred stock, $0.001 par value, 1,000,000 shares authorized, | ||||||||
| none issued and outstanding | - | - | ||||||
| Common stock, $0.001 par value; 100,000,000 shares authorized, | ||||||||
| 1,320,755 issued and outstanding | 1,321 | 1,321 | ||||||
| Additional paid-in capital | 1,877,893 | 1,877,893 | ||||||
| Deficit accumulated during the development period | (1,881,058 | ) | (1,864,464 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | (1,844 | ) | 14,750 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 5,853 | $ | 28,972 | ||||
The accompanying notes are an integral part of these unaudited financial statements.
3
NEWTOWN
LANE
MARKETING,
INCORPORATED
(A
Development
Stage
Company)
STATEMENTS
OF
EXPENSES
(unaudited)
| September 26, 2005 | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | (Inception) | ||||||||||||||||||||
| September 30, | September 30, | Through | ||||||||||||||||||||
| 2008 | 2007 | 2008 | 2007 | September 30, 2008 | ||||||||||||||||||
| Expenses: | ||||||||||||||||||||||
| Selling, general and administrative | $ | 7,404 | $ | 170,564 | $ | 16,617 | $ | 216,322 | $ | 1,438,199 | ||||||||||||
| Loss from operations | (7,404 | ) | (170,564 | ) | (16,617 | ) | (216,322 | ) | (1,438,199 | ) | ||||||||||||
| Interest expense (income), net | (5 | ) | 48,049 | (23 | ) | 94,254 | 288,023 | |||||||||||||||
| Loss from discontinued operations | - | 3,296 | - | 3,681 | 154,836 | |||||||||||||||||
| Net loss | $ | (7,399 | ) | $ | (221,909 | ) | $ | (16,594 | ) | $ | (314,257 | ) | $ | (1,881,058 | ) | |||||||
| Net loss per share - basic and diluted | ||||||||||||||||||||||
| Continuing operations | $ | (0.01 | ) | $ | (0.58 | ) | $ | (0.01 | ) | $ | (1.28 | ) | ||||||||||
| Discontinued operations | $ | - | $ | (0.01 | ) | $ | - | $ | (0.02 | ) | ||||||||||||
| Net loss | $ | (0.01 | ) | $ | (0.59 | ) | $ | (0.01 | ) | $ | (1.30 | ) | ||||||||||
| Weighted average shares outstanding - basic and diluted | 1,320,755 | 378,495 | 1,320,755 | 242,324 | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
4
NEWTOWN
LANE
MARKETING,
INCORPORATED
(A
Development
Stage
Company)
STATEMENTS
OF
CHANGES
IN
STOCKHOLDERS’
EQUITY
(DEFICIT)
For the Period from
September
26, 2005
(Inception)
through
September
30, 2008
(unaudited)
| Deficit | ||||||||||||||||||||||
| Accumulated | Total | |||||||||||||||||||||
| Additional | During the | Stockholders’ | ||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Development | Equity | ||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Stage | (Deficit) | ||||||||||||||||
| Founders shares issued at inception | - | $ | - | 67,000 | $ | 67 | $ | 74,933 | $ | - | $ | 75,000 | ||||||||||
| Stock issued for services | - | - | 7,000 | 7 | 8,743 | - | 8,750 | |||||||||||||||
| Stock issued in connection with convertible notes | - | - | 10,972 | 11 | 159,992 | - | 160,003 | |||||||||||||||
| Net loss | - | - | - | - | - | (363,474 | ) | (363,474 | ) | |||||||||||||
| Balances at March 31, 2006 | - | - | 84,972 | 85 | 243,668 | (363,474 | ) | (119,721 | ) | |||||||||||||
| Accrued consulting fees converted to stock | - | - | 5,184 | 5 | 64,795 | - | 64,800 | |||||||||||||||
| Stock issued for services to founders | - | - | 12,000 | 12 | 149,988 | - | 150,000 | |||||||||||||||
| Transfer of officer’s shares | - | - | - | - | 78,750 | - | 78,750 | |||||||||||||||
| Issuance of stock options | - | - | - | - | 83,100 | - | 83,100 | |||||||||||||||
| Stock issued in exchange for options | - | - | 2,500 | 3 | 49,997 | - | 50,000 | |||||||||||||||
| Net loss | - | - | - | - | - | (1,124,608 | ) | (1,124,608 | ) | |||||||||||||
| Balances at March 31, 2007 | - | - | 104,656 | 105 | 670,298 | (1,488,082 | ) | (817,679 | ) | |||||||||||||
| Stock transferred for services | - | - | - | - | 19,000 | - | 19,000 | |||||||||||||||
| Stock issued to retire debt and accrued interest | - | - | 27,420 | 27 | 479,784 | - | 479,811 | |||||||||||||||
| Stock issued for cash proceeds | 500 | 1 | 447,925 | 448 | 599,551 | - | 600,000 | |||||||||||||||
| Series A preferred stock converted | (500 | ) | (1 | ) | 740,754 | 741 | (740 | ) | - | - | ||||||||||||
| Contributed capital | - | - | - | - | 110,000 | - | 110,000 | |||||||||||||||
| Net loss | - | - | - | - | - | (376,382 | ) | (376,382 | ) | |||||||||||||
| Balances at March 31, 2008 | - | - | 1,320,755 | 1,321 | 1,877,893 | (1,864,464 | ) | 14,750 | ||||||||||||||
| Net loss | - | - | - | - | - | (16,594 | ) | (16,594 | ) | |||||||||||||
| Balances at September 30, 2008 | - | $ | - | 1,320,755 | $ | 1,321 | $ | 1,877,893 | $ | (1,881,058 | ) | $ | (1,844 | ) | ||||||||
The accompanying notes are an integral part of these unaudited financial statements.
5
NEWTOWN LANE MARKETING, INCORPORATED
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(unaudited)
The accompanying notes are an integral part of these unaudited financial statements.
6
NEWTOWN LANE MARKETING, INCORPORATED
(A Development Stage Company)
September 30, 2008
(unaudited)
NOTE 1 - DESCRIPTION OF COMPANY
Newtown Lane Marketing Incorporated (“we”, “our”, “us” or “Newtown”) was incorporated in Delaware on September 26, 2005. We are a development stage company that held the exclusive license to exploit the Dreesen’s Donut Brand in the United States with the exception of the states of Florida and Pennsylvania, and in Suffolk County, New York, which the licensor, Dreesen’s, retained for itself. The license from Dreesen expired on December 31, 2007. In August 2007 there was a change in control, as detailed below, and we discontinued our efforts to promote the Dreesen’s Donut Brand at that time. Accordingly, prior operations in this regard are reflected in these financial statements as discontinued operations.
The interim financial information as of September 30, 2008 and for the three and six month periods ended September 30, 2008 and 2007 has been prepared without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to provide for fair presentation. These financial statements should be read in conjunction with the financial statements and the notes thereto, included in our Annual Report on Form 10-KSB, as amended, for the fiscal year ended March 31, 2008, previously filed with the SEC.
In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of our financial position as of September 30, 2008 and results of operations and cash flows for the three and six months ended September 30, 2008 and 2007, as applicable, have been made. The results of operations for the three and six months ended September 30, 2008 are not necessarily indicative of the operating results that may be expected for the full fiscal year or any future periods.
EQUITY TRANSACTIONS
On August 8, 2007 (the “Effective Date”), we entered into and closed a Stock Purchase Agreement (the “Purchase Agreement”) with Moyo Partners, LLC, a New York limited liability company (“Moyo”) and R&R Biotech Partners, LLC, a Delaware limited liability company (“R&R” collectively with Moyo, the “Purchasers”), pursuant to which we sold to them, in the aggregate, approximately, four hundred forty seven thousand nine hundred twenty five (447,925) shares (rounded-up) of our common stock, par value $0.001 per share (“Common Stock”) and five hundred (500 ) shares of our Series A Preferred Stock, par value $.001 per share (“Series A Preferred Stock”), each share convertible at the option of the holder into, approximately, one thousand four hundred eighty two (1,482) shares (rounded-up) of Common Stock, for aggregate gross proceeds to us of $600,000. The shares of Series A Preferred Stock were convertible only to the extent there were a sufficient number of shares of Common Stock available for issuance upon any such conversion.
On the Effective Date: (i) the Purchasers acquired control of Newtown, with (a) R&R acquiring nine hundred fifty thousand nine hundred forty four (950,944) shares (rounded-up) of Common Stock (assuming the conversion by R&R of the four hundred (400) shares of Series A Preferred Stock it acquired pursuant to the Purchase Agreement into five hundred ninety two thousand eight hundred (592,800) shares (rounded-up) of Common Stock) constituting 72% of the then issued and outstanding shares of Common Stock, and (b) Moyo acquiring two hundred thirty seven thousand seven hundred thirty six (237,736) shares (rounded-up) of Common Stock (assuming the conversion by Moyo of its one hundred (100) shares of Series A Preferred Stock it acquired pursuant to the Purchase Agreement into one hundred forty eight thousand one hundred fifty one (148,151) shares (rounded-up) of Common Stock) constituting 18% of the then issued and outstanding shares of Common Stock; and (ii) in full satisfaction of our obligations under outstanding convertible promissory notes in the principal amount of $960,000 (the “December Notes”), the Note holders of the December Notes converted an aggregate of $479,811 of principal and accrued interest into 27,420 shares (rounded-up) of Common Stock and accepted a cash payment from us in the aggregate amount of $625,030 for the remaining principal balance.
On the Effective Date: (i) Arnold P. Kling was appointed to our Board of Directors (“Board”) and served together with Vincent J. McGill, a then current director who continued to serve until August 20, 2007, the effective date of his resignation from our Board; (ii) all of our then officers and directors, with the exception of Mr. McGill, resigned from their respective positions with us; (iii) our Board appointed Mr. Kling as president and Kirk M. Warshaw as chief financial officer and secretary; and (iv) we relocated our headquarters to Chatham, New Jersey.
Following Mr. McGill’s resignation from our Board on August 20, 2007, Mr. Kling became our sole director and president.
7
On October 19, 2007, we put into effect an amendment to our Certificate of Incorporation to increase to 100,000,000 the number of authorized shares of Common Stock available for issuance (the “Charter Amendment”). As a result of the Charter Amendment, as of October 19, 2007, we had adequate shares of Common Stock available for issuance upon the conversion of all the issued and outstanding shares of Series A Preferred Stock.
On December 19, 2007, the holders of all the issued and outstanding shares of Series A Preferred Stock elected to convert all of their shares into shares of Common Stock. As a result, the 500 shares of Series A Preferred Stock outstanding were exchanged for 740,754 shares of Common Stock.
On August 15, 2008 (the “Series A Preferred Elimination Date”), all 500 shares of the Series A Preferred Stock were returned to the status of authorized and unissued shares of undesignated preferred stock, par value $.001 per shares. None of the Series A Preferred Stock were outstanding as of the Series A Preferred Elimination Date.
On August 29, 2008 (the “Reverse Split Effective Date”), we implemented a 1 for 50 reverse stock split (the “Reverse Split”) of the Common Stock. Pursuant to the Reverse Split, each 50 shares of Common Stock issued and outstanding as of the Reverse Split Effective Date was converted into one (1) share of Common Stock. All share and per share data herein has been retroactively restated to reflect the Reverse Split.
As of September 30, 2008, our authorized capital stock consisted of 100,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock of which 1,320,755 shares of Common Stock, and no shares of Preferred Stock, were issued and outstanding. All shares of Common Stock currently outstanding are validly issued, fully paid and non-assessable.
THE COMPANY TODAY
Since the Effective Date, our main purpose has been to serve as a vehicle to acquire an operating business and we are currently considered a “shell” company in as much as we are not generating revenues, do not own an operating business, and have no specific plan other than to engage in a merger or acquisition transaction with a yet-to-be identified operating company or business. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with an operating business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business. The analysis of new business opportunities will be undertaken by or under the supervision of our officers and directors. We have no employees and no material assets.
Commencing with the filing of our Form 10-Q for the quarter ended September 30, 2007, all of our donut-related business services activities have been accounted for as Discontinued Operations. As such, all of the prior activity has been shown in the financials as one line item that is labeled “Loss from Discontinued Operations.” Our activities since August 2007 are shown in the Income Statement under the section labeled “Loss from Continuing Operations.” These amounts are for expenses incurred since August 2007 and are of the nature we expect to incur in the future, whereas the Loss from Discontinued Operations are from activities we are no longer engaged in.
NOTE 2 – GOING CONCERN
As shown in the accompanying financial statements, we incurred recurring net losses of $16,594 and $310,576 for the six month periods ended September 30, 2008 and 2007, respectively, and have an accumulated deficit of $1,881,058 and a working capital deficit of $1,844 as of September 30, 2008. These conditions raise substantial doubt as to our ability to continue as a going concern and the financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. As mentioned above we are pursuing a merger with an operating company or business and will not commence operations until that target is identified and a merger completed.
8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Use of Forward-Looking Statements
Some of the statements in this Form 10-Q, including some statements in “Management’s Discussion and Analysis or Plan of Operation” are forward-looking statements about what may happen in the future. They include statements regarding our current beliefs, goals, and expectations about matters such as our expected financial position and operating results, our business strategy, and our financing plans. These statements can sometimes be identified by our use of forward-looking words such as “anticipate,” “estimate,” “expect,” “intend,” “may,” “will,” and similar expressions. We cannot guarantee that our forward-looking statements will turn out to be correct or that our beliefs and goals will not change. Our actual results could be very different from and worse than our expectations for various reasons. You are urged to carefully consider these factors, as well as other information contained in this Form 10-Q and in our other periodic reports and documents filed with the United States Securities and Exchange Commission (“SEC”).
In our Form 10-KSB filed with the SEC for the year ended March 31, 2008, we have identified critical accounting policies and estimates for our business.
Plan of Operation
We are a development stage corporation with limited operations and have very limited revenues from our business operations since our incorporation in September 2005. Until December 31, 2007, we held the exclusive license to exploit the Dreesen’s Donut Brand in the United States with the exception of the states of Florida and Pennsylvania, and in Suffolk County, New York, which the licensor, Dreesen’s, retained for itself. The license from Dreesen expired on December 31, 2007.
On August 8, 2007 (the “Effective Date”), we entered into and closed a Stock Purchase Agreement (the “Purchase Agreement”) with Moyo Partners, LLC, a New York limited liability company (“Moyo”) and R&R Biotech Partners, LLC, a Delaware limited liability company (“R&R” collectively with Moyo, the “Purchasers”), pursuant to which we sold to them, in the aggregate, approximately, four hundred forty seven thousand nine hundred twenty five (447,925) shares (rounded-up) of our common stock, par value $0.001 per share (“Common Stock”) and five hundred (500 ) shares of our Series A Preferred Stock, par value $.001 per share (“Series A Preferred Stock”), each share convertible at the option of the holder into, approximately, one thousand four hundred eighty two (1,482) shares (rounded-up) of Common Stock, for aggregate gross proceeds to us of $600,000. The shares of Series A Preferred Stock were convertible only to the extent there were a sufficient number of shares of Common Stock available for issuance upon any such conversion.
On the Effective Date: (i) the Purchasers acquired control of Newtown, with (a) R&R acquiring nine hundred fifty thousand nine hundred forty four (950,944) shares (rounded-up) of Common Stock (assuming the conversion by R&R of the four hundred (400) shares of Series A Preferred Stock it acquired pursuant to the Purchase Agreement into five hundred nine two thousand eight hundred (592,800) shares (rounded-up) of Common Stock) constituting 72% of the then issued and outstanding shares of Common Stock, and (b) Moyo acquiring two hundred thirty seven thousand seven hundred thirty six (237,736) shares (rounded-up) of Common Stock (assuming the conversion by Moyo of its one hundred (100) shares of Series A Preferred Stock it acquired pursuant to the Purchase Agreement into one hundred forty eight thousand one hundred fifty one (148,151) shares (rounded-up) of Common Stock) constituting 18% of the then issued and outstanding shares of Common Stock; and (ii) in full satisfaction of our obligations under outstanding convertible promissory notes in the principal amount of $960,000 (the “December Notes”), the Note holders of the December Notes converted an aggregate of $479,811 of principal and accrued interest into 27,420 shares (rounded-up) of Common Stock and accepted a cash payment from us in the aggregate amount of $625,030 for the remaining principal balance.
On October 19, 2007, we put into effect an amendment to our Certificate of Incorporation to increase to 100,000,000 the number of authorized shares of Common Stock available for issuance (the “Charter Amendment”). As a result of the Charter Amendment, as of October 19, 2007, we had adequate shares of Common Stock available for issuance upon the conversion of all the issued and outstanding shares of Preferred Stock.
On December 19, 2007, the holders of all the issued and outstanding shares of Series A Preferred Stock elected to convert all of their shares into shares of Common Stock. As a result, the 500 shares of Series A Preferred Stock outstanding were exchanged for 740,754 shares of Common Stock.
On August 15, 2008 (the “Series A Preferred Elimination Date”), all 500 shares of the Series A Preferred Stock were returned to the status of authorized and unissued shares of undesignated preferred stock, par value $.001 per shares. None of the Series A Preferred Stock were outstanding as of the Series A Preferred Elimination Date.
9
On August 29, 2008 (the “Reverse Split Effective Date”), we implemented a 1 for 50 reverse stock split (the “Reverse Split”) of the Common Stock. Pursuant to the Reverse Split, each 50 shares of Common Stock issued and outstanding as of the Reverse Split Effective Date was converted into one (1) share of Common Stock. All share and per share data herein has been retroactively restated to reflect the Reverse Split.
As of September 30, 2008, our authorized capital stock consisted of 100,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock of which 1,320,755 shares of Common Stock, and no shares of Preferred Stock, were issued and outstanding. All shares of Common Stock currently outstanding are validly issued, fully paid and non-assessable.
As of the Effective Date, we discontinued our efforts to promote the Dreesen’s Donut Brand, we have no employees and our main purpose has been to effect a business combination with an operating business which we believe has significant growth potential. As of yet, we have no definitive agreements or understandings with any prospective business combination candidates and there are no assurances that we will find a suitable business with which to combine. The implementation of our business objectives is wholly contingent upon a business combination and/or the successful sale of our securities. We intend to utilize the proceeds of any offering, any sales of equity securities or debt securities, bank and other borrowings or a combination of those sources to effect a business combination with a target business which we believe has significant growth potential. While we may, under certain circumstances, seek to effect business combinations with more than one target business, unless and until additional financing is obtained, we will not have sufficient proceeds remaining after an initial business combination to undertake additional business combinations.
A common reason for a target company to enter into a merger with us is the desire to establish a public trading market for its shares. Such a company would hope to avoid the perceived adverse consequences of undertaking a public offering itself, such as the time delays and significant expenses incurred to comply with the various Federal and state securities law that regulate initial public offerings.
As a result of our limited resources, we expect to have sufficient proceeds to effect only a single business combination. Accordingly, the prospects for our success will be entirely dependent upon the future performance of a single business. Unlike certain entities that have the resources to consummate several business combinations or entities operating in multiple industries or multiple segments of a single industry, we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. A target business may be dependent upon the development or market acceptance of a single or limited number of products, processes or services, in which case there will be an even higher risk that the target business will not prove to be commercially viable.
Our officers are only required to devote a small portion of their time (less than 10%) to our affairs on a part-time or as-needed basis. We expect to use outside consultants, advisors, attorneys and accountants as necessary. We do not anticipate hiring any full-time employees so long as we are seeking and evaluating business opportunities.
We expect our present management to play no managerial role in our company following a business combination. Although we intend to scrutinize closely the management of a prospective target business in connection with our evaluation of a business combination with a target business, our assessment of management may be incorrect. We cannot assure you that we will find a suitable business with which to combine.
Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with an operating business. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business. The analysis of new business opportunities will be undertaken by or under the supervision of our officers and directors.
Results of Operations
THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2007
We are a development stage corporation with limited operations and did not have any revenues during the three and six month periods ended September 30, 2008 and 2007, respectively.
Total expenses from Continuing Operations for the three months ended September 30, 2008 and 2007 were $7,404 and $170,564, respectively. These expenses primarily constituted general and administrative expenses. Net interest (income) expense was ($5) for the three months ended September 30, 2008 and was $48,049 for the three months ended September 30, 2007.
Losses from Continuing Operations for the six months ended September 30, 2008 and 2007 were $16,617 and $216,322, respectively. These expenses primarily constituted general and administrative expenses. Net interest (income) expense was ($23) for the six months ended September 30, 2008 and was $94,254 for the six months ended September 30, 2007.
10
Liquidity and Capital Resources
At September 30, 2008, we did not have any revenues from operations. Absent a merger or other combination with an operating company, we do not expect to have any revenues from operations. No assurance can be given that such a merger or other combination will occur or that we can engage in any public or private sales of our equity or debt securities to raise working capital. We are dependent upon future loans or capital contributions from our present stockholders and/or management and there can be no assurances that our present stockholders or management will make any loans or capital contributions to us. At September 30, 2008, we had cash of $5,853 and a working capital deficit of $1,844.
Our present material commitments are professional and administrative fees and expenses associated with the preparation of our filings with the U.S. Securities and Exchange Commission and other regulatory requirements. In the event that we engage in any merger or other combination with an operating company, we will have additional material professional commitments.
Commitments
We do not have any commitments which are required to be disclosed in tabular form as of September 30, 2008.
Off-Balance Sheet Arrangements
As of September 30, 2008, we have no off-balance sheet arrangements such as guarantees, retained or contingent interest in assets transferred, obligation under a derivative instrument and obligation arising out of or a variable interest in an unconsolidated entity.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
A smaller reporting company is not required to provide the information required by this Item.
ITEM 4T. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our president and our chief financial officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (the “Exchange Act”) Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, our president and our chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our president and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
11
PART II. - OTHER INFORMATION
ITEM 6. EXHIBITS
| Exhibit No. | Description | |
| 3.1 |
Certificate of Amendment of the Certificate of Incorporation, effective as of August 29, 2008. |
|
| 3.2 |
Certificate Eliminating the Series A Preferred Stock. |
|
| 31.1 |
Certification of the President pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
| 31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
| 32.1 |
Certification of the President pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
| 32.2 |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
12
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Newtown Lane Marketing, Incorporated | ||
| Dated: October 31, 2008 | /s/ Arnold P. Kling | |
| -------------------------------------------- | ||
| Arnold P. Kling, President | ||
| (Principal Executive Officer) | ||
| Dated: October 31, 2008 | /s/ Kirk M. Warshaw | |
| -------------------------------------------- | ||
| Kirk M. Warshaw, Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
13
EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
OF NEWTOWN LANE MARKETING, INCORPORATED
Pursuant to Section 242 of the General Corporation Law of the State of Delaware (the “DGCL”), Newtown Lane Marketing, Incorporated, a corporation organized and existing under the DCGL, does hereby certify and set forth as follows:
1. The name of the corporation is Newtown Lane Marketing, Incorporated (the “ Corporation ”).
2. The Corporation’s Amended and Restated Certificate of Incorporation was filed on February 27, 2006 (the “Charter”).
3. Resolutions were duly adopted by the Board of Directors of the Corporation (the “Board”) to amend the Corporation’s Charter to implement a reverse split of the Corporation’s common stock, par value $0.001 per share (the “Charter Amendment”), and declaring such Charter Amendment to be advisable and in the best interests of the Corporation and its stockholders.
4. Pursuant to the recommendation of the Board, the Charter Amendment and this Certificate of Amendment was consented to in writing by the stockholders of the Corporation in accordance with Section 228 of the DCGL. Prompt written notice of the adoption of the Charter Amendment herein certified has been given to those stockholders who did not consent in writing thereto, as provided in Section 228 of the DCGL.
5. The Charter is hereby amended by inserting the following three new paragraphs following the current text of Paragraph C of Article FOURTH:
Effective at 9:00 AM Eastern Time, on August 29, 2008 (the "Effective Date"), each 50 shares of Common Stock then issued, which are the only voting securities of the Corporation issued and outstanding, shall be automatically reclassified into one (1) share of Common Stock (the “Reverse Stock Split”). Any fractional interests resulting from such reclassification shall be rounded-up to the nearest full share.
From and after the Effective Date, the amount of capital represented by the Common Stock immediately after the Effective Date shall be the same as the amount of capital represented by such shares immediately prior to the Effective Date, until thereafter reduced or increased in accordance with applicable law. The par value of a share of Common Stock shall remain unchanged after the Reverse Stock Split at $.001 per share.
From and after the Effective Date, the total number of shares of all classes of capital stock which the Corporation shall have authority to issue shall remain unchanged.
6. For accounting purposes only, the effective date of this Certificate of Amendment shall be August 29, 2008.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, Newtown Lane Marketing, Incorporated has caused this Certificate of Amendment to be signed on this 15th day of August 2008.
| Newtown Lane Marketing, Incorporated | |||
| By: | /s/ Arnold P. Kling | ||
| Arnold P. Kling, President | |||
EXHIBIT 3.2
CERTIFICATE ELIMINATING REFERENCE TO A SERIES
OF SHARES OF STOCK FROM THE
CERTIFICATE OF INCORPORATION
OF
NEWTOWN LANE MARKETING, INCORPORATED
(Pursuant to Section 151 (g) of the Delaware General Corporation Law)
___________
Newtown Lane Marketing, Incorporated (hereinafter called the "corporation"), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify:
1. The name of the corporation is Newtown Lane Marketing, Incorporated.
2. The designation of the series of shares of stock of the corporation to which this certificate relates is Series A Convertible Preferred Stock, $.001 par value per share (the “Series A Preferred Stock”).
3. The voting powers, designations, preferences, and the relative, participating, optional, or other rights, and the qualifications, limitations, and restrictions of the said series of shares of stock were provided for in a resolution adopted by the Board of Directors of the corporation pursuant to authority expressly vested in it by the provisions of the certificate of incorporation of the corporation. A certificate setting forth the said resolution has been heretofore filed with the Secretary of State of the State of Delaware pursuant to the provisions of Section 151 (g) of the General Corporation Law of the State of Delaware (the “Certificate of Designation”).
4. The Board of Directors of the corporation has adopted the following resolution:
RESOLVED, that none of the authorized shares of Series A Preferred Stock are outstanding, and
BE IT FURTHER RESOLVED, that none of the Series A Preferred Stock will be issued pursuant to the Certificate of Designation, and
BE IT FURTHER RESOLVED, that all the shares of Preferred Stock designated as Series A Preferred Stock by the due filing of Certificate of Designation shall be returned to the status of authorized and unissued shares of Preferred Stock subject to Article FOURTH of the corporation’s certificate of incorporation; and
BE IT FURTHER RESOLVED, that the President of the corporation be, and hereby is authorized and directed to file a certificate setting forth this resolution with the Secretary of State of the State of Delaware pursuant to the provisions of Section 151(g) of the General Corporation Law of the State of Delaware for the purpose of eliminating from the certificate of incorporation of the corporation all reference to the Series A Preferred Stock.
******
1
Executed on this 15th day of August, 2008
| /s/ Arnold P. Kling | ||
| Arnold P. Kling | ||
| President | ||
2
EXHIBIT 31.1
CERTIFICATION
I, Arnold P. Kling, certify that:
| 1. |
I have reviewed this quarterly report on Form 10-Q of Newtown Lane Marketing, Incorporated; |
||
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
||
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
||
| 4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: |
||
| a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
||
| b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
||
| c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
||
| d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
||
| 5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
||
| a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
||
| b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
||
Date: October 31, 2008
| /s/ Arnold P. Kling | |
| Arnold P. Kling, | |
| President | |
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION
I Kirk M. Warshaw, certify that:
| 1. |
I have reviewed this quarterly report on Form 10-Q of Newtown Lane Marketing, Incorporated; |
||
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
||
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
||
| 4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: |
||
| a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
||
| b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
||
| c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
||
| d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
||
| 5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
||
| a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
||
| b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
||
Date: October 31, 2008
| /s/ Kirk M. Warshaw | |
| Kirk M. Warshaw | |
| Chief Financial Officer | |
| (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Newtown Lane Marketing, Incorporated (the “Company”) on Form 10-Q for the period ending September 30, 2008 as filed with the Securities and Exchange Commission (the “Report”), I, Arnold P. Kling, President of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
| (2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
|
| Dated: October 31, 2008 |
| /s/ Arnold P. Kling |
| ----------------------------------- |
| Arnold P. Kling |
| President |
A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Newtown Lane Marketing, Incorporated (the “Company”) on Form 10-Q for the period ending September 30, 2008 as filed with the Securities and Exchange Commission (the “Report”), I, Kirk M. Warshaw, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
| (2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
|
| Dated: October 31, 2008 |
| /s/ Kirk M. Warshaw |
| ----------------------------------- |
| Kirk M. Warshaw |
| Chief Financial Officer |
A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.