UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------
FORM 10Q
-----------------
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the quarterly period ended March 31, 2010
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from
Commission file number : 333-38184
TOMBSTONE TECHNOLOGIES, INC.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 51-0431963
---------- ------------
(State of Incorporation) (IRS Employer ID Number)
5380 Highlands Drive, Longmont, CO 80503
-----------------------------------------------
(Address of principal executive offices)
303-684-6644
--------------------------
(Registrant's Telephone number)
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 past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 for Regulation S-T (ss.232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated file, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] (Do
not check if a smaller reporting company) Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate the number of share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of May 6, 2010, there were 4,878,000 shares of the registrant's common stock
issued and outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Condensed Balance Sheets - March 31, 2010 and
December 31, 2009 F-1
Condensed Statement of Operations -
Three months ended March 31, 2010 and 2009 and From January 1,
2009 (Inception of Development Stage)
through March 31, 2010 F-2
Condensed Statement of Changes in Shareholders' Equity -
From January 1, 2009 through March 31, 2010 F-3
CondensedStatement of Cash Flows - Three months ended March 31, 2010
and 2009 and from January 1, 2009
(Inception of Development Stage) through March 31, 2010 F-4
Notes to the Condensed Financial Statements F-5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 1
Item 3. Quantitative and Qualitative Disclosures About Market Risk - Not Applicable
Item 4. Controls and Procedures 3
Item 4T. Controls and Procedures 3
PART II - OTHER INFORMATION
Item 1. Legal Proceedings -Not Applicable 4
Item 1.A. Risk Factors - Not Applicable
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 4
Item 3. Defaults Upon Senior Securities - Not Applicable 4
Item 4. Removed and Reserved 5
Item 5. Other Information - Not Applicable 5
Item 6. Exhibits 5
SIGNATURES 6
PART I
ITEM 1. FINANCIAL STATEMENTS
TOMBSTONE TECHNOLOGIES, INC.
(A Development Stage Company)
Condensed Balance Sheets
March 31, December 31,
2010 2009
(Unaudited) (Audited)
------------------- ------------------
Assets
Current Assets
Cash and cash equivalents $ 5,067 $ 7,439
------------------- ------------------
Total Current Assets 5,067 7,439
Property and equipment, net 4,077 5,679
Intangible assets, net 83,382 92,647
------------------- ------------------
Total Assets $ 92,526 $ 105,765
=================== ==================
Liabilities and Shareholders' Equity/(Deficit)
Current Liabilities:
Accounts payable $ 6,284 $ 7,234
Indebtedness to acquistion candidate (Note 1) 25,028 --
Convertible promissory notes, net of unamortized
discount of $0 and $1,667 (Note 2) -- 98,333
Current portion - capital lease obligation 1,303 1,925
------------------- ------------------
Total Current Liabilities 32,615 107,492
Shareholders' Equity/(Deficit):
Preferred stock, no par value; 1,000,000 shares authorized,
-0- and -0- shares issued and outstanding, respectively -- --
Common stock, no par value; 100,000,000 shares authorized,
4,878,000 and 3,878,000 shares issued and outstanding,
respectiv1y 1,055,775 955,775
Additional paid-in capital 253,275 253,275
Accumulated deficit (909,499) (909,499)
Deficit accumulated during development stage (339,640) (301,278)
------------------- ------------------
Total Shareholders' Equity/(Deficit) 59,911 (1,727)
------------------- ------------------
Total Liabilities and Shareholders' Equity/(Deficit) $ 92,526 $ 105,765
=================== ==================
See accompanying notes to unaudited condensed financial statements
F-1
TOMBSTONE TECHNOLOGIES, INC.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
January 1, 2009
(Inception of
Development Stage)
For the Three Months Ended through
March 31, March 31,
----------------------------- ------------------
2010 2009 2010
------------- ------------- ------------------
Continuing operations:
Sales $ -- $ -- $ 1,508
Cost of sales -- 740 1,120
------------- ------------- ------------------
Gross profit -- (740) 388
Selling, general and administrative expenses (36,397) (27,445) (234,051)
------------- ------------- ------------------
Loss from continuing operations (36,397) (28,185) (233,663)
Other income and (expense):
Interest income -- 5 5
Interest expense:
Beneficial conversion feature -- -- (98,333)
Interest expense-promissory notes (1,914) -- (7,114)
Interest expense-other (51) (135) (535)
------------- ------------- ------------------
(1,965) (130) (105,977)
Loss before income taxes (38,362) (28,315) (339,640)
Income tax provision -- -- --
------------- ------------- ------------------
Net loss $ (38,362)$ (28,315)$ (339,640)
============= ============= ==================
Basic and diluted loss per share $ (0.01)$ (0.01)
============= =============
Basic and diluted weighted average
common shares outstanding 4,644,667 3,253,333
============= =============
See accompanying notes to unaudited condensed financial statement
F-2
TOMBSTONE TECHNOLOGIES, INC.
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
January 1, 2009
(Inception of
Development Stage )
For The Three Months Ended through
March 31, March 31,
--------------------------------- -------------------
2010 2009 2010
-------------- ----------------- -------------------
Cash flows from operating activities:
Net cash flows used in operating activities $ (26,778) $ (13,267) $ (114,050)
-------------- ----------------- -------------------
Cash flows from investing activities:
Purchase of software - - (14,857)
-------------- ----------------- -------------------
Net cash used in investing activities - - (14,857)
-------------- ----------------- -------------------
Cash flows from financing activities:
Proceeds from short term loans 25,028 7,500 125,028
Cash payments on capital lease (622) (559) (2,936)
-------------- ----------------- -------------------
Net cash provided by financing activities 24,406 6,941 122,092
-------------- ----------------- -------------------
Net change in cash and cash equivalents (2,372) (6,326) (6,815)
Cash and cash equivalents:
Beginning of year 7,439 11,882 11,882
-------------- ----------------- -------------------
End of year $ 5,067 $ 5,556 $ 5,067
============== ================= ===================
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes $ -- $ -- $ --
============== ================= ===================
Interest $ 298 $ -- $ 5,498
============== ================= ===================
Noncash investing and financing transactions:
Common stock issued as payment for stoftware
development costs $ -- $ 37,870 $ 42,870
============== ================= ===================
Common stock issued as payment for accrued
payroll $ -- $ -- $ 36,000
============== ================= ===================
See accompanying notes to unaudited condensed financial statements
F-3
TOMBSTONE TECHNOLOGIES, INC.
(A Development Stage Company)
Statement of Changes in Shareholders' Equity/(Deficit)
(Unaudited)
Deficit
Accumulated
Additional During
Common Stock Paid-in Accumulated Development
---------------------------------
Shares Amount Capital Deficit Stage Total
---------------- -------------- -------------- --------------- ---------------- --------------
Balance at December 31,
2008 3,230,000 $ 816,305 $ 134,892 $ (909,499) $ -- $ 41,698
March 2009, shares
issued for software
development 140,000 37,870 -- -- -- 37,870
June 2009, shares
issued for accrued
payroll and services
by an officer 476,170 95,234 -- -- -- 95,234
July 2009, shares issued
for services by an
officer 6,830 1,366 -- -- -- 1,366
July 2009, shares issued
for software development 25,000 5,000 -- -- -- 5,000
Stock options issued and
extended -- -- 18,383 -- -- 18,383
Discount on convertible
promissory notes -- -- 100,000 -- -- 100,000
Net loss -- -- -- -- (301,278) (301,278)
---------------- -------------- -------------- --------------- ---------------- -------------
Balance at December 31, 2009 3,878,000 955,775 253,275 (909,499) (301,278) (1,727)
---------------- -------------- -------------- --------------- ---------------- -------------
January 2010 shares, issued
to Convertible Promissory 1,000,000 100,000 -- -- -- 100,000
Note Holders
Net loss -- -- -- -- (38,362) (38,362)
---------------- -------------- -------------- --------------- ---------------- -------------
Balance at March 31, 2010 4,878,000 $ 1,055,775 $ 253,275 $ (909,499)$ (339,640)$ 59,911
================ ============== ============== =============== ================ =============
See accompanying notes to unaudited condensed financial statements
F-4
TOMBSTONE TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Condensed Financial Statements
March 31, 2010
(Unaudited)
Note 1: Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
and Regulation S-K. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements. In the opinion of the
Company, the accompanying unaudited condensed financial statements contain all
adjustments (consisting of only normal recurring accruals) necessary to present
fairly the financial position as of March 31, 2010, the results of operations
for the three months ended March 31, 2010, and cash flows for the three months
ended March 31, 2010. These financial statements should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's annual report on Form 10-K for the year ended December 31, 2009. There
have been no updates or changes to our audited financial statements for the year
ended December 31, 2009. There is no provision for dividends for the quarter to
which this quarterly report relates.
The results of operations for the three months ended March 31, 2010 are not
necessarily indicative of the results to be expected for the full year.
Proposed Acquisition
During the three months ended March 31, 2010, the Company entered into an
agreement to acquire the assets of Hunt Global Resources, Inc. ("Hunt"), a
Houston based company focused on the use of new technologies to maximize the
value of its natural resources projects. The completion of acquisition is
contingent upon the deliverance of audited financial statements of Hunt. At this
time, the Company has not closed on the acquisition. See Note 5, Subsequent
Events.
During the three months ended March 31, 2010, Hunt advanced the Company funds
totaling $25,028 to support operations. These funds are due on demand.
Going Concern
The Company's financial statements for the three months ended March 31, 2010
have been prepared on a going concern basis, which contemplates the realization
of assets and the settlement of liabilities and commitments in the normal course
of business. The Company reported an accumulated deficit of $1,249,139 as of
March 31, 2010. The Company recognized losses of $38,362 from its operational
activities during the three months ended March 31, 2010. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Recent Accounting Pronouncements
There were various other accounting standards and interpretations issued in
2010, none of which are expected to have a material impact on the Company's
financial position, operations or cash flows.
Note 2: Convertible Promissory Notes
During the year ended December 31, 2009, the Company issued Convertible
Promissory Notes payable to unrelated third parties totaling $100,000 with
interest accruing at 8% per annum (paid quarterly) maturing twelve months from
date of issuance. The notes were immediately convertible to restricted shares of
common stock at $0.10 per share.
F-5
TOMBSTONE TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Condensed Financial Statements
March 31, 2010
(Unaudited)
A beneficial conversion feature (difference between conversion price and the
quoted stock price on the date of commitment) embedded in the convertible
promissory notes was measured at $100,000 and recorded as a debt discount on the
transaction date. As of December 31, 2009, $98,333 of the discount was amortized
to interest expense, leaving an unamortized discount of $1,667 in the
accompanying financial statements for the year ended December 31, 2009.
In January 2010, all of the holders of the outstanding Convertible Promissory
Notes gave conversion notice to the Company that they would convert their notes
into shares of the Company's common stock. The conversion of the Convertible
Promissory Notes resulted in the issuance of 1,000,000 shares of Company's
common stock to the convertible promissory note holders of such notes as of
January 15, 2010. After the conversion of such Convertible Promissory Notes the
Company does not have any Convertible Promissory Notes outstanding.
The following is a summary of convertible promissory notes at March 31, 2010 and
December 31, 2009:
March 31, 2010 December 31, 2009
---------------------- --------------------
Notes issued in March 2009 $ - $ 7,500
Notes issued in April 2009 - 25,000
Notes issued in May 2009 - 27,500
Notes issued in July 2009 - 40,000
---------------------- --------------------
Total convertible promissory notes $ - $ 100,000
====================== ====================
Note 3: Shareholders' Equity
Common Stock
In January 2010, all of the holders of the outstanding Convertible Promissory
Notes totaling $100,000 gave conversion notice to the Company that they would
convert their notes into shares of the Company's common stock. The conversion of
the Convertible Promissory Notes resulted in the issuance of 1,000,000 shares of
Company's common stock to the convertible promissory note holders of such notes
as of January 15, 2010. After the conversion of such Convertible Promissory
Notes the Company does not have any Convertible Promissory Notes outstanding
Stock Options
Pursuant to our Employee/Consultant Stock Option Plan, stock options generally
are granted with an exercise price equal to the market price of our common stock
at the date of grant. Substantially all of the options granted to employees and
consultants are exercisable pursuant to an immediate vesting schedule with a
maximum contractual term of 5 years. The fair value of these options is
estimated using the Black-Scholes option pricing model which incorporates the
assumptions noted in the table below. The risk-free interest rate for periods
within the expected life of the option is based on the U.S. Treasury bond rate
in effect at the time of grant. We do not pay dividends and do not expect to do
so in the future. Expected volatilities are based on the historical volatilities
of appropriate industry sector index. The expected term of the options granted
during 2009 is approximately 3 years calculated using the simplified method.
We use historical volatility of appropriate industry sector index as we believe
it is more reflective of market conditions and a better indicator of volatility.
We use the simplified calculation of expected life. If we determined that
another method used to estimate expected volatility was more reasonable than our
current methods, or if another method for calculating these input assumptions
was prescribed by authoritative guidance, the fair value calculated for
F-6
TOMBSTONE TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Condensed Financial Statements
March 31, 2010
(Unaudited)
share-based awards could change significantly. Higher volatility and longer
expected lives result in an increase to share-based compensation determined at
the date of grant.
A summary of changes in the number of stock options outstanding for the three
months ended March 31, 2010 is as follows:
Number of Price Per Price Per Share Contractual Aggregate
Shares Share Life Intrinsic
Value
Outstanding at January 1, 2010.......... 1,689,999 $0.10 - $1.50 $0.65 2.67 years $38,500
Granted................................. -- -- -- -- --
Expired................................. -- -- -- -- --
Cancelled/Expired....................... -- -- -- -- --
------------------------------------------------------------------------
Outstanding at March 31, 2010........... 1,689,999 $0.10 - $1.50 $0.65 2.42 years $142,499
========================================================================
Exercisable at March 31, 2010 1,689,999 $0.10 - $1.50 $0.65 2.42 years $142,499
========================================================================
Note 4: Income Taxes
The Company incurred net operating losses during the periods shown on the
condensed financial statements resulting in a deferred tax asset, which was
reserved; therefore the net benefit and expense resulted in $-0- income taxes.
Note 5: Subsequent Events
Hunt Global Resources, Inc. Acquisition
The Company entered into an agreement to acquire the assets of Hunt Global
Resources, Inc. ("Hunt"), a Houston based company focused on the use of new
technologies to maximize the value of its natural resources projects.
The transaction is structured in the form of a reverse merger where the
shareholders of Hunt will receive in excess of 90% of the issued and outstanding
stock of Company when the transaction is complete. As a result of the
transaction, Hunt will acquire all of the outstanding assets and liabilities of
the Company.
The transaction contemplates the issuance of shares as follows:
A) 29,000,000 shares of Common Stock of the Company to Hunt;
B) 125,000 Class A Preferred Convertible Shares (having a conversion ratio
of one preferred to 208 common shares of the Company and subject to the common
stock of the Company having traded at an average bid price of $3.00 for ten
consecutive trading days); and
C) 125,000 Class B Convertible Preferred Shares (having a conversion ratio
of one preferred for 248 common shares of the Company and subject to the common
stock of the Company having traded at an average bid price of $7.00 for ten
consecutive trading days).
The completion of the acquisition is contingent upon the receipt of audited
financial statements of Hunt. Such audited financial statements have not been
completed at the time of this filing.
F-7
TOMBSTONE TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Condensed Financial Statements
March 31, 2010
(Unaudited)
The Company has evaluated it activities subsequent to the quarter ended March
31, 2010 and found no other reportable subsequent events, then those discussed
above.
F-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward-looking statements.
The independent registered public accounting firm's report on the Company's
financial statements as of December 31, 2009, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
PLAN OF OPERATIONS
At March 31, 2010, we had cash on hand of $5,067. We intend to use our cash
funds to continue operations. We intend to continue to develop the business
opportunities presented by our OIEPrint(TM) software. The development of the
business opportunities includes continued marketing efforts and product testing
over the next twelve months.
During the year ended December 31, 2009, we raised $100,000 in Convertible Notes
that will mature after one year. Payments of interest at the rate of 8.0% per
annum will be accrued and paid each quarter to each investor beginning June 30,
2009. During the year ended December 31, 2009, we paid interest of $4,744. The
investor also has the option, based on their conversion terms, to convert to
restricted shares of common stock at $0.10 per share with immediate
convertibility (i.e. $2,500 = 25,000 shares.) In January 2010, all of the
investors of the $100,000 Convertible Promissory Notes elected to convert their
promissory notes into shares of the Company's common stock. The Company issued
1,000,000 shares of its restricted common stock upon the conversion of $100,000
in principal.
On January 19, 2010, Tombstone entered into an Agreement and Plan of Merger with
Hunt Global Resources, Inc. and Hunt Acquisition Corp. Hunt Global Resources,
Inc. (Hunt) is a Houston-based company focused on the use of new technologies to
maximize the value of its natural resources projects.
The transaction is structured in the form of a reverse merger wherein Hunt
shareholders will receive in excess of 90% of Tombstone Technologies, Inc. when
the transaction is complete. The completion of the transaction is dependent upon
the deliverance of audited financial statements of Hunt. At the time of this
filing, the transaction has not closed nor have audited financial statements
been received.
The transaction contemplates the issuance of shares as follows:
A) 29,000,000 shares of Common Stock of Tombstone;
B) 125,000 Class A Preferred Convertible Shares (having a conversion
ratio of one preferred to 208 common Tombstone shares and subject to
the common stock of the Tombstone having traded at an average bid price
of $3.00 for ten consecutive trading days); and
2
C) 125,000 Class B Convertible Preferred Shares (having a conversion
ratio of one preferred for 248 common Tombstone shares and subject to
the common stock of Tombstone having traded at an average bid price of
$7.00 for ten consecutive trading days).
In the continuance of our business operations we do not intend to purchase or
sell any significant assets and we do not expect a significant change in the
number of employees of the Company.
RESULTS OF OPERATIONS
For the Three Months Ended March 31, 2010 Compared to the Three Months Ended
March 31, 2009
During the three months ended March 31, 2010 and March 31, 2009, the Company did
not recognize any revenues from its operational activities.
During the three months ended March 31, 2010, we incurred $36,397 in selling and
general administrative expenses compared to $27,445 during the three months
ended March 31, 2009. The increase of $8,952 was a result of the increase in our
activities in operations.
During the three months ended March 31, 2010, we recognized a net loss of
$38,362 compared to $28,315 for the three months ended March 31, 2009. The
increase of $10,047 was a result of the increases of selling and general and
administrative expenses of $8,952 and an increase of $1,830 in interest expenses
and amortization expenses as a result of the issuance of convertible promissory
notes.
LIQUIDITY
At March 31, 2010, we had total current assets of $5,067 consisting solely of
cash on hand. At March 31, 2010, we had total current liabilities of $32,615,
consisting of accounts payable of $6,284, other current liabilities of $25,028
and lease obligations of $1,303. At March 31, 2010, we had a working capital
deficit of $27,548.
Net cash used in operating activities during the three months ended March 31,
2010 was $26,778, compared to net cash used in operating activities during the
three months ended March 31, 2009 of $13,627.
During the three months ended March 31, 2010 and 2009, there was no cash used or
received in investing activities.
During the three months ended March 31, 2010, we received $24,406 from our
financing activities compared to $6,941 during the three months ended March 31,
2009.
During the three months ended March 31, 2010, the Company entered into a
agreement to acquire the assets of Hunt Global Resources, Inc. ("Hunt"), a
Houston based company focused on the use of new technologies to maximize the
value of its natural resources projects. The completion of acquisition is
contingent upon the deliverance of audited financial statements of Hunt. At this
time, the Company has not closed on the acquisition.
During the three months ended March 31, 2010, Hunt advanced the Company funds
totaling $25,028 to support operations. These funds are due on demand.
In January 2010, all of the holders of the outstanding Convertible Promissory
Notes totaling $100,000 gave conversion notice to the Company that they would
convert their notes into shares of the Company's common stock. The conversion of
the Convertible Promissory Notes resulted in the issuance of 1,000,000 shares of
3
Company's common stock to the convertible promissory note holders of such notes
as of January 15, 2010. After the conversion of such Convertible Promissory
Notes the Company does not have any Convertible Promissory Notes outstanding
Need for Additional Financing
We do not have capital sufficient to meet our cash needs. We will have to seek
loans or equity placements to cover such cash needs. Once exploration commences,
our needs for additional financing is likely to increase substantially.
No commitments to provide additional funds have been made by our management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to us to allow it to cover our expenses as they may be
incurred.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
Disclosures Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b), Messrs. Harris and Cox our Chief Executive
Officer and Chief Financial Officer for the quarter ended March 31, 2010,
carried out an evaluation under the supervision and with the participation of
our management, of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of
the end of the period covered by this report. Based on the foregoing evaluation,
Messrs. Harris and Cox have concluded that our disclosure controls and
procedures are effective in timely alerting them to material information
required to be included in our periodic SEC filings and to ensure that
information required to be disclosed in our periodic SEC filings is accumulated
and communicated to our management, including our Chief Executive Officer and
Chief Financial Officer, to allow timely decisions regarding required disclosure
as a result of the deficiency in our internal control over financial reporting
discussed below.
ITEM 4T. CONTROLS AND PROCEDURES
Management's Quarterly Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company in accordance with as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control
over financial reporting is designed 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, based on criteria established in Internal
Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and includes those policies and
procedures that:
(i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our
assets;
4
(ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation
(iii)provide reasonable assurance regarding prevention or timely detection
of unauthorized
Management's assessment of the effectiveness of the small business issuer's
internal control over financial reporting is as of the quarter ended March 31,
2010. We believe that internal control over financial reporting is effective. We
have not identified any, current material weaknesses considering the nature and
extent of our current operations and any risks or errors in financial reporting
under current operations.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
This quarterly report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this annual report.
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended March 31, 2010, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 1A. RISK FACTORS
NONE
ITEM 2. CHANGES IN SECURITIES
The Company made the following unregistered sales of its securities from January
1, 2010 through March 31, 2010.
DATE OF TITLE OF NO. OF
SALE SECURITIES SHARES CONSIDERATION CLASS OF PURCHASER
------------------ -------------------- ---------------- ----------------------- -------------------
Conversion of
January 2010 $100,000 in
Common Stock 1,000,000 Promissory Notes Business Associates
------------------ -------------------- ---------------- ----------------------- -------------------
5
Exemption From Registration Claimed
All of the sales by the Company of its unregistered securities were made by the
Company in reliance upon Section 4(2) of the Securities Act of 1933, as amended
(the "1933 Act"). All of the individuals and/or entities listed above that
purchased the unregistered securities were almost, all known to the Company and
its management, through pre-existing business relationships, as long standing
business associates, and employees. All purchasers were provided access to all
material information, which they requested, and all information necessary to
verify such information and were afforded access to management of the Company in
connection with their purchases. All purchasers of the unregistered securities
acquired such securities for investment and not with a view toward distribution,
acknowledging such intent to the Company. All certificates or agreements
representing such securities that were issued contained restrictive legends,
prohibiting further transfer of the certificates or agreements representing such
securities, without such securities either being first registered or otherwise
exempt from registration in any further resale or disposition.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. RESCINDED AND RESERVED.
ITEM 5. OTHER INFORMATION
NONE.
ITEM 6. EXHIBITS
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act
Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act
Exhibit 32.1 Certification of Principal Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
Exhibit 32.2 Certification of Principal Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
6
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
TOMBSTONE TECHNOLOGIES, INC.
(Registrant)
Dated: May 11, 2010 By: /s/ John N. Harris
---------------------------------------
John N. Harris, President & Chief
Executive Officer
Dated: May 11, 2010 By: /s/ Neil A. Cox
---------------------------------------
Neil A. Cox, Chief Financial Officer &
Chief Accounting Officer
7