UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2002.
OR
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION FROM _______ TO ________.
COMMISSION FILE NUMBER 333-61286
INVESTMENT AGENTS, INC.
______________________________________________
(Name of Small Business Issuer in its charter)
Nevada 88-0467944
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6767 W. Tropicana Avenue, Suite 207
Las Vegas, Nevada 89103-4754
________________________________________ __________
(Address of principal executive offices) (Zip code)
(702) 248-1047
_________________________
Issuer's telephone number
N/A
______________________________________________
(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 / /
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
At August 31, 2002, there were outstanding 1,970,000 shares of the
Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format: Yes / / No /X/
-1-
PART I
FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
INVESTMENT AGENTS, INC.
(A Development Stage Company)
FINANCIAL REPORTS
AUGUST 31, 2002
FEBRUARY 28, 2002
INVESTMENT AGENTS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS F-1
________________________________________________________________________________
FINANCIAL STATEMENTS
Balance Sheets F-2
Statements of Income F-3
Statements of Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6-8
________________________________________________________________________________
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Investment Agents, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of Investment Agents, Inc. (A
Development Stage Company) as of August 31, 2002 and February 28, 2002 and the
related statements of income, stockholders' (deficit), and cash flows for the
three months ended August 31, 2002, the six months ended August 31, 2002, the
year ended February 28, 2002 and the period August 8, 1996 (inception) through
August 31, 2002. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Investment Agents, Inc. (A
Development Stage Company) as of August 31, 2002 and February 28, 2002 and the
results of its operations and cash flows for the three months ended August 31,
2002, the six months ended August 31, 2002, the year ended February 28, 2002 and
the period August 8, 1996 (inception) through August 31, 2002, in conformity
with generally accepted accounting principles..
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 8 to the
financial statements, the Company has limited operations and has not established
any source of revenue. This raises substantial doubt about its ability to
continue as a going concern. Management's plan in regard to these matters is
also described in Note 8. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Kyle L. Tingle, CPA, LLC
September 18, 2002
Henderson, Nevada
F-1
INVESTMENT AGENTS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
August 31, February 28,
2002 2002
__________ ____________
ASSETS
CURRENT ASSETS
Accounts receivable $ 49 $ 49
Prepaid expenses 9,975 11,025
________ ________
Total current assets $ 9,724 $ 11,074
________ ________
Total assets $ 9,724 $ 11,074
======== ========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 1,716 $ 8,290
Officers advances (Note 5) 30,764 20,399
________ ________
Total current liabilities $ 32,480 $ 28,689
________ ________
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: $.001 par value;
authorized 25,000,000 shares;
issued and outstanding:
1,970,000 shares at February 28, 2002: $ $ 1,970
1,970,000 shares at August 31, 2002 1,970
Additional Paid In Capital (Notes 2 and 5) 13,500 13,500
Accumulated deficit during development stage (38,226) (33,085)
________ ________
Total stockholders' (deficit) $(22,756) $(17,615)
________ ________
Total liabilities and
stockholders' (deficit) $ 9,724 $ 11,074
======== ========
See Accompanying Notes to Financial Statements.
F-2
INVESTMENT AGENTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF INCOME
Three months ended Six Months ended
___________________________ ___________________________
August 31, August 31, August 31, August 31,
2002 2001 2002 2001
__________ __________ _________ _________
Revenues $ 0 $ 0 $ 0 $ 0
Cost of revenue 225 225 450 375
__________ __________ _________ _________
Gross profit $ (225) $ (225) $ (450) $ (375)
General, selling and
administrative expenses 2,251 1,456 4,691 4,645
__________ __________ _________ _________
Operating (loss) $ (2,476) $ (1,681) $ (5,141) $ (5,020)
Nonoperating income (expense)
Interest income 0 0 0 0
__________ __________ _________ _________
Net (loss) $ (2,476) $ (1,681) $ (5,141) $ (5,020)
========== ========== ========= =========
Net (loss) per share, basic
and diluted (Note 2) $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========= =========
Average number of shares
of common stock outstanding 1,970,000 1,970,000 1,970,000 1,970,000
========== ========== ========= =========
See Accompanying Notes to Financial Statements.
F-3
INVESTMENT AGENTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF INCOME
Years ended Aug. 8, 1996
_______________________________ (inception) to
February 28, February 28, August 31,
2002 2001 2002
__________ __________ ______________
Revenues $ 49 $ 0 $ 49
Cost of revenue 825 0 1,275
________ _______ ________
Gross profit $ (776) $ 0 $ (1,226)
General, selling and
administrative expenses 30,339 0 37,000
________ _______ ________
Operating (loss) $(31,115) $ 0 $(38,226)
Nonoperating income (expense)
Interest income 0 0 0
________ _______ ________
Net (loss) $(31,115) $ 0 $(38,226)
======== ======= ========
Net (loss) per share, basic
and diluted (Note 2) $ (0.02) $ 0.00 $ (0.02)
======== ======= ========
Average number of shares
of common stock outstanding 1,970,000 1,970,000 1,970,000
========= ========= =========
See Accompanying Notes to Financial Statements.
F-4
INVESTMENT AGENTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
Accumulated
(Deficit)
Common Stock Additional During
______________________ Paid-In Development
Shares Amount Capital Stage
_________ ________ __________ ___________
Sale of 1,970,000 shares, October 17, 1997 1,970,000 $ 1,970 $ 0 $ 0
Net (loss), February 28, 1998 (1,970)
_________ ________ ________ _________
Balance, February 28, 1998 1,970,000 $ 1,970 $ 0 $ (1,970)
Net income, February 28, 1999 0
_________ ________ ________ _________
Balance, February 28, 1999 1,970,000 $ 1,970 $ 0 $ (1,970)
Net (loss), February 29, 2000 0
_________ ________ ________ _________
Balance, February 29, 2000 1,970,000 $ 1,970 $ 0 $ (1,970)
Capital contribution, February, 2001 13,500
Net (loss), February 28, 2001 0
_________ ________ ________ _________
Balance, February 28, 2001 1,970,000 $ 1,970 $ 13,500 $ (1,970)
Net (loss), February 28, 2002 (31,115)
_________ ________ ________ _________
Balance, February 28, 2002 1,970,000 $ 1,970 $ 13,500 $ (33,085)
Net (loss), August 31, 2002 (5,141)
_________ ________ ________ _________
Balance, August 31, 2001 1,970,000 $ 1,970 $ 13,500 $ (38,226)
========= ======== ======== =========
See Accompanying Notes to Financial Statements.
F-5
INVESTMENT AGENTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Three months ended Six months ended
___________________________ ___________________________
August 31, August 31, August 31, August 31,
2002 2001 2002 2001
__________ __________ _________ _________
Cash Flows From
Operating Activities
Net (loss) $ (2,476) $ (1,681) $ (5,141) $ (5,020)
Adjustments to reconcile
net (loss) to cash (used in)
operating activities:
Changes in assets and
liabilities
(Increase) in Accounts receivable 0 0 0 0
(Increase) decrease in
prepaid expenses 675 675 1,350 1,125
Increase (decrease) in accounts
payable (274) 0 (6,574) 0
Increase in officer payable 2,075 1,006 10,365 3,895
________ ________ ________ ________
Net cash (used in)
operating activities $ 0 $ 0 $ 0 $ 0
________ ________ ________ ________
Cash Flows From
Investing Activities $ 0 $ 0 $ 0 $ 0
________ ________ ________ ________
Cash Flows From
Financing Activities
Issuance of common stock $ $ $ $ 0
Capital contribution 0 0 0 0
________ ________ ________ ________
Net cash (used in)
financing activities $ 0 $ 0 $ 0 $ 0
________ ________ ________ ________
Net increase (decrease)
in cash $ 0 $ 0 $ 0 $ 0
Cash, beginning of period 0 0 0 0
________ ________ ________ ________
Cash, end of period $ 0 $ 0 $ 0 $ 0
======== ======== ======== ========
See Accompanying Notes to Financial Statements.
F-6
INVESTMENT AGENTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Years ended Aug. 8, 1996
_______________________________ (inception) to
February 28, February 28, August 31,
2002 2001 2002
__________ __________ ______________
Cash Flows From
Operating Activities
Net (loss) $(31,115) $ 0 $(35,750)
Adjustments to reconcile
net (loss) to cash (used in)
operating activities:
Changes in assets and
liabilities
(Increase) in Accounts receivable (49) 0 (49)
(Increase) decrease in
prepaid expenses 2,475 (13,500) (10,350)
Increase (decrease) in accounts
payable 8,290 0 1,990
Increase in officer payable 20,399 0 28,689
________ ________ ________
Net cash (used in)
operating activities $ 0 $(13,500) $(15,470)
________ ________ ________
Cash Flows From
Investing Activities $ 0 $ 0 $ 0
________ ________ ________
Cash Flows From
Financing Activities
Issuance of common stock $ $ 0 $ 1,970
Capital contribution 0 13,500 13,500
________ ________ ________
Net cash (used in)
financing activities $ 0 $ 13,500 $ 15,470
________ ________ ________
Net increase (decrease)
in cash $ 0 $ 0 $ 0
Cash, beginning of period 0 0 0
________ ________ ________
Cash, end of period $ 0 $ 0 $ 0
======== ======== ========
See Accompanying Notes to Financial Statements.
F-7
INVESTMENT AGENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2002 and February 28, 2002
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS:
Investment Agents, Inc. ("Company") was organized August 8, 1996 under the laws
of the State of Nevada. The Company currently has limited operations through an
agreement with Verio, Inc. The Company acts as a referral source for domain
registration and web hosting provided by Verio. Due to the limited nature of the
operations, and, in accordance with Statement of Financial Accounting Standard
(SFAS) No. 7, "Accounting and Reporting by Development Stage Enterprises," is
considered a development stage company.
A SUMMARY OF THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES IS AS FOLLOWS:
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CASH
For the Statements of Cash Flows, all highly liquid investments with maturity of
three months or less are considered to be cash equivalents. There were no cash
equivalents as of August 31, 2002, February 28, 2002, and February 28, 2001.
INCOME TAXES
Income taxes are provided for using the liability method of accounting in
accordance with SFAS No. 109 "Accounting for Income Taxes." A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax basis. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effect of
changes in tax laws and rates on the date of enactment.
NOTE 2. STOCKHOLDERS' EQUITY
COMMON STOCK
The authorized common stock of the Company consists of 25,000,000 shares with
par value of $0.001. On October 15, 1997, the Company authorized and issued
19,700 shares of its no par value common stock in consideration of $1,970 in
cash.
F-8
INVESTMENT AGENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2002 and February 28, 2002
NOTE 2. STOCKHOLDERS' EQUITY (CONTINUED)
On November 29, 2000, the State of Nevada approved the Company's amended
Articles of Incorporation, which increased its capitalization from 25,000 common
shares to 25,000,000 common shares. The no par value was changed to $0.001 per
share.
On November 29, 2000, the Company's shareholders approved a forward split of its
common stock at one hundred shares for one share of the existing shares. The
number of common stock shares outstanding increased from 19,700 to 1,970,000.
Prior period information has been restated to reflect the stock split
An officer contributed $13,500 to the Company through a retainer to a legal firm
for services to be rendered.
The Company has not authorized any preferred stock.
Net loss per common share
Net loss per share is calculated in accordance with SFAS No. 128, "Earnings Per
Share." The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. Diluted loss per share is
computed using the weighted averaged number of shares and dilutive potential
common shares outstanding. Dilutive potential common shares are additional
common shares assumed to be exercised.
Basic net loss per common share is based on the weighted average number of
shares of common stock outstanding of 1,970,000 during the six months ended
August 31, 2002, the year ended February 28, 2002, and since inception. As of
August 31, 2002, February 28, 2002, and since inception, the Company had no
dilutive potential common shares.
NOTE 3. INCOME TAXES
There is no provision for income taxes for the period ended August 31, 2002, due
to the net loss and no state income tax in Nevada, the state of the Company's
domicile and operations. The Company's total deferred tax asset as of August 31,
2002 is as follows:
Net operating loss carry forward $ 38,226
Valuation allowance $(38,226)
________
Net deferred tax asset $ 0
The net federal operating loss carry forward will expire in 2018 and 2022. This
carry forward may be limited upon the consummation of a business combination
under IRC Section 381.
F-9
INVESTMENT AGENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2002 and February 28, 2002
NOTE 4. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An officer of
the corporation provides office services without charge. Such costs are
immaterial to the financial statements and accordingly, have not been reflected
therein. The officers and directors for the Company are involved in other
business activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interest. The Company has not formulated a policy for the resolution of
such conflicts.
In April 2001, the Company established a policy that "transactions between the
Company and its officers, directors or five percent shareholders, and their
respective affiliates, will be on terms no less favorable than those terms which
could be obtained from unaffiliated third parties and said transactions will be
approved by a majority of the independent and disinterested directors."
NOTE 5. CONTRACTS AND OBLIGATIONS
On April 19, 2001, the Company entered into a Web Agent Agreement with Verio,
Inc. The Company is a referral partner and hosts a web site to direct customers
to the web hosting and registration services of Verio. The non-cancelable
agreement requires a payment obligation of $75 per month for a period of two
years. The contract allows for three one-year extensions by notifying Verio,
Inc. in writing not more than 180 and not less than 90 days from the expiration
of the current contract. The Company intends to exercise these extensions. The
minimum future contract payments are:
Year End Contract
February 28, Payment
____________ ________
2003 450
2004 900
2005 900
2006 900
2007 75
______
Total future
Obligations $3,225
======
On February 1, 2001, the Company retained a legal firm, prepaying $13,500 for
services related to this contract. Services are to be provided for the
three-year term and two one-year renewal periods. Services include paying the
monthly fees to Verio, Inc. and reviewing the performance of the Company
website. The fee is non-refundable and no additional fees will be required in
the normal course of business for these services. If these costs were for a
one-time performance or start-up of services for the new products provided by
the Company, they would be currently expensed as required by Statement of
Position 98-5 "Reporting on the Costs of Start-Up Activities. Due to the
continuing nature of the performance required by the contract, this fee not
considered a start-up cost and is amortized over the life of the contract, with
extensions
F-10
INVESTMENT AGENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2002 and February 28, 2002
NOTE 6. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of
common stock of the Company.
NOTE 7. OFFICERS' ADVANCES
The Company has incurred costs in connection with the implementation of its
business plan and in connection with the Company complying with federal
securities laws. An officer of the Company has advanced funds on behalf of the
Company to pay for these costs. These funds have been advanced interest free.
NOTE 8. GOING CONCERN
The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Currently, the Company does not have significant cash or
other material assets, nor does it have operations or a source of revenue
sufficient to cover its operation costs and allow it to continue as a going
concern. Until the Company has sufficient operations, the stockholders,
officers, and directors have committed to advancing the operating costs of the
Company.
F-11
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Plan of Operation.
We are a referral agent and we collect a selling commission
for referring customers who purchase Verio, Inc.'s ("Verio") domain registration
services, web hosting services and e-commerce services. We are a development
stage company with limited operations and revenues. We may be unable to satisfy
cash requirements without management's financial support. We anticipate that we
will meet our cash requirements for the foreseeable future through the financial
support of our management. Management's financial accommodations will be
evidenced by non-interest bearing promissory notes between management and us. No
promissory notes are currently in effect.
Over the next twelve months, we plan to market our web site
and we will do domain registration and web hosting sales. We will require
additional funds to market our web site. Our cost of maintaining the web site,
without any marketing costs and expense, should not exceed the sum of $80.00 per
month. We are obligated through April 18, 2003 to Verio in connection with this
expense. The officers and directors have agreed to fund our "burn rate," pay
expenses of having us comply with the federal securities laws (and being a
public company) and have orally agreed to extend, if required, a "line of
credit" in the amount of $10,000, without interest, to implement our marketing
plan. Upon implementation of our marketing plan, we expect that our "burn rate"
will increase to approximately $800 per month. Not to exceed $500 per month will
be expended for maintaining our web site and for the strategic listing of our
web site with major search engines. The balance of approximately $300 will be
utilized in connection with establishing reciprocal click-through agreements
with complementary web site and for the expenses of having us comply with the
federal securities laws. The line of credit will expire on August 31, 2002.
Today, no funds have been drawn down on the line of credit. These agreements may
not be enforceable. There is no assurance that we will be able to
2
obtain financing for our business development. If adequate funds are not
available to us, we believe that our business development will be adversely
affected.
Our objective will be to market the web site upon full
completion of its development - after we feel it is no longer "under
construction." This marketing strategy is subject to our having sufficient
funding to carry out our plan which will include the following elements:
1. Strategic listing of our web site with major search
engines in order to increase the visibility of our
web site when users enter applicable keywords, such
as "domain registration" and "web site hosting," with
major search engines. We believe that many of the
people looking for information concerning domain
registration and web site hosting will enter those
keywords with major search engines in order to find
relevant web sites. Our objective will be to ensure
that our site is frequently cited by major search
engines when these keywords are searched; and
2. Reciprocal click-through agreements with
complementary web sites who are prepared to allow us
to place links to our web site on their web sites in
consideration for us permitting a reciprocal link to
their web site on our web site.
The exact nature of our marketing plan will depend on a number
of factors, including the availability of funds to implement our marketing plan
and internet marketing conditions and practices at the time we complete
development of our web site. We may pursue different marketing strategies from
the marketing strategies listed above.
Until such time as we market our web site, if ever, we may not
have revenues from our operations. We anticipate that if our web site is
properly marketed, we will generate revenues from the sale of domain
registration and web hosting sales. There is no assurance that we will be
successful in selling our services on our web site. We have no other sources of
revenue. As such, if we are not successful in this regard, we will be unable to
achieve revenues under our current business plan.
We have not expended any monies during each of the last two
fiscal years and during this current quarter on research and development
activities applicable to our website. All
3
development activities to date have been provided to us by Verio at no cost or
expense. Accordingly, none of the research and development costs will be borne
directly by our customers. Other than these initial web site development, we
have not undergone any other research and development activity. We do not expect
to purchase or sell any plant and significant equipment or make any significant
changes in the number of employees over the next twelve months.
Analysis of Financial Condition.
We currently have no cash, an account receivable of $49 and
$9,675 in prepaid expenses which constitutes our total assets. We have no other
liquid current assets. Our web site has been accessed by visitors and we may
have sales pending. Our loss from inception through August 31, 2002 is $38,226.
During the six months ending August 31, 2002, we incurred
expenses of $2,476 as compared to the six months ended August 31, 2001 of $1,681
or an increase of $795.
Without the implementation of any marketing plan, our current
"burn rate" is less than $80 per month. Upon implementation of our marketing
plan, we expect that our "burn rate" will increase to approximately $800 per
month. Not to exceed $500 per month will be expended for maintaining our web
site and for the strategic listing of our web site with major search engines.
The balance of approximately $300 will be utilized in connection with
establishing reciprocal click-through agreements with complimentary web site and
for the expenses of having us comply with the federal securities laws.
Qualitative and Quantitative Disclosures About Market Risk.
We have neither considered nor conducted any research
concerning qualitative and quantitative market risk.
PART II
OTHER INFORMATION
Item 1 - Legal Proceedings .................................................None
Item 2 - Changes in the Rights of the Company's
Security Holders .........................................None
Item 3 -.Defaults by the Company on its
Senior Securities ........................................None
4
Item 4 - Submission of Matter to Vote of Security
Holders ..................................................None
Item 5 - Other Information
Board Meeting.
Our board of directors held one meeting during the current
quarter, which was a special meeting by written consent.
Independent Directors.
We have no independent directors. We do intend to secure
independent directors; however, until such time as we are financially able to
attract independent directors and we are able to meet the cost of insuring each
director, we will not, in all likelihood, be able to have a board containing
independent directors.
Subject to us attracting independent directors and providing
insurance for each director, so long as we have an outstanding class of
securities registered under the Securities Exchange Act of 1934, as amended, and
the outstanding securities are held of record by 100 or more persons of record,
after the annual meeting in 2003, we contemplate having not less than one
independent director and after the annual meeting in 2004, we contemplate having
a majority of independent directors.
Audit Committee and Other Committees.
As of August 31, 2002, our board of directors had not
established an audit committee. We had not intended, in all likelihood, to
establish any independent audit committee until such time as we had reached the
qualitative standards for the Bulletin Board Exchange, which will be phased in
during calendar year 2003 and will replace the OTC Bulletin Board, which is
operated by the NASDAQ Stock Market, Inc. which will be phased out in 2003. The
Bulletin Board Exchange will be a listed market place, with qualitative listing
standards but with no minimum share price, income, or asset requirements. The
system has been designed to provide market participants and customers with
increased speed and reliability to transactions, as well as to
5
improve the overall transparency of the market place. In general, the Bulletin
Board Exchange will have minimum requirements of 100 round-lot shareholders and
200,000 shares in public float and will have other certain minimum corporate
governance standards to those presently existing for the NASDAQ National Market
and small cap markets, with an adjustment to certain of the requirements
cognizant of the difficulty that small companies, such as ours, may have in
meeting those governance standards.
Our new bylaws, adopted on October 1, 2002, provides that we
have an independent audit committee, a majority of which members cannot be
comprised of non independent directors so long as we have a class of securities
registered under the Securities Exchange Act of 1934. As of the date hereof, we
have not implemented this bylaw requirement.
We recognize that an audit committee, when established, will
play a critical role in our financial reporting system by overseeing and
monitoring management's and the independent auditors' participation in the
financial reporting process. The audit committee will adopt its own charter.
Until such time as an audit committee has been established,
the board of directors will continue to undertake those tasks normally
associated with an audit committee to include, but not by way of limitation, the
(i) review and discussion of the audited financial statements with management,
and (ii) discussions with the independent auditors the matters required to be
discussed by the Statement On Auditing Standards No. 61, as may be modified or
supplemented.
Our board of directors, consistent with our intent to enhance
the reliability and credibility of the financial statements, has submitted the
financial statements included in this Form 10-QSB to our independent auditor
prior to the filing of this report. An audit was completed for the period then
ended.
Our auditor is subject to peer review consistent with the
American Institute of Certified Public Accountants (AICPA) procedures.
In addition, we do not have any compensation or executive or
similar committees.
6
Bylaws.
Our board of directors has adopted bylaws that establish
independent directors, an audit committee, and provisions which mandate an
annual meeting, provide for proxy solicitation with minimum quorum requirements
of at least 33% of the outstanding shares and other corporate governance
standards consistent with those imposed by current BBX qualitative standards.
At the time of adoption of the amended bylaws, we had 3
directors. The new bylaws provide for not less than 5 nor more than 15
directors, with classes and designated terms. As of the date hereof, we
currently have two vacancies on the board of directors.
ITEM 6 -.EXHIBITS AND REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the quarter for
which this report is filed. The following exhibits are filed with this report:
3.2 Bylaws
23.1 Consent of Kyle L. Tingle, CPA.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: October 3, 2002 INVESTMENT AGENTS, INC.
By: /s/ PAMELA RAY STINSON
______________________
Pamela Ray Stinson
President
By: /s/ RAYMOND ROBERT ACHA
_______________________
Raymond Robert Acha
Chief Financial Officer,
Secretary, Treasurer and
Director
By: /s/ JOSEPH H. PANGANIBAN
________________________
Joseph H. Panganiban
Director
7
CERTIFICATIONS
I, Pamela Ray Stinson, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Investment Agents,
Inc.;
2. Based on my knowledge, this quarterly 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly represent 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 quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particu-
larly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 45 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
October 3, 2002 By: /s/ PAMELA RAY STINSON
______________________
Pamela Ray Stinson
President
8
I, Raymond Robert Acha, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Investment Agents,
Inc.;
2. Based on my knowledge, this quarterly 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly represent 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 quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particu-
larly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 45 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
October 3, 2002 By: /s/ RAYMOND ROBERT ACHA
___________________________
Raymond Robert Acha
Chief Financial Officer,
Secretary, Treasurer and
Director
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