FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended January 31, 2006
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _______ to _______
Commission file number 0-3338
ARBOR ENTECH CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 22-2335094
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(State or other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
PO Box 656, Tuxedo Park, New York 10987
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(Address of Principal Executive Office) (Zip Code)
(201) 782-9237
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(Registrant's telephone number including area code)
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 _____
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes_X__ No _____
The number of shares of Registrant's Common Stock, $0.001 par value, outstanding
as of March 6, 2006, was 7,050,540 shares.
ARBOR ENTECH CORPORATION AND SUBSIDIARY
INDEX
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Page
Number
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PART 1 - FINANCIAL INFORMATION
Item 1 Financial Statements (unaudited)
Condensed Balance Sheet
- January 31, 2006 4
Condensed Statements of Operations
- Three and Nine months ended January 31, 2006 and 2005 5
Condensed Statements of Cash Flows
- Nine months ended January 31, 2006 and 2005 6
Notes to Condensed Financial Statements 7
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 3 Controls and Procedures 10
PART II - OTHER INFORMATION 11
SIGNATURES 12
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying financial statements are unaudited for the interim
periods, but include all adjustments (consisting only of normal recurring
accruals), which we consider necessary for the fair presentation of results for
the three and nine months ended January 31, 2006.
Moreover, these financial statements do not purport to contain complete
disclosure in conformity with U.S. generally accepted accounting principles and
should be read in conjunction with our audited financial statements at, and for
the fiscal year ended April 30, 2005.
The results reflected for the three and nine months ended January 31, 2006
are not necessarily indicative of the results for the entire fiscal year.
3
ARBOR ENTECH CORPORATION
CONDENSED BALANCE SHEET
JANUARY 31, 2006
(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 471,071
Prepaid Expenses 711
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Total Current Assets 471,782
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Total Assets $ 471,782
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Liabilities $ 4,839
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Total Current Liabilities 4,839
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Commitments and Contingencies
Stockholders' Equity:
Common Stock, $.001 Par Value; Authorized
10,000,000 Shares; Issued and Outstanding
7,050,540 Shares 7,050
Additional Paid-In Capital 2,365,441
Retained Earnings (Deficit) (1,905,548)
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Total Stockholders' Equity 466,943
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$ 471,782
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The accompanying notes are an integral part of the financial statements.
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ARBOR ENTECH CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
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January 31, January 31,
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2006 2005 2006 2005
----------- ----------- ----------- -----------
Net Sales $ -- $ -- $ -- $ --
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Costs and Expenses:
Selling, General and Administrative Expenses 3,411 6,024 18,852 25,776
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3,411 6,024 18,852 25,776
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Loss from Operations (3,411) (6,024) (18,852) (25,776)
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Other Income:
Interest 480 255 1,273 797
Other -- -- 15 22
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480 255 1,288 819
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Net Loss $ (2,931) $ (5,769) $ (17,564) $ (24,957)
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Loss Per Common Share - Basic $ (.00) $ (.00) $ (.00) $ (.00)
=========== =========== =========== ===========
Weighted Average Shares Outstanding 7,050,540 7,050,540 7,050,540 7,050,540
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The accompanying notes are an integral part of the financial statements.
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ARBOR ENTECH CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Ended
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January 31,
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2006 2005
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Cash Flows from Operating Activities:
Net Loss $ (17,564) $ (24,957)
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Adjustments to Reconcile Net Loss to Net Cash (Used) by
Operating Activities:
Depreciation -- 862
Decrease in Deferred Tax Assets 81,762 --
Decrease in Deferred Tax Liabilities (81,762) --
Changes in Operating Assets and Liabilities:
Decrease in Miscellaneous Receivable 826 --
Decrease in Prepaid Expenses 1,531 --
(Decrease) in Accounts Payable and Accrued Liabilities (12,382) (13,387)
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Total Adjustments (10,025) (12,525)
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Net Cash (Used) by Operating Activities (27,589) (37,482)
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Cash Flows from Investing Activities:
Proceeds from Receivable from Sale of Real Property 213,589 --
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Net Cash Provided by Investing Activities 213,589 --
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Cash Flows from Financing Activities:
Proceeds of Loans to Related Parties -- 1,019,850
Dividends Paid -- (1,057,581)
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Net Cash Provided (Used) by Financing Activities -- (37,731)
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Increase (Decrease) in Cash and Cash Equivalents 186,000 (75,213)
Cash and Cash Equivalents - Beginning of Period 285,071 365,128
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Cash and Cash Equivalents - End of Period $ 471,071 $ 289,915
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Supplemental Cash Flow Information:
Cash Paid for Interest $ -- $ --
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Cash Paid for Income Taxes $ -- $ --
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The accompanying notes are an integral part of the financial statements.
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ARBOR ENTECH CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - Unaudited Interim Financial Statement
In the opinion of the Company's management, the accompanying
unaudited condensed financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the information
set forth therein. These financial statements are condensed and therefore 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.
Results of operations for interim periods are not necessarily indicative
of the results of operations for a full year.
NOTE 2 - Discontinued Operations - Sale of Real Property
On July 20, 2005, the Company closed on the sale of real property located
in Tioga County, Pennsylvania pursuant to a contract entered into on April 15,
2005. The Company recognized a gain of $185,820 on the sale during the year
ended April 30, 2005. The proceeds were collected in July 2005.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this report which are not historical fact are
"forward-looking statements" that involve various important assumptions, risks,
uncertainties and other factors that could cause our actual results to differ
materially from those expressed in such forward-looking statements. These
important factors include, without limitation, competitive factors and pricing
pressures, changes in legal and regulatory requirements, technological change or
difficulties, product development risks, commercialization and trade
difficulties and general economic conditions, as well as other risks previously
disclosed in our securities filings and press releases.
These forward-looking statements often can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," or similar terms.
PLAN OF OPERATION
We were a wood products company that had been in business since 1980. Our
business fluctuated over the years. We were almost wholly dependent on sales to
The Home Depot, Inc. As discussed below in "Discontinued Operations," on
September 2, 2003, we discontinued our wood products business.
At present, we our seeking other business opportunities, but there can be
no assurance that such opportunities will be identified, engaged in, or result
in any profits. Unless and until we find a business opportunity, we believe that
we can satisfy our cash requirements over the next 12 months. As of January 31,
2006, we had cash and cash equivalents of $471,071 and working capital of
$466,943. We currently have no employees. Mr. Shefts, one of our three officers,
devotes a small portion of his time to us. Since the sale of our real estate, we
have no principal executive office. We utilize a mailing address in Tuxedo Park,
New York and we utilize a telephone number at Mr. Shefts' office.
QUARTER ENDED JANUARY 31, 2006 COMPARED TO THE QUARTER ENDED JANUARY 31, 2005
Since we discontinued our wood products business, there were no sales from
continuing operations during the quarter ended January 31, 2006 or 2005.
Selling, general and administrative expenses were $3,411 for the quarter
ended January 31, 2006, a decrease of $2,613 over selling, general and
administrative expenses of $6,024 for the quarter ended January 31, 2005. The
decrease in selling, general and administrative expenses is primarily a result
of decreases in utilities, depreciation, professional and filing fees. As our
selling general and administrative expenses decreased, our net loss decreased
from $5,769 for the quarter ended January 31, 2005 to $2,931 for the quarter
ended January 31, 2006.
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NINE MONTHS ENDED JANUARY 31, 2006 COMPARED TO THE NINE MONTHS ENDED JANUARY 31,
2005
As noted above, since we discontinued our wood products business, there
were no sales from continuing operations during the nine months ended January
31, 2006 or 2005.
Selling, general and administrative expenses were $18,852 for the nine
months ended January 31, 2006, a decrease of $6,924 over selling, general and
administrative expenses of $25,776 for the nine months ended January 31, 2005.
The decrease in selling, general and administrative expenses is primarily a
result of a decrease in expenses (insurance, real estate taxes, utilities and
depreciation) related to real property that we sold in April 2005 offset by
increases in professional and filing fees. As we had no revenues other than de
minimis interest income and no other expenses, our net loss decreased from
$24,957 for the nine months ended January 31, 2005 to $17,564 for the nine
months ended January 31, 2006.
DISCONTINUED OPERATIONS
On September 2, 2003, we informed Home Depot that we would no longer do
business with that company due to increased difficulties in transacting business
with Home Depot on a profitable basis. We stated to Home Deport that these
difficulties included Home Depot's prohibition against price increases despite
increases in our costs of production, a diminution in the Home Depot territories
we were allowed to sell product to, and Home Depot's demands regarding returns
of ordered products that we were unwilling to accede to for economic reasons. As
a result, on September 2, 2003, we discontinued our wood products business.
LIQUIDITY AND CAPITAL RESOURCES
In periods prior to those discussed above, our working capital
requirements were met primarily from sales generated by our discontinued wood
products business. At January 31, 2006, we had working capital of $466,943.
As at January 31, 2006, we had cash and cash equivalents of $471,071,
which represented 99.9% of total assets. We believe we have adequate working
capital to fund our operations for at least the next 12 months unless and until
we find a business opportunity.
Off-Balance Sheet Transactions
We do not have any transactions, agreements or other contractual
arrangements that constitute off-balance sheet arrangements.
Application Of Critical Accounting Policies
Our financial statements and accompanying notes are prepared in accordance
with accounting principles generally accepted in the United States of America.
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by management's
application of accounting policies. Critical accounting policies for use of
estimates, accounting for stock-based compensation and environmental remediation
costs.
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ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). This term refers to the controls and procedures of a company that are
designed to ensure that information required to be disclosed by a company in the
reports that it files under the Exchange Act is recorded, processed, summarized,
and reported within the required time periods. Our Chief Executive Officer and
our Chief Financial Officer have evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this quarterly
report. They have concluded that, as of that date, our disclosure controls an
procedures were effective at ensuring that required information will be
disclosed on a timely basis in our reports filed under the Exchange Act.
(b) Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) 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
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PART II - OTHER INFORMATION
Item 1 Legal Proceedings
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- None
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
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- None
Item 3 Defaults Upon Senior Securities
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- None
Item 4 Submission of Matters to a Vote of Securities' Holders
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- None
Item 5 Other Information
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- None
Item 6 Exhibits
31.1 Certification of Harvey Houtkin, Chief Executive Officer, pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Mark Shefts, Chief Financial Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Harvey Houtkin, Chief Executive Officer, pursuant
to Sections 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350.
32.2 Certification of Mark Shefts, Chief Financial Officer, pursuant to
Sections 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350.
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SIGNATURES
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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.
ARBOR ENTECH CORPORATION
Date: March 8, 2006 By: /s/ Mark Shefts
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Mark Shefts
Chief Financial Officer
Chief Accounting Officer
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