10QSB 1 decq.txt QUARTERLY FILING UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C., 20549 FORM 10-Q SB/A (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter report ended December 31, 2001 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 000-14869 KOMODO, INC. (Exact name of small business issuer as registrant as specified in charter) Nevada 95-3932052 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Suite 400, 1111 West Georgia Street, Vancouver, BC Canada V6E4M3 (Address of principal executive office) Registrants telephone no., including area code (604) 689-5377 N/A. (Former name, changed since last report) Check 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), Yes [X] No [ ] and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the last practicable date. Class Outstanding as of December 31, 2001 Common Stock, $0.001 1,528,420 i TABLE OF CONTENTS PART 1. FINANCIAL INFORMATION Heading Page Item 1. Consolidated Financial Statements 1 Consolidated Balance Sheets September 30, 2001 And December 30, 2000 2 Consolidated Statements of Operations nine months Ended September 30, 2001 and September 30, 2000 3 Consolidated Statement of Stockholders Equity 4 - 9 Consolidated Statements of Cash Flows nine months Ended September 30, 2001 and September 30, 2000 10-11 Notes to Consolidated Financial Statements 12 Item 2. Managements Discussion and Analysis and Result of Operations 13-14 PART II. OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes in Security 13 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matter to a Vote of 14 Securities Holders Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 15 Signatures S-1 ii PART 1 FINANCIAL INFORMATION Item 1. Financial Statement The accompanying unaudited financial statements have been prepared in accordance with the instructions for Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnotes necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholders equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. The unaudited balance sheet of the Company as of December 31, 2001, and the related balance sheet of the Company derived from the Companys audited financial statements as of March 31, 2001, the unaudited statement of operations and cash flows for the nine months ended December 31, 2001 and the statements of stockholders equity for the period from December 31, 1997 through September 30, 2001 are attached hereto and incorporated herein by this reference. Operating results for the quarters ended December 31, 2001 are not necessarily indicative of the results that can be expected for the year ending March 31, 2002. KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and March 31, 2001 KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Balance Sheets ASSETS December 31, March 31, 2001 2001 (Unaudited) CURRENT ASSETS Cash$ - $ - Prepaid expenses - 1,333 Technology 62,500 - Notes Receivable - related party 9,191 - Total Current Assets 71,691 1,333 FURNITURE AND EQUIPMENT, NET - - TOTAL ASSETS $ 71,691 $ 1,333 LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) CURRENT LIABILITIES Cash overdraft $ 22 $ 11 Accounts payable 65,303 3,444 Notes payable, related party - 27,999 Reserve for discontinued operations 205,676 205,676 Total Current Liabilities 271,001 237,130 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS EQUITY (DEFICIT) Preferred stock: 10,000,000 shares authorized of $0.001 par value, 2,000,000 shares issued and outstanding 2,000 2,000 Common stock: 100,000,000 shares authorized of $0.001 par value, 1,528,420 shares issued and outstanding at December 31, 2001 and 401,752 at March 31, 2000 1,528 402 Additional paid-in capital 12,520,749 11,567,091 Stock subscriptions receivable (543,421) (24,346) Deficit accumulated during the development stage (12,180,166) (11,780,944) Total Stockholders Equity (Deficit) (199,310) (235,797) TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) $ 71,691 $ 1,333 KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Statements of Operations (Unaudited) For the three Months Ended 1995 Through December 31, 2001 2000 REVENUES $ - $ - EXPENSES Depreciation and amortization - - General and administrative 390,507 5,127 Total Expenses 390,507 5,127 LOSS FROM OPERATIONS (390,507) (5,127) LOSS FROM DISCONTINUED OPERATIONS - - NET LOSS $ (390,507) $ (5,127) BASIC LOSS PER SHARE OF COMMON STOCK $ (0.34) $ (0.00) WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 1,148,799 236,109 From Inception on November 10 For the nine montsh ended December 31 December 31 2001 2000 2001 REVENUES $ -$ - $ - EXPENSES Depreciation and amortization - - 170,538 General and administrative 399,222 17,696 1,099,898 Total Expenses 399,222 17,696 1,270,436 LOSS FROM OPERATIONS (399,222) (17,696) (1,270,436) LOSS FROM DISCONTINUED OPERATIONS NET LOSS $ (399,222) $ (17,696) $ (12,180,166) BASIC LOSS PER SHARE OF COMMON STOCK $ (0.52) $ (0.00) WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 763,631 236,109 The accompanying notes are an integral part of these consolidated financial statements. KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Statements of Stockholders Equity (Deficit) Preferred Stock Shares Amount Balance at November 10, 1995 (Inception) - $ - Common stock issued for cash at approximately $0.00 per share - - Currency translation adjustment - - Net loss for the year ended March 31, 1996 - - Balance, March 31, 1996 - - Common stock issued for cash at approximately $3.80 per share - - Common stock issued for services at approximately $7.60 per share - - Currency translation adjustment - - Net loss for the year ended March 31, 1997 - - Balance, March 31, 1997 - $ - Common stock Shares Amount Balance at November 10, 1995 (Inception) $ - Common stock issued for cash at approximately $0.00 per share - - Currency translation adjustment - - Net loss for the year ended March 31, 1996 - - Balance, March 31, 1996 - - Common stock issued for cash at approximately $3.80 per share 9,617 10 Common stock issued for services at approximately $7.60 per share 384 - Currency translation adjustment - - Net loss for the year ended March 31, 1997 - - Balance, March 31, 1997 10,001 $ 10 Addiitonal Stock paid in subscription capital receivable Balance at November 10, 1995 (Inception) $ - $ - Common stock issued for cash at approximately $0.00 per share - - Currency translation adjustment - - Net loss for the year ended March 31, 1996 - - Balance, March 31, 1996 - - Common stock issued for cash at approximately $3.80 per share 1,089,477 - Common stock issued for services at approximately $7.60 per share 87,556 - Currency translation adjustment - - Net loss for the year ended March 31, 1997 - - Balance, March 31, 1997 $1,177,033 $ - Deficit Accumulated Other During the Comprehensive Development Incomes (loss) Stage Balance at November 10, 1995 (Inception) $ - $ - Common stock issued for cash at approximately $0.00 per share - - Currency translation adjustment (1,230) - Net loss for the year ended March 31, 1996 - (157,549) Balance, March 31, 1996 (1,230) (157,549) Common stock issued for cash at approximately $3.80 per share - - Common stock issued for services at approximately $7.60 per share - - Currency translation adjustment 8,542 - Net loss for the year ended March 31, 1997 - (1,388,389) Balance, March 31, 1997 $ 7,312 $(1,545,938) The accompanying notes are an integral part of these consolidated financial statements. KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Statements of Stockholders Equity (Deficit) (Continued) Preferred Stock Shares Amount Balance, March 31, 1997 $ - Recapitalization (Note 1) - - Common stock issued for cash at approximately $3.60 per share - - Common stock issued for services at approximately $3.60 per share - - Issuance of warrants - - Common stock issued for debt at approximately $2.60 per share - - Common stock issued for mineral properties at $10.00 per share - - Preferred stock issued for services at $1.80 per share 2,000,000 200,000 Currency translation adjustment - - Net loss for the year ended March 31, 1998 - - Balance, March 31, 1998 2,000,000 $ 200,000 Common stock shares amount Balance, March 31, 1997 10,001 $ 10 Recapitalization (Note 1) 41,030 41 Common stock issued for cash at approximately $3.60 per share 20,359 20 Common stock issued for services at approximately $3.60 per share 11,222 11 Issuance of warrants - - Common stock issued for debt at approximately $2.60 per share 382,800 13 Common stock issued for mineral properties at $10.00 per share 55,000 2 Preferred stock issued for services at $1.80 per share - - Currency translation adjustment - - Net loss for the year ended March 31, 1998 - - Balance, March 31, 1998 97,206 $ 97 Additional Stock paid in subscription capital receivable Balance, March 31, 1997 $1,177,033$ - $ Recapitalization (Note 1) 394,021 - Common stock issued for cash at approximately $3.60 per share 2,822,107 (100,000) Common stock issued for services at approximately $3.60 per share 1,179,615 (154,281) Issuance of warrants 17,220 - Common stock issued for debt at approximately $2.60 per share 995,706 - Common stock issued for mineral properties at $10.00 per share 549,998 -- Preferred stock issued for services at $1.80 per share 160,000 - Currency translation adjustment - - Net loss for the year ended March 31, 1998 - - Balance, March 31, 1998 $7,295,700 $ (254,281) Deficit Accumulted Other during the comprehensive development Income(loss) stage Balance, March 31, 1997 $ 7,312 $(1,545,938) Recapitalization (Note 1) - - Common stock issued for cash at approximately $3.60 per share - - Common stock issued for services at approximately $3.60 per share - - Issuance of warrants - - Common stock issued for debt at approximately $2.60 per share - - Common stock issued for mineral properties at $10.00 per share - - Preferred stock issued for services at $1.80 per share - - Currency translation adjustment 260,719 - Net loss for the year ended March 31, 1998 - (3,332,577) Balance, March 31, 1998 $ 268,031 $(4,878,515) The accompanying notes are an integral part of these consolidated financial statements. KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Statements of Stockholders Equity (Deficit) (Continued) Preferred Stock Shares Amount Balance, March 31, 1998 2,000,000 $ 200,000 Common stock issued for cash at approximately $1.40 per share - - Common stock issued for services at approximately $1.50 per share - - Receipt of subscription receivable - - Common stock issued for debt at approximately $2.00 per share - - Currency translation adjustment - - Net loss for the year ended March 31, 1999 - - Balance, March 31, 1999 2,000,000 $ 200,000 Common stock shares amount Balance, March 31, 1998 97,206 $ 97 Common stock issued for cash at approximately $1.40 per share 28,545 29 Common stock issued for services at approximately $1.50 per share 34,091 34 Receipt of subscription receivable - - Common stock issued for debt at approximately $2.00 per share 400 - Currency translation adjustment - - Net loss for the year ended March 31, 1999 - - Balance, March 31, 1999 160,242 $ 160 Additional Stock paid in subscription capital receivable Balance, March 31, 1998 $ 7,295,700 $ (254,281) Common stock issued for cash at approximately $1.40 per share 1,224,251 - Common stock issued for services at approximately $1.50 per share 1,495,188 - Receipt of subscription receivable - 254,281 Common stock issued for debt at approximately $2.00 per share 24,000 - Currency translation adjustment - - Net loss for the year ended March 31, 1999 - - Balance, March 31, 1999 $10,039,139 $ - Deficit Accumulated Other During the Comprehensive Development income (Loss) stage Balance, March 31, 1998 $ 268,031 $ (4,878,515) Common stock issued for cash at approximately $1.40 per share - - Common stock issued for services at approximately $1.50 per share - - Receipt of subscription receivable - - Common stock issued for debt at approximately $2.00 per share - - Currency translation adjustment (268,031) - Net loss for the year ended March 31, 1999 - (6,031,215) Balance, March 31, 1999 $ - $(10,909,730 ) The accompanying notes are an integral part of these consolidated financial statements. KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Statements of Stockholders Equity (Deficit) (Continued) Preferred stock shares amount Balance, March 31, 1999 2,000,000 $ 200,000 Common stock issued for debt at $2.50 per share - - Common stock issued for cash at $0.50 per share - - Common stock issued for services at approximately $0.46 per share - - Common stock issued for license at $0.50 per share - - Cancellation of common stock - - Change in preferred stock at par value - (198,000) Net loss for the year ended March 31, 2000 - - Balance, March 31, 2000 2,000,000 $ 2,000 Common stock shares amount Balance, March 31, 1999 160,242 $ 160 Common stock issued for debt at $2.50 per share 24,540 Common stock issued for cash at $0.50 per share 3,334 3 Common stock issued for services at approximately $0.46 per share 39,743 40 Common stock issued for license at $0.50 per share 8,334 8 Cancellation of common stock (84) - Change in preferred stock at par value - - Net loss for the year ended March 31, 2000 - - Balance, March 31, 2000 7,083,142 $ 7,083 Additional Stock Paid in Subscription Capital Income (Loss) Balance, March 31, 1999 $ 10,039,139 $ - Common stock issued for debt at $2.50 per share 520,921 - Common stock issued for cash at $0.50 per share 49,997 - Common stock issued for services at approximately $0.46 per share 553,851 - Common stock issued for license at $0.50 per share 124,992 - Cancellation of common stock (3,750) - Change in preferred stock at par value 198,000 - Net loss for the year ended March 31, 2000 - - Balance, March 31, 2000 $ 11,476,303 $ - Deficit Accumulated Other During the Comprehensive Developement Income (loss) Stage Balance, March 31, 1999 $ - $(10,909,730) Common stock issued for debt at $2.50 per share - - Common stock issued for cash at $0.50 per share - - Common stock issued for services at approximately $0.46 per share - - Common stock issued for license at $0.50 per share - - Cancellation of common stock - - Change in preferred stock at par value - - Net loss for the year ended March 31, 2000 - (796,123) Balance, March 31, 2000 $ - $(11,705,853) The accompanying notes are an integral part of these consolidated financial statements. KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Statements of Stockholders Equity (Deficit) (Continued) Preferred Stock Shares Amount Balance, March 31, 2000 2,000,000 $ 2,000 Stock issued for services at $0.08 per share - - Stock issued for cash at $0.005 per share - - Additional expense through extension and revaluation of warrants - - Net loss for the year ended March 31, 2001 - - Balance, March 31, 2001 2,000,000 $ 2,000 Common Stock Shares Amount Balance, March 31, 2000 236,109 $ 236 Stock issued for services at $0.08 per share 3,334 3 Stock issued for cash at $0.005 per share 162,309 163 Additional expense through extension and revaluation of warrants - - Net loss for the year ended March 31, 2001 - - Balance, March 31, 2001 401,752 $ 402 Additional Stock paid in Subscription capital receivable Balance, March 31, 2000 $11,483,150 $ - $ Stock issued for services at $0.08 per share 7,997 - Stock issued for cash at $0.005 per share 24,183 (24,346) Additional expense through extension and revaluation of warrants 51,761 - Net loss for the year ended March 31, 2001 - - Balance, March 31, 2001 $11,567,091 $ (24,346) Deficit Accumulated Other During the Comprehensive Development Income (loss) Stage Balance, March 31, 2000 $ - $(11,705,853) Stock issued for services at $0.08 per share - - Stock issued for cash at $0.005 per share - - Additional expense through extension and revaluation of warrants - - Net loss for the year ended March 31, 2001 - (75,091) Balance, March 31, 2001 $ - $(11,780,944) The accompanying notes are an integral part of these consolidated financial statements. KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Statements of Stockholders Equity (Deficit) (Continued) Preferred Stock Shares Amount Balance, March 31, 2001 2,000,000 $ 2,000 Stock issued for cash at $0.005 per share (unaudited) - - Stock issued for cash at $0.001 per share (unaudited) - - Receipt of subscription receivable (unaudited) - - Stock issued for debt at $0.25 per share (unaudited) - - Stock issued for cash at $1.00 per share (unaudited) - - Stock issued for technology at $1.25 per share (unaudited) - - Additional expense through granting of warrants (unaudited) - - Net loss for the nine months ended December 31, 2001 (unaudited) - - Balance, December 31, 2001 (unaudited) 2,000,000 $ 2,000 Common stock shares amount Balance, March 31, 2001 401,752 $ 402 Stock issued for cash at $0.005 per share (unaudited) 133,334 133 Stock issued for cash at $0.001 per share (unaudited) 293,334 293 Receipt of subscription receivable (unaudited) - - Stock issued for debt at $0.25 per share (unaudited) 150,000 150 Stock issued for cash at $1.00 per share (unaudited) 500,000 500 Stock issued for technology at $1.25 per share (unaudited) 50,000 50 Additional expense through granting of warrants (unaudited) - - Net loss for the nine months ended December 31, 2001 (unaudited) - - Balance, December 31, 2001 (unaudited) 1,528,420 $ 1,528 Additional Stock paid in Subscription Capital Receivable Balance, March 31, 2001 $11,567,091 $ (24,346) Stock issued for cash at $0.005 per share (unaudited) 19,867 (20,000) Stock issued for cash at $0.001 per share (unaudited) 8,507 (8,800) Receipt of subscription receivable (unaudited) - 9,725 Stock issued for debt at $0.25 per share (unaudited) 37,350 - Stock issued for cash at $1.00 per share (unaudited) 499,500 (500,000) Stock issued for technology at $1.25 per share (unaudited) 62,450 - Additional expense through granting of warrants (unaudited) 325,984 - Net loss for the nine months ended December 31, 2001 (unaudited) - - Balance, December 31, 2001 (unaudited) $12,520,749 $ (543,421) Deficit Accumulated Other During the Comprehensive developement Income (loss) stage Balance, March 31, 2001 $ - $(11,780,944) Stock issued for cash at $0.005 per share (unaudited) - - Stock issued for cash at $0.001 per share (unaudited) - - Receipt of subscription receivable (unaudited) - - Stock issued for debt at $0.25 per share (unaudited) - - Stock issued for cash at $1.00 per share (unaudited) - - Stock issued for technology at $1.25 per share (unaudited) - - Additional expense through granting of warrants (unaudited) - - Net loss for the nine months ended December 31, 2001 (unaudited) - (399,222) Balance, December 31, 2001 (unaudited) $ - $(12,180,166) KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited) Inception on November 10, For the nine Months Ended 1995 Through December 31, December 31, 2001 2000 2001 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (399,222) $ (12,569) $(12,180,166) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization expense - - 194,021 Stock issued for services - - 3,526,273 Bad debt expense - - 224,941 Write-off mineral property - - 3,914,434 Issuance of warrants 325,984 - 394,965 Currency translation adjustment - - (168,626) Changes in operating assets and liabilities: (Increase) decrease in accounts receivable - - (213,312) (Increase) decrease in deposits and prepaid expenses 1,333 10,677 (85,365) Increase (decrease) in accounts payable 61,859 (2,158) 223,575 Increase in reserve for discontinued operations - - 258,161 Net Cash (Used) by Operating Activities (10,046) (4,050) (3,911,099) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets - - (149,014) Purchase of mineral property and deferred exploration costs - - (2,762,539) Net Cash (Used) by Investing Activities - - (2,911,553) CASH FLOWS FROM FINANCING ACTIVITIES Decrease in cash overdraft 11 1,551 22 Proceeds from common stock 9,725 - 5,349,900 Payments on notes payable - related party 310 - 1,472,730 Net Cash Provided by Financing Activities 10,046 1,551 6,822,652 NET INCREASE IN CASH - (2,499) - CASH AT BEGINNING OF PERIOD - 2,499 - CASH AT END OF PERIOD $ - $ - $ - KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Consolidated Statements of Cash Flows (Continued) (Unaudited) From Inception on November 10, For the Nine Months Ended 1995 Through December 31, December 31, 2001 2000 2001 CASH PAID FOR: Interest $ - $ $ - Income taxes $ - $ $ - NON-CASH FINANCING ACTIVITIES Common stock issued for acquisition of asset $ 62,500 $ - $ 456,562 Common stock issued for debt conversion $ 37,500 $ - $1,248,219 Common stock issued for mineral properties $ - $ - $ 550,000 Common stock issued for services $ - $ - $3,518,273 Common stock issued for license $ - $ - $ 125,000 Common stock issued for subscription $ 528,800 $ - $ 528,800 Warrants granted below market value $ 325,984 $ - $ 394,965 KOMODO, INC. (Formerly PhantomFilm.com) (A Development Stage Company) Notes to the Consolidated Financial Statements December 31, 2001 and March 31, 2001 NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The accompanying consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at December 31, 2001 and 2000 and for all periods presented have been made. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Companys March 31, 2001 audited consolidated financial statements. The results of operations for period ended December 31, 2001 and 2000 are not necessarily indicative of the operating results for the full year. NOTE 2 - GOING CONCERN The Companys consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The Company intends to develop business on the internet. In the interim, management is committed to meeting the operational cash flow needs of the Company. NOTE 3 - OPTIONS AND WARRANTS The Company authorized the following additional outstanding warrants: Number of Exercise Number Number Expiration Warrants Price Exercised Outstanding Date 1,500,000 $ 0.25 - 1,500,000 Oct. 15, 2011 100,000 $ 1.00 - 100,000 Nov. 15, 2003 The exercise price was less than the fair value of the stock. Accordingly, a compensation expense was recorded of $325,984 per the Black Scholes calculation. NOTE 4 - TECHNOLOGY On October 28, 2001, the Company entered into an agreement with Micro-American, Inc. to purchase virus protection software technology for further development by the Company to render the software technology suitable for commercial sale to the Companys customers. The purchase price is 50,000 unregistered and restricted shares of the Company to be delivered upon execution of the agreement at the market price on the date of closing of $1.25 per share and 2,000,000 shares when and if the software technology is proven to be commercially viable at the sole determination of the Company. Managements Discussion and Analysis Plan of Operation During the quarter the Company focused on setting up the development team for the E-Virus solutions which is a web based virus protection program for email and software downloads designed to combat and destroy viruses before they infect your computer and its documents. This technology incorporates a fundamentally different and unique approach to the delivery of email and the downloading of software on the Internet. We believe that the protection of email or software downloads is a viable business opportunity for Komodo. This Form 10-Q contains forward-looking statements that involve risks and uncertainties. We may use words such as "anticipates," "believes," "plans," "expects," "future," "intends," "may," "will," "should," "estimates," "predicts," "potential," "continue" and similar expressions to identify such forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, achievements and prospects to be materially different from those expressed or implied by such forward-looking statements. These forward-looking statements apply only as of the date of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed in this Form 10-Q might not occur. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described above and elsewhere in this Form 10-Q and readers are cautioned not to place undue reliance on these forward looking statements, which reflect management's analysis only as of the date hereof. Results of Operations We have incurred significant losses since inception on November 10, 1995. From inception to December 31, 2001, the Company has incurred a net loss of $12,270,436, with a net loss of $390,507 for the three months ended December 31, 2001. For the majority of this quarter the Company was engaged in hiring programmers and establishing the development plan of action. We estimate that existing sources of liquidity, forecasted funds from operations and the funds provided by anticipated capital activity will satisfy our projected working capital requirements through the last quarter of fiscal 2001. Our ability to maintain sufficient liquidity through fiscal 2002 is dependent on the company achieving a viable virus protection product. If the company raises additional 13 capital, such capital may not be available on acceptable terms, if at all. Additional financing may result in substantial and immediate dilution to existing stockholders. If adequate funds are not available to satisfy either short or long-term capital requirements, the company may be required to curtail operations significantly or to seek funds through arrangements with strategic partners, existing investors or other parties. Subsequent to the quarter the Company entered into the following equity transactions: 1. The sale of 250,000 common shares for cash in the amount of $187,500 at a purchase price of $0.75 per share. PART II OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities During the quarter the company issued the following shares for cash: 500,000 at $1.00 per share and 150,000 at $0.25 per share. None of the above noted shares involved a public offering. Item 3. Defaults Upon Senior Securities None; not applicable Item 4 Submission of Matters to a Vote of Security Holders None Item 5. Other Information Subsequent to the quarter Penny Perfect and Katharine Johnston resigned as Directors of the Company due to time constraints from other work commitments. Gordon Muir became the President and Victor Cardenas the Secretary/Treasurer. 14 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None (b) Report on Form 8-K None SIGNATURES 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. KOMODO, INC. Date: February 13, 2002 _________________________ By / s / Gordon Muir President / Director 15 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated: KOMODO, INC. Date: February 13, 2002 ____________________ By / s / Gordon Muir President / Director Date: February 13, 2002 ____________________ By / s / Victor Cardenas