Nevada
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20-8-182
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(State or Other Jurisdiction of Incorporation of Organization)
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(I.R.S. Employer Identification No.)
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7064 Sampey Road Groveland Florida 34736
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321-274-9675
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(Address of principal executive offices) (ZIP Code)
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(Registrant’s telephone number, including area code)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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x
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RAPTOR TECHNOLOGY GROUP, INC.
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CONDENSED BALANCE SHEETS
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September 30, 2011
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December 31, 2010
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(Unaudited)
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Assets
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||||||||
Current assets
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||||||||
Cash
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$ | - | $ | 1,893 | ||||
Accounts receivable
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2,026,095 | 2,005,116 | ||||||
Inventory
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601,447 | 704,012 | ||||||
Total current assets
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2,627,542 | 2,711,021 | ||||||
Property and equipment, net
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553,650 | 414,926 | ||||||
Other assets
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||||||||
Security deposit
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21,000 | 21,000 | ||||||
Total assets
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$ | 3,202,192 | $ | 3,146,947 | ||||
Liabilities and Stockholders' Equity (Deficit)
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||||||||
Current liabilities
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||||||||
Bank indebtedness
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$ | 16,487 | $ | - | ||||
Accounts payable and accrued expenses
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367,282 | 57,593 | ||||||
Billings in excess of costs
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2,242,926 | 2,323,139 | ||||||
Loan payable - related party
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12,500 | - | ||||||
Loan payable
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5,000 | - | ||||||
Note payable - related party
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600,000 | 538,462 | ||||||
Current portion of long term debt
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87,517 | 154,648 | ||||||
Total current liabilities
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3,331,712 | 3,073,842 | ||||||
Long term debt, net of current portion
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27,303 | 101,720 | ||||||
Derivative liabilities
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19,355 | - | ||||||
46,658 | 101,720 | |||||||
Total liabilities
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3,378,369 | 3,175,562 | ||||||
Stockholders' equity (deficit)
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Preferred stock. $0.0001 par value,
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||||||||
100,000,000 shares authorized, -0- shares issued
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and outstanding
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- | - | ||||||
Common stock, par value $0.0001 per share,
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||||||||
100,000,000 shares authorized; 70,346,538 shares | ||||||||
outstanding at September 30, 2011 and 42,000,000
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||||||||
shares outstanding at December 31, 2010
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4,899 | 4,200 | ||||||
Additional paid-in capital
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1,654,997 | 541,380 | ||||||
Accumulated deficit
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(1,836,073 | ) | (574,195 | ) | ||||
Total stockholders' equity (deficit)
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(176,178 | ) | (28,615 | ) | ||||
Total liabilities and stockholders' equity (deficit)
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$ | 3,202,192 | $ | 3,146,947 |
RAPTOR TECHNOLOGY GROUP, INC.
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UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
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For the Three Months Ended
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For the Nine Months Ended
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September 30,
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September 30,
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|||||||||||||||
2011
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2010
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2011
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2010
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Revenues
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$ | 196,837 | $ | 17,158 | $ | 552,411 | $ | 55,498 | ||||||||
Cost of revenues
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(14,634 | ) | - | (72,102 | ) | - | ||||||||||
Gross profit
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182,203 | 17,158 | 480,309 | 55,498 | ||||||||||||
Operating expenses
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||||||||||||||||
Professional services
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23,410 | - | 122,096 | 27,746 | ||||||||||||
Payroll
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142,964 | 35,494 | 562,872 | 96,086 | ||||||||||||
Rent
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63,534 | 63,534 | 195,702 | 155,521 | ||||||||||||
Other general and administrative expenses
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128,112 | 41,129 | 794,487 | 312,508 | ||||||||||||
Total operating expenses
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358,020 | 140,157 | 1,675,157 | 591,861 | ||||||||||||
Loss from operations
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(175,817 | ) | (122,999 | ) | (1,194,848 | ) | (536,363 | ) | ||||||||
Other income (expenses)
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Interest expense
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(3,072 | ) | (494 | ) | (73,676 | ) | (2,200 | ) | ||||||||
Change in fair value of derivative liabilities
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11,809 | (19,355 | ) | - | ||||||||||||
Gain/(Loss) on settlement of debt
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26,000 | - | 26,000 | - | ||||||||||||
Interest income
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- | - | - | 26 | ||||||||||||
Net loss before income tax
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(141,080 | ) | (123,493 | ) | (1,261,878 | ) | (538,538 | ) | ||||||||
Income tax expense
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- | - | - | - | ||||||||||||
Net loss
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$ | (141,080 | ) | $ | (123,493 | ) | $ | (1,261,878 | ) | $ | (538,538 | ) | ||||
Basic and diluted loss per common share
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.01 | ) | ||||
Weighted average common shares outstanding
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70,213,929 | 42,000,000 | 52,006,379 | 42,000,000 |
RAPTOR TECHNOLOGY GROUP, INC.
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UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
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For the Nine Months Ended
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September 30,
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||||||||
2011
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2010
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Cash flows from operating activities:
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Net loss
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$ | (1,261,878 | ) | $ | (538,538 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in)
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||||||||
operating activities:
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Depreciation
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53,276 | 56,061 | ||||||
Amortization of loan fee
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61,538 | - | ||||||
Stock based compensation
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762,560 | - | ||||||
Changes in fair value of derivative liabilities
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19,355 | - | ||||||
Gain on settlement of debt
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(26,000 | ) | - | |||||
Net changes in operating assets and liabilities:
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- | - | ||||||
Accounts receivable
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(20,979 | ) | (1,603,858 | ) | ||||
Employee advances
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- | (6,323 | ) | |||||
Inventory
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102,565 | 313,977 | ||||||
Billing in excess of cost
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82,426 | 1,675,261 | ||||||
Prepaid expenses and other current assets
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- | - | ||||||
Accounts payable and accrued expenses
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309,690 | 187,368 | ||||||
Net cash provided by (used in) operating activities
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82,552 | 83,948 | ||||||
Cash flows from investing activities:
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Purchase of property and equipment
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(2,000 | ) | (21,155 | ) | ||||
Net cash used in investing activities
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(2,000 | ) | (21,155 | ) | ||||
Cash flows from financing activities:
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Bank indebtedness | 16,487 | - | ||||||
Borrowings on short term debt
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67,500 | - | ||||||
Principal reduction on notes payable
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(141,548 | ) | (6,102 | ) | ||||
Distributions to shareholders
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(24,884 | ) | (59,908 | ) | ||||
Net cash provided by (used in) financing activities
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(82,445 | ) | (66,010 | ) | ||||
Net increase (decrease) in cash and cash equivalents
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(1,893 | ) | (3,217 | ) | ||||
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Cash and cash equivalents - Beginning of period
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1,893 | 21,718 | ||||||
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Cash and cash equivalents - End of period
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$ | - | $ | 18,501 | ||||
Supplemental disclosure of cash flow activity:
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Cash paid during the period for income taxes
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$ | - | $ | - | ||||
Cash paid during the period for interest expense
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$ | 12,138 | $ | 965 |
Supplemental disclosure of noncash investing and financing activities:
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In May 2011, the Company issued 1,000,000 shares of its common stock for the purchase
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of equipment valued at $190,000.
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In June 011, the Company issued 5,670,000 shares of its common stock to employees and
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consultants for services rendered valued at $907,200. of which $744,560 was charged to
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operations and $162,640 was allocated to construction still in progress and is included
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in the accompanying balance sheet in Billings in excess of costs.
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On August 19, 2011, the Company issued 120,000 shares of its common stock to employees
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for services rendered valued at $18,000.
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●
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Level one – Quoted market prices in active markets for identical assets or liabilities;
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●
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Level two – Inputs other than level one inputs that are either directly or indirectly observable; and
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●
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Level three – Unobservable inputs developed using estimates and assumptions,
which are developed by the reporting entity and reflect those assumptions that a
market participant would use.
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September 30,
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December 31,
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2011
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2010
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(Unaudited)
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Furniture and fixtures (10 years)
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$ | 18,164 | $ | 18,164 | ||||
Machinery and equipment (10 years)
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441,383 | 249,383 | ||||||
Office equipment (5 to 10 years)
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36,261 | 36,261 | ||||||
Vehicles (5 years)
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174,968 | 174,968 | ||||||
Building improvements (10 years)
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68,916 | 68 916 | ||||||
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739,692 | 739,692 | ||||||
Less: accumulated depreciation
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(186,042 | ) | (132,766 | ) | ||||
Property and equipment – net
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$ | 553,650 | $ | 414,926 |
September 30,
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December 31,
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2011
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2010
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(Unaudited)
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Costs incurred on uncompleted contracts
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$ | 1,990,853 | $ | 1,213,310 | ||||
Less: Billings to date
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(4,233,779 | ) | (3,536,449 | ) | ||||
Billings in excess of costs and estimated earnings
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on uncompleted contracts
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$ | (2,242,926 | ) | $ | (2,323,139 | ) |
September 30,
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December 31,
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2011
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2010
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(Unaudited)
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Installment note payable, due in equal monthly
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payments of $906 including interest at 5.9%
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collateralized by a vehicle and maturing in May 2015
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$ | 36,315 | $ | 42,035 | ||||
Installment note payable, due to an individual in equal
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monthly payments of $13,280 including interest at 5%
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maturing in May 2012 and secured by
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various property and equipment
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78,505 | 214,333 | ||||||
114,820 | 256,368 | |||||||
Less: principal amounts due within 12 months
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(87,517 | ) | (154,648 | ) | ||||
Long-term debt
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$ | 27,303 | $ | 101,720 |
Period Ending
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September 30,
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||||
2013
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$ | 9,558 | ||
2014
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10,137 | |||
2015
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7,608 | |||
Total
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$ | 27,303 |
Balance as of December 31, 2010
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$ | 3,584,915 | ||
New contracts and contracts adjustments
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725,935 | |||
Less: contract revenues earned for the period ended September 30, 2011
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- | |||
Balance at September 30, 2011
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$ | 4,310,850 |
Period Ending
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September 30,
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||||
2012
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$ | 256,671 | ||
2013
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258,868 | |||
2014
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261,086 | |||
2015
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262,949 | |||
Total
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$ | 1,039,574 |
-
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On February 6, 2008, RFEI issued 2,000 common shares at $0.01 per share.
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-
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On May 2, 2011, RFEI amended the articles of incorporation to increase the authorized common shares to 100,000,000 at $0.0001 per share. At the same time, RFEI effected a stock split of 21,000 to 1 of the existing issued and outstanding common share, resulting in 42,000,000 common shares issued and outstanding.
On May 27, 2011, the Company purchased equipment in exchange for issuing 1,000,000 shares of its common stock. The equipment was valued at the estimated value of the issued common shares of $190,000. The Company’s president was a former manager of the Seller.
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-
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On June 12, 2011, the Company issued a total of 5,670,000 shares of its common stock to employees and consultants for services. The Company valued the services at the estimated value of the issued common shares of $907,200.
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-
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As at September 30, 2011, the note payable to a related party was $600,000 (December 31, 2010 - $538,462). Refer to Note 6 for further details.
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-
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A loan payable to a major shareholder was $12,500 as of September 30, 2011 (December 31, 2010 - $ nil). The loan was due on demand, non-interest bearing and unsecured.
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-
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Included in accounts payable and accrued expenses, $60,008 (December 31, 2010 - $18,732) was payable to the president of the Company for payroll accrual.
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-
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During the nine months ended September 30, 2011, the Company paid $10,000 fees to a shareholder of the Company (nine months ended September 30, 2010 - $nil).
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For the Three Months Ended
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Increase
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September 30,
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(decrease)
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|||||||||||
2011
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2010
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2011 v 2010 | ||||||||||
Professional services
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$ | 23,410 | $ | - | $ | 23,410 | ||||||
Payroll
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142,964 | 35,494 | 107,470 | |||||||||
Rent
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63,534 | 63,534 | - | |||||||||
Other general and administrative expenses
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128,112 | 41,129 | 86,983 | |||||||||
Total operating expenses
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$ | 358,020 | $ | 140,157 | $ | 217,863 |
For the Nine Months Ended
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Increase
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|||||||||||
September 30,
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(decrease)
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|||||||||||
2011
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2010
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2011 v 2010 | ||||||||||
Professional services
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$ | 122,096 | $ | 27,746 | $ | 94,350 | ||||||
Payroll
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562,872 | 96,086 | 466,786 | |||||||||
Rent
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195,702 | 155,521 | 40,181 | |||||||||
Other general and administrative expenses
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794,487 | 312,508 | 481,979 | |||||||||
Total operating expenses
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$ | 1,675,157 | $ | 591,861 | $ | 1,083,296 |
3.1 | Articles of Incorporation, exhibit 3.1 filed with the registrant’s Registration Statement on Form SB -2, as amended; filed with the Securities and Exchange Commission on December 14, 2007. |
3.2
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Bylaws, filed as exhibit 3.2 with the registrant’s Registration Statement on Form SB-2, as amended; filed with the Securities and Exchange Commission on December 14, 2007.
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3.2
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Amended Articles of Incorporation, filed as exhibit 3.3 with the registrant’s Quarterly Report on Form 10-Q; filed with the Securities and Exchange Commission on April 22, 2011.
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10.1
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Plan of Merger and Reorganization with Raptor Fabrication and Equipment, Inc. entered into on January 6, 2011, amended, restated and replaced in its entirety, April 21, 2011, filed as exhibit 10.1 with the registrant’s Quarterly Report on Form 10-Q; filed with the Securities and Exchange Commission on April 22, 2011.
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Raptor Technology Group, Inc.
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By:
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/s/ Tom Gleason
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||
Date: November 22 , 2011
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Tom Gleason
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||
President,
Principal Executive Officer
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|||
Principal Financial Officer
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1.
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I have reviewed this quarterly report on Form 10-Q /A of Raptor Technology Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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Payables and Accruals | 3 Months Ended |
---|---|
Sep. 30, 2011 | |
Payables and Accruals | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | Note 6 Convertible Note Payable
In October 2010, Raptor borrowed $500,000 from Spencer Douglass under a Secured Convertible Note. The convertible note, with fees of $100,000, totaling $600,000 is payable in full on demand at the option of Mr. Douglass on the earlier of (i) that date which is six months from the date of full funding or (ii) two business days after Raptor receives funding in a proposed PIPE offering for a minimum of $1,000,000. As of September 30, 2011, there has been no funding and the note is past its maturity date was April 22, 2011 (six months from the date of full funding). Subsequent to any reverse acquisition of a public company by Raptor, the Convertible Note may be converted at the option of the holder into common stock of Raptor at the lower of (i) a discount of 20% from the average weighted average closing price of the Raptor common stock for the 30 trading days immediately preceding such conversion, or (ii) $0.50 per share. The Convertible Note shall be automatically converted into Raptor common stock at the rate set forth above in the event the weighted average closing price of the Raptor common stock shall equal or exceed $1.00 for ten consecutive trading days. Per ASC Topic 815-20-15-78, these convertible debentures do not meet the definition of a conventional convertible debt instrument since the debt is not convertible into a fixed number of shares. The debt can be converted into common stock at a conversion price that is a percentage of the market price as yet to be determined; therefore, the number of shares that could be required to be delivered upon net-share settlement is essentially indeterminate. Therefore, the convertible debenture is considered non-conventional, which means that the conversion feature must be bifurcated from the debt and shown as a separate derivative liability. The Company recognized a derivative liability of $19,355 on September 30, 20011 with an offsetting charge to operations.
The convertible debt was recorded net of the $100,000 loan fee. The fee is being amortized into the principal loan balance over the estimated six-month life of the loan. The outstanding balance of the convertible debt net of the unamortized portion of the loan fee at September 30, 2011 and December 31, 2010 was $600,000 and $538,462, respectively. The amortized portion of the loan fee charged to interest at September 30, 2011 totaled $100,000. The note is personally guaranteed by the President of the Company. |