-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VG1ei6Y7WIaWM5cwhMRosjn+GRqWwj4SRa8ud+Ek6Jcr4Vp/Bw4CoFGZt9W7/YQ7 yMYl8V4TFG/KJ0bTaRIkcg== 0001015402-04-000037.txt : 20040105 0001015402-04-000037.hdr.sgml : 20040105 20040105144100 ACCESSION NUMBER: 0001015402-04-000037 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20040105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEMINIQUE CORP CENTRAL INDEX KEY: 0000733337 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122] IRS NUMBER: 133186327 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-09370 FILM NUMBER: 04503956 BUSINESS ADDRESS: STREET 1: 990 STATION RD CITY: BELLPORT STATE: NY ZIP: 11713 BUSINESS PHONE: 5162865800 MAIL ADDRESS: STREET 1: 990 STATION ROAD CITY: BELLPORT STATE: NY ZIP: 11713 FORMER COMPANY: FORMER CONFORMED NAME: BIOPHARMACEUTICS INC// DATE OF NAME CHANGE: 19990730 FORMER COMPANY: FORMER CONFORMED NAME: INTEGRATED GENERICS INC /NV/ DATE OF NAME CHANGE: 19880824 FORMER COMPANY: FORMER CONFORMED NAME: PATIENT MEDICAL SYSTEMS CORP DATE OF NAME CHANGE: 19880615 10QSB 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 1-9370 (COMMISSION FILE NUMBER) FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003 OR [ ] FEMINIQUE CORPORATION (Exact Name of Registrant as Specified in the Charter) DELAWARE 13-3186327 (State of Other Jurisdiction (I.R.S. Employer of Incorporation) Identification Number) 140 Broadway, 46th Floor New York, New York 10005 (Address, including zip code, and telephone number, of registrant's principal executive offices) Check whether the Registrant (1) has filed all reports required 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 [ ] As of December 4, 2003, there were 25,005,733 shares of the Registrant's Common Stock, $0.001 par value per share, outstanding. TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT YES [ ] NO [X] FEMINIQUE CORPORATION FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003 TABLE OF CONTENTS PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION RISK FACTORS ITEM 3. CONTROLS AND PROCEDURES PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS ITEM 3. DEFAULTS UPON SENIOR SECURITIES ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K SIGNATURES 2 THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT THE COMPANY AND ITS INDUSTRY. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE, ACHIEVEMENTS AND PROSPECTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON EVEN IF NEW INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCURRING IN THE FUTURE. 3 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - FEMINIQUE CORPORATION AND SUBSIDIARIES INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 2003 AND 2002 PAGE(S) ------- CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED: Balance Sheet of March 31, 2003 - Unaudited 5 Statement of Income (Operations) For the Six Months and Three Months Ended March 31, 2003 and 2002 - Unaudited 7 Statement of Cash Flows For the Six Months Ended March 31, 2003 and 2002 - Unaudited 8 Notes to Condensed Consolidated Financial Statements 9 4
FEMINIQUE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET - UNAUDITED MARCH 31, 2003 ASSETS CURRENT ASSETS Cash $161,482 Prepaid expenses and other current assets 5,316 -------- TOTAL CURRENT ASSETS 166,798 -------- TOTAL ASSETS $166,798 ======== The accompanying notes are an integral part of the condensed consolidated financial statements.
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FEMINIQUE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED) - UNAUDITED MARCH 31, 2003 CURRENT LIABILITIES Accounts payable - Trade $ 721,693 Accrued expenses 89,538 Notes payable 137,000 Convertible debentures payable 575,000 ------------- TOTAL CURRENT LIABILITIES 1,523,231 ------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' DEFICIT Common stock, par value $.001 per share; authorized 50,000,000 shares; issued shares; 25,005,733 25,005 Additional paid-in capital 35,012,966 Accumulated deficit (35,449,792) Less: treasury stock, at cost (103,432 shares) (944,612) ------------- TOTAL STOCKHOLDERS' DEFICIT (1,356,433) ------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 166,798 =============
The accompanying notes are an integral part of the condensed consolidated financial statements. 6
FEMINIQUE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (OPERATIONS) - UNAUDITED FOR THE SIX AND THREE MONTHS ENDED MARCH 31, 2003 AND 2002 FOR THE SIX MONTHS ENDED FOR THE THREE MONTHS ENDED MARCH 31, MARCH 31, 2003 2002 2003 2002 ------------ ----------- ----------- ----------- REVENUES - ROYALTIES $ 21,904 $ 79,077 $ 43,618 ------------ ----------- ----------- ----------- COSTS AND EXPENSES Selling, general and administrative 50,000 45 - - ------------ ----------- ----------- ----------- TOTAL COSTS AND EXPENSES 50,000 45 - - ------------ ----------- ----------- ----------- NET INCOME (LOSS) BEFORE OTHER INCOME (28,096) 79,032 - 43,618 OTHER INCOME Other income 1,269 1,339 474 695 ------------ ----------- ----------- ----------- TOTAL OTHER INCOME 1,269 1,339 474 695 ------------ ----------- ----------- ----------- NET INCOME (LOSS) BEFORE PROVISION FOR STATE INCOME TAXES (26,827) 80,371 474 44,313 Provision for state income taxes - - - - ------------ ----------- ----------- ----------- NET INCOME (LOSS) $ (26,827) $ 80,371 $ 474 $ 44,313 ============ =========== =========== =========== BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE $ (0.002) $ 0.004 $ - $ 0.002 ============ =========== =========== =========== AVERAGE WEIGHTED OUTSTANDING SHARES OF COMMON STOCK 25,005,733 25,005,733 25,005,733 25,005,733 ============ =========== =========== =========== The accompanying notes are an integral part of the condensed consolidated financial statements.
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FEMINIQUE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 2003 AND 2002 2003 2002 ---------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (loss) $ (26,827) $ 80,371 ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES: CHANGES IN OPERATING LIABILITIES: Accounts payable - Trade (115,374) (24,776) ---------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (142,201) 55,595 ---------- --------- NET INCREASE (DECREASE) IN CASH (142,201) 55,295 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 303,683 143,066 ---------- --------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 161,482 $198,661 ========== ========= The accompanying notes are an integral part of the condensed consolidated financial statements.
8 FEMINIQUE CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2003 AND 2002 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. THE COMPANY The condensed consolidated unaudited interim financial statements included herein have been prepared by Feminique Corporation and Subsidiaries (the "Company") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as allowed by such rules and regulations, and the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the September 30, 2002 audited consolidated financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed consolidated financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year. The management of the Company believes that the accompanying unaudited condensed consolidated financial statements contain all adjustments (including normal recurring adjustments) necessary to present fairly the operations, changes in stockholders' equity (deficit), temporary equity, and cash flows for the periods presented. In June 1999, Biopharmaceutics, Inc. (the "Company"), pursuant to a meeting of the Board of Directors, adopted a resolution and filed a Certificate of Amendment to the Certificate of Incorporation and changed the name of the Company to Feminique Corporation. The Company, after its restructuring in 1998 (Note 2) became a distributor of consumer feminine hygiene and family planning products which are sold nationwide in major chain stores, distributors and wholesalers. In August 2000, the Company and its only operating subsidiary Quality Health Products, Inc. filed for reorganization under Chapter 11 of the United States Bankruptcy Code, which was confirmed July 28, 2003 (See Note 10). B. PRINCIPLES OF CONSOLIDATION The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. 9 FEMINIQUE CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -UNAUDITED (CONTINUED) MARCH 31, 2003 AND 2002 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. REVENUE RECOGNITION Royalties are recognized when earned. D. DEPRECIATION AND AMORTIZATION The Company amortized its intangible asset on the straight-line method over its estimated useful life of twenty years. Beginning in 2000 the Company depreciated its property and equipment on the straight-line method for financial reporting purposes. The Company adopted FASB 142, which recognizes accounting treatment for goodwill and other intangibles (See Note 3). For tax reporting purposes, the Company uses the straight-line or accelerated methods of depreciation. Expenditures for maintenance, repairs, renewals and betterments are reviewed by management and only those expenditures representing improvements to plant and equipment are capitalized. At the time plant and equipment are retired or otherwise disposed of, the cost and accumulated depreciation accounts and the gain or loss on such disposition is reflected in operations. E. DEFERRED INCOME TAXES Deferred income taxes are provided based on the provisions of SFAS No. 109, "Accounting for Income Taxes" ("SFAS 109"), to reflect the tax effect of differenced in the recognition of revenues and expenses between financial reporting and income tax purposes based on the enacted tax laws in effect at March 31, 2003 and 2002. F. EARNINGS (LOSS) PER SHARE OF COMMON STOCK Historical net income (loss) per common share is computed using the weighted-average number of common shares outstanding. Diluted earnings per share (EPS) includes additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share when the Company reported a loss because to do so would be antidilutive for periods represented. 10 The following is a reconciliation of the computation for basic and diluted EPS:
MARCH 31, MARCH 31, 2003 2002 ------------ ----------- Net income (loss) $ (26,827) $ 80,371 Weighted-average common shares Outstanding (Basic) 25,005,733 25,005,733 Weighted-average common shares Equivalents Stock options - - Warrants - - ------------ ----------- Weighted-average common shares Outstanding (Diluted) 25,005,733 25,005,733 ============ ===========
G. RECLASSIFICATION Certain amounts in the March 31, 2003 financial statement have been reclassified to conform with the March 31, 2002 presentation. The reclassifications did not effect income or loss. H. RECENT ACCOUNTING PRONOUNCEMENTS In June 2001, the FASB issued Statement No. 142 "Goodwill and Other Intangible Assets". This statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supercedes APB Opinion No. 17, Intangible Assets. It addresses how intangible assets that are acquired individually or with a group of other assets (but not those acquired in a business combination) should be accounted for in financial statements upon their acquisition. This statement also addresses how goodwill and other intangible assets should be accounted for after they have been initially recognized in the consolidated financial statements. NOTE 2- BASIS OF PREPARATION - GOING CONCERN The Company has incurred net income of $80,371 for the six months ended March 31, 2002, and has a deficit of $1,356,433 at March 31, 2003. In conjunction with restructuring, the Company in August 2000 filed for reorganization under Chapter 11 of the United States Bankruptcy Code. The order confirming the plan of reorganization was accepted July 28, 2003 (See Note 10). 11 As shown in the accompanying financial statements the Company has sustained operating losses through March 31, 2003 and has an accumulated deficit of $35,449,792. The Company filed under Chapter 11 of the United States Bankruptcy Code and had its order confirming reorganization dated July 28, 2003. The Company is a going concern. There is no guarantee that the Company will be able to raise enough capital, generate revenues or execute its reorganization plan to sustain its operations. Management plans to execute its reorganization and seek means of financing through investors and seek a potential merger. NOTE 3- INTANGIBLE ASSETS Intangible assets represented assets acquired from London International US Holdings, Inc., now know as SSL Americas Inc. comprising of trademarks, trade names and a customer base. These assets, which were purchased in 1996 through one of the Company's subsidiaries for $3,600,000 included four branded consumer product lines (namely Koromex, Koroflex, Vaginex and Feminique). The obligations bore interest at 9.5% per annum and in the event of default, the entire unpaid balance becomes due and payable on trademarks and trade name purchased. NOTE 3- INTANGIBLE ASSETS (CONTINUED) The Company on July 12, 2002 entered into an asset purchase sale with Clay Park Labs, Inc. In this sale the Company sold certain U.S. and foreign patents, trademarks, trademark applications, goodwill, customer lists, supplier lists, and technology. The Company understood that SSL Americas and LRC North America (LRC) held a first and second secured interest in the assets. Therefore, in consideration for the release of such security interest, the Company assigned the rights to the assets to SSL and LRC under the approval of the United States Bankruptcy Court (See Note 10). The Company on May 4, 2000 had executed a license agreement with Clay Park Health Products, Inc. to distribute its products worldwide. Clay Park Health Products, Inc. assigned that license to Clay Park Labs, Inc. The Company at July 12, 2002 valued its intangible assets at the value of $1,700,076, which was equivalent to the long-term debt it owed to SSL Americas Inc. and certain unsecured debt of $360,000. The components of intangible assets as of March 31, 2003 and 2002 are as follows: 12
2003 2002 --------- ------------ Trademarks, tradenames, and customer base acquired from London International $ - $ 3,771,425 Less: accumulated amortization - (2,071,349) --------- ------------ $ - $ 1,700,076 ========= ============
The asset was sold July 12, 2002. See Note 10. NOTE 4- NOTES PAYABLE A. On September 15, 1999, the Company borrowed $100,000 from a shareholder, evidenced by a convertible promissory note bearing interest at 8% per annum with interest payments due on October 31, 1999, March 31, 2000 and June 1, 2000, the maturity date of this note. The conversion price on the note is $.15 per share, subject to certain adjustments as outlined therein. B. On January 16, 2000, the Company borrowed an additional $37,000, the terms and conditions of which are similar to those of the preceding $100,000 note. Both notes are in default and were listed as obligations in the Company's filing for reorganization on August 2000. The Company's plan in bankruptcy reorganization as filed in August 2000 stopped the accrual of additional interest in these notes. 13 FEMINIQUE CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED (CONTINUED) MARCH 31, 2003 AND 2003 NOTE 5- LONG-TERM DEBT Long-term debt consists of the following:
MARCH 31, MARCH 31, 2003 2002 ---------- ------------ Note payable - in connection with purchase of the feminique hygiene product line $ - $ 1,340,076 Less: current maturities - (1,340,076) ---------- ------------ Total $ - $ - ========== ============
(*) In December, 1998, effective September 30, 1998, the Company modified the payment terms of its outstanding debt, the related accrued interest and accounts payable to London International U.S. Holdings, Inc. The amended terms provide for monthly payments ranging from $21,000 per month increasing to $43,621 per month, with the final payment due on or before October 1, 2003. The obligation bears interest at 9.5% per annum and in the event of default, the entire unpaid balance becomes due and payable on demand. The note defaulted and is classified as a current obligation at March 31, 2003. The debt to London International was released and exchanged for the rights of the intangible assets (See Note 10). NOTE 6- CONVERTIBLE DEBENTURES PAYABLE The $575,000 of convertible debentures outstanding at March 31, 2002 mature by June 2002, with optional redemptions available in May or June 2000 at 105% of par. Interest of the debentures accrues at 10% per annum and is payable in cash or stock, at the Company's option, on a quarterly basis. The debentures can be converted at the holder's option into the Company's common stock in its entirety, or in multiples of $1,000, at conversion prices equal to the greater of $.54 per share of 75% of the closing price per share over the five consecutive trading days immediately prior to the date of exercising the conversion right. At September 30, 1999, the Company was not in compliance with its interest payments on the debentures. As a result thereof, the accompanying consolidated financial statements at March 31, 2003 and 2002 reflect the convertible debentures payable as a current liability. 14 FEMINIQUE CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED (CONTINUED) MARCH 31, 2003 AND 2002 NOTE 7- STOCK OPTIONS In 1993, the Company adopted a stock option plan under which selected eligible key employees of the Company are granted the opportunity to purchase shares of the Company's common stock. The plan provides that 750,000 shares of the Company's authorized common stock be reserved for issuance under the plan as either incentive stock options or non-qualified options. Options are granted at prices not less than 100 percent of the fair market value at the date of grant and are exercisable over a period of ten years or a long as that person continues to be employed or serve on the Board of Directors, whichever is shorter. Under the 1993 plan, no options may be granted subsequent to January 5, 2003. At March 31, 2003, the Company had no options outstanding under this plan. In March 1997, the Company adopted a qualified stock option plan entitled the 1997 Employee and Consultant Stock Option Plan and a separate 1997 Non-qualified Stock Option Plan (the "Plans". The plans reserved for future issuance to a total of 6,500,000 shares and 720,000 shares, respectively. The annual meeting stockholders on July 29,1998 voted to cancel the 1997 stock option plans and all outstanding options related thereto. NOTE 8- INCOME TAXES The Company, as of March 31, 2003, has available approximately $23,000,000 of net operating loss carry forwards to reduce future Federal and State income taxes. Since there is no guarantee that the related deferred tax asset will be realized by reduction of taxes payable on taxable income during the carry forward period, a valuation allowance has been computed to offset in its entirety the deferred tax asset attributable to this net operating loss in the amount of approximately $8,970,000. The amount of the valuation allowance is reviewed periodically. NOTE 9- COMMON STOCK There were no issuances for the six months ended March 31, 2003 and 2002, respectively. 15 FEMINIQUE CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED (CONTINUED) MARCH 31, 2003 AND 2002 NOTE 10- SUBSEQUENT EVENTS On July 29, 2003 the United States Bankruptcy Court Eastern District of New York confirmed and approved a plan of reorganization for the Company. Its subsidiary, Quality Health Products, Inc. had received their order confirming its plan of reorganization on January 29, 2003. The Company, in anticipation of reorganizing on July 12, 2002, entered into an asset purchase agreement whereby its sold without limitations the rights to all the assets used in connection with its feminine hygiene business. The aggregate purchase price was the satisfaction of certain debt of $340,308 due the purchaser, Clay Park Labs, Inc., which was the pre-petition debt, and an amount not less than $350,000 and not more than $1,500,000 (Additional purchase price). The additional purchase price is based on applicable percentages of net sales of the purchaser of feminine hygiene products sold. The company also recognized $1,700,076 which represented the debt exchanged for the rights to the assets. The agreement is for 5 years expiring July 12, 2007. The Company pursuant to the bankruptcy order, assigned the purchase price and collateral to its secured creditors. The Company acknowledged that LRC North American and SSL Americas, Inc. held a first and second priority interest in the assets and in consideration for the release of the security interest assigned its interest in the agreement. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS AND OTHER FINANCIAL INFORMATION APPEARING ELSEWHERE IN THIS REPORT. OVERVIEW The Company on August 3, 2000 ceased operations and filed a Chapter 11 Petition in the United States Bankruptcy Court for the Eastern District of New York. The order was confirmed July 28, 2003. The Company had financed its operating requirements for prior periods primarily by the issuance of short and long-term debt and notes. The Company had no revenues in the quarter ended March 31, 2003. RESULTS OF OPERATIONS For the six and three month periods ended March 31, 2003, the Company only had royalty income of $21,904 and $0, compared to $79,077 and $43,618 for the same periods in 2002. Selling, general and administrative expenses were $50,000 and $0 for the six and three month periods ended March 31, 2003, compared to $45 and $0 for the same periods in 2002. The $50,000 represented a timing difference, which was used to offset $50,000 in revenue recorded during the three month period ended September 30, 2002. 16 There were no other expenses as the Company ceased operations in August 2000. OUTLOOK Without an operating subsidiary, the Company has had no operating business since on or about August 3, 2000. The Company intends to explore other business opportunities. There can be no assurance that the Company will be able to find any suitable business opportunity. Suitable business opportunities may include those presented to the Company by persons or firms desiring to seek the perceived advantages of a corporation registered under the Exchange Act. The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature. The Company has, and will continue to have, little or no capital with which to provide the owners of business opportunities with any significant cash or other assets. However, management believes the Company will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a publicly registered company without incurring the cost and time required to conduct an initial public offering. Any such acquisition candidate will, however, incur significant legal and accounting costs in connection with an acquisition of the Company, including the costs of preparing current reports on Form 8-K and periodic reports on Form 10-Q or 10-QSB and Form 10-K and 10-KSB, various agreements and other documents. PLAN OF OPERATIONS The Company plans on carrying out its reorganization under the bankruptcy court order. The Company plans on borrowing from investors so it can satisfy its cash requirements. The Company has no plans to conduct any research and development, to purchase any equipment or to change its number of employees. RECENT ACCOUNTING PRONOUNCEMENTS The Company continues to assess the effects of recently issued accounting standards. The impact of all recently adopted and issued accounting standards has been disclosed in the Notes to the Audited Consolidated Financial Statements. CRITICAL ACCOUNTING ESTIMATES The Company is a shell company and, as such, the Company does not employ critical accounting estimates. Should the Company resume operations it will employ critical accounting estimates and will make any disclosures that are necessary and appropriate. RISK FACTORS IN ADDITION TO OTHER INFORMATION IN THIS REPORT, YOU SHOULD CONSIDER THE FOLLOWING RISK FACTORS CAREFULLY. THESE RISKS MAY IMPAIR THE COMPANY'S OPERATING RESULTS AND BUSINESS PROSPECTS AS WELL AS THE MARKET PRICE OF THE COMPANY'S COMMON STOCK. 17 RISKS RELATED TO THE COMPANY'S FINANCIAL CONDITION AND BUSINESS MODEL THE COMPANY'S LIQUIDITY IS LIMITED AND IT MAY NOT BE ABLE TO OBTAIN SUFFICIENT FUNDS TO FUND ITS BUSINESS The Company's cash is currently very limited and may not be sufficient to fund future operations. These factors may make the timing, amount, terms and conditions of additional financing unattractive for the Company. If the Company is unable to raise additional capital, any future operations could be impeded. If the Company obtains additional funding, the issuance of additional capital stock may be dilutive to the Company's stockholders. THE COMPANY HAS RECEIVED A GOING CONCERN OPINION FROM ITS AUDITORS The Company's consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern. The Company's independent auditors have issued a report dated December 5, 2003, that includes an explanatory paragraph stating the Company's lack of revenue generating activities and substantial operating deficits, among other things, raise substantial doubt about the Company's ability to continue as a going concern. THE COMPANY CURRENTLY HAS NO OPERATIONS The Company has had no operations since August 3, 2000 when it filed for protection under Chapter 11 of the U.S. Bankruptcy Code. IT MAY BE DIFFICULT TO CONSUMMATE A MERGER OR ACQUISITION WITH A PRIVATE ENTITY The Company expects its purpose will include locating and consummating a merger or acquisition with a private entity. The Company anticipates the selection of a business opportunity in which to participate will be complex and extremely risky. The Company has, and will continue to have, little or no capital with which to provide the owners of the business opportunities with any significant cash or other assets. However, management believes the Company will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a publicly registered company without incurring the cost and time required to conduct an initial public offering. Such an acquisition candidate will, however, incur significant legal and accounting costs in connection with an acquisition of the Company, including the costs of preparing current and periodic reports, various agreements and other documents. THE COMPANY MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL There is no assurance that the Company will be able to raise capital on a debt or equity basis, or obtain other means of financing. THE COMPANY'S STOCK PRICE HAS DECLINED SIGNIFICANTLY AND MAY NOT REBOUND The trading price of the stock has declined significantly since August 2000. The market for the common stock is essentially non-existent and there can be no assurance that the Company's stock price will rebound. PENNY STOCK REGULATIONS AND REQUIREMENTS FOR LOW PRICED STOCK The SEC adopted regulations which generally define a "penny stock" to be any non-Nasdaq equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Based upon the price of the Common Stock as currently traded on the pink sheets, the Company's Common Stock is subject to Rule 15g-9 under the Exchange Act which imposes additional sales practice requirements on broker-dealers which sell securities to persons other than established customers and "accredited investors." For transactions covered by this rule, a broker-dealer must make a 18 special suitability determination for the purchaser and have received a purchaser's written consent to the transaction prior to sale. Consequently, this rule may have a negative effect on the ability of stockholders to sell common shares of the Company in the secondary market. ITEM 3. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Based on their evaluation of the Company's disclosure controls and procedures conducted as of the end of the period covered by this report on Form 10-QSB, Max Khan, the Company's Chief Executive Officer and Chief Financial Officer, has concluded that the Company's directors and officers, are the only individuals involved in the Company's disclosure process. The Company has no specific procedures in place for processing and assembling information to be disclosed in the Company's periodic reports. The Company's system is designed so that information is retained by the Company and relayed to counsel as it becomes available. The Company currently functions only as a shell corporation and it has no revenues, significant assets or independent operations. The Company intends to establish more reliable disclosure controls and procedures when merging or entering into any other business combination with another company. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING No changes in the Company's internal control over financial reporting have come to management's attention during the Company's last fiscal quarter that have materially affected, or are likely to materially affect, the Company's internal control over financial reporting. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not a party to any pending legal proceedings nor is any of the Company's property the subject of any pending legal proceedings. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS Not applicable. ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 4. OTHER INFORMATION GOING CONCERN The Company has incurred recurring operating losses and does not have any revenue generating activities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. If at any time the Company determines that it does not have sufficient cash in order to execute the foregoing strategy, then the Company intends to endeavor to obtain additional equity or other funding, if it is able to do so. However, there can be no assurance 19 that the Company will be able to raise additional funding necessary to operate. See "RISK FACTORS - Risks Related to the Company's Financial Condition and Business Model". REGISTRATION OF SECURITIES The Company appears to be a blank check company, as defined by Rule 419 of Regulation C, promulgated under the Securities Act. Generally, a blank check company is a development stage company that has no specific business plan or purpose, or is seeking to merge with or acquire an unidentified target, and is issuing "penny stock". So long as the Company continues to be a blank check company any registration statement filed by the Company will need to comply with Rule 419. ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit Number Description ------ ----------- 31.1 Certification pursuant to Exchange Act Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (b) Reports for 8-K None SIGNATURES In accordance with the requirements of the Exchange Act, the Company has caused this report to be signed by the undersigned, thereunto duly authorized. FEMINIQUE CORPORATION Date: December 7, 2003 By: /s/ Max Khan ---------------- Max Khan Chief Executive Officer Chief Financial Officer 20 EX-31.1 3 doc2.txt EXHIBIT 31.1 Certification pursuant to Securities Exchange Act Rules 13a-14 and 15(d)-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. I, Max Kahn, the Chief Executive Officer and Chief Financial Officer of Feminique Corporation, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Feminique Corporation; 2. Based on my knowledge, this report does not contain any untrue statements 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; 3. 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 small business issuer as of, and for, the periods presented in this report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the small business issuer and have: a. 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 small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b. Evaluated the effectiveness of the small business issuer'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 c. Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer'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 small business issuer's internal control over financial reporting; and 5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent function): a. 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 small business issuer's ability to record, process, summarize and report financial information. b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. FEMINIQUE CORPORATION By: /s/ Max Khan ------------- Max Khan Chief Executive Officer Chief Financial Officer December 7, 2003 EX-32.1 4 doc3.txt EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly report of Feminique Corporation (the "COMPANY") on Form 10-QSB for the period ended March 31, 2003 as filed with the SEC on the date hereof (the "REPORT"), I hereby certify, in my capacity as an officer of the Company, for purposes of 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. FEMINIQUE CORPORATION By: /s/ Max Khan ---------------- Max Khan Chief Executive Officer Chief Financial Officer December 7, 2003 End of Filing -----END PRIVACY-ENHANCED MESSAGE-----