UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For the Period ended September 30, 2008
Commission File Number 333-147104
Casita Enterprises, Inc.
(Exact name of Registrant as specified in its charter)
Nevada 20-8457250
(State of Incorporation) (IRS Employer ID Number)
1093 East Main Street, Suite 508
El Cajon, CA 92021
(775) 352-4133
(Address and telephone number of principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do Not Check if a Smaller Reporting Company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
The number of registrant's shares of common stock, $0.001 par value, outstanding
as of November 12, 2008 was 9,000,000.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CASITA ENTERPRISES INC.
(A Development Stage Company)
Balance Sheets
September 30, December 31,
2008 2007
-------- --------
ASSETS
CURRENT ASSETS
Cash $ 4,650 $ 12,087
-------- --------
Total Current Assets 4,650 12,087
-------- --------
TOTAL ASSETS $ 4,650 $ 12,087
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Accounts Payable $ -- $ 2,000
Loan Payable - Director $ 7,645 $ 3,645
-------- --------
TOTAL LIABILITIES $ 7,645 $ 5,645
-------- --------
STOCKHOLDERS' EQUITY
Common Stock; 50,000,000 shares authorized; par value
$.001; 9,000,000 and 5,000,000 shares issued and
outstanding at September 30, 2008 and December 31, 2007 9,000 5,000
Additional Paid-in Capital 27,000 15,000
Deficit accumulated during the Development Stage (38,995) (13,558)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (2,995) 6,442
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,650 12,087
======== ========
See accompanying notes to the financial statements
2
CASITA ENTERPRISES INC.
(A Development Stage Company)
Statements of Operations
February 12, 2007 February 12, 2007
Three months Three months Nine months (Inception) (Inception)
ended ended ended through through
September 30, September 30, September 30, September 30, September 30,
2008 2007 2008 2007 2008
---------- ---------- ---------- ---------- ----------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
TOTAL REVENUES -- -- -- -- --
OPERATING EXPENSE
Administrative Expense (3,967) (6,803) (25,437) (10,247) (38,995)
---------- ---------- ---------- ---------- ----------
NET (LOSS) $ (3,967) $ (6,803) $ (25,437) $ (10,247) $ (38,995)
========== ========== ========== ========== ==========
Basic and Diluted (loss) per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted average number of common
shares outstanding 9,000,000 4,320,652 8,781,022 2,956,522
See accompanying notes to the financial statements
3
CASITA ENTERPRISES INC.
(A Development Stage Company)
Statements of Cash Flows
February 12,2007 February 12, 2007
Nine months (Inception) (Inception)
ended through through
September 30, September 30, September 30,
2008 2007 2008
-------- -------- --------
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) $(25,437) $(10,247) $(38,995)
Changes in operating assets & liabilities
Loan payable from Director 4,000 3,645 7,645
Accounts Payable (2,000) -- --
-------- -------- --------
Net cash (used in) operating activities (23,437) (6,602) (31,350)
CASH FLOW FROM INVESTING ACTIVITIES
Net cash provided by (used in) investing activities -- -- --
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 16,000 20,000 36,000
-------- -------- --------
Net cash provided by financing activities 16,000 20,000 36,000
Net increase in cash (7,437) 13,398 4,650
Cash at beginning of period 12,087 -- --
-------- -------- --------
Cash at end of period $ 4,650 $ 13,398 $ 4,650
======== ======== ========
See accompanying notes to the financial statements
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CASITA ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited)
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Casita Enterprises, Inc. (the Company) was incorporated under the laws of the
State of Nevada on February 12, 2007. The Company was formed to provide IT
services to small businesses. The Company is in the development stage. Its
activities to date have been limited to capital formation, organization,
development of its business plan and raising capital to implement its plan. The
Company has not commenced operations.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF PRESENTATION
The Company's financial statements are prepared using the accrual method of
accounting and have been prepared in accordance with accounting principles
generally accepted in the United States. The Company has elected a December 31,
year-end.
These interim financial statements for the three and nine month periods ended
September 30, 2008 and 2007, and for the period from February 12, 2007
(inception) to September 30, 2008, are not audited. These financial statements
reflect all adjustments that, in the opinion of management, are necessary to
present fairly the results of operations for the interim periods presented. All
adjustments are of a normal recurring nature, unless otherwise disclosed. The
Company suggests that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2007. The results of
operations for the three and nine month periods ended September 30, 2008 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2008.
B. BASIC AND DILUTED EARNINGS PER SHARE
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective February 12, 2007 (inception).
Basic net loss per share amounts is computed by dividing the net loss by the
weighted average number of common shares outstanding. Diluted earnings per share
are the same as basic earnings per share due to the lack of dilutive items in
the Company.
C. CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents. At September 30, 2008,
the Company did not have any cash equivalents.
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CASITA ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. STOCKHOLDERS' EQUITY
The Company accounts for stock transactions with nonemployees based on the fair
value of the consideration received. Stock transactions with employees are
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, whichever is more readily determinable.
E. USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
F. INCOME TAXES
Income taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carryforwards.
Deferred tax expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion of all of the deferred
tax assets will be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of enactment.
G. CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash deposits. This cash is
on deposit with a large federally insured bank. The Company has not experienced
any losses in cash balances and does not believe it is exposed to any
significant credit risk on cash and cash equivalents.
H. RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect any recent accounting pronouncements to have a
material impact on its financial statements.
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CASITA ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited)
NOTE 3. GOING CONCERN
The accompanying financial statements are presented on a going concern basis.
The Company had no revenues during the period from February 12, 2007 (inception)
to September 30, 2008 and has a deficit accumulated during the development stage
as of September 30, 2008 of $38,995. This condition raises substantial doubt
about the Company's ability to continue as a going concern. Management's plans
are to raise funds through debt or equity offerings, to fund its operations over
the next twelve months.
NOTE 4. RELATED PARTY TRANSACTIONS
On March 6, 2007, the Company issued 2,500,000 shares of common stock to its
President and sole Director for $10,000.
While the company was seeking additional capital, the director advanced funds to
the company to pay for organizational costs and other expenses incurred. These
funds are interest free with no specific terms of repayment. The balance due the
director on September 30, 2008 was $7,645.
NOTE 5. INCOME TAXES
As of September 30, 2008
------------------------
Deferred tax assets:
Net operating loss carryforwards $ 38,995
Other 0
--------
Gross deferred tax assets 13,259
Valuation allowance (13,259)
--------
Net deferred tax assets $ 0
========
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce taxable income. As the achievement of
required future taxable income is uncertain, the Company has recorded a
valuation allowance for the full amount of the deferred tax asset related to the
net operating loss carryforward.
NOTE 6. NET OPERATING LOSSES
As of September 30, 2008, the Company has a net operating loss carryforward of
approximately $38,995. The net operating loss carryforward begins to expire
twenty years from the date the loss was incurred.
7
CASITA ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited)
NOTE 7. STOCKHOLDERS' EQUITY
On March 9, 2007 the Company issued a total of 2,500,000 shares of common stock
to the sole director for cash at $0.004 per share for a total of $10,000.
On July 25, 2007 the Company issued a total of 2,500,000 shares of common stock
to 4 investors for cash at $0.004 per share for a total of $10,000 (625,000
shares each for $2,500).
In January 2008 the Company completed an offering of 4,000,000 shares of common
stock. The shares were sold at $0.004 per share for a total of $16,000.
The stockholders' equity section of the Company contains the following classes
of capital stock as of September 30, 2008:
* Common stock, $ 0.001 par value: 50,000,000 shares authorized;
9,000,000 shares issued and outstanding.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This report contains forward-looking statements that are based on current
expectations, estimates, forecasts and projections about us, the industry in
which we operate and other matters, as well as management's beliefs and
assumptions and other statements regarding matters that are not historical
facts. These statements include, in particular, statements about our plans,
strategies and prospects. For example, when we use words such as "projects,"
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
"should," "would," "could," "will," "opportunity," "potential" or "may,"
variations of such words or other words that convey uncertainty of future events
or outcomes, we are making forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 (Securities Act) and Section 21E of
the Securities Exchange Act of 1934 (Exchange Act). Our forward-looking
statements are subject to risks and uncertainties. Actual events or results may
differ materially from the results anticipated in these forward-looking
statements as a result of a variety of factors.
These and other risks and uncertainties that could affect our actual results are
discussed in this report and in our other filings with the SEC, particularly in
Item 1A of Part I of our Annual Report on Form 10-K for the year ended December
31, 2007 in the section entitled "Risk Factors."
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, levels of
activity, performance, or achievements. We do not assume responsibility for the
accuracy and completeness of the forward-looking statements other than as
required by applicable law. We do not undertake any duty to update any of the
forward-looking statements after the date of this report to conform them to
actual results, except as required by the federal securities laws.
OVERVIEW
Casita Enterprises, Inc. plans to market and sell its computer installations and
maintenance services to small and medium-sized businesses. Our mission is to
provide computer network services to businesses seeking a solution for
installing and maintaining their computer systems. Information Technology (IT)
refers to multiple products and services that turn data into useful, meaningful,
accessible information. The Information Technology industry has three main
components: computer hardware, software, and services. Large companies often
have sophisticated IT departments to install, manage, and maintain their
computer networks. Small and medium-sized businesses often find developing an
in-house IT department to be prohibitively expensive, and a full time staff
unnecessary. They are, however, in need of qualified computer technicians. We
intend to provide our clients with outsource IT services and computer network
installations.
Since inception, we have set ambitious business goals to provide value to our
shareholders. We plan to continue our efforts to achieve our business goals,
however we now face a major economic downturn in Mexico and the United States
that has affected our abilities to obtain additional funding for our business
operations. Our director continues to provide funding for our basic business
operations, but we cannot operate our business on the scale we believe is
9
profitable without additional outside capital. As of the date of this filing,
our director has been unsuccessful in securing any new outside sources willing
to provide us with necessary funding. During our current year, as we seek
additional funding, we intend to reduce the level of our operations in order to
maintain our cash flow and incur a lower level of expenses until more financial
resources are available. We plan to seek funds through sales of our equity
securities or through outside debt.
Only if we have sufficient funding will we be able to hire the two IT technical
service personnel we need in order to meet our company's technical personnel
skill requirements. We plan to purchase computer service equipment when we are
able to hire service personnel. Based upon our ability to find competent service
personnel, we believe we will be able to offer our IT services to business
customers by the end of 2009.
In the past we were able to pay our president a management fee of $450 per month
which also includes the use of his existing shop area of approximately 700
square feet. We may need to delay paying our director so that our available
funds can be used for administrative and minor operating expenses. Without new
outside funding, we will likely only budget $1,000 to $1,500 per month in basic
operations until the last quarter of 2009. If we are able to secure funding as
economic conditions improve in Mexico, we will continue our original operating
plans with estimated expenditures per month of approximately $4,500 for officer
salary and use of shop space, employee costs for two salaries of IT service
technicians $6,000, purchase of furniture and equipment $2,100, telephone &
utilities $2,000, costs of website and marketing $2,100, auto fuel and
maintenance $1,300. Based upon these future estimates, contingent upon future
additional capital, total cost of operations will be approximately $18,000 for
one year.
We will only be able to begin delivering bids for IT services to business
customers after hiring our service technicians. We anticipate we will be
successful in winning enough bids for IT services once we have sufficient
capital to continue our IT services operating plan. At this time we anticipate
we will be forced by current financial conditions to only be able to continue
our original operating plan near the end of 2009. Once we are able to implement
IT services and invoice our customers, we anticipate receiving revenues from our
customers' payments to us during the first quarter of 2010. Our budgeted costs
and projected sales are estimates based upon our president's past experience in
this same type of business. Due to current financial conditions in Mexico, we
are unable to predict when or if we will be able to raise outside capital to
continue our original business plan.
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at September 30, 2008 was $4,650. We believe our existing cash
balance will only be sufficient to fund our minor level of operations for the
next twelve months if our director continues to loan funds to us. Our director
has loaned the company $7,645 and has agreed to loan the company funds as
needed. The loan is non-interest bearing and has no specific terms of repayment.
In the event our director does not provide such funding if it becomes necessary
our business may fail and investors will likely lose their money. We are a
development stage company and have generated no revenue to date. We have sold
$36,000 in equity securities to pay for our operations.
10
RESULTS OF OPERATIONS
We have generated no revenues since inception and have incurred $38,995 in
expenses from inception (February 12, 2007) through September 30, 2008. For the
three month periods ended September 30, 2008 and 2007 we incurred $3,967 and
$6,803 in expenses. These costs consisted of operating and administrative
expenses.
The following table provides selected financial data about our company for the
period ended September 30, 2008.
Balance Sheet Data: 9/30/08
------------------- -------
Cash $ 4,650
Total assets $ 4,650
Total liabilities $ 7,645
Stockholders' equity $(2,995)
In March 2007, our director purchased 2,500,000 shares of common stock for
$10,000. In July 2007, four non-affiliated investors purchased 2,500,000 shares
of common stock for a total of $10,000. In January 2008, we successfully
completed an offering of 4,000,000 shares of our common stock to forty
non-affiliated investors for total proceeds of $16,000.
Our cash balance has been materially reduced this year. We will need additional
funds which we plan to raise through sales of our equity securities and loans
from banks or third parties to continue our business plan. No assurances can be
given that we will be able to raise additional funds to satisfy our financial
requirements. At some point, even with reduced operations, we may determine we
our business operations will cease due to a lack of financial resources. We may
look for other potential business opportunities that might be available to us.
There are no assurances that we will find other business opportunities, or find
business opportunities that meet our goals, or that we will have financial
resources required to take advantage of any possible business opportunities.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our management team, under the supervision and with the participation of our
principal executive officer and our principal financial officer, evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures as such term is defined under Rule 13a-15(e) promulgated under the
Exchange Act, as of the last day of the fiscal period covered by this report,
11
September 30, 2008. The term disclosure controls and procedures means our
controls and other procedures that are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is accumulated and communicated to
management, including our principal executive and principal financial officer,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. Based on this evaluation, our principal
executive officer and our principal financial officer concluded that, as of
September 30, 2008, our disclosure controls and procedures were effective at a
reasonable assurance level.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting
during the fiscal quarter ended September 30, 2008 that materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
There have been no material changes to the risks to our business described in
our Annual Report on Form 10-K for the year ended December 31, 2007 filed with
the SEC on March 27, 2008.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
Incorporated by Reference or
Exhibit No. Exhibit Filed Herewith
----------- ------- --------------
3.1 Articles of Incorporation Incorporated by reference to the
Registration Statement on Form
SB-2 filed with the SEC on
11/2/07, File No. 333-147104
3.2 Bylaws Incorporated by reference to the
Registration Statement on Form
SB-2 filed with the SEC on
11/2/0707, File No. 333-147104
31.1 Section 302 Certification of Filed herewith
Chief Executive Officer
31.2 Section 302 Certification of Filed herewith
Chief Financial Officer
32 Section 906 Certification of Filed herewith
Chief Executive Officer and
Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Casita Enterprises, Inc. (Registrant)
/s/ Jose Cisneros November 12, 2008
---------------------------------------------------------- -----------------
Jose Cisneros Date
(Principal Executive Officer, Principal Financial Officer,
Principal Accounting Officer & Sole Director)
13