UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
quarterly period ended March 31, 2010
Commission File Number: 333-151312
THE
CONNECT CORP.
(Exact name of registrant as specified in its charter)
Nevada
26-2230717
(State
or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification
No.)
2118
102
nd
Crescent North Battleford, Saskatchewan Canada
S9A
1J5
(Address
of principal executive
offices)
(Zip Code)
1-800-609-0775
(Registrants telephone number, including area code)
Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. [X] Yes [ ] No
Indicate by check
mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post
such files). [ ] Yes [ ] No
(Not
required)
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer, and smaller
reporting company in Rule 12b-2 of the Exchange Act.
|
|
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Large
accelerated filer
|
[
]
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Accelerated
filer
|
[
]
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Non-accelerated
filer
|
[ ]
(Do not check if a smaller reporting
company)
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Smaller
reporting company
|
[X]
|
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act.) [X] Yes [ ]
No
1
Indicate the number
of shares outstanding of each of the issuers classes of common stock, as of the
latest practicable date:
As of
March 31, 2010, there were 55,500,000 common shares issued and outstanding
2
PART I FINANCIAL STATEMENTS
Item 1.
Financial Statements
3
The Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Financial Statements (Unaudited)
For
the Period from April 27, 2007
(Inception) to March 31, 2010
4
The
Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Index
to the Financial Statements (Unaudited)
For
the Period from April 27, 2007
(Inception) to March 31, 2010
Balance
Sheets (Unaudited) as of March 31, 2010 and December 31, 2009
3
Statements of
Operations (Unaudited) for the three month period ended March 31, 2010,
and
for the three month period ended March 31, 2009, and for the period from
April
27, 2007 (Inception) to March 31, 2010
4
Statement of Changes
in Stockholders Equity (Deficit) (Unaudited) for the period from
April
27, 2007 (Inception) to March 31, 2010
5
Statements of Cash
Flows (Unaudited) for the three month period ended March 31, 2010,
and
for the three month period ended March 31, 2009, and for the period from
April
27, 2007 (Inception) to March 31, 2010
6
Notes to
the Unaudited Financial Statements
7-15
5
The Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Balance Sheets
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March 31,
2010
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December
31, 2009
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Unaudited
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ASSETS
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$
-
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$
-
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Total assets
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$
-
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$
-
|
|
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LIABILITIES AND
STOCKHOLDERS' DEFICIT
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Current liabilities:
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Accounts
payable
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$
6,430
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$
11,200
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Total current liabilities
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6,430
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11,200
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Stockholders' Deficit
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Common
stock, par value $0.001, 450,000,000 shares authorized, 55,500,000 shares
issued and outstanding
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55,500
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55,500
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Additional
paid-in capital
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(8,210)
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(18,467)
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Deficit
accumulated during the development stage
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(53,720)
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(48,233)
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Total stockholders'
deficit
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(6,430)
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(11,200)
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Total liabilities and
stockholders' deficit
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$
-
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$
-
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See accompanying
notes to the unaudited financial statements.
6
The Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Statements of Operations (Unaudited)
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|
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For the
Three Month Period Ended March 31, 2010
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For the
Three Month Period Ended March 31, 2009
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For the
Period from April 27, 2007 (Inception) to March 31, 2010
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Revenues:
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$
-
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$
-
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$
-
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Operating expenses:
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Exploration
costs
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-
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-
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2,500
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Selling,
general and administrative
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5,487
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13,301
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51,220
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Operating loss before
income taxes
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(5,487)
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(13,301)
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(53,720)
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Income tax (expense)
benefit
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-
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-
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-
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Net loss available to
common stockholders
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$
(5,487)
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$
(13,301)
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$
(53,720)
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Basic and diluted loss
per common share
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(0.00)
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(0.00)
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Weighted average shares
outstanding
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55,500,000
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55,500,000
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See accompanying
notes to the unaudited financial statements.
7
The Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Statement of Changes in Stockholders Equity (Deficit)
(Unaudited)
For
the Period from April 27, 2007 (Inception) to March 31, 2009
|
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Common
Stock
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Shares
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Amount
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Additional Paid-In Capital
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Deficit
Accumulated During the Exploration Stage
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Total
Stockholders' Equity (Deficit)
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Balance, April 27, 2007
(Inception)
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-
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$
-
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$
-
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$
-
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$
-
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|
|
|
|
|
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Common
shares issued for cash, $0.001 per share, May 31, 2007
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55,500,000
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55,500
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(46,250)
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-
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9,250
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Loss
during the period from April 27, 2007 (Inception) to December 31, 2007
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-
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-
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-
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(200)
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(200)
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Contributed
capital
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-
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-
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200
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-
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200
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Balance, December 31,
2007
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55,500,000
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55,500
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(46,050)
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(200)
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9,250
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Loss
for the year ended December 31, 2008
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-
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-
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-
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(22,396)
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(22,396)
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Mining
expenses contributed by related party
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-
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-
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2,500
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-
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2,500
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Contributed
capital
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-
|
-
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10,546
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-
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10,546
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Balance, December 31,
2008
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55,500,000
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55,500
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(33,004)
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(22,596)
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(100)
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Loss
for the year ended December 31, 2009
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-
|
-
|
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(25,637)
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(25,637)
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Contributed
capital
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-
|
-
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14,537
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-
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14,537
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Balance, December 31,
2009
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55,500,000
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55,500
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(18,467)
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(48,233)
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(11,200)
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Loss
for the three month period ended March 31, 2010
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-
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-
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-
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(5,487)
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(5,487)
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Contributed
capital
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-
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-
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10,257
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-
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10,257
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Balance, March 31, 2010
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55,500,000
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$
55,500
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$
(8,210)
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$
(53,720)
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$
(6,430)
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See
accompanying notes to the unaudited financial statements.
The Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Statements of Cash Flows (Unaudited)
|
|
|
|
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For the
Three Month Period Ended March 31, 2010
|
For the
Three Month Period Ended March 31, 2009
|
For the
Period from April 27, 2007 (Inception) to March 31, 2010
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Cash flows from operating
activities:
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Net
loss
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$
(5,487)
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$
(13,301)
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$
(53,720)
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Adjustments
to reconcile net loss to net cash used in operating activities:
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Mining
expense contributed by related party
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-
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-
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2,500
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Change
in operating liabilities:
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Increase
(decrease) in accounts payable
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(4,770)
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5,671
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6,430
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Net cash used in
operating activities
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(10,257)
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(7,630)
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(44,790)
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Cash flows from investing
activities:
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-
|
-
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-
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Net cash provided by
investing activities
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-
|
-
|
-
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Cash flows from financing
activities:
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Cash
received from stock subscriptions receivable
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-
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-
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9,250
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Contributed
capital
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10,257
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7,630
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35,540
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Net cash provided by
financing activities
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10,257
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7,630
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44,790
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|
|
|
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Net increase in cash
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-
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-
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-
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Cash at beginning of
period
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-
|
-
|
-
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Cash at end of period
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$
-
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$
-
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$
-
|
|
|
|
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Supplemental Disclosures:
|
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Cash
paid for interest
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$
-
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$
-
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$
-
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Cash
paid for income taxes
|
$
-
|
$
-
|
$
-
|
See accompanying
notes to the unaudited financial statements.
The Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Notes
to the Unaudited Financial Statements
For
the Period from April 27, 2007 (Inception) to March 31, 2010
1)
ORGANIZATION
Formerly
known as Adicus Energy Corporation, the Company was incorporated on April 27,
2007 in the State of Nevada. In February, 2009, the Company changed its
name to The Connect Corporation (see Note 4). The Companys headquarters
are based in the state of Florida. The accounting and reporting policies
of the Company conform to accounting principles generally accepted in the United
States of America, and the Companys fiscal year end is December 31.
Formerly
an exploration stage company that primarily engaged in the acquisition,
exploration, and development of resource properties, the Company is currently a
development stage company that seeks to identify organizations that have
attained critical mass thresholds of members, affiliates, and customers with
established electronic communication and delivery systems. The Company
provides value added benefits to these organizations that can significantly
enhance the financial well being through the cost effective electronic
installation of the Net Savings Connection web based savings system. To
date, the Companys activities have been limited to its formation, minimal
operations, and the raising of equity capital.
DEVELOPMENT
STAGE COMPANY
The
Company is considered to be in the development stage as defined in ASC 915
Accounting and Reporting by Development Stage Enterprises.
The
Companys efforts have been devoted primarily to raising capital, borrowing
funds and attempting to implement its planned, principal activities.
2)
SIGNIFICANT
ACCOUNTING POLICIES
USE
OF ESTIMATES
The
preparation of the Companys financial statements in conformity with accounting
principles generally accepted in the United States 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 amount of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
The Companys periodic filings with the Securities and Exchange Commission
include, where applicable, disclosures of estimates, assumptions, uncertainties
and
The Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Notes
to the Unaudited Financial Statements
For
the Period from April 27, 2007 (Inception) to March 31, 2010
2)
SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
USE
OF ESTIMATES
markets
that could affect the financial statements and future operations of the
Company.
RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
In
June 2009, the FASB established the Accounting Standards Codification
(Codification or ASC) as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in accordance with generally accepted
accounting principles in the United States (GAAP). Rules and interpretive
releases of the Securities and Exchange Commission (SEC) issued under
authority of federal securities laws are also sources of GAAP for SEC
registrants. Existing GAAP was not intended to be changed as a result of the
Codification, and accordingly the change did not impact our financial
statements. The ASC does change the way the guidance is organized and
presented.
Statement
of Financial Accounting Standards (SFAS) No. 165 (ASC Topic 855), Subsequent
Events, SFAS No. 166 (ASC Topic 810), Accounting for Transfers of Financial
Assets-an Amendment of FASB Statement No. 140, SFAS No. 167 (ASC Topic 810),
Amendments to FASB Interpretation No. 46(R), and SFAS No. 168 (ASC Topic 105),
The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles- a replacement of FASB Statement No. 162 were
recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability
to the Company or their effect on the financial statements would not have been
significant.
Accounting
Standards Update (ASU) ASU No. 2009-05 (ASC Topic 820), which amends Fair
Value Measurements and Disclosures Overall, ASU No. 2009-13 (ASC Topic 605),
Multiple Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985),
Certain Revenue Arrangements that include Software Elements, and various other
ASUs No. 2009-2 through ASU No. 2010-18 which contain technical corrections to
existing guidance or affect guidance to specialized industries or entities were
recently issued. These updates have no current applicability to the Company or
their effect on the financial statements would not have been significant.
The Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Notes
to the Unaudited Financial Statements
For
the Period from April 27, 2007 (Inception) to March 31, 2010
2)
STOCKHOLDERS
EQUITY
CAPITAL
CONTRIBUTIONS
During
the three month periods ended March 31, 2010 and 2009, the Companys Assistant
Secretary who is also a shareholder contributed $10,257 and $7,630,
respectively. For the period from April 27, 2007 (Inception) to March 31,
2010, the Companys Assistant Secretary has contributed of $35,540. These
amounts represent payment by the shareholder of certain recurring operating
expenditures incurred on behalf of the Company. These contributed amounts have
been included in additional paid-in capital, totaling ($8,210) as of March 31,
2010.
3)
GOING
CONCERN AND LIQUIDITY CONSIDERATIONS
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates, among other things, the
realization of assets and satisfaction of liabilities in the normal course of
business. As of March 31, 2010, the Company has negative working capital
of $6,430 and an accumulated deficit totaling $53,720. The Company intends
to fund operations through equity financing arrangements, which may be
insufficient to fund its capital expenditures, working capital and other cash
requirements for the next twelve months.
The
ability of the Company to emerge from the development stage is dependent upon,
among other things, obtaining additional financing to continue operations,
successfully implement its newly adopted business plan and realize
profitability, as well as recurring operating cash flows. In response to
these factors, management intends to raise additional funds through public or
private placement offerings, and to expedite to the extent possible the
implementation of its newly adopted business plan.
These
factors, among others, raise substantial doubt about the Companys ability to
continue as a going concern. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
The Connect Corporation
(Formerly Iron Head Mining Corporation)
(A
Development Stage Company)
Notes
to the Unaudited Financial Statements
For
the Period from April 27, 2007 (Inception) to March 31, 2010
4)
SUBSEQUENT
EVENTS
The
Company has evaluated its subsequent events from the balance sheet date through
the date the financial statements were issued and determined there are no
additional events to disclose.
Item
2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
The Connect Corp. is
a Nevada corporation originally incorporated as Adicus Energy Corp. on April 27,
2007. We changed our name on October 16, 2007, to Iron Head Mining
Corporation. On March 17, 2009, we filed a Certificate of Amendment
changing our name to The Connect Corp.
Our previous business
focus was on mineral exploration. In January 2008, we obtained an option
to acquire a 100% interest in a mineral claim located in the Smithers Mining
Region in the Province of British Columbia, Canada. The option was
terminated due to our inability to meet option payment and exploration cost
requirements. Since that time, the Company has undergone a revision to its
business plan.
Since the adoption of
its revised business plan, the Company has continued to focus its efforts on the
raising of equity capital for the completion and launch of its web-based
membership savings system, which will offer families options to reduce their
monthly spending. Through the savings website, members will have access to
discounts, sales, and other venues for saving on purchases. Vendors will
supply these savings to Members and pay Connect Corp. a commission.
Products available through the website will include everything from
groceries to dining, travel, shopping, banking, and more everyday expenses.
The target customers
will be both individuals and large businesses, the latter of which can offer the
savings to employees as a fringe benefit. The cost to the employer will be
small per employee, but the employee will be entitled to savings from
manufacturers, retailers, and other businesses. We will collect fees from
both businesses, individuals who sign up for membership, as well as businesses
that offer discounts through the website.
As of March 31, 2010,
the Company had not generated any revenues. Since inception, the Company
had incurred expenses of $53,720, consisting solely of mining, selling, and
general and administrative expenses. For the three-month period ended
March 31, 2010, the Company had expenses totaling $5,487, compared to $13,301
for the same period in 2009.
Over the next 12
months, it is expected that we will need approximately $50,000 to meet our
expenses. Expenses include legal and accounting fees, salaries and general
and administrative expenses. In order to develop its business plan, the
Company will be required to raise capital through the sale of equity, the
issuance of debt or a combination of both. The failure to raise capital
may result in curtailing the development of its business plan, or potentially
the failure to continue the Companys operations.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item
4(T). Controls and Procedures
Evaluation of
Disclosure Controls and Procedures
Our Chief Executive
Officer and Chief Financial Officer conducted an evaluation of the effectiveness
of the design and operation of the Company's disclosure controls and procedures,
as defined in Rules 13a-15(e) and Rule 15d-15(e) under the Exchange Act. Based
upon his evaluation as of March 31, 2010, he concluded that those disclosure
controls and procedures are effective.
Internal Control over
Financial Reporting
There have been no
changes in the Company's internal control over financial reporting during the
quarter ended March 31, 2010, that have materially affected, or are reasonably
likely to affect, the Company's internal control over financial reporting.
PART
II OTHER INFORMATION
Item 6.
Exhibits
The following
exhibits are incorporated into this Form 10-Q Quarterly Report:
|
|
Exhibit
No.
|
Description
|
31.1
|
Certifications
of Chief Financial Officer and Principal Executive Officer Pursuant to
Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of
1934
|
32.1
|
Certification
of Chief Financial Officer and Principal Executive Officer under Section
1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
THE
CONNECT CORP.
Date
May 20, 2010
/s/
Michelle Pannoni
Michelle
Pannoni, President, Director
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