SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 2003.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number
Ridgefield Acquisition Corp.
----------------------------
(Exact name of small business issuer as specified in its charter.)
Colorado 0-16335 84-0922701
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
10 South Street, Ste. 202, Ridgefield, CT 06877
(203) 894-9755
---------------------------
(Issuer's telephone number,
including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
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As of November 12, 2003 the Registrant had outstanding 813,028 shares of common
stock, par value $.10
Transitional Small Business Disclosure Format (check one):
Yes No X
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RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY
(A Development Stage Company)
FORM 10-QSB
SEPTEMBER 30, 2003
Page
PART I - FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Consolidated Balance Sheets as of December 31, 2002 and
September 30, 2003 (unaudited) 3
Consolidated Statements of Operations for the Nine Months Ended
September 30, 2002 and 2003, Cumulative Amounts from
January 1, 2000 through September 30, 2003 (unaudited) 4
Consolidated Statements of Operations for the Three Months Ended
September 30, 2002 and 2003 (unaudited) 5
Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 2002 and 2003, Cumulative Amounts from
January 1, 2000 through September 30, 2003 (unaudited) 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Plan Of Operations 9
PART II - OTHER INFORMATION 13
Item 5. Other Information 13
Item 6. Exhibits & Reports on Form 8-K 13
SIGNATURES 14
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
December 31, September 30, 2003
2002 (Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 346,165 $ 306,450
Prepaid expenses -- 1,120
----------- -----------
346,165 307,570
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Total Current Assets
$ 346,165 $ 307,570
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 22,482 $ 43,054
----------- -----------
Total Current Liabilities 22,482 43,054
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STOCKHOLDERS' EQUITY
Preferred Stock, $.10 par value; authorized - 1,000,000 shares
Issued - none
Common Stock, $.10 par value; authorized - 5,000,000 shares
Issued and outstanding - 813,028 shares 81,303 81,303
Capital in excess of par value 1,595,509 1,595,509
Accumulated (deficit) (947,820) (947,820)
(Deficit) accumulated during the development stage (405,309) (464,476)
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323,683 264,516
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$ 346,165 $ 307,570
=========== ===========
See accompanying notes to consolidated financial statements.
3
RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Cumulative
Nine Months Ended Amounts from
September 30, January 1, 2000 to
September 30,
2002 2003 2003
REVENUES
Interest income $ 5,701 $ 2,791 $ 24,389
--------- --------- ---------
OPERATING EXPENSES
General and administrative 59,232 61,958 339,516
Employee stock options 130,625 -- 130,625
Patent write-off -- -- 18,724
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189,857 61,958 488,865
--------- --------- ---------
NET LOSS $(184,156) $ (59,167) $(464,476)
========= ========= =========
NET LOSS PER COMMON SHARE
Basic $ (0.23) $ (0.07) $ (0.61)
========= ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
Basic 813,028 813,028 766,337
========= ========= =========
See accompanying notes to consolidated financial statements.
4
RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
September 30,
2002 2003
REVENUES $ 2,243 $ 766
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Interest Income
OPERATING EXPENSES
General and administrative 21,621 16,619
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NET LOSS $ (19,378) $ (15,853)
========= =========
NET LOSS PER COMMON SHARE
Basic $ (0.02) $ (0.02)
========= =========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 813,028 813,028
========= =========
See accompanying notes to consolidated financial statements
5
RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Cumulative
Nine Months Ended Amounts from
September 30, January 1, 2000 to
September 30,
2002 2003 2003
CASH FLOWS FROM OPERATING ACTIVITES
Net loss $(184,156) $ (59,167) $(464,476)
Adjustment to reconcile net loss to net cash
used in operating activities
Stock issuance for salary 11,000 -- 96,000
Stock issued for professional services -- -- 18,200
Stock options compensation 130,625 -- 130,625
Write-off of patent -- -- 18,724
Changes in assets and liabilities
Increase in prepaid expenses -- (1,120) (1,120)
(Increase) decrease in note and interest receivable (2,250) 50,000
Increase in accounts payable and
accrued expenses 18,976 20,572 27,661
--------- --------- ---------
Net Cash Used in Operating Activities (18,092) (39,715) (124,386)
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CASH FLOWS FROM FINANCING ACTIVITIES
Exercise of common stock warrants -- -- 5,625
--------- --------- ---------
Net Cash Provided by Financing Activities -- -- 5,625
--------- --------- ---------
NET DECREASE IN CASH (18,092) (39,715) (118,761)
CASH, BEGINNING OF PERIODS 341,611 346,165 425,211
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CASH, END OF PERIODS $ 323,519 $ 306,450 $ 306,450
========= ========= =========
See accompanying notes to consolidated financial statements.
6
The unaudited financial statements included herein were prepared from
the records of Ridgefield Acquisition Corp. (the "Company") in accordance with
accounting principles generally accepted in the United States of America and
reflect all adjustments which are, in the opinion of management, necessary to
provide a fair statement of the results of operations and financial position for
the interim periods. Such financial statements generally conform to the
presentation reflected in the Company's Form 10-KSB filed with the Securities
and Exchange Commission for the year ended December 31, 2002. The current
interim period reported herein should be read in conjunction with the Company's
December 31, 2002 Form 10-KSB.
The results of operations for the nine months ended September 30, 2003
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2003.
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
On January 14, 2003, in connection with its reinstatement as an active
corporation in the State of Colorado, the Company changed its name from
Bio-Medical Automation, Inc. to Ridgefield Acquisition Corp.
On February 27, 2003, the Board of Directors of the Company authorized the
formation of a Nevada corporation named Bio-Medical Automation, Inc. and
authorized the management of the Company to transfer the Company's rights, title
and interest in its patent to Bio-Medical Automation, Inc. On March 3, 2003, the
Company filed Articles of Incorporation with the Secretary of State of the State
of Nevada to form Bio-Medical Automation, Inc., a Nevada corporation wholly
owned by the Company.
The accompanying financial statements as of September 30, 2003 and for the nine
months then ended include the accounts of the company and its wholly owned
subsidiary. All intercompany accounts and transactions have been eliminated in
consolidation.
The Company has accumulated a deficit since reentering the development stage, on
January 1, 2000, of $464,476 through September 30, 2003. In 1999, the Company
sold all of its assets relating to its historical line of business and in 2000
abandoned its research and development efforts on a micro-robotic device. As of
September 30, 2003, the Company has no principal operations or revenue producing
activities. The Company is now pursuing an acquisition strategy whereby it is
seeking to arrange for a merger, acquisition or other business combination with
a viable operating entity.
On August 25, 2003, the Board of Directors of the Company authorized the Company
to invest a portion of the Company's cash in marketable securities in an effort
to realize a greater rate of return than the Company is currently earning. The
Board directed that management maintain at least $40,000 of the Company's cash
in a federally insured bank or money market account. On October 14, 2003, the
Company deposited $250,000 in a brokerage account with Catalyst Financial, LLC
("Catalyst"). Catalyst is a broker-dealer registered with the U.S. Securities
and Exchange Commission and a member of the National Association of Securities
Dealers, Inc. Catalyst is owned and controlled by the Company's Chairman and
Chief Executive Officer. Catalyst has agreed to charge the Company commissions
of no more that $.02 per share with a minimum charge of $75 per trade on
securities transactions.
7
NOTE 2 - RELATED PARTY TRANSACTIONS
On March 21, 2003, the Board of Directors renewed the President's employment
agreement through March 2004 with an annual salary of $48,000, and granted the
President an option to purchase 150,000 shares of the Company's common stock,
for a period of five years, at an exercise price of $1.20 per share, which was
equal 110% of the closing market price as of the date of grant.
8
Item 2. Management Discussion and Analysis and Plan of Operations
The following discussion and analysis provides information which the
Company's management believes to be relevant to an assessment and understanding
of the Company's results of operations and financial condition. This discussion
should be read together with the Company's financial statements and the notes to
financial statements, which are included in this report, as well as the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2002.
Background
-----------
Ridgefield Acquisition Corp. ("RAC" or the "Company") was incorporated as a
Colorado corporation on October 13, 1983 under the name OZO Diversified
Automation, Inc. In March 1999, in connection with the sale of substantially all
of the Company's assets the Company changed its name to Bio-Medical Automation,
Inc. On April 1, 2002, the Company was administratively dissolved by the
Colorado Secretary of State for failing to timely file its bi-annual
registration with the Colorado Secretary of State. On January 14, 2003 the
Company filed an Application for Reinstatement pursuant to Section 7-114-203 of
the Colorado Revised Statutes. In connection with the reinstatement, and in
accordance with Colorado corporate law, the Company changed its name from
Bio-Medical Automation, Inc. to Ridgefield Acquisition Corp. The reinstatement
and name change became effective on January 14, 2003 when the Application for
Reinstatement was filed with the Colorado Secretary of State. Neither the
administrative dissolution nor reinstatement and name change has had or will
have any material effect on the holders of the securities of the Company.
On March 9, 1999, the Company completed the sale of substantially all of
its assets to JOT Automation, Inc. (the "JOT Transaction"). As a result of the
JOT Transaction, the Company's historical business, the depaneling and routing
business, is considered to be a "discontinued operation" and, consequently,
provides no benefit to persons seeking to understand the Company's financial
condition or results of operations.
Following the JOT Transaction the Company devoted its efforts to the
development of a prototype micro-robotic device (the "micro-robotic device") to
manipulate organic tissues on an extremely small scale. Due to the inability to
complete the micro-robotic device, the Company determined that it would cease
the development of the micro-robotic device and, as of June 30, 2000, the
capitalized costs related to the patent underlying the micro-robotic device have
been written off by the Company. The Company has never derived any revenues from
the micro-robotic device.
Since July 2000 the Company has suspended all operations, except for
necessary administrative matters relating to the timely filing of periodic
reports as required by the Securities Exchange Act of 1934. Accordingly, during
the period from January 1, 2003 through September 30, 2003 and the years ended
December 31, 2002 and December 31, 2001, the Company has earned no revenues
other than interest income from investments.
9
Acquisition Strategy
--------------------
The Company is primarily engaged in seeking to arrange for a merger,
acquisition, business combination or other arrangement by and between the
Company and a viable operating entity. The Company has not identified a viable
operating entity for a merger, acquisition, business combination or other
arrangement, and there can be no assurance that the Company will ever
successfully arrange for a merger, acquisition, business combination or other
arrangement by and between the Company and a viable operating entity.
The Company anticipates that the selection of a business opportunity will
be a complex process and will involve a number of risks, because potentially
available business opportunities may occur in many different industries and may
be in various stages of development. Due in part to depressed economic
conditions in a number of geographic areas, rapid technological advances being
made in some industries and shortages of available capital, management believes
that there are numerous firms seeking either the limited additional capital
which the Company will have or the benefits of a publicly traded corporation, or
both. The perceived benefits of a publicly traded corporation may include
facilitating or improving the terms upon which additional equity financing may
be sought, providing liquidity for principal shareholders, creating a means for
providing incentive stock options or similar benefits to key employees,
providing liquidity for all shareholders and other factors.
In some cases, management of the Company will have the authority to effect
acquisitions without submitting the proposal to the shareholders for their
consideration. In some instances, however, the proposed participation in a
business opportunity may be submitted to the shareholders for their
consideration, either voluntarily by the Board of Directors to seek the
shareholders' advice and consent, or because of a requirement of state law to do
so.
In seeking to arrange a merger, acquisition, business combination or other
arrangement by and between the Company and a viable operating entity,
management's objective will be to obtain long-term capital appreciation for the
Company's shareholders. There can be no assurance that the Company will be able
to complete any merger, acquisition, business combination or other arrangement
by and between the Company and a viable operating entity.
The Company may need additional funds in order to effectuate a merger,
acquisition or other arrangement by and between the Company and a viable
operating entity, although there is no assurance that the Company will be able
to obtain such additional funds, if needed. Even if the Company is able to
obtain additional funds there is no assurance that the Company will be able to
effectuate a merger, acquisition or other arrangement by and between the Company
and a viable operating entity.
10
The Company's U.S. Patent
--------------------------
Following the sale of substantially all of the Company's assets in 1999,
the Company devoted its efforts to the development of a prototype micro-robotic
device (the "micro-robotic device") to manipulate organic tissues on an
extremely small scale for microdissection. The Company filed a patent
application in February 1998, to protect certain features of the system and
method of the micro-robotic device. However, due to the inability of the Company
to complete the micro-robotic device, the Company determined that it would cease
development of the micro-robotic device and, as of June 30, 2000, the
capitalized costs related to the patent underlying the micro-robotic device have
been written off by the Company.
On March 19, 2002, the Company was awarded United States Patent No. US
6,358,749 B1 for the "Automated System for Chromosome Microdissection and Method
of Using Same" (the "Patent").
The Patent covers an automated system and method for microdissection of
samples such as chromosomes or other biological material, and in particular, it
relates to a robotic assisted microdissection system and method that
significantly reduces the time and skill needed for cellular and sub-cellular
dissections. Microdissection is defined as dissection under the microscope;
specifically: dissection of cells and tissues by means of fine needles that are
precisely manipulated by levers. The system and method covered by the Patent
attempts to provide reliability and ease of operation thereby making
microdissection widely available to laboratories. While the Company has never
derived any revenues from the micro-robotic device, the Company plans to attempt
to license or sell the technology covered by the Patent. There can be no
assurances that the Company will be able to successfully market the technology
covered by the Patent or that the Company will ever derive any revenues from the
Patent or the technology covered by the Patent.
During the first quarter of 2003, the Board of Directors of the Company
authorized the formation of a wholly owned subsidiary of the Company for the
purposes of owning, developing and exploiting Patent. On March 3, 2003 the
Company filed Articles of Incorporation with the Secretary of State of the State
of Nevada to form Bio-Medical Automation, Inc., a Nevada corporation wholly
owned by the Company (the "Subsidiary"). A copy of the Articles of Incorporation
of Bio-Medical Automation, Inc. a Nevada corporation are attached as an Exhibit
to the Company's Current Report on Form 8-K filed on March 7, 2003 which is
incorporated herein by reference. The Board of Directors of the Company has
authorized management of the Company to transfer the Patent to the Subsidiary in
exchange for 5,000,000 shares of the common stock of the Subsidiary. The
transfer of the Patent to the Subsidiary became effective in the quarter ended
June 30, 2003. The Company plans to develop and exploit the Patent through the
Subsidiary. There can be no assurances that the Subsidiary will successfully
develop and/or exploit the technology covered by the Patent.
11
Investment Strategy
-------------------
On August 25, 2003, the Board of Directors of the Company authorized the
Company to invest a portion of the Company's cash in marketable securities in an
effort to realize a greater rate of return then the Company is currently earning
in light of historically low interest rates. The Board directed that management
maintain at least $40,000 of the Company's cash in a federally insured bank or
money market account.
In furtherance of the Company's investment strategy the Company opened a
brokerage account with Catalyst Financial LLC ("Catalyst"), a broker-dealer
registered with the U.S. Securities and Exchange Commission and a member in good
standing with the National Association of Securities Dealers, Inc. Catalyst is
owned and controlled by Steven N. Bronson, the Company's Chairman and Chief
Executive Officer. Catalyst has agreed to charge the Company commissions of no
more that $.02 per share with a minimum of $75 per trade on securities
transactions. The Board approved the commission structure to be charged by
Catalyst. Mr. Bronson abstained from voting on all Board resolutions concerning
the Company's investment strategy and the Company's arrangements with Catalyst.
On October 14, 2003, the Company deposited $250,000 in a brokerage account
with Catalyst.
Results of Operations
---------------------
For the nine months ended September 30, 2003, the Company has not earned
any revenues, except for interest income of $2,791. For the same period the
Company incurred general and administrative expenses of $61,958 resulting in a
net loss from operations equal to $59,167. General and administrative
expenditures were and have been directed to maintaining the Company's status as
a public company, including (without limitation) filing reports with the
Securities and Exchange Commission.
Liquidity and Capital Resources
-------------------------------
During three months ended September 30, 2003, the Company satisfied its
working capital needs from cash on hand at the beginning of the quarter and cash
generated from interest income during the quarter. As of September 30, 2003, the
Company had on hand cash in the amount of $306,450.
The Company's future financial condition will be subject to: (1) its
ability to arrange for a merger, acquisition or a business combination with an
operating business on favorable terms that will result in profitability, or (2)
its ability to successfully develop and exploit the Patent. There can be no
assurance that the Company will be able to do so or, if it is able to do so,
that the transaction will be on favorable terms not resulting in an unreasonable
amount of dilution to the Company's existing shareholders.
The Company may need additional funds in order to effectuate a merger,
acquisition or other arrangement by and between the Company and a viable
operating entity, although there is no assurance that the Company will be able
to obtain such additional funds, if needed. Even if the Company is able to
obtain additional funds there is no assurance that the Company will be able to
effectuate a merger, acquisition or other arrangement by and between the Company
and a viable operating entity.
The Company may need additional funds in order to develop and commercially
exploit the Patent, although there is no assurance that the Company will be able
to obtain such additional funds, if needed. Even if the Company is able to
obtain additional funds there is no assurance that the Company will be able to
develop and commercially exploit the Patent.
12
Except for historical information contained herein, the statements in this
report are forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. You can
identify these forward-looking statements when you see words such as "expect,"
"anticipate," "estimate," "may," "believe," and other similar expressions. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict. Actual
results could differ materially from those projected in the forward-looking
statements. Forward-looking statements involve known and unknown risks and
uncertainties, which may cause the Company's actual results in future periods to
differ materially, from forecasted results. These and other risks are described
elsewhere herein and in the Company's other filings with the Securities and
Exchange Commission, namely the Company's Annual Report on Form 10-KSB for the
year ended December 31, 2002.
PART II - OTHER INFORMATION
Item 5. Other Information
Disclosure Controls and Procedures
----------------------------------
Under the supervision and with the participation of our principal executive
officer, the Company has evaluated the effectiveness of the design and operation
of our disclosure controls and procedures as of the end of the period covered by
the quarterly report, and, based on such evaluation, our president has concluded
that these controls and procedures are effective. There were no significant
changes in our internal controls over financial reporting or in other factors
that could significantly affect these controls subsequent to the date of his
evaluation.
Disclosure controls and procedures are 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
Securities and Exchange Commission'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 under the Exchange Act is accumulated and communicated to our management,
including our principal executive and financial officer, as appropriate to allow
timely decisions regarding required disclosure.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
99.1 President's Statement Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 By Principal Executive Officer
and Principal Financial Officer Regarding Facts and
Circumstances Relating to Exchange Act Filings
99.2 President's Written Certification Of Financial Statements
Pursuant to 18 U.S.C. Statute 1350.
13
b. Reports on Form 8-K.
During the quarter ended September 30, 2003, the Company did not file any
current reports on Form 8-K.
On October 22, 2003, the Company filed a current report on Form 8-K,
reporting a change in the Company's independent auditors. On October 15, 2003
the Company dismissed Wheeler Wasoff, P.C. as its independent auditors and on
October 16, 2003 the Company engaged Kostin, Ruffkess & Company, LLC as its
independent auditors. The October 22, 2003 Form 8-K filed by the Company is
incorporated herein by reference.
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.
Dated: November 14, 2003
RIDGEFIELD ACQUSITION CORP.
By: /s/ Steven N. Bronson
------------------------------------
Steven N. Bronson, President
(Principle Executive Officer),
as Registrant's duly authorized officer
14
EXHIBIT INDEX
The following Exhibits are filed herewith:
Exhibit
Number Description of Document
------ -----------------------
99.1 President's Statement Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 By Principal Executive Officer and Principal Financial
Officer Regarding Facts and Circumstances Relating to Exchange Act
Filings
99.2 President's Written Certification Of Financial Statements Pursuant
to 18 U.S.C. Statute 1350.