10-Q 1 cygni-10qsb_33108.txt FORM 10-Q MARCH 31, 2008 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 2008 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to __________ Commission File Number: 000-31165 CYGNI INVESTMENTS, INC. (Exact name of Registrant as specified in charter) NEVADA 88-0442584 State or other jurisdiction of I.R.S. Employer I.D. No. incorporation or organization 3857 BIRCH STREET, #606, NEWPORT BEACH, CA 92660 (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: (949) 644-0095 Check whether the Issuer (1) has 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 fling requirements for the past 90 days. (1) Yes [X] No [ ] (2) Yes [X] No [ ] Check whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act). Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] 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). Yes [X] No [ ] State the number of shares outstanding of each of the Issuer's classes of common equity as of the latest practicable date: At May 19, 2008, there were 500,001 shares of the Registrant's Common Stock outstanding. PART I ITEM 1. FINANCIAL STATEMENTS The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of the Company, all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the financial position of the Company as of March 31, 2008, and the results of its operations and changes in its financial position from November 17, 1999, through March 31, 2008, have been made. The results of its operations for such interim period is not necessarily indicative of the results to be expected for the entire year. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2007. 2 Cygni Investments, Inc. (A Development Stage Company) Balance Sheets (Unaudited) March December 31, 2008 31, 2007 ----------- ----------- Assets Current Assets Cash $ - - ---------- ---------- Total Current Assets $ - $ - ========== ========== Liabilities and Stockholders' Equity Current Liabilities Accounts Payable $ 41,813 $ 40,669 Interest Payable 19,844 19,055 Note Payable - Related Party 31,563 31,563 ---------- ---------- Total Current Liabilities 93,220 91,287 Stockholders' Equity Common Stock 100,000,000 Shares Authorized at $.001 Par Value; 500,001 Shares Issued and Outstanding 500 500 Additional Paid in Capital 9,500 9,500 Accumulated Deficit During Development Stage (103,220) (101,287) ---------- ---------- Total Stockholders' Equity (Deficit) (93,220) (91,287) ---------- ---------- Total Liabilities and Stockholders' Equity $ - $ - ========== ========== The accompanying notes are an integral part of these financial statements. 3 Cygni Investments, Inc. (A Development Stage Company) Statements of Operations (Unaudited) For the Period November 17, 1999 For the Three Months Ended (Inception) March March to March 31, 2008 31, 2007 31, 2008 ----------- ----------- ----------- Revenue $ - $ - $ - ---------- ---------- ---------- Expenses General & Administrative 1,144 1,983 83,127 ---------- ---------- ---------- Total Expenses 1,144 1,983 83,127 ---------- ---------- ---------- Income (Loss) from Operations (1,144) (1,983) (83,127) Other Income (Expenses) Interest Expense (789) (789) (20,093) ---------- ---------- ---------- Total Other Income (Expenses) (789) (789) (20,093) ---------- ---------- ---------- Income (Loss) Before Taxes (1,933) (2,772) (103,220) Taxes - - - ---------- ---------- ---------- Net Income (Loss) $ (1,933) $ (2,772) $ (103,220) ========== ========== ========== Basic Earnings PerShare (Loss) Per Common Share $ (0.01) $ (0.01) Weighted Average Outstanding Shares 500,001 500,001 The accompanying notes are an integral part of these financial statements. 4 Cygni Investments, Inc. (A Development Stage Company) Statements of Cash Flows (Unaudited)

The accompanying notes are an integral part of these financial statements. 5 Cygni Investments, Inc. (A Development Stage Company) Notes to the Financial Statements March 31, 2008 (unaudited) NOTE 1 - CORPORATE HISTORY -------------------------- Cygni Investments, Inc. (the "Company") was incorporated in Nevada on November 17, 1999, as Cygni Investments, Inc. for the purpose of seeking and consummating a merger or acquisition with a business entity organized as a private corporation, partnership, or sole proprietorship as defined by Statement of Financial Accounting Standards (SFAS) No. 7. The Company has yet to fully develop any material income from its stated primary objective and it is classified as a development stage company. All income, expenses, cash flows and stock transactions are reported since the beginning of development stage. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES ---------------------------------------- Cash and Cash Equivalents - The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. Earnings (Loss) Per Share - The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. In these financial statements, assets, liabilities and earnings involve extensive reliance on management's estimates. Actual results could differ from those estimates. Fair Value of Financial Instruments - The fair value of the Company's cash and cash equivalents, accounts payable and accrued liabilities approximate carrying value based on their effective interest rates compared to current market prices. 6 Cygni Investments, Inc. (A Development Stage Company) Notes to the Financial Statements March 31, 2008 (unaudited) For the Three Months Ended March 31, 2008 2007 Basic Earnings per share: -------- -------- Income (loss) (numerator) $ (1,933) $ (2,772) Shares (demoninator) 500,001 500,001 Per share amount $ (.01) $ (.02) NOTE 3 - NEW TECHNICAL PRONOUNCEMENTS ------------------------------------- In February 2007, FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities- including an amendment of FASB Statement 115", ("SFAS 159"). This statement provides companies with an option to report selected financial assets and liabilities at fair value. This statement is effective for fiscal years beginning after November 15, 2007 with early adoption permitted. We have determined that the adoption of SFAS 159 will not have a material affect on our consolidated financial position, results of operations, cash flows or financial statement disclosures. In December 2007, the FASB issued FAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51". FAS No. 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. FAS No. 160 is effective for the Company in its fiscal year beginning January 1, 2009. We have determined that the adoption of SFAS 159 will not have a material affect on our consolidated financial position, results of operations, cash flows or financial statement disclosures. In December 2007, the FASB issued FAS No. 141 R "Business Combinations". FAS No. 141R establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree. FAS No. 141R also provides guidance for recognizing and measuring the goodwill acquired in a business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of a business combination. FAS No. 141R is effective for the Company in its fiscal year beginning January 1, 2009. While the Company has not yet evaluated this statement for the impact, if any, that FAS No. 141R will have on its consolidated financial position and results of operations, the Company will be required to expense costs related to any acquisitions after September 30, 2009. NOTE 4 - INCOME TAXES --------------------- The Company adopted Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" in the fiscal year ended December 31, 2000 and has applied the provisions of the statement to the current year which resulted in no significant adjustment. Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" requires an asset and liability approach for financial accounting and reporting for income tax purposes. This statement recognizes (a) the amount of taxes payable or refundable for the current year and (b) deferred tax liabilities and assets for future tax consequences of events that have been recognized in the financial statements or tax returns. Deferred income taxes result from temporary differences in the recognition of accounting transactions for tax and financial reporting purposes. There were no temporary differences at March 31, 2008 and earlier years; accordingly, no deferred tax liabilities have been recognized for all years. 7 Cygni Investments, Inc. (A Development Stage Company) Notes to the Financial Statements March 31, 2008 (unaudited) NOTE 4 - INCOME TAXES (continued) --------------------------------- The Company has cumulative net operating loss carryforwards of approximately $103,000 at March 31, 2008. No effect has been shown in the financial statements for the net operating loss carryforwards as the likelihood of future tax benefit from such net operating loss carryforwards is not presently determinable. Accordingly, the potential tax benefits of the net operating loss carryforwards, estimated based upon current tax rates at March 31, 2008 have been offset by valuation reserves in the same amount. The net operating losses begin to expire in 2019. The deferred tax asset and the valuation account is as follows at March 31, 2008 and December 31, 2007: March 31, December 31, 2008 2007 ---------- ------------ Deferred tax asset: Deferred noncurrent tax asset $ 15,483 $ 15,193 --------- --------- Valuation allowance (15,483) (15,193) --------- --------- Total $ - $ - ========= ========= The components of Income Tax expense are as follows: March 31, March 31, 2008 2007 ---------- ---------- Current Federal Tax - - Current State Tax - - Change in NOL benefit (290) (415) Change in Allowance 290 415 $ - $ - ======== ======== NOTE 5 - NOTE PAYABLE RELATED PARTY ----------------------------------- The Company has issued several promissory notes to various corporations whose officers and/or directors are shareholders of the Company. The notes are unsecured, bear an interest rate of 10% per annum and are due and payable on demand. At March 31, 2008, the accrued interest associated with the various notes was $19,844. 8 Cygni Investments, Inc. (A Development Stage Company) Notes to the Financial Statements March 31, 2008 (Unaudited) March 31, December 31, The Company has the following note payable obligations: 2008 2007 ---------- ------------ Related party notes payable due on demand, accruing interest at a rate of 10% per annum $ 31,563 $ 31,563 --------- --------- Totals $ 31,563 $ 31,563 Less Current Maturities (31,563) (31,563) --------- --------- Total Long-Term Notes Payable $ - $ - ========= =========

Following are maturities of long-term debt for each of the next five years: Year Amount ---------- -------- 2008 $ 31,563 2009 - 2010 - 2011 - 2012 - Thereafter - ------- Total $ 31,563 ======= NOTE 6 - GOING CONCERN ---------------------- The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Currently, the Company has no cash or other material assets, nor does it have an established source of revenues sufficient to cover any anticipated operating costs to allow it to continue as a going concern. It is the intent of the Company to find additional capital funding and/or a profitable business venture to acquire or merge. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Company is a development stage company. Since its inception, the Company has had no operations. The Company was organized for the purpose of engaging in any lawful activity permitted under Nevada state law; however, the Company does not have any significant cash or other material assets, nor does it have an established source of revenues sufficient to cover operating costs and to allow it to continue as a going concern. The Company intends to take advantage of any reasonable business proposal presented which management believes will provide the Company and its stockholders with a viable business opportunity. The board of directors will make the final approval in determining whether to complete any acquisition, but may submit the proposal to the shareholders for final approval. The original shareholders contributed a total of $7,715 in cash and $2,285 in services as capital contributions for stock of the Company. Since inception the Company has borrowed funds from corporations related to the Company for operating expenses. Management estimates that the cash requirements for the year ending December 31, 2008, will be approximately $5,000, if no change in operations occurs during the year. Management anticipates that any additional needed funds will be loaned to the Company on the same or similar terms as those of other loans to the Company. There are no agreements with any of the companies and no assurance that all or a portion of these funds will be loaned to the Company. If the Company is unable to borrow such funds, management will seek other sources of funding which are currently unknown to management. There is no assurance that such funding would be available or that if it is made available, it could be obtained on terms favorable to the Company. The investigation of specific business opportunities and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and will require the Company to incur costs for payment of accountants, attorneys, and others. If a decision is made not to participate in or complete the acquisition of a specific business opportunity, the costs incurred in a related investigation will not be recoverable. Further, even if an agreement is reached for the participation in a specific business opportunity by way of investment or otherwise, the failure to consummate the particular transaction may result in a loss to the Company of all related costs incurred. Currently, management is not able to determine the time or resources that will be necessary to locate and acquire or merge with a business prospect. There is no assurance that the Company will be able to acquire an interest in any such prospects, products, or opportunities that may exist or that any activity of the Company, regardless of the completion of any transaction, will be profitable. If and when the Company locates a business opportunity, management of the Company will give consideration to the dollar amount of that entity's profitable operations and the adequacy of its working capital in determining the terms and conditions under which the Company would consummate such an acquisition. Potential business opportunities, no matter 10 which form they may take, will most likely result in substantial dilution for the Company's shareholders due to the likely issuance of stock to acquire such an opportunity. Off-Balance Sheet Arrangements Management does not believe the Company has any off-balance sheet arrangements that have, or are reasonable 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 which would be material to investors. ITEM 3. CONTROLS AND PROCEDURES Evaluation of disclosure and controls and procedure The principal executive officer and principal financial officer, Carl Suter, has concluded, based on his evaluation, as of the end of the period covered by this report, that the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are (1) effective to ensure that material information required to be disclosed by us in reports filed or submitted by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and (2) effective to ensure that information required to be disclosed by us in such reports filed or submitted by the Company under the Exchange Act is accumulated and communicated to management of the Company, including the principal executive officer, to allow timely decisions regarding required disclosure. Changes in internal controls During the last quarter ended March 31, 2008, there were no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. 11 PART II OTHER INFORMATION ITEM 6. EXHIBITS Exhibits. 31.1 Rule 13a-14(a) Certification by Principal Executive Officer 31.2 Rule 13a-14(a) Certification by Principal Financial Officer 32 Section 1350 Certification of Principal Executive Officer and Principal Financial Officer SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Cygni Investments, Inc. Date: May 20, 2008 By: /s/ Carl Suter Carl Suter, President and Treasurer (Principal Executive Officer and Principal Financial and Accounting Officer) 12

CYGNI INVESTMENTS INC 10-Q