UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 June 30, 2005
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ________ to _________
Commission file number: 0-14136
Aries Ventures Inc.
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(Exact name of small business issuer as specified in its charter)
Nevada 84-0987840
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
11111 Santa Monica Boulevard, Suite 1250, Los Angeles, California 90025
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(Address of principal executive offices)
Issuer's telephone number: (310) 402-5069
Not Applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
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 issuer 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 has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Act of 1934 subsequent to the distribution of securities under a plan confirmed
by a court.
Yes [X] No [ ]
As of June 30, 2005, the Company had 2,032,226 shares of common stock
issued and outstanding.
Documents incorporated by reference: None.
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ARIES VENTURES INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets - June 30, 2005 (Unaudited) and
September 30, 2004
Condensed Statements of Operations (Unaudited) - Three
Months and Nine Ended June 30, 2005 and 2004
Condensed Statements of Cash Flows (Unaudited) - Nine Months
Ended June 30, 2005 and 2004
Notes to Condensed Financial Statements (Unaudited) - Three
Months and Nine Months Ended June 30, 2005 and 2004
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
SIGNATURES
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Aries Ventures Inc.
Condensed Balance Sheets
June 30, September 30,
2005 2004
---------- ----------
(Unaudited)
ASSETS
CURRENT
Cash and cash equivalents $ 2,565,392 $ 2,686,241
Prepaid expenses and other
current assets 31,265 18,147
---------- ----------
2,596,657 2,704,388
---------- ----------
PROPERTY AND EQUIPMENT 27,363 27,363
Less: accumulated depreciation (27,363) (26,642)
---------- ----------
- 721
---------- ----------
OTHER
Deposits - 2,309
---------- ----------
$ 2,596,657 $ 2,707,418
========== ==========
(continued)
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Aries Ventures Inc.
Condensed Balance Sheets (continued)
June 30, September 30,
2005 2004
---------- ----------
(Unaudited)
LIABILITIES
CURRENT
Accounts payable $ 54,722 $ 50,045
Accrued liabilities 18,646 10,135
---------- ----------
73,368 60,180
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, $0.01 par value
Authorized - 10,000,000 shares
Issued and outstanding - None - -
Common stock, $0.01 par value
Authorized - 50,000,000 shares
Issued - 3,311,981 shares
(outstanding - 2,032,226 shares) 33,120 33,120
Less: securities held in
treasury - 1,279,755 shares of
common stock and 1,194,755 Class
A common stock purchase warrants,
at cost (1,343,743) (1,343,743)
Additional paid-in capital 1,800,859 1,800,859
Retained earnings 2,033,053 2,157,002
---------- ----------
2,523,289 2,647,238
---------- ----------
$ 2,596,657 $ 2,707,418
========== ==========
See accompanying notes to condensed financial statements.
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Aries Ventures Inc.
Condensed Statements of Operations (Unaudited)
Three Months Ended June 30, Nine Months Ended June 30,
--------------------------- --------------------------
2005 2004 2005 2004
---- ---- ---- ----
REVENUES $ - $ - $ - $ -
------ ------ ------- -------
COSTS AND EXPENSES
General and
administrative 35,531 84,959 135,691 268,313
Legal fees - - (404) 2,000
Depreciation - 127 721 380
Interest expense 285 231 423 523
Interest income (6,125) (851) (13,282) (3,989)
------ ------ ------- -------
29,691 84,466 123,149 267,227
------ ------ ------- -------
Net loss before
income taxes (29,691) (84,466) (123,149) (267,227)
State income taxes - - 800 800
------ ------ ------- -------
NET LOSS $(29,691) $(84,466) $(123,949) $(268,027)
====== ====== ======= =======
NET LOSS PER COMMON
SHARE -
BASIC AND DILUTED $(0.01) $(0.04) $(0.06) $(0.12)
==== ==== ==== ====
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES
OUTSTANDING -
BASIC AND
DILUTED 2,032,226 2,032,226 2,032,226 2,256,417
========= ========= ========= =========
See accompanying notes to condensed financial statements.
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Aries Ventures Inc.
Condensed Statements of Cash Flows (Unaudited)
Nine Months Ended June 30,
--------------------------
2005 2004
---- ----
OPERATING ACTIVITIES
Net loss $ (123,949) $ (268,027)
Adjustments to reconcile
net loss to net cash
used in operating
activities:
Depreciation 721 380
Changes in operating
assets and liabilities:
(Increase) decrease in:
Prepaid expenses and
other current assets (13,118) 16,394
Deposits 2,309 -
Increase (decrease) in:
Accounts payable 4,677 (4,947)
Accrued liabilities 8,511 (12,694)
--------- ---------
Net cash used in operating
activities (120,849) (268,894)
--------- ---------
INVESTING ACTIVITIES
Payments from related party 16,459 47,262
Increase in amounts due from
related party (16,459) (29,349)
Purchases of property and
equipment - (119)
--------- ---------
Net cash provided by investing
activities - 17,794
--------- ---------
FINANCING ACTIVITIES
Repurchase of securities - (1,343,743)
--------- ---------
Net cash used in financing
activities - (1,343,743)
--------- ---------
CASH AND CASH EQUIVALENTS:
Net decrease (120,849) (1,594,843)
Balance at beginning of period 2,686,241 4,345,513
--------- ---------
Balance at end of period $ 2,565,392 $ 2,750,670
========= =========
(continued)
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Aries Ventures Inc.
Condensed Statements of Cash Flows (Unaudited) (continued)
Nine Months Ended June 30,
--------------------------
2005 2004
---- ----
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Cash paid for:
Interest $ 423 $ 523
======== ========
Income taxes $ 800 $ 800
======== ========
NON-CASH INVESTING AND
FINANCING ACTIVITIES:
None
See accompanying notes to condensed financial statements.
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Aries Ventures Inc.
Notes to Condensed Financial Statements (Unaudited)
Three Months and Nine Months Ended June 30, 2005 and 2004
1. Organization and Basis of Presentation
Basis of Presentation - The accompanying condensed financial statements include
the operations of Aries Ventures Inc., a Nevada corporation (the "Company"). The
condensed financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America.
As of June 30, 2005, the Company had no business operations. The Company's
activities are focused on maintaining the corporate entity and seeking a new
business opportunity. The acquisition of a new business opportunity may result
in a change in name and in control of the Company.
The accompanying interim condensed financial statements are unaudited, but in
the opinion of management of the Company, contain all adjustments, which include
normal recurring accruals, necessary to present fairly the financial position at
June 30, 2005, the results of operations for the three months and nine months
ended June 30, 2005 and 2004, and cash flows for the nine months ended June 30,
2005 and 2004. The balance sheet as of September 30, 2004 is derived from the
Company's audited financial statements.
Certain information and footnote disclosures normally included in financial
statements that have been prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission, although management of
the Company believes that the disclosures contained in these financial
statements are adequate to make the information presented therein not
misleading. For further information, refer to the financial statements and the
notes thereto included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended September 30, 2004, as filed with the Securities and Exchange
Commission.
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, 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.
The results of operations for the three months and nine months ended June 30,
2005 are not necessarily indicative of the results of operations to be expected
for the full fiscal year ending September 30, 2005.
Reclassification - Certain amounts have been reclassified in 2004 to conform to
the presentation in 2005.
Loss Per Share - Basic earnings (loss) per share is calculated by dividing
earnings (loss) by the weighted average number of common shares outstanding
during the period. Diluted earnings per share gives effect to all potentially
dilutive common shares outstanding during the period. These potentially dilutive
securities were not included in the calculation of loss per share for the three
months and nine months ended June 30, 2005 and 2004 because the Company incurred
a loss during such periods and thus their effect would have been anti-dilutive.
Accordingly, basic and diluted loss per share are the same for the three months
and nine months ended June 30, 2005 and 2004.
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At June 30, 2005, potentially dilutive securities consisted of outstanding
Series A common stock purchase warrants to acquire 2,056,226 shares of common
stock and stock options to acquire 353,318 shares of common stock.
Stock-Based Compensation - The Company may periodically issue shares of common
stock for services rendered or for financing costs. Such shares are valued based
on the market price on the transaction date.
The Company may periodically issue stock options and warrants to employees and
non-employees in non-capital raising transactions for services and for financing
costs.
The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
123, "Accounting for Stock-Based Compensation", which establishes a fair value
method of accounting for stock-based compensation plans.
The provisions of SFAS 123 allow companies to either record an expense in the
financial statements to reflect the estimated fair value of stock options or
warrants to employees, or to continue to follow the intrinsic value method set
forth in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees", but to disclose on an annual basis the pro forma effect on
net income (loss) and net income (loss) per common share had the fair value of
the stock options and warrants been recorded in the financial statements. SFAS
123 was amended by SFAS 148, which now requires companies to disclose in interim
financial statements the pro forma effect on net income (loss) and net income
(loss) per common share of the estimated fair market value of stock options or
warrants issued to employees. The Company has elected to continue to account for
stock-based compensation plans utilizing the intrinsic value method.
Accordingly, compensation cost for stock options and warrants is measured as the
excess, if any, of the fair market price of the Company's common stock at the
date of grant above the amount an employee must pay to acquire the common stock.
In accordance with SFAS 123, the cost of stock options and warrants issued to
non-employees is measured at the grant date based on the fair value of the
award. The fair value of the stock-based award is determined using the
Black-Scholes option-pricing model. The resulting amount is charged to expense
on the straight-line basis over the period in which the Company expects to
receive benefit, which is generally the vesting period.
Pro Forma Financial Disclosure - The fair value of stock options granted under
the Company's Employee Stock Option Plan and Management Incentive Stock Option
Plan on November 1, 2000 were estimated on the grant date using the
Black-Scholes option-pricing model. Had such stock options been accounted for
pursuant to SFAS 123, the effect on the Company's results of operations would
have been as follows:
Three Months Ended June 30, Nine Months Ended June 30,
--------------------------- --------------------------
2005 2004 2005 2004
---- ---- ---- ----
Net loss:
As reported $(29,691) $(84,466) $(123,949) $(268,027)
Pro forma $(29,691) $(84,466) $(123,949) $(269,689)
Net loss per common share:
As reported $(0.01) $(0.04) $(0.06) $(0.12)
Pro forma $(0.01) $(0.04) $(0.06) $(0.12)
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2. Due from Related Entity
During the nine months ended June 30, 2005 and 2004, the Company allocated
certain common corporate services (consisting of rent, utilities, common area
services, insurance and other office services) aggregating $16,459 and $29,349,
respectively, to Resource Ventures, Inc. ("Resource"), a related entity with
certain common officers and directors. As of June 30, 2005 and September 30,
2004, there were no amounts due from Resource. During the nine months ended June
30, 2005 and 2004, Resource paid the Company $16,459 and $47,262, respectively.
The allocation of common corporate services between the Company and Resource
ceased effective December 31, 2004.
3. Equity-Based Transactions
During the nine months ended June 30, 2004, the Company repurchased from an
institutional shareholder 1,279,755 shares of common stock and 1,194,755 Series
A common stock purchase warrants in a private transaction for an aggregate cash
purchase price of $1,343,743 effective November 17, 2003. As a result of the
exercise price of the Series A common stock purchase warrants being
substantially in excess of the fair market value of the Company's common stock,
all of the consideration was allocated to the common shares. These securities
have been classified as treasury securities and recorded at cost as a reduction
to stockholders' equity in the Company's condensed balance sheets.
Effective December 31, 2004, the Company's Board of Directors approved an
extension of the expiration date of a stock option to acquire 176,659 shares of
common stock exercisable at $0.25 per share previously granted to the Company's
former Chairman of the Board of Directors, from March 31, 2005 to October 31,
2005. The former Chairman had resigned from the Company's Board of Directors
effective December 31, 2004. The financial effect of the extension of the stock
option calculated pursuant to the Black-Scholes option-pricing model was not
material.
4. Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"), a revision to SFAS
No. 123, "Accounting for Stock-Based Compensation". SFAS 123R supersedes
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", and amends SFAS No. 95, "Statement of Cash Flows". SFAS 123R
requires that the Company measure the cost of employee services received in
exchange for equity awards based on the grant date fair value of the awards. The
cost will be recognized as compensation expense over the vesting period of the
awards. The Company is required to adopt SFAS 123R effective January 1, 2006.
Under this method, the Company will begin recognizing compensation cost for
equity-based compensation for all new or modified grants after the date of
adoption. In addition, the Company will recognize the unvested portion of the
grant date fair value of awards issued prior to adoption based on the fair
values previously calculated for disclosure purposes over the remaining vesting
period of the outstanding options and warrants. The Company is currently
evaluating the potential effect that the adoption of SFAS 123R will have on the
Company's financial statement presentation and disclosures.
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In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets, an amendment to APB Opinion No. 29" ("SFAS 153"). SFAS 153 amends
Accounting Principles Board Opinion No. 29, "Accounting for Nonmonetary
Transactions", to require that exchanges of nonmonetary assets be measured and
accounted for at fair value, rather than at carryover basis, of the assets
exchanged. Nonmonetary exchanges that lack commercial substance are exempt from
this requirement. SFAS 153 is effective for nonmonetary exchanges entered into
in fiscal periods beginning after June 15, 2005. The Company does not routinely
enter into nonmonetary exchanges. Accordingly, the Company does not expect that
the adoption of SFAS 153 will have a significant effect on the Company's
financial statement presentation or disclosures.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Special Note Regarding Forward-Looking Statements:
This Quarterly Report on Form 10-QSB for the quarterly period ended June 30,
2005 contains "forward-looking" statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including statements that include the words
"believes", "expects", "anticipates", or similar expressions. These
forward-looking statements include, but are not limited to, statements
concerning the Company's expectations regarding its working capital
requirements, financing requirements, business prospects, and other statements
of expectations, beliefs, future plans and strategies, anticipated events or
trends, and similar expressions concerning matters that are not historical
facts.
The forward-looking statements in this Quarterly Report on Form 10-QSB for the
quarterly period ended June 30, 2005 involve known and unknown risks,
uncertainties and other factors that could the cause actual results, performance
or achievements of the Company to differ materially from those expressed in or
implied by the forward-looking statements contained herein. Except as required
by applicable law or regulation, the Company undertakes no obligation to update
or revise any forward-looking statement contained in this Quarterly Report on
Form 10-QSB for the quarterly period ended June 30, 2005 to reflect any future
events or circumstances.
General Overview:
As of June 30, 2005, the Company had no business operations. The Company's
activities are focused on maintaining the corporate entity and seeking a new
business opportunity. The acquisition of a new business opportunity may result
in a change in name and in control of the Company.
Critical Accounting Policies:
The Company prepared its financial statements in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities and the 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.
Management periodically evaluates the estimates and judgments made. Management
bases its estimates and judgments on historical experience and on various
factors that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates as a result of different assumptions or
conditions.
The following critical accounting policies affect the more significant judgments
and estimates used in the preparation of the Company's financial statements.
Cash and Cash Equivalents:
Cash and cash equivalents include all highly-liquid investments with an original
maturity of three months or less at the date of purchase. The Company minimizes
its credit risk by investing its cash and cash equivalents with major banks and
financial institutions located primarily in the United States. However, cash
balances exceeded federally-insured levels at June 30, 2005 and September 30,
2004. Balances that exceed such limits are separately insured through the
commercial insurance carrier of the financial institution. The Company believes
that no risk exists with respect to its concentration of balances in cash and
cash equivalents.
Income Taxes:
The Company records a valuation allowance to reduce its deferred tax assets to
the amount that is more likely than not to be realized. In the event the Company
was to determine that it would be able to realize its deferred tax assets in the
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future in excess of its recorded amount, an adjustment to the deferred tax
assets would be credited to operations in the period such determination was
made. Likewise, should the Company determine that it would not be able to
realize all or part of its deferred tax assets in the future, an adjustment to
the deferred tax assets would be charged to operations in the period such
determination was made.
Results of Operations:
Three Months Ended June 30, 2005 and 2004:
General and Administrative. General and administrative expenses were $35,531 and
$84,959 for the three months ended June 30, 2005 and 2004, respectively. General
and administrative expenses decreased by $49,428 or 58.2% in 2005 as compared to
2004, primarily as a result of a decrease in management compensation, insurance,
and office and occupancy expenses, as a result of the restructuring and
relocation of the Company's corporate office as described below. Significant
components of general and administrative expenses include management and
directors' compensation, insurance costs, accounting fees and office and
occupancy expenses.
Effective January 1, 2005, the Company restructured and relocated its corporate
office to a new facility in the Los Angeles area, which is being provided by an
affiliate without charge on a month-to-month basis. The fair value of the new
office facility is nominal. As a result, for the three months ended March 31,
2005, the Company incurred substantially reduced office and occupancy expenses,
as well as reduced personnel-related costs.
Legal Fees. The Company did not have any legal fees for the three months ended
June 30, 2005 or 2004.
Depreciation. Depreciation was $127 for the three months ended June 30, 2004.
The Company did not have any depreciation for the three months ended June 30,
2005.
Interest Expense. Interest expense was $285 and $231 for the three months ended
June 30, 2005 and 2004, respectively.
Interest Income. Interest income was $6,125 and $851 for the three months ended
June 30, 2005 and 2004, respectively.
Net Loss Before Income Taxes. Net loss before income taxes was $29,691 and
$84,466 for the three months ended June 30, 2005 and 2004, respectively.
State Income Taxes. The Company did not have any state income taxes for the
three months ended June 30, 2005 or 2004.
Net Loss. Net loss was $29,691 and $84,466 for the three months ended June 30,
2005 and 2004, respectively.
Nine Months Ended June 30, 2005 and 2004:
General and Administrative. General and administrative expenses were $135,691
and $268,313 for the nine months ended June 30, 2005 and 2004, respectively.
General and administrative expenses decreased by $132,622 or 49.4% in 2005 as
compared to 2004, primarily as a result of a decrease in management
compensation, insurance, and office and occupancy expenses, as a result of the
restructuring and relocation of the Company's corporate office as described
below. Significant components of general and administrative expenses include
management and directors' compensation, insurance costs, accounting fees and
office and occupancy expenses.
Effective January 1, 2005, the Company restructured and relocated its corporate
office to a new facility in the Los Angeles area, which is being provided by an
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affiliate without charge on a month-to-month basis. The fair value of the new
office facility is nominal. As a result, beginning January 1, 2005, the Company
incurred substantially reduced office and occupancy expenses, as well as reduced
personnel-related costs.
Legal Fees. Legal fees were $(404) for the nine months ended June 30, 2005, as
compared to $2,000 for the nine months ended June 30, 2004.
Depreciation. Depreciation was $721 and $380 for the nine months ended June 30,
2005 and 2004, respectively. Included in depreciation for the nine months ended
June 30, 2005 was a charge of $594 to write-off the remaining net book value of
the Company's property and equipment at December 31, 2004, as a result of the
relocation of the Company's corporate office to a new facility effective January
1, 2005.
Interest Expense. Interest expense was $423 and $523 for the nine months ended
June 30, 2005 and 2004, respectively.
Interest Income. Interest income was $13,282 and $3,989 for the nine months
ended June 30, 2005 and 2004, respectively.
Net Loss Before Income Taxes. Net loss before income taxes was $123,149 and
$267,227 for the nine months ended June 30, 2005 and 2004, respectively.
State Income Taxes. State income taxes were $800 for the nine months ended June
30, 2005 and 2004.
Net Loss. Net loss was $123,949 and $268,027 for the nine months ended June 30,
2005 and 2004, respectively
Financial Condition - June 30, 2005:
Liquidity and Capital Resources:
Overview. The Company had cash and cash equivalents of $2,565,392 at June 30,
2005, as compared to $2,686,241 at September 30, 2004, a decrease of $120,849.
The Company had working capital of $2,523,289 at June 30, 2005, as compared to
working capital of $2,644,208 at September 30, 2004, a decrease of $120,919.
Operating. The Company's operations utilized cash resources for various general
and administrative expenses of $120,849 during the nine months ended June 30,
2005, as compared to utilizing cash resources of $268,894 during the nine months
ended June 30, 2004. The reduction in cash utilized in operations in 2005 as
compared to 2004 of $148,045 was a result of the reduction in operating expenses
as described above at "Results of Operations".
As of June 30, 2005, the Company had no business operations. The Company's
activities are focused on maintaining the corporate entity and seeking a new
business opportunity. The acquisition of a new business opportunity may result
in a change in name and in control of the Company.
The Company believes that its working capital resources are adequate to fund
anticipated costs and expenses for the remainder of the fiscal year ending
September 30, 2005 and beyond.
Investing. During the nine months ended June 30, 2005 and 2004, the Company
allocated certain common corporate services (consisting of rent, utilities,
common area services, insurance and other office services) aggregating $16,459
and $29,349, respectively, to Resource Ventures, Inc. ("Resource"), a related
entity with certain common officers and directors. During the nine months ended
June 30, 2005 and 2004, Resource paid the Company $16,459 and $47,262,
respectively. The allocation of common corporate services between the Company
and Resource ceased effective December 31, 2004.
-13-
During the nine months ended June 30, 2004, the Company purchased $119 of
property and equipment.
Financing. During the nine months ended June 30, 2004, the Company repurchased
from an institutional shareholder 1,279,755 shares of common stock and 1,194,755
Series A common stock purchase warrants in a private transaction for an
aggregate cash purchase price of $1,343,743 effective November 17, 2003.
Commitments and Contingencies. At June 30, 2005, the Company did not have any
commitments for capital expenditures or other obligations.
Off-Balance Sheet Arrangements. At June 30, 2005, the Company did not have any
transactions, obligations or relationships that could be considered off-balance
sheet arrangements.
Recent Accounting Pronouncements:
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"), a revision to SFAS
No. 123, "Accounting for Stock-Based Compensation". SFAS 123R supersedes
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", and amends SFAS No. 95, "Statement of Cash Flows". SFAS 123R
requires that the Company measure the cost of employee services received in
exchange for equity awards based on the grant date fair value of the awards. The
cost will be recognized as compensation expense over the vesting period of the
awards. The Company is required to adopt SFAS 123R effective January 1, 2006.
Under this method, the Company will begin recognizing compensation cost for
equity-based compensation for all new or modified grants after the date of
adoption. In addition, the Company will recognize the unvested portion of the
grant date fair value of awards issued prior to adoption based on the fair
values previously calculated for disclosure purposes over the remaining vesting
period of the outstanding options and warrants. The Company is currently
evaluating the potential effect that the adoption of SFAS 123R will have on the
Company's financial statement presentation and disclosures.
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets, an amendment to APB Opinion No. 29" ("SFAS 153"). SFAS 153 amends
Accounting Principles Board Opinion No. 29, "Accounting for Nonmonetary
Transactions", to require that exchanges of nonmonetary assets be measured and
accounted for at fair value, rather than at carryover basis, of the assets
exchanged. Nonmonetary exchanges that lack commercial substance are exempt from
this requirement. SFAS 153 is effective for nonmonetary exchanges entered into
in fiscal periods beginning after June 15, 2005. The Company does not routinely
enter into nonmonetary exchanges. Accordingly, the Company does not expect that
the adoption of SFAS 153 will have a significant effect on the Company's
financial statement presentation or disclosures.
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ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the Securities and Exchange
Commission. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in the reports filed under the Securities Exchange Act of 1934 is
accumulated and communicated to management, including its principal executive
and financial officers, as appropriate, to allow timely decisions regarding
required disclosure.
The Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including its principal executive and
financial officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of the end of the period covered
by this report. Based upon and as of the date of that evaluation, the Company's
principal executive and financial officer concluded that the Company's
disclosure controls and procedures are effective to ensure that information
required to be disclosed in the reports the Company files and submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms.
(b) Changes in Internal Controls
There were no changes in the Company's internal controls or in other factors
that could have significantly affected those controls subsequent to the date of
the Company's most recent evaluation.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OR PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS
A list of exhibits required to be filed as part of this report is set forth in
the Index to Exhibits, which immediately precedes such exhibits, and is
incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
ARIES VENTURES INC.
------------------------
(Registrant)
/s/ ROBERT N. WEINGARTEN
DATE: August 8, 2005 By: ________________________
Robert N. Weingarten
President and Chief
Financial Officer
(Duly Authorized Officer
and Chief Financial
Officer)
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INDEX TO EXHIBITS
Exhibit
Number Description of Document
------ -----------------------
31 Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
32 Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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