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 ACT OF 1934
For the quarterly period ended December 31, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES 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
28720 Canwood Street, Suite 207, Agoura Hills, California 91301
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(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 December 31, 2004, the Company had 2,032,226 shares of common stock
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 - December 31, 2004 (Unaudited) and
September 30, 2004
Condensed Statements of Operations (Unaudited) - Three Months
Ended December 31, 2004 and 2003
Condensed Statements of Cash Flows (Unaudited) - Three Months
Ended December 31, 2004 and 2003
Notes to Condensed Financial Statements (Unaudited) - Three
Months Ended December 31, 2004 and 2003
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Controls and Procedures
PART II. OTHER INFORMATION
Item 6. Exhibits
SIGNATURES
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Aries Ventures Inc.
Condensed Balance Sheets
December 31, September 30,
2004 2004
---------- ----------
(Unaudited)
ASSETS
CURRENT
Cash and cash equivalents $ 2,622,082 $ 2,686,241
Due from related party 12,076 -
Prepaid expenses and other
current assets 16,622 18,147
---------- ----------
2,650,780 2,704,388
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PROPERTY AND EQUIPMENT 27,363 27,363
Less: accumulated depreciation (27,363) (26,642)
---------- ----------
- 721
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OTHER
Deposits - 2,309
---------- ----------
$ 2,650,780 $ 2,707,418
========== ==========
(continued)
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Aries Ventures Inc.
Condensed Balance Sheets (continued)
December 31, September 30,
2004 2004
---------- ----------
(Unaudited)
LIABILITIES
CURRENT
Accounts payable $ 66,479 $ 50,045
Accrued liabilities 2,554 10,135
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69,033 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 2,091,511 2,157,002
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2,581,747 2,647,238
---------- ----------
$ 2,650,780 $ 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 December 31,
-------------------------------
2004 2003
---- ----
REVENUES $ - $ -
------ -------
COSTS AND EXPENSES
General and
administrative 66,639 101,671
Legal fees - 2,000
Depreciation 721 127
Interest expense 124 263
Interest income (2,793) (1,653)
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Net loss before
income taxes (64,691) (102,408)
State income taxes 800 -
------ -------
NET LOSS $(65,491) $(102,408)
====== =======
LOSS PER COMMON SHARE -
BASIC AND DILUTED $(0.03) $(0.04)
==== ====
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND DILUTED 2,032,226 2,699,924
========= =========
See accompanying notes to condensed financial statements.
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Aries Ventures Inc.
Condensed Statements of Cash Flows (Unaudited)
Three Months Ended December 31,
-------------------------------
2004 2003
---- ----
OPERATING ACTIVITIES
Net loss $ (65,491) $ (102,408)
Adjustments to reconcile
net loss to net cash
used in operating
activities:
Depreciation 721 127
Changes in operating
assets and liabilities:
Decrease in:
Prepaid expenses and
other current assets 1,525 13,165
Other assets 2,309 -
Increase (decrease) in:
Accounts payable 16,434 9,094
Accrued liabilities (7,581) (21,727)
--------- ---------
Net cash used in operating
activities (52,083) (101,749)
--------- ---------
INVESTING ACTIVITIES
Payments from related party - 26,894
Increase in amounts due from
related party (12,076) (11,246)
Purchases of property and
equipment - (119)
--------- ---------
Net cash provided by (used in)
investing activities (12,076) 15,529
--------- ---------
FINANCING ACTIVITIES
Repurchase of securities - (1,343,743)
--------- ---------
Net cash used in
financing activities - (1,343,743)
--------- ---------
CASH AND CASH EQUIVALENTS:
Net decrease (64,159) (1,429,963)
Balance at beginning of period 2,686,241 4,345,513
--------- ---------
Balance at end of period $ 2,622,082 $ 2,915,550
========= =========
(continued)
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Aries Ventures Inc.
Condensed Statements of Cash Flows (Unaudited) (continued)
Three Months Ended December 31,
-------------------------------
2004 2003
---- ----
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Cash paid for interest $ 124 $ 263
========= =========
Cash paid for income taxes $ - $ -
========== =========
See accompanying notes to condensed financial statements.
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Aries Ventures Inc.
Notes to Condensed Financial Statements (Unaudited)
Three Months Ended December 31, 2004 and 2003
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.
The accompanying interim condensed financial statements are unaudited, but in
the opinion of management of the Company, contain all adjustments, which include
normal recurring adjustments, necessary to present fairly the financial position
at December 31, 2004, the results of operations for the three months ended
December 31, 2004 and 2003, and cash flows for the three months ended December
31, 2004 and 2003. 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 ended December 31, 2004 are not
necessarily indicative of the results of operations to be expected for the full
fiscal year ending September 30, 2005.
Business - As of December 31, 2004, the Company had no business operations. The
Company is 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.
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 ended December 31, 2004 and 2003 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
ended December 31, 2004 and 2003.
At December 31, 2004, 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.
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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 No. 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
No. 123 was amended by SFAS No. 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 No. 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 No. 123, the effect on the Company's results of operations
would have been as follows:
For the three months ended December 31, 2004 and 2003, the Company would have
recorded $0 and $1,662 as additional compensation expense, resulting in a net
loss of $65,491 and $104,070, respectively, and a net loss per common share of
$0.03 and $0.04, respectively.
Reclassification - Certain amounts have been reclassified in 2003 to conform to
the presentation in 2004.
2. Due from Related Entity
During the three months ended December 31, 2004 and 2003, the Company allocated
certain common corporate services (consisting of rent, utilities, common area
services, insurance and other office services) aggregating $12,076 and $11,246,
respectively, to Resource Ventures, Inc. ("Resource"), a related entity with
certain common officers and directors. As of December 31, 2004 and September 30,
2004, amounts due from Resource aggregated $12,076 and $0, respectively. During
the three months ended December 31, 2004 and 2003, Resource paid the Company $0
and $26,894, respectively. The allocation of common corporate services between
the Company and Resource ceased effective December 31, 2004.
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3. Stockholders' Equity
Effective November 17, 2003, 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. 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 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 January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" ("FIN 46"), which clarifies the
application of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements", relating to consolidation of certain entities. In December 2003,
the FASB issued a revised version of FIN 46 ("FIN 46R") that replaced the
original FIN 46. FIN 46R requires identification of a company's participation in
variable interest entities ("VIEs"), which are defined as entities with a level
of invested equity that is not sufficient to fund future activities to permit it
to operate on a standalone basis. For entities identified as a VIE, FIN 46R sets
forth a model to evaluate potential consolidation based on an assessment of
which party to the VIE (if any) bears a majority of the exposure to its expected
losses, or stands to gain from a majority of its expected returns. FIN 46R also
sets forth certain disclosures regarding interests in VIEs that are deemed
significant, even if consolidation is not required. The Company is not currently
participating in, or invested in any VIEs, as defined in FIN 46R. The
implementation of the provisions of FIN 46R in 2003 did not have a significant
effect on the Company's financial statement presentation or disclosures.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS No. 150
establishes standards for how an issuer classifies and measures in its statement
of financial position certain financial instruments with characteristics of both
liabilities and equity. SFAS No. 150 requires that an issuer classify a
financial instrument that is within its scope as a liability (or an asset in
some circumstances) because that financial instrument embodies an obligation of
the issuer. SFAS No. 150 is effective for financial instruments entered into or
modified after May 31, 2003 and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. SFAS No. 150 is to be
implemented by reporting the cumulative effect of a change in accounting
principle for financial instruments created before the issuance date of SFAS No.
150 and still existing at the beginning of the interim period of adoption.
Restatement is not permitted. The adoption of SFAS No. 150 did not have a
significant effect on the Company's financial statement presentation or
disclosures.
In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment". SFAS
No. 123(R) revises SFAS No. 123, "Accounting for Stock-Based Compensation" and
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees". SFAS
No. 123(R) focuses primarily on the accounting for transactions in which an
entity obtains employee services in share-based payment transactions. SFAS No.
-10-
123(R) requires companies to recognize in the statement of operations the cost
of employee services received in exchange for awards of equity instruments based
on the grant-date fair value of those awards (with limited exceptions). SFAS No.
123(R) is effective as of the first interim or annual reporting period that
begins after June 15, 2005 for non-small business issuers and after December 15,
2005 for small business issuers. Accordingly, the Company will adopt SFAS No.
123(R) in its quarter ending March 31, 2006. The Company is currently evaluating
the provisions of SFAS No. 123(R) and has not yet determined the impact, if any,
that SFAS No. 123(R) will have on its financial statement presentation or
disclosures.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Quarterly Report on Form 10-QSB for the quarterly period ended December 31,
2004 contains "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, 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 December 31, 2004 involve known and unknown
risks, uncertainties and other factors that could cause the actual results,
performance or achievements of the Company to differ materially from those
expressed in or implied by the forward-looking statements contained herein.
General Overview:
As of December 31, 2004, the Company had no business operations. The Company is
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 December 31, 2004 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.
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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
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 December 31, 2004 and 2003:
General and Administrative. General and administrative expenses were $66,639 and
$101,671 for the three months ended December 31, 2004 and 2003, respectively.
General and administrative expenses decreased by $35,032 or 34.5% in 2004 as
compared to 2003, primarily as a result of a decrease in management compensation
and insurance. Significant components of general and administrative expenses
include management and directors' compensation, insurance costs, accounting fees
and office 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. As a result, beginning
January 1, 2005, the Company expects to incur substantially reduced office and
occupancy expenses, as well as reduced personnel-related costs.
Legal Fees. Legal fees were $2,000 for the three months ended December 31, 2003.
The Company did not have any legal fees for the three months ended December 31,
2004.
Depreciation. Depreciation was $721 and $127 for the three months ended December
31, 2004 and 2003, respectively. Included in depreciation for the three months
ended December 31, 2004 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 $124 and $263 for the three months ended
December 31, 2004 and 2003, respectively.
Interest Income. Interest income was $2,793 and $1,653 for the three months
ended December 31, 2004 and 2003, respectively.
Net Loss Before Income Taxes. Net loss before income taxes was $64,691 and
$102,408 for the three months ended December 31, 2004 and 2003, respectively.
State Income Taxes. State income taxes were $800 for the three months ended
December 31, 2004. The Company did not have any state income taxes for the three
months ended December 31, 2003.
Net Loss. Net loss was $65,491 and $102,408 for the three months ended December
31, 2004 and 2003, respectively.
-12-
Financial Condition - December 31, 2004:
Liquidity and Capital Resources:
Overview. The Company had cash and cash equivalents of $2,622,082 at December
31, 2004, as compared to $2,686,241 at September 30, 2004, a decrease of
$64,159. The Company had working capital of $2,581,747 at December 31, 2004, as
compared to working capital of $2,644,208 at September 30, 2004.
Operating. The Company's operations utilized cash resources for various general
and administrative expenses of $52,083 during the three months ended December
31, 2004, as compared to utilizing cash resources of $101,749 during the three
months ended December 31, 2003. The reduction in cash utilized in operations in
2004 as compared to 2003 of $49,666 was primarily a result of the reduction in
net loss.
As of December 31, 2004, the Company had no business operations. The Company is
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.
Investing. During the three months ended December 31, 2004, net cash used in
investing activities was $12,076, as compared to net cash provided by investing
activities of $15,529 for the three months ended December 31, 2003.
During the three months ended December 31, 2004 and 2003, the Company allocated
certain common corporate services (consisting of rent, utilities, common area
services, insurance and other office services) aggregating $12,076 and $11,246,
respectively, to Resource Ventures, Inc. ("Resource"), a related entity with
certain common officers and directors. During the three months ended December
31, 2004 and 2003, Resource paid the Company $0 and $26,894, respectively. The
allocation of common corporate services between the Company and Resource ceased
effective December 31, 2004.
During the three months ended December 31, 2003, the Company also purchased $119
of property and equipment.
Financing. Effective November 17, 2003, 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.
Commitments and Contingencies. At December 31, 2004, the Company did not have
any commitments for capital expenditures.
Off-Balance Sheet Arrangements. At December 31, 2004, the Company did not have
any transactions, obligations or relationships that could be considered
off-balance sheet arrangements.
Recent Accounting Pronouncements:
In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" ("FIN 46"), which clarifies the
application of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements", relating to consolidation of certain entities. In December 2003,
the FASB issued a revised version of FIN 46 ("FIN 46R") that replaced the
original FIN 46. FIN 46R requires identification of a company's participation in
variable interest entities ("VIEs"), which are defined as entities with a level
of invested equity that is not sufficient to fund future activities to permit it
-13-
to operate on a standalone basis. For entities identified as a VIE, FIN 46R sets
forth a model to evaluate potential consolidation based on an assessment of
which party to the VIE (if any) bears a majority of the exposure to its expected
losses, or stands to gain from a majority of its expected returns. FIN 46R also
sets forth certain disclosures regarding interests in VIEs that are deemed
significant, even if consolidation is not required. The Company is not currently
participating in, or invested in any VIEs, as defined in FIN 46R. The
implementation of the provisions of FIN 46R in 2003 did not have a significant
effect on the Company's financial statement presentation or disclosures.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS No. 150
establishes standards for how an issuer classifies and measures in its statement
of financial position certain financial instruments with characteristics of both
liabilities and equity. SFAS No. 150 requires that an issuer classify a
financial instrument that is within its scope as a liability (or an asset in
some circumstances) because that financial instrument embodies an obligation of
the issuer. SFAS No. 150 is effective for financial instruments entered into or
modified after May 31, 2003 and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. SFAS No. 150 is to be
implemented by reporting the cumulative effect of a change in accounting
principle for financial instruments created before the issuance date of SFAS No.
150 and still existing at the beginning of the interim period of adoption.
Restatement is not permitted. The adoption of SFAS No. 150 did not have a
significant effect on the Company's financial statement presentation or
disclosures.
In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment". SFAS
No. 123(R) revises SFAS No. 123, "Accounting for Stock-Based Compensation" and
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees". SFAS
No. 123(R) focuses primarily on the accounting for transactions in which an
entity obtains employee services in share-based payment transactions. SFAS No.
123(R) requires companies to recognize in the statement of operations the cost
of employee services received in exchange for awards of equity instruments based
on the grant-date fair value of those awards (with limited exceptions). SFAS No.
123(R) is effective as of the first interim or annual reporting period that
begins after June 15, 2005 for non-small business issuers and after December 15,
2005 for small business issuers. Accordingly, the Company will adopt SFAS No.
123(R) in its quarter ending March 31, 2006. The Company is currently evaluating
the provisions of SFAS No. 123(R) and has not yet determined the impact, if any,
that SFAS No. 123(R) will have on its financial statement presentation or
disclosures.
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 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 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
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.
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(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.
PART II. OTHER INFORMATION
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: February 9, 2005 By: ________________________
Robert N. Weingarten
President and Chief
Financial Officer
(Duly Authorized Officer
and Chief Financial
Officer)
-16-
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