UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2008
GATEWAY CERTIFICATIONS, INC .
Commission File Number: 333-144228
Nevada |
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20-5548974 |
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(State of organization) |
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(I.R.S. Employer Identification No.) |
250 West 57 th Street
Suite 917
New York, New York 10107
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(Address of principal executive offices)
(212) 586-6103
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Registrants 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 [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer o |
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Accelerated Filer o |
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Non-Accelerated Filer o (Do not check if a smaller reporting company) |
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Smaller Reporting Company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [ X ]
As of August 14, 2008, there were 8,343,000 outstanding shares of the registrant's common stock, $.001 par value per share.
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4.
CONTROLS AND PROCEDURES
PART II OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
ITEM 1A
RISK FACTORS
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES
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
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GATEWAY CERTIFICATIONS, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
(Unaudited)
June 30, 2008 and December 31, 2007
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June 30, 2008 |
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December 31, 2007 |
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(Unaudited) |
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ASSETS |
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Current assets |
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Cash |
$ 1,645 |
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$ 18,019 |
Other receivable |
291 |
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- |
Total current assets |
1,936 |
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18,019 |
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Equipment, net of accumulated depreciation |
1,191 |
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1,383 |
of $704 and $512, respectively |
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Total assets |
$ 3,127 |
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$ 19,402 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Current portion of shareholder loan |
$ 250 |
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$ - |
Unearned revenue |
2,000 |
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- |
Income tax payable |
- |
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450 |
Deposits |
50 |
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- |
Commission payable |
1,200 |
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450 |
Professional fees payable |
1,600 |
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3,085 |
Total current liabilities |
5,100 |
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3,985 |
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June 30, 2008 |
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December 31, 2007 |
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(Unaudited) |
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Shareholder loan |
$ 750 |
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$ - |
Total liabilities |
5,850 |
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3,985 |
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Stockholders' equity/(deficit) |
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Common stock $.001 par value, 50,000,000 shares |
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authorized, 8,343,000 shares issued and outstanding |
8,343 |
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8,343 |
Additional paid in capital |
41,507 |
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41,507 |
Deficit accumulated during the development stage |
(52,573) |
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(34,433) |
Total stockholders' equity/(deficit) |
(2,723) |
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15,417 |
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Total liabilities and stockholders' equity |
$ 3,127 |
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$ 19,402 |
See accompanying notes to condensed financial statements
GATEWAY CERTIFICATIONS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Six months ended June 30, 2008 and June 30, 2007
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Three Months |
Six Months |
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Cumulative From Inception |
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Ended |
Ended |
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(August 30, 2006) to |
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June 30, |
June 30, |
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June 30, |
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2008 |
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2007 |
2008 |
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2007 |
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2008 |
Revenue |
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Consulting income |
$1,500 |
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$1,523 |
$2,500 |
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$3,523 |
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$6,000 |
Commission expense |
450 |
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- |
750 |
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- |
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1,200 |
Net revenue |
1,050 |
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1,523 |
1,750 |
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3,523 |
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4,800 |
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General and administrative expenses |
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Organization Costs |
- |
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- |
- |
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- |
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752 |
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Advertising and Promotion |
816 |
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- |
1,636 |
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- |
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2,726 |
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Computer and Internet Expense |
249 |
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- |
571 |
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- |
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1,942 |
Depreciation expense |
96 |
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96 |
192 |
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192 |
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704 |
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Filing fees, dues and subscriptions |
1,196 |
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- |
1,640 |
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- |
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6,682 |
Legal fees |
- |
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- |
- |
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- |
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1,000 |
Outside services |
- |
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- |
- |
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- |
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1,200 |
Office expense |
509 |
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3,250 |
640 |
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5,050 |
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4,159 |
Rent expense |
4,699 |
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2,922 |
8,278 |
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2,922 |
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19,840 |
Telephone expense |
375 |
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- |
706 |
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- |
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2,032 |
Professional fees |
1,600 |
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6,500 |
6,100 |
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6,500 |
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16,395 |
Other expense |
19 |
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- |
127 |
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- |
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319 |
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Franchise taxes |
- |
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546 |
- |
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546 |
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900 |
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Total general and administrative expenses |
9,558 |
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13,314 |
19,890 |
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15,210 |
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58,650 |
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Loss from operations |
(8,508) |
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(11,791) |
(18,140) |
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(11,687) |
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(53,850) |
Other income/(expense) |
- |
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- |
- |
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- |
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- |
Miscellaneous income |
- |
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- |
- |
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- |
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1,523 |
Interest expense |
- |
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- |
- |
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- |
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(246) |
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Total other income/(expense) |
- |
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- |
- |
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- |
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1,277 |
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Net (loss) before income taxes |
(8,508) |
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(11,791) |
(18,140) |
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(11,687) |
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(52,573) |
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Federal income tax expense |
- |
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- |
- |
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36 |
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- |
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Net (loss) |
$(8,508) |
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$(11,791) |
$(18,140) |
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$(11,723) |
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$(52,573) |
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Net loss per common shares outstanding |
$(0.0010) |
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$(0.0015) |
$(0.0022) |
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$(0.0015) |
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Weighted average shares outstanding: |
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Basic and diluted |
8,343,000 |
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7,954,124 |
8,343,000 |
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7,954,124 |
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See accompanying notes to condensed financial statements
GATEWAY CERTIFICATIONS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30, 2008 and June 30, 2007
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Six Months |
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Cumulative From Inception |
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Ended |
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(August 30, 2006) to |
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June 30, |
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June 30, |
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Cash flows from operating activities |
2008 |
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2007 |
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2008 |
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Net (loss) |
$ (18,140) |
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$(11,687) |
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$ (52,573) |
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Adjustments to reconcile net (loss) to net |
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cash used in operating activities |
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Depreciation |
192 |
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192 |
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704 |
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Outside services in exchange for common stock |
- |
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- |
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1,200 |
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(Increase)/decrease in other receivable |
(291) |
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835 |
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(291) |
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Increase/(decrease) in: |
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Unearned revenue |
2,000 |
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(2,000) |
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2,000 |
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Income tax payable |
(450) |
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(150) |
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- |
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Deposit |
50 |
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- |
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50 |
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Rent payable |
- |
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- |
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- |
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Commission payable |
750 |
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- |
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1,200 |
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Professional fees payable |
(1,485) |
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6,500 |
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1,600 |
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Net cash used in operating activities |
(17,374) |
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(6,310) |
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(46,110) |
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Cash flows from financing activities |
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Proceeds from issuance of common stock |
- |
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36,700 |
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46,755 |
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Shareholder loan |
1,000 |
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- |
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1,000 |
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Net cash provided by financing activities |
1,000 |
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36,700 |
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47,755 |
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Net increase/(decrease) in cash |
(16,374) |
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30,390 |
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1,645 |
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Cash , beginning of period |
18,019 |
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3,390 |
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- |
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Cash , end of period |
1,645 |
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33,780 |
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1,645 |
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Supplemental disclosure of Cash Flows information cash paid for: |
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Income taxes |
- |
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- |
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0 |
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Interest |
- |
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- |
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246 |
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Supplemental disclosure of non-cash investing and financing activities |
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During the period ended December 31, 2006, equipment with a value of $1,895 was contributed to the Company in |
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exchange for common stock. This contribution and related issuance of common stock has been excluded from the |
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condensed statements of cash flows presented. |
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See accompanying notes to condensed financial statements
GATEWAY CERTIFICATIONS, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 2008
1.
Basis of Presentation
The accompanying unaudited interim condensed financial statements of Gateway Certifications, Inc. and the information for Form 10-Q have been prepared in accordance with the rules of the Securities and Exchange Commission, and do not include all of the information and note disclosures required by generally accepted accounting principles, and should be read in conjunction with the audited financial statements and notes thereto also contained in Gateway Certifications, Inc. Form 10-KSB/A. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financials statements as reported in Form 10-KSB/A have been omitted.
2.
Basic and Diluted Net (Loss) Per Share
The basic net (loss) per common share is computed by dividing the net (loss) by the weighted average number of common shares outstanding. Diluted net (loss) per common share is computed by dividing the net (loss) adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities.
3.
Unsecured Promissory Note
On June 19, 2008, the Company and Lawrence Williams, Jr., an officer of the Company, entered into an unsecured promissory note for the amount of $1,000 loaned by Mr. Williams to the Company (Williams Loan). Interest shall accrue on the principal amount of this note at a rate of eight percent (8%) per annum. The Company shall pay the Williams Loan in twelve (12) quarterly installments of approximately $83 payable each on the last day of each quarter with the first such installment on December 31, 2008 until the principal and interest have been paid in full. The outstanding principal and accrued interest on Williams Loan is due June 30, 2013.
On July 23, 2008, the Company and Kwajo Sarfoh, secretary of the Company, entered into an unsecured promissory note for the amount of $1,000 loaned by Mr. Sarfoh to the Company (Sarfoh Loan). Interest shall accrue on the principal amount of this note at a rate of eight percent (8%) per annum. The Company shall pay the Sarfoh Loan in twelve (12) quarterly installments of approximately $83 payable each on the last day of each quarter with the first such installment on December 31, 2008 until the principal and interest have been paid in full. The outstanding principal and accrued interest on Sarfoh Loan is due July 30, 2013.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion should be read in conjunction with our unaudited financial statements and the notes thereto.
Forward-Looking Statements
This quarterly report contains forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words "believe," "anticipate," "expect," "estimate," intend, plan and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management's current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that we desire to effect; Securities and Exchange Commission regulations which affect trading in the securities of "penny stocks,"; and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this report on Form 10-Q, including, without limitation, the information set forth under the heading Managements Discussion and Analysis or Plan of Operation" identifies important additional factors that could materially adversely affect actual results and performance. You are urged to carefully consider these factors. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement.
Overview and Plan of Operation
A brief history and recent developments
Gateway Certifications, Inc. (Gateway or the Company) was incorporated on August 30, 2006 and became a reporting public company in July 2007. We are headquartered in New York City. Our principal executive offices are located at 250 West 57 th Street, Suite 917, New York, NY 10107, and our telephone number is (212) 586-6103. Our website address is www.gcertifications.com .
In company with federal agencies and private organizations, Gateway recognizes the historical lack of access that women, minorities and other qualifying individuals have had to the resources needed to develop their small businesses.
How we generate revenue
The Company was formed to provide certification services to women-owned, minority-owned and other qualified businesses (collectively referred to as Minority Businesses) that seek Minority Business Enterprises certification (MBE), Womens Business Enterprise certification (WBE), Disadvantaged Business Enterprise (DBE) certification, 8(a) and or SDB designation and various State, City and private sector certifications (collectively referred to as Certifications Programs).
Once successfully certified in one or more Certification Programs, the Company then assists Minority Businesses to leverage and utilize their certification status to procure and secure business relationships and available opportunities for the delivery or provision of their goods and/or services to public and private corporations, federal, state and local agencies. We connect Minority Businesses with opportunities based on their business, capacity, expertise and strategic goals.
Although federal, state, city and local government agencies and public and private corporations do not and can not guarantee any specific amount of business a certified Minority Business, once certified, Minority Businesses achieve preferential access to bid for contracts for goods or services that are related to their respective business concerns.
Results of Operations for the Six Months Ended June 30, 2008 Compared to the Six Months Ended June 30, 2007
Our certification and supplier diversity consulting income during the six months ended June 30, 2008 resulted in net revenues of $1,750 as compared to the six months ended June 30, 2007 where we had $3,523 in revenues. This was a decrease of $1,773, or 50%. The decrease in certification and supplier diversity consulting income was due to the fact that we were not successful in converting our pipeline of certification and supplier diversity consulting into contracts for the period.
General and administrative expenses for the six months ended June 30, 2008 were $19,890. This was an increase of $4,680, or 31%, as compared to general and administrative expenses of $15,210 for the six months ended June 30, 2007. During the six months ended June 30, 2008, we incurred professional services fees in the amount of $6,100, filing fees, dues and subscription costs of $1,640, advertising and
promotional expenses of $1,636, computer and internet expenses of $571, rent expenses of $8,278, office expenses of $640, telephone expenses of $706, depreciation expenses of $192, and other miscellaneous operating expenses amounting to $127.
Depreciation expense for the six months ended June 30, 2008 was $192. This is an increase of $0, or 0%, as compared to depreciation expense of $192 for the six months ended June 30, 2007.
We had net loss of $18,140 (or basic and diluted loss per share of $0.0022) for the six months ended June 30, 2008, as compared to a net loss of $11,723 (or basic and diluted loss per share of $0.0015) for the six months ended June 30, 2007. The increase in net loss was primarily due to the increase in general and administrative expenses, discussed above, that arose from an increase in overall operating activities associated with conducting our business.
Liquidity and Capital Resources
We had total current assets of $1,936 as of June 30, 2008. This consisted of cash of $1,645 and an other receivable of $291, a decrease of $16,083, or 89%, as compared to current assets of $18,019 for the year ended December 31, 2007. Other assets as of June 30, 2008 included property and equipment of $1,191 net of $704 of accumulated depreciation.
We had negative working capital of $3,164 as of June 30, 2008.
We had total liabilities of $5,850 as of June 30, 2008, which consisted of current liabilities of $5,100 and long term liabilities related to a shareholder loan of $750. This was an increase of $1,865, or 47%, as compared to total liabilities of $3,985 for the period ended December 31, 2007.
We had an accumulated deficit of $52,573 as of June 30, 2008. This was an increase of $18,140, or 53%, as compared to an accumulated deficit of $34,433 for the period ended December 31, 2007.
We had net cash used in operating activities of $17,374 for the six months ended June 30, 2008, which consisted of net loss of $18,140, depreciation of $192, decrease in other receivable of $291, unearned revenue of $2,000, decrease in income tax payable of $450, a customer deposit of $50, commission payable of $750, and a decrease in professional fees payable of $1,485. The net cash used in operating activities of $17,374 for the six months ended June 30, 2008 represented an increase of $11,064, or 175%, as compared to net cash used in operating activities of $6,310 for the six months ended June 30, 2007.
We had $1,000 in net cash provided by financing activities for the six months ended June 30, 2008, as compared to $36,700 for the six months ended June 30, 2007, which consisted solely of proceeds from sale of common stock.
We have no specific commitments for any future capital expenditures. However, we will continue to incur normal operating expenses and routine fees and expenses incident to our reporting duties as a public company. Our cash requirements for the next twelve months are relatively modest, principally rent, other office expense and accounting expenses.
Unless we receive additional capital, we will only be able to pay our future debts and meet operating expenses by conducting profitable operations or otherwise generating positive cash flow. As a practical matter, we are unlikely to generate positive cash flow by any means other than successful and profitable operations. Management and the shareholders are not obligated to provide any further funding. Notwithstanding, on June 19, 2008 and July 23, 2008, two officers of the Company each loaned the Company $1,000 for operating expenses and, if positive cash flows are not achieved through operations over the next three months of operations, will likely loan the Company additional capital to fund the Companys operating expenses. Any of our shareholders and management who advance money to us to cover operating expenses will expect to be reimbursed when the Company achieves positive cash flows.
Outside of principal loans, we do not have any other identified sources of additional capital from third parties or from shareholders. There can be no assurance that additional capital will be available to us, or that, if available, it will be on terms satisfactory to us. Any additional financing may involve dilution to our shareholders. In the alternative, additional funds may be provided from cash flow in excess of that needed to finance our day-to-day operations, although we may never generate this excess cash flow. If we do not raise additional capital or generate additional funds, implementation of our plans for expansion will be delayed. If necessary we may withdraw from certain growth strategies to conserve cash for continued operation
We have no intention of borrowing money to reimburse or pay commissions to any of our officers, directors or shareholders or their affiliates. Other than as presented in our registration statement on Form SB-2, there currently are no plans to sell additional securities to raise capital, although sales of securities may be necessary to obtain needed funds.
Should the Company lack available funding, severe consequences could occur, including among others:
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failure to make timely filings with the SEC as required by the Exchange Act, which also probably would result in suspension of trading or quotation in our stock and could result in fines and penalties to us under the Exchange Act;
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curtailing or eliminating our ability to continue operations; or
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inability to pay legal and accounting fees and other operating expenses.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably 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 that is material to investors.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is subject to certain market risks, including changes in interest rates and currency exchange rates. The Company does not undertake any specific actions to limit those exposures.
ITEM 4.
CONTROLS AND PROCEDURES
Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report (the Evaluation Date), has concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, and (ii) is recorded, processed, summarized and reported within the time periods specified in the Commissions rules and forms.
We plan to improve our internal control over financial reporting in an effort to remediate these deficiencies through improved supervision and training of our accounting staff. These deficiencies have been disclosed to our board of directors. We believe that this effort is sufficient to fully remedy these deficiencies and we are continuing our efforts to improve and strengthen our control processes and procedures. Our Chief Executive Officer, Chief Financial Officer and directors will continue to work with our auditors and other outside advisors to ensure that our controls and procedures are adequate and effective.
Changes in Internal Control Over Financial Reporting
There were no changes in the Companys internal control over financial reporting that occurred during the most recent quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting for that period.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.
ITEM 1A.
RISK FACTORS
As a smaller reporting company as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
Except as may have previously been disclosed on our registration statement on Form SB-2, a current report on Form 8-K or a quarterly report on Form 10-Q, we have not sold any of our securities in a private placement transaction or otherwise during the past three years.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote or for the written consent of security shareholders, through the solicitation of proxies or otherwise, during the three-months ended June 30, 2008 and no meeting of shareholders was held.
ITEM 5. OTHER INFORMATION
On June 19, 2008, the Company and Lawrence Williams, Jr., an officer of the Company, entered into an unsecured promissory note for the amount of $1,000 loaned by Mr. Williams to the Company (Williams Loan). Interest shall accrue on the principal amount of this note at a rate of eight percent (8%) per annum. The Company shall pay the Williams Loan in twelve (12) quarterly installments of approximately $83 payable each on the last day of each quarter with the first such installment on December 31, 2008 until the principal and interest have been paid in full. The outstanding principal and accrued interest on Williams Loan is due June 30, 2013.
On July 23, 2008, the Company and Kwajo Sarfoh, secretary of the Company, entered into an unsecured promissory note for the amount of $1,000 loaned by Mr. Sarfoh to the Company (Sarfoh Loan). Interest shall accrue on the principal amount of this note at a rate of eight percent (8%) per annum. The Company shall pay the Sarfoh Loan in twelve (12) quarterly installments of approximately $83 payable each on the last day of each quarter with the first such installment on December 31, 2008 until the principal and interest have been paid in full. The outstanding principal and accrued interest on Sarfoh Loan is due July 30, 2013.
ITEM 6. EXHIBITS
Exhibit No. |
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Description |
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31.1* |
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Certification of Principal Executive Officer and Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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32.1* |
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Certification of Principal Executive Officer and Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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10.1* |
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Unsecured Promissory Note between Gateway Certifications, Inc. and Lawrence Williams, Jr. |
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10.2* |
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Unsecured Promissory Note between Gateway Certifications, Inc. and Kwajo Sarfoh |
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* Filed herein.
SIGNATURES
In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
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GATEWAY CERTIFICATIONS, INC. |
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Date: August 14, 2008 |
By: |
/s/ Lawrence Williams, Jr. |
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Lawrence Williams, Jr. |
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Chief Executive Officer and Principal Accounting Officer |
PROMISSORY NOTE
June 19, 2008
$1,000
FOR VALUE RECEIVED, GATEWAY CERTIFICATIONS, INC. (collectively, the Maker), at 250 WEST 57 TH STEET, SUITE 917, NEW YORK, NY, 10107, promises to pay to the order of LAWRENCE WILLIAMS, JR. (the Holder), at 250 WEST 57 TH STEET, SUITE 917, NEW YORK, NY, 10107, or at such other place as the Holder may designate in writing, in lawful money of the United States of America, the principal sum of One Thousand Dollars ($1,000.00).
The following terms and provisions apply to this Note:
1.
Interest Rate . Interest shall accrue on the principal amount of this note at a rate of Eight percent (8%) per annum.
2.
Payment Terms . Maker shall pay to Holder twelve (12) quarterly installments of $83.34 each on the last day of each quarter as provided herein with the first such installment on December 31, 2008 until the principal and interest have been paid in full. Maker shall pay to Holder all outstanding principal and accrued interest on the Maturity Date (defined below).
3.
Maturity Date
.
All outstanding principal and unpaid interest under this Note and all other amounts due and payable under this Note shall become automatically due and payable, without demand or notice, on June 30, 2013.
4.
Security For Payment . This Note is not secured.
5.
Prepayment
.
This Note may be prepaid in whole or in part at any time, and from time to time, without penalty, but any prepayment shall not postpone any required payment hereunder.
6.
General Payment Terms
.
Receipt of a check shall not constitute payment hereunder until such check is fully and finally honored by the bank upon which it is drawn, and any wire transfer of funds shall not constitute payment until actually credited to such bank account of the Holder as the Holder may from time to time designate.
7.
Computations and Payments . All payments of interest under this Note shall be computed on the basis of a 360-day year factor applied to the actual number of days elapsed. If the date for a payment under this Note shall be a day that is not a business day, then for all purposes of this Note, the payment then due shall be made on the next business day, and such extension of time shall in each case be included in any computation of payments of interest. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorneys fees, then to the payment in full of any late charges, then to the payment in full of accrued, unpaid interest and finally to the reduction of the unpaid principal balance of this Note.
8.
Default
.
The occurrence of any one or more of the following shall constitute a default (an Event of Default) under this Note:
(a)
the failure to make a payment under this Note when due or any other default in or breach of Makers performance under this Note or any other indebtedness of Maker; or
(b)
the filing or commencement by or against Maker of any proceeding regarding bankruptcy or insolvency.
9.
Late Charge . Maker shall pay to Holder a late charge equal to 5% of any amount due hereunder that is not received by Holder within ten (10) days of when such amount is due. Maker agrees that it would be extremely difficult or impractical to determine Holders actual damages in the event of such late payment, that the amount specified above is a reasonable estimate of such damages and that such amount shall constitute liquidated damages for such late payment. The foregoing provision shall not be construed to extend the due date for any amount required to be paid hereunder. Holder shall have no obligation to accept any late payment not accompanied by such late charge.
10.
Remedies . Upon the occurrence of an Event of Default and so long as the Event of Default shall continue unwaived by Holder:
(a)
In the case of an Event of Default described in Section 8(a) hereof, Holder may, by written notice to Maker, declare all amounts evidenced by this Note immediately due and payable.
(b)
In the case of an Event of Default described in Section 8(b) hereof, all amounts evidenced by this Note shall become due and payable automatically and immediately.
(c)
Holder may exercise any of its rights and remedies set forth herein.
(d)
The remedies of Holder shall be cumulative and concurrent, and may be pursued singly, successively, or together, at Holders sole discretion, and may be exercised as often as the occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.
11.
Extensions
.
Maker consents to any and all renewals and extensions in the time of payment hereof without in any way affecting the liability of Maker. No extension of time for the payment of this Note or any installment due hereunder made by agreement with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the liability of Maker, either in whole or in part, unless Holder agrees otherwise in writing.
12.
Limit of Validity . It is the intention of the parties hereto to comply with all applicable usury laws; accordingly, it is agreed that notwithstanding any provision to the contrary herein, no such provision shall require the payment of or permit the collection of interest in excess of the maximum permitted by law to be collected from the Maker. If any excess of interest in such respect is provided for, or shall be adjudicated to be so provided for, herein then in such event (a) the provisions of this paragraph shall govern and control, (b) neither the Maker nor their successors or assigns or any other party liable for the payment hereof, shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount permitted by law, and the same shall be construed as a mutual mistake of the parties, and (c) any such excess which may have been collected shall be, at the option of the Holder, either applied as a credit against the then unpaid Principal amount hereof or refunded to Maker.
13.
Collection Costs and Expenses . Maker shall pay all costs, fees and expenses (including court costs and reasonable attorneys fees) incurred by Holder in collecting or attempting to collect any amount that becomes due hereunder or in seeking legal advice with respect to such collection or a default hereunder.
14.
Notices . All notices, requests, demands, and other communications with respect hereto shall be in writing and shall be delivered by hand, sent prepaid by air courier or sent by the United States
mail, certified, postage prepaid, return receipt requested, at the addresses designated herein or such other address as the parties may designate to each other in writing.
15.
Amendments Only in Writing . This Note or any provision hereof may be waived, changed, modified or discharged only by agreement in writing signed by Maker and Holder.
16.
Obligations Joint and Several
.
The term Maker shall include each person and entity now or hereafter liable hereunder, whether as maker, principal, surety, guarantor, endorser or otherwise, each of whom shall be jointly, severally and primarily liable for all of the obligations set forth herein.
17.
Time of Essence
.
TIME IS OF THE ESSENCE with respect to the performance by the Maker of each of their obligations hereunder.
18.
Choice of Law . This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York where jurisdiction shall lie.
IN WITNESS WHEREOF , the Maker has caused this Note to be signed in its name by its duly authorized officer on the date first written above.
MAKER :
Gateway Certifications, Inc.
By:
/s/ Kwajo Sarfoh
Kwajo Sarfoh, Secretary
PROMISSORY NOTE
July 23, 2008
$1,000
FOR VALUE RECEIVED, GATEWAY CERTIFICATIONS, INC. (collectively, the Maker), at 250 WEST 57 TH STEET, SUITE 917, NEW YORK, NY, 10107, promises to pay to the order of KWAJO SARFOH (the Holder), at 250 WEST 57 TH STEET, SUITE 917, NEW YORK, NY, 10107, or at such other place as the Holder may designate in writing, in lawful money of the United States of America, the principal sum of One Thousand Dollars ($1,000.00).
The following terms and provisions apply to this Note:
1.
Interest Rate . Interest shall accrue on the principal amount of this note at a rate of Eight percent (8%) per annum.
2.
Payment Terms . Maker shall pay to Holder twelve (12) quarterly installments of $83.34 each on the last day of each quarter as provided herein with the first such installment on December 31, 2008 until the principal and interest have been paid in full. Maker shall pay to Holder all outstanding principal and accrued interest on the Maturity Date (defined below).
3.
Maturity Date
.
All outstanding principal and unpaid interest under this Note and all other amounts due and payable under this Note shall become automatically due and payable, without demand or notice, on July 30, 2013.
4.
Security For Payment . This Note is not secured.
5.
Prepayment
.
This Note may be prepaid in whole or in part at any time, and from time to time, without penalty, but any prepayment shall not postpone any required payment hereunder.
6.
General Payment Terms
.
Receipt of a check shall not constitute payment hereunder until such check is fully and finally honored by the bank upon which it is drawn, and any wire transfer of funds shall not constitute payment until actually credited to such bank account of the Holder as the Holder may from time to time designate.
7.
Computations and Payments . All payments of interest under this Note shall be computed on the basis of a 360-day year factor applied to the actual number of days elapsed. If the date for a payment under this Note shall be a day that is not a business day, then for all purposes of this Note, the payment then due shall be made on the next business day, and such extension of time shall in each case be included in any computation of payments of interest. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorneys fees, then to the payment in full of any late charges, then to the payment in full of accrued, unpaid interest and finally to the reduction of the unpaid principal balance of this Note.
8.
Default
.
The occurrence of any one or more of the following shall constitute a default (an Event of Default) under this Note:
(a)
the failure to make a payment under this Note when due or any other default in or breach of Makers performance under this Note or any other indebtedness of Maker; or
(b)
the filing or commencement by or against Maker of any proceeding regarding bankruptcy or insolvency.
9.
Late Charge . Maker shall pay to Holder a late charge equal to 5% of any amount due hereunder that is not received by Holder within ten (10) days of when such amount is due. Maker agrees that it would be extremely difficult or impractical to determine Holders actual damages in the event of such late payment, that the amount specified above is a reasonable estimate of such damages and that such amount shall constitute liquidated damages for such late payment. The foregoing provision shall not be construed to extend the due date for any amount required to be paid hereunder. Holder shall have no obligation to accept any late payment not accompanied by such late charge.
10.
Remedies . Upon the occurrence of an Event of Default and so long as the Event of Default shall continue unwaived by Holder:
(a)
In the case of an Event of Default described in Section 8(a) hereof, Holder may, by written notice to Maker, declare all amounts evidenced by this Note immediately due and payable.
(b)
In the case of an Event of Default described in Section 8(b) hereof, all amounts evidenced by this Note shall become due and payable automatically and immediately.
(c)
Holder may exercise any of its rights and remedies set forth herein.
(d)
The remedies of Holder shall be cumulative and concurrent, and may be pursued singly, successively, or together, at Holders sole discretion, and may be exercised as often as the occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.
11.
Extensions
.
Maker consents to any and all renewals and extensions in the time of payment hereof without in any way affecting the liability of Maker. No extension of time for the payment of this Note or any installment due hereunder made by agreement with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the liability of Maker, either in whole or in part, unless Holder agrees otherwise in writing.
12.
Limit of Validity . It is the intention of the parties hereto to comply with all applicable usury laws; accordingly, it is agreed that notwithstanding any provision to the contrary herein, no such provision shall require the payment of or permit the collection of interest in excess of the maximum permitted by law to be collected from the Maker. If any excess of interest in such respect is provided for, or shall be adjudicated to be so provided for, herein then in such event (a) the provisions of this paragraph shall govern and control, (b) neither the Maker nor their successors or assigns or any other party liable for the payment hereof, shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount permitted by law, and the same shall be construed as a mutual mistake of the parties, and (c) any such excess which may have been collected shall be, at the option of the Holder, either applied as a credit against the then unpaid Principal amount hereof or refunded to Maker.
13.
Collection Costs and Expenses . Maker shall pay all costs, fees and expenses (including court costs and reasonable attorneys fees) incurred by Holder in collecting or attempting to collect any amount that becomes due hereunder or in seeking legal advice with respect to such collection or a default hereunder.
14.
Notices . All notices, requests, demands, and other communications with respect hereto shall be in writing and shall be delivered by hand, sent prepaid by air courier or sent by the United States
mail, certified, postage prepaid, return receipt requested, at the addresses designated herein or such other address as the parties may designate to each other in writing.
15.
Amendments Only in Writing . This Note or any provision hereof may be waived, changed, modified or discharged only by agreement in writing signed by Maker and Holder.
16.
Obligations Joint and Several
.
The term Maker shall include each person and entity now or hereafter liable hereunder, whether as maker, principal, surety, guarantor, endorser or otherwise, each of whom shall be jointly, severally and primarily liable for all of the obligations set forth herein.
17.
Time of Essence
.
TIME IS OF THE ESSENCE with respect to the performance by the Maker of each of their obligations hereunder.
18.
Choice of Law . This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York where jurisdiction shall lie.
IN WITNESS WHEREOF , the Maker has caused this Note to be signed in its name by its duly authorized officer on the date first written above.
MAKER :
Gateway Certifications, Inc.
By:
/s/ Lawrence Williams, Jr. __
Lawrence Williams, Jr., CEO
Exhibit 31.1
Certification of Principal Executive Officer and Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
I, Lawrence Williams, Jr., certify that:
1.
I have reviewed this quarterly report of Gateway Certifications, Inc. on Form 10-Q for the quarterly period ended June 30, 2008.
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4.
The small business issuers other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the small business issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the small business issuers internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
5.
The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 14, 2008
/s/ Lawrence Williams, Jr.
_____________________
Lawrence Williams, Jr.
Principal Executive Officer and Principal Accounting Officer
Exhibit 32.1
Certification of Principal Executive Officer and Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
In connection with the quarterly report of Gateway Certifications, Inc. (the Company) on Form 10-Q for the period ended June 30, 2008 as filed with the Securities and Exchange Commission on the date hereof, the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1.
The Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (the Report) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2.
Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
IN WITNESS WHEREOF, the undersigned has executed this statement this 14 th day of August 2008.
/s/ Lawrence Williams, Jr.
______________________________
Lawrence Williams, Jr.
Principal Executive Officer and
Principal Accounting Officer