Abazias 10QSB 2004 Q2 Quarterly report (small business)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Form 10-QSB

(Mark one)

[X]         QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2004

[  ]         TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission file number: 0-27565

Abazias, Inc.
(Exact name of registrant as specified in its charter)

Delaware	0-23532	65-0636277
(State or other jurisdiction       of incorporation)	(Commission   File No.)	(IRS Employer Identification No.)

5214 SW 91^st Terrace Suite A
Gainesville, FL 32608
(Address of principal executive offices) (Zip Code)

352-264-9940
(Registrant's telephone number)

HUNNO TECHNOLOGIES INC
(Former Name)

2700 North 29th Avenue, Suite 305, Hollywood, FL 33020
(Former Address of principal executive offices) (Zip 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 report(s), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Applicable only to corporate issuers:

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: Common Stock, $.001 par value 74,937,109 shares outstanding as of June 30, 2004.

Transitional Small Business Disclosure Format: Yes __ No X

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PART I.

Item 1. FINANCIAL INFORMATION

ABAZIAS, INC.
BALANCE SHEET
June 30, 2004
(unaudited)

ASSETS
Current assets
Accounts receivable	$	89,032
Property & equipment, net		4,801
TOTAL ASSETS	$	93,833
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable	$	125,846
Note payable		8,000
Loans from stockholders		78,235
Total Current Liabilities		212,081
Commitments and Contingencies
Stockholders' Deficit
Common stock, $.001 par value, 150,000,000 shares
authorized, 74,937,109 issued and outstanding		74,937
Additional paid in capital		3,047,008
Accumulated deficit		(3,240,193	)
Total Stockholders' Deficit		(118,248	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	93,833

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ABAZIAS, INC.
STATEMENTS OF OPERATIONS
Three and Six Months Ended June 30, 2004 and 2003
(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
Sales	$	389,991		$	294,290		$	918,918		$	807,134
Cost of sales		351,494			265,737			839,922			765,467
Gross profit		38,497			28,553			78,996			41,667
General and administrative		247,410			40,620			1,081,679			60,759
Net operating loss		(208,913	)		(12,067	)		(1,002,683	)		(19,092	)
Interest expense		(1,504	)		--			(2,595	)		--
NET LOSS	$	(210,417	)	$	(12,067	)	$	(1,005,278	)	$	(19,092	)
Basic and diluted loss per share	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Weighted average
shares outstanding		74,154,472			1,000,000			72,421,505			1,000,000

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ABAZIAS, INC.
STATEMENTS OF CASH FLOW
Six Months Ended June 30, 2004 and 2003
(unaudited)

	2004			2003
Cash Flows From Operating Activities
Net loss	$	(1,005,278	)	$	(19,092	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Common stock issued for services		970,000			--
Imputed interest on stockholder loan		2,596			--
Depreciation		480			--
Changes in:
Accounts receivable		(72,932	)		3,367
Accounts payable		73,234			15,502
Accrued expenses		--			(6,272	)
Net Cash Provided (Used) In Operating Activities		(31,900	)		(6,495	)
Cash Flows From Financing Activities
Proceeds from note		--			3,045
Proceeds from stockholder loan		31,900			--
Payments on stockholder loans		--			(1,400	)
Dividends Paid		--			(4,196	)
Net Cash Provided (Used) By Financing Activities		31,900			(2,551	)
Net change in cash		--			(9,046	)
Cash at beginning of year		--			9,046
Cash at end of year

F-3

ABAZIAS, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)

NOTE 1 — SUMMARY OF ACCOUNTING POLICIES

The accompanying unaudited interim financial statements of Abazias, Inc., a Delaware corporation (“Abazias”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Abazias’ latest Annual Report filed with the SEC on Form 10-KSB. 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 which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year, 2003, as reported in Form 10-KSB, have been omitted.

NOTE 2 — COMMON STOCK

On February 3, 2004, 6,500,000 shares of common stock were issued to a consultant at a value of $780,000.

On April 21, 2004, 720,000 shares of common stock were issued to two consultants at a value of $36,000.

On May 21, 2004, 1,100,000 shares of common stock were issued to two consultants at a value of $154,000.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

Some of the statements contained in this Form 10-KSB that are not historical facts are “forward-looking statements” which can be identified by the use of terminology such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative or other variations, or by discussions of strategy that involve risks and uncertainties.  We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Form 10-KSB, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses.  No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events.  Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

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o Our ability to maintain, attract and integrate internal management, technical information and management information systems;

o Our ability to generate customer demand for our services;

o The intensity of competition; and

o General economic conditions.

All written and oral forward-looking statements made in connection with this Form 10-QSB that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Overview

We are an online retailer of high quality loose diamonds and fine jewelry settings for our diamonds. Our web site at www.abazias.com showcases over 60,000 diamonds almost all of which are independently certified and around 100 styles of fine jewelry, including rings, wedding bands, earrings, necklaces, and bracelets.

RESULTS OF OPERATIONS

Three and Six Months Ended June 30, 2004 and 2003

	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
Sales	$	389,991		$	294,290		$	918,918		$	807,134
Cost of sales		351,494			265,737			839,922			765,467
Gross profit		38,497			28,553			78,996			41,667
General and administrative		247,410			40,620			1,081,679			60,759
Net operating loss		(208,913	)		(12,067	)		(1,002,683	)		(19,092	)
Interest expense		(1,504	)		--			(2,595	)		--
NET LOSS	$	(210,417	)	$	(12,067	)	$	(1,005,278	)	$	(19,092	)

Three Ended June 30, 2004 and 2003

Our sales for the three months ended June 30, 2004 vs. three months ended June 30, 2003 increased 33% to $389,991 from $294,290 due to increase in diamond sales.

Our cost of sales for the three months ended June 30, 2004 vs. three months ended June 30, 2003 increased 32% to $351,494 from $265,737 due to increase in diamond sales.

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Our general and administrative expenses for the three months ended June 30, 2004 vs. three months ended June 30, 2003 increased 509% to $247,410 from $40,620 due primarily to expensing of stock issued to various management and consultants.

Our interest expense for the three months ended June 30, 2004 vs. three months ended June 30, 2003 increased to $1,504 due to an increase the loan from the major shareholder.

Accordingly, our net loss for the three months ended June 30, 2004 vs. three months ended June 30, 2003 increased 1,644% to $210,417 from $12,067 primarily due to the expensing of stock issued to various management and consultants.

Six Months Ended June 30, 2004 and 2003

Our sales for the six months ended June 30, 2004 vs. six months ended June 30, 2003 increased 14% to $918,918 from $807,134 due to increase in diamond sales.

Our cost of sales for the six months ended June 30, 2004 vs. six months ended June 30, 2003 increased 10% to $839,922 from $765,467 due to increase in diamond sales.

Our general and administrative expenses for the six months ended June 30, 2004 vs. six months ended June 30, 2003 increased 1,680% to $1,081,679 from $60,759 due primarily to expensing of stock issued to various management and consultants.

Our interest expense for the six months ended June 30, 2004 vs. six months ended June 30, 2003 increased to $2,595 due to an increase the loan from the major shareholder.

Accordingly, our net loss for the six months ended June 30, 2004 vs. six months ended June 30, 2003 increased 5,165% to $1,005,278 from $19,092 primarily due to the expensing of stock issued to various management and consultants.

Liquidity and Capital Resources

At June 30, 2004, we had an accumulated deficit of $3,240,193. We had no cash available as of July 31, 2004. We also had $89,032 of accounts receivable as of that date. Assuming we collect all receivables, we can continue operations for approximately 5 months if we do not have revenues. Thereafter, we will need to continue generating operating revenues or secure other funding on or before December 1st in the amount of $131,978 to remain operational until July 31, 2005. There are no preliminary or definitive agreements or understandings with any party for such financing. We cannot predict when, if ever, that will happen if necessary.

On August 5, 2003, Abazias issued a promissory note in the amount of $8,000. The note is due on demand, bears no interest and has no collateral.

The majority stockholder advances money to Abazias on an as-needed basis. The advances are due on demand, bear no interest and have no collateral. At June 30, 2003, the amount of the advance was $78,235.

As of June 30, 2004, we had $125,846 of trade accounts payable.

There are no long term commitments.

During 2003, one supplier provided 15% of total purchases. All other suppliers provided less than 10% of total purchases.

Our ability to continue as a going concern is dependent on our ability to raise funds to implement our planned development; however we may not be able to raise sufficient funds to do so. Our independent auditors have indicated that here is substantial doubt about our ability to continue as a going concern over the next twelve months. Our poor financial condition could inhibit our ability to achieve our business plan, because we are currently operating at a substantial loss with no operating history and revenues, an investor cannot determine if we will ever become profitable.

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Item 3. Controls and Procedures

The Corporation maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, the Corporation’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Corporation’s disclosure controls and procedures. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, the Corporation’s Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures are effective as of the end of the period covered by this report. There were no changes in the Corporation’s internal control over financial reporting that occurred during the Corporation’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

Item 2. Changes in Security

Not applicable.

Item 3. Default Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

(a)     Exhibits:

Exhibit No.        Document Description

31.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

31.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(b)     Form 8-K.

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SIGNATURES

In accordance with Section 12 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Abazias, Inc.


By: /s/ Oscar Rodriguez
Oscar Rodriguez
President and Director

By: /s/ Jesus Diaz
Jesus Diaz
Principal Financial Officer
Principal Accounting Officer

Dated: August 12, 2004

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