UNITED STATES
X...Quarterly report under section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2004.
....Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ____ to ____.
MID-AM SYSTEMS, INC.
(Name of small business in its charter)
| Delaware | 0-50001 | 52-2175894 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| P.O. Box 110310 Naples, Florida | 34108-0106 |
| (Address of Principal Executive Office) | (Zip Code) |
Issuer's telephone number: (239) 598-2300
5150 Tamiami Trail N., Ste. 202
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 ....
Applicable only to issuers involved in bankruptcy proceedings during the past five years.
Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ..... 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. At March 31, 2004, the following shares were outstanding: 8,870,040
Transitional Small Business Disclosure Format (Check one): Yes ..... No ..X..
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) The unaudited financial statements of registrant for the three months ended March 31, 2004, follow. The financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented.
| INDEX TO FINANCIAL STATEMENTS: | |
| Balance Sheet | |
| Statements of Operations | |
| Statements of Stockholders' Equity | |
| Statements of Cash Flows | |
| Notes to Financial Statements |
MID-AM SYSTEMS, INC.
MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET (UNAUDITED)
| March 31, | |
| ASSETS | 2004 |
| Current assets: | |
| Cash | $ - |
| Loans receivable | 610 |
| Total current assets | 610 |
| Total assets | $ 610 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |
| Current liabilities: | |
| Accounts payable | $ 250 |
| Loans payable | - |
| Total current liabilities | 250 |
| Stockholders' equity: | |
| Common stock, $.001 par value; 10,000,000 shares | |
| authorized, 8,870,040 shares issued and outstanding | 8,870 |
| Additional paid-in capital | 5,638 |
| Deficit accumulated during the development stage | (14,148) |
| Total stockholders' equity | 360 |
| Total liabilities and stockholders' equity | $ 610 |
See notes to unaudited financial statements.
MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS (UNAUDITED)
| March 31, | August 19, 1997 (date of inception) | ||||
| 2004 | 2003 | to March 31, 2004 | |||
| Revenues | $ - | $ - | $ - | ||
| Expenses: | |||||
| General and administrative | - | 735 | 13,928 | ||
| Net loss before taxes | - | (735) | (13,928) | ||
| Provision for income taxes | - | - | 220 | ||
| Net loss | $ - | $ (735) | $ (14,148) | ||
| Loss per share | $ .00 | $ (.00) | |||
| Weighted average common shares outstanding | 8,870,040 | 8,870,040 | |||
See notes to unaudited financial statements.
MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
FROM AUGUST 19, 1997 (DATE OF INCEPTION) TO MARCH 31, 2004
| Common Stock | |||||
| Additional | |||||
| Paid-In | Accumulated | ||||
| Shares | Amount | Capital | Deficit | Total | |
| Balance at August 19, 1997 (Date of Inception) | - | $- | $- | $- | $- |
| Common stock issued for cash | 670,610 | 671 | - | - | 671 |
| Net loss | - | - | - | (937) | (937) |
| Balance at December 31, 1997 | 670,610 | 671 | - | (937) | (266) |
| Net loss | - | - | - | (105) | (105) |
| Balance at December 31, 1998 | 670,610 | 671 | - | (1,042) | (371) |
| Common stock issued for cash | 2,043,180 | 2,043 | 1,832 | - | 3,875 |
| Net loss | - | - | - | (1,828) | (1,828) |
| Balance at December 31, 1999 | 2,713,790 | 2,714 | 1,832 | (2,870) | 1,676 |
| Common stock issued for cash | 48,250 | 48 | 3,806 | - | 3,854 |
| Net loss | - | - | - | (4,674) | (4,674) |
| Balance at December 31, 2000 | 2,762,040 | 2,762 | 5,638 | (7,544) | 856 |
| Common stock issued for cash | 2,240,000 | 2,240 | - | - | 2,240 |
| Net loss | - | - | - | (2,509) | (2,509) |
| Balance at December 31, 2001 | 5,002,040 | 5,002 | 5,638 | (10,053) | 587 |
| Common stock issued for cash | 3,868,000 | 3,868 | - | - | 3,868 |
| Net loss | - | - | - | (2,605) | (2,605) |
| Balance at December 31, 2002 | 8,870,040 | 8,870 | 5,638 | (12,658) | 1,850 |
| Net loss | - | - | - | (1,490) | (1,490) |
| Balance at December 31, 2003 | 8,870,040 | 8,870 | 5,638 | (14,148) | 360 |
| Net loss | - | - | - | - | - |
| Balance at March 31, 2004 | 8,870,040 | $8,870 | $5,638 | $(14,148) | $360 |
See notes to unaudited financial statements.
MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS (UNAUDITED)
| March 31, | August 19, 1997 (date of inception) | ||||
| 2004 | 2003 | to March 31, 2004 | |||
| Cash flows from operating activities: | |||||
| Net loss | $ - | $ (735) | $ (14,148) | ||
| Adjustments to reconcile net loss to net | |||||
| cash flows from operating activities: | |||||
| Changes in operating assets & liabilities | |||||
| Loan receivable | - | 555 | (610) | ||
| Loans payable | - | - | - | ||
| Accounts payable | - | 250 | 250 | ||
| Net cash flows from operating activities | - | 70 | (14,508) | ||
| Cash flows from financing activities: | |||||
| Issuance of common stock | - | - | 14,508 | ||
| Net cash flows from financing activities | - | - | 14,508 | ||
| Net change in cash | - | 70 | - | ||
| Cash at beginning of period | - | 2 | - | ||
| Cash at end of period | $ - | $ 72 | $ - | ||
See notes to unaudited financial statements.
MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2004 AND 2003
1. Summary of Significant Accounting Policies
Quarterly Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB but do not include all of the information and footnotes required by generally accepted accounting principles and should, therefore, be read in conjunction with the Company's 2003 financial statements in Form 10-KSB. These statements do include all normal recurring adjustments which the Company believes necessary for a fair presentation of the statements. The interim operating results are not necessarily indicative of the results for a full year.
Description of Business
Mid-Am Systems, Inc. (a development stage enterprise) (the Company) was formed on August 19, 1997. The Company's activities to date have been primarily directed towards the raising of capital and seeking business opportunities.
Estimates and Assumptions
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 and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Earnings Per Share
Basic earnings per common share are computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Due to net losses, potentially dilutive securities would be antidilutive and are therefore not included.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date.
There is no provision for income taxes due to continuing losses. At March 31, 2004, the Company has net operating loss carryforwards for tax purposes of approximately $14,000, which expire through 2023. The Company has recorded a valuation allowance that fully offsets deferred tax assets arising from net operating loss carryforwards because the likelihood of the realization of the benefit cannot be established. The Internal Revenue Code contains provisions that may limit the net operating loss carryforwards available if significant changes in stockholder ownership of the Company occur.
2. Going Concern
As shown in the consolidated financial statements, the Company has an accumulated deficit of $14,148 at March 31, 2004, and no cash. The Company has suffered losses from operations and has a substantial need for working capital. This raises substantial doubt about its ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. The Company is dependent on its existing shareholders to be able to continue as a going concern. The Company has indicated its intention to participate in one or more as yet unidentified business ventures, which management will select after reviewing the business opportunities for their profit or growth potential.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this report, including statements in the following discussion, which are not statements of historical fact, are what are known as "forward-looking statements," which are basically statements about the future. For that reason, these statements involve risk and uncertainty since no one can accurately predict the future. Words such as "plans," "intends," "will," "hopes," "seeks," "anticipates," "expects," and the like, often identify such forward-looking statements, but are not the only indication that a statement is a forward-looking statement. Such forward-looking statements include statements concerning our plans and objectives with respect to the present and future operations of the Company, and statements which express or imply that such present and future operations will or may produce revenues, income or profits. Numerous factors and future events could cause the Company to change such plans and objectives, or fail to successfully implement such plans or achieve such objectives, or cause such present and future operations to fail to produce revenues, income or profits.
Therefore, the reader is advised that the following discussion should be considered in light of the discussion of risks and other factors contained in this report on Form 10QSB and in the Company's other filings with the Securities and Exchange Commission. No statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results.
Liquidity and Capital Resources
As of March 31, 2004, the Company remains in the development stage. For the period ended March 31, 2004, the Company's balance sheet reflects current and total assets of $ 610, all of which is in the form of a loan receivable, and current liabilities of $ 250.
The Company does not have sufficient assets or capital resources to pay its on-going expenses while it is seeking out business opportunities, and it has no current plans to raise additional capital through sale of securities, or otherwise. As a result, although the Company has no agreement in place with its shareholders or other persons to pay expenses on its behalf, it is currently anticipated that the Company will rely on loans or additional capital contributions from shareholders or to pay expenses at least until it is able to consummate a business transaction.
Results of Operations
During the period from August 19, 1997 (inception) through March 31, 2004, the Company has engaged in no significant operations other than organizational activities, acquisition of capital and preparation and filing of its registration statement on Form 10-SB under the Securities Exchange Act of 1934, as amended, compliance with its periodical reporting requirements and initial efforts to locate a suitable merger or acquisition candidate. No revenues were received by the Company during this period.
The Company experienced a net loss of $ 0 for the three months ended March 31, 2004 compared with a loss of $ 735 for the same period last year. The Company does not expect to generate any revenue until it completes a business combination, but will continue to incur legal and accounting fees and other costs associated with compliance with its reporting obligations. As a result, the Company expects that it will continue to incur losses each quarter at least until it has completed a business combination. Depending upon the performance of any acquired business, the Company may continue to operate at a loss even following completion of a business combination.
Inflation
The Company believes that the impact of inflation and changing prices on its operations since commencement of operations has been negligible.
Seasonality
The Company does not deem its revenues to be seasonal and any effect would be immaterial.
Plan of Operations
For the fiscal year ending December 31, 2004, and for the succeeding twelve months, the Company expects to continue its efforts to locate a suitable business acquisition candidate and thereafter to complete a business acquisition transaction. The Company anticipates incurring a loss for the fiscal year as a result of expenses associated with compliance with the reporting requirements of the Securities Exchange Act of 1934, and expenses associated with locating and evaluating acquisition candidates. The Company does not expect to generate revenues until it completes a business acquisition, and, depending upon the performance of the acquired business, it may also continue to operate at a loss after completion of a business combination.
Need for Additional Financing
The Company will require additional capital in order to pay the costs associated with carrying out its plan of operations and the costs of compliance with its continuing reporting obligations under the Securities Exchange Act of 1934, as amended, for the fiscal year ending December 31, 2004 and thereafter. This additional capital will be required whether or not the Company is able to complete a business combination transaction during the current fiscal year. Furthermore, once a business combination is completed, the Company's needs for additional financing are likely to increase substantially.
No specific commitments to provide additional funds have been made by management or other stockholders, and the Company has no current plans, proposals, arrangements or understandings to raise additional capital through the sale or issuance of additional securities prior to the location of a merger or acquisition candidate. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover its expenses. Notwithstanding the foregoing, however, to the extent that additional funds are required, the Company anticipates receiving such funds in the form of loans or advancements from current shareholders without the issuance of additional shares or other securities, or through the private placement of restricted securities. In addition, in order to minimize the amount of additional cash which is required in order to carry out its business plan, the Company might seek to compensate certain service providers by issuances of stock in lieu of cash.
ITEM 3. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC reports. It should be noted that design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how
remote.
In addition, there has been no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-QSB REPORT REFLECT MANAGEMENT'S BEST JUDGMENT BASED UPON FACTORS CURRENTLY KNOWN AND INVOLVE RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY MATERIALLY
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits are filed herewith:
31.1 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) A current report on Form 8-K to announce a change in the registrant's certifying accountant was filed on March 29, 2004, with the Securities and Exchange Commission.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MID-AM SYSTEMS, INC.
By: /S/ COSMO PALMIERI
Cosmo Palmieri, President and a Director
By: /S/ JOSE ACEVEDO
Jose Acevedo, Secretary and a Director
By: /S/ MILTON POLLAND
Milton Polland, Director
Date: May 17, 2004
