SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended – March 31, 2004
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Guideline Capital, Inc.
(Exact name of registrant as it appears in its charter)
000-32127
Commission File Number)
NEVADA | 86-1004672 |
1607 N.E. 41st Avenue, Portland, Oregon 97232
(Address of Principal Executive Office)
(800) 482-5316
Registrant's telephone number, including area code
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (b) of the Act: Class A Common Stock $0.001 Par Value
Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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
At the end of the quarter ending March 31, 2004 there were 39,250,000 issued and outstanding shares of the registrant’s common stock.
There is no active market for the registrant's securities.
<Page>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GUIDELINE CAPITAL, INC.
(A Development Stage Enterprise)
Consolidated Balance Sheets
March 31, 2004 | December 31, 2003 | |
Assets | ||
Current assets – Cash | $ 245 | $ 245 |
Marketing rights | 100,000 | 100,000 |
$ 100,245 | $100,245 | |
LIABILITIES AND NET CAPITAL DEFICIENCY | ||
Current liabilities - accounts payable | $ 111,142 | $ 111,142 |
Payable to related parties | 6,600 | 6,600 |
Net capital deficiency: | ||
Common stock; $.001 par value; authorized 50,000,000 shares; issued and outstanding 39,250,000 |
|
|
Additional paid-in capital | 53,637 | 53,637 |
Deficit accumulated during development stage | (110,384) | (110,384) |
Net capital deficiency | (17,497) | (17,497) |
$ 100,245 | $ 100,245 |
See accompanying notes.
<Page>
GUIDELINE CAPITAL, INC.
(A Development State Enterprise)
Consolidated Statement of Operations
Three months ended | |||
|
| Cumulative activity during development stage August 17, 2000 (inception) through | |
Operating Expenses | $ - | $ 3,723 | $ 110,384 |
Net loss from operations | - | (3,723) | (110,384) |
Provision for income taxes | - | - | - |
Net loss | $ - | $ (3,723) | $(110,384) |
Net loss per share | $ - | $ (.000) | $ (.007) |
See accompany notes.
<Page>
GUIDELINE CAPITAL, INC.
(A Development State Enterprise)
Consolidated Statement of Cash Flows
Three months ended | |||
|
|
| |
Cash flows from operating activities: | |||
Net loss | $ - | $ (3,723) | $(110,384) |
Adjustment to reconcile net loss to net cash used for by operating activities: | |||
Common stock issued in exchange for services | - | - | 61,250 |
Negative goodwill | - | - | 19,000 |
Increase in accounts payable | - | 2,361 | 11,142 |
- | (2,361) | (18,992) | |
Cash flows from financing activities: | |||
Expenses paid by stockholder | - | 2,361 | 12,637 |
Advances from related parties | - | - | 6,600 |
245 | 2,361 | 19,237 | |
Net increase in cash | - | - | 245 |
Cash at beginning of period | 245 | - | - |
Cash at end of period | $ 245 | $ - | $ 245 |
Supplemental schedule of non-cash investing and financing activities - | |||
Common stock exchanged for subsidiaries | $ - | $ - | $ 19,000 |
See accompanying notes.
<Page>
GUIDELINE CAPITAL, INC.
(A Development State Enterprise)
Notes to Consolidated Financial Statements
March 31, 2004
1. Summary of Significant Accounting Policies
Company: Guideline Capital, Inc. (“Guideline” or collectively the “Company”), was incorporated under the laws of the State of Nevada on August 17, 2000. The Company is currently involved with seeking a company or companies that it can acquire or with whom it can merge.
Basis of consolidation: The consolidated financial statements include the accounts of Guideline and its 100% owned subsidiaries On Guard Systems, Inc. (“On Guard”) since its acquisition on June 23, 2003 and The Arches Group, Inc. (the “Arches Group”) since its acquisition on July 24, 2003. All intercompany accounts and transactions have been eliminated.
Development stage enterprise: Since inception, the Company has not commenced any formal business operations. The Company is considered to be in the development stage and therefore has adopted the accounting and reporting standards of Statement of Financial Accounting Standards No. 7, “Accounting and Reporting by Development Stage Enterprises”.
Interim reporting: The Company’s year-end for accounting and tax purposes is December 31. The accompanying unaudited interim financial statements have been prepared by the Company, in accordance with U.S. generally accepted accounting principles pursuant to Regulation S-B of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. Accordingly, these interim financial statements should be read in conjunction with the Company’s financial statements and related notes as contained in U.S. Securities and Exchange Commission Form 10-KSB for the year ended December 31, 2002. In the opinion of Management, the accompanying financial statements as of March 31, 2003 and for the three and nine months ended March 31, 2003 and 2002 contain all adjustments, consisting of only normal recurring adjustments, except as noted elsewhere in the notes to the financial statements, necessary to present fairly its financial position, results of its operations and cash flows. The results of operations for the three and nine months ended March 31, 2003 and 2002 are not necessarily indicative of the results to be expected for the full year.
Cash equivalents: For purposes of the statement of cash flows, cash equivalents include all highly liquid investments purchased with original maturities of three months or less.
Marketing rights: Marketing rights consist of a license to marketing electric energy products and will be amortized on the straight-line method over the estimated useful life of the rights when marketing activities begin.
<Page>
GUIDELINE CAPITAL, INC.
(A Development State Enterprise)
Notes to Consolidated Financial Statements
March 31, 2004
Impairment of long-lived assets: The Company assesses the recoverability of long-lived assets by determining whether the amortization of the asset’s balance over its remaining life can be recovered through projected undiscounted future cash flows. The amount of impairment, if any, is measured based on fair value and charged to operations in the period in which the impairment is determined by management.
Stock options and warrants: The Company accounts for stock based compensation to employees using the fair value method of accounting. The Company also accounts for stock options and warrants issued to non-employees for services using the fair value method of accounting.
Income taxes: The Company files a consolidated tax return that includes Guideline and On Guard. The Arches Group files a separate tax return. The consolidated tax liability of Guideline and On Guard, determined without taking credits into account, is allocated based on each company’s contribution to consolidated taxable income. Tax credits are allocated to Guideline and On Guard on a pro rata basis equal to each company’s contribution to the consolidated tax credits determined to be available each year.
Income taxes are provided on the liability method whereby deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases and reported amounts of assets and liabilities. Deferred tax assets and liabilities are computed using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides a valuation allowance for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
Net income (loss) per share: Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during the period. The weighted average number of shares outstanding was 39,250,000 for the three months ended March 31, 2004; 10,250,000 for the three months ended March 31, 2003; and 15,987,339 for the cumulative period from August 17, 2000 (inception) through March 31, 2004.
Reporting comprehensive income (loss): The Company reports and displays comprehensive income (loss) and its components as separate amounts in the financial statements with the same prominence as other financial statements. Comprehensive income (loss) includes all changes in equity during the period that results from recognized transactions and other economic events other than transactions with owners. There were no comprehensive income items to report for the three months ended March 31, 2004 and 2003 and for the cumulative period from August 17, 2000 (inception) through March 31, 2004.
<Page>GUIDELINE CAPITAL, INC.
(A Development State Enterprise)
Notes to Consolidated Financial Statements
March 31, 2004
Use of estimates: 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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
2. Payable to related parties
Since inception related parties have paid expenses on behalf of the Company. The advances are non-interest bearing and due on demand; however, these individuals have agreed not to demand repayment until cash is available from a merger, capital stock exchange, asset acquisition, or other business combination, or from operations.
<Page>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
Results of Operations
The Company has had no operations during this quarter.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of matters To a Vote of Security Holders
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports.
(a) EXHIBITS.
EXHIBIT NUMBER | DESCRIPTION | LOCATION |
3.1 | Articles of Incorporation | Incorporated by reference to 3.1 to the Registrant's Form 10-SB Registration |
3.2 | Bylaws | Incorporated by reference to 3.2 to the Registrant's Form 10-SB Registration |
31 | Rule 15d-14(a) | Attached |
32 | Rule 1350 | Attached |
REPORTS ON FORM 8-K.
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunder duly authorized.
GUIDELINE CAPITAL, INC. | |
Dated: June 23, 2004 | By: /s/ Ernest J. Wesson |
I, Ernest J. Wesson, certify that:
1. I have reviewed this quarterly report on Form 10Q-SB of Guideline Capital, Inc;
2. Based on my knowledge, this report does not contain any untrue statement of 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or person performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial date and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there are significant changes in internal controls or other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Dated: June 23, 2004 | By: /s/ Ernest J. Wesson |
Statement of Chief Executive Officer Regarding
Facts and Circumstances Relating to Exchange Act Filings
I, Ernest J. Wesson, state and certify as follows:
The financial statements filed with the report on Form 10-QSB for the period ended March 31, 2004 fully comply with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934 and that the information contained in said periodic report fairly presents, in all material respects, the financial condition and results of operations of Guideline Capital, Inc.
This Statement is submitted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Dated: June 23, 2004 | By: /s/ Ernest J. Wesson |
