UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 June 30, 2005
OR
| [_] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to ________
Commission File No. 000-50366
(Exact name of Registrant as specified in its charter)
Nevada | 94-3409449 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
| | |
| 210 Mountain Park Blvd. SW, Ste F204 | |
Issaquah, WA | 98027 |
| (Address of principal executive offices) | (Zip/Postal Code) |
(425) 557-6622
(Telephone Number)
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 period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date. There were 4,020,000 common stock shares, par value $0.001, as of August 12, 2005.
TABLE OF CONTENTS
| PART I. | FINANCIAL INFORMATION | | 4 |
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| Item 1 | Financial Statements | | 4 |
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| | Condensed Balance Sheets (Unaudited) -June 30, 2005 and December 31, 2004 | | 4 |
| | | | |
| | Condensed Statements of Operations for the Three and Six Months Ended June 30, 2005 and 2004 and for the Period from October 12, 2001( Date of Inception) through June 30, 2005 (Unaudited) | | 5 |
| | | | |
| | Condensed Statements of Cash Flows for the Six Months Ended June 30, 2005 and 2004 and for the Period from October 12, 2001 (Date of Inception) through June 30, 2005 (Unaudited) | | 6 |
| | | | |
| | Notes to Condensed Financial Statements (Unaudited) | | 7 |
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| Item 2 | Plan of Operation | | 8 |
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| Item 3 | Controls and Procedures | | 10 |
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| PART II | OTHER INFORMATION | | 11 |
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| Item 1 | Legal Proceedings | | 11 |
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| Item 2 | Changes in Securities and Small Business Issuer Purchases of Equity Security | | 11 |
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| Item 3 | Defaults Upon Senior Securities | | 11 |
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| Item 4 | Submission of Matters to a Vote of Security Holders | | 11 |
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| Item 5 | Other Information | | 11 |
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| Item 6 | Exhibits and Reports on Form 8-K | | 11 |
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| Signature | | 12 |
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Report contains forward-looking statements. Such forward-looking statements are generally accompanied by words such as "intends," "projects," "strategies," "believes," "anticipates," "plans," and similar terms that convey the uncertainty of future events or outcomes. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in ITEM 2 of this Report, the section entitled "MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION." Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof and are in all cases subject to the Company's ability to cure its current liquidity problems. There is no assurance that the Company will be able to generate sufficient revenues from its current business activities to meet day-to-day operation liabilities or to pursue the business objectives discussed herein.
The forward-looking statements contained in this Report also may be impacted by future economic conditions. Any adverse effect on general economic conditions and consumer confidence may adversely affect the business of the Company.
Conscious Intention, Inc. undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including without limitation those identified in the "Risk Factors" section of the Company's Registration Statement filed with the Securities and Exchange Commission (the "SEC") on May 14, 2003 on Form SB-2/A.
(A Development Stage Enterprise)
CONDENSED BALANCE SHEETS (UNAUDITED)
| | | June 30, 2005 | | December 31, 2004 | |
ASSETS | | | | | |
| | | | | | |
Current Assets | | | | | |
| Cash | | $ | - | | $ | - | |
Total Current Assets | | | - | | | - | |
| | | | | | | | |
Total Assets | | $ | - | | $ | - | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | |
| | | | | | | | |
Current Liabilities | | | | | | | |
| Funds drawn in excess of cash in bank | | $ | - | | $ | 2 | |
| Accounts payable | | | 34,038 | | | 39,330 | |
| Payable to related parties | | | 17,810 | | | 7,810 | |
| | | | | | | | |
Total Current Liabilities | | | 51,848 | | | 47,142 | |
| | | | | | | | |
Stockholders’ Deficit | | | | | | | |
| Common stock - $0.001 par value; 10,000,000 shares authorized; 4,020,000 and 4,020,000 shares issued and outstanding | | | 4,020 | | | 4,020 | |
| Additional paid-in capital | | | 9,980 | | | 9,980 | |
| Deficit accumulated during the development stage | | | (65,848 | ) | | (61,142 | ) |
| | | | | | | | |
Total Stockholders’ Deficit | | | (51,848 | ) | | (47,142 | ) |
| | | | | | | | |
Total Liabilities and Stockholders’ Deficit | | $ | - | | $ | - | |
The accompanying notes are an integral part of these condensed financial statements
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
| | | For the Three Months Ended June 30, | | For the Six Months Ended June 30, | | For the Cumulative Period from October 12, 2001 (Date of Inception through June 30, | |
| | | 2005 | | 2004 | | 2005 | | 2004 | | 2005 | |
| | | | | | | | | | | | |
Revenue | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
| | | | | | | | | | | | | | | | | |
General and administrative expenses | | | (4,126 | ) | | (2,320 | ) | | (4,706 | ) | | (4,707 | ) | | (65,878 | ) |
| | | | | | | | | | | | | | | | | |
Interest Income | | | - | | | - | | | - | | | - | | | 30 | |
| | | | | | | | | | | | | | | | | |
Net Loss | | $ | (4,126 | ) | $ | (2,320 | ) | $ | (4,706 | ) | $ | (4,707 | ) | $ | (65,848 | ) |
| | | | | | | | | | | | | | | | | |
Loss Per Share | | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | | | |
| | | | | | | | | | | | | | | | | |
Weighted Average Number of Shares Outstanding | | | 4,020,000 | | | 4,020,000 | | | 4,020,000 | | | 4,020,000 | | | | |
The accompanying notes are an integral part of these condensed financial statements
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
| | | For the Six Months Ended June 30, | | For the Cumulative Period From October 12, 2001 (Date of Inception) through June 30, | |
| | | 2005 | | 2004 | | 2005 | |
Cash Flows from Operating Activities | | | | | | | |
| Net loss | | $ | (4,706 | ) | $ | (4,707 | ) | $ | (65,848 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | | | | |
| Change in assets and liabilities: | | | | | | | | | | |
| Deferred offering costs | | | - | | | - | | | 23,844 | |
| Funds drawn in excess of cash in bank | | | (2 | ) | | - | | | - | |
| Accounts payable | | | (5,292 | ) | | (2,341 | ) | | 10,194 | |
Net Cash Used in Operating Activities | | | (10,000 | ) | | (7,048 | ) | | (31,810 | ) |
| | | | | | | | | | | |
Cash Flows From Investing Activities | | | - | | | - | | | - | |
| | | | | | | | | | | |
Cash Flows From Financing Activities | | | | | | | | | | |
| Increase in receivable from related party | | | - | | | - | | | (1,690 | ) |
| Proceeds from receivable from related party | | | - | | | - | | | 1,690 | |
| Proceeds from payable to related party | | | (10,000 | ) | | 7,000 | | | 22,510 | |
| Payments on payable to related party | | | - | | | - | | | (4,700 | ) |
| Proceeds from issuance of common stock | | | - | | | - | | | 14,000 | |
Net Cash Provided by Financing Activities | | | (10,000 | ) | | 7,000 | | | 1,810 | |
| | | | | | | | | | | |
Net Increase (Decrease) in Cash | | | - | | | (48 | ) | | - | |
| | | | | | | | | | | |
Cash at Beginning of period | | | - | | | 88 | | | - | |
| | | | | | | | | | | |
Cash at End of Period | | $ | - | | $ | 40 | | $ | - | |
The accompanying notes are an integral part of these condensed financial statements
Interim Financial Statements — The accompanying unaudited financial statements have been condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company’s annual financial statements included in the Company’s December 31, 2004 Annual Report on Form 10-KSB. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented have been included in the accompanying condensed financial statements and consist of only normal recurring adjustments. The results of operations for the six months ended June 30, 2005 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2005.
Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts in the financial statements and the accompanying notes. Actual results could differ from those estimates.
Business Condition — The Company has not yet been able to execute its business plan. As a result, the Company has negative working capital, negative equity, and recurring operating losses and negative cash flows from operations since inception. This situation raises substantial doubt about its ability to continue as a going concern. The Company plans to fund its operations by any of the following: issue debt securities, issue equity securities, or loans from related parties. Success in these efforts is not assured. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
NOTE 2 - RELATED PARTY TRANSACTIONS
During 2005 and 2004, the Company received $10,000 and $7,000, respectively, advance from an officer of the Company. The advances are non-interest bearing and repayment terms have not been determined.
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements.
Overview
Conscious Intention is a development stage company. From inception through June 30, 2005, the Company was engaged in the business of developing executive coaching support materials to be sold on line. We believed that this plan would provide a needed resource for coaches and we had great hopes for realizing this vision, hopes which required financing. Although we made efforts toward obtaining financing, we were never able to obtain sufficient financing to develop our product line. Because our chief executive officer has concluded that further efforts to seek financing for the executive coaching business would not be fruitful, she decided to abandon this business line. The Company has ceased to explore this business line as of June 30, 2005 and currently has no business and no assets, other than the plan to seek a business combination that might benefit shareholders.
Conscious Intention's principal products and services
Conscious Intention is not currently providing any products or services. The Company has no present intention to provide any product or service.
Distribution and marketing methods
The Company does not distribute or market any products or services.
Status of products and services
The Company has never completed any products or services and has no present intention to do so.
Business Combination
We are actively evaluating opportunities for growth through a business combination. There can be no assurance that, even if we desired such a business combination, it would be available under suitable terms and conditions.
Revenues
Conscious Intention has derived no revenue to date. The Company has no plans to develop revenues other than through a business combination.
Sales and marketing.
We do not expect to spend any money on sales or marketing in the foreseeable future. We did not spend any money on sales and marketing during the six months ended June 30, 2005.
General and administrative.
General and administrative expenses were $4,126 during the three months ended June 30, 2005 and $2,320 during the three months ending June 30, 2004.
Financial Condition
For the three-month period ended June 30, 2005, Conscious Intention had a net loss of $4,126 while for the period ended June 30, 2004, the Company had a net loss of $2,320. Also, for the period ended June 30, 2005, the Company had a working capital deficit of $51,848 while for the period ended December 31, 2004, the Company had a working capital deficit of $47,142.
Conscious Intention's current financial condition makes it impossible to commence operations of any kind until a suitable business combination is discovered.
Liquidity and capital resources
Net cash used in operating activities for the three-month period ended June 30, 2005 and 2004 was $10,000 and $7,048 respectively. As of June 30, 2005, we had no cash. Net cash used in operating activities was zero due to the cessation of our business efforts.
Net cash provided by financing activities was $0 for the three-month period ended June 30, 2005. Net cash provided by financing activities was $7,000 for the period ended June 30, 2004.
As of June 30, 2005 our principal commitments consisted of our obligations outstanding under accounts payable and our notes payable to related parties. We have no material commitments for capital expenditures. We expect no significant capital expenditures or lease commitments during the next fiscal quarter.
We believe that our current cash balances, including cash and cash equivalents, are insufficient to meet our working capital and capital expenditure requirements. We have exhausted all of our working capital. We will need to receive an infusion of capital from our chief executive officer or receive funding from another source in order to continue to seek a business combination.
We need to secure additional cash as soon as possible. We have no current plan to find such cash other than through a business combination or loans from our chief executive officer or shareholders, which cannot be assured.
Conscious Intention's short-term prospects are challenging considering our lack of financial resources. Management has substantial doubt about its ability to maintain even the presently minimal level of operations should the liquidity situation not improve. Without raising any additional cash or achieving a business combination, Conscious Intention's short-term and long-term prospects for growth and survival are minimal.
Cash requirements
Presently, without additional cash, we will not be able to continue operations. We have exhausted all of our working capital. Our continued operation is therefore dependent upon our ability to secure additional cash. We need to raise additional funds as soon as practicable, through the sale of debt securities in the company. We presently have no arrangements or understandings with any investors or potential investors with respect to an investment in Conscious Intention. We have not decided at what price or under what terms we will raise such additional funds. We are actively seeking a business combination as a source of funds, though no assurance can be given that we will be successful in finding such a combination.
Research and development
We have no present intention to spend any money on research and development over the next 12 months.
Property and equipment
We currently have an office in Issaquah, Washington. We believe our currently available space should be sufficient for our needs for the next twelve months.
Employees
We have no current plans to hire any additional employees. We believe our revenue and growth will be derived through a business combination, if such a combination occurs.
(a) The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed within 90 days of the filing date of this report, the chief executive officer and the principal financial officer of the Company concluded that the Company's disclosure controls and procedures were adequate.
(b) Changes in internal controls. The Company made no significant changes in its internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the chief executive officer and principal financial officer.
OTHER INFORMATION
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
| LIST OF EXHIBITS |
| | | |
| | List of Exhibits |
| | | |
| | 3.1 | Articles of Incorporation of registrant as filed previously with the Commission on Form SB-2, dated April 12, 2002. |
| | | |
| | 3.2 | Bylaws of registrant as filed previously with the Commission on Form SB-2, dated April 12, 2002. |
| | | |
| | 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 |
| | | |
| | 32.1 | Certification of the Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| | | |
| | | |
| (b) | REPORTS ON FORM 8-K |
The following reports on Form 8-K were filed by the Company during the fiscal quarter ended June 30, 2005:
None
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.
Conscious Intention, Inc.
/s/ Sylva Leduc
Sylva Leduc
Chief Executive Officer
(Duly Authorized Officer and Principal Financial and Accounting Officer)
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Sylva Leduc
Sylva Leduc
Chief Executive Officer
(Duly Authorized Officer and Principal Financial and Accounting Officer)
Dated: August 12, 2005
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