U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the Quarterly
Period Ended January 31, 2004
Commission file number: 000-49896
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DOWNSIDE UP, INC.
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(Exact name of small business issuer as specified in its charter)
Colorado 84-1493157
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16200 WCR 18E, Loveland, Colorado 80537
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(Address of principal executive offices) (Zip Code)
970-635-0346
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(Issuer's telephone number)
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o (Former name, former address and former fiscal year,
if changed since last report)
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 ---- ----
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.
As of January 31, 2004, 1,230,000 shares of common stock, no par value, were outstanding.
1
AKID CORPORATION
TABLE OF CONTENTS
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Page
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed balance sheet, January 31, 2004 (Unaudited).......... 3
Condensed statements of operations (Unaudited) -
Three and nine months ended January 31, 2004 and 2003,
and for the period from April 9, 1998 (inception)
through January 31, 2004...................................... 4
Condensed statements of cash flows (Unaudited) - Nine
months ended January 31, 2004 and 2003, and for the
period from April 9, 1998 (inception) through January 31, 2004........................................................... 5
Notes to condensed financial statements (Unaudited)....... 6
Item 2. Plan of Operation................................. 7
Item 3. Controls and Procedures........................... 7
Part II Other Information.................................. 7
Item 1. Legal Proceedings
Item 2. Changes in 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 and Reports on Form 8-K
Signatures................................................. 8
2
Assets
Cash $ 2,938 Cash
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Liabilities and Shareholders Deficit
Current liabilities:
Accounts payable and accrued liabilities $ 350 AP
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Total current liabilities 350
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Shareholders deficit:
Common stock 2,673 CS
Additional paid-in capital 22,815 APIC
Deficit accumulated during the
development stage (22,900)
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Total shareholders deficit 2,588
$ 2,938
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3
<TABLE>
<S> <C> <C> <C>
April 9,
1998
(inception)
Three Months Ended Nine Months Ended Through
January 31, January 31, January 31,
2004 2003 2004 2003 2004
Costs and expenses: ------------------ ------------------ -----------
Stock-based compensation (Note 2):
Organization costs............. $ - $ - $ - $ - $ 500
Contributed rent (Note 2)........ 300 300 900 900 7,000 RentRP
Other general and administrative 600 - 2,000 - 8,539 SGA
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900 300 2,900 900 16,039
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Loss before income taxes and inter (900) (300) (2,900) (900) (16,039)
Interest income.................. - - - - 116 Othinc
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Loss before
income taxes.............. (900) 300) (2,900) (900) (15,923)
Income tax provision (Note 3).... - - - - Tax
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Net loss .................$ (900) $ (300) $ (2,900) $ (900) $(15,923)
========= ========= ========= ========= =========
Basic and diluted loss per share.$ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted average common shares ========= ========= ========= =========
outstanding 1,230,000 1,230,000 1,230,000 1,230,000
========= ========= ========= =========
</TABLE>
4
<TABLE>
April 9, 1998
(inception)
Nine Months Ended Through
January 31, January 31,
2004 2003 2004
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Net cash used in operating activities $ - $ - $ (2,172)
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Cash flows from financing activities:
Proceeds from sale of common stock,
net of offering costs............. - - 2,172
Net cash provided by
financing activities....... - - 2,172
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Net change in cash........... - - -
Cash:
Beginning of period................ - - -
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End of period...................... $ - $ - $ -
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Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes...................... $ - $ - $ -
======= ======== ==========
Interest.......................... $ - $ - $ -
======= ======== ==========
</TABLE>
5
Part I - Item 2. Plan of Operation
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The Company's plan of operation is to seek out, investigate, and pursue a merger, acquisition, or other business combination with an entity desiring the perceived benefits of offered by the Company as a result of its having a class of securities registered under the Securities Exchange Act. There have been no revenues from operations since inception, and none are anticipated prior to completing a business combination. The Company has one part time employee, incurs minimal rent and administrative expenses, and has no other recurring operational expenses except professional fees incurred as necessary. The Company's president devotes time as required to the affairs of the Company.
The Company has been operating on working capital contributed by the Company's president. There is no assurance that the Company's president will continue to provide working capital.
To date, the Company has not identified a suitable target entity for any type of business combination, and management has no particular type of merger, acquisition, or business opportunity in mind. No restrictions have been placed on management's discretion to seek out and participate in an appropriate business opportunity. Due to financial resources, it is anticipated that only a single potential business venture will be pursued.
Selection of an appropriate business opportunity is complex and risky due to the Company's limited financial resources, the speculative nature of operations, management's limited time commitment to the Company, management's potential conflicts of interest, the burdens of being a reporting company, lack of market research, and competition in the marketplace.
The Company's success is dependent upon consummating a business combination and there are no assurances that this will occur.
Part I - Item 3. Controls and Procedures
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(a) Evaluation of disclosure controls and procedures
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We maintain controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit 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, our chief executive officer and principal financial officer has concluded that our disclosure controls and procedures were adequate.
(b) Changes in internal controls
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There were no significant changes in our 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.
Part II - Other Information
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Items 1 through 5
No response required.
Item 6: Exhibits and Reports on Form 8-K
(a). Exhibits:
1. 31: Certification
2. 32: Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer and Principal Financial Officer
(b) Reports on Form 8-K
None.
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.
Downside Up, Inc.
Date: March 9, 2004 By: /s/ James B. Wiegand
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James B. Wiegand,
President/Secretary
