UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 MARCH 31, 2004.
¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________________ TO ________________ .
COMMISSION FILE NUMBER: 000-49924
CENTRO SERVICES INC.
(Exact name of small business issuer as specified in its charter)
| NEVADA | 88-0513395 | |
| (State or other jurisdiction of | (IRS Employer | |
| incorporation or organization) | Identification No.) |
C/o Resident Agents of Nevada
Suite 4-711 S. Carson, Carson City, Nevada 89701
(Address or principal executive offices)
(775) 882-4641
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act: Common Stock, $0.001 Par Value.
Indicate by check mark whether the Registrant (1) had filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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 ¨
As of March 31, 2004, the Registrant had 4,526,000 shares of common stock issued and outstanding. Transitional Small Business Disclosure Format (check one) Yes ¨ No x
TABLE OF CONTENTS
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CENTRO SERVICES INC.
(A Development Stage Company)
BALANCE SHEET
(unaudited)
| March 31, 2004 $ | December 31, | |||||
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash | 683 | 707 | ||||
| LONG TERM | ||||||
| Incorporation and start up costs | ||||||
| 683 | 707 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| CURRENT LIABILITIES | ||||||
| Accounts Payable | 650 | 0 | ||||
| Advances from Shareholders | 12 | 12 | ||||
| Contingencies (Note 1) | ||||||
| STOCKHOLDERS’ EQUITY (CAPITAL DEFICIENCY) | ||||||
| Capital Stock | ||||||
| Common Stock, par value of $.001 each | ||||||
| 100,000,000 shares authorized | ||||||
| 4,526,000 issued and outstanding | 4,526 | 4,526 | ||||
| Deficit accumulated during development stage | (4,505 | ) | (3,831 | ) | ||
| 21 | 695 | |||||
| 683 | 707 |
The accompanying notes are an integral part of these interim financial statements.
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CENTRO SERVICES INC.
(A Development Stage Company)
INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended March 31, 2004 | Three Months Ended March 31, 2003 | |||||
| GENERAL AND ADMINISTRATIVE EXPENSES | ||||||
| Bank Charges | $ | 24 | $ | 19 | ||
| Accounting and filing costs | 650 | 732 | ||||
| NET LOSS FOR THE | ||||||
| PERIOD | $ | 674 | $ | 751 | ||
| BASIC NET LOSS | ||||||
| PER SHARE | $ | 0.00 | $ | 0.00 | ||
| WEIGHTED AVERAGE | ||||||
| COMMON SHARES | ||||||
| OUTSTANDING | 4,526,000 | 4,526,000 |
The accompanying notes are an integral part of these interim financial statements.
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CENTRO SERVICES INC.
(A Development Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, 2004 | Three Months Ended March 31, 2003 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| Net loss for the period | $ | (674 | ) | $ | (751 | ) |
| Increase in Accounts Payable | (650 | ) | (732 | ) | ||
| NET CASH USED IN | ||||||
| OPERATING ACTIVITIES | (24 | ) | (19 | ) | ||
| CASH USED IN INVESTING ACTIVITIES | ||||||
| Incorporation and filing costs | 0 | 0 | ||||
| CASH FLOWS FROM | ||||||
| FINANCING ACTIVITIES | ||||||
| Advances from shareholder | 0 | 0 | ||||
| Common shares issued | 0 | 0 | ||||
| NET CASH FLOWS | ||||||
| FROM FINANCING ACTIVITES | 0 | 0 | ||||
| INCREASE (DECREASE) | ||||||
| IN CASH | (24 | ) | (19 | ) | ||
| CASH, BEGINNING OF | ||||||
| PERIOD | 707 | 2,132 | ||||
| CASH, END OF PERIOD | $ | 683 | $ | 2,113 |
The accompanying notes are an integral part of these interim financial statements
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Centro Services Inc.
(A Development Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
The Company was incorporated on November 21, 2001 in the State of Nevada. To date the Company has had no business operations and was organized for the purpose of creating a corporate vehicle to locate and acquire an operating business. The ability of the Company to continue as a going concern is dependent on raising capital to acquire a business venture.
On July 17, 2002, the Company completed a Form 10SB registration (“10SB”) with the United States Securities and Exchange Commission (“SEC”) and as a result is subject to the regulations governing reporting issuers in the United States.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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| (a)Cash and Cash Equivalents | |
| The Company considers all highly liquid investments with original maturities of 90 days or less at the date of acquisition to be cash equivalents. | |
| (b)Intangible Assets | |
| Incorporation costs are expensed during the period that the costs are incurred. | |
| (c)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, the disclosure of contingent assets and liabilities at the financial statement date, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |
| (d)Foreign Currency Translation | |
| These financial are presented in United States dollars. In accordance with Statement of Financial Accounting Standards No. 52, foreign denominated monetary assets and liabilities are translated to their U.S. dollar equivalents using the exchange rate in effect at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the year. Related translation adjustments are reported as a separate component of stockholder's equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations. | |
| (e)Fair Value of Financial Instruments | |
| In accordance with the requirements of SFAS No. 107, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair market value of financial instruments classified as current assets or liabilities, including cash and cash equivalents and accounts payable, approximate their carrying values due to the short-term maturity of the instruments. | |
| (f)Net Loss per Common Share | |
| Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution by securities that could share in the earnings of the Company. Because the Company has not issued any potentially dilutive securities, only basic loss per share is reported on the Statements of Operations and Accumulated Deficit. |
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NOTE 3- RELATED PARTY TRANSACTIONS
A certain director has provided a cash advance totalling $12 at March 31, 2004. Amounts due from related parties are non-interest bearing and have no specific terms of repayment.
NOTE 4 –AMENDED DECEMBER 31, 2002 FINANICAL STATEMENTS
The December 31, 2003 Financial Statements were amended to reflect the change in recognition of incorporation costs as a period expense ($2,082) rather than capitalizing as an intangible long term asset.
STOCK BASED COMPENSATION
The Company has not granted or paid any stock based compensation.
Recent Accounting Pronouncements
In April 2003, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities," effective for contracts entered into or modified after September 30, 2003. This amendment clarifies when a contract meets the characteristics of a derivate, clarifies when a derivative contains a financing component and amends certain other existing pronouncements. The Company believes the adoption of the SFAS No. 149 will not have a material effect on the Company's financial statements.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. SFAS No. 150 requires the classification as a liability of any financial instruments with a mandatory redemption feature, an obligation to repurchase equity shares, or a conditional obligation based on the issuance of a variable number of its equity shares. The Company believes the adoption of SFAS No. 150 will not have a material effect on the Company's financial statements.
In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46). FIN 46 states that companies that have exposure to the economic risks and potential rewards from another entity's assets and activities have a controlling financial interest in a variable interest entity and should consolidate the entity, despite the absence of clear control through a voting equity interest. The consolidation requirements apply to all variable interest equities created after January 31, 2003. For variable interest entities that existed prior to February 1, 2003, the consolidation requirements are effective for annual or interim periods beginning after June 15, 2003. Disclosure of significant variable interest entities is required in all financial statements issued after January 31, 2003, regardless of when the variable interest was created. The Company does not expect the adoption of FIN 46 to have a material impact on its financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the Company's consolidated financial statements and the notes thereto. The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future.
Forward Looking Statements
The information in this discussion may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding the Company's capital needs, business strategy and expectations. Any statements that are not of historical fact may be deemed to be forward-looking statements. These forward-looking statements involve substantial risks and uncertainties. In some cases you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," or "continue", the negative of the terms or other comparable
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terminology. Forward-looking statements in this Report also include references to anticipated sales volume and product margins, efforts aimed at establishing new or improving existing relationships with customers, other business development activities, anticipated financial performance, business prospects and similar matters. Actual events or results may differ materially from the anticipated results or other expectations expressed in the forward-looking statements. In evaluating these statements, you should consider various factors, including the risks included from time to time in other reports or registration statements filed materially from any forward-looking statements. The Company disclaims any obligation to publicly update these statements, or disclose any difference between actual results and those reflected in these statements. Such information constitutes harbor for forward-looking statements. However, the company, as a penny stock company, cannot claim this safe harbor.
Critical Accounting Policies
We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest impact on our financial statements, so we consider these to be our critical accounting policies. Because of the uncertainty inherent in these matters, actual results could differ from the estimates we used in applying the critical accounting policies. Within the context of these critical accounting policies, we are not currently aware of any reasonably likely event that would result in materially different amounts being reported.
Results of Operations.
On July 17, 2002 the Registrant completed a Form 10SB registration with the United States Securities and Exchange Commission. As such the Registrant is subject to the regulations governing reporting issuers in the United States.
To date the Registrant has had no business operations and was organized for the purpose of creating a corporate vehicle to locate and acquire an operating business entity.
For the three months ended March 31, 2004 the Registrant incurred bank charges of $24 (March 31, 2003 - $19).
For the three months ended March 31 30, 2004 the Registrant had a net loss of $674 or 0.00 cents per share (March 31, 2003 - $751).
Liquidity and Capital Resources
During the three months ended March 31, 2004 the Registrant used $0 in cash for investing activities. As at March 31, 2004 the Registrant had $683 cash in the bank (December 31, 2003 - $707).
As the Registrant does not currently engage in any business activities that provide any cash flow, the Registrant is dependant on the Registrant raising capital or receiving loans from management in order to meet the costs of identifying, investigating and analyzing business combinations and for general corporate needs.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK
The Company does not have an active business at this time.
Inflation and Currency Fluctuation
Management does not believe that inflation or currency fluctuation have had a material adverse affect on the financial statements for the periods presented.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
Our chief executive officer and our chief financial officer, after evaluating the effectiveness of the Company's "disclosure controls and procedures" (as defined in Exchange Act Rules 13a-14 (C) and 15-d-14 (C) as of a date (the "Evaluation Date") within 90 days of filing date of this quarterly report, have concluded that as of the Evaluation Date, our disclosure controls and procedures were adequate and designed to ensure that material information relating to us and our consolidated subsidiaries would be made known to them by others within those entities.
Changes in internal controls
There were no significant changes in our internal controls or to our knowledge, in other factors that could significantly affect our internal controls subsequent to the Evaluation Date.
PART II. – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Registrant is not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by or against the Registrant has been threatened.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Reports on Form 8-K. The Registrant did not file any reports on Form 8-K during the quarterly period ended March 31, 2004.
(b) Exhibits. Exhibits included or incorporated by reference herein: See Exhibit Index.
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EXHIBIT INDEX
| Number | Exhibit Description |
| 3.1 | Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registration Statement on Form 10-QSB filed on July 17, 2002). |
| 3.2 | Articles of Incorporation (incorporated by reference to Exhibit 3.2 of the Registration Statement on Form 10-SB filed on July 17, 2002). |
| 3.3 | Bylaws of the Corporation (incorporated by reference to Exhibit 3.3 of the Form 10-QSB filed on July 17, 2002. |
| 31.1 | Section 302 Certification of CEO |
| 31.2 | Section 302 Certification of CFO |
| 32.1 | Section 906 Certification of CEO |
| 32.2 | Section 906 Certification of CFO |
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, thereunto duly authorized.
| CENTRO SERVICES, INC. | |
| Dated: May 15th, 2004 | By: /s/ Keith Attoe |
| Keith Attoe, President and Director |
| Dated: May 15th, 2004 | By: /s/ Gerry Racicot |
| Gerry Racicot, Treasurer, Chief Financial Officer, Principle Accounting Officer and Director |
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