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 September 30, 2003 |
| ¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
| For the transition period from to |
Commission file number: 000-50284
UNIVERSAL TANNING VENTURES, INC.
(Exact name of Registrant as specified in its charter)
| Delaware | 80-0025175 | |
(State or other Jurisdiction of Incorporation or Organization) | (IRS Employer I.D. No.) |
600 East Altamonte Drive, Unit 1050
Altamonte Springs, Florida 32701
(407) 260-9206
(Address and telephone number of
principal executive offices)
Indicate by check mark whether registrant (1) has 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 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. x Yes ¨ No
The number of shares of the registrant’s common stock, par value $0.0001 per share, outstanding as of November 5, 2003 was 7,565,000 and there were 165 stockholders of record.
Transitional Small Business Issuer Format: ¨ YES x NO
UNIVERSAL TANNING VENTURES, INC.
FORM 10-QSB
INDEX
PART I. | FINANCIAL INFORMATION | |||
Item 1. | Financial Statements | |||
Consolidated Balance Sheet (unaudited) at September 30, 2003 | 3 | |||
| 4 | ||||
| 5 | ||||
| 6 | ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 10 | ||
Item 3. | 14 | |||
PART II | OTHER INFORMATION | |||
Item 1. | 15 | |||
Item 2. | 15 | |||
Item 3. | 15 | |||
Item 4. | 15 | |||
Item 5. | 15 | |||
Item 6. | 16 | |||
| SIGNATURE PAGE | 17 | |||
2
Universal Tanning Ventures, Inc.
And Subsidiary
Assets | ||||
September 30, 2003 | ||||
| (unaudited) | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 89,367 | ||
Inventories | 7,250 | |||
Other current assets | 200 | |||
Total current assets | 96,817 | |||
Property and equipment, net | 80,671 | |||
Total assets | $ | 177,488 | ||
Liabilities and Stockholders’ Equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 40,414 | ||
Accrued expenses | 2,859 | |||
Deferred revenue | 15,356 | |||
Total current liabilities | 58,629 | |||
Stockholders’ equity | ||||
Common stock, $0.0001 par value, 10,000,000 shares authorized, 7,565,000 shares issued and outstanding | 757 | |||
Additional paid-in capital | 554,694 | |||
Accumulated deficit | (436,592 | ) | ||
Total stockholders’ equity | 118,859 | |||
Total liabilities and stockholders’ equity | $ | 177,488 | ||
See accompanying notes to unaudited consolidated financial statements.
3
Universal Tanning Ventures, Inc.
And Subsidiary
Consolidated Statements of Operations
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
Revenue: | ||||||||||||||||||
Tanning services | $ | 26,680 | $ | 22,277 | $ | 97,507 | $ | 74,475 | ||||||||||
Product sales, net of returns and allowances | 4,610 | 3,116 | 16,304 | 13,717 | ||||||||||||||
Total revenue | 31,290 | 25,393 | 113,811 | 88,192 | ||||||||||||||
Cost of revenue: | ||||||||||||||||||
Tanning services | 24,484 | 28,404 | 77,139 | 72,220 | ||||||||||||||
Product sales | 2,245 | 1,222 | 8,432 | 6,061 | ||||||||||||||
Total cost of revenue | 26,729 | 29,626 | 85,571 | 78,281 | ||||||||||||||
Gross profit | 4,561 | (4,233 | ) | 28,240 | 9,911 | |||||||||||||
Selling, general and administrative expenses | 36,307 | 177,120 | 108,460 | 252,620 | ||||||||||||||
Loss from operations | (31,746 | ) | (181,353 | ) | (80,220 | ) | (242,709 | ) | ||||||||||
Non-operating income (expense), net | 14 | 280 | 20 | 436 | ||||||||||||||
Net loss | $ | (31,732 | ) | $ | (181,073 | ) | $ | (80,200 | ) | $ | (242,273 | ) | ||||||
Weighted average common shares outstanding | 7,518,370 | 7,325,519 | 7,506,190 | 6,066,016 | ||||||||||||||
Basic and diluted loss per share | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.04 | ) | ||||||
See accompanying notes to unaudited consolidated financial statements.
4
Universal Tanning Ventures, Inc.
And Subsidiary
Consolidated Statements of Cash Flows
| Nine months ended September 30, | ||||||||
| 2003 | 2002 | |||||||
| (unaudited) | (unaudited) | |||||||
Operating activities: | ||||||||
Net Loss | $ | (80,200 | ) | $ | (242,273 | ) | ||
Adjustments to reconcile net loss to cash provided by (used in) operations: | ||||||||
Depreciation and amortization | 17,418 | 14,638 | ||||||
(Increase) decrease in assets: | ||||||||
Prepaid consulting fees | 33,333 | (108,333 | ) | |||||
Other current assets | 76 | (1,394 | ) | |||||
Inventories | 1,005 | (6,656 | ) | |||||
Increase (decrease) in liabilities: | ||||||||
Accounts payable and accrued expenses, net of acquisition | 30,199 | 11,553 | ||||||
Loan from shareholder | — | (7,803 | ) | |||||
Deferred revenue | 4,958 | (1,479 | ) | |||||
Net cash provided by (used in) operating activities: | 6,789 | (341,747 | ) | |||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (1,114 | ) | (73,520 | ) | ||||
Sale of property and equipment | — | 833 | ||||||
Purchase of assets of Altamonte Tan, Inc. net of liabilities assumed | — | (30,000 | ) | |||||
Net cash used in investing activities: | (1,114 | ) | (102,687 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 65,000 | 563,000 | ||||||
Deferred offering costs | (24,456 | ) | (40,000 | ) | ||||
Capital lease obligation repayments | (1,990 | ) | (5,491 | ) | ||||
Net cash provided by financing activities: | 38,554 | 517,509 | ||||||
Net increase in cash and cash equivalents | 44,229 | 73,075 | ||||||
Cash and cash equivalents, beginning of period | 45,138 | 9,231 | ||||||
Cash and cash equivalents, end of period | $ | 89,367 | $ | 82,306 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 11 | $ | 794 | ||||
Assumption of capital lease obligation from Altamonte Tan, Inc. | $ | — | $ | 8,092 | ||||
See accompanying notes to unaudited consolidated financial statements.
5
Universal Tanning Ventures, Inc.
And Subsidiary
Notes to Unaudited Consolidated Financial Statements
September 30, 2003
Note 1—Summary of Significant Accounting Policies
Basis of Presentation.The accompanying unaudited consolidated financial statements have been prepared by Universal Tanning Ventures, Inc. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-QSB. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited consolidated financial statements included herein reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. Interim results are not necessarily indicative of the results that may be expected for the year. The consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis and results of operations, for the year ended December 31, 2002, contained in the Company’s registration statement on Form SB-2 (File No. 333-101551) which was declared effective by the SEC on May 13, 2003.
Reporting Entity and Principles of Consolidation. Universal Tanning Ventures, Inc. and Subsidiary (“Universal” or the “Company”) were incorporated in the State of Delaware on January 4, 2002 and January 24, 2002, respectively. The Company is in the business of providing tanning services from one location, located in Altamonte Springs, Florida. During the period from inception through February 28, 2002, the company’s operations were primarily organizational.
The Company’s consolidated financial statements for the three and nine months ended September 30, 2003 include the accounts of its wholly owned subsidiary UT Holdings, Inc., a Delaware corporation. All intercompany balances and transactions have been eliminated.
The consolidated statements of operations and cash flows include the activity of Altamonte Tan, Inc. for the period from January 1, 2002—February 28, 2002.
Revenue Recognition. Revenue is recognized when tanning services are rendered or when the product is sold to customers. Tanning services sold to customers in a package plan are recorded as deferred revenue and are recognized as revenue when the customer utilizes the services.
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 the reported amounts of assets and liabilities and disclosure of contingent assets and
6
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.
Cash and Cash Equivalents. The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
Inventories. Inventories are valued at the lower of cost or market and consist of tanning lotions and supplies. Cost is determined using the first-in, first-out method.
Property and Equipment. Property and equipment are carried at cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. Routine maintenance and repairs are charged to expense as incurred. Major replacements and improvements are capitalized. Gains or losses are credited or charged to income upon disposition.
Impairment of Long-Lived Assets. The Company evaluates its long-lived assets for financial impairment as events or changes in circumstances indicate that the carrying value of a long-lived asset may not be fully recoverable. The Company evaluates the recoverability of long-lived assets by measuring the carrying amount of the assets against their estimated undiscounted future cash flows. If such evaluations indicate that the future undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to their fair values.
Income Taxes. The Company accounts for income taxes utilizing the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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 be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enacted date.
Loss per Share. The Company utilizes Financial Accounting Standards Board Statement No. 128, “Earnings Per Share.” Statement No. 128 requires the presentation of basic and diluted loss per share on the face of the statement of operations.
Basic loss per share has been calculated using the weighted average number of common shares outstanding during the period. In calculating diluted loss per share, the Company had no common stock equivalent shares as of September 30, 2003 or 2002. However, if the Company had such common stock equivalents, they would be considered anti-dilutive due to there being losses, and therefore, basic and diluted loss per share are the same.
Advertising. Advertising consists primarily of yellow-page and magazine advertisements. All costs are expensed as incurred. Advertising expense totaled approximately $9,500 and $4,300 for the nine months ended September 30, 2003 and 2002, respectively.
Seasonality and Weather. The tanning services market is seasonal, as customers tend to prefer to be outdoors during warmer weather. Accordingly, demand for the Company’s tanning services are generally higher during winter and spring (the Company’s first and second quarters).
Fair Value of Financial Instruments. The carrying amount of cash and cash equivalents, accounts payable and accrued expenses approximates fair value because of the short maturity of those instruments.
Recent Accounting Pronouncements. In May 2003, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer
7
classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity.
The Company does not expect that the adoption of this Statement will have a material effect on the Company’s financial position or results of operation.
Note 2—Initial Public Offering
In November 2002, the Company’s Board of Directors authorized management to file a registration statement with the Securities and Exchange Commission to permit the Company to sell its common stock to the public. On May 13, 2003 the Securities and Exchange Commission declared our registration statement effective and we commenced the offering. We closed the offering on September 7, 2003 having sold an aggregate of 65,000 shares for total gross proceeds of $65,000. Deferred offering costs at December 31, 2002, consisted of legal and other professional fees relating to the Company’s public offering which closed on September 7, 2003. At the time that the offering closed, there was a total of $72,549 of Deferred offering costs. After the offering closed, these costs were netted against the proceeds of the offering as a charge against additional paid-in capital.
Note 3—Property and Equipment
Property and equipment, their estimated useful lives, and related accumulated depreciation are summarized as follows:
| Range of lives in years | September 30, 2003 | |||||
Tanning equipment | 7 | $ | 80,577 | |||
Furniture and fixtures | 5 – 7 | 1,060 | ||||
Leasehold improvements | 5 | 33,812 | ||||
| 115,449 | ||||||
Less accumulated depreciation | (34,778 | ) | ||||
Total property and equipment | $ | 80,671 | ||||
8
Depreciation and Amortization expense amounted to $17,418 and $14,638 for the nine months ended September 30, 2003 and 2002, respectively.
Note 4—Certain Consulting Transactions
Since the inception of the Company in January 2002, the Company has employed various consultants to advise the company in matters related to the marketing of its products, the identification of investors and the implementation of short and long term strategic planning. The following is a brief description of the consulting agreements entered into during 2002.
Varela Consulting Group. The Company entered into a 6-month agreement in July 2002 with Varela Consulting Group (“Varela”) to represent the Company relating to the potential sale of its products and services to business contacts and potential customers worldwide, particularly in Central and South America. Compensation paid to Varela for their services totaled $100,000 and was amortized over the life of the contract on a straight-line basis.
Brannon Capital Corp. The Company entered into a 12-month agreement in March 2002 with Brannon Capital Corp. (“BCC”) to advise the Company in the implementation of short and long-term strategic planning, recruitment and employment of key executives consistent with the expansion of operations and advising the company concerning matters related to the management and organization of the Company. Compensation paid to BCC for their services totaled $100,000 and was amortized over the life of the contract on a straight-line basis.
9
| Item 2. | Management’s Discussion and Analysis or Plan of Operation. |
The following discussion of our plan of operation, financial condition and results of operations should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, included elsewhere herein. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors including, but not limited to, those discussed in this Quarterly Report.
In General
We own and operate a single indoor tanning salon business that offers a full range of indoor tanning products and services to our customers. The revenue from this single salon accounts for 100% of our total revenues.
We are a Delaware corporation formed for the purpose of acquiring the business of Altamonte Tan, Inc. (“Altamonte Tan”), a single indoor tanning salon previously owned and operated by our president, Glen Woods. Through our wholly owned subsidiary, UT Holdings, Inc., we acquired substantially all of the assets and assumed certain liabilities of Altamonte Tan, Inc. on February 28, 2002 in exchange for $30,000. We have continued to operate the business of Altamonte Tan since our acquisition of its assets under the name “Universal Tanning.” Although Altamonte Tan had been in operation for 5 years prior to our acquisition, our own independent pre-acquisition revenues and operations have been de minimis.
We believe that tanning salon customers want a single source from which to access all indoor tanning related products, services and information. Our goal is to become that single source by utilizing online information and services, multiple physical locations and an interconnected network of salons to become a total tanning company and a leading provider of tanning related goods and services. Our business strategy focuses on growth through opening new tanning salons and acquiring existing salons. The timing of the implementation of our strategy and our pace of growth will depend on the amount of capital we are able to secure for this purpose.
10
Comparison of Three Months Ended September 30, 2003 and September 30, 2002.
Net Sales. Net sales of tanning services for the three months ended September 30, 2003 increased by approximately $4,400 (or 20%) to $26,700 from $22,300 for the same period in 2002. This increase was the result of the purchase of new tanning equipment in March 2002 and increased advertising expenditures. These capital expenditures expanded our ability to provide more service to our customers by providing higher quality tanning beds. Net sales of tanning products for the three months ended September 30, 2003 increased by approximately $1,500 (or 33%) to $4,600 from $3,100 for the same period in 2002 due to an increased customer base as a result of increased advertising.
Cost of Revenue. Our cost of revenue for the three months ended September 30, 2003 decreased by approximately $2,900 (or 10%) to $26,700 from $29,600 for the same time period in 2002. This was due to a reduction in the work force during the period.
Selling, General and Administrative. Selling, general and administrative expenses decreased $140,800 (or 80%) to $36,300 from $177,100 for the same period in 2002. We believe that the decrease was primarily attributable to the hiring of consultants to assist us with strategic planning, international sales and investor and public relations matters during 2002.
Comparison of Nine Months Ended September 30, 2003 and September 30, 2002.
Net Sales. Net sales of tanning services for the nine months ended September 30, 2003 increased by approximately $23,000 (or 31%) to $97,500 from $74,500 for the same period in 2002. This increase was the result of the purchase of new tanning equipment in March 2002 and increased advertising expenditures. These capital expenditures expanded our ability to provide more service to our customers by providing higher quality tanning beds. Net sales of tanning products for the nine months ended September 30, 2003 increased by approximately $2,600 (or 19%) to $16,300 from $13,700 for the same period in 2002. This increase was a result of the increased amount of tanning services that were provided during the period.
Cost of Revenue. Our cost of revenue for the nine months ended September 30, 2003 increased by approximately $7,300 (or 9%) to $85,600 from $78,300 for the same time period in 2002. This was due to both the increase in the sales commissions we paid to our employees and the increased hours of operation for our store during the same period. During this period we doubled the commissions we pay to our employees for the sale of tanning products and services from 5% to 10% and added an additional day each week to our operations.
Selling, General and Administrative. Selling, general and administrative expenses decreased $144,100 (or 57%) to $108,500 from $252,600 for the same period in 2002. We believe that the decrease was primarily attributable to the hiring of consultants to assist us with strategic planning, international sales and investor and public relations matters during 2002.
Plan of Operation
In an effort to obtain the financing necessary to implement our business plan, we filed a registration statement with the United States Securities and Exchange Commission (the “SEC”) registering 1,000,000 shares for sale at $1.00 per share. The registration statement was declared effective on May 13, 2003. We closed the offering on September 7, 2003 having sold a total of only 65,000 shares with total proceeds of $65,000. We projected that a minimum of $250,000 of net proceeds would be necessary to begin the implementation of our business plan. Since the amount of money we raised was insufficient to permit us to begin implementing our business and expansion plans, we have been utilizing the proceeds in the operation of our single tanning salon.
As a result of our lack of available resources, at this time we are unable to pursue our plan to expand the Company. For the foreseeable future, we intend to focus the available capital resources of the Company on the operation of our single tanning salon. We are attempting to raise additional capital to improve our ability to implement our plan. We cannot be certain that additional financing will become available, or if available, whether it will be on terms and conditions satisfactory to us.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $6,789 during the nine months ended September 30, 2003, compared to net cash used of $341,747 for the nine months ended September 30, 2002. The increase in cash provided by operating activities is a result of the decrease in consulting fees paid by us during 2003.
Cash used in investing activities totaled $1,114 and $102,687 during the nine months ended September 30, 2003 and 2002, respectively. Capital expenditures in 2003 were primarily comprised of the purchasing of tanning equipment for our single tanning salon. Net cash used in investing activities is largely attributable to capital expenditures for tanning equipment to support our internal expansion. We have no material commitments for capital expenditures. However, we will continue to need computer and office equipment if our expansion plans are implemented.
11
Net cash provided by financing activities totaled $38,554 and $517,509 during the nine months ended September 30, 2003 and 2002, respectively. During the nine months ended September 30, 2002, financing activities consisted primarily of the sale of shares pursuant to a private placement that began in February 2002.
At September 30, 2003 we had cash balances in the amount of $89,367. Our principal source of funds has been cash generated from financing activities. In 2002, we received offering proceeds of $562,500 (net of $62,500 of offering expenses) in a private placement, which were primarily used in the purchase of Altamonte Tan along with costs associated with our current public offering. On May 13, 2003, the SEC declared effective our registration statement on Form SB-2, wherein we registered for sale 1,000,000 shares of our common stock at an offer price of $1.00 per share. We offered the securities on a “best efforts” basis and no minimum amount of shares is required to be sold. We sold a total of 65,000 shares in this offering for total gross proceeds of $65,000.
We have been unable to generate significant liquidity or cash flow from our current operations. We frequently change our pricing structure to take into account our clients’ fluctuating cash flows, service and product needs. For example, we may reduce our prices of tanning packages or offer certain advantageous offers during our non-peak months of July through December. We generally experience an increased level of cash flow from operations in the first six months of the calendar year as our clients prepare their tan for the summer. We anticipate that cash flows from operations will be insufficient to fund our business operations for the full year 2004 and that we must continue attempting to raise additional capital to fund our operations and implement our business plan.
Variables and Trends
We anticipate experiencing greater sales in the first and second quarters of the calendar year, as opposed to the third and fourth quarters of the calendar year. The seasonality of our sales will be directly related to weather patterns. The first and second quarters of the calendar year are usually our strongest revenue producing quarters as customers begin to build their tan after the winter for the upcoming spring and summer season. The third quarter of the calendar year is usually the slowest due to the summer weather and customers electing to achieve their tan at the beach or other non-indoor location. The fourth quarter of the calendar year is slow at our location due to the warm temperatures and sunshine usually occurring in the central Florida area, where our store is located. Comparisons of our sales and operating results between different quarters within a single year are, therefore, not necessarily indicators of our future performance.
Although we have a limited operating history in connection with the operation of our single tanning salon, we have no operating history with respect to our desire to expand our business to multiple locations. In the event we are able to obtain the necessary financing to move forward with our business plan, we expect our expenses to increase significantly as we grow our business and enter into new markets through the opening of new locations or through acquisitions. Accordingly, the comparison of the financial data for the periods presented may not be a meaningful indicator of our future performance and must be considered in light of our single tanning salon operating history.
Looking forward at our business prospects for the future, we have no way of knowing if scientific research will find new or increased health risks to indoor tanning. If such new or increased health risks are discovered, or if media reports create concern or uncertainty in the public’s perception of the health risks associated with indoor tanning, our existing customers would likely decide to reduce or eliminate their use of our products and services. New customers would similarly be discouraged from patronizing our
12
business. The resulting reduction in revenue would have a material adverse affect on our business and financial conditions.
Forward Looking Statements
This report includes “Forward-Looking Statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be considered “forward looking statements”. We do not guarantee that the transactions and events described in this Report will happen as described or that any positive trends noted in this Report will continue. These types of statements are generally located in the section entitled “Management’s Discussion and Analysis or Plan of Operation,” but may be found elsewhere in this Report as well. Forward-looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. You should understand that many important factors, in addition to those discussed elsewhere in this Report, could cause our results to differ materially from those expressed in the forward-looking statements. These factors include, without limitation, the rapidly changing industry and regulatory environment, our limited operating history, our ability to implement our growth strategy, our ability to integrate acquired companies and their assets and personnel into our business, our fixed obligations, our dependence on new capital to fund our growth strategy, our ability to attract and retain quality personnel, our competitive environment, perceived health issues associated with tanning generally and tanning booths in particular, economic and other conditions in markets in which we operate, increases in maintenance costs and insurance premiums and cyclical and seasonal fluctuations in our operating results.
A more comprehensive list of such factors and related discussion are set forth in our Form SB-2 registration statement (File No. 333-101551) which was declared effective by the SEC on May 13, 2003, and our other filings made with the SEC from time to time.
13
ITEM 3—CONTROLS AND PROCEDURES
We have evaluated, with the participation of our Chief Executive Officer and Principal Financial Officer, the effectiveness of our disclosure controls and procedures as of September 30, 2003. Based on this evaluation, our Chief Executive Officer and Principal Financial Officer has concluded that our disclosure controls and procedures are effective to ensure that we record, process, summarize, and report information required to be disclosed by us in our quarterly reports filed under the Securities Exchange Act within the time periods specified by the Securities and Exchange Commission’s rules and forms.
During the quarterly period covered by this report, there were no changes in our internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. There were no significant changes in the Company’s internal controls or in other factors that could significantly affect its internal controls subsequent to the Evaluation Date.
14
PART II—OTHER INFORMATION
| Item 1. | Legal Proceedings. |
The Company is not a party to any pending legal proceedings nor is any of its property subject to pending legal proceedings.
| Item 2. | Changes in Securities and Use of Proceeds. |
Pursuant to the Company’s Registration Statement on Form SB-2, as amended, filed with the Securities and Exchange Commission on November 27, 2002 and declared effective May 13, 2003, (Registration No. 333-101551), the Company commenced the initial public offering of 1,000,000 registered shares of common stock, par value per share $0.0001, on May 14, 2003, at a price of $1.00 per share. The Offering was completed on September 7, 2003, and of the 1,000,000 shares offered, 65,000 shares were sold, generating cash proceeds for the Company during third quarter 2003 of $65,000.
In connection with the Offering, the Company incurred approximately $72,500 in other offering related expenses, including approximately $17,000 to be paid in fourth quarter 2003. There were no offering expenses that were paid to affiliates of the Company.
The Company used approximately $25, 000 of its net proceeds from the Offering to repay a portion of the offering expenses in connection with the offering. As of the date of this Form 10-QSB filing, the balance of the net proceeds from the Offering, approximately $40,000 has been retained by the Company to be used for working capital purposes. See “Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Form 10-QSB for further discussion.
| 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. |
Not Applicable.
15
| Item 6. | Exhibits and Reports on Form 8-K. |
(a) Exhibits
EXHIBIT NUMBER | DESCRIPTION | |
| 31.1 | Certification of Chief Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended* | |
| 32.1 | Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.* | |
| * | Filed herewith. |
(b) Reports on Form 8-K.
Not Applicable.
16
In accordance with the requirements of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 14, 2003
UNIVERSAL TANNING VENTURES, INC. | ||
| By: | /s/ Glen Woods | |
Name: | Glen Woods | |
Title: | Chief Executive Officer, President and Principal Financial Officer | |
| By: | /s/ Dyron Watford | |
Name: | Dyron Watford | |
Title: | Principal Accounting Officer | |
17
EXHIBIT INDEX
EXHIBIT NUMBER | DESCRIPTION | |
| 31.1 | Certification of Chief Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended* | |
| 32.1 | Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.* | |
| * | Filed herewith. |
18
