UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment Number 1
to
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:September 30, 2004 | |
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 Number: 000-50465 | |
STAT SOFTWARE, INC. (Exact name of registrant as specified in its charter) | |
Nevada 76-0702680 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) | |
|
| |
2061 East Sahara Avenue 89107 Las Vegas, Nevada (Address of principal executive offices) (Zip Code) | |
|
| |
(702) 732-2744 (Registrant's telephone number, including area code) |
N/A (Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the 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.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 4,314,000
STAT SOFTWARE, INC.
(A Development Stage Company)
Table of Contents
| Page |
PART I - FINANCIAL INFORMATION | |
Item 1. Financial Statements | 3 |
Balance Sheet | 4 |
Statements of Operations | 5 |
Statements of Cash Flows | 6 |
Notes | 7 |
Item 2. Management's Discussion and Plan of Operation | 8 |
PART II - OTHER INFORMATION | |
Item 4. Controls and Procedures | 10 |
Item 6. Exhibits | 10 |
SIGNATURES | 11 |
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PART I - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission"). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes that are included in the Company's Annual Report on Form 10-KSB/A [Amendment Number 1] previously filed with the Commission on September 9, 2004, and subsequent amendments made thereto.
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Stat Software, Inc.
(a Development Stage Company)
Balance Sheet
(Unaudited)
September 30, | |
2004 | |
Assets | |
Current assets: | |
Cash and equivalents | $25,503 |
Accounts receivable | 1,500 |
Total current assets | 27,003 |
Fixed asses, net | 11,592 |
$38,595 | |
Liabilities and Stockholders’ Equity | |
Current liabilities: | |
Accounts payable | - |
Stockholders’ equity: | |
Preferred stock, $0.001 par value, 5,000,000 | |
shares authorized, zero shares issued and outstanding | - |
Common stock, $0.001 par value, 20,000,000 | |
shares authorized, 4,314,000 shares | |
issued and outstanding as of 9/30/04 | 4,314 |
Additional paid-in capital | 96,386 |
Prior period adjustment | (1,656) |
(Deficit) accumulated during development stage | (60,449) |
38,595 | |
$38,595 | |
The accompanying Notes are an integral part of these financial statements.
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Stat Software, Inc.
(a Development Stage Company)
Statements of Operations
(Unaudited)
June 13, 2002 | |||||
Three Months Ending | Nine Months Ending | (Inception) to | |||
September 30, | September 30, | September 30, | |||
2004 | 2003 | 2004 | 2003 | 2004 | |
Revenue – related party | $3,819 | $13,150 | $21,069 | $26,650 | $64,407 |
Cost of revenue: | |||||
Contract labor – related party | - | 18,000 | 6,875 | 24,000 | 27,982 |
Contract labor | - | 3,500 | 9,139 | 9,500 | 29,246 |
- | 21,500 | 16,014 | 33,500 | 57,228 | |
Gross profit (loss) | 3,819 | (8,350) | 5,055 | (6,850) | 7,179 |
Expenses: | |||||
General and administrative expenses | 2,581 | 5,131 | 8,835 | 6,131 | 15,503 |
General and administrative expenses – related party | - | - | - | 6,250 | 12,500 |
Research and development | - | - | 2,962 | - | 12,500 |
Depreciation expense | 410 | 253 | 1,032 | 253 | 1,709 |
Organizational and offering costs | - | - | - | 3,105 | 11,416 |
Consulting – related party | - | - | - | - | 17,500 |
Total expenses | 2,991 | 5,384 | 12,829 | 15,739 | 71,128 |
Other income (expense): | |||||
Gain on forgiveness of debt | - | - | 3,500 | - | 3,500 |
Net (loss) | $828 | $(13,734) | $(4,274) | $(22,589) | $(60,449) |
Weighted average number of | |||||
Common shares outstanding – basic and fully diluted | 4,314,000 | 3,300,000 | 4,314,000 | 3,300,000 | |
Net (loss) per share – basic and fully diluted | $(0.00) | $(0.00) | $(0.00) | $(0.01) | |
The accompanying notes are an integral part of these financial statements.
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Stat Software, Inc.
(a Development Stage Company)
Statements of Cash Flows
(Unaudited)
June 13, 2002 | |||
Nine Months Ending | (Inception) to | ||
September 30, | September 30, | ||
2004 | 2003 | 2004 | |
Cash flows from operating activities | |||
Net (loss) | $(4,274) | $(22,589) | $(60,449) |
Adjustment to reconcile net (loss) to | |||
net cash (used) by operating activities: | |||
Depreciation | 1,032 | - | 1,709 |
Amortization of prepaid rent –related party | - | - | 12,500 |
Shares issued for consulting – related party | - | - | 17,500 |
Changes in operating assets and liabilities | |||
(Increase) in accounts receivable | (1,500) | - | (1,500) |
(Increase) in prepaid expenses | - | 6,250 | - |
(Decrease) in accounts payable | (3,500) | 3,500 | - |
Net cash (used) by operating activities | (8,242) | (12,839) | (30,240) |
Cash flows from investing activities | |||
Purchase of fixed assets | (9,631) | (3,558) | (14,289) |
Net cash (used) by investing activities | (9,631) | (3,558) | (14,289) |
Cash flows from financing activities | |||
Issuances of common stock | - | 50,700 | 70,032 |
Net cash provided by financing activities | - | 50,700 | 70,032 |
Net increase in cash | (17,873) | 34,303 | 25,503 |
Cash and equivalents – beginning | 43,376 | 10,214 | - |
Cash and equivalents – ending | $25,503 | $44,517 | $25,503 |
Supplemental disclosures: | |||
Interest paid | $- | $- | $- |
Income taxes paid | $- | $- | $- |
Non-cash transactions: | |||
Shares issued for consulting and prepaid rent | |||
to related parties | $- | $- | $30,000 |
Number of shares issued for consulting and | |||
prepaid rent to related parties | - | - | 1,980,000 |
The accompanying notes are an integral part of these financial statements.
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Stat Software, Inc.
(a Development Stage Company)
Notes
Note 1 - Basis of presentation
The Company was organized June 13, 2002 (Date of Inception) under the laws of the State of Nevada, as Stat Software, Inc. The Company has limited operations and in accordance with SFAS #7, the Company is considered a development stage company.
We are a development stage information technology consulting, development and research firm. We provide information technology and consulting services such as internet accessible and software development services, as well as technology-related business research and testing services to our customers. Since our formation our efforts had been devoted primarily to startup and development activities, which include the following:
1.
Formation of the Company and obtaining start-up capital;
2.
Obtaining capital through sales of our common stock;
3.
Developing our corporate hierarchy, including naming directors to our board, appointing our executive officers and setting forth a business plan; and
4.
Developing our information technology consulting services, including developing markets and customers for our services.
The consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these consolidated interim financial statements be read in conjunction with the audited financial statements and notes of the Company filed with its Form 10KSB with the US Securities and Exchange Commission for the year ended December 31, 2003. The Company follows the same accounting policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of annual results.
Note 2 - Fixed assets
The Company recorded depreciation expense of $1,032 and $253 during the nine months ended September 30, 2004 and 2003, respectively.
Note 3 - Stockholder’ equity
The Company did not issue any shares of its preferred or common stock during the nine months ended September 30,2004.
Note 4 - Related party transactions
The Company paid its officer and director contract labor fees totaling $6,875 during the nine months ended September 30,2004. These fees were paid for substantive services provided by the officer and director to the Company’s customers.
In addition, the Company received primarily all of its revenues from two companies in which the Officers and Directors of the Company hold an ownership interest.
The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.
Note 5 – Research and development costs
The Company expended $2,962 towards research and development of its software technology during the nine months ended September 30,2004.
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Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about STAT Software, Inc.’s business, financial condition and prospects that reflect management’s assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of our management’s assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, STAT’s actual results may differ materially from those indicated by the forward-looking statements.
The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand our customer base, managements’ ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.
There may be other risks and circumstances that management may be unable to predict. When used in this Quarterly Report, words such as, "believes," "expects," "intends," "plans," "anticipates," "estimates"and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.
Management’s Discussion and Analysis
We were incorporated on June 13, 2002. Our efforts to date have focused primarily on recruiting independent contract labor and on the discussion of the potential pursuit to develop biometric security products that use individually unique physical characteristics for identification and security purposes, inventory database applications and secure on-line education products. While we intend to pursue the development of these biometric technologies, such is at a conceptual stage only. Thus, no research and development costs have been incurred and no anticipated product launch date can be determined at the present time.
Results of Operations for the Quarter Ended September 30, 2004
We generated $3,819 in revenues during the three months ended September 30, 2004. In the year ago period ended September 30, 2003, we generated revenues of $13,150. The decrease in comparable periods is the result of variables in our customers’ needs and the early stage of our development where we have an extremely limited and concentrated customer base. To the extent that we do not generate new customers and new sources of revenues, we expect that our limited revenues may fluctuate in a similar manner.
There was no Cost of revenues for the three-month period ended September 30, 2004. We did not incur any cost of revenues for the period because the Company did not pay any contract labor fees during the period and because the revenues generated resulted from recurring revenue streams that do not require additional or recurring labor costs to generate. We do not believe that the lack of cost of revenues represents a long-term trend, to the extent that new sources of revenue will necessarily require additional contract fees or labor wages to generate. Our recurring revenues will continue in a similar pattern, but the lack of cost of labor is not anticipated to be a trend overall. Comparatively, cost of labor for the third quarter ended September 30, 2003 was $21,500, of which $18,000 was paid to related parties. These costs were incurred as part of implementing new customer projects. We will typically incur larger labor costs at the inception of new projects which require installation or programming of new software systems on a per client basis, but these increased labor costs are not indicative of a trend, only of new projects or growth in the overall business.
Total expenses for the three months ended September 30, 2004 was $2,991. Approximately $2,281 of that amount is attributable to general and administrative expenses. Additionally, we recorded $410 in depreciation expense for the period. In the three months ended September 30, 2003, total expenses were $5,384. The decrease in comparable periods is the result of variables in our customers’ needs and the early stage of our development where we have an extremely limited and concentrated customer base. To the extent that we do not generate new customers and new sources of revenues, we expect that our limited revenues may fluctuate in a similar manner.
During the three months ended September 30, 2004, we had a net gain of $828, an increase of $12,906 from the year ago three month period ended September 30, 2003.
Comparison of Operating Results for the Nine Month Period Ended Septemer 30, 2004 and September 30, 2003
In the nine months ended September 30, 2004, revenues were $21,069, a decrease of $5,581 compared with revenues of $26,650 during the nine months ended September 30, 2003. From our inception on June 13, 2002 to September 30, 2004, we generated an aggregate of $64,407 in revenues. All of these revenues were derived solely from sales of our information technology services and software products which were sold to two related parties. We have two recurring clients who account for substantially all of our revenues. To the extent that we do not generate new customers and new sources of revenues, we expect that our limited revenues may fluctuate from one comparable period to another in a similar manner.
In the nine months ended September 30, 2004, cost of revenues was $16,014, $6,875 of which was paid to a related party. During the nine months ended September 30, 2003, our cost of revenues totaled $33,500, with $9,500 being paid to a related party. Since our inception, cost of revenues has been $57,228.
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Liquidity and Capital Resources
At September 30, 2004, the Company had $25,503 in cash and liquid assets with which to conduct operations. Minimal cash or liquid assets raises substantial doubt about the Company's ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its obligations and sustain operations. We will be able to fund our operations for a minimum period of twelve months given our current capital resources and the extremely limited amount of additional contractually committed capital which we are entitled to receive from our two clients. This represents a downward revision from our prior estimates and is due to the reduction in costs associated with generating revenues. To meet required current operating expenses the Company is dependent upon its principal shareholders to advance funds until the Company has acquired another entity that has sufficient resources to fund the Company's operations.
Need for Additional Financing
Since our incorporation, we have raised capital through sales of our common equity. All told, we raised $70,032 in cash from sales of our common stock. If our costs of operations increase unexpectedly, we may need to raise additional capital by issuing equity or debt securities in exchange for cash. There can be no assurance that we will be able to secure additional funds in the future to stay in business.
There can be no assurance that any additional funds will be available to the Company to allow it to cover its expenses as they may be incurred.
Irrespective of whether the Company's cash assets prove to be inadequate to meet the Company's operational needs, the Company might seek to compensate providers of services by issuances of stock in lieu of cash.
The Company has no plans at this time for purchases or sales of fixed assets which would occur in the next twelve months.
The Company has no expectation or anticipation of significant changes in number of employees in the next twelve months, however, if it commences acquisition, it may acquire or add employees of an unknown number in the next twelve months.
The Company's auditor has issued a "going concern" qualification as part of his opinion in the Audit Report. There is substantial doubt about the ability of the Company to continue as a "going concern."
Item 3. Controls and Procedures
Within 90 days prior to the date of filing of this quarterly report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective for the gathering, analyzing and disclosing the information we are required to disclose in the reports we file under the Securities Exchange Act of 1934, for the quarter ended September 30, 2004. There have been no changes in our internal controls or in other factors that could significantly affect internal controls during the second fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal controls over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.
Item 2. Change in Securities
None
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)
Item 6. Exhibits
Exhibit Number | Name and/or Identification of Exhibit |
3 | Articles of Incorporation & By-Laws |
(a) Articles of Incorporation (1) | |
(b) By-Laws (1) | |
31 | Certifications |
32 | Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350) |
(1) Incorporated by reference to the exhibits to the Company's General Form for Registration of Securities of Small Business Issuers on Form 10-SB, filed on November 12, 2003 and all amendments thereto.
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
STAT SOFTWARE, INC. | ||
(Registrant) | ||
Signature | Title | Date |
/s/ Douglas P. Condie | Chief Executive Officer | May 2, 2005 |
Douglas P. Condie | ||
/s/ Richard B. Vincent | Chief Financial Officer | May 2, 2005 |
Richard B. Vincent | ||
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