SECURITIES AND EXCHANGE COMMISISON
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 June 30, 2001
Commission File number 000-32201
LUMMI DEVELOPMENT, INC.
(Name of Small Business Issuer in its Charter)
7255 Meadowlark Road, Vernon, British Columbia, Canada V1B3R6
(Address of Principal Executive Offices including Zip Code)
(250) 542-3069
(Issuer's Telephone Number, Including Area Code)
Not Applicable
(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 [ ]
There were 5,207,000 shares of Common stock outstanding as of June 30, 2001.
ITEM 1. FINANCIAL STATEMENTS
LUMMI DEVELOPMENT, INC.
(A Development Stage Company)
Balance Sheets
As of June 30, 2001 and 2000
SIX MONTHS ENDED JUNE 30,
-------------------------
2001 2000
-------- --------
ASSETS
CURRENT ASSETS
Cash $ 81 $ 2,511
-------- --------
TOTAL CURRENT ASSETS 81 2,511
-------- --------
TOTAL ASSETS $ 81 $ 2,511
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 810 $ 50
-------- --------
TOTAL CURRENT LIABILITIES 810 50
-------- --------
TOTAL LIABILITIES 810 50
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value authorized (20,000,000
shares authorized; none issued and outstanding.) 0 0
Common stock $.0001 par value authorized (80,000,000 shares
authorized; 5,207,000 shares issued and outstanding at
June 30, 2001 and 2000, respectively.) 521 521
Additional paid-in capital 21,179 21,179
Deficit accumulated during development stage (22,429) (19,239)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (729) 2,461
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 81 $ 2,511
======== ========
See Accompanying Notes
2
LUMMI DEVELOPMENT, INC.
(A Development Stage Company)
Statements of Operations
JANUARY 19, 1999
SIX MONTHS ENDED JUNE 30, THREE MONTHS ENDED JUNE 30, (INCEPTION)
-------------------------- --------------------------- THROUGH
2001 2000 2001 2000 JUNE 30, 2001
----------- ----------- ----------- ----------- -------------
REVENUES
Revenues $ 0 $ 0 $ 0 $ 0 $ 0
----------- ----------- ----------- ----------- ---------
TOTAL REVENUES 0 0 0 0 0
GENERAL & ADMINISTRATIVE EXPENSES 1,544 6,635 336 5,239 22,429
----------- ----------- ----------- ----------- ---------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES 1,544 6,635 336 5,239 22,429
----------- ----------- ----------- ----------- ---------
NET LOSS $ (1,544) $ (6,635) $ (336) $ (5,239) $ (22,429)
=========== =========== =========== =========== =========
BASIC LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 5,207,000 5,207,000 5,207,000 5,207,000
=========== =========== =========== ===========
See Accompanying Notes
3
LUMMI DEVELOPMENT, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
From January 19, 1999 (inception) through June 30, 2001
DEFICIT
ACCUMULATED
COMMON ADDITIONAL DURING
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
---------- ------ ------- -------- ---------
Issued for cash on January 19, 1999 5,000,000 $ 500 $ 0 $ 0 $ 500
Issued from sale of private placement (Note #1)
April 7, 1999 207,000 21 21,179 0 21,200
Net loss, January 19, 1999 (inception) to
December 31, 1999 (12,604) (12,604)
---------- ----- -------- -------- ---------
BALANCE, DECEMBER 31, 1999 5,207,000 521 21,179 (12,604) 9,096
========== ===== ======== ======== =========
Net loss, January 1, 2000 to December 31, 2000 (8,281) (8,281)
---------- ----- -------- -------- ---------
BALANCE, DECEMBER 31, 2000 5,207,000 521 21,179 (20,885) 815
========== ===== ======== ======== =========
Net loss, January 1, 2001 to June 30, 2001 (1,544) (1,544)
---------- ----- -------- -------- ---------
BALANCE, JUNE 30, 2001 5,207,000 $ 521 $ 21,179 $(22,429) $ (729)
========== ===== ======== ======== =========
See Accompanying Notes
4
LUMMI DEVELOPMENT, INC.
(A Development Stage Company)
Statements of Cash Flows
JANUARY 19, 1999
SIX MONTHS ENDED JUNE 30, THREE MONTHS ENDED JUNE 30, (INCEPTION)
-------------------------- --------------------------- THROUGH
2001 2000 2001 2000 JUNE 30, 2001
----------- ----------- ----------- ----------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Operating loss $ (1,544) $ (6,635) $ (336) $ (5,239) $(22,429)
Increase in accounts payable 105 50 0 0 810
-------- -------- -------- -------- --------
NET CASH (USED) BY OPERATING ACTIVITIES (1,439) (6,585) (336) (5,239) (21,619)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY INVESTING ACTIVITIES 0 0 0 0 0
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock 0 0 0 0 521
Additional paid-in capital 0 0 0 0 21,179
-------- -------- -------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 0 0 0 0 21,700
-------- -------- -------- -------- --------
NET (DECREASE)/INCREASE IN CASH (1,439) (6,585) (336) (5,239) 81
CASH AT BEGINNING OF PERIOD 1,520 9,096 417 7,750 0
-------- -------- -------- -------- --------
CASH AT END OF PERIOD $ 81 $ 2,511 $ 81 $ 2,511 $ 81
======== ======== ======== ======== ========
See Accompanying Notes
5
LUMMI DEVELOPMENT, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Six Months Ended June 30, 2001
NOTE 1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized January 19, 1999, under the laws of the state of
Delaware, as Lummi Development, Inc. The Company has no operations and in
accordance with SFAS # 7, the Company is considered a development stage company.
The Company is in the business of selling marine safety kits and related marine
accessories.
On January 19, 1999, the Company issued 5,000,000 shares of its $ 0.0001 par
value common stock for cash of $ 1,000.00.
On April 7, 1999, the Company completed a public offering that was offered
without registration under the securities Act of 1933, as amended (The "Act"),
in reliance upon the exemption from registration afforded by sections 4(2) and
3(b) of Securities Act and Regulation D, Rule 504 promulgated thereunder. The
Company sold 207,000 shares of common stock at a price of $ 0.10 per share for a
total amount raised of $ 20,700.00.
NOTE 2. ACCOUNTING POLICIES AND PROCEDURES
A. BASIS OF ACCOUNTING
The Company uses the accrual method of accounting.
B. BASIC LOSS PER SHARE
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective January 19, 1999 (inception).
Basic net loss per share amounts is computed by dividing the net income by the
weighted average number of common shares outstanding. Diluted earnings per share
are the same as basic earnings per share due to the lack of dilutive items in
the Company.
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NOTE 2. ACCOUNTING POLICIES AND PROCEDURES (CONTINUED)
C. CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
D. USE OF 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 and disclosure of
contingent assets and 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.
E. INCOME TAXES
The Company accounts for income taxes using the asset and liability method.
Under the asset and liability method, deferred income taxes are recognized for
the tax consequences of "temporary differences" by applying enacted statutory
tax rates applicable to future years to differences between the financial
statement carrying amounts and the tax bases of existing assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized.
NOTE 3. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of
common stock or preferred stock.
NOTE 4. GOING CONCERN
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. Without realization of additional capital, it would be unlikely for
the company to continue as a going concern. It is management's plan to seek
additional capital through the sale of its securities through private
placements.
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NOTE 5. RELATED PARTY TRANSACTION
The Company neither owns, nor leases any real or personal property. A director
provides warehouse and office services without charge. Such costs are immaterial
to the financial statements and, accordingly, have not been reflected therein.
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 become 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 resolution of such
conflicts.
NOTE 6. INCOME TAXES
June 30, December 31,
2001 2000
------- -------
Deferred tax assets:
Net operating loss carryforwards $ 51 $ 1,242
------- -------
Other 0 0
Valuation allowance (51) (1,242)
------- -------
Net deferred tax assets $ 0 $ 0
======= =======
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce taxable income. As the achievement of
required future taxable income is uncertain, the Company recorded a valuation
allowance.
NOTE 7. SCHEDULE OF NET OPERATING LOSSES
1999 Net Operating Loss $(12,604)
2000 Net Operating Loss (8,281)
2001 Net Operating Loss (six months) (1,544)
--------
Net Operating Loss $(22,429)
========
As of June 30, 2001, the Company has net operating loss carryforwards of
approximately $ 22,429, which will expire through 2019.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CERTAIN FORWARD-LOOKING INFORMATION
Information provided in this Quarterly report on Form 10QSB may contain
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 that are not historical facts and information. These
statements represent the Company's expectations or beliefs, including, but not
limited to, statements, concerning future and operating results, statements
concerning industry performance, the Company's operations, economic performance,
financial conditions, margins and growth in sales of the Company's products,
capital expenditures, financing needs, as well assumptions related to the
foregoing. For this purpose, any statements contained in this Quarterly Report
that are not statement of historical fact may be deemed to be forward-looking
statements. These forward-looking statements are based on current expectations
and involve various risks and uncertainties that could cause actual results and
outcomes for future periods to differ materially from any forward-looking
statement or views expressed herein. The Company's financial performance and the
forward-looking statements contained herein are further qualified by other risks
including those set forth from time to time in the documents filed by the
Company with the Securities and Exchange Commission, including the Company's
most recent Form 10SB.
CONDITIONS AND RESULTS OF OPERATIONS.
THREE MONTHS ENDED JUNE 30, 2001.
Revenues were $0 for the quarter ending June 30, 2001 and $0 for the same
quarter ending 2000.
Operating Expenses were $336 for the quarter ending June 30, 2001 and $5,239 for
the same quarter in 2000.
The Company had an operating loss of ($336) for the quarter ending June 30, 2001
and ($5,239) for the same quarter in 2000.
The Company has not generated revenues from operating activities during the
quarter ending June 30, 2001. During the quarter ending June 30, 2001,
management has prepared emergency marine safety kit prototypes to be used for
demonstration for marketing sources and product display. Management has
contacted various wholesale suppliers for its product line of related marine
accessories and has sought wholesale distributors for placement of its marine
safety kits in retail outlets. To date, no contractual arrangements have been
made with any wholesale supplier or distributor for the Company's product line.
The Company has begun its design phase for a web site offering the Company's
products of marine safety kits on the Internet. During the quarter ending June
30, 2001, management submitted documentation to World Trade Financial, La Jolla,
CA for a 15c2-11 filing with the National Association of Security Dealers for
listing on the OTC Electronic Bulletin Board.
The Company does not anticipate any material increase in operating expenses
until such time as additional capital can be raised and the Company proceeds
with the further development of its business plan. Management believes that the
Company must be successful in raising equity or debt financing sufficient to
meet its working capital requirements and to support the expenses associated
with developing its product sales of marine safety kits within the next several
months. To date, no sales have been made in marine safety kits or related marine
accessories nor has the Company been successful in raising equity or debt
financing sufficient to meet its working capital requirements. No assurance can
be given that the Company will have other financing available, if required; or
if available, will be available on terms and conditions satisfactory to
management.
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ANALYSIS OF FINANCIAL CONDITION
As of June 30, 2001, the Company had working capital of ($729) and faces the
need for substantial additional working capital in the near future. The Company
will be required to seek sources of financing. No assurance can be given that
the Company will have financing available, if required, or if available, will be
available on terms and conditions satisfactory to management.
The financial statements of the Company were prepared for the quarter ending
June 30, 2001. The Company's ability to establish itself as a going concern is
dependent upon the Company obtaining sufficient financing to continue its
development activities. There is no assurance that the company will achieve
profitable operations in the future. The Company could be required to secure
additional financing to implement further development plans. There is no
assurance that such financing will be available to the Company, of if available,
will be available on terms and conditions satisfactory to management.
As part of the Company's plan to raise additional working capital, the Company
my make a limited number of offers and sales of its Common Shares to qualified
investors in transactions that are exempt from registration under the 1933 Act.
Other offers and sales of Common Shares may be at prices per share that are
higher or lower than the price of the Common Shares in this registration
statement. There can be no assurance the Company will not make other offers of
its securities at different prices, when, in the Company's discretion, such
prices are deemed by the Company to be reasonable under the circumstances.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDING.
None
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REORTS ON FORM 8-K.
None
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Company has duly caused this disclosure statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
LUMMI DEVELOPMENT, INC.
Date 08/14/01 /s/ Gary Stannell
------------------------------
Gary Stannell
President
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