SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarter ended:
June 30, 2003
Commission File Number
333-64840
CEDAR MOUNTAIN DISTRIBUTORS, INC.
--------------------------------------------
(Name of small business issuer in its charter)
Nevada 91-2015441
------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
1236 EAST FRONTIER LANE
OLATHE, KANSAS 66062
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(Address of Principal Executive offices) (Zip Code)
Issuer's telephone number: (913) 782-3068
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: None:
Check whether the issuer (1) has 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 3,200,000 shares of common stock $.001 par value outstanding as of
July 16, 2003.
Documents incorporated by reference: None
Transitional Small Business Format (check one); Yes No X
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Consolidated Financial Statements of the Company required to be filed
with this 10-QSB Quarterly Report were prepared by management and commence on
the following page, together with related Notes. In the opinion of management,
the Consolidated Financial Statements fairly present the financial condition of
the Company.
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
2003 2002
(Unaudited)
Current assets:
Cash .......................................................... $ 1,261 $ 9,840
Accounts receivable ........................................... -- 1,297
Merchandise inventory, at lower of cost or market ............. 7,267 7,989
--------- ---------
Total current assets ............................... 8,528 19,126
--------- ---------
$ 8,528 19,126
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts and notes payable:
Accounts payable ......................................... $ 8,846 8,017
Accrued interest payable ................................. 4,741 3,565
Notes payable, shareholders .............................. 25,000 22,500
--------- ---------
Total current liabilities .......................... 38,587 34,082
Shareholders' deficit:
Preferred stock, $0.001 par value;
5,000,000 shares authorized, -0-
issued and outstanding ....................................... -- --
Common stock, $0.001 par value,
50,000,000 shares authorized, 3,200,000
and 3,200,000 issued and outstanding ......................... 3,200 3,200
Additional paid-in capital .................................... 226,819 219,619
Retained deficit .............................................. (260,078) (237,775)
--------- ---------
Total shareholders' deficit ...................... (30,059) (14,956)
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$ 8,528 19,126
========= =========
See accompanying notes to consolidated financial statements
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Quarter Ended
June 30,
-----------------------------
2003 2002
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Sales .................................. $ 544 $ 8,480
Cost of sales .......................... 435 7,027
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Gross profit ............... 109 1,453
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Operating Expenses ..................... 13,142 16,713
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Loss from operations ....... (13,033) (15,260)
Interest (expense) ..................... (613) (2,544)
------------ ------------
Net loss ................... $ (13,646) $ (17,804)
============ ============
Basic loss per common share ............ $ (0.00) $ (0.00)
============ ============
Basic weighted average shares outstanding... 3,200,000 3,000,000
============ ============
See accompanying notes to consolidated financial statements
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Six Months Ended
June 30,
-----------------------------
2003 2002
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Sales .................................. $ 944 $ 18,139
Cost of sales .......................... 722 14,905
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Gross profit ............... 222 3,234
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Operating Expenses ..................... 21,349 25,730
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Loss from operations ....... (21,127) (22,496)
Interest (expense) ..................... (1,176) (4,933)
------------ ------------
Net loss ................... $ (22,303) $ (27,429)
============ ============
Basic loss per common share ............ $ (0.01) $ (0.01)
============ ============
Basic weighted average shares outstanding... 3,200,000 3,000,000
============ ============
See accompanying notes to consolidated financial statements
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Six Months Ended
June 30,
----------------------
2003 2002
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Cash flows from operating activities:
Net loss ............................................. $ (22,303) $ (27,429)
Adjustments to reconcile net loss to
net cash used in operating activities:
Contribution of Services ........................ 7,200 7,200
--------- ---------
(15,103) (20,229)
Changes in current assets and liabilities:
Accounts receivable, inventory
and other current assets ...................... 2,019 (2,886)
Accounts payable and accrued expenses ........... 2,005 20,924
--------- ---------
Net cash flow (used in) operating activities . (11,079) (2,191)
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Cash flows from financing activities:
Offering costs incurred .............................. -- (15,091)
Proceeds from Notes Payable - Shareholders............ 2,500 12,500
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Net cash flow provided by financing activities 2,500 (2,591)
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Net change in cash ......................................... (8,579) (4,782)
Cash at beginning of period ................................ 9,840 6,986
--------- ---------
Cash at end of period ........................ $ 1,261 $ 2,204
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest ........................................ $ -- $ --
========= =========
Income taxes .................................... $ -- $ --
========= =========
See accompanying notes to consolidated financial statements
CEDAR MOUNTAIN DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
JUNE 30, 2003 AND 2002
1. Interim Reporting - BASIS OF PRESENTATION
Summary of issuer's significant accounting policies are incorporated by
reference to the Company's annual report on Form 10KSB dated December 31, 2002.
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
and with Form 10-QSB requirements. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements.
In the opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the six month period
ended June 30, 2003, are not necessarily indicative of the results that may be
expected for the year ended December 31, 2003.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
For the quarter ended June 30, 2003, the Company had sales of $544 and cost
of net product sales of $435 compared to sales of $8,480 and cost of $7,027 for
the quarter ended June 30, 2002. Operating expenses were $13,142, resulting in a
loss from operations of $13,013, compared to operating expenses and a loss from
operations of $16,713 and $15,260, respectively for the same quarter of the
prior year.
For the six months ended June 30, 2003, the Company had sales of $944 and
cost of net product sales of $722 compared to sales of $18,139 and cost of
$14,905 for the six months ended June 30, 2002. Operating expenses were $21,349,
resulting in a loss from operations of $21,127 compared to operating expenses
and a loss from operations of $25,730 and $22,496, respectively for the same six
months of the prior year. The nominal sales are the result of the limited
availability during the six months of the Company's sole employee. Expenses are
substantially legal and accounting costs and services contributed by a
shareholder and officer. A higher level of operations and promotion activities
is expected if additional funding is achieved.
Liquidity and Capital Resources.
On June 30, 2003, the Company had $8,528 in current assets, including
$1,261 in cash, and total current liabilities of $38,587, resulting in a net
working capital deficit of $30,059 compared to a net working capital deficit of
$14,956 at December 31, 2002. Of the liabilities, $29,741 is owed to
shareholders and an officer. Net cash used in operating activities for the six
months ended June 30, 2003 was $11,079, compared to $2,191 for the six months
ended June 30, 2002. Net cash provided by financing activities for the six month
periods ended June 30, 2003 and 2002 was $2500 and $12,500, respectively, from
proceeds of notes payable to shareholders,
The Company does not have any commitments for significant capital or operating
expenditures above their current levels and believes it has sufficient available
resources to maintain its operations at the current restricted level but will
need to obtain additional funding to execute its business plan and expand its
operations for the year ending December 31, 2003.
Our auditors included an explanatory paragraph in their opinion on our financial
statements for the year ended December 31, 2002, to state that our losses since
inception and our net capital deficit at December 31, 2002 raise substantial
doubt about our ability to continue as a going concern. Our ability to continue
as a going concern is dependent upon raising additional capital and achieving
profitable operations. We cannot assure you that our plan of operation will be
successful in addressing this issue.
Employees
The Company currently has no full time employees, but the president devotes time
to this business as resources allow.
Item 3. Controls and procedures
Currently we have only one employee who is also our sole officer and director.
Therefore we have not adopted any internal controls or any disclosure controls
and procedures.
Forward Looking Statements
Certain statements contained in this Report on Form 10-QSB, including
statements of the Company's current expectations, intentions, plans and beliefs,
and statements containing the words "believes," "anticipates," "estimates,"
"expects," or "may," are forward-looking statements, as defined in Section 21D
of the Securities Exchange Act of 1934. Such forward-looking statements involve
known and unknown risk, uncertainties and other factors which may cause the
actual results, performance, timing or achievements of the Company to be
materially different from any results, performance, timing or achievements
expressed or implied by such forward-looking statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
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 Reports on Form 8-K.
(a) Exhibits.
99.1 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
99.2 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
(b) Reports on Form 8-K: Form 8-K filed August 11, 2003
reporting changes in Registrant's Certifying Accountant.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CEDAR MOUNTAIN DISTRIBUTORS, INC.
By: /s/ James R. Smith
--------------------------------
James R. Smith
President and Principal
Executive Officer