U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 333-43126
MOBILE DESIGN CONCEPTS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 87-0650219
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
6500 S. 400 W., Suite C, Salt Lake City, Utah 84107
(Address of principal executive offices)
(801) 266-2420
(Registrant's telephone number, including area code)
Check whether the issuer (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 report(s), YES [X] NO [ ]
and (2) has been subject to such filing requirements for the past 90 days.
YES[ ] NO [X ]
The number of $.001 par value common shares outstanding at March 31, 2001:
4,500,000
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
See attached.
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2001
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
CONTENTS
PAGE
Unaudited Condensed Balance Sheet,
March 31, 2001 2
Unaudited Condensed Statement of Operations,
for the three months ended March 31, 2001
and for the period from inception on March 10,
2000 through March 31, 2000 and 2001 3
Unaudited Condensed Statement of Cash Flows,
for the three months ended March 31, 2001
and for the period from inception on March 10,
2000 through March 31, 2000 and 2001 4
- Notes to Unaudited Condensed Financial Statements 5 - 8
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEET
ASSETS
March 31,
2001
___________
CURRENT ASSETS:
Cash $ 624
Inventory -
___________
Total Current Assets 624
___________
PROPERTY AND EQUIPMENT, net 13,672
___________
$ 14,296
____________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - related party $ 45
Accounts payable - trade -
Interest payable -
Line of credit 10,606
___________
Total Current Liabilities 10,651
___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
1,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
4,500,000 shares issued and
outstanding 4,500
Capital in excess of par value 4,500
Deficit accumulated during the
development stage (5,355)
___________
Total Stockholders' Equity 3,645
____________
$ 14,296
____________
The accompanying notes are an integral part of these
unaudited financial statements.
-2-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
From Inception
on March 10,
For the Three 2000 Through
Months Ended March 31,
March 31, _________________
2001 2000 2001
__________ ________ ________
REVENUE $ - $ - $ -
OPERATING EXPENSES:
General and Administrative 210 545 5,082
__________ ________ ________
LOSS FROM OPERATIONS (210) (545) (5,082)
OTHER EXPENSES:
Interest 156 - 273
__________ ________ ________
LOSS BEFORE INCOME TAXES (366) (545) (5,355)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
__________ ________ ________
NET LOSS $ (366) $ (545) $(5,355)
__________ ________ ________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00)
__________ ________ ________
The accompanying notes are an integral part of these
unaudited financial statements.
-3-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
From Inception
on March 10,
For the Three 2000 Through
Months Ended March 31,
March 31, _________________
2001 2000 2001
________ _______ ________
Cash Flows From Operating Activities:
Net loss $ (366) $ (545) $ (5,355)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Changes in assets and liabilities:
(Increase) in inventories (3,694) - (13,672)
Increase in accounts
payable - related party - 545 45
Increase in accounts
payable - trade (812) - -
Increase in interest payable (80) - -
________ _______ _________
Net Cash (Used) by
Operating Activities (4,952) - (18,982)
________ _______ _________
Cash Flows From Investing Activities: - - -
________ _______ _________
Net Cash Provided by
Investing Activities - - -
________ _______ _________
Cash Flows From Financing Activities:
Proceeds from issuance of
common stock - - 9,000
Proceeds from line of credit 5,000 - 10,606
________ _______ _________
Net Cash Provided by
Financing Activities 5,000 - 19,606
________ _______ _________
Net Increase in Cash 48 - 624
Cash at Beginning of Period 576 - -
________ _______ _________
Cash at End of Period $ 624 $ - $ 624
________ _______ _________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 156 $ - $ 273
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing
and Financing Activities:
For the period ended March 31, 2001:
None
The accompanying notes are an integral part of these
unaudited financial statements.
-4-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Mobile Design Concepts, Inc. (the Company) was organized
under the laws of the State of Nevada on March 10, 2000. The Company plans
to design and manufacture mobile kiosks and other structures. The Company
has not yet generated any revenues from its planned principal operations
and is considered a development stage company as defined in SFAS No. 7.
The Company has, at the present time, not paid any dividends and any
dividends that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors. The Company's
fiscal year-end is December 31.
Condensed Financial Statements - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary
to present fairly the financial position, results of operations and cash
flows at March 31, 2001 and 2000 and for the periods then ended have been
made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the company's December 31, 2000
audited financial statements. The results of operations for the period
ended March 31, 2001 are not necessarily indicative of the operating
results for the full year.
Loss Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share". [See Note 8]
Cash and Cash Equivalents - For purposes of the statement of cash flows,
the Company considers all highly liquid debt investments purchased with a
maturity of three months or less to be cash equivalents.
Property and Equipment - Property and equipment are stated at cost.
Expenditures for repairs and maintenance are charged to operating expense
as incurred. Expenditures for additions and betterments that extend the
useful lives of property and equipment are capitalized, upon being placed
in service. When assets are sold or otherwise disposed of, the cost and
related accumulated depreciation or amortization are removed from the
accounts and any resulting gain or loss is included in operations.
Organization Costs - Organization costs, which reflect amounts expended to
organize the Company, amounted to $545 and were expensed during the period
ended April 30, 2000.
Accounting 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 disclosures of contingent assets and
liabilities at the date of the financial statements, and the reported
amount of revenues and expenses during the reported period. Actual results
could differ from those estimated.
-5-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards (SFAS) No. 136, "Transfers of Assets to a not for profit
organization or charitable trust that raises or holds contributions for
others", SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - deferral of the effective date of FASB Statement No. 133 (an
amendment of FASB Statement No. 133)", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and Amendment of
SFAS No. 133", SFAS No. 139, "Recission of SFAS No. 53 and Amendment to
SFAS No. 63, 89 and 21", and SFAS No. 140, "Accounting to Transfer and
Servicing of Financial Assets and Extinguishment of Liabilities", were
recently issued. SFAS No. 136, 137, 138, 139 and 140 have no current
applicability to the Company or their effect on the financial statements
would not have been significant.
NOTE 2 - PROPERTY AND EQUIPMENT
The following is a summary of property and equipment - at cost, less
accumulated depreciation and amortization as of March 31, 2001:
March 31,
2001
___________
Leased Equipment: modular structure $ 13,672
Less: accumulated depreciation
and amortization -
___________
$ 13,672
____________
Depreciation and amortization expense for the period ended March 31,
2001, amounted to $0. This modular structure will begin being
depreciated in April 2001 when this structure is placed in service.
NOTE 3 - LINE OF CREDIT
The Company has entered into a line of credit arrangement with a bank. The
line provides for borrowings up to $20,606 with a variable interest rate
that is 2% above the bank's prime rate. The initial rate is 11.5% per
annum. The line of credit matures on August 1, 2001. At March 31, 2001
the outstanding balance on the line of credit was $10,606.
NOTE 4 - CAPITAL STOCK
Preferred Stock - The Company has authorized 1,000,000 shares of preferred
stock, $.001 par value, with such rights, preferences and designations and
to be issued in such series as determined by the Board of Directors. No
shares are issued and outstanding at March 31, 2001.
Common Stock - During April of 2000, in connection with its organization,
the Company issued 4,500,000 shares of its previously authorized, but
unissued common stock for cash. The shares were issued for $9,000 (or
$.002 per share).
-6-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards. The Company has available at
March 31, 2001 an operating loss carryforwards of approximately $5,300
which may be applied against future taxable income and which expires in
various years through 2020.
The amount of an ultimate realization of the benefits from the operating
loss carryforwards for income tax purposes is dependent, in part, upon the
tax laws in effect, the future earnings of the Company, and other future
events, the effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards the
Company has established a valuation allowance equal to the amount of the
loss carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax asset is
approximately $1,800 as of March 31, 2001, with an offsetting valuation
allowance at March 31, 2001 of the same amount. The change in the
valuation allowance for the period ended March 31, 2001 is approximately
$200.
NOTE 6 - RELATED PARTY TRANSACTIONS
Management Compensation - As of March 31, 2001, the Company has not paid
any compensation to any officer or director of the Company.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his/her
offices as a mailing address, as needed, at no expense to the Company.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. However, the Company was only recently
formed and has not yet been successful in establishing profitable
operations. Further, the Company has current liabilities in excess of
current assets. These factors raise substantial doubt about the ability of
the Company to continue as a going concern. In this regard, management is
proposing to raise any necessary additional funds not provided by
operations through loans or additional sales of its common stock. There is
no assurance that the Company will be successful in raising this additional
capital or achieving profitable operations. The financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.
-7-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 8 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
From Inception
on March 10,
For the Three 2000 Through
Months Ended March 31,
March 31, ___________________
2001 2000 2001
________ __________ _________
Loss from continuing operations
available to common shareholders
(numerator) $(366) $ (545) $(5,355)
________ __________ __________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 4,500,000 4,500,000 4,500,000
________ __________ __________
Fully diluted earnings per share was not disclosed as the Company has no
common stock equivalents.
NOTE 9 - SUBSEQUENT EVENT
The Company has negotiated a lease agreement for the use of their mobile
structure to an un-related party. Specific details of this agreement were
finalized subsequent to March 31, 2001. The agreement will be effective
retroactive to March 20, 2001. The lease has a term of four years with
increasing monthly payments which start out at $600 per month and level off
at $1,250 per month during the 4th year.
-8-
ITEM 2: MANAGEMENT'S DISCUSSION & ANALYSIS OR PLAN OF OPERATIONS
PLAN OF OPERATIONS.
Our company was recently incorporated under the laws of Nevada on March
10, 2000, is a small start up company that only recently commenced active
business operations, has not yet generated any revenues from operation and is
considered a development stage company. In August, 2000, the Company filed a
registration statement on Form SB-2 with the U.S. Securities & Exchange
Commission under the Securities Act of 1933, to register the offering, on a
"best efforts, no minimum" basis, of up to 500,000 shares of $.001 par value
common stock, at a price of $.25 per share. This registration statement was
declared effective on May 14, 2001. As of June 25, 2001, the Company has sold
312,800 shares of common stock and raised gross proceeds of $78,200 pursuant
to this offering. The offering has not closed. Management's plan of operation
for the next twelve months is to use funds generated from sale of shares in
this offering to provide initial working capital for the operation of the
proposed business.
Our plan of operation is to use our existing capital together with the
proceeds from this offering to complete construction of our prototype kiosk
and to construct up to three additional kiosks for sale or lease to third
parties. In addition, we have established a one-year $20,606 revolving line
of credit with our bank that bears interest at the rate of prime plus 2%, for
a current rate of 11.5%. To date we have drawn $10,606 against the line of
credit in connection with the construction of our prototype kiosk. We plan to
repay all amounts advanced to us under the line of credit with the proceeds
from this offering.
We estimate our general and administrative expenses during the next
twelve months to be approximately $15,000, including rent, office, legal, and
accounting expenses. We estimate the cost of constructing our prototype kiosk
at $20,000 to $25,000, and the cost of constructing additional kiosks to be
somewhat lower as the construction process becomes more uniform and design
problems have been resolved. If all shares in this offering are sold, we will
proceed with the construction plan outlined above, subject to indications of
interest from prospective operators. Our prototype was completed in February,
2001 and we anticipate that additional kiosks will be completed sequentially
based on demand with a total construction time of approximately 45 days. If
less than all offered shares are sold, we will reduce our construction budget
as appropriate and may attempt to finance the construction of additional
kiosks using a purchase contract or lease with the potential operator as
security for a loan.
We plan to generate revenue from the lease and sale of our kiosks to
third parties. We plan to initially lease our kiosks for a monthly rental of
from $12,000 to $15,000 per year under a lease with a term of three years that
may be renewed on an annual basis after the initial three-year term. We
believe that an operator at a good location will continue to rent the kiosk
for its useful life, which we estimate at ten to fifteen years. We also plan
to sell kiosks at prices ranging from $40,000 to $65,000, depending on the
design features and equipment included in the particular unit. Our proposed
lease rates and sales prices will be subject to adjustment based on demand,
changes in our cost structure and competitive conditions prevailing in our
industry.
We anticipate that the proceeds from the sale of the offering together
with our current assets and bank line of credit will be sufficient to permit
us to implement our business plan and conduct our operations for a period of
at least twelve months. If we receive only limited funds in this offering,
we will delay construction of additional kiosks, if necessary. We may have to
seek additional funds within the next twelve months. We have no assurance of
receiving any additional funding.
The accompanying financial statements have been prepared assuming that
we will continue as a going concern. As discussed in Note 7 to the financial
statements, the Company was only recently formed, has incurred losses since
its inception and has not yet been successful in establishing profitable
operations, raising substantial doubt about its ability to continue as a going
concern. Management's plans in regards to these matters are also described in
Note 7. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties. In the event the proposed
business is unsuccessful, there is no assurance we could successfully become
involved in any other business venture. Management presently has no plans,
commitments or arrangements with respect to any other proposed business
venture.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) None.
(b) None.
(c) See Part I, Item 1 (financial statements) and Item 2 (management's
discussion) for financial information and a discussion regarding
use of proceeds.
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
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Mobile Design Concepts, Inc.
Date: June 28, 2001 by: /s/ Steven N. Bednarik
Steven N. Bednarik, President and Secretary/Treasurer