U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: March 31, 2004
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.)
311 South State Street, Suite 460, Salt Lake City, Utah 84111
(Address of principal executive offices)
(801) 364-9262
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
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), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
The number of $.001 par value common shares outstanding at March 31, 2004:
4,812,800
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
See attached.
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2004
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Unaudited Condensed Balance Sheets,
March 31, 2004 and December 31, 2003 2
- Unaudited Condensed Statements of Operations,
for the three months ended March 31, 2004
and 2003 and for the period from inception on
March 10, 2000 through March 31, 2004 3
- Unaudited Condensed Statements of Cash Flows,
for the three months ended March 31, 2004
and 2003 and for the period from inception on
March 10, 2000 through March 31, 2004 4
- Notes to Unaudited Condensed Financial Statements 5 - 9
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
March 31, December 31,
2004 2003
___________ ___________
CURRENT ASSETS:
Cash $ 33,703 $ 34,564
___________ ___________
Total Current Assets 33,703 34,564
___________ ___________
$ 33,703 $ 34,564
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,130 $ 685
Accounts payable - related party 5,045 5,045
___________ ___________
Total Current Liabilities 7,175 5,730
___________ ___________
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,
4,812,800 shares issued and
outstanding 4,813 4,813
Capital in excess of par value 68,770 68,770
Deficit accumulated during the
development stage (47,055) (44,749)
___________ ___________
Total Stockholders' Equity 26,528 28,834
___________ ___________
$ 33,703 $ 34,564
___________ ___________
NOTE: The balance sheet at December 31, 2003 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-2-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three From Inception
Months Ended on March 10,
March 31, 2000 Through
_____________________ March 31,
2004 2003 2004
_________ __________ ____________
REVENUE $ - $ - $ -
EXPENSES:
General and administrative 2,330 2,610 8,880
_________ __________ ____________
LOSS BEFORE OTHER INCOME (EXPENSE) (2,330) (2,610) (8,880)
OTHER INCOME (EXPENSE)
Tax refund 24 - 24
_________ __________ ____________
LOSS BEFORE INCOME TAXES (2,306) (2,610) (8,556)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
_________ __________ ____________
LOSS FROM CONTINUING OPERATIONS (2,306) (2,610) (8,556)
_________ __________ ____________
DISCONTINUED OPERATIONS:
Loss from operations of
discontinued mobile kiosk
business (net of $0 in income taxes) - - (38,199)
Gain (loss) on disposal of
discontinued operations
(net of $0 in income taxes) - - -
_________ __________ ____________
LOSS FROM DISCONTINUED
OPERATIONS - - (38,199)
_________ __________ ____________
NET LOSS $ (2,306) $ (2,610) $ (47,055)
_________ __________ ____________
LOSS PER COMMON SHARE:
Continuing operations $ (.00) $ (.00) $ (.00)
Operations of discontinued
mobile kiosk business - - (.01)
Gain (loss) on disposal of
discontinued operations - - -
_________ __________ ____________
Net Loss Per Common Share $ (.00) $ (.00) $ (.01)
_________ __________ ____________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-3-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Three From Inception
Months Ended on March 10,
March 31, 2000 Through
____________________ March 31,
2004 2003 2004
__________ _________ _____________
Cash Flows from Operating Activities:
Net loss $ (2,306) $ (2,610) $ (47,055)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Depreciation - - 10,030
Impairment loss - - 13,312
Changes in assets and liabilities:
Increase (decrease) in
accounts payable 1,445 (255) 2,130
Increase in accounts
payable - related party - - 5,045
__________ _________ ____________
Net Cash (Used)
by Operating Activities (861) (2,865) (16,538)
__________ _________ ____________
Cash Flows from Investing Activities:
Proceeds from sale of property
and equipment - 5,575 5,575
Payments for property and equipment - - (28,917)
__________ _________ ____________
Net Cash Provided (Used)
by Investing Activities - 5,575 (23,342)
__________ _________ ____________
Cash Flows from Financing Activities:
Proceeds from issuance
of common stock - - 87,200
Payments for stock offering costs - - (13,617)
Proceeds from line of credit - - 10,606
Payments on line of credit - - (10,606)
__________ _________ ____________
Net Cash Provided by
Financing Activities - - 73,583
__________ _________ ____________
Net Increase (Decrease) in Cash (861) 2,710 33,703
Cash at Beginning of Period 34,564 36,584 -
__________ _________ ____________
Cash at End of Period $ 33,703 $ 39,294 $ 33,703
__________ _________ ____________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ 465
Income taxes $ - $ - $ -
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the three months ended March 31, 2004 and March 31, 2003:
None
The accompanying notes are an integral part of these unaudited condensed
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 was
formed to design, manufacture, and lease mobile kiosks and other
structures. The Company discontinued its mobile kiosk business effective
December 31, 2002 [See Note 2] and is currently considering other business
opportunities. The Company has not yet generated significant revenues and
is considered a development stage company as defined in Statement of
Financial Accounting Standards 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.
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 March 31, 2004 and 2003 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 in the United States of America 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, 2003 audited financial statements.
The results of operations for the periods ended March 31, 2004 and 2003
are not necessarily indicative of the operating results for the full year.
Cash and Cash Equivalents - 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 major renewals and betterments that extend the useful
lives of property and equipment are capitalized, upon being placed in
service. Expenditures for maintenance and repairs are charged to
operating expense as incurred. Depreciation is computed on a straight-
line basis over the estimated useful lives of the assets, which ranges
from three to ten years. The Company has adopted Statement of Financial
Accounting Standards No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets". SFAS No. 144 modifies previous disclosure
requirements and requires additional disclosure for assets held for sale.
Revenue Recognition - The Company previously recognized revenue based on
the terms of lease agreements with third parties. The Company currently
has no sources of revenue.
Discontinued Operations - The Company has adopted Statement of Financial
Accounting Standards No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets". SFAS No. 144 modifies previous disclosures and
requires additional disclosures for discontinued operations and the assets
associated with discontinued operations.
-5-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
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 9].
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles in the United
States of America 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.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards ("SFAS") No. 146, "Accounting for Costs Associated with Exit or
Disposal Activities", SFAS No. 147, "Acquisitions of Certain Financial
Institutions - an Amendment of FASB Statements No. 72 and 144 and FASB
Interpretation No. 9", SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an Amendment of FASB Statement
No. 123", SFAS No. 149, "Amendment of Statement 133 on Derivative
Instruments and Hedging Activities", and SFAS No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity", were recently issued. SFAS No. 146, 147, 148, 149 and 150 have
no current applicability to the Company or their effect on the financial
statements would not have been significant.
Reclassification - The financial statements for periods prior to March 31,
2004 have been reclassified to conform to the headings and classifications
used in the March 31, 2004 financial statements.
NOTE 2 - DISCONTINUED OPERATIONS
On December 31, 2002, the Company discontinued its mobile kiosk business
and in March 2003 the Company's President resigned. The Company has
accounted for this disposal in accordance with Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets".
-6-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - DISCONTINUED OPERATIONS [Continued]
The following is a summary of the results of operations of the Company's
discontinued mobile kiosk business:
For the Three From Inception
Months Ended on March 10,
March 31, 2000 Through
__________________ March 31,
2004 2003 2004
________ _________ _______________
Revenue $ - $ - $ 4,800
General and administrative - - (29,222)
Impairment loss - - (13,312)
Interest expense - - (465)
________ _________ _______________
Net loss $ - $ - $ (38,199)
________ _________ _______________
NOTE 3 - LEASE AGREEMENT
The Company had leased its modular structure and beverage equipment;
however, the agreement was terminated during 2002.
NOTE 4 - LEASE PROPERTIES
On December 31, 2002, the Company discontinued its mobile kiosk business.
In accordance with the Company's plan of disposal, the carrying amount of
leased properties were reduced to their net realizable value. The Company
determined to divide and sell off its leased properties. In January 2003,
the Company sold its beverage equipment for $5,575. Due to the difficulty
of moving the kiosk, the Company expected the sale of its remaining lease
property to raise only nominal amounts, if the Company was able to sell
the lease property at all. In December 2002, the Company recognized an
impairment loss of $13,312 to reduce the carrying amount of the leased
properties to their net realizable value. The Company was actively
seeking a buyer to purchase its leased properties. The Company could not
find a buyer and abandoned the lease property during the three months
ended December 31, 2003.
The modular structure and the beverage equipment were depreciated over
their estimated useful lives of ten and three years, respectively.
Depreciation expense for the three months ended March 31, 2004 and for the
year ended December 31, 2003 amounted to $0 and $0, respectively.
-7-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - CAPITAL STOCK
Preferred Stock - The Company has authorized 1,000,000 shares of preferred
stock with a $.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, 2004 and
December 31, 2003.
Common Stock - The Company has authorized 50,000,000 shares of common
stock with a $.001 par value. In June 2001, the Company sold 312,800
shares of its previously authorized but unissued common stock for cash of
$78,200, or $.25 per share. Stock offering costs of $13,617 were offset
against the proceeds.
During April 2000, in connection with its organization, the Company issued
4,500,000 shares of its previously authorized but unissued common stock
for cash of $9,000, or $.002 per share.
NOTE 6 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes".
SFAS No. 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, 2004 an operating loss carryforwards of
approximately $47,000 which may be applied against future taxable income
and which expire in various years through 2024.
The amount of and ultimate realization of the benefits from the deferred
tax assets 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 deferred tax assets, the
Company has established a valuation allowance equal to their tax effect
and, therefore, no deferred tax asset has been recognized. The net
deferred tax assets, which include the net operating loss and the
difference between the book and tax basis of depreciable assets, are
approximately $7,000 and $6,700 as of March 31, 2004 and December 31,
2003, respectively, with an offsetting valuation allowance of the same
amount. The change in the valuation allowance for the three months ended
March 31, 2004 is approximately $300.
NOTE 7 - RELATED PARTY TRANSACTIONS
Accounts Payable - Officers and shareholders of the Company have paid
expenses on behalf of the Company totaling $5,045. These funds are due on
demand and bear no interest.
-8-
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 7 - RELATED PARTY TRANSACTIONS [Continued]
Management Compensation - For the three months ended March 31, 2004 and
2003, the Company did not pay 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
offices as a mailing address, as needed, at no expense to the Company.
The cost value of this service is considered nominal and, therefore, has
not been recorded as an expense by the Company.
NOTE 8 - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles in the United States of
America, which contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception and has not
yet been successful in establishing profitable operations. 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 in
achieving profitable operations. The financial statements do not include
any adjustments that might result from the outcome of these uncertainties.
NOTE 9 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
For the Three From Inception
Months Ended on March 10,
March 31, 2000 Through
___________________ March 31,
2004 2003 2004
_________ _________ _____________
Loss from continuing operations
(numerator) $ (2,306) $ (2,610) $ (8,856)
Loss from discontinued
operations (numerator) - - (38,199)
Gain (loss) on disposal of
discontinued operations
(numerator) - - -
_________ _________ _____________
Loss available to common
shareholders (numerator) $ (2,306) $ (2,610) $ (47,055)
_________ _________ _____________
Weighted average number of
common shares outstanding for
the period (denominator) 4,812,800 4,812,800 4,640,481
_________ _________ _____________
Dilutive loss per share was not presented, as the Company had no common
stock equivalent shares for all periods presented that would affect the
computation of diluted loss per share.
-9-
ITEM 2: MANAGEMENT'S DISCUSSION & ANALYSIS OR PLAN OF OPERATIONS
PLAN OF OPERATIONS.
The company was incorporated under the laws of Nevada on March 10, 2000,
is a small start up company that has not yet generated significant revenues
from operations 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. The Company
sold 312,800 shares of common stock and raised gross proceeds of $78,200
pursuant to this offering. The offering closed June 27, 2001. The Company then
began to use the offering proceeds to continue to provide general working
capital for its proposed business operations to design and manufacture mobile
kiosks for use as drive-through beverage units. Since management's
determination is that this business was not successful, operations were
discontinued as of December 31, 2002.
Management's plan of operation for the next twelve months is to continue
using the capital remaining from the offering to provide general working
capital during the next twelve months to continue in existence while
management seeks other business opportunities. The Company has limited
operating capital and no income producing assets. At this time, we do not
know how long it will be necessary to fund necessary expenditures from
existing capital. The Company is not presently engaged in any significant
business activities and has no operations. Presently the Company's principal
activity has been to investigate potential acquisitions. However, the Company
has not located any suitable potential business acquisition and has no plans,
commitments or arrangements with respect to any potential business venture.
There is no assurance the Company could become involved with any business
venture, especially any business venture requiring significant capital. We do
not anticipate any capital commitments for product research and development or
significant purchases of plant or equipment, or any change in the number of
employees. Since the business was unsuccessful, investors have lost the money
invested and management will not attempt to pursue further efforts with
respect to this business, and it is unlikely the Company would have the
financial ability to do so in any event. Instead management will call a
shareholders meeting to decide whether to liquidate the Company or what
direction the Company will pursue, if any.
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 been successful in establishing profitable operations.
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.
ITEM 3. CONTROLS AND PROCEDURES.
The issuer's principal executive officer or officers and principal
financial officer or officers, or persons performing similar functions, are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the issuer and have:
designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under their supervision, to
ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to them by others within those
entities, particularly during the period in which the periodic reports are
being prepared;
designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under their
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
evaluated the effectiveness of the issuer's disclosure controls and
procedures as of the end of the fiscal quarter (the "Evaluation Date").
Based on their evaluation as of the Evaluation Date, their conclusions
about the effectiveness of the disclosure controls and procedures were that
nothing indicated:
any significant deficiencies in the design or operation of internal
controls which could adversely affect the issuer's ability to record, process,
summarize and report financial data;
any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer's internal controls; or
any material weaknesses in internal controls that have been or should be
identified for the issuer's auditors and disclosed to the issuer's auditors
and the audit committee of the board of directors (or persons fulfilling the
equivalent function).
Changes in internal control over financial reporting. There was no
significant change in the issuer's internal control over financial reporting
that occurred during the most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the issuer's internal
control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings. No
such action is contemplated by the Company nor, to the best of its knowledge,
has any action been threatened against the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) No instruments defining the rights of the holders of any class of
registered securities have been materially modified.
(b) No rights evidenced by any class of registered securities have
been materially limited or qualified by the issuance or
modification of any other class of securities.
(c) During the period covered by this report, there were not any
securities that the issuer sold without registering the securities
under the Securities Act.
(d) 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.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There has not been any material default in the payment of principal,
interest, a sinking or purchase fund installment, or any other material
default not cured within 30 days, with respect to any indebtedness of the
issuer exceeding 5 percent of the total assets of the issuer.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter has been submitted to a vote of security holders during the
period covered by this report, through the solicitation of proxies or
otherwise.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-B.
31. Certifications required by Rules 13a-14(a) or 15d-14(a).
32. Section 1350 Certifications
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter for which this report is filed.
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: May 17, 2004 by: /s/ Lynn Dixon
Lynn Dixon, President and Secretary/Treasurer