UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________________ to _________________
Commission file number 0-50742
SIGN MEDIA SYSTEMS, INC.
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(Exact name of small business issuer as specified in its charter)
FLORIDA 02-0555904
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(State or other jurisdiction of IRS Employer
incorporation or organization) Identification No.)
2100 19th Street, Sarasota FL 34234
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(Address of principal executive offices)
(941) 330-0336
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(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 8,593,334 Common Shares no par value
as of September 30, 2004
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
The information required by Item 310(b) of Regulation S-B is attached hereto as
Exhibit One.
Item 2. Management's Discussion and Analysis or Plan of Operation.
THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND
NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.
THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, AND THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING, BUT NOT LIMITED TO COMPETITION AND OVERALL MARKET AND ECONOMIC
CONDITIONS.
RESULTS OF OPERATIONS
Management Discussion Snapshot.
The following tables sets forth certain of the Company's summary selected
operating and financial data. The following tables should be read in conjunction
with all other financial information and analysis presented herein including the
Financial Statements for the Nine Months Ended September 30, 2004 and 2003 and
the Three Months Ended September 30, 2003 and 2003.
Nine Months Ended
September 30
2004 2003
Revenue $ 1,291,885 $ 146,783
Cost of Goods Sold 196,469 59,277
Gross profit 1,095,416 87,506
Operating and
Other Expenses 454,394 406,366
Income (Loss) from before
provision for income taxes 641,022 (318,860)
Provision for income taxes 80,850 -
Net income (loss) 560,172 (318,860)
Gross profit margin 85% 0.6%
Earnings per share
of common stock $ 0.068 $ (0.040)
Weighted Average of
Common Shares 8,368,865 7,972,333
For the nine months ended September 30, 2004, the Company generated $1,291,885
of revenue, $1,095,416 of gross profit, $560,172 of net income after a provision
of $80,850 for income taxes, and $0.068 in earnings per weighted average common
share based upon a weighted average of 8,368,865 common shares outstanding. .
For the nine months ended September 30, 2003, the Company generated $146,783 of
revenue, $87,506 of gross profit, $(318,860) of net loss, and $(0.040) of net
loss per weighted common share based upon a weighted average of 7,972,333 common
shares outstanding.
Revenue for the nine months ended September 30, 2004, increased $1,145,102 from
the same period last year. Income from continuing operations after a provision
of $87,506 for income taxes for the nine months ended September 30, 2004,
increased $879,032 from the same period last year. Earnings per share for the
nine months ended September 30,2004, increased $.11 from the same period last
year.
Three Months Ended
September 30
2004 2003
Revenue $ 637,401 $ 42,815
Cost of Goods Sold 102,209 25,853
Gross profit 535,192 16,962
Operating and
Other Expenses 125,431 156,209
Income (Loss) from before
provision for income taxes 409,761 (139,247)
Provision for income taxes - -
Net income (loss) 409,761 (139,247)
Gross profit margin 84% -3.25%
Earnings per share
of common stock $ 0.048 $ (0.017)
Weighted Average of
Common Shares 8,593,334 8,000,000
For the three months ended September 30, 2004, the Company generated $637,401 of
revenue, $535,192 of gross profit, $409,761 of net income, and $0.048 in
earnings per weighted average common share based upon a weighted average of
8,593,334 common shares outstanding. .
For the three months ended September 30, 2003, the Company generated $42,815
revenue, $16,962 of gross profit, $(139,247) of net loss, and $(0.017) of net
loss per weighted average common share based upon a weighted average of
8,000,000 outstanding.
Revenue for the three months ended September 30, 2004, increased $594,586 from
the same period last year. Income from continuing operations for the nine months
ended September 30, 2004, increased $549,008 from the same period last year.
Earnings per share for the nine months ended September 30,2004, increased $0.65
from the same period last year.
MANAGEMENT'S DISCUSSION
The Company is in the business of developing, manufacturing and marketing mobile
billboard mounting systems which are mounted primarily on truck sides, rear
panels and breaking panel roll up doors. The Company also produces digitally
created outdoor, full color vinyl images ("Fleet Graphics") which are inserted
into the mounting systems and displayed primarily on trucks. The Company has
developed mounting systems which allow Fleet Graphics to easily slide into an
aluminum alloy extrusion with a cam-lever that snaps closed stretching the image
tight as a drum, and that also easily opens to free the image for fast removals
and change outs without damaging the truck body or the Fleet Graphics. The
mounting systems' proprietary cam-lever technology is the key to their
operation.
The Company's revenue comes from three primary sources; sales of the mobile
billboard mounting systems, sales of Fleet Graphics, and sales of third party
advertising utilizing the mobile billboard mounting systems and the Fleet
Graphics mounted on the sides of trucks owned by third parties. During the nine
months and the three months ended September 30, 2004, $1,278,966 and $631,027
respectively or 99% for both periods of the Company's revenue came from the sale
of its mobile billboard mounting systems, and $631,027 and $6,374 respectively
or 1% for both periods of the Company's revenue came from the sale of third
party advertising.
A material part of the Company's business is currently dependent upon one key
customer, Applied Advertising Network, LLC of Lake Mary, Florida. During the
nine months ended September 30, 2004, the Company's sales to this customer were
approximately $1,278,966 or 99% of all sales. During the three months ended
September 30, 2004, the Company's sales to this customer were approximately
$631,027 or 99% of all sales. The Company continues to rely on this customer for
the majority of its sales. However, the Company is moving forward to expand its
distribution base so that it will no longer depend on this one key customer.
There can be no guarantee that the Company will be able to diversify its
distribution base. Applied Advertising Network, LLC is not a related party.
The Company attributes the increases in revenue, income from continuing
operations and earnings per share to increases in sales due to the continued
expansion of the Company's sales and marketing division. The Company's primary
emphases is to expand sales nation wide and to also expand into Latin America by
acquiring independent dealers.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
There are no pending or threatened legal proceedings against the Company or any
of its subsidiaries.
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.
INDEX TO EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMEN
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1 SIGN MEDIA SYSTEMS, INC. FINANCIAL STATEMENTS
The Company filed no Forms 8K for the quarter ended September 30, 2004.
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.
SIGN MEDIA SYSTEMS, INC.
(Registrant)
Date November 22, 2004 /s/Antonio F. Uccello, III
----------------- -----------------------------
Antonio F. Uccello, III
Chief Executive Officer
Chairman of the Board
EXHIBIT 1
SIGN MEDIA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (OPERATIONS)
FOR THE NINE MONTHS AND THREE MONTHS ENDED
SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)
SIGN MEDIA SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,876
Accounts receivable 1,406,340
Inventory 33,416
Miscellaneous receivable 4,000
---------------
Total current assets 1,446,632
PROPERTY AND EQUIPMENT - Net 148,732
---------------
TOTAL ASSETS $ 1,595,364
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 18,123
Accounts payable and accrued expenses 220,626
Income taxes payable 80,850
Liability for stock to be issued 200,000
---------------
Total current liabilties 519,599
LONG-TERM DEBT - Net of Current Portion 14,687
DUE TO OFFICER/STOCKHOLDER 36,404
DUE TO RELATED PARTY COMPANIES 342,054
---------------
TOTAL LIABILITIES 912,744
STOCKHOLDERS' EQUITY
Common stock, no par value, 100,000,000 shares
authorized at September 30, 2004 and 8,460,000
shares issued and outstanding at September 30, 2004 5,000
Additional paid-in capital 739,437
Deficit (61,817)
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Total stockholders' equity 682,620
---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,595,364
===============
The accompanying notes are an integral part of these
condensed consolidated financial statements
SIGN MEDIA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (OPERATIONS)
FOR THE NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)
NINE MONTHS ENDED THREE MONTHS ENDED
September 30, September 30,
2004 2003 2004 2003
REVENUE $ 1,291,885 $ 146,783 $ 637,401 $ 42,815
COST OF GOODS SOLD 196,469 59,277 102,209 25,853
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GROSS PROFIT 1,095,416 87,506 535,192 16,962
OPERATING EXPENSES
Professional fees 63,064 47,038 35,043 22,319
General and administrative expenses 320,258 317,036 71,163 110,243
Depreciation 17,463 7,089 748 2,363
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Total operating expenses 400,785 371,163 106,954 134,925
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NET INCOME (LOSS) BEFORE
OTHER (EXPENSE) 694,631 (283,657) 428,238 (117,963)
OTHER (EXPENSE)
Interest expense 53,609 35,203 18,477 21,284
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Total Other (Expense) 53,609 35,203 18,477 21,284
------------------------------------------
NET INCOME (LOSS) BEFORE
PROVISION FOR INCOME TAXES 641,022 (318,860) 409,761 (139,247)
Provision for income taxes 80,850 - - -
------------------------------------------
NET INCOME (LOSS) APPLICABLE
TO COMMON SHARES $ 560,172 $ (318,860)$ 409,761 $(139,247)
==========================================
NET INCOME (LOSS) PER BASIC
AND DILUTED SHARES 0.068 (0.040) 0.048 (0.017)
==========================================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 8,368,865 7,972,333 8,593,334 8,000,000
==========================================
The accompanying notes are an integral part of these
condensed consolidated financial statements
SIGN MEDIA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
2004 2003
------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 560,172 $ (318,860)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities
Depreciation 17,463 7,089
Changes in assets and liabilities:
(Increase) in accounts receivable (834,442) (88,465)
(Increase) decrease in inventory 4,995 (1,397)
Decrease in prepaid expenses and other current assets 55,144 -
(Increase) in miscellaneous receivable (4,000) -
Increase in accounts payable and accrued expenses 67,666 67,526
Increase in income taxes payable 80,850
Increase in liability for stock to be issued 200,000 -
-------------------------
Total adjustments (412,324) (15,247)
-------------------------
Net cash provided by (used in) operating activities 147,848 (334,107)
-------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (63,141) (56,444)
-------------------------
Net cash (used in) investing activities (63,141) (56,444)
-------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (payments) from long-term debt,
net of current portion (14,050) 8,022
Due to officers/stockholders (9,499) (14,955)
Proceeds (payments) to related party companies (105,350) 360,055
Contribution of additional paid-in capital - 34,437
-------------------------
Net cash provided (used) by financing activities (128,899) 387,559
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NET (DECREASE) IN CASH AND CASH EQUIVALENTS (44,192) (2,992)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 47,068 5,138
-------------------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 2,876 $ 2,146
=========================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest. $ 53,609 $ 35,043
=========================
SUPPLEMENTAL NON-CASH INVESTING ACTIVITIES:
Conversion of liability to common stock $ 324,000 $ -
==========================
The accompanying notes are an integral part of
these condensed consolidated financial statements.
3
SIGN MEDIA SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 AND 2003
NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION
The condensed unaudited interim financial statements included
herein have been prepared by Sign Media Systems, Inc. (the
"Company") without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (the
"SEC"). Certain information and footnote disclosures normally
included in the financial statements prepared in accordance
with accounting principles generally accepted in the United
States of America have been condensed or omitted as allowed by
such rules and regulations, and the Company believes that the
disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed consolidated
financial statements be read in conjunction with the December
31, 2003 audited financial statements and the accompanying
notes thereto. While management believes the procedures
followed in preparing these condensed financial statements are
reasonable, the accuracy of the amounts are in some respects
dependent upon the facts that will exist, and procedures that
will be accomplished by the Company later that year.
The management of the Company believes that the accompanying
unaudited condensed consolidated financial statements contain
all adjustments (including normal recurring adjustments)
necessary to present fairly the operations and cash flows for
the periods presented.
The Company began business as E Signs Plus.com LLC, a Florida
Limited Liability Company ("Go Agency"). E Signs Plus.com was
formed on June 20, 2000. Initially the Company engaged in the
business of manufacturing and selling signage of all types and
also engaged in third party truck side advertising. In August
of 2001, the Company began developing its own proprietary
truck side mounting system and at that time decided to limit
its business to developing, manufacturing and marketing mobile
bill board mounting systems. On August 27, 2001, the Company
changed its name to GO! Agency, LLC. The principal of Go
Agency invested approximately $857,000 in Go Agency pursuing
this business.
On January 28, 2002, GO! Agency incorporated Sign Media
Systems, Inc. in the State of Florida. GO! Agency continued in
the business of marketing its proprietary truck side mounting
system and printing of graphics. Sign Media Systems engaged in
the business of developing manufacturing and marketing the
proprietary mounting system.
4
SIGN MEDIA SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 AND 2003
NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
Effective January 1, 2003, GO! Agency transferred all of its
assets including its interest in the proprietary cam lever
technology, which together had an original cost basis of
$300,000 to Sign Media Systems ("SMS"). The agreed upon value
of the assets $55,702 was exchanged for 7,959,000 shares of
the Company's common stock which was in excess of eighty
percent (80%) of the Company's then issued and outstanding
shares of common stock. In connection with this exchange, SMS
assumed $25,765 of Go Agency's debt, which consisted primarily
of 7,960,000 shares of common stock issued and outstanding.
The Company has developed and filed an application for a
patent on its mounting system.
Sign Media Systems Acquisition Company, Inc., ("SMA") a
Florida Corporation and American Powerhouse, Inc. ("API")
entered into an Agreement and Plan of Share Exchange dated
November 17, 2003, (the "Share Exchange") pursuant to which
the shareholders of API on November 17, 2003 (the "Exchange
Date") were issued 300,000 shares of common stock of SMA, no
par value, in exchange for one hundred percent (100%) of the
issued and outstanding shares of API. The Share Exchange
called for the resignation of the original officers and
directors, who no longer have any continued involvement in the
Company, and the appointing of a new board and officers. As of
the Exchange Date SMA, became the surviving company.
Simultaneously, Sign Media Systems Acquisition Company, Inc.,
a Florida corporation, was merged into Sign Media Systems,
Inc. per a Plan of Merger that was adopted by the shareholders
of both companies on November 17, 2003.
For accounting purposes, these transactions were accounted for
as a reverse acquisition under the purchase method of
accounting. Accordingly, SMS will be treated as the continuing
entity for accounting purposes, and the condensed consolidated
financial statements presented herein are those of SMS.
5
SIGN MEDIA SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2004 AND 2003
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The condensed consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary. All
significant intercompany accounts and transactions have been
eliminated in consolidation.
Use of Estimates
The preparation of condensed consolidated financial statements
in conformity with accounting principles generally accepted in
the United States of America requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures 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.
Revenue and Cost Recognition
Revenue is recognized under the accrual method of accounting
when the services are rendered rather than when cash is
collected for the services provided.
Cost is recorded on the accrual basis as well, when the
services are incurred rather than paid for.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments and
other short-term investments with an initial maturity of three
months or less to be cash equivalents.
The Company maintains cash and cash equivalent balances at
several financial institutions that are insured by the Federal
Deposit Insurance Corporation up to $100,000.
Property and Equipment
Property and equipment are stated at cost. Depreciation is
computed primarily using the straight-line method over the
estimated useful life of the assets.
Furniture and fixtures 5 years
Equipment 5 years
Trucks 5 years
6
SIGN MEDIA SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2004 AND 2003
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Advertising
Costs of advertising and marketing are expensed as incurred.
Advertising and marketing costs were $4,593 and $35,033 for
the nine months ended September 30, 2004 and 2003,
respectively
Fair Value of Financial Instruments
The carrying amount reported in the balance sheets for cash
and cash equivalents, accounts receivable, accounts payable
and accrued expenses approximate fair value because of the
immediate or short-term maturity of these financial
instruments.
Earnings (Loss) per Share of Common Stock
Historical net income (loss) per common share is computed
using the weighted-average number of common shares
outstanding. Diluted earnings per share (EPS) includes
additional dilution from common stock equivalents, such as
stock issuable pursuant to the exercise of stock options and
warrants.
The following is a reconciliation of the computation for basic
and diluted EPS:
September 30
2004 2003
Nwr income (loss) $560,172 $ (318,860)
======================
Weighted-average common
shares outstanding
Basic 8,368,865 7,972,333
Weighted-average common
stock equivalents
Stock options - -
Warrants - -
------------------------
Weighted-average common
shares outstanding
Diluted 8,368,865 7,972,333
=========================
7
SIGN MEDIA SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2004 AND 2003
NOTE 3- PROPERTY AND EQUIPMENT
Property and equipment consist of the following at September
30, 2004 and 2003:
2004 2003
-------- -------
Equipment $ 71,461 $ 18,032
Furniture & fixtures 57,882 29,552
Transportation equipment 54,621 8,860
--------------------
183,732 56,444
Less: accumulated depreciation (35,232) ( 3,162)
---------------------
Net book value $ 148,732 $ 53,282
=====================
Depreciation expense for the nine months ended September 30,
2004 and 2003 was $17,463 and $7,089, respectively.
NOTE 4- COMMITMENTS AND CONTINGENCIES
The Company entered into a lease agreement on November 1, 2002
with Hawkeye Real Estate, LLC, a related entity, to lease
warehouse and office space. The lease expires on December 30,
2007, and provides that SMS pay all applicable sales and use
tax, insurance and maintenance. The total minimum rental
commitments at September 30, 2004 under this lease are as
follows:
2004 $ 7,500
2005 30,000
2006 30,000
2007 15,000
-------
$ 82,500
========
Rent expense for the nine months ended September 30, 2004 and
2003 was $35,698 and $25,061, respectively.
8
SIGN MEDIA SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2004 AND 2003
NOTE 5- RELATED PARTY TRANSACTIONS
On January 28, 2002, Sign Media Systems, Inc. was formed as a
Florida Corporation but did not begin business operations
until April, 2002. Most of the revenue that Sign Media
Systems, Inc. earned was contract work with Go! Agency, LLC.,
a Florida limited liability company, a related party. Sign
Media Systems, Inc. would contract Go! Agency, LLC. to handle
and complete jobs. There was no additional revenue or expense
added from one entity to the other.
On September 15, 2002, the Company entered into a loan
agreement with Go! Agency, LLC and in connection therewith
executed a promissory note with a future advance clause in
favor of Go! Agency whereby Go! Agency agreed to loan the
Company up to a maximum of $100,000 for a period of three
years, with interest accruing on the unpaid balance at 18% per
annum, payable interest only monthly, with the entire unpaid
balance due and payable in full on September 15, 2005. At
September 30, 2004, the Company was indebted to Go! Agency in
the amount of $108,480.
On January 3, 2003, the Company entered into a loan agreement
with Olympus Leasing Company, a related party, and in
connection therewith executed a promissory note with a future
advance clause in favor of Olympus Leasing, whereby Olympus
Leasing agreed to loan the Company up to a maximum of
$1,000,000 for a period of three years, with interest accruing
on the unpaid balance at 18% per annum, payable interest only
monthly, with the entire unpaid balance due and payable in
full on January 3, 2006. As of September 30, 2004 there was
$233,574 due.
NOTE 6- LONG-TERM DEBT
Long-term debt consists of two installment notes with GMAC
Finance. As discussed in Note 1, the Company assumed debt from
Go! Agency as of January 28, 2002. On June 18, 2003, the
Company acquired a truck in the amount of $45,761 financed by
GMAC over a period of 5 years. Monthly payments are $763. The
loan carries no interest charges.
9
SIGN MEDIA SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2004 AND 2003
NOTE 7- PROVISION FOR INCOME TAXES
The provision for income taxes at September 30, 2004 consisted
of the following:
Current tax expense $ 213,704
Benefit of loss carry forwards (132,854)
---------
Net current tax expense $ 80,850
=========
The company has loss carry forwards of $390,748 that may be
offset against future taxable income that may be used against
future income taxes.
NOTE 8- LIABILITY FOR STOCK TO BE ISSUED
As of September 30, 2004 the Company received $200,000 for
common stock to be issued at a later date. Upon issuance of
the common stock the liability will be removed.
NOTE 9- STOCKHOLDERS' EQUITY
As of September 30, 2004 and 2003, there were 100,000,000
shares of common stock authorized.
As of September 30, 2004 and 2003, there were 8,460,000 and
7,960,000 shares of common stock issued and outstanding.
During the nine months ended September 30, 2004 the Company
had the following stock transactions:
The company issued 216,000 shares of common stock in
conversion of a liability.
10