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:
March 31, 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
-------------------------------------- --------
(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 $.001 par value outstanding as of
April 30, 2003.
Documents incorporated by reference: None
Transitional Small Business Format (check one); Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Consolidated Financial Statements of the Company required to be
filed with this 10-QSB Quarterly Report were prepared by management and commence
on the following page, together with related Notes. In the opinion of
management, the Consolidated Financial Statements fairly present the financial
condition of the Company.
2
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
2003 2002
--------- ---------
(Unaudited)
Current assets:
Cash .....................................................$ 7,125 $ 9,840
Accounts receivable ....................................... -- 1,297
Merchandise inventory, at lower of cost or market ......... 7,702 7,989
--------- ---------
Total current assets ........................... 14,827 19,126
--------- ---------
$ 14,827 19,126
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts and notes payable:
Accounts payable ..................................... $ 8,213 8,017
Accrued interest payable.............................. 4,127 3,565
Notes payable, shareholder............................ 22,500 22,500
--------- ---------
Total current liabilities ...................... 34,840 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 ................................ 223,219 219,619
Retained deficit .......................................... (246,432) (237,775)
--------- ---------
Total shareholders' deficit................... (20,013) (14,956)
--------- ---------
$ 14,827 19,126
========= =========
See accompanying notes to consolidated financial statements
3
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Quarter Ended
March 31,
------------------------------------
2003 2002
------------ ------------
Sales .............................................. $ 400 $ 9,659
Cost of sales ....................................... 287 7,878
------------ ------------
Gross profit ............................ 113 1,781
------------ ------------
Operating Expenses .................................. 8,207 9,017
------------ ------------
Loss from operations .................... (8,094) (7,236)
Interest (expense) .................................. (563) (2,389)
------------ ------------
Net loss ................................ $ (8,657) $ (9,625)
============ ============
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
4
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Quarter Ended
March 31,
-------------------------------------
2003 2002
--------- ---------
Cash flows from operating activities:
Net loss ............................................. $ (8,657) $ (9,625)
Adjustments to reconcile net loss to
net cash used in operating activities:
Contribution of Services ........................ 3,600 3,600
--------- ---------
(5,057) (6,025)
Changes in current assets and liabilities:
Accounts receivable, inventory
and other current assets ...................... 1,584 (5,496)
Accounts payable and accrued expenses ........... 758 10,226
--------- ---------
Net cash flow (used in) operating activities . (2,715) (1,295)
--------- ---------
Cash flows from financing activities:
Offering costs incurred .............................. -- (8,720)
Proceeds from Notes Payable - Shareholders............ -- 8,500
--------- ---------
Net cash flow provided by financing activities -- (220)
--------- ---------
Net change in cash ......................................... (2,715) (1,515)
Cash at beginning of period ................................ 9,840 6,986
--------- ---------
Cash at end of period ........................ $ 7,125 $ 5,471
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest ........................................ $ -- $ --
========= =========
Income taxes .................................... $ -- $ --
========= =========
See accompanying notes to consolidated financial statements
5
CEDAR MOUNTAIN DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
MARCH 31, 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 generally accepted accounting principles and with Form 10-QSB requirements.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the three month period
ended March 31, 2003, are not necessarily indicative of the results that may be
expected for the year ended December 31, 2003.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
For the quarter ended March 31, 2003, the Company had revenues of $400
and cost of net product sales of $287 compared to revenues of $9,659 and cost of
$7,878 for the quarter ended March 31, 2002. Operating expenses were $8,207,
resulting in a loss from operations of $8,094, compared to operating expenses
and a loss from operations of $9,017 and $7,236, respectively for the same
quarter of the prior year. The nominal sales are the result of the limited
availability during the three 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 March 31, 2003, the Company had $14,827 in current assets, including
$7,125 in cash, and total current liabilities of $34,840, resulting in a net
working capital deficit of $20,013 compared to a net working capital deficit of
$14,956 at December 31, 2002. Of the liabilities, $26,627 is owed to a
shareholder and officer. Net cash used in operating activities for the quarter
ended March 31, 2003 was $2,725, compared to $1,295 for the quarter ended March
31, 2002. Net cash used in financing activities for the quarter ended March 31,
2002 was $220. Proceeds of notes payable to shareholders were $8,500 during the
quarter ended March 31, 2002.
The Company does not have any commitments for significant capital or
operating expenditures above their current levels and believes it has sufficient
cash 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.
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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. None
(b) Reports on Form 8-K: None
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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.
May 20, 2003 CEDAR MOUNTAIN DISTRIBUTORS, INC.
By: /s/ James R. Smith
--------------------------------
James R. Smith
President and Principal
Executive Officer
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Certifications
I, James R. Smith, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Cedar
Mountain Distributors, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 20, 2003
/s/ James R. Smith
- --------------------------------------
James R. Smith
Chief Executive and Financial Officer
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CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, I, James R. Smith, Chief Executive Officer and Chief
Accounting Officer of CEDAR MOUNTAIN DISTRIBUTORS, INC. (the "Company"), hereby
certify that the Company's Quarterly Report on Form 10-QSB for the period ending
March 31, 2003, as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), fully complies with the requirements of Section 13(a) or
15(d), as applicable, of the Securities Exchange Act of 1934 and that the
information contained in the Report fairly presents, in all material respects,
the financial condition and result of operations of the Company.
/s/ James R. Smith
- ------------------------------
James R. Smith
Chief Executive Officer and
Chief Accounting Officer
May 20, 2003
11