FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2004
Commission File Number 333-64840
CEDAR MOUNTAIN DISTRIBUTORS, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 91-2015441
------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1065 West 1150 South, Provo, Utah 84601
---------------------------------------
(Address of principal executive offices)
(Zip Code)
(801) 607-1120
---------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (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 reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding as of November 16, 2004
------------ -----------------------------------
Common Stock 13,200,000
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
CEDAR MOUNTAIN DISTRIBUTORS, INC.
Consolidated Balance Sheets
ASSETS
September 30,
2004
(Unaudited)
------------------
Current Assets:
Cash $ 1,370
------------------
Total current assets 1,370
------------------
$ 1,370
==================
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts and notes payable:
Accounts payable $ 8,846
Accrued interest payable 8,135
Notes payable, shareholders 31,300
------------------
Total current Liabilities 48,281
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, 13,200,000
and 13,200,000 issued and outstanding 13,200
Additional paid-in capital 251,219
Retained deficit (311,330)
------------------
Total shareholders' deficit (46,911)
------------------
$ 1,370
==================
See accompanying notes to consolidated financial statements
2
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMETNS OF OPERATIONS
(Unaudited)
For the Three Months Ended
September 30,
-------------------------------------------
2004 2003
--------------- ---------------
Sales $ 0 $ 320
Cost of Sales 0 256
--------------- ---------------
Gross Profit 0 64
--------------- ---------------
Operating Expenses 2,058 10,232
--------------- ---------------
Loss from operations (2,058) (10,168)
Interest (expense) (783) (563)
--------------- ---------------
Total Expenses 2,841 10,731
--------------- ---------------
Loss before income taxes (2,841) (10,731)
Income tax benefit -- --
--------------- ---------------
Net loss $ (2,841) $ (10,731)
=============== ===============
Basic loss per common share $ (0.00) $ (0.00)
=============== ===============
Basic weighted average shares outstanding 13,200,000 $ 7,656,522
=============== ===============
See accompanying notes to consolidated financial statements
3
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Nine Months Ended
September 30,
-------------------------------------------
2004 2003
--------------- ---------------
Sales $ 0 $ 1,264
Cost of Sales 0 978
--------------- ---------------
Gross Profit 0 286
--------------- ---------------
Operating Expenses 16,107 31,581
--------------- ---------------
Loss from operations (16,107) (31,295)
Interest (expense) (2,207) (1,739)
--------------- ---------------
Total expenses 18,314 33,034
--------------- ---------------
Loss before income taxes (18,314) (33,034)
Income Tax Benefit -- --
--------------- ---------------
Net loss $ (18,314) $ (33,034)
=============== ===============
Basic loss per common share $ (0.00) $ (0.01)
=============== ===============
Basic weighted average shares outstanding 13,200,000 4,701,832
=============== ===============
See accompanying notes to consolidated financial statements
4
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended
September 30,
-------------------------------------------
2004 2003
--------------- ---------------
Cash flows from operating activities:
Net loss $ (18,314) $ (33,034)
Adjustments to reconcile net loss to
net cash used in operating activities:
Contribution of Services 7,200 10,800
--------------- ---------------
(11,114) (22,234)
Changes in current assets and liabilities:
Accounts receivable, inventory
and other current assets - 2,275
Accounts payable and accured expenses 2,458 (3,984)
--------------- ---------------
Net cash flow (used in) operating activities (8,656) (23,943)
Cash flows from financing activities
Offering costs incurred - -
Proceeds from sale of common stock 20,000
Proceeds from Notes Payable - Shareholders 5,000 1,850
--------------- ---------------
Net cash flow provided by financing acitivities 5,000 21,850
--------------- ---------------
Net change in cash (3,656) (2,093)
Cash at beginning of period 5,026 9,840
--------------- ---------------
Cash at end of period $ 1,370 $ 7,747
=============== ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - $ 51
=============== ===============
Income taxes - -
=============== ===============
See accompanying notes to consolidated financial statements
5
CEDAR MOUNTAIN DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2004 AND 2003
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 10-KSB dated December
31, 2003.
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 nine month
period ended September 30, 2004, are not necessarily indicative of the
results that my be expected for the year ended December 31, 2004.
2. Related Party Transactions
During the nine month periods ended September 30, 2004 and 2003, the
Company utilized the services, furniture, equipment, and facilities of
an officer and director of the subsidiary of the company, valued at
$1,200 each month. These services have been reflected as an operating
expense and with a corresponding charge to additional paid in capital
in the accompanying consolidated financial statements. As of July 1,
2004 the company terminated the use of the facilities.
During the nine month periods ended September 30, 2004, the sole
officer and director of the Company's subsidiary advanced $5,000 to the
Company. The amount owed to the officer/director was $31,300 at
September 30, 2004. Notes payable for this amount carry a ten percent
interest rate and are due on demand. Interest expense on the notes
totaled $2,207 and $1,739 for the nine month periods ended September
30, 2004 and 2003, respectively. Accrued interest payable on the notes
totaled $8,135 as of September 30, 2004.
3. Income Taxes
The Company records its income taxes in accordance with Statement of
Financial Accounting Standard No. 109, "Accounting for Income Taxes".
The Company incurred net operating losses during the periods shown on
the condensed financial statements resulting in a deferred tax asset,
which was fully allowed for, therefore the net benefit and expense
result in $0 income taxes.
6
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
Company's consolidated results of operations and financial condition. The
discussion should be read in conjunction with the consolidated financial
statements and notes thereto.
Financial Position
The Company had $1,370 in cash as of September 30, 2004. As of
September 30, 2004, the Company's working capital (deficit) was ($46,911) and
current liabilities were $48,281.
The Company has experienced net losses during the last two fiscal
years, has had no significant revenues during such period and has a significant
working capital deficit. During the past two fiscal years the Company has very
limited operations. In light of these circumstances, the ability of the Company
to continue as a going concern is significantly in doubt. The attached financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Three and Nine Months Ended September 30, 2004 and 2003
For the three and nine months ended September 30, 2004, the Company had
no revenues or cost of net product sales compared to revenues of $320 and
$1,264, respectively, and cost of sales of $256 and $978, respectively, for the
comparable periods, because the Company discontinued operations during 2003 due
to the lack of availability of the Company's sole employee.
Operating expenses were $2,058 and $10,232 during the three months
ended September 30, 2004 and 2003, respectively. The difference of $8,174 was
due to the fact that the Company paid rent for office and warehouse space during
the three months ended September 30, 2003, but not during the three months ended
September 30, 2004.
The operating expenses for the nine months ended September 30, 2004 and
2003 were $16,107 and $31,581, respectively. The difference of $15,474 was due
to the fact that the Company paid rent for office and warehouse space during the
nine month ended September 30, 2003, but not during the nine months ended
September 30, 2004.
Operating expenses consist primarily of 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 September 30, 2004, the Company had total current assets of $1,370,
and total current liabilities of $48,281, resulting in a net working capital
(deficit) of ($46,911) compared to a net working capital deficit of ($35,797) at
December 31, 2003. Of the liabilities, $39,435 is owed to a shareholder and
officer. Net cash used in operating activities for the nine months ended
September 30, 2004 was $8,656, compared to $23,943 for the nine months ended
September 30, 2003. Net cash provided by financing activities for the nine
months ended September 30, 2004 was $5,000, compared to $21,850 for the nine
months ended September 30, 2003, representing proceeds of notes payable to
shareholders and proceeds from the sale of common stock.
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, 2004.
7
Our auditors included an explanatory paragraph in their opinion on our
financial statements for the year ended December 31, 2003, to state that our
losses since inception and our net capital deficit at December 31, 2003 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.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
Critical Accounting Policies
Due to the lack of current operations and limited business activities,
the Company does not have any accounting policies that it believes are critical
to facilitate an investor's understanding of the Company's financial and
operating status.
Recent Accounting Pronouncements
The Company has not adopted any new accounting policies that would have
a material impact on the Company's financial condition, changes in financial
conditions or results of operations.
Forward-Looking Statements
When used in this Form 10-QSB or other filings by the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized officer of the Company's executive officers, the words
or phrases "would be", "will allow", "intends to", "will likely result", "are
expected to", "will continue", "is anticipated", "estimate", "project", or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any
forward-looking statements, which speak only as of the date made, and advises
readers that forward-looking statements involve various risks and uncertainties.
The Company does not undertake, and specifically disclaims any obligation to
update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statement.
Item 3. Controls and Procedures
The Company has evaluated, with the participation of the Company's
Chief Executive Officer and Chief Financial Officer, the effectiveness of the
design and operation of the Company's disclosure controls and procedures as of
September 30, 2004 pursuant to Exchange Act Rule 15d-15. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company required to be
included in the Company's periodic SEC filings. There have been no significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation.
8
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a)
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
3(i).1 Restated Articles of Incorporation (Incorporated by reference
to Exhibit 3.2 of the Company's Registration Statement on Form
SB-2 filed July 10, 2001 (File No. 333-64840))
3(ii).2 Restated Bylaws (Incorporated by reference to Exhibit 3.3 of
the Company's Registration Statement on Form SB-2 filed July
10, 2001 (File No. 333-64840))
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
32.1 Certification 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:
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.
CEDAR MOUNTAIN DISTRIBUTORS, INC.
(Registrant)
Date: November 16, 2004 By /s/ Brenda Hall
---------------------------------
Brenda Hall
President, CEO, CFO and Secretary
9