SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
- - ----------------- ----------------------
March 31, 2004 000-32099
The Art Boutique, Inc.
--------------------------
(Exact name of registrant as specified in its charter)
Wyoming 83-0269496
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(State of incorporation) (I.R.S. Employer
Identification No.)
Rooms 1203-8, 12 Floor, Hang Seng Bldg.
77 Des Voeux Road Central,l Hong Kong
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: None
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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 the filing
requirements for at least the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
12,471,900 as of March 31, 2004
ART BOUTIQUE, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE-MONTHS ENDED MARCH 31, 2004
(UNAUDITED)
MICHAEL JOHNSON & CO., LLC
Certified Public Accountants
9175 East Kenyon Ave., Suite 100
Denver, Colorado 80237
Michael B. Johnson C.P.A. Telephone: (303) 796-0099
Member: A.I.C.P.A. Fax: (303) 796-0137
Colorado Society of C.P.A.s
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Art Boutique, Inc.
We have reviewed the accompanying balance sheet of Art Boutique, Inc. (A
Development Stage Company) as of March 31, 2004 and the related statements of
operations for the three-months ended March 31, 2004 and 2003, and for the
period May 15, 1984 (inception) to March 31, 2004, stockholders' equity for the
period ended March 31, 2004, cash flows for the three-month period ended March
31, 2004 and 2003and for the period May 15, 1984 (inception) to March 31, 2004
included in the accompanying Securities and Exchange Commission Form 10-QSB for
the period ended March 31, 2004. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquires of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, the objective
of which is the expression of an opinion regarding the financial statements as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with accounting principles generally accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet as of December 31, 2003, and
the related statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein). In our report dated May 3, 2004, we
expressed an unqualified opinion on those financial statements. In our opinion,
the information set forth in the accompanying balance sheet as of March 31, 2004
is fairly stated in all material respects in relation to the balance sheet from
which it has been derived.
Michael Johnson & Co., LLC
Denver, Colorado
May 20, 2004
/s/Michael Johnson & Co., LLC
ART BOUTIQUE, INC.
(A Development Stage Company)
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
2004 2003
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ASSETS:
Current Assets:
Cash $ 79,897 $280,054
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Total Current Assets 79,897 280,054
----------------- -------------
Fixed Assets:
Office Equipment 7,945 4,738
Furniture & Fixtures 922 -
----------------- -------------
8,867 4,738
Less Accumulated Depreciation (379) (237)
----------------- -------------
Total Fixed Assets 8,488 4,501
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Other Assets:
Deposits 730 -
Prepaid Expenses 28,301 -
----------------- -------------
Total Other Assets 29,031 -
----------------- -------------
TOTAL ASSETS $ 117,416 $284,555
================= =============
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 18,429 $17,291
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Total Current Liabilities 18,429 17,291
----------------- -------------
Stockholders' Equity:
Common Stock, no par value; 50,000,000 shares authorized;
12,471,900 shares issued and outstanding 433,095 433,095
Deficit accumulated during the development stage (334,108) (165,831)
----------------- -------------
Total stockholders' equity 98,987 267,264
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 117,416 $284,555
================= =============
See Accountants Review Report
ART BOUTIQUE, INC.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
May 15, 1984
Three-Month Period Ended Inception to
March 31, March 31,
---------------------------------
2004 2003 2004
--------------- -------------- -------------
Revenue $ - $ - $ 61,102
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Expenses:
Depreciation 378 - 4,360
Loss from discontinued operations - - 26,331
Acquisition costs - - 2,100
General and administrative 167,958 - 362,638
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Total Expenses 168,336 - 395,429
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Other Revenue/Expense:
Exchange Rate Gain/Loss (59) - (219)
--------------- -------------- -------------
Net Loss $(168,277) $ - $(334,108)
=============== ============== =============
Net Loss per share common stock $ (0.01) * )
=============== ==============
Weighted average number of
common shares outstanding 12,471,900 4,471,900
=============== ==============
* Less than a $.01 per share
See Accountants Review Report
ART BOUTIQUE, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
May 15, 1984
Three-Month Period Ended (Inception) to
March 31, March 31,
------------------------------------
2004 2003 2004
--------------- -------------- ---------------
Cash Flows from Operating Activities:
Net Loss $(168,277) $(12,683) $(334,108)
Adjustments to reconcile net loss to net cash used
by operating activities
Stock issued for services - - 1,000
Depreciation 379 - 379
Changes in operating assets and liabilities:
Increase in Accounts Payable 1,138 12,683 18,429
(Increase) in Deposits (730) - (730)
(Increase) in Prepaid Expenses (28,301) - (28,301)
--------------- -------------- ---------------
Net Cash Flows Used by Operating Activities (195,791) - (343,331)
--------------- -------------- ---------------
Cash Flows from Investing Activities:
Sale of Equipment (Net) - - -
Acquisition of Fixed Assets (4,366) - (8,867)
--------------- -------------- ---------------
Net Cash Flows Provided by Investing Activities (4,366) - (8,867)
--------------- -------------- ---------------
Cash Flows from Financing Activities:
Issuance of Common Stock - - 432,095
--------------- -------------- ---------------
Net Cash Flows Provided by Financing Activities - - 432,095
--------------- -------------- ---------------
Net Increase (Decrease) in Cash (200,157) - 79,897
--------------- -------------- ---------------
Cash at Beginning of Period 280,054 - -
--------------- -------------- ---------------
Cash at End of Period $ 79,897 $ - $ 79,897
=============== ============== ===============
Supplemental Disclosure of Cash Flows Information:
Cash paid for interest $ - $ - $ -
=============== ============== ===============
Cash paid for taxes $ - $ - $ -
=============== ============== ===============
Supplemental Disclosure of Non-Cash Transactions
Stock issued for services - 4,000,000 Shares $ 1,000
===============
See Accountants Review Report
ART BOUTIQUE, INC.
(A Development Stage Company)
Consolidated Stockholders' Equity (Deficit)
March 31, 2004
(Unaudited)
Deficit
Accum. During
Common Stock the Development
------------------------------------
# of Shares Amount Stage Totals
----------- ------ ----- ------
Balance - December 31, 1995 471,900 29,795 (29,842) (47)
Net Profit for year - - 47 47
----------------- --------------- ---------------- ----------------
Balance - December 31, 1996 471,900 29,795 (29,795) -
----------------- --------------- ---------------- ----------------
Issued March 14, 1997 4,000,000 1,000 - 1,000
Net Loss for year - - (1,000) (1,000)
----------------- --------------- ---------------- ----------------
Balance - December 31, 1997 4,471,900 30,795 (30,795) -
----------------- --------------- ---------------- ----------------
Net Profit for year - - - -
----------------- --------------- ---------------- ----------------
Balance - December 31, 1998 4,471,900 30,795 (30,795) -
----------------- --------------- ---------------- ----------------
Net Profit for year - - - -
----------------- --------------- ---------------- ----------------
Balance - December 31, 1999 4,471,900 30,795 (30,795) -
----------------- --------------- ---------------- ----------------
Cash for acquisition - 2,300 - 2,300
Net Loss for year - - (2,300) (2,300)
----------------- --------------- ---------------- ----------------
Balance - December 31, 2000 4,471,900 33,095 (33,095) -
----------------- --------------- ---------------- ----------------
Net Loss for year - - (4,608) (4,608)
----------------- --------------- ---------------- ----------------
Balance - December 31, 2001 4,471,900 33,095 (37,703) (4,608)
----------------- --------------- ---------------- ----------------
Net Loss for Year - - (12,683) (12,683)
----------------- --------------- ---------------- ----------------
Balance - December 31, 2002 4,471,900 33,095 (50,386) (17,291)
----------------- --------------- ---------------- ----------------
Issuance of stock for cash 12/03 8,000,000 400,000 - 400,000
Net Loss for Year - - (115,445) (115,445)
----------------- --------------- ---------------- ----------------
Balance - December 31, 2003 12,471,900 433,095 (165,831) 267,264
----------------- --------------- ---------------- ----------------
Net Loss for Period - - (168,277) (168,277)
----------------- --------------- ---------------- ----------------
Balance - March 31, 2004 12,471,900 $ 433,095 $ (334,108) $ 98,987
================= =============== ================ ================
See Accountants Review Report
ART BOUTIQUE, INC.
(A Development Stage Company)
March 31, 2004
Note 1 - Presentation of Interim Information
In the opinion of the management of Art Boutique, Inc., and Key Chance
International, LTD (a wholly owned subsidiary) the accompanying unaudited
financial statements include all normal adjustments considered necessary to
present fairly the financial position as of March 31, 2004 and the results of
operations for the three-months ended March 31, 2004 and 2003 and the period May
15, 1984 (inception) to March 31, 2004, and cash flows for the three-months
ended March 31, 2004 and 2003, and for the period May 15, 1984 (Inception) to
March 31, 2004. Interim results are not necessarily indicative of results for a
full year.
The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain certain information included in the Company's audited
financial statements and notes for the fiscal year ended December 31, 2003.
Note 2 - Going Concern:
The company's financial statements have been presented on the basis that it is a
going concern, which contemplated the realization of assets and the satisfaction
of liabilities in the normal course of business.
The Company is in the development stage and has not earned any revenue from
operations. The Company's ability to continue as a going concern is dependent
upon its ability to develop additional sources of capital or locate a merger
candidate and ultimately, achieve profitable operations. The accompanying
financial statements do not include any adjustments that might result from the
outcome of these uncertainties. Management is seeking new capital to revitalize
the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
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OF OPERATIONS
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Cautionary and Forward Looking Statements
In addition to statements of historical fact, this Form 10-QSB contains
forward-looking statements. The presentation of future aspects of XsunX, Inc.
("The Art Boutique," the "Company" or "issuer") found in these statements is
subject to a number of risks and uncertainties that could cause actual results
to differ materially from those reflected in such statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
reflect management's analysis only as of the date hereof. Without limiting the
generality of the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "intend," or "could" or the negative variations thereof or
comparable terminology are intended to identify forward-looking statements.
These forward-looking statements are subject to numerous assumptions, risks
and uncertainties that may cause XsunX's actual results to be materially
different from any future results expressed or implied by The Art Boutique in
those statements. Important facts that could prevent The Art Boutique from
achieving any stated goals include, but are not limited to, the following:
Some of these risks might include, but are not limited to, the
following:
(a) volatility or decline of the Company's stock price;
(b) potential fluctuation in quarterly results;
(c) failure of the Company to earn revenues or profits;
(d) inadequate capital to continue or expand its busi-
ness, inability to raise additional capital or financ
-ing to implement its business plans;
(e) failure to commercialize its technology or to make
sales;
(f) rapid and significant changes in markets;
(g) litigation with or legal claims and allegations by
outside parties;
(h) insufficient revenues to cover operating costs.
There is no assurance that the Company will be profitable, the Company
may not be able to successfully develop, manage or market its products and
services, the Company may not be able to attract or retain qualified executives
and technology personnel, the Company's products and services may become
obsolete, government regulation may hinder the Company's business, additional
dilution in outstanding stock ownership may be incurred due to the issuance of
more shares, warrants and stock options, or the exercise of warrants and stock
options, and other risks inherent in the Company's businesses.
The Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
Readers should carefully review the factors described in other documents the
Company files from time to time with the Securities and Exchange Commission,
including the Quarterly Reports on Form 10-QSB and Annual Report on Form 10-KSB
filed by the Company in 2004 and any Current Reports on Form 8-K filed by the
Company.
RESULTS OF OPERATIONS FOR QUARTER ENDED MARCH 31, 2004 COMPARED TO SAME PERIOD
ENDED MARCH 31, 2003.
The Company had no revenues from operations in the period in 2004 or 2003.
The Company incurred general and administrative expenses in the period in 2004
of $168,336 compared to none in the period in 2003. The expenses were incurred
by the company in its search for a business acquisition, for salaries,
accounting legal, and travel expenses. The company is continuing to seek a
business operation to acquire. The Company had loss in 2004 in the quarter of
($168,277) compared to a loss on operations of none in 2003 in the quarter. The
Company had loss per share in 2004 of ($.01) and no loss in 2003.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash capital of $79,897 at the end of the period and other
assets of $8,867. The Company will need to either borrow money or make private
placements of stock in order to fund any significant operations. No assurance
exists as to the ability to achieve loans or make private placements of stock.
The company expects the trend of losses to continue until the company is
able to achieve revenues sufficient to cover expenses of which there is no
assurance.
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet the Company's cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. The Company will have to
seek loans or equity placements to cover such cash needs. In the event the
Company is able to complete a business combination during this period, lack of
its existing capital may be a sufficient impediment to prevent it from
accomplishing the goal of completing a business combination. There is no
assurance, however, that without funds it will ultimately allow registrant to
carry out its business
The Company will need to raise additional funds to conduct its business
activities in the next twelve months.
No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses as they may be incurred.
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.
The Company's auditor has issued a "going concern" qualification as part of
his opinion in the Audit Report. There is substantial doubt about the ability of
the Company to continue as a "going concern." The Company has no business,
limited capital, debt in excess of $18,429, all of which is current, $79,897 in
cash, nominal other assets, and no capital commitments. The effects of such
conditions could easily be to cause the Company's bankruptcy.
Management hopes to develop its business plan and will need, at which to
seek and obtain funding, via loans or private placements of stock for operations
debt and to provide working capital. Management has plans to seek capital in the
form of loans or stock private placements in the next quarter of approximately
$250,000.
ITEM 3. CONTROLS AND PROCEDURES
a. Evaluation of Disclosure Controls and Procedures:
Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported, within the time period
specified in the SEC's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in the reports filed under the Exchange Act
is accumulated and communicated to management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. As of the end of the period covered by this
report, the Company carried out an evaluation, under the supervision and with
the participation of the Company's management, including the Company's Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures. Based
upon and as of the date of that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed in
the reports the Company files and submits under the Exchange Act is recorded,
processed, summarized and reported as and when required.
b. Changes in Internal Control over Financial Reporting:
There were no changes in the Company's internal control over financial reporting
identified in connection with the Company evaluation of these controls as of the
end of the period covered by this report that could have significantly affected
those controls subsequent to the date of the evaluation referred to in the
previous paragraph, including any correction action with regard to significant
deficiencies and material weakness.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT 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
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) 31 Sarbanes-Oxley Certification
32 Sarbanes-Oxley Certification
(B) Reports on Form 8-K - Filed January 28, 2004
THE ART BOUTIQUE, INC.
(A Development Stage Company)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE ART BOUTIQUE, INC.
Date: May 20, 2004 /s/ Ronald Lui
-----------------------------
Ronald Lui, CEO