UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the quarter ended June 30, 2002 Commission file number 000-49634
FIRST IMPRESSIONS
(Exact name of registrant as specified in its charter)
NEVADA 88-0475756
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1601 E. Flamingo Rd., Suite 18B
Las Vegas, Nevada 89119
(Address of principal executive offices) (Zip Code)
(702) 866-5834
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.
Yes X No
As of July 31, 2002 there were 20,000,000 shares of common stock outstanding.
Transitional Small Business Disclosure Format (check one)
Yes No X
FIRST IMPRESSIONS
JUNE 30, 2002
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheet as of June 30, 2002 and 2001 3
Statement of Operations three months and six months
ended June 30, 2002 and 2001 4
Statement of Cash Flows three months and six months
ended June 30, 2002 and 2001 5
Notes to Unaudited Financial Statements 6-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matter to a Vote of
Security Holders 12
Item 5. Other Information 13
Item 6. Exhibits and Reports of Form 8-K 13
SIGNATURES 14
FIRST IMPRESSIONS
BALANCE SHEET
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
June 30,
2002
ASSETS
CURRENT ASSETS
Cash $ 24,878
----------
TOTAL CURRENT ASSETS 24,878
----------
$ 24,878
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable $ 0
----------
TOTAL CURRENT LIABILITIES 0
----------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value
authorized 5,000,000; no shares
issued and outstanding as of 6/30/02 0
Common stock, $.001 par value,
authorized 50,000,000 shares;
20,000,000 and 15,000,000 shares
issued and outstanding as of 6/30/02 20,000
Additional paid-in capital 32,231
(Deficit) accumulated during
development stage (27,353)
----------
TOTAL STOCKHOLDER'S EQUITY 24,878
----------
$ 24,878
==========
The Accompanying Notes are an integral par of these financial statements.
FIRST IMPRESSIONS
STATEMENT OF OPERATIONS
UNAUDITED
For the
Period
Three Three October 18,
Months Months Six Months Six Months 2000,
Ended Ended Ended Ended (Inception)
June 30, June 30, June 30, June 30, to June 30,
2002 2001 2002 2001 2002
Revenue $ 0 $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- ---------- ----------
EXPENSES
General and
Administrative 1,994 438 4,075 3,099 20,122
Officer services 1,500 1,231 3,000 1,231 7,231
---------- ---------- ---------- ---------- ----------
TOTAL EXPENSES 3,494 1,669 7,075 4,330 27,353
---------- ---------- ---------- ---------- ----------
NET (LOSS) $ (3,494) $ (1,669) $ (7,075) $ (4,330) $ (27,353)
========== ========== ========== ========== ==========
Net (loss) per
weighted shares-
basic and fully
diluted $ (.00) $ (.00) $ (.00) $ (.00)
========== ========== ========== =========
Weighted average
number of common
shares
outstanding
basic and fully
diluted 20,000,000 20,000,000 20,000,000 15,000,000
========== ========== ========== =========
The Accompanying Notes are an integral par of these financial statements.
FIRST IMPRESSIONS
STATEMENT OF CASH FLOWS
UNAUDITED
For the
Period
October 18,
2000,
Six Months Six Months (Inception)
Ended June Ended June to June 30,
30, 2002 30, 2001 2002
Cash Flows from
Operating Activities
Net loss $ (7,075) $ (4,330) $ (27,353)
Adjustment to reconcile net loss to net
cash used by operations
Note Payable (1,500) 1,500 0
Payroll Liabilities 0 (769) 0
---------- ---------- -----------
Net cash used in operating activities (8,575) (3,599) (27,353)
Cash Flows from Investing Activities 0 0 0
Cash Flows from Financing Activities
Issuance of common stock 23,700 10,531 52,231
---------- ---------- -----------
Net increase in cash 15,125 6,933 24,878
Cash, beginning of period 9,753 2,920 0
---------- ---------- -----------
Cash, end of period $ 24,878 $ 9,853 $ 24,878
========== ========== ===========
The Accompanying Notes are an integral par of these financial statements.
FIRST IMPRESSIONS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The consolidated interim financial statements included herein, presented in
accordance with United States generally accepted accounting principles and
stated in US dollars, have been prepared by the Company, without audited,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that
these consolidated interim financial statements be read in conjunction with
the financial statements of the Company for the year ended December 31, 2001
and notes thereto included in the Company's 10-KSB annual report. The
Company follows the same accounting policies in the preparation of interim
reports.
Results of operation for the interim period are not indicative of annual
results.
Note 2 - Going concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern which contemplates the
recoverability of assets and the satisfaction of liabilities in the normal
course of business. As noted above, the Company is in the development stage
and, accordingly, has not yet generated revenues from operations. Since its
inception, the Company has been engaged substantially in financing activities
and developing its product line, incurring substantial costs and expenses. As
a result, the Company incurred accumulated net losses from October 18, 2000
(inception) through the period ended June 30, 2002 of $(27,353). In addition,
the Company's development activities since inception have been financially
sustained by capital contributions.
The ability of the Company to continue as a going concern is dependent upon
its ability to raise additional capital from the sale of common stock and,
ultimately, the achievement of significant operating revenues. The
accompanying financial statements do not include any adjustments that might
be required should the Company be unable to recover the value of its assets
or satisfy its liabilities.
Note 3 - Related party transactions
The Company neither owns nor leases any real or personal property. An officer
of the Company donated services at $50 an hour for 10 hours per month for a
total of $500 per month. The total services donated as of June 30, 2002 were
$3,000 and the total as of October 31, 2000 (Inception) to June 30, 2002 were
$7,231. Both amounts have been expensed accordingly.
The officers and directors of the Company are involved in other business
activities and may in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with
the Company's unaudited financial statements and the notes thereto contained
elsewhere in this filing.
Overview
First Impressions was organized October 18, 2000 as a Nevada
corporation, and has a limited operation history. We were organized to
develop a business as an online retailer and distributor of perfume
fragrances, bath products and related products specifically designed for
First Impressions.
BUSINESS OF THE COMPANY
First Impressions intends to be an online retailer and distributor of
perfume fragrances, bath products and related products specifically designed
for First Impressions. Our goal is to operate an online store that
specializes in the sale of fragrances, fragrance related products and bath
and body products on a retail and wholesale basis. The business-to-business
component of the online store is intended to offer products on a wholesale
basis to the market of smaller specialty retailers. Users will be able to
browse and locate products. The online store, domain name -
first2impress.com, will offer personalized customer service, secure ordering,
numerous shipping options and fast delivery. As of the date of this filing
our website is not yet operational.
To effectuate the business plan of the Company, we executed an agreement
on October 18, 2000 with Desert Health Products, Inc., which provides for the
licensing, manufacturing and distribution of First Impressions' products
until termination in December of 2010. The agreement provides for a price to
be paid to Desert Health Products, of the cost of production, including a
reasonable allowance for overhead, plus 30%, which also provides for a price
increase every six (6) months. There were no up front licensing fees. The
agreement further provides for termination prior to its expiration, by either
party for the following reasons:
* Upon the bankruptcy or liquidation of the other party, whether voluntary
or involuntary;
* Upon the other party taking the benefit of any insolvency law;
* Upon the other party having or applying for a receiver appointed for
either party;
* For cause, and/or
* For early termination in the event First Impressions fails or refuses to
cooperate with Desert Health Products, fails or refuses to make timely
payment of the compensation required by the agreement. In addition, upon
early termination, all invoicing shall become immediately due and payable
and/or deliverable.
Under the contract and relationship established between Desert Health
Products and First Impressions, we have the ability to choose the fragrance
desired by First Impressions, and utilize the fragrance in the various
products, which Desert Health Products already produces with different
fragrances, thus establishing an exclusive product for First Impressions.
Under the agreement, the fragrance formula is a one of a kind specially
formulated fragrance selected by First Impressions and to be utilized
exclusively by First Impressions in various forms of perfumes and related
products. Additionally, Desert Health Products has agreed to handle all
packaging and shipping for First Impressions.
Results of Operations for the three months ended June 30, 2002 as compared to
the three months ended June 30, 2001.
The Company's net loss was $3,581 for the three months ended June 30,
2002 as compared to a net loss of $2,660 for the three months ended June 30,
2001. This represents a 109% or $1,825 increase over the same period last
year. This net loss increase was primarily the result of expensing officer
donated services at $500 a month. The Company has not generated any
revenues.
Results of Operations for the six months ended June 30, 2002 as compared to
the three months ended June 30, 2001.
The Company's net loss was $7,075 for the six months ended June 30, 2002
as compared to a net loss of $4,330 for the six months ended June 30, 2001.
This represents a 63% or $2,745 increase over the same period last year. This
net loss increase was primarily the result of expensing officer donated
services at $500 a month. The Company has not generated any revenues.
Liquidity and Capital Reserves
As of June 30, 2002 (Unaudited)
As of June 30, 2002, the Company's assets were $24,878 and its current
liabilities were $0.
Plan of Operation
The Company's current cash balance as of June 30, 2002 is $24,878.
Management believes the current cash balance is sufficient to fund the
current minimum level of operations through January, 2003, however, in order
to advance the Company's business plan the Company must raise additional
capital through the sale of equity securities. Management has continued to
avoid incurring substantial obligations to the Company pending the final
choice selection of product to place on the Internet. Once the product has
been selected and the Website complete, the Company's costs will increase as
a function of the advertising required to bring in business. The plan of
management is to increase advertising costs in direct proportion to sales,
advertising dollars coming into the Company, and equity capital raised by the
Company in the future. In the event any of the above do not happen in a
timely fashion, management is prepared to slow the expenditures of
advertising costs so that the Company can sustain itself until January 2003.
To date, the Company has sold $30,000 in equity securities and used
approximately $1,500 to repay a note. Sales of the Company's equity
securities have allowed the Company to maintain a positive cash flow balance.
We have prepared our financial statements assuming the Company will
continue as a going concern, which contemplates the recoverability of assets
and the satisfaction of liabilities in the normal course of business. As a
result of our development stage and our incurring start up costs and
expenses, the Company has incurred accumulated net loses from October 18,
2000 (inception) through the period ended June 30, 2002 of $27,353. As a
result of these losses our auditor has reflected our "Going Concern" in Note
4 of our audited financial statements.
Management has made initial progress in implementing its business plan
by commencing design of its website. First Impressions intends to use its
initial equity capital to fund First Impressions' initial business plan
during the next twelve months, as cash flow from sales is not estimated to
begin until year two of its business plan.
First Impressions will face considerable risk in each of its business
plan steps, such as difficulty of hiring competent personnel within its
budget, longer than anticipated website programming, and a shortfall of
funding due to First Impressions' inability to raise capital in the equity
securities market. If no funding is received during the next twelve months,
First Impressions will be forced to rely on its existing cash in the bank. In
such a restricted cash flow scenario, First Impressions would be unable to
complete all business plan steps, and would, instead, delay all cash
intensive activities. Primarily the cash intensive activities include full
time management and significant advertising dollars. First Impressions will
not be increasing management or incurring any equipment expenses until
additional dollars are available either through equity or revenues.
In the event equity or revenues are available to advance the business
plan to the next step, which amount would be approximately $100,000, then in
that event our current president would become operational on a full time
basis or we would bring in full time management. Additionally, approximately
$50,000 would be spent on advertising to assist in building up the revenues.
Phase three of the business plan would include hiring additional
personnel, spending additional dollars on advertising, updating the Website
software, where required, for increase sales volumes, and covering additional
accounting and legal fees.
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB contains forward-looking
statements. These forward looking statements are based largely on the
Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control, including, but
not limited to, economic, competitive and other factors affecting the
Company's operations, markets, products and services, expansion strategies
and other factors discussed elsewhere in this report and the documents filed
by the Company with the Securities and Exchange Commission. Actual results
could differ materially from these forward-looking statements. In light of
these risks and uncertainties, there can be no assurance that the forward-
looking information contained in this report will in fact prove accurate.
The Company does not undertake any obligation to revise these forward-looking
statements to reflect future events or circumstances.
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 Matter to a Vote of Security Holders.
None
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
Ex-99 - Certification of President and Chief Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST IMPRESSIONS
By:/s/ Tammy Kraft
Tammy Kraft, President
Date: August 13, 2002