UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
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 SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____ to ____
MID-AM SYSTEMS, INC.
(Name of small business in its charter)
Delaware 0-50001 52-2175894
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
P.O. Box 110310
Naples, Florida 34108-0106
(Address of Principal Executive Office)(Zip Code)
Issuer's telephone number: (239) 598-2300
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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....
Applicable only to issuers involved in bankruptcy proceedings during the past
five years.
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes... No.....
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. At September 30, 2004, the
following shares were outstanding: 8,870,040.
Transitional Small Business Disclosure Format (Check one): Yes... No X
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PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) The unaudited financial statements of registrant for the nine months
ended September 30, 2004, follow. The financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim period presented.
MID-AM SYSTEMS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended September 30, 2004
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INDEX TO FINANCIAL STATEMENTS:
Balance Sheet 4
Statements of Operations 5
Statements of Stockholders' Equity 6
Statements of Cash Flows 7
Notes to Financial Statements 8
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MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 2004
September 30,
ASSETS 2004
Current assets:
Cash $ -
Loans receivable 610
Total current assets 610
Total assets $ 610
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 250
Loans payable -
Total current liabilities 250
Stockholders' equity:
Common stock, $.001 par value; 50,000,000 shares
authorized, 8,870,040 shares issued and outstanding 8,870
Additional paid-in capital 5,638
Deficit accumulated during the development stage (14,148)
Total stockholders' equity 360
Total liabilities andstockholders' equity $ 610
See notes to unaudited financial statements.
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MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS (UNAUDITED)
SEPTEMBER 30, 2004 AND 2003
Nine months ended Three months ended August 19, 1997
September 30, September 30, (date of inception)
2004 2003 2004 2003 to September 30, 2004
Revenues $ - $ - $ - $ - $ -
Expenses:
General and administrative - 1,490 - 250 13,928
Net loss before taxes - (1,490) - (250) (13,928)
Provision for income taxes - - - - 220
Net loss $ - $(1,490) $ - $(250) $(14,148)
Loss per share $ .00 $ (.00) $.00 $ (.00)
Weighted average common 8,870,040 8,870,040 8,870,040 8,870,040
shares outstanding
See notes to unaudited financial statements.
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MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
FROM AUGUST 19, 1997 (DATE OF INCEPTION) TO SEPTEMBER 30, 2004
Common Stock Additional
Paid-In Accumulated
Shares Amount Capital Deficit Total
Balance at August 19, 1997 - $ - $ - $ - $ -
(Date of Inception)
Common stock issued for cash 670,610 671 - - 671
Net loss - - - (937) (937)
Balance at December 31, 1997 670,610 671 - (937) (266)
Net loss - - - (105) (105)
Balance at December 31, 1998 670,610 671 - (1,042) (371)
Common stock issued for cash 2,043,180 2,043 1,832 - 3,875
Net loss - - - (1,828) (1,828)
Balance at December 31, 1999 2,713,790 2,714 1,832 (2,870) 1,676
Common stock issued for cash 48,250 48 3,806 - 3,854
Net loss - - - (4,674) (4,674)
Balance at December 31, 2000 2,762,040 2,762 5,638 (7,544) 856
Common stock issued for cash 2,240,000 2,240 - - 2,240
Net loss - - - (2,509) (2,509)
Balance at December 31, 2001 5,002,040 5,002 5,638 (10,053) 587
Common stock issued for cash 3,868,000 3,868 - - 3,868
Net loss - - - (2,605) (2,605)
Balance at December 31, 2002 8,870,040 8,870 5,638 (12,658) 1,850
Net loss - - - (1,490) (1,490)
Balance at December 31, 2003 8,870,040 8,870 5,638 (14,148) 360
Net loss - - - - -
Balance at September 30, 2004 8,870,040 $8,870 $5,638 $(14,148) $ 360
See notes to unaudited financial statements.
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MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS (UNAUDITED)
SEPTEMBER 30, 2004 AND 2003
Nine months ended August 19, 1997
September 30, (date of inception)
2004 2003 to September 30,
2004
Cash flows from operating activities:
Net loss $ - $ (1,490) $ (14,148)
Adjustments to reconcile net loss to net
cash flows from operating activities:
Changes in operating assets & liabilities
Loan receivable - 2,458 (610)
Accounts payable - (970) 250
Net cash flows from operating activities - (2) (14,508)
Cash flows from financing activities:
Issuance of common stock - - 14,508
Net cash flows from financing activities - - 14,508
Net change in cash - (2) -
Cash at beginning of period - 2 -
Cash at end of period $ - $ - $ -
See notes to unaudited financial statements.
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MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2004 AND 2003
1. Summary of Significant Accounting Policies
Quarterly Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB but do not include all of
the information and footnotes required by generally accepted accounting
principles and should, therefore, be read in conjunction with the
Company's 2003 financial statements in Form 10-KSB. These statements do
include all normal recurring adjustments which the Company believes
necessary for a fair presentation of the statements. The interim
operating results are not necessarily indicative of the results for a full
year.
Description of Business
Mid-Am Systems, Inc. (a development stage enterprise) (the Company) was
formed on August 19, 1997. The Company's activities to date have been
primarily directed towards the raising of capital and seeking business
opportunities.
Estimates and Assumptions
The preparation of financial statements in conformity with generally
accepted accounting principles 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 income and expenses
during the reporting period. Actual results could differ from those
estimates.
Earnings Per Share
Basic earnings per common share are computed by dividing net income (loss)
by the weighted average number of shares of common stock outstanding
during the period. Due to net losses, potentially dilutive securities
would be antidilutive and are therefore not included.
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MID-AM SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2004 AND 2003
1. Summary of Significant Accounting Policies (Continued)
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to reverse. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the
statement of operations in the period that includes the enactment date.
There is no provision for income taxes due to continuing losses. At
September 30, 2004, the Company has net operating loss carryforwards for
tax purposes of approximately $14,000, which expire through 2023. The
Company has recorded a valuation allowance that fully offsets deferred tax
assets arising from net operating loss carryforwards because the
likelihood of the realization of the benefit cannot be established. The
Internal Revenue Code contains provisions that may limit the net operating
loss carryforwards available if significant changes in stockholder
ownership of the Company occur.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this report, including statements in the following
discussion, which are not statements of historical fact, are what are known as
"forward-looking statements," which are basically statements about the future.
For that reason, these statements involve risk and uncertainty since no one can
accurately predict the future. Words such as "plans," "intends," "will,"
"hopes," "seeks," "anticipates," "expects," and the like, often identify such
forward-looking statements, but are not the only indication that a statement is
a forward-looking statement. Such forward-looking statements include
statements concerning our plans and objectives with respect to the present and
future operations of the Company, and statements which express or imply that
such present and future operations will or may produce revenues, income or
profits. Numerous factors and future events could cause the Company to change
such plans and objectives, or fail to successfully implement such plans or
achieve such objectives, or cause such present and future operations to fail to
produce revenues, income or profits.
Therefore, the reader is advised that the following discussion should be
considered in light of the discussion of risks and other factors contained in
this report on Form 10QSB and in the Company's other filings with the
Securities and Exchange Commission. No statements contained in the following
discussion should be construed as a guarantee or assurance of future
performance or future results.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2004, the Company remains in the development stage.
For the period ended September 30, 2004, the Company's balance sheet reflects
current and total assets of $610, all of which is in the form of a loan
receivable, and total current liabilities of $250.
The Company does not have sufficient assets or capital resources to pay
its on-going expenses while it is seeking out business opportunities, and it
has no current plans to raise additional capital through sale of securities, or
otherwise. As a result, although the Company has no agreement in place with
its shareholders or other persons to pay expenses on its behalf, it is
currently anticipated that the Company will rely on loans or additional capital
contributions from shareholders or to pay expenses at least until it is able to
consummate a business transaction.
RESULTS OF OPERATIONS
During the period from August 19, 1997 (inception) through September 30,
2004, the Company has engaged in no significant operations other than
organizational activities, acquisition of capital and preparation and filing of
its registration statement on Form 10-SB under the Securities Exchange Act of
1934, as amended, compliance with its periodical reporting requirements and
initial efforts to locate a suitable merger or acquisition candidate. No
revenues were received by the Company during this period.
The Company experienced a net loss of $ 0 for the three months ended
September 30, 2004 compared with a loss of $250 for the same period last year.
The Company does not expect to generate any revenue until it completes a
business combination, but will continue to incur legal and accounting fees and
other costs associated with compliance with its reporting obligations. As a
result, the Company expects that it will continue to incur losses each quarter
at least until it has completed a business combination. Depending upon the
performance of any acquired business, the Company may continue to operate at a
loss even following completion of a business combination.
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PLAN OF OPERATIONS
For the fiscal year ending December 31, 2004, and for the succeeding
twelve months, the Company expects to continue its efforts to locate a suitable
business acquisition candidate and thereafter to complete a business
acquisition transaction. The Company anticipates incurring a loss for the
fiscal year as a result of expenses associated with compliance with the
reporting requirements of the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates. The Company
does not expect to generate revenues until it completes a business acquisition,
and, depending upon the performance of the acquired business, it may also
continue to operate at a loss after completion of a business combination.
NEED FOR ADDITIONAL FINANCING
The Company will require additional capital in order to pay the costs
associated with carrying out its plan of operations and the costs of compliance
with its continuing reporting obligations under the Securities Exchange Act of
1934, as amended, for the fiscal year ending December 31, 2004 and thereafter.
This additional capital will be required whether or not the Company is able to
complete a business combination transaction during the current fiscal year.
Furthermore, once a business combination is completed, the Company's needs for
additional financing are likely to increase substantially.
No specific commitments to provide additional funds have been made by
management or other stockholders, and the Company has no current plans,
proposals, arrangements or understandings to raise additional capital through
the sale or issuance of additional securities prior to the location of a merger
or acquisition candidate. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses. Notwithstanding the foregoing, however, to the extent that
additional funds are required, the Company anticipates receiving such funds in
the form of loans or advancements from current shareholders without the
issuance of additional shares or other securities, or through the private
placement of restricted securities. In addition, in order to minimize the
amount of additional cash which is required in order to carry out its business
plan, the Company might seek to compensate certain service providers by
issuances of stock in lieu of cash.
ITEM 3. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of our chief
executive officer and chief financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this
evaluation, our chief executive officer and chief financial officer concluded
that our disclosure controls and procedures are effective in timely alerting
them to material information required to be included in our periodic SEC
reports. It should be noted that design of any system of controls is based in
part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions, regardless of how
remote.
In addition, there has been no change in our internal control over
financial reporting during the most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
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ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-QSB REPORT REFLECT
MANAGEMENT'S BEST JUDGMENT BASED UPON FACTORS CURRENTLY KNOWN AND INVOLVE RISKS
AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY MATERIALLY
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 6. EXHIBITS
(a) The following exhibits are filed herewith:
31.1 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the
Securities Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the
Securities Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certifications pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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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.
MID-AM SYSTEMS, INC.
By: /S/ COSMO PALMIERI
Cosmo Palmieri, President and a Director
By: /S/ JOSE ACEVEDO
Jose Acevedo, Secretary and a Director
By: /S/ MILTON POLLAND
Milton Polland, Director
Date: November 22, 2004
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