UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 JUNE 30, 2004
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO
005-78248
(Commission file number)
AUTOCARBON, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
33-0976805
(IRS Employer Identification No.)
126 E. 83RD STREET, SUITE 2F, NEW YORK, NY 10028
(Address of principal executive offices)
(212) 717-4254
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
CLASS OUTSTANDING AS OF JUNE 30, 2004
----- -------------------------------
COMMON STOCK, $.0001 PAR VALUE 33,056,185
Transitional Small Business Disclosure Format (check one): |_| Yes |X| No
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AUTOCARBON, INC.
FORM 10-QSB
JUNE 30, 2004
INDEX
Page
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets..........................................2
Consolidated Statements of Operations................................3
Consolidated Statements of Cash Flows................................4
Consolidated Statements of Stockholders' Equity......................5
Notes to Consolidated Financial Information..........................6
Item 2. Management's Discussion & Analysis..................................10
Item 3. Controls and Procedures.............................................11
Part II - OTHER INFORMATION
Item 1. Legal Proceedings...................................................11
Item 2. Changes In Securities...............................................11
Item 3. Defaults Upon Senior Securities.....................................11
Item 4. Submission Of Matters To A Vote Of Security Holders.................11
Item 5. Other Information...................................................11
Item 6. Exhibits and Reports on Form 8-K....................................11
Signatures...................................................................12
Certifications...............................................................12
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AUTOCARBON, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
JUNE 30, 2004 (UNAUDITED)
ASSETS
Current Assets
Cash and Cash Equivalents $ --
-----------
Total current assets $ --
-----------
$ --
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Shares not Issued $ 1,200
Advance from Shareholders 51,114
-----------
Total current liabilities $ 52,314
-----------
STOCKHOLDERS' DEFICIT
Common Stock, $.0001 par value,
100,000,000 shares authorized,
33,056,185 issued and outstanding $ 3,306
Additional Paid-in Capital 1,011,901
Deficit Accumulated During the Development Stage (1,067,521)
-----------
Total Stockholders' Deficit (52,314)
-----------
$ --
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AUTOCARBON, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Three Months June 26, 2001
Ended Ended Inception) to
June 30,2004 June 30,2003 June 30, 2004
(Unaudited) (Unaudited) (Unaudited)
-------------- -------------- --------------
Revenues $ -- $ -- $ --
General & Administrative Expenses -- -- --
-------------- -------------- --------------
Income (Loss) Before Discontinued
Discontinued Operations, Net of
Income Taxes of $-0- -- -- --
-------------- -------------- --------------
Discontinued Operations, Net of
Income Taxes of $-0- -- (9,129) (1,065,561)
Expenses (Income) in Connection With
Discontinued Operations, Net of
Income Taxes of $-0- -- 9,400 1,960
-------------- -------------- --------------
Net Loss -- $ (18,529) $ (1,067,521)
============== ============== ==============
Loss Per Share
Basic $ -- $ (0.0136) $ (0.0323)
============== ============== ==============
Weighted Average Number of
Common Shares outstanding 33,056,185 1,357,677 33,056,185
============== ==============
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AUTOCARBON.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
Three Months Three Months June 26, 2001
Ended Ended (Inception)to
June 30, 2004 June 30,2003 June 30, 2004
(Unaudited) (Unaudited) (Unaudited)
-------------- -------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss From Discontinued
Operations: $ -- $ (18,529) $ (1,067,521)
Adjustments to reconcile net loss to cash
used in operating activities:
Issuance of stock for services -- 13,246 521,431
Depreciation -- -- 8,575
-------------- -------------- --------------
-- (5,283) (537,515)
Changes in Assets and Liabilities
(Increase) decrease in:
Increase (decrease) in:
Accounts Payable -- (4,976) 129,090
Net Cash Used in Operating Activities -- (10,259) (408,425)
-------------- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets - software -- -- (34,300)
Write-off of net assets of
discontinued - operation -- -- 25,725
-------------- -------------- --------------
Net Cash Used in Investing Activities -- -- (8,575)
-------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock & options -- 10,000 493,776
Advances from Shareholders 51,114
Payment for shares not issued -- -- 1,200
Net Cash Provided by Financing
Activities -- 10,000 546,090
-------------- -------------- --------------
Net increase in cash -- (259) --
Cash at beginning of period -- 284 --
-------------- -------------- --------------
Cash at end of period $ 0 $ 25 --
============== ============== ==============
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AUTOCARBON, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED)
Common
Stock Paid-In Development
Shares Amount Capital Stage Total
------------ ------------ ------------ ------------ ------------
Common stock issued at inception -
for services rendered 170,000 $ 17 $ 56,933 $ -- $ 56,950
Issuance of common stock - private
placement July 1 - September 30, 2001 5,185 1 129,599 -- 129,600
Issuance of common stock - private
placement - November 1- 30, 2001 2,280 -- 57,000 -- 57,000
Issuance of common stock -
for services rendered 30,000 3 9,997 -- 10,000
Issuance of common stock -
for services rendered 1,200 -- 30,000 -- 30,000
Net loss - year ended March 31, 2002 -- -- -- (425,932) (425,932)
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Balance - March 31, 2002 208,665 21 283,529
(425,932) (142,382)
Common stock issued 8,800 1 219,999 -- 220,000
Issuanc of common stock -
for services rendered 12,900 1 317,499 -- 317,500
Common stock issued 1,200 -- 15,000 -- 15,000
Exercise of stock options 1,000 -- 12,500 -- 12,500
Issuance of common stock - private
placement - January 6 - January 30,
2003 993,520 99 49,577 -- 49,676
Net loss-year ended March 31, 2003 -- -- -- (607,276) (607,276)
------------ ------------ ------------ ------------ ------------
Balance-March 31, 2003 1,226,085 122 898,104 (1,033,208) (134,982)
Issuance of common stock-
for services rendered 25,000 3 13,243 -- 13,246
Common stock issued 200,000 20 9,980 -- 10,000
Issuance of stock for acquisition of
subsidiary 31,295,000 3,130 (3,130) -- --
Rescission of common stock (9,900) (1) 1 -- --
Issuance of stock for settlement of
accounts payable 320,000 32 93,703 -- --
Net loss- year ended March 31, 2004 -- -- -- (34,313) (34,313)
Net loss-quarter ended June 30, 2004 -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Balance-June 30, 2004 33,056,185 $ 3,306 $ 1,011,901 $ (1,067,521) $ (146,049)
============ ============ ============ ============ ============
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AUTOCARBON, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: ORGANIZATION, BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Autocarbon, Inc. (formerly Autocarbon.com, Inc.) (the "Company") was
incorporated on June 26, 2001 under the laws of the State of
Delaware as Autocarbon.com, Inc. On October 25, 2002 Autocarbon,
Inc. was incorporated under the laws of the State of Delaware and
became a wholly owned subsidiary of Autocarbon.com, Inc. and was
merged into Autocarbon.com, Inc. on October 28, 2002. The surviving
corporation, Autocarbon.com, Inc. changed its name to Autocarbon,
Inc.
On January 26, 2004 the Board of Directors by unanimous consent
elected a new President and appointed a new Secretary of the
Company.
On February 15, 2004 two members of the Board of Directors resigned
their respective positions.
BUSINESS
The Company, through its New Concepts Nutraceuticals (NCN) wholly
owned subsidiary, is engaged in the sale and marketing of a cosmetic
cream to the construction industry. The cream is designed to block
transmission of fiberglass particles from attaching to the skin and
hence causing irritation thereto. The Company has discontinued its
prior business related to carbon fiber and composite products.
NCN was until recently in the business of offering for sale weight
management and nutritional supplement products to the general
public. The Company is contemplating selling NCN, whose operating
results have been immaterial, to a third party buyer.
GOING CONCERN CONSIDERATIONS
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has
no operating history nor any revenues or earnings from operations.
The Company intends to resolve its liquidity problems through
pursuing a merger or combination with an profitable third party
buyer. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
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NOTE 1: ORGANIZATION, BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES IN FINANCIAL STATEMENTS - Management uses estimates
and assumptions in preparing these financial statements in
accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities,
and the reported revenue and expenses. Actual results could vary
from the estimates that were used.
CASH AND CASH EQUIVALENTS - For purposes of reporting cash flows,
the Company considers all cash accounts, which are not subject to
withdrawal restrictions or penalties, as cash and equivalents in the
accompanying balance sheet.
FIXED ASSETS - Fixed assets of the prior business consisted of CAD
production software that have been written off. Major expenditures
that substantially increase the useful lives of assets are
capitalized. Maintenance, repairs and minor renewals are expensed as
incurred. When assets are retired or otherwise disposed of, their
costs and related accumulated amortization are removed from the
accounts and resulting gains or losses are included in income.
Amortization will be provided on a straight- line basis over the
estimated useful lives of the assets.
DEFERRED REVENUE - Deferred revenue represents amounts received from
customers for tooling costs that will be amortized over an estimated
number of units delivered pursuant to the customers purchase order.
INCOME TAXES - Any provision (benefit) for income taxes is computed
based on the loss before income tax included in the Statement of
Operations. The asset and liability approach is used to recognize
deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts
and the tax bases of assets and liabilities. At present the Company
has a benefit due to a net tax loss carry forward. The benefit has
been fully reserved due to the uncertainty of its use. The company
has a tax net operating loss of $1,033,208 that may be carried over
and utilized against taxable income in future years.
EARNINGS PER COMMON SHARE - Basic earnings per share are computed
using the weighted average number of shares outstanding during the
year. Basic earnings per share also exclude any dilutive effects of
options, warrants and convertible securities. Diluted net loss per
share does not include options, warrants or convertible securities,
as they would be anti-dilutive.
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NOTE 2: STOCKHOLDERS' EQUITY
AUTHORIZED STOCK
The Company is authorized to issue 100,000,000 shares of common
stock with a par value of $0.0001 per share.
PRIVATE PLACEMENT
The Company, from July 1, 2001 through September 30, 2001 offered
for sale 40,000 Units at a value of $0.50 per Unit consisting of one
share of common stock and one warrant to purchase one additional
share of common stock at a value of $0.25 in a "private placement"
pursuant to Regulation D, Rule 506 of the Securities Act of 1933.
The Company, from November 1, 2001 through November 30, 2001 offered
for sale an additional 40,000 Units at a value of $0.50 per Unit
consisting of one share of common stock and one warrant to purchase
one additional share of common stock at a value of $0.25 in a
"private placement" pursuant to Regulation D, Rule 506 of the
Securities Act of 1933.
The Company, from January 6, 2003 through January 30, 2003 offered
for sale 20,000 Units at a value of $.05 per unit consisting of one
share of common stock and one common stock purchase warrant.
COMMON STOCK ISSUED FOR SERVICES
The Company issued common stock to various individuals and companies
(non- employees) in return for services rendered. 170,000 shares of
common stock along with warrants to acquire an additional 37,500
shares of common stock at a value of $0.25 were issued.
The Company has determined that the value of the common stock issued
is more reliably determined based on the value of the services
rendered. All services were provided prior to the Private Placement.
The 170,000 shares of common stock were valued at $56,950.
Legal and consulting services valued at $10,000 were paid for with
the issuance of 30,000 shares of common stock and warrants to
acquire an additional 15,000 shares of common stock at a value of
$0.25.
Additionally, $30,000 of marketing, and promotional expenses was
paid for with the issuance of 1,200 shares of common stock.
Consulting services valued at $317,500 were paid for with the
issuance of 12,900 shares of common stock.
The Company issued 31,295,000 shares of common stock to the
shareholders of New Concept Nutriceuticals, Inc. (NCN) in exchange
for all of the issued and outstanding shares of NCN. The shares were
exchanges on the basis of 10 shares of the Company for each share
owned of NCN. The Companies President owned 3,000,000 shares of NCN
at the time of this transaction. As a result of this transaction
30,000,000 shares of the Company were issued to the Companies
President.
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NOTE 2: STOCKHOLDERS' EQUITY, CONTINUED
The Company issued 320,000 shares of common stock in settlement with
creditors who collectively were owed $93,735.
Individuals who were both Officers and Directors received 66,850
shares of common stock valued at $22,395, individuals who were
solely Directors received 5,000 shares of common stock valued at
$1,675, and others who are neither Officer nor Directors received
98,150 shares of common stock valued at $32,880.
REVERSE STOCK SPLIT
Pursuant to the written consent of a majority of the stockholders
dated August 21, 2002, the Company effected a one-for-fifty reverse
stock split of the Company's Common Stock. All per share amounts
have been retroactively restated for the effect of this reverse
split. All information pertaining to shares issued pursuant to a
private placement or for service has been retroactively restated as
well.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
FORWARD-LOOKING STATEMENTS
The following discussion should be read in conjunction with our audited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward-looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or our behalf. We disclaim any obligation to update
forward-looking statements.
OVERVIEW
Autocarbon, Inc. (formerly Autocarbon.com, Inc.) (the "Company") was
incorporated on June 26, 2001 under the laws of the State of Delaware as
Autocarbon.com, Inc. On October 25, 2002 Autocarbon, Inc. was incorporated under
the laws of the State of Delaware and became a wholly owned subsidiary of
Autocarbon.com, Inc. and was merged into Autocarbon.com, Inc. on October 28,
2002. The surviving corporation, Autocarbon.com, Inc. changed its name to
Autocarbon, Inc.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS, CONTINUED
BUSINESS
The Company was previously engaged in the sale and marketing of carbon fiber and
composite products. That business was discontinued on or before February, 2003.
The Company has recently refocused its business model to market and distribute a
cosmetic product aimed toward the construction industry for blocking fiberglass
insulation fibers from becoming lodged on a workman's skin. The Company conducts
this business through its wholly-owned subsidiary, New Concepts Nutraceuticals,
Inc. ("NCN"), a Delaware corporation.
NCN sells its product through its website www.newconceptsnutra.com and hopes to
expand its range of products through the coming year.
While we may, under certain circumstances, seek to effect business combinations
with one or more than one target business, unless and until additional financing
is available, we do not believe that we will have sufficient financing to pursue
an additional business combination without effecting a further change in control
in the Company. We are however constantly looking for any business transaction
that would be in the best interests of our shareholders.
EQUIPMENT AND EMPLOYEES
As of March 31, 2004, we had acquired our subsidiary, NCN, which has very
limited business operations, and thus no equipment and no employees. Mr.
Thurlow, the new President, Chief Financial Officer and director of the Company
and the subsidiary, does not receive any salary.
SUBSEQUENT TRANSACTIONS
None
RESULTS OF OPERATIONS
During the first quarter of the Registrant's fiscal year, ending June 30, 2004,
the Registrant's operating unit did not have any sales. Therefore a comparison
of sales to the previous year is not an accurate representation of the increase
or decrease of the revenues, costs and sales of the Registrant.
LIQUIDITY AND FINANCIAL RESOURCES
The Company experienced sales, expenses, and a profit of zero for the quarter
ended June 30, 2004. For the quarter ended June 30, 2003, the Company incurred a
net loss of $(18,529).
These factors raise substantial doubt about the Company's ability to continue as
a going concern. It is the intention of the Company's management to increase
revenues significantly, through growth and acquisitions. The ultimate success of
these measures is not reasonably determinable at this time.
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ITEM 3. CONTROLS AND PROCEDURES
The Registrant's principal executive officer/principal financial officer, based
on his evaluation of the registrant's disclosure controls and procedures (as
defined in Rules 13a-14 (c) of the Securities Exchange Act of 1934) as of
September 8, 2004, has concluded that the Registrants' disclosure controls and
procedures are adequate and effective to ensure that material information
relating to the registrants and their consolidated subsidiaries is recorded,
processed, summarized and reported within the time periods specified by the
SEC's rules and forms, particularly during the period in which this quarterly
report has been prepared.
The Registrants' principal executive officers and principal financial officer
has concluded that there were no significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to July 1, 2004, the date of their most recent evaluation of
such controls, and that there was no significant deficiencies or material
weaknesses in the registrant's internal controls.
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.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Articles of Incorporation of the Registrant*
3.2 By-laws of the Registrant*
31.1 Section 302 Certification
32.1 Section 906 Certification
------------
* These documents are hereby incorporated by reference to Form SB-2, as amended,
filed on August 17, 2001
(b) Reports on Form 8-K filed during the three months ended June 30, 2004.
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.
Date: September 8, 2004
Autocarbon, Inc.
/s/ Simon Thurlow
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Simon Thurlow, President/Financial Officer
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