U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[ 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 EXCHANGE ACT
For the transition period from _____________ to ______________
Commission file number: 000-50830
HARDWOOD DOORS AND MILLING SPECIALITIES, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 88-0343804
-------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) identification No.)
4302 HOLLOW ROAD, LOGAN, UTAH 84321
(Address of principal executive offices)
(435) 245-6004
(Issuer's telephone number)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the 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 PRECEDING FIVE YEARS
Check whether the registrant 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 plan confirmed by a court. Yes ____ No ____
APPLICABLE ONLY TO CORPORATE ISSUERS
The aggregate number of shares issued and outstanding of the issuer's common
stock as of September 30, 2004 was 23,100,000 shares of $0.001par value.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
FORM 10-QSB
HARDWOOD DOORS AND MILLING SPECIALITIES, INC.
INDEX
Page
PART I.. Financial Information
Item 1. Unaudited Financial Statements 3
Balance Sheets Septemeber 30, 2004(unaudited) and December 31,
2003(audited) 4
Unaudited Statements of Operations for the Three and Nine
Months Ended September 30, 2004 and 2003 and since inception
December 18, 1994 through September 30, 2004 5
Statements of Cash Flows for the Nine Months Ended September
30, 2004 and 2003 and Since Inception December 18, 1994
Through September 30, 2004 6
Notes to Unaudited Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition or Plan of Operation 8-11
Item 3. Controls and Procedures 11
PART II. Other Information
Item 2. Changes in Securities and Use of Proceeds 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
(Inapplicable items have been omitted)
2
PART I- FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited financial statements
included in this Form 10-QSB reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results of
operations for the periods presented. The results of operations for the periods
presented are not necessarily indicative of the results to be expected for the
full year.
3
HARDWOOD DOORS & MILLING SPECIALTIES, INC.
------------------------------------------
(A Development Stage Company)
-----------------------------
BALANCE SHEETS
--------------
September 30, December 31,
2004 2003
ASSETS (Unaudited) (Audited)
- --------------------------------------------------- --------------- ------------
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . $ 5,419 16,708
--------------- -------------
Total current assets. . . . . . . . . . . $ 5,419 16,708
=============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
-----------------------------------------
Current liabilities:
Accrued expenses . . . . . . . . . . . . . . . $ - 545
--------------- -------------
Total current liabilities . . . . . . . . - 545
=============== =============
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding. . . - -
Common stock, $.001 par value, 50,000,000 shares
authorized, 23,100,000 and 23,100,000 shares
issued and outstanding, respectively . . . . 23,100 23,100
Additional paid-in capital. . . . . . . . . . . . . 124,900 124,900
Deficit accumulated during the development stage. . (142,581) (131,837)
--------------- -------------
Total stockholders' equity . . . . . . . . . . 5,419 16,163
--------------- -------------
Total liabilities and stockholders' equity . . $ 5,419 16,708
=============== =============
4
HARDWOOD DOORS & MILLING SPECIALTIES, INC.
------------------------------------------
(A Development Stage Company)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
Three Months Ended Nine Months Ended
September 30, September 30, Cumulative
----------------------- -----------------------
2004 2003 2004 2003 Amounts
------------ --------- ----------- ---------- ----------
Revenue . . . . . . . . . . . . . . . . . $ - - - - -
General and administrative costs. . . . . 2,636 - 10,744 360 20,396
------------ --------- ----------- ---------- ----------
Loss before income taxes . . . . . . (2,636) - (10,744) (360) (20,396)
Provision for income taxes. . . . . . . . - - - - -
------------ --------- ----------- ---------- ----------
Loss before discontinued operations. $ (2,636) - (10,744) (360) (20,396)
============ ========= =========== ========== ==========
Loss from discontinued operations,
net of taxes of $0 . . . . . . . . . - - - - (122,185)
------------ --------- ----------- ---------- ----------
Net loss . . . . . . . . . . . . . $ (2,636) - (10,744) (360) (142,581)
============ ========= =========== ========== ==========
Loss per common share - basic and diluted $ - - - -
============ ========= =========== ==========
Weighted average common shares -
basic and diluted . . . . . . . . . . . 23,100,000 6,563,000 23,100,000 6,563,000
============ ========= =========== ==========
5
HARDWOOD DOORS & MILLING SPECIALTIES, INC.
------------------------------------------
(A Development Stage Company)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
Nine Months Ended
September 30, Cumulative
-----------------
2004 2003 Amounts
--------- ------ ----------
Cash flows from operating activities:
- ---------------------------------------------
Net loss. . . . . . . . . . . . . . . . . . $(10,744) (360) (142,581)
Adjustments to reconcile net loss to net cash
used in operating activities:
Increase (decrease) in accrued expenses. (545) - -
--------- ------ ----------
Net cash used in operating activities. . (11,289) (360) (142,581)
--------- ------ ----------
Cash flows from investing activities: . . . . - - -
- --------------------------------------------- --------- ------ ----------
Cash flows from financing activities:
- ---------------------------------------------
Proceeds from issuance of common stock. . . - - 148,000
Proceeds from notes payable . . . . . . . . - - 52,500
Payments on notes payable . . . . . . . . . - - (52,500)
--------- ------ ----------
Net cash provided by financing activities . . - - 148,000
--------- ------ ----------
Net increase (decrease) in cash. . . . . (11,289) (360) 5,419
Cash, beginning of period . . . . . . . . . . 16,708 2,959 -
--------- ------ ----------
Cash, end of period . . . . . . . . . . . . . $ 5,419 2,599 5,419
========= ====== ==========
6
HARDWOOD DOORS AND MILLING SPECIALTIES, INC.
--------------------------------------------
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
---------------------------------------
September 30, 2004
------------------
Note 1 - Basis of Presentation
- -----------------------------------
The accompanying unaudited condensed financial statements have been prepared by
management in accordance with the instructions in Form 10-QSB and, therefore, do
not include all information and footnotes required by generally accepted
accounting principles and should, therefore, be read in conjunction with the
Company's Form 10-SB for the year ended December 31, 2003, filed with the
Securities and Exchange Commission. These statements do include all normal
recurring adjustments which the Company believes necessary for a fair
presentation of the statements. The interim operations are not necessarily
indicative of the results to be expected for the full year ended December 31,
2004.
Note 2 - Additional Footnotes Included By Reference
- ----------------------------------------------------------
Except as indicated in Notes above, there have been no other material changes in
the information disclosed in the notes to the financial statements included in
the Company's Form 10-SB for the year ended December 31, 2003, filed with the
Securities and Exchange Commission. Therefore, those footnotes are included
herein by reference.
Note 3 - Going Concern
- --------------------------
At September 30, 2004 the Company has an accumulated deficit, has incurred
losses since inception as well as negative cash flow from operations. These
conditions raise substantial doubt about he ability of the Company to continue
as a going concern. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
The Company's ability to continue as a going concern is subject to obtaining
necessary funding from outside sources. There can be no assurance that the
Company will be successful in these efforts.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION
FORWARD-LOOKING STATEMENT NOTICE
When used in this report, the words"may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "intend," and similar expressions are
intended to identify forward-looking statements within the meaning of Section
27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934 regarding events, conditions, and financial trends that may affect the
Company's future plans of operations, business strategy, operating results, and
financial position. Persons reviewing this report are cautioned that any
forward-looking statements are not guarantees of future performance and are
subject to risks and uncertainties and that actual results may differ materially
from those included within the forward-looking statements as a result of various
factors. Such factors are discussed under the "Item 2. Management's Discussion
and Analysis of Financial Condition or Plan of Operations," and also include
general economic factors and conditions that may directly or indirectly impact
the Company's financial condition or results of operations.
OUR HISTORY
We were formed as a Nevada corporation on December 18, 1994, originally under
the name of American Outdoorsman, Inc. to manage sporting goods stores. We were
unsuccessful in commencing any business operations. On May 24, 2000, we changed
our name to Hardwood Doors & Milling Specialities, Inc. (Hardwood Doors) with
the intent to focus on marketing and distributing hardwood interior and exterior
doors and accessories via direct sales and the internet. The Company commenced
limited operations and was not successful with the intended business.
As of September 1, 2002, we ceased operations and have focused our efforts on
seeking a viable business opportunity. The Company will attempt to locate and
negotiate with a business entity for the merger of that target company into the
Company. In certain instances, a target company may wish to become a subsidiary
of the Company or may wish to contribute assets to the Company rather than
merge. No assurances can be given that the Company will be successful in
locating or negotiating with any target company. The Company will provide a
method for a foreign or domestic private company to become a reporting
("public") company whose securities are qualified for trading in the United
States secondary market.
OUR BUSINESS
We have not had ongoing business operations since September 1, 2002.
Hardwood Doors intends to seek, investigate, and if warranted, acquire an
interest in a business opportunity. We are not restricting our search to any
particular industry or geographical area. We may therefore engage in
essentially any business in any industry. Our management has unrestricted
discretion in seeking and participating in a business opportunity, subject to
the availability of such opportunities, economic conditions and other factors.
The selection of a business opportunity in which to participate is complex and
extremely risky and will be made by management in the exercise of its business
judgment. There is no assurance that we will be able to identify and acquire
any business opportunity which will ultimately prove to be beneficial to our
company and shareholders.
8
Because we have no specific business plan or expertise, our activities are
subject to several significant risks. In particular, any business acquisition
or participation we pursue will likely be based on the decision of management
without the consent, vote, or approval of our shareholders.
SOURCES OF OPPORTUNITIES
We anticipate that business opportunities may arise from various sources,
including officers and directors, professional advisers, securities
broker-dealers, venture capitalists, members of the financial community, and
others who may present unsolicited proposals.
We will seek potential business opportunities from all known sources, but will
rely principally on the personal contacts of our officers and directors as well
as indirect associations between them and other business and professional
people. Although we do not anticipate engaging professional firms specializing
in business acquisitions or reorganizations, we may retain such firms if
management deems it in our best interests. In some instances, we may publish
notices or advertisements seeking a potential business opportunity in financial
or trade publications.
CRITERIA
We will not restrict our search to any particular business, industry or
geographical location. We may acquire a business opportunity in any stage of
development. This includes opportunities involving "start up" or new companies.
In seeking a business venture, management will base their decisions on the
business objective of seeking long-term capital appreciation in the real value
of our company. We will not be controlled by an attempt to take advantage of an
anticipated or perceived appeal of a specific industry, management group, or
product.
In analyzing prospective business opportunities, management will consider the
following factors:
- available technical, financial and managerial resources;
- working capital and other financial requirements;
- the history of operations, if any;
- prospects for the future;
- the nature of present and expected competition;
- the quality and experience of management services which may be
available and the depth of the management;
- the potential for further research, development or exploration;
- the potential for growth and expansion;
- the potential for profit;
- the perceived public recognition or acceptance of products, services,
trade or service marks, name identification; and other relevant
factors.
Generally, our management will analyze all available factors and make a
determination based upon a composite of available facts, without relying on any
single factor.
METHODS OF PARTICIPATION OF ACQUISITION
Management will review specific business opportunities and then select the most
suitable opportunities based on legal structure or method of participation.
Such structures and methods may include, but are not limited to, leases,
purchase and sale agreements, licenses, joint ventures, other contractual
9
arrangements, and may involve a reorganization, merger or consolidation
transaction. Management may act directly or indirectly through an interest in a
partnership, corporation, or other form of organization.
PROCEDURES
As part of the our investigation of business opportunities, officers and
directors may meet personally with management and key personnel of the firm
sponsoring the business opportunity. We may visit and inspect material
facilities, obtain independent analysis or verification of certain information
provided, check references of management and key personnel, and conduct other
reasonable measures.
We will generally ask to be provided with written materials regarding the
business opportunity. These materials may include the following:
- descriptions of product, service and company history; management
resumes;
- financial information;
- available projections with related assumptions upon which they are
based;
- an explanation of proprietary products and services;
- evidence of existing patents, trademarks or service marks or rights
thereto;
- present and proposed forms of compensation to management;
- a description of transactions between the prospective entity and its
affiliates;
- relevant analysis of risks and competitive conditions;
- a financial plan of operation and estimated capital requirements; and
other information deemed relevant.
COMPETITION
We expect to encounter substantial competition in our efforts to acquire a
business opportunity. The primary competition is from other companies organized
and funded for similar purposes, small venture capital partnerships and
corporations, small business investment companies and wealthy individuals.
RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30,
2004 AND 2003
The Company generated no revenue during the three and nine-month periods ended
September 30, 2004 and 2003. The Company ceased operations on September 1, 2002.
The Company experienced general and administrative expenses of $2,636 during the
three months ended September 30, 2004, resulting in an equal net loss of $2,636.
During the same three-month period in 2003 the Company experienced no expenses.
Expenses during the nine-month period ended September 30, 2004 consisted of
$10,744, resulting in a net loss of $10,744. Expenses during the comparable
nine-month period in 2003 consisted of $360 in general and administrative
expenses resulting in a loss before income taxes of $360. Expenses during the
first nine months of 2004 and 2003 consisted mainly of general corporate
administration, legal and professional fees, and accounting and auditing costs.
Cumulative net loss from inception on December 18, 1994 through September 30,
2004 was $142,581.
10
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2004, the Company's total assets consisted of $5,419 in cash
with no liabilities. At December 31, 2003, the Company had total assets
consisting of $16,708 in cash with accrued expenses totaling $545. As a result,
stockholders' equity totaled $5,419 at September 30, 2004 compared to total
stockholders' equity of $16,163 at December 31, 2003.
The Company has no material commitments for the next twelve months. The Company
only has $5,419 in cash on hand and will require additional capital to meet its
liquidity needs. As a result, our independent auditors have expressed
substantial doubt about our ability to continue as a going concern. In the past,
the Company has relied on capital contributions from shareholders to supplement
operating capital when necessary. The Company anticipates that it will receive
sufficient contributions from shareholders to continue operations for at least
the next twelve months. However, there are no agreements or understandings to
this effect. The Company may sell common stock, take loans from officers,
directors or shareholders or enter into debt financing agreements.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Based on the evaluation of
our disclosure controls and procedures (as defined in Securities Exchange Act of
1934 Rules 13a-15(e) and 15d-15(e)) required by Securities Exchange Act Rules
13a-15(b) or 15d-15(b), our Chief Executive Officer and our Chief Financial
Officer have concluded that as of the end of the period covered by this report,
our disclosure controls and procedures were effective.
(b) Changes in internal controls. There were no changes in our internal control
over financial reporting that occurred during our most recent fiscal quarter
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the past three years, the Company has sold securities that were not
registered as follows:
In 2003, the Company issued 20,000,000 shares of common stock to Luke Frazier
for $20,000 in cash. The shares were issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act and no commissions were
paid relating to the sale of stock.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were filed by Hardwood Doors during the quarter ended
September 30, 2004.
11
EXHIBIT NUMBER TITLE LOCATION
31 Certification of the Principal Executive Officer and Attached
Principal Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32 Certification of the Principal Executive Officer and Attached
Principal Financial Officer pursuant to U.S.C. Section
1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
In accordance with the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
HARDWOOD DOORS AND MILLING SPECIALITIES, INC.
Date: October 28, 2004 By:/s/Luke Frazier
------------------------------
Luke Frazier
Chief Executive Officer and
Chief Financial Officer
12