UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______to________
Commission file number: O-50212
BAS CONSULTING, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 81-0592184
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
5675 Baldwin Court, Norcross, GA. 30071
(Address of principal executive offices)
770-417-1664
(Issuer's telephone number, including area code)
1686 Citation Drive West Palm Beach, FL 33417
(Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)
Check whether the registrant (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
[ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 9,000,000 shares of Common Stock, as
of August 14, 2003.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
BAS CONSULTING, INC.
INDEX
PART I.
FINANCIAL INFORMATION
Page
Number
PART I - Item 1. Financial Statements
Unaudited Condensed Financial Statements:
Condensed Balance Sheet as of June 30, 2003 3
Condensed Statements of Operations for the Three and Six Months Ended
June 30, 2003 and the Cumulative Period from December 18, 2002
(inception) to June 30, 2003 4
Statements of Cash Flows for the Six Months Ended June 30, 2003 and the
Cumulative Period from December 18, 2002 (inception) to June 30, 2003 5
Notes to Unaudited Condensed Financial Statements 6
Item 2. - Management's Discussion and Analysis or Plan of Operation 10
Item 3 - Controls and Procedures 12
PART II.
Other Information (Items 1-6) 13
2
BAS CONSULTING, INC.
Balance Sheet
June 30, 2003
(unaudited)
ASSETS
CURRENT ASSETS:
Cash $ -
--------------
Total Current Assets -
--------------
TOTAL ASSETS $ -
==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accrued expenses $ 3,000
--------------
Total Current Liabilities 3,000
--------------
STOCKHOLDERS' DEFICIT:
Preferred stock at $0.001 par value; 1,000,000 shares
authorized, -0- outstanding -
Common stock at $0.001 par value; authorized 24,000,000
shares; 9,000,000 shares issued and outstanding 9,000
Deficit accumulated during the development stage (12,000)
--------------
Stockholders' Deficit (3,000)
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ -
==============
The accompanying notes are an integral part of these financial statements.
3
BAS CONSULTING, INC.
Statement of Operations
(unaudited)
Cumulative from
Three Months December 18, 2002
Ended March Six Months Ended (inception) to
31, 2003 June 30, 2003 June 30, 2003
----------- ---------------- -----------------
Revenue $ - $ - $ -
Organization and related
expenses 1,500 3,000 12,000
----------- --------------- -----------------
Net loss $ 1,500 $ 3,000 $ (12,000)
=========== =============== =================
Basic and diluted loss per
share $ (.00) $ (.00) $ (.00)
=========== =============== =================
Weighted average number of
common shares outstanding 9,000,000 9,000,000 9,000,000
=========== =============== =================
The accompanying notes are an integral part of these financial statements.
4
BAS CONSULTING, INC.
Statements of Cash Flows
(unaudited)
Cumulative from
December 18, 2002
Six Months Ended (inception) to
June 30, 2003 June 30, 2003
---------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (3,000) $ (12,000)
Noncash services received - 9,000
Increase (decrease) in accrued expenses 3,000 3,000
---------------- ------------------
Net Cash (Used) by Operating Activities - -
---------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES - -
---------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES - -
---------------- ------------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS: - -
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD - -
---------------- ------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ - $ -
================ ==================
SUPPLEMENTAL SCHEDULE OF CASH FLOW
ACTIVITIES:
Cash Paid For:
Interest $ - $ -
================ ==================
Income taxes $ - $ -
================ ==================
The accompanying notes are an integral part of these financial statements.
5
BAS CONSULTING, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited)
NOTE 1--BASIS OF PRESENTATION
BAS Consulting, Inc. (the "Company") was incorporated under the laws of
the State of Nevada on December 18, 2002 (inception). The Company, which had not
generated revenue through June 30, 2003, but has obtained (through June 30,
2003) two initial agreements to perform consulting services, operates as a
consulting firm. The Company realized its initial fee revenue ($13,750) in July
2003.
The accompanying unaudited condensed financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-QSB and Item 310 of Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and six-month periods ended June 30, 2003 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2003. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Form 10-SB for the fiscal period
ended December 31, 2002.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements as well as the reported amount of revenues and expenses
during the reporting period. Actual results could differ from these estimates.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the
accrual method of accounting. The Company has elected a year
ending on December 31.
b. Provision for Taxes
At June 30, 2003, the Company had net operating loss
carryforwards of approximately $12,000 that may be offset
against future taxable income through 2021. No tax benefit has
been reported with respect to these net operating loss
carryforwards in the accompanying financial statements because
the Company believes that realization is not likely.
Accordingly, the potential tax benefits of the net loss
carryforwards are fully offset by a valuation allowance.
6
The income tax benefit differs from the amount computed at the
federal statutory rates of approximately 38% as follows:
Income tax benefit at statutory rate $ 4,200
Change in valuation allowance (4,200)
-------------
Total $ -
=============
Deferred tax assets (liabilities) at June 30, 2003 are comprised
of the following:
Net operating loss carryforwards $ 4,200
Allowance (4,200)
-------------
Net $ -
=============
If substantial changes in the Company's ownership should occur,
there would be an annual limitation of the amount of net
operating loss carryforwards that could be utilized by the
Company.
c. Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
d. Estimates
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 disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
e. Basic Loss Per Common Share
Basic loss per common share has been calculated based on the
weighted average number of shares outstanding during the period
after giving retroactive effect to stock splits.
7
f. Recently Issued Accounting Standards
In April 2002, the FASB issued Statement of Financial Accounting
Standards No. 145, Rescission of FASB Statements No. 4, 44 and
62, Amendment of FASB Statement 13, and Technical Corrections
("SFAS 145"). For most companies, SFAS 145 requires gains and
losses from the extinguishment of debt to be classified as a
component of income or loss from continuing operations. Prior to
the issuance of SFAS 145, early debt extinguishments were
required to be recognized as extraordinary items. SFAS 145
amended other previously issued statements and made numerous
technical corrections. SFAS 145 is effective for fiscal years
beginning after May 15, 2002. Adoption of this standard has had
no impact on the Company.
The FASB recently issued Statement of Financial Accounting
Standards No. 146, Accounting for Costs Associated with Exit or
Disposal Activities ("SFAS 146"). SFAS 146 nullifies the
Emerging Issues Task Force ("EITF") Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity. SFAS 146 requires that a liability
associated with an exit or disposal activity be recognized when
the liability is incurred while EITF Issue No. 94-3 recognized
such liability at such time that an entity committed to an exit
plan. The provisions of SFAS 146 are effective for exit or
disposal activities initiated after December 31, 2002 with early
application encouraged.
On October 1, 2002, the FASB issued SFAS 147, which applies to
all acquisitions of a financial institution except those between
two or more mutual enterprises, which is being addressed in a
separate project. SFAS 147 is not expected to have any impact on
the Company
On December 31, 2002, the FASB issued SFAS No. 148, Accounting
for Stock-Based Compensation--Transition and Disclosure, which
amends SFAS No. 123, Accounting for StockBased Compensation.
SFAS 148 provides alternative methods of transition for a
voluntary change to the fair value based method of accounting
for stock-based employee compensation. (Under the fair value
based method, compensation cost for stock options is measured
when options are issued.) In addition, SFAS 148 amends the
disclosure requirements of SFAS 123 to require more prominent
and more frequent disclosures in financial statements of the
effects of stock-based compensation. The transition guidance and
annual disclosure provisions of SFAS 148 are effective for
fiscal years ending after December 15, 2002, with earlier
application permitted in certain circumstances. The interim
disclosure provisions are effective for financial reports
containing financial statements for interim periods beginning
after December 15, 2002.
8
In May 2003, the FASB issued SFAS No. 150, Accounting for
Certain Financial Instruments with Characteristics of both
Liabilities and Equity." This statement establishes standards
for how an issuer classifies and measures in its statement of
financial position certain financial instruments with
characteristics of both liabilities and equity. In accordance
with the standard, financial instruments that embody obligations
for the issuer are required to be classified as liabilities.
This Statement is effective for financial instruments entered
into or modified after May 31, 2003, and otherwise is effective
at the beginning of the first interim period beginning after
June 15, 2003. The Company does not expect the provision of this
statement to have a significant impact on the Company's
financial statements.
In November 2002, the FASB issued Interpretation No. 45,
Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others." Interpretation 45 requires a guarantor to include
disclosure of certain obligations, and if applicable, at the
inception of the guarantee, recognize a liability for the fair
value of other certain obligations undertaken in issuing a
guarantee. The recognition requirement is effective for
guarantees issued or modified after December 31, 2002. The
Company has no obligations regarding Interpretation No. 45.
In January 2003, the FASB issued Interpretation No. 46,
Consolidation of Variable Interest Entities." Interpretation 46
clarifies the application of Accounting Research Bulletin No.
51, Consolidated Financial Statements, and applies immediately
to any variable interest entities created after January 31, 2003
and to variable interest entities in which an interest is
obtained after that date. The Company holds no interest in
variable interest entities.
g. Revenue Recognition
The Company recognizes revenue when work has been completed, and
there are no unresolved contingencies outstanding.
h. Stock Options and Warrants
The Company has elected to measure and record compensation cost
relative to employee stock option and warrant costs in
accordance with Accounting Principles Board (`APB") Opinion 25,
Accounting for Stock Issued to Employees, and related
Interpretations and will make pro forma disclosures of net
income and earnings per share as if the fair value method of
valuing stock options and warrants had been applied. Under APB
Opinion 25. compensation cost is recognized for stock options
and warrants granted to employees when the option or warrant
price is less than the market price of the underlying common
stock on the date of grant. Options that are outstanding to
purchase 650,000 shares at $.01 per share were deemed to have
been issued at the fair market value at the date of grant at
which time the Company had no resources or revenue.
9
NOTE 3 -- GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern that contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. The Company has not established revenues sufficient to cover its
operating costs to allow it to continue as a going concern. The Company will
engage in very limited activities without incurring any liabilities that must be
satisfied in cash until a source of funding is secured. The Company will offer
noncash consideration and seek equity lines as a means of financing its
operations. If the Company is unable to obtain revenue producing contracts or
financing or if the revenue or financing it does obtain is insufficient to cover
any operating losses it may incur, it may substantially curtail or terminate its
operations or seek other business opportunities through strategic alliances,
acquisitions or other arrangements that may dilute the interests of existing
stockholders.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
OF OPERATION
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Information set forth herein contains "forward-looking statements"
which can be identified by the use of forward-looking terminology such as
"believes," "expects," "may," "should" or "anticipates" or the negative thereof
or other variations thereon or comparable terminology, or by discussions of
strategy. No assurance can be given that the future results covered by the
forward-looking statements will be achieved. The Company cautions readers that
important factors may affect the Company's actual results and could cause such
results to differ materially from forward-looking statements made by or on
behalf of the Company. These include the Company's lack of historically
profitable operations, dependence on key personnel, the success of the Company's
consulting services business, ability to manage anticipated growth and other
factors identified in the Company's filings with the Securities and Exchange
Commission, press releases and other public communications.
10
Operations
BAS has begun soliciting engagements and performing work. It earned its
first revenue ($13,750) in July 2003. All but one of the current outstanding
engagement agreements contain contingencies or milestones. We are not entitled
to receive fees until the related milestones have been achieved. We cannot
predict the likelihood of being successful in achieving the milestones. The
extent of operations over the next 12 months will be determined by:
o The amount of financing obtained, if any,
o The number of client engagements that can be obtained that are either
short-term in nature or provide for progress billing, and
o Our ability to negotiate non-cash compensation to satisfy commitments.
We cannot predict what our level of activity will be over the next 12
months because we do not know how many, if any, client engagements that we will
obtain. We will not incur any cash obligations that we cannot satisfy with known
resources of which there are currently none except as hereinafter indicated. Our
founder will provide his services at no cost and will advance a limited amount
of funds to cover costs incurred. All of these advances will be treated as loans
and will be repaid if and when we have the financial resources to do so. These
costs will include the costs of seeking engagements, professional services and
incidentals. If we obtained funding of $50,000, such funds would be used to
cover initial needs for salaries, travel and advertising costs, including
printed marketing materials and a basic website. We believe that this amount
would cover at least 12 months of costs.
If we are unable to obtain financing, we will seek engagements (i.e.,
consulting contracts) through approaching the business contacts of our founder
directly rather than through other marketing strategies. By doing so, we will
not incur significant cash requirements in the process.
Liquidity
BAS does not have any credit facilities or other commitments for debt
or equity. No assurances can be given that advances when needed will be
available. BAS has commenced work on a website and is soliciting engagements. We
do not believe that we need funding to cover initial operations because we do
not have a capital intensive business plan and can also use independent
contractors to assist in many projects. We will use funding, if obtained, to
cover the salary of our founder and to pay for marketing materials and proposal
efforts. We currently have no formal salary arrangements with Dr. Schoomer.
While no annual salary or length of employment has been determined to date, we
anticipate providing a minimum annual salary of $50,000 to be accrued and paid
out of revenues, if any. No salary will be earned or accrued until initial
revenue commences. No formal written arrangements will be made until we have
either obtained financing or client engagements, however, under no circumstances
will the first year's base salary exceed $100,000. We will seek venture or
private capital immediately upon the effectiveness of this registration
statement. Such funding, which would not exceed $100,000 will, if obtained, be
used to pay salaries and for the production of marketing materials. However, we
will commence operations and seek client engagements even if no funding is
obtained. The private capital will be sought from former business associates of
our founder or private investors referred to us by those associates. If a market
for our shares ever develops, of which there can be no assurances, we will use
shares to compensate employees/consultants wherever possible. To date, we have
not sought any funding source and have not authorized any person or entity to
seek out funding on our behalf.
11
To meet commitments that are greater than 12 months in the future, we
will have to obtain client engagements in sufficient number and at sufficient
levels of profitability. There does not currently appear to be any other viable
source of long-term financing except that management may consider various
sources of debt and/or equity financing if same can be obtained on terms deemed
reasonable to management.
Recent Accounting Pronouncements
No new pronouncement issued by the Financial Accounting Standards
Board, the American Institute of Certified Public Accountants or the Securities
and Exchange Commission is expected to have a material impact on BAS' financial
position or reported results of operations.
Seasonality
We do not yet have a basis to determine whether our consulting business
will be seasonal.
ITEM 3.
CONTROLS AND PROCEDURES
Our Chief Executive Officer and Chief Financial Officer (collectively,
the "Certifying Officer") are responsible for establishing and maintaining
disclosure controls and procedures for us. Currently our founder serves in both
capacities. Such officer has concluded (based upon his evaluation of these
controls and procedures as of a date within 90 days of the filing of this
report) that our disclosure controls and procedures are effective to ensure that
information required to be disclosed by us in this report is accumulated and
communicated to management, including our principal executive officers as
appropriate, to allow timely decisions regarding required disclosure.
The Certifying Officer also has indicated that there were no
significant changes in our internal controls or other factors that could
significantly affect such controls subsequent to the date of his evaluation, and
there were no corrective actions with regard to significant deficiencies and
material weaknesses.
12
PART II OTHER INFORMATION
Item 1 Legal Proceedings
None
Item 2 Changes in Securities and Uses of Proceeds
None
Item 3 Defaults Upon Senior Securities
None
Item 4 Submission of Matters to a Vote of Shareholders
None
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-K
None
13
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.
BAS CONSULTING, INC.
(Registrant)
Date: August 19, 2003 By: /s/ B. Alva Schoomer
--------------------
B. Alva Schoomer,
President