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 Fiscal Quarter Ending March 31, 2003
GBO CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as it appears in its charter)
000-49705
(Commission File Number)
NEVADA 80-0011246
- --------------------------------------------------------------------------------
(State or jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
4213 N. Tabor Street, Mesa, Arizona 85215
- --------------------------------------------------------------------------------
(Address of Principal Executive Office)
(480) 832-0094
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code
Securities registered pursuant to Section 12 (b) of the Act:
None
Securities registered pursuant to Section 12 (b) of the Act:
Class A Common Stock $0.001 Par Value
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or 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
---
At the end of the quarter ending March 31, 2003, there were 20,000,000 issued
and outstanding shares of the registrants common stock.
There is no active market for the registrant's securities.
TABLE OF CONTENTS
1
Part I Financial Information Page
Item 1. Financial Statements:
Balance Sheets .......................................................... 3-4
Unaudited Condensed Statements of Operations ............................. 5
Statement of Changes in Stockholders' equity ............................. 6
Unaudited Condensed Statements of Cash Flows ............................. 7
Notes to Financial Statements (unaudited) ............................. 8 -12
Item 2. Plan of operation ................................................... 12
Part II - Other Information
Item 1. Legal Proceedings ................................................... 12
Item 2. Changes in Securities ............................................... 12
Item 3. Default Upon Senior Securities ...................................... 13
Item 4. Submission of matters To a Vote of Security Holders ................. 13
Item 5. Other Information ................................................... 13
Item 6. Exhibits and Reports. ............................................... 13
Signatures .................................................................. 13
2
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
GBO CORPORATION
(A Development Stage Company)
BALANCE SHEET
-------------
(Unaudited)
ASSETS
------
Three Months Year
Ended Ended
March 31, December 31,
2003 2002
CURRENT ASSETS
Cash (13) 8
-------------------- --------------------
Total Current Assets (13) 8
-------------------- --------------------
OTHER ASSETS 0 0
-------------------- --------------------
Total Other Assets 0 0
-------------------- --------------------
TOTAL ASSETS (13) 8
==================== ====================
The accompanying notes are an integral part of these statements
3
GBO CORPORATION
(A Development Stage Company)
BALANCE SHEET
-------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Three Months Year
Ended Ended
March 31, December 31,
2003 2002
LIABILITIES
Current Liabilities 0 0
-------------------- --------------------
Total Current Liabilities 0 0
-------------------- --------------------
STOCKHOLDERS' EQUITY
Common Stock, authorized
25,000,000 shares of stock,
issued and outstanding 20,000,000,
par value $0.001 per share 20,000 20,000
Additional Paid in Capital 5,670 5,670
Deficit accumulated during the
development stage (25,683) (25,662)
-------------------- --------------------
Total Stockholders' Equity (13) 8
-------------------- --------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (13) 8
==================== ====================
The accompanying notes are an integral part of these statements
4
GBO CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
-----------------------
(Unaudited)
Three Months Three Months Period January 18,
Ended Ended (Inception)
March 31, March 31, to March 31,
2003 2002 2003
INCOME
Revenue 0 0 0
---------------------- ---------------------- ----------------------
EXPENSES
General, Selling and
Administrative 21 20,600 25,683
---------------------- ---------------------- ----------------------
Total Expense 21 20,600 25,683
---------------------- ---------------------- ----------------------
Loss before Provision for
Income Taxes (21) (20,600) (25,683)
Provision for Income Taxes 0 0 0
---------------------- ---------------------- ----------------------
NET INCOME (LOSS) (21) (20,600) (25,683)
====================== ====================== ======================
Primary and Diluted Earnings
(Loss) per Weighted Average
Number of Common Shares 0.01 0.01 0.01
---------------------- ---------------------- ----------------------
Weighted Average Number of
Common Shares 20,000,000 20,000,000 20,000,000
---------------------- ---------------------- ----------------------
The accompanying notes are an integral part of these statements
5
GBO CORPORATION
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
---------------------------------
(Unaudited)
<table>
<caption>
Common Stock Additional Accumulated Total
Shares Amount Paid in Deficit Equity
Capital
------------ ------------ -------------- ------------- ------------
Initial Capitalization
Stock issued for services 19,370,000 19,370 - 19,370
Stock sales for cash 630,000 630 5,670 6,300
Retained Earnings (Loss) (25,662) (25,662)
------------ ------------ -------------- ------------- ------------
Balance, December 31, 2002 20,000,000 20,000 5,670 (25,662) 8
Accumulated Deficit (21) (21)
------------ ------------ -------------- ------------- ------------
Balance, March 31, 2003 20,000,000 20,000 5,670 (25,683) (13)
============ ============ ============== ============= ============
</table>
The accompanying notes are an integral part of these statements
6
GBO CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
-----------------------
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
2003 2002
---------------- ----------------
Cash Flows from Operating Activities
Net Loss (21) (20,600)
Consulting for stock 0 19,370
Changes in assets and liabilities 0 0
---------------- ----------------
Net Cash Provided by Operations (21) (1,230)
---------------- ----------------
Cash Flow Used in Investing Activities 0 0
---------------- ----------------
Cash Flows from Financing Activities
Sales of Stock 0 6,300
---------------- ----------------
Cash Flows from Financing Activities 0 6,300
---------------- ----------------
Net Increase (Decrease)
Net Increase (Decrease) in Cash (21) 5,070
Cash, Beginning of Period 8 0
---------------- ----------------
Cash, End of Period (13) 5,070
================ =================
The amount of interest paid for the period shown above was $00.00. The amount of
taxes paid for the period shown above was $00.00.
Significant non cash transactions
Issuance of 19,370,000 shares of common stock for consulting services
valued at $19,370
The accompanying notes are an integral part of these statements
7
GBO Corporation
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Note 1. GENERAL ORGANIZATION AND BUSINESS
GBO Corporation, (the Company) was organized in the state of Nevada on January
18, 2002. The Company is currently in its development stage and to date its
activities have been limited to organization and capital formation. The Company
currently has no operations and, in accordance with SFAS No. 7, is considered a
development stage company.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company has no assets except cash and no debt. The relevant accounting
policies and procedures are listed below.
Accounting Basis
The basis is generally accepted accounting principles.
Earnings per Share
The basic earnings (loss) per share is calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares during the year. The diluted earnings (loss) per share is calculated by
dividing the Company's net income (loss) available to common shareholders by the
diluted weighted average number of shares outstanding during the year. The
diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted as of the first of the year for any potentially
dilutive debt or equity.
The Company has no potentially dilutive securities outstanding at the end of the
statement periods. Therefore, the basic and diluted earnings (loss) per share
are presented on the face of the statement of operations as the same number.
The Company has not issued any options or warrants or similar securities since
inception.
Dividends
The Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid since inception.
Stock Based Compensation
The Company accounts for its stock based compensation based upon provisions in
SFAS No. 123, Accounting for Stock-Based Compensation. In this statement stock
based compensation is divided into two general categories, based upon who the
stock receiver is, namely: 1. Non-employees. 2. Employees or directors. The
employees/directors category is further divided based upon the particular stock
issuance plan, namely compensatory and non-compensatory. Each of these
categories treats the valuation of the stock issuance for accounting purposes in
a specific manner.
8
1. Non-employees the security is recorded at its fair value
2. Employees or directors
Non-compensatory No security value is booked until the stock is
actually paid for
Compensatory The Company may select between two methods,
compensation is calculated and recorded at
the securities' fair value, or intrinsic value
The Company has selected to utilize the fair value method for the valuation of
it securities given as compensation.
Income Taxes
The provision for income taxes is the total of the current taxes payable and the
net of the change in the deferred income taxes. Provision is made for the
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
Advertising
Advertising is expensed when incurred. There has been no advertising since
inception.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 revenue and expenses during
the reporting period. Actual results could differ from those estimates.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of business.
However the Company has neither a current source of revenue, nor operations.
Without realization of additional capital, it would be unlikely for the Company
to continue as a going concern. It is management's plan to seek additional
capital through a merger with an existing operating company.
NOTE 4. STOCKHOLDERS' EQUITY
At inception the Company had 25,000,000 shares of common stock authorized. The
shareholders have all of the rights afforded Nevada shareholders.
Par value is $0.001 per common share.
There are no warrants or options outstanding to acquire any additional shares of
common stock.
The Company was initially capitalized during on January 18, 2002. Also, $19,370
of value was given in services for which 19,370,000 shares of stock were issued
at par value. Afterward, 630,000 shares of common stock were sold for $6,300
($0.01 per share) as shown in the statement of stockholders' equity
9
NOTE 5. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An officer
who lives in Arizona provides administrative services, without charge. Such
costs are immaterial to the financial statements and accordingly, have not been
reflected therein. 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.
NOTE 5. INCOME TAXES
The Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Accordingly, a
valuation allowance equal to the deferred tax asset has been recorded. The total
deferred tax asset is estimated at $5,650, which is calculated by multiplying a
22% estimated tax rate by the two items making up the deferred tax account, the
accumulated NOL of $25,108 and the difference between tax and book net loss of
$575, (which was due to the organization costs). The total valuation allowance
is a comparable $5,650
The provision for income taxes is comprised of the net change in deferred taxes
less the valuation account plus the current taxes payable as shown in the chart
below.
2002 2003
Net change in deferred taxes $5,646 4
Valuation Account (5,646) (4)
Current taxes payable 0 0
-------- -------
Provision for Income Taxes 0 0
-------- -------
Below is a chart showing the federal net operating losses and the year in which
it will expire.
Year Amount Expiration
---- ------ ----------
2002 25,050 2022
2003 (Estimated thru 3/31/03) 58 2023
Note 6. OPERATING LEASES AND OTHER COMMITMENTS:
As explained in the note pertaining to related parties, the Company uses the
offices of its president with no charge. The Company also has no assets, debts
nor lease obligations of any kind. The five-year projection of these future
obligations will be zero in each year, as follows:
10
Year 1 Year 2 Year 3 Year 4 Year 5
Operating Leases, etc 0 0 0 0 0
Note 8. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards SFAS 141-144 and
their effect on the Company.
SFAS 141 Business Combinations
This Statement addresses financial accounting and reporting for business
combinations and supersedes APB 16 and SFAS 38. All business combinations in the
scope of this Statement are to be accounted for using one method, the purchase
method. The effective date for this Statement is June 30, 2001 and thereafter.
SFAS 142 Goodwill and Other Intangibles Assets
This Statement addresses financial accounting and reporting for acquired
goodwill and other intangible assets and supersedes APB 17. It addresses how
intangible assets that are acquired individually or with a group (but not those
acquired in a business combination) should be accounted for in financial
statements upon their acquisition. This Statement also addresses how goodwill
and other intangible assets should be accounted for after they have been
initially recognized in the financial statements. The effective date for this
Statement is December 15, 2001.
SFAS 143 Accounting for Asset Retirement Obligations
This Statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. This Statement applies to all entities. It applies to
legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development, and (or) the normal
operation of a long-lived asset, except for certain obligations of leases. This
Statement amends SFAS 19. The effective date for this Statement is June 15,
2002.
SFAS 144 Accounting for the Impairment or Disposal of Long-Lived Assets
This Statement addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. This statement supersedes SFAS 121, the
accounting and reporting provisions of APB 30 and amends ARB 51. The effective
date of this Statement is December 15, 2001.
SFAS 145 Extra-ordinary item classification, Sale-lease-back classification
This statement rescinds SFAS 4, 44 and 64 and reinstates APB 30 as the standard
for the classification of gains and losses of the extinguishment of debt as an
operating lease to be accounted for under the sale-lease-back provisions of SFAS
98. The effective date of this statement is May 15, 2002.
SFAS 146 Accounting for Costs Associated with Exit or Disposal Activities
This statement requires companies to recognize costs associated with exit or
disposal activities, other than SFAS 143 costs, when they are incurred rather
than at the date of a commitment to an exit or disposal plan. Examples of these
costs are lease termination costs, employee severance costs associated with
11
restructuring, discontinued operation, plant closing, or other exit or disposal
activity. This statement is effective after December 15, 2002.
SFAS 147 Acquisitions of Certain Financial Institutions - an amendment of FASB
Statement No. 72 and 144 and FASB Interpretation No. 9.
This statement makes the acquisition of financial institutions come under the
statements 141 and 142 instead of statement 72, 144 and FASB Interpretation No.
9. This statement is applicable for acquisition on or after October 1, 2002.
The adoption of these new Statements is not expected to have a material effect
on the Company's financial position, results or operations, or cash flows.
SFAS 148 Accounting for Stock-Based Compensation - Transition and Disclosure
Amends FASB 123 to provide alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee compensation.
SFAS 149 Amendment of Statement 133 on Derivative Instruments and Hedging
Activities
This Statement amends and clarifies financial accounting and reporting for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives) and for hedging
activities under FASB Statement No. 133, Accounting for Derivative Instruments
and Hedging Activities.
SFAS 150 Financial Instruments with Characteristics of both Liabilities and
Equity
This statement requires that such instruments be classified as liabilities in
the balance sheet. SFAS 150 is effective for financial instruments entered into
or modified after May 31, 2003.
The adoption of these new Statements is not expected to have a material effect
on the Company's current financial position, results or operations, or cash
flows. These standards will have an impact if the Company merges with an
operating entity.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
Results of Operations
The Company has had no operations during this quarter.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities
None
12
Item 3. Default Upon Senior Securities
None
Item 4. Submission of matters To a Vote of Security Holders
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports.
99.1 Certificate of CEO/CFO as Required by Rule 13a-14(a)/15d-14
99.2 Certificate of CEO/CFO as Required by Rule Rule 13a-14(b) and Rule
15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of
Title 18 of the United States Code
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 31, 2003 GBO CORPORATION
By: /s/ William D. O'Neal
--------------------------
William D. O'Neal
President
13
EXHIBIT 99.1
CERTIFICATION
-------------
I, William D. O'Neal, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of GBO CORPORATION;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 31, 2003
/s/ William D. O'Neal
- -----------------------------
William D. O'Neal, CEO
14
EXHIBIT 99.2
CERTIFICATION
-------------
I, William D. O'Neal, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of GBO CORPORATION;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 31, 2003
/s/ William D. O'Neal
- -----------------------------
William D. O'Neal, CFO
15