UNITED STATES
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: June 30, 2005
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
For the transition period from to
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Commission file number 0-29545
WESTERN TRANSITIONS, INC.
------------------------------------------------------------------------
(Exact name of small business issuer as
specified in its charter)
Nevada 86-0972630
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
2920 N. Swan Road, Suite 206, Tucson, Arizona 85712
(Address of principal executive offices)
(520) 977-9654
Issuer's telephone number
Western Transitions, Inc.
(Former name, former address and former fiscal year, if changed
since last report.)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING 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 a plan confirmed by a court.
Yes ----- No -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
Classes of common equity, as of the latest practical date:
March 31, 2005 1,000,000
Transitional Small Business Disclosure Format (check one).
Yes ; No X
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PART I
ITEM 1. FINANCIAL STATEMENTS
WESTERN TRANSITIONS, INC.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
June 30, December 31,
2005 2004
------------------ -----------------
Assets: $ - $ -
================== ==================
Liabilities - Accounts Payable $ 1,118 $ 818
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Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 13,452,000 Shares at June 30,
2005 and 1,000,000 at December 31, 2004 13,452 1,000
Paid-In Capital 3,588 3,588
Retained Deficit (1,200) (1,200)
Deficit Accumulated During the
Development Stage (16,958) (4,206)
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Total Stockholders' Equity (1,118) (818)
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Total Liabilities and
Stockholders' Equity $ - $ -
================== ==================
See accompanying notes.
WESTERN TRANSITIONS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
since October
20, 1999
Inception
For the three months For the six months of
ended June 30, June 30, development
2005 2005 stage
------------------ ----------------- -----------------
Revenues: $ - $ - $ -
Expenses: - - 4,506
------------------ ----------------- -----------------
Net Loss $ - $ - $ (4,506)
================== ================= =================
Basic &
Diluted loss
per share $ - $ - $ -
================== ================= =================
See accompanying notes.
WESTERN TRANSITIONS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative
since October
20, 1999
For the six months ended Inception of
June 30, Development
2005 Stage
----------------- ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ - $ (4,506)
Increase (Decrease)in Accounts Payable - 918
---------------- -----------------
Net Cash Used in operating activities - (3,588)
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CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by investing activities - -
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CASH FLOWS FROM FINANCING
ACTIVITIES:
Capital contributed by shareholder - 3,588
---------------- ----------------
Net Cash Provided by
Financing Activities - 3,588
---------------- ----------------
Net (Decrease) Increase in
Cash and Cash Equivalents -
- - -
Cash and Cash Equivalents
at Beginning of Period - -
---------------- ----------------
Cash and Cash Equivalents
at End of Period $ - $ -
================ ================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ -
Franchise and income taxes $ - $ 500
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None
See accompanying notes.
WESTERN TRANSITIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED June 30, 2005 AND 2004
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Western Transitions, Inc.,
Formerly In Full Affect, Inc. (a development stage company) is
presented to assist in understanding the Company's financial statements.
The accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.
Going Concern
The accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in the
United States, which contemplates the Company as a going concern. However,
the Company has sustained substantial operating losses in recent years and has
used substantial amounts of working capital in its operations. Realization of
the assets reflected on the accompanying balance sheet is dependent upon
continued operations of the Company which, in turn, is dependent upon the
Company's ability to meet its financing requirements and succeed in its
future operations. Management believes that actions presently being
taken to revise the Company's operating and financial requirements provide
them with the opportunity for the Company to continue as a going concern.
Interim Reporting
The unaudited financial statements as of March 31, 2005 and for the
three month period then ended reflect, in the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary
to fairly state the financial position and results of operations for the
three months. Operating results for interim periods are not necessarily
indicative of he results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada
on July 2, 1997. The Company ceased all operating activities during the period
from July 2, 1997 to October 20, 1999 and was considered dormant. Since
October 20, 1999, the Company is in the development stage, and has not
commenced planned principal operations.
On May 16, 2005, the Company merged with In Full Affect, Inc., a Wyoming
corporation, with the Company as the surviving entity. In the merger
transaction, the common shareholders of In Full Affect, Inc. received one
share of the Company?s common stock for each common share outstanding, a
total of 452,000 common shares, and ten common shares of the Company for
each share of preferred stock of In Full Affect, Inc. then outstanding, a
total of 12 million common shares of the Company. As a result, there are
13,452,000 common shares of the Company now outstanding.
WESTERN TRANSITIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004 (Continued)
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Nature of Business
The Company has no products or services as of June 30, 2005.
The Company was organized as a vehicle to seek merger or acquisition
candidates. The Company intends to acquire interests in various business
opportunities, which in the opinion of management will provide a profit
to the Company.
Loss per Share
The reconciliations of the numerators and denominators of the
Basic loss per share computations are as follows:
Income Shares Per Share
(Numerator) (Denominator) Amount
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For the six months ended June 30, 2005
BASIC LOSS PER SHARE
Loss to common shareholders $ - 13,242,000 $ -
=============== ================ ================
For the six months ended June 30, 2004
BASIC LOSS PER SHARE
Loss to common shareholders $ - 1,000,000 $ -
============== ================ ================
The effect of outstanding common stock equivalents would
be anti-dilutive for June 30, 2005 and 2004 and are thus not considered.
WESTERN TRANSITIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004 (Continued)
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments purchased with a maturity of three months
or less to be cash equivalents to the extent the funds are not being held
for investment purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with
Generally accepted accounting principles required 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.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations
Of credit risk such as foreign exchange contracts, options contracts
or other foreign hedging arrangements.
NOTE 2 - INCOME TAXES
As of June 30, 2005, the Company had a net operating
Loss carryforward for income tax reporting purposes of approximately
$5,500 that may be offset against future taxable income through 2021.
Current tax laws limit the amount of loss available to be offset against
future taxable income when a substantial change in ownership occurs.
Therefore, the amount available to offset future taxable income may be
limited. No tax benefit has been reported in the financial statements,
because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation allowance
of the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common
with a development stage company, the Company has had recurring losses
during its development stage.
WESTERN TRANSITIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 and 2004 (Continued)
(Unaudited)
NOTE 4 - COMMITMENTS
As of June 30, 2005 all activities of the Company have
Been conducted by corporate officers from either their homes or business
offices. Currently, there are no outstanding debts owed by the company
for the use of these facilities and there are no commitments for future use of
the facilities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Quarterly Report contains certain forward-looking
Statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbors created
thereby. Investors are cautioned that all forward-looking statements
involve risks and uncertainty, including without limitation, the ability
of the Company to continue its expansion strategy, changes in costs of
raw materials, labor, and employee benefits, as well as general market
conditions, competition and pricing. Although the Company believes
that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be
inaccurate, and therefore, there can be no assurance that the forward
looking statements included in this Quarterly Report will prove to
be accurate. In light of the significant uncertainties inherent in
the forward-looking statements included herein, the inclusion of such
information should not be regarded as a presentation by the Company or any
other person that the objectives and plans of the Company will be achieved.
As used herein the term "Company" refers to Western Transitions,
Inc., a Nevada corporation and its predecessors, unless the context
indicates otherwise. The Company is currently a shell company whose purpose
is to acquire operations through an acquisition or merger or to begin its
own start-up business.
The Company is in the process of attempting to identify and
acquire a favorable business opportunity. The Company has reviewed and
evaluated a number of business ventures for possible acquisition or
participation by the Company. The Company has not entered into any agreement,
nor does it have any commitment or understanding to enter into or become
engaged in a transaction as of the date of this filing. The Company continues
to investigate, review, and evaluate business opportunities as they
become available and will seek to acquire or become engaged in business
opportunities at such time as specific opportunities warrant.
On May 16, 2005, the Company merged with In Full Affect, Inc., a Wyoming
corporation, with the Company as the surviving entity. In the merger
transaction, the common shareholders of In Full Affect, Inc. received one
share of the Company?s common stock for each common share outstanding, a
total of 452,000 common shares, and ten common shares of the Company for
each share of preferred stock of In Full Affect, Inc. then outstanding, a
total of 12 million common shares of the Company. As a result, there are
13,452,000 common shares of the Company now outstanding. AS a result of
the merger, the Company?s common shares are now listed for trading on The
Pink Sheets under the symbol WTTN.
PLAN OF OPERATIONS
The Company had no sales or sales revenues for the six months
ended June 30, 2005 and 2004 because it is a shell company that has not
had any business operations for the past three years.
The Company had no costs of sales revenues for the six months
ended June 30, 2005 and 2004 because it is a shell company that has not had
any business operations for the past three years. The Company had
general and administrative expenses of $-0- for the six month period ended
June 30, 2005 and $-0- for the same period in 2004.
CAPITAL RESOURCES AND LIQUIDITY
At June 30, 2005, the Company had total current assets of $0
and total assets of $0 as compared to $0 current assets and $0 total
assets at December 31, 2004. The Company had a net working capital deficit
of $1,118 at June 30, 2005 and December 31, 2004.
ITEM 3. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer
have concluded, based on an evaluation conducted within 90 days prior to the
filing date of this Quarterly Report on Form 10-QSB, that the Company's
disclosure controls and procedures have functioned effectively so as to
provide those officers the information necessary to evaluate whether:
(i) this Quarterly Report on Form 10-QSB contains any untrue
statement of a material fact or omits 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 on Form 10-QSB, and
(ii) the financial statements, and other financial information
included in this Quarterly Report on Form 10-QSB, fairly present in all
Material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this
Quarterly Report on Form 10-QSB.
There have been no significant changes in the Company's
internal controls or in other factors since the date of the Chief Executive
Officer's and Chief Financial Officer's evaluation that could
significantly affect these internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
On May 16, 2005, the Company merged with In Full Affect, Inc., a Wyoming
corporation, with the Company as the surviving entity. In the merger
transaction, the common shareholders of In Full Affect, Inc. received one
share of the Company?s common stock for each common share outstanding, a
total of 452,000 common shares, and ten common shares of the Company for
each share of preferred stock of In Full Affect, Inc. then outstanding, a
total of 12 million common shares of the Company. As a result, there are
13,452,000 common shares of the Company now outstanding.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None/Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None/Not Applicable.
ITEM 5. OTHER INFORMATION
None/Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following documents are filed herewith or have been included
as exhibits to previous filings with the Commission and are incorporated
herein by this reference:
Exhibit No. Exhibit
*3 Articles of Incorporation
*3.2 Bylaws
*3.1 Amended Articles of Incorporation
31 Certification Pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
32 Certification Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
period covered by this Form 10-QSB.
* Incorporated herein by reference from Registrant's Form
10SB12G, Registration Statement, dated February 16, 2000.
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, this 13th day of August, 2005.
Western Transitions, Inc.
/s/ Daniel L. Hodges
----------------
Daniel L. Hodges
President/CFO and Director
August 13, 2005