U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2004
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from _________ to ___________
Commission file number: 0-25097
ADVANCED 3-D ULTRASOUND SERVICES, INC.
(Exact Name of Small Business Issuer in Its Charter)
Florida 65-0783722
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7732 N. Mobley Drive, Odessa, FL 33556
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 926-3298
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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 a plan confirmed by a court.
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of the registrant's common stock, par value $.0001 per
share, outstanding as of September 30, 2004, was 198,063.
Transitional Small Business Disclosure Format (Check one): No
Part I
Item 1- Financial Information
ADVANCED 3-D ULTRASOUND SERVICES, INC.
FINANCIAL STATEMENTS
September 30, 2004
ADVANCED 3-D ULTRASOUND SERVICES, INC.
BALANCE SHEET
September 30, 2004
(unaudited)
ASSETS
Current assets
Cash $ 1,893
Property and equipment, net 4,477
Total Assets ---------------------
$ 6,370
=====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 30,397
Stockholders' equity
Common stock; $.0001 par value; 50,000,000 shares authorized; 198,063 shares issued and 20
outstanding
Paid-in capital 8,968,303
Accumulated deficit (8,992,350)
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Total stockholders' equity (24,027)
Total Liabilities and Stockholders' Equity ---------------------
$ 6,370
====================
The accompanying notes are an integral part
of these financial statements.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
STATEMENTS OF OPERATIONS
Three Months Ended September 30, Nine Months Ended September 30,
2004 2003 2004 2003
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ - $ - $ - $ -
---------------- ----------------- -------------- ----------------
Expenses
Selling, general and administrative 244,605 34,009 395,447 153,862
---------------- ----------------- -------------- ----------------
Total expenses 244,605 34,009 395,447 153,862
Other income (expense)
Interest expense - - (137) (9)
---------------- ----------------- -------------- ----------------
Total other income (expense) - - (137) (9)
---------------- ----------------- -------------- ----------------
Net loss $ (244,605) $ (34,009) $ (395,584) $ (153,691)
================ =========== ========= ===========
Loss per common share $ (1.33) $ (0.31) $ (2.64) $ (1.51)
================ =========== ========= ===========
Weighted average common shares outstanding 184,470 109,150 149,973 101,872
================ =========== ========= ===========
The accompanying notes are an integral part
of these financial statements.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
2004 2003
(unaudited) (unaudited)
Cash flows from operating activities
Net loss $ (395,584) $ (153,691)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense 283 -
Stock issued to consultants 175,500 15,000
(Increase) decrease in accounts payable and accrued expenses (3,549) 5,530
Total adjustments --------------- ---------------
172,234 20,530
Net cash used in operating activities --------------- ---------------
(223,350) (133,161)
Cash flows from investing activities
Purchase of equipment (4,760) -
Cash flows from financing activities
Proceeds from sale of common stock 230,000 126,300
Net increase (decrease) in cash --------------- ----------------
1,890 (6,861)
Cash, beginning of period 3 6,998
Cash, end of period --------------- ----------------
$ 1,893 $ 137
=============== ================
Supplemental disclosures of noncash investing and financing activities:
The Company issued stock amounting to $175,500 and $15,000 to consultants
for the nine months ended September 30, 2004 and 2003, respectively.
Supplemental disclosures of cash flow information:
The Company paid $137 and $9 in interest and $0 in taxes for the nine months
ended September 30, 2004 and 2003, respectively.
The accompanying notes are an integral part
of these financial statements.
The information presented herein as of September 30, 2004, and for the three and
nine-months ended September 30, 2004 and 2003, is unaudited.
(1) Basis of Presentation:
The accompanying financial statements of Advanced 3-D Ultrasound Services, Inc.
(the Company) have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and item 310(b) 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 required adjustments)
considered necessary for a fair presentation have been included.
Operating results for the nine-month period ended September 30, 2004, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2004. For further information, refer to the financial statements
and footnotes included in the Company's annual report of Form 10-KSB for the
year ended December 31, 2003.
Net loss per common share is computed in accordance with the requirements of
Statement of Financial Accounting Standards No. 128 (SFAS 128). SFAS 128
requires net loss per share information to be computed using a simple weighted
average of common shares outstanding during the periods presented. In computing
diluted loss per share, warrants exercisable into common shares were excluded
because the effect is antidilutive.
(2) Stock Transactions:
During the nine months ended September 30, 2004, the Company sold 46,000 shares
of common stock for cash of $230,000. During the nine months ended September 30,
2003, the Company sold 21,050 shares of common stock for cash of $126,300.
On February 1, 2003, the Company entered into a consulting agreement with an
individual to investigate a potential business opportunity for a period of
ninety days. In exchange for services, the consultant received $10,000 and 2,500
common shares. The Company recognized an expense of $15,000 related to the
shares issued which represents the market value of the shares.
In August 2004, the Company entered into consulting agreements with six
different individuals to provide consulting services for one year in exchange
for common stock. The consultants each received 5,850 common shares valued at
$29,250, totaling $175,500.
(3) Going Concern:
As shown in the accompanying financial statements, the Company has incurred
recurring losses from operations and at September 30, 2004, the Company's cash
balance was $1,893 and its current liabilities exceeded its current assets by
$28,504.
Management has taken several actions to ensure that the Company will continue as
a going concern through September 30, 2005, including obtaining written
commitments from certain officers of the Company to fund future operations as
needed. In addition, the Company expects to continue to receive funds from the
sale of its common stock. Management believes that these actions will enable the
Company to continue as a going concern through September 30, 2005. There can be
no assurance, however, that the Company will raise funds from the sale of its
securities beyond those disclosed in these financial statements.
Item 2. Management's Discussion and Analysis or Plan of Operation
PLAN OF OPERATION
The Company's plans include developing a profitable business in 3-D fetal
photography. On February 1, 2003, the Company entered into a consulting
agreement with an individual to investigate this potential business opportunity
for a period of ninety days. In exchange for these services, the consultant
received $10,000 and 2,500 common shares. Currently the Company is actively
pursuing the business of 3-D fetal photography. 3-D fetal photography provides
clear color photographs of an unborn child. The Company believes recent
improvements make this technology practical and desired by parents. In response
to the Companys' decision to pursue this business venture, the Company received
shareholder approval to pursue this venture and therefore changed its name to
Advanced 3-D Ultrasound Services, Inc. at its shareholders meeting on May 2,
2003.
The Company is currently working on the plans for opening its first 3-D fetal
photography center. The Company entered into a lease for its first center in May
2004. However, due to problems with the landlord improvements and the space,
this lease was cancelled during the 3rd quarter of 2004. Additionally, the
company has determined the specifications for the equipment it will need and has
identified the sources of the equipment. Potential employees have been
identified to operate the center. The Company has launched a web site to educate
consumers on the opportunity for 3-D photographs of their baby. The website
address is www.3dbabyphotos.com. The web site is in its early stages but it
displays example images and answers questions about the service and provides
general information about 3-D fetal photography. The Company entered into a
lease for its corporate offices. The lease was an operating lease for six months
and it commenced March 18, 2004. The total rent for the six months is $3,600.
This lease was also cancelled during August 2004. The company's officers are
working out of home offices at this time. In August 2004 the Company entered
into consulting agreements with six individuals. These individuals will provide
consulting services in the areas of marketing, business planning and legal
services for a period of one year. The consultants each received 5,850 shares of
common stock in exchange for their services.
The Companies' plans to develop a profitable 3-D fetal photography business will
require additional funds.
In 2002, the Company adopted a subscription agreement to raise $300,000 of which
$200,000 was to be used for fetal photography development and $100,000 for
working capital. From September 2002 through December 2002, the Company received
$138,730 from sales of common stock, of which $35,000 was from one of the new
officers who is a major stockholder. This initial funding was used primarily to
pay off debts and to fund minimal administrative costs. In 2003, the Company
received $164,300 from sales of common stock. This funding was used to fund
administrative costs and to fund the consulting agreement noted in a preceding
paragraph. The Company plans to fund its near-term operations through additional
sales of common stock.
In January 2004, the Company issued a private placement memorandum to issue up
to 1,000,000 common shares at $5.00 per share to raise up to $5,000,000 to
develop and operate imaging centers to provide ultrasound pictures of fetuses.
These centers will be for elective, non-diagnostic purposes and will be located
in commercial office parks, malls and shopping centers. The funds raised will be
used for development costs, equipment, salaries, marketing and future public
offering costs.
In the first three quarters of 2004, the Company received $230,000 from sales of
common stock. Approximately 90% of this funding has been spent on development
costs, salaries and other administrative costs.
Item 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
The Company's principal executive officer and principal financial officer, after
evaluating the effectiveness of the Company's disclosure controls and procedures
(as defined in Exchange Act Rule 13a-14(c)) within 90 days prior to the filing
of this report, has concluded that, based on such evaluation, the Company's
disclosure controls and procedures were adequate and effective to ensure that
material information relating to the Company was made known to them by others
within those entities, particularly during the period in which this Quarterly
Report on Form 10-QSB was being prepared.
(b) Changes in internal controls.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation, nor were there any significant deficiencies or material
weaknesses in the Company's internal controls. Accordingly, no corrective
actions were required or undertaken.
Part II.
Item. 2. Changes in Securities
From June 30, 2004, to September 30, 2004, Registrant sold a total of 12,000
common shares for a cash purchase price of $5.00 per share as follows:
Number Common Per Share
Name Shares Purchased Date Price
Evelyn Malone-Stephens and
Connie Malone, JTWROS 2,000 07-01-04 $5.00
Denno Family Limited Partnership 5,000 07-02-04 $5.00
Richard T. Fisher 5,000 07-02-04 $5.00
All sales were made pursuant to Section 4(2) of the 1933 Act. The proceeds of
the sale of these securities $60,000 were used to provide operating capital.
From June 30, 2004, to September 30, 2004, Registrant transferred a total of
35,100 common shares in exchange for consulting services as follows:
Number Common Per Share
Name Shares Purchased Date Price
Ray Cibischino 5,850 08-06-04 $5.00
Catherine Roberts 5,850 08-06-04 $5.00
Martin White 5,850 08-06-04 $5.00
Mark Dolan 5,850 08-04-04 $5.00
Alvin Ferer 5,850 08-06-04 $5.00
Dan Witherspoon 5,850 08-06-04 $5.00
Item 6. Exhibits and Reports on Form 8-K
Exhibits
Exhibit Description Number
(2) Plan of Acquisition, Reorganization,
Arrangement, Liquidation or Succession................................None
(4) Instruments defining the rights of holders, including Indentures None
(10) Material contracts ...................................................None
(11) Statement re: computation of per share earnings............... ...Note 1 to
Financial
Statements
(15) Letter re: Unaudited Interim Financial Information....................None
(18) Letter on change in accounting principles.............................None
(19) Report Furnished to Security Holders .................................None
(22) Published report regarding matters submitted to
vote..................................................................None
(23) Consents of Experts and Counsel.......................................None
(24) Power of Attorney.....................................................None
(99) Additional Exhibits...................................................None
99.1 Certification of CEO and CFO........................................*
99.2 Section 1350 certification *
* Filed herewith
(b) REPORTS ON FORM 8-K:
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.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
Dated: November 4, 2004 By: /s/ David Weintraub
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David Weintraub
Chief Executive Officer
Chief Financial Officer