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 June 30, 2005.
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934
For the transition period from __________ to ____________.
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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.)
3900A 31st Street North, St. Petersburg, Florida 33714
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 727-525-5552
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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
The number of shares of the registrant's common stock, par value $.0001 per
share, outstanding as of August 3, 2005, was 198,063.
Part I. Financial Information
Item 1- Financial Statements
ADVANCED 3-D ULTRASOUND SERVICES, INC.
BALANCE SHEET
June 30, 2005
(unaudited)
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ASSETS
Current assets
Cash $ -
Property and equipment, net 3,763
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Total Assets $ 3,763
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LIABILITIES & STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses $ 41,906
Notes payable 26,250
Loans from related party 1,830
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Total current liabilities 69,986
Commitments and contingencies
Stockholders' equity (deficit)
Common stock; $.0001 par value; 50,000,000 shares
authorized; 198,063 shares issued and outstanding 20
Paid-in capital 8,968,303
Accumulated deficit (9,034,546)
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Total stockholders' equity (deficit) (66,223)
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Total Liabilities and Stockholders' Equity (Deficit) $ 3,763
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The accompanying notes are an integral part
of the financial statements.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2005 2004 2005 2004
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Revenues $ - $ - $ - $ -
Expenses
Selling, general
and administrative 14,775 109,168 31,271 150,842
----------- ----------- ----------- -----------
Total expenses 14,775 109,168 31,271 150,842
----------- ----------- ----------- -----------
Other income (expense)
Interest expense (636) (3) (853) (137)
----------- ----------- ----------- -----------
Total other
income (expense) (636) (3) (853) (137)
----------- ----------- ----------- -----------
Net loss $ (15,411) $ (109,171) $ (32,124) $ (150,979)
=========== =========== =========== ===========
Loss per common share $ (0.08) $ (0.76) $ (0.16) $ (1.14)
=========== =========== =========== ===========
Weighted average common
shares outstanding 198,063 142,896 198,063 132,724
=========== =========== =========== ===========
The accompanying notes are an integral part
of the financial statements.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
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2005 2004
(unaudited) (unaudited)
----------- -----------
Cash flows from operating activities
Net loss $ (32,124) $ (150,979)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 476 45
Increase in deposits - (3,641)
Increase in accounts payable
and accrued expenses 3,455 3,510
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Total adjustments 3,931 (86)
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Net cash used in operating activities (28,193) (151,065)
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Cash flows from investing activities
Purchase of equipment - (898)
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Cash flows from financing activities
Proceeds from sale of common stock - 170,000
Proceeds from notes payable 26,250 -
Repayments made on related party loans (10,700) -
Proceeds from related party loans 12,530 -
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Net cash provided by financing activities 28,080 170,000
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Net increase (decrease) in cash (113) 18,037
Cash, beginning of period 113 3
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Cash, end of period $ - $ 18,040
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Supplemental disclosures of noncash investing and
financing activities:
Professional fees financed through loans from related parties totaled $6,430
and $0 for the six months June 30, 2005 and 2004, respectively
Cash flow information:
2005 2004
----------- -----------
Cash paid for interest $ - $ 137
Cash paid for income taxes - -
The accompanying notes are an integral part
of the financial statements.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
The information presented herein as of June 30, 2005, and for the six-months
ended June 30, 2005 and 2004, is unaudited.
(1) Basis of Presentation:
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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 six-month period ended June 30, 2005, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2005. 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, 2004.
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.
(2) Stock Transactions:
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During the six months ended June 30, 2005 and 2004, the Company sold 0 and
34,000 shares of common stock for cash of $0 and $170,000.
(3) Notes and Loans Payable:
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During the six months ended June 30, 2005, a stockholder of the Company loaned
$12,530 to the Company, of which $10,700 has been repaid. This loan is
unsecured, bears interest at 10% and is due on demand. Accrued interest as of
June 30, 2005 is $369 related to this loan.
During the six months ended June 30, 2005, a stockholder of the Company loaned
$16,250 to the Company. This loan is unsecured, bears interest at 10% and is due
September 15, 2005. Accrued interest at June 30, 2005 is $322 related to this
loan.
During the six months ended June 30, 2005, an individual loaned the Company
$10,000. This loan is unsecured, bears interest at 10% and is due August 29,
2005. Accrued interest at June 30, 2005 is $162 related to this loan.
(4) Other:
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On May 25, 2005 the Company entered into a letter of intent to acquire
Professional Technical Systems, Inc. (PTS). Subject to the due diligence of both
parties and the execution of a definitive agreement, the Company anticipates
that, in connection with the aforementioned transaction, PTS shareholders will
receive one share of Company common stock for every PTS common share held.
(5) Going Concern:
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As shown in the accompanying financial statements, the Company has incurred
recurring losses from operations and at June 30, 2005, the Company's cash
balance was $0 and its current liabilities exceeded its current assets by
$69,986.
Management has taken several actions to ensure that the Company will continue as
a going concern through June 30, 2006, including the potential acquisition of a
liquid company. In addition, the Company expects to continue to receive funds
from the sale of its common stock. Management believes these actions will enable
the Company to continue as a going concern through June 30, 2006. 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
Currently the Company plans to acquire a profitable business. Company management
is currently performing due diligence regarding potential business acquisitions.
The Company entered into a letter of intent to acquire Professional Technical
Systems, Inc (PTS). PTS is an operating company engaged in the business of
developing, manufacturing and selling electrical surge protection devices. The
Company has also discussed the merger of World Energy Solutions, Inc. (WESI)
into the Company. WESI is not an operating company at this time however it has
been formed to engage in the business of consulting regarding energy
conservation technologies and installing such technologies at commercial and
industrial facilities.
Previously, the Company's plans included developing a profitable business in 3-D
fetal photography. In response to the Company's' decision to pursue this
business venture, the Company changed its name to Advanced 3-D Ultrasound
Services, Inc. at its shareholders meeting on May 2, 2003. Subsequently, as a
result of recent concerns of the FDA related to non-diagnostic ultrasounds, the
Company has decided not to enter this market. In furtherance of pursuing a
business in 3-D fetal photography, the Company entered into leases for office
space and a photograph center, which have subsequently expired or were cancelled
and not renewed. The Company's officers were working out of home offices through
June 30, 2005.
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.
In June, 2005, in light of the plans to acquire PTS and merge with WESI, the
officers of the Company resigned and were replaced by new officers and directors
with experience in the industries of PTS and WESI. The new officers and
directors of the Company are officers and/or stockholders of PTS and/or WESI.
The Company's plans to acquire a profitable business and to expand operations
will require additional funds. The Company plans to fund acquisitions through
the sale 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.
The funds raised were to have been used for development costs, equipment,
salaries, marketing and future public offering costs. The plans to develop and
operate imaging centers has been abandoned.
In 2004, the Company received $230,000 from sales of common stock. This funding
was spent on development costs, salaries and other administrative costs.
Administrative costs in 2005 have been funded from loans from Company
stockholders and an unrelated individual.
Item 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
The Company's management, recognizes its responsibility for establishing and
maintaining internal control over financial reporting for the Company. After
evaluating the effectiveness of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as
of December 31, 2004 (the "Evaluation Date"), the Company's management has
concluded, as of the Evaluation Date, the Company's disclosure controls and
procedures were adequate and designed to ensure the information required to be
disclosed in the reports filed or submitted by us under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported with in the
requisite time periods.
(b) Effectiveness of Internal Control
The Company's management is reviewing the Company's internal controls over
financial reporting to determine the most suitable recognized control framework.
The Company will give great weight and deference to the product of the
discussions of the SEC's Advisory Committee on Smaller Public Companies (the
"Advisory Committee") and the Committee of Sponsoring Organizations' task force
entitled Implementing the COSO Control Framework in Smaller Businesses (the
"Task Force"). Both the Advisory Committee and the Task Force are expected to
provide practical, needed guidance regarding the applicability of Section 404 of
the Sarbanes-Oxley Act to small business issuers. The Company's management
intends to perform the evaluation required by Section 404 of the Sarbanes-Oxley
Act at such time as a framework is adopted by the Company. For the same reason,
the Company's registered accounting firm has not issued an "attestation report"
on the Company management's assessment of internal controls.
(c) Changes in internal controls.
After evaluation by the Company's management, the Company's management has
determined there were no significant changes in the Company's internal controls
or in other factors that could significantly affect the Company's internal
controls subsequent to the Evaluation Date.
Part II. Other Information
Item 1. Legal Proceedings.
NONE
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
NONE
Item 3. Defaults 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 on Form 8-K
Exhibit Description Number
(2) Plan of Acquisition, Reorganization,
Arrangement, Liquidation or Succession............................. None
(3) (i) Articles of Incorporation................................... *
(ii) By-Laws..................................................... **
(iii) Articles of Amendment (Name Change)......................... ***
(4) Instruments defining the rights of holders, including Indentures
(a) Subscription Agreement...................................... None
(b) Warrant Agreement........................................... *
(c) Warrant Resolution dated March 2, 2000...................... ***
(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
(31) Certification of Chief Executive
Officer and Chief Financial Officer................................ ****
(32) Certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002......................................... ****
(99) Additional Exhibits
(a) Letter of Intent with Professional Technical
Systems, Inc................................................ +
(b) Election of Directors and Appointment of
Principal Officers.......................................... ++
* Previously filed with Form 10-SB on November 23, 1998.
** Previously filed with Form 10-SBA No. 1 on February 2, 1999.
*** Previously filed with Form 10KSB filed March 29, 2001.
**** Filed herewith.
+ Previously filed with Form 8-K on May 25, 2005.
++ Previously filed on Form 8-K on July 6, 2005.
(b) REPORTS ON FORM 8-K:
Item 8 on Form 8-K: Other Events.
A Letter of Intent ("LOI") to acquire Professional Technical Systems, Inc.
("PTS"), subject to the due diligence of both parties and the execution of
a definitive agreement. A copy of the LOI was filed as an Exhibit to the
Company's Form 8-K filed with the Securities and Exchange Commission on May
25, 2005. (See Exhibit 99(a), incorporated by reference, herein).
Item 5.02 on Form 8-K: Departures of Directors or Principal Officers;
Election of Directors; Appointment of Principal
Officers.
On June 29, 2005, Registrant's board elected the following persons to serve
as directors: Benjamin C. Croxton, Mike Prentice and Jodi Crumbliss.
Biographical information and qualifications of those elected are included
in the Company's Form 8-K filed with the Securities and Exchange Commission
on July 6, 2005. (See Exhibit 99(b), incorporated by reference, herein).
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: August 9, 2005 /s/ Benjamin C. Croxton
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Benjamin C. Croxton
Chief Executive Officer
Chief Financial Officer