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, 2004
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.)
14502 N. Dale Mabry, Suite 200-1, Tampa, FL 33618
(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
The number of shares of the registrant's common stock, par value $.0001 per
share, outstanding as of July 29, 2004, was 150,963.
Part I
Item 1- Financial Information
Advanced 3-D Ultrasound Services, Inc.
FINANCIAL STATEMENTS
ADVANCED 3-D ULTRASOUND SERVICES, INC.
BALANCE SHEET
June 30, 2004
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(unaudited)
ASSETS
Current assets
Cash $ 18,040
Property and equipment, net 853
Other assets
Deposits 3,640
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Total Assets $ 22,533
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 37,456
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Stockholders' equity
Common stock; $.0001 par value; 50,000,000 shares
authorized; 150,963 shares issued and outstanding 15
Paid-in capital 8,732,808
Accumulated deficit (8,747,746)
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Total stockholders' equity (14,923)
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Total Liabilities and Stockholders' Equity $ 22,533
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The accompanying notes are an integeral part of these financial statements.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ - $ - $ - $ -
Expenses
Selling, general and administrative 109,168 51,784 150,842 119,673
Total expenses 109,168 51,784 150,842 119,673
Other income (expense)
Interest expense (3) (9) (137) (9)
Total other income (expense) (3) (9) (137) (9)
Net loss $ (109,171) $ (51,793) $ (150,979) $ (119,682)
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Loss per common share $ (0.76) $ (0.51) $ (1.14) $ (1.22)
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Weighted average common
shares outstanding 142,896 102,211 132,724 98,232
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The accompanying notes are an integeral part of these financial statements.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2004 2003
(unaudited) (unaudited)
Cash flows from operating activities
Net loss $ (150,979) $ (119,682)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense 45 -
Stock issued to consultants - 15,000
Increase in deposits (3,641) -
Increase in receivables - (877)
Increase in accounts payable and accrued expenses 3,510 4,894
Total adjustments (86) 19,017
Net cash used in operating activities (151,065) (100,665)
Cash flows from investing activities
Purchase of equipment (898) -
Cash flows from financing activities
Proceeds from sale of common stock 170,000 100,050
Net increase (decrease) in cash 18,037 (615)
Cash, beginning of period
3 6,998
Cash, end of period $ 18,040 $ 6,383
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Supplemental disclosures of noncash investing and financing activities:
None
Supplemental disclosures of cash flow information:
The Company paid $137 and $9 in interest and $0 in taxes for the six months ended June 30, 2004 and 2003, respectively.
The accompanying notes are an integeral part of these financial statements.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
The information presented herein as of June 30, 2004, and for the three and
six-months ended June 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 six-month period ended June 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 six months ended June 30, 2004, the Company sold 34,000 shares of
common stock for cash of $170,000. During the six months ended June 30, 2003,
the Company sold 16,675 shares of common stock for cash of $100,050.
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.
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 Company's 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 final plans for opening its first 3-D
fetal photography center. The Company entered into a lease for its first center
in May 2004. The lease is for three years, commencing ten days following receipt
of the Certificate of Occupancy. The lease calls for rent of $18.00 per square
foot in the first year for a total of $27,000 plus sales tax, real estate taxes,
insurance and common area maintenance charges. In year two, the base rent
increases to $27,750 per year and in year three the base rent increases to
$28,500 per year. Improvements and modifications to the facility are underway.
Additionally, the company has determined the specifications for the equipment it
will need and has identified the sources of the equipment. Potential employees
are being interviewed to operate the center. The Company is also pursuing
trademark protection. 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. Lastly, the Company has entered into a
lease for its corporate offices. The lease is an operating lease for six months
and it commenced March 18, 2004. The total rent for the six months is $3,600.
The Company's 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 two quarters of 2004, the Company received $170,000 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 March 31, 2004 to June 30, 2004, Registrant sold a total of 18,000 common
shares for a cash purchase price of $5.00 per share as follows:
Number Common Per Share
Name Shares Purchased Date Price
Edwardlyn Chrishom 1,000 04-01-04 $5.00
Glenn M. Noble 2,000 06-30-04 $5.00
Ian Stewart 5,000 04-23-04 $5.00
Ronald R. Reschly and
Barbara Reschly 10,000 05-13-04 $5.00
All sales were made pursuant to Section 4(2) of the 1933 Act. The proceeds of
the sale of these securities ($90,000.00) were used to provide operating
capital.
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: July 28, 2004 By: /s/ David Weintraub
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David Weintraub
Chief Executive Officer
Chief Financial Officer