UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2005
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______to________
Commission file number: O-50212
BAS CONSULTING, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 81-0592184
(State or other jurisdiction (IRS Employer
incorporation or organization) Identification Number)
5675B Baldwin Court
Norcross, GA 30071
(Address of principal executive offices)
770-378-4180
(Issuer's telephone number)
Check whether the registrant (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
[ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 10.453,850 shares of Common Stock, as
of May 10, 2005.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
BAS CONSULTING, INC.
INDEX
PART I.
FINANCIAL INFORMATION
Page Number
PART I
Item 1 - Unaudited Condensed Financial Statements:
Condensed Balance Sheet as of March 31, 2005 3
Condensed Statements of Operations for the Three
Months Ended March 31, 2005 and 2004 and the Cumulative
Period from December 18, 2002 (inception) to March 31, 2005 4
Statements of Cash Flows for the Three Months Ended
March 31, 2005 and 2004 and the Cumulative Period from
December 18, 2002 (inception) to March 31, 2005 5
Statement of Stockholders' Deficit 6
Notes to Unaudited Condensed Financial Statements 7
Item 2. - Management's Discussion and Analysis or Plan of
Operation 9
Item 3 - Controls and Procedures 13
PART II.
Other Information (Items 1-6) 13
2
BAS CONSULTING, INC.
(A Development Stage Company)
Balance Sheet
March 31, 2005
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ -
---------
Total Current Assets -
---------
TOTAL ASSETS $ -
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accrued expenses $ 32,000
Loans payable 6,000
---------
Total Current Liabilities 38,000
---------
STOCKHOLDERS' DEFICIT:
Preferred stock at $0.001 par value;
1,000,000 shares authorized, -0- outstanding -
Common stock at $0.001 par value; authorized
24,000,000 shares; 10,453,850 shares issued
and outstanding 10,454
Additional paid-in capital 45,239
Deficit accumulated in the development stage (93,693)
---------
Stockholders' Deficit (38,000)
---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ -
=========
The accompanying notes are an integral part of these financial statements.
3
BAS CONSULTING, INC.
(A Development Stage Company)
Statements of Operations
(unaudited)
Cumulative from
Three Months Ended December 18, 2002
March 31, (inception) to
2005 2004 March 31, 2005
--------- ---------- --------------
Revenue $ - $ - $ 24,500
General and administrative 5,000 46,693 118,193
--------- --------- ------------
Net loss $ (5,000) $ (46,693) $ (93,693)
========= ========= =============
Basic and diluted loss per
share $ (.01) $ (.01)
========= =========
Weighted average number of
common shares
outstanding 10,453,850 9,807,694
========== ==========
The accompanying notes are an integral part of these financial statements
4
BAS CONSULTING INC.
(A Development Stage Company)
Statement of Stockholders' Deficit
Common Stock Deficit
Accumulated
Additional During the
Paid-in Development
Shares Amount Capital Stage Total
------------- ------------- ------------- --------------- --------------
Balance, January 1, 2003 9,000,000 $ 9,000 $ - $ (9,000) $ (9,000)
Net loss for the year ended
December 31, 2003 - - - (17,000) (17,000)
------------- ------------- ------------- --------------- --------------
Balance, December 31, 2003 9,000,000 9,000 - (26,000) (26,000)
Exercise of stock options 1,397,850 1,398 12,581 - -
Issuance of stock options - - 29,914 - -
Sale of shares of common stock 56,000 56 2,744 - -
Net loss for the year ended
December 31, 2004 - - - (62,693) -
------------- ------------- ------------- --------------- --------------
Balance, December 31, 2004 10,453,500 10,454 45,239 (88,693) (33,000)
Net loss for the three months ended
March 31, 2005 - - - (5,000) (5,000)
------------- ------------- ------------- --------------- --------------
Balance, March 31, 2005 10,453,500 $ 10,454 $ 45,239 $ 93,693 $(38,000)
============= ============= ============= =============== ==============
The accompanying notes are an integral part of these financial statements.
5
BAS CONSULTING, INC.
(A Development Stage Company)
Statements of Cash Flows
(unaudited)
Cumulative from
Three Months Ended December 18, 2002
March 31, (inception) to
2005 2004 March 31, 2005
--------- ---------- --------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (5,000) $ (46,693) $ (93,693)
Noncash services received - - 9,000
Compensation associated with
issuance of stock options - 43,893 43,893
Increase (decrease) in accrued
expenses (1,000) - 32,000
--------- --------- ------------
Net Cash Used by Operating
Activities (6,000) (2,800) (8,800)
--------- --------- ------------
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
--------- --------- ------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Receipt of loans 6,000 - 6,000
Issuance of common stock - 2,800 2,800
--------- --------- ------------
6,000 2,800 8,800
--------- --------- ------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS: - - -
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD - - -
--------- --------- ------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ - $ - $ -
========= ========= =============
The accompanying notes are an integral part of these financial statements.
6
BAS CONSULTING, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited)
NOTE 1--BASIS OF PRESENTATION
BAS Consulting, Inc. (the "Company") was incorporated under the laws of
the State of Nevada on December 18, 2002 (inception). The Company, which has not
yet generated revenue but has obtained two initial agreements to perform
consulting services, will operate as a consulting firm. The Company is
considered a development stage company as defined by Statements of Financial
Accounting Standards No. 7.
The accompanying unaudited condensed financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-QSB and Item 310 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 recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three-month period ended March 31, 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 thereto included in
the Company's Form 10-KSB for the fiscal period ended December 31, 2004.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States 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 as well as the reported amount of revenues and expenses
during the reporting period. Actual results could differ from these estimates.
As part of the Company's plan to augment its financial resources and
consider attractive business opportunities, the Company and its principal
stockholders entered into a letter of intent, in May 2005, with the shareholders
of AiDa Pharmaceuticals Co., Ltd., a company based in China, with respect to a
potential merger transaction which could result in the discontinuance of the
Company's current operations, change of control/ownership and new management.
There can be no assurance that a merger or other significant transaction will be
consummated with AiDa Pharmaceuticals Co., Ltd. or, if consummated, that the
Company or its stockholders would realize any benefits from it.
7
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern that contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. The Company has not established revenues sufficient to cover its
operating costs to allow it to continue as a going concern. The Company will
engage in very limited activities without incurring material liabilities that
must be satisfied in cash until a source of funding is secured. The Company will
offer noncash consideration and seek equity lines as a means of financing its
operations. If the Company is unable to obtain revenue producing contracts or
financing or if the revenue or financing it does obtain is insufficient to cover
any operating losses it may incur, it may substantially curtail or terminate its
operations or seek other business opportunities through strategic alliances,
acquisitions or other arrangements that may dilute the interests of existing
stockholders.
8
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
OF OPERATION
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Certain matters discussed in this interim report on Form 10-QSB are
forward-looking statements. Such forward-looking statements contained in this
annual report involve risks and uncertainties, including statements as to:
o our future operating results,
o our business prospects,
o our contractual arrangements and relationships with third
parties,
o the dependence of our future success on the general economy and
its impact on the industries in which we may be involved,
o the adequacy of our cash resources and working capital, and
o other factors identified in our filings with the SEC, press
releases and other public communications.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as we "believe," "anticipate,"
"expect," "estimate" or words of similar meaning. Similarly, statements that
describe our future plans, objectives or goals are also forward-looking
statements. Such forward-looking statements are subject to certain risks and
uncertainties which are described in close proximity to such statements and
which could cause actual results to differ materially from those anticipated as
of the date of this Form 10-QSB. Shareholders, potential investors and other
readers are urged to consider these factors in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements included herein are only made as of
the date of this report and we undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
General
As part of our plan to augment our financial resources and consider
attractive business opportunities, we entered into a letter of intent, in May
2005, with the shareholders of AiDa Pharmaceuticals Co., Ltd., a company based
in China, with respect to a potential merger transaction which could result in
the discontinuance of our current operations, change of control/ownership and
new management. There can be no assurance that a merger or other significant
transaction will be consummated with AiDa Pharmaceuticals Co., Ltd. or, if
consummated, that we or our stockholders would realize any benefits from it.
9
Operations
BAS was incorporated in Nevada in 2002 and has not yet generated
significant amounts of revenue, is considered a development stage company as
defined by Statement of Financial Accounting Standards No. 7. During its
development stage, BAS has developed and refined its basic business plan and
strategy and commenced making business contacts and seeking clients.
The extent of our operations over the next 12 months will be determined by:
o The number of client engagements that can be obtained that are
either short-term in nature or provide for progress billing,
and
o Our ability to negotiate non-cash compensation to satisfy
commitments.
We cannot predict what our level of activity will be over the next 12
months because we do not know how many, if any, client engagements we will be
able to obtain. We performed a small engagement during the fourth quarter of
2004 and realized revenue of $6,500 thereon.
We will not incur any cash obligations that we cannot satisfy with
known resources of which there are currently none except as hereinafter
indicated. Our founder will provide his services at no cost and will advance a
limited amount of funds to cover costs incurred. All of these advances will be
treated as loans and will be repaid if and when we have the financial resources
to do so. These costs will include the costs of seeking engagements,
professional services and incidentals. If we obtained funding of $50,000, such
funds would be used to cover initial needs for salaries, travel and advertising
costs, including printed marketing materials and a basic website. We believe
that this amount would cover at least 12 months of costs.
If we are unable to obtain financing, we will seek engagements
(non-contingent consulting contracts) through approaching the business contacts
of our founder directly rather than through other marketing strategies. By doing
so, we will not incur significant cash requirements in the process.
Liquidity
BAS does not have any credit facilities or other commitments for debt
or equity. No assurances can be given that advances when needed will be
available. BAS has begun seeking engagements. We do not believe that we need
funding to cover initial operations because we do not have a capital intensive
business plan and can also use independent contractors to assist in many
projects. We will use funding, if obtained, to cover the salary of our founder
10
and to pay for marketing materials and proposal efforts. We currently have no
formal salary arrangements with Dr. Schoomer. While no definitive annual salary
or length of employment has been determined to date, we anticipate providing a
minimum annual salary of $50,000 to be accrued and paid out of revenues, if any.
No salary will be earned or accrued until initial revenue commences. No formal
written arrangements will be made until we have either obtained financing or
client engagements, however, under no circumstances will the first year's base
salary exceed $100,000. To meet commitments in the future, we will have to
obtain client engagements in sufficient number and at sufficient levels of
profitability to generate cash to meet obligations. There does not currently
appear to be any other viable source of long-term financing except that
management may consider various sources of debt and/or equity financing if same
can be obtained on terms deemed reasonable to management.
Recent Accounting Pronouncements
In June 2003, the Securities and Exchange Commission ("SEC") adopted
final rules under Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404").
Commencing with our annual report for the year ended December 31, 2006, we will
be required to include a report of management on our internal control over
financial reporting. The internal control report must include a statement
o of management's responsibility for establishing and maintaining
adequate internal control over our financial reporting;
o of management's assessment of the effectiveness of our internal
control over financial reporting as of year end;
o of the framework used by management to evaluate the
effectiveness of our internal control over financial reporting;
and
o that our independent accounting firm has issued an attestation
report on management's assessment of our internal control over
financial reporting, which report is also required to be filed.
In December 2004, the FASB issued FASB SFAS No. 123 (revised 2004),
Share-Based Payment, which is a revision of SFAS No. 123, Accounting for
Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of
Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the
approach described in SFAS No. 123. However, SFAS No. 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the income statement based on their fair values. Pro forma
disclosure is no longer an alternative. The new standard will be effective for
the Company in the fiscal year ended December 31, 2006. The Company has not yet
assessed the impact on future operations of adopting this new standard.
11
Seasonality
We do not yet have a basis to determine whether our consulting business
will be seasonal.
12
ITEM III.
CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report on Form
10-QSB, an evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures was carried out by the Company
under the supervision and with the participation of the Company's Chief
Executive Officer and Chief Financial Officer. Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures have been designed and are being operated in
a manner that provides reasonable assurance that the information required to be
disclosed by the Company in reports filed under the Securities Exchange Act of
1934, as amended, is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms. A system of controls, no
matter how well designed and operated, cannot provide absolute assurance that
the objectives of the system of controls are met, and no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within a company have been detected. There have been no changes in the
Company's internal controls over financial reporting that occurred during the
most recent fiscal quarter that have materially affected, or are reasonably
likely to materially affect, the Company's internal controls over financial
reporting.
PART II OTHER INFORMATION
Item 1 Legal Proceedings
None
Item 2 Changes in Securities and Small Business Issuer Purchases of
Equity Securities
None
Item 3 Defaults Upon Senior Securities
None
Item 4 Submission of Matters to a Vote of Shareholders
None
13
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-K
None
Exhibit Number Description
31.1 Section 302 Certification of Chief Executive Officer and
Chief Financial Officer
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of The Sarbanes-Oxley
Act of 2002
14
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BAS Consulting, Inc.
--------------------
(Registrant)
/s/ B. Alva Schoomer
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By: B. Alva Schoomer
President
May 19, 2005