SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For Period ended June 30, 2003
Commission File Number 0-32201
TASCO INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0824714
(State of Incorporation) (I.R.S. Employer Identification No.)
1649 Dartmouth, Chula Vista, CA 91913
(Address of Principal Executive Offices) (Zip Code)
(619) 482-7800
(Registrant's telephone number, including area code)
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
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 [ ]
There were 1,278,000 shares of Common Stock outstanding as of June 30, 2003.
PART 1 FINANCIAL INFORMATION
TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Balance Sheets
--------------------------------------------------------------------------------
As of Year Ended
June 30, September 30,
2003 2002
-------- --------
ASSETS
Current Assets
Cash $ 23 $ --
-------- --------
Total Current Assets 23 --
-------- --------
TOTAL ASSETS $ 23 $ --
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 1,760 $ 1,210
Notes payable 5,047 2,947
-------- --------
Total Current Liabilities 6,807 4,157
-------- --------
TOTAL LIABILITIES 6,807 4,157
Stockholders' Equity (Deficit)
Preferred stock, $.0001 par value authorized
(20,000,000 shares authorized; none
issued and outstanding.) -- --
Common stock, $.0001 par value authorized
(80,000,000 shares authorized; issued
and outstanding : 1,278,000 shares as of June
30, 2003 and September 30, 2002) 128 128
Additional paid-in capital 11,662 11,662
Deficit accumulated during development stage (18,574) (15,947)
-------- --------
Total Stockholders' Equity (Deficit) (6,784) (4,157)
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 23 $ --
======== ========
See Notes to Financial Statements
2
TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Operations
--------------------------------------------------------------------------------
October 6, 1998
Nine Months Nine Months Three Months Three Months (inception)
Ended Ended Ended Ended through
June 30, June 30, June 30, June 30, June 30,
2003 2002 2003 2002 2003
----------- ----------- ----------- ----------- ----------
Revenues
Revenues $ -- $ 1,000 $ -- $ -- $ 1,000
----------- ----------- ----------- ----------- ----------
Total Revenues -- 1,000 -- -- 1,000
General & Administrative Expenses 2,627 3,957 1,020 1,293 19,574
----------- ----------- ----------- ----------- ----------
Total General & Administrative
Expenses 2,627 3,957 1,020 1,293 19,574
----------- ----------- ----------- ----------- ----------
Net Loss $ (2,627) $ (2,957) $ (1,020) $ (1,293) $ (18,574)
=========== =========== =========== =========== ==========
Basic loss per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
=========== =========== =========== ===========
Weighted average number of
common shares outstanding 1,278,000 1,278,000 1,278,000 1,278,000
=========== =========== =========== ===========
See Notes to Financial Statements
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TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
From October 6, 1998 (inception) through June 30, 2003
--------------------------------------------------------------------------------
Deficit
Accumulated
Common Additional During
Common Stock Paid-in Development
Stock Amount Capital Stage Total
----- ------ ------- ----- -----
Stock issued for cash on October 6,
1998 @ $0.0001 per share 100,000 $ 10 $ -- $ -- $ 10
Stock issued for cash on October 9,
1998 @ $0.0001 per share 130,000 13 1,287 -- 1,300
Stock issued for cash on October 12,
1998 @ $0.0001 per share 19,000 2 188 -- 190
Stock issued for cash on April 1,
1999 @ $0.0001 per share 29,000 3 287 -- 290
Net loss, October 6, 1998 (inception)
through September 30, 1999 (295) (295)
---------- -------- ------- -------- --------
Balance, September 30, 1999 278,000 28 1,762 (295) 1,495
========== ======== ======= ======== ========
Stock issued for cash on October 19,
1999 @ $0.01 per share 1,000,000 100 9,900 10,000
Net loss, October 1, 1999 through
September 30, 2000 (367) (367)
---------- -------- ------- -------- --------
Balance, September 30, 2000 1,278,000 128 11,662 (662) 11,128
========== ======== ======= ======== ========
Net loss, October 1, 2000 through
September 30, 2001 (11,028) (11,028)
---------- -------- ------- -------- --------
Balance, September 30, 2001 1,278,000 128 11,662 (11,690) 100
========== ======== ======= ======== ========
Net loss, October 1, 2001 through
September 30, 2002 (4,257) (4,257)
---------- -------- ------- -------- --------
Balance, September 31, 2002 1,278,000 128 11,662 (15,947) (4,157)
========== ======== ======= ======== ========
Net loss, October 1, 2002 through
June 30, 2003 (2,627) (2,627)
---------- -------- ------- -------- --------
Balance, June 30, 2003 1,278,000 $ 128 $11,662 $(18,574) $ (6,784)
========== ======== ======= ======== ========
See Notes to Financial Statements
4
TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Cash Flows
--------------------------------------------------------------------------------
October 6, 1998
Nine Months Nine Months Three Months Three Months (inception)
Ended Ended Ended Ended through
June 30, June 30, June 30, June 30, June 30,
2003 2002 2003 2002 2003
----------- ----------- ----------- ----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (2,627) $ (2,957) $ (1,020) $ (1,293) $(18,574)
Amortization -- -- -- -- 240
(Increase) decrease in organization costs -- -- -- -- (240)
Increase (decrease) in accounts payable 549 (340) (210) 220 1,759
Increase (decrease) in notes payable 2,100 3,277 1,200 113 5,047
-------- -------- -------- -------- --------
Net cash provided by (used in)
operating activities 23 (20) (30) (960) (11,767)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided by (used in)
investing activities -- -- -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock -- -- -- -- 128
Additional paid-in capital -- -- -- -- 11,662
-------- -------- -------- -------- --------
Net cash provided by (used in)
financing activities -- -- -- -- 11,790
-------- -------- -------- -------- --------
Net increase (decrease) in cash 23 (20) (30) (960) 23
Cash at beginning of period -- 660 53 1,600 --
-------- -------- -------- -------- --------
Cash at end of period $ 23 $ 640 $ 23 $ 640 $ 23
======== ======== ======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Interest paid $ -- $ -- $ -- $ -- $ --
======== ======== ======== ======== ========
Income taxes paid $ -- $ -- $ -- $ -- $ --
======== ======== ======== ======== ========
See Notes to Financial Statements
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TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
As of June 30, 2003
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was organized October 6, 1998, under the laws of the State of
Delaware as Tasco International, Inc. The Company is engaged in the business of
offering virtual reality technology for CD-ROM, media and Internet
presentations. The Company has no operations and in accordance with SFAS #7, the
Company is considered a development stage company.
On October 6, 1998, the Company issued 100,000 shares of common stock for cash
at $0.0001 per share.
On October 9, 1998, the Company issued 130,000 shares of common stock for cash
at $0.01 per share.
On October 12, 1998, the Company issued 19,000 shares of common stock for cash
at $0.01 per share.
On April 1 1999, the Company issued 29,000 shares of common stock for cash at
$0.01 per share.
On October 19, 1999, the Company issued 1,000,000 shares of common stock for
cash at $0.01 per share.
As of June 30, 2003 the Company had 1,278,000 shares of its common stock issued
and outstanding.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Accounting
The financial statements have been prepared using the accrual basis of
accounting. Under the accrual basis of accounting, revenues are recorded as
earned and expenses are recorded at the time liabilities are incurred. The
Company has adopted a September 30, year-end.
b. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles 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 and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
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TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
As of June 30, 2003
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
d. Income Taxes
Income taxes are provided in accordance with Statement of Financial accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carryforwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion of all of the deferred
tax assets will be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of enactment.
e. Basic Earnings per Share
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective October 6, 1998 (inception).
Basic net loss per share amounts is computed by dividing the net income by the
weighted average number of common shares outstanding. Diluted earnings per share
are the same as basic earnings per share due to the lack of dilutive items in
the Company.
NOTE 3. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of
common or preferred stock.
NOTE 4. GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to seek additional capital
through sale of its securities through private placements.
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TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
As of June 30, 2003
NOTE 5. INCOME TAXES
As of June 30, 2003
-------------------
Deferred tax assets:
Net operating tax carryforwards $ 2,786
Other 0
-------
Gross deferred tax assets 2,786
Valuation allowance (2,786)
-------
Net deferred tax assets $ 0
=======
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce taxable income. As the achievement of
required future taxable income is uncertain, the Company recorded a valuation
allowance.
NOTE 6. SCHEDULE OF NET OPERATING LOSSES
1998 Net Operating Loss $ (295)
1999 Net Operating Loss (367)
2000 Net Operating Loss (11,028)
2001 Net Operating Loss (4,257)
2002 Net Operating Loss (nine months) (2,627)
--------
Net Operating Loss $(18,574)
========
As of June 30, 2003, the Company has a net operating loss carryforward of
approximately $ 18,574, which will expire 20 years from the date the loss was
incurred.
NOTE 7. RELATED PARTY TRANSACTION
The Company's neither owns nor leases any real or personal property. A director
without charge provides office services. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business activities
and may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. CERTAIN FORWARD-LOOKING INFORMATION
Information provided in this Quarterly report on Form 10QSB may contain
forward-looking statements within the meaning of Section 21E or Securities
Exchange Act of 1934 that are not historical facts and information. These
statements represent the Company's expectations or beliefs, including, but no
limited to, statements concerning future and operating results, statements
concerning industry performance, the Company's operations, economic performance,
financial conditions, margins and growth in sales of the Company's products,
capital expenditures, financing needs, as well assumptions related to the
forgoing. For this purpose, any statements contained in this Quarterly Report
that are not statement of historical fact may be deemed to be forward-looking
statements. These forward-looking statements are based on current expectations
and involve various risks and uncertainties that could cause actual results and
outcomes for future periods to differ materially from any forward-looking
statement or views expressed herein. The Company's financial performance and the
forward-looking statements contained herein are further qualified by other risks
including those set forth from time to time in the documents filed by the
Company with the Securities and Exchange Commission, including the Company's
most recent Form 10KSB.
CONDITION AND RESULTS OF OPERATIONS NINE MONTHS ENDED JUNE 30, 2003
Revenues were -0- for the quarter ending June 30, 2003 and $1,000 for the same
quarter ending 2002. Operating Expenses were $2,627 for the nine months ended
June 30, 2003 and $3,957 for the same period in 2002. Tasco International, Inc.
has adopted a business plan to provide production of visual content and other
digital media solutions to facilitate commerce, communication and entertainment.
The Company plans to offer both business and consumers solutions that enable the
Company to deliver digital media content to web sites. The Company initially
plans to use and develop collective resources within the digital media arena to
provide production of visual content, particularly of providing images in the
360-degree format whereby users can easily navigate on a computer screen by
moving a cursor inside the image. The Company has initially targeted the
following global vertical markets: real estate, travel and hospitality,
automotive and entertainment. The Company plans to fund the growth and expansion
of its business by earning profits through sales of it products and by the sale
of its securities through private placements.
RISK FACTORS
1. LIMITED HISTORY OF OPERATIONS
The Company was incorporated under the laws of the State of Delaware on October
6, 1998 and has had limited operations to date. Therefore the Company must be
considered in the early development stages of embarking upon a new venture. The
Company has had minimal revenues to date. The Company's business and prospects
must be considered in light of the risk, expense, and difficulties frequently
encountered by companies in an early stage of development, particularly
companies in new and rapidly evolving markets of providing services on the
Internet. Prospective investors should be aware of the difficulties encountered
9
by such new enterprises, as the Company faces all the risks inherent in any new
business, including: competition, the absence both of an operating history and
profitability and the need for additional working capital. The likelihood of the
success of the Company must be considered in light of the problems and expenses
that are frequently encountered in connection with the operation of a new
business and the competitive environment in which the Company will be operating.
2. NEED FOR ADDITIONAL WORKING CAPITAL - CONTINUATION OF GOING CONCERN NOT
ASSURED
As of June 30, 2003, the Company had working capital of $23 and faces the need
for substantial additional working capital in the near future. The capital needs
of the Company are greater than currently anticipated, and the Company will be
required to seek other sources of financing. No assurance can be given that the
Company will be able to organize debt or equity financing, or that if available,
it will be available on terms and conditions satisfactory to management and
might dilute current shareholders. The Company has no commitments for any
additional debt or equity financing and there can be no assurance that any such
commitments will be obtained on favorable terms, if at all.
3. THE COMPANY HAS NO SIGNIFICANT HISTORY OF OPERATIONS AND EXPECT OPERATING
LOSSES IN THE FORESEEABLE FUTURE
The Company expects to incur operating losses for the foreseeable future and if
the Company ever has operating profits, it may not be able to sustain them.
Expenses will increase as the Company builds an infrastructure to implement its
business model. The Company plans to hire additional employees and lease space
for its corporate offices as the need arises. Expenses may also increase due to
the potential effect of goodwill amortization and other charges resulting from
future partnerships and/or alliances, if any. If any of these and other expenses
are not accompanied by increased revenue, the Company's operating losses will be
even greater than anticipated.
4. THE PROGRESS AND OVERALL SUCCESS OF THE COMPANY IS SUBSTANTIALLY DEPENDENT
UPON THE ABILITIES OF THE CURRENT OFFICER AND DIRECTORS OF THE COMPANY
The Company's performance and operating results are substantially dependent on
the continued service and performance of its officer and directors. The loss of
the services of the Company`s key employee or the inability to attract and
retain the necessary technical, sales and other personnel, would likely limit
the changes for success and have a negative effect upon the Company's business,
financial condition, operating results and cash flows. In addition, the
concentrated ownership of the officer and directors have over the Company, may
have a material adverse effect on future business progress. Furthermore, the
current officer and directors are involved with other employment other than that
of the Company, which may take time from development the business of the Company
and effect the overall success.
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5. COMPETITION
The Company will operate in a highly competitive environment. The Company
competes with larger companies who provide digital media. Our competitors have
greater financial, marketing, and distribution resources. Our success will be
dependent on our ability to compete with these and any other competitors on the
quality of our services and their cost effectiveness. There is no assurance that
we will be successful in that competition.
6. LACK OF CASH DIVIDENDS
The Company has not paid any cash dividends on its Common Shares to date and
there are no plans for paying cash dividends in the foreseeable future. Initial
earnings that the Company may realize, if any, will be retained to finance the
growth of the Company. Any future dividends, of which there can be no assurance,
will be directly dependent upon earnings of the Company, its financial
requirements and other factors.
7. CAPITAL RESOURCE REQUIREMENTS
The Company presently plans to complete its development and design of its
digital Internet web site. Expenses needed to build an infrastructure to
implement its business model will depend upon a number of factors including the
Company's ability to raise sufficient capital. There are no assurances that the
Company can raise sufficient capital through debt or equity financing, which
might be available to the Company on favorable terms or at all and might dilute
current shareholders.
8. GROWTH MAY STRAIN THE MANAGEMENT, OPERATION AND FINANCIAL RESOURCES
There can be no assurances that the Company's proposed business model will be
adequate to support any future operations. In addition, there is a risk that the
Company may not be able to expand their operations at the same rate as market
demand may be created.
9. SHARES SUBJECT TO RULE 144
On June 30, 2003, the Company had 1,278,000 Common Shares issued and outstanding
that have not been registered with the Commission or any state securities agency
and are currently restricted pursuant to Rule 144 promulgated by the Commission
under the 1933 Act. Rule 144 provides, in essence, that a person holding
restricted securities for one year from the date the securities were purchased
from the issuer, or an affiliate of the issuer, and fully paid, may sell limited
quantities of the securities to the public without registration, provided there
shall be certain public information with respect to the issuer. Pursuant to Rule
144, securities held by non-affiliates for more than two years may generally be
sold without reference to the current public information or broker transaction
requirements, or the volume limitations. Certain limited quantities of the
current outstanding restricted shares are available for resale pursuant to Rule
144.
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10. OTHER NON-PUBLIC SALES OF SECURITIES
As part of the Company's plan to raise additional working capital, the Company
may make a limited number of offers and sales of its Common Shares to qualified
investors in transactions that are exempt from registration under the 1933 Act.
There can be no assurance the Company will not make other offers of its
securities at different prices, when, in the Company's discretion, such prices
are deemed by the Company to be reasonable under the circumstances.
11. NO ASSURANCE OF LIQUIDITY
There is currently no public market for the common shares or any other
securities of the Company and there can be no assurance that a trading market
will develop in the future.
12. WE FACE THE LOSS OF KEY PERSONNEL WHICH COULD ADVERSELY AFFECT PROPOSED
OPERATIONS
The Company's performance is greatly dependent on the performance of its
management. The loss of the services of our executive officer or directors could
harm the Company's business. The Company's officer has some expertise in digital
media, and the loss of the Company's officer or director could have a negative
impact on the Company's reputation for expertise in the industry.
13. THE COMPANY IS LARGELY CONTROLLED BY MANAGEMENT
The Company's officer and director currently owns or controls a substantial
majority of its outstanding common stock and thereby continues to be able to
exercise voting control over the company for the foreseeable future and will be
able to elect the entire Board of Directors. This management control could
prevent, or make more difficult, on-going business.
ITEM 3 - CONTROLS AND PROCEDURES
Tasco's chief executive officer and chief financial officer evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rule
13a-14c under the Securities and Exchange Act of 1934, as amended) within 90
days of the filing date of this Form 10-Q (the Evaluation Date). Based on that
evaluation, they concluded that, as of the Evaluation Date, Tasco had sufficient
procedures for recording, processing, summarizing and reporting information that
is required to be disclosed in its reports under the Securities and Exchange Act
of 1934, as amended.
Since the Evaluation Date, there have not been any significant changes to
Tasco's internal controls or other factors that could significantly affect these
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
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
31.1 302 Certification of Chief Executive Officer
31.2 302 Certification of Chief Financial Officer
32.1 906 Certification of Chief Executive Officer
32.2 906 Certification of Chief Financial Officer
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Company has duly caused this disclosure statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
TASCO INTERNATIONAL, INC.
Date: 8/6/03
By: /s/ Adrienne Humphreys
-----------------------------
Adrienne Humphreys, President
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