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 December 31, 2004
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 December 31, 2004.
PART 1 FINANCIAL INFORMATION
PRESENTATION OF UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited consolidated financial statements have been prepared in accordance
with rules of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows, in conformity with
generally accepted accounting principles. The information furnished in the
opinion of management, reflects all adjustments necessary to present fairly, and
not misleading, the financial position as of December 31, 2004 and results of
operations and cash flows for the three months ended December 31, 2004 and 2003.
The results of operations are not necessarily indicative of results, which may
be expected for any other interim period, or for the year as a whole.
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TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Balance Sheets
--------------------------------------------------------------------------------
As of As of
December 31, September 30,
2004 2004
-------- --------
ASSETS
Current Assets
Cash $ 1,258 $ 315
-------- --------
Total Current Assets 1,258 315
-------- --------
TOTAL ASSETS $ 1,258 $ 315
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 4,812 $ 4,412
-------- --------
Total Current Liabilities 4,812 4,412
-------- --------
TOTAL LIABILITIES 4,812 4,412
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
December 31, 2004 and September 30, 2004) 128 128
Additional paid-in capital 27,724 24,024
Deficit accumulated during development stage (31,406) (28,249)
-------- --------
Total Stockholders' Equity (Deficit) (3,554) (4,097)
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 1,258 $ 315
======== ========
See Notes to Financial Statements
2
TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Operations
--------------------------------------------------------------------------------
October 6, 1998
Three Months Three Months (inception)
Ended Ended through
December 31, December 31, December 31,
2004 2003 2004
----------- ----------- -----------
Revenues
Revenues $ -- $ -- $ 1,000
----------- ----------- -----------
Total Revenues -- -- 1,000
General & Administrative Expenses 3,157 1,212 32,431
----------- ----------- -----------
Total General & Administrative Expenses 3,157 1,212 32,431
Other Income & (Expenses)
Other income -- (25) (25)
----------- ----------- -----------
Total Other Income & (Expenses) -- (25) (25)
----------- ----------- -----------
Net Loss $ (3,157) $ (1,187) $ (31,406)
=========== =========== ===========
Basic loss per share $ (0.00) $ (0.00)
=========== ===========
Weighted average number of
common shares outstanding 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 (Deficit)
From October 6, 1998 (inception) through December 31, 2004
--------------------------------------------------------------------------------
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 30, 2002 1,278,000 128 11,662 (15,947) (4,157)
========== ======== ======= ======== ========
Net loss, October 1, 2002 through
September 30, 2003 (4,328) (4,328)
---------- -------- ------- -------- --------
BALANCE, SEPTEMBER 30, 2003 1,278,000 $ 128 $11,662 $(20,275) $ (8,485)
========== ======== ======= ======== ========
Contributed capital 12,362 12,362
Net loss, October 1, 2003 through
September 30, 2004 (7,974) (7,974)
---------- -------- ------- -------- --------
BALANCE, SEPTEMBER 30, 2004 1,278,000 $ 128 $24,024 $(28,249) $ (4,097)
========== ======== ======= ======== ========
Contributed capital 3,700 3,700
Net loss, October 1, 2004 through
December 31, 2004 (3,157) (3,157)
---------- -------- ------- -------- --------
Balance, December 31, 2004 1,278,000 $ 128 $27,724 $(31,406) $ (3,554)
========== ======== ======= ======== ========
See Notes to Financial Statements
4
TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Cash Flows
--------------------------------------------------------------------------------
October 6, 1998
Three Months Three Months (inception)
Ended Ended through
December 31, December 31, December 31,
2004 2003 2004
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (3,157) $ (1,187) $(31,406)
Amortization -- -- 240
(Increase) decrease in organization costs -- -- (240)
Increase (decrease) in accounts payable 400 350 4,812
Increase (decrease) in notes payable -- 850 --
-------- -------- --------
Net cash provided by (used in) operating activities (2,757) 13 (26,594)
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 3,700 -- 27,724
-------- -------- --------
Net cash provided by (used in) financing activities 3,700 -- 27,852
-------- -------- --------
Net increase (decrease) in cash 943 13 1,258
Cash at beginning of period 315 (13) --
-------- -------- --------
Cash at end of period $ 1,258 $ -- $ 1,258
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $ -- $ -- $ --
======== ======== ========
Income taxes paid $ -- $ -- $ --
======== ======== ========
See Notes to Financial Statements
5
TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
As of December 31, 2004
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 December 31, 2004 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 December 31, 2004
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. DEVELOPMENT STAGE
The Company continues to devote substantially all of its efforts in the
development of its plan to market and sell proprietary human resource database
services to companies in the building, architectural, and construction
industries.
E. 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.
F. BASIC EARNINGS (LOSS) 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.
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TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
As of December 31, 2004
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 accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company generated net losses of
$31,406 during the period from October 6, 1998 (inception) to December 31, 2004.
This condition raises substantial doubt about the Company's ability to continue
as a going concern. The Company's continuation as a going concern is dependent
on its ability to meet its obligations, to obtain additional financing as may be
required and ultimately to attain profitability. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Management plans to raise additional funds through debt or equity offerings.
Management has yet to decide what type of offering the Company will use or how
much capital the Company will raise. There is no guarantee that the Company will
be able to raise any capital through any type of offerings.
NOTE 5. INCOME TAXES
As of December 31, 2004
-----------------------
Deferred tax assets:
Net operating tax carryforwards $ 4,711
Other 0
-------
Gross deferred tax assets 4,711
Valuation allowance (4,711)
-------
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.
8
TASCO INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
As of December 31, 2004
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 (4,328)
2003 Net Operating Loss (7,974)
2004 Net Operating Loss (3,157)
--------
Net Operating Loss $(31,406)
========
As of December 31, 2004, the Company has a net operating loss carryforward of
approximately $31,406, 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.
The note payable represents a loan from a related party. Currently there are no
repayment terms nor is there interest being charged.
NOTE 8. STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes
of capital stock as of December 31, 2004:
* Preferred stock, $ 0.0001 par value; 20,000,000 shares authorized: -0-
shares issued and outstanding.
* Common stock, $ 0.0001 par value; 80,000,000 shares authorized:
1,278,000 shares issued and outstanding.
9
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 for the year ended September 30, 2004.
CONDITION AND RESULTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 2004
Revenues were -0- for the quarter ending December 31, 2004 and -0- for the same
quarter ending 2003. Operating Expenses were $3,157 for the three months ended
December 31, 2004 and $1,212 for the same period in 2003. 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
10
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
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 December 31, 2004, the Company had a cash balance of $1,258 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. 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.
10. 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
11. 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.
12. 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
The Company's president acts both as the Company's chief executive officer and
chief financial officer and is responsible for establishing and maintaining
disclosure controls and procedures for the Company.
(a) Evaluation of Disclosure Controls and Procedures
Based on her evaluation as of December 31, 2004, the chief executive officer and
chief financial officer has concluded that the Company's disclosure controls and
procedures (as defined in Rule 13a-14(c) and 15d-15(e) of the Securities
Exchange Act of 1934, as amended) are effective to ensure that information
required to be disclosed by the Company in reports that the Company files or
submits under the Securities Exchange Act, as amended is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission.
(b) Changes in Internal Controls
Based on her evaluation as of December 31, 2004, the chief executive officer and
chief financial officer has concluded that there were no significant changes in
the Company's internal controls over financial reporting or in any other areas
that could significantly affect the Company's internal controls subsequent to
the date of her most recent evaluation, including corrective actions with regard
to significant deficiencies and material weaknesses.
13
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
14
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: 2/10/05
By: /s/ Adrienne Humphreys
----------------------------------------
Adrienne Humphreys, President
15