Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended January 31, 2011
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________ to ___________
Commission file number 000-53048
Concrete Leveling Systems, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 28-0851977
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
5046 E. Boulevard, NW, Canton, OH 44718
(Address of principal executive officer)
(330) 966-8120
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
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 [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 5,315,418
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Concrete Leveling Systems Inc.
Balance Sheets
January 31, 2011 and July 31, 2010
January 31 July 31
---------- ----------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash in bank $ 489 $ 2,426
Accounts receivable 893 --
Current portion of notes receivable 24,478 17,815
Inventory 9,788 613
---------- ----------
Total Current Assets 35,648 20,854
---------- ----------
PROPERTY, PLANT AND EQUIPMENT
Equipment 1,900 1,900
Less: Accumulated depreciation (1,700) (1,382)
---------- ----------
Total Property, Plant and Equipment 200 518
---------- ----------
OTHER ASSETS
Note receivable 37,970 47,246
Deposits 10 10
---------- ----------
37,980 47,256
---------- ----------
TOTAL ASSETS $ 73,828 $ 68,628
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 65,879 $ 63,782
Notes payable 42,450 17,000
Other accrued expenses 12,191 10,068
---------- ----------
Total Current Liabilites 120,520 90,850
---------- ----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock (par value $0.001)
100,000,000 shares authorized:
5,315,418 and 5,136,668 shares issued and outstanding
at January 31, 2011 and July 31, 2010 5,315 5,137
Additional paid-in capital 203,935 168,363
Retained (Deficit) (255,942) (195,722)
---------- ----------
Total Stockholders' Equity (Deficit) (46,692) (22,222)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) $ 73,828 $ 68,628
========== ==========
See notes to financial statements.
2
Concrete Leveling Systems Inc.
Statements of Income
For the Three and Six Months Ended January 31, 2011
(Unaudited)
3 Months 6 Months
Ended Ended
January 31, 2011 January 31, 2011
---------------- ----------------
Equipment and parts sales $ -- $ 416
---------- ----------
Cost of Sales -- 183
---------- ----------
Gross Margin -- 233
---------- ----------
EXPENSES
Selling, general and administration 29,362 60,291
Depreciation 159 318
---------- ----------
Total Expenses 29,521 60,609
---------- ----------
(Loss) from Operations (29,521) (60,376)
OTHER INCOME (EXPENSE)
Interest income 1,290 2,244
Interest expense (1,168) (2,088)
---------- ----------
Total Other Income (Expense) 122 156
---------- ----------
Net (Loss) Before Income Taxes (29,399) (60,220)
Provision for Income Taxes -- --
---------- ----------
Net (Loss) $ (29,399) $ (60,220)
========== ==========
Net (Loss) per Share - Basic and Fully Diluted $ (0.01) $ (0.01)
========== ==========
Weighted average number of common shares
outstanding - basic and fully diluted 5,137,639 5,137,639
========== ==========
See notes to financial statements.
3
Concrete Leveling Systems Inc.
Statements of Income
For the Three and Six Months Ended January 31, 2010
(Unaudited)
3 Months 6 Months
Ended Ended
January 31, 2010 January 31, 2010
---------------- ----------------
Equipment and parts sales $ -- $ 45,000
---------- ----------
Cost of Sales -- 26,543
---------- ----------
Gross Margin -- 18,457
---------- ----------
EXPENSES
Selling, general and administration 27,073 55,583
Depreciation 158 317
---------- ----------
Total Expenses 27,231 55,900
---------- ----------
(Loss) from Operations (27,231) (37,443)
OTHER INCOME (EXPENSE)
Interest income -- --
Interest expense (182) (366)
---------- ----------
Total Other Income (Expense) (182) (366)
---------- ----------
Net (Loss) Before Income Taxes (27,413) (37,809)
Provision for Income Taxes -- --
---------- ----------
Net (Loss) $ (27,413) $ (37,809)
========== ==========
Net (Loss) per Share - Basic and Fully Diluted $ (0.01) $ (0.01)
========== ==========
Weighted average number of common shares
outstanding - basic and fully diluted 4,849,032 4,845,975
========== ==========
See notes to financial statements.
4
Concrete Leveling Systems, Inc.
Statements of Cash Flows
For the Six Months Ended January 31, 2011 and 2010
(Unaudited)
2011 2010
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $(60,220) $(37,809)
Adjustments to reconcile net (loss) to net
cash used in operating activities:
Depreciation and amortization 318 316
(Increase) in accounts receivable (892) (20,066)
(Increase) Decrease in inventory (9,175) 15,404
Decrease in prepaid expenses -- 75
Increase in accounts payable 37,846 33,202
Increase in other accrued expenses 2,123 658
-------- --------
Net cash (used by) operating activities (30,000) (8,220)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments received on notes receivable 2,613 1,634
Loans from stockholders 25,450 7,000
-------- --------
Net cash provided by financing activities 28,063 8,634
-------- --------
Net (decrease) increase in cash (1,937) 414
Cash and equivalents - beginning 2,426 530
-------- --------
Cash and equivalents - ending $ 489 $ 944
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
Interest $ 244 $ 255
======== ========
Income Taxes $ -- $ --
======== ========
Non-Cash Financing Activities. During October 2009, the Company converted
$20,000 of accounts receivable into a note receivable from the customer.
See notes to financial statements.
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Concrete Leveling Systems, Inc.
Notes to Financial Statements
January 31, 2011
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited 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-Q and
Article 8 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by accounting principles generally accepted
in the United States of America 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. For further
information, refer to the financial statements and footnotes thereto included in
the Concrete Leveling Systems, Inc. Form 10-K filing for the period ended July
31, 2010.
NOTE B - GOING CONCERN
As shown in the financial statements, the Company incurred a net loss of $60,219
for the six months ended January 31, 2011, and has incurred substantial net
losses since its inception. At January 31, 2011, current liabilities exceed
current assets by $84,872. These factors raise substantial doubt about the
Company's ability to continue as a going concern.The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and classification of liabilities that might be
necessary in the event the Company cannot continue existence.
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Concrete Leveling Systems, Inc. ("CLS" or "The Company") became an
operating company during the last fiscal year, having experienced sales in
excess of $100,000. As of January 31, 2011, CLS has cash assets of $489 and
outstanding notes receivable from the sale of concrete leveling service units in
the amount of $62,448. The Company is currently carrying an inventory valued at
$9,788.
The Company's cash flow is currently not sufficient to maintain operations.
However, the Company is receiving monthly payments from the self financed sale
of its concrete leveling service units, which creates some cash flow for the
Company. At the present time, the Company is in negotiations with several
potential buyers for the concrete leveling service units. After attending the
2011 World of Concrete Tradeshow in Las Vegas, Nevada in January, the Company
obtained several positive leads for new customers. Although interest has been
very high, many of the potential customers are experiencing difficulties in
obtaining sufficient financing to purchase the concrete leveling service units.
In anticipation of the upcoming season, the Company has borrowed funds to
fabricate a concrete leveling service unit for fast delivery. At the present
time, the unit is approximately 70% complete and can be quickly completed in the
event one of CLS's customers obtain necessary financing, since all remaining
components can be purchased from current suppliers. The Company is encouraged by
the overall increase in the United States economy and is hopeful that the US
financial markets will commence to free up credit in the upcoming season.
CLS continues to have cash flow issues. As of January 31, 2011, it had
total current liabilities of $120,520. The majority of these current liabilities
represent accounts payable and other accrued expenses. The Company has reduced
some current liability obligations by permitting Mrs. Suzanne I. Barth, the
Company's CEO and Mr. Edward A. Barth, the Company's President to exercise their
right to reduce accrued wages and rent through the purchase of additional shares
of the Company's common stock. Although the Company continues to experience
negative income figures for the quarter, its continued effort in contacting
potential customers and the high level of interest shown by potential customers
will create a more profitable scenario by the end of this fiscal year.
There are no off balance sheet arrangements involving CLS at this time.
Liquidity Issues. Since its inception, the Company has experienced
continued need for additional liquidity in order to provide for operating
expenses and to purchase components for the assembly of its product. The sale of
concrete leveling units on credit created a small amount of cash flow to the
Company during the quarter ended January 31, 2011. The amount received, however,
is not sufficient to sustain operations of the Company and the Company found it
necessary to borrow funds from the stock holders during the quarter in order to
pay operating expenses.
Capital Resources. CLS has made no material commitments for capital
expenditures as of the end of its fiscal quarter ending January 31, 2011 and
does not anticipate any immediate need for material capital expenditures over
the next quarter.
Result of Operations. During the three months ending January 31, 2011, CLS
made no sales of units. Although the Company has generated considerable interest
in its units, purchasers are finding it difficult to obtain financing to
purchase the units. Management of the Company believes that the demand for its
product is there, however, until the economy rebounds and credit is more readily
available, sales of its concrete leveling units will remain at a low level.
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ITEM 4 - CONTROLS AND PROCEDURES
Disclosure Controls and Procedures. Pursuant to Rule 13a-15(b) of the
Securities Exchange Act of 1934 ("Exchange Act"), the Company carried out an
evaluation, with the participation of the Company's management, which
constitutes of the Company's Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), of the effectiveness of the Company's disclosure controls and
procedures (as defined under Rule 13a-15(e) of the Exchange Act) as of the end
of the period covered by this report. Based upon that evaluation, the Company
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in the reports
that the Company files or submits under the Exchange Act, is recorded,
processed, summarized and reported, within the time period specified by the
United States Securities and Exchange Commission rules and forms, and that such
information is accumulated and communicated to the Company's management,
including the Company's CEO and CFO, as appropriate, to allow timely decisions
regarding required disclosure.
Changes in Internal Control Over Financial Reporting. Management has not
identified any change in the Company's internal control over financial reporting
in connection with the evaluation that management of the Company, including the
Company's CEO and CFO, that is required by paragraph (d) of Rule 13(a)-15 under
the Exchange Act of 1934 that occurred during the Company's last fiscal quarter.
ITEM 4T - CONTROLS AND PROCEDURES
CLS has not made any change in its internal controls over financial
reporting during its last fiscal quarter that has materially affected or is
reasonably likely to materially affect CLS's internal control over financial
reporting.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
To the best of its knowledge, management of CLS is not aware of any legal
proceedings in which CLS is currently involved.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 31, 2011, the Board of Directors approved the issuance of
additional shares of common stock to Mrs. Suzanne I. Barth and to Mr. Edward A.
Barth. The purpose of the issuance of stock was to permit Mrs. Barth to
capitalize accrued income owed to her through the end of the Company's fiscal
quarter ending January 31, 2011. Mrs. Suzanne I. Barth was owed a total of
$19,500 in accrued and unpaid fees. The Directors authorized the issuance of
97,500 shares of the Company's 0.001 par value common stock in satisfaction of
the outstanding payable owed by the Company to Mrs. Barth. All shares issued
were restricted shares. In addition, the Directors approved the issuance of
81,050 shares to Mr. Edward A. Barth, the Company's President. These shares were
issued in exchange for Mr. Barth capitalizing accrued rent and accrued salary
owed to Mr. Barth through the Company's fiscal quarter ending January 31, 2011
in the amount of $16,250. All common stock issued to Mr. Barth were restricted
shares. All shares were issued to Mr. and Mrs. Barth at the rate of $0.20 per
share.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
There are no defaults upon any senior securities.
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ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the past
quarter.
ITEM 5 - OTHER INFORMATION
There are no items of information required to be disclosed pursuant to this
item at this time.
ITEM 6 - EXHIBITS
A. The following are filed as Exhibits to this report. The numbers refer to the
exhibit table of Item 601 of regulation S-K: Reference is hereby made to the
exhibits contained in the registration statement (Form SB-2) filed by Concrete
Leveling Systems, Inc.
Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) - Certification
Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) - Certification
Exhibit 32 - Section 1350 - Certification
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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.
CONCRETE LEVELING SYSTEMS, INC.
Date: March 17, 2011 By: /s/ Edward A. Barth
---------------------------------------------
Edward A. Barth, Principal Executive Officer
Date: March 17, 2011 By: /s/ Suzanne I. Barth
---------------------------------------------
Suzanne I. Barth, Principal Financial Officer
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