UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: February 29, 2004
Or
[ ] 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: 000-31431
US BIODEFENSE, INC.
--------------------------------
(Exact name of registrant as specified in its charter)
Utah 33-0052057
----------------- --------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
13674 E. Valley Blvd. 91746
City of Industry, CA -------
--------------------------- (Zip Code)
(Address of principal executive
offices)
(626) 961-8039
----------------------
(Registrant's telephone number, including area code)
N/A
-----------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to 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:
10,101,349
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US Biodefense, Inc.
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheet 4
Statements of Operations 5
Statements of Cash Flows 6
Notes 7
Item 2. Management's Discussion and Plan of Operation 9
PART II - OTHER INFORMATION
Item 4. Controls and Procedures 11
Item 6. Exhibits 11
SIGNATURES 12
CERTIFICATION 12
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PART I - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial reporting and pursuant to the
rules and regulations of the Securities and Exchange Commission
("Commission"). While these statements reflect all normal
recurring adjustments which are, in the opinion of management,
necessary for fair presentation of the results of the interim
period, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. For further information, refer to the
financial statements and footnotes thereto, which are included in
the Company's Registration Statement on Form 10-KSB previously
filed with the Commission on March 16, 2004, and subsequent
amendments made thereto.
The accompanying notes are an integral part of these
financial statements.
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US Biodefense, Inc.
Balance Sheet
(unaudited)
February 29,
2004
Assets --------------
Current assets:
Cash $-
Prepaid services - related party 10,000
Prepaid services 12,000
--------------
Total current assets 22,000
--------------
$22,000
==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $99
Notes payable - related party 3,500
--------------
Total current liabilities 3,599
--------------
Stockholders' equity:
Common stock, $0.001 par value, 100,000,000 shares
authorized, 10,101,349 shares issued and outstanding 10,101
Additional paid-in capital 3,793,289
Accumulated deficit (3,784,989)
--------------
18,401
--------------
$22,000
==============
The accompanying notes are an integral part of these financial
statements.
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US Biodefense, Inc.
Statements of Operations
(unaudited)
Three Months Ended
February 29,
2004 2003
----------------------
Revenue $- $-
----------------------
Expenses:
General and administrative expenses 3,599 -
General and administrative expenses - related party 15,000 -
----------------------
Total expenses 18,599 -
----------------------
Net (loss) $(18,599) $-
======================
Weighted average number of
common shares outstanding - basic and fully diluted 10,101,349 101,349
======================
Net (loss) per share - basic & fully diluted $(0.00) $-
======================
The accompanying notes are an integral part of these financial
statements.
-5-
US Biodefense, Inc.
Statements of Cash Flows
(unaudited)
Three Months Ended
February 29,
2004 2003
------------------------
Cash flows from operating activities
Net (loss) $(18,599) $-
Adjustment to reconcile net (loss) to
net cash (used) by operating activities:
Decrease in prepaid expense 15,000 -
Increase in accounts payable 99 -
------------------------
Net cash (used) by operating activities (3,500) -
------------------------
Cash flows from financing activities
Proceeds from notes payable - related party 3,500 -
Issuances of common stock - -
------------------------
Net cash provided by financing activities 3,500 -
------------------------
Net increase (decrease) in cash - -
Cash - beginning - -
------------------------
Cash - ending $- $-
========================
Supplemental information:
Interest paid $- $-
========================
Income taxes paid $- $-
========================
The accompanying notes are an integral part of these financial
statements.
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US Biodefense, Inc.
Notes
Note 1 - Basis of presentation
The interim financial statements included herein, presented in
accordance with United States generally accepted accounting
principles and stated in US dollars, have been prepared by the
Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures
are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal
recurring adjustments, which, in the opinion of management, are
necessary for fair presentation of the information contained
therein. It is suggested that these interim financial statements
be read in conjunction with the financial statements of the Company
for the year ended November 30, 2003 and notes thereto included in
the Company's Form 10-KSB. The Company follows the same accounting
policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of
annual results.
Note 2 - Going concern
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As shown in the
accompanying financial statements, the Company has incurred a net
loss of $18,599 for the three months ended February 29, 2004, and
had no sales. The future of the Company is dependent upon its
ability to obtain financing and upon future profitable operations
from the development of its new business opportunities. In order
to obtain the necessary capital, the Company is seeking equity
and/or debt financing. If the financing does not provide
sufficient capital, some of the shareholders of the Company have
agreed to provide sufficient funds as a loan over the next twelve
month period. The financial statements do not include any
adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of
liabilities that might be necessary in the event the Company cannot
continue in existence.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern. These financial statements
do not include any adjustments that might arise from this
uncertainty.
Note 3 - Prepaid expense
On April 1, 2003, the Company entered into an employment agreement
with an individual who is an officer and director of the company.
The compensation is $60,000 annually. The Company recognized
$15,000 as an expense in the three months ended February 29, 2004
and prepaid payroll for the unearned portion of $10,000.
On June 10, 2003, the Company entered into an agreement with Erin
Rahe. The agreement has a term of one year and may be extended
upon agreement by both parties. Either party may cancel the
agreement with five days written notice in the event of a material
violation of the agreement. Either party may cancel the agreement
for any reason upon 30 days written notice. The compensation for
the agreement was paid with the issuance of 1,000,000 shares of
common stock. As of November 30, 2003, the Company had recorded a
prepaid expense of $12,000.
Note 4 - Notes payable
During the three months ended February 29, 2004, an officer and
director loaned the Company $3,500 to pay for general and
administrative expenses. The loan bears no interest and is due
upon demand. As of February 29, 2004, the amount owed is $3,500.
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US Biodefense, Inc.
Notes
Note 5 - Related party transactions
Office space is provided without charge by an officer, director and
shareholder. 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 Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements
about US Biodefense, Inc.'s business, financial condition and
prospects that reflect management's assumptions and beliefs based
on information currently available. We can give no assurance that
the expectations indicated by such forward-looking statements will
be realized. If any of our management's assumptions should prove
incorrect, or if any of the risks and uncertainties underlying such
expectations should materialize, UBDF's actual results may differ
materially from those indicated by the forward-looking statements.
The key factors that are not within our control and that may
have a direct bearing on operating results include, but are not
limited to, acceptance of our services, our ability to expand our
customer base, managements' ability to raise capital in the future,
the retention of key employees and changes in the regulation of our
industry.
There may be other risks and circumstances that management may
be unable to predict. When used in this Quarterly Report, words
such as, "believes," "expects," "intends," "plans,"
"anticipates," "estimates" and similar expressions are intended to
identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions.
Plan of Operation
We were incorporated in the State of Utah on June 29, 1983,
under the name Teal Eye, Inc. We merged with Terzon Corporation
and changed our name to Terzon Corporation in 1984. We
subsequently changed our name to Candy Stripers Candy Corporation.
We were engaged in the business of manufacturing and selling candy
and gift items to hospital gift shops across the country. We were
traded Over-the-Counter Bulletin Board for several years. In 1986
we ceased the candy manufacturing operations and filed for Chapter
11 Bankruptcy protection. After emerging from Bankruptcy in 1993,
we remained dormant until January 1998, when we changed our name to
Piedmont, Inc. On May 13, 2003, we filed an amendment to our
Articles of Incorporation to change our name from Piedmont, Inc. to
US Biodefense, Inc. We have not generated any revenues since we
emerged from bankruptcy.
We intend to provide diversified professional and technical
services involving the application of scientific, engineering and
management expertise to provide biological defense solutions for
government and commercial customers in the U.S. and abroad. We are
currently developing our internal operations and researching
potential opportunities for our business. We expect to continue to
experience additional expenditures and incur ongoing losses until
we are able to implement our services and generate revenues and
cash flows to satisfy our financial obligations.
We have no cash on hand, and may be unable to continue
operations for the next at least 12 months if we are unable to
generate revenues or obtain capital infusions by issuing equity or
debt securities in exchange for cash. If we are unable to obtain
capital through issuances of equity or debt, David Chin, a
shareholder and President of our company, has verbally agreed to
loan us cash, which shall bear no interest and be due upon demand.
We have no formal written agreement with Mr. Chin for such loans,
and we cannot guarantee you that we will be able to enforce this
agreement. Notwithstanding this, there can be no assurance that we
will be able to secure additional funds in the future to stay in
business. Our principal accountants have expressed substantial
doubt about our ability to continue as a going concern because we
have limited operations and have not commenced planned principal
operations.
We currently do not own any significant plant or equipment
that we would seek to sell in the near future.
Our management does not anticipate the need to hire additional
full- or part- time employees over the next 12 months, as the
services provided by our officers and directors appear sufficient
at this time. We believe that our operations are currently on a
small scale that is manageable by a few individuals. We outsource
for the manufacture of our products, as well as the hosting and
maintenance of our web site, thus our responsibilities are related
predominantly to graphic design and administrative duties.
Additionally, our marketing and advertising efforts are mainly
conducted via the Internet, and can be designed by our current
staff or our third-party Internet services firm. While we believe
that
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the addition of employees is not required over the next 12 months,
we intend to contract sales representatives to market our products
for us on an independent contractor basis. These representatives
are not intended to be employees of our company.
We have not paid for expenses on behalf of any of our
directors. Additionally, we believe that this fact shall not
materially change.
Item 3. Controls and Procedures
Within 90 days prior to the date of filing of this report, we
carried out an evaluation, under the supervision and with the
participation of our management, including the Chief Executive
Officer and our Chief Financial Officer, of the design and
operation of our disclosure controls and procedures. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer
have concluded that our disclosure controls and procedures are
effective for gathering, analyzing and disclosing the information
we are required to disclose in the reports we file under the
Securities Exchange Act of 1934, within the time periods specified
in the SEC's rules and forms. There have been no significant
changes in our internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
this evaluation.
PART II - OTHER INFORMATION
Item 6. Exhibits
Exhibi Name and/or Identification of Exhibit
t
Number
3 Articles of Incorporation & By-Laws
a. Articles of Incorporation of Teal Eyes, Inc.
Incorporated by reference herein filed as Exhibit (a)
to Form 10SB12G filed on September 1, 2000.
b. Amendment to Articles of Incorporation of Teal
Eyes, Inc. Incorporated by reference herein filed as
Exhibit (b) to Form 10SB12G filed on September 1,
2000.
c. Amendment to Articles of Incorporation of Terzon
Corporation. Incorporated by reference herein filed
as Exhibit (c) to Form 10SB12G filed on September 1,
2000.
d. Amended and Restated Articles of Incorporation of
Candy Stripers Candy Corp. Incorporated by reference
herein filed as Exhibit (d) to Form 10SB12G filed on
September 1, 2000.
e. By-Laws of the Company. Incorporated by reference
herein filed as Exhibit (e) to Form 10SB12G filed on
September 1, 2000.
f. Certificate of Amendment to Articles of
Incorporation filed May 13, 2003. Incorporated by
reference herein filed as Exhibit 3 to Form 10-QSB
filed on July 15, 2003.
31 Rule 13a-14(a)/15d-14(a) Certifications
32 Certification under Section 906 of the Sarbanes-Oxley Act
(18 U.S.C. Section 1350)
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
US BIODEFENSE, INC.
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(Registrant)
By: /s/ David Chin
----------------
David Chin, President
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