Concrete Leveling Systems Inc - Quarter Report: 2017 January (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended January 31, 2017

[  ] 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)

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) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405 of this chapter) during the preceding 12 month (or for such shorter period that the registrant was required to submit and post such files).  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).

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 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:  6,395,418

 

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

 

		January 31				July 31
		(Unaudited)				(Audited)
Assets
Current Assets
Cash in bank		$	466			$	104
Accounts receivable, net of allowance for doubtful accounts of $0 at January 31, 2017 and July 31, 2016			-				217
Current portion of notes receivable, net of allowance for loan losses of and $2,391 at January 31, 2017 and July 31, 2016			1,256				-
Interest receivable, net of collectability allowance of and $242 at January 31, 2017 and July 31, 2016			544				26
Inventory			23,703				23,607
Prepaid expenses and other current assets			943				485
Total Current Assets			26,912				24,439
Property, Plant and Equipment
Equipment			700				700
Less: Accumulated depreciation			(700	)			(700	)
Total Property, Plant and Equipment			-				-
Other Assets
Notes receivable, net of current portion and allowance for loan losses of $21,860 at January 31, 2017 and July 31, 2016			1,107				2,695
Total Assets		$	28,019			$	27,134
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts payable		$	35,923			$	33,559
Accounts payable - stockholders			35,486				35,486
Advances - stockholders			111,800				89,400
Notes payable - stockholders			62,750				62,750
Accrued interest - stockholders			15,139				15,139
Other accrued expenses			17,329				15,828
Total Current Liabilities			278,427				252,162
Stockholders’ Equity (Deficit)
Common stock (par value $0.001)
100,000,000 shares authorized:
6,395,418 shares issued and outstanding at January 31, 2017 and July 31, 2016			6,395				6,395
Additional paid-in capital			405,355				405,355
Retained (deficit)			(662,158	)			(636,778	)
Total Stockholders’ Equity (Deficit)			(250,408	)			(225,028	)
Total Liabilities and Stockholders’ Equity (Deficit)		$	28,019			$	27,134

 

 

 

 

		3 Months Ended				6 Months Ended
		January 31, 2017				January 31, 2017
		(Unaudited)				(Unaudited)
Equipment and parts sales		$	387			$	387
Cost of Sales			110				110
Gross Margin			277				277
Expenses
Selling, general and administration			5,709				25,960
(Loss) from Operations			(5,432	)			(25,683	)
Other Income (Expense)
Interest income			389				786
Interest expense			(241	)			(483	)
Total Other Income (Expense)			148				303
Net (Loss) Before Income Taxes			(5,284	)			(25,380	)
Provision for Income Taxes			-				-
Net (Loss)		$	(5,284	)		$	(25,380	)
Net (Loss) per Share - Basic and Fully Diluted		$	(0.00	)		$	(0.00	)
Weighted average number of common shares outstanding - basic and fully diluted			6,395,418				6,395,418

 

 

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Concrete Leveling Systems, Inc. (“CLS” or “The Company”) became an operating company in 2009.  As of January 31, 2017, CLS has cash assets of $466, no accounts receivable and net notes receivable in the amount of $2,363.  As of January 31, 2017, the Company was carrying inventory valued at $23,703.

The Company’s cash flow is currently not sufficient to maintain operations.  However, the Company is receiving periodic payments from the self financed sale of its concrete leveling service units, which creates some cash flow for the Company.  Mr. Edward A. Barth has continued to contact companies regarding the service units and has listed the service units held in inventory on Ebay. To date, the Company has been contacted with inquiries regarding the purchase of a unit, but no acceptable offers have been made.

CLS continues to have cash flow issues.  As of January 31, 2017, it had total current liabilities of $278,427, which includes advances from stockholders and notes and accounts payable to stockholders in the amount of $225,175, including accrued interest on those obligations.  The Company had a net loss of $5,284 during the quarter.  Mr. Barth continues to remain in contact with potential purchasers, who have expressed an interest in purchasing a service unit. The purchase of the Company’s product is seasonal in nature. Interest in purchasing the concrete leveling service units increases in late winter and early spring, since the use of the product is restricted by cold temperature.

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 company maintains an inventory of two substantially completed service units.  In the event the Company receives an order for a concrete leveling service unit, it will seek a down payment in an amount sufficient to complete the unit, in order not to have to borrow additional funds. The Company is currently relying upon loans from stockholders to meet operating expenses.

Capital Resources.  CLS has made no material commitments for capital expenditures as of the end of its fiscal quarter ending January 31, 2017 and does not anticipate any immediate need for material capital expenditures over the next quarter.

Result of Operations.  During the quarter ended January 31, 2017, the Company has experienced little activity. The Company has devoted a limited amount of its resources to marketing its product during the last quarter. At present, it is not in discussions with any potential buyers of its concrete leveling service units.

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 consists 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.  There are no changes in the Company’s internal controls over financial reporting that occurred during the three months ended January 31, 2017 that have materially affected, or are reasonably likely to materially affect, the internal controls 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

There were no unregistered sales of equity securities during this quarter.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

There are no defaults upon any senior securities.

ITEM 4 – MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 – OTHER INFORMATION

None

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

Exhibit 101 – Interactive Data Files Pursuant to Rule 405 of Regulation S-T

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.