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TREES Corp (Colorado) - Quarter Report: 2012 September (Form 10-Q)

Converted by EDGARwiz

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2012


¨   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934


For the transition period from _______ to _________


Commission File No. 000-54457


PROMAP CORPORATION

(Name of registrant in its charter)


Colorado

  

20-8096131

(State or other jurisdiction of incorporation or formation)

   

(I.R.S. employer identification number)


6855 South Havana Street, Suite 400, Centennial, CO 80112

(Address of principal executive offices)

 

(720) 889-0510

(Registrant’s telephone number, including area code) 


Not Applicable

(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.  x  Yes   ¨  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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  x  Yes   ¨  No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.


Large accelerated filer  ¨

 

Accelerated filer  ¨

Non-accelerated filer    ¨

(Do not check if a smaller reporting company)

 

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   x  No


Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  On October 10, 2012, there were 9,724,200 shares of Common Stock issued and outstanding.





PROMAP CORPORATION

FORM 10-Q


TABLE OF CONTENTS


PART I.  FINANCIAL INFORMATION

 

Page

 

 

 

 

Item 1.

Financial Statements

 

3

 

 

 

 

 

  Balance sheets

 

3

 

  Statements of operations

 

4

 

  Statements of cash flows

 

5

 

  Notes to unaudited consolidated financial statements

 

6-7

 

 

 

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

8

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

9

 

 

 

 

Item 4.

Controls and Procedures

 

9

 

 

 

 

PART II.  OTHER INFORMATION

 

10

 

 

 

 

Item 1.

Legal Proceedings

 

10

 

 

 

 

Item 1A.

Risk Factors

 

10

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

10

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

10

 

 

 

 

Item 4.

Mine Safety Disclosures

 

10

 

 

 

 

Item 5.

Other Information

 

10

 

 

 

 

Item 6.

Exhibits

 

10

 

 

 

 

 

Signatures

 

11






2



PART I—FINANCIAL INFORMATION


Item 1.  Financial Statements.


PROMAP CORPORATION

BALANCE SHEETS


 

 

December 31,

2011

 

 

Sept. 30,

2012

 

 

 

 

 

 

(Unaudited)

 

  

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

  

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$

28,951

 

 

$

19,314

 

Accounts receivable (net of allowance for doubtful accounts)

 

 

6,029

 

 

 

22,823

 

Total current assets

 

 

34,980

 

 

 

42,137

 

  

 

 

 

 

 

 

 

 

Total Assets

 

$

34,980

 

 

$

42,137

 

  

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accrued payables

 

$

158

 

 

$

122

 

Taxes payable

 

 

-

 

 

 

1,439

 

Total current liabilities

 

 

158

 

 

 

1,561

 

  

 

 

 

 

 

 

 

 

Total Liabilities

 

 

158

 

 

 

1,561

 

  

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

Preferred stock, no par value; 5,000,000 shares authorized; No shares issued & outstanding

 

 

-

 

 

 

-

 

Common stock, no par value;100,000,000 shares authorized; 9,724,200 shares issued and outstanding

 

 

76,050

 

 

 

76,050

 

Additional paid in capital

 

 

24,000

 

 

 

24,000

 

Retained earnings

 

 

(65,228

)

 

 

(59,474

)

  

 

 

 

 

 

 

 

 

Total Stockholders' Equity

 

 

34,822

 

 

 

40,576

 

  

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

34,980

 

 

$

42,137

 


The accompanying notes are an integral part of the financial statements.




3






PROMAP CORPORATION

STATEMENTS OF OPERATIONS

(Unaudited)


 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

Sept. 30,

 

 

Sept. 30,

 

 

 

2011

 

 

2012

 

 

2011

 

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales (net of returns) - related party

 

$

20,931

 

 

$

10,076

 

 

$

53,172

 

 

$

31,085

 

Reserve recovery

 

 

-

 

 

 

-

 

 

 

-

 

 

 

40,860

 

Cost of goods sold

 

 

231

 

 

 

602

 

 

 

539

 

 

 

602

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

20,700

 

 

 

9,474

 

 

 

52,633

 

 

 

71,343

 


Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

28,283

 

 

 

32,989

 

 

 

54,786

 

 

 

64,165

 

 

 

 

28,283

 

 

 

32,989

 

 

 

54,786

 

 

 

64,165

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

(7,583

 

 

(23,515

)

 

 

(2,153

 

 

7,178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

36

 

 

 

5

 

 

 

96

 

 

 

15

 

Other income

 

 

-

 

 

 

-

 

 

 

15

 

 

 

-

 

 

 

 

36

 

 

 

5

 

 

 

111

 

 

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before provision for income taxes

 

 

(7,547

 

 

(23,510

)

 

 

(2,042

 

 

7,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income tax

 

 

-

 

 

 

(4,702

)

 

 

-

 

 

 

1,439

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(7,547

 

$

(18,808

)

 

$

(2,042

 

$

5,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Basic and fully diluted)

 

$

(0.00

 

$

(0.00

)

 

$

(0.00

 

$

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

9,724,200

 

 

 

9,724,200

 

 

 

9,699,289

 

 

 

9,724,200

 


The accompanying notes are an integral part of the financial statements.




4






PROMAP CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)


 

 

Nine Months Ended

 

 

 

Sept. 30,

 

 

 

2011

 

 

2012

 

  

 

 

 

 

 

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

Net income (loss)

 

$

(2,042

 

$

5,754

 

  

 

 

 

 

 

 

 

 

Adjustments to reconcile net loss to net cash provided by (used for)operating activities:

 

 

 

 

 

 

 

 

Accounts receivable - related party

 

 

(15,608

 

 

(16,794

)

Taxes payable

 

 

-

 

 

 

1,439

 

Accrued payables

 

 

352

 

 

 

(36

Net cash provided by (used for) operating activities

 

 

(17,298

 

 

(9,637

  

 

 

 

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

  

 

 

-

 

 

 

-

 

Net cash provided by (used for) investing activities

 

 

-

 

 

 

-

 

  

 

 

 

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

Sales of common stock

 

 

56,050

 

 

 

-

 

Net cash provided by (used for) financing activities

 

 

56,050

 

 

 

-

 

  

 

 

 

 

 

 

 

 

Net Increase (Decrease) In Cash

 

 

38,752

 

 

 

(9,637

  

 

 

 

 

 

 

 

 

Cash At The Beginning Of The Period

 

 

15,361

 

 

 

28,951

 

  

 

 

 

 

 

 

 

 

Cash At The End Of The Period

 

$

54,113

 

 

$

19,314

 

  

 

 

 

 

 

 

 

 

Schedule Of Non-Cash Investing And Financing Activities

 

 

 

 

 

 

 

 

None

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

Supplemental Disclosure

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

-

 

 

$

-

 

Cash paid for income taxes

 

$

-

 

 

$

-

 



The accompanying notes are an integral part of the financial statements.





5



PROMAP CORPORATION

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)



NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Promap Corporation (the “Company”), was incorporated in the State of Colorado on November 12, 1989. The Company sells oil and gas maps to oil and gas industry businesses.


Basis of Presentation


The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year.


Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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.


Cash and cash equivalents


The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.


Accounts receivable


The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary.


Property and equipment


Property and equipment are recorded at cost and depreciated under accelerated or straight line methods over each item's estimated useful life.




6



PROMAP CORPORATION

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)



NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):


Revenue recognition


Revenue is recognized on an accrual basis as earned under contract terms. Specifically, revenue from product sales is recognized subsequent to a customer ordering a product at an agreed upon price, delivery has occurred, and collectability is reasonably assured.


Income tax


The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


Net income (loss) per share


The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.


Financial Instruments


The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheets, approximates fair value.


Long-Lived Assets


In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.





7





Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.


The following discussion and analysis should be read in conjunction with the Financial Statements (unaudited) and Notes to Financial Statements (unaudited) filed herein.


BUSINESS OVERVIEW


Promap Corporation was incorporated in the State of Colorado on November 12, 1987. We are an independent GIS and custom draft energy mapping company for the oil and gas industry in the United States and Canada.  We provide hard copy and digital format oil and gas production maps which cover various geologic basins in numerous areas including:  Denver Basin, Powder River Basin, Michigan Basin, Williston Basin, Arkoma Basin, Illinois Basin, Cincinnati Arch, Uintah - Piceance Basins and The Nevada Basin.  We also provide maps of the North American Coal Basin and Coal Bed Methane Activity and North American Devonian - Mississippian Shale Map with detailed pipeline locations.


RESULTS OF OPERATION FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AS COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2011.


Revenues for the three months ended September 30, 2012 were $10,076 as compared to the revenues of $20,931 for the three months ended September 30, 2011.  The revenues decreased because the level of oil and gas drilling activity of the Company’s clients decreased.


The only operating expenses during these periods consisted of general and administrative expenses which were $32,989 in the three months ended September 30, 2012 as compared to $28,283 for the three months ended September 30, 2011.  The $4,706 increase was due to expenses associated with preparing additional maps.


The net loss for the three months ended September 30, 2012 was ($18,808) as compared to a net loss of ($7,547) for the three months ended September 30, 2011.  The primary reasons for the increased loss were the reduction in sales and the increase in general and administrative expenses.


RESULTS OF OPERATION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AS COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2011.


Revenues for the nine months ended September 30, 2012 were $31,085 as compared to the revenues of $53,172 for the nine months ended September 30, 2011.  The revenues declined significantly because the level of oil and gas drilling activity of the Company’s clients declined.


The only operating expenses during these periods consisted of general and administrative expenses which were $64,165 in the nine months ended September 30, 2012 as compared to $54,786 for the nine months ended September 30, 2011.  The $9,379 increase was due to expenses associated with improvements to the Company’s website and preparing additional GIS maps.


The net income for the nine months ended September 30, 2012 was $5,754 as compared to a net loss of ($2,042) for the nine months ended September 30, 2011.  The primary reason for the increase in income was the fact that the Company collected $40,860 in receivables that had previously been written off.




8





LIQUIDITY AND CAPITAL RESOURCES


As of September 30, 2012, we had $40,576 of working capital compared to $34,822 of working capital as of December 31, 2011.


Net cash used for operating activities during the nine months ended September 30, 2012 was $9,637 as compared to net cash used for operating activities in the nine months ended September 30, 2011 of ($17,298).  The primary reason for the improvement was the payment of a related party account receivable during the latest nine month period.


Net cash provided by financing activities during the nine months ended September 30, 2012 was zero as compared to $56,050 provided by financing activities in the nine months ended September 30, 2011.  The $56,050 represents the proceeds from the Company’s initial public offering.


CONTRACTUAL OBLIGATIONS


None.


OFF-BALANCE SHEET ARRANGEMENTS


We do not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk. 


Not applicable.


Item 4.  Controls and Procedures.


(a)  Evaluation of Disclosure Controls and Procedures.


Our Chief Executive Officer and Principal Financial Officer have evaluated the effectiveness of the design and operations of our disclosure controls and procedures as of the end of the period covered by this quarterly report, and have concluded that our disclosure controls and procedures are adequate.


(b)  Changes in Internal Control over Financial Reporting.


No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



9





PART II – OTHER INFORMATION


Item 1.    Legal Proceedings.


None.


Item 1A.  Risk Factors.


Not applicable.


Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.


None.


Item 3.    Defaults Upon Senior Securities.


Not applicable.


Item 4.    Mine Safety Disclosures.


Not applicable.


Item 5.    Other Information.


Not applicable.


Item 6.    Exhibits.


(a)  Exhibits required by Item 601 of Regulation S-K.

 

Exhibit

 

Description

 

 

 

31.1

 

Certification of CEO and Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) - Filed herewith electronically

 

 

 

31.2

 

Certification of CFO and Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) - Filed herewith electronically

 

 

 

32.1

 

Certification of CEO and Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically

 

 

 

32.2

 

Certification of CFO and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically




  



10





SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 

 

PROMAP CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

Date:  October 11, 2012

By:

/s/ Steven A. Tedesco

 

 

 

 

Steven A. Tedesco, President and CEO

(Principal Executive Officer)

 

 

 

 

 

 

 

 

 

 

 

 

Date:  October 11, 2012

By:

/s/ Robert W. Carington, Jr.

 

 

 

 

Robert W. Carington, Jr., CFO

(Principal Financial Officer and Principal Accounting Officer)

 





11