TREES Corp (Colorado) - Quarter Report: 2013 June (Form 10-Q)

PROMAP CORPORATION

BALANCE SHEETS

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

3

PROMAP CORPORATION

STATEMENTS OF OPERATIONS

(Unaudited)

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

4

PROMAP CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)

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 JUNE 30, 2013 AS COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2012.

Revenues for the three months ended June 30, 2013 were $4,147 as compared to the revenues of $16,393 for the three months ended June 30, 2012.  The revenues decreased significantly due to a decrease in the oil and gas drilling activities of the Company’s clients.   

The only operating expenses during these periods consisted of general and administrative expenses which were $6,446 in the three months ended June 30, 2013 as compared to $9,170 for the three months ended June 30, 2012.  The $2,724 decrease was due to the reduced level of business activity.

The net loss for the three months ended June 30, 2013 was ($9,852) as compared to a net loss of ($4,944) for the three months ended June 30, 2012.  The primary reason for the increased loss in the second quarter of 2013 was due to the decline in revenue.

RESULTS OF OPERATION FOR THE SIX MONTHS ENDED JUNE 30, 2013 AS COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2012.

Revenues for the six months ended June 30, 2013 were $21,511 as compared to the revenues of $21,009 for the six months ended June 30, 2012.  The revenues were fairly steady for the complete 6 month periods although they declined in the last 3 months of the latest period.

The only operating expenses during these periods consisted of general and administrative expenses which were $15,233 in the six months ended June 30, 2013 as compared to $18,692 for the six months ended June 30, 2012.  The $3,459 decrease was due to a general slowdown in the Company’s business activity during the last three months.

The net loss for the six months ended June 30, 2013 was ($5,855) as compared to a net income of $24,562 for the six months ended June 30, 2012.  The primary reason for the change from a small income in 2012 to a small loss in 2013 was the reduction in the Company’s business primarily in the last three months.

 LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2013, we had $8,644 of working capital compared to $14,499 of working capital as of December 31, 2012.

Net cash used for operating activities during the six months ended June 30, 2013 was $12,608 as compared to net cash provided by operating activities in the six months ended June 30, 2012 of $22,485.  The primary reason for the poor performance was due to the $5,855 loss in the most recent period compared to net income of $24,562 in the prior year period.

8

Net cash provided by financing activities during the six months ended June 30, 2013 was zero as compared to zero provided by financing activities in the six months ended June 30, 2012.  

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.

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.

11