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EXCEL - IDEA: XBRL DOCUMENT - GENERAL CANNABIS CORPFinancial_Report.xls
EX-31 - EXHIBIT 31.1 - GENERAL CANNABIS CORPexhibit31-1.htm
EX-32 - EXHIBIT 32.1 - GENERAL CANNABIS CORPexhibit32-1.htm
EX-32 - EXHIBIT 32.1 - GENERAL CANNABIS CORPexhibit32-2.htm
EX-31 - EXHIBIT 31.2 - GENERAL CANNABIS CORPexhibit31-2.htm

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, 2011


¨   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. 333-163342


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, Colorado  80112

(Address of principal executive offices)

 

(720) 990-0510

(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).   ¨ 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 November 4, 2011, there were 9,724,000 shares of Common Stock issued and outstanding.




PROMAP CORPORATION

FORM 10-Q


TABLE OF CONTENTS


PART I.  FINANCIAL INFORMATION

 

Page No.

 

 

 

 

Item 1.

Financial Statements

 

3

 

  Balance sheets

 

3

 

  Statements of operations (unaudited)

 

4

 

  Statements of cash flows (unaudited)

 

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.

(Removed and Reserved)

 

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

 

 

 

 

 

Dec. 31, 2010

Sept. 30, 2011

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current Assets:

 

 

  Cash

$15,361

$54,113

  Accounts receivable-related party-net allowance for doubtful accounts

 23,512

39,120

    Total Current Assets

38,873

93,233

 

 

 

    Total Assets

$38,873

$93,233

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current Liabilities:

 

 

  Accrued payables

$     100

$     452

  Income tax payable

1,318

1,318

    Total current liabilities

1,418

1,770

 

 

 

    Total Liabilities

1,418

1,770

 

 

 

Stockholders' Equity:

 

 

  Preferred stock, no par value; 5,000,000 shares authorized,

    no shares issued and outstanding

-

-

  Common stock, no par value; 100,000,000 shares authorized;

    9,500,000 (2010) and 9,724,200 (2011) shares issued and

    outstanding

20,000

76,050

  Additional paid in capital

24,000

24,000

  Retained earnings

-6,545

-8,587

 

 

 

    Total Stockholders' Equity

37,455

91,463

 

 

 

    Total Liabilities and Stockholders' Equity

$38,873

$93,233





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



3






PROMAP CORPORATION
STATEMENT OF OPERATIONS (UNAUDITED)

 

 

 

 

 

 

 

Three Months

Ended

Sept. 30, 2010

Three Months

Ended

Sept. 30, 2011

Nine Months

Ended

Sept. 30, 2010

Nine Months

Ended

Sept. 30, 2011

 

 

 

 

 

Revenue:

 

 

 

 

  Sales (net of returns) - related party

30,886

20,931

57,334

53,172

  Cost of goods sold

0

231

0

539

  Gross profit

30,886

20,700

57,334

52,633

 

 

 

 

 

Operating expenses:

 

 

 

 

  General and administrative

28,474

28,283

40,438

54,786

Total operating expenses

28,474

28,283

40,438

54,786

 

 

 

 

 

Income (loss) from operations

2,412

-7,583

16,896

-2,153

 

 

 

 

 

Other income (expense):

 

 

 

 

  Interest income

5

36

16

96

  Other income

-

-

-

15

Total other income (expense)

5

36

16

111

 

 

 

 

 

Income (loss) before provision for income taxes

2,417

-7,547

16,912

-2,042

 

 

 

 

 

Provision for income tax

783

-

4,282

-

 

 

 

 

 

Net income (loss)

1,634

-7,547

12,630

-2,042

 

 

 

 

 

Net income (loss) per share (basic and fully diluted)

0.00

-0.00

0.00

-0.00

 

 

 

 

 

Weighted average number of common shares outstanding

9,500,000

9,724,200

9,500,000

9,699,289



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



4







PROMAP CORPORATION
STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

 

 

Nine Months

Ended

Sept. 30, 2010

Nine Months

Ended

Sept. 30, 2011

 

 

 

Cash flows from operating activities:

 

 

  Net income (loss)

$ 12,630

$ -2,042

 

 

 

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

 

 

  Donated services

4,500

-

  Accounts receivable-related party-net

-29,742

-15,608

  Accrued payables

4,485

352

Net cash provided by (used for) operating activities

-8,127

-17,298

 

 

 

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

-8,127

38,752

 

 

 

Cash at the beginning of the period

28,131

15,361

 

 

 

Cash at the end of the period

$ 20,004

$ 54,113

 

 

 

Schedule of non-cash 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, 2011 AS COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2010.


Revenues for the three months ended September 30, 2011 were $20,931 as compared to the revenues of $30,886 for the three months ended September 30, 2010.  The revenues decreased 32% due to the decrease in oil and gas drilling activity of the Company’s clients.


The only operating expenses during these periods consisted of general and administrative expenses which were $28,283 in the three months ended September 30, 2011 as compared to $28,474 for the three months ended September 30, 2010.


The net loss for the three months ended September 30, 2011 was $(7,583) as compared to a net income of $2,412 for the three months ended September 30, 2010.  The primary reason for the net loss was the 32% decrease in sales.


RESULTS OF OPERATION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AS COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2010.


Revenues for the nine months ended September 30, 2011 were $53,172 as compared to the revenues of $57,334 for the nine months ended September 30, 2010.  The revenues decreased 7% primarily due to the reduction in sales during the three months ended September 30, 2011.


The only operating expenses during these periods consisted of general and administrative expenses which were $54,786 in the nine months ended September 30, 2011 as compared to $40,438 for the nine months ended September 30, 2010.  The $14,348 increase was due to one time legal and accounting expenses related to the initial public offering.

 

The net loss for the nine months ended September 30, 2011 was $2,042 as compared to a net income of $12,630 for the nine months ended September 30, 2010.  The reason for the $14,672 reduction in net income was primarily due to the one time legal and accounting expenses related to the initial public offering.




8





LIQUIDITY AND CAPITAL RESOURCES


As of September 30, 2011, we had $91,463 of working capital compared to $37,455 of working capital as of December 31, 2010.


Net cash used for operating activities during the nine months ended September 30, 2011 was $17,298 as compared to net cash used for operating activities in the nine months ended September 30, 2010 of $8,127.  The primary reason for the reduction in this item was that the Company had a net loss of $(2,042) for the nine months ended September 30, 2011 compared to a net income of $12,630 during the comparable period in 2010.


Net cash provided by financing activities during the nine months ended September 30, 2011 was $56,050 as compared to no cash provided by or used for financing activities in the nine months ended September 30, 2010.  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.


We received a total of $56,050 in gross proceeds from the sale of 224,200 shares of common stock in our initial public offering which was closed on January 21, 2011.  The effective date of the registration statement for our initial public offering was September 25, 2010, and the SEC file number was 333-163342.  The offering terminated on January 21, 2011, which was the end of the offering period, and 575,800 shares which were registered for sale by the Company were not sold.


From the effective date of the registration statement (June 25, 2010) through March 15, 2011 we incurred and paid approximately $12,239 in expenses in connection with the offering.  There were no payments made to officers or directors of the Company or to affiliates of the Company.  The net offering proceeds after deducting the above expenses was $43,811.  Since the offering was closed, the only other expenditure from the offering proceeds through September 30, 2011was the payment of $4,000 to the Company’s auditor in connection with the audit for the fiscal year ended December 31, 2010.  The remaining funds were placed in an interest bearing savings account.


The registration statement also registered 1,500,000 shares of common stock to be offered by selling shareholders.  The selling shareholders have not started offering any of their shares for sale.


Item 3.

Defaults Upon Senior Securities.

 

Not applicable.


Item 4.

(Removed and Reserved)


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

 

 

 

10

 

 

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

 

 

 


 


 


  

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:  November 1, 2011

By:

/s/ Steven A. Tedesco

 

 

Steven A. Tedesco, President and CEO

(Principal Executive Officer)

 

 

 

 

 

 

Date:  November 1, 2011

By:

/s/ Robert W. Carington, Jr.

 

 

Robert W. Carington, Jr., CFO

(Principal Financial Officer and Principal Accounting Officer)






11