Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2012
OR
o 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: 333-174581
Comp Services, Inc.
(Exact name of registrant as specified in its charter)
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Nevada
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45-2972060
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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414 S. Almansor St.
Alhambra, CA
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91801
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code (626)-227-1453
Not applicable.
(Former Name or Former Address 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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 o No o
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.
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o (Do not check if a smaller reporting company)
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Smaller reporting company x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
As of September 12, 2012, there were 3,739,000 shares of Common Stock, par value $0.001 per share, outstanding.
COMP SERVICES, INC.
QUARTERLY REPORT ON FORM 10-Q
JULY 31, 2012
TABLE OF CONTENTS
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PART 1 - FINANCIAL INFORMATION
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PAGE
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Item 1.
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Financial Statements (Unaudited)
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F-1
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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1
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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4
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Item 4.
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Controls and Procedures
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4
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PART II - OTHER INFORMATION
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Item 1.
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Legal Proceedings
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5
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Item 1A.
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Risk Factors
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5
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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5
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Item 3.
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Defaults Upon Senior Securities
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5
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Item 4.
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Mine Safety Disclosures
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5
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Item 5.
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Other Information
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5
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Item 6.
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Exhibits
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5
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SIGNATURES
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6
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CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
CERTAIN TERMS USED IN THIS REPORT
When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Comp Services, Inc. “SEC” refers to the Securities and Exchange Commission.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Comp Services, Inc.
(A Development Stage Company)
Financial Statements
July 31, 2012
(Unaudited)
CONTENTS
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Page(s)
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Balance Sheets – July 31, 2012 (unaudited) and October 31, 2011
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F-1 | |||
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Statements of Operations – Three and Nine Months ended July 31, 2012, from June 17, 2011 (Inception) to July 31, 2011, and from June 17, 2011 (Inception) to July 31, 2012 (unaudited)
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F-2 | |||
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Statements of Stockholders’ Deficit – from June 17, 2011 (Inception) to July 31, 2012 (unaudited)
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F-3 | |||
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Statements of Cash Flows – Nine Months Ended July 31, 2012, from June 17, 2011 (Inception) to July 31, 2011, and from June 17, 2011 (Inception) to July 31, 2012 (unaudited)
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F-4 | |||
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Notes to Financial Statements (unaudited)
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F-5 - F-9 |
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Comp Services, Inc.
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(A Development Stage Company)
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Balance Sheets
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July 31, 2012
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October 31, 2011
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Assets
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(Unaudited)
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Current Assets
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Cash
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$ | 5,210 | $ | 30,778 | ||||
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Total Current Assets
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5,210 | 30,778 | ||||||
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Total Assets
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$ | 5,210 | $ | 30,778 | ||||
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Liabilities and Stockholders' Equity (Deficit)
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Current Liabilities
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Accrued liabilities
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$ | 23,838 | $ | 1,225 | ||||
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Total Current Liabilities
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23,838 | 1,225 | ||||||
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Stockholders' Equity (Deficit)
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Preferred stock, $0.001 par value, 10,000,000 shares authorized;
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none issued and outstanding
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- | - | ||||||
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Common stock, $0.001 par value, 500,000,000 shares authorized;
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3,739,000 and 3,645,000 shares issued and outstanding, respectively
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3,739 | 3,645 | ||||||
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Additional paid-in capital
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36,251 | 31,645 | ||||||
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Deficit accumulated during the development stage
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(58,618 | ) | (5,737 | ) | ||||
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Total Stockholders' Equity (Deficit)
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(18,628 | ) | 29,553 | |||||
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Total Liabilities and Stockholders' Equity (Deficit)
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$ | 5,210 | $ | 30,778 | ||||
See accompanying notes to financial statements
F-1
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(A Development Stage Company)
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Statements of Operations
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(Unaudited)
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Three Months
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June 17, 2011
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Nine Months
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June 17, 2011
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Ended
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(Inception) to
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Ended
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(Inception) to
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July 31, 2012
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July 31, 2011
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July 31, 2012
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July 31, 2012
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Revenue
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$ | - | $ | - | $ | 3,000 | $ | 3,000 | ||||||||
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General and administrative expenses
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23,958 | 3,000 | 55,881 | 61,618 | ||||||||||||
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Net loss
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$ | (23,958 | ) | $ | (3,000 | ) | $ | (52,881 | ) | $ | (58,618 | ) | ||||
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Net loss per common share - basic and diluted
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$ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.02 | ) | ||||
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Weighted average number of common shares outstanding
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during the period - basic and diluted
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3,739,000 | 3,000,000 | 3,735,964 | 3,564,697 | ||||||||||||
See accompanying notes to financial statements
F-2
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(A Development Stage Company)
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Statement of Stockholders' Equity
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June 17, 2011 (Inception) to July 31, 2012
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(Unaudited)
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Additional
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Deficit
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Total
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Common Stock, $0.001 Par Value
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Paid In
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Accumulated during
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Stockholders'
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Shares
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Amount
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Capital
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Development Stage
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Equity (Deficit)
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Stock issued for services - related party ($0.001/share) (June 2011)
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3,000,000 | $ | 3,000 | $ | - | $ | - | $ | 3,000 | |||||||||||
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Stock issued for cash ($0.05/share) (August 2011)
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272,400 | 272 | 13,348 | - | 13,620 | |||||||||||||||
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Stock issued for cash ($0.05/share) (September 2011)
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195,200 | 195 | 9,565 | - | 9,760 | |||||||||||||||
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Stock issued for cash ($0.05/share) (October 2011)
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177,400 | 177 | 8,693 | - | 8,870 | |||||||||||||||
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Capital contribution - related party
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40 | - | 40 | |||||||||||||||||
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Net loss - from June 17, 2011 (inception) to October 31, 2011
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- | - | - | (5,737 | ) | (5,737 | ) | |||||||||||||
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Balance - October 31, 2011
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3,645,000 | 3,645 | 31,645 | (5,737 | ) | 29,553 | ||||||||||||||
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Stock issued for cash ($0.05/share) (November 2011)
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94,000 | 94 | 4,606 | - | 4,700 | |||||||||||||||
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Net loss - nine months ended July 31, 2012
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- | - | - | (52,881 | ) | (52,881 | ) | |||||||||||||
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Balance - July 31, 2012
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3,739,000 | $ | 3,739 | $ | 36,251 | $ | (58,618 | ) | $ | (18,628 | ) | |||||||||
See accompanying notes to financial statements
F-3
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Comp Services, Inc.
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(A Development Stage Company)
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Statements of Cash Flows
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(Unaudited)
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Nine Months
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June 17, 2011
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June 17, 2011
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Ended
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(Inception) to
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(Inception) to
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CASH FLOWS FROM OPERATING ACTIVITIES:
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July 31, 2012
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July 31, 2011
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July 31, 2012
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Net loss
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$ | (52,881 | ) | $ | (3,000 | ) | (58,618 | ) | ||||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Stock issued for services - related party
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- | 3,000 | 3,000 | |||||||||
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Changes in operating assets and liabilities:
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Increase in accrued liabilities
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22,613 | - | 23,838 | |||||||||
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Net Cash Used In Operating Activities
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(30,268 | ) | - | (31,780 | ) | |||||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Capital contribution - related party
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- | - | 40 | |||||||||
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Proceeds from issuance of common stock
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4,700 | - | 36,950 | |||||||||
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Net Cash Provided By Financing Activities
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4,700 | - | 36,990 | |||||||||
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Net Increase (Decrease) in Cash
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(25,568 | ) | - | 5,210 | ||||||||
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Cash - Beginning of Period
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30,778 | - | - | |||||||||
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Cash - End of Period
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$ | 5,210 | $ | - | 5,210 | |||||||
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Supplemental Cash Flow Information:
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Cash Paid During the Period for:
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Income Taxes
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$ | - | $ | - | - | |||||||
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Interest
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$ | - | $ | - | - | |||||||
See accompanying notes to financial statements
F-4
Comp Services, Inc.
(A Development Stage Company)
Notes to Financial Statements
July 31, 2012
(Unaudited)
Note 1 Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Comp Services, Inc. (the “Company”), was incorporated in the State of Nevada on June 17, 2011.
The Company operates a website that connects its users to computer hardware and software product websites. The Company intends to generate commission revenue as a percentage of each sale made through its website.
The Company has generated revenue through computer consulting services.
Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, the rules and regulations of the United States Securities and Exchange Commission for interim financial information.
The financial information as of October 31, 2011, is derived from the audited financial statements presented in the Company’s Annual Report on Form S-1 for the period ended October 31, 2011. The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form S-1, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the period ended October 31, 2011.
Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted, pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the period ended July 31, 2012, are not necessarily indicative of results for the full fiscal year.
The Company’s fiscal year end is October 31.
F-5
Comp Services, Inc.
(A Development Stage Company)
Notes to Financial Statements
July 31, 2012
(Unaudited)
Development Stage
The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan.
Risks and Uncertainties
The Company intends to operate in an industry that is subject to rapid change. The Company's operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks associated with a development stage company, including the potential risk of business failure.
Use of Estimates
The preparation of unaudited interim financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the unaudited interim financial statements and accompanying notes. Such estimates and assumptions impact, among others, the fair value of share based payments.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.
Cash
The Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. The Company had no cash equivalents at July 31, 2012 and October 31, 2011.
Share Based Payments
Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants, are measured at their fair value on the awards’ grant date, and based on the estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded as a component of general and administrative expense.
F-6
Comp Services, Inc.
(A Development Stage Company)
Notes to Financial Statements
July 31, 2012
(Unaudited)
Earnings (loss) per Share
Basic earnings (loss) per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of warrants), and convertible debt, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. The Company has had no common stock equivalents since inception.
Since the Company reflected a net loss, the effect of considering any common stock equivalents, if outstanding, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.
Revenue Recognition
The Company recognizes revenue for its computer consulting services when the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the service has been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Recent Accounting Pronouncements
There are no recent accounting pronouncements that are expected to have an effect on the Company’s financial statements.
Note 2 Going Concern
As reflected in the accompanying financial statements, the Company has a net loss of $52,881 and net cash used in operations of $30,268 for the nine month period ended July 31, 2012. The Company also has a working capital deficit and stockholders’ deficit of $58,618 at July 31, 2012. In addition, the Company is in the development stage and has generated nominal revenues since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The ability of the Company to continue its operations is dependent on Management's plans, which include continuing to raise equity-based financing as well as development of the business plan.
F-7
Comp Services, Inc.
(A Development Stage Company)
Notes to Financial Statements
July 31, 2012
(Unaudited)
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 3 Fair Value
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
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Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
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Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
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Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.
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The Company's financial instruments consisted primarily of accrued liabilities. The carrying amount of the Company's financial instrument generally approximates its fair value as of July 31, 2012 and October 31, 2011, due to the short-term nature of this instrument.
At July 31, 2012 and October 31, 2011, the Company has no instruments that require additional disclosure.
F-8
Comp Services, Inc.
(A Development Stage Company)
Notes to Financial Statements
July 31, 2012
(Unaudited)
Note 4 Stockholders’ Equity
From June 17, 2011 (inception) to October 31, 2011, the Company issued the following shares for cash and services:
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Type
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Quantity
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Valuation
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Value per share
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Services – Chief executive officer and founder
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3,000,000 | $ | 3,000 | $ | 0.001 | |||||||
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Cash
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645,000 | 32,250 | $ | 0.05 | ||||||||
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Total
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3,645,000 | $ | 35,250 | $ | 0.001 - $0.05 | |||||||
In August 2011, the Company’s CEO contributed $40 to the Company for general working capital purposes.
From November 1, 2011 to July 31, 2012, the Company issued the following shares for cash:
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Type
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Quantity
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Valuation
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Value per share
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Cash
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94,000 | $ | 4,700 | $ | 0.05 | |||||||
In connection with the stock issued for services, the Company determined fair value based upon the value of the services provided, which was the most readily available evidence.
F-9
The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto contained elsewhere in this Report. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.
Overview
We were incorporated in the State of Nevada on June 17, 2011 as Comp Services, Inc. and are based in, Alhambra California. We are a development stage company. More specifically, the Company has constructed a website, www.computerbuyout.com, that will serve as a platform to connect website visitors to suppliers of high-quality computer, electronic, and software products. We intend to generate revenue by earning commissions on the sales made through the sites of our affiliates and through the installation services we offer on our website. We have established affiliate relationships with Google AdSense Publish Program, Amazon, Corel Draw, CompuVest, AVG Technologies, and Roxio.
To date, we have generated $3,000 in revenue. The revenue generated was for the installation and troubleshooting of computer hardware. However, there can be no assurance that we will continue to generate revenue.
We do not consider ourselves to be a blank check company and we do not have any plan, arrangement, or understanding to engage in a merger or acquisition with any other entity. Additionally, we have a specific business plan and have moved forward with our business operations. Specifically, while in the development stage, we are have established our interactive website and have taken steps to establish relationships with companies that will give us a commission based on any future sales made by customers following our site directing the user to the company’s product.
We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.
Business Strategy and Objectives
We offer the computer products of our affiliate partners through our website computerbuyout.com. We have generated $3,000 in revenue to date for the installation and troubleshooting of computer hardware. We generated our initial revenue in January 2012. We intend to focus our marketing to the Los Angeles area. Our website is fully functioning and does not need any further updates to process additional sales. We intend to earn a commission based on each product sold through our website. Sales are tracked using a tracking system, which is on our current domain. The Company’s primary objective is to offer a one-stop portal to reach diverse computer hardware and software product websites.
Our objective is to focus our efforts over the next twelve months on marketing and negotiating additional agreements with affiliates. The Company expects to accomplish this objective by implementing a well-built online marketing practice.
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We believe that our success will be based on a few key factors. First, the website is maintained by GoDaddy. The website requires low maintenance, and all affiliate partners are responsible for interacting and fulfilling orders made on their own websites. Our affiliate partners are solely responsible for all sales and shipment of products to the customer, as well as customer service. Second, our website is convenient for visitors because it offers a one-stop portal to reach diverse computer hardware, software and a network of alternate computer products for customers via worldwide-web. We also believe that we will obtain a strong reputation in the field by our affiliation with companies that are recognized as having the experience, credibility and dedication that visitors seek. Finally, we believe that the Company’s installation and troubleshooting of computer hardware services will continue to generate additional revenue.
Products and Services
ComputerBuyout.com is designed and created to link all our clients to the correct affiliate companies and their products. We offer a one-stop portal to reach diverse computer hardware and software and alternate computer products for customers via worldwide-web.
Comp Services, Inc. intends to gain a certain amount of commission based on each product. This is all tracked using a tracking system, which is on our current domain. Our commissions earned will be deposited directly into our bank account by our customers.
Our revenue will be based on commissions from affiliate sales As such, prices are controlled by our affiliate partners and we generate revenues in the form of commissions from all sales generated from our website. These sales are maintained and tracked through a sales tracking system, which is linked through our HTML coding system. Our commission rate varies based on the products sold.
Market Opportunity
We plan to link our website with other affiliate companies to increase our sales. Some advertising companies pay as much as 25% commission on each product. We intend to increase market visibility and become competitive in the market by combining 30 sub-domain directories, monthly advertisers, and Google AdSense.
Website Marketing Strategy & Revenue Generation
We are a start-up company focused on building stable and long-term marketing programs. As such, we are focused on a strategic Internet marketing campaign consisting of Google Ad words. We provide sub-domain links where visitors can buy products at the lowest cost from other companies who use our website as a platform to sell their products instead of building and maintaining their own website. We intend to earn a certain amount of commission based on each product sale. If a specific product is not selling, we can remove this product from our site at any time.
A few main marketing strategies including: Amazon Associates Program, Google AdSense Publish Program, Commission Junction Roxio, Commission Junction AVG, Commission Junction Corel Draw, Commission Junction Compuvest, Commission Junction Web Watcher, and Smooth Antivirus. These commission and associates programs will allow www.ComputerBuyout.com to earn up to 25% commission on certain computer products and software.
Employees
As of September, 12, 2012, we have one (1) employee. Our President and sole officer and director spends approximately 20 hours per week on Company matters.
Results of Operations For the Quarterly Period Ended July 31, 2012, First Nine Months of Fiscal Year 2012 and Since Inception June 17, 2011 to July 31, 2011.
Revenues. We had no revenues for the three month period ended July 31, 2012. For the nine month period ended July 31, 2012, we had $3,000 in revenue from the installation and troubleshooting of computer hardware. From inception to July 31, 2011, the Company had revenues of $-0-. The Company is in the process of negotiating contracts that will hopefully generate revenue in the future.
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Operating Expenses. Operating expenses for the three month period ended July 31, 2012 totaled $23,958, resulting in a net loss of $23,958. Our operating expenses for the three month period ended July 31, 2012 were comprised of $11,804 in legal fees, $3,023 in auditor fees, and $9,131 in additional expenses related to our being a public company.
Operating expenses for the nine month period ended July 31, 2012 totaled $55,881, and resulted in a net loss of $52,881 for the same period. Our operating expenses for the nine month period ended July 31, 2012 were comprised of $23,054 in legal fees, $9,273 in auditor fees, and $23,554 in additional expenses related to our being a public company.
Operating expenses from inception to July 31, 2011 totaled $3,000, and resulted in a net loss of $3,000 for the same period. Our operating expenses since inception to the end of the July 31, 2011 period were comprised of $3,000 for founder shares.
Officer Compensation. Gabriel Mendez, the sole officer and director, was compensated $1,735 during the three period ended July 31, 2012, pursuant to his employment agreement that compensated him at a minimum of $500 per month. During the nine month period ended July 31, 2012, Gabriel Mendez was compensated $6,251 pursuant to his employment agreement. From inception to July 31, 2011, Gabriel Mendez was compensated $3,000 for founder services.
Liquidity and Capital Resources
Our cash and cash equivalents totaled approximately $5,210 at July 31, 2012.
Net Cash Used in Operating Activities. Net cash of $30,268 was used for operating activities in the nine month period ended July 31, 2012. From June 17, 2011 (inception) to July 31, 2012, net cash of $31,780 was used for operating activities.
Net Cash Provided By Financing Activities. Net cash of $4,700 was provided from financing activities in the nine month period ended July 31, 2012. From June 17, 2011 (inception) to July 31, 2012, net cash of $36,990 was generated from financing activities.
Going Concern
Our financial statements have been prepared on a going concern basis. The Company has a net loss of $52,881 and net cash used in operations of $30,268 for the nine month period ended July 31, 2012. The Company also has a working capital deficit and stockholders’ deficit of $58,618 at July 31, 2012. As of July 31, 2012, we have generated minimal revenues since inception. We expect to finance our operations primarily through our existing cash, our operations and any future financing. However, there exists substantial doubt about our ability to continue as a going concern because we will be required to obtain additional capital in the future to continue our operations and there is no assurance that we will be able to obtain such capital, through equity or debt financing, or any combination thereof, or on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our capital needs. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, our operations would be materially negatively impacted. Therefore, there is substantial doubt as to our ability to continue as a going concern. Our ability to complete additional offerings is dependent on the state of the debt and/or equity markets at the time of any proposed offering, and such market’s reception of the Company and the offering terms. There is no assurance that capital in any form would be available to us, and if available, on terms and conditions that are acceptable.
Critical Accounting Policies
Development Stage
The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan.
Risks and Uncertainties
The Company intends to operate in an industry that is subject to rapid change. The Company's operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks associated with a development stage company, including the potential risk of business failure.
Use of Estimates
The preparation of unaudited interim financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the unaudited interim financial statements and accompanying notes. Such estimates and assumptions impact, among others, the fair value of share based payments.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.
Cash
The Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. The Company had no cash equivalents at July 31, 2012 and October 31, 2011.
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Share Based Payments
Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights, are measured at their fair value on the awards’ grant date, and based on the estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded as a component of general and administrative expense.
Earnings (loss) per Share
Basic earnings (loss) per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of warrants), and convertible debt, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. The Company has had no common stock equivalents since inception.
Since the Company reflected a net loss, the effect of considering any common stock equivalents, if outstanding, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.
Revenue Recognition
The Company recognizes revenue for its computer consulting services when the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the service has been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Recent Accounting Pronouncements
There are no recent accounting pronouncements that are expected to have an effect on the Company’s financial statements.
Comp Services, Inc. is a smaller reporting company and is therefore not required to provide this information.
(a) Evaluation of disclosure controls and procedures.
Management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on management’s evaluation, our chief executive officer and chief financial officer concluded that, as of July 31, 2012, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
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(b) Changes in internal control over financial reporting.
We review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.
There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
None.
None.
Not Applicable.
None.
(a) Exhibits
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Exhibit
Number
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Description
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31.1
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1*
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS **
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XBRL Instance Document
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101.SCH **
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XBRL Taxonomy Schema
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101.CAL **
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XBRL Taxonomy Calculation Linkbase
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101.DEF **
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XBRL Taxonomy Definition Linkbase
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101.LAB **
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XBRL Taxonomy Label Linkbase
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101.PRE **
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XBRL Taxonomy Presentation Linkbase
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* In accordance with SEC Release 33-8238, Exhibit 32.1 is furnished and not filed.
** Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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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.
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COMP SERVICES, INC.
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Date: September 12, 2012
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By:
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/s/ Gabriel Mendez
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Gabriel Mendez, President
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Chief Executive Officer
(Principal Executive Officer and Principal Financial Officer)
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