Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended October 31, 2012
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________ to ___________
Commission file number 000-53048
Concrete Leveling Systems, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 28-0851977
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
5046 E. Boulevard, NW, Canton, OH 44718
(Address of principal executive officer)
(330) 966-8120
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). YES [X] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] 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 [ ] NO [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 6,395,418
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Concrete Leveling Systems Inc.
Balance Sheets
October 31, 2012 and July 31, 2012
October 31 July 31
---------- ----------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash in bank $ 2,008 $ 9,658
Accounts receivable 800 800
Current portion of notes receivable 26,803 25,838
Prepaid expenses 3,332 --
Inventory 22,185 14,971
---------- ----------
Total Current Assets 55,128 51,267
---------- ----------
PROPERTY, PLANT AND EQUIPMENT
Equipment 700 1,900
Less: Accumulated depreciation (700) (1,900)
---------- ----------
Total Property, Plant and Equipment -- --
---------- ----------
OTHER ASSETS
Notes receivable, net of current portion 44,562 48,231
Deposits 10 10
---------- ----------
44,572 48,241
---------- ----------
TOTAL ASSETS $ 99,700 $ 99,508
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 82,252 $ 51,547
Notes payable - stockholders 62,750 62,750
Other accrued expenses 21,592 18,723
Deferred revenue 50,000 50,000
---------- ----------
Total Current Liabilites 216,594 183,020
---------- ----------
Stockholders' Equity (Deficit)
Common stock (par value $0.001)
100,000,000 shares authorized:
6,395,418 shares issued and outstanding
at October 31, 2012 and July 31, 2012 6,395 6,395
Additional paid-in capital 324,355 324,355
Accumulated (deficit) (447,644) (414,262)
---------- ----------
Total Stockholders' Equity (Deficit) (116,894) (83,512)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 99,700 $ 99,508
========== ==========
See notes to financial statements.
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Concrete Leveling Systems Inc.
Statements of Income
For the Three Months Ended October 31, 2012 and 2011
2012 2011
---------- ----------
(Unaudited) (Unaudited)
Equipment and parts sales $ 384 $ --
---------- ----------
Cost of Sales 183 --
---------- ----------
Gross Margin 201 --
---------- ----------
Expenses
Selling, general and administration 32,436 38,127
---------- ----------
(Loss) from Operations (32,235) (38,127)
Other Income (Expense)
Interest income 722 801
Interest expense (1,869) (1,502)
---------- ----------
Total Other Income (Expense) (1,147) (701)
---------- ----------
Net (Loss) Before Income Taxes (33,382) (38,828)
Provision for Income Taxes -- --
---------- ----------
Net (Loss) $ (33,382) $ (38,828)
========== ==========
Net (Loss) per Share - Basic and Fully Diluted $ (0.01) $(0.01)01)
========== ==========
Weighted average number of common shares outstanding -
basic and fully diluted 6,395,418 5,585,418
========== ==========
See notes to financial statements.
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Concrete Leveling Systems, Inc.
Statements of Cash Flows
For the Three Months Ended October 31, 2012 and 2011
2012 2011
-------- --------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $(33,382) $(38,828)
Adjustments to reconcile net (loss) to net
cash used in operating activities:
(Increase) in inventory (7,214) (400)
(Increase) in prepaid expenses (3,332) --
Increase in accounts payable 30,705 20,312
Increase in other accrued expenses 2,869 447
-------- --------
Net cash from (used by) operating activities (10,354) (18,469)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments on notes receivable 2,704 1,848
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from (payments to) stockholders -- (300)
-------- --------
Net Increase (decrease) in cash (7,650) (16,921)
Cash and equivalents - beginning 9,658 19,710
-------- --------
Cash and equivalents - ending $ 2,008 $ 2,789
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
Interest $ 226 $ 226
======== ========
Income Taxes $ -- $ --
======== ========
See notes to financial statements.
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Concrete Leveling Systems, Inc.
Notes to Financial Statements
October 31, 2012
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10?Q and
Article 8 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. For further
information, refer to the financial statements and footnotes thereto included in
the Concrete Leveling Systems, Inc. Form 10-K filing for the period ended July
31, 2012.
NOTE B - GOING CONCERN
As shown in the financial statements, the Company incurred a net loss of $33,382
for the three months ended October 31, 2012, and has incurred substantial net
losses since its inception. At October 31, 2012, current liabilities exceed
current assets by $116,894. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and classification of liabilities that might be
necessary in the event the Company cannot continue existence.
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Concrete Leveling Systems, Inc. ("CLS" or "The Company") became an
operating company in 2009. As of October 31, 2012, CLS has cash assets of $2,008
and has outstanding notes receivable from the sale of concrete leveling service
units in the amount of $71,365. As of October 31, 2012, the Company was carrying
inventory valued at $22,185.
The Company's cash flow is currently not sufficient to maintain operations.
However, the Company is receiving monthly payments from the self financed sale
of its concrete leveling service units, which creates some cash flow for the
Company. During the past fiscal year, CLS contracted to sell one concrete
leveling service unit. The terms of the sale provided that a portion of the
sales price would be financed through an installment promissory note. The
balance of the price was paid in cash. This cash was borrowed by the Buyer from
Mr. Edward Barth, President of the Company. In November, 2012, Mr. Edward Barth
attended a trade show in Toronto, Ontario known as Concrete Canada. The concrete
leveling service unit was well received and Mr. Barth received serious inquiries
at the show from several individuals in the concrete leveling industry. In
addition, since the show has closed, Mr. Barth has received a follow up
communication from a Buyer who has requested a price for a custom made unit. It
is believed that negotiations will continue between the company and the
interested parties through the winter and that one or more units will be
prepared and delivered by the end of the Company's fiscal year.
The Company has determined that it must maintain an inventory of at least
one (1) concrete leveling service unit in order to demonstrate its capabilities
to potential customers. Over the past months, CLS has borrowed funds to
fabricate a new unit, which will soon be completed. In the past, financing
issues have prevented potential purchasers from buying a service unit, however,
CLS has been able to locate a company that should be in the position to commence
financing service unit purchases.
CLS continues to have cash flow issues. As of October 31, 2012, it had
total current liabilities of $216,594. This amount includes deferred revenue in
the amount of $50,000 related to the self financed sales of concrete leveling
service units. It continues to experience negative income figures for the
quarter, but has received indications that interest in the service units is
increasing.
There are no off balance sheet arrangements involving CLS at this time.
Liquidity Issues. Since its inception, the Company has experienced
continued need for additional liquidity in order to provide for operating
expenses and to purchase components for the assembly of its product. The sale of
concrete leveling units, on credit, created a small amount of cash flow to the
Company during the quarter ended October 31, 2012. The amount received, however,
is not sufficient to sustain operations of the Company and the Company has been
accruing liabilities during the quarter. In the event the Company receives
orders for concrete leveling service units, it will seek a down payment in an
amount sufficient to construct the unit, in order not to have to borrow
additional funds.
Capital Resources. CLS has made no material commitments for capital
expenditures as of the end of its fiscal quarter ending October 31, 2012 and
does not anticipate any immediate need for material capital expenditures over
the next quarter.
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Result of Operations. In July 2012, CLS contracted to sell of one concrete
leveling service unit. This unit is expected to be delivered in a few weeks. At
present, the Company is negotiating for sales with several interested customers,
as the result of its attendance at Concrete Canada in Toronto, Ontario in
November, 2012. Gains in recent economic indicators have created optimism that
sales of the concrete leveling service units will increase by next spring. The
Company is hopeful that as the economy rebounds, credit will become more readily
available, resulting in additional concrete leveling unit sales.
ITEM 4 - CONTROLS AND PROCEDURES
Disclosure Controls and Procedures. Pursuant to Rule 13a-15(b) of the
Securities Exchange Act of 1934 ("Exchange Act"), the Company carried out an
evaluation, with the participation of the Company's management, which consists
of the Company's Chief Executive Officer (CEO) and Chief Financial Officer
(CFO), of the effectiveness of the Company's disclosure controls and procedures
(as defined under Rule 13a-15(e) of the Exchange Act) as of the end of the
period covered by this report. Based upon that evaluation, the Company concluded
that the Company's disclosure controls and procedures are effective to ensure
that information required to be disclosed by the Company in the reports that the
Company files or submits under the Exchange Act, is recorded, processed,
summarized and reported, within the time period specified by the United States
Securities and Exchange Commission rules and forms, and that such information is
accumulated and communicated to the Company's management, including the
Company's CEO and CFO, as appropriate, to allow timely decisions regarding
required disclosure.
Changes in Internal Control Over Financial Reporting. There are no changes
in the Company's internal controls over financial reporting that occurred during
the three months ended October 31, 2012 that have materially effected, or are
reasonably likely to materially effect, the internal controls over financial
reporting.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
To the best of its knowledge, management of CLS is not aware of any legal
proceedings in which CLS is currently involved.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities during this quarter.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
There are no defaults upon any senior securities.
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5 - OTHER INFORMATION
There are no items of information required to be disclosed pursuant to this
item at this time.
ITEM 6 - EXHIBITS
A. The following are filed as Exhibits to this report. The numbers refer to
the exhibit table of Item 601 of regulation S-K: Reference is hereby made to the
exhibits contained in the registration statement (Form SB-2) filed by Concrete
Leveling Systems, Inc.
Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) - Certification
Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) - Certification
Exhibit 32 - Section 1350 - Certification
Exhibit 101 - Interactive Data Files Pursuant to Rule 405 of Regulation S-T
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONCRETE LEVELING SYSTEMS, INC.
Date: December 12, 2012 By: /s/ Edward A. Barth
---------------------------------------------
Edward A. Barth, Principal Executive Officer
Date: December 12, 2012 By: /s/ Suzanne I. Barth
---------------------------------------------
Suzanne I. Barth, Principal Financial Officer
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