SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 2006
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
for the transition period from __________ to __________.
Commission File Number: 000-31451
---------
CYBERADS, INC.
--------------
(Exact name of small business issuer as specified in its charter)
Nevada 65-1000634
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
370 Amapola Ave. # 202, Torrance, California 90501
--------------------------------------------------------
(Address of principal executive office) (Zip Code)
1-800-288-3099
----------------
(Issuer's telephone number)
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
-------- --------
As of May 17, 2006, the number of outstanding shares of the issuer's common
stock was 132,846,915 shares.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: Yes [ ] No [X]
1
TABLE OF CONTENTS
PART I - FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS ............................................... 3
Consolidated Balance Sheets for the periods ended
March 31, 2006 and December 31, 2005......................... 3
Consolidated Statements of Operations for the Three Months
ended March 31, 2006 and 2005, and from inception of development
stage January 1, 2005 to March 31, 2006....................... 4
Consolidated Statement of Stockholders' Equity...................... 5
Consolidated Unaudited Statement of Cash Flows for the Three Months
ended March 31, 2006 and 2005, and from inception of development
stage January 1, 2005 to March 31, 2006....................... 6
Notes to Consolidated Financial Statements.......................... 7
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS .............................................. 13
ITEM 3. CONTROLS AND PROCEDURES............................................. 15
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS............................................................ 16
SIGNATURES................................................................... 17
2
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
March 31, December 31,
2006 2005
(unaudited)
------------------ -------------------
ASSETS
CURRENT ASSETS
Cash $ 52,399 $ -
Loan receivable 7,500 7,500
Prepaid expense 5,000 -
Deposits 15,000 15,000
------------------ -------------------
Total Current Assets 79,899 22,500
------------------ -------------------
TOTAL ASSETS $ 79,899 $ 22,500
================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 1,117,055 $ 1,063,251
Bank overdrafts 14,774 15,108
Accrued liabilities 1,075,923 971,762
Deferred revenue 173,453 172,453
Notes payable 294,192 294,192
Notes payable - related parties 1,315,661 1,226,161
------------------ -------------------
Total Current Liabilities 3,991,058 3,742,927
------------------ -------------------
COMMITMENTS AND CONTINGENCIES - -
------------------ -------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.001 par value; 5,000,000 shares authorized
Series A - 835,660 shares issued and outstanding 836 836
Series B - 1,000,000 shares issued and outstanding 1,000 1,000
Common stock, $.001 par value; 500,000,000 shares authorized,
132,846,915 and 123,351,777 shares issued and oustanding,
respectively 132,847 123,352
Additional paid-in capital 23,523,686 23,172,901
Accumulated deficit prior to current development stage (19,234,546) (19,234,546)
Accumulated deficit in development stage (8,334,982) (7,783,970)
------------------ -------------------
Total Stockholders' Equity (Deficit) (3,911,159) (3,720,427)
------------------ -------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 79,899 $ 22,500
================== ===================
3
The accompanying condensed notes are an integral part of these
interim financial statements.
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
From
inception of
development
stage
January 1,
Three Months Ended 2005
---------------------------------------------- to
March 31, March 31, March 31
2006 2005 2006
(unaudited) (unaudited) (unaudited)
---------------------- -------------------- -------------------
REVENUES $ - $ - $ -
---------------------- -------------------- -------------------
OPERATING EXPENSES
General and administrative 172,093 753,396 803,824
Marketing expenses 213,425 1,049,422 5,819,038
Selling expenses 146,856 304,897 1,559,109
---------------------- -------------------- -------------------
TOTAL OPERATING EXPENSES 532,374 2,107,715 8,181,971
---------------------- -------------------- -------------------
LOSS FROM OPERATIONS (532,374) (2,107,715) (8,181,971)
---------------------- -------------------- -------------------
OTHER INCOME (EXPENSES)
Other income - - 5,430
Gain on forgiveness of debt - - 2,500
Interest expense (18,638) - (96,770)
Loss on abandonment of assets - - (14,171)
---------------------- -------------------- -------------------
TOTAL OTHER INCOME (EXPENSES) (18,638) - (103,011)
---------------------- -------------------- -------------------
LOSS BEFORE TAXES (551,012) (2,107,715) (8,284,982)
INCOME TAXES - - -
---------------------- -------------------- -------------------
NET LOSS $ (551,012) $ (2,107,715) $ (8,284,982)
====================== ==================== ===================
NET LOSS PER COMMON SHARE,
BASIC AND DILUTED $ nil $ (0.08)
====================== ====================
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES
OUTSTANDING, BASIC AND DILUTED 128,826,507 26,521,465
====================== ====================
4
The accompanying condensed notes are an integral part of these
interim financial statements.
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
--------------------------------------------------------------------------------
Convertible
Preferred Stock Common Stock Additional
-------------------- ------------------------ Paid-in Deficit
Shares Amount Shares Amount Capital Accumulated Totals
----------- -------- ------------- ---------- ------------- -------------- -------------
Balance, December 31, 2004 835,660 $ 836 23,225,777 $ 23,226 $16,170,135 $(19,234,546) $(3,040,349)
Shares issued for consulting expense - - 99,626,000 99,626 6,846,766 - 6,946,392
Shares issued for debt - - 500,000 500 57,000 - 57,500
Shares issued in exchange for compensation 1,000,000 1,000 - - 99,000 - 100,000
Net loss for year ending December 31, 2005 - - - - - (7,783,970) (7,783,970)
----------- -------- ------------- ---------- ------------- -------------- -------------
Balance, December 31, 2005 1,835,660 $1,836 123,351,777 $123,352 $23,172,901 $(27,018,516) $(3,720,427)
Shares issued for consulting expense - - 9,495,138 9,495 350,785 - 360,280
Net loss for period ending March 31, 2006 - - - - - (501,012) (501,012)
----------- -------- ------------- ---------- ------------- -------------- -------------
Balance, March 31 2006 (unaudited) 1,835,660 $1,836 132,846,915 $132,847 $23,523,686 $(27,519,528) $(3,861,159)
=========== ======== ============= ========== ============= ============== =============
5
The accompanying condensed notes are an integral part of these
interim financial statements.
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
From
inception of
development
stage
January 1,
Three Months Ended 2005
--------------------------------------- to
March 31, March 31, March 31
2006 2005 2006
(unaudited) (unaudited) (unaudited)
----------------- ------------------ --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (501,012) $ (2,107,715) $ (8,284,982)
Stock issued for accrued wages - - 100,000
Common stock issued for compensation and services 360,280 2,073,000 7,306,672
Forgiveness of debt - - (2,500)
Loss on abandonment of assets - - 14,171
Adjustments to reconcile net loss to net cash
used by operating activities:
Increase in prepaid expense (5,000) - (5,000)
Increase (decrease) in accounts payable 3,804 (5,002) 197,833
Increase in accrued liabilities 104,161 - 422,787
Increase in deferred revenue 1,000 10,000 173,453
----------------- ------------------ --------------------
Net cash used by operating activities (36,767) (29,717) (77,566)
----------------- ------------------ --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in loan receivable - - (7,500)
Increase in deposits - - (6,415)
Purchase of marketing rights - (145,000) -
----------------- ------------------ --------------------
Net cash used by investing activities - (145,000) (13,915)
----------------- ------------------ --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from related parties 89,500 - 129,106
Increase (decrease) in bank overdrafts (334) - 14,774
Increase in notes payable - 185,644 -
----------------- ------------------ --------------------
Net cash provided by financing activities 89,166 185,644 143,880
----------------- ------------------ --------------------
Change in cash 52,399 10,927 52,399
CASH, BEGINNING OF PERIOD - - -
----------------- ------------------ --------------------
CASH, END OF PERIOD $ 52,399 $ 10,927 $ 52,399
================= ================== ====================
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ - $ - $ 5,502
================= ================== ====================
Income taxes paid $ - $ - $ -
================= ================== ====================
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for debt $ - $ - $ 57,500
================= ================== ====================
6
The accompanying condensed notes are an integral part of these
interim financial statements.
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED INTERIM NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2006
--------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
The foregoing unaudited interim financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Regulation S-B as promulgated by the
Securities and Exchange Commission. Accordingly, these financial statements do
not include all of the disclosures required by generally accepted accounting
principles in the United States of America for complete financial statements.
These unaudited interim financial statements should be read in conjunction with
the audited financial statements for the period ended December 31, 2005. In the
opinion of management, the unaudited interim financial statements furnished
herein include all adjustments, all of which are of a normal recurring nature,
necessary for a fair statement of the results for the interim period presented.
Operating results for the three-month period ending March 31, 2006 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2006.
As of January 1, 2005, the Company abandoned its previous business plan of
marketing cellular phone services and began a new development stage where it
intends to provide management and sales support to businesses focused in the
Extreme Sports/Lifestyle market segment.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
This summary of significant accounting policies of Cyberads, Inc, is presented
to assist in understanding the Company's financial statements. The financial
statements and notes are representations of the Company's management, which is
responsible for their integrity and objectivity. These accounting policies
conform to accounting principles generally accepted in the United States of
America, and have been consistently applied in the preparation of the financial
statements.
Development Stage Activities
----------------------------
The Company has been in the development stage since its inception of the current
development stage which was January 1, 2005 and has not realized any revenue
from operations. It will be engaged by various companies to provide management
and sales support to businesses focused in the Extreme Sports/Lifestyle market
segment.
Going Concern
-------------
As shown in the accompanying financial statements, the Company had negative
working capital of approximately $3,911,000 and an accumulated deficit in excess
of $27,500,000 incurred through March 31, 2006. The Company is currently putting
business plans in place which will, if successful, mitigate these factors which
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 in existence.
7
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED INTERIM NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2006
--------------------------------------------------------------------------------
Management has established plans designed to increase the sales of the Company's
products and decrease debt. These plans will include providing management and
sales support to businesses focused in the Extreme/Lifestyle market segment
where the Company anticipates earning commissions/fees on securing distribution
from business and products it represents.
An estimated $2 million is believed necessary to continue operations and
increase development through the next fiscal year. The timing and amount of
capital requirements will depend on a number of factors, including demand for
products and services and the availability of opportunities for international
expansion through affiliations and other business relationships. Management
intends to seek new capital from new equity securities issuances to provide
funds needed to increase liquidity, fund internal growth, and fully implement
its business plan.
Principles of Consolidation
---------------------------
The accompanying consolidated financial statements at March 31, 2006 include the
accounts of Cyberads and its wholly owned subsidiary IDS Cellular, Inc. ("IDS").
All significant transactions and balances among the companies included in the
consolidated financial statements have been eliminated. The operations of IDS
are currently idle.
Reclassifications
-----------------
Certain amounts from prior periods have been reclassified to conform to the
current period presentation. This reclassification has resulted in no changes to
the Company's accumulated deficit or net losses presented.
Revenue Recognition
-------------------
The Company will recognize revenue from contracts (1) upon actual sale
(disposition) of such contracts and (2) upon actual cash collections for ongoing
contracts. With these two types of revenue sources, revenue will thereby be
recorded when there is persuasive evidence that an arrangement exists, services
have been rendered, the contract price is determinable, and collectibility is
reasonably assured (or, in the case of ongoing contracts, actually collected).
Use of Estimates
----------------
The process of preparing financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements. Accordingly,
upon settlement, actual results may differ from estimated amounts.
NOTE 3 - BANK OVERDRAFTS
Bank overdrafts consist of checks written in excess of funds on deposit. The
underlying bank is used as an imprest account with automatic transfers from the
Company's general account as checks are presented.
8
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED INTERIM NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2006
--------------------------------------------------------------------------------
NOTE 4 - CAPITAL STOCK
Preferred Stock
---------------
The Company is authorized to issue 5,000,000 shares of preferred stock with a
par value of $0.001. As of December 31, 2005 the company had issued 835,660
shares of preferred series A, and 1,000,000 shares of preferred series B.
On June 26, 2005, the Company issued 1,000,000 shares of its preferred series B
stock in exchange for partial payment of accrued salary to an officer of the
Company. The shares were measured at $0.10 per, which was a fair price average
during the period of accrual. The Company recorded a reduction in accrued salary
liability as a result of this issuance.
Common Stock
------------
The Company is authorized to issue 500,000,000 shares of common stock. All
shares have equal voting rights, are non-assessable and have one vote per share.
Voting rights are not cumulative and, therefore, the holders of more than 50% of
the common stock could, if they choose to do so, elect all of the directors of
the Company.
During the quarter ended March 31, 2006, the Company issued 9,495,140 shares of
its common stock in exchange for consulting services for approximately $360,000.
The services were measured at the fair market value of the shares received on
the day the shares were issued.
During the year ended December 31, 2005, the Company issued 99,626,000 shares of
its common stock in exchange for consulting services for approximately
$6,946,000. The services were measured at the fair market value of the shares
received on the day the shares were issued.
During the year ended December 31, 2005, the Company issued 500,000 shares of
its common stock in exchange for debt of $60,000 and recorded a gain of
forgiveness of debt of $2,500 for this exchange. The services were measured at
the fair market value of the shares received on the day the shares were issued.
NOTE 5 - COMMON STOCK OPTIONS
Stock Options
-------------
The Company's stock option activity for options granted to employees and non
employees is summarized at March 31, 2006 as follows:
Fixed Plan
----------
Weighted average Shares Weighted average
Shares exercise price exercisable exercise price
-------------- ------------------ ------------------ -------------------
Outstanding at
December 31, 2004 1,900,000 $ 0.51 1,900,000 $ 0.51
Exercised - - - -
Expired (700,000) 1.03 (700,000) 1.03
Cancelled - - - -
-------------- ------------------ ------------------ -------------------
9
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED INTERIM NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2006
--------------------------------------------------------------------------------
-------------- ------------------ ------------------ -------------------
Outstanding at 1,200,000 0.51 1,200,000 0.51
December 31, 2005
Exercised - - - -
Expired - - - -
Cancelled - - - -
-------------- ------------------ ------------------ -------------------
Outstanding at
March 31, 2006 1,200,000 $ 0.51 1,200,000 $ 0.51
============== ================== ================== ===================
The Company's stock option outstanding and exercisable at March 31, 2006 is
summarized as follows:
Fixed Plan
----------
Options Outstanding Options Exercisable
------------------------------------------------------------------------------ -------------------------------------
Weighted Weighted
Average Average
Range of Prices Shares Remaining life Exercise price Shares exercise price
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
$0.04 - $0.99 1,200,000 2 months $ 0.27 1,200,000 $ 0.27
All of the above options will expire at the end of May 2006.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
The Company is non-compliant with respect to certain federal and state payroll
related taxes. Included in accrued payroll and payroll related liabilities at
March 31, 2006 is approximately $582,800 of unpaid payroll taxes.
In April 2004, the Company agreed to indemnify a former officer of the Company
for any loss he sustained in a settlement reached with a cellular phone service
provider against IDS and him personally. Under the indemnification, the Company
was obligated to pay an aggregate of $72,261 in installments of $5,000 each on
or before August 1, 2004 and September 1, 2004 with the balance due October 1,
2004. The indemnification had no effect on the accompanying financial statements
as the amount owed to the cellular phone service provider was previously
recorded as accounts payable in the records of IDS.
The Company is currently in negotiations with an individual who has threatened a
lawsuit against the Company, a former officer and a cellular phone service
provider. The Company has offered to issue the individual 250,000 shares of
common stock to settle any claims he may have against the Company. This
individual has verbally accepted the settlement offer. The offer had no effect
on the accompanying consolidated financial statements as consulting services
totaling $27,500 owed this individual was previously recorded as accounts
payable in the records of Cyberads. The Company has reserved 250,000 shares of
common stock to be issued under this settlement offer.
10
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED INTERIM NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2006
--------------------------------------------------------------------------------
A claim against the Company of approximately $500,000 has been threatened by the
Creditors Committee of World Com. The Company does not believe that it owes the
amount and intends to vigorously defend the claim. The claim has not been
pursued and the Company is not subject to any legal action pursuing this claim.
Any claims would have been offset by counter balancing claims of the Company
concerning funds owed to Cyberads for its prior trade relationship with World
Com.
NOTE 7 - LOAN PAYABLE
Notes payable consisted of the following:
March 31, December 31,
2006 2005
------------- -------------
Note payable; was due in installments of
$5,000 on January 15, 2004 and February 15,
2004 with final payment due March 15, 2004,
plus interest at 10% per annum; secured by
all of the Company's accounts receivable,
inventories, and computer hardware and
software and is personally guaranteed by two
former officers of the Company. In default. $ 109,000 $ 109,000
Note payable to cellular phone service
provider; due in installments of $92,596
payable on January 2, 2005 and August 2,
2005, plus interest at libor index. In
default. 185,192 185,192
------------- -------------
Total Notes Payable $ 294,192 $ 294,192
============= =============
The Company is currently in default with the repayment terms of the installment
note. As of March 31, 2006, the Company had accrued $16,221 of interest for
notes payable.
NOTE 8 - RELATED PARTY TRANSACTIONS
Related party transactions consisted of the following:
March 31, December 31,
2006 2005
------------- -------------
Advance due to a corporation owned by a
former officer of the Company, accruing
interest at libor index, due on demand and
unsecured. $ 54,000 $ 54,000
Advance due to a former officer of the
Company, bearing interest at 5% per annum,
due on demand and unsecured 1,229,555 1,139,661
Advance due to a current officer of the
Company, bearing no interest, due on demand,
and unsecured 32,500 32,500
------------- -------------
$ 1,226,161 $ 1,186,555
============= =============
11
CYBERADS, INC
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED INTERIM NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2006
--------------------------------------------------------------------------------
As of March 31, 2006, the Company had accrued $75,047 of interest for related
party notes payable.
NOTE 9 - SUBSEQUENT EVENT
On April 3, 2006, the Company paid $51,500 to a related party for partial
payment of its note payable owed for advances to a former officer of the
Company. The balance of this note to the related party on March 31, 2006 was
$1,229,555.
12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Management's discussion and analysis contains various forward-looking statements
within the meaning of the Securities and Exchange Act of 1934. These statements
consist of any statement other than a recitation of historical fact and can be
identified by the use of forward looking terminology such as "may", "expect",
"anticipate", "estimates", or "continue" or use of negative or other variations
of comparable terminology. We caution that these statements are further
qualified by important factors that could cause actual results to differ
materially from those contained in our forward looking statements, that these
forward looking statements are necessarily speculative, and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in our forward looking statements.
Management's discussion and analysis should be read in conjunction with the
financial statements and the notes thereto.
RESULTS OF OPERATIONS
---------------------
Three months ended March 31, 2006 compared to the Three months ended March 31,
--------------------------------------------------------------------------------
2005
----
Three months ended March 31 Increase
--------------------------- --------------------------
2006 2005 Amount %
------------ ------------ ------------ ------------
Revenue $ 0 $ 0 $ 0 -
============ ============ ============ ============
There were no revenues posted during the three months ended March 31, 2006, and
no revenues posted during the three months ended March 31, 2005. The Company has
been in development stage during both reporting periods.
Three months ended March 31 Decrease
--------------------------- --------------------------
2006 2005 Amount %
------------ ------------ ------------ ------------
General & administrative $ 172,093 $ 753,396 ($581,303) 77%
============ ============ ============ ============
General & administrative expenses for the three months ended March 31, 2006
decreased by $581,303 to the comparable period in 2005. The G&A expenses in the
three months ended 2005 included Trade Show administration expenses related to
XBoard. This decrease in G & A expenses in the three month period ending March
31, 2006 is directly related to the Company not taking part in trade show events
and administrative activities on XBoard.
Three months ended March 31 Decrease
--------------------------- --------------------------
2006 2005 Amount %
------------ ------------ ------------ ------------
Selling Expense $ 146,856 $ 304,897 $ (158,041) (52)
============ ============ ============ ============
Selling expense of $146,856 for the three months ended March 31, 2006 was
related to the Company's continued development of Rhino, XBoard, and Planet X
TV. Selling Expenses
13
decreased by $158,041 compared to the three months ended March 31, 2005 due to
reduced activities on XBoard as noted above.
Three months ended March 31 Increase
--------------------------- --------------------------
2006 2005 Amount %
------------ ------------ ------------ ------------
Interest Expense $ 18,638 $ 0 $ 18,638 0
============ ============ ============ ============
Interest expense of $18,638 for the three months ended March 31, 2006 was
attributable to the Company's accrual of interests on related parties notes.
FINANCIAL POSITION & LIQUIDITY AND CAPITAL RESOURCES
----------------------------------------------------
As of March 31, 2006 compared to March 31, 2005:
------------------------------------------------
Three months ended March 31 Increase
--------------------------- --------------------------
2006 2005 Amount %
------------ ------------ ------------ ------------
Cash $ 52,399 $ 0 $ 52,399 0
============ ============ ============ ============
The increase in cash results from the receipt of $50,000 on March 30 from a
shareholder loan.
14
ITEM 3. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange of 1934, within 90 days
prior to the filing of this report, we carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures. This evaluation was carried out under the supervision and with the
participation of our management, principally our President and Chief Executive
Officer. Based on that evaluation, we concluded that our disclosure controls and
procedures are effective. There have been no significant changes in our internal
controls subsequent to the date we carried out our evaluation. Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rule and form. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in our reports is accumulated and communicated to management.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS
Exhibit
Number Description of Document
3.1(a) * Articles of Incorporation
3.1(b) * Articles of Amendment
3.2 * Bylaws
4.0 * Form of Stock Certificate
4.1 * Certificate of Designation of Series B Convertible Preferred Stock
4.2 * Certificate of Designation of Series C Convertible Preferred Stock
31.1 Rule 13a-14(a)/15d-14(a) Certification
32.1 Section 1350 Certification
* Incorporated by reference
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this amended report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: May 22, 2006 CYBERADS, INC.
By: /s/ JEFF CRISWELL
--------------------------
Jeff Criswell, President
15