U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2003
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-25097
ADVANCED 3-D ULTRASOUND SERVICES, INC. f/k/a/ YSEEK, INC.
(Exact Name of Small Business Issuer in Its Charter)
Florida 65-0783722
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7732 N. Mobley Drive, Odessa, Florida 33556
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 926-3298
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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
The number of shares of the registrant's common stock, par value $.0001 per
share, outstanding as of September 30, 2003, was 44,231,765.
Part I - Financial Information
Advanced 3-D Ultrasound Services, Inc.
(Formerly Yseek, Inc.)
FINANCIAL STATEMENTS
September 30, 2003
ADVANCED 3-D ULTRASOUND SERVICES, INC. (FORMERLY YSEEK, INC.)
BALANCE SHEET
September 30,
2003
____________
(unaudited)
ASSETS
Current assets
Cash $ 137
____________
Total Assets $ 137
____________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 44,559
____________
Commitments and contingencies
Stockholders' equity
Common stock; $.0001 par value; 50,000,000 shares
authorized; 44,231,765 shares issued and outstanding 4,423
Paid in capital 8,520,400
Accumulated deficit (8,569,245)
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Total stockholders' equity (44,422)
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Total Liabilities and Stockholders' Equity $ 137
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The accompany notes are an integral part of the financial statements.
Advanced 3-D Ultrasound Services, Inc. (Formerly Yseek, Inc.)
ADVANCED 3-D ULTRASOUND SERVICES, INC. (FORMERLY YSEEK, INC.)
STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30,
---------- ---------- ------------ ------------
2003 2002 2003 2002
---------- ---------- ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ - $ - $ - $ 254
---------- ---------- ------------ ------------
Expenses
Selling, general and administrative 34,009 23,297 153,682 60,900
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Total expenses 34,009 23,297 153,682 60,900
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Other income (expense)
Interest expense - 6,002 (9) (2,853)
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Total other income (expense) - 6,002 (9) (2,853)
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Loss from continuing operations (34,009) (17,295) (153,691) (63,499)
Discontinued operations
Loss from discontinued operations
of internet business - 543 - 33,329
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Net loss $ (34,009) $ (17,838) $ (153,691) $ (96,828)
---------- ---------- ------------ ------------
Loss per common share
From continuing operations $ - $ - $ - $ -
Discontinued operations - loss
from operations - - - -
---------- ---------- ------------ ------------
Total loss per share $ - $ - $ - $ -
---------- ---------- ------------ ------------
Weighted average common
shares outstanding 43,660,098 24,051,989 40,748,691 22,894,063
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The accompany notes are an integral part of the financial statements.
Advanced 3-D Ultrasound Services, Inc. (Formerly Yseek, Inc.)
ADVANCED 3-D ULTRASOUND SERVICES, INC. (FORMERLY YSEEK, INC.)
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
Nine Months Ended
September 30,
2003 2002
(unaudited) (unaudited)
Cash flows from operating activities
Net loss $ (153,691) $ (96,828)
Adjustments to reconcile net loss to net cash
used in operating activities:
Stock issued to consultants 15,000 -
Amortization - 49,050
Decrease (increase) in receivables - 2,025
Increase in accounts payable and accrued expenses 5,530 3,564
Total adjustments 20,530 54,639
Net cash used in operating activities (133,161) (42,189)
Cash flows from financing activities
Payments on notes payable - (68,201)
Proceeds from issuance of loans payable - 23,314
Net advances from a stockholder - 3,941
Proceeds from sale of common stock 126,300 105,000
Net cash provided by financing activities 126,300 64,054
Net increase (decrease) in cash (6,861) 21,865
Cash, beginning of period 6,998 238
Cash, end of period $ 137 $ 22,103
The accompany notes are an integral part of the financial statements.
Advanced 3-D Ultrasound Services, Inc. (Formerly Yseek, Inc.)
Supplemental disclosures of noncash investing and financing activities:
In September, 2002, the Company received a stock subscription for 700,000 common
shares in exchange for a future cash payment of $10,500
Supplemental disclosure of cash flow information:
The Company paid $9 and $2,853 in interest for the nine months ended September
30, 2003 and 2002, respectively.
NOTES TO FINANCIAL STATEMENTS
September 30, 2003
The information presented herein as of September 30, 2003, and for the three and
nine-months ended September 30, 2003 and 2002, is unaudited.
(1) Organization:
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The Company changed its name from Yseek, Inc. to Advanced 3-D Ultrasound
Service, Inc. on May 2, 2003.
(2) Basis of Presentation:
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The accompanying financial statements of Advanced 3-D Ultrasound Services, Inc.
(Formerly Yseek, Inc.) (the Company) have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal required
adjustments) considered necessary for a fair presentation have been included.
Operating results for the nine-month period ended September 30, 2003, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2003. For further information, refer to the financial statements
and footnotes included in the Company's annual report of Form 10-KSB for the
year ended December 31, 2002.
Net loss per common share is computed in accordance with the requirements of
Statement of Financial Accounting Standards No. 128 (SFAS 128). SFAS 128
requires net loss per share information to be computed using a simple weighted
average of common shares outstanding during the periods presented. In computing
diluted loss per share, warrants exercisable into common shares were excluded
because the effect is antidilutive.
(3) Loss on Impairment of Software License and Discontinued Operations:
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Late in 2000, the Company launched an internet search portal called Yseek.com
based on a ten-year license it acquired in late 2000. During 2001 and 2002, the
Company entered into several short-term revenue sharing agreements with internet
host sites to generate traffic to the site and generate revenues. The Company's
management with internet related experience resigned from the Company in
September 2002.
In December 2002, current management determined they would dispose of their
software license for an internet search portal called Yseek.com due to the lack
of revenues, experience of current management with internet businesses and due
to the lack of funds available to generate sufficient revenues from the site.
Management will attempt to sell the license however there is not an active
market for such an asset, and no buyer is presently identified. As of December
31, 2002, the net book value of the license was $517,754. The Company recognized
a loss from impairment of $517,754 in 2002. The Company discontinued internet
operations in December 2002.
Amortization expense on software license, which is included in loss from
discontinued operations, was $32,700 for the nine months ended September 30,
2002.
ADVANCED 3-D ULTRASOUND SERVICES, INC. (FORMERLY YSEEK, INC.)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(3) Loss on Impairment of Software License and Discontinued
Operations:(Continued)
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Summarized results of internet operations for the nine months ended September
30, 2003 and 2002, are as follows:
Nine Months Ended
September 30,
2003 2002
Net sales $ - $ -
Operating loss $ - $ (33,329)
Loss from discontinued operations $ - $ (33,329)
(4) Stock Transactions:
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During the nine months ended September 30, 2003, the Company sold 8,420,000
shares of common stock for cash of $126,300.
On February 1, 2003, the Company entered into a consulting agreement with an
individual to investigate a potential business opportunity for a period of
ninety days. In exchange for services, the consultant will receive $10,000 and
1,000,000 common shares. The Company recognized an expense of $15,000 related to
the shares issued which represents the market value of the shares.
(5) Subsequent Events:
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Subsequent to September 30, 2003, the Company sold 1,600,000 shares of common
stock for cash of $24,000.
Item 2. Management's Discussion and Analysis or Plan of Operation
PLAN OF OPERATION
During the first eight months of 2002, the Company's board of directors and
officers were affiliated with companies and individuals with substantial
experience in the internet industry. Prior to 2002, strategic alliances and
consulting agreements had allowed the Company to acquire management and
marketing expertise with these individuals and companies. In September 2002
these officers and directors elected new officers and directors and then
resigned. The new officers and directors have been involved with the company
since its inception, except for the period from April 2001 to September 2002.
In late 2000, the Company acquired a ten-year software license for the use of a
keyword biddable search engine and related domain names. The Company entered
into two traffic promotion agreements whereby each promoter provided hits to the
Company web site. The Company issued stock in exchange for these agreements
enabling the Company to move forward on its plans without the use of any funds.
The stock issued under the traffic promotion agreements was returned in
September 2002. New management elected in September 2002 has decided not to
pursue an Internet related business and therefore recognized an impairment loss
for the unamortized value of the search engine in the fourth quarter of 2002.
Management will attempt to sell the remaining term of the license however there
is no ready market and the ultimate proceeds, if any, cannot be determined.
The Company's plans include acquiring or developing profitable business
ventures. On February 1, 2003, the Company entered into a consulting agreement
with an individual to investigate a potential business opportunity for a period
of ninety days. In exchange for these services, the consultant will receive
$10,000 and 1,000,000 common shares. Currently the Company is actively pursuing
the business of 3-D fetal photography. 3-D fetal photography provides clear
color photographs of an unborn child. The Company believes recent improvements
make this technology practical and desired by parents. In response to the
Company's decision to pursue this business venture, the Company received
shareholder approval to pursue this venture and therefore changed its name to
Advanced 3-D Ultrasound Services, Inc. at its shareholders meeting on May 2,
2003.
The Company is currently working on the business model for a 3-D fetal
photography center and a marketing plan for the first center. The Company is
also pursuing a lease for the center, determining the design of such space and
negotiating with vendors to provide equipment. The Company is also pursuing
trademark protection.
The Company's plans to develop a profitable 3-D fetal photography business will
require additional funds. The Company has adopted a subscription agreement to
raise $300,000 of which $200,000 will be used for fetal photography development
and $100,000 used for working capital. In the second and third quarters of 2003,
the Company received an additional $43,050 and $26,250, respectively from the
sales of common stock.
From September 2002 through December 2002, the Company received $138,730 from
sales of common stock, of which $35,000 was from one of the new officers who is
a major stockholder. This initial funding was used primarily to pay off debts
and to fund minimal administrative costs. In the first quarter of 2003, the
Company received an additional $57,000 from sales of common stock. This funding
was used to fund administrative costs and to fund the consulting agreement noted
in a preceding paragraph. The Company plans to fund its near-term operations
through additional sales of common stock.
As of September 30, 2003 the Company had little available cash. However, the
Company's operations are currently minimal and the cash outflows have been
substantially reduced. Additionally the Company's officers and board members
have agreed to fund the Company's current level of operations if necessary.
Additionally, the Company sold stock subsequent to September 30, 2003 totaling
$24,000.
In October 2002 the Company entered into employment agreements with its vice
president and treasurer. The employment agreements are for the period October 1,
2002 through September 30, 2003. Compensation under both agreements will be
4,500,000 common shares valued at $.01 per share. Bonuses can be paid at the
discretion of the Board.
Item 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
The Company's principal executive officer and principal financial officer, after
evaluating the effectiveness of the Company's disclosure controls and procedures
(as defined in Exchange Act Rule 13a-14(c)) within 90 days prior to the filing
of this report, has concluded that, based on such evaluation, the Company's
disclosure controls and procedures were adequate and effective to ensure that
material information relating to the Company, including its consolidated
subsidiaries, was made known to them by others within those entities,
particularly during the period in which this Quarterly Report on Form 10-QSB was
being prepared.
(b) Changes in internal controls.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation, nor were there any significant deficiencies or material
weaknesses in the Company's internal controls. Accordingly, no corrective
actions were required or undertaken.
Part II.
Item. 2. Changes in Securities
From July 1, 2003 to September 30, 2003, Registrant sold a total of 1,750,000
common shares for a cash purchase price of $.015 per share as follows:
Name Number Common Shares Purchased Date
Theodore Grevas 350,000 07-07-03
Gurwitz Enterprises, Ltd. 500,000 07-08-03
Timothy T. Berrong 500,000 08-14-03
Douglas W. Kile 100,000 08-29-03
Ian Stewart 200,000 09-04-03
Craig Huber 100,000 09-11-03
All sales were made pursuant to Section 4(2) of the 1933 Act. The proceeds of
the sale of these securities ($26,250.00) were used to provide operating
capital.
Item 6. Exhibits and Reports on Form 8-K
Exhibits
Exhibit Description Number
(2) Plan of Acquisition, Reorganization,
Arrangement, Liquidation or Succession................................None
(4) Instruments defining the rights of holders, including Indentures None
(10) Material contracts ...................................................None
(11) Statement re: computation of per share earnings............... ...Note 2 to
Financial
Statements
(15) Letter re: Unaudited Interim Financial Information....................None
(18) Letter on change in accounting principles.............................None
(19) Report Furnished to Security Holders .................................None
(22) Published report regarding matters submitted to
vote..................................................................None
(23) Consents of Experts and Counsel.......................................None
(24) Power of Attorney.....................................................None
(99) Additional Exhibits...................................................None
99.1 Certification of CEO and CFO........................................*
99.2 Section 1350 certification *
* Filed herewith
(b) REPORTS ON FORM 8-K:
Report on Form 8-K filed November 4, 2003, reporting Item 4.
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.
YSEEK, INC.
Dated: November 6, 2003 By: /s/ David Weintraub
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David Weintraub
Chief Executive Officer
Chief Financial Officer