10QSB/A 1 java10qsba.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB/A (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 2003 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ______________to________________ Commission file number 000-50547 Java Express, Inc. (Exact name of small business issuer as specified in its charter) Nevada 88-0515333 (State or other jurisdiction of IRS Employer Identification No.) incorporation or organization) 5017 Wild Buffalo Avenue, Las Vegas, NV 89131 (Address of principal executive offices) (702) 839-1098 Issuer's telephone number ----------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practical date: February 13, 2004 - 4,501,000 ------------------------------- Transitional Small Business Disclosure Format (check one). Yes [ ] No [X] PART I - FINANCIAL INFORMATION Item 1. Financial Statements Our unaudited financial statements for December 31, 2003 begin on the next page. -2- JAVA EXPRESS, INC. (A Development Stage Company) BALANCE SHEETS (Unaudited) December 31, March 31, 2003 2003 ------------- ------------- ASSETS: Current Assets: Cash & Cash Equivalents $ 10,853 $ 7,724 Inventory 3,000 - ------------- ------------- Total Current Assets 13,853 7,724 ------------- ------------- Fixed Assets: Equipment 33,800 10,000 Furniture & Fixtures 15,925 7,500 Less Accumulated Depreciation (6,084) (2,816) ------------- ------------- Net Fixed Assets 43,641 14,684 ------------- ------------- Total Assets $ 57,494 $ 22,408 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY: Liabilities: Accounts Payable $ 750 $ 1,464 ------------- ------------- Total Liabilities 750 1,464 ------------- ------------- Stockholders' Equity: Preferred Stock, Par value $.001 Authorized 10,000,000 shares No Shares Issued - - Common Stock, Par value $.001 Authorized 50,000,000 shares, Issued 4,501,000 and 4,343,000 shares December 31, 2003 and March 31, 2003 4,501 4,343 Paid-In Capital 167,221 88,334 Deficit Accumulated During Development Stage (114,978) (71,733) ------------- ------------- Total Stockholders' Equity 56,744 20,944 ------------- ------------- Total Liabilities and Stockholders' Equity $ 57,494 $ 22,408 ============= ============= The accompanying notes are an integral part of these financial statements. -3-
JAVA EXPRESS, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS (Unaudited) Cumulative Since December 14, 2001 For the Three Months Ended For the Nine Months Ended Inception of December 31, December 31, Development 2003 2002 2003 2002 Stage ------------- ------------- ------------- ------------- ------------- Revenues: $ - $ - $ - $ - $ - Expenses: General & Administrative 16,270 2,968 51,280 40,931 122,915 ------------- ------------- ------------- ------------- ------------- Operating Loss (16,270) (2,968) (51,280) (40,931) (122,915) Other Income (Expense): Interest - - - (98) (98) Misc Income - - 2,300 - 2,300 Gain on Sale of Equipment 5,735 - 5,735 - 5,735 ------------- ------------- ------------- ------------- ------------- Loss Before Income Taxes (10,535) (2,968) (43,245) (41,029) (114,978) Income Taxes - - - - - ------------- ------------- ------------- ------------- ------------- Net Loss $ (10,535) $ (2,968) $ (43,245) $ (41,029) $ (114,978) ============= ============= ============= ============= ============= Basic & Diluted loss per share $ (0.01) $ - $ (0.01) $ (0.01) ============= ============= ============= ============= Weighted Average Shares 4,501,000 4,000,000 4,475,631 4,000,000 ============= ============= ============= ============= The accompanying notes are an integral part of these financial statements. -4-
JAVA EXPRESS, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS (Unaudited) Cumulative Since December 14, 2001 For the Nine Months Ended Inception of December 31, Development 2003 2002 Stage ------------- ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (43,245) $ (41,029) $ (114,978) Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: Depreciation 5,958 1,286 8,774 Stock Issued for Interest on Note - 98 98 Gain on Sale of Equipment (5,735) - (5,735) Changes in Operating Assets & Liabilities (Increase) Decrease in Inventory (3,000) - (3,000) Increase (Decrease) in Accounts Payable (714) 1,465 750 ------------- ------------- ------------- Net Cash Used in Operating Activities (46,736) (38,180) (114,091) ------------- ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from Sale of Equipment 13,045 - 13,045 Purchase of Furniture & Fixtures (8,425) (6,500) (13,425) Purchase of Equipment (33,800) (5,000) (46,300) ------------- ------------- ------------- Net Cash Used by Investing Activities (29,180) (11,500) (46,680) ------------- ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Sale of Common Stock 78,987 - 153,566 Capital Contributed by Shareholder 58 2,000 2,058 Proceeds from Note Payable - 16,000 16,000 ------------- ------------- ------------- Net Cash Provided by Financing Activities 79,045 18,000 171,624 ------------- ------------- ------------- Net (Decrease) Increase in Cash 3,129 (31,680) 10,853 Cash Beginning of Period 7,724 32,619 - ------------- ------------- ------------- Cash at End of Period $ 10,853 $ 939 $ 10,853 ============= ============= ============= The accompanying notes are an integral part of these financial statements. -5-
JAVA EXPRESS, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS (Unaudited) (Continued) Cumulative Since December 14, 2001 For the Nine Months Ended Inception of December 31, Development 2003 2002 Stage ------------- ------------- ------------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ - $ - $ - Franchise and income taxes $ - $ - $ - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Converted Note Payable to Common Stock $ - $ - $ 16,000 The accompanying notes are an integral part of these financial statements. -6-
JAVA EXPRESS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of accounting policies for Java Express, Inc. is presented to assist in understanding the Company's financial statements. The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. Interim Reporting The unaudited financial statements as of December 31, 2003 and for the three and nine month period then ended reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to fairly state the financial position and results of operations for the three and nine months. Operating results for interim periods are not necessarily indicative of the results which can be expected for full years. Nature of Operations and Going Concern The accompanying financial statements have been prepared on the basis of accounting principles applicable to a "going concern", which assume that the Company will continue in operation for at least one year and will be able to realize its assets and discharge its liabilities in the normal course of operations. Several conditions and events cast doubt about the Company's ability to continue as a "going concern". The Company has incurred net losses of approximately $115,000 for the period from December 14, 2001 (inception) to December 31, 2003 and requires additional financing in order to finance its business activities on an ongoing basis. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses. The Company's future capital requirements will depend on numerous factors including, but not limited to, the development and success of the Company's coffee kiosk consulting. These financial statements do not reflect adjustments that would be necessary if the Company were unable to continue as a "going concern". While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the "going concern" assumption used in preparing these financial statements, there can be no assurance that these actions will be successful. If the Company were unable to continue as a "going concern", then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported expenses, and the balance sheet classifications used. -7- JAVA EXPRESS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Organization and Basis of Presentation The Company was incorporated under the laws of the State of Nevada on December 14, 2001. The Company's fiscal year end is March 31. Since December 14, 2001, the Company is in the development stage, and has not commenced planned principal operations. Nature of Business The Company has no products or services as of December 31, 2003. The Company was organized to develop and market coffee through a retail coffee kiosk-store located in Las Vegas, Nevada malls. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Pervasiveness of Estimates The preparation of financial statements in conformity with generally accepted accounting principles required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Concentration of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits. -8- JAVA EXPRESS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and Equipment Property and equipment are stated at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on a straight-line basis for 5 to 7 years. Upon sale or other disposition of property and equipment, the cost and related accumulated depreciation or amortization are removed from the accounts and any gain or loss is included in the determination of income or loss. Expenditures for maintenance and repairs are charged to expense as incurred. Major overhauls and betterments are capitalized and depreciated over their useful lives. The Company identifies and records impairment losses on long-lived assets such as property and equipment when events and circumstances indicate that such assets might be impaired. The Company considers factors such as significant changes in the regulatory or business climate and projected future cash flows from the respective asset. Impairment losses are measured as the amount by which the carrying amount of intangible asset exceeds its fair value. Inventory Inventory consists of coffee machines and other related materials and is stated at the lower of cost or market. Loss per Share Basic loss per share has been computed by dividing the loss for the year applicable to the common stockholders by the weighted average number of common shares outstanding during the years. There were no common equivalent shares outstanding at December 31, 2003 and 2002. NOTE 2 - OTHER INCOME During 2003, in order to help cover the cost of general and administrative expenses, the company performed consulting services, in which they were paid $2,300. -9- JAVA EXPRESS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 3 - INCOME TAXES As of December 31, 2003, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $115,000 that may be offset against future taxable income through 2022. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carry forwards will expire unused. Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount. NOTE 4 - DEVELOPMENT STAGE COMPANY The Company has not begun principal operations and as is common with a development stage company, the Company has had recurring losses during its development stage. Continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to be successful in its planned activity, and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding and long term financing, which will enable the Company to operate for the coming year. NOTE 5 - COMMITMENTS As of December 31, 2003, all activities of the Company have been conducted by corporate officers from either their homes or business offices. Currently, there are no outstanding debts owed by the company for the use of these facilities and there are no commitments for future use of the facilities. NOTE 6 - COMMON STOCK TRANSACTIONS On December 15, 2001, 2,000,000 shares of common stock were issued at $.01 per share. On March 25, 2002, 2,000,000 shares of common stock were issued at $.02 per share. On July 9, 2002, the Company converted a $16,000 note payable including interest payable of $98 into 300,000 shares of Common Stock. On December 31, 2002, the Company issued 30,000 shares of common stock for $.50 per share. On February 15, 2003, the Company issued 13,000 shares of common stock for $.50 per share. On April 23, 2003, the Company issued 100,000 shares of common stock for $.50 per share. -10- JAVA EXPRESS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 6 - COMMON STOCK TRANSACTIONS (Continued) On May 18, 2003, the Company issued 10,400 shares of common stock for $.50 per share. On June 2, 2003, the Company issued 10,000 shares of common stock for $.50 per share. On June 26, 2003, the Company issued 23,000 shares of common stock for $.50 per share On July 9, 2003, the Company issued 5,000 shares of common stock for $.50 per share. On July 17, 2003, the Company issued 8,000 shares of common stock for $.50 per share. On July 23, 2003, the Company issued 1,600 shares of common stock for $.50 per share. -11- Item 2. Plan of Operation. General Java Express, Inc. was incorporated on December 14, 2001 under the laws of the State of Nevada for the purpose of selling coffee and other related items to the general public from retail coffee shop locations. Our principal business offices are located at 5017 Wild Buffalo Avenue, Las Vegas, Nevada 89131. The Company was organized to develop and market coffee through a retail coffee kiosk-store located in Las Vegas, Nevada malls. Limited Operations; Losses Since Inception Our activities to date have been limited to our formation, property site study, kiosk design, business plan development, some equipment purchase and sale, and the completion of various placements of our stock. We have experienced losses from inception of $114,978; and, during the nine month period ended December 31, 2003 losses equaled $43,245. A general breakdown of our losses since inception are as follows: legal, accounting and professional fees of approximately $13,622; travel, entertainment and promotion expenses of a little over $58,000; consulting expenses for our kiosk design and business plan of $15,424; rental costs for equipment storage of approximately $5,338; marketing expense of approximately $4,692; office supplies and postage of $4,944; telephone and utilities of approximately $1,000; computer and equipment maintenance of $1,033; bank fees and interest of approximately $342; taxes and licenses of $195; and miscellaneous expenses of $9,533. Our revenues during the nine months ended December 31, 2003 consisted of $2,300 during our second quarter from consulting performed by our president and $13,045 from sale of equipment discussed below. We have $10,853 cash on hand and $750 in current liabilities. Since inception, we have primarily financed our operations through the sale of our common stock. Purchase and Sale of Equipment In anticipation of the opening or our first kiosk, we spent approximately $53,103, net of depreciation, on coffee equipment and furniture which included espresso machines, stools, chairs and tables, a counter top, a commercial refrigerator, and various office equipment. Most of this equipment and furniture was purchased during the nine months ended December 31, 2003 from wholesalers. However, because we have not yet opened our initial business and the fact that some of the equipment/furniture was becoming out-of date, we sold some of our equipment for $13,045 during the quarter ended December 31, 2003, for a gross profit of $5,735. We have no commitments for capital expenditures for the next twelve months However, if we are successful in negotiating a lease for a kiosk, we need to spend approximately $40,000 on the construction os a coffee kiosk. Plan of Operation for the Next 12 Months Management intends to continue to pursue the first phase of our business plan over the next 12 months, that of establishing a coffee kiosk in Las Vegas, Nevada. Management also intends to pursue the "turnkey" coffee kiosk -12- idea and will continue to develop it in conjunction with establishing and maintaining relationships in the industry. Currently, the $10,853 in cash on hand is not sufficient to fund our operations over the next 12 months. Although most of our business development is being handled by our officers/director who are not taking any compensation, we will need approximately $ 70,000 - 100,000 over the next year to continue to develop our business. This includes an estimated $1,000 plus per month associated with a lease of a kiosk space if we are able to successfully negotiate one, and the $40,000 needed to construct the kiosk. It also includes the additional expenses associated with our reporting obligations which commence within 60 days of the initial filing of this registration statement and involve considerable time, energy and professional fees including legal and accounting. As an alternative to a lease and the $40,000 expense of lease improvements, we are also looking into possibly taking over an existing kiosk lease and remodeling it to meet our specifications. This would cost approximately $50,000 for the sublease and then approximately $15,000 for the remodel. The advantage would be monthly payments and the elimination of the initial construction costs. We also have approximately $45,000 in coffee equipment, furniture and fixtures on hand which we can sell to generate funds if necessary. The following is a breakdown of our principal activities in the next twelve months, as well as the anticipated funding and its source: Goal Estimated Cost Funding Source ---- -------------- -------------- Continue our day to day $ 16,000 Cash on hand; operations and comply with Cash flows from SEC reporting requirements operations, if any; Sale of additional equipment Continue to research market $ 1,000 Cash on hand and site locations or private loans Acquire a lease on suitable $ 12,000-$15,000 Private loan or property and make tenants sale of stock improvements Construct kiosk $ 40,000 Sale of stock OR OR Sublease kiosk $ 50,000 Monthly payments and remodel made from advances and cash flows from operations Acquire additional equipment Part of contract for kiosk, if needed $ 0 w/ coffee supplier Purchase inventory $ 2,000-$5,000 Cash on hand, loans, or stock sales -13- Begin operations; work towards $11,000-$30,000 Stock sales, loan, profitability; marketing; accrue Lance Musi- cant compensation, if necessary Hire and train additional $ dictated by loans, stock sales, employees if warranted. cash flows cash flows from operations During the next twelve months we believe that our current cash needs can be met in one of two ways: (1) by loans from our director, officers and stockholders and (2) by private placements of our common stock. In the past we have received loans from a shareholder, Dominion World Investments and small advancements for expenses from our sole director who, along with some shareholders, have indicated the possibility of future loans or advances, if needed. However, there are no written agreements with these parties regarding loans or advances and they are not obligated to provide any funds. If these parties do provide loans or advances, we may repay them, or we may convert them into common stock. We do not, however, have any commitments or specific understandings from any of the foregoing parties or from any other individual, in writing or otherwise, regarding any loans or advances or the amounts. Management also anticipates that additional capital may also be provided by private placements of our common stock. We intend to issue such stock pursuant to exemptions provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions. We do not currently intend to make a public offering of our stock. We also note that if we issue more shares of our common stock our shareholders may experience dilution in the value per share of their common stock. At this time, we have no commitments from anyone for financing of any type. We have suffered recurring losses from operations which raises substantial doubt as to our ability to continue as a going concern. If we are unable to negotiate a lease for a coffee kiosk and/or raise sufficient additional funding to start operations, we may be forced to cease operations entirely. Management could attempt to seek an alternative business opportunity although there is no guarantee that any such search for a business alternative would be successful. Item 3. Controls and Procedures The Company's Chief Executive and Financial Officer have concluded, based on an evaluation conducted within 90 days prior to the filing date of this Quarterly Report on Form 10-Q, that the Company's disclosure controls and procedures have functioned effectively so as to provide those officers the information necessary whether: (i) this Quarterly Report on Form 10-Q contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report on Form 10-Q, and -14- (ii) the financial statements, and other financial information included in this Quarterly Report on Form 10-Q, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Quarterly Report on Form 10-Q. There have been no significant changes in the Company's internal controls or in other factors since the date of the Chief Executive and Financial Officer's evaluation that could significantly affect these internal controls, including any corrective actions with regards to significant deficiencies and material weaknesses. PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K Exhibits The following exhibits are included as part of this report: Exhibit Number Title of Document ---------------------------------------------------------------------------- 31 Certification of Principal Executive and Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. -15- Reports on Form 8-K The Company did not file a report on Form 8-K during the three months ended December 31, 2003. 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. JAVA EXPRESS, INC.. (Registrant) DATE: March 24, 2004 By: /s/ Lance Musicant Lance Musicant President, Chief Executive Office, Chief Financial Officer and Director (Principal Executive & Accounting Officer) -16-