10QSB/A 1 lilm10qsba2-093006.txt LILM 10QSBA #2 093006 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A [Amendment No. 2] [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 2006 or [ ] 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 000-51872 LILM, INC. ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Nevada 87-0645394 ------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1390 South 1100 East # 204, Salt Lake City, Utah 84105-2463 (Address of principal executive offices) (801) 322-0253 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] 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 practicable date. Class Outstanding as of June 8, 2007 ----------------------------- ------------------------------ Common Stock, $.001 par value 2,583,750 Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] -1- PART I Explanatory Statement This Amendment No. 2 to the LILM, Inc. Form 10-QSB for the quarterly period ended September 30, 2006 is being filed to include restated financial statements for the period covered. Item 1. Financial Statements The accompanying unaudited restated balance sheets of LILM, Inc., and Subsidiary and LiL Marc, Inc. (predecessor) (development stage company) as of September 30, 2006 and December 31, 2005, related unaudited statements of income and cash flows for the three and nine months ended September 30, 2006 and 2005 and the period April 22, 1997 (date of inception of predecessor) to September 30, 2006, have been prepared by management in conformity with United States generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the period ended September 30, 2006, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2006 or any other subsequent period. LILM, INC. (A Development Stage Company) FINANCIAL STATEMENTS September 30, 2006 and December 31, 2005 -2-
LILM, INC. and SUBSIDIARY and LIL MARC INC. (predecessor) ( Development Stage Company ) CONSOLIDATED BALANCE SHEETS September 30, 2006 and December 31, 2005 RESTATED ----------------------------------------------------------------------------------------- Sept 30, Dec 31, 2006 2005 ----------- ----------- ASSETS CURRENT ASSETS Cash $ 12,731 $ 21,530 ----------- ----------- Total Current Assets 12,731 21,530 ----------- ----------- OFFICE EQUIPMENT - net of depreciation 1,189 1,469 ----------- ----------- $ 13,920 $ 22,999 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable - related party $ 5,797 $ 5,797 Accounts payable -- 250 ----------- ----------- Total Current Liabilities 5,797 6,047 ----------- ----------- STOCKHOLDERS' EQUITY Common stock 25,000,000 shares authorized at $0.001 par value; 2,583,750 shares issued and outstanding 2,584 2,584 Capital in excess of par value - RESTATED 135,111 135,111 Accumulated deficit during development stage-RESTATED (129,572) (120,743) ----------- ----------- Total Stockholders' Equity 8,123 16,952 ----------- ----------- $ 13,920 $ 22,999 =========== =========== The accompanying notes are an integral part of these financial statements.
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LILM, INC. and SUBSIDIARY and LIL MARC INC. (predecessor) ( Development Stage Company ) CONSOLIDATED STATEMENT OF OPERATIONS For the Three and Nine Months Ended September 30, 2006 and 2005 and the Period April 22, 1997 (date of inception of predecessor) to September 30, 2006 -------------------------------------------------------------------------------------------------------------- RESTATED Three Months Nine Months -------------------------- -------------- ----------- Sept 30, Sept 30, Sept 30, Sept 30, Apr 22, 1997 2006 2005 2006 2005 to Sept 30, 2006 ----------- ----------- ----------- ----------- ---------------- REVENUES $ 474 $ 700 $ 2,718 $ 877 $ 17,452 ----------- ----------- ----------- ----------- ----------- EXPENSES Administrative 3,319 740 11,057 9,891 118,165 Royalties -- -- 16 -- 81 Depreciation and amortization 158 937 474 1,406 28,778 ----------- ----------- ----------- ----------- ----------- 3,477 1,677 11,547 11,297 147,024 ----------- ----------- ----------- ----------- ----------- NET LOSS $ (3,003) $ (977) $ (8,829) $ ( 10,420) $ (129,572) =========== =========== =========== =========== =========== NET LOSS PER COMMON SHARE Basic and diluted $ -- $ -- $ -- $ -- ----------- ----------- ----------- ----------- AVERAGE OUTSTANDING SHARES Basic (stated in 1000's) 2,548 2,548 2,584 2,548 ----------- ----------- ----------- ----------- The accompanying notes are an integral part of these financial statements.
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LILM, INC. and SUBSIDIARY and LIL MARC INC. (predecessor) ( Development Stage Company ) CONSOLIDATED STATEMENT OF CASH FLOWS For the Nine Months Ended September 30, 2006 and 2005 and the Period April 22, 1997 (date of inception of predecessor) to September 30, 2006 --------------------------------------------------------------------------------------------------------- RESTATED Sept 30, Sept 30, Apr 22, 1999 to 2006 2005 Sept 30, 2006 ----------- ----------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (8,829) $ (10,420) $ (129,572) Adjustments to reconcile net loss to net cash provided by operating activities Issuance of common stock for expenses -- -- 8,700 Depreciation and amortization 474 1,406 28,628 Changes in accounts payable (250) -- (4,388) Contributions to capital - expenses -- -- 100 Net Cash Flows Used in Operations (8,605) (9,014) (96,532) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of patent -- -- (28,650) Purchase office equipment (194) (504) (2,096) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Changes in advances from related parties -- -- 5,797 Proceeds from issuance of common stock net of costs -- -- 134,212 ----------- ----------- ----------- Net Change in Cash (8,799) (9,518) 12,731 Cash at Beginning of Period 21,530 33,363 -- ----------- ----------- ----------- Cash at End of Period $ 12,731 $ 23,845 $ 12,731 =========== =========== =========== NON CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES Issuance of 922,900 common shares for a patent - 2000 $ 11,963 ----------- Contributions to capital - expenses - 2001 100 ----------- The accompanying notes are an integral part of these financial statements.
-5- LILM, INC. and SUBSIDIARY and LIL MARC INC. (predecessor) ( Development Stage Company ) NOTES TO FINANCIAL STATEMENTS September 30, 2006 -------------------------------------------------------------------------------- 1. ORGANIZATION The Company was incorporated under the laws of the state of Nevada on December 30, 1999 with authorized common stock of 25,000,000 shares with a par value of $.001. The principal business activity of the Company is to manufacture and market the "LiL Marc" urinal used in the training of young boys. During January 2005 the Company organized "LiL Marc, Inc.", in the state of Utah, and transferred all its assets and liabilities to LiL Marc Inc. in exchange for all of the outstanding stock of LiL Marc, Inc. for the purpose of continuing the operations of the Company in the subsidiary. "LiL Marc, Inc." (predecessor) was incorporated under the laws of the state of Nevada on April 22, 1997 for the purpose of marketing and sales of the "Lil Marc" training urinal for use by young boys. The marketing and sales activity was transferred to LILM, Inc. on December 30, 1999. Included in the following financial statements are the combined statement of operations of LIL Marc, Inc. (predecessor) for the period April 22, 1997 to December 30, 1999 and LILM, Inc., and its subsidiary, for the period December 30, 1999 to September 30, 2006. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Methods ------------------ The Company recognizes income and expenses based on the accrual method of accounting. Dividend Policy --------------- The Company has not yet adopted a policy regarding payment of dividends. Income Taxes ------------ The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized. On September 30, 2006, the Company had a net operating loss available for carryforward of $77,595. The income tax benefit of approximately $23,300 from the carryforward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful since the Company has not started full operations. The net operating loss will expire starting in 2021 through 2027. -6- LILM, INC. and SUBSIDIARY and LIL MARC INC. (predecessor) ( Development Stage Company ) NOTES TO FINANCIAL STATEMENTS (Continued) September 30, 2006 -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Revenue Recognition ------------------- Revenue is recognized upon the completion of the sale and shipment of the training urinal products. Advertising and Market Development ---------------------------------- The company expenses advertising and market development costs as incurred. Financial Instruments --------------------- The carrying amounts of financial instruments, including cash and accounts payable, are considered by management to be their estimated fair values due to their short term maturities. Basic and Diluted Net Income (Loss) Per Share --------------------------------------------- Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report. Financial and Concentrations Risk --------------------------------- The Company does not have any concentration or related financial credit risk. Estimates and Assumptions ------------------------- Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements. Recent Accounting Pronouncements -------------------------------- The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements. -7- LILM, INC. and SUBSIDIARY and LIL MARC INC. (predecessor) ( Development Stage Company ) NOTES TO FINANCIAL STATEMENTS (Continued) September 30, 2006 -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Principles of Consolidation --------------------------- The accompanying consolidated financial statements include the accounts of the Company and its subsidiary from its inception. All significant intercompany accounts and balances have been eliminated in consolidation. 3. PATENT The Company acquired a patent, from a related party, for the "LiL Marc" training urinal and is shown at the predecessor cost, less amortization. The patent was issued on July 16, 1991 and is fully amortized. The terms of the acquisition of the patent includes a royalty of $.25, due to the inventor, on the sale of each training urinal. 4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES Officer-directors have acquired 73% of the outstanding common stock of the Company and have made demand, no interest, loans to the Company of $ 5,797. 5. PRIOR REPORTS REVISED AND RESTATED The Company's financial statements for the year ended December 31, 2005 and the quarters ended June 30, 2006 and September 30, 2006 were revised and restated to include the historical operating loss of the Company's predecessor for the period April 22, 1997 to December 30, 1999 in the amount of $51,977. (note 1) Following are the before and after account balances as restated: Dec 31, Jun 30, Sept 30, 2005 2006 2006 ---------- ---------- ---------- Capital in excess of par value Before 83,134 83,134 83,134 After 135,111 135,111 135,111 Deficit Before (68,766) (74,592) (77,595) After (120,743) (126,569) (129,572) Net loss - inception to period end Before (68,766) (74,592) (77,595) After (120,743) (126,569) (129,572) -8- Item 6. Exhibits and Reports (a) Exhibits: Exhibit 31.1 Certification of C.E.O. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 31.2 Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 32.1 Certification of C.E.O. Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Exhibit 32.2 Certification of Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. -9- SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LILM, INC. Date: June 25, 2007 By: /S/ GEORGE I. NORMAN, III ----------------------------------------- George I. Norman, III President, C.E.O. and Director (Principal Accounting Officer) -10-