10KSB/A 1 lilm10ksba-123106.txt LILM 10KSBA #1 123106 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB/A [Amendment No. 1] (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2006 [ ] Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Commission File Number: 000-51872 LILM, INC. ---------------------------------------------- (Name of small business issuer 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) (Zip Code) Issuer's telephone no.: (801) 322-0253 Securities registered pursuant to Section 12(b) of the Exchange Act: None Securities registered pursuant to Section 12(g) of the Exchange Act: Common 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 [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] State the issuer's revenues for its most recent fiscal year. $ 2,984 State the aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the stock was sold, or the average bid and ask prices of such stock as of a specified date within 60 days. $ 73,063 (Based on bid price $0.10 per share on April 13, 2007) 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, Par Value 2,583,750 $0.001 par value DOCUMENTS INCORPORATED BY REFERENCE A description of "Documents Incorporated by Reference" is contained in Part III, Item 14. Transitional Small Business Disclosure Format. Yes [ ] No [X] PART I Explanatory Statement This Amendment No. 1 to the LILM, Inc. Form 10-KSB for the fiscal year ended December 31, 2006 is being filed to include revised financial statements for the period covered that contain a new Note 5 to the financial statements. Item 7. Financial Statements Financial statements for the fiscal years ended December 31, 2006 and 2005 have been examined to the extent indicated in their reports by Madsen & Associates, CPA's Inc., independent certified public accountants and have been prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to Regulation S-B as promulgated by the SEC. -2- MADSEN & ASSOCIATES, CPA's INC. 684 East Vine St, # 3 ------------------------------- Murray, Utah 84107 Certified Public Accountants and Business Consultants Telephone 801-268-2632 Fax 801-262-3978 Board of Directors LILM, INC. and Subsidiary and LIL Marc INC. (predecessor) Salt Lake City, Utah REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have audited the accompanying consolidated balance sheet of LILM, INC. and Subsidiary and LIL Marc INC. (predecessor) (development stage company) at December 31, 2006, and the consolidated statements of operations, stockholders' equity, and cash flows for the years ended December 31, 2006, and 2005 and the period April 22, 1997 (date of inception of predecessor) to December 31, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of LILM, INC. and Subsidiary and LIL Marc INC. (predecessor) at December 31, 2006, and the results of operations, and cash flows for the years ended December 31, 2006 and 2005 and the period April 22, 1997 (date of inception of LIL Marc, INC. (predecessor) to December 31, 2006, in conformity with accounting principles generally accepted in the United States of America. The Company's financial statements for the year ended December 31, 2005 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. (see note 5) Salt Lake City, Utah February 28, 2007, except for Note 5 which is dated June 11, 2007 /s/ Madsen & Associates, CPA's Inc. ----------------------------------- -3- LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor) ( Development Stage Company ) CONSOLIDATED BALANCE SHEET December 31, 2006 -------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash $ 10,897 Total Current Assets 10,897 ----------- OFFICE EQUIPMENT - net of accumulated depreciation 1,031 ----------- $ 11,928 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 5,000 Accounts payable - related party 5,797 ----------- Total Current Liabilities 10,797 ----------- STOCKHOLDERS' EQUITY Common stock 25,000,000 shares authorized at $0.001 par value; 2,583,750 shares issued and outstanding 2,584 Capital in excess of par value 135,111 Accumulated deficit during development stage (136,564) ----------- Total Stockholders' Equity 1,131 ----------- $ 11,928 The accompanying notes are an integral part of these financial statements -4- LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor) ( Development Stage Company ) CONSOLIDATED STATEMENT OF OPERATIONS For the Years Ended December 31, 2006 and 2005 and the Period April 22, 1997 (date of inception of LIL Marc, INC. (predecessor) to December 31, 2006 -------------------------------------------------------------------------------- Dec 31, Dec 31, Apr 22, 1997 2006 2005 to Dec 31, 2006 ----------- ----------- --------------- REVENUES $ 2,984 $ 1,515 $ 17,718 ----------- ----------- ----------- EXPENSES Administrative 18,157 12,624 125,265 Royalties 16 21 81 Depreciation and amortization 632 1,562 28,936 ----------- ----------- ----------- 18,805 14,207 154,282 ----------- ----------- ----------- NET LOSS $ (15,821) $ (12,692) $ (136,564) =========== =========== =========== NET LOSS PER COMMON SHARE Basic and diluted $ -- $ -- ----------- ----------- AVERAGE OUTSTANDING SHARES Basic (stated in 1000's) 2,584 2,584 ----------- The accompanying notes are an integral part of these financial statements -5-
LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor) ( Development Stage Company ) STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY For the Period December 30, 1999 (date of inception) to December 31, 2006 ---------------------------------------------------------------------------------------------------- Common Stock Capital in -------------------------- Excess of Accumulated Shares Amount Par Value Deficit ----------- ----------- ----------- ----------- Balance December 30, 1999 (predecessor) -- $ -- $ 51,977 $ (51,977) Issuance of common shares for cash and a patent at $.0129 - December 30, 1999 1,000,000 1,000 11,963 -- Net operating loss for the year ended December 31, 2000 -- -- -- (8,867) Issuance of common shares for cash at $.025 - June 27, 2001 800,000 800 19,200 -- Issuance of common shares for cash at $.025 - August 31, 2001 20,000 20 480 -- Stock offering costs -- -- (375) -- Capital contribution - related party -- -- 100 -- Net operating loss for the year ended December 31, 2001 -- -- -- (13,537) Stock offering costs -- -- (2,500) -- Net operating loss for the year ended December 31, 2002 -- -- -- (13,858) Issuance of common shares for cash at $.08 - February 20, 2003 763,750 764 60,336 -- Stock offering costs -- -- (6,070) -- Net operating loss for year ended December 31, 2003 -- -- -- (18,081) Net operating loss for the year ended December 31, 2004 -- -- -- (1,731) ----------- ----------- ----------- ----------- Balance December 31, 2004 2,583,750 2,584 135,111 (108,051) Net operating loss for the year ended December 31, 2005 -- -- -- (12,692) Balance December 31, 2005 2,583,750 2,584 135,111 (120,743) Net operating loss for the year ended December 31, 2006 -- -- -- (15,821) Balance December 31, 2006 2,583,750 $ 2,584 $ 135,111 $ (136,564) =========== =========== =========== =========== The accompanying notes are an integral part of these financial statements.
-6-
LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor) ( Development Stage Company ) CONSOLIDATED STATEMENT OF CASH FLOWS For the Years Ended December 31, 2006 and 2005 and the Period April 22, 1997 (date of inception of LIL Marc, Inc. (predecessor) to December 31, 2006 -------------------------------------------------------------------------------------------------------- Dec 31, Dec 31, Apr 22, 1997 to 2006 2005 Dec 31, 2006 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (15,821) $ (12,692) $ (136,564) Adjustments to reconcile net loss to net cash provided by operating activities Issuance of common stock for expenses -- -- 8,700 Depreciation and amortization 632 1,562 28,786 Changes in accounts payable 4,750 (200) 6,409 Contributions to capital - expenses -- -- 100 Net Cash Flows Used in Operations (10,439) (11,330) (92,569) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of patent -- -- (28,650) Purchase office equipment (194) (503) (2,096) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock net of costs -- -- 134,212 ----------- ----------- ----------- Net Change in Cash (10,633) (11,833) 10,897 Cash at Beginning of Period 21,530 33,363 -- ----------- ----------- ----------- Cash at End of Period $ 10,897 $ 21,530 $ 10,897 =========== =========== =========== 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.
-7- LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor) ( Development Stage Company ) NOTES TO FINANCIAL STATEMENTS December 31, 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, liabilities, and operations to LiL Marc Inc. in exchange for all of the outstanding stock of LiL Marc, Inc. for the purpose of continuing the operations 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 December 31, 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 December 31, 2006, the Company had a net operating loss available for carryforward of $84,587. The income tax benefit of approximately $25,000 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. -8- LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor) ( Development Stage Company ) NOTES TO FINANCIAL STATEMENTS (Continued) December 31, 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. 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. -9- LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor) ( Development Stage Company ) NOTES TO FINANCIAL STATEMENTS (Continued) December 31, 2006 -------------------------------------------------------------------------------- Office Equipment ---------------- Office equipment consists of computers and is depreciated over three years on the straight method. 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. 3. PATENT The Company acquired a patent, from a related party, for the "LiL Marc" training urinal and was recorded at the predecessor cost, less amortization. The patent was issued on July 16, 1991 and has been 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) -10- Item 13. Exhibits (a) Exhibits Exhibit No. Exhibit Name ----------- ------------ 3.1* Articles of Incorporation (Nevada) 3.2* By-Laws of Registrant 4.1* Instrument defining rights of holders (See Exhibit No. 3.1, Articles of Incorporation) 10.1** Promissory Note 21.1* Subsidiaries 31.1 Certification of C.E.O. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 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. 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. ---------------- * Included as exhibit to Form 10-SB filed March 30, 2006. ** Included as Exhibit to Amendment No. 1 to Form 10-SB/A filed August 22, 2006 -11- SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LILM, Inc. By: /S/ GEORGE I. NORMAN, III -------------------------------------- George I. Norman, III President and C.E.O. Dated: June 25, 2007 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /S/ GEORGE I. NORMAN, III President, C.E.O. and director June 25, 2007 --------------------------------------- (Principal Accounting Officer) George I. Norman, III /S/ LAURIE J. NORMAN Secretary / Treasurer and Director June 25, 2007 --------------------------------------- Laurie J. Norman /S/ JESSIE SCOTT BEAN Director June 25, 2007 --------------------------------------- Jessie Scott Bean
-12-