10QSB 1 form10qsb.txt FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 0R 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2002 -------------- [ ] TRANSITION REPORT UNDER SECTION 13 0R 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------- --------- COMMISSION FILE NUMBER 000-33309 --------- ARTESCOPE, INC. ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter)
Incorporated in the State of Delaware 33-0953557 -------------------------------------------------------------- ---------- (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
29 Abingdon Road, Kensington, London, W86AH, England ---------------------------------------------------- (Address of principal executive offices) 44-20-7938-5409 --------------- (Issuer's telephone number) 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 AT MAY 13, 2002 ----- --------------------------- Common Stock - $0.001 par value 6,210,000 Transitional Small Business Disclosure Format (Check one): YES [ ] NO [X] ARTESCOPE, INC. FORM 10-QSB PAGE 2 OF 4 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. See financial statements for the period ended March 31, 2002 attached to this Form 10-QSB. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. This following information specifies certain forward-looking statements of management of the company. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as "may", "shall", "will", "could", "expect", "estimate", "anticipate", "predict", "probable", "possible", "should", "continue", or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. We cannot guaranty that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements. We are a development stage business that has generated only minimal revenues to date. We began our current operations in February 2001. We provide graphic design services to various commercial and corporate entities. Our services primarily include commercial digital graphics design and production services related to digitally-created print, graphics and multimedia services. These services include the production and distribution of marketing materials and providing on-demand printing services. Our graphic design services range from print media, catalogues on CD-ROM, trade show graphics and web page design and development. The design and production of our products involve a wide range of marketing, advertising and media imaging and digital printing using software and digital printing equipment. Our primary focus is on design, however, we work closely with various third parties to meet our client's needs for graphic design and production. LIQUIDITY AND CAPITAL RESOURCES Artescope had cash of $8,150 and working capital of $3,582 at March 31, 2002. During the three month period ended March 31, 2002, cash used in operations decreased by $1,384, primarily to cover an operating loss of $1,646 and a decrease in accounts payable of $1,812, offset by a decrease in accounts receivable of $1,574 and an occupancy cost contribution, by an officer, of $500. A decrease in working capital of $1,146 was primarily due to a reduction in cash of $1,384. Artescope has accumulated a deficit of $35,693 since inception and has stockholders equity of $3,582. Artescope has no long-term commitments or contingencies. RESULTS OF OPERATIONS Revenues. Artescope had revenues of $630 for the three month period ended March 31, 2002, as compared to the three month period ended March 31, 2001 when Artescope had no revenues. The increase in revenues was due to the commencement of operations related to graphic and media production services. Artescope hopes to generate additional revenues as it expands its' customer base. Operating Expenses. Artescope had operating expenses of $2,276 for the three month period ended March 31, 2002, as compared to the three month period ended March 31, 2001 when Artescope had no operating expenses. The increase in operating expenses was from legal, professional, printing, occupancy and office expense requirements due to the commencement of graphic and media production operations. ARTESCOPE, INC. FORM 10-QSB PAGE 3 OF 4 Plan of Operation for the Next Twelve Months. We anticipate that we will not be able to satisfy our working capital requirements for the next 12 months. As a result, we anticipate that we may need to raise additional funding to continue our operations. Such additional funding may be raised through public or private financing as well as borrowings and other sources. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue our operations may be adversely affected. However, we believe that our officers and directors will contribute funds to pay for our expenses. Therefore, we have not contemplated any plan of liquidation if we do not generate revenues. We have also contemplated acquiring a third party, merging with a third party or pursuing a joint venture with a third party in order to assist us in raising the required funding. We have conducted informal discussions with potential acquisition or merger candidates, although we have not conducted any formal negotiations. We cannot guaranty that we will acquire or merge with a third party, or, if we acquire or merge with a third party, that such acquisition or merger will increase the value of our Common Stock. We are not currently conducting any research and development activities, other than the development of our website. We do not anticipate conducting such activities in the near future. If we expand our customer base, then we may need to hire additional employees or independent contractors as well as purchase or lease additional equipment. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. Artescope is not a party to any pending legal proceedings, and to the best of Artescope's knowledge, none of Artescope's assets are the subject of any pending legal proceedings. ITEM 2. CHANGES IN SECURITIES. During the first quarter of the fiscal year covered by this report, (i) Artescope did not modify the instruments defining the rights of its shareholders, (ii) no rights of any shareholders were limited or qualified by any other class of securities, and (iii) Artescope did not sell any unregistered equity securities. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. During the first quarter of the fiscal year covered by this report, no material default has occurred with respect to any indebtedness of Artescope. Also during this quarter, no material arrearage in the payment of dividends has occurred. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the first quarter of the fiscal year covered by this report. ITEM 5. OTHER INFORMATION There has been a change in Artescope's management. The previous directors and officers have resigned and as of May 6, 2002, John daCosta was appointed the sole director and officer of Artescope. As a result of the change in management, Artescope has moved its principal executive office to 29 Abingdon Road, Kensington, London, W86AH, England. ARTESCOPE, INC. FORM 10-QSB PAGE 4 OF 4 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS All Exhibits required to be filed with the Form 10-QSB are incorporated by reference to Artescope's previously filed Form SB-2 and Form 10-KSB. (B) REPORTS ON FORM 8-K. There were no reports on Form 8-K filed by Artescope during the quarter ended March 31, 2002. SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, Artescope has caused this report to be signed on its behalf by the undersigned duly authorized person. ARTESCOPE, INC. By: /S/ JOHN DACOSTA -------------------------------------------------------- Name: JOHN DACOSTA Title: SOLE DIRECTOR AND PRESIDENT, SECRETARY AND TREASURER Dated: MAY 14, 2002 ARTESCOPE, INC. FINANCIAL STATEMENTS MARCH 31, 2002 ARTESCOPE, INC. CONTENTS PAGE ---- Financial Statements (Unaudited) Balance Sheets 1 Statements of Operations 2 Statements of Changes in Stockholders' Equity 3 Statements of Cash Flows 4 Notes to Financial Statements 5 ARTESCOPE, INC. BALANCE SHEETS (UNAUDITED)
MARCH 31, DECEMBER 31, 2002 2001 ------- -------- ASSETS ------ Current assets Cash $ 8,150 $ 9,534 Accounts receivable, net 108 1,682 ------- -------- Total current assets 8,258 11,216 Other assets -- -- ------- -------- Total assets $ 8,258 $ 11,216 ======= ======== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities Accounts payable and accrued expenses $ 4,676 $ 6,488 ------- -------- Total current liabilities 4,676 6,488 Stockholders' Equity Preferred stock, $.001 par value; Authorized shares -- 5,000,000 Issued and outstanding share -- 0 -- -- Common stock, $.001 par value; Authorized shares-- 50,000,000 Issued and outstanding shares-- 6,210,000 6,210 6,210 Additional paid-in capital 33,065 32,565 Accumulated deficit (35,693) (34,047) ------- -------- Total stockholders' equity 3,582 4,728 ------- -------- Total liabilities and stockholders' equity $ 8,258 $ 11,216 ======= ========
See accompanying notes to financial statements. -1- ARTESCOPE, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, ------------------------------------ 2002 2001 ----------- ----------- Net revenues $ 630 $ -- Operating expenses Legal and professional fees -- 850 Printing and reproduction -- 583 Occupancy -- 500 Office supplies and expense 343 -- ----------- ----------- Total operating expenses 2,276 -- ----------- ----------- Loss from operations (1,646) -- Provision for income tax expense (benefit) -- -- ----------- ----------- Net loss/comprehensive loss $ (1,646) $ -- =========== =========== Net loss/comprehensive loss per common share-- basic and diluted $ -- $ -- =========== =========== Weighted average of common shares-- basic and diluted 6,210,000 3,591,667 =========== ===========
See accompanying notes to financial statements. -2- ARTESCOPE, INC. STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY MARCH 2, 2000 (INCEPTION) THROUGH MARCH 31, 2002 (UNAUDITED)
COMMON STOCK ADDITIONAL ------------ PAID-IN ACCUMULATED SHARES AMOUNT CAPITAL DEFICIT TOTAL --------- --------- --------- --------- --------- Balance, March 2, 2000 -- $ -- $ -- $ -- $ -- Issuance of common stock, March 3, 2000 3,075,000 3,075 -- -- 3,075 Net loss/comprehensive loss -- -- -- (5,575) (5,575) --------- --------- --------- --------- --------- Balance, December 31, 2000 3,075,000 3,075 -- (5,575) (2,500) ========= ========= ========= ========= ========= Issuance of common stock, February 28, 2001 1,500,000 1,500 1,500 -- 3,000 Net loss/comprehensive loss -- -- -- -- -- --------- --------- --------- --------- --------- Balance, March 31, 2001 4,575,000 4,575 1,500 (5,575) 500 ========= ========= ========= ========= ========= Issuance of common stock, May 25, 2001 1,635,000 1,635 31,065 -- 32,700 Net loss/comprehensive loss -- -- -- (28,472) (28,472) --------- --------- --------- --------- --------- Balance, December 31, 2001 6,210,000 6,210 32,565 (34,047) 4,728 ========= ========= ========= ========= ========= Cost of occupancy contributed by officer -- -- 500 -- 500 Net loss/comprehensive loss -- -- -- (1,646) (1,646) --------- --------- --------- --------- --------- Balance, March 31, 2002 6,210,000 $ 6,210 $ 33,065 $ (35,693) $ 3,582 ========= ========= ========= ========= =========
See accompanying notes to financial statements. -3- ARTESCOPE, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, ---------------------------- 2002 2001 ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(1,646) $ -- Adjustments to reconcile net loss to net cash used in operating activities Occupancy cost contributed by officer 500 -- Changes in operating assets and liabilities Decrease in accounts receivable 1,574 -- (Decrease) in accounts payable and accrued expenses (1,812) -- ------- ------- Net cash used in operating activities (1,384) -- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES -- -- ------- ------- Net cash provided by investing activities -- -- ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the issuance of common stock -- 2,000 ------- ------- Net cash provided by financing activities -- 2,000 ------- ------- NET INCREASE (DECREASE) IN CASH (1,384) 2,000 CASH, beginning of period 9,534 -- ------- ------- CASH, end of period $ 8,150 $ 2,000 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Income taxes paid $ -- $ -- ======= ======= Interest paid $ -- $ -- ======= =======
See accompanying notes to financial statements. -4- ARTESCOPE, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2002 (UNAUDITED) NOTE 1 - NATURE OF OPERATIONS Artescope, Inc. (the "Company") provides digital graphics design and production services for commercial and corporate enterprises. The Company was incorporated in the state of Delaware on March 2, 2000 and is headquartered in Fountain Valley, California. NOTE 2 - BASIS OF PRESENTATION The unaudited financial statements included herein 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. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2002 and 2001 are not necessarily indicative of the results that may be expected for any interim period or the entire year. For further information, these financial statements and the related notes should be read in conjunction with the Company's audited financial statements for the year ended December 31, 2001 included in the Company's annual report on Form 10-KSB. NOTE 3 - COMMON STOCK On March 3, 2000, the Company issued 1,525,000 shares of its common stock to its officers and founders for consulting services and 1,550,000 shares of its common stock to various individuals for legal services rendered in connection with the initial start-up and organization costs incurred. Since there was no readily available market value at the time the services were rendered, par value of $0.001 per share was considered as a reasonable estimate of fair value by all parties. On February 28, 2001, the Company issued 1,500,000 shares of its common stock to an officer and director for cash of $2,000 and consulting services. Since there was no readily available market value at the time the services were rendered, the value of $0.002 per share was considered as a reasonable estimate of fair value between the Company and the officer. On May 31, 2001, the Company completed a "best efforts" offering of its common stock pursuant to the provisions of Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated by the Securities and Exchange Commission. In accordance with the Private Placement Memorandum Offering, which was initiated on March 15, 2001, the Company issued 1,635,000 shares of its common stock at $0.02 per share for a total of $32,700. -5-