Quarterly Report (10-q)
June 10 2016 - 4:05PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 30, 2016
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission file number 000-53048
Concrete Leveling Systems, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 26-0851977
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
5046 E. Boulevard, NW, Canton, OH 44718
(Address of principal executive offices)
(330) 966-8120
(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 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 has submitted electronically and
posted on its corporate web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405
of this chapter) during the preceding 12 month (or for such shorter period that
the registrant was required to submit and post such files). YES [X] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 6,395,418
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Concrete Leveling Systems, Inc.
Balance Sheets
April 30, 2016 and July 31, 2015
April 30 July 31
---------- ----------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash in bank $ 2,763 $ 116
Accounts receivable, net of allowance for doubtful accounts
of $0 and $4,046 at April 30, 2016 and July 31, 2015 -- 449
Current portion of notes receivable, net of allowance for
loan losses of $7,326 and $39,050 at April 30, 2016 and July 31, 2015 6,663 13,423
Interest receivable, net of collectability allowance of
$106 and $3,922 at April 30, 2016 and July 31, 2015 478 1,910
Inventory 16,915 17,379
Prepaid expenses and other current assets 597 352
---------- ----------
Total Current Assets 27,416 33,629
---------- ----------
PROPERTY, PLANT AND EQUIPMENT
Equipment 700 700
Less: Accumulated depreciation (700) (700)
---------- ----------
Total Property, Plant and Equipment -- --
---------- ----------
OTHER ASSETS
Notes receivable, net of current portion and allowance for loan losses
of $23,040 and $0 at April 30, 2016 and July 31, 2015 2,041 5,618
---------- ----------
TOTAL ASSETS $ 29,457 $ 39,247
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 32,268 $ 36,317
Accounts payable - stockholders 35,654 35,654
Advances - stockholders 87,800 74,300
Notes payable - stockholders 62,750 62,750
Accrued interest - stockholders 15,139 15,139
Other accrued expenses 13,755 12,350
---------- ----------
Total Current Liabilities 247,366 236,510
---------- ----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock (par value $0.001)
100,000,000 shares authorized:
6,395,418 shares issued and outstanding at
April 30, 2016 and July 31, 2015 6,395 6,395
Additional paid-in capital 405,355 405,355
Retained (deficit) (629,659) (609,013)
---------- ----------
Total Stockholders' Equity (Deficit) (217,909) (197,263)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 29,457 $ 39,247
========== ==========
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See notes to financial statements.
2
Concrete Leveling Systems, Inc.
Statements of Income
For the Three and Nine Months Ended April 30, 2016
3 Months Ended 9 Months Ended
April 30, 2016 April 30, 2016
-------------- --------------
(Unaudited) (Unaudited)
Equipment and parts sales $ 2,395 $ 3,235
---------- ----------
Cost of Sales 2,128 2,680
---------- ----------
Gross Margin 267 555
---------- ----------
Expenses
Selling, general and administration 7,129 21,459
---------- ----------
Income (Loss) from Operations (6,862) (20,904)
---------- ----------
Other Income (Expense)
Interest income 412 988
Interest expense (234) (729)
---------- ----------
Total Other Income (Expense) 178 259
---------- ----------
Net Income (Loss) Before Income Taxes (6,684) (20,645)
Provision for Income Taxes -- --
---------- ----------
Net Income (Loss) $ (6,684) $ (20,645)
========== ==========
Net Income (Loss) per Share - Basic and Fully Diluted $ (0.00) $ (0.00)
========== ==========
Weighted average number of common shares outstanding -
basic and fully diluted 6,395,418 6,395,418
========== ==========
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See notes to financial statements.
3
Concrete Leveling Systems, Inc.
Statements of Income
For the Three and Nine Months Ended April 30, 2015
3 Months Ended 9 Months Ended
April 30, 2015 April 30, 2015
-------------- --------------
(Unaudited) (Unaudited)
Equipment and parts sales $ -- $ 545
---------- ----------
Cost of Sales -- 308
---------- ----------
Gross Margin -- 237
---------- ----------
Expenses
Selling, general and administration 4,330 26,683
---------- ----------
(Loss) from Operations (4,330) (26,446)
---------- ----------
Other Income (Expense)
Interest income 398 1,001
Interest expense (229) (683)
---------- ----------
Total Other Income (Expense) 169 318
---------- ----------
Net (Loss) Before Income Taxes (4,161) (26,128)
Provision for Income Taxes -- --
---------- ----------
Net (Loss) $ (4,161) $ (26,128)
========== ==========
Net (Loss) per Share - Basic and Fully Diluted $ (0.00) $ (0.00)
========== ==========
Weighted average number of common shares outstanding -
basic and fully diluted 6,395,418 6,395,418
========== ==========
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See notes to financial statements.
4
Concrete Leveling Systems, Inc.
Statements of Cash Flows
For the Nine Months Ended April 30, 2016 and 2015
April 30, 2016 April 30, 2015
-------------- --------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $(20,645) $(26,128)
Adjustments to reconcile net (loss) to net cash
used in operating activities:
(Decrease) in allowances for doubtful accounts and loan losses (16,546)
(Increase) Decrease in accounts receivable 4,495 135
Decrease (Increase) in interest receivable 5,248 (584)
Decrease (Increase) in inventory 464 (1,612)
(Increase) Decrease in prepaid expenses and other current assets (245) 436
(Decrease) Increase in accounts payable (4,049) 4,443
Increase in other accrued expenses 1,405 1,021
-------- --------
Net cash (used by) operating activities (29,873) (22,289)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments on notes receivable 19,020 1,542
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from (repayments to) stockholders 13,500 20,200
-------- --------
Net increase (decrease) in cash 2,647 (547)
Cash and equivalents - beginning 116 641
-------- --------
Cash and equivalents - ending $ 2,763 $ 94
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
Interest $ 729 $ 683
======== ========
Income Taxes $ -- $ --
======== ========
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See notes to financial statements.
5
Concrete Leveling Systems, Inc.
Notes to Financial Statements
April 30, 2016
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-Q and
Article 8 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. For further
information, refer to the financial statements and footnotes thereto included in
the Concrete Leveling Systems, Inc. Form 10-K filing for the period ended July
31, 2015.
NOTE B - GOING CONCERN
As shown in the financial statements, the Company incurred a net loss of $6,684
for the three months ended April 30, 2016, and has incurred substantial net
losses since its inception. At April 30, 2016, current liabilities exceed
current assets by $219,950. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and classification of liabilities that might be
necessary in the event the Company cannot continue existence.
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Concrete Leveling Systems, Inc. ("CLS" or "The Company") became an
operating company in 2009. As of April 30, 2016, CLS has cash assets of $2,763,
no accounts receivable and net notes receivable in the amount of $8,704. As of
April 30, 2016, the Company was carrying inventory valued at $16,915.
The Company's cash flow is currently not sufficient to maintain operations.
However, the Company is receiving periodic payments from the self financed sale
of its concrete leveling service units, which creates some cash flow for the
Company. Mr. Edward A. Barth has continued to contact companies regarding the
service unit and has listed the service unit held in inventory on Ebay. To date,
the Company has been contacted with inquiries regarding the purchase of a unit,
but no offer has been made.
CLS continues to have cash flow issues. As of April 30, 2016, it had total
current liabilities of $247,366, which includes advances from stockholders and
notes and accounts payable to stockholders in the amount of $201,343, including
accrued interest on those obligations. The Company had a net loss of $6,684
during the quarter. Mr. Barth continues to remain in contact with potential
purchasers, who have expressed an interest in purchasing a service unit. The
purchase of the Company's product is seasonal in nature. Interest in purchasing
the concrete leveling service units increases in late winter and early spring,
since the use of the product is restricted by cold temperature.
There are no off balance sheet arrangements involving CLS at this time.
Liquidity Issues. Since its inception, the Company has experienced
continued need for additional liquidity in order to provide for operating
expenses and to purchase components for the assembly of its product. The company
maintains an inventory of one partially completed service unit. In the event the
Company receives an order for a concrete leveling service unit, it will seek a
down payment in an amount sufficient to complete the unit, in order not to have
to borrow additional funds. The Company is currently relying upon loans from
stockholders to meet operating expenses.
Capital Resources. CLS has made no material commitments for capital
expenditures as of the end of its fiscal quarter ending April 30, 2016 and does
not anticipate any immediate need for material capital expenditures over the
next quarter.
Result of Operations. During the quarter ended April 30, 2016, the Company
has experienced little activity. The Company has devoted a limited amount of its
resources to marketing its product during the last quarter. Management has
concentrated its efforts on field training for its current customers, in order
to assure repayment of the outstanding receivables. At present, it is not in
discussions with any potential buyers of its concrete leveling service units.
ITEM 4 - CONTROLS AND PROCEDURES
Disclosure Controls and Procedures. Pursuant to Rule 13a-15(b) of the
Securities Exchange Act of 1934 ("Exchange Act"), the Company carried out an
evaluation, with the participation of the Company's management, which consists
of the Company's Chief Executive Officer (CEO) and Chief Financial Officer
(CFO), of the effectiveness of the Company's disclosure controls and procedures
(as defined under Rule 13a-15(e) of the Exchange Act) as of the end of the
period covered by this report. Based upon that evaluation, the Company concluded
that the Company's disclosure controls and procedures are effective to ensure
that information required to be disclosed by the Company in the reports that the
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Company files or submits under the Exchange Act, is recorded, processed,
summarized and reported, within the time period specified by the United States
Securities and Exchange Commission rules and forms, and that such information is
accumulated and communicated to the Company's management, including the
Company's CEO and CFO, as appropriate, to allow timely decisions regarding
required disclosure.
Changes in Internal Control Over Financial Reporting. There are no changes
in the Company's internal controls over financial reporting that occurred during
the three months ended April 30, 2016 that have materially affected, or are
reasonably likely to materially affect, the internal controls over financial
reporting.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
To the best of its knowledge, management of CLS is not aware of any legal
proceedings in which CLS is currently involved.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities during this quarter.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
There are no defaults upon any senior securities.
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 - OTHER INFORMATION
None
ITEM 6 - EXHIBITS
A. The following are filed as Exhibits to this report. The numbers refer to the
exhibit table of Item 601 of regulation S-K: Reference is hereby made to the
exhibits contained in the registration statement (Form SB-2) filed by Concrete
Leveling Systems, Inc.
Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) - Certification
Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) - Certification
Exhibit 32 - Section 1350 - Certification
Exhibit 101 - Interactive Data Files Pursuant to Rule 405 of Regulation S-T
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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.
CONCRETE LEVELING SYSTEMS, INC.
Date: June 10, 2016 By: /s/ Edward A. Barth
---------------------------------------------
Edward A. Barth, Principal Executive Officer
Date: June 10, 2016 By: /s/ Suzanne I. Barth
---------------------------------------------
Suzanne I. Barth, Principal Financial Officer
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