SECURTIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FORM 10Q
FOR THE QUARTER ENDED JULY 31, 2004
COMMISSION FILE NUMBER 0001084937
GREAT EXPECTATION AND ASSOCIATES, INC.
(Exact name of Registrant as specified in its charter)
Colorado 84-1521955
(State or other jurisdiction of (I.R.S. Employer I.D.)
incorporation or organization)
501 S. Cherry Street, Suite 610, Denver, Co. 80246
Registrant's Telephone Number, including area code (303) 320-0066
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding twelve months, and (2) has been
subject to such filing requirements for the past 90 days.
Yes No
------ ------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report: 150,520,000 shares.
2
Great Expectations and Associates, Inc.
Index
Part I Financial Information Page No.
Item 1.
Balance Sheet 2
Statements of Loss and Accumulated Deficit 3
Statement of Stockholders' Equity 4
Statements of Cash Flows 5
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II None
Signatures 7
3
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
BALANCE SHEET
July
30, 2004 October
(unaudited) 31, 2003
---------- ---------
ASSETS
CURRENT ASSETS
Cash - -
---------- ----------
Total current assets - -
Other Assets
Deferred offering costs (Note 1) 22,099 22,099
---------- ----------
Total other assets 22,099 22,099
---------- ----------
Total assets $ 22,099 $ 22,099
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Due to stockholders (Note 4) $ 55,162 $ 50,638
---------- ----------
Total current liabilities 55,162 50,638
STOCKHOLDERS' EQUITY
Common stock, no par value, 500,000,000
shares authorized;150,520,000 shares
issued and outstanding (Note 1) 20,432 20,432
Deficit accumulated during the development
Stage (53,495) (48,971)
---------- ----------
Total stockholders' equity (33,063) (28,539)
---------- ----------
Total liabilities and stockholders'
equity $ 22,099 $ 22,099
========== ==========
The accompanying notes are an integral part of the financial
statements.
4
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
For the period from inception (June 5, 1987) to June 31,2004
Cumulative
During Nine Months Nine Months
Development Ended Ended
Stage 31-Jul-04 31-Jul-03
---------- ---------- ----------
Revenue
Interest Income $ 166 - -
---------- ---------- ----------
Total revenue 166 - -
Other expense
Amortization 700 - -
Rent 4,512 - -
Salaries (Note 3) 6,129 - -
Office supplies and expense 4,880 199 -
Legal 14,299 550 5,549
Travel 3,810 2,375 -
Escrow fees 1,500 - -
Transfer fees 4,051 - 751
Filing fees 4,825 - 250
Accounting 8,955 1,400 2,400
---------- ---------- ----------
Total expense 53,661 4,524 8,950
---------- ---------- ----------
NET LOSS (53,495) (4,524) (8,950)
---------- ---------- ----------
Accumulated deficit
Balance, beginning of period - (48,971) (32,087)
---------- ---------- ----------
Balance, end of period $ (53,495) (53,495) (41,037)
========== ========== ==========
Loss per share $ (Nil) $ (Nil) $ (Nil)
========== ========== ==========
Shares outstanding 150,520,000 150,520,000 150,520,000
=========== =========== ===========
The accompanying notes are an integral part of the financial
statements.
5
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS EQUITY
For the period from inception (June 5, 1987) to June 31,2004
Total
Common stock stock-
Number Accumulated holders'
of shares Amount deficit equity
---------- ---------- ---------- ----------
Balance, June 5, 1987 - $ - $ - $ -
Issuance of stock for cash
July 1987 ($.00005 per share) 67,000,000 3,000 - 3,000
Issuance of stock for cash
July 1987 ($.0017 per share) 7,200,000 12,000 - 12,000
Issuance of stock for services (Note 3)
July 1987 ($.0017 per share) 1,000,000 1,666 - 1,666
Issuance of stock for services (Note 3)
March 1998 ($.00005 per share) 75,320,000 3,766 - 3,766
Net loss for the period inception
to October 31, 1998 - - (10,833) 10,833)
---------- ---------- ---------- ----------
Balance, October 31, 1998 150,520,000 20,432 (10,833) ,599
Issuance of stock for services (Note 3)
October 1999 ($.00005 per share) 7,300,000 326 - 326
Issuance of stock for services (Note 3)
October 1999 ($.00005 per share) 7,300,000 326 - 326
Issuance of stock for services (Note 3)
October 1999($.00005 per share) 1,000,000 45 - 45
Net loss for the period October 31, 1999 - - (697) (697)
---------- ---------- ---------- ----------
Balance, October 31, 1999 166,120,000 $ 21,129 $ (11,530) $ 9,599
---------- ---------- ---------- ----------
Net loss for the period October 31, 2000 - - (8,815) (8,815)
Treasury stock (15,600,000) (697) - (697)
---------- ---------- ---------- ----------
Balance, October 31, 2000 150,520,000 $ 20,432 $ (20,345) $ 87
Net loss for the period October 31, 2001 - - (11,742) (11,742)
---------- ---------- ---------- ----------
Balance, October 31, 2001 150,520,000 $ 20,432 $ (32,087) $ (11,655)
---------- ---------- ---------- ----------
Net loss for the period October 31, 2002 - - (7,059) (7,059)
Balance, October 31, 2002 150,520,000 $ 20,432 $ (39,146) $ (18,714)
---------- ---------- ---------- ----------
Net loss for the period October 31, 2003 - - (9,825) (9,825)
---------- ---------- ---------- ----------
Balance, October 31, 2003 150,520,000 $ 20,432 $ (48,971) $ (28,539)
---------- ---------- ---------- ----------
Net loss for the nine months ended
July 31, 2004 - - (4,524) (4,524)
---------- ---------- ---------- ----------
Balance, July 31, 2004 150,520,000 $ 20,432 $ (53,495) $ (33,063)
========== ========== ========== ==========
The accompanying notes are an integral part of the financial statements.
6
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
Cumulative
During
Development Nine Months Ended
Stage 31-Jul-04 31-Jul-03
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (53,495) $ (4,524) $ (8,950)
Add non-cash items:
Salaries paid with stock (Note 3) 5,432 - -
Organizational cost amortization 700 - -
Increase in organizational cost (700) - -
---------- ---------- ----------
Cash used in operations (48,063) (4,524) (8,950)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans-stockholders (Note 4) 55,162 4,524 8,950
Proceeds from issuance of common stock 15,000 - -
Offering costs (22,099) - -
---------- ---------- ----------
Cash provided by financing activities 48,063 4,524 8,950
---------- ---------- ----------
Net increase (decrease) in cash - - -
---------- ---------- ----------
Cash, beginning of periods - - -
---------- ---------- ----------
Cash, end of periods $ - $ - $ -
========== ========== ==========
The accompanying notes are an integral part of the financial
statements.
7
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
1. Summary of significant accounting policies
Organization
Great Expectations and Associates Inc. (the "Company", formerly
Great Expectations, Inc.) was organized under the laws of the State of
Colorado on June 5, 1987, for the purpose of evaluating and seeking
merger candidates. The Company is currently considered to be in the
development stage as more fully defined in the Financial Accounting
Standards Board Statement No. 7. The Company has engaged in limited
activities, but has not generated significant revenues to date. The
Company is currently seeking business opportunities.
Accounting methods
The Company records income and expenses on the accrual method.
Fiscal year
The Company has selected October 31 as its fiscal year.
Deferred offering cost
Costs associated with any public offering were charged to proceeds
of the offering.
Loss per share
All stock outstanding prior to the public offering had been issued
at prices substantially less than that which was paid for the stock in
the public offering. Accordingly, for the purpose of the loss per
share calculation, shares outstanding at the end of the period were
considered to be outstanding during the entire period.
2. Income taxes
Since its inception, the Company has incurred a net operating loss.
Accordingly, no provision has been made for income taxes.
3. Stock issued for services
The value of the stock issued for services is based on management's
estimate of the fair market value of the services rendered.
4. Due to stockholders
During the nine months ended July 31, 2004, advances totaling $4,524
were made to the Company by stockholders. The total amount since
inception totals $55,162. There are no specific repayment terms and no
interest is charged.
5. Management representation
For the nine months ended July 31, 2004 management represents that all
adjustments necessary to a fair statement of the results for the period
have been included and such adjustments are of a normal and recurring
nature.
8
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
6. Going concern
The company has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its ability to
continue as a going concern.
Note 1. In the opinion of management of Great Expectations and
Associates, Inc., the unaudited financial statements of Great
Expectations and Associates, Inc. for the interim period shown, include
all adjustments, necessary for a fair presentation of the financial
position at July 31, 2004, and the results of operations and cash flows
for the period then ended. The results of operations for the interim
periods shown may not be indicative of the results that may be expected
for the fiscal year. These statements should be read in conjunction
with the financial statements and notes thereto included in the
Company's Form 10-K for the year October 31, 2003.
9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources.
The Company's balance sheet as of June 30, 2004, reflects a current
asset value of $0, and a total asset value of $22,099 in the form of
deferred offering costs. The Company will carry out its plan of
business as discussed above. The Company cannot predict to what
extent its liquidity and capital resources will be diminished prior to
the consummation of a business combination or whether its capital will
be further depleted by the operating losses (if any) of the business
entity which the Company may eventually acquire.
Pursuant to its public offering under Rule 419, the Company sold common
shares which were to be held in escrow until an acquisition is
consummated and approved by the investors. The Company did not
complete an acquisition within the time frame of Rule 419 and the funds
received in the public offering were returned to investors as required
and the escrow was closed.
Great Expectations entered into an agreement with a third party to
merge the two companies together. On completion of the merger, the
other company failed to comply with the terms of the merger agreement.
During the nine months ended July 31, 2003, the parties entered into an
agreement to return the parties to their original positions.
Results of Operations
During the period from June 5, 1987 (inception) through June 30, 2004,
the Company has engaged in no significant operations other than
organizational activities, acquisition of capital and preparation for
registration of its securities under the Securities Exchange Act of
1934, as amended. No revenues were received by the Company during this
period.
For the current fiscal year, the Company anticipates incurring a loss
as a result of expenses associated with registration under the
Securities Exchange Act of 1934, and expenses associated with locating
and evaluating acquisition candidates. The Company anticipates that
until a business combination is completed with an acquisition
candidate, it will not generate revenues other than interest income,
and may continue to operate at a loss after completing a business
combination, depending upon the performance of the acquired business.
Need for Additional Financing
The Company believes that its existing capital will not be sufficient
to meet the Company's cash needs, including the costs of compliance
with the continuing reporting requirements of the Securities Exchange
Act of 1934, as amended, for a period of approximately one year.
Accordingly, in the event the Company is able to complete a business
combination during this period, it anticipates that its existing
capital will not be sufficient to allow it to accomplish the goal of
completing a business combination. The Company will depend on
additional advances from stockholders. There is no assurance,
however, that the available funds will ultimately prove to be adequate
to allow it to complete a business combination, and once a business
combination is completed, the Company's needs for additional financing
10
are likely to increase substantially. No commitments to provide
additional funds have been made by management or other stockholders.
Accordingly, there can be no assurance that any additional funds will
be available to the Company to allow it to cover its expenses.
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might
seek to compensate providers of services by issuances of stock in lieu
of cash.
Controls and Procedures. The Chief Executive Officer and the Chief
Financial Officer of the Company have made an evaluation of the
disclosure controls and procedures relating to the quarterly report on
Form 10QSB for the period ended June 30, 2004 as filed with the
Securities and Exchange Commission and have judged such controls and
procedures to be effective as of June 30, 2004 (the evaluation date).
There have not been any significant changes in the internal controls of
the Company or other factors that could significantly affect internal
controls relating to the Company since the evaluation date.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
By
-------------------------------
Fred Mahlke
Chief Executive Officer
Chief Financial Officer
Date 9/10/2004
-----------------------------
CERTIFICATIONS I, Fred Mahlke, certify that: 1. I have reviewed this quarterly report on Form 10QSB of Great Expectations and Associates, Inc. 2. Based on my knowledge, the quarterly report does not contain any untrue statement of a material fact or omit 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; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date; 5. I have disclosed, based on my most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and (6) I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of my most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: September 10, 2004 /s/Fred W. Mahlke Chief Executive Officer/Chief Financial Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Great Expectations &
Associates, Inc. (the "Company") on Form 10-Q for the period ending
July 31, 2004 as filed with the Securities and Exchange Commission on
the date hereof (the "Report"), I, Fred W. Mahlke, Chief Executive
Officer and Chief Financial Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and result of
operations of the Company.
/s/Fred W. Mahlke
- -----------------------------
Fred W. Mahlke
Chief Executive Officer
Chief Financial Officer
September 10, 2004