UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
______________________________________________________________________________
(Mark one)
[XX] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2005
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
For the transition period from _____ to __________
______________________________________________________________________________
Commission File Number: 0-31619
MILLENNIUM QUEST, INC.
----------------------------------------------------------------
(Exact Name of small business issuer as specified in its charter)
Delaware 87-0445575
---------------------- -----------------------
(State of Incorporation) (IRS Employer ID Number)
4089 Mount Olympus Way, Salt Lake City, Utah 84124
---------------------------------------------------
(Address of principal executive offices)
(801) 278-6990
--------------------------------
(Issuer's telephone number)
______________________________________________________________________________
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 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 [XX] NO [ ]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). YES [XX] NO [ ]
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: 1,961,643 shares of its
common stock, par value $0.001, as of the date of this report.
Transitional Small Business Format: Yes [ ] No [XX]
MILLENNIUM QUEST, INC.
Form 10-QSB for the Quarter ended September 30, 2005
Table of Contents
Part I - Financial Information Page
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis
or Plan of Operation 8
Item 3. Controls and Procedures 9
Part II - Other Information
Item 1. Legal Proceedings 10
Item 2 - Unregistered Sales of Equity
Securities and Use of Proceeds 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
2
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
MILLENNIUM QUEST, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
ASSETS
September 30, December 31,
2005 2004
------------- -------------
(unaudited)
CURRENT ASSETS:
Cash $ 3,286 $ 9,936
------------- -------------
Total Current Assets 3,286 9,936
------------- -------------
$ 3,286 $ 9,936
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 14,759 $ 13,031
------------- -------------
Total Current Liabilities 14,759 13,031
------------- -------------
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value,
5,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
20,000,000 shares authorized,
1,961,643 shares issued and
outstanding 1,962 1,962
Capital in excess of par value 161,088 161,088
Retained deficit (106,991) (106,991)
Deficit accumulated during the
development stage (67,532) (59,154)
------------- -------------
Total Stockholders' Equity (Deficit) (11,473) (3,095)
------------- -------------
$ 3,286 $ 9,936
============= =============
Note: The balance sheet at December 31, 2004 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these
unaudited condensed financial statements.
3
MILLENNIUM QUEST, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
From Re-entering
For the Three For the Nine of Development
Months Ended Months Ended Stage on May 4,
September 30, September 30, 1994 Through
--------------------------- --------------------------- September 30,
2005 2004 2005 2004 2005
------------- ------------- ------------- ------------- --------------
REVENUE $ - $ - $ - $ - $ -
OPERATING EXPENSES:
General and administrative 3,939 1,833 8,389 6,356 76,532
------------- ------------- ------------- ------------- --------------
LOSS BEFORE OTHER INCOME (3,939) (1,833) (8,389) (6,356) (76,532)
------------- ------------- ------------- ------------- --------------
OTHER INCOME:
Interest and other income 3 8 11 22 9,000
------------- ------------- ------------- ------------- --------------
Total Other Income 3 8 11 22 9,000
------------- ------------- ------------- ------------- --------------
LOSS BEFORE INCOME TAXES (3,936) (1,825) (8,378) (6,334) (67,532)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
------------- ------------- ------------- ------------- --------------
NET LOSS $ (3,936) $ (1,825) $ (8,378) $ (6,334) $ (67,532)
============= ============= ============= ============= ==============
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00) $ (.00) $ (.04)
============= ============= ============= ============= ==============
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
MILLENNIUM QUEST, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
From Re-entering
For the Nine of Development
Months Ended Stage on May 4,
September 30, 1994 Through
---------------------------- September 30,
2005 2004 2005
-------------- ------------- ---------------
Cash Flows from Operating Activities:
Net loss $ (8,378) $ (6,334) $ (67,532)
Adjustments to reconcile net loss to net
cash used by operating activities:
Non-cash expenses - - 10,000
Changes in assets and liabilities:
Increase (decrease) in accounts payable 1,728 5,163 14,759
-------------- ------------- ---------------
Net Cash Provided (Used) by Operating Activities (6,650) (1,171) (42,773)
-------------- ------------- ---------------
Cash Flows from Investing Activities - - -
-------------- ------------- ---------------
Net Cash Provided by Investing Activities - - -
-------------- ------------- ---------------
Cash Flows from Financing Activities - - -
-------------- ------------- ---------------
Net Cash Provided by Financing Activities - - -
-------------- ------------- ---------------
Net Increase (Decrease) in Cash (6,650) (1,171) (42,773)
Cash at Beginning of Period 9,936 12,116 46,059
-------------- ------------- ---------------
Cash at End of Period $ 3,286 $ 10,945 $ 3,286
============== ============= ===============
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the nine months ended September 30, 2005:
None
For the nine months ended September 30, 2004:
None
The accompanying notes are an integral part of these unaudited condensed financial statements.
5
MILLENNIUM QUEST, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Condensed Financial Statements - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows at
September 30, 2005 and 2004 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles in the United States of America have been condensed or omitted. It
is suggested that these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
December 31, 2004 audited financial statements. The results of operations for
the periods ended September 30, 2005 and 2004 are not necessarily indicative
of the operating results for the full year.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards ("SFAS") No. 151, "Inventory Costs - an amendment of ARB No. 43,
Chapter 4", SFAS No. 152, "Accounting for Real Estate Time-Sharing
Transactions - an amendment of FASB Statements No. 66 and 67", SFAS No. 153,
"Exchanges of Nonmonetary Assets - an amendment of APB Opinion No. 29", SFAS
No. 123 (revised 2004), "Share-Based Payment", and SFAS No. 154, "Accounting
Changes and Error Corrections - a replacement of APB Opinion No. 20 and FASB
Statement No. 3", were recently issued. SFAS No. 151, 152, 153, 123 (revised
2004) and 154 have no current applicability to the Company or their effect on
the financial statements would not have been significant.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America which
contemplate continuation of the Company as a going concern. However, the
Company has incurred losses since re-entering development stage and has no
on-going operations. Further, the Company has current liabilities in excess
of current assets. These factors raise substantial doubt about the ability of
the Company to continue as a going concern. In this regard, management is
proposing to raise additional funds through loans or through additional sales
of its common stock or through the acquisition of other companies. There is
no assurance that the Company will be successful in raising this additional
capital or in achieving profitable operations. These financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.
NOTE 3 - INCOME TAXES
At September 30, 2005, the Company has available unused operating loss
carryforwards of approximately $154,000, which may be applied against future
taxable income and which expire in various years through 2025. However, if
certain substantial changes should occur in the Company's ownership, there
could be an annual limitation on the amount of net operating loss
carryforwards which can be utilized. The net deferred tax assets are
approximately $23,100 and $21,800 as of September 30, 2005 and December 31,
2004, respectively, with an offsetting valuation allowance of the same amount,
resulting in a change in the valuation allowance of approximately $1,300
during the nine months ended September 30, 2005.
6
MILLENNIUM QUEST, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - LOSS PER SHARE
The following data show the amounts used in computing loss per share for the
periods presented:
From Re-entering
For the Three For the Nine of Development
Months Ended Months Ended Stage on May 4,
September 30, September 30, 1994 Through
--------------------------- --------------------------- September 30,
2005 2004 2005 2004 2005
------------- ------------- ------------- ------------- --------------
Loss available to common
shareholders (numerator) $ (3,936) $ (1,825) $ (8,378) $ (6,334) $ (67,532)
------------- ------------- ------------- ------------- --------------
Weighted average number of
common shares outstanding
used in loss per share for
the period (denominator) 1,961,643 1,961,643 1,961,643 1,961,643 1,539,997
------------- ------------- ------------- ------------- --------------
Dilutive loss per share was not presented, as the Company had no common stock equivalent
shares for all periods presented that would affect the computation of diluted loss per share.
7
Item 2 - Management's Discussion and Analysis or Plan of Operation
(1) Caution Regarding Forward-Looking Information
When used in this report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend," and similar
expressions are intended to identify forward-looking statements within the
meaning of Section 27a of the Securities Act of 1933 and Section 21e of the
Securities Exchange Act of 1934 regarding events, conditions, and financial
trends that may affect the Company's future plans of operations, business
strategy, operating results, and financial position. Persons reviewing this
report are cautioned that any forward-looking statements are not guarantees of
future performance and are subject to risks and uncertainties and that actual
results may differ materially from those included within the forward-looking
statements as a result of various factors.
(2) Plan of Operation
The Company's current operating plan is to (a) cover the administrative
and reporting requirements of a public company; and (b) search for, and
investigate, potential businesses, products, technologies and companies for
acquisition or merger. For the past several years, the Company has had no
active business operations, and has been seeking to acquire an interest in a
business with long-term growth potential. The Company currently has no
commitment or arrangement to participate in a business and cannot now predict
what type of business it may enter into or acquire. It is emphasized that the
business objectives discussed herein are extremely general and are not
intended to be restrictive on the discretion of the Company's management.
The Company is not aware of any trends that have or are reasonably
likely to have a material impact on its liquidity, net sales, revenues, or
income from continuing operations. There have been no events which have
caused material changes from period to period in one or more line items of the
financial statements or any seasonal aspects that have had a material effect
on the financial condition or results of operation.
Three and Nine Month Periods Ended September 30, 2005 and 2004
The Company has not been engaged in business operations, and has had no
revenue from continuing operations for the three and nine months periods ended
September 30, 2005 and 2004.
General and administrative expenses for the three-month periods ended
September 30, 2005 and 2004 were $3,939 and $1,833, respectively. For the
nine-month periods ended September 30, 2005 and 2004, general and
administrative expenses were $8,389 and $6,356, respectively. These expenses
consisted of general corporate administration, legal and professional
expenses, and accounting and auditing costs, in connection with periodic
reports and related corporate matters.
The Company's cash is held in an interest-bearing checking account. As
a result, the Company had nominal interest income for the three-months ended
September 30, 2005 ($3) and 2004 ($8). Due to the foregoing factors, the
Company has realized a net loss of $3,936 for the three months ended September
30, 2005, as compared to a net loss of $1,825 for the three months ended
September 30, 2004. The Company has had a net loss from the reentering of
development stage on May 4, 1994 through September 30, 2005, of $67,532.
8
Liquidity and Capital Resources
The Company has not experienced a material change in financial condition
over the past year. At September 30, 2005 and December 31, 2004, the Company
had no working capital. Working capital consists of cash less accounts
payable. The Company is dependent upon management and/or significant
shareholders to provide sufficient working capital to preserve the integrity
of the corporate entity during this phase. It is the intent of management and
significant shareholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
Although the Company's assets consist of cash and cash equivalents, the
Company has no intent to become, or hold itself out to be, engaged primarily
in the business of investing, reinvesting, or trading in securities.
Accordingly, the Company does not anticipate being required to register
pursuant to the Investment Company Act of 1940, and expects to be limited in
its ability to invest in securities, other than cash equivalents and
government securities, in the aggregate amount of over 40% of its assets.
There can be no assurance that any investment
made by the Company will not result in losses.
The Company has had no business operations for several years, and has a
stockholders' deficit of $11,473 as of September 30, 2005. Therefore, these
factors raise substantial doubt about the ability of the Company to continue
as a going concern. In this regard, in order to maintain operations,
management would need to raise additional funds through loans or through
additional sales of its common stock or through the acquisition of other
companies. There is no assurance that the Company will be successful in
raising this additional capital or in achieving profitable operations. The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
Item 3 - Controls and Procedures
As of the end of the period covered by this report, an evaluation was
performed under the supervision and with the participation of the Company's
management, including the Chief Executive Officer and Chief Financial Officer
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures. Based on that evaluation, the Company's management,
including the Chief Executive Officer and Chief Financial Officer, concluded
that the Company's disclosure controls and procedures were effective. There
have been no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the evaluation.
9
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None.
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 - Defaults on Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
During the quarter ended September 30, 2005, the Company held no
regularly scheduled, called or special meetings of shareholders during the
reporting period, nor were any matters submitted to a vote of this Company's
security holders.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit Description
------- -----------------------------------------------------------------
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002*
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002*
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002**
* Included herein pursuant to Item 601(b) 31 of Regulation SB.
** Included herein pursuant to Item 601(b) 32 of Regulation SB.
(b) Reports on Form 8-K. During the quarter ended September 30,
2005, the Company did not file any reports on Form 8-K. However, on November
16, 2005, the Company filed a report on Form 8-K, reporting the resignation of
Pritchett, Siler & Hardy, P.C., as the Company's auditors, and the appointment
of Michael J. Larsen, LLC, as the new auditors.
10
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.
MILLENNIUM QUEST, INC.
November 16, 2005 /s/ Dimitri Cocorinis
------------------------------------------
Dimitri Cocorinis, Chief Executive Officer
MILLENNIUM QUEST, INC.
November 16, 2005 /s/ Terry Cononelos
------------------------------------------
Terry Cononelos, Chief Financial Officer
11