UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[xx] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
Commission file Number: 000-29645
AMNIS SYSTEMS INC.
(FORMERLY GRAFFITI-X, INC.)
(Exact name of small business issuer as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
33-0821967
(I.R.S. Employer Identification Number)
619 Serrano Lane
Chula Vista, California 91910
(Address of principal executive offices)
(604)681-9588
(Issuer's telephone number)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
9,310,000 common shares as at September 30, 2000
Transitional Small Business Disclosure Format (check one): Yes [_] No [X]
<PAGE>
AMNIS SYSTEMS INC.
(formerly Graffiti-X, Inc.)
INDEX
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2000
(unaudited) and December 31, 1999
Consolidated Statements of Operations for the three and nine
month periods ended September 30, 1999 and September 30, 2000
Consolidated Statements of Cash Flows for the nine month
period Ended September 30, 1999 and September 30, 2000
Consolidated Statements of Changes in Stockholders' Equity
Notes to Consolidated Financial Statements
Item 2 Plan of Operation
PART II. OTHER INFORMATION
Item 1 Legal Proceedings
Item 2 Changes in Securities
Item 3 Defaults Upon Senior Securities
Item 4 Submission of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8K
SIGNATURES
2
<PAGE>
AMNIS SYSTEMS INC.
(FORMERLY GRAFFITI-X, INC.)
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
SEPTEMBER 30, 2000
<PAGE>
Robert J. Bliss, C.P.A.
289 Church Avenue
Chula Vista, CA 91910
FAX (619)585-7597 Phone (619)585-7595
Independent Auditor's Report
The Board Of Directors
AMNIS Systems, Inc.
I have compiled the accompanying balance sheet of AMNIS Systems, Inc.
(formerly Graffiti-X, Inc.) as of September 30, 1999 and 2000 and the related
statements of operations, changes in stockholders' equity and cash flows for
three and nine months ended September 30, 1999 and September 30, 2000, in
accordance with standards established by the American Institute of Certified
Public Accountants.
A compilation is limited to presenting in the form of financial
statements information that is the representation of management. I have not
audited or reviewed the accompanying statements and accordingly do not express
an opinion or any other form of assurance on them.
December 1, 2000
<PAGE>
AMNIS Systems, Inc
(formerly Graffiti-X, Inc.)
BALANCE SHEET
<TABLE>
<CAPTION>
September 30 December 31
2000 1999
------------ -----------
<S> <C> <C>
ASSETS
Cash $ 100 $ 3,697
Inventory 240 976
------- -------
TOTAL ASSETS $ 340 $ 4,673
LIABILITIES
Accounts payable 0 0
TOTAL LIABILITIES 0 0
------- -------
STOCKHOLDERS' EQUITY
Common Stock, &.0001 par value,
40,000,000 shares authorized;
9,310,000 issued and outstanding 931 931
Additional paid-in capital 5,872 5,872
Accumulated deficit (6,463) (2,130)
------- -------
TOTAL STOCKHOLDERS' EQUITY 340 4,673
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 340 $ 4,673
------- -------
</TABLE>
See Accountant's Compilation Report and Notes.
<PAGE>
AMNIS SYSTEMS, INC.
(formerly Graffiti-S, Inc.)
STATEMENT OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales 0 0 0 0
Cost of sales 0 0 0 0
Gross Profit 0 0 0 0
Operating Expenses
General and Administrative 1,037 30 4,333 768
Total Operating Expenses 1,037 30 4,333 768
---------- ---------- ---------- ----------
Net Income (loss) (1,037) (30) (4,333) (768)
Income Taxes (Note C) 0 0 0 0
Net Income (1,037) (30) (4,333) (768)
Earnings per share (.00011) $ (.00000) (.00047) (.00013)
Weighted Average 9,310,000 9,310,000 9,310,000 5,565,555
</TABLE>
See Accountant's Compilation Report and Notes.
<PAGE>
AMNIS SYSTEMS, INC.
(formerly Graffiti-X, Inc.)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
September 30, 2000
<TABLE>
<CAPTION>
Common Stock Additional
------------ Paid-In Accumulated
Shares Amount Capital Deficit
----------- ------ ----------- -----------
<S> <C> <C> <C> <C>
Beginning Balance
July 29, 1998 $ 0 $ 0 $ 0
Issuance of Common
Stock for expenses
And inventory paid
On August 4, 1998
at $0.0015 per share 1,000,000 $ 100 $ 1,392
Issuance of Common
Stock for cash on
Sept. 20, 1998 at
$0.01 per share 385,000 39 3,811
Net income (loss)
December 31, 1998 $ (761)
----------- ------ ------- -------
Balance 12/31/98 1,385,000 $ 139 $ 5,203 $ (761)
Stock split:
Six for One
May 10, 1999 6,925,000 692 (692)
Issuance of Common
Stock for merchandise
On July 1, 1999 at
$0.0015 per share 1,000,000 100 1,361
Net income (loss)
December 31, 1999 (1,369)
----------- ------ ------- -------
Balance on
December 31, 1999 9,310,000 $ 931 $ 5,872 $(2,130)
Net income (loss) for
Sept 30, 2000 (4,333)
Balance 9/30/2000 9,310,000 $ 931 $ 5,872 $(6,463)
</TABLE>
See Accountant's Compilation Report and Notes.
<PAGE>
AMNIS SYSTEMS, INC.
(formerly Graffiti-X, Inc.)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the nine months ended
September 30,
2000 1999
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(4,333) $ (768)
Adjustments to reconcile net income
To net cash used in operating activities:
Use of Inventory 736 678
------- -------
NET CASH USED IN OPERATING ACTIVITIES (3,597) (90)
CASH FLOWS FROM INVESTINF ACTIVITIES 0 0
CASH FLOWS FROM FINANCING ACITIVITIES 0 0
PROCEEDS FROM ISSUANCE OF COMMON STOCK 0 0
NET INCREASE (DECREASE) IN CASH (3,597) (90)
CASH-BEGINNING 3,697 3,817
------- -------
CASH-ENDING $ 100 $ 3,727
</TABLE>
See Accountant's Compilation Report and Notes
<PAGE>
AMNIS SYSTEMS, INC.
(formerly Graffiti-X, Inc.)
NOTES TO FINANCIAL STATEMENTS
A. Organization and Summary of Significant Accounting Policies:
Organization
AMNIS Systems, Inc, (The Company) was incorporated under the
laws of the State of Delaware on July 29, 1998. The company was formed
to manufacture and sell two chemical products designed to remove
graffiti from a variety of surfaces. The Company has not engaged in any
significant operations since inception other than product
demonstration, the search for a manufacturing facility, corporate
maintenance activities, acquisition of capital, and preparation for
filing of its Registration Statement Form 10-SB. No operating revenues
have been realized by the Company since inception.
The Company anticipates incurring increased expenses in the
current year as a result of costs associated with registration under
the Securities Exchange Act of 1934. However the Company also expects
to generate its first revenues from sales before August 31, 2000. The
Company's marketing efforts indicate that it should be able to sell its
products at a price that is approximately 400% of manufacturing cost.
Management therefore expects that it will be able to offset the higher
operating cost associated with registration under the Securities
Exchange Act with profits from product sales. Management expects sales
to begin in the third quarter and increase in the fourth quarter of the
year 2000.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities, and
reported amounts of revenues and expenses. Actual results could differ
from those estimates.
Cash and Cash Equivalents
The Company considers all investments with a maturity of three
months or less to be cash equivalents.
<PAGE>
AMNIS Systems, Inc.
(formerly Graffiti-X, Inc.)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
Earning Per Share
Earnings per share is provided in accordance with Accounting
Principles board opinion No. 15 (APB No. 15) "Earnings Per Share". Due
to the Company's simple capital structure, only one earnings per share
calculation is presented. Earnings per share is computed by dividing
income available to common stockholders by the weighted average number
of common shares outstanding during the period.
Income Taxes
Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS No. 109), "Accounting for
Income Taxes." A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting and net
operating loss carry forwards. Deferred tax expense (benefit) results
from the net change during the year of deferred tax assets and
liabilities.
Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment. No deferred
taxes have been recorded as an asset or liability.
B. Income Tax Expense:
The Company's provision for income taxes for the nine months
ended September 30, 1999 and 2000 is $0. Due to the Company's operating
loss, there is no tax expense recognized for 1999 or 2000.
C. Stockholders' Equity:
The Company is authorized to issue 40,000,000 shares of common
stock, par value $0.0001 per share, of which 9,310,000 shares are
issued and outstanding.
On August 4, 1998 the company issued 950,000 shares of common
stock to its President, Amin Hassan, in exchange for the rights to
formulations of the Graffiti XL products and an inventory of chemicals
for the manufacture of these products costing $1,367. Also on that date
the Company issued 50,000
<PAGE>
AMNIS Systems, Inc.
(formerly Graffiti-X, Inc.)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
shares of common stock to Daniel Masters in exchange for his services
in incorporating the Company.
On August 4, 1998 the Company filed a Form-D with the U.S.
Securities and Exchange Commission. Between August 4, 1998 and
September 30, 1998 the Company sold 385,000 shares of common stock at
$0.00 per share to 37 individuals for a total proceeds of $3,850. The
offers and sales were made pursuant to Rule 504 of Regulation D under
the Securities Act of 1933 as amended.
On May 10, 1999 the shareholders of the Company agreed to a
stock split on the basis of six new shares for one old share.
Therefore, as of that date the Company had 8,310,000 shares for one old
share. Therefore, as of that date the Company had 8,310,000 shares of
common stock issued and outstanding.
On July 1, 1999 the Company issued 1,000,000 shares of common
stock to its President, Amin Hassan, in exchange for an inventory of
chemicals used in the manufacture of Graffiti XL products costing
$1,461. Consequently, at December 31, 1999 the Company had 9,310,000
shares of common stock issued and outstanding.
D. Need for Additional Financing
The company believes that its existing capital will be sufficient to
meet the Company's cash needs through the inception of manufacturing
and sales. The Company believes that profits from sales will generate
sufficient cash for its operating needs by the end of the third
quarter, and the Company believes it has sufficient resources to see it
through to that time and beyond if necessary. The Company therefore
does not foresee the need for additional financing in the year ahead.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity and Capital Resources
-------------------------------
The Company is in the development stage. The Company's capital consists of
chemicals supplied by the Company's founder and President, Amin Hassan and funds
provided by investors. The opening chemical inventory had a cost basis to Mr.
Hassan (and therefore to the Company) of $1,367. Mr Hassan subsequently
contributed an additional chemical inventory which had a cost basis to him of
$1,461 for a total inventory contribution of $2,828. Approximately ninety-two
percent (92%) of the chemicals have been expended in the course of demonstrating
the Company's products, however approximately twenty-nine percent (8%) remain
available. Of the $3,850 raised in the Company's private placement $3,667
remains available. The Company's capital is sufficient to allow it to continue
to finance operating activities in this manner for one to two years to come.
When the Company commences manufacturing it will accept orders only with a down
payment of twenty-five percent (25%) of the total sales price. This down payment
will be sufficient to provide the necessary working capital to produce and
deliver the product.
Results of Operations
---------------------
The Company's balance sheet for the period ending December 31, 1999, the
Company's first full year of operation, reflects a cash asset of $3,697 and
inventory of $976 for a total asset value of $4,673. On July 1, 1999 the
Company's President sold an inventory of chemicals with a cost basis of $1,461
to the Company in exchange for 1,000,000 shares of common stock. Thus the total
inventory for the year was $2,225 and the ending inventory of $976 reflected a
decrease of $1,249 (56%). Cash decreased by $120 (3%), and total assets
decreased by $1,369 (23%) during the year.
The Company's balance sheet for September 30, 2000, the end of the Company's
third quarter of the current year, reflects a cash asset of $100 and inventory
of $240 for a total asset value of $340. Cash decreased by $3,557, and total
assets decreased by $4,293 during the nine month period.
The Company cannot predict to what extent its liquidity and capital resources
will be diminished prior to commencement of manufacturing and sales, however
management believes that the Company's present capital is sufficient to commence
those activities, given the Company's plan to accept orders only with a partial
payment approximately equal to the cost of goods sold.
The Company has not engaged in any significant operations since inception other
than product demonstration, the search for a manufacturing facility, corporate
maintenance activities, acquisition of capital, preparation for filing of its
Registration Statement on Form 10-SB, and, most recently, preliminary
discussions aimed at combining with a better funded company in the event that
sales do not materialize. No operating revenues have been realized by the
Company since inception.
The Company anticipates incurring increased expenses in the current year as a
result of costs associated with registration under the Securities Exchange Act
of 1934. However the Company
5
<PAGE>
also expects to generate its first revenues from sales before June 30, 2001. The
Company's marketing efforts indicate that it should be able to sell its products
at a price that is approximately 400% of manufacturing cost. Management
therefore expects that it will be able to offset the higher operating costs
associated with registration under the Securities Exchange Act with profits from
product sales. Sales, which are expected to begin in the second quarter of 2001,
should increase in the latter half of 2001.
Need for Additional Financing
-----------------------------
The Company believes that its existing capital will be sufficient to meet the
Company's cash needs through the inception of manufacturing and sales. The
Company believes that profits from sales will generate sufficient cash for its
operating needs by the end of 2001. The Company therefore does not foresee the
need for additional financing in the year ahead.
"CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Except for historical matters,
the matters discussed in this Form 10-SB are forward-looking statements based on
current expectations, and involve risks and uncertainties. Forward-looking
statements include, but are not limited to, statements under the following
heading: "Managements Discussion And Analysis Or Plan Of Operations" the timing
and expected profitable results of manufacturing and sales and the need for no
additional financing.
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
None
Item 3 DEFAULTS UPON SENIOR SECURITIES
None
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5 OTHER INFORMATION
None
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
6
<PAGE>
Exhibit 27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
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.
AMNIS SYSTEMS INC.
(formerly Graffiti-X, Inc.
Dated: December 5, 2000 Per: /s/Jason John
----------------------------------
Jason John, President and Director
7
