<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED SEPTEMBER 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-31249
MOJAVE SOUTHERN, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Nevada 88-0331369
(State of Organization) (I.R.S. Employer Identification No.)
2949 East Desert Inn Road, Suite 1d, Las Vegas, NV 89121
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (702) 451-2029
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 past 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 [ ]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filings. (See
definition of affiliate in Rule 405)
The aggregate market value of the voting stock held by non-affiliates of the
registrant is $_____________.
Note: If a determination as to whether a particular person or entity is an
affiliate cannot be made without involving unreasonable effort and expense, the
aggregate market value
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of the common stock held by non-affiliates may be calculated on the basis of
assumptions reasonable under the circumstances, provided that the assumptions
are set forth in this form.
525,000 Common Shares, $0.001 Par Value, Issued and Outstanding
Transitional Small Business Disclosure Format: Yes [ ] No [X]
PART I
Item 1. Financial Statements
Independent Auditor's Report dated November 3, 2000
Financial Statements
Balance Sheet
Statement of Operations
Statement of Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statements
<PAGE> 3
MARK SHERMAN, CPA
7601 MOORING AVENUE
LAS VEGAS, NV 89129
(702) 645-0808
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Mojave Southern, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of Mojave Southern, Inc., and
subsidiary as of September 30, 2000; and the related statement of operations,
stockholders' equity and cash flows for the period ended September 30, 2000.
These financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mojave Southern, Inc., and
subsidiary at September 30, 2000; and the results of operations and their cash
flows for the nine months ended September 30, 2000 in conformity with generally
accepted accounting principles.
/s/
Mark S. Sherman
November 3, 2000
<PAGE> 4
MOJAVE SOUTHERN, INC.
BALANCE SHEET
SEPTEMBER 30, 2000
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash $ 139.00
Accounts Receivable $ 40,000
Marketable Securities (Note 2) $ 4,152
---------
TOTAL CURRENT ASSETS $ 44,291
OTHER ASSETS
Investment in Netta's Salon (Note 4) $ 80,060
Refundable Deposits $ 3,300
Goodwill (Note 5) $ 32,863
---------
TOTAL OTHER ASSETS $ 116,223
---------
TOTAL ASSETS $ 160,514
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 84,323
Other Current Liabilities $ 61,268
---------
TOTAL CURRENT LIABILITIES $ 145,591
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value authorized 50,000,000 shares;
issued and outstanding at September 30, 2000
525,000 shares $ 525
Additional Paid in Capital $ 114,669
Retained Earnings (Deficit) ($100,271)
---------
TOTAL STOCKHOLDERS' EQUITY $ 14,923
---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 160,514
---------
</TABLE>
<PAGE> 5
MOJAVE SOUTHERN, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
January 1, 2000 December 30, 1994
to (Inception)
September 30, 2000 to September 30, 2000
------------------ ---------------------
<S> <C> <C>
INCOME
Revenue $ 0 $ 0
--------- ---------
TOTAL INCOME $ 0 $ 0
EXPENSES
General and
Administrative $ 9,519 $ 100,271
--------- ---------
TOTAL EXPENSES $ 9,519 $ 100,271
--------- ---------
NET PROFIT (LOSS) ($ 9,519) ($100,271)
========= =========
NET PROFIT (LOSS)
PER SHARE ($ 0.0181) ($ 0.1910)
========= =========
AVERAGE NUMBER OF
SHARES OF COMMON
STOCK OUTSTANDING 525,000 525,000
========= =========
</TABLE>
<PAGE> 6
MOJAVE SOUTHERN, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
September 30, 2000
Common Stock
<TABLE>
<CAPTION>
(Deficit)
Accumulated
Number Additional During
Of Paid In Development
Shares Amount Capital Stage
--------- ------ ---------- -----------
<S> <C> <C> <C> <C>
January 10, 1995
issued for cash 50,000 $ 50 $ 3,542
Net (Loss) 12-30-94
(inception) to 12-31-95 $ (80)
--------- ---- -------- ---------
Balance, Dec. 31, 1995 50,000 $ 50 $ 3,542 (80)
Net (Loss), 12-31-96 $ (3,307)
--------- ---- -------- ---------
Balance, Dec. 31, 1996 50,000 $ 50 $ 3,542 $ (3,387)
Net (Loss), 12-31-97 $ (209)
--------- ---- -------- ---------
Balance Dec. 31, 1997 50,000 $ 50 $ 3,542 $ (3,596)
April 4, 1998 issued
for cash and stock 125,000 $125 $ 11,527
April 4, 1998 cancel 50,000 $ 50
October 2, 1998
issued for cash 200,000 $200 $ 49,800
Net (Loss), 12-31-98 $ (66,306)
Net (Loss), 12-31-99 $ (20,850)
--------- ---- -------- ---------
Balance
December 31, 1999 325,000 $325 $ 64,869 $ (90,752)
February 29, 2000 issued
For 100% of stock of
Norden Associates, Inc. 200,000 $200 $ 49,800
Net (Loss), September 30, 2000 (9,519)
Balance September 30, 2000 525,000 $525 $114,869 $(100,271)
</TABLE>
<PAGE> 7
MOJAVE SOUTHERN, INC
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Jan. 1, 2000 Dec. 30, 1994
to (inception)
Sept. 30, 2000 Sept. 30, 2000
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Income(Loss) $(95,519) (100,271)
Goodwill Amortization $ 486 $ 486
Accounts Receivable Increase $ 0 $ (40,000)
Investment in Netta's Salon $(80,060) $ (80,060)
Refundable Deposits $ (3,300) $ (3,300)
Goodwill $(33,349) (33,349)
Accounts Payable Increase 75,368 $ 145,591
CASH FLOWS FROM
FROM OPERATING ACTIVITIES $(50,370) $(110,903)
CASH FLOWS FROM
INVESTING ACTIVITIES
Issue Common Stock $ 200 $ 525
Additional Paid In Capital $ 49,800 $ 110,517
CASH FLOWS FROM
INVESTING ACTIVITIES $ 50,000 $ 111,042
Net Increase
(decrease) in Cash $ (374) $ 139
Cash
Beginning of Period $ 513 $ 0
Cash
September 30, 2000 $ 139 $ 139
</TABLE>
<PAGE> 8
MOJAVE SOUTHERN, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
NOTE 1 - ORGANIZATION AND ACCOUNTING POLICIES
The Company was incorporated on December 30, 1994 under the Laws of the
State of Nevada. The Company was organized to engage in any lawful activity.
The Company's accounting policies and procedures are as follows:
A) The Company uses the accrual method of accounting.
B) Earnings per share are computed using the weighted average number of
shares of common stock outstanding.
C) The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
NOTE 2 - MARKETABLE SECURITIES
Marketable securities represent 4,286 shares of the stock of Centenary
International Corp. (RRRI) at the bid price of $0.09688 per share as shown on
the OTC Electronic Bulletin Board market at September 30, 1999. The RRRI stock
was acquired on April 4, 1998, in exchange for the issuance of 125,000 shares of
Mojave Southern, Inc., stock in addition to $7,500 in cash.
NOTE 3 - INVESTMENT IN NORDEN ASSOCIATES, INC.
On February 29, 2000, the Company purchased 100% of the common stock of
Norden Associates, Inc., d/b/a Netta's Salon, a company with an established
source of revenue, in exchange for 200,000 shares of Mojave Southern, Inc.'s
restricted common stock $0.01 par value. For purposes of the transaction, Mojave
Southern, Inc.'s shares were valued at $0.25 per share.
NOTE 4 - INVESTMENT IN NETTA'S SALON
On May 12, 1999, Norden Associates, Inc., purchased "Bella Dona Hair and
Nails," a personal care salon for $22,000 in cash. Norden has continued this
business by doing business under the name of Netta's Salon. The following
audited information of Netta's Salon is selected financial information at June
30, 2000 and December 31, 1999:
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<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
<S> <C> <C>
ASSETS
Current Assets $ 967 $ 1,300
Fixed Assets $ 7,160 $ 9,764
Other Assets $ 12,815 $ 17,474
Total Assets $ 20,942 $ 28,538
LIABILITIES AND OWNERS EQUITY
Current Liabilities $ 594 $ 0
Owners Equity $ 20,348 $ 28,538
Total $ 20,942 $ 28,538
</TABLE>
Revenues and net income (loss) for the period ended September 30, 2000, and
year ended December 31, 1999, are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
<S> <C> <C>
Revenues $ 24,978 $ 27,830
Net Income (loss) $(12,737) $ (6,438)
</TABLE>
NOTE 5 - GOODWILL
The Company records goodwill upon consolidation of its wholly owned
subsidiary Norden Associates, Inc.
NOTE 6 - COMMON STOCK
On April 4, 1998, the Company canceled 50,000 shares of stock originally
issued on January 10, 1995. On the same date, the Company issued 125,000 shares
of stock for $7,500 cash and 4,285 shares of R & R Resources, Inc., equaling
$7,5000 in total consideration.
On February 29, 2000, the Company issued 200,000 shares of stock to Norden
Associates, Inc.'s sole shareholder.
<PAGE> 10
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS
This statement includes projections of future results and "forward looking
statements" as that term is defined in Section 27A of the Securities Act of 1933
as amended (the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934 as amended (the "Exchange Act"). All statements that are included in
this Quarterly Report, other than statements of historical fact, are forward
looking statements. Although management believes that the expectations reflected
in these forward looking statements are reasonable, it can give no assurance
that such expectations will prove to have been correct. Important factors that
could cause actual results to differ materially from the expectations are
disclosed in the Registration Statement.
Mojave, through Netta's Salon, provides affordable Salon and Day Spa services to
under serviced areas in the Las Vegas valley area of Nevada. The Salon and Day
Spa industry continues to be a growth industry as more and more women join the
work force and thereby gain disposable income. Its growth is due in part to the
fact that having your hair, nails and feet groomed and a body massage just feels
great. Additionally, television and the motion picture industry continue to show
us a thinner more vibrant picture of health and beauty that some may wish to
aspire to, and, where Las Vegas residents, domiciliaries and tourists are
concerned, there is always the "Show Girl" or "Dancer" image of youth that must
be maintained. Netta's Salon was formed to focus on the exploitation of these
public wants, needs, and perceptions, with the goal of becoming leading
independent provider of Salon and Day Spa services in the Las Vegas area.
Mojave specializes in offering Hair Care, Manicure, Masseuse, Esthetician,
Henna, Permanent Eye Makeup, and tanning facilities to consumers at affordable
prices. Primary emphasis is placed on offering personal care and service to
customers in the Salon's local community.
In addition, with the rapid penetration of tourists and new residents into Las
Vegas, it has become increasingly difficult to make a Salon or Day Spa
appointment at the existing facilities, which are primarily resort based, on
short notice. This almost full capacity has created a market niche for non-hotel
based Salon and Day Spa service providers in the Las Vegas valley area who aim
to service locals and/or tourists.
Mojave has positioned itself in a location away from the hustle and bustle of
the famed Las Vegas Strip. As such, Mojave's pricing structure for cost items
such as rent, parking, and other realty services is more modest than near
<PAGE> 11
the Strip. These cost relief's are passed on to the consumer in the form of
lower prices for the Company's Salon and Day Spa services.
Mojave's mission is to provide Salon and Day Spa services, away from the hustle
and bustle of the Las Vegas Strip, at affordable pricing, rendering its
customers with the preeminent service and pampering that Salon and Day Spa
consumers envision as their expected experience.
Mojave offers Salon and Day Spa services that answer the unfilled needs of
consumers who prefer to buy their leisure time service purchases within a local
area close to home, and to Las Vegas Resort goers who are unable to book an
appointment at a Resort's Salon and Spa. Mojave's services answer the consumers
want for most, if not all of the services associated with a major hotel or chain
Salon and Day Spa, at prices less than those commanded by Resort based service
providers. Mojave's management team and service providers have significant
experience in providing Salon and Day Spa services in the Las Vegas Valley area.
PRICING AND VALUE
Mojave's pricing policy reflects the savings associated with a non-Strip
location, away from the higher priced tourist geared similar service providers.
These savings, when passed on to the consumer, allow the consumer to receive
local Salon and Day Spa services at prices ranging from 12% to 15% below Resort
Based providers. This pricing strategy is designed to attract new clients while,
at the same time, offering singularly superlative Salon and Day Spa services and
products.
MARKET OVERVIEW AND SIZE
The Las Vegas/Henderson area of Nevada has been either the top one or two growth
cities in the United States, in terms of population added, for the last decade.
Further, Las Vegas, Nevada has been and remains one of the top vacation and
convention centers in the world. Currently, no significant alteration to the
forgoing is in sight.
Mojave is a specialty service provider and retailer of Salon and Day Spa
services and products. Mojave believes that the growth potential of a specialty
service provided and retailer is dependant upon three primary factors: (1) the
size of the market for services and products; (2) the market's growth rate; and
(3) the share of the market that can be earned and held through customer
satisfaction.
Sales growth is typically driven by gains in market share rather than by overall
market growth. The appropriate inquire being, "How does Mojave attract and
maintain a
<PAGE> 12
customer base? Mojave believes that by targeting under served areas of the
greater Las Vegas area for store locations, while at the same time being within
a convenient commuting distance from the Las Vegas Strip, there should be a
reduction in fixed operating costs for major items such as realty and other
services, and thus, increased profitability. Mojave's focus, therefore, is to
pass these reductions in operating expenses through to the consumer, while at
the same time providing services and products typified by the Resort Based
operators.
MARKET SEGMENTS
The Beauty Salon that conducts hair styling and manicure operations as its main
business has been the anchor of the Salon business for decades. However, such
services are limited in scope. This limitation applies to the "Manicure Only",
Pedicure Only", "Massage Only", "Beauty Supply Only", or "Tanning Only",
singular use Salons and shops. Today's customer is more demanding in that they
are gravitating to "One Stop Shopping" on a more frequent basis.
Mojave's niche is its ability to offer and provide most if not all expected
Salon and Day Spa services. Mojave offers Beauty Supply, Hairdressing,
Manicurists, Masseuse, Esthetician, Henna, Permanent Eye Makeup and tanning
services in its current location and expects to offer identical full service in
any and all anticipated locations with a constant eye to the market for changes
in wants, needs, and expectations of Salon and Day Spa customers.
CUSTOMER PROFILE
In an article posted by Standard & Poors in its Industry Surveys-Retailing:
Specialty, May 27, 1999, Standard & Poors described the customer Mojave seeks to
service as a "Precision Shopper." More than half the American work force is
female, which encompass many time pressured working mothers. Shopping, which was
considered a recreational activity in the 1980's is now often considered a
chore. As a result, convenience and a single "full service" location have become
an important part of a consumer's experience. This trend has become so prevalent
that it has been dubbed, "Precision Shopping." In addition to the "Precision
Shopper," Mojave's customer profile also includes tourists and conventioneers
who come to Las Vegas for business and/or pleasure. According to Standard &
Poors, Precision Shoppers, if and when satisfied, are loyal to their product and
service providers and tend to increase spending on continued visits to their
chosen retailer.
COMPETITION
Competition in the Salon and Day Spa business is ever
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present. Both individual operators and "chain" stores participate within the
marketplace. However, few Salon and Day Spa service and product providers offer
a complete package of Salon and Day Spa services and products. Mojave, in
filling this market niche, offers Beauty Supply, Hairdressing, Manicurists,
Masseuse, Esthetician, Henna, Permanent Eye Makeup and tanning services. When
you look in the yellow pages under Beauty, you find the by-lines fill up four
full pages. That is, hair by -, or nails by -, or hands and feet by -. Further,
many limited service Salon's and Spa's fail, in pertinent part, due to lack of
diversification in their services. Mojave had concluded that there are many
limited service privateers in its competitive geographic are. These limited
service privateers, however, do not offer any organized form of competition in
the full service Salon and Day Spa arena.
Resort based Salons and Spas do provide significant competition to Mojave.
However, due to the ever increasing Las Vegas population and visitors, these
Resort based Salons and Spas do not have the capacity to service both residents
and tourists. Further, such Resort based Salons and Spas are quite pricey. The
services, products, atmosphere and attention to detail provided by Mojave equals
that of many competitive Resort based providers, at a substantially decreased
cost.
While competition does exist, Mojave believes that it has positioned itself to
gain market share by way of its full service offerings and greater
affordability.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Inapplicable/None
ITEM 2. CHANGES IN SECURITIES
Inapplicable/None
ITEM 3. DEFAULTS UPON SENIOR NOTES
Inapplicable/None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Inapplicable/None
ITEM 5. OTHER INFORMATION
Inapplicable/None
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K
Inapplicable/None
A. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Status Title
-------------- ------ -----
<S> <C> <C>
3(i) (*) Articles of Incorporation
3(ii) (*) By-laws
10 (*) Material Contracts
23 [prior] (*) Consents of Experts and Counsel
23 [current] (**) Consents of Experts and Counsel
24 (**) Power of Attorney
27 (**) Financial Data Schedule
</TABLE>
---------------
(*) Previously provided as an exhibit to the Company's Registration Statement
(**) Provided herewith
B. REPORTS on FORM 8-K
Inapplicable/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.
MOJAVE SOUTHERN, INC.,
By: /s/ VIVIAN NEHLS
------------------------------------
Vivian Nehls
Its President
November 13, 2000
