UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarter ended September 30, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Commission File No. 000-32603
Historical Autographs U.S.A., Inc.
----------------------------------
(Name of Small Business Issuer in its charter)
Nevada 91-1955323
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
516 W. Sprague Ave., Spokane, WA 99201
--------------------------------------
(Address of principal executive offices)
(509) 744-8590
--------------
(Issuer's Telephone Number Including Area Code)
(former name, former address and former fiscal year
if changed since last report)
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 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 number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date:
Title of each class of Common Stock Outstanding at October 28, 2003
----------------------------------- -------------------------------
Common Stock, $0.001 par value 1,220,000
Transitional Small Business Disclosure Format (check one):
Yes No x
--- ---
TABLE OF CONTENTS
FORM 10-QSB REPORT - FOR QUARTER ENDED SEPTEMBER 30, 2003
Historical Autographs U.S.A., Inc.
PART I
Item 1. Financial Statements
Condensed Balance Sheets -
September 30, 2003 (unaudited) and December 31, 2002 (audited) 3
Condensed Statements of Operations 4
Three Months and Nine Month ended September 30, 2003 and 2002
Condensed Statement of Stockholders' Equity 5
Condensed Statements of Cash Flows 6
Nine Months ended September 30, 2003 and 2002
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of Operation 11
Item 3. Controls and Procedures 13
PART II
Item 1. Legal Proceedings 13
Item 2. Change in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURE PAGE 15
2
PART I
ITEM 1. FINANCIAL STATEMENTS
HISTORICAL AUTOGRAPHS U.S.A., INC.
BALANCE SHEETS
September 30,
2003 December 31,
(unaudited) 2002
---------- ---------
ASSETS
CURRENT ASSETS
Cash $ 237 $ 30
Accounts receivable -- 6,000
Inventory 74,860 72,960
---------- ---------
TOTAL CURRENT ASSETS 75,097 78,990
---------- ---------
TOTAL ASSETS $ 75,097 $ 78,990
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 6,304 $ 1,200
Commissions payable - related party 1,020 660
Sales tax payable -- --
Interest payable 15 --
Loan 500 500
Loan from officer 50 --
---------- ---------
TOTAL CURRENT LIABILITIES 7,889 2,360
---------- ---------
COMMITMENTS AND CONTINGENCIES -- --
---------- ---------
STOCKHOLDERS' EQUITY
Preferred stock, 5,000,000 shares authorized,
$0.001 par value; no shares issued and outstanding -- --
Common stock, 25,000,000 shares authorized,
$0.001 par value; 610,000 shares
issued and outstanding 610 610
Additional paid-in capital 114,390 114,390
Accumulated deficit (47,792) (38,370)
---------- ---------
TOTAL STOCKHOLDERS' EQUITY 67,208 76,630
---------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 75,097 $ 78,990
========= =========
See accompanying notes.
3
HISTORICAL AUTOGRAPHS U.S.A., INC.
STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
--------------------------- -----------------------------
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
(unaudited) (unaudited) (unaudited) (unaudited)
--------- -------- --------- ---------
SALES $ 6,000 $ - $ 6,000 $ 8,500
COST OF GOODS SOLD 3,500 - 3,500 4,761
--------- -------- --------- ---------
GROSS PROFIT 2,500 - 2,500 3,739
EXPENSES
Marketing 80 120 357 360
Rent 900 900 2,700 2,700
General and administrative 160 76 392 689
Legal and accounting 2,879 3,255 7,222 15,110
Consulting - 116 - 1,575
Stock transfer and resident agent fees - 27 819 971
Commissions 360 - 360 510
--------- -------- --------- ---------
TOTAL EXPENSES 4,379 4,494 11,850 21,913
--------- -------- --------- ---------
LOSS FROM OPERATIONS (1,879) (4,494) (9,350) (18,174)
OTHER EXPENSE
Interest expense (29) - (72) (12)
--------- -------- --------- ---------
TOTAL OTHER EXPENSES (29) - (72) (12)
--------- -------- --------- ---------
LOSS BEFORE INCOME TAXES (1,908) (4,494) (9,422) (18,186)
INCOME TAXES - - - -
--------- -------- --------- ---------
NET LOSS $ (1,908) $ (4,494) $ (9,422) $ (18,186)
========= ======== ========= =========
NET LOSS PER COMMON SHARE,
BASIC AND DILUTED $ (0.00) $ (0.01) $ (0.02) $ (0.03)
========= ======== ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES
OUTSTANDING, BASIC AND DILUTED 610,000 610,000 610,000 596,250
========= ======== ========= =========
See accompanying notes.
4
HISTORICAL AUTOGRAPHS U.S.A., INC.
STATEMENT OF STOCKHOLDERS' EQUITY
Common Stock
------------------
Additional Total
Number Paid-in Accumulated Stockholders'
of Shares Amount Capital Deficit Equity
--------- ------ ---------- ----------- -------------
Balance, December 31, 2001 $ 585,000 $ 585 $ 89,415 $ (18,116) $ 71,884
Common stock issued for cash at $1.00 per share 25,000 25 24,975 - 25,000
Net loss for the year ended December 31, 2002 - - - (20,254) (20,254)
--------- ------ --------- ---------- -------------
Balance, December 31, 2002 610,000 610 114,390 (38,370) 76,630
Net loss for the period ended September 30, 2003 - - - (9,422) (9,422)
--------- ------ --------- ---------- -------------
Balance, September 30, 2003 (unaudited) 610,000 $ 610 $ 114,390 $ (47,792) $ 67,208
========= ====== ========= ========== =============
See accompanying notes.
5
HISTORICAL AUTOGRAPHS U.S.A., INC.
STATEMENTS OF CASH FLOWS
Nine Months Ended
----------------------------
September 30, September 30,
2003 2002
(unaudited) (unaudited)
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,422) $(18,186)
Adjustments to reconcile net loss
to net cash provided (used) in operating activities:
Decrease (increase) in inventory (1,900) (239)
Increase in accrued rent -- --
Increase (decrease) in accounts payable 5,104 (1,236)
Decrease in Accounts Receivable 6,000
Increase (decrease) in sales tax payable -- (1,546)
Increase in interest payable 15 --
Increase (decrease) in commissions payable 360 (4,158)
-------- --------
Net cash provided (used) in operating activities 157 (25,365)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES: -- --
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in loans payable 50 --
Common stock issued for cash -- 25,000
-------- --------
Net cash provided (used) by financing activities 50 25,000
-------- --------
Change in cash 207 (365)
Cash, beginning of period 30 1,703
-------- --------
Cash, end of period $ 237 $ 1,338
======== ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $ -- $ --
======== ========
Income taxes paid $ -- $ --
======== ========
See accompanying notes.
6
HISTORICAL AUTOGRAPHS U.S.A., INC.
Condensed Notes to Financial Statements
September 30, 2003
--------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION OF UNAUDITED INTERIM FINANCIAL INFORMATION
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial statements and with instructions to Form 10-QSB pursuant
to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information required by accounting
principles generally accepted in the United States of America for complete
financial statements. The accompanying financial statements should be read in
conjunction with the audited financial statements of the Company included in the
Company's December 31, 2002 Annual Report on Form 10-KSB.
In the opinion of management, all adjustments, consisting only of normal
recurring accruals considered necessary for a fair presentation, have been
included. The results of operations for the nine-month period ended September
30, 2003 are not necessarily representative of operating results to be expected
for the entire fiscal year.
NOTE 2 - ACCOUNTING POLICIES
Use of Estimates
----------------
The process of preparing financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements. Accordingly,
upon settlement, actual results may differ from estimated amounts. At September
30, 2003, the Company had not participated in consignment or conditional sales;
therefore, there are no unsettled transactions related to sales or cost of
sales.
Reclassifications
-----------------
Certain amounts from prior periods have been reclassified to conform with the
current period presentation. These reclassifications have resulted in no changes
to the Company's accumulated deficit or net losses presented.
Inventories
-----------
Inventories are accounted for using the specific identification method, and
stated at the lower of cost or market, with market representing the lower of
replacement cost or estimated net realizable value. The Company has no insurance
coverage on its inventory.
The Company has no inventory on consignment at September 30, 2003. In the
future, if the Company consigns inventory, it will retain title and will insure
the inventory until the inventory is sold, returned, lost, stolen, damaged, or
destroyed.
Revenue and Cost Recognition
----------------------------
Revenues from retail sales are recognized at the time the products are
delivered.
7
HISTORICAL AUTOGRAPHS U.S.A., INC.
Condensed Notes to Financial Statements
September 30, 2003
--------------------------------------------------------------------------------
NOTE 2 - ACCOUNTING POLICIES (continued)
Revenue and Cost Recognition (continued)
----------------------------------------
Although the Company does not provide a written warranty on its items sold, the
Company will refund the purchase price paid to any customer in those instances
when an item sold is proven to be non-authentic. In a majority of instances, the
Company receives a certificate of authenticity for documents (items) purchased
from its vendors and is reasonably assured as to the provenance of its products.
Since inception, the Company has made no refunds for the sale of any non-
authentic items nor has the Company received any claims or notice of prospective
claims relating to such items. Accordingly, the Company has not established a
reserve against forgery or nonauthenticity.
If a product proves not to be authentic, a full refund is given to the purchaser
and a charge against sales and related costs is recorded.
Going Concern
-------------
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the nine months ended September
30, 2003, the Company has a net loss of $9,422, an accumulated deficit of
$47,792 and limited cash resources. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. The future of the
Company is dependent upon its ability to obtain financing and upon future
profitable operations from the commercial success of its retail venture.
Management's plans are to seek additional capital through sales of the Company's
stock.
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 in existence.
Recent Accounting Pronouncements
--------------------------------
In May 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity" (hereinafter
"SFAS No. 150"). SFAS No. 150 establishes standards for classifying and
measuring certain financial instruments with characteristics of both liabilities
and equity and requires that those instruments be classified as liabilities in
statements of financial position. Previously, many of those instruments were
classified as equity. SFAS No. 150 is effective for financial instruments
entered into or modified after May 31, 2003 and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. The Company
has not yet determined the impact of the adoption of this statement.
In April 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities" (hereinafter "SFAS No. 149").
SFAS No. 149 amends and clarifies the accounting for derivative instruments,
including certain derivative instruments embedded in
8
HISTORICAL AUTOGRAPHS U.S.A., INC.
Condensed Notes to Financial Statements
September 30, 2003
--------------------------------------------------------------------------------
NOTE 2 - ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements (continued)
--------------------------------------------
other contracts, and for hedging activities under SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". This statement is effective for
contracts entered into or modified after June 30, 2003 and for hedging
relationships designated after June 30, 2003. The adoption of SFAS No. 149 is
not expected to have a material impact on the financial position or results of
operations of the Company.
In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46 "Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51" (hereinafter "FIN 46"). FIN 46 requires certain
variable interest entities to be consolidated by the primary beneficiary of the
entity if the equity investors in the entity do not have the characteristics of
a controlling financial interest or do not have sufficient equity at risk for
the entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 is effective for all new variable interest
entities created or acquired after January 31, 2003. The provisions of FIN 46
must be applied for the first interim or annual period beginning after June 15,
2003. The Company does not have any entities that require disclosure or new
consolidation as a result of adopting the provisions of FIN 46.
NOTE 3 - PREFERRED AND COMMON STOCK
The Company has 5,000,000 shares of preferred stock authorized and none issued.
The Company has 25,000,000 shares of common stock authorized. Upon
incorporation, the Company issued 500,000 shares of common stock to officers and
directors for $5,000 in cash. During 1999, the Company issued 67,900 shares of
common stock for cash at $1.00 per share and 17,100 shares at $1.00 per share
for subscriptions receivable, which were paid in January of 2000.
During 2002, the Company issued 25,000 shares of common stock for cash at $1.00
per share.
All shares of preferred and common stock are non-assessable and non-cumulative.
The common stock has no preemptive rights.
NOTE 4 - STOCK OPTION PLAN
The Company's board of directors approved the adoption of the "2001
Non-Qualified Stock Option and Stock Appreciation Rights Plan" by unanimous
consent on March 5, 2001. This plan was initiated to encourage and enable
officers, directors, consultants, advisors and other key employees of the
Company to acquire and retain a proprietary interest in the Company by ownership
of its common stock. A total of 1,000,000 of the authorized shares of the
Company's common stock may be subject to, or issued pursuant to the terms of the
plan. No options have been issued under the plan as of September 30, 2003.
9
HISTORICAL AUTOGRAPHS U.S.A., INC.
Condensed Notes to Financial Statements
September 30, 2003
--------------------------------------------------------------------------------
NOTE 5 - COMMITMENTS AND CONTINGENCIES
Rental Agreement
----------------
The Company has a month-to-month rental agreement for office space in Spokane,
Washington. The minimum monthly rent is $300.
Concentration
-------------
As of September 30, 2003, the Company had $74,860 of its total assets of $75,097
invested in inventory.
NOTE 6 - RELATED PARTY TRANSACTIONS
The occasional usage of used computer equipment, provided to the Company by the
Company's officers at no charge, is considered immaterial for financial
reporting purposes.
The Company pays a 3% commission on every sale to each of the Company's two
officers. Commissions unpaid, but accrued, are unsecured, payable upon demand
and non-interest bearing.
On March 28, 2003, Mr. Ray Kuh resigned as president of the Company. Ms. Cindy
Swank was voted the new president, and Mr. Scott Wetzel was voted in as the new
secretary and vice president.
NOTE 7 - LOAN PAYABLE
In December 2002 the Company borrowed $500. According to the loan agreement,
principal and interest, in the amount of 6%, is due on December 12, 2003.
NOTE 8 - SUBSEQUENT EVENTS
Subsequent to the date of these financial statements, on October 20, 2003 the
Company executed an agreement to acquire all of the issued and outstanding
shares of Arbios Technologies, Inc., a private biomedical device company based
in Los Angeles, CA. The Company will acquire all of Arbios' shares through a
merger in which the Company will issue approximately 12,000,000 shares of its
unregistered common stock to the shareholders of Arbios. After the merger,
Historical will change its name to "Arbios Systems, Inc.", and will continue to
trade on the Pink Sheets under a new trading symbol. Arbios Technologies, Inc.
has worldwide rights to patents issued or pending covering a portfolio of
technologies, including two extracorporeal liver assist devices, which are in
pre-clinical development. Each of Arbios' devises is considered to be a
potential treatment for liver failure.
Also subsequent to the date of these financial statements, on October 6, 2003
the Company declared a 100% stock dividend for all shareholders of record as of
that date totaling 610,000 shares of common stock. For each share of common
stock held, the shareholders received an additional share of common stock. This
transaction will be accounted for as a stock split for accounting purposes,
although under Nevada law this was recognized as a stock dividend.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD-LOOKING STATEMENTS
The securities of the Company are speculative and involve a high degree of risk,
including, but not necessarily limited to, the factors affecting operating
results described in the Form 10KSB which includes audited financial statements
for the year ended December 31, 2002. The statements which are not historical
facts contained in this report, including statements containing words such as
"believes," "expects," "intends," "estimates," "anticipates," or similar
expressions, are "forward looking statements" (as defined in the Private
Securities Litigation Reform Act of 1995) that involve risks and uncertainties.
The foregoing and subsequent discussion contains certain forward-looking
statements within the meaning of Section 27A of the Securities A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
which are intended to be covered by the safe harbors created thereby. These
forward-looking statements include the plans and objectives of management for
future operations, including plans and objectives relating to the possible
further capitalization and the possible acquisition of Arbios Technologies, Inc.
The forward-looking statements included herein are based on current expectations
that involve numerous risks and uncertainties. Assumptions relating to the
foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. Although the Company believes that the
assumptions underlying the forward-looking statements are reasonable, any of the
assumptions could be inaccurate and, therefore, there can be no assurance that
the forward-looking statements included in this Form 10-QSB will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.
Overview
--------
Historical Autographs U.S.A., Inc. was organized as a Nevada Corporation on
February 1, 1999. The original Articles of Incorporation authorize the issuance
of thirty million (30,000,000) shares of stock, including twenty five million
(25,000,000) shares of common stock at par value $0.001 per share and five
million (5,000,000) shares of Preferred stock at par value $0.001 per share. As
of September 30, 2003 the Company has six hundred ten thousand (610,000) shares
of its $0.001 par value common voting stock issued and outstanding. As the
result of a 100% stock dividend for the benefit of the shareholders of record on
October 6, 2003, as of October 6, 2003 there are one million two hundred twenty
thousand (1,220,000) shares of its $0.001 par value common voting stock issued
and outstanding.
The Company is an e-Commerce firm engaged in the business of acquiring and
marketing historical documents such as letters, photographs and signatures of
governmental, political and military figures, inventors, Nobel Prize winners,
significant physicians, scientists, explorers, aviators and astronauts,
entertainers, musicians, composers, authors, artists, clergymen, judges,
lawyers, and well-known athletes, among others.
The Company's executive offices are located at 516 W. Sprague Ave., Spokane, WA
99201 and its telephone and facsimile numbers are (509) 744-8590 and (509)
623-0121, respectively.
The Company has a limited operational history and from inception (February 1999)
has generated limited revenues. The Company has financed its operations during
its initial operational stage from the sale of its common stock. Due to our
limited operating history, our financial statements are not indicative of
anticipated revenues that may be attained or expenditures that may be incurred
by the Company in future periods. Our ability to achieve profitable operations
is subject to the validity of our assumptions and risk factors within the
industry and pertaining to the Company.
Current Status and Operations
-----------------------------
Historical Autographs U.S.A., Inc. is in its initial operational stage as an
e-Commerce based company engaged in the business of acquiring and marketing
historical documents such as letters, photographs and signatures of
11
governmental, political and military figures, inventors, Nobel Prize winners,
significant physicians, scientists, explorers, aviators and astronauts,
entertainers, musicians, composers, authors, artists, clergymen, judges,
lawyers, and well-known athletes, among others. Our document inventory currently
consists of approximately 30 different documents, with an inventory cost of
$74,860 at September 30, 2003, including photographs and signatures of
entertainers, letters, documents and signatures of political figures, letters
and signatures of scientists and signatures of historic sports figures. The
Company purchases documents principally at auctions, from private collectors,
dealers in historical documents, estates and various individuals who are not
collectors but are in possession of documents. These avenues of supply are
likely to continue to be the Company's main sources of inventory. Retail sales
of documents are primarily facilitated through our web site:
http://www.historical-autographs.com.
Marketing efforts principally target individuals who appreciate or collect
antiques, paintings, lithographs, other works of art and collectibles, but who
may not be aware of the availability of historical documents for purchase. In
addition, autograph and document collectors, consignment to auction houses,
interior decorators, interior designers, private clients and corporations are
being targeted as these groups may have an appreciation for historical documents
displayed in aesthetically pleasing presentations. The Company's primary
marketing strategy is a direct sales approach via an internet retail site. Upon
accessing the site, interested parties are able to read about the Company,
browse the majority of inventory items and place orders.
Subsequent to the quarter ended September 30, 2003, the Company entered into an
agreement to acquire all of the issued and outstanding shares of Arbios
Technologies, Inc. a private biomedical device company based in Los Angles,
California. The agreement intends that the Company will acquire Arbios
Technologies, Inc. through the issuance of approximately 12,000,000 shares of
its unregistered common stock to the shareholders of Arbios Technologies, Inc.
If the transaction is completed the current shareholders of the Company will own
approximately nine percent of the then outstanding stock. Arbios Technologies,
Inc. is an early stage company engaged in the discovery, acquisition and
development of proprietary liver assist devices and new technologies useful the
diagnosis and treatment of acute liver failure. If the acquisition of Arbios
Technologies, Inc. is completed as currently contemplated, the Company will
cease its current e-commerce operations and continue the development of the
medical technologies that Arbios Technologies, Inc. is currently pursuing.
Accordingly, the Company's plan of operations will change from the plan
discussed in this Form 10-QSB and in the Company's prior filings with the
Securities and Exchange Commission. If the acquisition of Arbios Technologies,
Inc. is completed as scheduled on October 30, 2003, the Company will provide
information regarding Arbios Technologies, Inc., its business, operations,
technologies, officers and directors, and financial condition in filings made by
the Company with the Securities and Exchange Commission following the closing.
No assurance can be given that the acquisition will be completed, or if
completed that the Company's new plan of operations will be successful.
LIQUIDITY AND CAPITAL RESOURCES/RESULTS OF OPERATIONS
Historical Autographs U.S.A., Inc. has limited assets. As of September 30, 2003,
our assets consisted of cash of $237 and resale inventories of $74,860 for total
assets of $75,097. Our officers own the computer equipment the Company utilizes.
Current liabilities totaled $7,889, with available working capital at $67,208.
The Company has had minimal operations and limited revenues. From inception the
Company accumulated an operating deficit of $47,792. For the nine months ended
September 30, 2003, the Company had a net loss of $9,422 on gross revenues of
$6,000.
Management currently believes that its existing capital and future funds from
operations will be insufficient to fund the Company's activities, and according
that the Company may need to raise additional funds through public and private
financing. No assurance can be given that additional financing will be available
or that, if available, can be obtained on terms favorable to the Company and its
stockholders. Failure to obtain such financing could delay or prevent our
planned expansion, which could adversely affect our business, financial
condition and results of operations. If additional capital is raised through the
sale of additional equity or convertible securities, dilution to the Company's
stockholders could occur.
For the quarter ending September 30, 2003, the Company reported a net loss of
$1,908 on revenues of $6,000. compared to sales of $0 and a net loss of $4,494
in the quarter ended September 30, 2002. The Company incurred Operating Expenses
of $4,379 in the quarter ended September 30, 2003, almost identical to the
quarter ending September 30, 2002, when the Company incurred similar expenses
totaling $4,494. The Company's Quarter ended September 30, 2003 financial
statements reflect adjustments and nonrecurring cost items and are not
indicative of
12
anticipated revenues which may be attained or expenditures which may be incurred
by the Company in future periods.
The Company's independent public accountants have included explanatory
paragraphs in their reports on the Company's financial statements for the years
ended December 31, 2002 and 2001, which express substantial doubt about the
Company's ability to continue as a going concern. As discussed in Footnote 2 to
the Company's financial statements, included with the Company's Form 10-KSB, the
Company has suffered recurring losses from operations and accumulated deficit
that raises substantial doubt about its ability to continue as a going concern.
As a result of the foregoing, the Company decided to acquire Arbios
Technologies, Inc. If the acquisition is completed as contemplated, Arbios
Technologies, Inc. will, at the time of the acquisition have in excess of
$3,500,000 of cash on hand, other assets of approximately $500,000, and
liabilities of less than $150,000. Upon the closing of the acquisition, the
company will cease its current e-commerce business and will assume the
operations of Arbios Technologies, Inc. The financial resources that Arbios
Technologies, Inc. is expected to have at the time of the acquisition are
currently expected by the Company to be sufficient to fund the working capital
needs of the Company (including those of Arbios Technologies, Inc.) for at least
the next twelve months.
ITEM 3. CONTROLS AND PROCEDURES
Within 90 days prior to the date of filing of this quarterly report on Form
10-QSB, we carried out an evaluation, under supervision and with the
participation of our management, including our CEO and CFO, of the effectiveness
of the design and operation of our disclosure controls and procedures pursuant
to Exchange Act Rule 13a-14. Based upon that evaluation, our CEO and CFO
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information relating to us required to be included in
our periodic SEC filings. Subsequent to the date of that evaluation, there have
been no changes in internal controls or in other factors that could
significantly affect internal controls, nor were any corrective actions required
with regard to significant deficiencies and material weaknesses.
PART II
ITEM 1. LEGAL PROCEEDINGS
No material legal proceedings to which the Company is a party or to which the
property of the Company is subject, is pending or is known by the Company to be
contemplated.
ITEM 2. CHANGE IN SECURITIES.
After the end of the fiscal quarter ending September 30, 2003, the Company
issued a stock dividend of one share of common stock for each share of common
stock outstanding on October 6, 2003.
ITEM 3. Defaults Upon Senior Securities. NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On October 6, 2003, the holders of over 81% of the then issued and outstanding
shares of common stock voted to amend the name of the Company to "Arbios
Systems, Inc." if the acquisition of Arbios Technologies, Inc. is completed. The
vote was taken by written consent without a meeting, and notice of the action is
being provided to the Company's stockholders as required by Nevada law. The name
change will be effected after the acquisition of Arbios Technologies, Inc.
ITEM 5. OTHER INFORMATION: NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31.1 Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
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(b) The Company filed the following reports on Form 8-K:
The Company filed no Form 8-K forms during the quarter ended September 30, 2003
but filed one Form 8-K on October 24, 2003, subsequent to the quarter ended
September 30, 2003, for the purpose of furnishing a copy of a press release
issued October 23, 2003 concerning the execution of an agreement to acquire all
of the issued and outstanding shares of Arbios Technologies, Inc., a private
biomedical device company.
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SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report signed on its
behalf by the undersigned, thereunto duly authorized.
HISTORICAL AUTOGRAPHS U.S.A., INC.
Date: October 29, 2003 By: s/Cindy Swank
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Cindy Swank, Chief Financial Officer
Date: October 29, 2003 By: s/Cindy Swank
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Cindy Swank, Chief Executive Officer
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