datastorage10q63009_81409.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
|
[x]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the quarterly period ended June 30, 2009
|
|
OR
|
[
]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from to
|
Data Storage Consulting,
Inc.
(Exact
name of registrant as specified in its charter)
Colorado
|
000-53126
|
20-8096131
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification
No.)
|
13990 Braun Road, Golden,
CO
|
80401
|
(Address
of principal executive offices)
|
(Zip
Code)
|
303-
883-9334
(Registrant's
telephone number, including area code)
N/A
(Former
name, former address & former fiscal year, if changed since last
report)
Indicate
by check mark whether the registrant (1) has filed all documents and reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filings for the past 90 days. YES [X] NO
[ ]
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes
No N/A
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.
Large
accelerated filer
|
Accelerated
filer
|
Non-accelerated
filer (Do
not check if a smaller reporting company)
|
Smaller
reporting company [x]
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [ ] No [x]
APPLICABLE
ONLY TO CORPORATE ISSUERS:
As of
August 10, 2009, the number of the Company's shares of par value, $0.001, common
stock outstanding was 8,929,000.
INDEX
|
|
Page
|
|
PART
I – FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
ITEM
1.
|
Financial
Statements.
|
3
|
|
|
|
|
Balance
Sheets–June 30, 2009 (Unaudited) and December 31, 2008
(audited)
|
4
|
|
|
|
|
Statements
of Operations for the Three Months and Six Months Ended
June
30, 2009 and 2008, and from inception through June 30, 2009 (all
unaudited)
|
5
|
|
|
|
|
Statements
of Cash Flows for the Three Months and Six Months Ended
June
30, 2009 and 2008, and from inception through June 30, 2009 (all
unaudited)
|
6
|
|
|
|
|
Notes
to the Consolidated Financial Statements (unaudited)
|
8
|
|
|
|
ITEM
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
10
|
|
|
|
ITEM
3.
|
Quantitative
and Qualitative Disclosures about Market Risk.
|
14
|
|
|
|
ITEM
4T.
|
Controls
and Procedures.
|
14
|
|
|
|
|
PART
II – OTHER INFORMATION
|
|
|
|
|
ITEM
1.
|
Legal
Proceedings.
|
15
|
|
|
|
ITEM
1A.
|
Risk
factors.
|
15
|
|
|
|
ITEM
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
15
|
|
|
|
ITEM
3.
|
Defaults
Upon Senior Securities.
|
15
|
|
|
|
ITEM
4.
|
Submission
of Matters to a Vote of Security Holders.
|
15
|
|
|
|
ITEM
5.
|
Other
Information.
|
15
|
|
|
|
ITEM
6.
|
Exhibits.
|
16
|
|
|
|
|
Signatures.
|
16
|
PART
I - FINANCIAL INFORMATION
ITEM
1 - FINANCIAL STATEMENTS
DATA
STORAGE CONSULTING SERVICES, INC.
(A
Development Stage Company)
FINANCIAL
STATEMENTS
(Unaudited)
Quarter
Ended June 30, 2009
DATA
STORAGE CONSULTING SERVICES, INC.
|
|
(A
Development Stage Company)
|
|
BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2009
|
|
|
|
Dec.
31, 2008
|
|
|
(Unaudited)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash
|
|
$ |
16 |
|
|
$ |
- |
|
Total current
assets
|
|
|
16 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Deferred
offering costs
|
|
|
10,465 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$ |
10,481 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
&
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Related
party payables
|
|
$ |
1,605 |
|
|
$ |
9,430 |
|
Total current
liabilities
|
|
|
1,605 |
|
|
|
9,430 |
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
1,605 |
|
|
|
9,430 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
Preferred
stock, $.10 par value;
|
|
|
|
|
|
|
|
|
1,000,000
shares authorized;
|
|
|
|
|
|
|
|
|
none
issued and outstanding
|
|
|
- |
|
|
|
- |
|
Common
stock, $.001 par value;
|
|
|
|
|
|
|
|
|
50,000,000
shares authorized;
|
|
|
|
|
|
|
|
|
8,929,000
shares issued and outstanding
|
|
|
8,929 |
|
|
|
8,929 |
|
Additional
paid in capital
|
|
|
64,386 |
|
|
|
64,386 |
|
Deficit
accumulated during the development stage
|
|
|
(74,904 |
) |
|
|
(82,745 |
) |
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
|
|
(1,589 |
) |
|
|
(9,430 |
) |
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
|
$ |
16 |
|
|
$ |
- |
|
The
accompanying notes are an integral part of the financial
statements.
DATA
STORAGE CONSULTING SERVICES, INC.
|
|
(A
Development Stage Company)
|
|
STATEMENTS
OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec.
12, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Inception
of
|
|
|
|
Three
Months
|
|
|
Three
Months
|
|
|
Six
Months
|
|
|
Six
Months
|
|
|
Dev.
Stage)
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Through
|
|
|
|
June
30, 2008
|
|
|
June
30, 2009
|
|
|
June
30, 2008
|
|
|
June
30, 2009
|
|
|
June
30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
40,625 |
|
|
|
6,251 |
|
|
|
48,993 |
|
|
|
7,841 |
|
|
|
82,767 |
|
|
|
|
40,625 |
|
|
|
6,251 |
|
|
|
48,993 |
|
|
|
7,841 |
|
|
|
82,767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
|
|
(40,625 |
) |
|
|
(6,251 |
) |
|
|
(48,993 |
) |
|
|
(7,841 |
) |
|
|
(82,767 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
22 |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
22 |
|
Income
(loss) before provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for
income taxes
|
|
|
(40,625 |
) |
|
|
(6,251 |
) |
|
|
(48,993 |
) |
|
|
(7,841 |
) |
|
|
(82,745 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income tax
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$ |
(40,625 |
) |
|
$ |
(6,251 |
) |
|
$ |
(48,993 |
) |
|
$ |
(7,841 |
) |
|
$ |
(82,745 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Basic
and fully diluted)
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common
shares outstanding
|
|
|
8,929,000 |
|
|
|
8,929,000 |
|
|
|
8,895,333 |
|
|
|
8,929,000 |
|
|
|
|
|
The
accompanying notes are an integral part of the financial
statements.
DATA
STORAGE CONSULTING SERVICES, INC.
|
|
(A
Development Stage Company)
|
|
STATEMENTS
OF CASH FLOWS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec.
12, 2006
|
|
|
|
|
|
|
|
|
|
(Inception
of
|
|
|
|
Six
Months
|
|
|
Six
Months
|
|
|
Dev.
Stage)
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Through
|
|
|
|
June
30, 2008
|
|
|
June
30, 2009
|
|
|
June
30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$ |
(48,993 |
) |
|
$ |
(7,841 |
) |
|
$ |
(82,745 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
to reconcile net loss to
|
|
|
|
|
|
|
|
|
|
|
|
|
net
cash provided by (used for)
|
|
|
|
|
|
|
|
|
|
|
|
|
operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Related
party payables
|
|
|
(695 |
) |
|
|
7,825 |
|
|
|
9,430 |
|
Compensatory
stock issuances
|
|
|
|
|
|
|
|
|
|
|
8,450 |
|
Net cash provided by (used
for)
|
|
|
|
|
|
|
|
|
|
|
|
|
operating
activities
|
|
|
(49,688 |
) |
|
|
(16 |
) |
|
|
(64,865 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
offering costs
|
|
|
(34,070 |
) |
|
|
- |
|
|
|
(44,535 |
) |
Net
cash provided by (used for)
|
|
|
|
|
|
|
|
|
|
|
|
|
investing
activities
|
|
|
(34,070 |
) |
|
|
- |
|
|
|
(44,535 |
) |
(Continued
On Following Page)
The
accompanying notes are an integral part of the financial
statements.
DATA
STORAGE CONSULTING SERVICES, INC.
|
|
(A
Development Stage Company)
|
|
STATEMENTS
OF CASH FLOWS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
(Continued
From Previous Page)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec.
12, 2006
|
|
|
|
|
|
|
|
|
|
(Inception
of
|
|
|
|
Six
Months
|
|
|
Six
Months
|
|
|
Dev.
Stage)
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Through
|
|
|
|
June
30, 2008
|
|
|
June
30, 2009
|
|
|
June
30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
|
Sales
of common stock
|
|
|
101,000 |
|
|
|
- |
|
|
|
108,500 |
|
Paid
in capital
|
|
|
|
|
|
|
|
|
|
|
900 |
|
Net cash provided by (used
for)
|
|
|
|
|
|
|
|
|
|
|
|
|
financing
activities
|
|
|
101,000 |
|
|
|
- |
|
|
|
109,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) In Cash
|
|
|
17,242 |
|
|
|
(16 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
At The Beginning Of The Period
|
|
|
135 |
|
|
|
16 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
At The End Of The Period
|
|
$ |
17,377 |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule Of Non-Cash Investing And Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for interest
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Cash
paid for income taxes
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
The
accompanying notes are an integral part of the financial
statements.
DATA
STORAGE CONSULTING SERVICES, INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Data
Storage Consulting Services, Inc. (the “Company”), was incorporated in the State
of Colorado on December 12, 2006. The Company was formed to provide data
management, consulting and storage services to clients.
Development stage
company
The
Company is currently in the development stage, and has commenced operations but
has not yet generated significant revenues.
Basis of
Presentation
The
accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB and do not include all of the information
and disclosures required by generally accepted accounting principles for
complete financial statements. All adjustments which are, in the opinion of
management, necessary for a fair presentation of the results of operations for
the interim periods have been made and are of a recurring nature unless
otherwise disclosed herein. The results of operations for such interim periods
are not necessarily indicative of operations for a full year.
Cash and cash
equivalents
The
Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
Accounts
receivable
The
Company reviews accounts receivable periodically for collectability and
establishes an allowance for doubtful accounts and records bad debt expense when
deemed necessary.
Property and
equipment
Property
and equipment are recorded at cost and depreciated under accelerated methods
over each item's estimated useful life, which is five years for vehicles,
computers and other items.
Revenue
recognition
Revenue
is recognized on an accrual basis after services have been performed under
contract terms, the event price to the client is fixed or determinable, and
collectibility is reasonably assured. Standard contract policy calls for partial
payment up front with balance due upon receipt of final billing.
DATA
STORAGE CONSULTING SERVICES, INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Income
tax
The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (“SFAS 109”). Under SFAS 109 deferred taxes are provided on a
liability method whereby deferred tax assets are recognized for deductible
temporary differences and operating loss carryforwards and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. 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.
Net income (loss) per
share
The net
income (loss) per share is computed by dividing the net income (loss) by the
weighted average number of shares of common outstanding. Warrants, stock
options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share.
Financial
Instruments
The
carrying value of the Company’s financial instruments, including cash and cash
equivalents and accrued payables, as reported in the accompanying balance sheet,
approximates fair value.
ITEM
2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
The
following should be read in conjunction with the consolidated financial
statements of the Company included elsewhere herein.
FORWARD-LOOKING
STATEMENTS
When used
in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,”
“estimate,” “intend,” “plans”, and similar expressions are intended to identify
forward-looking statements regarding events, conditions and financial trends
which may affect our future plans of operations, business strategy, operating
results and financial position. Forward looking statements in this
report include without limitation statements relating to trends affecting our
financial condition or results of operations, our business and growth strategies
and our financing plans.
Such
statements are not guarantees of future performance and are subject to risks and
uncertainties and actual results may differ materially from those included
within the forward-looking statements as a result of various
factors. Such factors include, among other things, general economic
conditions; cyclical factors affecting our industry; lack of growth in our
industry; our ability to comply with government regulations; a failure to manage
our business effectively; our ability to sell products at profitable yet
competitive prices; and other risks and factors set forth from time to time in
our filings with the Securities and Exchange Commission, including our
registration statement on Form SB-2, as amended. .
Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date made. We undertake no obligation to publicly
release the result of any revision of these forward-looking statements to
reflect events or circumstances after the date they are made or to reflect the
occurrence of unanticipated events.
Overview and Recent
History
Data Storage Consulting Services, Inc.
sells data storage protection and consulting services to small and medium
businesses. We currently operate exclusively in Colorado. We market and
sell our products and services to directly to business end users. We have a
limited history of operations.
On March
7, 2008, we closed our registered public offering. We sold a total of 404,000
common shares at a price of $.25 per share, for a total of
$101,000.
Our
headquarters are located at 13990 Braun Road, Golden, CO 80401. Our phone number
at our headquarters is (303)883-9334. Our fiscal year end is December
31st.
To date,
since inception on December 12, 2006, we have had no revenues and only losses,
and we anticipate this continuing for the foreseeable future. Accordingly, until
such time that we are profitable, if at all, we will be dependent upon debt and
equity financing which may not be available to us. Our auditors are currently
of the opinion, and have formally indicated that for the fiscal year ended
December 31, 2008, that they doubt our ability to continue as a going concern as
a result of our continued net losses.
Plan of
Operation
We did
not have revenues and only losses since inception on December 12, 2006.
Accordingly, our only source of capital has been the gross proceeds of
$101,000 from our registered public offering which closed on March 7,
2008.
As a
development stage company in the early phase of developing its business
– selling data storage protection and consulting services to small and
medium businesses -- our primary efforts have been devoted to developing our
business and raising capital. We have limited capital resources and have
experienced net losses and negative cash flows from operations since inception
and expect these conditions to continue for the foreseeable future. As of
June 30, 2009, the Company had $0 in cash and other current assets. We estimate
that we will require a minimum of approximately $36,000 for operating expenses
over the next 12 months. Since we do not have any cash and cash assets as
of June 30, 2009 and we do not anticipate having revenues for the foreseeable
future, we will be required to raise additional funds to meet our short goals.
There can be no assurance that such funds, if available at all, can be obtained
on terms reasonable to us. We cannot predict if and when we will become
profitable and less dependent upon outside financing sources.
If we are
unsuccessful in our attempts to raise sufficient capital, we may have to cease
operations, seek joint venture partners, a merger or acquisition candidate, or
postpone our plans to initiate or complete our business plan. In that case, you
may lose your entire investment in our company.
Our plan
for the next 12 months is to operate at a profit or at break even. Our plan is
to attract sufficient additional product sales and services within our present
organizational structure and resources to become profitable in our
operations.
Currently,
we are conducting business in only one location in the Denver Metropolitan area.
We have no plans to expand into other locations or areas. We believe that we can
achieve profitability as we are presently organized with sufficient
business.
Proposed
Milestones
At the
present time, we are operating from one location in the Denver Metropolitan
area. Our plan is to make our operation profitable by the end of our next fiscal
year. We estimate that we must generate approximately $3,000 in sales per month
to be profitable.
We
believe that we can be profitable or at break even by the end of the first
quarter of the next fiscal year, assuming sufficient sales of which there is no
assurance. Based upon our current plans, we have adjusted our operating expenses
so that cash generated from operations and from working capital financing, if
any, is expected to be sufficient for the foreseeable future to fund our
operations at our currently forecasted levels. To try to operate at a break-even
level based upon our current level of anticipated business activity, we believe
that we must generate approximately $36,000 in revenue per year. However, if our
forecasts are inaccurate, we will need to raise additional funds. On the other
hand, we may choose to scale back our operations to operate at break-even with a
smaller level of business activity, while adjusting our overhead to meet the
revenue from current operations. In addition, we expect that we will need to
raise additional funds if we decide to pursue more rapid expansion, the
development of new or enhanced services and products, appropriate responses to
competitive pressures, or the acquisition of complementary businesses or
technologies, or if we must respond to unanticipated events that require us to
make additional investments. We cannot assure that additional financing will be
available when needed on favorable terms, or at all.
We expect
to incur operating losses in future periods because we will be incurring
expenses and not generating sufficient revenues. We expect approximately $36,000
in operating costs over the next twelve months. We cannot guarantee that we will
be successful in generating sufficient revenues or other funds in the future to
cover these operating costs. Failure to generate sufficient revenues or
additional financing when needed could cause us to go out of
business
No
commitments to provide additional funds have been made by management or current
shareholders. There is no assurance that additional funds will be made available
to us on terms that will be acceptable, or at all, if and when needed. We expect
to continue to generate and increase sales, but there can be no assurance we
will generate sales sufficient to continue operations or to expand.
We
also are planning to rely on the possibility of referrals from clients and will
strive to satisfy our clients. We believe that referrals will be an effective
form of advertising because of the quality of service that we bring to clients.
We believe that satisfied clients will bring more and repeat
clients.
In the
next 12 months, we do not intend to spend any material funds on research and
development and do not intend to purchase any large equipment.
Results of
Operations
The
Three Months Ended June 30, 2009 Compared to the Three Months Ended June 30,
2008
The
revenues for the three months ended June 30, 2009 and June 30, 2008 were both
$0.
The
Operating Expenses, which are composed entirely of general and administrative
expenses, for the three months ended June 30, 2009 and June 30, 2008, were
$6,251 and $40,625, respectively. The higher expenses in 2008 were attributable
to the payment of the professional fees and costs related to the Company’s 2008
registered public offering.
Similarly,
our Net Loss for the three months ended June 30, 2009 and June 30, 2008, were
$6,251 and $40,625, respectively.
The
Six Months Ended June 30, 2009 Compared to the Six Months Ended June 30,
2008
The
revenues for the six months ended June 30, 2009 and June 30, 2008 were both
$0.
The
Operating Expenses, which are composed entirely of general and administrative
expenses, for the six months ended June 30, 2009 and June 30, 2008, were $7,841
and $48,993, respectively. The higher expenses in 2008 were attributable to the
payment of the professional fees and costs related to the Company’s 2008
registered public offering.
Similarly,
our Net Loss for the six months ended June 30, 2009 and June 30, 2008, were
$7,841 and $48,993, respectively.
Generally, the major components of
general and administrative expenses to date were payments to independent
contractors, professional fees, and prepaid expenses. While our general and
administrative expenses will continue to be our largest expense item until and
if we become fully operational, we believe that this expense will stabilize in
the coming fiscal year as we reduce independent contractors, professional fees,
and prepaid expenses.
Also, in general, we believe that
overhead cost in current operations should remain fairly constant as (if)
revenues develop. Each dollar of revenue will have minimal offsetting overhead
cost. We believe that if we can develop sufficient revenues, we could be
profitable by the end of the first quarter of fiscal year 2010.
As of
June 30, 2009, we had cash or cash equivalents of $0.00.
Net cash
used for operating activities was $16 for the six months ended June 30, 2009,
compared to cash provided by operating activities of $17,242 for the period
ended June 30, 2008.
We will
attempt to maintain overhead costs in current operations as we develop
revenues.
Presently,
we believe that we can attract sufficient additional product sales and services
within our present organizational structure and resources to become profitable
in our operations. Additional resources will be needed to expand into additional
locations, which we have no plans to do at this time.
We
believe that the principal source of our liquidity will be our operations. Our
variation in revenues is based upon the level of our sales activity and will
account for the difference between a profit and a loss. Also business activity
is closely tied to the economy of Denver and the U.S. economy. A slow down in
interior design work will have a negative impact to our business. In any case,
we try to operate with minimal overhead. Our primary activity will be to seek to
expand the interior design projects and, consequently, our sales. If we succeed
in expanding our client base and generating sufficient sales, we will become
profitable. We cannot guarantee that this will ever occur. Our plan is to build
our company in any manner which will be successful.
Since we
had no available cash resources on June 30, 2009 and we do not anticipate
sufficient revenues in the foreseeable future, we intend to seek additional
funding (debt or equity) from outside sources (and possibly from our officers
and directors) for pursuing our business plan, to the extent that our operations
do not generate sufficient levels of profitability and cash flow. Should we seek
to raise additional capital, there can be no assurances that such capital can be
raised on satisfactory terms, on a timely basis, or at all. In the event that we
are unable to raise the additional capital (or a significant portion of it) that
we require, we will not be able to execute our business plan which may result in
the termination of our operations.
Our
future capital requirements will depend upon many factors, including the
expansion of our business operations.
Off-Balance Sheet
Arrangements
At June
30, 2009, we did not have any transactions, obligations or relationships that
could be considered off-balance sheet arrangements.
Significant Accounting
Policies
Our
discussion and analysis of results of operations and financial condition are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these consolidated financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. We evaluate our estimates on an ongoing basis, including those
related to provisions for uncollectible accounts receivable, inventories,
valuation of intangible assets and contingencies and litigation. We base our
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
The
accounting policies that we follow are set forth in Note 1 to our financial
statements as included in this document. These accounting policies conform to
accounting principles generally accepted in the United States, and have been
consistently applied in the preparation of the financial
statements.
Recently
Issued Accounting Pronouncements
In
December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 123R "Share Based Payment." This
statement is a revision of SFAS No. 123, "Accounting for Stock-Based
Compensation" and supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees, and its related implementation guidance. SFAS No. 123R addresses all
forms of share based payment ("SBP") awards including shares issued under
employee stock purchase plans, stock options, restricted stock and stock
appreciation rights. Under SFAS No. 123R, SBP awards result in a cost that will
be measured at fair value on the awards' grant date, based on the estimated
number of awards that are expected to vest. This statement is effective for
public entities that file as issuers, as of the beginning of the first interim
or annual reporting period that begins after December 15, 2005. We adopted this
pronouncement during the first quarter of 2005.
In
December 2004, the FASB issued SFAS No. 153, Exchanges of Non-monetary Assets -
An Amendment of APB Opinion No. 29. The amendments made by SFAS No. 153 are
based on the principle that exchanges of non-monetary assets should be measured
based on the fair value of the assets exchanged. Further, the amendments
eliminate the narrow exception for non-monetary exchanges of similar productive
assets and replace it with a broader exception for exchanges of non-monetary
assets that do not have "commercial substance." SFAS No. 153 is effective for
non-monetary asset exchanges occurring in fiscal periods beginning after June
15, 2005. The adoption of SFAS No. 153 on its effective date did not have a
material effect on our consolidated financial statements.
In March
2005, the FASB issued Financial Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations - an Interpretation of FASB Statement
No. 143", which specifies the accounting treatment for obligations associated
with the sale or disposal of an asset when there are legal requirements
attendant to such a disposition. We adopted this pronouncement in 2005, as
required, but there was no impact as there are no legal obligations associated
with the future sale or disposal of any assets.
In May
2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections —
A Replacement of APB Opinion No. 20 and SFAS Statement No. 3". SFAS No. 154
changes the requirements for the accounting and reporting of a change in
accounting principle by requiring retrospective application to prior periods'
financial statements of the change in accounting principle, unless it is
impracticable to do so. SFAS No. 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005. We
do not expect the adoption of SFAS No. 154 to have any impact on our
consolidated financial statements.
ITEM
3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide the information under this
item.
ITEM
4T - CONTROLS AND PROCEDURES
As of the
end of the period covered by this report, based on an evaluation of our
disclosure controls and procedures (as defined in Rules 13a -15(e) and
15(d)-15(e) under the Exchange Act), our Chief Executive Officer and the Chief
Financial Officer each have concluded that our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in our Exchange Act reports is recorded, processed, summarized, and reported
within the applicable time periods specified by the SEC’s rules and
forms.
There
were no changes in our internal controls over financial reporting that occurred
during our most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
This
report does not include an attestation report of the company’s registered public
accounting firm regarding internal control over financial reporting. Identified
in connection with the evaluation required by paragraph (d) of Rule 240.13a-15
or Rule 240.15d-15 of this chapter that occurred during the registrant’s last
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting.
PART
II - OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS.
We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide the information under this
item.
The above statement notwithstanding,
shareholders and prospective investors should be aware that certain risks exist
with respect to the Company and its business, which risks include: its limited
assets, lack of revenues and only losses since inception, industry risks, the
need for additional capital; the fact that our accountants have expressed doubts
about our ability to continue as a going concern; among other factors. The
Company management is aware of these risks and has attempted to establish the
minimum controls and procedures to insure adequate risk assessment and execution
to reduce loss exposure. For more specific detail regarding the risks inherent
in an investment in the Company, shareholders and prospective investors are also
referred to the “Risk Factors” section of the Company’s registration statement
filed with the Securities and Exchange Commission on Form SB-2, as amended. See
www.sec.gov.
ITEM
2. UNREGISTERED SALES OF EQUITY 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.
Exhibit
31.1
|
Certification
required by Rule 13a-14(a) or Rule 15d-14(a) and section 302 of the
Sarbanes-Oxley Act of 2002, CEO
|
|
|
Exhibit
31.2
|
Certification
required by Rule 13a-14(a) or Rule 15d-14(a) and section 302 of the
Sarbanes-Oxley Act of 2002, CFO
|
|
|
Exhibit
32.1
|
Certification
required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, CEO
|
|
|
Exhibit
32.2
|
Certification
required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350,
CFO
|
SIGNATURES
Pursuant
to the requirements of Section 13 of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Data Storage Consulting,
Inc.
(Registrant)
By:/s/Ross Bernstein
|
Date:
August 18, 2009
|
Ross
Bernstein, President/Chief Executive
|
|
Officer
|
|
|
|
By:/s/
Neil
Bernstein
|
Date:
August 18, 2009
|
|
|
Neil
Bernstein, Secretary/Treasurer
|
|
Principal
Accounting Officer and Financial Officer
|
|
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