[
X
]
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QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the quarterly period ended June 30, 2007
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|
[ ]
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
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For
the transition period from ________________ to
_________________
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|
Commission
file number 0-50742
|
SIGN
MEDIA SYSTEMS, INC.
__________________________________________________________________________
(Exact
name of small business issuer as specified in its
charter)
|
|
FLORIDA
________________________________________________
(State
or other jurisdiction of incorporation or organization)
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02-0555904
____________________________
(IRS
Employer Identification No.)
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2100
19th
Street, Sarasota FL 34234
_____________________________________________________________________________
(Address
of principal executive offices)
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|
(941)
330-0336
_____________________________________________________________________________
(Issuer's
telephone number)
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|
_____________________________________________________________________________
(Former
name, former address and former fiscal year, if changed since last
report)
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June
30
|
||||
2007
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||||
CURRENT
ASSETS
|
||||
Cash
and cash equivalents
|
$ |
2,132
|
||
Accounts
receivable, net
|
875
|
|||
Total
current assets
|
3,007
|
|||
PROPERTY
AND EQUIPMENT - Net
|
78,420
|
|||
OTHER
ASSETS
|
||||
Due
from related parties
|
613,342
|
|||
Total
other assets
|
613,342
|
|||
TOTAL
ASSETS
|
$ |
694,769
|
||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||
CURRENT
LIABILITIES
|
||||
Current
portion of long-term debt
|
$ |
7,410
|
||
Accounts
payable and accrued expenses
|
138,477
|
|||
Due
to related parties
|
99,953
|
|||
Income
tax payable
|
45,007
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|||
Total
current liabilities
|
290,847
|
|||
TOTAL
LIABILITIES
|
290,847
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|||
STOCKHOLDERS'
EQUITY
|
||||
Common
stock, no par value, 100,000,000 shares authorized at
|
||||
June
30, 2007; 11,493,267 shares issued and outstanding
|
||||
at
June 30 2007
|
1,394,900
|
|||
Additional
paid-in capital
|
671,700
|
|||
Accumulated
deficit
|
(1,662,678 | ) | ||
Total
stockholders' equity
|
403,922
|
|||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ |
694,769
|
SIX
MONTHS ENDED
|
THREE
MONTHS ENDED
|
|||||||||||||||
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
REVENUE
|
||||||||||||||||
Truck
side advertising
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
||||||||
Graphics
and imaging
|
7,482
|
1,476
|
7,306
|
-
|
||||||||||||
Truck
side mounting systems
|
17,231
|
727,203
|
1,148
|
426,427
|
||||||||||||
Total
revenue
|
24,713
|
728,679
|
8,454
|
426,427
|
||||||||||||
COST
OF GOODS SOLD
|
19,955
|
15,820
|
1,258
|
6,469
|
||||||||||||
GROSS
PROFIT
|
4,758
|
712,859
|
7,196
|
419,958
|
||||||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Professional
fees and administrative payroll
|
1,270,788
|
157,386
|
42,495
|
78,003
|
||||||||||||
General
and administrative expenses
|
477,792
|
63,522
|
432,258
|
22,971
|
||||||||||||
Depreciation
|
20,332
|
32,938
|
10,166
|
23,938
|
||||||||||||
Total
operating expenses
|
1,768,912
|
253,846
|
484,919
|
124,912
|
||||||||||||
NET
INCOME (LOSS) BEFORE OTHER INCOME (EXPENSE)
|
(1,764,154 | ) |
459,013
|
(477,723 | ) |
295,046
|
||||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||||||
Impairment
of inventory
|
(7,462 | ) |
-
|
-
|
-
|
|||||||||||
Interest
income and other
|
15,460
|
18,000
|
7,350
|
7,296
|
||||||||||||
Interest
expense
|
(381 | ) | (583 | ) | (309 | ) | (316 | ) | ||||||||
Total
Other Income (Expense)
|
7,617
|
17,417
|
7,041
|
6,980
|
||||||||||||
NET
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
|
(1,756,537 | ) |
476,430
|
(470,682 | ) |
302,026
|
||||||||||
Provision
for income taxes
|
-
|
(101,775 | ) |
-
|
(96,175 | ) | ||||||||||
NET
INCOME (LOSS) APPLICABLE TO COMMON SHARES
|
$ | (1,756,537 | ) | $ |
374,655
|
$ | (470,682 | ) | $ |
205,851
|
||||||
NET
INCOME (LOSS) PER BASIC AND DILUTED SHARES
|
$ | (0.16 | ) | $ |
0.04
|
$ | (0.04 | ) | $ |
0.02
|
||||||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
||||||||||||||||
SHARES
OUTSTANDING
|
11,287,742
|
8,460,000
|
11,493,267
|
8,460,000
|
2007
|
2006
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income (loss)
|
$ | (1,756,537 | ) | $ |
374,655
|
|||
Adjustments
to reconcile net income (loss)
|
||||||||
to
net cash (used in) provided by operating
activities:
|
||||||||
Depreciation
|
20,332
|
32,938
|
||||||
Bad
debt expense
|
393,835
|
-
|
||||||
Issuance
of common stock for consulting
|
1,075,000
|
-
|
||||||
Issuance
of common stock for compensation
|
90,000
|
-
|
||||||
Changes
in assets and liabilities:
|
||||||||
(Increase)
in accounts receivable
|
(875 | ) | (724,575 | ) | ||||
Decrease
in inventory
|
7,462
|
7,540
|
||||||
Increase
(decrease) in accounts payable and accrued expenses
|
(8,919 | ) |
89,275
|
|||||
Total
adjustments
|
1,576,835
|
(594,822 | ) | |||||
Net
cash (used in) operating activities
|
(179,702 | ) | (220,167 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Acquisition
of property and equipment
|
(3,280 | ) | (1,984 | ) | ||||
(Increase)
in interest receivable - related party
|
(197,211 | ) | (17,594 | ) | ||||
Net
cash (used in) investing activities
|
(200,491 | ) | (19,578 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
(Payments)
on long-term debt
|
(4,578 | ) | (11,023 | ) | ||||
(Payments)
on debt-related party
|
(96,773 | ) | (8,319 | ) | ||||
Proceeds
from related parties
|
179,549
|
260,998
|
||||||
Net
cash provided by financing activities
|
78,198
|
241,656
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||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(301,995 | ) |
1,911
|
|||||
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
304,127
|
2,252
|
||||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$ |
2,132
|
$ |
4,163
|
||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
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||||||||
Cash
paid during the year for interest
|
$ |
381
|
$ |
583
|
||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INFORMATION:
|
||||||||
Issuance
of common stock for consulting
|
$ |
1,075,000
|
$ |
-
|
||||
Issuance
of common stock for compensation
|
$ |
90,000
|
$ |
-
|
||||
Bad
debt expense
|
$ |
393,835
|
$ |
-
|
Accounts
receivale
|
$ |
30,668
|
||
Fixed
assets, net of depreciation
|
112,214
|
|||
Other
assets
|
85,264
|
|||
Accounts
payable
|
(29,242 | ) | ||
Notes
payable
|
(27,338 | ) | ||
Other
payables
|
(115,864 | ) | ||
Total
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$ |
55,702
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(1)
|
The
sale and installation of their mounting
system;
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(2)
|
The
printing of advertising images to be inserted on trucks utilizing
the
Company’s mounting systems; and
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(3)
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Third
party advertising.
|
|
Balance
|
Charged
|
|
Balance
|
|||||||||||||
|
at
Beginning
|
to
Costs and
|
|
at
End of
|
|||||||||||||
|
of
Period
|
Expenses
|
Deductions
|
Period
|
|||||||||||||
|
|
|
|
|
|||||||||||||
Six
Months ended June 30, 2007
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$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
|||||||||
|
|
||||||||||||||||
Six
Months ended June 30, 2006
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
June
30,
|
||||||||
2007
|
2006
|
|||||||
Net income (loss)
|
$ | (1,756,537 | ) | $ |
374,655
|
|||
Weighted-average common shares outstanding
|
||||||||
Basic
|
11,287,742
|
8,460,000
|
||||||
Weighted-average common stock equivalents
|
||||||||
Stock options
|
-
|
-
|
||||||
Warrants
|
-
|
-
|
||||||
Weighted-average common shares outstanding
|
||||||||
Diluted
|
11,287,742
|
8,460,000
|
2007
|
||||
Accounts
receivable
|
$ |
394,710
|
||
Less
uncollectible receivables written-off
|
(393,835 | ) | ||
Total
accounts receivable, net
|
$ |
875
|
2007
|
||||
Equipment
|
$ |
128,745
|
||
Furniture
and Fixtures
|
112,022
|
|||
Transportation
Equipment
|
24,621
|
|||
265,388
|
||||
Less:
Accumulated Depreciation
|
186,968
|
|||
Net
Book Value
|
$ |
78,420
|
2007
|
2006
|
|||||||
Total
Revenue
|
$ |
24,713
|
$ |
728,679
|
||||
Cost
of Goods Sold
|
19,955
|
15,820
|
||||||
Gross
profit
|
4,758
|
712,859
|
||||||
Total
Operating Expenses
|
1,768,912
|
253,846
|
||||||
Net
Income (Loss) Before Other
Income (Expense)
|
(1,764,154 | ) |
459,013
|
|||||
Total
Other Income (Expense)
|
7,617
|
17,417
|
||||||
Net
Income (Loss)Before Provision
For Income Taxes
|
(1,756,537 | ) |
476,430
|
|||||
Provision
For Income Taxes
|
-
|
(101,775 | ) | |||||
Net
Income (Loss) Applicable
To Common Shares
|
$ | (1,756,537 | ) | $ |
374,655
|
|||
Net
Income (Loss) Per Basic
And Diluted Shares
|
$ | (0.16 | ) | $ |
0.04
|
|||
Weighted
Average Number
OF Common Shares
Outstanding
|
11,287,742
|
8,460,000
|
||||||
Gross
profit margin
|
19 | % | 98 | % |
2007
|
2006
|
|||||||
Revenue
|
$ |
8,454
|
$ |
426,427
|
||||
Cost
of Goods Sold
|
1,258
|
6,469
|
||||||
Gross
profit
|
7,196
|
419,958
|
||||||
Total
Operating Expenses
|
484,919
|
124,912
|
||||||
Net
Income (Loss) Before Other
Income (Expense)
|
(477,723 | ) |
295,046
|
|||||
Total
Other Income (Expense)
|
7,041
|
6,980
|
||||||
Net
Income (Loss)Before Provision
For Income Taxes
|
(470,682 | ) |
302,026
|
|||||
Provision
For Income Taxes
|
-
|
(96,175 | ) | |||||
Net
Income (Loss) Applicable
To Common Shares
|
$ | (470,682 | ) | $ |
205,851
|
|||
Net
Income (Loss) Per Basic
And Diluted Shares
|
$ | (0.04 | ) | $ |
0.02
|
|||
Weighted
Average Number
OF Common Shares
Outstanding
|
11,493,267
|
8,460,000
|
||||||
Gross
profit margin
|
85 | % | 98 | % |
Date
|
Name
|
Number
of Shares
|
Consideration
in Dollars
|
January
24, 2007
|
Marcus
Faller
|
150,000
|
Services
75,000
|
February
8, 2007
|
Evelyn
P. Silva
|
300,000
|
Services
90,000
|
Total
|
$165,00
|
SIGN
MEDIA SYSTEMS, INC.
(Registrant)
|
|
Date
August 20, 2007
|
/s/Antonio
F. Uccello, III
Antonio
F. Uccello, III
Chief
Executive Officer
Chairman
of the
Board
|