NextTrip, Inc. — Interim / Quarterly Report 2004

Aug 12, 2004

U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB (Mark One) [ X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2004 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ___ to __ Commission file number: 33-2783-S FRAMEWAVES, INC. (Exact name of small business issuer as specified in its charter) NEVADA 82-0404220 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1981 EAST 4800 SOUTH, SUITE 100, SALT LAKE CITY, UTAH, 84117 (Address of principal executive offices) (801) 272-9294 (Issuer's telephone number) NOT APPLICABLE (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 [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under plan confirmed by a court. Yes __ No ____ APPLICABLE ONLY TO CORPORATE ISSUERS The aggregate number of shares issued and outstanding of the issuer's common stock as of June 30, 2004 was 1,208,994 shares of $0.001par value. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

(Inapplicable items have been omitted) 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

The accompanying notes are an integral part of the financial statements. 3

The accompanying notes are an integral part of the financial statements. 4

The accompanying notes are an integral part of the financial statements. 5

The accompanying notes are an integral part of the financial statements. 6

The accompanying notes are an integral part of the financial statements. 7 FRAMEWAVES, INC. AND SUBSIDIARY (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Business and Significant Accounting Policies ------------------------------------------------------------- a. Summary of Business --------------------- The Company was incorporated under the laws of the State of Nevada on December 23, 1985. The Company was formed to pursue business opportunities. The Company was unsuccessful in its operations. During 1993, Management determined it was in the best interest of the Company to discontinue its previous operations. The Company is considered to have re-entered into a new development stage on December 31, 1993. Because the Company discontinued its previous operations and is selling new potential business opportunities, the Company adopted quasi-reorganization accounting procedures to provide the Company a "fresh start" for accounting purposes. b. Principles of Consolidation ----------------------------- The consolidated financial statements contain the accounts of the Company and its wholly-owned subsidiary, Corners, Inc. All significant intercompany balances and transactions have been eliminated. c. Cash Flows ----------- For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash or cash equivalents. d. Net Loss Per Share --------------------- The net loss per share calculation is based on the weighted average number of shares outstanding during the period. e. Use of Estimates ------------------ The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 2. Quasi-Reorganization -------------------- December 7, 2000, the shareholders of the Company approved to adopt quasi-reorganization accounting procedures. Quasi-reorganization accounting allowed the Company to eliminate its previous accumulated deficit of approximately $235,000 against additional paid-in capital. Therefore, the adoption of quasi-reorganization accounting procedures gave the Company a "fresh start" for accounting purposes. The Company is also considered as re-entering a new 8 Notes to Financial Statements - Continued Quasi-Reorganization -------------------- development stage on December 31, 1993, as it discontinued all of its previous operations. These financial statements have been restated to reflect the change. 3. Stock Split ------------ On December 27, 2000, the Company approved a 100 for 1 reverse split of the issued and outstanding common stock but no shareholder's ownership shall be less than 100 shares. An additional 43,394 shares were issued as a result of rounding up to the 100 share minimum. The 100 for 1 reverse split has been retroactively applied in the accompanying financial statements. 4. Amended Articles of Incorporation ------------------------------------ On December 27, 2000, the Company amended its articles of incorporation to change its name from Messidor Limited to FrameWaves, Inc. In addition, the Company decreased its authorized shares from 500,000,000 to 110,000,000 shares of stock of which 100,000,000 shall be designated common stock and 10,000,000 shall be designated preferred stock. At June 30, 2004, no preferred stock has been issued by the Company. The Company has the authorization to issue the preferred stock in one or more series and to determine the voting rights, preferences as to dividends and liquidation, conversion rights, and other rights of each series. 5. Issuance of Common Stock --------------------------- On November 3, 2000, the Company issued 100,000 shares of its $.001 par value common stock for an aggregate price of $10,000. $5,000 was received in cash and $5,000 for services rendered. 6. Stock Options and Warrants ----------------------------- The Company has designated 2,000,000 shares of its authorized and unissued common stock to a future stock option plan. At June 30, 2004, there are no options or warrants outstanding to acquire the Company's common stock. 7. Acquisition of Subsidiary --------------------------- On December 27, 2000, the Company acquired 100% of the outstanding common shares of Corners, Inc. in exchange for the issuance of 1,000,000 shares of its previously authorized but unissued common stock. Corners, Inc. was purchased at book value of $910 or $.001 per share. The acquisition has been accounted for on the purchase method and 100% of the purchase price was allocated to cash. 9 Notes to Financial Statements - Continued 8. Income Taxes ------------- The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling $33,683 that may be offset against future federal income taxes. If not used, the carryforwards will expire between 2020 and 2023. Due to the Company being in the development stage and incurring net operating losses, a valuation allowance has been provided to reduce the deferred tax assets from the net operating losses to zero. Therefore, there are no tax benefits recognized in the accompanying statement of operations. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATIONS SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS When used in this report, the words "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," and similar expressions are intended to identify forward-looking statements within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Company's future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the forward-looking statements as a result of various factors. Such factors are discussed under the "Item 2. Management's Discussion and Analysis of Financial Condition or Plan of Operations," and also include general economic factors and conditions that may directly or indirectly impact the Company's financial condition or results of operations. HISTORY FrameWaves, Inc. (the "Company" or "FrameWaves") was originally incorporated under the name of Messidor Limited on December 23, 1985 as a development stage company for the purpose of engaging in all lawful transactions permitted under the State of Nevada, including the acquisition of various business opportunities to provide profit and maximize shareholder value. On December 27, 2000, the shareholders, at a special meeting, changed the Company's name from Messidor Limited to FrameWaves, Inc. The shareholders also approved the acquisition of Corners, Inc. ("Corners"), a Nevada corporation, whereby the Company exchanged 1,000,000 shares of the Company's common stock for all of Corner's issued and outstanding shares of common stock. Corners had incorporated on November 17, 1998 in the State of Nevada to provide custom framing for interior designers in conjunction with business contacts provided by Corners' officers and directors. Since its inception, Corners has had limited operations due to its officers and directors other obligations, however, the officers and directors have maintained their business contacts with certain interior designers. Further, FrameWaves intends to use Corners as an operating subsidiary and actively pursue the custom framing business by utilizing Corners' business contacts to procure contracts for future operations, and to engage in a comprehensive and aggressive marketing campaign, including but not limited to, soliciting unknown but potential business contacts through direct mailings, media, and other mediums that will generate leads to contracts for future operations PRINCIPAL PRODUCTS AND SERVICES FrameWaves' principal product and service consists of providing customized frames to interior designers and retail consumers. This will be accomplished by interfacing directly with designers and consumers where they will be presented with a selection of FrameWaves' materials and styles in order to determine the type and quality of frame desired. FrameWaves will then customize frames to the clients' specifications. Such customization might entail the ordering, designing, manufacturing, or the subcontracting of work in order to meet the clients' needs. This product and service will allow FrameWaves to be a complete and professional supplier of customized frames to the interior designers and retail customers. However, the Company is a development stage company with no operations and has yet to engage in any contract negotiations with frame suppliers, interior designers or retail consumers. 11 MARKETING FrameWaves intends to market its product and service to interior designers and retail consumers through established business contacts of the officers and directors, direct mailing program targeting interior designers, and word of mouth. FrameWaves might also market its products and services by advertising in widely distributed magazines that Management considers influential among designers and consumers. These advertisements will focus on FrameWaves' ability to be a complete and professional supplier of customized frames. However, the Company is in its development stage and has not yet launched any of the above marketing strategies, and there is no assurance that such marketing strategies will be launched in the future. Additionally, the Company cannot predict whether it will, in the future, be dependent upon one or a few major customers. RESULTS OF OPERATIONS FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2004 AND 2003 The Company generated no revenue during the three and six-month periods ended June 30, 2004 and 2003. General and administrative expenses for the three months ended June 30, 2004 were $2,582 compared to general and administrative expenses of $1,101 during the three-month period ended June 30, 2003. General and administrative expenses for the six-month period ended June 30, 2004 were $4,212 compared to general and administrative expenses of $3,312 during the six-month period ended June 30 , 2003. Expenses consisted of general corporate administration, legal and professional fees, and accounting and auditing costs. As a result of these factors, the Company realized a net loss of $2,582 and $4,212 respectively for the three and six-month periods ended June 30, 2004 and a net loss of $1,101 and 3,312 for the comparable periods in 2003. Cumulative net loss from quasi-reorganization on December 31, 1993 through June 30, 2004 was $37,895. LIQUIDITY AND CAPITAL RESOURCES At June 30, 2004, the Company's total assets consisted of $2,002 in cash. Total current liabilities at June 30, 2004 consisted of $6,791 in accounts payable. At December 31, 2003, the Company had total assets consisting of $2,040 in cash and total liabilities consisting of $2,617 in accounts payable. The Company has no material commitments for the next twelve months and believes that its current liquidity needs can be met with the cash on hand. In the past, the Company has relied on capital contributions from shareholders to supplement operating capital when necessary. The Company anticipates that should it become necessary, it will receive sufficient contributions from shareholders to continue operations for at least the next twelve months. However, there are no agreements or understandings to this effect. Should the Company require additional capital, it may sell common stock, take loans from officers, directors or shareholders or enter into debt financing agreements. ITEM 3. CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures. Based on the evaluation of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) required by Securities Exchange Act Rules 13a-15(b) or 15d-15(b), our Chief Executive Officer and our Chief Financial Officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective. 12 (b) Changes in internal controls. There were no changes in our internal control 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. PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K were filed by FrameWaves during the quarter ended June 30, 2004.

SIGNATURES In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FRAMEWAVES, INC. Date: August 11, 2004 /s/Thomas A. Thompson ----------------- ------------------------- Thomas A. Thomsen President Chief Executive Officer Date: August 11, 2004 /s/Susan Santage ----------------- ------------------------- Susan Santage Chief Financial Officer 13