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 September 30,
2004
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
for the transition period from __________ to __________.
Commission File Number: 000-31451
---------
CYBERADS, INC.
--------------
(Exact name of small business issuer as specified in its charter)
Florida 65-1000634
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
370 Amapola Ave. # 202, Torrance, California 90501
--------------------------------------------------------
(Address of principal executive office) (Zip Code)
(561) 672 2193
----------------
(Issuer's telephone number)
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 XX No
-------- --------
As of September 30, 2004 , the number of outstanding shares of the issuer's
common stock, $.001 par value, was 22,925,777 shares.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: Yes [ ] No [X]
1
TABLE OF CONTENTS
ITEM 1. FINANCIAL STATEMENTS ............................................... 3
Consolidated Unaudited Balance Sheet as of September 30, 2004....... 3
Consolidated Unaudited Statements of Operations for the
Quarters ended September 30, 2004 and September 30, 2003... 4
Consolidated Unaudited Statements of Cash Flows for the
Quarter ended September 30, 2004........................... 5
Notes to Consolidated Financial Statements.......................... 7
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS .............................................. 12
ITEM 3. CONTROLS AND PROCEDURES............................................. 14
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K..................................... 15
SIGNATURES................................................................... 15
2
CYBERADS, INC.
Consolidated Balance Sheets
See accompanying notes.
September 30, December 31,
2004 2003
----------------- ----------------
Assets
Current asset -
Accounts receivable $ - $ 20,380
Property and equipment, net 14,171 14,171
Other assets:
Investments 10,700,000 10,700,000
Deposits 8,585 8,585
-------------- --------------
Total other assets 10,708,585 10,708,585
-------------- --------------
$ 10,722,756 $ 10,743,136
============== ==============
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Outstanding checks in excess of cash in bank $ 14,774 $ 1,207
Notes payable 294,192 120,000
Accounts payable 814,447 697,748
Accounts payable to cellular phone service provider - 492,423
Accrued payroll and payroll related liabilities 614,143 548,195
Other accrued liabilities 38,993 35,000
Payable to related parties 786,555 786,555
Loans payable - convertible debentures 60,000 60,000
-------------- --------------
Total current liabilities 2,623,104 2,741,128
Payable to stockholder - 157,634
Stockholders' equity:
Preferred stock; $.001 par value; authorized 5,000,000
shares, of which 1,000,000 shares has been designated
as Series A Convertible, shares issued and outstanding
835,660 836 836
Common stock; $.001 par value; shares authorized
50,000,000; shares issued and outstanding 22,925,777 in
2004 (18,325,777 in 2003) 22,926 18,326
Common stock to be issued 9,802,550 11,140,000
Additional paid in capital 17,450,885 15,399,238
Retained deficit (19,177,545) (18,714,026)
-------------- --------------
Total stockholders' equity 8,099,652 7,844,374
-------------- --------------
$ 10,722,756 $ 10,743,136
============== ==============
3
CYBERADS, INC.
Consolidated Statements of Operations
Three months ended Nine months ended
September 30 September 30
--------------------------------- -----------------------------------
2004 2003 2004 2003
--------------- --------------- ----------------- ----------------
Revenues $ - $ 320,700 $ 303,120 $ 3,897,574
Cost of revenues - 162,146 - 1,153,862
--------------- --------------- ----------------- ----------------
Gross profit - 158,554 303,120 2,743,712
Operating expenses:
Selling - 285,690 - 1,348,577
General and administrative 231,482 535,796 755,824 2,173,595
--------------- --------------- ----------------- ----------------
Total operating expenses 231,482 821,486 755,824 3,522,172
--------------- --------------- ----------------- ----------------
Net loss from operations (231,482) (662,932) (452,704) (778,460)
Other income (expenses):
Other income (expense) - (41,274) 4,847 (38,396)
Interest expense and financing
costs, net (9,663) (101,252) (15,663) (130,415)
--------------- --------------- ----------------- ----------------
Total other income
(expenses) (9,663) (142,526) (10,816) (168,811)
--------------- --------------- ----------------- ----------------
Net loss before provision for income taxes (241,145) (805,458) (463,520) (947,271)
Provision for income taxes - - - -
--------------- --------------- ----------------- ----------------
Net loss $ (241,145) $ (805,458) $ (463,520) $ (947,271)
=============== =============== ================= ================
Net loss per common share $ (.012) $ (.050) $ (.024) $ (.066)
=============== =============== ================= ================
4
CYBERADS, INC.
Consolidated Statements of Cash Flows
September 30, 2004
Three months ended Nine months ended
September 30 September 30
--------------------------------- -----------------------------------
2004 2003 2004 2003
--------------- --------------- ---------------- ----------------
Cash flows from operating activities:
Net loss $ (241,145) $ (805,458) $ (463,520) $ (947,271)
Adjustment to reconcile net
loss to net cash used in
operating activities:
Provision for doubtful accounts - - - 364,991
Impairment of inventories - - 120,879
Impairment of long-lived assets - 92,317 - 190,962
Depreciation - - - 19,493
Deferred financing costs - - - 7,015
Common stock issued for in
exchange for compensation
and services 250,000 - 439,500 -
Common stock issued for
interest 9,663 - 9,663 -
Changes in assets and
liabilities:
Receivables - 139,062 20,380 708,769
Inventories - 18,027 - 35,355
Deposits and other assets - 190,547 - 167,932
Outstanding checks in
excess of cash in bank - - 13,567 (112,649)
Accounts payable (18,518) 403,469 (190,531) (1,372,131)
Accrued liabilities - (77,401) 69,941 134,838
--------------- --------------- ---------------- ----------------
- (39,437) (101,000) (681,817)
Cash flows from investing
activities - capital expenditures - - - (13,967)
Cash flows from financing
activities:
Borrowings from notes payable - 72,000 - 72,000
Principal repayments of note
payable - - (11,000) -
Advances from stockholder
and related parties - - 47,000 281,100
Proceeds from stock options
exercised - - 65,000
Net borrowings from factor - 42,806 - 446,662
--------------- --------------- ---------------- ----------------
- 114,806 101,000 799,762
--------------- --------------- ---------------- ----------------
Net increase in cash $ - $ 75,369 $ - $ 103,978
=============== =============== ================ ================
Continued on next page.
5
CYBERADS, INC.
Consolidated Statements of Cash Flows (continued)
September 30, 2004
See accompanying notes.
Three months ended Nine months ended
September 30 September 30
--------------------------------- -----------------------------------
2004 2003 2004 2003
--------------- --------------- ---------------- ----------------
Net increase in cash $ - $ 75,369 $ - $ 103,978
Cash at beginning of period - 28,609 - -
--------------- --------------- ---------------- ----------------
Cash at end of period $ - $ 103,978 $ - $ 103,978
=============== =============== ================ ================
Supplement schedule of
noncash investing and
financing activities:
Common stock issued in
exchange for payable to
stockholder $ 204,634 $ - $ 204,634 $ -
=============== =============== ================ ================
Accounts payable to supplier
converted to note payable $ 185,192 $ - $ 185,192 $ -
=============== =============== ================ ================
6
CYBERADS, INC.
Notes to Consolidated Financial Statements
September 30, 2004
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
BUSINESS: CyberAds, Inc. ("CyberAds") was incorporated in the state of
Florida on April 12, 2000. The Company earns commissions from selling
approved contracts to subscribers for cellular telephone service.
Commissions are received either from master dealers or cellular phone
service providers, not the subscriber. Applications for cellular
telephone services are obtained from advertising banners placed at
various websites. The Company does business with cellular phone service
providers as well as master dealers that have contracted with various
other carriers and with several website hosts who receive a commission
for each completed contract for cellular phone service. The Company has
been idle during the three months ended September 30, 2004 and
management has devoted their attention toward restructuring debt and
seeking profitable products.
PRINCIPLES OF CONSOLIDATION: The accompanying consolidated financial
statements include the accounts of CyberAds and it's wholly owned
subsidiary IDS, Inc. ("IDS"). All significant intercompany balances
have been eliminated in consolidation. The operations of IDS are
currently idle.
INTERIM REPORTING: The Company's year-end for accounting and tax
purposes is December 31. In the opinion of Management, the accompanying
consolidated financial statements as of September 30, 2004 and 2003 and
for the three and nine months then ended, consisting of only normal
recurring adjustments, except as noted elsewhere in the notes to the
consolidated financial statements, necessary to present fairly its
financial position, results of its operations and cash flows. The
results of operations for the three and nine months ended September 30,
2004 and 2003 are not necessarily indicative of the results to be
expected for the full year.
INVESTMENTS: The Company's investments as of September 30, 2004 and
December 31, 2003 consisted of a 22% interest in a limited liability
company that owns real estate. The Company uses the equity method of
accounting for its investment in this company.
IMPAIRMENT OF LONG-LIVED ASSETS: The Company assesses the
recoverability of long-lived assets under SFAS 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" by determining whether the
depreciation and amortization of the asset's balance over its remaining
life can be recovered through projected undiscounted future cash flows.
The amount of impairment, if any, is measured based on fair value and
charged to operations in the period in which the impairment is
determined by management. Long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less cost to
sell.
The Company recorded an impairment loss during the three months ended
September 30, 2003 of $92,317 and during the nine months ended
September 30, 2003 of $190,962 for assets that became idle as a result
of staff reductions.
7
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------------------
REVENUE RECOGNITION: In 2004 and 2003, the Company recorded revenue on
a "net" basis when contracts were submitted to master dealers. The
phones are shipped from the dealers to the subscriber and the Company
does not bear the risk of loss on the cellular phone. Revenue is
recognized when the master dealer ships the phones to the subscriber.
In 2003, the Company also recorded revenue on a "gross" basis when
contracts were submitted directly to cellular phone service providers.
The phones were shipped from the Company to the subscriber and the
Company bore the risk of loss on the cellular phone. Revenue was
recognized when the phones were shipped along with commissions and
related cost of goods sold for the cellular phone.
STOCK OPTIONS AND WARRANTS: The Company uses a fair value based method
of accounting for stock based compensation to employees. The Company
also accounts for stock options and warrants issued to non-employees
for services under the fair value method of accounting.
NET INCOME (LOSS) PER COMMON SHARE: Net income (loss) per common share
is computed by dividing net income (loss) by the weighted average
number of common shares outstanding during the period. The weighted
average number of common stock shares outstanding was 20,208,386 for
the three months ended September 30, 2004 and 19,115,193 for the nine
months ended September 30, 2004.
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.
Accordingly, upon settlement, actual results may differ from estimated
amounts.
2. OPERATIONS
----------
Management of the Company plans to continue to restructure debt, seek
profitable products, reduce operating expenses, and seek additional
capital and debt financing until operations achieve profitability.
Management of the Company believes the above actions, along with other
plans, will allow them to continue operations and ultimately achieve
profitability. Until then, the Company is dependent upon its ability to
obtain additional capital and debt financing. The consolidated
financial statements as of September 30, 2004 do not reflect
adjustments relating to the recorded asset amounts, or the amounts of
liabilities that would be necessary should the Company not be able to
continue in existence.
8
3. CASH FLOWS
----------
Supplemental disclosure of cash flow information was as follows:
Three months ended Nine months ended
September 30 September 30
--------------------------- --------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Cash paid during the period for -
Interest $ - $ - $ - $ 13,604
============ ============ ============ ============
4. NOTES PAYABLE
-------------
Notes payable consisted of the following:
September 30, December 31,
2004 2003
----------------- -----------------
Note payable; was due in installments of $5,000 on
January 15, 2004 and February 15, 2004 with final
payment due March 15, 2004, plus interest at 10%
per annum; secured by all of the Company's
accounts receivable, inventories, and computer
hardware and software and is personally
guaranteed by two former officers of the Company. $ 109,000 $ 120,000
Note payable to cellular phone service provider;
due in installments of $92,596 payable on January
2, 2005 and August 2, 2005, plus interest at 1 1/2%
per month. 185,192 -
----------------- -----------------
Total notes payable $ 294,192 $ 120,000
================= =================
The Company is currently in default with the repayment terms of the
installment note.
5. PAYABLE TO RELATED PARTIES
--------------------------
Advances from related parties consisted of the following:
September 30, December 31,
2004 2003
----------------- -----------------
Advance due to a corporation owned by a former
officer of the Company, bearing interest at 10%
per annum, due on demand and unsecured $ 54,000 $ 54,000
----------------- -----------------
9
5. PAYABLE TO RELATED PARTIES (CONTINUED)
--------------------------------------
September 30, December 31,
2004 2003
----------------- -----------------
Advance due to a former officer of the Company,
bearing interest at 10% per annum, due on
demand and unsecured $ 732,555 $ 732,555
----------------- -----------------
Total payable to related parties $ 786,555 $ 786,555
================= =================
6. LOANS PAYABLE - CONVERTIBLE DEBENTURES
--------------------------------------
Loans payable - convertible debentures consists of unsecured loans from
two individuals whereby the principal of the note is convertible into
the Company's common stock at the option of the holder. Interest on
borrowings is payable quarterly at a rate of 20% per annum. The notes
were due in installments of $15,000 on November 13, 2003, $13,750 on
December 13, 2003 and January 13, 2004, with final payment due February
13, 2004. The Company is currently in default with the repayment terms
of the agreements. The notes are convertible into the Company's common
stock at a conversion rate of 75% of the closing bid price of the
Company's common stock one trading day prior to conversion.
7. COMMITMENTS AND CONTINGENCIES
-----------------------------
The Company is non-compliant with respect to certain federal and state
payroll related taxes. Included in accrued payroll and payroll related
liabilities at September 30, 2004 and December 31, 2003 is
approximately $540,800 of unpaid payroll taxes.
In April 2004, the Company agreed to indemnify a former officer of the
Company for any loss he sustained in a settlement reached with a
cellular phone service provider against IDS and him personally. Under
the indemnification, the Company was obligated to pay an aggregate of
$72,261 in installments of $5,000 each on or before August 1, 2004 and
September 1, 2004 with the balance due October 1, 2004. The
indemnification had no effect on the accompanying financial statements
as the amount owed to the cellular phone service provider was
previously recorded as accounts payable in the records of IDS.
The Company is currently in negotiations with an individual who has
threatened a lawsuit against the Company, a former officer and a
cellular phone service provider. The Company has offered to issue the
individual 250,000 shares of common stock to settle any claims he may
have against the Company. This individual has verbally accepted the
settlement offer. The Company has reserved 250,000 shares of common
stock to be issued under this settlement offer.
A claim against the Company of approximately $500,000 has been
threatened by the Creditors Committee of World Com. The Company does
not believe that they owe
10
7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
-----------------------------------------
the amount and intends to vigorously defend the claim. The claim has
not been recorded in the accompanying consolidated financial statements
due to the uncertainty of the matter.
8. COMMON STOCK TRANSACTIONS
-------------------------
On May 19, 2004, the Company issued 50,000 shares of its common stock
to a former officer of the Company in lieu of compensation. The shares
were valued at $1.59, the closing bid price of the Company's common
stock on the date of issuance. The Company record compensation expense
of $79,500 as a result of the issuance.
On August 31, 2004, the Company issued 1,000,000 shares of its common
stock to a major shareholder of Novanet Media, Inc. in exchange for
consulting services. The shares were valued at $.25 per share which
represented a 12% discount from the closing bid price of the common
stock on the date of issuance. Management of the Company estimated the
value the shares issued based on the closing bid price of the Company's
common stock at the date of issuance, the historical trend of the
trading prices for its common stock and the volume of shares traded.
The Company recorded professional fees of $250,000 as a result of the
issuance.
On September 2, 2004, the Company issued 2,000,000 share of its common
stock to a major shareholder in exchange for $204,634 of working
capital advances. The shares were valued at $.107 per share which
represented a 68% discount from the closing bid price of the common
stock on the date of issuance. Management of the Company estimated the
value the shares issued based on the closing bid price of the Company's
common stock at the date of issuance, the historical trend of the
trading prices for its common stock and the volume of shares traded.
The Company also recorded imputed interest of $9,663 as a result of the
exchange.
9. Stock options
-------------
The Company's stock option activity for options granted to employees
and non-employees is summarized as follows for the nine months ended
September 30, 2004:
Fixed Plan
-----------------------------------------------------------
Weighted Weighted
average average
exercise Shares exercise
Shares price exercisable price
--------------- ----------- --------------- -----------
Outstanding at January 1, 2004 2,925,000 $ .48
===========
Exercised (500,000) .13
===========
Cancelled (225,000) .25
===========
Expired (300,000) 1.04
===========
Outstanding at September 30, 2004 1,900,000 $ .51 1,900,000 $ .51
=============== =========== =============== ===========
11
9. STOCK OPTIONS (CONTINUED)
-------------------------
The Company's stock option outstanding and exercisable at September 30,
2004 is summarized as follows:
Fixed Plan
----------------------------------------------------------------------------------------------------
Options outstanding Options exercisable
--------------------------------------------------------------- -----------------------------------
Weighted average
----------------------------- Weighted
Range remaining exercise average
of prices Shares life price Shares exercise price
--------------- --------------- -------------- ------------- --------------- -----------------
$.04 - $.99 1,200,000 1 yr. 5 mo. $ .27 1,200,000 $ .27
=============== ============== ============= =================
$.99 - $1.25 700,000 1 yr. 2 mo. $ 1.03 700,000 $ 1.03
=============== --------------- ============== ============= --------------- =================
$.04 - $1.25 1,900,000 1 yr. 3 mo. $ .51 1,900,000 $ .5
10. SETTLEMENT
----------
The Company entered into a consulting agreement in September 2002 for
advisory, investor relations and public relations services. The
consulting firm and the Company have taken the position that the other
is in default of the agreement. The Company and the consulting firm
reached a settlement in April 2004 whereby the Company agreed to issue
100,000 shares of its common stock granted to the consulting firm under
the original consulting agreement; however, the consulting firm was
restricted from reselling the shares. Under the terms of the settlement
agreement the consulting firm could resell no more than 3,000 share of
the Company's common stock per week and no more than an aggregate of
50,000 shares over a period of 120 days from the date of the
settlement. They were further restricted from reselling the Company's
common stock until September 13, 2004 at which time they could resell
no more than 3,000 shares of the Company's common stock per week and no
more than an aggregate of 50,000 shares over a period of 120 days. The
Company recorded settlement expenses aggregating $110,000 as a result
of the agreement in April 2004.
Management of the Company valued the shares issued at $1.10 per share,
the closing bid price of the Company's common stock on the date of the
agreement. Management of the Company estimated the value of the
Company's shares granted after considering the historical trend of the
trading prices for its common stock and the limited volume of shares
being traded.
On April 27, 2004 the Company issued 50,000 shares of its common stock
in accordance with the terms of the settlement. The Company has
reserved an additional 50,000 shares of its common stock for issuance
under the settlement.
12
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's discussion and analysis contains various forward-looking statements
within the meaning of the Securities and Exchange Act of 1934. These statements
consist of any statement other than a recitation of historical fact and can be
identified by the use of forward looking terminology such as "may", "expect",
"anticipate", "estimates", or "continue" or use of negative or other variations
of comparable terminology. We caution that these statements are further
qualified by important factors that could cause actual results to differ
materially from those contained in our forward looking statements, that these
forward looking statements are necessarily speculative, and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in our forward looking statements.
Management's discussion and analysis should be read in conjunction with the
financial statements and the notes thereto.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 2003 AND THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS
ENDED SEPTEMBER 30, 2003:
In March 2003, the Company changed their business model whereby cellular phone
service providers, or a fulfillment company, began shipping cellular telephones
directly to the Company's subscribers, rather than the Company carrying cellular
telephone inventories and shipping to the Company's subscribers.
Also, effective September 9, 2003, all then-existing officers of the Company
resigned and were replaced with new management.
Revenues were $303,120 for the nine months ended September 30, 2004 compared to
$3,897,574 for the nine months ended September 30, 2003. The $3,594,454 decrease
reflects the impact of the change in the Company's business model. Under the new
model, the Company records revenue on a "net" basis when the master dealers ship
the phones to the subscriber. Under the previous business model, the Company
recorded revenue on a "gross" basis when the Company shipped the phones. The
decrease in revenues also reflects the impact of the elimination of unprofitable
products by new management.
The Company had no revenues for the three months ended September 30, 2004
compared to $320,700 for the three months ended September 30, 2003. Management
of the Company has devoted all of there efforts during the three months ended
September 30, 2004 toward restructuring debt, settling claims and evaluating
profitable products.
There were no costs of revenues for the nine months ended September 30, 2004
compared to $1,153,862 for the nine months ended September 30, 2003. Under the
new business model the Company no longer carries cellular telephone inventories.
There were also no selling expenses for the nine months ended September 30, 2004
compared to $1,348,577 for the nine months ended September 30, 2003. The
decrease reflects the impact of the change in the Company's business model
whereby the service provider is now responsible for handling all order
fulfillment processes, customer service, verification and shipping.
13
General and administrative expenses were $755,824 for the nine months ended
September 30, 2004 compared to $2,173,595 for the nine months ended September
30, 2003. The decrease reflects the impact of the change in the Company's
business model and the impact of new management reducing overhead. Also, losses
from settlements of claims against the Company aggregated $254,500 during the
nine months ended September 30, 2004 that the Company believes will not reoccur
along with legal costs of $37,000 relating to those settlements.
General and administrative expenses were $231,482 for the three months ended
September 30, 2004 compared to $535,796 for the three months ended September 30,
2003. The decrease reflects the impact of the change in the Company's business
model and the impact of new management reducing overhead.
FINANCIAL POSITION & LIQUIDITY AND CAPITAL RESOURCES
AS OF SEPTEMBER 30, 2004 COMPARED TO DECEMBER 31, 2003:
The Company had a working capital deficit of $2,623,104 as of September 30, 2004
compared to a working capital deficit of $2,720,748 as of December 31, 2003. The
decrease in the Company's working capital deficit of $97,644 was a result of the
Company raising $65,000 from the exercise of stock options and $47,000 of
advances from a stockholder.
Since September 2003 when new management began operating the Company
approximately $1,668,400 of accounts payable and accrued liabilities have been
renegotiated into term debt or converted to capital stock of the Company. New
management expects to continue to improve its working capital by restructuring
debt, seeking profitable products, reducing overhead, and seeking additional
capital until debt can be satisfied and assets recovered through continued
profitable operations.
14
ITEM 3. CONTROLS AND PROCEDURES
As of September 30, 2004 the Company carried out an evaluation, under the
supervision and with the participation of the Company's management, including
the Company's Chief Executive Officer and President, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures
pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. Based upon that
eva1uation, these principal executive officers and principal financial officer
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company, including
its consolidated subsidiaries, required to be included in the Company's periodic
SEC filings. There have been no significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation.
15
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K
(a) Exhibits.
--------
Exhibit
Number Description of Document
3.1(a) Articles of Incorporation (Incorporated by reference)
3.1(b) Amendment to Articles of Incorporation (Incorporated by reference)
3.2 ByLaws (Incorporated by reference)
4.0 Description of Series A Convertible Preferred Stock (Incorporated by
reference)
31 Rule 13a-14(a)/15d-14(a) Certification
32 Section 1350 Certification
(b) Reports on Form 8-K.
-------------------
No reports on Form 8-K were filed during the period covered by
this report.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: November 16, 2004 CYBERADS, INC.
By: /s/ WALTER TATUM
--------------------------
Walter Tatum, President
15