[
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 March 31, 2006
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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
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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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SIGN
MEDIA SYSTEMS, INC.
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||||
CONDENSED
CONSOLIDATED BALANCE SHEET (UNAUDITED)
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||||
March
31, 2006
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||||
ASSETS
|
||||
2006
|
||||
CURRENT
ASSETS
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||||
Cash and cash equivalents
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$
|
3,103
|
||
Accounts receivable, net
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700,632
|
|||
Inventory, net
|
17,464
|
|||
721,199
|
||||
PROPERTY
AND EQUIPMENT - Net
|
167,565
|
|||
OTHER
ASSETS
|
||||
Due from related parties
|
727,952
|
|||
727,952
|
||||
|
|
|||
TOTAL
ASSETS
|
$
|
1,616,716
|
||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
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||||
CURRENT
LIABILITIES
|
||||
Current portion of long-term debt
|
$
|
13,815
|
||
Accounts payable and accrued expenses
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234,426
|
|||
Current portion of debt - related parties
|
2,485
|
|||
Deferred revenue
|
400,000
|
|||
Liability for stock to be issued
|
224,900
|
|||
875,626
|
||||
LONG-TERM
DEBT - Net of Current Portion
|
32,765
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|||
TOTAL
LIABILITIES
|
908,391
|
|||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
||||
Common stock, no par value, 100,000,000 shares authorized
at
|
||||
March 31, 2006; 8,460,000 shares issued and outstanding
|
||||
at March 31 2006
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5,000
|
|||
Additional paid-in capital
|
671,700
|
|||
Retained Earnings
|
31,625
|
|||
708,325
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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$
|
1,616,716
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SIGN
MEDIA SYSTEMS, INC.
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|||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
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|||||||
FOR
THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
|
|||||||
2006
|
2005
|
||||||
REVENUE
- SALES, net
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$
|
302,252
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$
|
22,271
|
|||
COSTS
OF GOODS SOLD
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9,351
|
2,507
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|||||
GROSS
PROFIT
|
292,901
|
19,764
|
|||||
OPERATING
EXPENSES
|
|||||||
Professional fees and administrative payroll
|
79,383
|
111,884
|
|||||
General and administrative expenses
|
40,551
|
65,989
|
|||||
Depreciation
|
9,000
|
11,892
|
|||||
128,934
|
189,765
|
||||||
NET
INCOME (LOSS) BEFORE OTHER INCOME (EXPENSE)
|
163,967
|
(170,001
|
)
|
||||
OTHER
INCOME (EXPENSE)
|
|||||||
Interest income and other
|
10,704
|
2
|
|||||
Interest (expense)
|
(267
|
)
|
(303
|
)
|
|||
Total other income (expense) |
10,437
|
(301
|
)
|
||||
NET
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
|
174,404
|
(170,302
|
)
|
||||
Provision for income taxes
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(5,600
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)
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-
|
||||
NET
INCOME (LOSS) APPLICABLE TO COMMON SHARES
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$
|
168,804
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$
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(170,302
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)
|
||
NET
INCOME (LOSS) PER BASIC AND DILUTED SHARES
|
$
|
0.02
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$
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(0.02
|
)
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||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|||||||
SHARES
OUTSTANDING
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8,460,000
|
8,460,000
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SIGN
MEDIA SYSTEMS, INC.
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|||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
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|||||||
FOR
THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
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|||||||
2006
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2005
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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|||||||
Net income (loss)
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$
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168,804
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$
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(170,302
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)
|
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Adjustments
to reconcile net income (loss)
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|||||
to
net cash (used in) operating activities:
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|||||||
Depreciation
|
9,000
|
11,892
|
|||||
Changes
in assets and liabilities:
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|||||
(Increase) decrease in accounts receivable
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(700,632
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)
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7,340
|
||||
Decrease in inventory
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7,536
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-
|
|||||
Increase in accounts payable and accrued expenses
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18,156
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90,711
|
|||||
Increase in deferred revenue
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400,000
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-
|
|||||
Total adjustments
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(265,940
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)
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109,943
|
||||
Net cash (used in) operating activities
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(97,136
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)
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(60,359
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)
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|||
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CASH
FLOWS FROM INVESTING ACTIVITIES:
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|||||||
Acquisition of property and equipment
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(1,772
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)
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(17,461
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)
|
|||
Increase in interest receivable - related party
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(10,300
|
)
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-
|
||||
Proceeds from related parties
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120,498
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-
|
|||||
Net cash provided by (used in) investing
activities
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108,426
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(17,461
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)
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
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|
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|||||
Increase in liability for stock to be issued
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-
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24,900
|
|||||
(Payments) on long-term debt
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(4,605
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)
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(4,605
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)
|
|||
Proceeds (Payments) on debt-related party
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(5,834
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)
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62,046
|
||||
Net cash provided by (used in) financing
activities
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(10,439
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)
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82,341
|
||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
851
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4,521
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|||||
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|||||
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
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2,252
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6,352
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|||||
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|||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
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$
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3,103
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$
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10,873
|
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SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
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|||||||
Cash paid during the year for interest
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$
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267
|
$
|
-
|
(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) |
Third
party advertising.
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Balance
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Charged
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Balance
|
|
||||
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at
Beginning
|
|
to
Costs and
|
|
|
|
at
End of
|
|
||||
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of
Period
|
|
Expenses
|
|
Deductions
|
|
Period
|
|
||||
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|
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|
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Three
Months ended March 31, 2006
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|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Three
Months ended March 31, 2005
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|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
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March
31,
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|||||||
2006
|
2005
|
||||||
Net
income (loss)
|
$
|
168,804
|
$
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(170,302
|
)
|
||
Weighted-average
common shares outstanding
|
|||||||
Basic
|
8,460,000
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8,460,000
|
|||||
Weighted-average
common stock equivalents
|
|||||||
Stock
options
|
-
|
-
|
|||||
Warrants
|
-
|
-
|
|||||
Weighted-average
common shares outstanding
|
|||||||
Diluted
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8,460,000
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8,460,000
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2006
|
||||
Accounts
receivable
|
$
|
1,408,197
|
||
Less
allownace for doubtful accounts
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(707,565
|
)
|
||
Total
accounts receivable, net
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$
|
700,632
|
||
2006
|
||||
Equipment
|
$
|
127,099
|
||
Furniture
and Fixtures
|
112,022
|
|||
Transportation
Equipment
|
54,621
|
|||
293,742
|
||||
Less:
Accumulated Depreciation
|
126,177
|
|||
Net
Book Value
|
$
|
167,565
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2006
|
||||
Current
tax expense
|
$
|
5,600
|
||
Benefit
of loss carry forward
|
$
|
-
|
||
Net
current expense
|
$
|
5,600
|
2006
|
$
|
21,975
|
||
2007
|
15,000
|
|||
$
|
36,975
|
2006
|
2005
|
||||||
Revenue-Sales,
net
|
$
|
302,252
|
$
|
22,271
|
|||
Cost
of Goods Sold
|
9,351
|
2,507
|
|||||
Gross
profit
|
292,901
|
19,764
|
|||||
Total
Operating Expenses
|
128,934
|
189,765
|
|||||
Net
Income (Loss) Before
Other
Income (Expense)
|
163,967
|
(170,001
|
)
|
||||
Total
Other Income
(Expense)
|
10,437
|
(301
|
)
|
||||
Net
Income (Loss)Before
Provision
For Income
Taxes
|
174,404
|
(170,302
|
)
|
||||
Provision
For Income
Taxes
|
(5,600
|
)
|
-
|
||||
Net
Income (Loss)
Applicable
To Common
Shares
|
$
|
168,804
|
$
|
(170,302
|
)
|
||
Net
Income (Loss) Per
Basic
And Diluted Shares
|
$
|
0.02
|
$
|
(0.02
|
)
|
2006
|
2005
|
||||||
Weighted
Average
Number
OF Common
Shares
Outstanding
|
8,460,000
|
8,460,000
|
|||||
Gross
profit margin
|
97
|
%
|
89
|
%
|
SIGN
MEDIA SYSTEMS, INC.
(Registrant)
|
|
Date:
May
19, 2006
|
/s/Antonio
F. Uccello, III
Antonio
F. Uccello, III
Chief
Executive Officer
Chairman
of the Board
|