CANN 10-Q Quarter ended Sept. 30, 2012

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _________

Commission File No. 000-54457

PROMAP CORPORATION

(Name of registrant in its charter)

Colorado		20-8096131
(State or other jurisdiction of incorporation or formation)		(I.R.S. employer identification number)

6855 South Havana Street, Suite 400, Centennial, CO 80112

(Address of principal executive offices)

(720) 889-0510

( Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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 filing requirements for the past 90 days. x Yes ¨ 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). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “ large accelerated filer, ” “ accelerated filer ” and “ smaller reporting company ” in Rule 12b-2 of the Exchange Act.

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 x No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  On October 10, 2012, there were 9,724,200 shares of Common Stock issued and outstanding.

PROMAP CORPORATION

FORM 10-Q

TABLE OF CONTENTS

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PART I—FINANCIAL INFORMATION

Item 1.  Financial Statements.

PROMAP CORPORATION

BALANCE SHEETS

		December 31, 2011				Sept. 30, 2012
						(Unaudited)
ASSETS
Current assets
Cash		$	28,951			$	19,314
Accounts receivable (net of allowance for doubtful accounts)			6,029				22,823
Total current assets			34,980				42,137
Total Assets		$	34,980			$	42,137
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accrued payables		$	158			$	122
Taxes payable			-				1,439
Total current liabilities			158				1,561
Total Liabilities			158				1,561
Stockholders' Equity
Preferred stock, no par value; 5,000,000 shares authorized; No shares issued & outstanding			-				-
Common stock, no par value;100,000,000 shares authorized; 9,724,200 shares issued and outstanding			76,050				76,050
Additional paid in capital			24,000				24,000
Retained earnings			(65,228	)			(59,474	)
Total Stockholders' Equity			34,822				40,576
Total Liabilities and Stockholders' Equity		$	34,980			$	42,137

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

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PROMAP CORPORATION

STATEMENTS OF OPERATIONS

(Unaudited)

		Three Months Ended								Nine Months Ended
		Sept. 30,								Sept. 30,
		2011				2012				2011				2012
Sales (net of returns) - related party		$	20,931			$	10,076			$	53,172			$	31,085
Reserve recovery			-				-				-				40,860
Cost of goods sold			231				602				539				602
Gross profit			20,700				9,474				52,633				71,343
Operating expenses:
General and administrative			28,283				32,989				54,786				64,165
			28,283				32,989				54,786				64,165
Income (loss) from operations			(7,583	)			(23,515	)			(2,153	)			7,178
Other income (expense):
Interest income			36				5				96				15
Other income			-				-				15				-
			36				5				111				15
Income (loss) before provision for income taxes			(7,547	)			(23,510	)			(2,042	)			7,193
Provision for income tax			-				(4,702	)			-				1,439
Net income (loss)		$	(7,547	)		$	(18,808	)		$	(2,042	)		$	5,754
Net income (loss) per share
(Basic and fully diluted)		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	0.00
Weighted average number of common shares outstanding			9,724,200				9,724,200				9,699,289				9,724,200

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

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PROMAP CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)

		Nine Months Ended
		Sept. 30,
		2011				2012
Cash Flows From Operating Activities:
Net income (loss)		$	(2,042	)		$	5,754
Adjustments to reconcile net loss to net cash provided by (used for)operating activities:
Accounts receivable - related party			(15,608	)			(16,794	)
Taxes payable			-				1,439
Accrued payables			352				(36	)
Net cash provided by (used for) operating activities			(17,298	)			(9,637	)
Cash Flows From Investing Activities:
			-				-
Net cash provided by (used for) investing activities			-				-
Cash Flows From Financing Activities:
Sales of common stock			56,050				-
Net cash provided by (used for) financing activities			56,050				-
Net Increase (Decrease) In Cash			38,752				(9,637	)
Cash At The Beginning Of The Period			15,361				28,951
Cash At The End Of The Period		$	54,113			$	19,314
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.

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PROMAP CORPORATION

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Promap Corporation (the “Company”), was incorporated in the State of Colorado on November 12, 1989. The Company sells oil and gas maps to oil and gas industry businesses.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q 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.

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.

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 or straight line methods over each item's estimated useful life.

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PROMAP CORPORATION

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Revenue recognition

Revenue is recognized on an accrual basis as earned under contract terms. Specifically, revenue from product sales is recognized subsequent to a customer ordering a product at an agreed upon price, delivery has occurred, and collectability is reasonably assured.

Income tax

The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 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, as reported in the accompanying balance sheets, approximates fair value.

Long-Lived Assets

In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the Financial Statements (unaudited) and Notes to Financial Statements (unaudited) filed herein.

BUSINESS OVERVIEW

Promap Corporation was incorporated in the State of Colorado on November 12, 1987. We are an independent GIS and custom draft energy mapping company for the oil and gas industry in the United States and Canada.  We provide hard copy and digital format oil and gas production maps which cover various geologic basins in numerous areas including:  Denver Basin, Powder River Basin, Michigan Basin, Williston Basin, Arkoma Basin, Illinois Basin, Cincinnati Arch, Uintah - Piceance Basins and The Nevada Basin.  We also provide maps of the North American Coal Basin and Coal Bed Methane Activity and North American Devonian - Mississippian Shale Map with detailed pipeline locations.

RESULTS OF OPERATION FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AS COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2011.

Revenues for the three months ended September 30, 2012 were $10,076 as compared to the revenues of $20,931 for the three months ended September 30, 2011.  The revenues decreased because the level of oil and gas drilling activity of the Company’s clients decreased.

The only operating expenses during these periods consisted of general and administrative expenses which were $32,989 in the three months ended September 30, 2012 as compared to $28,283 for the three months ended September 30, 2011.  The $4,706 increase was due to expenses associated with preparing additional maps.

The net loss for the three months ended September 30, 2012 was ($18,808) as compared to a net loss of ($7,547) for the three months ended September 30, 2011.  The primary reasons for the increased loss were the reduction in sales and the increase in general and administrative expenses.

RESULTS OF OPERATION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AS COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2011.

Revenues for the nine months ended September 30, 2012 were $31,085 as compared to the revenues of $53,172 for the nine months ended September 30, 2011.  The revenues declined significantly because the level of oil and gas drilling activity of the Company’s clients declined.

The only operating expenses during these periods consisted of general and administrative expenses which were $64,165 in the nine months ended September 30, 2012 as compared to $54,786 for the nine months ended September 30, 2011.  The $9,379 increase was due to expenses associated with improvements to the Company’s website and preparing additional GIS maps.

The net income for the nine months ended September 30, 2012 was $5,754 as compared to a net loss of ($2,042) for the nine months ended September 30, 2011.  The primary reason for the increase in income was the fact that the Company collected $40,860 in receivables that had previously been written off.

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LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2012, we had $40,576 of working capital compared to $34,822 of working capital as of December 31, 2011.

Net cash used for operating activities during the nine months ended September 30, 2012 was $9,637 as compared to net cash used for operating activities in the nine months ended September 30, 2011 of ($17,298).  The primary reason for the improvement was the payment of a related party account receivable during the latest nine month period.

Net cash provided by financing activities during the nine months ended September 30, 2012 was zero as compared to $56,050 provided by financing activities in the nine months ended September 30, 2011.  The $56,050 represents the proceeds from the Company’s initial public offering.

CONTRACTUAL OBLIGATIONS

None.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.  Controls and Procedures.

(a)  Evaluation of Disclosure Controls and Procedures.

Our Chief Executive Officer and Principal Financial Officer have evaluated the effectiveness of the design and operations of our disclosure controls and procedures as of the end of the period covered by this quarterly report, and have concluded that our disclosure controls and procedures are adequate.

(b)  Changes in Internal Control over Financial Reporting.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1.    Legal Proceedings.

None.

Item 1A.  Risk Factors.

Not applicable.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3.    Defaults Upon Senior Securities.

Not applicable.

Item 4.    Mine Safety Disclosures.

Not applicable.

Item 5.    Other Information.

Not applicable.

Item 6.    Exhibits.

(a)  Exhibits required by Item 601 of Regulation S-K.

Exhibit		Description
31.1		Certification of CEO and Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) - Filed herewith electronically
31.2		Certification of CFO and Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) - Filed herewith electronically
32.1		Certification of CEO and Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically
32.2		Certification of CFO and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PROMAP CORPORATION
	Date:  October 11, 2012	By:	/s/ Steven A. Tedesco
			Steven A. Tedesco, President and CEO (Principal Executive Officer)
	Date:  October 11, 2012	By:	/s/ Robert W. Carington, Jr.
			Robert W. Carington, Jr., CFO (Principal Financial Officer and Principal Accounting Officer)

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