UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
OR
[ ] 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.
0-28154
MUSIC TONES LTD.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Colorado 84-1337504
----------------------- -------------------------------
(State or other juris- (IRS Employer Identification No.)
diction of incorporation
or organization)
12146 East Amherst Circle
Aurora, Colorado 80014
--------------------------------------
(Address of principal executive offices)
Issuer's telephone number: (303) 695-9554.
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 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.
YES [ ] NO [X]
As of December 12, 1996, Registrant had 36,000,000 shares of its $0.0001 par
value common stock outstanding.
<PAGE>
MUSIC TONES LTD.
Form 10-QSB Quarterly Report
Table of Contents
- -----------------
Part I - Financial Statements
Item 1 - Financial Statements
Balance Sheets
as of September 30, 1996 and December 31, 1995........................1
Statements of Operations for the three and nine months ended September
30, 1996 and 1995 and from October 26, 1987 (Inception) through
September 30, 1996....................................................2
Statements of Cash Flows for the nine months ended September 30, 1996
and 1995 and from October 26, 1987 (Inception) through September 30,
1996..................................................................3
Notes to Financial Statements.........................................4
Item 2 - Management's Discussion and Analysis or
Plan of Operation.....................................................5
Part II - Other Information
Item 1 Legal Proceedings None
Item 2 Change in Securities None
Item 3 Default Upon Senior Securities None
Item 4 Submission of Matters to a Vote
of Security Holders None
Item 5 Other Information None
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits None
(b) Reports on Form 8-K None
i
<PAGE>
<TABLE>
<CAPTION>
MUSIC TONES LTD.
(A Development Stage Enterprise)
Balance Sheets
September 30, December 31,
1996 1995
------------ -----------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash in Checking ................................................. $ 1,036 $ 0
-------- --------
TOTAL ASSETS ..................................................... $ 1,036 $ 0
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES ............................................................... $ 0 $ 0
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred Stock, $.01 par value,
10,000,000 shares authorized,
no shares issued and outstanding ................................. -- --
Common Stock, $.0001 par value,
100,000,000 shares authorized,
36,000,000 shares issued and
outstanding ...................................................... 3,600 675
Additional paid-in capital ....................................... 12,000 --
(Deficit) accumulated during
the development stage ............................................ (14,564) (675)
-------- --------
TOTAL STOCKHOLDERS' EQUITY ....................................... 1,036 0
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ............................................. $ 1,036 $ 0
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
MUSIC TONES LTD.
(A Development Stage Enterprise)
Statements of Operations
For the Period
For the Three Months Ended For the Nine Months Ended October 26, 1987
Sept 30, Sept 30, Sept 30, Sept 30, (Inception) thru
1996 1995 1996 1995 Sept 30, 1996
-------- -------- -------- -------- ---------------
<S> <C> <C> <C> <C> <C>
INCOME FROM OPERATIONS $ 0 $ 0 $ 0 $ 0 $ 0
-------- -------- -------- -------- ---------
OPERATING EXPENSES:
Audit fees .................. 0 0 600 0 600
Filing fees ................. 0 0 200 0 875
Legal fees .................. 400 0 12,400 0 12,400
Office expense .............. 15 0 689 0 689
-------- -------- -------- -------- ---------
TOTAL OPERATING
EXPENSES ........... 415 0 13,889 0 14,564
-------- -------- -------- -------- ---------
NET (LOSS) ........................... $ (415) $ 0 $(13,889) $ 0 (14,564)
========= ======== ======== ======== =========
NET (LOSS) PER SHARE ................. $ N/A $ N/A $ N/A $ N/A $ N/A
========= ======== ======== ======== =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
MUSIC TONES LTD.
(A Development Stage Enterprise)
Statements of Cash Flows
For the Period
October 26, 1987
For the Nine Months For the Nine Months (Inception) thru
Ended Sept 30, 1996 Ended Sept 30, 1995 Sept 30, 1996
------------------- ------------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) ............................................... $(13,889) $ 0 $(14,564)
Decrease in Organization Costs ........................... $ (75) $ 0 0
-------- -------- --------
NET CASH USED BY
OPERATING ACTIVITIES .............................................. $(13,964) $ 0 (14,564)
-------- -------- --------
CASH FLOES FROM FINANCING ACTIVITIES:
Proceeds from
issuance of stock ........................................ $ 15,000 $ 0 15,600
-------- -------- --------
NET INCREASE IN CASH .............................................. $ 1,036 $ 0 1,036
CASH,
BEGINNING OF THE PERIOD ........................................... $ 0 $ 0 0
-------- -------- --------
CASH,
END OF THE PERIOD ................................................. $ 1,036 $ 0 1,036
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
MUSIC TONES LTD.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE I - HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Music Tones
Ltd., a Colorado Corporation, was incorporated October 26, 1987, and since its
inception, the Company has been in the development stage. The original name of
the corporation was The Trader's Edge Ltd.; the name change occurred March 20,
1996.
Year End
The Company has elected a calendar year-end.
Accounting Method
The company records income and expenses on the accrual method.
Organization Costs
Costs incurred in organizing the Company are being amortized over a
sixty-month period.
NOTE II - CAPITAL STOCK
On March 20, 1996, the corporation issued a 2,000 to 1 forward stock split for
common stock. Thus, the total common stock authorized changed from 50,000 to
100,000,000; and from no par value to $.0001 par value.
NOTE III - RELATED PARTIES
The Company has issued 3,000 shares of stock for services rendered from March
18, 1990 to March 21, 1993.
NOTE IV - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Regulation S-B. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
4
<PAGE>
MUSIC TONES LTD.
(A Development Stage Enterprise)
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity and Capital Resources
During the first nine months of 1996, the Company's working capital decreased by
$13,889.
Results of Operations
The results of operation for the nine months ended September 30, 1996 and 1995
reflect the inactivity of the Company. The Company has no revenues since it is
in the development stage.
Operating expenses primarily represent legal and accounting fees associated with
the cost of filings with the Securities and Exchange Commission.
The Company is seeking additional financing.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 18, 1996 /s/ Daniel C. Steinberg
--------------------------------
6
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,036
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,036
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 3,600
<OTHER-SE> (2,564)
<TOTAL-LIABILITY-AND-EQUITY> 1,036
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,889
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,889)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
