U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
x Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
Transition Report Under Section 13 or 15(d) of
the Exchange Act
For the transition period from ____________ to____________.
Commission file number 0-23199
WIN-GATE EQUITY GROUP, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Florida 65-0669842
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8700 N.W. 47th Drive
Coral Springs, Florida 33067
(Address of Principal Executive Office)
(954) 255-5566
-----------------------------------
(Issuer's Telephone Number, Including Area Code)
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 [ ]
The number of shares outstanding of the issuer's common stock, par value $.001
per share as of May 12, 1998 was 4,964,000.
Traditional Small Business Disclosure Format: Yes [X] No [_]
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WIN-GATE EQUITY GROUP, INC.
INDEX TO FINANCIAL STATEMENTS
Page
PART I. FINANCIAL INFORMATION
ITEM. 1 Financial Statements
Balance Sheet 2
Notes to Financial Statements 3
1
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<TABLE>
<CAPTION>
WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
March 31, 1998
ASSETS
CURRENT ASSETS:
<S> <C>
Organizational Costs $ 400
Deferred Offering Costs 18,901
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Total Assets $ 19,301
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Bank Overdraft $ 11
Accrued Expenses 7,500
Due to Shareholder 5,152
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Total Liabilities $ 12,663
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SHAREHOLDERS' EQUITY
Common Stock, par value $.001 per share; 20,000,000 shares 4,900
authorized; 4,900,000 shares issued and outstanding
Preferred Stock, par value $.001 per share; 5,000,000 shares
authorized; no shares issued and outstanding -
Additional Paid-in Capital 2,000
Accumulated Deficit (262)
Total Shareholders' Equity 6,638
Total Liabilities and Shareholders' Equity $ 19,301
==========
</TABLE>
2
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WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. GENERAL:
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments), which are, in the opinion of management, necessary for a fair
statement of the Company's financial position.
The accompanying unaudited interim financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
for reporting on Form 10-QSB. Pursuant to such rules and regulations, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. The Company had nominal operating activity since
inception. Accordingly, no statements of operations or cash flows are included.
The information contained in this Form 10-QSB should be read in conjunction with
the Notes to the Financial Statements appearing in the Company's Annual Report
ended December 31, 1997.
2. SHAREHOLDERS' EQUITY:
At April 7, 1997, the Company sold 64,000 units pursuant to a Blank Check
Offering at $1 per unit. Each unit consists of one share of Common Stock and 10
Common Stock purchase warrants to purchase Common Stock at $1.20 per warrant
exercisable over a 5 year period. The net proceeds were $57,600.
3
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.
General
The Company was formed in May 1996 to seek to effect a Business
Combination with an Acquired Business. In connection with its initial
capitalization, the Company issued 4,900,000 shares of its Common Stock to its
officers, directors, and other stockholders for an aggregate sum of $6,900. On
October 10, 1997, the Company's Registration Statement was declared effective by
the SEC. Pursuant to the Registration Statement, the Company, in its initial
public offering of securities, offered 100,000 Units and sold 64,000 Units, each
unit consisting of one share of Common Stock, par value $.001 per share and ten
Common Stock Purchase Warrants of the Company, at a purchase price of $1.00 per
Unit (the "Offering") and received net proceeds of approximately $57,600 after
the payment of all expenses of the Offering (the "Net Proceeds").
LIQUIDITY AND CAPITAL RESOURCES/PLAN OF OPERATION.
As of March 31, 1998, the Company had cash of $0, and restricted
cash and cash equivalents of $0. As of March 31, 1998, the Company had total
liabilities of $12,663 and total shareholders' equity of $6,638. The Net
Proceeds ($64,000) (the "Escrow Fund") were delivered to Mellon United National
Bank, as Escrow Agent, to be held in escrow by such firm, until the earlier of
(i) written notification by the Company of its need for all or substantially all
of the Escrow Fund for the purpose of facilitating a Business Combination; or
(ii) the exercise by certain stockholders of the Redemption Offer. As of March
31, 1998, there was $0 in the Escrow Fund. The Escrow Fund is currently invested
in United States government-backed short-term securities.
The Company's objective is to seek to effect a Business Combination with an
Acquired Business, which the Company believes has growth potential. The expenses
required to select and evaluate an Acquired Business candidate (including
conducting a due diligence review) and to structure and consummate a Business
Combination (including the negotiation of relevant agreements and the
preparation of requisite documents for filing pursuant to applicable securities
laws and state corporation laws) cannot be presently ascertained with any degree
of certainty.
The Company anticipates that it will make contact with business prospects
primarily through the efforts of its officers, who will meet personally with
existing management and key personnel, visit and inspect material facilities,
assets, products and services belonging to such prospects, obtain independent
analysis for verification of information provided and undertake such further
reasonable investigation as management deems appropriate, to the extent of its
limited financial resources. The Company anticipates that certain Acquired
Business candidates may be brought to its attention from various unaffiliated
sources, including securities broker-dealers, investment bankers, venture
capitalists, bankers, other members of the financial community, and affiliated
sources, including, possibly, the Company's executive officers, directors and
their affiliates, who may present solicited or unsolicited proposals. While the
Company does not presently anticipate engaging the services of professional
firms that specialize in business acquisitions on any formal basis, the Company
may engage such firms in the future, in which event the Company may pay a
finder's fee or other compensation. In no event, however, will the Company pay a
finder's fee or commission to officers or directors of the Company or any entity
with which they are affiliated for such service.
4
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As part of the Company's investigation of prospective enterprises, products
and services, management intends to request that current owners of a prospective
Acquired Business provide, among other things, written materials regarding the
current owner's business, product or service, available market studies, as well
as the assumptions upon which they are made, appropriate title documentation
with respect to the assets, products and services of the potential Acquired
Business, detailed written descriptions of any transactions between the
potential Acquired Business and any of its affiliates, copies of pleadings and
material litigation, if any, copies of material contracts and any and all other
information deemed relevant. Additionally, the Company may verify such
information, if possible, by interviewing competitors, certified public
accountants and other persons in a position to have independent knowledge
regarding the product or service as well as the financial condition of the
potential Acquired Business.
5
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
None.
6
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SIGNATURES
In accordance with Section 13 or 15 (d) of the Securities Exchange Act of
1934, Win-Gate Equity Group, Inc. has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
WIN-GATE EQUITY GROUP, INC.
DATE: May 15, 1998 By: /s/ Debra Janssen
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Debra Janssen, President and Director
7
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,301
<CURRENT-LIABILITIES> 12,663
<BONDS> 0
0
2,000
<COMMON> 4,900
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 19,301
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (24)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (24)
<INCOME-TAX> 0
<INCOME-CONTINUING> (24)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24)
<EPS-PRIMARY> (.00)
<EPS-DILUTED> (.00)
</TABLE>
