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 June 30, 1999
[ ] 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
------------------------------- -----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2808 N. Federal Highway
Fort Lauderdale, Florida 33306
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(Address of Principal Executive Office)
(954) 561-9766
-----------------------------------
(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 [ ] No [X]
The number of shares outstanding of the issuer's common stock, par value $.001
per share as of October 1, 1999 was 4,900,000.
Traditional Small Business Disclosure Format: Yes [X] [ ]
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<CAPTION>
WIN-GATE EQUITY GROUP, INC.
INDEX TO FINANCIAL STATEMENTS
Page
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<S> <C> <C>
ACCOUNTANTS' REPORT 1
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FINANCIAL STATEMENTS
- --------------------
Balance Sheet 2
Statement of Income for the three 3
months ended June 30, 1999
Statement of Income for the six 4
months ended June 30, 1999
Statement of Changes in Stockholders' 5
Equity
Statement of Cash Flow for the three 6
months ended June 30, 1999
Statement of Cash Flow for the six 7
months ended June 30, 1999
Notes to Financial Statements 8
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WIN-GATE EQUITY GROUP, INC.
UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 1999
<PAGE>
ACCOUNTANTS' REPORT
To the Shareholders
Win-Gate Equity Group, Inc.
The accompanying balance sheet of
WIN-GATE EQUITY GROUP, INC. (A DEVELOPMENT STAGE COMPANY)
as of June 30, 1999 and the related statements of income, changes in
stockholders' equity, and cash flows for the three and six months ended June 30,
1999 and 1998 and for the period from inception, May 17, 1996, to June 30, 1999
were not audited by us and, accordingly, we do not express an opinion on them.
/s/ LONDON WITTE & COMPANY, P.A.
- --------------------------------
LONDON WITTE & COMPANY, P.A.
Certified Public Accountants
Fort Lauderdale, Florida
August 30, 1999
1
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<CAPTION>
WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
June 30, 1999
(UNAUDITED)
A S S E T S
JUNE 30,
1999
-----------
<S> <C>
CURRENT ASSETS
Cash $ 13,577
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TOTAL CURRENT ASSETS 13,577
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OTHER ASSETS
Restricted cash 0
Organization costs 400
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TOTAL OTHER ASSETS 400
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TOTAL ASSETS $ 13,977
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L I A B I L I T I E S A N D S T O C K H O L D E R S ' E Q U I T Y
CURRENT LIABILITIES
Accrued expenses $ 2,190
Accrued interest 208
Loan payable 12,971
Stockholder loan 50
Note payable - current 20,000
-----------
TOTAL CURRENT LIABILITIES 35,419
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STOCKHOLDERS' EQUITY
Common stock offering subject to rescission
shares issued and outstanding:
0 as of 6/30/99 and 64,000 as of 12/31/98 0
Common stock, par value $.001 per share;
20,000,000 shares authorized; 4,900,000
shares issued and outstanding 4,900
Preferred stock, par value $.001 per share;
5,000,000 shares authorized; no shares
issued and outstanding 0
Additional paid-in capital 2,000
Deficit accumulated during the development
stage (28,342)
-----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (21,442)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 13,977
===========
</TABLE>
See Accompanying Notes to Financial Statements
2
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<CAPTION>
WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF INCOME
For the three months ended June 30, 1999 and 1998
and the Period from May 17, 1996 (Date of Inception) to June 30, 1999
(UNAUDITED)
INCEPTION
JUNE 30, JUNE 30, TO
1999 1998 1999
--------- ---------- ----------
<S> <C> <C> <C>
REVENUES $ 0 $ 0 $ 0
--------- ---------- ----------
OPERATING EXPENSES:
General and administrative 24 539 975
--------- ---------- ----------
OTHER EXPENSE
Stock offering costs 990 0 27,159
Interest expense 208 0 208
--------- ---------- ----------
TOTAL OTHER EXPENSE 1,198 0 27,367
--------- ---------- ----------
NET LOSS BEFORE INCOME TAXES (1,222) (539) (28,342)
INCOME TAX EXPENSE (BENEFIT) 0 0 0
--------- ---------- ----------
NET INCOME (LOSS) $ (1,222) $ (539) $(28,342)
========= ========== ==========
</TABLE>
See Accompanying Notes to Financial Statements
3
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<TABLE>
<CAPTION>
WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF INCOME
For the six months ended June 30, 1999 and 1998
and the Period from May 17, 1996 (Date of Inception) to June 30, 1999
(UNAUDITED)
INCEPTION
JUNE 30, JUNE 30, TO
1999 1998 1999
--------- --------- ----------
<S> <C> <C> <C>
REVENUES $ 0 $ 0 $ 0
--------- --------- ----------
OPERATING EXPENSES:
General and administrative 174 563 975
--------- --------- ----------
OTHER EXPENSE
Stock offering costs 1,368 0 27,159
Interest expense 208 0 208
--------- --------- ----------
TOTAL OTHER EXPENSE 1,576 0 27,367
--------- --------- ----------
NET LOSS BEFORE INCOME TAXES (1,750) (563) (28,342)
INCOME TAX EXPENSE (BENEFIT) 0 0 0
--------- --------- ----------
NET INCOME (LOSS) $ (1,750) $ (563) $(28,342)
========= ========= ==========
</TABLE>
See Accompanying Notes to Financial Statements
4
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<TABLE>
<CAPTION>
WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the period from May 17, 1996 (Date of Inception)
to June 30, 1999
(UNAUDITED)
COMMON STOCK AND
CAPITAL IN EXCESS
OF PAR VALUE
------------
RETAINED
SHARES AMOUNT EARNINGS TOTAL
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
BALANCES AT MAY 17, 1996 0 $ 0 $ 0 $ 0
Net Loss -- -- (173) (173)
Issuance of common shares 4,900,000 6,900 -- 6,900
--------- --------- --------- ----------
BALANCES AT DECEMBER 31, 1996 4,900,000 6,900 (173) 6,727
Net Loss -- -- (65) (65)
--------- --------- --------- ----------
BALANCES AT DECEMBER 31, 1997 4,900,000 6,900 (238) 6,662
Net Loss -- -- (26,354) (26,354)
Issuance of common shares
subject to rescission 64,000 64,000 -- 64,000
--------- --------- --------- ----------
BALANCES AT DECEMBER 31, 1998 4,964,000 70,900 (26,592) 44,308
Net Loss -- -- (1,750) (1,750)
Rescission of common shares (64,000) (64,000) -- (64,000)
--------- --------- --------- ----------
BALANCES AT JUNE 30, 1999 4,900,000 $ 6,900 $ (28,34 $ (21,442)
========= ========= ========= ==========
</TABLE>
See Accompanying Notes to Financial Statements
5
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<TABLE>
<CAPTION>
WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the three months ended June 30, 1999 and 1998
and the Period from May 17, 1996 (Date of Inception) to June 30, 1999
(UNAUDITED)
INCEPTION
JUNE 30, JUNE 30, TO
1999 1998 1999
---------- --------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,222) $ (539) $ (28,342)
Adjustments to reconcile net loss to net
cash provided by operating activites:
Changes in assets and liabilities:
Organizational costs 0 0 (400)
Accrued expenses (5,459) 0 2,190
Accrued interest 208 0 208
---------- --------- -----------
Net cash used by operating activities (6,473) (539) (26,344)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used by investing activities 0 0 0
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stockholder loan 50 0 50
Proceeds from loan payable 0 550 12,971
Proceeds from note payable 20,000 0 20,000
Proceeds from common stock issuance 0 0 6,900
Proceeds from common stock offering
of 64,000 subject to rescission 0 0 64,000
Cash deposit into escrow account 0 0 (64,000)
Rescission of common stock offering (64,000) 0 (64,000)
Cash withdrawn from escrow account 64,000 0 64,000
---------- --------- -----------
Net cash provided by financing
activities 20,050 550 39,921
---------- --------- -----------
NET INCREASE (DECREASE) IN CASH 13,577 11 13,577
CASH AND EQUIVALENTS, BEGINNING 0 (11) 0
---------- --------- -----------
CASH AND EQUIVALENTS, ENDING $ 13,577 $ 0 $ 13,577
========== ========= ===========
</TABLE>
See Accompanying Notes to Financial Statements
6
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<TABLE>
<CAPTION>
WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1999 and 1998
and the Period from May 17, 1996 (Date of Inception) to June 30, 1999
(UNAUDITED)
INCEPTION
JUNE 30, JUNE 30, TO
1999 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,750) $ (563) $ (28,342)
Adjustments to reconcile net loss to net
cash provided by operating activites:
Changes in assets and liabilities:
Organizational costs 0 0 (400)
Accrued expenses (5,621) 0 2,190
Accrued interest 208 0 208
---------- ---------- ----------
Net cash used by operating activities (7,163) (563) (26,344)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used by investing activities 0 0 0
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stockholder loan 50 0 50
Proceeds from loan payable 690 550 12,971
Proceeds from note payable 20,000 0 20,000
Proceeds from common stock issuance 0 0 6,900
Proceeds from common stock offering
of 64,000 subject to rescission 0 0 64,000
Cash deposit into escrow account 0 0 (64,000)
Rescission of common stock offering (64,000) 0 (64,000)
Cash withdrawn from escrow account 64,000 0 64,000
---------- ---------- ----------
Net cash provided by financing
activities 20,740 550 39,921
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH 13,577 (13) 13,577
CASH AND EQUIVALENTS, BEGINNING 0 13 0
---------- ---------- ----------
CASH AND EQUIVALENTS, ENDING $ 13,577 $ 0 $ 13,577
========== ========== ==========
</TABLE>
See Accompanying Notes to Financial Statements
7
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WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
(UNAUDITED)
NOTE 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 information contained in these financial statements should be read in
conjunction with the Notes to the Financial Statements appearing in the
Company's Annual Report for the year ended December 31, 1998.
NOTE 2 - RESCISSION OF COMMON STOCK OFFERING
The Company was obligated under Securities and Exchange Commission's Rule 419 of
Regulation C under the Securities Act of 1933, as amended, to complete an
acquisition meeting specified criteria. As of June 30, 1999 no acquisition had
been identified. Pursuant to Rule 419, $64,000 was refunded to the investors and
64,000 shares of common stock and 640,000 common stock purchase warrants were
canceled.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.
General
The Company was organized under the laws of the State of Florida on May
17, 1996 in order to seek and effect a merger, acquire the assets or the capital
stock of existing businesses or other similar business combination. The Company
has not been engaged in active operations since its organization and is in the
development stage. From inception of the Company through October 1, 1999,
management's primary emphasis has been on organizing the Company, preparing and
completing the Company's Registration Statement on Form SB-2 for purposes of
undertaking the Blank Check Offering and the investigation of certain potential
business opportunities.
Revenues
For the quarter ended June 30, 1999 and for the six months ended June
30, 1999, the Company had no revenues and had expenses of $1,222 and 1,750,
respectively.
Liquidity and Capital Resources
During the period from the Company's inception through September 30,
1997, the Company was principally engaged in organizational activities,
completing the aforementioned Registration Statement and investigation of
certain potential business opportunities. During the first quarter of 1998, the
Company completed the public offering of 64,000 units (the "Units"), each Unit
consisting of one (1) share of Common Stock and ten (10) common stock purchase
warrants pursuant to Rule 419 under the Securities Act of 1933, as amended. The
funds, along with the Units sold in such offering, were being held in escrow
until the Company received shareholder approval for a proposed acquisition. The
Company was not able to complete the offering on a timely basis and as a result,
all of the funds were returned to the investors in the Rule 419 offering. The
Company will continue with its original business plan which consisted of efforts
to seek and undertake a merger, acquire the assets or the capital stock of
existing businesses, effectuate joint ventures or strategic alliances or
otherwise complete a business combination with independent companies or with
entities or businesses affiliated with the principal of the Company. Inasmuch as
certain of the shares of Common Stock held by shareholders of the Company are
eligible for sale pursuant to Rule 144 or are currently freely tradeable as a
result of having been acquired and held for in excess of two years, the Company
plans to seek inclusion of its Common Stock on the OTC Bulletin Board. As
indicated, the Company is currently a reporting company under the Securities
Exchange Act of 1934 pursuant to Section 12(g) of the Securities Exchange Act of
1934. In any event, it is the Company's intention to maintain a current status
with regard to its obligation to file periodic reports under the Securities
Exchange Act of 1934. The Company's principal asset at June 30, 1999 was cash
totaling $13,577. As of such date, the Company had total current liabilities of
$35,419.
9
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits
27. Financial Data Schedule
Reports on Form 8-K
Form 8-K dated May 28, 1999
10
<PAGE>
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: October 26, 1999 By: /s/ Roman Fisher
-----------------------------------
Roman Fisher, President
11
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<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Win-Gate
Equity Group, Inc.'s Balance Sheet, Statement of Income and Statement of Changes
in Stockholders' Equity for the six months ended June 30, 1999 and is qualified
in it's entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-1-1999
<PERIOD-END> Jun-30-1999
<CASH> 13,577
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13,577
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,977
<CURRENT-LIABILITIES> 35,419
<BONDS> 0
0
2,000
<COMMON> 4,900
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,977
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,542
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 208
<INCOME-PRETAX> (1,750)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,750)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,750)
<EPS-BASIC> (0.000)
<EPS-DILUTED> (0.000)
</TABLE>
