U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission file number 0-23199
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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.)
100 N. Biscayne Blvd., Suite 2500, Miami, Florida 33132
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(Address of Principal Executive Offices)
(305) 371-3300
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(Issuer's Telephone Number, Including Area Code)
(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 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
---- ----
At March 27, 2000 there were 18,150,702 shares of the issuer's Common Stock
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
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WIN-GATE EQUITY GROUP, INC.
INDEX
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PAGE NUMBER
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PART I - FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Balance Sheet 3
Statements of Income for the 4
three months ended March 31, 1999
and 1998 and the period from inception
to March 31, 1999
Statement of Changes in Stockholders' Equity 5
for the period from inception to March 31, 1999
Statements of Cash Flow for the 6
three months ended March 31, 1999
and 1998 and the period from inception
to March 31, 1999
Notes to Financial Statements 7
Item 2. Management's Plan of Operation 8
PART II - OTHER INFORMATION 9
SIGNATURES 10
EXHIBIT 27.1 11
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2
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PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
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WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
March 31, 1999
(UNAUDITED)
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A S S E T S
CURRENT ASSETS
Cash $ 0
Deferred offering costs 0
--------
TOTAL CURRENT ASSETS 0
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OTHER ASSETS
Restricted cash 64,000
Organization costs 400
--------
TOTAL OTHER ASSETS 64,400
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TOTAL ASSETS $ 64,400
========
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 $ 7,649
Stockholder loan 12,971
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TOTAL CURRENT LIABILITIES 20,620
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STOCKHOLDERS' EQUITY
Common stock offering subject to rescission
shares issued and outstanding:
64,000 as of 3/31/99 64,000
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 (27,120)
--------
TOTAL STOCKHOLDERS' EQUITY 43,780
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 64,400
========
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See Accompanying Notes To Financial Statements
3
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<CAPTION>
WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF INCOME
For the three months ended March 31, 1999 and 1998
and the Period from May 17, 1996 (Date of Inception) to March 31, 1999
(UNAUDITED)
INCEPTION
MARCH 31, MARCH 31, TO
1999 1998 1999
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<S> <C> <C> <C>
REVENUES $ 0 $ 0 $ 0
OPERATING EXPENSES:
General and administrative 150 24 951
OTHER EXPENSE
Stock offering costs 378 0 26,169
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NET LOSS BEFORE INCOME TAXES (528) (24) (27,120)
INCOME TAX EXPENSE (BENEFIT) 0 0 0
-------- -------- --------
NET INCOME (LOSS) $ (528) $ (24) $(27,120)
======== ======== ========
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See Accompanying Notes To Financial Statements
4
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<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 March 31, 1999
(UNAUDITED)
COMMON STOCK AND
CAPITAL IN EXCESS
OF PAR VALUE
------------
RETAINED
SHARES AMOUNT EARNINGS TOTAL
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<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 -- -- (528) (528)
--------- --------- --------- ---------
BALANCES AT MARCH 31, 1999 4,964,000 $ 70,900 $ (27,120) $ 43,780
========= ========= ========= =========
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See Accompanying Notes To Financial Statements
5
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<CAPTION>
WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1999 and 1998
and the Period from May 17, 1996 (Date of Inception) to March 31, 1999
(UNAUDITED)
INCEPTION
MARCH 31, MARCH 31, TO
1999 1998 1999
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<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (528) $ (24) $(27,120)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Changes in assets and liabilities:
Organizational costs 0 0 (400)
Accrued expenses (162) 0 7,649
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Net cash used by operating activities (690) (24) (19,871)
------- -------- --------
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 690 0 12,971
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 deposited into escrow account for
stock offering subject to rescission 0 0 (64,000)
------- -------- --------
Net cash provided by financing
activities 690 0 19,871
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NET INCREASE (DECREASE) IN CASH 0 (24) 0
CASH AND EQUIVALENTS, BEGINNING 0 13 0
------- -------- --------
CASH AND EQUIVALENTS, ENDING $ 0 $ (11) $ 0
======= ======== ========
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See Accompanying Notes To Financial Statements
6
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WIN-GATE EQUITY GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
March 31, 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 - SUBSEQUENT EVENT
- -------------------------
As referred to in note 8 of the Company's Annual Report, 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.
7
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Item 2. Management's Plan of Operation.
To the knowledge of the Company's current management, the information provided
under this Item 2 accurately represented the Company's plan of operation as of
March 31, 1999. For a discussion of the Company's and current management's plan
of operation as of April 28, 2000, please refer to the Company's Form 10-KSB as
filed with the Securities and Exchange Commission on April 28, 2000.
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 combinations. The Company has not
been engaged in active operations since its organization and is in the
development stage. From inception of the Company through March 31, 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 investigating certain potential
business opportunities.
Revenues
For the quarter ended March 31, 1999, the Company had no revenues and had
expenses of $528.
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 investigating 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 will be 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
8
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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. The Company's principal asset at March 31, 1999 was cash totaling $64,000.
As of such date, the Company had total current liabilities of $20,620.
Certain statements about the Company's future expectations, including without
limitation, future revenues and earnings, plans and objectives for future
operations, future agreements, future economic performance, operations and all
other statements in this Form 10-QSB are "forward- looking statements" within
the meaning of Section 27A of the Securities Act of 1933, Section 21E of the
Securities Exchange Act of 1934, and as that term is defined in the Private
Securities Litigation Reform Act of 1995. The Company intends that such
forward-looking statements be subject to the safe harbors created thereby. Since
these statements involve risks and uncertainties, including but not limited to
economic, competitive, governmental, contractual and technological factors
affecting the Company's, markets and profitability, actual results could differ
materially and adversely from expected results.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities And Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit Index:
27.1 Financial Data Schedule
(b) Current Reports on Form 8-K: None.
9
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: May ___, 2000
WIN-GATE EQUITY GROUP, INC.
By: /s/ Gary D. Morgan
-------------------------------
Gary D. Morgan, Chief Executive
Officer
By: /s/ David Walsh
-------------------------------
David Walsh, Principal Financial
Officer
10
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE COMPANY'S
BALANCE SHEET, STATEMENTS OF INCOME, STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY AND STATEMENTS OF CASH FLOW FOR THE THREE MONTHS ENDED MARCH 31, 1999,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Mar-31-1999
<CASH> 64,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 400
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 64,400
<CURRENT-LIABILITIES> 20,620
<BONDS> 0
0
0
<COMMON> 70,900
<OTHER-SE> (27,120)
<TOTAL-LIABILITY-AND-EQUITY> 64,400
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 150
<OTHER-EXPENSES> 378
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (528)
<INCOME-TAX> 0
<INCOME-CONTINUING> (528)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (528)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
