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, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission File Number 333-43497
CUIDAO HOLDING CORP.
(Exact name of small business issuer as specified in its charter)
FLORIDA 65-0639616
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2951 SIMMS STREET
HOLLYWOOD, FL 33020-1510
(Address of principal executive offices)
(954) 924-0047
(Issuer's telephone number)
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 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: At March 31, 1999, the
registrant had outstanding 2,222,000 shares of common stock, par value $0.0001,
which is the registrant's only class of common stock.
<PAGE>
Part I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
CUIDAO HOLDING CORP. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
December 31, 1997, 1998 and Unaudited 3 Months Ended March 31, 1999
ASSETS
Unaudited
Audited Audited March 31,
1997 1998 1999
---- ---- ----
<S> <C>
Current Assets
Cash and Cash Equivalents........... $5,840 $353,281 $164,598
Accounts Receivable................. $19,633 $24,226 $ 34,248
Inventory........................... $3,220 0 $ 17,472
Prepaid Expenses.................... $1,534 $32,444 $ 14,390
------ ------- --------
Total Current Assets............. $30,227 $409,951 $230,709
Property & Equipment
(Net of $2,161 and $6,220 of accumulated
depreciation at December 31, 1997
and 1998)........................ $10,007 $18,782 $605,250
------- ------- --------
Other Assets
Goodwill (Net of $3,750 and $8,333
of accumulated amortization at
December 31, 1997
and 1998......................... 11,250 6,667 6,200
Organizational Costs
(Net of $432 and $740 of accumulated
amortization at December 31, 1997
and 1998)........................ 1,108 800 600
Deferred Offering Costs............. 35,162 0 0
Prepayments and Deposits............ 1,658 18,157 7,157
Total Other Assets............... 49,178 25,624 13,959
Total Assets $89,412 $454,357 $849,918
------- -------- --------
Current Liabilities
Accounts Payable and Accrued
Expenses....................... $5,377 $78,714 $83,891
Loan Payable..................... 2,500 50,070 58,279
Mortgage's Payable............... 0 0 480,000
-------- ------------ -------
Total Current Liabilities..... $7,877 $128,784 $622,170
------ -------- --------
Stockholders' Equity
Common Stock, $.0001 per value:
Authorized shares-- 100,000,000
Issued and outstanding
shares--2,222,000 at
December 31, 1997 and 2,356,175 at
December 31, 1998.............. $ 223 $ 236 $ 236
Preferred Stock, $.0001 par value:
Authorized shares--10,000,000
Issued and outstanding
shares--38,000
at December 31, 1997 and 0 at
December 31, 1998................ 4 0 0
Additional Paid-In Capital.......... 246,299 660,918 660,918
Deficit Accumulated during Development
Stage.............................. (164,991) (335,581) (433,170)
Total Stockholders' Equity.......... 81,535 325,573 227,748
------- ------- -------
Total Liabilities and
Stockholders' Equity................ $89,412 $454,357 $849,918
</TABLE>
See Note To Financial Statements
<PAGE>
CUIDAO HOLDING CORP. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 and
3 MONTHS ENDED MARCH 31,1999
Year Ended Year Ended Three Months
December 31, December 31, Ended
1997 1998 March 31, 1999
------------ ------------ ---------------
Revenues $27,071 $68,387 $24,683
Cost of Revenues 27,450 40,359 19,920
Gross Profit (379) 28,028 4,763
Operating Expenses:
General and
Administrative 120,783 197,365 101,975
Income (Loss) Before
Interest Income (121,162) (169,337) (97,212)
Interest Income 180 (1,254) (377)
-------- -------------
Net Income (Loss) During
Development Stage $(120,982) $(170,591) $(97,589)
Income (Loss) Per Common
Share $ (.099) $ (.076) (.041)
---------- ------------- ------
Weighted Average Common
Shares Outstanding 1,221,520 2,224,363 2,356,175
Comprehensive Income Items 0 0 0
Net Comprehensive Income (Loss) $ (120,982) $ (170,591) $(97,589)
----------- ----------- ---------
<PAGE>
CUIDAO HOLDING CORP. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 &
3 MONTHS ENDED MARCH 31,1999
<TABLE>
<CAPTION>
Year Ended Year Ended Three Mos. Ended
December 31, December 31, March 31,
1997 1998 1999
---- ---- ----
<S> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss ..................... $(120,982) $(170,591) $(97,589)
Adjustments to Reconcile Net Loss
to Net Cash Used in Operating
Activities:
Depreciation .......... 1,914 4,059
Amortization .......... 4,043 4,892
Issuance of Common Stock
for Legal Services ... 0 0 0
(Increase) Decrease in
Inventory ............ (3,220) 3,220 17,472
(Increase) Decrease in
Organizational Costs.. (475) 0 600
(Increase) Decrease in
Deferred Offering
Costs ................ (14,662) 35,162 0
(Increase) Decrease in
Prepayments and
Deposits.............. (1,384) (47,409) (11,000)
Increase in Accounts
Payable and
Accruals ............. 4,190 73,337 83,891
----- ------ ------
Net Cash Used in Operating
Activities.............. (150,209) (101,923)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of Equipment and
Building................. (10,444) (12,834)
------- --------
Net cash Used in Investing
Activities ............. (10,444) (12,838)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in Loans Payable 2,500 47,570 58,279
Proceeds from Issuing Common 57,300 414,628 0
Stock Proceeds from Issuing 95,000 0 0
--------- ------------ ----------
Preferred Stock...............
Net Cash Provided by
Financing Activities.... 154,800 462,198 0
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (5,853) 347,441
</TABLE>
<PAGE>
CUIDAO HOLDING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Deficit
Accumulated
During
Paid-In the
Common Stock Preferred Stock Capital Development Stage
------------ --------------- ------- -----------------
Shares Amount Shares Amount Capital
------ ------ ------ ------ -------
<S> <C>
Balance at 2,356,175 $236 $660,918 $335,581
December 31, 1998
Net loss, (97,589)
March 31, 1999
Balance, 2,356,175 $236 660,918 (433,170)
March 31, 1999
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CUIDAO HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31,1999
(UNAUDITED)
Note 1 - Summary of Significant Accounting Policies
The Company
CUIDAO HOLDING CORP. (the "Company") is a development stage
company which imports, develops, manages and distributes a portfolio of
international and regional brands of beer, wine and spirits.
The Company was organized under the laws of the State of Florida on
February 12, 1996. On June 27, 1996, the Company formed Cuidao (USA) Import Co.,
Inc., a wholly owned subsidiary incorporated under the laws of the State of
Florida. On March 31, 1997, the Company acquired all of the issued and
outstanding common stock of R&R (Bordeaux) Imports, Inc., a wholly owned
subsidiary of the Company.
The accompanying condensed consolidated financial statements
presented include the accounts of the Company and its wholly owned subsidiaries.
All significant intercompany balances and transactions have been eliminated.
Basis of Presentation
The condensed consolidated balance sheet as of March 31, 1999, the
related periods ended March 31, 1999 and 1998 and for the three-month period
ended March 31, 1999 and 1998 and for the period beginning with the inception
and ending March 31, 1999, the related condensed consolidated statement of
stockholders' equity for the three-month period ended March 31, 1999, and the
related condensed consolidated statements of cash flows for the three-month
periods ended March 31, 1999 and 1998 and for the period beginning with
inception and ending March 31, 1999 are unaudited. In the opinion of management,
all adjustments necessary consisted of normal recurring items. Interim results
may not be indicative of results for a full year.
The condensed consolidated financial statements and notes are
presented as permitted on Form 10-QSB and do not contain information included in
the Company's annual consolidated statements and notes. The year-end condensed
consolidated balance sheet, was derived from the Company's financial statements,
but may not include all disclosures required by generally accepted accounting
principles. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and related notes thereto
included in the Company's December 31, 1998 financial statements.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and any
highly liquid investment with a maturity of three months or less at the time of
purchase.
Office Equipment
Office equipment is stated at cost aid depreciation over its estimated
allowable useful life (7 years), using the double declining balance method.
Expenditure for major renewals and betterments that extend the useful lives of
fixed assets are capitalized. Expenditures for the maintenance and repairs are
charged to expense as incurred.
Organizational Costs
The Company has incurred certain federal and state filing and registration
fees, legal and promotional fees in its formation and capitalization, which will
benefit the Company in future periods. These costs are being amortized over a
five year life using the straight-line method.
<PAGE>
Note 2 Related Party Loans
At September 30, 1998, the Company had loans outstanding from officers,
directors and shareholders of the Company totalling $35,199. Between September
30, 1998 and March 31, 1999, the loans were repaid to the respective parties in
full.
Note 3 Stockholders' Equity
The Company's authorized and outstanding $.0001 par value capital
stock as of March 31, 1999 was as follows:
Shares Shares
Authorized Outstanding
---------- -----------
Series A Preferred Stock 10,000,000 38,000
Common Stock 100,000,000 2,222,000
On December 30, 1997, the Company filed a Registration Statement
with the Securities and Exchange Commission to offer up 260,000 units to the
general public. Each unit consists of one share of the Company's Common Stock
and one common stock purchase warrant ("Warrant"). Each Warrant entitles the
holder thereof to purchase one share of common stock at an exercise price of
$8.00 subject to adjustment, at any time over a three year period commencing on
the effective date of the Registration Statement. The Warrants may be redeemed
by the Company at $.05 per Warrant, at any time prior to their expiration on not
less than 30 days written notice, if the closing bid price of the common stock
equals or exceeds $10.00 per share for 30 consecutive trading days ending within
10 days of the notice of redemption.
Item 2. Plan of Operation
General
The Company intends on continuing three basic principal objectives:
(1) aggressively manage and market its current portfolio of beers,
wines and spirits in specific niche markets of the overall alcoholic beverage
industry;
(2) expand its management and administrative personnel to support
its alcoholic beverage product lines; and
(3) expand its product line and distribution channels through
strategic alliances and/or through acquisitions of other importers and
distributors of alcoholic beverage products or through the acquisition of
producers of alcoholic beverage products.
Marketing of Products
The Company's current portfolio of beers consists of the following
line of beers produced in the People's Republic of China by Tsingtao Brewery No.
3, a brewery owned and operated by Tsingtao Brewery Co., Ltd., Red Dragon Draft,
Red Dragon Light, and Red Dragon Amber. The Company's marketing strategy for its
line of Chinese beer will be to first introduce its Red Dragon product line to
Asian-theme restaurants (primarily Chinese restaurants), stressing the fact that
the Company's line of Chinese beer products will provide the restaurateur with a
product that he or she currently does not have, which is a diversified light,
amber and draft Chinese beer line.
With its wine products, the Company's objective is to successfully
introduce a profitable line of imported wines into the United States retail
market. The Company's marketing and sales strategy with respect to its wine
products will be to provide the off premise merchandise market with quality
products at a reasonable cost to the retailer and the consumer.
Expansion of Product Line and Distribution Channels
During the balance of 1999, the Company plans to expand the number
of alcoholic beverage products under its management, as well as increase the
number of distribution channels for its products. The foundation for this
expansion will be the acquisition of other importers and/or distributors of
alcoholic beverage products.
<PAGE>
Currently the Company is involved in negotiation to acquire a
distributor of alcoholic beverage products. These negotiations have not been
finalized.
Forward-looking Statements
This Quarterly Report on Form 10-QSB contains statements relating to
future results, which are forward-looking statements as that term is defined in
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other statements which are
other than statements of historical assumptions or facts. Actual results may
differ materially from those anticipated as a result of certain risks and
uncertainties, including but not limited to changes in general economic
conditions, foreign exchange rate fluctuations, competitive product and pricing
pressures, the impact of tax increases with respect to alcoholic beverage
products, regulatory developments, as well as other risk and uncertainties
detailed from time to time in the Company's Securities and Exchange Commission
filings. The Company's expectations, beliefs and projections are expressed in
good faith and are believed by the Company to have a reasonable basis, including
without limitation, data contained in the Company's records and other available
data from third parties, but there can be no assurance that management's
expectations, beliefs or projections will result, or be achieved, or be
accomplished.
Part II.
Items 3 through 6.
None
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 hereunto duly authorized.
CUIDAO HOLDING CORP.
(registrant)
Dated May 24, 1999 By
-----------------------
C. Michael Fisher
President
Chief Financial Officer
