United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended January 31, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-21683
Unity First Acquisition Corp.
(Exact name of registrant as specified in its charter)
Delaware 13-3899021
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
245 Fifth Avenue, Suite 1500
New York, New York 10016
(Address of principal executive offices) (Zip Code)
(212) 696-4282
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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. |X| Yes |_| No
Applicable Only to Issuers Involved in Bankruptcy
Proceeding During the Preceding Five Years:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. |_| Yes |_| No
Applicable Only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
1,625,125 shares of Common Stock at March 17, 1997
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed financial statements included herein have been prepared by Unity
First Acquisition Corp. (the "Company"), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. While certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, the Company
believes that the disclosures made herein are adequate to make the information
presented not misleading.
2
<PAGE>
UNITY FIRST ACQUISITION CORP.
(a development stage entity)
BALANCE SHEETS
================================================================================
ASSETS
July 31,
January 31, 1997 1996
----------- ---------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 407,654 $ 563
Restricted cash and investments 6,071,041 --
----------- ---------
6,478,695 563
DEFERRED REGISTRATION COSTS -- 250,000
----------- ---------
TOTAL ASSETS $ 6,478,695 $ 250,563
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued expenses $ 102,529 $ 225,000
Advances from affiliate -- 40,500
----------- ---------
TOTAL CURRENT LIABILITIES 102,529 265,500
----------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value,
5,000 shares authorized, no shares
issued or outstanding -- --
Common stock, $.0001 par value,
249,875 shares subject to possible
conversion, at conversion value 1,201,899 --
Common stock, $.0001 par value,
20,000,000 shares authorized, 1,625,125
and 625,000 shares issued
and outstanding (excluding 249,875
shares subject to possible conversion) 163 63
Additional paid-in capital 5,200,113 --
Deficit accumulated during the development stage (26,009) (15,000)
----------- ---------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) 6,376,166 (14,937)
----------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT) $ 6,478,695 $ 250,563
=========== =========
See Selected Notes to Financial Statements
3
<PAGE>
UNITY FIRST ACQUISITION CORP.
(a development stage entity)
STATEMENTS OF OPERATIONS
(UNAUDITED)
================================================================================
For The For The Cumulative
Six Months Ended Three Months Ended Amounts
January 31, 1997 January 31, 1997 from Inception
---------------- ---------------- --------------
REVENUES $ -- $ -- $ --
---------- ---------- ----------
EXPENSES:
General and
administrative 78,707 56,207 93,707
---------- ---------- ----------
OTHER INCOME:
Interest and dividends 67,698 67,698 67,698
---------- ---------- ----------
NET INCOME (LOSS) $ (11,009) $ 11,491 $ (26,009)
========== ========== ==========
NET INCOME (LOSS) PER
COMMON SHARE $ (.01) $ .01
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 871,527 1,118,056
========== ==========
See Selected Notes to Financial Statements
4
<PAGE>
UNITY FIRST ACQUISITION CORP.
(a development stage entity)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
================================================================================
For The Six Months Cumulative
Ended Amounts
January 31, 1997 from Inception
---------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (11,009) $ (26,009)
CHANGES IN CERTAIN ASSETS AND LIABILITIES:
Increase in accrued expenses 127,529 102,529
----------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 116,520 76,520
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 6,402,112 6,402,175
Advances from affiliate 55,417 95,917
Repayment to affiliate (95,917) (95,917)
----------- -----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 6,361,612 6,402,175
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) in restricted cash and
investments (6,071,041) (6,071,041)
----------- -----------
NET CASH (USED IN) INVESTING
ACTIVITIES (6,071,041) (6,071,041)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 407,091 407,654
CASH AND CASH EQUIVALENTS, beginning of
period 563 --
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 407,654 $ 407,654
=========== ===========
See Selected Notes to Financial Statements
5
<PAGE>
UNITY FIRST ACQUISITION CORP.
(a development stage entity)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD MAY 30, 1996
(DATE OF INCEPTION) THROUGH JULY 31, 1996
AND THE SIX MONTHS ENDED JANUARY 31, 1997 (UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Common stock
subject to Deficit
possible Common Stock Additional Accumulated During
conversion ------------------------- Paid-In the Development
(249,875 shares) Shares Par Value Capital Stage Total
---------------- ------------ --------- ---------- ------------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Issuance of stock to original
founders for cash, at par value $ -- 625,000 $ 63 $ -- $ -- $ 63
Net loss for the period May 30, 1996
(date of inception) through July
31, 1996 -- -- -- -- (15,000) (15,000)
----------- ----------- ----------- ----------- ----------- -----------
Balance, July 31, 1996 -- 625,000 63 -- (15,000) (14,937)
Issuance of units to public 1,201,899 1,000,125 100 5,200,113 -- 6,402,112
Net loss for the period ended
January 31, 1997 (unaudited) -- -- -- -- (11,009) (11,009)
----------- ----------- ----------- ----------- ----------- -----------
Balance, January 31, 1997
(unaudited) $ 1,201,899 1,625,125 $ 163 $ 5,200,113 $ (26,009) $ 6,376,166
=========== =========== =========== =========== =========== ===========
</TABLE>
See Selected Notes to Financial Statements
6
<PAGE>
UNITY FIRST ACQUISITION CORP.
(a development stage entity)
SELECTED NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 1 - FINANCIAL STATEMENTS
The financial statements have been prepared by Unity First Acquisition
Corp. ("the Company"), without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash
flows at January 31, 1997 and for all periods presented have been made.
The results of operations for the period ended January 31, 1997 are not
necessarily indicative of the operating results for a full year.
Certain information and footnote disclosures prepared in accordance with
general accepted accounting principles and normally included in the
financial statements have been condensed or omitted. It is suggested that
these financial statements be read in conjunction with the financial
statements and notes included in the Company's Registration Statement on
Form S-1 (File No. 333-11165).
NOTE 2 - ORGANIZATION AND OPERATIONS
The Company was incorporated in the State of Delaware on May 30, 1996 to
serve as a vehicle to effect a merger, exchange of capital stock, asset
acquisition or other similar business combination (a "Business
Combination"). The Company is currently in the development stage. All
activity of the Company to date relates to its formation, fund-raising,
and search to effect a Business Combination.
NOTE 3 - OFFERING OF SECURITIES
On November 12, 1996, the Company completed its initial public offering
(the "Offering") consisting of the sale of 1,250,000 units (the "Units").
Each Unit consists of one share of the Company's Common Stock ("Common
Stock"), $.0001 par value, one Class A Redeemable Warrant (the "A
Warrants") and one Class B Redeemable Warrant (the "B Warrants"). Each A
Warrant and B Warrant entitles the holder to purchase from the Company one
share of Common Stock at an exercise price of $5.50 and $7.50,
respectively, commencing on the later of a Business Combination or
November 12, 1997. The A Warrants and B Warrants are redeemable, each as a
class, in whole and not in part, at the option of the Company and with the
consent of the Underwriter upon 30 days notice at any time after the
Warrants become exercisable, only in the event that the reported high bid
price of the Common Stock is at least $8.50 per share for the 20
consecutive trading days immediately prior to notice of redemption, at a
price of $.05 per A Warrant or B Warrant. The Warrants are immediately
separable and transferable. In connection with the Offering, the Company
granted the managing underwriter (the "Underwriter") an option,
exercisable within 45 business days from November 12, 1996, to purchase up
to 187,500 additional Units at $6.00 per unit. This option, which was
solely for the purpose of covering over-allotments, was not exercised by
the Underwriter either in whole or in part prior to its expiration date.
None of the A and B Warrants have been exercised through January 31, 1997.
7
<PAGE>
UNITY FIRST ACQUISITION CORP.
(a development stage entity)
SELECTED NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 3 - OFFERING OF SECURITIES (Cont'd.)
Net proceeds of the Offering to the Company including the purchase of
warrants by the Underwriter, discussed below, were $6,402,112, after
deducting related expenses. Ninety percent (90%) of the net proceeds are
held in an interest bearing Trust Fund until the earlier of (i) written
notification by the Company of its need for all or substantially all of
the net proceeds for the purpose of implementing or facilitating the
implementation of a Business Combination or (ii) the liquidation of the
Company.
In the event that the Company does not effect a Business Combination
within eighteen months from the date of the Offering, the Company will be
dissolved and the Company will distribute to all Public Stockholders in
proportion to their respective equity interests in the Company, an
aggregate sum equal to the Company's book value, calculated as of the
approval date of such proposal. In this regard, the Company's Initial
Stockholders, including all of the officers and directors of the Company,
have agreed to waive their respective rights to participate in any such
liquidation distribution.
All of the Company's Initial Stockholders, including all of the officers
and directors of the Company, have agreed to vote their respective shares
of Common Stock in accordance with the vote of the majority of all
non-affiliated future stockholders of the Company with respect to a
Business Combination. In addition, the Common Stock owned by all of the
executive officers and directors of the Company, their affiliates and by
all persons owning 5% or more of the currently outstanding share of Common
Stock was placed in escrow until the earlier of (i) the occurrence of a
Business Combination or (ii) 18 months from the date of the Offering.
During the escrow period, such stockholders are not able to sell or
otherwise transfer their respective shares of Common Stock, but will
retain all other rights as stockholders of the Company, including, without
limitation, the right to vote such shares of Common Stock.
In connection with the Offering, the Company sold to the Underwriter and
its designees, for $100, warrants (the "Underwriter's Warrants") to
purchase up to 125,000 Units at an exercise price of $6.60 per Unit. The
Underwriter's Warrants will be exercisable for a period of five years
commencing on November 12, 1996. The Underwriter's Warrants are not
redeemable and have not been exercised.
NOTE 4 - RESTRICTED CASH AND INVESTMENTS
The Company, pursuant to the terms of its initial public offering ("the
Offering"), placed $6,007,500 as of November 19, 1996, in a trust account
which was primarily invested in a short-term U.S. Government Security.
These funds are subject to release upon the earlier of (i) written
notification by the Company of its need for all or substantially all of
the net proceeds for the purpose of implementing or facilitating the
implementation of a Business Combination or (ii) the liquidation of the
Company.
8
<PAGE>
UNITY FIRST ACQUISITION CORP.
(a development stage entity)
SELECTED NOTES TO FINANCIAL STATEMENTS
================================================================================
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Unity First Acquisition Corp. (the "Company") was incorporated in May 1996 for
the purpose of raising money to fund a vehicle to effect a Business Combination
with an operating business. On November 12, 1996 the Company's Registration
Statement covering 1,250,000 Units was declared effective by the Securities and
Exchange Commission. Each Unit consists of one share of the Company's Common
Stock, one Class A Redeemable Warrant and one Class B Redeemable Warrant
(hereafter the "Units").
The Company, after the offering, had net proceeds of approximately $6,402,000.
Approximately $6,007,500 was invested in an interest bearing Trust Fund at The
Bank of New York and the balance at the same banking institution in checking and
money market accounts.
For the six months ended January 31, 1997 the Company had net a loss of $11,009
attributable to operating expenses of $78,707, consisting primarily of
management and professional fees, offset by interest income of $67,698.
9
<PAGE>
PART III - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
(i) Financial Data Schedule (Exhibit 27)
(B) Reports on Form 8-K
(i) November 18, 1996; Item 5.
9
<PAGE>
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 thereunto duly authorized.
UNITY FIRST ACQUISITION CORP.
(registrant)
Dated: March 17, 1997 By:/s/ Lawrence Burstein
------------------------------
Lawrence Burstein
President
(Principal Executive Officer)
By:/s/ Norman Leben
------------------------------
Norman Leben
Secretary
(Principal Financial and
Accounting Officer)
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 407,654
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,478,695
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,478,695
<CURRENT-LIABILITIES> 102,529
<BONDS> 0
0
0
<COMMON> 163
<OTHER-SE> 6,376,003
<TOTAL-LIABILITY-AND-EQUITY> 6,748,695
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 78,707
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (11,009)
<INCOME-TAX> 0
<INCOME-CONTINUING> (11,009)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,009)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
