U.S. Securities and Exchange Commission
Washington D.C. 20549
Form 10-QSB
[X] Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934.
For the Quarter Ended September 30, 1999
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number 333-16031
Empire Communications Corporation
(name of small business issuer as specified in its charter)
Nevada 86-0793960
(State of other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
545 West 150 South, Springville, UT 84663
(Address of principal executive offices)
Registrant's telephone no., including area code: 801-489-0468
Former name, former address, and former
fiscal year, if changed since last report.
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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.
Yes X No___.
Common Stock outstanding at November 12, 1999 - 23,200,000 shares of $.001
par value Common Stock.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
The Financial Statements of the Registrant required to be filed
with this 10-QSB Quarterly Report were prepared by management together with
Related Notes. In the opinion of management, the Financial Statements fairly
present the financial condition of the Registrant.
EMPIRE COMMUNICATIONS CORPORATION
(Formerly Litigation Economics, Inc)
[Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
<TABLE>
ASSETS
September 30, 1999 Dec. 31, 1998
---------------- ---------------
<S> <C> <C>
CURRENT ASSETS:
Cash in Checking $ 11,107 $ 0
Note Receivable $ 3,587 $ 0
--------------- ------------
Total Current Assets 14,694 0
TOTAL ASSETS: $ 14,694 $ 0
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
September 30, 1999 Dec. 31, 1998
--------------- ---------------
CURRENT LIABILITIES:
Accounts payable $ 3,437 $ 506
--------------- --------------
Total Current Liabilities 3,437 506
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock; authorized 50,000,000
shares at $0.001 par value; 23,200 3,200
$0.001 par value; 23,200,000
shares issued and outstanding
Additional paid-in Capital 102,800 102,800
Deficit accumulated during the
development stage (114,742) (106,506)
--------------- --------------
Total Stockholders' Equity 11,258 (506)
TOTAL LIABILITIES & EQUITY $14,694 $(506)
</TABLE>
The accompanying notes are an integral part of these financial statements.
NOTE: The balance sheet at December 31, 1998 was taken from the audited
financial statements at that date and condensed.
<PAGE>
EMPIRE COMMUNICATIONS CORPORATION
(Formerly Litigation Economics, Inc.)
[Development Stage Companies]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
<TABLE>
For the Three For the Three
Months Ended Months Ended
Sept. 30, 1999 Sept. 30, 1998
----------------- ---------------
<S> <C> <C>
REVENUE $ 70 $ 0
Interest Income -------- --------
Total Revenue $ 70 $ 0
EXPENSES
General and Administrative Expenses $ 953 $15,994
-------- --------
Total Expenses $ 953 $15,994
INCOME FROM OPERATION ($ 883) $(15,994)
TOTAL OTHER INCOME 0 0
NET INCOME/LOSS ($ 883) $(15,994)
NET LOSS PER SHARE ($.00) ($.00)
The accompanying notes are an integral part of these financial statements.
</TABLE>
EMPIRE COMMUNICATIONS CORPORATION
(Formerly Litigation Economics, Inc.)
[Development Stage Companies]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
<TABLE>
For the Nine For the Nine
Months Ended Months Ended
Sept. 30, 1999 Sept. 30, 1998
-------------- --------------
<S> <C> <C>
REVENUE
Revenue $ 70 $ 13,206
Cost of Goods Sold (1,200)
------- ---------
Total Revenue $ 70 $ 12,006
EXPENSES
General and Administrative Expenses $8,306 $ 35,929
------- --------
Total Expenses $8,306 $ 35,929
INCOME FROM OPERATION ($8,236) ($ 23,923)
TOTAL OTHER INCOME 0 (12,035)
NET INCOME/LOSS ($8,236) ($35,958)
NET LOSS PER SHARE ($.00) ($.011)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
EMPIRE COMMUNICATIONS CORPORATION
(Formerly Litigation Economics, Inc.)
[A Development Stage Company]
Consolidated Statements of Stockholders' Equity
<TABLE>
Deficit
Capital In Accumulated
Common Stock Excess Of During the
Shares Amount Par Value Develop. Stage
------ -------- ----------- ---------------
<S> <C> <C> <C> <C>
BALANCE,
April 27, 1995 -- $ -- $ -- $ --
Common stock issued for cash
at $0.001 per share 2,000,000 $ 2,000 (1,000) --
Recapitalization of
G.E.C, Inc. 1,000,000 $ 1,000 4,000 --
Net loss for the period ended
December 31, 1996 -- -- -- (5,125)
BALANCE,
December 31, 1996 3,000,000 $ 3,000 3,000 (5,125)
Common stock issued for cash
at $1.00 per share 200,000 $ 200 99,800 --
Net loss for the year ended
December 31, 1997 -- -- -- (19,959)
BALANCE, 3,200,000 $ 3,200 102,800 (25,084)
December 31, 1997
Net loss for the period ended
December 31, 1998 -- -- -- (81,422)
Balance, December 31, 1998 3,200,000 $ 3,200 102,800 $(106,506)
Common Stock issued for cash
at $.001 per share 20,000,000 20,000 -- --
Net loss for the period ending
Sept. 30, 1999 -- -- -- (8,236)
Balance, Sept. 30, 1999 23,200,000 23,200 102,800 $( 114,742)
</TABLE>
<PAGE>
EMPIRE COMMUNICATIONS CORPORATION
(Formerly Litigation Economics, Inc.)
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED & CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Condensed Financial Statements - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to pre-
sent fairly the financial position and results of operations at September 30,
1999 and for all the periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and notes there-
to included in the Company's December 31, 1998, audited financial statements.
The results of operations for the period ended September 30, 1999, are not
necessarily indicative of the operation results for the full year.
The Company was incorporated on April 27, 1995. During its first
approximately three years of operations, the Company generated no significant
revenues and is thus considered a development stage company. The Company raised
funds initially from its founders, and then from a public offering in July,
1997. In 1997 and early 1998, the Company attempted to develop an economic con-
sulting and expert witness business based on the talents of its then management
and a proprietary software program for the analysis of economic damages in liti-
gation contests. During this time period, the Company took the name Litigation
Economics, Inc. to reflect its new business plan.
During the first quarter of 1998, the Company changed its name to Empire
Communications Corporation and sold a controlling equity interest to Empire
Financial Corporation, a Dallas, Texas-based merchant bank, all in connection
with the Company's proposed acquisition and operation of two Businesses then
being sold by DeLuxe Corporation: PaperDirect, Inc. and Current Social Expres-
sions. The Company worked hard in February, March, April and early May to com-
plete due diligence on the PaperDirect and Current Social Expressions acquisi-
tions and to raise new equity funding through a private placement. Several cor-
porate actions took place in contemplation of the PaperDirect and Current
Social Expressions acquisitions, including the sale of the Company's GEC, Inc.
subsidiary to the Company's then controlling shareholders, Mr. and Mrs.
Cornelius Hofman for a surrender of 1.2 million shares of the Company's Common
Stock and $10,000.
Late in the second quarter of 1998, Empire Financial Corporation indicated
its desire to rescind its investment in the Company, and also to rescind its
assignment to the Company of the contract rights for the acquisition of Paper-
Direct, Inc. and Current Social Expressions. The Company agreed, and the Empire
Financial investment was unwound, the PaperDirect and Current Social Expres-
sions acquisition efforts ceased, the new private placement was abandoned, and
Mr. and Mrs. Hofman agreed to sell GEC back to the Company for a return of the
consideration they made--all during the third quarter of 1998. Further details
concerning the rescission of the PaperDirect and GEC transactions can be found
in the Report on Form 8-K filed by the Company with the Commission in July 1998.
<PAGE>
In December 1998, the Company sold G.E.C, it's wholly-owned subsidiary, for
$16,911 cash, and currently has no business operations. The Company is actively
seeking a successful business opportunity through technology acquisition, merger
with a going concern or otherwise.
On March 25, 1999, the Company issued 20,000,000 shares of its "unregist-
ered" and "restricted" common stock to the appointed Director and President,
Susan M. Grant, in consideration of the sum of $20,000 cash, effectively passing
control (86%) to the new officer. The Company is now exploring various business
opportunities, and moved its executive offices to Springville, Utah in space
provided by the Company's new Chief Executive Officer and sole Director, Susan
Grant.
Accounting Method - The Company's financial statements are prepared
using the accrual method of accounting. The Company has selected a December 31,
year end.
Net Loss Per Share - The computation of loss per share of common stock is
based on the weighted average number of shares outstanding at the date
of the consolidated financial statements.
Provision of Taxes - At December 31, 1998, the Company has net operating
loss carryforwards of approximately $104,000 that may be offset against future
taxable income through 2013. No tax benefit has been reported in the consoli-
dated financial statements, because the Company believes there is a 50% or
greater chance the operatingloss carryforwards will expire unused. Accordingly,
the potential tax benefits of the operating loss carryforwards are offset by a
valuation allowance of the same amount.
Cash and Cash Equivalents - For purposes of financial statement present-
ation, the Company considers all highly liquid investments with a maturity of
three months or less to be cash equivalents.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make esti-
mates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the report-
ing period. Actual results could differ from those estimates.
NOTE 2 - Related Party Transactions
The Company made loans at 8% interest to Suzan M. Grant, it's sole officer
and director, totaling $3,517.14. As of this date, the loans have been satis-
fied in full.
NOTE 3 - Discontinued Operations
On December 31, 1998, the company agreed to sell all of its ownership of
G.E.C., Inc. for $16,911 in the form of the assumption of debts of the company.
The financials have been adjusted to show the sale of G.E.C., Inc.
NOTE 4 - Common Stock
Unless otherwise stated, all transactions shown below were with unrelated
parties and the securities issued were restricted:
On May 5, 1995, the Company issued 1,000,000 shares in consideration for
$5,000 cash.
<PAGE>
On August 22, 1996, the Company acquired all of the outstanding stock of
GEC, Inc., (the Subsidiary) for 1,000,000 shares of the Company's common stock
valued at $.001 per share or $1,000 which represented the capital contributed to
the subsidiary.
The Company also issued 1,000,000 shares in exchange for software tech-
nology rights to officers of the Company.
In June and July of 1997, the Company issued 200,000 shares of common stock
(restated) in a public offering for $.50 per share (restated).
On March 12, 1998, the Board of Directors of the Company declared a 2 for
1 forward split of the outstanding common stock, in the form of a 100% stock
dividend distributed to shareholders of record on March 1, 1998, payable on
March 13, 1998.
On March 25, 1999, the Company issued 20,000,000 shares of its "unregister-
ed" and "restricted" common stock to the appointed Director and President, Susan
M. Grant, in consideration of the sum of $20,000 cash, effectively passing con-
trol (86%) to the new officer.
NOTE 5 - Going Concern
The Company's consolidated financial statements are prepared using generally
accepted accounting principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash and has not had
significant operations. To date, the Company has been able to cover operating
costs with existing financial resources.
NOTE 6 - Contingencies
None.
NOTE 7 - Subsequent Events
None.
<PAGE>
ITEM 2.
Management's Discussion and Analysis of Financial Condition
And Results of Operations
Plan of Operation
The Company's plan of operation for the next 12 months is to continue to
seek the acquisition of assets, properties or businesses that may benefit the
Company and its stockholder. Management anticipates that to achieve any such
acquisition, the Company will issue shares of its common stock as the sole con-
sideration for such acquisition.
During the next 12 months, the Company's only foreseeable cash requirements
will relate to maintaining the Company in good standing or the payment of
expenses associated with reviewing or investigating any potential business
venture, which the Company expects to pay from advances from management.
Results of Operations
General
Nine-months periods ended Sept. 30, 1999 and Sept. 30, 1998.
For the nine month period ended Sept. 30, 1999, the Company incurred
nominal general and administrative expenses totaling $8,306 for shareholder
costs, legal and accounting fees compared to $35,929 for nine months period in
1998, which were directly related to unwinding the Paper Direct transaction.
Liquidity and Capital Resources
As a result of assets lost in the sale of the economic consulting
business and cash expended in the PaperDirect effort, shareholders equity in
the Company had a net worth of $11,258 at September 30, 1999 compared to a
negative net worth of ($506) at December 31, 1998.
PART II - OTHER INFORMATION
ITEM I Legal Proceedings
None.
ITEM 2 Change in Securities
None.
ITEM 3 Defaults on Senior Securities
None.
ITEM 4 Submission on Matters to a Vote of Security Holders
None.
ITEM 5 Other Information
None.
ITEM 6 Exhibits and Reports on Form 8-K
(A) Exhibits
None.
(B) Reports on Form 8-K
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.
Empire Communications Corporation
Date: 11/12/99 By /s/ Susan M. Grant
---------------------
Susan M. Grant
President and Chief Executive Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> 12-31-1999
<PERIOD-END> 06-30-1999
<CASH> 11,107
<SECURITIES> 0
<RECEIVABLES> 3,587
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14,694
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,694
<CURRENT-LIABILITIES> 3,437
<BONDS> 0
0
0
<COMMON> 23,200
<OTHER-SE> 11,258
<TOTAL-LIABILITY-AND-EQUITY> 14,694
<SALES> 70
<TOTAL-REVENUES> 70
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,269
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,236)
<EPS-BASIC> .00
<EPS-DILUTED> .00
