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 March 31, 2000
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.
4001 West 104th Terrace, Overland Park, KS 66207
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 May 1, 2000-46,400,000 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.
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EMPIRE COMMUNICATIONS CORPORATION
(Formerly Litigation Economics, Inc)
[Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
March 31, 2000 Dec. 31, 1999
<S> <C> <C>
CURRENT ASSETS:
Cash on Hand $ 8,912 $ 14,578
Total Current Assets 8,912
TOTAL ASSETS $ 8,912 $ 14,578
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
March 31, 2000 Dec. 31,1999
CURRENT LIABILITIES:
Accounts payable $ 2,540 $ 5,075
Total Current Liabilities 2,540 5,075
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock; authorized 50,000,000
shares at $0.001 par value; 23,200 23,200
$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 (119,629) (116,497)
Total Stockholders' Equity 6,371 9,503
TOTAL LIABILITIES & EQUITY $ 8,912 $ 14,578
</TABLE>
The accompanying notes are an integral part of these financial statements.
NOTE: The balance sheet at December 31, 1999 was taken from the audited
financial statements at that date and condensed.
<PAGE>
<TABLE>
EMPIRE COMMUNICATIONS CORPORATION
(Formerly Litigation Economics, Inc.)
[Development Stage Companies]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
For the Three For the Three
Months Ended Months Ended
March 31, 2000 March 31, 1999
<S> <C> <C>
REVENUE $ 0 $ 0
Total Revenue $ 0 $ 0
EXPENSES
General and Administrative Expenses $3,131 $ 3,816
Total Expenses $3,131 $ 3,816
INCOME FROM OPERATION ($ 3,131) ($ 3,816)
TOTAL OTHER INCOME 0 0
NET INCOME/LOSS ($ 3,131) ($ 3,816)
NET LOSS PER SHARE ($.01) ($.01)
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
EMPIRE COMMUNICATIONS CORPORATION
(Formerly Litigation Economics, Inc.)
[A Development Stage Company]
Statements of Cash Flow
For The Period Ending For the Period Ending
March 31, 2000 March 31, 1999
----------------------- -------------------------
<S> <C> <C>
Cash flows from Operating
Activities
Net Income (3,131) (3,816)
Accounts Payable (2,535) 3,816
------- ---------
Net Cash Provided by Operations (5,666) 0
Cash flows from Investing
Activities 0 20,000
Cash flows from Financing
Activities 0 0
Net increase (decrease) in cash (5,666) 20,000
--------- --------
Cash balance at End of Period 8,912 20,000
Cash balance at Beginning of
Period (8,932) 0
--------- ---------
Net increase (decrease) in Cash (20) 20,000
</TABLE>
<PAGE>
<TABLE>
EMPIRE COMMUNICATIONS CORPORATION
(Formerly Litigation Economics, Inc.)
[A Development Stage Company]
Consolidated Statements of Stockholders' Equity
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
December 31, 1999 -- -- -- (9,991)
Net loss for the period ending
March 31, 2000 (3,131)
Balance, March 31, 2000 23,200,000 23,200 102,800 $ ( 119,628)
</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 present fairly the financial position and results of operations at March 31,
2000 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, 1999, audited financial statements.
The results of operations for the period ended March 31, 2000, are not necessar-
ily 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 signifi-
cant 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 Cur-
rent Social Expressions.
The Company worked hard in February, March, April and early May to complete
due diligence on the PaperDirect and Current Social Expressions acquisitions
and to raise new equity funding through a private placement. Several
corporate 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 Com-
mon 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 PaperDirect, Inc. and Current Social Expressions. The Company agreed, and the
Empire Financial investment was unwound, the PaperDirect and Current Social
Expressions 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 aid--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
$16,911,22 cash, and currently has no business operations. The Company is
actively seeking a successful business opportunity through technology acquisi-
tion, merger with a going concern or otherwise.
On March 25, 1999, the Company issued 20,000,000 shares of its "unregis-
tered" 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 itsexecutive 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, 1999, the Company has net operating
loss carryforwards of approximately $116,497 that may be offset against future
taxable incomethrough 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 operating loss 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
estimates 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 reporting period. Actual results could differ from those
estimates.
NOTE 2 - Related Party Transactions
Management Compensation - During the periods presented the Company did not
pay any compensation to its officers and directors.
<PAGE>
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.
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 soft-
ware technology 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, pay-
able on March 13, 1998.
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.
NOTE 5 - Going Concern
The Company's consolidated financial statements are prepared using gen-
erally accepted accounting principles applicable to a going concern which con-
templates 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
The Company is currently in negotiations with Front Porch Digital, Inc.
where in a stock for stock exchange is being comptemplated.
<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 expen-
ses associated with reviewing or investigating any potential business venture,
which the Company expects to pay from advances from management.
Results of Operations
General
Three-months periods ended March 31, 2000 and March 31, 1999.
For the three month period ended March 31, 2000, the Company incurred
nominal general and administrative expenses totaling $3,131.15 for shareholder
costs, legal and accounting fees compared to $3,816 for first quarter 1999.
Liquidity and Capital Resources
Shareholders equity in the Company had a net worth of $6,372 at March 31,
2000, compared to a net worth of $15,678 at March 31, 1999.
PART II - OTHER INFORMATION
ITEM I Legal Proceedings
None.
ITEM 2 Change in Securities
The Company effectuated a 2 for 1 forward split of the Company's com-
mon stock on April 19, 2000, resulting in 46,400,000 outstanding shares.
ITEM 3 Defaults on Senior Securities
None.
ITEM 4 Submission on Matters to a Vote of Security Holders
None.
ITEM 5 Other Information
On April 12, 2000, the Board of Directors and majority shareholder of
the Company voted in favor of a two for one forward split on the outstanding
common stock of the Company. The forward split was effective April 19, 2000.
ITEM 6 Exhibits and Reports on Form 8-K
(A) Exhibits
None.
(B) Reports on Form 8-K;
None.
<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, hereunto duly authorized.
Empire Communications Corporation
Date: 5/1/2000 By /s/ Susan M. Grant
Susan M. Grant
President and Chief Executive Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001025707
<NAME> EMPIRE COMMUNICATIONS CORPORATION
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 8,912
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,912
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<TOTAL-ASSETS> 8,912
<CURRENT-LIABILITIES> 2,540
<BONDS> 0
<COMMON> 23,200
0
0
<OTHER-SE> (16,829)
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<OTHER-EXPENSES> 3,131
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,131)
<INCOME-TAX> (3,131)
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,131)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
