SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
November 30, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES ACT OF 1934 FOR THE TRANSITION PERIOD FROM
TO
COMMISSION FILE NO. 001-12509
MEGA HOLDING CORP.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
NEW YORK 13-2793653
--------------------------------- ----------------------------
(State or other jurisdiction (IRS Employer Identification
of incorporation or organization) Number)
278A New Dorp Lane, Staten Island, NY 10306
-------------------------------------------
(Address of principal executive offices)
(718) 667-9117
-------------------------
Issuer's telephone number
Check whether registrant (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act of 1934 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___
As of November 30, 1999, 3,858,450 Shares of Common Stock were outstanding.
Transitional Small Business Disclosure Format: Yes ____ No_x_
<PAGE>
MEGA HOLDING CORP. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
November 30, August 31,
1999 1999
(Unaudited) (Audited)
--------- ----------
Current Assets:
<S> <C> <C>
Cash ................................................ $ 438,624 $ 252,500
Royalties Receivable ............................... 407 407
Notes Receivable ................................... 16,700 16,700
Inventory ........................................... 10,710 10,710
Employee Advance .................................... 500 500
Prepaid Expenses .................................... 937 1,250
---------- ----------
Total Current Assets ........................... 467,878 282,067
Property and Equipment:
Office Equipment at Cost ......................... 131,603 92,737
Less: Accumulated Depreciation .................... (64,548) (62,447)
---------- ----------
Net Property and Equipment .................... 67,055 30,290
Investments and Other Assets:
Deferred Tax Asset ................................ 200,020 220,078
Marketable Securities .............................. 229,430 235,259
Marketable Securities -
Valuation Allowance to FMV ...................... (116,903) (107,978)
Restricted Marketable Securities .................. 109,124 109,124
Royalties Receivable ............................... 153,660 153,660
---------- ----------
Total Investments & Other Assets................. 575,331 610,143
---------- ----------
Total Assets .......................................... $1,110,264 $ 922,500
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable & Accrued Expenses ................. $ 14,155 $ 13,442
Advance From Shareholders (Note 2) ................ 272,986 0
Officer's Loan ..................................... 24,500 24,500
Payroll Taxes Payable ............................. 2,130 1,129
---------- ----------
Total Current Liabilities ...................... 313,771 39,071
Long - Term Liabilities:
Deferred Taxes ..................................... 418,227 418,227
---------- ----------
Total Long - Term Liabilities .................. 418,227 418,227
Stockholders' Equity:
Common Stock - $.01 par value
Authorized 20,000,000 shares
Issued 3,858,450 and 3,858,450 shares 38,585 38,585
Paid In Capital ................................... 1,056,681 1,056,681
Retained Earnings / (Deficit) ...................... (717,000) (630,064)
---------- ----------
Total Stockholders' Equity ..................... 378,266 465,202
Total Liabilities and Stockholders' Equity $1,110,264 $ 922,500
========== ==========
</TABLE>
See accompanying notes to the financial statements.
<PAGE>
<TABLE>
<CAPTION>
MEGA HOLDING CORP. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
November 30, August 31,
1999 1998 1999
(Unaudited) (Unaudited) (Audited)
---------- ---------- ----------
<S> <C> <C> <C>
Net Sales ............................ $ 300 $ 129,481 $ 404,971
---------- ---------- ----------
Cost Of Sales ....................... 7,917 4,103 47,394
---------- ---------- ----------
Gross Profit ....................... (7,617) 125,378 357,577
---------- ---------- ----------
General and Administrative Expenses:
Advertising ......................... 875 0 557
Bad Debt Expense .................... 0 0 21,310
Commissions ......................... 7,905 29,641 97,247
Consulting Fees ..................... 409 0 390,000
Dues and Subscriptions ............ 429 400 2,109
Equipment Lease .................... 591 0 0
Executive Compensation ............. 0 0 14,801
Exposition / Shows .................. 0 0 3,150
Insurance ........................... 445 796 4,612
Internet Fees ...................... 1,302 0 0
Licenses and Application Fees .... 1,285 0 725
Miscellaneous ....................... 681 0 1,385
Office Expense ..................... 10,701 7,824 41,990
Outside Services ................... 3,300 0 0
Payroll and Related Costs ........ 8,418 4,909 17,755
Postage ............................. 766 1,737 5,913
Printing ............................ 3,481 0 0
Professional Fees .................. 1,500 0 23,132
Rent ................................ 3,941 3,941 15,765
Taxes ............................... 0 0 350
Telephone and Utilities ........... 2,358 2,833 11,557
Travel and Entertainment .......... 1,820 7,305 24,109
Depreciation ........................ 2,101 2,417 10,755
---------- ---------- ----------
Total Operating Expenses .......... 52,308 61,803 687,222
---------- ---------- ----------
Earnings/(Loss) Before Gains/(Loss)
on Marketable Securities,
Other Income, Income Taxes,
and Comprehensive Income
(net of taxes) ...................... (59,925) 63,575 (329,645)
Gain / (Loss) on Sale
of Marketable Securities ........... 1,039 (23,536) (212,542)
---------- ---------- ----------
Other Income/Expenses:
Royalties Income ................... 0 0 4,585
Interest Income - Royalties ........ 0 0 12,374
Interest Income / (Expense) - net .. 933 97 (405)
---------- ---------- ----------
Total Other Income .............. 933 97 16,554
---------- ---------- ----------
Earnings / (Loss) Before
Income Taxes ....................... (57,953) 40,136 (525,633)
Provision For Income Taxes ....... (8,693) 13,646 (154,157)
---------- ---------- ----------
Net Earnings / (Loss) ................ (49,260) 26,490 (371,476)
Comprehensive Income / (Loss),
net of taxes:
Unrealized Holding Gain / ( Loss) .. (99,367) (140,515) (61,691)
---------- ---------- ----------
Comprehensive Income / (Loss) ........ $ (148,627) $ (114,025) $ (433,167)
========== ========== ==========
Net Earnings / (Loss)
Per Share:
Basic Net Earnings / (Loss)
net income............... ....... $ (0.01) $ 0.01 $ (0.10)
Diluted Net Earnings / (Loss)
net income....................... $ (0.01) $ 0.01 $ (0.10)
Net Earnings / (Loss) -
comprehensive income............. $ (0.04) $ (0.03) $ (0.12)
Weighted Average
Number of Common
Shares Outstanding ............. 3,780,883 3,630,250 3,723,500
</TABLE>
See accompanying notes to the financial statements.
<PAGE>
MEGA HOLDING CORP. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Retained Total
September 1, 1997 Common Stock Paid In Earnings/ Stockholders'
To November 30, 1999 Shares Dollar Value Capital Deficit Equity
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
September 1, 1997 3,630,250 $ 36,303 $ 488,463 $ (118,864) $ 405,902
Dividends - - - (311,516) (311,516)
Net Earnings 1998 - - - 448,735 448,735
Unrealized Holding
Loss - - - (97,661) (97,661)
--------- ---------- ---------- ---------- ---------
Total Stockholders'
Equity As Of
August 31,
1998 3,630,250 36,303 488,463 (79,306) 445,460
Issuance of Common 72,200 722 179,778 0 180,500
Common Stock Issued
For Services 156,000 1,560 388,440 0 390,000
Dividends - - - (117,591) (117,591)
Net Loss 1999 - - - (371,476) (371,476)
Unrealized Holding Loss - - - (61,691) (61,691)
--------- ---------- ---------- ---------- ---------
Total Stockholders'
Equity As Of
August 31, 1999 3,858,450 38,585 1,056,681 (630,064) 465,202
Net Loss Nov. 1999 - - - (49,260) (49,260)
Unrealized Holding Loss - - - (37,676) (37,676)
--------- ---------- ---------- ---------- ---------
Total Stockholders'
Equity As Of
November 30, 1999 3,858,450 $ 38,585 $ 1,056,681 $(717,000) $ 378,266
--------- ---------- ----------- --------- ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MEGA HOLDING CORP. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
November 30, August 31,
1999 1999
(Unaudited) (Audited)
----------- ----------
Cash Flow from Operating Activities:
<S> <C> <C>
Net Income / (Loss) $ (49,260) $ (371,476)
Adjustments To Reconcile Net Income / (Loss) To Net
Cash Provided / (Used) In Operating Activities:
Depreciation 2,101 10,755
Stock Issued For Services Rendered 0 390,000
Unrealized Holding Gain / (Loss) on
Marketable Securities-AFS (37,676) (61,691)
(Increase) / Decrease in
Marketable Securities 5,829 519,176
(Increase) / Decrease
Marketable Securities - Valuation Allow. 8,925 (86,423)
(Increase) / Decrease in Inventory 0 (10,710)
Property Dividends 0 (117,591)
(Increase) / Decrease in Accounts Receivable 0 12,810
(Increase) / Decrease in Employee Advance 0 (500)
(Increase) / Decrease in Royalties
Receivalbe (Current) 0 (31)
(Increase) / Decrease in Royalties
Receivalbe (Long-term) 0 456
(Increase) / Decrease in Prepaid Expenses 313 (1,250)
(Increase) / Decrease in Deferred Tax
Asset 20,058 (123,338)
Increase / (Decrease) in Accounts
Payable and Accrued Expenses 713 2,010
Increase / (Decrease) in Payroll Taxes
Payable 1,001 753
Increase / (Decrease) in Deferred Tax
Liability 0 (97,118)
----------- ----------
Total Adjustments 1,264 437,308
----------- ----------
Net Cash Provided / (Used) by Operating Activities (47,996) 65,832
Cash Flow from Investing Activities:
(Purchase) / Disposal of Property, Plant &
Equipment (38,866) (22,944)
(Increase) / Decrease in Notes Receivable 0 11,500
----------- ----------
Net Cash Provided / (Used) by Investing Activities (38,866) (11,444)
Cash Flow from Financing Activities:
Proceeds From Sale of Common Stock 0 180,500
Increase / (Decrease) in Advance From Stockholders 272,986 0
Increase / (Decrease) in Officer's Loan 0 (2,000)
----------- ----------
Net Cash Provided / (Used) by Financing Activities 272,986 178,500
----------- ----------
Net Increase / (Decrease) in Cash 186,124 232,888
Cash at the Beginning of the Period 252,500 19,612
----------- ----------
Cash at the End of the Period $ 438,624 $ 252,500
=========== ==========
Additional Disclosure of Operating Cash Flow
Cash paid during the periods ended
Tax Expense . . . . . . . . . . 0 $ 350
</TABLE>
See accompanying notes to the financial statements.
<PAGE>
MEGA HOLDING CORP. & SUBSIDIARIES
Notes To the Consolidated Financial Statements
November 30, 1999
Note 1 - Basis of Presentation:
The accompanying unaudited financial statements have been prepared by
Mega Holding Corp. (the "Company") in accordance with generally
accepted accounting principles for interim financial statements and
with the instructions to Form 10-QSB and Item 310 of Regulation S-B.
Accordingly, they do not include all of the information and
disclosures required by generally accepted accounting principles for
complete financial statements. In the opinion of the Company's
management, all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation have been included. Results of
operations for the three-month period ended November 30, 1999 are not
necessarily indicative of future financial results. For further
information, refer to the financial statements and footnotes thereto
for the fiscal year ended August 31, 1999, included with the Company's
Form 10-KSB, as filed with the Securities and Exchange Commission.
Note 2 - Advance From Shareholders:
During the first quarter of fiscal year 1999, various shareholders
have advanced the Company $272,986. These advances carry no interest
and are payable upon demand.
Note 3 - Subsequent Events:
Subsequent to November 30, 1999 a merger between SaveCashSave.Com,
Inc. (a Nevada corporation formerly known as Cybertech International,
Inc.), a wholly owned subsidiary of the Company, and SaveCashSave.Com,
Inc. (a Florida corporation), an internet advertiser, was completed.
As compensation, the Company received 600,000 shares of
SaveCashSave.Com, Inc. (Florida) common stock with no value at
present.
<PAGE>
Mega Holding Corp.
MDA Section - November 1999 Review
Results of Operations
Three Months Ended November 30, 1999 Compared to Three Months Ended
November 30, 1998
- --------------------------------------------------------------------------------
Revenues for the three months ended November 30, 1999 decreased $129,181 or
99.8% when compared to the three months ended November 30, 1998. During the
three months ended November 30, 1999, the Company generated $ -0- (0.0%) of its
revenues from its business and financial consulting services and $300 (100.0%)
of its revenues from its mortgage brokering activities. During the three months
ended November 30, 1998, the Company generated $129,578 (100.0%) of its revenues
from business and financial consulting services, and $ -0- (0.0%) of its
revenues from mortgage brokering activities.
Business and financial consulting service revenues decreased by $129,578
(100.0%) due to no deals closing during the first quarter. Additionally,
mortgage brokering activity revenues increased $300 (100.0%) due to activity
during the first quarter of fiscal 2000.
Cost of sales for the three months ended November 30, 1999 increased by $3,814
(92.9%) when compared to the three months ended November 30, 1998. General and
administrative expenses however, decreased by $9,495 (15.4%) for the three
months ended November 30, 1999 when compared to the three months ended November
30, 1998 due to normal operating activities.
As a percentage of sales, cost of sales increased from 3.2% for the three months
ended November 30, 1998 to 2,639.0% for the three months ended November 30, 1999
whereas general and administrative expenses increased from 47.7% for the three
months ended November 30, 1998 to 17,436.0% for the three months ended November
30, 1999. These percentage changes are attributable to the Company showing lower
revenues for the three months ended November 30, 1999 as compared to the three
months ended November 30, 1998.
Marketable securities decreased at November 30, 1999 when compared to November
30, 1998 due to the sale of various securities during the interim twelve-month
period. Due to a decline in market price of these marketable securities, a
negative valuation allowance has been created. Accordingly, an unrealized
holding loss has been accounted for as other comprehensive income / (loss) for
the three month period ended November 30, 1999.
The Company gains interests in other companies by acquiring shares of such
companies' stocks as payment for services rendered. The Company's marketable
securities for the three months ended November 30, 1999 decreased $559,014 from
the same period in the prior fiscal year. This decrease is attributable to the
fact that the Company sold a portion of its marketable securities. As of August
31, 1998, management classifies these marketable securities as
available-for-sale because the Company now intends to hold these securities
until a time when cash is required to continue operations. At November 30, 1999
and 1998, any unrealized holding gains and losses are included in other
comprehensive income which is a component of stockholders' equity. As a result,
for the three months ended November 30, 1999, the Company's net unrealized loss
decreased $41,148 (29.3%) when compared to the three months ended November 30,
1998.
<PAGE>
Liquidity and Capital Resources
- ----------------------------------
At November 30, 1999, the Company's current assets exceeded its current
liabilities by $154,107. The majority, $438,624, of current assets was cash with
the remainder being comprised of various other assets.
Historically, the Company has financed its operations through cash flow from
operations. Due to the current operating cash flow, the Company has no need to
maintain any external funding sources.
As of November 30, 1999, the Company had no material commitments for capital
expenditures.
During the three months ended November 30, 1999, the Company received no
revenues in the form of stock. Although the Company received no revenues in the
form of stock this first quarter, it has been receiving a greater percent of its
revenues in stock with no material effect on the Company's liquidity and overall
financial position. Although the Company anticipates continuing to distribute to
its shareholders a portion of the stock that it receives in other entities, it
is retaining a greater percentage of these stocks to be used as working capital.
If the fees received are more so in the form of stock than cash, and the
majority are distributed to the Company's shareholders, the Company's liquidity
may be adversely affected. However, management anticipates, but cannot assure,
that the cash portion of fees received and the proceeds from the sale of stock
not distributed to the Company's shareholders will be sufficient to meet the
Company's anticipated cash flow needs. Where the Company receives shares with
restrictions on transfer, the Company will be required to hold such shares
indefinitely. These shares will only be available for sale if and when the
restriction is lifted and if and when a market for such securities develops.
Accordingly, such shares will not be able to be used to meet cash flow needs.
At November 30, 1999, royalties due from Quaker Holding Company, Inc.
represented 13.9% of the Company's total assets. Based upon Quaker Holding's
prior history in payment of like kind transactions, management believes that all
royalties will be collected on a timely basis.
Item 3. Description of Properties
The Company maintains its principal executive offices at 278A New Dorp Lane,
Staten Island, NY in an approximately 1,300 square foot office facility pursuant
to a lease originally entered into in January, 1984, and thereafter renewed
periodically. The current renewal term expires on January 31, 2001. The annual
rental is $8,400 per annum ($700 per month) plus tenant's proportionate share of
Real Estate Taxes and escalations for the subject premises in the amount of
$602.29 per month for a total annual rental of $15,627.48.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001027642
<NAME> Mega Holding Corp.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-01-1999
<PERIOD-END> NOV-30-1999
<EXCHANGE-RATE> 1
<CASH> 438,624
<SECURITIES> 338,554
<RECEIVABLES> 170,767
<ALLOWANCES> 116,903
<INVENTORY> 10,710
<CURRENT-ASSETS> 467,878
<PP&E> 131,603
<DEPRECIATION> 64,548
<TOTAL-ASSETS> 1,110,264
<CURRENT-LIABILITIES> 313,771
<BONDS> 0
0
0
<COMMON> (38,585)
<OTHER-SE> 339,684
<TOTAL-LIABILITY-AND-EQUITY> 1,110,264
<SALES> 300
<TOTAL-REVENUES> 2,272
<CGS> 7,917
<TOTAL-COSTS> 60,225
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (57,953)
<INCOME-TAX> (8,693)
<INCOME-CONTINUING> (49,260)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,490
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
