<PAGE>
U. S. 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 September 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-28002
ICON SYSTEMS, INC.
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(Name of Small Business Issuer in its Charter)
NEVADA 87-0565018
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
4848 Highland Drive, #353
Salt Lake City, Utah 84117
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 278-2805
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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.
(1) Yes X No (2) Yes X No
--- --- --- ---
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
September 30, 1997
16,582,689
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of Icon Systems, Inc., a Nevada corporation
(the Company ), required to be filed with this 10-QSB Quarterly Report were
prepared by management, and commence on the following page, together with
Related Notes. In the opinion of management, the Financial Statements fairly
present the financial condition of the Company.
<PAGE>
<TABLE>
ICON SYSTEMS, INC.
(A Development Stage Company)
Balance Sheets
<CAPTION>
ASSETS
September 30, June 30,
1997 1997
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 5,742 $ 14,264
Total Current Assets 5,742 14,264
TOTAL ASSETS $ 5,742 $ 14,264
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ - $ 628
Total Current Liabilities - 628
STOCKHOLDERS' EQUITY
Preferred stock: 10,000,000 preferred
shares at $0.001 par value authorized;
-0- outstanding - -
Common stock authorized: 100,000,000
common shares at $0.001 par value;
16,582,689 shares issued and outstanding 16,582 16,582
Capital in excess of par value 383,338 383,338
Deficit accumulated during the
development stage (394,178) (386,284)
Total Stockholders' Equity 5,742 13,636
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,742 $ 14,264
</TABLE>
<TABLE>
ICON SYSTEMS, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<CAPTION>
From
Inception
on August 26,
For the Three Months 1987 Through
Ended September 30, September 30,
1997 1996 1997
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES
General and administrative 8,019 6,650 49,138
Total Expenses 8,019 6,650 49,138
OTHER INCOME (EXPENSES)
Interest income 125 - 125
Interest expense - - (700)
Total Other Income (Expenses) 125 - (575)
Income (Loss) From Continuing
Operations (7,894) (6,650) (49,713)
Income (Loss) From Discontinued
Operations - - (344,465)
NET LOSS $ (7,894) $ (6,650) $ (394,178)
LOSS PER SHARE $ (0.00) $ (0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES 16,582,689 68,574
</TABLE>
<TABLE>
ICON SYSTEMS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
<CAPTION>
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
<S> <C> <C> <C> <C>
Balance at inception on
August 26, 1987 - $ - $ - $ -
Issuance of 36 shares of common
stock to an officer for cash at
$27.78 per share 36 - 1,000 -
Net loss from inception on
August 26, 1987 through
June 30, 1988 - - - (914)
Balance, June 30, 1988 36 - 1,000 (914)
Net loss for the year ended
June 30, 1989 - - - (2,299)
Balance, June 30, 1989 36 - 1,000 (3,213)
Issuance of 195 shares of
common stock for cash at
$16.15 per share 195 - 3,150 -
Issuance of 375 shares of
common stock to shareholder
for office equipment and stock
of Alco Investment Corporation
and cash of $750 at $20.91
per share 375 - 7,840 -
Net loss for the year ended
June 30, 1990 - - - (3,245)
Balance, June 30, 1990 606 $ - $11,990 $(6,458)
Contribution of non-marketable
securities by officer - - 750 -
Contribution and cancellation of
shares by officer (318) - - -
Issuance of 18 shares for cash
at $111.11 per share 18 - 2,000 -
Issuance of 741 shares of
common stock to shareholder
and 1,500 shares of common
stock to QBC Holding Corp.
for $600 at $0.27 per share 2,241 2 598 -
Expenses paid on behalf of
the Company by shareholder - - 1,636 -
Net loss for the year ended
June 30, 1991 - - - (10,518)
Balance, June 30, 1991 2,547 2 16,974 (16,976)
Shares contributed to the
Company and cancelled by
the shareholders (2,364) (2) 2 -
Purchase of subsidiary for the
issuance of 37,707 shares of
common stock at approximately
$8.37 per share 37,707 38 315,451 -
Net loss for the year ended
June 30, 1992 - - - (276,103)
Balance, June 30, 1992 37,890 $ 38 $332,427 $ (293,079)
Net loss for the year ended
June 30, 1993 - - - (39,386)
Balance, June 30, 1993 37,890 38 332,427 (332,465)
Net loss for the year ended
June 30, 1994 - - - -
Balance, June 30, 1994 37,890 38 332,427 (332,465)
Net loss for the year ended
June 30, 1995 - - - -
Balance, June 30, 1995 37,890 38 332,427 (332,465)
Issuance of 44,799 shares of
common stock for services
rendered valued at
approximately $0.27 per share 44,799 44 11,956 -
Net loss for the year ended
June 30, 1996 - - - (12,000)
Balance, June 30, 1996 82,689 $ 82 $344,383 $ (344,465)
Issuance of 9,000,000 shares
of common stock for cash
at $0.0011 per share 9,000,000 9,000 1,000 -
Issuance of 6,000,000 shares of
common stock for services
rendered valued at $0.0011
per share 6,000,000 6,000 600 -
Issuance of 1,500,000 shares
of common stock for
compensation at approximately
$0.0067 per share 1,500,000 1,500 8,500 -
Contributed capital - - 28,855 -
Net loss for the year ended
June 30, 1997 - - - (41,819)
Balance, June 30, 1997 16,582,689 16,582 383,338 (386,284)
Net loss for the three months
ended September 30, 1997
(unaudited) - - - (7,894)
Balance, September 30, 1997
(unaudited) 16,582,689 $16,582 383,338 $ (394,178)
</TABLE>
<TABLE>
ICON SYSTEMS, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<CAPTION>
From
Inception on
August 26,
For the Three Months 1987 Through
Ended September 30, September 30,
1997 1996 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (7,894) $( 6,650) $ (394,178)
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation - - 59,907
Stock issued for services - 6,600 28,600
Loss on disposition of assets - - 9,352
Changes in operating asset and liability
accounts:
(Increase) decrease in prepaid assets - (2,500) -
Increase (decrease) in accounts payable (628) - -
Contributed capital - - 28,855
Cash Provided (Used) by Operating
Activities (8,522) (2,550) (267,464)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment - - (13,368)
Sale of equipment - - 7,090
Cash Provided (Used) by Investing
Activities - - (6,278)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable - 10,000 160,000
Payment on notes payable - - (53,764)
Payment of loan from officer - - (61,884)
Issuance of common stock - - 158,382
Proceeds of loan from officer - - 76,750
Cash Provided (Used) by Financing
Activities $ - $10,000 $ 279,484
NET INCREASE (DECREASE) IN CASH $ (8,522) $ 7,450 $ 5,742
CASH AT BEGINNING OF PERIOD 14,264 - -
CASH AT END OF PERIOD $ 5,742 $ 7,450 $ 5,742
Cash Payments For:
Income taxes $ - $ - $ -
Interest $ - $ - $ -
Non Cash Financing Activities:
Stock issued for services $ - $ - $ 28,600
Stock issued for equipment $ - $ - $ 7,214
Stock issued for subsidiary $ - $ - $ 315,489
</TABLE>
ICON SYSTEMS, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 1997 and 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Icon Systems, Inc.
The Company was incorporated as Loki Holding Corporation under the laws of the
State of Utah on August 26, 1987 and on August 4, 1988 changed its name to
Quazon Investment Corporation. On April 15, 1988 the Company became a
wholly-owned subsidiary of Loki Holding Corporation (formerly Dynamic Video,
Inc.). On May 25, 1990 the Company was "spun off" in a partial liquidating
dividend. In June of 1990 the Company acquired Alco Investment Corporation.
On January 7, 1991 the Company sold Alco Investment Corporation to a company
owned by a major shareholder. On August 15, 1991 the Company acquired all of
the shares of Tompkins Environmental Corporation (Tompkins) in exchange for
10,000,000 pre-split shares of the Company's authorized but previously
unissued common stock (See Note 2). The Company's name was changed to
Tompkins Environmental Corporation. The Company was engaged in disaster
cleanup operations. On October 25, 1995, Tompkins was involuntarily
dissolved and abandoned. All operations associated with Tompkins have been
accounted for as discontinued operations. On September 24, 1996, the Company
changed its name to Icon Systems, Inc. and changed its State of incorporation
to Nevada.
Currently the Company is seeking new business opportunities believed
to hold a potential profit or to merge with an existing company.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has adopted a June 30 year end.
c. Income (Loss) Per Share
The computations of income (loss) per share of common stock are
based on the weighted average number of shares issued and outstanding at the
date of the financial statements.
d. 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
statement and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a maturity
of three months or less when purchased to be cash equivalents.
f. Provision for Taxes
At September 30, 1997, the Company had net operating loss
carryforwards of approximately $400,000 that may be offset against future
taxable income through 2012. No tax benefit has been reported in the
financial statements, because the potential tax benefits of the net operating
loss carryforwards are offset by a valuation allowance of the same amount.
NOTE 2 - RELATED PARTY TRANSACTIONS
In January of 1997, the president of the Company contributed $28,155
to the Company for future working capital.
In October, 1996, a shareholder loaned the Company $10,000 to cover
operating expenses. The note bore 10% interest and was repaid in June of
1997. The total accrued interest of $700 was forgiven by the shareholder.
On October 10, 1996, the Company issued 6,000,000 post-split shares
of restricted common stock to officers and directors of the Company for
services valued at $0.0033 per share.
On September 14, 1996, the Company issued 9,000,000 post-split
shares of restricted common stock for cash to a company owned by an officer
for total consideration of $10,000.
On October 24, 1995, the Company issued 44,799 to officers and
directors of the Company for services rendered valued at $0.27 per share (See
Note 5).
NOTE 3 - GOING CONCERN
The Company's 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 or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to continue
as a going concern. It is the intent of the Company to seek a merger with an
existing, operating company. In the interim, shareholders of the Company
have committed to meeting its minimal operating expenses.
NOTE 4 - REVERSE STOCK SPLIT
On September 14, 1996, the board of directors of the Company
approved a 1-for-1,000 reverse stock split while retaining the authorized
shares at 100,000,000 and retaining the par value at $0.001. This change has
been applied to the financial statements on a retroactive basis back to
inception.
The Company provided that no shareholder would be reduced below 50
shares, accordingly, 5,413 post-split fractional shares were issued. These
shares have been allocated pro-rata to previous stock issuances.
NOTE 5 - FORWARD STOCK SPLIT
On July 14, 1997, the directors of the Company approved a 1 for 3
forward stock split while retaining the authorized shares at 100,000,000 and
the par value at $0.001. The change has been applied to the financial
statements on a retroactive basis back to inception.
NOTE 6 - ISSUANCES OF COMMON STOCK
At the Company's inception, the Board of Directors authorized the
issuance of 36 restricted shares of its common stock to an executive officer
who may be deemed to have been a promoter or founder of the Company for the
total consideration of $1,000.
On September 27, 1989, the Company became authorized to do business
in the State of Utah as Quazon International Corporation and changed its
business purpose to consulting in mergers and acquisitions. On September 28,
1989 the Company issued 195 shares of restricted common stock for $3,150 cash.
In June of 1990 the Company issued 375 shares of common stock to an
officer for equipment recorded at its depreciated cost of $7,090 and cash of
$750.
On September 28, 1990 the officer contributed back to the Company
318 shares.
In September of 1990 the Company issued 18 shares of restricted
common stock to a shareholder for $2,000 in cash.
In January of 1991 the Company issued 741 shares of restricted
common stock to a shareholder for $600 in cash, and 1,500 shares of restricted
common stock to QBC Holding Corp. which were recorded at predecessor cost of
$-0-.
In the year ended 1992 a shareholder contributed back to the Company
2,364 shares of restricted common stock.
On August 15, 1991 the Company issued 37,707 shares of restricted
common stock valued at predecessor cost of $8.37 per share for the purchase of
Tompkins Environmental Corporation.
On October 24, 1995, the Company issued 44,799 shares of restricted
common stock for services rendered valued at $12,000.
On September 14, 1996, the Company issued 9,000,000 shares of
restricted common stock for cash of $10,000.
On October 10, 1996, the Company issued 6,000,000 shares of
restricted common stock for services rendered valued at $6,600.
On June 2, 1997, the Company issued 1,500,000 shares of its common
stock for compensation valued at $10,000.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations
since its inception or during the quarterly period ended September 30, 1997.
During this period, the Company received revenues totaling $0. During the
same period, total expenses were $8,019 and net loss totaled $8,019.
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 stockholders.
Management anticipates that to achieve any such acquisition, the
Company will issue shares of its common stock as the sole
consideration 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. Management expects
that the Company's cash on hand of $5,742 at September 30, 1997, will
be sufficient to meet these requirements. If additional moneys are
needed, they may be advanced by management or principal stockholders
as loans to the Company. Because the Company has not identified any
such venture as of the date of this Report, it is impossible to
predict the amount of any such loan. However, any such loan
will not exceed $25,000 and will be on terms no less favorable to
the Company than would be available from a commercial lender in an arm's
length transaction. As of the date of this Report, the Company
has not begun seeking any acquisition.
Results of Operations.
- ----------------------
During the quarterly period ended September 30, 1997, the
Company had no business operations. During this period, the Company
received total revenues of $0 and had a net loss of $8,019.
Liquidity.
- ----------
At September 30, 1997, the Company had total current assets of
$5,742, with total current liabilities of $0.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
- ----------------------------
None; not applicable.
Item 2. Changes in Securities.
- --------------------------------
None; not applicable.
Item 3. Defaults Upon Senior Securities.
- ------------------------------------------
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
- --------------------------------------------------------------
On September 2, 1997, QBC Holding Corporation, a Utah corporation
doing business as Wasatch Consulting Group ( Wasatch ), which is the holder
of a majority of the issued and outstanding common stock of the Company,
consented to the election of Michelle Wheeler, Jeff Taylor and Steven D.
Moulton to the Company s Board of Directors, to serve until the next annual
meeting of the stockholders or his or her prior death, resignation or
termination and the qualification of his or her successor. At the time of
Wasatch s consent, each of these persons was an incumbent director of the
Company.
Item 5. Other Information.
- ----------------------------
On July 14, 1997, the Board of Directors of the Company unanimously
consented to a forward split of the Company s issued and outstanding common
stock in the ratio of three new shares for every share outstanding as of the
date of the filing with the Nevada Secretary of State of a Certificate
pursuant to Section 78.207(4) of the Nevada Revised Statutes, while retaining
the authorized capital and par value of the common stock at 100,000,000 shares
and one mill ($0.001) per share, respectively, and with appropriate
adjustments to the additional paid in capital and stated capital accounts of
the Company. The Certificate was duly filed on July 16, 1997, which became
the effective date of the forward split.
On September 3, 1997, the Board of Directors of the Company, acting
by unanimous consent without a meeting pursuant to Section 78.315 of the
Nevada Revised Statutes, consented to the election of each of the following to
serve as officers of the Company until the next annual meeting of the Board of
Directors or his or her prior death, resignation or termination and the
qualification of his or her successor: Michelle Wheeler (President); Jeff
Taylor (Vice President); and Steven D. Moulton (Secretary/Treasurer). At the
time of their election, each of these persons already served in the capacities
indicated.
Item 6. Exhibits and Reports on Form 8-K.
- -------------------------------------------
(a) Exhibits.
Financial Data Schedule.
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 thereunto duly authorized.
ICON SYSTEMS, INC.
Date: 11-3-97 By /s/ Michelle Wheeler
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Michelle Wheeler
Director and President
Date: 11-3-97 By /s/ Steven D. Moulton
-------------- -------------------------------------
Steven D. Moulton
Director and Secretary/Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0001029263
<NAME> ICON SYSTEMS, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 5,742
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,742
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,742
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 16,582
<OTHER-SE> (10,840)
<TOTAL-LIABILITY-AND-EQUITY> 5,742
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,019
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (125)
<INCOME-PRETAX> (7,894)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,894)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
