<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 March 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- ---------------
Commission File No. 0-28002
ICON SYSTEMS, INC.
(Name of Small Business Issuer in its Charter)
NEVADA 87-0565018
------ ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
4848 Highland Drive, #353
Salt Lake City, Utah 84117
---------------------------
(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:
March 31, 1998
16,582,689
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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, 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
Registrant.
<PAGE>
<TABLE>
ICON SYSTEMS, INC.
(A Development Stage Company)
Balance Sheets
<CAPTION>
ASSETS
March 31, June 30,
1998 1997
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 683 $ 14,264
Total Current Assets 683 14,264
TOTAL ASSETS $ 683 $ 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 (399,237) (386,284)
Total Stockholders' Equity 683 13,636
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 683 $ 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 For the Nine Months 1987 Through
Ended March 31, Ended March 31, March 31,
1998 1997 1998 1997 1998
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
EXPENSES
General and
administrative 1,800 2,871 13,154 24,712 54,273
Total Expenses 1,800 2,871 13,154 24,712 54,273
OTHER INCOME (EXPENSES)
Interest income 4 110 201 110 201
Interest expense - (250) - (451) (700)
Total Other Income
(Expenses) 4 (140) 201 (341) (499)
Income (loss) from
continuing operations (1,796) (3,011) (12,953) (25,053) (54,772)
Income (loss) from
discontinued operations - - - - (344,465)
NET LOSS $ (1,796) $ (3,011) $(12,953) $(25,053)$(399,237)
LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.01)
WEIGHTED AVERAGE NUMBER
OF SHARES 16,582,689 5,027,563 16,582,689 3,777,563
</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 canceled 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 nine months
ended March 31, 1998
(unaudited) - - - (12,953)
Balance, March 31, 1998
(unaudited) 16,582,689 $16,582 $ 383,338 $(399,237)
</TABLE>
<TABLE>
ICON SYSTEMS, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<CAPTION>
From
Inception
on August 26,
For the Three Months For the Nine Months 1987 Through
Ended March 31, Ended March 31, March 31,
1998 1997 1998 1997 1998
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,796 )$ (3,011 )$ (12,953)$ (25,053)$(399,237)
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
accounts payable - (1,278) (628) 3,566 -
Increase (decrease) in
accrued interest - 250 - 451 -
Contributed capital - 28,155 - 28,155 28,855
Cash Provided (Used)
by Operating
Activities (1,796) 24,116 (13,581) 13,719 (272,523)
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 - - - 10,000 158,382
Proceeds of loan from
officer - - - - 76,750
Cash Provided (Used)
by Financing
Activities $ - $ - $ - $ 20,000 $279,484
NET INCREASE (DECREASE)
IN CASH $(1,796) $ 24,116 $(13,581) $ 33,719 $ 683
CASH AT BEGINNING OF
PERIOD 2,479 9,603 14,264 - -
CASH AT END OF PERIOD $ 683 $ 33,719 $ 683 $ 33,719 $ 683
Cash Payments For:
Income taxes $ - $ - $ - $ - $ -
Interest $ - $ - $ - $ - $ -
Non Cash Financing Activities:
Stock issued for
services $ - $ - $ - $ 6,600 $ 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
March 31, 1998 and June 30, 1997
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. Loss Per Share
The computations of 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 December 31, 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.
g. Unaudited Financial Statement
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a
fair presentation. Such adjustments are of a normal, recurring
nature.
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 - 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.
NOTE 6 - FORWARD STOCK SPLIT
On July 14, 1997, the shareholders 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.
<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 March 31, 1998.
During this period, the Company received revenues totaling $0. During the
same period, total expenses were $1,800 and net loss totaled $1,796.
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 $683 at March 31, 1998, will not
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 March 31, 1998, the
Company had no business operations. During this period, the Company
received total revenues of $0 and had a net loss of $1,796.
Liquidity.
- ----------
At March 31, 1998, the Company had total current assets of
$683, 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.
- --------------------------------------------------------------
None; not applicable.
Item 5. Other Information.
- ----------------------------
None; not applicable.
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: 4/27/98 By:/S/Michelle Wheeler
-------------- -------------------------------------
Michelle Wheeler
Director and President
Date: 4/27/98 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> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 683
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 683
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 683
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 16,582
<OTHER-SE> (15,899)
<TOTAL-LIABILITY-AND-EQUITY> 683
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,953
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,953)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,953)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,953)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
