FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGES ACT OF 1934.
For the quarterly period ended June 30, 1998
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGES ACT OF 1934
For the transition period from __________________ to _________________
Commission file number 333-24671
1997 CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3936988
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
315 West 106th Street, New York New York 10025
(Address of principal executive offices) (Zip Code)
(212)-678-6231
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 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.
YES X NO
---- ----
The number of shares outstanding of the issuer's single class of common
stock as of June 30, 1998 was 45,000.
Transitional Small Business Disclosure Format (check one) YES NO X
---- ----
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company is currently in the development stage. In 1997 the Company
raised $150,000 through the sale of 30,000 shares of Common Stock. The proceeds
from the sale as well as the shares of Common Stock sold are currently held in
escrow pending approval of a Business Combination or the return of the same to
the shareholders of the Company. All activity of the Company to date has been
related to its formation, financing, and review of various businesses for
acquisition by the Company. The Company does not have discretionary access to
the income on the monies in escrow account and stockholders of the Company will
not receive any distribution of the income (except in connection with a
liquidation of the Company) or have any ability to direct other use or
distribution of such income. Thus, such income will cause the amount in escrow
to increase. The Company cannot use the escrowed amounts to pay the costs of
evaluation potential Business combinations. To the extent that Common Stock is
used as consideration to effect a Business Combination, the balance of the net
proceeds from the offering not theretofore expended will be used to finance the
operations of the Target Business. No cash compensation will be paid to any
officer or director in their capacities as such until after the consummation of
the first Business Combination. Since the role of present management after a
Business Combination is uncertain, the Company has no ability to determine what
remuneration, if any, will be paid to such persons after a Business Combination.
In the event that the Company does not effect a Business Combination by
October 24, 1998, the Company will distribute to the then holders of Common
Stock acquired as part of the Shares sold in its 1997 offering the amount held
in the escrow account with a pro-rata share of all interest accrued in such
account.
On July 15, 1998, 1997 Corp., entered into a Merger Agreement with CyBear,
Inc., a Florida corporation, and has filed a Post-Effective Amendment, to its
Registration Statement with the Securities and Exchange Commission (the "SEC").
CyBear was organized by Anda Generics, Inc. ("Anda") a wholly owned subsidiary
of Andrx Corporation, a Florida corporation, as a healthcare communications
technology company to develop technology and products to address the growing
communication and information problems within the healthcare community. The
Company intends to submit the proposed merger with CyBear to shareholders for
approval following the SEC review and declaration of effectiveness of the
Post-Effective Amendment to the Company's existing Registration Statement.
1
<PAGE>
1997 CORP.
BALANCE SHEET
ASSETS
June 30, 1998 Dec. 31, 1997
------------- -------------
(Unaudited)
Cash $ 1,077.74 $ 1,064.00
Shareholders Escrowed Funds (See Note 5) 152,687.90 151,362.00
Capitalized Acquisition Costs (See Note 3) 20,000.00 --
----------- -----------
TOTAL ASSETS $173,765.64 $152,426.00
=========== ===========
LIABILITIES AND REDEEMABLE STOCKHOLDERS' EQUITY
Accounts Payable $ 28,816.67 $ 407.00
Notes Payable to Stockholders (See Note 4) 3,000.00 --
----------- -----------
TOTAL LIABILITIES 31,816.67 407.00
REDEEMABLE STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value,
authorized 2,000,000 shares;
none issued or outstanding -- --
Common stock, $.001 par value,
authorized 10,000,000 shares;
issued and outstanding 45,000 shares 45.00 45.00
Paid in capital (See Note 5) 210,005.00 210,005.00
Accumulated Deficit (68,101.03) (58,031.00)
----------- -----------
TOTAL REDEEMABLE STOCKHOLDERS' EQUITY 141,948.97 152,019.00
----------- -----------
TOTAL LIABILITIES AND REDEEMABLE
STOCKHOLDERS' EQUITY $173,765.64 $152,426.00
=========== ===========
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
1997 CORP.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Year Ended
June 30,1998 June 30, 1998 Dec. 31, 1997
------------ ------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Interest income $ 304.90 $ 1,325.90 $ 1,362.00
---------- ----------- -----------
Expenses:
General and administrative expenses 8,995.93 11,395.93 59,393.00
---------- ----------- -----------
Total expenses 8,995.93 11,395.93 59,393.00
---------- ----------- -----------
Net loss $(8,284.03) $(10,070.03) $(58,031.00)
========== =========== ===========
Basic and diluted loss per share $ (0.18) $ (0.22) $ (2.05)
========== =========== ===========
Basic and diluted weighted average shares 45,000 45,000 28,333
========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
1997 CORP.
STATEMENT OF CASH FLOWS
(Unaudited)
For the period from January 1, 1998 to June 30, 1998
Cash flows from operating activities:
Net loss $(10,070.03)
Changes in assets and liabilities:
Increase in Accounts Payable for period 8,409.67
----------
Net cash used in operating activities (1,660.36)
----------
Cash flows from investing activities:
Payments to cash escrow reserve (1,325.90)
----------
Net cash used in investing activities (1,325.90)
----------
Cash flows from financing activities
Shareholder Loans 3,000.00
----------
Net cash provided by financing activities 3,000.00
----------
Increase in cash and cash equivalents during the period 13.74
Cash and cash equivalents, beginning of period 1,064.00
----------
Cash and cash equivalents, end of period $ 1,077.74
==========
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
1997 CORP.
NOTES TO FINANCIAL STATEMENT
JUNE 30, 1998
1. FORMATION OF COMPANY
1997 Corp. ( a development stage enterprise) (the "Company"), was
incorporated in the state of Delaware on March 17, 1997. It intends to
serve, as a vehicle to effect a business combination with a target business
which the Company believes will have significant growth potential. The
Company intends to utilize the net proceeds of this offering, equity
securities, debt securities, bank and other borrowing or a combination
thereof in effecting a business combination. (See Note 6)
2. SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
The financial statements are prepared on an accrual basis.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make significant
estimates and assumptions that effect the reported amount of assets and
liabilities at the date of the financial statements and the reported amount
of revenues and expenses during the reported period. Actual results could
differ from those estimates.
3. CAPITALIZED ACQUISITION COSTS
The capitalized acquisition costs reflects the legal fees associated
with the CyBear transaction. (see Note 6)
4. NOTES PAYABLE TO STOCKHOLDERS
Each of the two stockholders made a $1,500 loan to the Company on June
30, 1998, bearing 7% interest and payable on demand, to provide capital to
the Company to pay certain expenses.
5. SHAREHOLDER ESCROWED FUNDS
Continental Stock Transfer & Trust Company ("Continental") is holding
the public offering proceeds and the stock certificates of the public
investors in escrow pursuant to Rule 419 of the Rules and Regulations of
the Securities and Exchange Commission. Continental will
5
<PAGE>
hold the proceeds and the stock certificates pursuant to Rule 419 until the
approval of a business combination by the shareholders of the Company. If a
business combination has not been approved by the shareholders by October
28, 1998 all proceeds will be promptly returned to the shareholders and the
stock certificates will be canceled.
6. SUBSEQUENT EVENT
On July 15, 1998, 1997 Corp., entered into a Merger Agreement with
CyBear, Inc., a Florida corporation, and has filed a Post-Effective
Amendment, to its Registration Statement with the Securities and Exchange
Commission (the "SEC"). CyBear was organized by Anda Generics, Inc.
("Anda") a wholly owned subsidiary of Andrx Corporation, a Florida
corporation, as a healthcare communications technology company to develop
technology and products to address the growing communication and
information problems within the healthcare community. The Company intends
to submit the proposed merger with CyBear to shareholders for approval
following the SEC review and declaration of effectiveness of the
Post-Effective Amendment to the Company's existing Registration Statement.
6
<PAGE>
PART II - OTHER INFORMATION
1997 CORP.
JUNE 30, 1998
None.
7
<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:
1997 Corp.
Registrant
/s/Richard L. Campbell
------------------------
Date: August 13, 1998 By: Richard L. Campbell
Acting Chief Financial
Officer
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-Mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Jun-30-1998
<CASH> 153,765
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 173,765
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 173,765
<CURRENT-LIABILITIES> 31,816
<BONDS> 0
0
0
<COMMON> 141,949<F1>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 173,765
<SALES> 305<F2>
<TOTAL-REVENUES> 305<F2>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,996
<LOSS-PROVISION> (8,284)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,284)
<EPS-PRIMARY> (0.18)
<EPS-DILUTED> (0.18)
<FN>
(1) Includes restricted cash
(2) Interest Income
</FN>
</TABLE>
