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 September 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 September 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
evaluating 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 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.
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").
The SEC declared the Post-Effective Amendment effective on October 21, 1998 and
the Company has called a shareholders meeting for November 19, 1998 to vote on
the merger with CyBear. CyBear was organized by 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. Assuming the shareholders of the
Company approve the transaction: (i) CyBear will be merged into 1997 Corp., (ii)
each share of Common Stock of 1997 Corp. will be split into approximately six
shares of Common Stock, (iii) the name of the corporation will be changed to
CyBear, Inc. (iv) the shares of authorized Common Stock will be increased to 25
million, (v) Andrx Corporation will be the controlling shareholder of the
Company, and (vi) CyBear's employee stock option plan will be adopted.
The Company had interest income of $2,636 for the nine months ended
September 30, 1998 and total expenses for the period of $61,270. The expenses
were incurred primarily in connection with the proposed merger with CyBear.
<PAGE>
1997 CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
Sept. 30, 1998 Dec. 31, 1997
-------------- -------------
(Unaudited)
<S> <C> <C>
Cash $ 1,028 $ 1,064
Shareholders Escrowed Funds (See Note 4) $ 153,998 $ 151,362
--------- ---------
TOTAL ASSETS $ 155,026 $ 152,426
========= =========
LIABILITIES AND REDEEMABLE STOCKHOLDERS' EQUITY
Accounts Payable $ 58,641 $ 407
Notes Payable to Directors (See Note 3) $ 3,000 --
--------- ---------
TOTAL LIABILITIES $ 61,641 $ 407
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 $ 45
Paid in capital $ 210,005 $ 210,005
Accumulated Deficit $(116,665) $ (58,031)
--------- ---------
TOTAL REDEEMABLE STOCKHOLDERS' EQUITY $ 93,385 $ 152,019
--------- ---------
TOTAL LIABILITIES AND REDEEMABLE
STOCKHOLDERS' EQUITY $ 155,026 $ 152,426
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
1997 CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the period
Cumulative from from
March 17, 1997 Three Months Nine Months March 17, 1997
(inception) to Ended Ended (inception) to
Sept. 30,1998 Sept. 30, 1998 Sept. 30, 1998 Dec. 31, 1997
------------- -------------- -------------- -------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Interest income $ 3,998 $ 1,310 $ 2,636 $ 1,362
--------- --------- --------- ---------
Expenses:
General and administrative expenses $ 120,663 $ 49,874 $ 61,270 $ 59,393
--------- --------- --------- ---------
Total expenses $ 120,663 $ 49,874 $ 61,270 $ 59,393
--------- --------- --------- ---------
Net loss $(116,665) $ (48,564) $ (58,634) $ (58,031)
========= ========= ========= =========
Basic and diluted loss per share $ (3.20) $ (1.08) $ (1.30) $ (2.05)
========= ========= ========= =========
Basic and diluted weighted average shares 36,415 45,000 45,000 28,333
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
1997 CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative from For the Period from
March 17, 1997 For the Nine Months March 17, 1997
(inception) to ended (inception) to
Sept. 30, 1998 Sept. 30, 1998 Dec. 31, 1997
-------------- -------------- -------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(116,665) $ (58,634) $ (58,031)
Stock-based compensation expense 55,000 -- 55,000
Changes in assets and liabilities:
Increase in Accounts Payable for period 58,641 $ 58,234 407
--------- --------- ---------
Net cash used in operating activities $ (3,024) $ (400) $ (2,624)
Cash flows from investing activities:
Increase to shareholders escrowed funds $(153,998) $ (2,636) $(151,362)
--------- --------- ---------
Net cash used in investing activities $(153,998) $ (2,636) $(151,362)
Cash flows from financing activities
Notes Payable to Directors $ 3,000 $ 3,000 --
Proceeds from issuance of common stock $ 170,000 -- $ 170,000
Payments of stock issuance costs $ (14,950) $ -- $ (14,950)
--------- --------- ---------
Net cash provided by financing activities $ 158,050 $ 3,000 $ 155,050
Increase (Decrease) in cash and cash equivalents $ 1,028 $ (36) $ 1,064
during the period
Cash and cash equivalents, beginning of period -- 1,064 --
--------- --------- ---------
Cash and cash equivalents, end of period $ 1,028 $ 1,028 $ 1,064
========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
1997 CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(Unaudited)
1. FORMATION OF COMPANY
1997 Corp. (a development stage company) (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 5)
2. UNAUDITED FINANCIAL STATEMENTS
The interim financial statements as of September 30, 1998, for the three
and nine months ended September 30, 1998, for the period from March 17,
1997 (inception) to September 30, 1998 and all related footnote information
are unaudited. In the opinion of management, such unaudited financial
statements have been prepared by 1997 Corp. pursuant to the rules and
regulations of the Securities and Exchange Commission. The unaudited
financial statements reflect, in the opinion of management, all material
adjustments (which include only normal recurring adjustments) necessary to
present fairly the Company's financial position and results of operations.
The results of operations and cash flows for the three and nine months
ended September 30, 1998, are not necessarily indicative of the results of
operations or cash flows which may be expected for the remainder of 1998.
3. NOTES PAYABLE TO DIRECTORS
Each of the Company 's two directors made a $1,500 loan to the Company in
June 1998, bearing 7% interest and payable on demand, to provide capital to
the Company to pay certain expenses.
4. SHAREHOLDERS 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.
5. 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"). The SEC declared the Post-Effective Amendment effective on October
21, 1998 and the Company has called a shareholders meeting for November 19,
1998 to vote on the merger with CyBear. CyBear was organized by 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. Assuming the shareholders of the Company approve the
transaction: (i) CyBear will be merged into 1997 Corp., (ii) each share of
Common Stock of 1997 Corp. will be split into approximately six shares of
Common Stock, (iii) the name of the corporation will be changed to CyBear,
Inc. (iv) the shares of authorized Common Stock will be increased to 25
million, (v) Andrx Corporation will be the controlling shareholder of the
Company and (v) CyBear's employee stock option plan will be adopted.
6
<PAGE>
PART II - OTHER INFORMATION
1997 CORP.
SEPTEMBER 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: November 12, 1998 By: Richard L. Campbell
Acting Chief Financial Officer
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 10QSB for
nine months ended Sept. 30, 1998 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 155,026<F1>
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 155,026
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 155,026
<CURRENT-LIABILITIES> 58,641
<BONDS> 0
0
0
<COMMON> 45
<OTHER-SE> 93,340
<TOTAL-LIABILITY-AND-EQUITY> 155,026
<SALES> 2,636<F2>
<TOTAL-REVENUES> 2,636<F2>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 61,270
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (61,270)
<INCOME-TAX> 0
<INCOME-CONTINUING> (61,270)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (61,270)
<EPS-PRIMARY> (1.30)
<EPS-DILUTED> (1.30)
<FN>
<F1> Includes restricted cash
<F2> Interest Income
</FN>
</TABLE>
