SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999.
Registrant's SEC File Number: 000-24757
FASHION DYNAMICS, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0378451
(State of organization) (I.R.S. Employer Identification No.)
8105 Lake Hills Drive, Las Vegas, NV 89128
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 256-4250
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months and (2) has been subject to such filing requirements
for the past 90 days. Yes X
There are 6,600,000 shares of common stock issued and outstanding
as of March 22, 1999.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements and supplemental data required by this
Item follow the index of financial statements appearing at Item 6
of this Form 10Q-SB.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
Plan of Operation
The Company's Plan of Operation has not changed since the filing
of its Form 10-SB. The description of the current plan of
operation is incorporated by reference to Section 2 of that Form
10-SB filed with the SEC on May 24, 1999.
Competition
The Company is an insignificant participant among firms which
engage in business combinations with, or financing of,
development-stage enterprises. There are many established
management and financial consulting companies and venture capital
firms which have significantly greater financial and personal
resources, technical expertise and experience than the Company.
In view of the Company's limited financial resources and
management availability, the Company will continue to be at
significant competitive disadvantage vis-a-vis the Company's
competitors.
Year 2000 Compliance
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. The Company has assessed these issues as they relate
to the Company, and since the Company currently has no operating
business and does not use any computers, and since it has no
customers, suppliers or other constituents, it does not believe
that there are any material year 2000 issues to disclose in this
Form 10Q-SB.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No such matters were submitted during the most recent quarter.
ITEM 6. EXHIBITS.
FINANCIAL STATEMENTS
Audited financial statements for the quarter ended June
30, 1999.
INDEPENDENT AUDITORS' REPORT
Board of Directors July 19, 1999
Fashion Dynamics Corp.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of Fashion
Dynamics Corp. (A Development Stage Company), as of June 30,
1999, and December 31, 1998, and the related statements of
stockholders' equity for June 30, 1999, and December 31, 1998,
and statements of operation and cash flows for the three months
ending June 30, 1999, and June 30, 1998, for the six months ended
June 30, 1999, and June 30, 1998, and the two years ended
December 31, 1998, and December 31, 1997, and the period January
23, 1996 (inception), to June 30, 1999. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Fashion Dynamics Corp. (A Development Stage Company), as of June
30, 1999, and December 31, 1998, and the related statements of
stockholders' equity for June 30, 1999, and December 31, 1998,
and statements of operation and cash flows for the three months
ending June 30, 1999, and June 30, 1999, for the six months ended
June 30, 1998, and June 30, 1998, and the two years ended
December 31, 1998, and December 31, 1997, and the period January
23, 1996 (inception), to June 30, 1999, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note #5 to the financial statements, the Company has suffered
recurring losses from operations and has no established source of
revenue. This raises substantial doubt about its ability to
continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
Fashion Dynamics Corp.
(A Development Stage Company)
BALANCE SHEET
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6 Mos. Ending Year Ended Dec.
June 30, 1999 31, 1998
ASSETS
CURRENT ASSETS:
Cash $11,956 $16,255
TOTAL CURRENT ASSETS $11,956 $16,255
FIXED ASSETS
Equipment (Net) $3,951 $2,103
TOTAL FIXED ASSETS $3,951 $2,103
OTHER ASSETS:
Organization Costs (Net) 72 94
TOTAL OTHER ASSETS 72 94
TOTAL ASSETS 15,979 18,452
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts Payable $1,000 0
TOTAL CURRENT LIABILITIES $1,000 0
STOCKHOLDERS' EQUITY;
Common stock, $0.001 par value, $6,600
authorized 25,000,000 shares
issued and outstanding
December 31, 1998 - 6,600,000
shares
June 30, 1999 - 6,600,000 shares $6,600
Additional paid-in Capital 24,400 24,400
Accumulated loss -16,021 -12,548
TOTAL STOCKHOLDERS' EQUITY 14,979 18,452
TOTAL LIABILITIES AND 15,979 18,452
STOCKHOLDERS' EQUITY
</TABLE>
Fashion Dynamics Corp.
(A Development Stage Company)
STATEMENT OF OPERATION
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3 Mos. 3 Mos. 6 Mos. 6 Mos.
Ended Ended Ended Ended
June June 30, June 30, June 30,
30, 1998 1999 1998
1999
INCOME:
Revenue 0 0 0 0
EXPENSES:
General, Selling $3,070 0 $3,070 $2,690
and
Administrative
Depreciation 246 135 381 270
Amortization 11 11 22 22
Total Expenses $3,327 $146 $3,473 $2,982
Net Profit/Loss(- $ - $ -146 $ -3,473 $ -2,982
) 3,327
Net Profit/Loss $ - NIL $ -.0005 $ -.0004
(-) Per weighted .0005
Share (Note 2)
Weighted average 6,600,0 6,600,000 6,600,000 6,600,00
Number of common 00 0
Shares
outstanding
</TABLE>
See accompanying notes to financial statements & audit report
Fashion Dynamics Corp.
(A Development Stage Company)
STATEMENT OF OPERATION (continued)
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Year Year Jan. 23,
Ended Ended 1996
Dec. 31, Dec. 31, (Inceptio
1998 1997 n) to
June 30,
1999
INCOME:
Revenue 0 0 0
EXPENSES:
General, Selling $2,890 $5,155 $14,877
and
Administrative
Depreciation 542 68 991
Amortization 45 45 153
Total Expenses $3,477 $5,268 $16,021
Net Profit/Loss(- $ -3,477 $ -5,268 $ -16,021
)
Net Profit/Loss $ -.0005 $ -.0008 $ -.0024
(-) Per weighted
Share (Note 2)
Weighted average 6,600,000 6,600,000 6,600,000
Number of common
Shares
outstanding
</TABLE>
Fashion Dynamics Corp.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
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Common Shares Stock Amount Additional paid- Accumulated
in Capital Deficit
Balance, 1,100,000 $1,100 $29,900 $ -9,071
December 31, 1997
March 30, 1998 5,500,000 +5,500 -5,500
Forward Stock Split
6:1
Net Loss, Year -3,477
Ended
December 31, 1998
Balance, 6,600,000 $6,600 $24,400 $ -12,548
December 31, 1998
Net Loss January 1, -3,473
1999, to June 30,
1999
Balance, 6,600,000 $6,600 $24,400 $16,201
June 30, 1999
</TABLE>
See accompanying notes to financial statements & audit report.
Fashion Dynamics Corp.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
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3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
Cash Flows from
Operating Activities:
Net Loss $ -3,327 $ -1,161 $ -3,473 $ -2,892
Adjustment to
Reconcile net loss to
cash provided by
operating activities:
Depreciation +246 +135 +381 +270
Amortization +11 +11 +22 +22
Changes in Assets and
Liabilities:
Organization Costs 0 0 0 0
Equipment -2,229 0 -2,229 0
Increase in current
Liabilities:
Accounts Payable +1,000 0 +1,000 0
Cash Flows from 0 0 0 0
Investing Activities
Cash Flows from
Financing Activities:
Issuance of common 0 0 0 0
stock
Net increase $ -4,299 $ -1,015 $ -4,299 $ -2,690
(decrease) in cash
Cash, Beginning of 16,255 17,470 16,255 19,145
period
Cash, end of period $11,956 $16,455 $11,956 $ 16,455
</TABLE>
See accompanying notes to financial statements & audit report
Fashion Dynamics Corp.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (continued)
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Year Ended Year Ended Jan. 23, 1996
December 31, December 31, (Inception) to
1999 1998 June 30, 1999
Cash Flows from
Operating Activities:
Net Loss $ -3,477 $ -5,268 $ -16,021
Adjustment to
Reconcile net loss to
cash provided by
operating activities:
Depreciation +542 +68 +991
Amortization
Changes in Assets and
Liabilities:
Organization Costs 0 0 -225
Equipment 0 -2,713 -4,942
Increase in current
Liabilities:
Accounts Payable 0 0 +1,000
Cash Flows from 0 0 0
Investing Activities
Cash Flows from
Financing Activities:
Issuance of common 0 +25,000 +31,000
stock
Net increase $ -2,890 $ +17,132 $ +11,956
(decrease) in cash
Cash, Beginning of 19,145 2,013 0
period
Cash, end of period $16,255 $19,145 $11,956
</TABLE>
Fashion Dynamics Corp.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and December 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized January 23, 1996, under the laws of the
State of Nevada as Fashion Dynamics Corp. The Company currently
has no operations and in accordance with SFAS #7, is considered a
development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
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 statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits. For
the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of June 30, 1999.
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Organization Costs
Costs incurred to organize the Company are being amortized on a
straight-line basis over a sixty-month period.
Depreciation
Depreciation is calculated on the equipment on the basis of 5
year straight line.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of June 30, 1999, the Company had no dilative common
stock equivalents such as stock options.
Year End
The Company has selected December 31st as its year-end.
Year 2000 Disclosure
The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Computer programs that have time sensitive
software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or
miscalculations causing disruption of normal business activities.
Since the Company currently has no operating business and does
not use any computers, and since it has no customers, suppliers
or other constituents, there are no material Year 2000 concerns.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended June
30, 1999, due to the net loss and no state income tax in Nevada,
the state of the Company's domicile and operations. The Company's
total deferred tax asset as of December 31, 1998 is as follows:
Net operation loss carry forward $12,548
Valuation allowance $12,548
Net deferred tax asset $ 0
The federal net operation loss carry forward will expire in 2016
and 2018.
This carry forward may be limited upon the consummation of a
business combination under IRC Section 381.
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of
25,000,000 shares with a par value of $0.001 per share.
Preferred Stock
Fashion Dynamics Corp. has no preferred stock.
On February 6, 1996, the Company issued 600,000 shares of its
$0.001 par value common stock in consideration of $6,000.00 in
cash.
On August 26, 1997, the Company completed an offering of its
Common Stock under Regulation "D", Rule 504 for 500,000 Common
Shares of stock at $0.05 per share or $25,000.00.
On March 30, 1998, the Company forward split its Common Stock
6:1, thus increasing the number of issued and outstanding Common
Stock shares from 1,100,000 to 6,600,000.
NOTE 5 - 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. Until that time, the
stockholders/officers and or directors have committed to
advancing the operating costs of the Company interest free.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal
property. An officer of the corporation provides office services
without charge. Such costs are immaterial to the financial
statements and accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other
business activities and may, in the future, become involved in
other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict
in selecting between the Company and their other business
interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any
additional share of common stock.
EXHIBITS
a) The exhibits, consisting of the Company's Articles of
Incorporation and Bylaws, are attached to the Company's Form 10-
SB, filed on May 24, 1999. These exhibits are incorporated by
reference to that Form.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Fashion Dynamics, Inc.
By: /s/ Lee Figgins
Lee Figgins, Secretary and
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999 DEC-31-1998
<PERIOD-END> JUN-30-1999 JUN-30-1999 DEC-31-1998
<CASH> 0 11,956 16,255
<SECURITIES> 0 0 0
<RECEIVABLES> 0 0 0
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 0 72 94
<PP&E> 0 3,951 2,103
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 0 15,979 18,452
<CURRENT-LIABILITIES> 0 0 0
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 0 6,600 6,600
<OTHER-SE> 0 0 0
<TOTAL-LIABILITY-AND-EQUITY> 0 15,979 18,452
<SALES> 0 0 0
<TOTAL-REVENUES> 0 0 0
<CGS> 0 0 0
<TOTAL-COSTS> 0 0 0
<OTHER-EXPENSES> 3,327 3,473 3,477
<LOSS-PROVISION> (3,327) (3,473) (3,477)
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 0 0 0
<INCOME-TAX> 0 0 0
<INCOME-CONTINUING> (3,327) (3,473) (3,477)
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (3,327) (3,473) (3,477)
<EPS-BASIC> 0 0 0
<EPS-DILUTED> 0 0 0
