U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: March 31, 1998
Commission File Number: 0-23535
SILVER QUEST, INC.
(Exact name of small business issuer as specified in its charter)
Idaho
(State or other jurisdiction of incorporation or organization)
82-0391094
(IRS Employer Identification No.)
15304 E. Monmouth Place
Aurora, Colorado
(Address of principal executive offices)
80015
(Zip Code)
(303) 693-0603
(Issuer's Telephone Number)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 of the registrant's only class of common stock issued and
outstanding, as of March 31, 1998, was 345,000 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the three month period ended March
31, 1998, are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and notes thereto included herein.
The Company generated no revenues during the three month period ended March
31, 1998. Management of the Company anticipates that the Company will not
generate any significant revenues until the Company accomplishes its business
objective of merging with a nonaffiliated entity or acquiring assets from the
same.
The Company's securities are currently not liquid. There are no market
makers in the Company's securities and it is not anticipated that any market
will develop in the Company's securities until such time as the Company
successfully implements its business plan of engaging in a business opportunity,
either by merger or acquisition of assets. The Company presently has no liquid
financial resources to offer such a candidate and must rely upon an exchange of
its stock to complete such a merger or acquisition.
Because the Company is not required to pay rent or salaries to any of its
officers or directors, management believes that the Company has sufficient funds
to continue operations through the foreseeable future.
Forward Looking Statements
This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") concerning the Company's
operations, economic performance and financial conditions, including, in
particular, the likelihood of the Company's ability to acquire another existing
business or assets. These statements are based upon a number of assumptions and
estimates which are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company and reflect
future business decisions which are subject to change. Some of these
assumptions inevitably will not materialize and unanticipated events will occur
which will affect the Company's results. Consequently, actual results will vary
from the statements contained herein and such variance may be material.
Prospective investors should not place undue reliance on this information.
Year 2000 Disclosure
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, many
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computer applications could fail or create erroneous results by or at the Year
2000. As a result, many companies will be required to undertake major projects
to address the Year 2000 issue. Because the Company has nominal assets,
including no personal property such as computers, it is not anticipated that the
Company will incur any negative impact as a result of this potential problem.
However, it is possible that this issue may have an impact on the Company after
the Company successfully consummates a merger or acquisition. Management
intends to address this potential problem with any prospective merger or
acquisition candidate. There can be no assurances that new management of the
Company will be able to avoid a problem in this regard after a merger or
acquisition is so consummated.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NONE.
ITEM 5. OTHER INFORMATION - NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
None.
Subsequent Event
On or about April 23, 1998, the Company filed a report on Form 8-K with the
Securities and Exchange Commission, advising that the Company had entered into
a letter of intent effective April 15, 1998, with Pact Communication Group, Inc.
("PACT"), a privately held Florida corporation, whereby the Company has agreed
in principle to acquire all of the issued and outstanding shares of PACT, in
exchange for issuance by the Company of previously unissued "restricted" common
stock. PACT is a provider of internet system and network management solutions
for enterprises with mission-critical internet operations.
The relevant terms of the transaction require the Company to undertake a
forward split of its common stock, whereby 1.45 shares of common stock will be
issued in exchange for one share of common stock, and, thereafter, to issue to
the PACT shareholders an aggregate of 4,500,000 "restricted" common shares,
representing 90% of the Company's then outstanding common stock, in exchange for
all of the issued and outstanding shares of PACT.
3
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<TABLE>
SILVER QUEST, INC.
(A Development Stage Company)
Unaudited
Balance Sheet
<CAPTION>
Unaudited Audited
March 31 December 31
1998 1997
--------- -----------
<S> <C> <C>
ASSETS
Current Assets - Cash $ 0 $ 0
--------- -----------
TOTAL ASSETS $ 0 $ 0
========= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities $ 2,593 $ 500
SHAREHOLDERS' EQUITY
Common Stock, $.01 Par Value;
50,000,000 Shares Authorized,
345,000 Issued and Outstanding at
March 31, 1998 and December 31, 1997,
respectively $ 3,450 $ 3,450
Additional Paid In Capital 19,361 19,361
Deficit Accumulated During
the Development Stage (25,404) (23,311)
--------- -----------
Total Shareholders' Equity $ (2,593) $ (500)
_________ ___________
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 0 $ 0
========= ===========
</TABLE>
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<TABLE>
SILVER QUEST, INC.
(A Development Stage Company)
Unaudited
Statement of Operations
<CAPTION>
January
For the For the 1, 1995
Three Months Three Months (Inception)
Ended Ended Thru
March 31, March 31, March 31,
1998 1997 1998
____________ ____________ _____________
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
------------ ------------ -------------
Expenses
Professional Fees 2,093 0 13,843
------------ ------------ -------------
Total 2,093 0 13,843
------------ ------------ -------------
Net (Loss) Accumulated
During The Development
Stage $ (2,093) $ 0 $ (13,843)
============ ============ ==============
Net (Loss) Per Share $ ($0.00) $ ($0.00) $ ($0.04)
============ ============ ==============
Common Shares
Outstanding 345,000 345,000 345,000
============ ============ ==============
</TABLE>
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<PAGE>
<TABLE>
SILVER QUEST, INC.
(A Development Stage Company)
Unaudited
Cash Flow Statement
<CAPTION>
January
For the For the 1, 1995
Three Months Three Months (Inception)
Ended Ended Thru
March 31, March 31, March 31,
1998 1997 1998
____________ ____________ ______________
<S> <C> <C> <C>
Cash Flows From
Operating Activities:
Net Profit (Loss)
Accumulated During The
Development Stage $ (2,093) $ 0 $ (13,843)
Items Not Affecting Cash Flow:
Expenses Paid by Shareholders
On Behalf of the Company 0 0 11,250
Increase (Decrease) In
Accounts Payable 2,093 0 2,593
------------ ------------ -------------
Net Cash Flows
From Operations 0 0 0
Cash Flows From
Financing Activities:
Issuance of Common Stock 0 0 0
Additional Paid in Capital 0 0 0
------------ ------------ -------------
Net Cash Provided
by Financing Activities 0 0 0
------------ ------------ -------------
Net Increase (Decrease) in Cash 0 0 0
Cash At Beginning of Period 0 0 0
------------ ------------ -------------
Cash At End of Period $ 0 $ 0 $ 0
============ ============ =============
Supplementary Disclosure of
Cash Flow Information:
Noncash Financing Activities:
Expenses Paid By Shareholder
On Behalf of The Company $ 0 $ 0 $ 11,250
=========== =========== =============
</TABLE>
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<PAGE>
<TABLE>
SILVER QUEST, INC.
(A Development Stage)
Unaudited
Statement of Shareholders' Equity
<CAPTION>
Deficit
Accumulated
Number of Additional During the
Shares Common Paid In Development
Common Stock Stock Capital Stage Total
____________ ______ __________ ___________ _______
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1994
and 1995 345,000 $3,450 $ 8,111 $ (11,561) $ 0
Net Loss
December 31, 1996 (1,250) (1,250)
------------ ------ ---------- ---------- -------
Balance at
December 31, 1996 345,000 $3,450 $ 8,111 (12,811) (1,250)
------------ ------ ---------- ---------- -------
Net Loss
December 31, 1997 (11,750) (11,750)
Additional Paid
In Capital 11,250 11,250
------------ ------ ---------- ---------- -------
Balance at
December 31, 1997 345,000 $3,450 $ 19,361 (24,561) ($1,750)
Net (Loss)
March 31, 1998 (2,093) (2,093)
------------ ------ ---------- ---------- -------
Balance at
March 31, 1998 345,000 $3,450 $ 19,361 $ (26,654) $(3,843)
============ ====== ========== ========== =======
</TABLE>
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<PAGE>
SILVER QUEST, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1.
- ------
The Company initially authorized 50,000,000 shares of $.01 par value common
stock. In February 1985, the Company issued 34,500 shares of common stock for
an assignment of mining claims valued at $11,561. In July 1997, the Company
effectuated a 50 to 1 forward split. For accounting purposes the equity of the
Company was retroactively restated to reflect this change.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments necessary for a fair statement of (a) the results of
operations for the three month periods ended March 31, 1998 and 1997, and for
the periods from inception at January 1, 1995 to March 31, 1998, (b) financial
position at March 31, 1998 and December 31, 1997, and (c) the cash flows for the
three months ended March 31, 1998 and 1997, and for the period from inception,
January 1, 1995 to March 31, 1998 have been made.
NOTE 2.
- ------
The results for the three month period ended March 31, 1998, are not necessarily
indicative of the results for the entire fiscal year ended December 31, 1998.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SILVER QUEST, INC.
(Registrant)
Dated: May 14, 1998
By: S/Carolyn Sagara
Carolyn Sagara,
President
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SILVER QUEST, INC.
Exhibit Index to Quarterly Report on Form 10-QSB
For the Quarter Ended March 31, 1998
EXHIBITS Page No.
EX-27 Financial Data Schedule 11
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1998,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 2,593
<BONDS> 0
0
0
<COMMON> 3,450
<OTHER-SE> (6,043)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,093
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,093)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,093)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
