U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-52721
MICRO INTERCONNECT TECHNOLOGY, INC.
(Name of Small Business Issuer as specified in its charter)
70 Horizon Drive, Bedford, New Hampshire 03110
(Address of principal executive offices)
603-666-0206
(Registrants telephone no., including area code)
No Change
(Former name, former address, and former fiscal year, if changed since last
report.)
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
Common Stock outstanding at March 31, 1999 - 1,000,000 shares of $.001 par
value Common Stock.
<PAGE>
MICRO INTERCONNECT TECHNOLOGY, INC.
[ A Development Stage Company ]
INDEX
PART I Financial Information
Item 1 Condensed Balance Sheets -
March 31, 1999 and December 31, 1998 2
Condensed Statements of Operations -
three months ended March 31, 1999 and
from inception on February 11, 1998 through
March 31, 1998 and 1999 3
Condensed Statements of Cash Flows -
three months ended March 31, 1999 and
from inception on February 11, 1998 through
March 31, 1998 and 1999 4
Notes to Condensed Financial Statements 5
Item 2 Management's Plan of Operations 9
PART II Other Information
Item 1 Legal Proceedings 11
Item 2 Changes in Securities 11
Item 3 Defaults upon Senior Securities 11
Item 4 Submission of Matters to a vote of
Security Holders 11
Item 5 Other Information 11
Item 6 Exhibits and Reports on Form 8-K 11
Signature page 12
<PAGE>
PART 1 FINANCIAL INFORMATION
Item 1 Financial Statements
MICRO INTERCONNECT TECHNOLOGY, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
March 31, December 31,
1999 1998
___________ ___________
CURRENT ASSETS:
Cash in bank $ 5,296 $ 6,200
___________ ___________
Total Current Assets 5,296 6,200
___________ ___________
OTHER ASSETS:
Organizational costs, net 355 405
Deferred stock offering costs 5,502 5,037
___________ ___________
Total Other Assets 5,857 5,442
___________ ___________
$ 11,153 $ 11,642
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 3,297 2,312
Accounts payable - related party 486 486
___________ ___________
Total Current Liabilities 3,783 2,798
___________ ___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,000,000 shares issued and
outstanding 1,000 1,000
Capital in excess of par value 9,000 9,000
Deficit accumulated during the
development stage (2,630) (1,156)
___________ ___________
Total Stockholders' Equity 7,370 8,844
___________ ___________
$ 11,153 $ 11,642
___________ ___________
NOTE: The balance sheet at December 31, 1998 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
MICRO INTERCONNECT TECHNOLOGY, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
From Inception on
For the Three February 11, 1998
Months Ended Through March 31,
March 31, _____________________
1999 1998 1999
__________ _________ _________
REVENUE $ - $ - $ -
__________ _________ _________
EXPENSES
General and administrative 1,520 28 2,788
__________ _________ _________
INCOME (LOSS) FROM OPERATIONS (1,520) (28) (2,788)
OTHER INCOME
Interest 46 - 158
__________ _________ _________
LOSS BEFORE INCOME TAXES (1,474) - (2,630)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
__________ _________ _________
NET LOSS $(1,474) $ (28) $(2,630)
__________ _________ _________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00)
__________ _________ _________
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
MICRO INTERCONNECT TECHNOLOGY, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
From Inception on
For the Three February 11, 1998
Months Ended Through March 31,
March 31, _________ _________
1999 1998 1999
_____________ _________ _________
Cash Flows from Operating
Activities:
Net loss $ (1,474) $ (28) $(2,630)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Amortization expense 50 16 131
Changes in assets and
liabilities:
Increase in accounts
payable 985 - 2,160
_____________ _________ _________
Net Cash Provided
(Used) by Operating
Activities (439) (12) (339)
_____________ _________ _________
Cash Flows from Investing
Activities:
Payments for organization
costs - - -
_____________ _________ _________
Net Cash Provided
(Used) by Investing
Activities - - -
_____________ _________ _________
Cash Flows from Financing
Activities:
Proceeds from common stock
issuance - 10,000 10,000
Payment of stock offering
costs (465) - (4,365)
_____________ _________ _________
Net Cash Provided
(Used) by Financing
Activities (465) 10,000 5,635
_____________ _________ _________
Net Increase (Decrease) in Cash (904) 9,988 5,296
Cash at Beginning of Period 6,200 - -
_____________ _________ _________
Cash at End of Period $ 5,296 $ 9,988 $ 5,296
_____________ _________ _________
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the Period Ended March 31, 1999
None
For the Period Ended March 31, 1998
The Company accrued $486 for organization costs which where paid by a
related party.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
MICRO INTERCONNECT TECHNOLOGY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the State of
Nevada on February 11, 1998. The Company has not commenced planned
principal operations and is considered a development stage company as
defined in SFAS No. 7. The Company is planning to engage in the business
of developing proprietary technology to make electronic devices that link
electronic components together smaller and to operate at higher speeds.
Condensed Financial Statements - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary
to present fairly the financial position, results of operations and cash
flows at March 31, 1999 and for all the periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 1998
audited financial statements. The results of operations for the periods
ended March 31, 1999 is not necessarily indicative of the operating results
for the full year.
Organization Costs - The Company is amortizing its organization costs,
which reflect amounts expended to organize the Company, over sixty [60]
months using the straight line method.
Loss Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in
accordance with Statement of Financial Standard No. 128, "Earnings Per
Share". [See Note 6]
Statement of Cash Flows - For purposes of the statement of cash flows, the
Company considers all highly liquid debt investments purchased with a
maturity of three months or less to be cash equivalents.
Accounting 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, the disclosures of contingent 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 estimated.
5
<PAGE>
MICRO INTERCONNECT TECHNOLOGY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Stock Option Plan - On February 17, 1998, the Board of Directors of the
Company adopted and the stockholders at that time approved, the 1998 Stock
Option Plan. The plan provides for the granting of awards of up to
1,000,000 shares of common stock to sales representatives, officers,
directors, consultants and employees. The awards can consist of stock
options, restricted stock awards, deferred stock awards, stock appreciation
rights and other stock-based awards as described in the plan. Awards under
the plan will be granted as determined by the board of directors. At
present, no awards have been granted under the plan.
Common Stock - During February, 1998, in connection with its organization,
the Company issued 1,000,000 shares of its previously authorized, but
unissued common stock. Total proceeds from the sale of stock amounted to
$10,000 (or $.01 per share).
Preferred Stock - The Company has authorized 10,000,000 shares of preferred
stock, $.001 par value, with such rights, preferences and designations and
to be issued in such series as determined by the Board of Directors. No
shares are issued and outstanding at March 31, 1999.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards. At March 31, 1999, the Company
has available unused operating loss carryforwards of approximately $2,600,
which may be applied against future taxable income and which expire in 2013
through 2014.
The amount of and ultimate realization of the benefits from the operating
loss carryforwards for income tax purposes is dependent, in part, upon the
tax laws in effect, the future earnings of the Company, and other future
events, the effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards the
Company has established a valuation allowance equal to the tax effect of
the loss carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax assets are
approximately $900 and $400 as of March 31, 1999 and December 31, 1998,
respectively, with an offsetting valuation allowance at each period end of
the same amount resulting in a change in the valuation allowance of
approximately $500 for the three months ended March 31, 1999.
6
<PAGE>
MICRO INTERCONNECT TECHNOLOGY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any compensation to its
officers and directors.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his home
as a mailing address, as needed, at no expense to the Company.
Payable to Related Party - An officer/shareholder of the Company paid
organization costs of $486 on behalf of the Company.
License Agreement - The Company entered into an exclusive licensing
agreement with the officer and shareholder of the Company for the exclusive
rights for patents covering electronic interconnection manufacturing
technologies for the United States and it's territories and possessions.
The agreement expires March 31, 2007. The Company will pay a 1% royalty of
gross sales and receipts for the right beginning January 1999.
NOTE 5 - DEVELOPMENT STAGE COMPANY
The Company was formed with a very specific business plan. However, the
possibility exists that the Company could expend virtually all of its
working capital in a relatively short time period and may not be successful
in establishing on-going profitable operations.
NOTE 6 - LOSS PER SHARE
The following data show the amounts used in computing loss per share for
the periods ended March 31, 1999 and 1998:
From Inception
For the Through
Three Months March 31,
Ended ____________________
March 31,
1999 1998 1999
__________ _________ _________
Loss from continuing operations
available to common shareholders
(numerator) $(1,474) $ (28) $ (2,630)
__________ _________ _________
Weighted average number of common
shares outstanding used in loss per
share for the period (denominator) 1,000,000 1,000,000 1,000,000
__________ _________ _________
7
<PAGE>
MICRO INTERCONNECT TECHNOLOGY, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - SUBSEQUENT EVENTS
Proposed Public Offering of Common Stock - The Company is proposing to make
a public offering of 150,000 units consisting of a total of 150,000 shares
of common stock and 300,000 redeemable common stock purchase warrants.
Each warrant allows the holder to purchase one share of common stock for
$2.50. The warrants are subject to adjustment in certain events and are
exercisable for a period of one year from the date of the offering. The
Company may redeem the warrants at a price of $.01 per warrant, at any time
beginning six months after the date of the offering upon not less than 30
days prior written notice, if the closing bid price of the Company's common
stock on the Nasdaq Bulletin Board is at least $3.00 per share for twenty
consecutive trading days, ending not earlier than five days before the
warrants are called for redemption. The Company plans to file a
registration statement with the United States Securities and Exchange
Commission on Form SB-2 under the Securities Act of 1933. An offering
price of $2 per unit has arbitrarily been determined by the Company. The
offering will be managed by the Company without any underwriter. The units
will be offered and sold by an officer of the Company, who will receive no
sales commissions or other compensation in connection with the offering,
except for reimbursement of expenses actually incurred on behalf of the
Company in connection with the offering. The Company has incurred stock
offering costs of approximately $5,500 as of March 31, 1999, but any such
costs will be deferred and netted against the proceeds of the proposed
public stock offering. As of March 31, 1999 the Company had sold
approximately 38,000 units of the offering. The Company is holding $77,100
as of March 31, 1999 in its escrow account from the sale of units pending
the completion of the offering.
8
<PAGE>
PART I FINANCIAL INFORMATION
Item 2 Management's Plan of Operation.
Micro Interconnect Technology( the "Company") was incorporated under the
laws of the State of Nevada on February 11, 1998. The Company has not
commenced planned principal business operations and is considered a
development stage company. The Company has no significant assets, no active
business operations nor any results therefrom. To date, activities have been
limited to organizational matters, research and due diligence for the
corporate business plan and the preparation and filing of the registration
statement. The purpose of the Company's formation is to initially engage in
the business of trying to reduce, to industrial production, the proprietary
technology contained in one of four patents exclusively licensed to the
Company. If successful the Company will use this proprietary technology
initially to develop and manufacture an imaging workstation that can be used
to help make high density electronic component interconnections that are
utilized in the growing trend to make electronics run at higher speeds, be
smaller and lighter, less expensive and more reliable.
The Company has allocated the use of approximately $228,620 (94% of the
net proceeds of this Offering) for research and development (salaries, parts
and supplies) of this imaging workstation and the remaining $14,600(6% of the
net proceeds of this Offering) for office, sales and travel expenses. The
majority of the cost in developing the imaging workstation will be in the form
of labor to reduce, to industrial production, the basic concepts of the
proprietary technology contained in the Company's exclusively licensed
patents. Management recognizes that this will be the most difficult and
hazardous aspect involved in the production of the imaging workstation.
Management expects a development period of at least 12 months, barring any
unexpected delays or challenges, before a marketable imaging workstation could
be produced.
The Company will both sell and lease its products. Consideration will be
given for the imaging workstation initially be set up as a service center to
provide imaged circuit substrates for a cluster of customers such as Printed
Circuit Board ("PCB") or Multi-Chip Module("MCM") manufacturers. The domestic
markets will be pursued until appropriate opportunities for foreign sales
arise.
If the Company is unsuccessful in developing and profitably marketing an
imaging workstation, it will, more than likely, be unable to continue
operations. The Company, if able to generate sufficient revenues from the
future sales of a developed imaging workstation or to obtain some other
suitable form of financing, will begin developing, one at a time, using the
Company's other licensed proprietary technology patents, a drilling
workstation, electroplating work station and chemical processing workstation.
These workstations, if successfully developed, would also be marketed and sold
by the Company. If the Company can successfully develop and profitably produce
these four workstations it would then try to incorporate them together to
create a complete flexible manufacturing cell (factory) for producing high
density electronic interconnects, which the Company itself would sell to the
manufacturers and suppliers of electronic components and devices. The Company
estimates that there exists at least a 3-12 month development period for each
of these other workstations and expects that it could take up to three years
before possibly reaching the phase for trying to develop and produce a
flexible manufacturing cell (factory). There are no guarantees that the
Company will be able successfully to fund, develop, manufacture and profitably
market these additional workstations or create the flexible manufacturing cell
(factory) for producing high density electronic interconnects. The risk of
failure is high, because the Company may find it more difficult than
anticipated to reduce the basic concepts of the patents to industrial
production. And since the technology covered by these patents does not cover
all the phases of the process of making high density electronic interconnects,
9
<PAGE>
there is a high probability that the Company may not be able to develop and
manufacture any of these workstations. There can be no guarantees that the
market will give financial support to these products when and if they are
developed and manufactured.
Upon successful completion of this Offering, the Company expects to spend
the following 12 months trying to develop an imaging workstation that can
produce insitu masks that will have high resolution, accurate alignment, and
can be computer compensated for manufacturing defects. First, the Company must
complete the design of the imaging workstation's overall system. The research
and development activities of the project primarily consist of labor to reduce
to, industrial production, the concepts of the patents. Next would be the
development of the exposing system where the electro-mechanical and optical
concepts would need to be finalized, a prototype produced and debugged. The
run-time and other software must be designed and coded and debugged. There can
be no guarantees that the Company will be able to successfully complete any of
these steps within the 12 month period following funding. If the Company is
not able to develop the imaging workstation on a timely basis because of
design set backs, non-delivery of parts, uncompleted testing, software
failures, lack of funding or other risks inherent with the development of new
technological products, or if the imaging workstation does not achieve market
acceptance, the Company's business, operation results and financial condition
will be materially adversely affected.
The Company is presently using its directors as part-time consultants. These
directors will not receive any compensation other than their out-of-pocket
expenses incurred when consulting with the Company. There is not any agreement
or understanding, other than those described above, to use the services of any
outside consultants for such purposes.
The Company presently has no office facilities but will use the home
office of N. Edward Berg, its president, on a rent-free basis until the
completion of this Offering, at which time the Company will enter into an
agreement for leasing approximately 1200 square feet of executive and
manufacturing space. The manufacturing space will have computers and software
support systems and manufacturing type tools needed for fabrication support.
Inasmuch as there is no assurance that the Offering will be successful or
that the Company will receive any net proceeds therefrom, the Company has not
presently entered into any contracts or commitments for leasing of offices,
factory space, purchasing of materials and equipment and delivery of products
and services to customers. Therefore, there is no assurance the Company will
be able, with the proceeds of this Offering, to lease sufficient office space
and factory space, acquire materials and equipment, develop a potential
customer base to commence operations. There is also no assurance that the
Company will be successful in its effort to develop or produce the
workstations, electronic interconnects or any other equipment that will enable
the Company to generate enough business to operate profitably.
The Company has reviewed the Year 2000 issue, where, if not corrected,
many computer applications could fail or create erroneous results by or at the
Year 2000. Management feels that there are presently no anticipated potential
costs or uncertainties related to any of the Company's developing products
surrounding its software and hardware. No software programs presently
anticipated by the Company will be written with code that would cause a Year
2000 stoppage on time critical operations. The only uncertainties, of which
the Company cannot give any assurance that could or could not develop, would
be if the Company's suppliers and the future purchasers of the Company's
imaging workstation would be unable to resolve any Year 2000 issues that could
aversely affect their operations. If this was to be the case, it could cause
delays in the development, production and sales of the imaging workstation,
10
<PAGE>
which would have a material adverse effect on the continued development and
growth of the business.
Based upon the anticipated proceeds of the Offering, management believes
that the proceeds of this Offering will be adequate to meet its working
capital requirements for the next 12 months following the Offering. Thereafter
the Company anticipates that, it could need additional financing to meet its
current plan for the development of additional workstations and a flexible
manufacturing cell. The Company presently anticipates that future sales of the
imaging workstation, if successfully developed, will provide the needed
financial resources. No assurance can be given of the Company's ability to
obtain sufficient revenues from the sales of its imaging workstation or obtain
outside financing on favorable terms, if at all. If the Company is unable to
obtain additional financing, its ability to meet its current plan for the
development of additional workstations and a flexible manufacturing cell could
be materially adversely affected.
At March 31, 1999 the Company's assets consist primarily of cash from the
issuance of common stock. The Company has no other resources.
PART II OTHER INFORMATION
Item 1 Legal Proceedings
None
Item 2 Changes in Securities
None
Item 3 Defaults on 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
None
b) Reports on Form 8-K
None
11
<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.
MICRO INTERCONNECT TECHNOLOGY, INC.
/s/ N. Edward Berg May 6, 1999
_________________________ _____________
N. Edward Berg, President Date
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements for the three month period ended March 31, 1999,
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 5,296
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,296
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,153
<CURRENT-LIABILITIES> 3,783
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 6,370
<TOTAL-LIABILITY-AND-EQUITY> 11,153
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,520
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,474)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,474)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,474)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
