FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 1999
AND
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-27131
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DP Charters, Inc.
(Exact name of Registrant as specified in its charter)
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Nevada 88-0381258
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
34700 Pacific Coast Highway, Suite 303 Capistrano Beach CA 92624
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 248-9561
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 27,656,000
Yes [X] No [ ] (Indicate by check mark whether the Registrant (1) has filed all
report 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.)
As of September 30, 1999, the number of shares outstanding of the Registrant's
Common Stock was 27,656,000.
<PAGE>
PART I: FINANCIAL INFORMATION
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Item 1. Financial Statements.
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Attached hereto and incorporated herein by this reference are consolidated
unaudited financial statements (under cover of Exhibit F99-Q3) for the Nine
months ended September 30, 1999.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
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(a) Plan of Operation for the next twelve months. This Registrant has filed a
1934 Act Registration which is currently effective, by operation of law, but
which has not cleared comments by the Staff of the Commission. That registration
statement is voluntarily filed pursuant to Section 12(g) of the Securities
Exchange Act of 1934, in order to comply with the requirements of National
Association of Securities Dealers for submission for quotation on the Over the
Counter Bulletin Board, often called "OTCBB". This Registrant's common stock is
not presently quoted on the OTCBB. The Registrant's common stock is qualified
for listing over the counter in the "Pink Sheets"; however the Registrant does
not believe that any of its shares ever traded in brokerage transactions. The
requirements of the OTCBB are that the financial statements and information
about the Registrant be reported periodically to the Commission and be and
become information that the public can access easily. This Registrant wishes to
report and provide disclosure voluntarily, and will file periodic reports in the
event that its obligation to file such reports is suspended under the Exchange
Act. If and when this 1934 Act Registration is effective and clear of comments
by the staff, this Registrant will be eligible for consideration for the OTCBB
upon submission of one or more NASD members for permission to publish quotes for
the purchase and sale of the shares of the common stock of the Registrant.
This Registrant may be the subject of a "Reverse Acquisition". A reverse
acquisition is the acquisition of a private ("Target") company by a public
company, by which the private company's shareholders acquire control of the
public company. While no negotiations are in progress, and no potential targets
have been identified, the business plan of this Registrant is to find such a
target or targets, and attempt to acquire them for stock. While no such
arrangements or plans have been adopted or are presently under consideration, it
would be expected that a reverse acquisition of a target company or business
would be associated with some private placements and/or limited offerings of
common stock of this Registrant for cash. Such placements, or offerings, if and
when made or extended, would be made with disclosure and reliance on the
businesses and assets to be acquired, and not upon the present condition of this
Registrant.
This Registrant is not presently pursuing its business plan, to seek an
acquistion partner, for the reason that such activities are not timely. They are
not timely because this Registrant must qualify itself for quotation on the Over
the Counter Bulletin Board ("OTCBB") before it can enter the arena of seeking
any business combination by reverse acquisition. The process of qualifying for
OTCBB requires first that this Registrant become a reporting company pursuant to
this 1934 Act Registration Statement. The process next requires that a
Broker/Dealer make a submission to the National Association of Securities
Dealers ("NASD") for permission to publish quotations for the purchase and sale
of the common stock of this Registrant on the OTCBB. It would be the policy of
this Registrant to employ a consultant to seek a broker/dealer to become such a
submitting market-maker in the common stock of this Registrant. Neither this
Registrant, nor any of its affiliates, are Broker/Dealers or NASD members. Since
this Registrant's common stock is presently quoted on the Pink Sheets, it is
likely that one or more existing Market-Makers would apply for up-grade from the
Pink Sheets to the OTCBB, without the necessity of this Registrant's employing
any consultants therefor. When and if an
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<PAGE>
NASD member Broker/Dealer might make such a submission to NASD, the Staff of
NASD would evaluate the submission, and the due diligence investigation, and
would make comments and requests for further information, deemed appropriate to
that Staff, over a period of some months, before granting permission for the
submitting Market-Maker to begin publishing quotations. Until such time as
permission may be granted, no quotations would be published on the OTCBB. While
quotations might be published on the Pink Sheets, such quotations do not, in the
judgment of Management, constitute the basis for the creation or development of
an orderly trading market for the common stock of this Registrant. In arriving
at this opinion, that the Pink Sheets do not constitute the equivalent of OTCBB,
Management must consider not only its own opinion, but its assessment of the
opinions of those with whom it might evaluate a reverse acquisition.
Accordingly, Management reports its conclusion that a search for an acquisition
target is premature, and that it would remain premature for some months, until
and unless the common stock of this Registrant may be quoted on the OTCBB.
This Registrant is not ready to search for or to consider any specific
acquisition target. It does not expect to be able to begin consideration of any
acquisitions for four to six months. It cannot expect to identify or commit
itself to any acquisition within the next twelve months, or perhaps longer for
the following reasons. It is not the policy or practice of the Registrant, its
Management or Principal Shareholder to advertise, or travel in search of
possible targets. This Registrant does not command the capital or liquidity with
which to conduct such a search, and does not expect to be able to engage in any
capital formation or loan funding activities for that purpose. While incidental
advances by the Principal Shareholder for corporate maintenance, filing fees,
legal and professional, and auditing are foreseeable, the Principal Shareholder
has no intention of general funding or funding search, advertising or other
promotion of this Registrant. Accordingly, the future prospects of this
Registrant is likely to await such serendipitous referral or introduction as may
lead to conversations with potential target businesses. The search for a
profitable business combination, accordingly, must be understood as an
essentially passive one, relying mostly on word of mouth. It is possible that
business brokers or promoters may at some point approach management with a
proposal. No estimate can be made when and if such a passive search might yield
an acquisition target.
When and if a probable acquisition target may be identified, or may
identify itself, Management will conduct extensive due diligence and evaluation
of the target, based upon the financial statements of an acquisition target, its
forseeable requirements for capital, and realistic potential of the target to
attract the capital it may require, and management's evaluation of its ability
to achieve its plan for profitability. No acquisition would be made if
Management were not satisfied that its plan for profitability and viability were
sound and in the interests of shareholders. The Registrant will continue its
evaluation of opportunities until an attractive business combination is
accomplished, no matter how long it may take.
(b) Discussion and Analysis of Financial Condition and Results of Operations.
This Registrant has no immediate need for current capital formation in its
present stage from outside sources. This means that the Registrant expects to
maintain its corporate and other filings and reports during the next twelve
months. This Registrant retained a firm named Capital Relations and Management
to assist in initial submission to the OTCBB, paying a fixed fee of $2,500 for
that service. Capital Relations and Management is not an affiliate of the
Registrant or of its Principal Shareholder. Capital Relations submitted the
Registrant's disclosure documents to National Capital, LLC, which market maker
duly submitted for permission to quote to the NASD. Before clearing comments,
the NASD effected its rule changes, with the result that the Registrant's common
stock was cleared for the Pink Sheets, but cannot be cleared for the OTCBB until
its 1934 Act Registration shall have become effective, and cleared comments. The
Registrant has not, and this Registrant will not, take other affirmative steps
to encourage or request any broker-dealer to act as a market maker for the its
securities.
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<PAGE>
The financial statements for the nine months reflect minimal changes and no
substantial corporate activity. No Revenues were recorded. The only expense was
for final amortization of organizational costs. Such costs had previously been
subject to amortization over five years, pursuant to then prevailing accounting
practices. They are currently subject to immediate expense treatment under new
accounting guidlines. These changes do not affect this Registrant, as the
current expense of 16,000 completes the amortization of such costs.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Change in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
Exhibit Index
Financial Statements and Documents
Furnished as a part of this Registration Statement
Exhibit F99-Q3: Financial Statements (Un-Audited) September 30, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-Q Report for the Quarter ended September 30, 1999, has been signed below
by the following person on behalf of the Registrant and in the capacity and on
the September 30, 1999 indicated.
Dated: September 30, 1999
DP Charters, Inc.
by
/s/ Kirt W. James /s/ J. Dan Sifford, Jr.
- ------------------------------------ ---------------------------------------
Kirt W. James J. Dan Sifford, Jr.
PRESIDENT/DIRECTOR SECRETARY/DIRECTOR
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<PAGE>
Exhibit F99-Q3
UN-AUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
6
<PAGE>
DP CHARTERS, INC.
BALANCE SHEET (UNAUDITED)
for the years ended December 31, 1998 and 1997
and for the period ended September 30, 1999
<TABLE>
<CAPTION>
September 30, December 31,
------------- ----------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 996 $ 12,321 $ 118,848
TOTAL CURRENT ASSETS 996 12,321 118,848
--------- --------- ---------
OTHER ASSETS
Organizational Costs 16,000 20,000
Accounts receivable 13,100
TOTAL OTHER ASSETS 13,100 16,000 20,000
--------- --------- ---------
TOTAL ASSETS $ 14,096 $ 28,321 $ 138,848
========= ========= =========
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; authorized 100,000,000
shares; issued and outstanding, 20,000,000 shares,
26,400,000 and 27,656,000 shares respectively 27,656 26,400 23,808
Additional Paid-In Capital 205,444 193,600 115,192
Accumulater Equity (Deficit) (219,004) (191,679) (152)
--------- --------- ---------
Total Stockholders' Equity 14,096 28,321 138,848
--------- --------- ---------
TOTAL STOCKHOLDERS' EQUITY $ 14,096 $ 28,321 $ 138,848
========= ========= =========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-2
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<PAGE>
DP CHARTERS, INC.
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT (UNAUDITED)
for the years ended December 31, 1998 and 1997
and for the period ended September 30, 1999
December 31,
September 30, -------------------------
1999 1998 1997
------------ ---------- ------------
Revenues $ -0- $ -0- $ -0-
------------ ---------- ------------
Amortization (4,000) -0-
Organizational costs (16,000)
Net Loss from Operations (11,325) (187,527) (152)
Net Income (Loss) $ (27,325) $ (191,527) $ (152)
============ ========== ============
Loss per Share $ (.00103) $ (.00725) $ -0-
============ ========== ============
Weighted Average
Shares Outstanding 26,405,834 26,400,000 20,000,000
============ ========== ============
The accompanying notes are an integral part
of these financial statements.
page F-3
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<PAGE>
DP CHARTERS, INC.
STATEMENTS OF CASH FLOW (UNAUDITED)
for the years ended December 31, 1998 and 1997
and for the period ended September 30, 1999
<TABLE>
<CAPTION>
December 31,
September 30, ----------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Operating Activities
Net Income (Loss) $ (27,325) $(191,527) $ (152)
Less items not effecting cash:
organization costs 16,000
amortization 4,000 -0-
--------- --------- ---------
Net Cash from Operations (11,325) (187,527) (152)
Cash Increase (Decrease) sale of Common Stock 13,100 81,000 119,000
Cash Increase (Decrease) accounts receivable (13,100)
--------- --------- ---------
Net increase (decrease) in cash (11,325) (106,527) 118,848
Beginning Cash 12,321 118,848 -0-
Cash as of Statement Date $ 996 $ 12,321 $ 118,848
========= ========= =========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-5
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<PAGE>
DP CHARTERS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
for the period from inception of the Development Stage
on December 18, 1997, through December 31, 1997
for the year ended December 31, 1998
and for the period ended September 30, 1999
<TABLE>
<CAPTION>
Additional Accumulated Total Stock-
Common Par Paid-In Equity holders' Equity
Stock Value Capital (Deficit) (Deficit)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Common Stock issued at inception 20,000,000 $ 20,000 $ 0 $ 0 $ 20,000
Sale of Common Stock 3,808,000 3,808 115,192
Loss during 1997 (152)
---------- ---------- ---------- ---------- ----------
Balance at December 31, 1997 23,808,000 23,808 115,192 (152) 138,848
Sale of Common Stock 2,592,000 2,592 78,408
Loss during 1998 (191,679)
---------- ---------- ---------- ---------- ----------
Balance at December 31, 1998 26,400,000 $ 26,400 $ 193,600 $ (191,679) $ 28,321
Sale of Common Stock 1,256,000 1,256 11,844
Loss during period ended
September 30,1999 (27,325)
---------- ---------- ---------- ---------- ----------
Balance at September 30, 1999 27,656,000 $ 27,656 $ 205,444 $ (219,004) $ 14,096
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-4
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<PAGE>
DP CHARTERS, INC.
NOTES TO FINANCIAL STATEMENTS
for the years ended December 31, 1997 and 1998
and for the six months ended September 30, 1999
1-FORMATION AND OPERATIONS OF THE COMPANY
DP Charters, Inc. (the "Company") was incorporated on December 18, 1997 in
the State of Nevada with the intent of initiating a charter yacht service
from the Dana Point harbor located in Dana Point, Orange County,
California. The Company is authorized to issue 100,000,000 Common Shares
each with a par value of $0.001. Since inception it has been the intent of
management to acquire and operate small to medium sized fishing and
pleasure motor yachts. As of the date of these statements the Company has
not yet begun any operations and is a development stage company according
to Financial Accounting Standards Board Statement No. 7. The Board of
Directors and Shareholders of the Company have authorized the issuance of
7,656,000 of its Common Shares in Regulation D, 504 offerings.
2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
Accounting records of the Company and financial statements are
maintained and prepared on an accrual basis.
(b) FISCAL YEAR
The Company's proposed fiscal year for accounting and tax purposes is
December 31.
(c) ORGANIZATION COSTS
The Company incurred $20,000 of organization costs in 1997. These
costs, which were paid by shareholders of the Company and which were
exchanged for 20,000,000 shares of common stock having a par value of
$20,000. On January 1, 1999, due to changes in accounting principals,
remaining organization costs were expensed.
(d) CASH EQUIVALENTS
For Financial Accounting Standards purposes, the Statement of Cash
Flows, Cash Equivalents include time deposits, certificates of
deposit, and all highly liquid debt instruments with original
maturities of three months or less. Whenever cash amount are to be
included on the Company's Statements of Cash Flow, however, they will
be comprised exclusively of cash.
page F-6
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<PAGE>
DP Charters, Inc.
Notes to Financial Statements
for the years ended December 31, 1997 and 1998
and for the period ended September 30, 1999
continued
3-PROPERTY AND EXECUTIVE COMPENSATION
(a) PROPERTY:
The Company's offices and all of its records are located at 24843 Del
Prado, Suite 318, Dana Point, California 92629.
(b) EXECUTIVE COMPENSATION:
Since inception, the Company has paid no cash compensation to its
officers or directors. Officers of the Company will be reimbursed for
out-of-pocket expenses and may be compensated for the time they devote
to the Company. In addition, Officers may receive compensation for
services performed on behalf of the Company. The terms of any such
compensation will be determined on the basis of the nature and extent
of the services which may be required and will be no less favorable to
the Company than the charges for similar services made by independent
third parties who are similarly qualified. No officer or director is
required to make any specific amount or percentage of his business
time available to the Company.
5-STOCKHOLDERS' EQUITY.
The Company is authorized to issue 100,000,000 shares of common stock
having a par value of $0.001. In October 1997, 20,000,000 shares of Common
Stock, were issued in exchange for organizational costs which were valued
by management at a total of $20,000. In 1997 and 1998, 6,400,000 shares of
Common Stock, were issued in exchange for cash in the amount of $200,000.
In January 1999, 6,000 shares of Common Stock, were issued in exchange for
cash in the amount of $600. In April 1999, 1,250,000 shares of Common
Stock, were issued in exchange for cash in the amount of $12,500.
page F-7
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