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 June 30, 2000
AND
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-27131
DP CHARTERS, INC.
(Exact name of Registrant as specified in its charter)
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 June 30, 2000, the number of shares outstanding of the Registrant's Common
Stock was 27,656,000.
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PART I: FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS.
Attached hereto and incorporated herein by this reference are consolidated
unaudited financial statements (under cover of Exhibit 00-FQ1) for the three
months ended June 30, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
(A) STATUS OF OUR FORM 10-SB. We 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.
(B) HISTORY AND RENEWAL OF OUR BUSINESS PLAN. This Corporation ("the
Registrant") was duly incorporated in Nevada on December 18, 1997, as DP
Charters, Inc., with the intention of initiating a charter yacht service from
the Dana Point Harbor, Orange County, California. The Registrant later expanded
its business plan to include the organization of scuba dive tours at various
world locations.
During October, November and December of 1997, the conceptual idea of
establishing a charter boat operation in Southern California was discussed among
the Registrant's Management, and with various friends and acquaintances. The
decision to form a company to be funded by those in discussion was taken, based
upon the expressed desire of the founders to fund the Registrant initially,
pursuant to a private placement in reliance on Rule 504. The formal funding by
founders was memorialized about January of 1998.
Specifically, 20,000,000 shares were issued at par value to the Principal
Shareholder, pursuant to Section 4(2) of the Securities Act of 1933. 6,400,000
shares (with warrants) were placed among 19 accredited investors, pursuant to
Regulation D, Rule 504, promulgated by the Commission pursuant to Section 3(b)
of the 1933 Act. All warrants have expired or been cancelled and are no longer
of any further force or effect. Thereafter, in January and April 1999, 6,000
shares and 1,250,000 shares, respectively, were placed pursuant to Rule 504, in
each case to a single sophisticated and knowledgeable investor. Each of the
foregoing issuances were made, where applicable, to specific exemptions from
registration pursuant to State Law.
The Registrant had ambitious plans, at that time, to network through travel
agencies, upon observing that none of the notable competitors were so networked.
The Registrant's plans included the development of networking with firms
marketing tour packages or tour clubs and firms which could utilize the
Registrant's charter services as a value-added supplement to their Southern
California operations. Emphasis was to be placed on identifying easy access to
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Dana Point Harbor, twenty minutes from Orange County Airport, one hour from San
Diego Airport or from Los Angeles International Airport. Arrangements with Dana
Point were investigated and the feasibility of its use determined. Management
further planned to make its services known to the American Association of
Retired Persons, which organization accounts for nearly 500,000 members touring
Southern California during the off-season. Plans were made to join the Dana
Point Chamber of Commerce, which would provide a cost-free listing in the
California tourism magazine and information data-base, with circulation of just
under one million copies in six counties and automatic posting with all major
hotels throughout the State of California. Plans were made for an Internet
web-page, linked to that of the Dana Point Chamber of Commerce.
All of these intentions, and the best laid plans of Management, were
dependant, however, upon securing boats and/or participating boat owners or
providers, so that the services could be offered.
On or about March 5, 1998 and continuing through September, tentative
arrangements were reached to acquire boats from a provider in Norway, which had
acquired them in foreclosure of a lien, but had no profitable operation in which
to use them. The concept was to acquire the boats for stock, but the arrangement
called for the common stock of the Registrant's achieving acceptance for
quotation on the OTC Bulletin Board. During 1998, the Registrant paid a
consulting fee to the Norwegian group for a joint marketing, advertising and
referral program to bring northern European tourists to Southern California's
sport fishing market. During 1998 arrangements were made with scuba diving tour
group leaders in Florida and Mexico, for possible dive tours in the Florida
Keys, the Great Barrier Reef of Australia, the Island of Cozumel off the Yucatan
Peninsula of Mexico, and the seas off Egypt.
By the end of June, 1998, the Registrant's then current unaudited financial
statements, indicated a net loss from operations of $155,544.00, $102,470.00 of
which represented consulting fees directed to Norway. The Registrant's ability
to launch was yet dependent upon OTC Bulletin Board acceptance, and comments
between the NASD Staff and NASD submitting members were on-going. Delay due to
NASD Commenting period for start-up companies was not deemed unusual by
management, but shortly before the review of the last set of Comments, the NASD
changed its rules for acceptability for new applicant submitter to the effect
that the class of common stock to be quoted must have been registered under the
Securities Exchange Act of 1934 Act, or the Registrant must have made an
offering under the Securities Act of 1933, such that the applicant have a
Commission file number and actually file and remain current in filing its
financial statements with the Commission, and be accessible to the public.
Accordingly, the NASD responded to the final set of Comments by qualifying the
Registrant's common stock for quotation on the Pink Sheets, but not on the
OTCBB.
As a result of the poor timing of events, from the Registrant's point of
view, the Registrant was unable to consummate the acquisition of the boats and
was forced to abandon its original business plan. After some unsuccessful
efforts to launch operations, the original business plan was abandoned, on or
about May 15, 1999. From that date, until about June 30, 2000, we remained
dormant without direction as to our business plan, and concentrated on
Registering our common stock under section 12(g) of the Securities Exchange Act
of 1934.
During late June, of this year, our management began evaluating the
possibility of renewing our original business plan, to initiate a charter yacht
service from the Dana Point Harbor, Orange County, California. The Registrant
later expanded its business plan to include the organization of scuba dive tours
at various world locations, rather than to seek a business combination by way of
merger or reverse acquisition.
We 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
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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.
During late June, of this year, our management began evaluating the
possibility of renewing our original business plan, to initiate a charter yacht
service from the Dana Point Harbor, Orange County, California, and the
organization of scuba dive tours at various world locations, rather than to seek
a business combination by way of merger or reverse acquisition. A decision by
management is expected in July of this year, definitively, whether to proceed
with such renewal.
(C) PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS. This Registrant has been
pursuing either its original business plan, to initiate a charter yacht service
from the Dana Point Harbor, Orange County, California, and the organization of
scuba dive tours at various world locations, rather than to seek a business
combination by way of merger or reverse acquisition, or its default plan to seek
an acquisition partner. The decision was not timely for the reason that we must
qualify for quotation on the Over the Counter Bulletin Board ("OTCBB") before we
can either raise funds to renew our original plan or 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 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. The reason for this is its inclination to renew and
resurrect its original business plan.
The process of renewing our original business plan is not conceptually
difficult, but may be somewhat more expensive that our original arrangements,
for the reason that the acquisition of boats may not be achievable on the terms
originally arranged. We had made tentative arrangements to acquire boats from a
provider in Norway, which had acquired them in foreclosure of a lien, but had no
profitable operation in which to use them. The concept was to acquire the boats
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for stock, but the arrangement called for the common stock of the Registrant's
achieving acceptance for quotation on the OTC Bulletin Board. It is possible
that we may be able to acquire boats for stock on substantially similar
arrangements. It is possible and forseeable that some or all cash, or secured
notes may be the only way we can acquire boats now.
During 1998, the Registrant paid a consulting fee to the Norwegian group
for a joint marketing, advertising and referral program to bring northern
European tourists to Southern California's sport fishing market. During 1998
arrangements were made with scuba diving tour group leaders in Florida and
Mexico, for possible dive tours in the Florida Keys, the Great Barrier Reef of
Australia, the Island of Cozumel off the Yucatan Peninsula of Mexico, and the
seas off Egypt. These arrangements are deemed viable for renewal.
Management had determined that to renew our business plan, we would need to
develop new supplemental funding of approximately $250,000. We are now engaged
in discussions with our existing shareholders and other investors known to
management to be regular investors in start-up ventures, to determine potential
interest in funding a renewal of our program.
(D) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The financial statements for the three months and six months ended June 30,
2000, reflect minimal changes and no substantial corporate activity. No Revenues
have been recorded. Legal and Professional expenses were incurred this quarter,
in connection with our continuing efforts to complete our 1934 act registration.
We have no other operating expenses to disclose, and none other were incurred
during the last six months. There has been no substantial change in our
financial condition or results of operations this quarter.
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PART II: OTHER INFORMATION
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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 00-FQ1: Financial Statements (Un-Audited) June 30, 2000
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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 June 30, 2000, has been signed below by
the following person on behalf of the Registrant and in the capacity and on the
June 30, 2000 indicated.
Dated: June 30, 2000
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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EXHIBIT 00-FQ1
UN-AUDITED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2000
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DP CHARTERS. INC.
BALANCE SHEET (UNAUDITED)
For the fiscal year ended December 31, 1999
And the three month period ended June 30, 2000
<TABLE>
<CAPTION>
<S> <C> <C>
June 30, December 31,
2000 1999
ASSETS
CURRENT ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . $ 996 $ 996
-----------------------------------------------------------------------------------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . 996 996
OTHER ASSETS
Accounts receivable. . . . . . . . . . . . . . . . . . 10,000 10,000
TOTAL OTHER ASSETS . . . . . . . . . . . . . . . . . . 10,000 10,000
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . $ 10,996 $ 10,996
===================================================================================
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . . $ 22,734 $ 0
Advance from shareholder . . . . . . . . . . . . . . . 10,000 10,000
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . $ 32,734 $ 10,000
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; authorized 100,000,000
shares; issued and outstanding, 27,656,000 shares,
and 27,656,000 shares respectively. . . . . . . . . 27,656 27,656
Additional Paid-In Capital . . . . . . . . . . . . . . 205,444 205,444
Accumulater Equity (Deficit) . . . . . . . . . . . . . (254,838) (232,104)
Total Stockholders' Equity . . . . . . . . . . . . . . (21,738) 996
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY . . . . . . . $ 10,996 $ 10,996
===================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
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DP CHARTERS. INC.
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT (UNAUDITED)
For the year ended December 31, 1999 and
The periods ended June 30, 1999 and 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C>
From
Inception on
December 18,
For the periods. 1997 through
ended June 30, . June 30,
2000 1999 2000
Revenues . . . . . . . . . $ 0 $ 0 $ 0
Amortization . . . . . . . 0 0 (6,000)
Organizational costs . . . 0 (16,000) (20,000)
Net Loss from Operations . (22,734) (6,325) (228,238)
Net Income (Loss). . . . . ($22,734) ($22,325) ($254,238)
======================================================================
Loss per Share . . . . . . ($0.00082) ($0.00082) ($0.00985)
======================================================================
Weighted Average
Shares Outstanding . . 27,656,000 27,342,150 25,814,915
----------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
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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 years ended December 31, 1998 and 1999
And for the six months ended June 30, 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Additional Accumulated Total Stock-
Common Par Paid-In Equity holders' Equity
Stock Value Capital (Deficit) (Deficit)
---------------------------------------------------------------------------------------------------------
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 0 0
Loss during 1997 . . . . . . . . 0 0 0 (152) 0
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 0 0
Loss during 1998 . . . . . . . . 0 0 0 (191,527) 0
Balance at December 31, 1998 . . 26,400,000 $ 26,400 $ 193,600 ($191,679) $ 28,321
Sale of Common Stock . . . . . . 6,000 6 594 (600) 0
Sale of Common Stock . . . . . . 1,250,000 1,250 11,250 $ (0) 0
Loss during 1999 . . . . . . . . 0 0 0 (39,825) 0
Balance at December 31, 1999 . . 27,656,000 $ 27,656 $ 205,444 ($232,104) $ 996
Loss during period ended
June 30, 2000 . . . . . . . 0 0 0 (22,734) 0
Balance at June 30, 2000 . . . . 27,656,000 $ 27,656 $ 205,444 ($254,838) ($21,738)
</TABLE>
The accompanying notes are an integral part of these financial statements.
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DP CHARTERS. INC.
STATEMENTS OF CASH FLOW (UNAUDITED)
For the year ended December 31, 1999 and
The periods ended June 30, 1999 and 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C>
From
Inception on
December 18,
For the periods 1997 through
ended June 30, June 30,
2000 1999 2000
------------------------------------------------------------------------------------------
Operating Activities
Net Income (Loss). . . . . . . . . . . . . . . ($22,734) ($22,325) ($254,238)
Less items not effecting cash:
shares issued for services . . . . . . . . . . 0 0 12,500
organization costs . . . . . . . . . . . . . . 0 16,000 20,000
Increase in payables . . . . . . . . . . . . . 22,734 0 22,734
Net Cash from Operations . . . . . . . . . . . -0- (6,325) (199,004)
Cash Increase (Decrease) sale of Common Stock. 0 0 200,000
Net increase (decrease) in cash. . . . . . . . -0- (6,325) 996
Beginning Cash . . . . . . . . . . . . . . . . 996 12,321 -0-
Cash as of Statement Date. . . . . . . . . . . $ 996 $ 5,996 $ 996
</TABLE>
The accompanying notes are an integral part of these financial statements.
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D P CHARTERS, INC.
(a Development Stage Company)
Notes to The Financial Statements
December 31, 1999 and the periods ended June 30, 1999 and 2000
NOTE I - Summary of Significant Accounting Policies
a. Organization
D P Charters, Inc., ("the Company") is a Nevada corporation organized on
December 18, 1997. The Company was formed to provide a charter yacht service
from the Dana Point harbor located in Dana Point, Orange County, California but
operations never commenced. It is the intent of management to raise capital in
order to secure business operations.
b. Accounting Method
The Company recognizes income and expenses on the accrual basis of accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the weighted
average number of shares outstanding at the date of the financial statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three
months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating losses
totaling approximately $231,500 that will be offset against future taxable
income. These NOL carryforwards begin to expire in the year 2012. No tax
benefit has been reported in the financial statements because the Company
believes there is a 50% or greater chance the carryforward will expire unused.
Accordingly, per FASB 109 the potential tax benefits of the loss carryforward
are offset by the valuation of the same amount.
Deferred tax assets and the valuation account is as follows at December 31, 1999
and June 30, 2000.
June 30, December 31,
2000 1999
Deferred tax asset:
NOL carrryforward $ 80,828 $ 78,710
Valuation allowance (80,828) (78,710)
---------------------------------------------------
Total 0 0
f. Organizational Costs
In 1997, the shareholders paid $20,000 in organizational costs. The Company
reimbursed the shareholders by issuing 20,000,000 shares of common stock at
$.001 par value. These costs were being amortized on a straight-line method
over a 60 month period beginning January 1, 1998, however, during January
1999 the remaining balance was written off in connection with a change in
accounting principle (See Note 5). These costs will be recovered only if the
Company is able to generate a positive cash flow from operations.
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D P CHARTERS, INC.
(a Development Stage Company)
Notes to The Financial Statements
December 31, 1999 and the periods ended June 30, 1999 and 2000
NOTE I - Summary of Significant Accounting Policies (continued)
g. Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reporting period. In these financial statements and other
assets involve extensive reliance on management's estimates. Actual results
could differ from those estimates.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is dependent upon raising
capital to continue operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. It is
management's plan to raise additional funds to begin its intended operations.
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in Financial Accounting
Standards Board Statement No. 7. It is concentrating substantially all of its
efforts in raising capital and developing its business operations in order to
generate significant revenues.
NOTE 4 - Related Party Transactions
During the first three months of 2000, during 1999 and 1998, $6,232, $10,000 and
$58,500, respectively was accrued or paid in consulting fees to a company owned
by shareholders of the Company.
During 1999, shareholders loaned the Company $13,000. The Company made payments
of $3,000 on these loans and the balance payable at December 31, 1999 is
$10,000.
During 1999, the Company advanced a shareholder $10,000. The balance of this
receivable at December 31, 1999 is $10,000.
NOTE 5 - Change in Accounting Principles
During the year ended December 31, 1999, the Company changed its method of
amortization of organizational costs in accordance with SOP 98-5 and expensed
the remaining balance. The effect of this change was to decrease net income for
the year ended December 31, 1999 by $12,000 ($0.00 per share).
NOTE 6 - Stockholders' Equity
In January 1999, the Company issued 6,000 shares of its common stock for a
subscription receivable of $600.
In April 1999, the Company issued 1,250,000 shares of its common stock for
services valued at $12,500.
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