SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period ended: October 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-21025
HDF, INC.
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(Exact name of small business issuer as specified in its charter)
Colorado 84-1455320
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1050 17th Street, Suite 1700, Denver, Colorado 80265
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(Address of principal executive offices)
(303) 292-3883
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(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the 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___ No_X_
As of October 31, 1998, 3,000,000 shares of common stock were outstanding.
Transitional Small Business Disclosure Format: Yes_____ No X
<PAGE>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements.
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For financial information, please see the financial statements and the
notes thereto, attached hereto and incorporated herein by this reference.
The financial statements have been prepared by HDF, Inc. without audit
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted as allowed by such rules and regulations, and
management believes that the disclosures are adequate to make the information
presented not misleading. These financial statements include all of the
adjustments which, in the opinion of management, are necessary to a fair
presentation of financial position and results of operations. All such
adjustments are of a normal and recurring nature. These financial statements
should be read in conjunction with the audited financial statements at April 30,
1998, included in the Company's Form 10-SB.
Item 2. Management's Discussion and Analysis or Plan of Operation.
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Results of Operations
Plan of Operation. HDF, Inc. (the "Company") was organized under the laws
of the State of Colorado to engage in any lawful business. The Company was
formed for the purpose of creating a vehicle to obtain capital to take advantage
of business opportunities that may have potential for profit. Management of the
Company has unlimited discretion in determining the business activities in which
the Company will become engaged. Such companies are commonly referred to as
"blind pool/blank check" companies. There is and can be no assurance that the
Company will be able to acquire an interest in any such opportunities that may
exist or that any activity of the Company, even after any such acquisition, will
be profitable.
The Company has generated no revenues from its operations and has been a
development stage company since inception. Since the Company has not generated
revenues and has never been in a profitable position, it operates with minimal
overhead.
During the period of this report, the Company has not engaged in any
preliminary efforts intended to identify any possible acquisitions nor entered
into a letter of intent concerning any business opportunity.
For the current fiscal year, the Company anticipates incurring a loss as a
result of organizational expenses, expenses associated with registration under
the Exchange Act and expenses associated with locating and evaluating
acquisition candidates. The Company anticipates that until a business
combination is completed with an acquisition candidate, it will not generate
revenues other than interest income, and may continue to operate at a loss after
completing a business combination, depending upon the performance of the
acquired business.
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<PAGE>
Liquidity and Capital Resources
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholders' equity other than the receipt of net cash proceeds in the amount
of $1,500 from the sale of stock to its three existing shareholders in fiscal
1997. Consequently, the Company's balance reflects current assets of $475 in the
form of cash, total assets of $475 and current liabilities of $1,434.
The Company cannot predict to what extent its liquidity and capital
resources will be diminished prior to the consummation of a business combination
or whether its capital will be further depleted by the operating losses (if any)
of the business entity which the Company may eventually acquire.
The Company believes that its existing capital will be insufficient to meet
the Company's cash needs for the next 12 months or to complete a business
transaction. The sole executive officer and director of the Company has advised
that he will pay certain costs and expenses of the Company from his personal
funds as interest free loans. There has been no specific agreement upon a dollar
cap of any such loans. Further, the Company's sole executive officer and
director recognizes that the only opportunity to have these loans repaid will be
from a prospective merger or acquisition candidate and has agreed that the
repayment of any loans made on behalf of the Company will not impede, or be made
conditional in any manner, to consummation of a proposed transaction. If the
prospective merger or acquisition candidate has insufficient capital with which
to repay any such loans or advances, or does not want to use its capital to
repay any such loans or advances, the Company's sole executive officer and
director may be required to convert such loans or advances into stock. The
Company's sole executive officer and director may under such circumstances agree
to convert any such advances or loans into stock in whole or in part rather than
being repaid by the acquisition candidate. Further, the Company's sole executive
officer and director may desire to convert such advances or loans into stock,
even if the prospective merger or acquisition candidate is willing to repay such
loans or advances, in which case the equity ownership of other shareholders
would be diluted. Once a business combination is completed, the Company's needs
for additional financing are likely to increase substantially.
Irrespective of whether the Company's cash assets prove to be inadequate to
meet the Company's operational needs, the Company might seek to compensate
providers of services by issuances of stock in lieu of cash.
Year 2000 Issues
"Year 2000 problems" result primarily from the inability of some computer
software to properly store, recall or use data after December 31, 1999. These
problems may affect many computers and other devices that contain imbedded
computer chips. The Company's operations, however, do not rely extensively on
information technology ("IT") systems. The IT software and hardware systems the
Company operates are all publicly available, pre-packaged systems that are
readily replaceable with other functionally similar systems. Accordingly, the
Company does not believe that it will be materially affected by Year 2000
problems in its IT software and hardware systems.
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<PAGE>
The Company relies on non-IT systems that may suffer from Year 2000 problems
including telephone systems and facsimile and other office machines. Moreover,
the Company relies on third-parties that may suffer from Year 2000 problems that
could affect the Company's operations, including banks, and utilities. In light
of the Company's substantially reduced operations, the Company does not believe
that such non-IT systems or third-party Year 2000 problems will affect the
Company in a manner that is different or more substantial than such problems
affect other similarly situated companies generally. Consequently, the Company
does not currently intend to conduct a readiness assessment of Year 2000
problems or to develop a detailed contingency plan with respect to Year 2000
problems that may affect the Company's IT and non-IT systems or third-parties.
The foregoing is a AYear 2000 Readiness Disclosure@ within the meaning of the
Year 2000 Information and Readiness Disclosure Act of 1998.
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<PAGE>
HDF, Inc.
(A Development Stage Company)
Balance Sheet
October 31, 1998
Unaudited
Assets
Current assets:
Cash $475
----
Total current assets $475
$475
====
Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable, trade $1,434
Total current liabilities $1,434
Stockholder's equity:
Preferred stock; 10,000 shares authorized; $0.001 par
value; none issued or outstanding
Common stock, 20,000,000 shares authorized, $0.001 par
value; 3,000,000 shares issued and outstanding 3,000
Deficit accumulated during development stage (3,959)
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Total shareholders' deficit (959)
----
$475
====
See accompanying notes to these financial statement
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<PAGE>
<TABLE>
<CAPTION>
HDF, Inc.
(A Development Stage Compny)
Statements of Operations
For the peiods ending October 31,
(Unaudited)
Inception
(April 21,
1997)
Three Months Ended Six Months Ended Through
1998 1997 1998 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Costs and expenses:
General and administrative $ 1,296 $ 0 $ 2,474 $ 1,500 $ 3,974
Loss from operations (1,296) 0 (2,474) (1,500) (3,974)
=========== =========== =========== =========== ===========
Interest income 4 0 13 2 15
=========== =========== =========== =========== ===========
Net (Loss) (1,292) 0 (2,461) (1,498) (3,959)
=========== =========== =========== =========== ===========
Net (Loss) per share ($ 0.00) $ 0.00 ($ 0.00) ($ 0.00) ($ 0.00)
=========== =========== =========== =========== ===========
Weighted average shares outstanding 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000
=========== =========== =========== =========== ===========
See accompanying notes to these financial statement
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<PAGE>
HDF, Inc.
(A Development Stage Company)
Statements of Cash Flows
For the Periods Ending October 31
(Unaudited)
Inception
(April 21,
Six Months Ending 1997)
Through
1998 1997 1998
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Cash flows from operating activities:
Net income (loss) ($2,461) ($1,498) ($3,959)
Adjustments to reconcile net income to
net cash provided by operating activities
Services provided for common stock 1,500 1,500
Net cash provided by (used in) operationg
activities (2,461) 2 (2,459)
Changes in assets and liabilites:
Increase (decrease) in accounts payable
and accrued expenses 1,434 0 1,434
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Total adjustments 1,434 0 1,434
Net cash (used in) operating activities (1,027) 2 (1,025)
Cash flows from financing activities:
Proceeds from sale of common stock 250 1,500
------- -------
Net cash (used in) investing activities 250 0 1,500
Increase (decrease) in cash (777) 2 475
Cash and cash equivalents, beginning of
the period 1,252 1,250 0
Cash and cash equivalents, end of the period $ 475 $ 1,252 $ 475
======= ======= =======
See accompanying notes to these financial statement
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</TABLE>
<PAGE>
HDF, Inc
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1.Basis of Presentation
In the opinion of management, all adjustments, consisting of normal recurring
accruals, have been made that are necessary for a fair presentation of the
financial position of the Company at October 31, 1998 and the results of
operations for the three month period and six month periods ended October 31,
1998 and 1997 and the statement of cash flows for the six months ended October
31, 1998 and 1997 and the statements of operations and cash flows cumulative
since inception to October 31, 1998. Quarterly results are not necessarily
indicative of the expected annual results. For a more complete understanding of
the Company's operations and financial position, reference is made to the
financial statements of the Company and related notes thereto, filed with the
Company's annual report on Form 10-KSB for the year ended April 30, 1998,
previously filed with the U.S. Securities and Exchange Commission.
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<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
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There are no pending legal proceedings, and the Company is not aware of any
threatened legal proceedings, to which the Company is a party or to which its
property is subject.
Item 2. Changes in Securities.
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(a) There have been no material modifications in any of the instruments
defining the rights of the holders of any of the Company's registered
securities.
(b) None of the rights evidenced by any class of the Company's registered
securities have been materially limited or qualified by the issuance or
modification of any other class of the Company's securities.
Item 3. Defaults Upon Senior Securities.
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(Not applicable)
Item 4. Submission of Matters to a Vote of Security Holders.
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(Not applicable)
Item 5. Other Information.
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(Not applicable)
Item 6. Exhibits and Reports on Form 8-K.
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(a) Exhibits
No exhibits as set forth in Regulation SB, are considered necessary for
this filing.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for which this report
is filed.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
as amended, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HDF, INC.
Date: August 10, 1999 /s/ Henry F. Schlueter
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Henry F. Schlueter, President, Secretary,
Treasurer and Director
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-END> OCT-31-1998
<CASH> 475
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 475
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 475
<CURRENT-LIABILITIES> 1,434
<BONDS> 0
0
0
<COMMON> 3,000
<OTHER-SE> (3,959)
<TOTAL-LIABILITY-AND-EQUITY> 475
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 2,474
<OTHER-EXPENSES> (13)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,461)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,461)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,461)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
