<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarter Ended: July 31, 1999
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Transition Period from _____________ to ____________
Commission File Number 0-25449
-------
PPI CAPITAL GROUP, INC.
----------------------------------------------
(Name of Small Business Issuer in its charter)
UTAH 87-0401453
- ------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
1661 Lakeview Circle, Ogden, Utah 84403
------------------------------------------------------
(Address of principal executive offices and Zip Code)
(801) 399-3632
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
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.
(1) Yes X No (2) Yes X No
--- --- --- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, Par Value $0.001 1,869,081
- -------------------------------- ----------------------------
Title of Class Number of Shares Outstanding
as of July 31, 1999
<PAGE>
<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PPI CAPITAL GROUP, INC.
FINANCIAL STATEMENTS
(UNAUDITED)
The financial statements included herein have been prepared by the
Company, 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.
However, in the opinion of management, all adjustments (which include only
normal recurring accruals) necessary to present fairly the financial position
and results of operations for the periods presented have been made. These
financial statements should be read in conjunction with the accompanying
notes, and with the historical financial information of the Company.
<PAGE>
<PAGE> 3
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
July 31, 1999 and 1998
(UNAUDITED)
ASSETS
1999 1998
---------- ----------
Current Assets
Cash $ 24 $ 178
---------- ----------
Fixed Assets 0 0
---------- ----------
Other Assets 0 0
---------- ----------
TOTAL ASSETS $ 24 $ 178
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
1999 1998
---------- ----------
Current Liabilities
Accrued Interest $ 3,830 $ 22
---------- ----------
Long-term Liabilities Officers' Loans 72,791 3,485
---------- ----------
Total Liabilities 76,621 3,507
---------- ----------
Stockholders' Equity:
Common stock, $.001 par value; authorized
200,000,000 shares; 1,869,081 shares
issued and outstanding 1,869 1,869
Capital Paid in Excess of Par Value 68,223 68,223
Accumulated deficit during the
development stage (146,689) (73,421)
---------- ----------
Total stockholders' Equity (Deficit) (76,597) (3,329)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 24 $ 178
========== ==========
See accountant's report and accompanying notes
<PAGE>
<PAGE> 4
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 1999 AND 1998,
AND THE PERIOD FROM INCEPTION OCTOBER 28, 1983 TO JULY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Inception
Three Months ended Nine Months ended Oct. 28, 1983
July 31, July 31, to
1999 1998 1999 1998 July 31, 1999
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0 $ 0 $ 66,249
---------- ---------- ---------- ---------- ----------
COST AND OPERATING EXPENSES 14,473 3,307 53,682 3,307 230,204
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS (14,473) (3,307) (53,682) (3,307) (163,955)
---------- ---------- ---------- ---------- ----------
OTHER INCOME (EXPENSES)
Other Income 0 0 0 0 1,250
Interest Expenses (1,666) (22) (3,544) (22) (3,830)
---------- ---------- ---------- ---------- ----------
Total Other Income (Expenses) (1,666) (22) (3,544) (22) (2,580)
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE TAXES (16,139) (3,329) (57,226) (3,329) (166,535)
PROVISION FOR INCOME TAXES 0 0 0 0 0
---------- ---------- ---------- ---------- ----------
NET (LOSS) BEFORE EXTRAORDINARY ITEM (16,139) (3,329) (57,226) (3,329) (166,535)
EXTRAORDINARY ITEM - LIQUIDATION 0 0 0 0 81,209
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) (16,139) (3,329) (57,226) (3,329) (85,326)
ACCUMULATED DEFICITS
BEGINNING OF PERIOD(S) (130,550) (70,092) (89,463) (70,092) 0
Adjustments -
Acquisition of Subsidiary 0 0 0 0 (38,146)
Issuance of stocks in lieu of salaries,
services and consultants 0 0 0 0 (23,217)
---------- ---------- ---------- ---------- ----------
ENDING OF PERIOD(S) $ (146,689) $ (73,421) $ (146,689) $ (73,421) $ (146,689)
========== ========== ========== ========== ==========
NET LOSS PER SHARE $ (.009) $ (.002) $ (.032) $ (.002)
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 1,869,081 1,869,081 1,869,081 1,869,081
========== ========== ========== ==========
</TABLE>
See accountant's report and accompanying notes
<PAGE>
<PAGE> 5
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED JULY 31, 1999 AND 1998,
AND THE PERIOD FROM INCEPTION OCTOBER 28, 1983 TO JULY 31, 1999
(UNAUDITED)
Inception
Oct. 28, 1983
July 31, to
1999 1998 July 31, 1999
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (57,226) $ (3,329) $ (85,326)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Extraordinary item - Liquidation 0 0 (81,209)
Increase in Accounts Payable (600) 0 0
Increase in Accrued Interest 3,544 22 3,830
---------- ---------- ----------
Net cash (used) by
operating activities (54,282) (3,307) (162,705)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Subsidiary 0 0 (38,146)
Liquidation of PPLI 0 0 81,209
---------- ---------- ----------
Net cash provided by
investing activities 0 0 43,063
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of common stocks 0 0 46,875
Net Proceeds from Officers' Loan 53,056 3,485 72,791
---------- ---------- ----------
Net cash provided by
financing activities 53,056 3,485 119,666
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH (1,226) 178 24
CASH AT BEGINNING OF PERIOD(S) 1,250 0 0
---------- ---------- ----------
CASH AT END OF PERIOD(S) $ 24 $ 178 $ 24
========== ========== ==========
SUPPLEMENTAL DISCLOSURE:
Interest paid $ 0 $ 0 $ 0
========== ========== ==========
Taxes paid $ 0 $ 0 $ 0
========== ========== ==========
See accountant's report and accompanying notes
<PAGE>
<PAGE> 6
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
PPI Capital Group, Inc., formerly known as Pain Prevention, Inc., (the
"Company") was incorporated under the laws of the state of Utah on October
28, 1983. The Company elected the fiscal year ended on October 31st.
The Company had been engaged in the business of contracting for the providing
psychological services and counseling to employees of corporations. Effective
November 30, 1989, the Company discontinued all operations. Presently, the
Company has no operations.
The Company is considered a development stage company as defined under
Financial Accounting Standards Board Statement No. 7.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company uses the accrual basis of accounting for financial reporting, in
accordance with generally accepted accounting principles.
Use of Estimates
- ----------------
The preparation of the accompanying financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that directly affect the results of reported
assets, liabilities, revenues and expenses. Actual results may differ from
these estimates.
Statement of Cash Flows
- -----------------------
The Company prepares its statements of cash flows using the indirect method
as defined under Financial Accounting Standards Board Statement No. 95. For
purposes of the statements of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents.
Revenue Recognition
- -------------------
The Company did not conduct any business operations since March 31, 1989, and
consequently, has not generated any operating revenue.
Fixed Assets
- ------------
As of July 31, 1999, the Company does not maintain or control any fixed
assets.
Income Taxes
- ------------
The Company accounts income taxes in accordance with Financial Accounting
standards Board Statement No. 109.
NOTE 3 - NOTE PAYABLE-RELATED PARTY
The Company had unsecured notes payable to an officer/stockholder. As of July
31, 1999, the outstanding balance was $72,791 plus accrued interest of
$3,830. The borrowing are due on demand and bear interest at ten percent per
annum.
<PAGE> 7
PPI CAPITAL GROUP, INC.
(FKA PAIN PREVENTION, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 4 - GOING CONCERN
The accompanying financial statements are presented on the basis that the
Company will continue as a going concern. Going concern contemplates the
realization of assets and the satisfaction of liabilities in the normal
course of business over a reasonable length of time. As shown in the
accompanying financial statements, the Company has incurred net losses of
$146,689 since inception, and as of July 31, 1999, the Company has a net
worth deficit $76,597. Furthermore, the Company has not generated sufficient
revenue to cover its operation costs.
Management intends to seek, investigate, and, if warranted, effect a business
combination with an existing, unidentified privately held company or entity,
in the interim, it has committed to meeting the Company's minimal operating
expenses. The Company continued existence depends on its ability to meet its
financing requirements and success of its future operations. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
NOTE 5 - YEAR 2000
The year 2000 issue concerns the ability of data sensitive software to
properly recognize the year 2000 in calculating and processing computer
system information. The Company has no hardware or software. The Company is
silent as to this issue.
<PAGE>
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Item 2. Management's Discussion and Analysis or Plan of Operation
Overview
- --------
The Registrant is considered a development stage company with no assets
or capital and with no operations or income since approximately 1989. The
costs and expenses associated with the preparation and filing of this
registration statement and other operations of the Registrant have been paid
for by shareholders of the Registrant, specifically Mark A. Scharmann (see
Item 4, Security Ownership of Certain Beneficial Owners and Management). It
is anticipated that the Registrant will require only nominal capital to
maintain the corporate viability of the Registrant and necessary funds will
most likely be provided by the Registrant's existing shareholders or its
officers and directors in the immediate future.
In May 1999, the Registrant entered into a master promissory note with
its President to loan the Registrant up to $120,000 for use as working
capital. The master promissory note bears interest and at 10% per annum and
supercedes previous notes issued by the Registrant to its President. At July
31, 1999, the master promissory note incorporated $76,621 in principle and
accrued interest. Other than the balance of funds available under master
promissory note the Registrant has no other financing means in place and
unless the Registrant is able to facilitate an acquisition of or merger with
an operating business or is able to obtain significant outside financing,
there is substantial doubt about the Registrant's ability to continue as a
going concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Registrant until such time as the
Registrant successfully completes an acquisition or merger. At that time,
management will evaluate the possible effects of inflation on the Registrant
as it relates to its business and operations following a successful
acquisition or merger.
Forward-Looking Statements
- --------------------------
This Form 10-SB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 321E of
the Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-SB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
business strategy, expansion and growth of the Company's business and
operations, and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company
in light of its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual
results or developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, general
economic market and business conditions; the business opportunities (or lack
thereof) that may be presented to and pursued by the Company; changes in laws
or regulation; and other factors, most of which are beyond the control of the
<PAGE> 9
Company. Consequently, all of the forward-looking statements made in this
Form 10-SB are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or
operations.
Plan of Operation
- -----------------
During the next twelve months, the Registrant's officers and directors
will contact business brokers, consultants, and other business professionals
in an effort to actively seek out and investigate possible business
opportunities with the intent to acquire or merge with one or more business
ventures. In its search for business opportunities, management will follow
the procedures outlined in Item 1 above. Because the Registrant lacks funds,
it may be necessary for the officers and directors to either advance funds to
the Registrant or to accrue expenses until such time as a successful business
consolidation can be made. Management intends to hold expenses to a minimum
and to obtain services on a contingency basis when possible. The Registrant's
directors may receive compensation for services provided to the Company until
such time as an acquisition or merger can be accomplished. However, if the
Registrant engages outside advisors or consultants in its search for business
opportunities, it may be necessary for the Registrant to attempt to raise
additional funds. As of the date hereof, the Registrant has not made any
arrangements or definitive agreements to use outside advisors or consultants
or to raise any capital.
In the event the Registrant does need to raise capital most likely the
only method available to the Registrant would be the private sale of its
securities. It is unlikely that it could make a public sale of securities or
be able to borrow any significant sum from either a commercial or private
lender. There can be no assurance that the Registrant will be able to obtain
additional funding when and if needed, or that such funding, if available,
can be obtained on terms acceptable to the Registrant.
The Registrant does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is confident that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
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.
<PAGE> 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
---------
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K.
--------------------
None.
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.
PPI CAPITAL GROUP, INC.
[Registrant]
Dated: October 18, 1999 By /S/ Mark A. Scharmann, President
and Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> JUL-31-1999
<CASH> 24
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 24
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 24
<CURRENT-LIABILITIES> 3,830
<BONDS> 0
0
0
<COMMON> 70,092
<OTHER-SE> (146,689)
<TOTAL-LIABILITY-AND-EQUITY> 24
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 53,682
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,544
<INCOME-PRETAX> (57,226)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (57,226)
<EPS-BASIC> (.032)
<EPS-DILUTED> (.032)
</TABLE>
