<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: April 30, 2000
[ ] 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
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PPI CAPITAL GROUP, INC.
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(Name of Small Business Issuer in its charter)
UTAH 87-0401453
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(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
1661 Lakeview Circle, Ogden, Utah 84403
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(Address of principal executive offices and Zip Code)
(801) 399-3632
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(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 12,7679,924
-------------------------------- ----------------------------
Title of Class Number of Shares Outstanding
as of April 30, 2000
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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.
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PPI CAPITAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
April 30, 2000 and 1999
(UNAUDITED)
ASSETS
2000 1999
---------- ----------
Current Assets
Cash $ 0 $ 597
---------- ----------
Fixed Assets 0 0
---------- ----------
Other Assets 0 0
---------- ----------
TOTAL ASSETS $ 0 $ 597
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
2000 1999
---------- ----------
Current Liabilities
Cash overdraft $ 1,994 $ 0
Accrued Interest 99 2,164
---------- ----------
Total Current Liabilities 2,093 2,164
---------- ----------
Long-term Liabilities
Officers' Loans 9,550 58,891
---------- ----------
Total Liabilities 11,643 61,055
---------- ----------
Stockholders' Equity:
Common stock, $.001 par value; authorized
200,000,000 shares; 12,779,924 shares
issued and outstanding in 2000 and
1,869,081 shares in 1999 12,780 1,869
Capital Paid in Excess of Par Value 166,420 68,223
Accumulated deficit during the
development stage (190,843) (130,550)
---------- ----------
Total stockholders' Equity (Deficit) (11,643) (60,458)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 0 $ 597
========== ==========
See accompanying notes
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PPI CAPITAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 2000 AND 1999,
AND THE PERIOD FROM INCEPTION OCTOBER 28, 1983 TO APRIL 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Inception
Three Months ended Six Months ended Oct. 28, 1983
April 30, April 30, to
2000 1999 2000 1999 April 30, 2000
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0 $ 0 $ 66,249
---------- ---------- ---------- ---------- ----------
COST AND OPERATING EXPENSES 16,828 16,830 31,754 39,209 269,272
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS (16,828) (16,830) (31,754) (39,209) (203,023)
---------- ---------- ---------- ---------- ----------
OTHER INCOME (EXPENSES)
Other Income 0 0 0 0 1,250
Interest Expenses (1,112) (1,203) (3,218) (1,878) (8,916)
---------- ---------- ---------- ---------- ----------
Total Other Income (Expenses) (1,112) (1,203) (3,218) (1,878) (7,666)
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE TAXES (17,940) (18,033) (34,972) (41,087) (210,689)
PROVISION FOR INCOME TAXES 0 0 0 0 0
---------- ---------- ---------- ---------- ----------
NET (LOSS) BEFORE EXTRAORDINARY ITEM (17,940) (18,033) (34,972) (41,087) (210,689)
EXTRAORDINARY ITEM - LIQUIDATION 0 0 0 0 81,209
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) (17,940) (18,033) (34,972) (41,087) (129,480)
ACCUMULATED DEFICITS
BEGINNING OF PERIOD(S) (172,903) (112,517) (155,871) (89,463) 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) $ (190,843) $ (130,550) $ (190,843) $ (130,550) $ (190,843)
========== ========== ========== ========== ==========
NET LOSS PER SHARE $ (.002) $ (0.01) $ (.036) $ (0.02)
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 9,142,976 1,869,081 5,506,029 1,869,081
========== ========== ========== ==========
</TABLE>
See accompanying notes
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PPI CAPITAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 AND 1999,
AND THE PERIOD FROM INCEPTION OCTOBER 28, 1983 TO APRIL 30, 2000
(UNAUDITED)
Inception
Oct. 28, 1983
April 30, to
2000 1999 April 30, 2000
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (34,972) $ (41,087) $ (129,480)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Extraordinary item - Liquidation 0 0 (81,209)
Increase in Accounts Payable (3,384) (600) 0
Increase in Accrued Interest 3,218 1,878 8,916
---------- ---------- ----------
Net cash (used) by
operating activities (35,138) (39,809) (201,773)
---------- ---------- ----------
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 32,900 39,156 109,842
---------- ---------- ----------
Net cash provided by
financing activities 32,900 39,156 156,717
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH (2,238) (653) (1,993)
CASH AT BEGINNING OF PERIOD(S) 245 1,250 0
---------- ---------- ----------
CASH AT END OF PERIOD(S) $ (1,993) $ 597 $ (1,993)
========== ========== ==========
SUPPLEMENTAL DISCLOSURE:
Cash Paid for:
Interest $ 0 $ 0 $ 0
========== ========== ==========
Taxes $ 0 $ 0 $ 0
========== ========== ==========
Schedule of Noncash Investing and Financing Activities:
In March 2000, the Company converted $100,291 officers' loan plus accrued
interest of $8,817 into 10,910,843 shares of common stock.
See accompanying notes
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PPI CAPITAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Presentation of Interim Information
-----------------------------------
In the Opinion of the management of PPI Capital Group, Inc. (the Company),
the accompanying unaudited financial statements include all normal
adjustments considered necessary to present fairly the financial position as
of April 30, 2000 and 1999, and the results of operations for the three and
six months ended April 30, 2000 and 1999, and for the period from Inception
October 28, 1983 to April 30, 2000, and cash flows for the six months ended
April 30, 2000 and 1999, and for the period from inception October 28, 1983
to April 30, 2000. Interim results are not necessarily indicative of results
for a full year.
The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain certain information included in the Company's audited
financial statements and notes for fiscal year ended October 31, 1999.
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 April 30, 2000, 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 "Accounting For Income taxes" (SFAS No.
109). SFAS No. 109 requires a company to recognize deferred tax liabilities
and assets for the expected future income tax consequences of events that
have been recognized in the Company's financial statements. Under this
method, deferred tax assets and liabilities are determined based on temporary
differences between the financial carrying amounts and the tax bases of
assets and liabilities using the enacted tax rates in effect in the years in
which the temporary differences are expected to reverse.
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PPI CAPITAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2 - NOTE PAYABLE-RELATED PARTY
The Company had unsecured notes payable to an officer/stockholder. As of
April 20, 2000 and 1999, the outstanding balance was $9,550 and $58,891,
respectively. The accrued interest on the notes was $99 and $2,164,
respectively. The borrowings are due on demand and bear interest at ten
percent per annum.
NOTE 3 - COMMON STOCK TRANSACTION
On March 9, 2000, the Company converted $100,291 notes payable plus $8,817
accrued interest into 10,910,843 shares of common stock.
NOTE 4 - PROVISION FOR INCOME TAXES
No provision for income taxes was provided in the accompanying statements of
operations. As of October 31, 1999, the Company had approximately $85,779 net
operation loss carryforward to reduce future taxable income. To the extent
not utilized, the NOL carryforward will begin to expire in 2013.
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
$130,550 since inception, and as of April 30, 2000, the Company has a working
capital deficiency of $2,093 and a net worth deficit of $11,643. Furthermore,
the Company has not generated sufficient revenue to cover its operation
costs.
As disclosed in Note 3 to the financial statements, on March 9, 2000, the
Company converted notes payable fo $100,291 plus accrued interest of $8,817
into common stock. 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.
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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 Company 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 Company's operations have been paid
for by shareholders of the Company, specifically Mark A. Scharmann. It is
anticipated that the Company will require only nominal capital to maintain
the corporate viability of the Company and necessary funds will most likely
be provided by the Company's existing shareholders or its officers and
directors in the immediate future.
In May 1999, the Company entered into a master promissory note with its
President to loan the Company 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 Company to its President. On March 9, 2000, the
Company's board of directors approved the issuance of 10,910,843 shares of
the Company's common stock to Mark A. Scharmann, the President of the
Company, in exchange for the conversion of $109,108.43 in principle and
accrued interest pursuant to the terms of a Master Promissory Note between
the Company and Mr. Scharmann, dated May 1, 1999.
Prior to the conversion of the Master Promissory Note, the Company had
1,869,081 shares of its common stock issued and outstanding. After giving
effect to the issuance of the conversion shares to Mr. Scharmann, the Company
now has 12,779,924 shares of common stock issued and outstanding. The shares
issued to Mr. Scharmann constitute restricted securities issued pursuant to
section 4(2) of the Securities Act of 1933, as amended. Prior to the Master
Promissory Note conversion, Mr. Scharmann owned 1,048,082 shares of the
Registrant's common stock or approximately 56.1% of the issued and
outstanding shares. After the issuance of the conversion shares, Mr.
Scharmann now owns 93.6% of the Company's issued and outstanding shares of
common stock.
Other than the funds loaned to the Company by its principal shareholder the
Company has no other financing means in place and unless the Company 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.
On May 18, 2000, the Company executed a letter of intent to acquire 100% of
the outstanding common stock of Utilicom, Inc. (doing business as UC
Wireless), Santa Barbara, California, for newly-issued shares of capital
stock of the Company. The terms of the letter of intent and the press
release issued by the Company in connection with the proposed transaction
were filed with the Commission in a Current Report on Form 8-K, dated May 18,
2000, and are incorporated herein by this reference.
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Plan of Operation
-----------------
Because the Company lacks funds, it may be necessary for the officers and
directors to either advance funds to the Company or to accrue expenses until
such time as the acquisition of Utilicom, Inc. can be completed. Management
intends to hold expenses to a minimum and to obtain services on a contingency
basis when possible. However, if the Company engages the services of others
to assist in the proposed acquisition it may be necessary for the Company to
attempt to raise additional funds. As of the date hereof, the Company has not
made any arrangements or definitive agreements to engage the services of
others or to raise any capital.
In the event the Company does need to raise capital, most likely the most
immediate source would be loan from its principal shareholder or 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 Company 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 Company.
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.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
---------
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K.
--------------------
None.
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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: June 14, 2000 By /S/ Mark A. Scharmann, President
and Director
