<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: January 31, 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
- ------------------------------- --------------------------
(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 1,869,081
- -------------------------------- ----------------------------
Title of Class Number of Shares Outstanding
as of January 31, 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 SHEETS
JANUARY 31, 2000 and 1999
(UNAUDITED)
ASSETS
2000 1999
---------- ----------
Current Assets
Cash $ 0 $ 0
---------- ----------
Fixed Assets 0 0
---------- ----------
Other Assets 0 0
---------- ----------
TOTAL ASSETS $ 0 $ 0
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Cash (Overdraft) $ 216 $ 273
Accounts payable 0 2,200
Accrued Interest 7,804 961
---------- ----------
TOTAL CURRENT LIABILITIES 8,020 3,434
---------- ----------
Long-term Liabilities Officers' Loans 94,791 38,991
---------- ----------
Total Liabilities 102,811 42,425
---------- ----------
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 (172,903) (112,517)
---------- ----------
Total stockholders' Equity (Deficit) (102,811) (42,425)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 0 $ 0
========== ==========
See accountant's report and accompanying notes
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PPI CAPITAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE THREE MONTHS ENDED JANUARY 31, 2000 and 1999
AND THE PERIOD FROM INCEPTION OCTOBER 28, 1983 TO JANUARY 31, 2000
(UNAUDITED)
Inception
Three Months ended Oct. 28, 1983
January 31, to
2000 1999 Jan. 31, 2000
---------- ---------- ----------
REVENUE $ 0 $ 0 $ 66,249
---------- ---------- ----------
COST AND OPERATING EXPENSES 14,926 22,379 252,444
---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS (14,926) (22,379) (186,195)
---------- ---------- ----------
OTHER INCOME (EXPENSES)
Other Income 0 0 1,250
Interest Expenses (2,106) (675) (7,804)
---------- ---------- ----------
Total Other Income (Expenses) (2,106) (675) (6,554)
---------- ---------- ----------
INCOME (LOSS) BEFORE TAXES (17,032) (23,054) (192,749)
PROVISION FOR INCOME TAXES 0 0 0
---------- ---------- ----------
NET (LOSS) BEFORE EXTRAORDINARY ITEM (17,032) (23,054) (192,749)
EXTRAORDINARY ITEM - LIQUIDATION 0 0 81,209
---------- ---------- ----------
NET INCOME (LOSS) (17,032) (23,054) (111,540)
ACCUMULATED DEFICITS
BEGINNING OF PERIOD(S) (155,871) (89,0463 0
Adjustments -
Acquisition of Subsidiary 0 0 (38,146)
Issuance of stocks in lieu of salaries,
services and consultants 0 0 (23,217)
---------- ---------- ----------
ENDING OF PERIOD(S) $ (172,903) $ (112,517) $ (172,903)
========== ========== ==========
NET LOSS PER SHARE $ (0.01) $ (0.01)
========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 1,869,081 1,869,081
========== ==========
See accountant's report and accompanying notes
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PPI CAPITAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 31, 2000 and 1999
AND THE PERIOD FROM INCEPTION OCTOBER 28, 1983 TO JANUARY 31, 2000
(UNAUDITED)
Inception
Three Months ended Oct. 28, 1983
January 31, to
2000 1999 Jan. 31, 2000
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (17,032) $ (23,054) $ (111,540)
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) 1,600 0
Increase in Accrued Interest 2,106 675 7,804
---------- ---------- -----------
Net cash (used) by
operating activities (18,310) (20,779) (184,945)
---------- ---------- -----------
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 17,850 19,258 94,792
---------- ---------- -----------
Net cash provided by
financing activities 17,850 19,258 141,667
---------- ---------- -----------
NET INCREASE (DECREASE) IN CASH (460) (1,523) (215)
CASH AT BEGINNING OF PERIOD(S) 245 1,250 0
---------- ---------- -----------
CASH AT END OF PERIOD(S) $ (215) $ (273) $ (215)
========== ========== ===========
SUPPLEMENTAL DISCLOSURE:
Interest paid $ 0 $ 0 $ 0
========== ========== ===========
Taxes paid $ 0 $ 0 $ 0
========== ========== ===========
See accountant's report and accompanying notes
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PPI CAPITAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JANUARY 31, 2000 AND 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 January 31, 2000 and 1999, and the results of operations for three months
then ended, and for the period from inception October 28, 1983 to January 31,
2000, and cash flows for the three months ended January 31, 2000 and 1999,
and for the period from inception October 28, 1983 to January 31, 2000.
Interim results are not necessarily indicative of results from a full year.
The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain 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 January 31, 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.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JANUARY 31, 2000 AND 1999
NOTE 2 - NOTE PAYABLE-RELATED PARTY
The Company had unsecured notes payable to an officer/stockholder. As of
January 31, 2000 and 1999, the outstanding balance was $94,791 and $38,991,
respectively. The accrued interest on the note was $7,804 and $961,
respectively. The borrowings are due on demand and bear interest at ten
percent per annum.
NOTE 3 - 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
operating 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
$172,903 since inception, and as of January 31, 2000, the Company has a
working capital deficiency of $8,020 and a net worth deficit $102,811.
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.
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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 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 a shareholder 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. At January 31, 2000,
the master promissory note incorporated $94,791 in principle and $7,804 in
accrued interest. Other than the balance of funds available under master
promissory note 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 Company'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 Company until such time as the
Company successfully completes an acquisition or merger. At that time,
management will evaluate the possible effects of inflation on the Company as
it relates to its business and operations following a successful acquisition
or merger.
Forward-Looking Statements
- --------------------------
This report may include "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
Company.
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Consequently, all of the forward-looking statements made in this report 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 Company'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. Because the Company lacks working capital, it may be necessary for
the officers and directors to either advance funds to the Company 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 Company'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 Company engages
outside advisors or consultants in its search for business opportunities, 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 use outside advisors or consultants or to raise any capital.
In the event the Company does need to raise capital most likely the only
method available to the Company 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 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.
The Company 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.
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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.
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: April 3, 2000 By /S/ Mark A. Scharmann, President
and Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-2000
<PERIOD-END> JAN-31-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 8,020
<BONDS> 0
0
0
<COMMON> 70,092
<OTHER-SE> (172,903)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 14,926
<OTHER-EXPENSES> 2,106
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,106
<INCOME-PRETAX> (17,032)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,032)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
