UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
- ----------- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
___________ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 333-63063
THE LIVING CARD COMPANY, INC.
(Exact Name of small business issuer as specified in its charter)
Nevada 87-0583192
(State or other jurisdiction of (IRS Employer ID Number)
incorporation or organization)
1174 East 2700 South, #16, Salt Lake City, Utah 84106
(Address of principal executive offices)
(801) 485-0430
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or 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 XX NO __
---
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
8,000,000 Shares as of the date of this report.
Transitional Small Business Disclosure Format (check one): YES_____ NO XX
-----
<PAGE>
THE LIVING CARD COMPANY, INC.
Form 10-QSB for the Quarter ended March 31, 1999
Table of Contents
Part I - Financial Information Page
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis or Plan of Operation 8
Part II - Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities and Use of Proceeds 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
2
<PAGE>
Item 1. Financial Statements
LIVING CARD COMPANY, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
------
March 31, June 30,
1999 1998
------------- -------------
(Unaudited)
CURRENT ASSETS
Cash $ 1,911 $ 26,586
Accounts receivable 3,555 -
Inventory 38,515 -
------------- -------------
Total Current Assets 43,981 26,586
------------- -------------
TOTAL ASSETS $ 43,981 $ 26,586
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
-----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 18,966 $ 3,400
Note payable - related party 80,000 25,000
------------- -------------
Total Current Liabilities 98,966 28,400
------------- -------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: $0.01 par value, 5,000,000
shares authorized, no shares issued and
outstanding - -
Common stock: $0.001 par value, 20,000,000
shares authorized; 6,000,000 shares issued
and outstanding 6,000 6,000
Additional paid-in capital 14,006 4,006
Deficit accumulated during the development
stage (74,991) (11,820)
------------- -------------
Total Stockholders' Equity (Deficit) (54,985) (1,814)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 43,981 $ 26,586
============= =============
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
LIVING CARD COMPANY, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
From
For the For the Inception on
Nine Months Three Months May 8,
Ended Ended 1998 Through
March 31, March 31, March 31,
1999 1999 1999
------------- ------------- -------------
<S> <C> <C> <C>
REVENUES $ 1,893 $ 358 $ 1,893
COST OF SALES 1,535 290 1,535
------------- ------------- -------------
GROSS MARGIN 358 68 358
------------- ------------- -------------
EXPENSES
Bad debt expense 2,187 1,230 2,187
Selling, general and administrative 61,464 48,002 73,284
------------- ------------- -------------
Total Expenses 63,651 49,232 75,471
------------- ------------- -------------
OPERATING LOSS (63,293) (49,164) (75,113)
------------- ------------- -------------
OTHER INCOME
Interest income 122 - 122
------------- ------------- -------------
Total Other Income 122 - 122
------------- ------------- -------------
NET LOSS $ (63,171) $ (49,164) $ (74,991)
============= ============= =============
BASIC LOSS PER SHARE $ (0.01) $ (0.01)
============= =============
BASIC WEIGHTED AVERAGE SHARES 6,000,000 6,000,000
============= =============
The accompanying notes are an integral part of these financial statements.
4
</TABLE>
<PAGE>
LIVING CARD COMPANY, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
From Inception on May 8, 1998 through March 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Balance at inception on
May 8, 1998 - $ - $ - $ -
Issuance of 6,000,000 shares
of common stock for cash at
approximately $0.001 per share 6,000,000 6,000 (1,000) -
Contributed capital - - 5,006 -
Net loss from inception on
May 8, 1998 through
June 30, 1998 - - - (11,820)
------------- ------------- ------------- -------------
Balance, June 30, 1998 6,000,000 6,000 4,006 (11,820)
Contributed capital (unaudited) - - 10,000 -
Net loss from July 1, 1998
through March 31, 1999
(unaudited) - - - (63,171)
------------- ------------- ------------- -------------
Balance, March 31, 1999
(unaudited) 6,000,000 $ 6,000 $ 14,006 $ (74,991)
============= ============= ============= =============
The accompanying notes are an integral part of these financial statements,
5
</TABLE>
<PAGE>
LIVING CARD COMPANY, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
From
For the For the Inception on
Nine Months Three Months May 8,
Ended Ended 1998 Through
March 31, March 31, March 31,
1999 1999 1999
------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (63,171) $ (49,164) $ (74,991)
Adjustments to reconcile net loss in
operating activities:
Allowance for bad debt 2,187 1,230 2,187
Changes in operating assets and liabilities:
Increase in accounts payable and accounts
payable - related party 15,565 1,227 18,965
(Increase) in accounts receivable (5,742) (4,062) (5,742)
(Increase) in inventory (38,514) (2,570) (38,514)
------------- ------------- -------------
Net Cash Used by Operating Activities (89,675) (53,339) (98,095)
------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Note payable related party 55,000 55,000 80,000
Common stock issued for cash - - 5,000
Additional capital contributed 10,000 - 15,006
------------- ------------- -------------
Net Cash Provided by Financing Activities 65,000 55,000 100,006
------------- ------------- -------------
NET INCREASE (DECREASE) IN CASH (24,675) 1,661 1,911
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 26,586 330 -
------------- ------------- -------------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 1,911 $ 1,911 $ 1,911
============= ============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
6
</TABLE>
<PAGE>
LIVING CARD COMPANY, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 1999 (Unaudited) and June 30, 1998
NOTE - 1 CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at March 31, 1999 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with general accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's June 30, 1998 audited
financial statements. The results of operations for the periods ended March
31, 1999 are not necessarily indicative of the operating results for the full
year.
7
<PAGE>
Part I
Item 2
Management's Discussion and Analysis or Plan of Operations
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the
Company or management as well as assumptions made by and information currently
available to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view
of the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered
in light of the accompanying meaningful cautionary statements herein.
(2) Plan of Operations
The Living Card Company, Inc. (the "Company") was organized as a Nevada
corporation on May 8, 1998, to engage in the creation, development and
marketing of unique, educational and low-cost "garden" greeting cards. Upon
organization, the Company's officers and directors, John F. Lund and R. Blair
Lund, transferred to the Company all of their rights to certain self-contained
greeting cards which were designed, created and developed by them over the
preceding two years. The officers also contributed capital to the Company,
for the purpose of further developing a unique line of "garden" greeting cards
with a variety of plants or flowers in a package which can be shipped via U.S.
mail.
The Company has completed the development of a line of products, produced
an initial inventory of products, and begun marketing efforts. The Company's
plan of operations has been, and continues to be, to develop a niche for its
unique products in the greeting card industry, through the establishment of a
network of distributors throughout the United States, and by the marketing and
distribution of its products to grocery stores, gift and specialty stores and
other retail stores. To achieve these objectives, shortly following
organization, the Company began efforts to raise capital through a public
offering pursuant to Form SB-1, to provide the Company with operating capital
to fund the further development, production and marketing of its products.
The offering, which was declared effective on April 22, 1999, or after the
fiscal quarter covered by this report, was completed in the beginning of July,
1999, resulting the sale of a total of 2,000,000 shares of common stock, for
gross proceeds of $200,000 and net proceeds after offering costs, of
approximately $168,000.
As indicated, the Company's plan of operations over the next year, is to
actively market its line of "garden" greeting cards in the United States and
Canada. As planned, the Company hopes to accomplish this objective through
(a) continued efforts to establish a network of
8
<PAGE>
qualified distributors in the United States and Canada, which are able to
place the Company's product line in grocery stores, gift and specialty stores
and other retail operations; (b) the direct marketing of the Company's product
line through various retail markets, including convenience stores, fundraising
efforts, gift and specialty stores and direct sale through a toll-free number
and via a Company website. As sales of the Company's existing product line
increase, the Company also plans to develop additional "garden" greeting card
products.
The Company has initially established a contractual relationship with a
number of distributors involved in marketing products in this industry in the
United States and Canada. The Company will seek to enter into additional
distributor arrangements with other carefully selected distributors in the
industry, over the next several months.
The Company has required more capital than anticipated for necessary
start-up costs, and it may be anticipated that additional capital will be
necessary before the Company's operations become profitable, if ever. The
Company has limited capital, even after its public offering, and there can be
no assurance the Company will be able to satisfy its cash requirements over
the next six months, unless the Company is able to achieve profits from
operations, or the Company is able to raise additional capital. If the
Company does not achieve profitable operations, of which there can be no
assurance, the Company may be required to raise additional debt or equity
capital to continue operations. There can be no assurance the Company will be
able to raise additional capital when needed, or on terms favorable to the
Company.
The Company plans to develop additional products over the next twelve
months, but does not anticipate that the development of such products will
involve substantial expense or effort by the Company. Similarly, the Company
does not anticipate that it will be required to make any significant
expenditures of equipment, or any significant changes in overhead or
employees.
(3) Results of Operations
During the quarter and the nine months ended March 31, 1999, the Company
had expenses of $49,232 and $63,651, respectively, resulting in net losses of
$49,164 and $63,171, respectively. The Company had nominal revenues of $358
for the quarter ended March 31, 1999, and revenues of $1,893 for the nine
months ended March 31, 1999. The Company has had total losses since
inception of $74,991. While a large part of the Company's losses may be
attributed to an absence of revenue, and expenses incurred in the start-up
stage since inception on May 8, 1998, there can be no assurance the Company
will not continue to experience similar losses over the next several months.
(4) Liquidity and Capital Resources
At March 31, 1999, the Company had total assets of $43,981, and total
liabilities of $98,966, or a stockholders' deficit of $54,985. Current
assets as of March 31, 1999 consist of cash in the amount of $1,911; accounts
receivable in the amount of $3,555; and inventory in the amount of $38,515.
Current liabilities total $98,966, including accounts payable ($18,966), and a
note payable to an officer ($80,000), which has subsequently been repaid
(after the quarter ended March 31, 1999), from offering proceeds.
9
<PAGE>
Part II - Other Information
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities and Use of Proceeds
None.
Item 3 - Defaults on Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings of
shareholders
during the reporting period.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
THE LIVING CARD COMPANY, INC.
November 5, 1999 /s/ John F. Lund
-----------------------------
John F. Lund
Principal Executive Officer
THE LIVING CARD COMPANY, INC.
November 5, 1999 /s/ R. Blair Lund
-----------------------------
R. Blair Lund
Secretary/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,911
<SECURITIES> 0
<RECEIVABLES> 3,555
<ALLOWANCES> 0
<INVENTORY> 38,515
<CURRENT-ASSETS> 43,981
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 43,981
<CURRENT-LIABILITIES> 98,966
<BONDS> 0
0
0
<COMMON> 6,000
<OTHER-SE> (60,985)
<TOTAL-LIABILITY-AND-EQUITY> 43,981
<SALES> 1,893
<TOTAL-REVENUES> 2,015
<CGS> 1,535
<TOTAL-COSTS> 1,535
<OTHER-EXPENSES> 63,651
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (63,171)
<INCOME-TAX> 0
<INCOME-CONTINUING> (63,171)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (63,171)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
