UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 1999
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( ) 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 0-25541
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CIGAR KING CORPORATION
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(Exact name of registrant as specified in charter)
Nevada 91-1948357
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
825 - 1200 West 73rd Avenue
Vancouver, BC, Canada V6P 6G5
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(Address of principal executive offices) (Zip Code)
604-267-1100
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Registrant's telephone number, including area code
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(Former name, address, and fiscal year, if changed since last report)
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), Yes [X] No [ ] and ( ) has been
subject to filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.
Class Outstanding as of March 26, 2000
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Common Stock, $0.001 per share 10,535,000
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<TABLE>
<CAPTION>
INDEX
Page
Number
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<S> <C>
PART 1.
ITEM 1. Financial Statements (unaudited)......................................... 3
Balance Sheet as at December 31, 1999.................................... 4
Statement of Operations
For the three months ended December 31, 1999 and
for the three months ended December 31, 1998
and for the period from October 8, 1998 (Date
of Incorporation) to December 31, 1999.................... 5
Statement of Changes in Shareholders' Equity
For the period from October 8, 1998 (Date of
Incorporation) to December 31, 1999............................... 6
Statement of Cash Flows
For the three months ended December 31, 1999 and
for the three months ended December 31, 1998
and for the period from October 8, 1998
(Date of Incorporation) to December 31, 1999....................... 7
Notes to the Financial Statements....................................... 8
ITEM 2. Plan of Operations...................................................... 10
PART 11 Signatures.............................................................. 11
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2
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PART 1 - FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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The accompanying balance sheet of Cigar King Corporation (a development stage
company) at December 31, 1999 and the statement of operations and statement of
cash flow for the three months ended December 31, 1999, for the three months
ended December 31, 1998 and for the period from October 8, 1998 (date of
incorporation) to December 31, 1999 and the statement of stockholders' equity
for the period from October 8, 1998 (date of incorporation) to December 31, 1999
have been prepared by the Company's management and they do not include all
information and notes to the financial statements necessary for a complete
presentation of the financial position, results of operations, cash flows, and
stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the quarter ended December 31, 1999, are not necessarily
indicative of the results that can be expected for the year ending September 30,
2000.
3
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CIGAR KING CORPORATION
(A Development Stage Company)
BALANCE SHEET
December 31, 1999
(Unaudited - Prepared by Management)
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<CAPTION>
DECEMBER 31, September 30,
1999 1999
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<S> <C> <C>
ASSETS
CURRENT ASSETS
Bank $ 2,788 $ 8,024
Accounts receivable 128 128
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2,916 8,152
OTHER ASSETS
Rights to Cigar King concept - Note 3 50,000 50,000
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$ 52,916 $ 58,152
======== ========
LIABILITIES
Accounts payable and accrued liabilities $ 3,250 $ 4,500
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STOCKHOLDERS' EQUITY
Common stock
200,000,000 shares authorized, at $0.001 par
value, 10,535,000 shares issued and outstanding 10,535 10,535
Capital in excess of par value 67,215 67,215
Deficit accumulated during the development stage (28,084) (24,098)
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Total Stockholders' Equity 49,666 53,652
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$ 52,916 $ 58,152
======== ========
</TABLE>
The accompanying notes are an integral part of these
unaudited financial statements.
4
<PAGE>
CIGAR KING CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the three months ended December 31, 1999, for the three months
December 31, 1998 and for the period from
October 8, 1998 (Date of Inception) to December 31, 1999
(Unaudited - Prepared by Management)
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<CAPTION>
FOR THE THREE For the Three From Inception
MONTHS ENDED Months Ended To
DECEMBER 31, December 31, December 31,
1999 1998 1999
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<S> <C> <C> <C>
SALES $ -- $ -- $ --
----------- ----------- -----------
GENERAL AND ADMINISTRATIVE EXPENSES:
Accounting and audit 1,000 5,000 9,700
Bank charges and interest 22 115 207
Consulting 1,500 3,950 5,450
Filing fees 564 -- 1,984
Legal -- 2,500 2,530
Office and adminstrative expenses 900 214 2,103
Telephone -- -- 450
Transfer agent's fees -- 2,965 3,160
Travel -- 2,000 2,000
Website fees -- -- 500
----------- ----------- -----------
NET LOSS $ 3,986 $ 16,744 $ 28,084
=========== =========== ===========
NET LOSS PER COMMON SHARE
Basic $ 0.0075 $ 0 .0035 $ 0.0030
=========== =========== ===========
AVERAGE OUTSTANDING SHARES
Basic 10,535,000 4,850,952 9,471,415
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
unaudited financial statements.
5
<PAGE>
CIGAR KING CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the period from October 8, 1998 (Date of Inception)
to December 31, 1999
(Unaudited - Prepared by Management)
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<CAPTION>
CAPITAL IN
COMMON STOCK EXCESS OF ACCUMULATED
SHARES AMOUNT PAR VALUE DEFICIT
------ ------ --------- -------
<S> <C> <C> <C> <C>
BALANCE OCTOBER 8, 1998 (date of inception) -- $ -- $ -- $ --
Issuance of common shares for cash at
$0.002 - November 20, 1998 4,500,000 4,500 -- --
Issuance of common shares for cash at
$0.01 - November 25, 1998 6,000,000 6,000 54,000 --
Issuance of common shares for cash at
$0.25 - December 4, 1998 35,000 35 8,715 --
Net operating loss for the period from
Operating 8, 1998 to December 31, 1999 -- -- -- (28,084)
---------- ---------- --------- -------------
BALANCE DECEMBER 31, 1999 10,535,000 $ 10,535 $ 62,715 $ (28,084)
========== ========== ========= =============
</TABLE>
The accompanying notes are an integral part of these
unaudited financial statements.
6
<PAGE>
CIGAR KING CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the three months ended December 31, 1999, for the three months ended
December 31, 1998 and for the period from October 8, 1998
(Date of Inception) to December 31, 1999
(Unaudited - Prepared by Management)
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<CAPTION>
FOR THE THREE For the Three From Inception
MONTHS ENDED Months Ended To
DECEMBER 31, December 31, December 31,
1999 1998 1999
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<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (3,986) $ (16,744) $ (28,084)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Increase in accounts receivable -- (1,250) (128)
Increase in accounts payable 300 9,259 3,250
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Net Cash from Operations (2,661) (8,735) (24,962)
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CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of Rights to Cigar King concept -- (50,000) (50,000)
-------- ------------ ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of common stock -- 77,750 77,750
-------- ------------ ---------
Net Increase in Cash (2,661) 19,015 2,788
Cash at Beginning of Period 11,440 -- --
-------- ------------ ---------
CASH AT END OF PERIOD $ 8,779 $ 19,015 $ 2,788
======== ============ =========
</TABLE>
The accompanying notes are an integral part of these
unaudited financial statements.
7
<PAGE>
CIGAR KING CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
(Unaudited - Prepared by Management)
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on
October 8, 1998 with the authorized common shares of 200,000,000 shares
at $0.001 par value.
The Company is in the development stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method
of accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of
dividends.
Income Taxes
The Company may incur an operating loss for the year ending September
30, 2000 which will be available for carryover and applied against
future taxable income resulting in a tax benefit. The potential tax
benefit from any loss carry forward has been fully offset by a
valuation reserve because the use of any future tax benefit is doubtful
since the Company has no operations.
Any loss carry forward from the year ended September 30, 2000 will
expire in the year 2020.
Loss per Share
Loss per share amounts are computed based on the weighted average
number of shares actually outstanding using the treasury stock method
in accordance with FABS Statement No. 128.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a
maturity, at the time of purchase, of less than three months, to be
cash equivalents.
8
<PAGE>
CIGAR KING CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
(Unaudited - Prepared by Management)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Financial Instruments
The carrying amounts of financial instruments, including cash, prepaid
expenses and deferred offering costs are considered by management to be
their standard fair values. These values are not necessarily indicative
of the amounts that the Company could realize in a current market
exchange.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of the
assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses. Actual results
could vary from the estimates that were assumed in preparing these
financial statements.
3. PURCHASE OF RIGHTS TO CIGAR KING CONCEPT
On November 24, 1998 the Company acquired the exclusive rights to use
the name "Cigar King" to market high quality cigars through a climate
controlled kiosk merchandising display case, by the payment of $50,000.
The purchase price will be amortized to expense over five years after
operations begin.
4. RELATED PARTY TRANSACTIONS
Related parties acquired 43% of the common stock issued.
The officers and directors of the Company are involved in other
business activities and they may, in the future, become involved in
additional business ventures which also may require their attention. If
specific business opportunity becomes available, such persons may face
a conflict in selecting between the Company and their other business
interests. The Company has formulated no policy for the resolution of
such conflicts.
5. GOING CONCERN
Continuation of the Company as a going concern is dependent upon
obtaining additional working capital and the management of the Company
has developed a strategy, which it believes will accomplish this
objective through additional equity funding, and long term financing,
which will enable the Company to operate in the future.
Management recognizes that, if it is unable to raise additional
capital, the Company cannot operate in the future.
9
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ITEM 2. PLAN OF OPERATIONS
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The Company's management is in the process of reviewing the costing of kiosk
systems and determining the profitability of various locations that are under
consideration for installation of the kiosks. It is difficult to obtain good
locations for the kiosks since in the Greater Vancouver area there are certain
bans against smoking in public areas. Nevertheless, the selling of tobacco has
not been restricted although the government with each new budget imposes greater
taxes on tobacco products. Management is still searching for idle locations for
its kiosks.
Liquidity and Capital Resources
The Company will need additional working capital to finance its activities. The
additional working capital may be obtained through additional equity funding and
long term financing.
Results of Operations
The Company has had no revenues from operations since its inception.
10
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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.
CIGAR KING CORPORATION
(Registrant)
March 27, 2000 " Steven Bruce"
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Date Steven Bruce. - President and Director
11
