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 March 31, 2000
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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 31, 2000
----------------------------------- --------------------------------
Common Stock, $0.001 per share 10,535,000
<PAGE>
INDEX
<TABLE>
<CAPTION>
Page
PART 1. Number
------
<S> <C>
ITEM 1. Financial Statements (unaudited) ............................. 3
Balance Sheet as at March 31, 2000
and September 30, 1999 .................... 4
Statement of Operations
For the three months ended March 31, 2000, for the
three months ended March 31, 1999, for the six
months ended March 31, 2000 and for
the six months ended March 31, 1999 and for the
period from October 8, 1998 (Date of
Incorporation) to March 31, 2000 .............. 5
Statement of Changes in Shareholders' Equity
For the period from October 8, 1998 (Date of
Incorporation) to March 31, 2000 ......... 6
Statement of Cash Flows
For the three months ended March 31, 2000, for
the three months ended March 31, 1999, for the
six months ended March 31, 2000 and for
the six months ended March 31, 1999 and for
the period from October 8, 1998 (Date of
Incorporation) to March 31, 2000 .............. 7
Notes to the Financial Statements ................... 8
ITEM 2. Plan of Operations ........................................... 11
PART 11
Signatures ................................................... 12
</TABLE>
2
<PAGE>
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 March 31, 2000 and the statement of operations and statement of cash
flow for the three months ended March 31, 2000, for the three months ended March
31, 1999, for the six months ended March 31, 2000, for the six months ended
March 31, 1999 and for the period from October 8, 1998 (date of incorporation)
to March 31, 2000 and the statement of stockholders' equity for the period from
October 8, 1998 (date of incorporation) to March 31, 2000 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 six months ended March 31, 2000, are not necessarily
indicative of the results that can be expected for the year ending September 30,
2000.
3
<PAGE>
CIGAR KING CORPORATION
(A Development Stage Company)
BALANCE SHEET
March 31, 2000 and September 30, 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
MARCH 31, September 30,
2000 1999
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<S> <C> <C>
ASSETS
CURRENT ASSETS
Bank $ 853 $ 8,024
Accounts receivable 128 128
Due from director 44 --
-------- --------
1,025 8,152
OTHER ASSETS
Rights to Cigar King concept - Note 3 50,000 50,000
-------- --------
$ 51,025 $ 58,152
======== ========
LIABILITIES
Accounts payable and accrued liabilities $ 4,600 $ 4,500
-------- --------
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 70,865 70,865
Deficit accumulated during the development stage (34,975) (27,748)
-------- --------
Total Stockholders' Equity 46,425 53,652
-------- --------
$ 51,025 $ 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 March 31, 2000,
for the three months ended March 31, 1999
For the six months ended March 31, 2000,
for the six months ended March 31, 1999
and
for the period from October 8, 1998 (Date of Inception) to March 31, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
FOR THE For the
THREE Three FROM
MONTHS Months For the Six For the Six INCEPTION
ENDED Ended Months Ended Months Ended TO
MARCH 31, March 31, March 31, March 31, MARCH 31,
2000 1999 2000 1999 2000
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SALES $ - $ - $ - $ - $ -
------------ ------------ ------------ ------------ ------------
GENERAL AND ADMINISTRATIVE EXPENSES:
Accounting and audit 1,350 - 2,350 6,700 11,050
Bank charges and interest 22 33 44 153 229
Consulting 1,400 - 2,900 3,950 6,850
Filing fees - 1,420 564 1,420 1,984
Legal 80 - 80 2,530 2,610
Office and adminstrative expenses 571 434 1,471 598 2,674
Rent 1,500 1,500 1,500
Telephone 750 - 750 - 1,200
Transfer agent's fees 1,218 180 1,218 3,160 4,378
Travel - - - 2,000 2,000
Website fees - - - - 500
------------ ------------ ------------ ------------ ------------
NET LOSS $ (6,891) $ (2,067) $ (10,877) $ (20,511) $ (34,975)
============ ============ ============ ============ ============
NET LOSS PER COMMON SHARE
Basic $ - $ - $ - $ -
AVERAGE OUTSTANDING SHARES
Basic 10,535,000 10,535,000 10,535,000 7,790,977
============ ============ ============ ============
</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 March 31, 2000
(Unaudited - Prepared by Management)
<TABLE>
<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 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 -
Capital contribution 3,650
Net operating loss for the period from
October 8, 1998 to March 31, 2000 - - - (34,975)
---------- ----------- --------- ----------
BALANCE MARCH 31, 2000 10,535,000 $ 10,535 $ 70,865 $ (34,975)
========== =========== ========= ==========
</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 March 31, 2000,
for the three months ended March 31, 1999
For the six months ended March 31, 2000,
for the six months ended March 31, 1999
and
for the period from October 8, 1998 (Date of Inception) to March 31, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
FOR THE For the
THREE Three
MONTHS Months For the Six For the Six FROM INCEPTION
ENDED Ended Months Ended Months Ended TO
MARCH 31, March 31, March 31, March 31, MARCH 31,
2000 1999 2000 1999 2000
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (6,891) $ (2,067) $(10,877) $(20,511) $(34,975)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Capital contributions 3,650 - 3,650 - 3,650
Increase in accounts receivable - 1,250 - - (128)
Increase in due from a director (44) - (44) - (44)
Increase in accounts payable 1,350 (6,759) 100 4,200 4,600
-------- -------- -------- -------- --------
Net cash used in operations (1,935) (7,576) (7,171) (16,311) (26,897)
-------- -------- -------- -------- --------
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 (1,935) (7,576) (7,171) 11,439 853
Cash at Beginning of Period 2,788 19,015 8,024 - -
-------- -------- -------- -------- --------
CASH AT END OF PERIOD $ 853 $ 11,439 $ 853 $ 11,439 $ 853
======== ======== ======== ======== ========
</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
March 31, 2000
(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
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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 March 31,
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.
Earnings (Loss) per Share
-------------------------
Earnings (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding.
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
March 31, 2000
(Unaudited - Prepared by Management)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Comprehensive Income
--------------------
The Company adopted Statement of Financial Accounting Standards No.
130. The adoption of this standard had no impact on the total
stockholder's equity.
Recent Accounting Pronouncements
--------------------------------
The Company does not expect that the adoption of other recent
accounting pronouncements will have a material impact on its financial
statements.
Financial Instruments
---------------------
The carrying amounts of financial instruments, including cash and
accounts payable are considered by management to be their estimated
fair values.
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.
9
<PAGE>
CIGAR KING CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited - Prepared by Management)
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.
10
<PAGE>
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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. The management is having
difficulty in determining suitable locations for the kiosks due to the adverse
reactions of the public to smoking.
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.
11
<PAGE>
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)
June 12,2000
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Date Steven Bruce - President and Director
12
