<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to __________
N.E.C. PROPERTIES, INC.
(Name of Small Business Issuer in its Charter)
Nevada 88-0339817
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6767 W. Tropicana Avenue, Suite 207
Las Vegas, Nevada 89103
(Address of principal executive offices)
Registrant's telephone number: (702) 248-1027
Former name, former address, and former fiscal
year end, if changed since last report: Not applicable
Indicate by checkmark 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 in the past 90 days
Yes [ X ] No [ ]
Indicate the number of shares outstanding for each of the issuer's classes of
Common Stock as of the last practical date:
Common Stock, Par Value $0.001 Per Share, 1,860,000 Shares Outstanding
at June 30, 1999.
Transactional Small Business Disclosure Format
Yes [ ] No [ X ]
<PAGE> 2
N.E.C. PROPERTIES, INC.
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I FINANCIAL STATEMENTS
Item 1 FINANCIAL STATEMENTS (Unaudited)
Balance Sheets .............................. 3
Statement of Operations ..................... 5
Statement of Changes in
Stockholders' Equity ........................ 6
Statement of Cash Flows ..................... 7
Notes to Financial Statements ............... 8
Item 2 Management Discussion and Analysis
of Financial Condition and Results
of Operations ............................... 13
PART II OTHER INFORMATION ........................... 13
SIGNATURES .................................. 14
</TABLE>
2.
<PAGE> 3
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
6 Mos Ending Year Ended
June 30,1999 Dec.31,1998
(Unaudited) (Audited)
------------ -----------
<S> <C> <C>
CURRENT ASSETS $ 0 $ 0
-------- --------
TOTAL CURRENT ASSETS $ 0 $ 0
-------- --------
OTHER ASSETS $ 0 $ 0
-------- --------
TOTAL OTHER ASSETS TOTAL ASSETS $ 0 $ 0
-------- --------
TOTAL ASSETS $ 0 $ 0
-------- --------
</TABLE>
See accompanying notes to financial statements
3.
<PAGE> 4
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
6 Mos Ending Year Ended
June 30,1999 Dec.31,1998
(Unaudited) (Audited)
------------ -----------
<S> <C> <C>
CURRENT LIABILITIES
Officers Advances (Note 6) $ 13,460 $ 360
-------- --------
TOTAL CURRENT LIABILITIES $ 13,460 $ 360
-------- --------
STOCKHOLDERS EQUITY (Note 1)
Common stock, $.001 par value
authorized 25,000,000 shares
issued and outstanding at
December 31, 1998 - 1,860,000 shares $ 1,860
June 30, 1999 - 1,860,000 shares $ 1,860
Additional paid in Capital 0 0
Accumulated loss -15,320 -2,220
TOTAL STOCKHOLDERS' EQUITY $-13,460 $ -360
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 0 $ 0
-------- --------
</TABLE>
See accompanying notes to financial statements
4.
<PAGE> 5
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
June 16,1995
3 Mos Ended 3 Mos Ended 6 Mos. Ended 6 Mos. Ended (Inception)
June 30, June 30, June 30, June 30, to June 30,
1999 1998 1999 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
REVENUE: $ 0 $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- ---------- ----------
EXPENSES:
General, Selling
and Administrative $ 12,000 $ 0 $ 13,100 $ 0 $ 15,320
---------- ---------- ---------- ---------- ----------
Total Expenses $ 12,000 $ 0 $ 13,100 $ 0 $ 15,320
---------- ---------- ---------- ---------- ----------
Net Profit/Loss (-) $ -12,000 $ 0 $ -13,100 $ 0 $ -15,320
---------- ---------- ---------- ---------- ----------
Net Profit/Loss(-)
per weighted
share (Note 2) $ -.0065 $ NIL $ -.0070 $ NIL $ -.0082
---------- ---------- ---------- ---------- ----------
Weighted average
number of common
shares outstanding 1,860,000 1,860,000 1,860,000 1,860,000 1,860,000
---------- ---------- ---------- ---------- ----------
</TABLE>
See accompanying notes to financial statements
5.
<PAGE> 6
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance,
December 31, 1996 18,600 $ 1,860 $ 0 $ -1,860
Net Loss Year Ended
December 31, 1997 -250
--------- --------- --------- ---------
Balance,
December 31, 1997 18,600 $ 1,860 $ 0 $ -2,110
November 19, 1998
Changed from no par
value to $.001 -1,841 +1,841
November 19, 1998
Forward Stock Split
100:1 1,841,400 +1,841 -1,841
Net loss, Year Ended
December 31, 1998 -110
--------- --------- --------- ---------
Balance,
December 31, 1998 1,860,000 $ 1,860 $ 0 $ -2,220
Net Loss
January 1, 1999, to
June 30, 1999 -13,100
--------- --------- --------- ---------
Balance,
June 30, 1999 1,860,000 $ 1,860 $ 0 $ -15,320
--------- --------- --------- ---------
</TABLE>
See accompanying notes to financial statements
6.
<PAGE> 7
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
June 16, 1995
3 Mos Ended 3 Mos Ended 6 Mos Ended 6 Mos Ended (Inception)
June 30, June 30, June 30, June 30, to June 30,
1999 1998 1999 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cash Flow from
Operating Activities
Net Loss $-12,000 $ 0 $-13,100 $ 0 $-15,320
Adjustment to reconcile
net loss to net cash
provided by operating
activities 0 0 0 0 0
Changes in Assets
and Liabilities
Increase in current
Liabilities
Officers Advances +12,000 0 +13,100 0 +13,460
-------- -------- -------- -------- --------
Net cash used in
operating Activities $ 0 $ 0 $ 0 $ 0 $-1,860
Cash Flows from
Investing Activities 0 0 0 0 0
Cash Flows from
Financing Activities
Issuance of Common
Stock 0 0 0 0 +1,860
-------- -------- -------- -------- --------
Net increase
(decrease)
in cash $ 0 $ 0 $ 0 $ 0 $ 0
Cash, beginning
of period 0 0 0 0 0
-------- -------- -------- -------- --------
Cash, end of period $ 0 $ 0 $ 0 $ 0 $ 0
-------- -------- -------- -------- --------
</TABLE>
See accompanying notes to financial statements
7.
<PAGE> 8
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999, and December 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized June 16, 1995, under the laws of the State of
Nevada as N.E.C. Properties, Inc. The Company currently has no
operations and in accordance with SFAS #7, is considered a development
company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits. For
the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of June 30, 1999.
8.
<PAGE> 9
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999, and December 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of June 30, 1999, the Company had no dilative common
stock equivalents such as stock options.
Year End
The Company has selected December 31st as its year-end.
9.
<PAGE> 10
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999, and December 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year 2000 Disclosure
The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Computer programs that have time sensitive
software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or
miscalculations causing disruption of normal business activities.
Since the Company currently has no operating business and does
not use any computers, and since it has no customers, suppliers
or other constituents, there are no material Year 2000 concerns.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended June 30,
1999, due to the net loss and no state income tax in Nevada, the state
of the Company's domicile and operations. The Company's total deferred
tax asset as of December 31, 1998, is as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $2,220
Valuation allowance $2,220
Net deferred tax asset $ 0
</TABLE>
The federal net operating loss carry forward will expire in 2016 and
2018.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
10.
<PAGE> 11
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999, and December 31, 1998
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of N.E.C. Properties, Inc. consists of
25,000,000 shares with a par value of $0.001 per share.
Preferred Stock
N.E.C. Properties, Inc. has no preferred stock.
On June 30, 1995, the Company issued 18,600 shares of its no par value
common stock in consideration of $1,860 in cash.
On November 19, 1998, the State of Nevada approved the Company's
restated Articles of Incorporation, which increased its capitalization
from 25,000 common shares to 25,000,000 common shares. The no par value
was changed to $0.001.
On November 19, 1998, the Company forward split its common stock 100:1,
thus increasing the number of outstanding common stock shares from
18,600 shares to 1,860,000.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal
course of business. However, the Company does not have significant cash
or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. It is the intent of the Company to seek a
merger with an existing, operating company. Until that time, the
stockholders/officers and or directors have committed to advancing the
operating costs of the Company interest free.
11.
<PAGE> 12
N.E.C. PROPERTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999, and December 31, 1998
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have
not been reflected therein. The officers and directors of the Company
are involved in other business activities and may, in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
12.
<PAGE> 13
ITEM 2
Management's Discussion and Analysis of Financial Condition and
Results of Operation
The Company has not commenced business activities and has no assets or
operations. The Company is dependent upon its officers to meet any de minimis
costs which may occur.
Jeffery D. Andre, an officer and director of the Company, has agreed to provide
the necessary funds, without interest, for the Company to comply with the
Securities Exchange Act of 1934, as amended, provided that he is an officer and
director of the Company when the obligation is incurred. All advances are
interest-free.
In addition, since the Company has had no operating history nor any revenues or
earnings from operations, with no significant assets or financial resources, the
Company will in all likelihood sustain operating expenses without corresponding
revenues, at least until the consummation of a business combination. This may
result in the Company incurring a net operating loss which will increase
continuously until the Company can consummate a business combination with a
profitable business opportunity. There is assurance that the Company can
identify such a business opportunity and consummate such a business
combination.
PART II
OTHER INFORMATION
<TABLE>
<S> <C>
Item 1 Legal Proceedings. . . . . . . . . . . . . . . . . None
Item 2 Changes in the Rights of the Company's
Security Holders . . . . . . . . . . . . . . . . . None
Item 3 Defaults by the Company on its Senior
Securities . . . . . . . . . . . . . . . . . . . . None
Item 4 Results of Votes of Security Holders . . . . . . . None
Item 5 Other Information. . . . . . . . . . . . . . . . . None
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . . None
</TABLE>
13.
<PAGE> 14
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.
N.E.C. PROPERTIES, INC.
Date: July 22, 1999 By: /S/ Vivian M. Krueger
-------------------------------
Vivian M. Krueger
President
14.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 13,460
<BONDS> 0
0
0
<COMMON> 1,860
<OTHER-SE> (2,535)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (12,000)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,000)
<EPS-BASIC> (0.007)
<EPS-DILUTED> 0
</TABLE>
