U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
( X ) QUARTERLY REPORT UNDER SECTION 13 0R 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
( ) TRANSITION REPORT UNDER SECTION 13 OR
15 (D) OF THE EXCHANGE ACT
For the transition period from.....................to.......................
Commission file number 0-30544
MARCH INDY INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 88-0339817
(State of other jurisdiction (IRS Employer
of incorporation or organization) identification No.)
400 North Federal Highway, Hallandale, Florida 33309
(Address of principal executive offices)
(305) 466-1912
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last
report)
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 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. YES_X_No_____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
OUTSTANDING AS OF
CLASS May 12, 2000
Common
Par value $0.001 per share 12,090,175
<PAGE>
MARCH INDY INTERNATIONAL, INC.
FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2000
TABLE OF CONTENTS
PART 1 - FINANCIAL INFORMATION
Page
Item 1. Consolidated Financial Statements:
Balance Sheet as of March 31, 2000 F-1
Statements of Operations for the three months ended
March 31, 2000 and from November 24, 1998 (inception)
to March 31, 2000 F-2
Statements of Cash Flows for the three months
ended March 31, 2000 and from November 24, 1998
(inception) to March 31, 2000 F-3
Notes to Financial Statements F-4 - F-5
Item 2. Management's Discussion and Analysis or Plan
of Operations 6-7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities and Use of Proceeds 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Securities Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
<PAGE>
MARCH INDY INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
March 31, 2000
(Unaudited)
ASSETS
CASH $ 200
EQUIPMENT 330,400
INTANGIBLE ASSETS 2,791,428
DEPOSITS 180,000
---------------
$ 3,302,028
===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 79,750
Loans payable 415,000
---------------
TOTAL CURRENT LIABILITIES 494,750
---------------
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value; authorized 50,000,000 shares;
10,840,175 shares issued and outstanding 10,840
Additional paid in capital 3,213,188
Deficit accumulated in the development stage (416,750)
---------------
TOTAL SHAREHOLDERS' EQUITY 2,807,278
---------------
$ 3,302,028
===============
See notes to consolidated financial statements
F-1
<PAGE>
MARCH INDY INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months November 24, 1998
Ended (Inception)
March 31, 2000 to March 31, 2000
---------------- ------------------
<S> <C> <C>
REVENUES $ - $ -
COSTS AND EXPENSES:
Equipment leasing expense 150,000 150,000
General and administrative 109,750 266,750
----------------- ------------------
NET LOSS $ (259,750) $ (416,750)
================= ==================
BASIC AND DILUTED LOSS
PER SHARE $ (0.02) $ (0.04)
================= ==================
WEIGHTED AVERAGE SHARES
OUTSTANDING 10,840,175 10,840,175
=============== ==================
The Company was inactive during the three months ended March 31, 1999.
Accordingly, no operating results are presented.
</TABLE>
See notes to consolidated financial statements
F-2
<PAGE>
MARCH INDY INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nov. 24, 1998
Ended (Inception)
March 31, 2000 to March 31, 2000
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (259,750) $ (416,750)
Changes in assets and liabilities:
Deposits (180,000) (180,000)
Accounts payable and accrued expenses 24,750 79,750
NET CASH FLOWS USED IN OPERATING
ACTIVITIES (415,000) (517,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in loans payable 415,000 415,200
Cancellation of shareholders' debt - 102,000
NET CASH FLOWS PROVIDED BY FINANCING
ACTIVITIES 415,000 517,200
NET INCREASE IN CASH - 200
CASH - Beginning of period 200 -
================= =================
CASH - End of period $ 200 $ 200
================= =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
No cash payments were made for income taxes or interest during each of the
above periods.
Non-cash investing and financing activities:
Contribution by shareholders of operating
assets for common stock
Equipment $ - $ 330,400
Intangible assets - 2,791,428
================= =================
$ - $ 3,121,828
================= =================
</TABLE>
The Company was inactive during the three months ended March 31, 1999.
Accordingly, no operating results are presented.
See notes to consolidated financial statements
F-3
<PAGE>
MARCH INDY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QB. Accordingly,
they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial
statements. 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 for all
periods presented have been made. The results of operations for the
three month period ended March 31, 2000 are not necessarily indicative
of the results of operations that may be expected for the year ending
December 31, 2000. These financial statements should be read in
conjunction with the Company's December 31, 1999 Form 10KSB, financial
statements and accompanying notes thereto.
2. GOING CONCERN
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company incurred an
operating loss of $416,000 from November 24, 1998 (Inception) to March
31, 2000. Additionally, the Company had a working capital deficiency of
$495,000 at March 31, 2000. These conditions raise substantial doubts
about the Company's ability to continue as a going concern.
Management's plans with respect to these matters include restructuring
its existing debt and raising additional capital through future
issuances of stock and or debentures. The accompanying financial
statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern.
3. LOANS PAYABLE
During the three months ended March 31, 2000, certain persons made
advances on behalf of the Company in payment for deposits, an equipment
lease and amounts due to vendors. Such advances were interest free and
due on demand. In May 2000, 1,250,000 restricted common shares were
issued in payment of the outstanding debt.
F-4
<PAGE>
4. COMMON STOCK
The Company has rescinded the issuance of 158,600 shares, resulting
from an over allotment of shares to certain shareholders in connection
with the reverse acquisition of March Indy International, Inc. The
financial statements give retroactive effect to this transaction.
5. COMMITMENTS AND CONTINGENCIES
a. The Company is obligated under an equipment lease which
terminates in December 2000. The lease requires advance
payments of $530,000 as of May 20, 2000, of which the Company
paid $150,000 as of March 31, 2000. The Company is presently
alleging failure of the lessor to perform in accordance with
the agreement and has withheld payment of the balance of
$380,000 due on the contract. Management is engaged in
negotiations to resolve the dispute and accordingly, has not
made any provision for loss in the financial statements. The
initial payment was charged to operations at March 31, 2000.
b.
In March 2000, the Company agreed to purchase an office building
in Hollywood, Florida for approximately $400,000 and has made a
non-refundable down payment of $170,000 towards the purchase
price. The Company has been given a six-month extension to
complete the transaction. The Company is obligated under a
three-year lease of the aforementioned premises, commencing April
1, 2000, for monthly rentals of $2,850.
c. In May 2000, the Company amended previously reported
compensation agreements with Messrs. Herd, Megas and
Johansson. The amended agreements call for modified payments
of combined aggregate annual compensation ranging from
$188,000 to $867,000, commencing June 1, 2000.
F-5
<PAGE>
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
Statements included in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" which are not historical facts are
forward-looking statements. These forward-looking statements involve risks and
uncertainties that could render them materially different, including, but not
limited to, the risk that new products and sponsorships may not be available on
a timely basis, and the risk that the Company will not raise additional funds
necessary to fund working capital needs and the risk that the Company would not
be able to fund its working capital needs from cash flow.
Overview
March Indy International, Inc. (the "Company"), was incorporated as N.E.C.
Properties Inc. in Nevada in 1995. In November, 1999, the Company changed its
name to March Indy International, Inc. after completing, on November 10, 1999,
the acquisition of all of the common stock of March Indy International, Inc., a
Delaware corporation ("March Delaware"). The merger was accounted for as a
reverse acquisition. The Company exists primarily as a stock holding company,
and accordingly, the operations described in this document, unless otherwise
specified, are those of the subsidiary, March Delaware. The Company intends to
engage in the business of designing and building racing chassis to be sold to
racing teams competing in Formula, KART and Indy racing competitions. The
Company also intends to develop a racing team which will compete in Formula,
KART and Indy racing competitions. The Company was in the development stage as
of March 31, 2000. The Company decided to delay the commencement of racing
operations until 2001 and decided not to enter the recent Indianapolis 500 race
in May, 2000. The Company also plans to develop an Internet Web site in order to
merchandise products related to its racing efforts. The Company's product
merchandising efforts are intended to be "track side" on the Internet and in
major sports shopping venues.
Development Stage Revenues
The Company's operations have been devoted primarily to developing a business
plan, acquiring its March subsidiary, developing its racing team, developing a
business plan for the production of chassis and administrative functions. The
Company has had no revenue to date. The Company intends to grow through internal
development and strategic alliances. The ability of the Company to achieve its
business objectives is contingent upon its success in raising additional capital
until adequate revenues are realized from operations.
6
<PAGE>
Development Stage Expenses
The Company's development stage expenses were $259,750.00 for the three month
period ending March 31, 2000 and $416,750.00 for the period from November 24,
1998 (inception) to March 31, 2000. The expenses incurred were primarily due to
various consulting, managerial and professional services in pursuit of the
Company's objectives.
Future Financing
The Company is preparing for a private offering of common shares in order to
raise $7,500,000. If fully subscribed, this would fund chassis development,
racing operations, corporate operations, strategic marketing and the development
of its Web site. The Company has no assurances at this time as to the funding
and there are no assurances that such funding will be sufficient to fully
execute the Company's business plans and achieve profitability, even if the
funding is obtained. Furthermore, the Company's cas h flow through operations
are of strategic importance, and although substantial planning and processes
have been designed and structured, there are no assurances as to the ability of
the Company to generate sufficient cash flow from operations. As of the date of
this Form 10-QSB, $415,000.00 has been raised in this private offering.
7
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
N/A
ITEM 2. Changes in Securities
N/A
ITEM 3. Defaults Upon Senior Securities
N/A
ITEM 4. Submission of Matters to a Vote of Securities Holders
N/A
ITEM 5. Other Information
ITEM 5. OTHER INFORMATION
A. On April 30, 2000, we entered into a four (4) year employment agreement with
Stephan Johansson as Director of Racing Operations and as a Member of the Board
of Directors with compensation to begin June 1, 2000 at a rate of $62,500 in the
first year, $150,000 in the second year, $175,000 in the third year, $200,000 in
the fourth year. Pursuant to the agreement, Mr. Johansson is granted the right
to purchase 100,000 shares of the Company's common stock per year, at a price of
one ($1.00) dollar per share. This agreement supercedes that earlier consulting
agreement executed between the Company and Mr. Johansson on January 3, 2000.
B. On April 30, 2000, we entered into a four (4) year employment agreement with
Robin Herd as Chairman of the Board of Directors with compensation to begin June
1, 2000 at a rate of $62,500 in the first year, $150,000 in the second year,
$175,000 in the third year, $200,000 in the fourth year. Pursuant to the
agreement, Mr. Herd is granted the right to purchase 200,000 shares of the
Company's common stock per year, at a price of one ($1.00) dollar per share.
This agreement supercedes that earlier consulting agreement executed between the
Company and Mr. Herd on January 3, 2000.
C. On April 30, 2000, we entered into a four (4) year employment agreement with
Thomas P. Megas as President and CEO of the Company with compensation to begin
June 1, 2000 at a rate of $62,500 in the first year, $150,000 in the second
year, $175,000 in the third year, $200,000 in the fourth year. Pursuant to the
agreement. Mr. Megas is granted the right to purchase 200,000 shares of the
Company's co mmon stock per year, at a price of one ($1.00) dollar per share.
This agreement supercedes that earlier consulting agreement executed between the
Company and Mr. Megas on January 3, 2000.
D. On March 21, 2000, the Company entered into a memorandum of agreement with
Martin Bloom for the purchase of a building and real estate located at 400 North
Federal Highway, Hallandale, FL 33309 for a purchase price of $350,000.00. The
Company has paid a down payment on the property in the amount of $150,000.00
with the balance to be paid in cash on or before September 21, 2000.
ITEM 6. Exhibits and Reports on Form 8-K
N/A
8
<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 hereunto duly authorized.
MARCH INDY INTERNATIONAL, INC.
Date: June 7,2000 By: /s/ Thomas Megas
Thomas Megas
Chairman and Cheif Executive Officer
9
