U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1999
Commission file no. 0-25359
Fundae Corporation
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(Name of Small Business Issuer in its Charter)
Florida 65-0877745
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(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
222 Lakeview Avenue, Suite 160-146
West Palm Beach, FL 33401
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (561) 832-5698
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 par value per share
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(Title of class)
Copies of Communications Sent to:
Donald F. Mintmire
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696 - Fax: (561) 659-5371
<PAGE>
Indicate by 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
--- ---
As of March 31, 1999, there are 1,400,000 shares of voting stock of the
registrant issued and outstanding.
<PAGE>
PART I
Item 1. Financial Statements
FUNDAE CORPORATION
Table of Contents
Balance Sheet....................................................F-2
Statement of Operations and Accumulated Deficit .................F-3
Statement of Cash Flows .........................................F-4
Notes to Financial Statements ...................................F-5-6
<PAGE>
FUNDAE CORPORATION
( A Development Stage Company)
BALANCE SHEET
<TABLE>
<CAPTION>
March 31, 1999
- -----------------------------------------------------------------------------
<S> <C>
ASSETS
Current Assets:
Cash $ 16,000
- -------------------------------------------------------------- ---------------
TOTAL CURRENT ASSETS 16,000
- -------------------------------------------------------------- ---------------
$ 16,000
- -------------------------------------------------------------- ---------------
LIABILITIES
Current Liabilities:
Accrued expenses $ 2,737
- -------------------------------------------------------------- ---------------
TOTAL CURRENT LIABILITIES 2,737
- -------------------------------------------------------------- ---------------
2,737
- -------------------------------------------------------------- ---------------
STOCKHOLDERS' EQUITY
Common stock $.0001 par value 50,000,000 shares authorized
1,400,000 shares issued and outstanding 140
Preferred stock No par value 10,000,000 shares authorized
No shares issued or outstanding -
Additional paid-in-capital 33,360
Accumulated (deficit)
(20,237)
- -------------------------------------------------------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 13,263
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$ 16,000
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</TABLE>
See Accompaning Notes to Financial Statements
F-2
<PAGE>
FUNDAE CORPORATION
( A Development Stage Company)
STATEMENT OF OPERATIONS AND
ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
For the three months ended March 31, 1999
- ----------------------------------------------------- ----------- -------------
<S> <C> <C>
Revenues $ -
- ----------------------------------------------------- ----------- -------------
Operating expenses:
Professional fees 5,500
Taxes and licenses 1,237 6,737
- ----------------------------------------------------- ---------- -------------
Loss before income taxes (6,737)
Income taxes -
- ----------------------------------------------------- ---------- -------------
Net loss (6,737)
Accumulated deficit - January 1, 1999 (13,500)
- ----------------------------------------------------- ---------- -------------
Accumulated deficit - March 31, 1999 $ (20,237)
- ----------------------------------------------------- ---------- -------------
Net loss per share $ (0.005)
- ----------------------------------------------------- ---------- -------------
</TABLE>
See Accompaning Notes to Financial Statements
F-3
<PAGE>
FUNDAE CORPORATION
(A Development Stage Company)
Statement of Cash Flows
<TABLE>
<CAPTION>
For the three months ended March 31, 1999
- --------------------------------------------------------------------------------
<S> <C>
Operating Activities:
Net loss $ (6,737)
Adjustments to reconcile net loss to net cash
used by operating activities:
Increase (decrease) in:
Accrued expenses 6,737
- --- --------- ------------------------------------------------- ---------------
Net cash used by operating activities (4,000)
- --------------------------------------------------------------- ---------------
Financing activities:
Issuance of Common Stock 20,000
- --- ----------------------------------------------------------- ---------------
Net cash provided by financing activities 20,000
- --------------------------------------------------------------- ---------------
Net increase in cash 16,000
- --------------------------------------------------------------- ---------------
Cash - March 31, 1999 $ 16,000
- --------------------------------------------------------------- ---------------
</TABLE>
See Accompaning Notes to Financial Statements
F-4
<PAGE>
Fundae Corporation
Notes to Financial Statements
Note A - Summary of Significant Accounting Policies:
Organization
Fundae Corporation (a development stage company) is a Florida Corporation
organized March 16, 1995 to sell chocolate malts, flavorings and related
products. The Company failed in its attempt to implement its initial business
plan and during June 1996 abandoned its efforts. The Company had no operations
for the period prior to June 1996. The Company was inactive and there were no
transactions from June 1996 to the date of reinstatement by the State of Florida
on December 1, 1998 that affect the balances reflected in the financial
statements as of December 1, 1998.
The Company has a new business plan, which was adopted on or about December 1,
1998, which is to engage in seeking potential operating businesses and business
opportunities with the intent to acquire or merge with such businesses. The
assets of the Company will be used for its expenses of operation to implement
this plan.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a September 30 year end.
Start - Up Costs
Start - up and organization costs are being expensed as incurred.
Loss Per Share
The computation of loss per share of common stock is based on the weighted
average number of shares outstanding at the date of the financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
F-5
<PAGE>
Fundae Corporation
Notes to Financial Statements
Note B - Stockholders' Equity:
On March 16, 1995, the Company issued 500,000 shares of common stock, in lieu of
cash, for the fair market value of services rendered by its initial officer -
stockholder. On or about December 1, 1998, third parties purchased the shares
from the initial officer - stockholder. On or about December 1, 1998, the
Company issued 500,000 shares of its common stock to its sole officer in
exchange for services valued at $12,500. Subsequently the same third parties
purchased at $0.05 per share, 400,000 shares of the common stock of the Company
in a private placement pursuant to Regulation D of the SEC. The $18,000 in
professional fees includes the costs and expenses (including legal fees)
associated with the preparation and filing of the registration statement.
Included in professional fees are additional legal fees of $1,500 unrelated to
the registration statement and $4,000 in auditing and accounting fees.
At January 15, 1999, the Company had authorized 50,000,000 shares of $.0001 par
value common stock and had 1,400,000 shares of common stock issued and
outstanding. In addition, the Company authorized 10,000,000 shares of preferred
stock with the specific terms; conditions, limitations and preferences to be
determined by the Board of Directors. None of the preferred stock is issued and
outstanding.
Note C - Income Taxes:
The Company has a net operating loss carry forward of $19,237 that may be offset
against future taxable income. If not used, the carry forward will expire in
2014.
Note D - Going Concern:
The Company's financial statements are prepared using generally accepted
accounting principles applied to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has incurred losses from its inception through March 31,
1999. It has not established revenues sufficient to cover operating costs and to
allow it to continue as a going concern. Management plans currently provide for
experts to secure a successful acquisition or merger partner so that it will be
able to continue as a going concern. In the event such efforts are unsuccessful,
contingent plans have been arranged to provide that the current Director of the
Company is to fund required future filings under the 34 Act, and existing
shareholders have expressed an interest in additional funding if necessary to
continue the Company as a going concern.
F-6
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
General
The Company is considered a development stage company with limited assets
or capital, and with no operations or income since approximately 1996. The costs
and expenses associated with the preparation and filing of the Company's
registration statement and other operations of the Company have been paid for by
a shareholder, specifically A. Rene Dervaes, Jr. It is anticipated that the
Company will require only nominal capital to maintain the corporate viability of
the Company and any additional needed funds will most likely be provided by the
Company's existing shareholders or its officers and directors in the immediate
future. However, unless the Company is able to facilitate an acquisition of or
merger with an operating business or is able to obtain significant outside
financing, there is substantial doubt about its ability to continue as a going
concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger. At that time, management will
evaluate the possible effects of inflation on the Company as it relates to its
business and operations following a successful acquisition or merger.
Plan of Operation
During the next twelve months, the Company will actively seek out and
investigate possible business opportunities with the intent to acquire or merge
with one or more business ventures. In its search for business opportunities,
management will follow the procedures outlined in Item 1 to its Registration
Statement on Form 10SB. Because the Company has limited funds, it may be
necessary for the officers and directors to either advance funds to the Company
or to accrue expenses until such time as a successful business consolidation can
be made. Management intends to hold expenses to a minimum and to obtain services
on a contingency basis when possible. Further, the Company's directors will
defer any compensation until such time as an acquisition or merger can be
accomplished and will strive to have the business opportunity provide their
remuneration. However, if the Company engages outside advisors or consultants in
its search for business opportunities, it may be necessary for the Company to
attempt to raise additional funds. As of the date hereof, the Company has not
made any arrangements or definitive agreements to use outside advisors or
consultants or to raise any capital. In the event the Company does need to raise
capital most likely the only method available to the Company would be the
private sale of its securities. Because of the nature of the Company as a
development stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a commercial or
private lender. There can be no assurance that the Company will able to obtain
additional funding when and if needed, or that such funding, if available, can
be obtained on terms acceptable to the Company.
The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is convinced that it will be
<PAGE>
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
For the period from January 1, 1999 through March 31, 1999, the Company had
no income from operations and operating expenses aggregating $6,737.
Financial Condition, Capital Resources and Liquidity
At March 31, 1999, the Company had assets totaling $16,000 and liabilities
of $2,737 attributable to accrued expenses. In December 1998, it has received
$20,000 in cash contributed as consideration for the issuance of shares of
Common Stock. Mr. Dervaes owns of record and beneficially 500,000 shares
representing approximately 35.7% of the outstanding shares of the Company's
Common Stock.
The Company has no potential capital resources from any outside sources at
the current time. It is anticipated that the Company will require only nominal
capital to maintain the corporate viability of the Company. Any additional
capital needed will most likely be provided by the Company's existing
shareholders or its officers and directors.
The ability of the Company to continue as a going concern is dependent upon
the availability of obtaining additional capital and financing from such
shareholders and directors.
Net Operating Losses
The Company has net operating loss carryforwards of $19,237 which expire in
the year 2014. Until the Company's current operations begin to produce earnings,
it is unclear whether the Company can utilize such carryforwards.
Year 2000 Compliance
The Company is currently in the process of evaluating its information
technology for Year 2000 compliance. The Company does not expect that the cost
to modify its information technology infrastructure to be Year 2000 compliant
will be material to its financial condition or results of operations. The
Company does not anticipate any material disruption in its operations as a
result of any failure by the Company to be in compliance.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof), finding
suitable merger or acquisition candidates, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
<PAGE>
current conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
or developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, general economic market and
business conditions; the business opportunities (or lack thereof) that may be
presented to and pursued by the Company; changes in laws or regulation; and
other factors, most of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Form 10-QSB are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequence to
or effects on the Company or its business or operations. The Company assumes no
obligations to update any such forward-looking statements.
PART II
Item 1. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the quarter ending March 31, 1999, covered
by this report to a vote of the Company's shareholders, through the solicitation
of proxies or otherwise.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation S-B,
as described in the following index of exhibits, are incorporated herein by
reference, as follows:
<PAGE>
Exhibit No. Description
- ----------------------------------------------------------------------
3(i).1 Articles of Incorporation filed March 16, 1995 (1)
3(i).2 Articles of Amendment filed January 20, 1999 (1)
3(ii).1 By-laws (1)
27 * Financial Data Schedule
- ----------------
(1) Incorporated herein by reference to the Company's Registration Statement on
Form 10-SB.
* Filed herewith
(b) No Reports on Form 8-K were filed during the quarter ended March 31, 1999.
SIGNATURES
----------
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Fundae Corporation
Date: May 17, 1999 BY:/s/ A. RENE DERVAES, JR.
------------------------
A. Rene Dervaes, Jr. President
and Chief Financial Officer
[sign page Fundae 10Q 3.31.99]
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<NAME> Fundae Corporation
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<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1999
<PERIOD-END> MAR-31-1999
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<CASH> 16,000
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0
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