U.S. Securities and Exchange Commission
Washington, DC 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ---- to ----
Commission File number 0-25429
Fairfax Group, Inc.
(Exact name of small business issuer as
specified in its charter)
Florida 65-0832025
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6758 N. Military Trail, Unit 303 West Palm Beach, Florida 33407
(Address of principal executive offices)
(561) 840-9100
(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 __ No _X__
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practicable
date: As of July 9, 1999, there were 6,150,000 shares of
common stock, $0.01 par value, issued and outstanding.
Transitional Small Business Disclosure Format (check one);
Yes __ No _X__
<PAGE>
FAIRFAX GROUP, INC.
Form 10-QSB Index
August 31, 1999
Page
Part I: Financial Information ............................ 2
Item 1. Financial Statements......................... 2
Balance Sheet Unaudited as of August 31, 1999........ 2
Balance Sheet Unaudited as of February 28, 1999...... 3
Profit and Loss Unaudited June through
August 1999.......................................... 4
Cash Flow Forecast June through
August 1999.......................................... 5
Notes to Unaudited Financial Statements ............. 6
Item 2. Management's Discussion and
Analysis or Plan of Operation ....................... 7
Part II: Other Information.............................. 8
Item 1. Legal Proceedings ........................ 8
Item 2. Changes in Securities..................... 8
Item 3. Defaults Upon Senior Securities........... 8
Item 4. Submission of Matters to a Vote
of Security Holders....................... 8
Item 5. Other Information ........................ 8
Item 6. Exhibits and Reports on Form 8-K ......... 8
Signatures................................................ 8
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
Fairfax Group, Inc.
Balance Sheet Comparison
As of August 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
31Aug99 31Aug98
<S> <C> <C>
ASSETS
Current Assets
Checking/Savings 3,973 2,558
------ ------
Total Current Assets 3,973 2,558
------ ------
Other Assets
Organizational Expense
Unamortized Organization 0 2,150
Accumulated Amortization 0 (860)
Total: Organizational Expense 0 1,290
Total Other Assets 0 1,290
------ ------
TOTAL ASSETS 3,973 3,848
------ ------
LIABILITIES & EQUITY
Liabilities
Current Liabilities 13
Other Current Liabilities
FL Unemployment Compensation
D/T KELLWAY
Total Current Liabilities 13
Long Term Liabilities
Loan Payable - FKT 174,812 59,575
------- -------
Total Liabilities 174,825 59,575
------- -------
Equity
Capital Stock 61,500 6,150
Retained Earnings (171,839) (16,403)
Net Income (60,512) (45,474)
-------- -------
Total Equity (170,852) (55,726)
-------- -------
TOTAL LIABILITIES & EQUITY 3,973 3,848
======== =======
</TABLE>
<PAGE> 2
Fairfax Group, Inc.
Balance Sheet Comparison
As of August 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
31Aug99 31Aug98 28Feb99
<S> <C> <C> <C>
ASSETS
Current Assets
Checking/Savin 3,973 2,558 1706
------ ------ ------
Total Current Assets 3,973 2,558 1,706
------ ------ ------
Other Assets
Organizational Expense
Unamortized Organization 0 2,150
Accumulated Amortization 0 (860)
Total: Organizational E 0 1,290 0
------ ------ ------
Total Other Assets 0 1,290 0
------ ------ ------
TOTAL ASSETS 3,973 3,848 1,706
------ ------ ------
LIABILITIES & EQUITY
Liabilities
Current Liabilities 13 325
Other Current Liabilities
FL Unemployment Compensation
D/T KELLWAY
------ ------ ------
Total Current Liabilities 13 0 325
------ ------ ------
Long Term Liabilities
Loan Payable - FKT 174,812 59,575 111720
------- ------- -------
Total Liabilities 174,825 59,575 112,046
------- ------- -------
Equity
Capital Stock 61,500 6,150 61500
Retained Earnings (171839) (16,403) (73,580)
Net Income (60,512) (45,474) (98,260)
------- ------- -------
Total Equity (170,852) (55,726) (110,339)
------- ------- -------
TOTAL LIABILITIES & EQUITY 3,973 3,848 1,706
======= ======= =======
</TABLE>
<PAGE> 3
Fairfax Group, Inc.
Profit and Loss
June through August, 1999 (Unaudited)
<TABLE>
<CAPTION>
June through August
2nd Quarter 2nd Quarter
1999 1998
<S> <C> <C>
Ordinary Income/Expense
Expense
Training & Seminars 50 0
Telephone & Communications 1,021 1,199
Office Expense 622 (530)
Dues & Subscriptions 186
Bank Service Charges 61 45
Dues and Subscriptions 20
Loan Interest Expense 7,092 797
Licenses, Permits & Filing 642 350
Miscellaneous 25 314
Office Supplies 52
Professional Fees 260 1,814
Accounting Fees 6,155 523
Legal Fees 4,415 1,350
Rent 6,996 6,996
Telephone
Travel and Entertainment 44
Contract Labor 3,189
Payroll Expenses
Officer Salaries 7,500 7,500
Employer Taxes 574
Unemployment Compensation Taxes 56
Payroll Expenses - Other 444
------- -------
Total Expense 35,324 24,434
------- -------
Net Ordinary Income (35,324) (24,434)
------- -------
Other Expense 248
Net Income (35,324) (24,682)
======= =======
</TABLE>
<PAGE> 4
Fairfax Group, Inc.
Cash Flow Forecast
June through August, 1999
For the Quarter
Ended August 31
Cash Flow from Operating Activities:
Net (Loss) (35,324)
Adjustments to reconcile net loss to net
cash used in operating activities:
Other Assets (860)
Accounts Payable 268
Equity adjustment 35,324
Net Cash (used) in Operating Activities (592)
Cash Flow From Financing Activities:
Proceeds from Shareholder Payable (37,430)
Net Cash Provided by Financing Activities: (38,022)
Net Increase (decrease) in Cash 557
Cash at Beginning of Period 3,416
Cash at End of Period 3,973
<PAGE> 5
Fairfax Group, Inc.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of Fairfax Group,
Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three-month period
ended August 31, 1999 are not necessarily indicative of the results
that may be expected for the year ended February 28, 2000.
Loss per Share - The company has adopted Financial Accounting
Standards No. 128, "Earnings per Share" ("FAS 128"), effective
October 1, 1997. FAS 128 requires presentation of earnings or
loss per share on basic and diluted earnings per share. Loss per
share is computed by dividing net income by the weighted average
numbers of shares outstanding during the period. There are no
potentially dilutive shares outstanding. Restatement of the
prior period for this pronouncement had no effect on the loss per
share amount.
Development Stage Activities - The Company has been in the
development stage since its inception on March 9, 1982. It has
conducted no business other than organize as a corporation. The
accompanying financial statements have been presented in
accordance with generally accepted accounting principles, which
assume the continuity of the Company as a going concern. The
Company has been seeking a merger partner and/or beginning a
business that would generate profits. As of the date of this
financial statement, no definitive arrangement has been made.
2. CAPITALIZATION
The Company was created March 9, 1982 and has never actively
engaged in any business activities. There is no litigation or
pending litigation. Fairfax Group, Inc. is a shell that has no
operations other than seeing possible merger partners.
During the quarter, the Company has not issued any shares of
common stock.
3. INCOME TAXES
The Company has no provision for taxes as they have net operating
losses of $139,536.00 that expire in 2012 and 2013. No deferred
asset has been recorded, as the possibility of benefiting from
the operating loss is dependent on the Company achieving
profitable operations.
<PAGE> 6
Item 2. Management's Discussion and Analysis or Plan of
Operation.
(a) Plan of Operation
Fairfax Group, Inc. (the "Registrant") is presently a
development stage company conducting virtually no business
operation, other than its efforts to effect a merger, exchange of
capital stock, asset acquisition or other similar business
combination (a "Business Combination") with an operating or
development stage business ("Target Business") which desires to
employ the Registrant to become a reporting corporation under the
Securities Exchange Act of 1934. To date, the Registrant has
neither engaged in any operations nor generated any revenue. It
receives no cash flow. The Registrant cannot predict to what
extent its liquidity and capital resources will be diminished
prior to the consummation of a Business Combination or whether
its capital will be further depleted by the operating losses, if
any, of the Target Business which the Registrant effectuates a
Business Combination with. No purchase or sale of significant
equipment or significant changes in the Registrant's number of
employees are expected prior to the consummation of a Business
Combination.
The Registrant does not generate any cash revenue or receive
any type of cash flow. Since February of 1997, Fred Keller,
Trustee, Fred Keller Trust, an affiliate shareholder of the
Registrant, has made loans to the Registrant on an almost month
by month basis in the form of demand notes payable bearing
interest at the prime rate plus two percent adjusted quarterly.
The Registrant has obtained a written commitment from Fred
Keller, Trustee, Fred Keller Trust, to continue to make such
loans to the Registrant during the next 12 months, and management
considers this commitment sufficient to enable the Registrant to
meet its cash requirements for the next 12 months. The
Registrant's operating costs, which includes professional fees
and costs related to a Business Combination, are likely to
approximate $100,000 during the next 12 months.
As of the date of this report, the Registrant has not yet
identified a Target Business to effectuate a Business Combination
with. Therefore, the Registrant is unable predict its cash
requirements subsequent to a Business Combination with the
unidentified Target Business. Subsequent to the occurrence of a
Business Combination, the Registrant may be required to raise
capital through the sale or issuance of additional securities in
order to ensure that the Registrant can meet its operating costs
for the remainder of its fiscal year. No commitments of any kind
to provide additional funds to the Registrant subsequent to a
Business Combination have been made by management, other
shareholders or any other third person. Accordingly, there can be
no assurance that additional funds will be available to the
Registrant to allow it to cover its expenses subsequent to a
Business Combination. If the Registrant cannot meet its operating
costs subsequent to a Business Combination, unless the Registrant
can obtain additional capital, the Registrant may cease
operations.
<PAGE> 7
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Change in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter
ended August 31, 1999.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FAIRFAX GROUP, INC.
Registrant
Date: September 16, 1999 /s/ Ernest L. Porter
Ernest L. Porter,
Chief Executive Officer
Date: September 16, 1999 /s/ Ernest L. Porter
Ernest L. Porter,
Chief Executive Officer
Date: September 16, 1999 /s/William H. Ritts, III
William H. Ritts, III
Chief Financial Officer and
Secretary
8.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements and Notes thereto incorporated in Part I, Item 1. of this
Form 10-QSB and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1999
<PERIOD-END> AUG-31-1999
<CASH> 3,973
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,973
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,973
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 61,500
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 3,973
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 28,232
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,092
<INCOME-PRETAX> (35,324)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (34,324)
<EPS-BASIC> (0.006)
<EPS-DILUTED> (0.006)
</TABLE>
