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 November 30, 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)
None
------------------------------------------
(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 September 30,
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
November 30, 1999
Page
Part I: Financial Information ............................ 2
Item 1. Financial Statements......................... 2
Balance Sheet Unaudited as of November 30, 1999...... 2
Balance Sheet Unaudited as of February 28, 1999...... 3
Profit and Loss Unaudited September through
November 1999........................................ 4
Cash Flow Forecast September through
November 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 November 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
30 Nov 99 30 Nov 98
--------- ---------
<S> <C> <C>
ASSETS
Current Assets
Checking/Savings 2,486 1,684
Total Current Assets 2,486 1,684
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 2,486 2,974
======== ========
LIABILITIES & EQUITY
Liabilities
Current Liabilities 21 35
Other Current Liabilities
FL Unemployment Compensation
D/T Kellway
Total Current Liabilities 21 35
Long Term Liabilities
Loan Payable - FKT 200,105 83,975
-------- --------
Total Liabilities 200,126 84,010
======== ========
Equity
Capital Stock 61,500 6,150
Retained Earnings (171,839) (16,403)
Net Income (87,301) (70,783)
-------- --------
Total Equity (197,640) (81,036)
======== ========
TOTAL LIABILITIES & EQUITY 2,486 2,974
======== ========
</TABLE>
<PAGE> 2
Fairfax Group, Inc.
Balance Sheet Comparison
As of November 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
30 Nov 99 30 Nov 98 28 Feb 99
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
Current Assets
Checking/Saving 2,486 1,684 1,706
--------- --------- ---------
Total Current Assets 2,486 1,684 1,706
========= ========= =========
Other Assets
Organizational Expense
Unamortized Organization 0 2,150
Accumulated Amortization 0 (860)
Total: Organizational Expense 0 1,290 0
Total Other Assets 0 1,290 0
========= ========= =========
TOTAL ASSETS 2,486 2,974 1,706
========= ========= =========
LIABILITIES & EQUITY
Liabilities
Current Liabilities 22 35 325
Other Current Liabilities
FL Unemployment Compensation
D/T Kellway
--------- --------- ---------
Total Current Liabilities 22 35 325
========= ========= =========
Long Term Liabilities
Loan Payable - FKT 200,104 83,975 111,720
--------- --------- ---------
Total Liabilities 200,126 84,010 112,045
========= ========= =========
Equity
Capital Stock 61,500 6,150 61,500
Retained Earnings (171,839) (16,403) (73,580)
Net Income (87,301) (70,783) (98,259)
--------- --------- ---------
Total Equity (197,640) (81,036) (110,339)
========= ========= =========
TOTAL LIABILITIES & EQUITY 2,486 2,974 1,706
========= ========= =========
</TABLE>
<PAGE> 3
Fairfax Group, Inc.
Profit and Loss
September through November, 1999
(Unaudited)
<TABLE>
<CAPTION>
Sept through November March through
3rd Quarter 3rd Quarter November 1999
----------------------- -------------
1999 1998
---------- ---------
<S> <C> <C> <C>
Ordinary Income/Expense
Expense
Training & Seminars 0 0 0
Telephone & Communications 1,007 1,188 3,131
Office Expense 0 336 649
Advertising 6 0 0
Bank Service Charges 45 45 151
Dues and Subscriptions 0 0 0
Loan Interest Expense 4,792 0 11,884
Licenses, Permits & Filing 220 0 1,457
Miscellaneous 47 47 72
Postage 15 0
Professional Fees 225 320 1,289
Accounting Fees 0 4,317 8,380
Legal Fees 2,174 1,470 1,683
Rent 9,328 6,996 23,300
Travel and Entertainment 166 27 243
Contract Labor 704 2,475 704
Officer Salaries 6,807 7,500 21,807
Employer Taxes 1,267 574 1,669
Payroll Expenses - Other 0 762
-------- -------- --------
Total Expense 26,788 25,310 87,301
-------- -------- --------
Net Ordinary Income (26,788) (25,310) (87,301)
-------- -------- --------
Other Expense 0
-------- -------- --------
Net Income (26,788) (25,310) (87,301)
-------- -------- --------
</TABLE>
<PAGE> 4
Fairfax Group, Inc.
Cash Flow Forecast
Sept through November, 1999
<TABLE>
<CAPTION>
For the Quarter March thru
Ended November 30 Nov 1999
----------------- ---------
<S> <C> <C>
Cash Flow from Operating Activities:
Net (Loss) (26,788) (87,301)
Adjustments to reconcile net loss to net
cash used in operating activities:
Other Assets 0
Accounts Payable 9 (303)
Equity adjustment 0
Net Cash (used) in Operating Activities (26,779) (87,604)
Cash Flow From Financing Activities:
Proceeds from Shareholder Payable (25,292) 88,384
Net Cash Provided by Financing Activities: (25,292) 88,384
Net Increase (decrease) in Cash (1,487) 780
Cash at Beginning of Period 3,973 1,706
Cash at End of Period 2,486 2,486
</TABLE>
<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 end November 30, 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 seeking 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
benefitting from the operating loss is dependent on the Company
achieving profitable operations.
4. Reclassifications have been made to the former financial
statements to conform to the current year analysis.
<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 November 30, 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: January 10, 2000 /s/ Ernest L. Porter
Ernest L. Porter,
Chief Executive Officer
Date: January 10, 2000 /s/ Ernest L. Porter
Ernest L. Porter,
Chief Executive Officer
Date: January 10, 2000 /s/Charles S. Hafer
Charles S. Hafer
Chief Financial Officer and
Director
<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> 3-MOS
<FISCAL-YEAR-END> FEB-28-1999
<PERIOD-END> NOV-30-1999
<CASH> 2,486
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,486
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 61,500
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,996
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,792
<INCOME-PRETAX> (26,788)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,788)
<EPS-BASIC> (0.004)
<EPS-DILUTED> (0.004)
</TABLE>
