UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
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[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended January 30, 2000
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LONDON SOFTWARE INDUSTRIES INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-4047693
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
52-30 Pacific Concourse Drive
Suite 350
Los Angeles, California 90045
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number 310-643-4467
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Check here whether the issuer (1) has filed all reports required
to be filed by Sections 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 for the
past 90 days.
Yes __X____ No_______
As of January 30, 2000, the following shares of the Registrant's
common stock were issued and outstanding:
6,000,000 shares of voting common stock
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<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . .3
CONDENSED CONSOLIDATED BALANCE SHEET . . . . . . . . .4
CONDENSED CONSOLIDATED INCOME STATEMENT. . . . . . . .5
STATEMENT OF CASH FLOWS. . . . . . . . . . . . . . . .6
Note 1. NATURE OF BUSINESS AND SIGNIFICANT
ACCOUNTING POLICIES. . . . . . . . . . . . .8
Note 2. USE OF OFFICE SPACE. . . . . . . . . . . . .9
Note 3. EARNINGS PER SHARE . . . . . . . . . . . . .9
Note 4. LIQUIDITY . . . . . . . . . . . . . . . . . 9
Note 5. SUBSEQUENT EVENTS . . . . . . . . . . . . .10
Item 2. Management's Discussion And Analysis or Plan of
Operations. . . . . . . . . . . . . . . . . . . . . .11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 16
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 16
Item 3. Defaults upon Senior Securities. . . . . . . . . . . 16
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . 17
Item 5. Other information. . . . . . . . . . . . . . . . . . 17
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 17
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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<PAGE>
PART I - FINANCIAL INFORMATION
To the Board of Directors of LONDON SOFTWARE INDUSTRIES INC.
We have reviewed the accompanying balance sheet of LONDON
SOFTWARE INDUSTRIES INC., (a development stage company) as of
January 31, 2000 and the related statements of loss and
accumulated deficit, and cash flows for the three months then
ended, in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of Certified
Public Accountants. All information included in these financial
statements is the representation of the management of LONDON
SOFTWARE INDUSTRIES INC.
A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements in order for them to be in conformity with generally
accepted accounting principles.
Graf Repetti & Co., LLP
Dated: New York, New York
March 20, 2000
LONDON SOFTWARE INDUSTRIES INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
As Of As Of
Jan. 31, 2000 Apr. 30, 1999
(Unaudited) (Audited)
--------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash $0 $0
Other Current Assets 0 0
_________ ________
Total Current Assets 0 0
Other Assets 0 0
_________ ________
TOTAL ASSETS $0 $0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $0 $0
Accrued Expenses 8,038 12,450
_________ ________
Total Current Liabilities 8,038 12,450
Loan Payable - See Note 6 16,500 50
_________ ________
Total Liabilities 24,538 12,500
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding
6,000,000 Shares 6,000 6,000
Additional Paid in Capital 265,500 185,100
Deficit Accumulated During the
Development Stage (296,038) (203,600)
_________ ________
Total Stockholders' Equity (24,538) (12,500)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $0 $0
</TABLE>
The accompanying notes and accountant's report are an integral
part of these financial statements.
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LONDON SOFTWARE INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
<TABLE>
For the 3 Mos Ended For the 3 Mos Ended
January 31 October 31
2000 1999 1999 1998
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<S> <C> <C> <C> <C>
TOTAL REVENUES: $ 0 N/A 0 N/A
OPERATING EXPENSES:
Accounting 1,500 N/A 1,500 N/A
Legal 2,500 2,500
Rent Expense (Note 2)1,800 1,800
Filing Fee 13 12
Contributed Svcs
(Note 6) 25,000 25,000
________ _______ ________ ________
NET LOSS (30,813) N/A (30,812) N/A
NET LOSS PER SHARE (.01) (.01)
Weighted Average
Number of Shares
Outstanding 6,000,000 6,000,000
</TABLE>
The accompanying notes and accountant's report are an integral
part of these financial statements.
<PAGE>
<PAGE>
LONDON SOFTWARE INDUSTRIES INC.
STATEMENT OF CASH FLOWS (unaudited)
<TABLE>
For the 3 mos For the 3 mos
Ended Ended
to to
January 31, 2000 April 30, 1999
________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $(30,813) $(39,212)
Adjustments to Reconcile Net Loss
to Net Cash Used in operating
Activities:
Changes in Assets and Liabilities
Increase/(Decrease) in Accounts
Payable and Accrued Expenses 3,963 12,362
Additional Paid In Capital
Contributed by Shareholders 26,800 26,800
________ _________
Total Adjustments 30,763 (39,162)
Net Cash Used in
Operating Activities ( 50) ( 50)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in Loan Payable 50 50
Net Cash Provided
by Financing Activities 50 50
Net Change in Cash 0 0
Cash at Beginning of Period 0 0
Cash at End of Period $ 0 0
Supplemental Disclosure of
Cash Flow Information
Cash Paid During the Period for
Interest Expense 0 0
Corporate Taxes $ 0 0
</TABLE>
The accompanying notes and accountant's report are an integral
part of these financial statements.
<PAGE>
<PAGE>
LONDON SOFTWARE INDUSTRIES INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. Description of Company
LONDON SOFTWARE INDUSTRIES INC.("the Company") is a for-profit
corporation, incorporated under the laws of the State of Delaware
on December 31, 1996. London Software Industries Inc., is a
developmental stage company whose principal objective
is to create and market a portfolio of CD Roms to include home
shopping CD catalogues, literary works, reference books, virtual
reality museums, data bases, city guides and teaching aides.
B. Basis of Presentation
Financial statements are prepared on the accrual basis of
accounting. Accordingly, revenue is recognized when earned and
expenses when incurred.
C. 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 these estimates. Significant estimates in the
financial statements include the assumption that the Company will
continue as a going concern. See Note 4.
D. Research and Development Costs
Research and development costs charged to expenses are $16,000
for the year ended April 30, 1999 and from December 31, 1996
(inception) to April 30, 1999.
E. Issuance of Common Stock
Consideration for issuance of the 4,000,000 shares of common
stock on April 25, 1997 consisted of intellectual property
including the idea of starting up the company. This
consideration was valued at the par value of the stock for lack
of an objective fair market value.
Consideration for issuance of the 3,998,998 shares of common
stock on January 3, 1999 consisted of payment by the shareholder
of research and development and consultant fees in the amount of
$4,000.
Consideration for issuance of the 4,000,000 shares of common
stock on February 2, 1999 consisted of $20,000.
NOTE 2 - USE OF OFFICE SPACE
The Company uses office space for its executive offices at two
locations, both of which it receives from two of its shareholders
at no cost. The fair market value of the 1,000 square foot
office at International House, 31 Church Road, Hendon, London, UK
is $300 per month. Use of this office space began August 10,
1998. The fair market value of the 600 square foot office at 52-
30 Pacific Concourse Drive, Suite 350, Los Angeles, California is
also $300 per month. Use of this office space began March 29,
1999. Before that, the Company used 600 square feet of office
space at 1750 Montgomery Street, San Francisco, California with
fair market value of $300 per month from November 30, 1998 to
March 29, 1999. Each amount is reflected as an expense with a
corresponding credit to additional paid-in capital.
NOTE 3 - EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED
JANUARY 31, 2000
Net Loss Per Share $ (0.01)
NOTE 4 - LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company's limited operating history, including its losses and
no revenues, primarily reflect the operations of its early stage.
As a result, the Company had from time of inception to January
31, 2000 no revenue and a net loss from operations of $(296,038).
As of January 31, 2000 the Company had a net capital deficiency
of $(24,538).
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with the
start up of its telecommunications operations. It is not
anticipated that the Company will be able to meet its financial
obligations through internal net revenue in the foreseeable
future. London Software Industries, Inc. does not have a working
capital line of credit with any financial institution.
Therefore, future sources of liquidity will be limited to the
Company's ability to obtain additional debt or equity funding.
See Note 6.
NOTE 5 - CONTRIBUTED SERVICES
On September 26, 1997, two of the Company's officers began
rendering services on behalf of the Company at no cost. The fair
market value is $4,167 per officer per month. Each amount is
reflected as an expense with a corresponding credit to additional
paid in capital.
NOTE 6 - LOAN PAYABLE
As of January 31, 2000, Tech Capital Group has paid $16,450 of
expenses on behalf of London Software Industries Inc. The
president of LSI is a 10% shareholder in Tech Capital Group. Tech
Capital Group will lend up to $65,000 to LSI upon request. The
loan is not evidenced by a note. The informal agreement calls
for no payment of interest. LSI intends to repay the loan out of
any fund raising that it may carry out or when the company
achieves sustainable revenue.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
RESULTS OF OPERATIONS
The Company is a development stage company which has no assets
and no recent operating history. The Company seeks to develop
software and computer related educational material to be
distributed through the medium of CD-ROM markets for personal and
business use.
The Company also seeks to conduct research and development of
educational software for the distribution on the new DVD high
density market. The Company also seeks to develop software
capable of converting from hard copy to an html based context, so
that it may be immediately and efficiently placed onto a digital
CD Rom for mass production. It is also the intention of the
Company to develop software that will be able to convert hard
copy into a format so that the CD Roms may be viewed from the
traditional game consoles that are popular with children.
The educational titles will be aimed at the children's market and
an attempt will be made by the Company's titles to make learning
and education fun. The Company will not develop its own content
for the CD Roms. Rather it will seek to obtain content from
independent vendors through licensing deals. The selection of
the content to be marketed by the Company will be solely in the
best discretion and judgment of management. It should be noted
that, at this time, the Company has no licensing arrangements or
deals with any third party. Once the Company obtains the right
to market the content, it shall out source the manufacturing of
the CD Roms. The Company believes that by doing so it shall be
able to keep costs to a minimum. The majority of the Company's
costs will come in the production of the CD Roms.
The Company's current intention is to first identify the initial
products that the Company feels would facilitate their entry into
the market place. The software that the Company intends to
develop can only be developed once the Company has raised
sufficient funds which will permit it to acquire the necessary
equipment to develop and produce such software. Once funded, the
company then intends on retaining at least three software
developers with extensive HTML knowledge to develop the software.
The cost for such developers, as with any technology company, is
expected to be substantial. However at this time no definite
figure as to cost can be calculated.
HTML, also known as Hypertext Markup Language, is the standard
language that World Wide Web documents utilize to enable users to
read or access them over the Internet on a variety of computer
platforms. HTML documents appear like text with codes added to
parts of the document. The codes instruct the software viewer how
to display particular parts of the document, like section
headings or images for example, or what new document you might
like see for more information or to illustrate a certain point.
Currently when transferring Hard Copy to HTML the hard copy must
be typed out to incorporate HTML. The Company believes that with
sufficient resources it can develop innovative software to
automatically convert hard copy to HTML, and therefore save time
and money. The Company will use the latest scanning technology
and write a program to read and digest the hard copy text and
automatically merge it with HTML.
During the last quarter, the company has the Company has
continued to research the various CD-Rom/DVD markets as well as
further looking into conducting transactions through the
internet.
Additional research has been conducted on the development of home
shopping CD Catalogues whereby a user can receive a CD in the
mail and access manufacturer's products for purchase. The
Company believes there is currently no entity marketing such a
product. Management believes such a product may be mass produced
and replace traditional home catalogue shopping. Research is
also being carried out in the development of reference books on
CD-Rom such as dictionaries, thesauruses, atlases and specialized
area publications.
The Company's research is taking longer than originally
anticipated as additional markets and concepts, such as health
and fitness, sports, cooking, music and travel, have also been
researched. This has required a more meticulous and detailed
effort to be taken by the Company thereby requiring more time and
resources to be devoted by management. These have been the
material activities of management to date. Research has been
carried out by attending seminars on technology and business, as
they relate to technology markets, and by discussing the overall
market with entrepreneurs already established in the field.
Management has also been identifying the various title segments
and concepts which the Company will seek to produce in the CD Rom
format. This has been important in terms of developing the
overall product which the Company will produce.
The Company's products will seek to combine elements from
successful software packages with the Company's innovative ideas
as set forth above. These innovative ideas include those set
forth in the Company's proposed portfolio of products. The
Company's goal is to develop educational and reference
software products which will be distributed on DVD high density
disks. The Company will design and market home shopping
catalogues, literary works of classic authors, reference books,
virtual reality museums, business related data bases, city guides
for tourists and residents and teaching aids. The Company's
emphasize "user friendliness" software which is both attractive
and entertaining. The targeted group of the company's software
will be able to be used by novice and intermediate computer users
and children.
Management intends to hold expenses to a minimum and to obtain
services on a contingency basis when possible. Further, the
Company's directors will forego any compensation until such time
as the Company begins to generate sufficient investment in the
Company to cover such expenses. However, if the Company engages
outside advisors or consultants in search for business
opportunities, it may be necessary for the Company to attempt to
raise additional funds. There is no assurance that the Company
will be 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 selection of a business opportunity in which to participate
is complex and risky. Additionally, as the Company has only
limited resources, it may be difficult to find favorable
opportunities. There can be no assurance that the Company's
research and selection of CD and DVD products will succeed or be
accepted by the public. Additionally, the DVD market is highly
undeveloped and there is substantial risk attributed to the
investment and entry into such market. There is no certainty
that the Company's business will be successful or profitable.
There is also no certainty that the Company will be able to
operate a successful business. Potential investors are alerted
that the investment in the Company is highly speculative and
involves a high degree of risk.
Because the Company lacks 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 the Company begins to
generate sufficient income to cover such expenses. Management
intends to hold expenses to a minimum and to obtain services on a
contingency basis when possible. Further, the Company's
directors will forego any compensation until such time as the
Company begins to generate sufficient income to cover such
expenses. However, if the Company engages outside advisors or
consultants in search for business opportunities, it may be
necessary for the Company to attempt to raise additional funds.
There is no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
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 develops material operations. At that time,
management will evaluate the possible effects of inflation on the
Company as it relates to its business and operations. The
Company will not borrow funds for the purpose of funding payments
to the Company's promoters, management or their affiliates or
associates. Any funds borrowed by the Company will be utilized
to pay statutory, legal and accountant fees expended by the
Company.
LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with
research and development of its software. As a result, the
Company had from time of inception to January 31, 2000 no
revenue and a net loss from operations of $(296,038). As of
January 31, 2000 the Company had a net capital deficiency
of $(24,538).
It is not anticipated that the Company will be able to meet its
financial obligations through internal net revenue in the
foreseeable future. The Company does not have a working capital
line of credit with any financial institution. Therefore, future
sources of liquidity will be limited to the Company's ability to
obtain additional debt or equity funding. The Company
anticipates that its existing capital resources will enable it to
maintain its current implemented operations for at least 12
months, however, full implementation of its business plan is
dependent upon its ability to raise substantial funding.
Currently, the Company has sufficient capital to cover the cost
of its operations for the next twelve (12) months which the
Company foresees will primarily consist of further research of
the Company's concept and also networking and discussions by the
Company's management with individuals and entities involved in
the CD-Rom software development field. The Company however
believes that it shall require additional capital in order to
implement its business plan once research of its concept is
completed. It is not anticipated that the Company will be able
to meet its financial obligations through internal net revenue in
the foreseeable future beyond twelve (12) months as the Company
has yet to generate sales of its product or to begin substantial
operations. Therefore, future sources of liquidity will be
limited to the Company's ability to obtain additional debt or
equity funding. Investors are alerted that the Company does not
have a working capital line of credit with any financial
institution and that there is no guarantee or assurance that the
Company will be able to raise such funds.
In the event the Company needs additional funding, it shall elect
to source funds from its shareholders owning more than 10% of the
Company's common stock and seek funding from such shareholders.
In such event, the Company will re-evaluate its plans and its
proposed operations to determine whether it would be feasible to
continue to implement its business plan. The Company would not
seek funding beyond its limitations and would ensure that the
Company would operate as efficiently as possible to keep costs as
streamlined as possible. The Company will not seek funding
beyond that which it foresees it will be able to re-pay over a
period of twelve (12) months. Should a sudden jump in inflation
occur the company's prices may then have to rise in line with
inflation.
The Company's costs over the past twelve (12) months have been
minimal and related to legal and accounting charges. Over the
next twelve (12) months, the Company's costs and expenses could
significantly increase as the Company begins to expend sums on
marketing, advertising and software development.
YEAR 2000 DISCLOSURE
The Company does not maintain any material active operations
which could have been impacted by the Year 2000 problem. There
were no effects of the Year 2000 on the Company and there were no
costs to the Company associated with this event.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are currently no pending legal proceedings against the
company.
Item 2. Changes in Securities
There has been no change in the Company's securities since the
filing of its Form 10SB-12G.
Item 3. Defaults upon Senior Securities
There has been no default in the payment of principal, interest,
sinking or purchase fund installment.
Item 4. Submission of Matters to a Vote of Security Holders
No matter has been submitted to a vote of security holders during
the period covered by this report.
Item 5. Other information
There is no other information to report which is material to the
company's financial condition not previously reported.
Item 6. Exhibits and Reports on Form 8-K
There are no Exhibits or reports on Form 8-K attached hereto.
<PAGE>
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
LONDON SOFTWARE INDUSTRIES, INC.
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(Registrant)
Date: March 20, 2000
By: /s/ Alan Bowen
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President
