UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 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: 33-27230
FOUNTAIN COLONY VENTURES INC.
-----------------------------
(Exact name of registrant as specified in its charter)
Colorado 95-4723110
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1621 Altivo Way, Los Angeles, California 90026
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(Address of principal executive offices)
(818) 980-0929
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(Registrant's telephone number, including area code)
Registrant's Name or 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 twelve 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
equity, as of the latest practicable date:
Date: March 31, 2000 Common Stock, par value $0.001 per share.
Shares outstanding: 3,780,000
Transitional Small Business Disclosure Format (Check one): Yes___ No X
<PAGE>
FOUNTAIN COLONY VENTURES INC.
(A DEVELOPMENT STAGE COMPANY)
Part 1 FINANCIAL INFORMATION Page
Item 1. Financial Statements
Item 2. Plan of Operation 3
Part II. OTHER INFORMATION
Item 1. Legal proceedings 4
Item 2. Changes in securities 4
Item 3. Defaults upon senior notes 4
Item 4. Submission of matters to a vote of security holders 4
Item 5. Other information 4
Item 6. Exhibits and reports on Form 8-K 4
2
<PAGE>
FOUNTAIN COLONY VENTURES, INC.
FINANCIAL STATEMENTS
March 31, 2000
Financial Statements:
Independent Accountants Review Report .............................. F-1
Balance Sheets ..................................................... F-2
Statements of Operations ........................................... F-3
Statement of Stockholders' Equity .................................. F-4
Statements of Cash Flows ........................................... F-5
Notes to Financial Statements ...................................... F-6 - F-7
<PAGE>
Gerald R. Perlstein
Certified Public Accountant
1260 S. Beverly Glen Blvd., Suite 106
Los Angeles, CA 90024
Telephone (310) 275 4650
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors
Fountain Colony Ventures, Inc.
Los Angeles, California
I have reviewed the accompanying balance sheet of Fountain Colony Ventures, Inc.
as of March 31, 2000 and the related statements of operations, stockholders'
equity (deficit) and cash flows for the periods ended March 31, 2000 and 1999.
These financial are the responsibility of the Company' management.
I conducted my reviews in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data, and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, which will be performed for the full
year with the objective of expressing an opinion regarding the financial
statements taken as a whole. Accordingly, I do not express such an opinion.
Based on my reviews, I am not aware of any material modifications that should be
made to the accompanying condensed financial statements referred to above for
them to be in conformity with accounting principles generally accepted in the
United States.
I have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet of Fountain Colony Ventures,
Inc. as of September 31, 1999, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the year then ended (not
presented herein) and in my report dated November 15, 1999, I expressed an
unqualified opinion on those financial statements.
/s/ Gerald R. Perlstein
- -----------------------
Gerald R. Perlstein
Los Angeles, CA
April 3, 2000
F-1
<PAGE>
<TABLE>
<CAPTION>
FOUNTAIN COLONY VENTURES, INC.
BALANCE SHEETS
ASSETS
------
March 31, September 30,
2000 1999
(Unaudited) (Audited)
----------- ---------
<S> <C> <C>
Current Assets: None None
- ---------------
Other Assets:
- -------------
Organizational costs, net $ 2,820 $ 3,180
--------- ---------
Total Assets 2,820 3,180
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
- --------------------
Due to Stockholder 30,600 26,100
--------- ---------
Total Liabilities 30,600 26,100
--------- ---------
Stockholders' Equity
- --------------------
Preferred stock - 10,000,000 shares
authorized; issued and outstanding
none; $.001 par value -- --
Common Stock -- 50,000,000 shares authorized;
issued and outstanding 3,780,000 shares and
900,000 shares at March 31, 2000 and
September 30, 1999, respectively, @ $.001 par value 3,780 900
Paid-in-capital 229,797 232,677
Accumulated Deficit (261,357) (256,497)
--------- ---------
Total Stockholders' Equity (deficit) (27,780) (22,920)
--------- ---------
Total Liabilities and Stockholders' Equity $ 2,820 $ 3,180
========= =========
The accompanying notes are an integral part of these financial statements.
F-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FOUNTAIN COLONY VENTURES, INC.
STATEMENTS OF OPERATIONS
For The Three and Six Months Ended March 31, 2000 and 1999
(Unaudited)
Three Months Ended Six Months Ended
------------------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating Expenses:
Amortization $ 180 $ 60 $ 360 $ 60
General and administrative $ 2,250 $ 2,250 $ 4,500 $ 8,000
----------- ----------- ----------- -----------
Total operating expenses $ 2,430 $ 2,310 $ 4,860 $ 8,060
----------- ----------- ----------- -----------
Net loss $ (2,430) $ (2,310) $ (4,860) $ (8,060)
=========== =========== =========== ===========
Weighted number of shares outstanding: 2,820,000 900,000 1,860,000 900,000
=========== =========== =========== ===========
Net loss per share nil nil nil nil
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FOUNTAIN COLONY VENTURES INC.
STATEMENT OF STOCKHOLDERS' EQUITY
For The Period Ended March 31, 2000
(Unaudited)
Total
Common Stock Paid-In- Accumulated Stockholders'
Number Amount Capital Deficit Equity
------ ------ ------- ------- ------
<S> <C> <C> <C> <C> <C>
Balance September 30, 1998 900,000 $ 900 $ 232,677 $ (243,577) (10,000)
Net loss for period (12,920) (12,920)
---------- ---------- ---------- ---------- ----------
Balance September 30, 1999 900,000 900 232,677 (256,497) $ (2,920)
Forwarded 4.2 to 1 stock
split 2,880,000 2,880 (2,880)
---------- ---------- ---------- ---------- ----------
Net loss October 1, 1999
to March 31, 2000 (4,860) (4,860)
---------- ---------- ---------- ---------- ----------
Balance March 31, 2000 3,780,000 $ 3,780 $ 229,797 $ (261,357) $ (27,780)
========== ========== ========== ========== ==========
The accompanying notes are an integral part of the financial statements.
F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FOUNTAIN COLONY VENTURES, INC.
STATEMENTS OF CASH FLOWS
For the Three and Six Months Ended March 31, 2000 and 1999
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (2,430) $ (2,310) $ (4,860) $ (8,060)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization $ 180 $ 60 $ 360 $ 60
Increase in organizational costs $ (3,600) $ (3,600)
Increase due to stockholder $ 2,250 $ 5,850 $ 4,500 $ 11,600
-------- -------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 0 0 0 0
-------- -------- -------- --------
NET INCREASE (DECREASED) IN CASH 0 0 0 0
CASH BALANCE, BEGINNING OF PERIOD 0 0 0 0
-------- -------- -------- --------
CASH BALANCE, END OF PERIOD 0 0 0 0
======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
F-5
</TABLE>
<PAGE>
FOUNTAIN COLONY VENTURES, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
Note 1 Summary of Significant Accounting Policies
- -------------------------------------------------
The unaudited financial statements and notes are representations of the
Company's management, which is responsible for their integrity and
objectivity. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation
of the interim period financial statements.
(a) Organization and Business Activities:
The Company was incorporated on May 6, 1988 under the laws of the
State of Delaware under the name Argyle Funding, Incorporated. The
Company changed its name to Fountain Colony Holding Corporation
effective January 2, 1991.
The Company changed its name to Fountain Colony Ventures, Inc.,
effective February 19, 1999.
The Company's business purpose is to seek out business opportunities,
including acquisitions, and mergers which management believes offers
long-term growth potential, and does not propose to engage in any
activity prior to this combination.
(b) Fiscal Year:
The Company operates on a September 30 fiscal year end.
(c) Basis of Operation:
The Company prepares its financial statements and federal income taxes
on the accrual basis of accounting.
(d) Loss Per Share:
Loss per share of common stock is computed using the weighted average
number of common shares outstanding during the periods shown.
(e) 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-6
<PAGE>
FOUNTAIN COLONY VENTURES, INC.
NOTES TO FINANCIAL STATEMENTS continued
March 31, 2000
(Unaudited)
(f) Organizational Costs:
Organizational costs consist of costs of $3,600 incurred for
professional services at the Reorganization of the Company in February
1999 and is being amortized over sixty months.
Note 2 Income Taxes
- -------------------
At March 31, 2000, the Company has a federal operating loss carryforward of
$261,357 for financial accounting and federal income tax purposes.
Utilization of the net operating loss in any taxable year during the
carryforward period may be subject to an annual limitation due to the
ownership change limitations imposed by the tax law. The net operating
losses will expire at various dates commencing in the year 2004 through
2019. The deferred tax asset consists of the future benefit of net
operating loss carryforwards. A valuation allowance limits the recognition
of the benefit of deferred tax assets until realization is reasonable
assured by future profitability.
Note 3 Due to Related Party
- ---------------------------
The Company presently utilizes office space and secretarial services
provided by its President at a cost of $750 per month. The Company
increased its accruals for general and administrative costs, due its
majority stockholder, by $2,250 and $2,250 during the three months ended
March 31, 2000 and 1999, respectively.
Note 4 Plan of Reorganization
- -----------------------------
On January 19, 2000, the Company entered into an agreement and Plan of
Reorganization with Green Medical Company Ltd. (Green Medical), a foreign
corporation, and its sole stockholder. Under the terms of the agreement,
the Company will acquire all the outstanding shares of Green Medical in
exchange for approximately 85% of the outstanding common stock of the
Company, in a tax-free exchange. This agreement has not yet been
consummated.
On January 28, 2000, the Company authorized a 4.2 to 1 forward stock split
of its 900,000 issued and outstanding shares of common stock, increasing
the issued and outstanding number of shares to 3,780,000.
F-7
<PAGE>
PLAN OF OPERATION
Item 2.
On January 19, 2000, Fountain Colony Ventures, Inc. (the "Company") entered
into an Agreement and Plan of Reorganization (the "Reorganization Agreement")
with Green Medical Company Ltd. ("Green Medical") a Japanese concern, and the
sole shareholder of Green Medical, Mr. Katumori Hayashi. Under the terms of the
Agreement, the Company will acquire all of the issued and outstanding shares of
Green Medical, becoming its sole shareholder in an attempted tax-exempt share
exchange.
Green Medical owns and operates a chain of 18 pharmacies, mostly centereed
in Nagoya, Japan.
Under the terms of the Reorganization Agreement the Company's pre-existing
shareholders will end up with 15% of the issued and outstanding shares
post-exchange. The remaining 85% will be held by Mr. Hayashi. After Green
Medical becomes the Company's sole wholly owned subsidiary, the Company's
current Board will withdraw, appointing Japanese successors.
The Reorganization Agreement requires the Company to forward-split its
900,000 issued and outstanding shares on a 4.2 to 1 basis, increasing their
number to 3,780,000. This action was taken on January 28, 2000, effective
immediately, satisfying one of the contingencies to closing.. If the transaction
closes as contemplated, the total number of issued and outstanding shares will
further increase to 25,200,000 because of the issuance of 21,420,000 additional
shares to Mr. Hayashi as part of the Reorganization Agreement.
The Reorganization Agreement is subject to contingencies which must be
satisfied before the parties are bound to close, and there can be no assurance
that the transaction will in fact close.
The Reorganization Agreement was amended on January 27, 2000 and on
February 28, 2000 the parties thereto extended the closing deadline to March 31,
2000. On March 23, 2000 the parties again amended the Agreement and Plan of
Reorganization.
On February 1, 2000 the Company filed its Form 8-K with the Securities and
Exchange Commission, to which reference is made for additional information.
As of March 31, 2000, the Company had nominal assets and liabilities of
$30,600. In these circumstances the Company is neither able to meet its current
obligations nor provide for the operational expenses of its continued existence.
3
<PAGE>
OTHER INFORMATION
PART II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
On January 28, 2000, the Company effectuated a forward split of its 900,000
shares of common stock on a 4.2 to 1 basis, increasing the number of shares
outstanding to 3,780,000.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Report on Form 8-K filed on February 1, 2000
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereto
duly authorized.
FOUNTAIN COLONY VENTURES INC.
/s/ Patrick C. Brooks
---------------------
Patrick C. Brooks
Director, President and Secretary
Dated: April 3, 2000
5
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM COMPANY
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,820
<CURRENT-LIABILITIES> 30,600
<BONDS> 0
0
0
<COMMON> (26,400)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,820
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (2,430)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,430)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,430)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
