U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: September 30, 1999
Commission File Number: 000-25609
MULLY CORP.
(Exact name of small business issuer as specified in its charter)
Colorado
(State or other jurisdiction of incorporation or organization)
84-1381946
(IRS Employer Identification No.)
2851 South Parker Road, Suite 720
August, Colorado
(Address of principal executive offices)
80014
(Zip Code)
(303) 671-8920
(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 Securities Exchange Act of 1934 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 ____.
The number of shares of the registrant's only class of common stock issued and
outstanding, as of September 30, 1999, was 500,000 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the nine month period ended
September 30, 1999, are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Company's
unaudited financial statements and notes thereto included herein. The Company
generated no revenues during the nine month period ended September 30, 1999.
Management of the Company anticipates that the Company will not generate any
significant revenues until the Company accomplishes its business objective of
merging with a nonaffiliated entity or acquiring assets from the same.
In connection with, and because it desires to take advantage of, the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995, the
Company cautions readers regarding certain forward looking statements in the
following discussion and elsewhere in this report and in any other statement
made by, or on the behalf of the Company, whether or not in future filings with
the Securities and Exchange Commission. Forward looking statements are
statements not based on historical information and which relate to future
operations, strategies, financial results or other developments. Forward looking
statements are necessarily based upon estimates and assumptions that are
inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the Company's control
and many of which, with respect to future business decisions, are subject to
change. These uncertainties and contingencies can affect actual results and
could cause actual results to differ materially from those expressed in any
forward looking statements made by, or on behalf of, the Company. The Company
disclaims any obligation to update forward looking statements.
Plan of Operation
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business, in exchange for its securities. As of the date of
this report, management of the Company has had preliminary discussions with
potential merger or acquisition candidates, but there is no definitive agreement
between the Company and any third party relevant thereto. In the event the
Company does enter into an agreement with such a third party, the Board of
Directors does intend to obtain certain assurances of value of the target entity
assets prior to
2
<PAGE>
consummating such a transaction, with further assurances that an audited
financial statement would be provided within sixty days after closing of such a
transaction. Closing documents relative thereto will include representations
that the value of the assets conveyed to or otherwise so transferred will not
materially differ from the representations included in such closing documents,
or the transaction will be voidable.
The Company has no full time employees. The Company's President and
Secretary have agreed to allocate a portion of their time to the activities of
the Company, without compensation. These officers anticipate that the business
plan of the Company can be implemented by their devoting approximately 20 hours
per month to the business affairs of the Company and, consequently, conflicts of
interest may arise with respect to the limited time commitment by such officers.
Because the Company presently has nominal overhead or other material
financial obligations, management of the Company believes that the Company's
short term cash requirements can be satisfied by management injecting whatever
nominal amounts of cash into the Company to cover these incidental expenses.
There are no assurances whatsoever that any additional cash will be made
available to the Company through any means.
Liquidity and Capital Resources
The Company presently has nominal cash or cash equivalents. Because the
Company is not required to pay rent or salaries to any of its officers or
directors, management believes that the Company has sufficient funds to continue
operations through the foreseeable future.
The Company's securities are currently not liquid. There are no market
makers in the Company's securities and it is not anticipated that any market
will develop in the Company's securities until such time as the Company
successfully implements its business plan of engaging in a business opportunity,
either by merger or acquisition of assets. The Company presently has no liquid
financial resources to offer such a candidate and must rely upon an exchange of
its stock to complete such a merger or acquisition.
Year 2000 Disclosure
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, many
computer applications could fail or create erroneous results by or at the Year
2000. As a result, many companies will be required to undertake major projects
to address the Year 2000 issue. Because the Company has nominal
3
<PAGE>
assets, including no personal property such as computers, it is not anticipated
that the Company will incur any negative impact as a result of this potential
problem. However, it is possible that this issue may have an impact on the
Company after the Company successfully consummates a merger or acquisition.
Management intends to address this potential problem with any prospective merger
or acquisition candidate. There can be no assurances that new management of the
Company will be able to avoid a problem in this regard after a merger or
acquisition is so consummated.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES - NONE
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 -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
None.
4
<PAGE>
<TABLE>
Mully Corp.
(A Development Stage Company)
Balance Sheet
- ----------------------------------------------------------------------
<CAPTION>
Unaudited Audited
September December
30, 1999 31, 1998
--------- ---------
<S> <C> <C>
ASSETS
Current Assets - Cash $ 0 $ 0
--------- ---------
TOTAL ASSETS $ 0 $ 0
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts Payable $ 500 $ 0
--------- ---------
Total Current Liabilities 500 0
--------- ---------
SHAREHOLDERS' EQUITY
Preferred Stock, $.001 Par Value
Authorized 25,000,000 Shares; Issued
And Outstanding -0- Shares 0 0
Common Stock, $.0001 Par Value
Authorized 100,000,000 Shares;
Issued And Outstanding 500,000 Shares 50 50
Additional Paid In Capital On Common Stock 450 450
Deficit Accumulated During The
Development Stage (1,000) (500)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY (500) 0
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 0 $ 0
========= =========
The Accompanying Notes Are An Integral Part Of These
Unaudited Financial Statements.
</TABLE>
5
<PAGE>
<TABLE>
Mully Corp.
(A Development Stage Company)
Unaudited Statement Of Operations
- ----------------------------------------------------------------------
<CAPTION>
Inception
Unaudited Unaudited November 4,
9 Month 9 Month 1996
Period Ended Period Ended Through
September September September
30, 1999 30, 1998 30, 1999
------------ ------------ ----------
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
Expenses:
Office 0 0 500
Legal And Accounting 500 0 500
------------ ------------ ----------
Total 500 0 1,000
------------ ------------ ----------
Net (Loss) $ (500) $ 0 $ (1,000)
============ ============ ==========
Basic (Loss) Per
Common Share ($0.00) ($0.00)
============ ============
Weighted Average Common Shares
Outstanding 500,000 500,000
============ ============
The Accompanying Notes Are An Integral Part Of These
Unaudited Financial Statements.
</TABLE>
6
<PAGE>
<TABLE>
Mully Corp.
(A Development Stage Company)
Unaudited Statement Of Operations
- ----------------------------------------------------------------------
Unaudited Unaudited
<CAPTION>
Three Month Three Month
Interim Period Interim Period
Ended Ended
September September
30, 1999 30, 1998
------------ ------------
<S> <C> <C>
Revenue $ 0 $ 0
------------ ------------
Expenses:
Office 0 0
Legal and Accounting 0 0
------------ ------------
Total 0 0
------------ ------------
Net (Loss) Before Other Income $ 0 $ 0
Other Income - Interest 0 0
------------ ------------
Net Income (Loss) $ 0 $ 0
============ ============
Basic Earnings (Loss)
Per Share $ 0.00 $ 0.00
============ ============
Weighted Average Common Shares
Outstanding 500,000 500,000
============ ============
The Accompanying Notes Are An Integral Part Of These
Financial Statements.
</TABLE>
7
<PAGE>
<TABLE>
Mully Corp.
(A Development Stage Company)
Unaudited Statement Of Cash Flows
- ----------------------------------------------------------------------
<CAPTION>
Inception
Unaudited Unaudited November 4,
9 Month 9 Month 1996
Period Ended Period Ended Through
September September September
30, 1999 30, 1998 30, 1999
------------ ------------ ----------
<S> <C> <C> <C>
Net (Loss) Accumulated During
The Development Stage $ (500) $ 0 $ (1,000)
Issuance of Common Stock For
Cash Advances & Services 0 0 500
Increase (Decrease) in
Account Payable 500 0 500
------------ ------------ ----------
Net Flows From Operations 0 0 0
------------ ------------ ----------
Cash Flows From
Investing Activities:
0 0 0
------------ ------------ ----------
Net Cash Flows From Investing 0 0 0
------------ ------------ ----------
Cash Flows From
Financing Activities:
0 0 0
------------ ------------ ----------
Cash Flows From Financing 0 0 0
------------ ------------ ----------
Net Increase In Cash 0 0 0
Cash At Beginning Of Period 0 0 0
------------ ------------ ----------
Cash At End Of Period $ 0 $ 0 $ 0
============ ============ ==========
Summary Of Non-Cash Investing
And Financing Activities: $ 0 $ 0 $ 500
============ ============ ==========
The Accompanying Notes Are An Integral Part Of These
Unaudited Financial Statements.
</TABLE>
8
<PAGE>
<TABLE>
Mully Corp.
(A Development Stage Company)
Unaudited Statement Of Shareholders' Equity
- -----------------------------------------------------------------------------------------------
<CAPTION>
Deficit
Accumulated
Number Of Number Of Additional During The
Common Preferred Common Preferred Paid-In Development
Shares Shares Stock Stock Capital Stage Total
------- ------ ------ ----- ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance At
November 4, 1996 0 0 $ 0 $ 0 $ 0 $ 0 $ 0
Issuance Of Common Stock:
November 4, 1996 for Cash
Advances Made on Behalf
of the Company &
Services at $.001
Per Share 500,000 0 50 0 450 0 500
Net (Loss) (500) (500)
------- ------ ------ ----- ------- ----- -----
Balance At December 31,
1996, 1997, and 1998 500,000 0 $ 50 $ 0 $ 450 $(500) $ 0
Net (Loss) (500) (500)
------- ------ ------ ----- ------- ------- -----
Balance at
September 30, 1999 500,000 0 $ 50 $ 0 $ 450 $(1,000) $(500)
======= ====== ====== ===== ======= ======= =====
The Accompanying Notes Are An Integral Part Of These
Unaudited Financial Statements.
</TABLE>
9
<PAGE>
Mully Corp.
Notes To Unaudited Financial Statements
For The Nine Month Period Ended September 30, 1999
Note 1 - Unaudited Financial Information
The unaudited financial information included for the three month and nine month
interim periods ended September 30, 1999 were taken from the books and records
of the Company without audit. However, such information reflects all adjustments
(consisting of normal recurring adjustments, which are of the opinion of
management, necessary to reflect properly the results of interim periods
presented). The results of operations for the nine month period ended September
30, 1999 are not necessarily indicative of the results expected for the year
ended December 31, 1999.
Note 2 - Financial Statements
Management has elected to omit substantially all footnotes relating to the
condensed financial statements of the Company included in the report. For a
complete set of footnotes, reference is made to the Company's audited financial
statement for the fiscal year ended December 31, 1998 included in its Form 10-SB
Registration Statement as filed with the Securities and Exchange Commission.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MULLY CORP.
(Registrant)
Dated: November 9, 1999
By: s/Andrew I. Telsey
------------------------
Andrew I. Telsey, President
11
<PAGE>
MULLY CORP.
EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
EXHIBITS Page No.
EX-27 Financial Data Schedule.............................................13
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30,
1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 500
<BONDS> 0
0
0
<COMMON> 50
<OTHER-SE> (550)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (500)
<INCOME-TAX> 0
<INCOME-CONTINUING> (500)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (500)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
