UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 2000
OR
[ ] 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 0-25853
QUAZON CORP.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0570975
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
135 West 900 South, Salt Lake City, Utah 84101
(Address of principal executive offices)
Registrant's telephone no., including area code: (801) 278-2805
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
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.
Class Outstanding as of March 31,2000
Common Stock, $.001 par value 3,991,180
TABLE OF CONTENTS
Heading Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements. . . . . . . . . . . . 3
Independent Accountant's Review Report . . . . . . . . . 4
Consolidated Balance Sheets -- March 31, 2000. . . . . . 5
Consolidated Statements of Operations -- three
months ended March 31, 2000. . . . . . . . . . . . . . 6
Consolidated Statements of Stockholders' Equity. . . . . 7
Consolidated Statements of Cash Flows -- three
months March 31, 2000. . . . . . . . . . . . . . . . . 9
Notes to Consolidated Financial Statements . . . . . . . 10
Item 2. Management's Discussion and Analysis or
Plan of Operations . . . . . . . . . . . . . . . . . . 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 15
Item 2. Changes In Securities and Use of Proceeds. . . . . . . . 15
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . 16
Item 4. Submission of Matters to a Vote of
Securities Holders . . . . . . . . . . . . . . . . . . 16
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 16
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 17
PART I
Item 1. Financial Statements
The following unaudited Financial Statements for the period
ended March 31, 2000, have been prepared by the Company.
QUAZON CORP.
FINANCIAL STATEMENTS
March 31, 2000 and December 31, 1999
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors
Quazon Corp.
Salt Lake City, Utah
We have reviewed the accompanying balance sheet of Quazon Corp. 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 statements are the
responsibility of the Company's management.
We conducted our 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, we do not express such an opinion.
Based on our reviews, we are 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.
We have previously audited, in accordance with auditing standards
generally accepted in the United States, the balance sheet of
Quazon, Corp. as of December 31, 1999, and the related statements
of operations, stockholders' equity, and cash flows for the year
then ended (not presented herein) and in our report dated January
7, 2000, we expressed an unqualified opinion on those financial
statements.
HJ & Associates, LLC
Salt Lake City, Utah
May 3, 2000
QUAZON, CORP.
(A Development Stage Company)
Balance Sheets
ASSETS
March 31, December 31,
2000 1999
CURRENT ASSETS
Cash $ 9,529 $ 2,474
Total Current Assets 9,529 2,474
TOTAL ASSETS $ 9,529 $ 2,474
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 2,788 $ 500
Notes payable - related party 8,000 -
Total Current Liabilities 10,788 500
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock authorized: 100,000,000 common shares
at $0.001 par value: 3,991,180 shares
issued and outstanding 3,991 3,991
Capital in excess of par value 1,872,740 1,872,740
Accumulated deficit prior to January 1, 1994 (1,826,092) (1,826,092)
Deficit accumulated during the development stage (51,898) (48,665)
Total Stockholders' Equity (Deficit) (1,259) 1,974
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 9,529 $ 2,474
QUAZON, CORP.
(A Development Stage Company)
Statements of Operations
From the
Beginning of
Development
Stage on
For the January 1,
Three Months Ended 1994 Through
March 31, March 31,
2000 1999 2000
REVENUES $ - $ - $ -
EXPENSES
General and administrative 3,233 3,994 51,259
Interest expense - 375 639
Total Expenses 3,233 4,369 51,898
NET LOSS $ (3,233) $ (4,369) $ (51,898)
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
WEIGHTD AVERAGE NUMBER
OF SHARES OUTSTANDING 3,991,180 1,492,550
QUAZON, CORP.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
Balance, December 31, 1993 5,530 $ 6 $ 1,826,086 $ (1,826,092)
Net loss for the year ended
December 31, 1994 - - - -
Balance, December 31, 1994 5,530 6 1,826,086 (1,826,092)
Net loss for the year ended
December 31, 1995 - - - -
Balance, December 31, 1995 5,530 6 1,826,086 (1,826,092)
Net loss for the year ended
December 31, 1996 - - - -
Balance, December 31, 1996 5,530 6 1,826,086 (1,826,092)
November 7, 1997, issuance of
common stock at $0.01 per share
for cash 466,667 467 4,533 -
November 12, 1997, issuance of
common stock at $0.01 per share
for cash 499,999 499 7,451 -
Fractional shares issued in reverse
stock split 18,984 19 (19) -
Contributed capital - - 936 -
Net loss for the year ended
December 31, 1997 - - - (16,286)
Balance, December 31, 1997 991,180 $ 991 $ 1,838,987 $(1,842,378)
QUAZON, CORP.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)(Continued)
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
Balance, December 31, 1997 991,180 $ 991 $ 1,838,987 $(1,842,378)
Contributed capital - - 1,753 -
October 31, 1998, issuance of
common stock at $0.003 per
share for services 1,500,000 1,500 3,500 -
October 31, 1998, issuance of
common stock at $0.003 per
share for cash 1,500,000 1,500 3,500 -
Net loss for the year ended
December 31, 1998 - - - (17,292)
Balance, December 31,1998 3,991,180 3,991 1,847,740 (1,859,670)
Contributed capital - - 25,000 -
Net loss for the year ended
December 31, 1999 - - - (15,087)
Balance, December 31, 1999 3,991,180 3,991 1,872,740 (1,874,757)
Net loss for the three months
ended March 31, 2000 - - - (3,233)
Balance, March 31, 2000 3,991,180 $ 3,991 $ 1,872,740 $(1,877,990)
QUAZON, CORP.
(A Development Stage Company)
Statements of Cash Flows
From the
Beginning of
Development
Stage on
For the January 1,
Three Months Ended 1994 Through
March 31, March 31,
2000 1999 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,233) $ (4,369) $ (51,898)
Adjustments to reconcile net loss to net cash
(used) by operating activities:
Stock issued for services - - 5,000
Changes in operating asset and liability accounts:
Increase in accounts payable 2,288 927 2,788
Net Cash (Used) by Operating Activities (945) (3,442) (44,110)
CASH FLOWS FROM INVESTING ACTIVITIES: - - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributed capital - - 26,809
Proceeds from notes payable - related party 8,000 2,500 18,000
Payments made on notes payable - - (10,000)
Issuance of common stock for cash - - 18,830
Net Cash Provided by Financing Activities 8,000 2,500 53,639
NET INCREASE (DECREASE) IN CASH 7,055 (942) 9,529
CASH AT BEGINNING OF PERIOD 2,474 2,884 -
CASH AT END OF PERIOD $ 9,529 $ 1,942 $ 9,529
Cash Payments For:
Income taxes $ - $ - $ -
Interest $ - $ - $ -
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Quazon, Corp. (the Company) was originally incorporated on
June 26, 1981, as a Utah Corporation under the name of The
Fence Post, Inc.
On March 24, 1986, the Company changed its name to Dynamic
Video, Inc. On September 6, 1988, the name was changed to
Loki Holding Corporation.
On September 11, 1990, the name was changed to Interactive
Development Applications, Inc. and completed a reverse
acquisition of several Belgium corporations, which was
revoked in 1997.
On November 7, 1997, the name was changed to Quazon, Corp.,
a Utah corporation. On November 19, 1997, Quazon, Corp. of
Utah merged with Quazon, Corp., a Nevada corporation,
leaving the Nevada corporation as the surviving company.
Currently the Company is seeking new business opportunities
believed to hold a potential profit or to merge with an
existing company.
b. Accounting Method
The Company's financial statements are prepared using the
accrual method of accounting. The Company has adopted a
December 31 year end.
c. Basic Loss Per Share
The following is an illustration of the reconciliation of
the numerators and denominators of the basic loss per share
calculation:
For the
Three Months Ended
March 31,
2000 1999
Net loss (numerator) $ (3,233) $ (4,369)
Weighted average shares outstanding
(denominator) 3,991,180 1,492,550
Basic loss per share $ (0.00) $ (0.00)
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statement and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
f. Provision for Taxes
At March 31, 2000, the Company had net operating loss
carryforwards of approximately $52,000 that may be offset
against future taxable income through 2019. No tax benefit
has been reported in the financial statements, because the
potential tax benefits of the net operating loss
carryforwards are offset by a valuation allowance of the
same amount.
NOTE 2 - REVERSE STOCK SPLIT
On October 24, 1997, the board of directors of the Company
approved a 1-for-250 reverse stock split and on October 30,
1998, the board of directors of the Company approved a 1-
for-15 reverse stock split while retaining the authorized
shares at 100,000,000 and retaining the par value at
$0.001. This change has been applied to the financial
statements on a retroactive basis back to inception of the
development stage. The Company provided that no
shareholder would be reduced below 100 shares, accordingly,
18,984 post-split fractional shares were issued.
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 3 - RELATED PARTY TRANSACTIONS
On November 11, 1997, the Company issued 466,667 shares
of its restricted common stock to officers of the Company
for cash of $5,000.
On November 12, 1997, the Company issued 499,999 shares of
its restricted common stock for $8,000 cash.
On October 30, 1998, the Company issued 1,500,000 post-split
shares of restricted common stock to officers of the Company
for services valued at $5,000 and 1,500,000 to Company officers
for $5,000 cash.
In 1999, an officer of the Company contributed $15,000 to
the Company in expenses incurred on the Company's behalf. The
officer contributed $1,753 in 1998.
In 1999, an officer of the Company contributed a $10,000 note
payable to the capital of the Company.
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company
does not have significant cash or other material assets, nor does
it have an established source of revenues sufficient to cover its
operating costs and to allow it to continue as a going concern.
It is the intent of the Company to seek a merger with an existing,
operating company. In the interim, shareholders of the Company
have committed to meeting its minimal operating expenses.
Item 2. Management's Discussion and Analysis or Plan
of Operations
The following information should be read in conjunction with
the financial statements and notes thereto appearing elsewhere in
this Form 10-QSB.
Quazon Corp. (the "Company"), a development stage company, has
not has significant operations or income for several years.
Certain costs and expenses have been paid for by funds advanced to
the Company by an officer pursuant to a note payable and the
private sale of shares of common stock. It is anticipated that the
Company will require only nominal capital to maintain the corporate
viability of the Company. Necessary funds, including funds to
cover expenses associated with being a public company, will most
likely be provided by the Company's officers and directors in the
immediate future. It must be noted that unless the Company is able
to facilitate an acquisition of or merger with an operating
business, or is able to obtain significant outside financing, there
is substantial doubt about its ability to continue as a going
concern.
At March 31, 2000 and December 31, 1999, the Company had total
assets consisting of cash of $9,529 and $2,474, respectively. The
cash represents advances to the Company by an officer. Total
liabilities at March 31, 2000 were $10,788, consisting of accounts
payable of $2,788 and notes payable to related parties of $8,000.
Total liabilities at December 31, 1999 were $500 in accounts
payable. During the first quarter of 2000, the Company received
$8,000 from a related party, to be used for general operating
expenses. The notes are unsecured and due upon demand. Interest
is imputed at the rate of ten percent (10%) per annum, which is
contributed by the officer to the capital of the Company.
For the three months ended March 31, 2000, general and
administrative expenses were $3,233 compared to $3,944 for the
three months ended March 31, 1999. General and administrative
expenses are primarily for legal and accounting expenses. Also,
during the first quarter of 1999, the Company had interest expense
of $375. The Company's net loss for the first quarter of 2000 was
$3,233 compared to $4,369 for the comparable 1999 period.
The Company does not anticipate any revenues until it is able
to complete an acquisition of or merger with an operating business.
During this interim period, the Company anticipates that its
expenses will be stable.
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 successfully completes an acquisition
or merger. At that time, management will evaluate the possible
effects of inflation on the Company related to it business and
operations following a successful acquisition or merger.
Plan of Operation
During the next 12 months, the Company will actively seek out
and investigate possible business opportunities with the intent to
acquire or merge with one or more business ventures. 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 a successful business consolidation can
be made. Management intends to hold expenses to a minimum and to
obtain services on a contingency basis when possible. Further, the
Company's directors will defer any compensation until such time as
an acquisition or merger can be accomplished and will strive to
have the business opportunity provide their remuneration. However,
if the Company engages outside advisors or consultants in its
search for business opportunities, it may be necessary for the
Company to attempt to raise additional funds. As of the date
hereof, the Company has not made any arrangements or definitive
agreements to use outside advisors or consultants or to raise any
capital.
In the event the Company needs to raise capital, most likely
the only method available to the Company would be the private sale
of its securities. Because of the nature of the Company as a
development stage company, it is unlikely that it could make a
public sale of securities or be able to borrow any significant sum
from either a commercial or private lender. There can be 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 Company does not intend to use any employees, with the
possible exception of part-time clerical assistance on an as-needed
basis. Outside advisors or consultants will be used only if they
can be obtained for minimal cost or on a deferred payment basis.
Management is confident that it will be able to operate in this
manner and to continue its search for business opportunities during
the next twelve months.
Net Operating Loss
The Company has accumulated approximately $48,500 of net
operating loss carryforwards as of December 31, 1999, which may be
offset against taxable income and income taxes in future years.
The use of these losses to reduce future income taxes will depend
on the generation of sufficient taxable income prior to the
expiration of the net operating loss carryforwards. The
carry-forwards expire in the year 2019. In the event of certain
changes in control of the Company, there will be an annual
limitation on the amount of net operating loss carryforwards which
can be used. No tax benefit has been reported in the financial
statements for the three months ended March 31, 2000 because there
is a 50% or greater chance that the carryforward will not be used.
Accordingly, the potential tax benefit of the loss carryforward is
offset by a valuation allowance of the same amount.
Year 2000
Year 2000 issues may arise if computer programs have been
written using two digits (rather than four) to define the
applicable year. In such case, programs that have time-sensitive
logic may recognize a date using "00" as the year 1900 rather than
the year 2000, which could result in miscalculations or system
failures.
Because the Company currently does not have any operations
except for its search for viable business opportunities, it does
not own or use any computer equipment. The Company does not
anticipate doing a full assessment of the potential Year 2000 issue
until it has made an acquisition of or merged with an operating
entity. The Company does not believe that the cost of addressing
the issue will have a material adverse impact on its financial
position. Further, the Company believes that no third parties with
whom it may have a material relationships will be materially
affected by the Year 2000 issues.
Risk Factors and Cautionary Statements
This report contains certain forward-looking statements. The
Company wishes to advise readers that actual results may differ
substantially from such forward-looking statements. Forward-
looking statements involve risks and uncertainties that could cause
actual results to differ materially from those expressed in or
implied by the statements, including, but not limited to, the
following: the ability of the Company search for appropriate
business opportunities and subsequently acquire or merge with such
entity, to meet its cash and working capital needs, the ability of
the Company to maintain its existence as a viable entity, and other
risks detailed in the Company's periodic report filings with the
Commission.
PART II
Item 1. Legal Proceedings
There are presently no other material pending legal
proceedings to which the Company or any of its subsidiaries is a
party or to which any of its property is subject and, to the best
of its knowledge, no such actions against the Company are
contemplated or threatened.
Item 2. Changes In Securities and Use of Proceeds
This Item is not applicable to the Company.
Item 3. Defaults Upon Senior Securities
This Item is not applicable to the Company.
Item 4. Submission of Matters to a Vote of Security Holders
This Item is not applicable to the Company.
Item 5. Other Information
This Item is not applicable to the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedules
(b) Reports on Form 8-K
No report on Form 8-K was filed by the Company during the
three month period ended March 31, 2000.
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
QUAZON CORP.
Date: May 15, 2000 By: /S/ Steven D. Moulton
STEVEN D. MOULTON
C.E.O., C.F.O., President
and Director
Date: May 15, 2000 By /S/ Dianne Reed
DIANE REED
Secretary/Treasurer, and
Director
(Principal Accounting
Officer)
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<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE QUAZON CORP.
FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31,
2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
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