<PAGE> 1
U.S. 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 quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to __________
DISCOVERY INVESTMENTS, INC.
(Name of Small Business Issuer in its Charter)
Nevada 88-0409151
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2980 S. Rainbow Boulevard, Suite 108
Las Vegas, Nevada 89146
(Address of principal executive offices)
Registrant's telephone number: (702) 248-1047
Former name, former address, and former fiscal year end, if changed since last
report:
The Postal Zip Code has been changed from 89103 to 89146.
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 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 in the past 90 days
Yes [X] No [ ]
Indicate the number of shares outstanding for each of the issuer's classes of
Common Stock as of the last practical date:
Common Stock, Par Value $0.001 Per Share, 2,100,000 Shares Outstanding
at June 30, 1999.
Transactional Small Business Disclosure Format
Yes [X] No [ ]
<PAGE> 2
DISCOVERY INVESTMENTS, INC.
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I FINANCIAL STATEMENTS
Item 1 FINANCIAL STATEMENTS (Unaudited)
Balance Sheet.................................... 3
Statement of Operations.......................... 5
Statement of Changes in
Stockholders' Equity............................. 6
Statement of Cash Flows.......................... 7
Notes to Financial Statements.................... 8
Item 2 Management Discussion and Analysis
of Financial Condition and Results
of Operations.................................... 13
PART II OTHER INFORMATION................................ 13
SIGNATURES....................................... 14
</TABLE>
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<PAGE> 3
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
3 Mos Ending Year Ended
June 30,1999 Mar.31,1999
(Unaudited) (Audited)
------------ -----------
<S> <C> <C>
CURRENT ASSETS $ 0 $ 0
----------- -----------
TOTAL CURRENT ASSETS $ 0 $ 0
----------- -----------
OTHER ASSETS $ 0 $ 0
----------- -----------
TOTAL OTHER ASSETS TOTAL ASSETS $ 0 $ 0
----------- -----------
TOTAL ASSETS $ 0 $ 0
----------- -----------
</TABLE>
See accompanying notes to financial statements
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<PAGE> 4
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
3 Mos Ending Year Ended
June 30,1999 Mar.31,1999
(Unaudited) (Audited)
------------ -----------
<S> <C> <C>
CURRENT LIABILITIES
Officers Advances (Note 6) $ 13,225 $ 0
----------- -----------
TOTAL CURRENT LIABILITIES $ 13,225 $ 0
----------- -----------
STOCKHOLDERS EQUITY (Note 1)
Common stock, $.001 par value
authorized 25,000,000 shares
issued and outstanding at
March 31, 1999 - 2,100,000 shares $ 2,100
June 30, 1999 - 2,100,000 shares $ 2,100
Additional paid in Capital 0 0
Accumulated loss -15,325 -2,100
----------- -----------
TOTAL STOCKHOLDERS' EQUITY $ -13,225 $ 0
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 0 $ 0
=========== ===========
</TABLE>
See accompanying notes to financial statements
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<PAGE> 5
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Sep.10, 1996
3 Mos Ended 3 Mos Ended Year Ended Year Ended (Inception)
June 30, June 30, March 31, March 31, to June 30,
1999 1998 1999 1998 1999
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
REVENUE: $ 0 $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- ---------- ----------
EXPENSES:
General, Selling
and Administrative $ 13,225 $ 0 $ 0 $ 0 $ 15,325
---------- ---------- ---------- ---------- ----------
Total Expenses $ 13,225 $ 0 $ 0 $ 0 $ 15,325
---------- ---------- ---------- ---------- ----------
Net Profit/Loss (-) $ 13,225 $ 0 $ 0 $ 0 $ -15,325
---------- ---------- ---------- ---------- ----------
Net Profit/Loss(-)
per weighted
share (Note 2) $ -.0063 $ NIL $ NIL $ NIL $ -.0073
---------- ---------- ---------- ---------- ----------
Weighted average
number of common
shares outstanding 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000
---------- ---------- ---------- ---------- ----------
</TABLE>
See accompanying notes to financial statements
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<PAGE> 6
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance,
March 31, 1997 21,000 $ 2,100 $ 0 $ -2,100
Net loss year ended
March 31, 1998 0
--------- --------- --------- ---------
Balance,
December 31, 1997 21,000 $ 2,100 $ 0 $ -2,100
March 15, 1999
Changed from NO PAR
VALUE to $.001 -2,079 +2,079
March 15, 1999
Forward Stock Split
100:1 2,079,000 +2,079 -2,079
Net loss year ended
March 31, 1999 0
--------- --------- --------- ---------
Balance,
March 31, 1999 2,100,000 $ 2,100 $ 0 $ -2,100
Net Loss,
April 1, 1999, to
June 30, 1999 -13,225
--------- --------- --------- ---------
Balance,
June 30, 1999 2,100,000 $ 2,100 $ 0 $ -15,325
--------- --------- --------- ---------
</TABLE>
See accompanying notes to financial statements
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<PAGE> 7
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Sep. 10, 1996
3 Mos Ended 3 Mos Ended Year Ended Year Ended (Inception)
June 30, June 30, March 31, March 31, to June 30,
1999 1998 1999 1998 1999
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C>
Cash Flow from
Operating Activities
Net Loss $ -13,225 $ 0 $ 0 $ 0 $ -15,325
Adjustment to reconcile
net loss to net cash
provided by operating
activities 0 0 0 0 0
Changes in Assets
and Liabilities
Increase in current
Liabilities
Officers Advances +13,225 0 0 0 $ +13,225
----------- ----------- ----------- ----------- -----------
Net cash used in
operating Activities $ 0 $ 0 $ 0 $ 0 $ -2,100
Cash Flows from
Investing Activities 0 0 0 0 0
Cash Flows from
Financing Activities
Issuance of Common
Stock 0 0 0 0 +2,100
----------- ----------- ----------- ----------- -----------
Net increase
(decrease)
in cash $ 0 $ 0 $ 0 $ 0 $ 0
Cash, beginning
of period 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Cash, end of period $ 0 $ 0 $ 0 $ 0 $ 0
----------- ----------- ----------- ----------- -----------
</TABLE>
See accompanying notes to financial statements
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<PAGE> 8
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999, and March 31, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized September 10, 1996, under the laws of the
State of Nevada as Discovery Investments, Inc., Inc. The Company
currently has no operations and in accordance with SFAS #7, is
considered a development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
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 statements
and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits.
For the purpose of the statements of cash flows, all highly
liquid investments with the maturity of three months or less
are considered to be cash equivalents. There are no cash
equivalents as of June 30, 1999.
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<PAGE> 9
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999, and March 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS #109) "Accounting for
Income Taxes". A deferred tax asset or liability is recorded
for all temporary difference between financial and tax
reporting. Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and liabilities.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings
Per Share". Basic loss per share is computed by dividing
losses available to common stockholders by the weighted
average number of common shares outstanding during the period.
Diluted loss per share reflects per share amounts that would
have resulted if dilative common stock equivalents had been
converted to common stock. As of June 30, 1999, the Company
had no dilative common stock equivalents such as stock
options.
Year End
The Company has selected March 31st as its year-end.
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<PAGE> 10
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999, and March 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year 2000 Disclosure
The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Computer programs that have time sensitive
software may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of normal
business activities. Since the Company currently has no
operating business and does not use any computers, and since
it has no customers, suppliers or other constituents, there
are no material Year 2000 concerns.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended February
16, 1999, due to the net loss and no state income tax in Nevada, the
state of the Company's domicile and operations. The Company's total
deferred tax asset as of March 31, 1999, is as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $ 2,100
Valuation allowance $ 2,100
Net deferred tax asset $ 0
</TABLE>
The federal net operating loss carry forward will expire in 2017.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
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<PAGE> 11
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999, and March 31, 1999
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of Discovery Investments, Inc. consists of
25,000,000 shares with a par value of $0.001 per share.
Preferred Stock
Discovery Investments, Inc. has no preferred stock.
On September 15, 1996, the Company issued 21,000 shares of its no par
value common stock in consideration of $2,100 in cash.
On March 15, 1999, the State of Nevada approved the Company's restated
Articles of Incorporation, which increased its capitalization from
25,000 common shares to 25,000,000 common shares. The no par value was
changed to $0.001.
On March 15, 1999, the Company forward split its common stock 100:1,
thus increasing the number of outstanding common stock shares from
21,000 shares to 2,100,000.
NOTE 5 - 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. Until
that time, the stockholders/officers and or directors have committed to
advancing the operating costs of the Company interest free.
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<PAGE> 12
DISCOVERY INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999, and March 31, 1999
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge.
Such costs are immaterial to the financial statements and accordingly,
have not been reflected therein. The officers and directors of the
Company are involved in other business activities and may, in the
future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business
interests. The Company has not formulated a policy for the resolution
of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
-12-
<PAGE> 13
ITEM 2
Management's Discussion and Analysis of Financial Condition and
Results of Operation
The Company has not commenced business activities and has no assets or
operations. The Company is dependent upon its officers to meet any de minimis
costs which may occur.
Jack A. Scott, an officer and director of the Company, has agreed to provide the
necessary funds, without interest, for the Company to comply with the Securities
Exchange Act of 1934, as amended, provided that he is an officer and director of
the Company when the obligation is incurred. All advances are interest-free.
In addition, since the Company has had no operating history nor any revenues or
earnings from operations, with no significant assets or financial resources, the
Company will in all likelihood sustain operating expenses without corresponding
revenues, at least until the consummation of a business combination. This may
result in the Company incurring a net operating loss which will increase
continuously until the Company can consummate a business combination with a
profitable business opportunity. There is assurance that the Company can
identify such a business opportunity and consummate such a business combination.
PART II
OTHER INFORMATION
Item 1 Legal Proceedings. . . . . . . . . . . . . . . . . None
Item 2 Changes in the Rights of the Company's
Security Holders . . . . . . . . . . . . . . . . . None
Item 3 Defaults by the Company on its Senior
Securities . . . . . . . . . . . . . . . . . . . . None
Item 4 Results of Votes of Security Holders . . . . . . . None
Item 5 Other Information. . . . . . . . . . . . . . . . .
The officers and directors have no dispositive control
over any shares of the Company other than the shares
held of record or beneficially.
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . . None
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<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
DISCOVERY INVESTMENTS, INC.
Date: July 9, 1999 By: /S/ Kimberly Lynn Jack
-----------------------------------
Kimberly Lynn Jack
President
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-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> 13,225
<BONDS> 0
0
0
<COMMON> 2,100
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> (13,225)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (13,225)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (13,225)
<INCOME-TAX> 0
<INCOME-CONTINUING> (13,225)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,225)
<EPS-BASIC> (0.006)
<EPS-DILUTED> 0
</TABLE>
