U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|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 __________________________________________
Harmony Trading Corp.
---------------------------------------
(Exact name of small business issuer as
specified in its charter)
New York 13-3935933
--------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
8 Harmony Lane, Hartsdale, New York 10530
----------------------------------------------------------------------
(Address of principal executive offices)
914-686-8255
------------------------------------------
(Issuer's telephone number)
Not Applicable
- --------------------------------------------------------------------------------
(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 Exchange Act 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 practical date: 3,110,000
------------------------------
Transitional Small Business Disclosure Format (check one).
Yes No X
------------- -----------
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed financial statements for the period ended March 31, 2000
included herein have been prepared by Harmony trading Corp. (the "Company")
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (the "Commission"). In the opinion of management, the
statements include all adjustments necessary to present fairly the financial
position of the Company as of March 31, 2000 and the results of operations and
cash flows for the three month periods ended March 31, 1999 and 2000.
HARMONY TRADING CORP.
(A development stage company)
BALANCE SHEET
December 31, March 31,
1999 2000
Unaudited
------------ ---------
Assets
Current assets
Cash and cash equivalents $ 3,182 $ 3,415
Commissions receivable 1,366
-------- --------
Current assets $ 3,182 4,781
Property and equipment -0- -0-
Total assets $ 3,182 $ 4,781
======== ========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $ 27,000 $ 30,078
-------- --------
Total current liabilities $ 27,000 30,078
Stockholders' equity
Preferred stock authorized
5,000,000 shares, $0.001 par
value each. At December 31, 1999
and March 31, 2000 there are
- -0- and -0- shares outstanding
respectively
Common Stock authorized 20,000,000
shares, $0.001 par value each. At
December 31, 1999 and March 31, 2000,
there are 3,110,000 3,110,000 shares
outstanding respectively 3,110 3,110
Additional paid in capital 20,330 20,330
Deficit accumulated during development
stage (47,258) (48,737)
-------- --------
Total stockholders' equity (23,818) (25,297)
-------- --------
Total liabilities and stockholders' equity $ 3,182 $ 4,781
======== ========
See accompanying notes to financial statements.
<PAGE>
HARMONY TRADING CORP.
(A development stage company)
STATEMENT OF OPERATIONS
For the period
from inception
March 31, March 31, August 13, 1996
1999 2000 to March 31,
2,000
Unaudited Unaudited Unaudited
----------- ----------- -----------
Revenue $ 2,694 $ 5,851 $ 25,769
Costs of goods sold -0- -0- -0-
----------- ----------- -----------
Gross profit $ 2,694 $ 5,851 $ 25,769
Operations:
General and
administrative 5,369 7,330 74,778
Depreciation and amortization -0- -0- -0-
----------- ----------- -----------
Total expense 5,369 7,330 74,778
Income (loss) from
operations (2,675) (1,479) (49,009)
Other income
Interest income 272
---
Total Other Income
Income (loss) $ (2,675) $ (1,479) $ (48,737)
=========== =========== ===========
Net income (loss)
per share - basic (0.00) (0.00) (0.02)
Number of shares
outstanding- basic 1,000,000 3,110,000 3,110,000
=========== =========== ===========
See accompanying notes to financial statements.
F-3
<PAGE>
HARMONY TRADING CORP.
(A development stage company)
STATEMENT OF STOCKHOLDERS EQUITY
Deficit
accumulated
Additional during
Common Common paid in development
Date Stock Stock Capital stage Total
---- --------- ------ -------- -------- --------
December 31, 1996
balance (1) 2,000,000 $2,000 $ 2,000
Net income $ (10,865) $(10,865)
--------- ------ --------- --------- --------
December 31, 1997
balance 2,000,000 2,000 $ (10,865) $ (8,865)
Net loss (10,785) (10,785)
--------- ------ --------- --------- --------
December 31, 1998
balance 2,000,000 2,000 ($21,650) (19,650)
Sale of shares 1,010,000 1,010 24,240 25,250
Contribution of services 375 375
Issuance of shares
for legal 100,000 100 2,400 2,500
services
Less offering expenses (6,685) (6,685)
Net Loss (25,608) (25,608)
--------- ------ --------- --------- --------
December 31, 1999
balance 3,110,000 $3,110 $ 20,330 $(47,258) $(23,818)
Unaudited
Net loss (1,479) (1,479)
--------- ------ --------- --------- --------
Balances
March 31, 2000 3,110,000 $3,110 $ 20,330 (48,737) $(25,297)
========= ====== ========= ========= ========
See accompanying notes to financial statements
F-4
<PAGE>
HARMONY TRADING CORP.
(A development stage company)
STATEMENT OF CASH FLOWS
For the period
from inception
March 31, March 31, August 13, 1996
1999 2000 to March 31,
2000
Unaudited Unaudited Unaudited
--------- --------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) $(2,675) $(1,479) $(48,737)
Non cash transaction 4,875
Corporate taxes (66)
Commissions receivable (1,366) (1,366)
Accounts payable and accrued 3,078 30,078
expenses
------- ------- --------
TOTAL CASH FLOWS FROM (2,741) 233 (15,150)
OPERATIONS
CASH FLOWS FROM INVESTING
ACTIVITIES -0- -0- -0-
CASH FLOWS FROM FINANCING
ACTIVITIES
Officer loan payable 3,408 -0- -0-
Sale of stock net of
offering expenses 18,565
--------
TOTAL CASH FLOWS FROM
FINANCING ACTIVITIES 18,565
NET INCREASE (DECREASE) IN CASH 667 233 $ 3,415
CASH BALANCE BEGINNING OF PERIOD -0- 3,182 -0-
period ------- ------- --------
CASH BALANCE END OF PERIOD $ 667 $ 3,415 $ 3,415
======= ======== ========
<PAGE>
HARMONY TRADING CORP.
(A development stage company)
Notes to Financial Statements
March 31, 2000
Note A - Basis of Reporting
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, such statements include all adjustments which are considered
necessary for a fair presentation of the financial position of Harmony Trading
Corp. (the "Company") at March 31, 2000 and the results of its operations, and
cash flows for the three-month period then ended. The results of operations for
the three-month period ended March 31, 2000 are not necessarily indicative of
the operating results for the full year. It is suggested that these financial
statements be read in conjunction with the financial statements and related
disclosures for the year ended December 31, 1999 included in the Company's Form
10-KSB.
Note B - Net Income Per Share of Common Stock
6
<PAGE>
In 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings Per Share". Statement No. 128 replaced the calculation of
primary and fully diluted earnings per share with basic and diluted earnings per
share. Unlike primary earnings per share, basic earnings per share exclude any
dilutive effects of options, warrants, and convertible securities. Dilutive
earnings per share is very similar to the previously reported fully diluted
earnings per share. The Company has adopted Statement No. 128.
Note C - Income Taxes
The Company provides for the tax effects of transactions reported in
the financial statements. The provision if any, consists of taxes currently due
plus deferred taxes related primarily to differences between the basis of assets
and liabilities for financial and income tax reporting. The deferred tax assets
and liabilities, if any represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of March 31, 2000, the Company had no
material current tax liability, deferred tax assets, or liabilities to impact on
the Company's financial position because the deferred tax asset related to the
Company's net operating loss carryforward and was fully offset by a valuation
allowance.
At March 31, 2000, the Company has a net operating loss carry forward for
income tax purposes of $48,737. This carryforward is available to offset future
taxable income, if any, and expires in the year 2010. The Company's utilization
of this carryforward against future taxable income may become subject to an
annual limitation due to a cumulative change in ownership of the Company of more
than 50 percent.
The components of the net deferred tax asset as of March 31, 2000 are as
follows:
Deferred tax asset:
Net operating loss carry forward $ 16,570
Valuation allowance $ (16,570)
---------
Net deferred tax asset $ -0-
=========
The Company has not recognized any income tax benefit for the loss
generated in the period from inception, August 13, 1996, to March 31, 2000.
SFAS No. 109 requires that a valuation allowance be provided if it
is more likely than not that some portion or all of a deferred tax asset will
not be realized. The Company's ability to realize benefit of its deferred tax
asset will depend on the generation of future taxable income. Because the
Company has yet to recognize significant revenue from the sale of its products,
the Company believes that a full valuation allowance should be provided.
7
<PAGE>
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.
On December 21, 1999 certain selling shareholders filed a registration
statement on Form SB-2, to register 1,265,000 shares of common stock. The
registration statement was declared effective on May 2, 2000.
Item 6. Exhibits and Reports on Form 8-K
None.
8
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
HARMONY TRADING CORP.
May 15, 2000 /s/ Paul B. Gottbetter
-----------------------------
Paul B. Gottbetter, President and
Chief Executive Officer, and Chief
Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements for the three month period ended March 31, 2000 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 3,415
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,781
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,781
<CURRENT-LIABILITIES> 27,000
<BONDS> 0
0
0
<COMMON> 3,110
<OTHER-SE> (28,407)
<TOTAL-LIABILITY-AND-EQUITY> 4,781
<SALES> 5,851
<TOTAL-REVENUES> 5,851
<CGS> 0
<TOTAL-COSTS> 7,330
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,479)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,479)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,479)
<EPS-BASIC> (.00)
<EPS-DILUTED> (.00)
</TABLE>
