UNITED STATES 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 September 30, 1999.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) for the transition period from _____ to ______.
Commission file number: 0-26755
Black Stallion Management, Inc.
---------------------------------
(Name of Small Business Issuer in Its Charter)
Nevada 88-0409147
-------- ------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
7432 South Carling Circle, Salt Lake City, Utah 84121
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(Address of Principal Executive Offices)(Zip Code)
801-944-0701
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(Issuer's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Exchange Act:
Title of Each Class: None
------
Name of each exchange on which registered: N/A
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Securities to be registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
--------------------------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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. [X] Yes [ ] No
The number of shares outstanding of the Company's common stock ($0.001
par value), as of November 10, 1999, was 2,200,000 shares.
Total of Sequentially Numbered Pages: 11
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<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION. . . . . . . . . . . . . . . . . . . . . . . . 3
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . 4
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2
<PAGE>
PART I
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ITEM 1. FINANCIAL STATEMENTS
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The Company's unaudited financial statements which are attached hereto
beginning on page F-1 include: a) Balance Sheet - September 30, 1999; b)
Statements of Operations - Three Months Ended September 30, 1999 and 1998, and
Inception to September 30, 1999; c) Statements of Stockholders' Equity
Inception to September 30, 1999; d) Statements of Cash Flows - Three Months
Ended August 31,1999 and 1998, and Inception to September 30, 1999; e) Notes
to Consolidated Financial Statements.
In the opinion of management, the accompanying unaudited financial
statements included in this Form 10-QSB reflect all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation of the
results of operations for the periods presented. The results of operations
for the periods presented are not necessarily indicative of the results to be
expected for the full year.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- ------------------------------------------------------------------------------
Results of Operations
Three Month Periods Ended September 30, 1999 and 1998
The Company had no revenue from continuing operations for the
three-month periods ended September 30, 1999 and 1998.
General and administrative expenses for the three month period ended
September 30, 1999, consisted of general corporate administration, legal and
professional expenses, and accounting and auditing costs. These expenses were
$3,226 for the three month period ended September 30, 1999. There were no
such costs for the comparable period in 1998.
Interest expense in the three month period ended September 30, 1999, was
$152 on a note payable to a third party in the principal amount of $5,500 due
March 31, 2000. There was no interest expense during the comparable period in
1998.
As a result of the foregoing factors, the Company realized a net loss of
$3,378 for the three months ended September 30, 1999, as compared to no gain
or loss for the same period in 1998.
Liquidity and Capital Resources
At September 30, 1999, the Company had a working capital deficit of
$4,341. The Company's cash in the amount of $1,434 resulted from a loan from a
related party, which bears interest at the rate of 10% per annum and is due
March 31, 2000. The funds were loaned to the Company to fund its revival and
finance its becoming a reporting company under the Securities Exchange Act of
1934. Management believes that the Company has sufficient cash to meet its
anticipated needs through at least the first calendar quarter of 2000.
3
<PAGE>
However, there can be no assurances to that effect, as the Company has no
revenues and its need for capital may change dramatically if it acquires an
interest in a business opportunity during that period. The Company's current
operating plan is to (i) handle the administrative and reporting requirements
of a public company; and (ii) search for potential businesses, products,
technologies and companies for acquisition. At present, the Company has no
understandings, commitments or agreements with respect to the acquisition of
any business, product, technology or company and there can be no assurance
that the Company will identify any such business, product, technology or
company suitable for acquisition in the future. Further, there can be no
assurance that the Company would be successful in consummating any acquisition
on favorable terms or that it will be able to profitably manage the business,
product, technology or company it acquires. If the Company is unable to
participate in a business venture, it may require additional capital to
continue its search for a business venture and avoid dissolution. In this
event, it is anticipated that the Company will seek extension of its note
payable, as well as additional debt or equity financing. The holder of the
note payable has verbally committed to provide these considerations for a term
of at least twenty-four (24) months from May 31, 1999, or until the Company
acquires or establishes active business operations.
PART II
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) Exhibits. There are no exhibits required, by Item 601 of Regulation
S-B, to be attached to this Form 10-QSB. Included only with the
electronic filing of this report is the Financial Data Schedule for the
three month period ended September 30, 1999 (Exhibit Reference No. 27).
(b) Reports on Form 8-K. No reports on Form 8-K have been filed during the
last quarter of the period covered by this report.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed by the undersigned, thereunto duly
authorized, this 10th day of November, 1999.
Black Stallion Management, Inc.
/s/ Kari Cunningham
-------------------------------------
Kari Cunningham, President
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dated indicated.
/s/ Kari Cunningham Date: November 10, 1999
- -------------------------------------
Kari Cunningham, President, Secretary, Treasurer and Director
4
<PAGE>
Black Stallion Management, Inc.
(A Development Stage Company)
Unaudited Balance Sheet
ASSETS
--------
September 30,
1999
-----------
CURRENT ASSETS
Cash $ 1,434
-----------
Total Current Assets 1,434
-----------
TOTAL ASSETS $ 1,434
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------
CURRENT LIABILITIES
Note payable - (Note 5) $ 5,500
Accrued interest - (Note 5) $ 275
-----------
Total Current Liabilities 5,775
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STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value,
5,000,000 shares authorized, -0- shares
issued and outstanding --
Common stock, $0.001 par value,
25,000,000 shares authorized, 2,200,000
issued and outstanding 2,200
Deficit accumulated during the development stage (6,541)
-----------
Total Stockholders' equity (Deficit) (4,341)
-----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,434
===========
The accompanying notes are an integral part of these financial statements
F-1
<PAGE>
Black Stallion Management, Inc.
(A Development Stage Company)
Unaudited Statements of Operations
From
inception on
For the July 10,
Three Month Ended 1996 Through
September 30, September 30,
1999 1998 1999
---------- ---------- ----------
NET SALES $ -- $ -- $ --
---------- ---------- ----------
COST OF SALES -- -- --
---------- ---------- ----------
GROSS MARGIN -- -- --
---------- ---------- ----------
EXPENSES
General and administrative 3,226 -- 6,266
---------- ---------- ----------
Interest expense 152 -- 275
---------- ---------- ----------
Total Expenses 3,378 -- 6,541
---------- ---------- ----------
LOSS FROM OPERATIONS $ (3,378) $ -- $ (6,541)
---------- ---------- ----------
NET LOSS $ (3,378) $ -- $ (6,541)
========== ========== ==========
BASIC LOSS PER SHARE (0.00) (0.00)
========== ==========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 2,200,000 2,200,000
========== ==========
The accompanying notes are an integral part of these financial statements
F-2
<PAGE>
Black Stallion Management, Inc.
(A Development Stage Company)
Unaudited Statements of Stockholders' Equity (Deficit)
From Inception on July 10, 1996 through September 30, 1999
Deficit
Accumulated
Preferred Stock Common Stock During the
------------------ -------------------------- Development
Shares Amount Shares Amount Stage
---------- ------ ----------- ------------- -----------
Balance, at inception
on July 10, 1996 -- -- -- -- $ --
Issuance of common
stock for services at
$0.001 per share -- -- 2,200,000 2,200 --
Net loss from
Inception on July 10,
1996 through June 30,
1997 -- -- -- -- (2,200)
---------- ------ ----------- ------------- -----------
Balance, June 30,
1997 -- -- 2,200,000 2,200 $ (2,200)
Net loss for the year
ended June 30, 1998 -- -- -- -- (2,200)
---------- ------ ----------- ------------- -----------
Balance, June 30,
1998 -- -- 2,200,000 2,200 $ (2,200)
Net loss for the year
ended June 30, 1999 -- -- -- -- (963)
---------- ------ ----------- ------------- -----------
Balance, June 30,
1999 -- -- 2,200,000 2,200 $ (3,163)
Net loss for the
quarter ended September
30, 1999 -- -- -- -- (3,378)
---------- ------ ----------- ------------- -----------
Balance, September 30,
1999 -- -- 2,200,000 2,200 $ (6,541)
========== ====== =========== ============= ===========
The accompanying notes are an integral part of these financial statements
F-3
<PAGE>
Black Stallion Management, Inc.
(A Development Stage Company)
Unaudited Statements of Cash Flows
From
inception on
For the July 10,
Three Month Ended 1996 Through
September 30, September 30,
1999 1998 1999
---------- ---------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (3,378) $ -- $ (6,541)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Common stock issued for services -- -- 2,200
Accrued Interest 152 275
---------- ---------- ------------
Net Cash Used by Operating
Activities (3,226) (4,066)
---------- ---------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES -- -- --
---------- ---------- ------------
CASH FLOWS FORM FINANCING ACTIVITIES
Proceeds from note payable -- -- 5,500
---------- ---------- ------------
Net Cash Provided by Financing
Activities -- -- 5,500
---------- ---------- ------------
NET INCREASE (DECREASE) IN CASH (3,226) -- 1,434
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4,660 -- --
---------- ---------- ------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 1,434 $ -- $ 1,434
========== ========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ -- $ -- $ --
Income taxes paid $ -- $ -- $ --
SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Common stock issued for services $ -- $ -- $ 2,200
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
Black Stallion Management, Inc.
(A Development Stage Company)
Notes to the Unaudited Financial Statements
September 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization: Black Stallion Management, Inc. (the "Company") was
organized under the laws of the State of Nevada on July 10, 1996. The
Company has not commenced planned principal operations and is considered
a development stage company as defined in SFAS No. 7. The Company is
seeking potential business ventures. The Company has, at the present
time, not paid any dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company and
other relevant factors.
Accounting Method: The financial statements are prepared using the
accrual method of accounting. The Company has elected a June 30 year
end.
Organization Costs: Organization costs, which reflect amounts expended
to organize the Company, amounted to $2,200 and were expensed during the
period ended June 30, 1997.
Loss Per Share: The computation of loss per share is based on the
weighted average number of shares outstanding during the period
presented in accordance with Statement of Financial Accounting
Standards No. 128, "Earnings Per Share".
Cash and Cash Equivalents: For purposes of the statement of cash flows,
the Company considers all highly liquid debt investments purchased with
a maturity of three months or less to be cash equivalents.
Accounting 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, the disclosures of contingent assets
and liabilities at the date of the financial statements, and the
reported amount of revenues and expenses during the reported period.
Actual results could differ from those estimated.
Recently Enacted Accounting Standards: SFAS No. 130, "Reporting
Comprehensive Income", SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information", SFAS No. 132, "Employer's
Disclosure about Pensions and Other Postretirement Benefits", SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities", and
SFAS No. 134, "Accounting for Mortgage-Backed Securities " were recently
issued. SFAS No. 130, 131, 132, 133 and 134 have no current
applicability to the Company or their effect on the financial statements
would not have been significant.
NOTE 2 - NOTE PAYABLE - RELATED PARTY
As of September 30, 1999, the Company owed a related party $5,500. The
note is due in full on March 31, 2000 and accrues interest at 10% per
annum beginning April 1, 1999. As of September 30, 1999, the Company
owed accrued interest on this note of $275.00.
F-5
<PAGE>
Black Stallion Management, Inc.
(A Development Stage Company)
Notes to the Unaudited Financial Statements (continued)
September 30, 1999
NOTE 3 - CAPITAL STOCK
Common Stock - During July, 1996, in connection with its organization,
the Company issued 2,200,000 shares of its previously authorized, but
unissued common stock. The amount was issued for services rendered at
$2,200 (or $.001 per share).
Forward Stock Split - On March 5, 1999 the Company approved a 100-for-1
forward stock split. The forward stock split is reflected on a
retroactive basis.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes".
FASB 109 requires the Company to provide a net deferred tax
asset/liability equal to the expected future tax benefit/expense of
temporary reporting differences between book and tax accounting methods
and any available operating loss or tax credit carry forwards.
The Company has available at September 30, 1999, unused operating loss
carry forwards of approximately $6,500 which may be applied against
future taxable income and which expire in various years through 2018.
The amount of and ultimate realization of the benefits from the
operating loss carry forwards for income tax purposes is dependent, in
part, upon the tax laws in effect, the future earnings of the Company,
and other future events, the effects of which cannot be determined.
Because of the uncertainty surrounding the realization of the loss
carry forwards the Company has established a valuation allowance equal to
the amount of the loss carry forwards and, therefore, no deferred tax
asset has been recognized for the loss carry forwards.
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - During June 1999, the Company paid directors
fees of $500 payable to an officer/director of the Company.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use
his/her home as a mailing address, as needed, at no expense to the
Company.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company was
only recently formed, has incurred losses since its inception and has
not yet been successful in establishing profitable operations. These
factors raise substantial doubt about the ability of the Company to
continue as a going concern. In this regard, management is proposing to
raise any necessary additional funds not provided by operations through
additional sales of its common stock. There is no assurance that the
F-6
<PAGE>
Black Stallion Management, Inc.
(A Development Stage Company)
Notes to the Unaudited Financial Statements (continued)
September 30, 1999
Company will be successful in raising this additional capital or
achieving profitable operations. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
F-7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from consolidated
unaudited financial statements filed with the Company's September 30, 1999
Quarterly Report on Form 10-QSB and is its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0001090052
<NAME> BLACK STALLION MANAGEMENT, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,434
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,434
<CURRENT-LIABILITIES> 5,775
<BONDS> 0
0
0
<COMMON> 2,200
<OTHER-SE> (6,541)
<TOTAL-LIABILITY-AND-EQUITY> 1,434
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,226
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 152
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,378)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
