U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MAY 31, 2000
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 000-30041
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CAMBRIDGE CREEK COMPANIES, LTD.
(Exact name of small business issuer as specified in its charter)
NEVADA 76-0609436
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
SUITE 37 B3 1410 PARKWAY BLVD.
COQUITLAM, BC, CANADA V3E 3J7
(Address of principal executive offices)
(604) 464-8374
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports 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 [ ] No [X].
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: As of August 15, 2000 -
2,500,000 shares of common stock, par value $0.001.
Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X].
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INDEX
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PART I - Financial Information Page
Item 1. Financial statements 2
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Balance Sheets as of May 31, 2000 (unaudited) and February 28, 2000 (audited) 2
Statements of Operations for the three months ended May 31, 2000 (unaudited) 3
Statements of Cash Flows for the three months ended May 31, 2000 (unaudited) 4
Notes to the financial statements 5-6
Item 2. Management's Discussion and Analysis of Results of
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Operations and Financial Condition 7-9
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PART II - Other Information
Item 1. Exhibits and Reports on Form 8-K 10
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Signatures 11
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PART I Financial Information
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Item 1. Financial statements
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Cambridge Creek Companies, Ltd.
(A Development Stage Company)
Balance Sheets
(expressed in U.S. dollars)
May 31, February 28,
2000 2000
(unaudited) (audited)
$
Assets
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License (Note 3) - -
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Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable 1,200 1,200
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Contingent Liability (Note 1)
Stockholders' Equity
Common Stock, 25,000,000 shares authorized with a par value
of $.001; 2,500,000 shares issued and outstanding 2,500 2,500
Additional Paid in Capital 155 155
Deficit Accumulated During the Development Stage (3,855) (3,855)
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(1,200) (1,200)
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Cambridge Creek Companies, Ltd.
(A Development Stage Company)
Statements of Operations
(expressed in U.S. dollars)
Accumulated
From May 27, 1999
(Date of Inception) Three Months Ended
to May 31, 2000 May 31, 2000
(unaudited) (unaudited)
$ $
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Revenues - -
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Expenses
Amortization 1,167 -
License written-off 833 -
Organization expenses 655 -
Transfer agent 1,200 -
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3,855 -
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Net Loss (3,855) -
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<CAPTION>
Cambridge Creek Companies, Ltd.
(A Development Stage Company)
Statements of Cash Flows
(expressed in U.S. dollars)
Accumulated
From May 27, 1999
(Date of Inception) Three Months Ended
to May 31, 2000 May 31, 2000
(unaudited) (unaudited)
$ $
<S> <C> <C>
Cash Flows to Operating Activities
Net loss (3,855) -
Non-cash items 2,155 -
Accounts payable 1,200 -
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Net Cash Used by Operating Activities (500) -
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Cash Flows from Financing Activities
Increase in shares issued 500 -
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Net Cash Provided by Financing Activities 500 -
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Change in cash - -
Cash - beginning of period - -
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Cash - end of period - -
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Non-Cash Financing Activities
A total of 2,000,000 shares were issued at
a fair market value of $0.001 per share for
the acquisition of a License (Note 3) 2,000 -
Organization costs paid for by a director
for no consideration treated as additional
paid in capital 155 -
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2,155 -
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Supplemental Disclosures
Interest paid - -
Income tax paid - -
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Cambridge Creek Companies, Ltd.
(A Development Stage Company)
Notes to the Financial Statements
(unaudited)
(expressed in U.S. dollars)
1. Development Stage Company
Cambridge Creek Companies, Ltd. herein (the "Company") was incorporated in
the State of Nevada, U.S.A. on May 27, 1999. The Company acquired a license
to market and distribute a product. As discussed in Note 3, this license is
in jeopardy and the Company has retained the right to sue the vendor. The
Company's new business plan is as a "blank check" company. Under the
Securities Act of 1933, a blank check company is defined as a development
stage company that has no specific business plan or purpose or has
indicated that its business plan is to engage in a merger or acquisition
with an unidentified company or companies and is issuing "penny stock"
securities.
In a development stage company, management devotes most of its activities
in investigating business opportunities. Planned principal activities have
not yet begun. The ability of the Company to emerge from the development
stage with respect to any planned principal business activity is dependent
upon its successful efforts to raise additional equity financing and find
an appropriate merger candidate. There is no guarantee that the Company
will be able to raise any equity financing or find an appropriate merger
candidate. There is substantial doubt regarding the Company's ability to
continue as a going concern.
2. Summary of Significant Accounting Policies
(a) Year end
The Company's fiscal year end is February 28.
(b) Licenses
Costs to acquire licenses are capitalized as incurred. These costs are
amortized on a straight-line basis over their remaining estimated useful
lives.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of
three months or less at the time of issuance to be cash equivalents.
(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 statements and the reported amounts of revenues and expenses
during the periods. Actual results could differ from those estimates.
(e) Adjustments
These interim unaudited financial statements have been prepared on the same
basis as the annual financial statements and in the opinion of management,
reflect all adjustments, which include only normal recurring adjustments,
necessary to present fairly the Company's financial position, results of
operations and cash flows for the periods shown. The results of operations
for such periods are not necessarily indicative of the results expected for
a full year or for any future period.
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3. License
The Company's only asset is a license to distribute and produce an oxygen
enriched water product, called "Biocatalyst," for remediation of sewage and
waste water in septic tanks and waste water treatment facilities, and for
other similar uses, and the rights accruing from this license. The
Company's original business plan was to determine the feasibility of the
Biocatalyst sewage and waste remediation application, and, if Biocatalyst
proved to be feasible for this application, become a Biocatalyst producer.
The Company acquired the three-year license from Mortenson & Associates on
July 1, 1999 by issuing 2,000,000 shares at a fair market value of $.001 or
$2,000. The general partner of Mortenson & Associates is also a spouse of a
former director and officer of the Company. Mortenson & Associates acquired
its right to sublicense Biocatalyst to the Company from NW Technologies.
In December, 1999, David R. Mortenson, Mortenson & Associates' principal,
notified the Company that he was involved in a legal dispute with NW
Technologies, and would be unable to fulfill his obligations under the
license to the Company. As a result, the Company's ability to implement its
business plan was seriously undermined. On February 18, 2000, Mortenson &
Associates, the Company, and the Company's sole shareholder, Douglas Roe,
entered into a settlement agreement. Under the terms of the settlement
agreement, Mortenson & Associates' affiliate, Vitamineralherb.com will
grant to Douglas Roe a license to distribute vitamins and similar products
in part for his agreement not to pursue his individual claims against
Mortenson & Associates. The settlement agreement provides that Mortenson
will prosecute his claims against NW Technologies diligently, with a goal
toward recovering the Biocatalyst rights. Pursuant to the settlement
agreement, the Company has retained its right to prosecute its claims
against Mortenson & Associates for breach of contract. The Company has no
plans to pursue a claim at this time.
May 31, February 28,
2000 2000
(unaudited) (audited)
$ $
License
Cost 2,000 2,000
Less amortization (1,167) (1,167)
Less amount written-off (833) (833)
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4. Related Party Transaction
The License referred to in Note 3 was sold to the Company by a partnership
whose general manager is the spouse of a former officer and director of the
Company for consideration of 2,000,000 shares for total fair market
consideration of $2,000. These shares were paid evenly to the ten partners.
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Item 2. Plan of Operation
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The discussion and financial statements contained herein are for the three
months ended May 31, 2000. The following discussion regarding the financial
statements of the Company should be read in conjunction with the financial
statements of the Company included herewith.
OVERVIEW
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The Company is a development stage company as defined in Statement of
Financial Accounting Standards No. 7, "Accounting and Reporting by Development
Stage Enterprises." The Company is devoting substantially all of its present
efforts to establish a new business and its planned principal operations have
not yet commenced. All losses accumulated since inception have been considered
as part of the Company's development stage activities.
The Company has had no operations nor revenues since its inception.
Plan of Operation
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The statements contained in this section include projections of future
results and "forward-looking statements" as that term is defined in Section 27A
of the Act, and Section 21E of the Exchange Act. All statements that are
included in this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management believes that the
expectations reflected in these forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without limitation, in
conjunction with those forward-looking statements contained in these statements.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the Company has
successfully implemented its business plan.
The Company is in the development stage in accordance with Financial
Accounting Standards Board Standard No. 7. The Company has not been operational,
other than occasionally searching for a business or venture to acquire, as
described below, or had revenues other than interest income since its inception.
Cambridge Creek Companies, Ltd. is a blank check company whose plan of
operation over the next twelve months is to seek and, if possible, acquire an
operating business or valuable assets by entering into a business combination.
The SEC defines a blank check company as one which has no specific business
or plan other than to consummate an acquisition of or merge into another
business or entity. A number of states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in their
respective jurisdictions. Additionally, some states prohibit the initial offer
and sale as well as any subsequent resale of securities of shell companies to
residents of their states. For this reason, management advises that any
potential investor who has an interest in the Company should consult local Blue
Sky counsel to determine whether the state within which that investor resides
prohibits the purchase of shares of the Company in that jurisdiction.
The selection of a business opportunity in which to participate is complex
and risky. Additionally, as the Company has only limited resources, it may be
difficult to find favorable opportunities. There can be no assurance that the
Company will be able to identify and acquire any business opportunity which will
ultimately prove to be beneficial to the Company and its shareholders. The
Company will select any potential business opportunity based on management's
business judgment.
The Company voluntarily filed a registration statement on Form 10SB in
order to make information concerning itself more readily available to the
public. Management believes that a reporting company under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") could provide a
prospective merger or acquisition candidate with additional information
concerning the Company. In addition, management believes that this might make
the Company more attractive to an operating business opportunity as a potential
business combination candidate. As a result of filing its registration
statement, the Company is obligated to file with the Commission certain interim
and periodic reports including an annual report containing audited financial
statements. The Company intends to continue to voluntarily file these periodic
reports under the Exchange Act even if its obligation to file such reports is
suspended under applicable provisions of the Exchange Act.
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Any target acquisition or merger candidate of the Company will become
subject to the same reporting requirements as the Company upon consummation of
any such business combination. Thus, in the event that the Company successfully
completes an acquisition or merger with another operating business, the
resulting combined business must provide audited financial statements for at
least the two most recent fiscal years or, in the event that the combined
operating business has been in business less than two years, audited financial
statements will be required from the period of inception of the target
acquisition or merger candidate.
The Company has no recent operating history and no representation is made,
nor is any intended, that the Company will be able to carry on future business
activities successfully. Further, there can be no assurance that the Company
will have the ability to acquire or merge with an operating business, business
opportunity or property that will be of material value to the Company.
There is always a present potential that the Company may acquire or merge
with a business or company in which the Company's promoters, management,
affiliates or associates directly or indirectly have an ownership interest.
There is no formal existing corporate policy regarding such transactions,
however, in the event such a potential arises, the Company shall disclose any
conflict of interest to its directors and shareholders for purposes of
determining whether to acquire or merge with such a business. Management does
not foresee or is aware of any circumstances under which this policy may be
changed.
The Company has held preliminary discussions with a number of entities for
the purpose of consummating an acquisition or merger. These discussions have not
developed into any serious negotiations, arrangement or understandings between
the Company and such entities and are merely part of the Company's efforts to
explore all available opportunities. The Company will consider the operations
and business activity of any entity with which it wishes to consummate a
transaction for the purpose of determining whether such entity will be able to
sustain growth, profit and viable operations over the long term. At this time,
the Company has not entered into any letters of intent, agreements or
preliminary term sheets with any entity for the purpose of any transaction.
The Company will not be restricted in its search for business combination
candidates to any particular geographical area, industry or industry segment,
and may enter into a combination with a private business engaged in any line of
business, including service, finance, mining, manufacturing, real estate, oil
and gas, distribution, transportation, medical, communications, high technology,
biotechnology or any other. Management's discretion is, as a practical matter,
unlimited in the selection of a combination candidate. Management of the Company
will seek combination candidates in the United States and other countries, as
available time and resources permit, through existing associations and by word
of mouth. This plan of operation has been adopted in order to attempt to create
value for the Company's shareholders.
The Company at this time does not foresee generating any substantial income
over the next 12 months. The Company's main purpose and goal is to locate and
consummate a merger or acquisition with a private entity. The Company's
directors will be compensated with stock of any surviving Company subsequent to
a merger or acquisition with a private entity.
The Company does not intend to do any product research or development. The
Company does not expect to buy or sell any real estate, plant or equipment
except as such a purchase might occur by way of a business combination that is
structured as an asset purchase, and no such asset purchase currently is
anticipated. Similarly, The Company does not expect to add additional employees
or any full-time employees except as a result of completing a business
combination, and any such employees likely will be persons already then
employed by the company acquired.
COMPETITION. The Company will be in direct competition with many entities
in its efforts to locate suitable business opportunities. Included in the
competition will be business development companies, venture capital partnerships
and corporations, small business investment companies, venture capital
affiliates of industrial and financial companies, broker-dealers and investment
bankers, management and management consultant firms and private individual
investors. Most of these entities will possess greater financial resources and
will be able to assume greater risks than those which the Company, with its
limited capital, could consider. Many of these competing entities will also
possess significantly greater experience and contacts than the Company's
Management. Moreover, the Company also will be competing with numerous other
blank check companies for such opportunities.
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EMPLOYEES. The Company has no full-time employees. It is not expected that
the Company will have additional full-time or other employees except as a result
of completing a combination.
LIQUIDITY AND CAPITAL RESOURCES. The Company has, since inception,
accumulated a deficit (net loss) of $3,855.00.
The Company has no commitment for any capital expenditure and foresees
none. However, the Company will incur routine fees and expenses incident to its
reporting duties as a public company, and it will incur expenses in finding and
investigating possible acquisitions and other fees and expenses in the event it
makes an acquisition or attempts but is unable to complete an acquisition. The
Company's cash requirements for the next 12 months are relatively modest,
principally accounting expenses and other expenses relating to making filings
required under the Securities Exchange Act of 1934 (the "Exchange Act"), which
should not exceed $10,000 in the fiscal quarter ending May 31, 2001. Any travel,
lodging or other expenses which may arise related to finding, investigating and
attempting to complete a combination with one or more potential acquisitions
could also amount to thousands of dollars.
The Company will only be able to pay its future debts and meet operating
expenses by raising additional funds, acquiring a profitable company or
otherwise generating positive cash flow. As a practical matter, the Company is
unlikely to generate positive cash flow by any means other than acquiring a
company with such cash flow. The Company believes that management members or
shareholders will loan funds to the Company as needed for operations prior to
completion of an acquisition. Management and the shareholders are not obligated
to provide funds to the Company, however, and it is not certain they will always
want or be financially able to do so. The Company s shareholders and management
members who advance money to the Company to cover operating expenses will expect
to be reimbursed, either by the Company or by the company acquired, prior to or
at the time of completing a combination. The Company has no intention of
borrowing money to reimburse or pay salaries to any Company officer, director or
shareholder or their affiliates. There currently are no plans to sell additional
securities of the Company to raise capital, although sales of securities may be
necessary to obtain needed funds. The Company's current management and its
counsel have agreed to continue their services to the Company and to accrue sums
owed them for services and expenses and expect payment reimbursement only.
Should existing management or shareholders refuse to advance needed funds,
however, the Company would be forced to turn to outside parties to either loan
money to the Company or buy the Company securities. There is no assurance
whatever that the Company will be able at need to raise necessary funds from
outside sources. Such a lack of funds could result in severe consequences to
the Company, including among others:
(1) failure to make timely filings with the SEC as required by the
Exchange Act, which also probably would result in suspension of
trading or quotation in the Company's stock and could result
in fines and penalties to the Company under the Exchange Act;
(2) curtailing or eliminating the Company's ability to locate and
perform suitable investigations of potential acquisitions; or
(3) inability to complete a desirable acquisition due to lack of funds
to pay legal and accounting fees and acquisition-related expenses.
The Company hopes to require potential candidate companies to deposit funds
with the Company that it can use to defray professional fees and travel, lodging
and other due diligence expenses incurred by the Company's management related to
finding and investigating a candidate company and negotiating and consummating a
business combination. There is no assurance that any potential candidate will
agree to make such a deposit.
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PART II Other Information
Item 1. Exhibits and Reports on Form 8-K
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27.1 - Financial Data Schedule
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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.
Dated: August 21, 2000 CAMBRIDGE CREEK COMPANIES, LTD.
By: /s/ Douglas Roe
Douglas Roe, President
(Principal Executive Officer)
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