UNITED STATES
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: September 30, 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:
Finders Keepers, Inc.
(Exact name of registrant as specified in its charter)
Nevada 88-0429812
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
711 Eastern Parkway, Brooklyn, 11213
NY (Zip Code)
(Address of principal executive
offices)
(718) 363-0588
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark 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 for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
80,880,912
/1/
FINDERS KEEPERS, INC.
Table of Contents
Page
PART I - FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Balance Sheet as at September 30, 2000 and December 4
31, 1999
Statement of Operations for the Three and Nine Month 5
Periods Ending September 30, 2000 and 1999
Statement of Cash Flows for the Three and Nine Month 6
Periods Ending September 30, 2000 and 1999
Notes to Financial Statements 7
Item 2. Management's Discussion and Plan of Operation 9
PART II - OTHER INFORMATION 10
Item 4. Submission of Matters to a Vote of Security 10
Holders
Item 6. Exhibits 11
SIGNATURES 12
/2/
Finders Keepers, Inc.
Balance Sheet
as of
September 30, 2000
and
December 31, 1999
and
Statements of Operations
for the Three and Nine Month Periods Ending
September 30, 2000 and 1999
and
Cash Flows
for the Three and Nine Month Periods Ending
September 30, 2000 and 1999
/3/
Finders Keepers, Inc.
Balance Sheet
(unaudited)
September December
30, 31,
2000 1999
Assets ---------- ---------
Current assets:
Cash $ 10,512 $ 17,631
Total current assets 10,512 17,631
Fixed assets, net 1,605 -
------- -------
$ 12,117 $ 17,631
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Payroll taxes $ 394 $ -
Total current liabilities 394 -
Total liabilities 394 -
------ -------
Stockholders' Equity:
Preferred stock, $0.001 par value,
5,000,000
shares authorized, zero shares
issued and
outstanding
- -
Common stock, $0.001 par value,
250,000,000
shares authorized, 80,880,912,
and 40,440,456 shares
issued and outstanding at
9/30/00 and 12/31/99,
respectively
80,881 40,440
Additional paid-in capital 5,450 45,891
Retained deficit (74,608) (68,700)
-------- --------
Total stockholders' equity 11,723 17,631
-------- --------
$ 12,117 $ 17,631
======== ========
The accompanying Notes are an integral part of these financial statements.
/4/
Finders Keepers, Inc.
Statement of Operations
(unaudited)
Three Nine Months
Months Ending
Ending September 30,
September
30,
2000 1999 2000 1999
------- ------- ------- -------
Revenue $ 144,269 $ 300 $ 280,679 $ 300
Cost of Sales (117,749) - (207,877) -
--------- ------ --------- -------
Gross Profit 26,520 300 72,802 300
--------- ------ --------- -------
Expenses:
General and 18,103 32,452 78,611 32,452
administrative
Depreciation 145 - 145 -
--------- ------ --------- -------
Total expenses 18,248 32,452 78,756 32,452
--------- ------ --------- -------
Other income:
Interest - 109 46 109
income
Total other - 109 46 109
income --------- ------ --------- -------
Net income $ 8,272 $(32,043) $ (5,908) $(32,043)
(loss) ========= ======= ========= ========
Weighted
average number
of
common shares 80,880,912 35,000,000 80,880,912 35,000,000
outstanding ========== ========== ========== ==========
Net income $ - $ - $ - $ -
(loss) per ========== ========== ========== ==========
share
The accompanying Notes are an integral part of these financial statements.
/5/
Finders Keepers, Inc.
Statement of Cash Flows
(unaudited)
Three months Nine months
ending September ending September
30, 30,
2000 1999 2000 1999
-------- -------- ------- -------
Cash flows from
operating activities
Net income (loss) $ 8,727 $(32,043) $(5,908) $(32,043)
Depreciation expense 145 - 145 -
Increase in payroll 394 591 394 591
taxes ------- -------- ------- --------
Net cash provided 8,811 (31,452) (5,369) (31,452)
(used) by operating
activities
Cash flows from
investing activities
Purchase of fixed (1,750) - (1,750) -
assets ------- -------- ------- --------
Net cash used by (1,750) - (1,750) -
investing activities
Cash flows from
financing activities
Issuance of common - 67,080 - 67,080
stock ------- -------- ------- --------
Net cash provided by - 67,080 - 67,080
financing activities
Net increase 7,061 35,628 (7,119) 35,628
(decrease) in cash
Cash - beginning 3,451 - 17,631 -
Cash - ending ------- -------- ------- --------
$ 10,512 $ 35,628 $ 10,512 $ 35,628
======= ======== ======= ========
Supplemental
disclosures:
Interest paid $ - $ - $ - $ -
======= ======== ======= ========
Income taxes paid $ - $ - $ - $ -
======= ======== ======= ========
The accompanying Notes are an integral part of these financial statements.
/6/
Finders Keepers, Inc.
Notes to Financial Statements
Note 1 - History and Organization of the Company
The Company was organized on May 28, 1999 (Date of Inception) under the
laws of the State of Nevada. The Company is authorized to issue
250,000,000 shares of $0.001 par value common stock and 5,000,000 shares
of $0.001 par value preferred stock.
The Company's principal business objective is to provide confidential,
unclaimed property location services to the public and to leading
corporations. The Company seeks to assist clients in obtaining
information regarding lost or forgotten estates, unclaimed assets, and/or
financial belongings anywhere in the United States which have escheated
to the state or federal government and governmental agencies.
Note 2 - Summary of Significant Accounting Policies
1. 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 significantly
from those estimates.
2. 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 September 30, 2000.
3. The cost of equipment is depreciated over the estimated useful life
of the equipment utilizing the straight line method of depreciation.
4. Earnings per share (EPS) is computed using the weighted average
number of shares of common stock outstanding during the period. Diluted
EPS is computed by dividing net income by the weighted average shares
outstanding, assuming all dilutive potential common shares were issued.
Since the Company has no common shares that are potentially issuable,
such as stock options, convertible preferred stock and warrants, basic
and diluted EPS are the same. The Company had no dilutive common stock
equivalents such as stock options as of September 30, 2000.
5. The Company recognizes revenue as a client search is completed and
funds are cleared from the escheated account. Cost of goods sold
represents the funds paid to the client net of the Company's finder and
processing fees.
Note 3 - Fixed Assets
The Company purchased computer equipment in the amount of $1,750 and
recorded depreciation expense in the amount of $145 during the period
ended September 30, 2000.
/7/
Finders Keepers, Inc.
Notes to Financial Statements
Note 4 - 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 differences between financial and tax
reporting. Deferred tax expenses (benefit) results from the net change
during the year of deferred tax assets and liabilities. A deferred tax
asset has been fully reserved.
Note 5 - Stockholders' Equity
On May 31, 1999, the Company issued 5,000,000 shares of its $0.001 par
value common stock for cash of $8,510 to its one director. Of the total,
$5,000 is considered common stock, and $3,510 is considered additional
paid-in capital.
On September 2, 1999, the Company completed an offering that was
registered with the State of Nevada pursuant to NRS 90.490 and was exempt
from federal registration pursuant to a Regulation D, Rule 504 of the
Securities Act of 1933, as amended. The Company sold 636,300 shares of
its $0.001 par value common stock at a price of $0.10 per share for total
cash of $63,630. In addition, the Company issued 140,908 shares of its
$0.001 par value common stock for services valued at $0.10 per share for
a total of $14,091.
On March 24, 2000, the Company effected a 2-for-1 stock split of its
$0.001 par value common stock, increasing the number of shares issued and
outstanding from 5,777,208 shares to 11,554,416 shares.
On July 27, 2000 the Company's Board of Directors approved a 7 for 1
forward stock split of its common shares. The Company's Certificate of
Incorporation has been amended to increase the authorized capital stock
of the Company to 250,000,000 shares, all of which will be common stock.
The record date for the forward split is Monday, August 7, 2000 with a
distribution date of August 9, 2000. $69,326 and $34,663 have been
adjusted from additional paid-in capital to common stock to reflect the
stock split as of September 30, 2000 and December 31, 1999, respectively.
Note 6 - Warrants and Options
There are no warrants outstanding to acquire any additional shares of
common stock as of September 30, 2000.
/8/
Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about our
business, financial condition and prospects that reflect our assumptions
and beliefs based on information currently available. We can give no
assurance that the expectations indicated by such forward-looking
statements will be realized. If any of our assumptions should prove
incorrect, or if any of the risks and uncertainties underlying such
expectations should materialize, our actual results may differ materially
from those indicated by the forward-looking statements.
The key factors that are not within our control and that may have a
direct bearing on operating results include, but are not limited to, the
acceptance of our services, our ability to file and realize claims, our
ability to raise capital in the future, the retention of key employees
and changes in the regulation of our industry.
There may be other risks and circumstances that we are unable to predict.
When used in this Quarterly Report, words such as, "believes,"
"expects," "intends," "plans," "anticipates," "estimates" and similar
expressions are intended to identify forward-looking statements, although
there may be certain forward-looking statements not accompanied by such
expressions. All forward-looking statements are intended to be covered
by the safe harbor created by Section 21E of the Securities Exchange Act
of 1934.
General
Finders Keepers, Inc., provides confidential, unclaimed property location
services to the public and to leading corporations. We assist clients in
obtaining information regarding lost or forgotten estates, unclaimed
assets and/or financial belongings anywhere in the United States, which
have escheated to the state or federal government and governmental
agencies.
We were organized as a Nevada corporation on May 28, 1999. Our principal
source of revenue is derived from a $9.95 fee received for performing an
initial search for unclaimed or lost assets. In addition, the Company
receives a 15% recovery fee upon the collection of lost, unclaimed or
escheated property.
The executives of Finders Keepers, Inc. have over three years experience
in this niche market. Their expertise includes the processing of Estate
Claims that often involved the location of the rightful heirs of the
estate, and the statutes and operations of Surrogate Courts.
Results of Operation
Due to the increase in demand for our services we have upgraded our
computer, database and telephone systems in order to be more competitive
and to handle the volume of calls we are currently and expect to receive.
We have upgraded and improved the format of our website design and
content, www.moneychest.com, because we believe that it will offer our
clients a more thorough resource to learn about our services and to have
the ease of use to request the process of claims online. We experience
approximately 9,000 to 11,000 hits on our website a month, however, our
main focus is on locating lost, unclaimed, or escheated property and then
locating the rightful owner of the property ourselves. This is where we
believe we will experience the greatest revenue growth.
Our revenues for the quarter ended September 30, 2000 were $144,269.
This represents a 14% increase from the quarter ended June 30, 1999, when
we reported revenue of $126,516. All revenue is attributable to the
realization of the collection of our fees related to the collection of
claims previously filed with various state agencies. Costs of goods for
the quarter ended September 30, 2000 were $117,749. This represents the
funds paid to the client net of the Company's finder and processing fees.
After expenses we reported net income of $8,272, an 87% increase over the
net income of $4,424 reported June 30, 2000.
Future Business
Our goal is to relocate and lease office facilities by the end of fiscal
year 2000 to facilitate our expansion and the hiring of two additional
employees to assist in the processing of claims. We foresee a continuing
increase in demand for our services and hope to be able to expand
operations along the east coast by early 2001.
Liquidity and Capital Resources
Since inception, we have funded our primary operations primarily through
the sale of our equity securities. On September 2, 1999, we completed an
offering of our securities whereby we sold 777,208 shares at a price of
$0.10 for total cash of $63,630 and in lieu of services rendered in the
amount of $14,091. Current expenses can be supported by existing
revenues, however, should we decide to expand on a larger scale,
additional funding would be required.
During the quarter ended September 30, 2000, $18,103 was used in general
operations.
/9/
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) Finders Keepers, Inc. held an annual stockholder meeting on July 5,
2000.
(b) Since the inception of the company in May of 1999 the number of
directors has been fixed at (1) one:
NAME OF DIRECTOR AGE POSITION
NOMINEE SINCE
--------- ----------- ----- ----------------
Devorah L. May, 1999 28 President, CEO and
Zirkind Director
(c) Issue 1: To elect one director to serve on the Board of Directors
for the ensuing year and until their respective successors are duly
elected and qualified.
Result: Devorah L. Zirkind was elected unanimously to the Board of
Directors
Issue 2: To transact other business as may properly come before the
Annual Meeting and any adjournment or adjournments thereof.
Result: No other business was transacted and the meeting was
adjourned.
/10/
Item 6. Exhibits
Exhibit Name and/or Identification of Exhibit
Number
3 Articles of Incorporation & By-Laws
(a) Articles of Incorporation of the Company filed
May 28, 1999. Incorporated by reference to the
exhibits to the Company's General Form For
Registration Of Securities Of Small Business
Issuers on Form 10 - SB, previously filed with the
Commission.
(b) By-Laws of the Company adopted May 31, 1999.
Incorporated by reference to the exhibits to the
Company's General Form For Registration Of
Securities Of Small Business Issuers on Form 10 -
SB, previously filed with the Commission.
13 Annual or Quarterly Reports
(a) Form 10-KSB for the year ended December 31, 1999.
Incorporated by reference to the Company's Annual Report for
Small Business Issuers, previously filed with the Commission.
(b) Form 10-QSB for the six-month period ended June 30, 2000.
Incorporated by reference to the Company's Quarterly Report
for Small Business Issuers, previously filed with the
Commission.
27 Financial Data Schedule
Financial Data Schedule of Finders Keepers, Inc.,
ending September 30, 2000
/11/
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Finders Keepers, Inc.
(Registrant)
Date: November 7, 2000
By:/s/ Devorah Zirkind
Devorah Zirkind, President, Chief Executive Officer and Director
/12/
