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 Quarter ended September 30, 2000
[ ] 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 0-30183
ARROW CAPITAL GROUP, INC.
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(Exact name of registrant as specified in its charter)
Nevada 13-4067631
------------------------ -----------------
(State or other jurisdiction (IRS Employer ID Number)
of incorporation or organization)
c/o Steven L. Siskind; 645 Fifth Avenue, Suite 403, New York, NY 10022
-----------------------------------------------------------------------
(Address of principal executive offices)
(212) 750-2002
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(Issuer's Telephone Number)
515 Madison Avenue, New York, New York 10022
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(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
------ ------
As of October 31, 2000, the Issuer had 689,700 shares of Common Stock,
par value $.001 per share, issued and outstanding.
<PAGE>
PART I
Item 1. Financial Statements
ARROW CAPITAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS AND
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
FOR THE PERIOD JUNE 4, 1999 (INCEPTION)
THROUGH SEPTEMBER 30, 2000
<PAGE>
ARROW CAPITAL GROUP, INC.
TABLE OF CONTENTS
Page No.
INDEPENDENT ACCOUNTANTS' REVIEW REPORT 1
FINANCIAL STATEMENTS
Balance sheets........................................... 2
Statements of Operations................................. 3
Statements of Changes in Stockholders' Deficit........... 4
Statements of Cash Flows................................. 5
Notes to Financial Statement............................. 6
<PAGE>
Time Palmieri, CPA
Certified Public Accountant
305 Morning Mist Walk
Suwanee, GA 30024
(770) 932-6817
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Stockholders
Arrow Capital Group, Inc.
Reno, Nevada
I have reviewed the accompanying balance sheets of Arrow Capital Group, Inc. (a
Nevada corporation in the developement stage), as of December 31, 1999, March
31, 2000, June 30, 2000, and September 30, 2000 and the related statements of
operations, stockholders' deficit, and cash flows for the periods then ended in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of Arrow Capital Group, Inc.
A review consists principally of inquires of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should be
made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
November 15, 2000
Suwanee, GA
Tim Palmieri
Certified Public Accountant
<PAGE>
ARROW CAPITAL GROUP, INC.
(A Development Stage Company)
Balance Sheets
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
December 31, 1999 March 31, 2000 June 30, 2000 September 30, 2000
----------------- -------------- ------------- ------------------
<S> <C> <C> <C> <C>
Current Assets:
Cash $ 1,794 $ 1,215 $ 982 $ 11
-------- -------- ------ ----
Other Assets: - - - -
-- -- -- -
$ 1,794 $ 1,215 $ 982 $ 11
======== ======== ====== ====
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current Liabilities:
Accounts payable $ 1,000 $ 1,250 $ 1,500 $ 1,750
Shareholder loan payable 1,140 1,140 1,140 1,140
------ ------ ------ ------
Total Current Liabilities 2,140 2,390 2,640 2,890
------ ------ ------ ------
Stockholder's Deficit: (Note 2)
Common stock; $.001 par value; authorized-
10,000,000 shares; issued and outstanding -
689,700 shares 690 690 690 690
Additional paid-in capital 890 890 890 1,090
Deficit accumulated during the development stage (1,926) (2,754) (3,238) (4,659)
------ ------- ------- -------
Total stockholder's Deficit (346) (1,174) (1,658) (2,879)
------ ------- ------- -------
$ 1,794 $ 1,215 $ 982 $ 11
====== ====== ====== ======
</TABLE>
The accompanying note are an integral part of the financial statements.
2
<PAGE>
ARROW CAPITAL GROUP, INC.
( A Development Stage Company)
Statements of Operations
(Unaudited)
For the periods ended
<TABLE>
<CAPTION>
For the period June 4 to Three months Three months Three months
December 31, 1999 ended March 31, 2000 ended June 30, 2000 ended September 30, 2000
------------------ --------------------- -------------------- ------------------------
<S> <C> <C> <C> <C>
Revenues:
Investment income $ 49 $ 22 $ 16 $ 16
-------- --------- --------- ---------
Total Revenues 49 22 16 16
-------- --------- --------- ---------
Costs and expenses:
General and administrative $ 1,975 $ 850 $ 500 $ 1,436
-------- --------- --------- ---------
Total Expenses 1,975 850 500 1,435
-------- ---- ---- ---------
Net loss $ (1,926) $ (828) $ (484) $ (1,420)
========= ========= ========= =========
Loss per common share $(0.0028) $ (0.0012) $ (0.0007) $ (0.0021)
========= ========= ========= =========
Weighted average common
shares outstanding 689,700 689,700 689,700 689,700
========= ========= ========= =========
</TABLE>
For the cumulative periods ended
<TABLE>
<CAPTION>
Three months Six months Nine months For the period June 4 to
ended March 31, 2000 ended June 30, 2000 ended September 30, 2000 September 30, 2000
---------------------- --------------------- -------------------------- ------------------------
<S> <C> <C> <C> <C>
Revenues:
Investment income $ 22 $ 38 $ 53 $ 102
--------- --------- --------- ---------
Total Revenues 22 38 53 102
--------- --------- --------- ---------
Costs and expenses:
General and administrative $ 850 $ 1,350 $ 2,786 $ 4,761
--------- --------- --------- ---------
Total Expenses 850 1,350 2,786 4,761
--------- --------- --------- ---------
Net loss $ (828) $ (1,312) $ (2,733) $ (4,659)
========= ========= ========= =========
Loss per common share $ (0.0012) $ (0.0019) $ (0.0040) $ (0.0068)
========= ========= ========= =========
Weighted average
common shares outstanding 689,700 689,700 689,700 689,700
========= ========= ========= =========
</TABLE>
The accompanying note are an integral part of the financial statements.
3
<PAGE>
ARROW CAPITAL GROUP, INC.
(A Development Stage Company)
Statements of Changes in Stockholder's Deficit
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Common Stock Additional Accumulated
----------------------- Paid-in from
Shares Amount Capital Inception Total
------ ------ ---------- ------------ ------
<S> <C> <C> <C> <C> <C>
Balance, June 4, 1999 (inception) - $ - $ - $ - $ -
Common stock issued,
valued at $.001 per share 689,700 690 890 - 1,580
Net loss for the period from
June 4 to December 31, 1999 - - - (1,926) (1,926)
------- ----- ------ -------- --------
Balance, December 31, 1999 689,700 $ 690 $ 890 $ (1,926) $ (346)
------- ----- ------ -------- --------
Net loss for the quarter ending March 31, 2000 - - - (828) (828)
------- ----- ------ -------- --------
Balance, March 31, 2000 689,700 690 890 (2,754) (1,174)
Net loss for the quarter ending June 30, 2000 - - - (484) (484)
------- ----- ------ -------- --------
Balance, June 30, 2000 689,700 $ 690 $ 890 $ (3,238) $ (1,658)
Net loss for the quarter ending September 30, 2000 - - 200 (1,420) (1,220)
------- ----- ------ -------- --------
Balance, September 30, 2000 689,700 $ 690 $1,090 $ (4,659) $ (2,879)
======= ===== ====== ======== ========
</TABLE>
The accompanying note are an integral part of the financial statements.
4
<PAGE>
ARROW CAPITAL GROUP, INC.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
For the periods ended
<TABLE>
<CAPTION>
For the period June 4 to Three months Three months Three months
December 31, 1999 ended March 31, 2000 ended June 30, 2000 ended September 30, 2000
------------------ --------------------- -------------------- ------------------------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net loss $ (1,926) $ (828) $ (484) $ (1,420)
Adjustments to reconcile net
loss to net cash
used in operating activities:
Accounts payable 1,000 249 251 250
-------- ------- ------ --------
Net cash used in operating activities (926) (579) (233) (1,170)
-------- ------- ------ --------
Cash flows from investing activities:
Advance from shareholder 1,670 - - -
Payments on shareholder loan payable (530) - - -
-------- ------- ------ --------
Net cash provided by in
investing activities 1,140 - - -
-------- ------- ------ --------
Cash flows from financing acitvities:
Proceeds from sale of common stock 1,580 - - 200
-------- ------- ------ --------
Net cash provided by
financing activities 1,580 - - 200
-------- ------- ------ --------
Net increase (decrease) in cash 1,794 (579) (233) (970)
Cash, beginning - 1,794 1,215 982
-------- ------- ------ --------
Cash, ending $ 1,794 $ 1,215 $ 982 $ 11
======== ======= ====== ========
</TABLE>
For the cumulative periods ended
<TABLE>
<CAPTION>
Three months Six months Nine months For the period June 4 to
ended March 31, 2000 ended June 30, 2000 ended September 30, 2000 September 30, 2000
---------------------- --------------------- -------------------------- ------------------------
<S> <C> <C> <C> <C>
Cash flows from
operating activities:
Net loss $ (828) $(1,312) $(2,733) $(4,659)
Adjustments to reconcile
net loss to net cash
used in operating activities:
Accounts payable 249 500 750 1,750
------- ------ ------- -------
Net cash used in
operating activities (579) (812) (1,983) (2,909)
------- ------ ------- -------
Cash flows from
investing activities:
Advance from shareholder - - - 1,670
Payments on shareholder loan payable - - - (530)
------- ------ ------- -------
Net cash provided by in
investing activities - - - 1,140
------- ------ ------- -------
Cash flows from financing acitvities:
Proceeds from sale of common stock - - 200 1,780
------- ------ ------- -------
Net cash provided by
financing activities - - 200 1,780
------- ------ ------- -------
Net increase (decrease) in cash (579) (812) (1,783) 11
Cash, beginning 1,794 1,794 1,794 -
------- ------ ------- -------
Cash, ending $ 1,215 $ 982 $ 11 $ 11
======= ====== ======= =======
</TABLE>
The accompanying note are an integral part of the financial statements.
5
<PAGE>
ARROW CAPITAL GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Description of Business
The financial statements presented are those of Arrow Capital Group, Inc. a
development stage company (the "Company"). The Company was incorporated under
the laws of the State of Nevada on June 4, 1999. The Company's activities, to
date, have been primarily directed towards the raising of capital.
As shown in the financial statement, as of March 31, June 30, and September 30,
2000, the Company has incurred accumulated deficits of $2,754, $3,238, and
$4,659, respectively and only had cash of $1,215, $982, and $11, respectively.
The Company's continued existence is dependent on its ability to generate
sufficient cash flow to meet its obligations on a timely basis. Accordingly, the
financial statements do not include any adjustment that might be necessary
should the Company be unable to continue in existence. The Company has been
exploring sources to obtain additional equity or debt financing. The Company has
also indicated its intention to participate in one or more as yet unidentified
business ventures, which management will select after reviewing the business
opportunities for their profit or growth potential.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reporting 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 period. Actual results
could differ from those estimates.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and 1iabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. The effect on deferred tax assets and.
liabilities of a change in tax rates is recognized in the statement of
operations in the period that includes the enactment date.
Loss Per Common Share
Loss per common share is computed by dividing the net loss by the weighted
average shares outstanding during the period.
6
<PAGE>
ARROW CAPITAL GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
Note 2 - Stockholders' Equity
Common Stock
The Company authorized 10,000,000 shares of par value $.001 common stock, the
rights and preferences of which were determined by the Board of Directors at the
time of issuance.
Dividends may be paid on outstanding shares as declared by the Board of
Directors. Each share of common stock is entitled to one vote.
Note 3 - Income Taxes
There is no provision for income taxes since the Company has incurred a net
operating loss.
Note 4 - Related Party Transactions
A shareholder advanced the Company $1,140 for operating expenses. This advance
will be repaid from future capital contributions.
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
For the periods ending March 31, June 30, and September 30, 2000, the Company
incurred net losses of ($828), ($484), and ($1,420), respectively. Explanations
of these results are set forth below.
Revenue
For the periods ending March 31, June 30, and September 30, 2000, the Company
recorded investment revenue of $22, $16, and $16, respectively.
Expenses
General and Administrative
General and administrative costs consist primarily of professional and
consulting fees. Significant costs are attributed to the Company becoming a
reporting public company. This status will increase audit and legal costs
significantly. In relation to the Company becoming a public company, the cost of
corporate relations will also increase as quarterly reports and other investor
information is required.
7
<PAGE>
ARROW CAPITAL GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
The Company incurred expenses of $850, $500, and $1,436, respectively during the
periods ending March 31, June 30, and September 30, 2000. This was due to the
high professional and legal costs related to the Company's operations.
Liquidity and Capital Resources
During the periods ending March 31, June 30, and September 30, 2000, the Company
decreased cash ($579), ($233), and ($970), respectively, primarily from
operations.
At March 31, June 30, and September 30, 2000, the Company had current assets of
$1,216, $982, $11 and current liabilities of $2,390, $2,640, $2,890,
respectively.
Implementation of the Company's business plan may require capital resources
substantially greater than those currently available to the Company. The Company
may determine, depending on the opportunities available to it, to seek
additional debt or equity financing to fund the cost of acquiring an operating
entity. There can be no assurance that additional equity financing will be
available. If neither additional debt or equity financing is available, the
Company might seek loans. In addition, the Company might seek some sort of
strategic alliance with another company that would provide equity to the
Company.
To the extent that the Company finances expansion through the issuance of
additional equity securities, any such issuance would result in dilution of the
interests of the Company's stockholders. Additionally, to the extent that the
Company incurs indebtedness or issues debt securities to finance expansion
activities, it will be subject to all of the risks associated with incurring
substantial indebtedness, including the risks that interest rates may fluctuate
and cash flow may be insufficient to pay the principal of , and interest on, any
such indebtedness.
Inflation
The Company believes that the impact of inflation and changing prices on its
operations since commencement of operations has been negligible.
Seasonality
The Company does not deem its revenues to be seasonal and any effect would be
immaterial.
8
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
The Company is considered a development stage company with limited
assets or capital, and with limited operations or income since inception in
June, 1999. The costs and expenses associated with the preparation and filing of
this registration statement and other operations of the company have been paid
for by the controlling shareholders of the Company who are also its officers and
directors. It is anticipated that the Company will require only nominal capital
to maintain the corporate viability of the Company and any additional needed
funds will most likely be provided by the Company's existing shareholders or its
officers and directors in the immediate future. Current shareholders have not
agreed upon the terms and conditions of future financing and such undertaking
will be subject to future negotiations, except for the express commitment of the
officers and directors to fund required 34 Act filings. Repayment of any such
funding will also be subject to such negotiations. However, unless the Company
is able to facilitate an acquisition of or merger with an operating business or
is able to obtain significant outside financing, there is substantial doubt
about its ability to continue as a going concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger. At that time, management will
evaluate the possible effects of inflation on the Company as it relates to its
business and operations following a successful acquisition or merger.
Management plans may but do not currently provide for experts to secure
a successful acquisition or merger partner so that it will be able to continue
as a going concern. In the event such efforts are unsuccessful, contingent plans
have been arranged to provide that the current Director of the Company is to
fund required future filings under the 34 Act, and existing shareholders have
expressed an interest in additional funding if necessary to continue the Company
as a going concern.
Plan of Operation
During the next twelve months, the Company will actively seek out and
investigate possible business opportunities with the intent to acquire or merge
with one or more business ventures. In its search for business opportunities,
management will follow the procedures outlined in Item 1, above. Because the
Company has limited funds, it may be necessary for the officers and directors to
either advance funds to the Company or to accrue expenses until such time as a
successful business consolidation can be made. The Company will not make it a
condition that the target company must repay funds advanced by its officers and
directors. Management intends to hold expenses to a minimum and to obtain
services on a contingency basis when possible. Further, the Company's directors
will defer any compensation until such time as an acquisition or merger can be
accomplished. However, if the Company engages outside advisors or consultants in
its search for business opportunities, it may be necessary for the Company to
attempt to raise additional funds. As of the date hereof, the Company has not
9
<PAGE>
made any arrangements or definitive agreements to use outside advisors or
consultants or to raise any capital. In the event the Company does need to raise
capital, most likely the only method available to the Company would be to
private sale of its securities. Because of the nature of the Company as a
development stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a commercial or
private lender. There can be no assurance that the Company will be able to
obtain additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is convinced that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
Year 2000 Compliance
The Year 2000 Issue is the result of potential problems with computer
systems or any equipment with computer chips that use dates where the date has
been stored as just two digits (e.g. 98 for 1998). On January 1, 2000, any clock
or date recording mechanism including date sensitive software which uses only
two digits to represent the year, may have recognized the date using 00 as the
year 1900 rather than the year 2000. This may have resulted in a system failure
or miscalculations causing disruption of operations, including among other
things, a temporary inability to process transactions, send invoices, or engage
in similar activities.
The Company has confirmed that its systems are year 2000 Compliant. It
has experience no Y2K problems to date.
The Company believes that it has disclose all required information
relative to Year 2000 issues relating to its business and operations. However,
there can be no assurance that the systems of other companies on which the
Company's systems rely also will be timely converted or that any such failure to
convert by another company would not have an adverse affect on the Company's
systems.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included or incorporated by reference in
this Form 10-QSB which address activities, events or developments which the
Company expects or anticipates, will or may occur in the future, including such
things as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements. These statements are based on certain assumptions and analysis made
by the Company in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
10
<PAGE>
factors it believes are appropriate in the circumstances. However, whether
actual results or developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, general economic
market and business conditions; the business opportunities (or lack thereof)
that may be presented to and pursued by the Company; changes in laws or
regulation; and other factors, most of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made in this Form
10-QSB are qualified by these cautionary statements, and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or operations.
The Company assumes no obligations to update any such forward-looking
statements.
PART II
Item 6. Exhibits and reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of
regulation S-B, as described in the following index of
exhibits, are incorporated herein by reference, as follows:
Exhibit No. Description
3.1 Articles of Incorporation of Arrow Capital Group, Inc. (1)
3.2 By-Laws of Arrow Capital Group, Inc. (1)
27 Financial Data Schedule *
-----------
(1) Incorporated by referenced from the Form 10-SB filed by the Company on
August 25, 2000.
* Filed herewith
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
September 30, 2000.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Dated November 16, 2000 ARROW CAPITAL GROUP, INC.
/s/ James Season
-------------------------
James Season, President
12
