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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
December 31, 1999
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 0-28143
MADISON HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-2102435
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
39 Broadway, Suite 2250, New York, NY 10006
(Address of principal executive offices (zip code))
212/425-8200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the last 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
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at December 31, 1999
Common Stock, par value $0.0001 5,000,000
ITEM 1. FINANCIAL STATEMENTS
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MADISON HOLDINGS, INC.
----------------------
(A Development Stage Company)
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FINANCIAL STATEMENTS
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FOR THE PERIOD ENDED DECEMBER 31, 1999
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MADISON HOLDINGS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION TO DECEMBER 31, 1999
(See Accountants' Review Report)
CONTENTS
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Page(s)
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Accountants' Review Report 1.
Financial Statements:
Balance Sheet 2.
Statement of Income and Retained Earnings 3.
Statement of Changes in Stockholders' Equity 4.
Statement of Cash Flows 5.
Notes to Financial Statements 6.
Cohen & Kameny CPA's PLLC
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Cohen & Kameny CPA's PLLC
3530 Henry Hudson Parkway, Suite B
Riverdale, NY 10463
(718) 548-7200 Fax (718) 796-0184
Eli Cohen, CPA
David Kameny, CPA
- - - -------------------
Accountants' Review Report
--------------------------
To The Board of Directors
Madison Holdings, Inc.
We have reviewed the accompanying balance sheet of Madison Holdings, Inc. (a
Delaware corporation) as of December 31, 1999 and the related statements of
operations and retained earnings, stockholders' equity and cash flows for the
period from inception (May 20, 1999) to December 31, 1999 in accordance with
standards established by the American Institute of Certified Public Accountants.
All information included in these financial statements is the representation of
the management of Madison Holdings, Inc.
A review consists principally of inquiries 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, we do not express such an opinion.
Based on our review, we are 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.
COHEN & KAMENY CPA'S PLLC
Riverdale, New York
February 15, 2000
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MADISON HOLDINGS, INC.
(A Development Stage Company)
BALANCE SHEET
AS OF DECEMBER 31, 1999
(See Accountants' Review Report)
ASSETS
------
<TABLE>
<CAPTION>
CURRENT ASSETS:
- - - ---------------
<S> <C>
Cash $ 701.
TOTAL CURRENT ASSETS: 701.
- - - --------------------- -----------------
TOTAL ASSETS $ 701.
- - - ------------ -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
- - - ------------
$ -
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TOTAL LIABILITIES: -
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STOCKHOLDERS' EQUITY:
- - - ---------------------
Common stock, $.0001 par value, 120,000,000 shares authorized,
5,000,000 issued and outstanding 500.
Additional paid in capital 225.
Retained Earnings (24).
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TOTAL STOCKHOLDERS' EQUITY: 701.
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 701.
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</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 2.
Cohen & Kameny CPA's PLLC
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MADISON HOLDINGS, INC.
(A Development Stage Company)
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIORD FROM INCEPTION TO DECEMBER 31, 1999
(See Accountants' Review Report)
<TABLE>
<S> <C>
NET SALES -
- - - ---------
COST OF SALES -
- - - -------------
GROSS PROFIT -
- - - ------------ ----------------
OPERATING EXPENSES
- - - ------------------
Bank charges 24.
INCOME FROM OPERATIONS (24).
- - - ---------------------- ----------------
NET LOSS (24).
- - - -------- ----------------
RETAINED EARNINGS - BEGINNING OF PERIOD -
- - - ---------------------------------------
RETAINED EARNINGS - END OF PERIOD (24).
- - - --------------------------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3.
Cohen & Kameny PCA's PLLC
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MADISON HOLDINGS, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION TO DECEMBER 31, 1999
(See Accountants' Review Report)
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained
Stock Capital Earnings
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<S> <C> <C> <C>
Balances at inception - May 20, 1999 475. - -
Stock options exercised 24. 214. -
Net income - - -
Balances at September 30, 1999 499. 214. -
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Stock options exercised 1. 11. -
Net (loss) - - (24).
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Balances at December 31, 1999 500. 225. (24).
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</TABLE>
The accompanying notes are an integral part of these financial statements.
Cohen & Kameny CPA's PLLC
Page 4.
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MADISON HOLDINGS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION TO DECEMBER 31, 1999
(See Accountants' Review Report)
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- - - -------------------------------------
Operating expenses (24).
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NET CASH USED BY OPERATING ACTIVITIES (24).
- - - ------------------------------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- - - ------------------------------------- -
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NET CASH PROVIDED BY INVESTING ACTIVITIES -
- - - ----------------------------------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- - - -------------------------------------
Capital contributions 725.
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NET CASH PROVIDED BY FINANCING ACTIVITIES 725.
- - - ----------------------------------------- -----------------
NET INCREASE IN CASH & CASH EQUIVELANTS $ 701.
- - - ---------------------------------------
Cash - at beginning of period -
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CASH & CASH EQUIVALENTS - AT END OF PERIOD $ 701.
- - - ------------------------------------------ -----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 5.
Cohen & Kameny CPA's PLLC
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MADISON HOLDINGS, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION TO DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF THE COMPANY'S BUSINESS:
- - - ------ ----------------------------------------
Madison Holdings, Inc. (the Company) was incorporated on May
20, 1999 in the state of Delaware. The Company was formed in
order to seek business opportunities and is currently a
"shell" with no business operations. As of the date of these
financial statements all of the Company's operations have been
organizational in nature and as a result it must be considered
in its developmental stage.
The Company's current business plan is to seek out business
opportunities and to pursue other related activities intended
to enhance shareholder value. The Company will be seeking
opportunities, which will probably be in the form of a merger
with a foreign or domestic private issuer that wishes to
become a reporting issuer. However, the Company will explore
opportunities, which may take the form of a purchase, exchange
of stock, or encompass entities such as a corporation, joint
venture or partnership. This includes industries such as
service, finance, natural resources, manufacturing, high
technology, product development, medical, communications and
others.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
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The Company's accounting policies are in accordance with
generally accepted accounting principles. Outlined below are
those policies considered significant.
(a) Statement of cash flows:
For purposes of the statement of cash flows, the company
considers all highly liquid investments purchased with an
original maturity of three months or less to be cash
equivalents.
NOTE 3 - COMMON STOCK:
- - - ------ ---------------
As part of the Company's initial organization the Company
issued 4,750,000 shares of it's $ .0001 par value common
stock. On June 1, 1999 the Company authorized a stock option
plan reserving 1,000,000 shares of it's common stock, and
pursuant to the plan granted stock options to it's officers
and directors in the amount of 250,000 shares exercisable as
defined by the terms of the stock option agreements. As of
December 31, 1999, all of the stock options were exercised.
Page 6.
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Cohen & Kameny CPA's PLLC
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company has registered its common stock on a Form 10-SB
registration statement filed pursuant to the Securities Exchange Act of 1934
(the "Exchange Act") and Rule 12(g) thereof. The Company files with the
Securities and Exchange Commission periodic and episodic reports under Rule
13(a) of the Exchange Act, including quarterly reports on Form 10-QSB and annual
reports Form 10-KSB. As a reporting company under the Exchange Act, the Company
may register additional securities on Form S-8 (provided that it is then in
compliance with the reporting requirements of the Exchange Act) and on Form S-3
(provided that it has during the prior 12 month period timely filed all reports
required under the Exchange Act), and its class of common stock registered under
the Exchange Act may be traded in the United States securities markets provided
that the Company is then in compliance with applicable laws, rules and
regulations, including compliance with its reporting requirements under the
Exchange Act. The Company was formed to engage in a merger with or acquisition
of an unidentified foreign or domestic private company which desires to become a
reporting ("public") company whose securities are qualified for trading in the
United States secondary market. The Company meets the definition of a "blank
check" company contained in Section (7)(b)(3) of the Securities Act of 1933, as
amended. Management believes that there are perceived benefits to being a
reporting company with a class of publicly-traded securities which may be
attractive to foreign and domestic private companies. These benefits are
commonly thought to include: (1) the ability to use registered securities to
make acquisition of assets or businesses; (2) increased visibility in the
financial community; (3) the facilitation of borrowing from financial
institutions; (4) improved trading efficiency; (5) shareholder liquidity; (6)
greater ease in subsequently raising capital; (7) compensation of key employees
through options for stock for which there is a public market; (8) enhanced
corporate image; and, (9) a presence in the United States capital market. A
private company which may be interested in a business combination with the
Company may include (1) a company for which a primary purpose of becoming public
is the use of its securities for the acquisition of assets or businesses; (2) a
company which is unable to find an underwriter of its securities or is unable to
find an underwriter of securities on terms acceptable to it; (3) a company which
wishes to become public with less dilution of its common stock than would occur
normally upon an underwriting; (4) a company which believes that it will be able
obtain investment capital on more favorable terms after it has become public;
(5) a foreign company which may wish an initial entry into the United States
securities market; (6) a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a qualified Employee
Stock Option Plan; and (7) a company seeking one or more of the other benefits
believed to attach to a public company. Management is actively engaged in
seeking a qualified private company as a candidate for a business combination.
The Company is authorized to enter into a definitive agreement with a wide
variety of private businesses without limitation as to their industry or
revenues. It is not possible at this time to predict with which private company,
if any, the Company will enter into a definitive agreement or what will be the
industry, operating history, revenues, future prospects or other characteristics
of that company. As of December 31, 1999, management had not made any final
decision concerning or entered into any agreements for a business combination.
See "SUBSEQUENT EVENTS" below. When any such
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agreement is reached or other material fact occurs, the Company will file notice
of such agreement or fact with the Securities and Exchange Commission on Form
8-K. Persons reading this Form 10-QSB are advised to see if the Company has
subsequently filed a Form 8-K. The current shareholders of the Company have
agreed not to sell or otherwise transfer any of their common stock of the
Company except in connection with a business combination. The Company does not
intend to trade its securities in the secondary market until completion of a
business combination. It is anticipated that immediately following such
occurrence the Company will cause its common stock to be listed or admitted to
quotation on the NASD OTC Bulletin Board or, if it then meets the financial and
other requirements thereof, on the Nasdaq SmallCap Market, National Market
System or regional or national exchange.
SUBSEQUENT EVENTS
Not applicable.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000
Many existing computer programs use only two digits to identify a year
in such program's date field. These programs were designed and developed without
consideration of the impact of the change in century for which four digits will
be required to accurately report the date. If not corrected, many computer
applications could fail or create erroneous results by or following the year
2000 ("Year 2000 Problem"). Many of the computer programs containing such date
language problems have not been corrected by the companies or governments
operating such programs. The Company does not have operations and does not
maintain computer systems. However, it is impossible to predict what computer
programs will be effected, the impact any such computer disruption will have on
other industries or commerce or the severity or duration of a computer
disruption. Before the Company enters into any business combination, it will
inquire as to the status of any target company's Year 2000 Problem, the steps
such target company has taken to correct any such problem and the probable
impact on such target company of any computer disruption. However, there can be
no assurance that the Company will not merge with a target company that has an
uncorrected Year 2000 Problem or that any such Year 2000 Problem corrections are
sufficient. The extent of the Year 2000 Problem of a target company may be
impossible to ascertain and its impact on the Company is impossible to predict.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the Company is
unaware of such proceedings contemplated against it.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Exhibit 4
-- Certificate of Incorporation filed as an exhibit to the Company's
registration statement on Form 10-SB (File No. 0-28143) filed on
November 22, 1999 which is incorporated herein by reference. -- By-Laws
filed as an exhibit to the Company's registration statement on Form
10-SB (File No. 0-28143) filed on November 22, 1999 which is
incorporated herein by reference.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed by the Company during the
quarter ended December 31, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MADISON HOLDINGS, INC.
By: /s/ Mark Elenowitz
Mark Elenowitz, CEO
Dated: February 16, 2000
