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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2000
Commission File Number
000-29271
ZENITH HOLDING CORP.
(Name of Small Business Issuer in its charter)
FLORIDA 65-0918833
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
120 N. U.S. Highway One 33469
Suite 100 (Zip Code)
Tequesta, FL
(Address of principal executive offices)
Issuer's telephone number: (561) 747-0244
--------------------------------
Check whether the issuer: (1) filed all reports required 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 [X] No
As of April 30, 2000 the issuer had 3,000,000 shares of $.001
par value common stock outstanding.
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INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheet
March 31, 2000
Condensed Statement of Operations
Three months ended March 31, 2000
Condensed Statement of Cash Flows
Three months ended March 31, 2000
Notes to Financial Statements
Item 2. Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Change in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
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ZENITH HOLDING CORP.
(A Development Stage Company)
CONDENSED BALANCE SHEET
MARCH 31, 2000
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 157
=======
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
CURRENT LIABILITIES
Due to affiliate $ 1,700
-------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 par value, 50,000,000
shares authorized, 3,000,000 shares
issued and outstanding 3,000
Deficit accumulated during the development
stage (4,543)
-------
Total Stockholders' Equity (Deficit) (1,543)
-------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 157
=======
Read accompanying Notes to Financial Statements.
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ZENITH HOLDING CORP.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000
AND
PERIOD FROM JANUARY 1, 1999 THROUGH MARCH 31, 2000
(Unaudited)
Period From
Three Months January 1, 1999
Ended March 31, Through March
2000 31, 2000
--------------- ---------------
REVENUES $ -- $ --
EXPENSES
General and administrative 2,880 4,543
------- -------
NET (LOSS) $(2,880) $(4,543)
======= =======
(LOSS) PER SHARE $ -- $ --
======= =======
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 3,000,000 3,000,000
========= =========
Read accompanying Notes to Financial Statements.
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ZENITH HOLDING CORP.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000
AND
PERIOD FROM JANUARY 1, 1999 THROUGH MARCH 31, 2000
(Unaudited)
Period From
Three Months January 1, 1999
Ended March 31, Through March
2000 31, 2000
--------------- ---------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net (loss) $(2,880) $(4,543)
Adjustments to reconcile
net loss to cash used in
operating activities:
Decrease in prepaid
expenses 500 --
(Decrease) in accounts
payable (1,663) --
------- -------
NET CASH USED IN OPERATING
ACTIVITIES (4,043) (4,543)
------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in amount due to
affiliate 1,700 1,700
Proceeds from issuance of
common stock -- 3,000
------- -------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 1,700 4,700
------- -------
NET INCREASE (DECREASE) IN
CASH (2,343) 157
CASH - BEGINNING 2,500 --
------- -------
CASH - ENDING $ 157 $ 157
======= =======
Read accompanying Notes to Financial Statements.
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ZENITH HOLDING CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1. ORGANIZATION
Zenith Holding Corp. was incorporated on January 26, 1998
under the laws of the State of Florida. The company is a
"shell" company, the purpose of which is to seek and
consummate a merger or acquisition. The company's
headquarters is in Tequesta, Florida. There were no
operations during the year ended December 31, 1998.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed financial statements are unaudited.
These statements have been prepared in accordance with the
rules and regulations of the Securities and Exchange
Commission (SEC). Certain information and footnote disclosures
normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments
(which include only normal recurring adjustments) considered
necessary for a fair presentation have been included. These
financial statements should be read in conjunction with the
Company's financial statements and notes thereto for the year
ended December 31, 1999, included in the Company's Form 10-SB
as filed with the SEC.
Loss Per Share
Loss per share is computed by dividing net loss for the year
by the weighted average number of shares outstanding.
Use of Estimates
Management uses estimates and assumptions in preparing
financial statements in accordance with generally accepted
accounting principles. Those estimates and assumptions affect
the reported amounts of assets and liabilities,
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ZENITH HOLDING CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates (Continued)
the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Accordingly, actual results
could vary from the estimates that were assumed in preparing
the financial statements.
NOTE 3. RELATED PARTY TRANSACTIONS
Due to Affiliate
Due to affiliate represents a non-interest bearing advance
from a company owned by the majority stockholder for operating
expenses.
NOTE 4. CAPITAL STOCK
The Company had originally authorized 25,000,000 common shares
and 5,000,000 preferred shares, each with a par value of $.01
per share. On December 13, 1999, the Articles of Incorporation
were amended to increase the number of authorized common
shares to 50,000,000, to eliminate the preferred shares and to
decrease the par value of the common shares to $.001 per
share. As of March 31, 2000, 3,000,000 common shares were
issued and outstanding.
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ITEM 2. PLAN OF OPERATION
The Company filed a registration statement Form 10-SB on February 1,
2000 and became a registered public company on April 1, 2000. The Company's
purpose is to seek, investigate and, if such investigation warrants, acquire an
interest in business opportunities presented to it by persons or firms who or
which desire to seek the perceived advantages of an Exchange Act registered
corporation. The Company will not restrict its search to any specific business,
industry, or geographical location and the Company may participate in a business
venture of virtually any kind or nature. This discussion of the plan of
operation is purposefully general and is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter into potential
business opportunities.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
Management intends to concentrate on identifying preliminary
prospective business opportunities which may be brought to its attention through
present associations of the company's officers and directors, or by the
Company's shareholders or its legal counsel or other professional persons with
whom the Company or its principals associate. In analyzing prospective business
opportunities, management will consider such matters as the available technical,
financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; the potential for growth or expansion; the potential for profit;
the perceived public recognition of acceptance of products, services, or trades;
name identification; and other relevant factors. Officers and directors of the
Company will meet personally with management and key personnel of the business
opportunity as part of their investigation. To the extent possible, the Company
intends to utilize written reports and personal investigation to evaluate the
above factors. The Company will not acquire or merge with any company for which
audited financial statements cannot be obtained within a reasonable period of
time after closing of the proposed transaction.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially
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any stage of its corporate life. It is impossible to predict at this time the
status of any business in which the Company may become engaged, in that such
business may need to seek additional capital, may desire to have its shares
publicly traded, or may seek other perceived advantages which the Company may
offer. However, the Company does not intend to obtain funds in one or more
private place-ments to finance the operation of any acquired business
opportunity until such time as the Company has successfully consummated such a
merger or acquisition.
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business.
It is anticipated that any securities issued in any reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities. The issuance of substantial additional securities and
their potential sale into any trading market which may develop in the Company's
securities may have a depressive effect on the value of the Company's securities
in the future, if such a market develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368 or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain 20% or less
of the issued and outstanding shares of the surviving entity, which would result
in significant dilution in the equity of such shareholders.
The manner in which the Company participates in an opportunity will
depend on the nature of the opportunity, the respective needs and desires of the
Company and other parties, the management of the opportunity and the relative
negotiation strength of the Company and such other management. Such negotiations
with target company management are expected to focus on the percentage of the
Company which target company shareholders would acquire in exchange for all of
their shareholdings in the target company. Depending upon, among other things,
the target company's assets and liabilities, the Company's shareholders will in
all likelihood hold a substantially lesser percentage ownership interest in the
Company following any
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merger or acquisition. Any merger or acquisition effected by the Company can be
expected to have a significant dilutive effect on the percentage of shares held
by the Company's shareholders. The management of the Company anticipates
obtaining the approval of the shareholders of the Company via a proxy or
information statement.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
The Company is subject to all of the reporting requirements included in
the Exchange Act. Included in these requirements is the affirmative duty of the
Company to file independent audited financial statements as part of its Form 8-K
to be filed with the Securities and Exchange Commission upon consummation of a
merger or acquisition, as well as the Company's audited financial statements
included in its annual report on Form 10-K (or 10-KSB, as applicable). If such
audited financial statements are not available at closing, or within time
parameters necessary to insure the Company's compliance with the requirements of
the Exchange Act, or if the audited financial statements provided do not conform
to the representations made by the candidate to be acquired in the closing
documents, the closing documents will provide that the proposed transaction will
be voidable, at the discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision providing for
the acquisition entity to pay for all costs associated with the proposed
transaction.
The Company's Board of Directors intends to provide the Company's
shareholders with complete disclosure documentation concerning a potential
business opportunity and the structure of the proposed business combination
prior to consummation of the same, which disclosure is intended to be in the
form of a proxy or information statement. While such disclosure may include
audited financial statements of such a target entity, there is no assurance that
such audited financial statements will be available. The Board of Directors does
intend to obtain certain assurances of value of the target entity assets prior
to consummating such a transaction, with further assurances that an audited
statement would be provided within sixty days after closing of such a
transaction. Closing documents relative thereto will include representations
that the value of the assets conveyed to or otherwise so transferred will not
materially differ from the representations included in such closing documents,
or the transaction will be voidable.
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The Company has no full time employees. The Company's officers and
directors have agreed to allocate a portion of their time to the activities of
the Company without compensation. The Company has minimal capital, no operating
costs, and does not expect to make any acquisitions of property.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There is no litigation of any type whatsoever pending or threatened by
or against the Company, its officers and its directors.
ITEM 2. CHANGES IN SECURITIES
There was no change in the Company's securities or in the instruments
defining the rights of the holders of such securities during the period covered
by this report (quarter ending March 31, 2000). The Company has no warrants,
options, rights, conversion privileges, or similar obligations in effect.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
N/A
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
N/A
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule (For SEC use only)
(b) Reports on Form 8-K
None.
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SIGNATURES
In accordance with the requirements of the Exchange, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ZENITH HOLDING CORP.
(Registrant)
Date: May 10, 2000 By: /s/ Vicki J. Lavache
----------------------------------
Vicki J. Lavache
President and Chief
Executive Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 2000 BALANCE SHEET AND THE STATEMENT OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 157
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 157
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 157
<CURRENT-LIABILITIES> 1,700
<BONDS> 0
0
0
<COMMON> 3,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 157
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,880
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,880)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,800)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,880)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
