U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
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(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
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For the transition period from to
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Commission File No.
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SEGWAY II CORP.
(Name of Small Business Issuer in Its Charter)
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New Jersey 22-3704065
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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4400 Route 9 South, 2nd Floor, Freehold, NJ 07728
(Address of Principal Executive Offices) (Zip Code)
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(732) 409-1212
(Issuer's Telephone Number, Including Area Code)
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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.
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Yes No X
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State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: As of April 25, 2000 the Company had
5,000,000 shares of Common Stock outstanding, $0.0001 par
value.
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SEGWAY II CORP.
Form 10-QSB Quarterly Report
For the Period Ended March 31, 2000
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Page
Part I FINANCIAL INFORMATION
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Item 1. Financial Statements 7
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Balance Sheets as of March 31, 2000 7
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Statements of Operations for the Period
from January 21, 2000 (Inception) through
March 31, 2000 8
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Statements of Cash Flows for the period
from January 21, 2000 (Inception) through
March 31, 2000 9
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
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PART II OTHER INFORMATION 13
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Item 1. Legal Proceedings 13
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Item 2. Changes in Securities 13
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Item 3. Defaults Upon Senior Securities 13
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Item 4. Submission of Matters to a Vote of Security Holders 13
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Item 5. Other Information 13
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Signatures 14
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Financial Data Schedule 15
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PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements:
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BASIS OF PRESENTATION
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The accompanying financial statements are
presented in accordance with generally accepted
accounting principles for interim financial information
and the instructions to Form 10-QSB and item 310 under
subpart A of Regulation S-B. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements. In the opinion of management, all
adjustments (consisting only of normal occurring accruals)
considered necessary in order to make the
financial statements not misleading, have been included.
Operating results for the three months ended March 31,
2000 are not necessarily indicative of results that may
be expected for the year ending December 31, 2000. The
financial statements are presented on the accrual basis.
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SEGWAY II CORP.
FINANCIAL STATEMENTS
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From January 21, 2000 (Inception) Through
March 31, 2000
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SEGWAY II CORP.
Financial Statements Table of Contents
For the period January 21, 2000
(Inception) Through
March 31, 2000
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FINANCIAL STATEMENTS
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<S> <C>
Page #
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Independent Auditor's Report 1
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Balance Sheet 2
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Statement of Operations and Retained Deficit 3
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Statement of Cash Flows 4
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Notes to the Financial Statements 5-7
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INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
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To the Board of Directors and Stockholder
Segway II Corp.
Freehold, New Jersey
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We have reviewed the accompanying balance sheet of Segway
II Corp. as of March 31, 2000, and the related statements
of operations and retained deficit, and cash flows for
the period ending March 31, 2000 in accordance with
statements on Standards for Accounting and Review
Services issued by the American Institute of Certified
Public Accountants. All information in these statements
is the representation of the Company's management.
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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.
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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.
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Our review was made for the purpose of exposing limited
assurances that there are no material modifications that
should be made to the financial statements in order for
them to be in conformity with generally accepted
accounting principles. The additional material section
of this report is presented only for additional
information purposes and has been subjected to the
inquiry and analytical procedures applied in the review
of the basic financial statements. We are not aware of
any additional material.
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/s/Varma and Associates
--------------------
Varma and Associates
Certified Public Accountants
Longwood, Florida
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SEGWAY II CORP.
BALANCE SHEET
As of March 31, 2000
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<S> <C>
ASSETS
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March 31, 2000
CURRENT ASSETS
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Cash $ 350
--------------
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TOTAL ASSETS $ 350
=============
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LIABILITIES AND STOCKHOLDER'S EQUITY
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CURRENT LIABILITIES
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Accrued expenses $ 520
------------
TOTAL LIABILITIES 520
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STOCKHOLDER'S EQUITY
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Common Stock - par value $0.0001;
100,000,000 shares authorized;
5,000,000 issued and outstanding 500
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Preferred Stock - Par value $0.0001;
20,000,000 shares authorized;
none issued and outstanding 0
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Retained earnings (670)
------------
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Total stockholder's equity (170)
TOTAL LIABILITIES AND EQUITY $ 350
=============
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The accompanying notes are an integral part
of these financial statements.
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SEGWAY II CORP.
STATEMENT OF OPERATIONS
From January 21,2000 (Inception) Through
March 31, 2000
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<S> <C>
March 31, 2000
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REVENUE Sales $ 0
Cost of sales 0
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GROSS PROFIT 0
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GENERAL AND ADMINISTRATIVE EXPENSES
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Legal and accounting fees 425
Other corporate fees 245
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TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 670
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Net accumulated deficit (670)
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Retained deficit, Beginning Balance 0
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Retained deficit, Ending Balance (670)
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NET EARNINGS PER SHARE
Basic and Diluted
Net loss per share $ *
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(* - less than $ .01)
Basic and Diluted Weighted Average
Number of Common Shares Outstanding 5,000,000
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The accompanying notes are an integral part
of these financial statements.
</TABLE>
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SEGWAY II CORP.
STATEMENT OF CASH FLOWS
From January 21, 2000 (Inception) Through
March 31, 2000
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<S> <C>
March 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (670)
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Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
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Increases in Accrued Expenses 520
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NET CASH PROVIDED OR (USED) IN OPERATIONS (150)
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from issuance of common stock 500
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NET CASH PROVIDED OR (USED) IN FINANCING 500
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CASH RECONCILIATION
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Net increase (decrease) in cash 350
Beginning balance cash 0
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CASH BALANCE AT END OF YEAR $ 350
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The accompanying notes are an integral part
of these financial statements.
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SEGWAY II CORP.
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NOTES TO THE FINANCIAL STATEMENTS
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1. Summary of significant accounting policies:
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Industry - Segway II Corp. (The Company), a Company
incorporated in the State of New Jersey on January 21,
2000, plans to locate and negotiate with a business
entity for the combination of that target company with
The Company. The combination will normally take the form
of a merger, stock-for-stock exchange or stock-for-assets
exchange. In most instances the target company will wish
to structure the business combination to be within the
definition of a tax-free reorganization under Section 351
or Section 368 of the Internal Revenue Code of 1986, as
amended. No assurances can be given that The Company
will be successful in locating or negotiating with any
target company.
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The Company has been formed to provide a method for a
foreign or domestic private company to become a reporting
("public") company whose securities are qualified for
trading in the United States secondary market.
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Results of Operations and Ongoing Entity - The Company is
considered to be an ongoing entity. The Company's sole
shareholder, RGR Corp., of the Company funds any
shortfalls in the Company's cash flow on a day to day
basis during the time period that The Company is in the
development stage.
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Liquidity and Capital Resources - In addition to the
stockholder funding capital shortfalls, The Company
anticipates interested investors that intend to fund the
Company's growth once a business is located.
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Cash and Cash Equivalents - The Company considers cash on
hand and amounts on deposit with financial institutions
which have original maturities of three months or less to
be cash and cash equivalents.
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Basis of Accounting - The Company's financial statements
are prepared in accordance with generally accepted
accounting principles.
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Income Taxes - The Company utilizes the asset and
liability method to measure and record deferred income
tax assets and liabilities. Deferred tax assets and
liabilities reflect the future income tax effects of
temporary differences between the financial statement
carrying amounts of existing assets and liabilities and
their respective tax basis and are measured using enacted
tax rates that apply to taxable income in the years in
which those temporary differences are expected to be
recovered or settled. Deferred tax assets are reduced by
a valuation allowance when in the opinion of management,
it is more likely than not that some portion or all of
the deferred tax assets will not be realized. At this
time, The Company has set up an allowance for deferred
taxes as there is no company history to indicate the
usage of deferred tax assets and liabilities.
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Fair Value of Financial Instruments The Company's
financial instruments may include cash and cash
equivalents, short-term investments, accounts receivable,
accounts payable and liabilities to banks and
shareholders. The carrying amount of long-term debt to
banks approximates fair value based on interest rates
that are currently available to The Company for issuance
of debt with similar terms and remaining maturities. The
carrying amounts of other financial instruments
approximate their fair value because of short-term
maturities.
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Concentrations of Credit Risk - Financial instruments
which potentially expose The Company to concentrations of
credit risk consist principally of operating demand
deposit accounts. The Company's policy is to place its
operating demand deposit accounts with high credit
quality financial institutions. At this time The Company
has no deposits that are at risk.
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2. Related Party Transactions and Going Concern:
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The Company's financial statements have been presented on
the basis that it is a going concern in the development
stage, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of
business. At this time The Company has not identified
the business that it wishes to engage in.
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The Company's sole shareholder, RGR Corp., funds The
Company's activities while The Company takes steps to
locate and negotiate with a business entity for
combination; however, there can be no assurance these
activities will be successful.
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3. Accounts Receivable and Customer Deposits:
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Accounts receivable and Customer deposits do not exist at
this time and therefore have no allowances accounted for
or disclosures made.
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4. Use of Estimates:
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Management uses estimates and assumptions in preparing
these financial statements in accordance with generally
accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and
liabilities, and the reported revenue and expenses.
Management has no reason to make estimates at this time.
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5. Revenue and Cost Recognition:
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The Company uses the accrual basis of accounting for
financial statement reporting. Revenues are recognized
when earned and realizable. Expenses are recognized when
incurred.
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6. Accrued expenses:
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Accrued expenses consist mainly of accrued legal and
accounting fees during this stage of the business.
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7. Operating Lease Agreements:
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The Company has no agreements at this time.
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8. Stockholder's Equity:
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Common Stock includes 100,000,000 shares authorized at a
par value of $0.0001, of which 5,000,000 have been issued
for the amount of $500. The Company has also authorized
20,000,000 shares of preferred stock at a par value of
$0.0001, none of which have been issued.
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9. Subsequent event:
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The Company's stockholder has negotiated a change in
ownership of the issued and outstanding shares. On April
17, 2000 the Company received $15,000 as a deposit prior
to the close of the transaction for the purchase of all
the issued and outstanding shares from Pangea Petroleum
Corp. The transaction called for a purchase price of
$75,000 and 5,000 shares in total for the sale of the
stock of the Company's stockholders.
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10. Required Cash Flow Disclosure for Interest and Taxes
Paid:
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The company has paid no amounts for federal income taxes
and interest.
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11. Earnings Per Share:
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Basic earnings per share ("EPS") is computed by dividing
earnings available to common shareholders by the
weighted-average number of common shares outstanding for
the period as required by the Financial Accounting
Standards Board (FASB) under Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings per
Shares". Diluted EPS reflects the potential dilution of
securities that could share in the earnings.
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Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
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Plan of Operation
-----------------
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The Registrant is continuing its efforts to locate a
merger candidate for the purpose of a merger. It is
possible that the registrant will be successful in
locating such a merger candidate and closing such merger.
However, if the registrant cannot effect a non-cash
merger, the registrant may have to raise funds from a
private offering of its securities under Rule 506 of
Regulation D. There is no assurance the registrant would
obtain any such equity funding. The registrant is
currently under negotiations. Please read footnote
number nine of the financial statements.
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Results of Operations
---------------------
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The Company did not have any operating income during the
period from January 21, 2000 (inception)through March
31, 2000. For this period, the registrant recognized a
net loss of $670. General and administrative expenses
during the current period were accrued. Expenses for the
period from January 21, 2000 through March 31, 2000 were
comprised of costs associated with legal and accounting
fees and organizational costs.
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Liquidity and Capital Resources
-------------------------------
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At March 31, 2000 the Company had no capital resources
other than an insignificant amount of cash, and will rely
on advances from related parties to fund administrative
expenses pending a merger of an operating company.
Presently the Company is completing negotiations for the
sale of all of its issued and outstanding shares. Please
read footnote number nine of the financial statements.
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PART II OTHER INFORMATION
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Item 1. Legal Proceedings. Not Applicable
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Item 2. Changes in Securities. None
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Item 3. Defaults Upon Senior Securities. Not Applicable
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Item 4. Submission of Matters to a Vote of Security
Holders. None
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Item 5. Other Information. None
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Item 6. Exhibits and Reports of Form 8-K. None
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Exhibit 27 Financial Date Schedule Electronic Filing
Only
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SIGNATURES
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Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed in its behalf by the
undersigned, thereunto duly authorized, on April 19,
2000.
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SEGWAY II CORP.
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By:/s/ Richard I. Anslow
--------------------------
Richard I. Anslow
President
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 350
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 350
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 350
<CURRENT-LIABILITIES> 520
<BONDS> 0
0
0
<COMMON> 500
<OTHER-SE> <670>
<TOTAL-LIABILITY-AND-EQUITY> 350
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 670
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> <670>
<INCOME-TAX> 0
<INCOME-CONTINUING> <670>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> <670>
<EPS-BASIC> LESS THAN $.01
<EPS-DILUTED> LESS THAN $.01
</TABLE>
