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 0-15893
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RCA TRADING CO.
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(Exact name of small business issuer as specified in its charter)
Florida 13-4025362
-------------------------------- -----------------
(State or other jurisdiction (IRS Employer ID Number)
of incorporation or organization)
515 Madison Avenue, Suite 2100, New York, New York 10022
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(Address of principal executive offices)
(212) 644-5440
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Issuer's Telephone Number
1512 Palisades Avenue, Suite 10F, Fort Lee, New Jersey
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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 6,439,175 shares of common stock, par
value $.001 per share issued and outstanding.
<PAGE>
PART I
Item 1. Financial Statements
RCA TRADING CO.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
AND FOR THE PERIOD MAY 6, 1996 (INCEPTION)
THROUGH SEPTEMBER 30, 2000
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TABLE OF CONTENTS
Page No.
ACCOUNTANT'S 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 Statements............................ 6
<PAGE>
STEWART H. BENJAMIN
CERTIFIED PUBLIC ACCOUNTANT, P.C.
27 SHELTER HILL ROAD
PLAINVIEW, NY 11803
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TELEPHONE: (516) 933-9781
FACSIMILE: (516) 827-1203
To the Board of Directors and Stockholders
RCA Trading Co.
New York, New York
I have reviewed the accompanying balance sheet of RCA Trading Co. (a Florida
corporation in the development stage) as of September 30, 2000, and the related
statements of operations, stockholders' deficit and cash flows, for the nine
months ended September 30, 2000 and 1999 and for the period from May 6, 1996
(inception), to September 30, 2000 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 RCA Trading Co.
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, I do not express such an opinion.
Based on my reviews, 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.
Stewart H. Benjamin
Certified Public Accountant, P.C.
Plainview, New York
November 13, 2000
1
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Balance Sheets
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
(Unaudited) (Audited)
--------------- ---------------
<S> <C> <C>
Current assets:
Cash $ 424 $ 1,888
Securities available-for-sale (Note 2) 1,500 4,680
---------------- ----------------
Total current assets 1,924 6,568
Other assets: (Note 1)
Organization costs, net 23 53
------------- --------------
$ 1,947 $ 6,621
============== ===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accrued expenses $ 2,500 $ 1,000
Due to stockholder (Note 5) 8,076 8,076
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Total current liabilities 10,576 9,076
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Stockholders' deficit: (Note 3)
Common stock; $.001 par value; authorized -
10,000,000 shares; issued and outstanding -
6,439,175 shares in 2000 and 6,422,925 in 1999 6,439 6,423
Additional paid-in capital 49,267 47,658
Deficit accumulated during the development stage (62,835) (58,216)
Unrealized gain (loss) on marketable securities (1,500) 1,680
------------- ---------------
Total stockholders' deficit (8,629) (2,455)
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$ 1,947 $ 6,621
============== ===============
</TABLE>
See accompanying notes and accountant's review report.
2
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
Nine Nine May 6, 1996
Months Ended Months Ended (inception) to
September 30, September 30, September 30,
2000 1999 2000
--------------- ---------------- --------------
<S> <C> <C> <C>
Commission income $ -- $ 27,500 $ 27,500
-------------- ------------- -------------
Costs and expenses:
Amortization $ 30 $ 30 $ 177
General and administrative 4,589 38,048 90,158
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4,619 38,078 90,335
------------- ------------- ------------
Net loss $ (4,619) $ (10,578) $ (62,835)
============= ============= =============
Loss per common share $ (.00) $ (.00)
============= =============
Weighted average common shares outstanding 6,431,259 6,188,274
============= =============
</TABLE>
See accompanying notes and accountant's review report.
3
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Statements of Changes in Stockholders' Deficit
For the Period May 6, 1996 (Inception) to September 30, 2000
<TABLE>
<CAPTION>
Deficit Unrealized
Common Stock Additional Accumulated Gain on
--------------------------------- Paid-in from Marketable
Shares Amount Capital Inception Securities
------------ ---------------- ---------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Balances, May 6, 1996 (inception) -- $ -- $ -- $ -- $ --
Sale of common stock 400,000 400 33,500 -- --
Net loss for the period (32,748)
------------ ---------------- --------------- ---------------- --------------
Balances, December 31, 1996 400,000 400 33,500 (32,748) --
Sale of common stock 5,758,000 5,758 4,842 -- --
Net loss (10,471)
------------ ---------------- --------------- ---------------- --------------
Balances, December 31, 1997 6,158,000 6,158 38,342 (43,219) --
Sale of common stock 5,500 6 3,245 -- --
Change in unrealized gain on
marketable securities -- -- -- -- 38,250
Net loss (2,908)
------------ ---------------- --------------- ---------------- --------------
Balances, December 31, 1998 6,163,500 6,164 41,587 (46,127) 38,250
Sale of common stock 259,425 259 6,071 -- --
Change in unrealized gain on
marketable securities -- -- -- -- (36,570)
Net loss (12,089)
------------ ---------------- --------------- ---------------- --------------
Balances, December 31, 1999 6,422,925 $ 6,423 $ 47,658 $ (58,216) $ 1,680
Sale of common stock 16,250 16 1,609 -- --
Change in unrealized gain on
marketable securities -- -- -- -- (3,180)
Net loss (4,619)
------------ ---------------- --------------- ---------------- --------------
Balances, September 30, 2000 6,439,175 $ 6,439 $ 49,267 $ (62,835) $ (1,500)
============ ================ =============== ================ ==============
</TABLE>
See accompanying notes and accountant's review report.
4
<PAGE>
RCA TRADING CO.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Nine May 6, 1996
Months Ended Months Ended (inception) to
September 30, September 30, September 30,
2000 1999 2000
------------ ------------ ---------
Cash flows from operating activities:
<S> <C> <C> <C>
Net loss $ (4,619) $ (10,578) $ (62,835)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 30 30 177
Common stock issued for services -- -- --
Changes in assets and liabilities:
Increase (decrease) in accrued expenses 1,500 1,961 2,500
Increase (decrease) in amounts
due to stockholder -- 6,500 8,076
------------ ------------ ----------
Net cash used in operating activities (3,089) (2,087) (52,082)
------------ ------------ ----------
Cash flows from investing activities:
Organization costs -- -- (200)
Investment in marketable securities -- -- (3,000)
----------- ------------ -----------
Net cash used in investing activities -- --
----------- ------------ -----------
(3,200)
Cash flows from financing activities:
Proceeds from sale of common stock 1,625 1,980 55,706
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Net cash provided by financing activities 1,625 1,980 55,706
----------- ----------- -----------
Net increase (decrease) in cash (1,464) (107) 424
Cash at beginning of period 1,888 107 --
----------- ----------- -----------
Cash at end of period $ 424 $ -- $ 424
============ =========== ===========
Supplemental disclosure of noncash
investing and financing activities:
Common stock issued for organizational costs $ -- $ -- $ --
============ ============ ===========
Common stock issued for services and costs advanced $ -- $ -- $ --
============ ============ ===========
Change in unrealized gain on securities available-for-sale $ (3,180) $ -- $ (1,500)
============ ============ ===========
</TABLE>
See accompanying notes and accountant's review report.
5
<PAGE>
RCA TRADING CO.
(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 RCA Trading Co., a development
stage company (the "Company"). The Company was incorporated under the laws of
the State of Florida on May 6, 1996. The Company's activities, to date, have
been primarily directed towards the raising of capital.
As shown in the financial statements, as of September 30, 2000, the Company has
incurred an accumulated deficit of $62,835 and has $424 in cash. 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 adjustments 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.
Securities Available-For-Sale
Securities available-for-sale consist of marketable equity securities not
classified as trading securities. Securities available-for-sale are stated at
fair value, and unrealized holding gains and losses are reported as a separate
component of stockholders' equity.
Dividends on marketable equity securities are recognized in income when
declared. Realized gains and losses are determined on the basis of the actual
cost of the securities sold.
Organization Costs
Organization costs are amortized using the straight-line method over five years.
Fair Value of Financial Instruments
The fair value of the Company's payables due to a stockholder is not practicable
to estimate due to the related party nature of the underlying transactions and
the indefinite payment terms.
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<PAGE>
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 liabilities 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.
Note 2 - Securities Available-For-Sale
The amortized cost and fair value of securities available-for-sale at September
30, 2000 are as follows:
Amortized cost $ 3,000
Gross unrealized loss (1,500)
---------
Fair value $ 1,500
==========
Securities available-for-sale at September 30, 2000 consists of 30,000 shares of
Radio World Corp., which is traded on the OTC Bulletin Board. The Company sold
no securities during the nine months ended September 30, 2000 and 1999.
Note 3 - Stockholders' Deficit
Common Stock
Since the date of inception, the Company has issued 6,439,175 shares of common
stock, 5,410,000 of which were for services and costs advanced, valued at $.001
per share. These shares were issued to officers and consultants of the Company.
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 4 - Income Taxes
There is no provision for income taxes since the Company has incurred net
operating losses. At September 30, 2000, the Company has net operating loss
carryforwards of $62,835 which may be available to offset future taxable income
through 2020.
7
<PAGE>
Note 5 - Related Party Transactions
The Company was indebted to a stockholder for the purchase of marketable equity
securities and expenses advanced on behalf of the Company, in the amount of
$8,076 at September 30, 2000. There are no specific terms for repayment on the
amount due to stockholder.
Office facilities are provided to the Company by an officer at no cost.
8
<PAGE>
RCA Trading Co.
Management's Discussion and Analysis or Plan of Operations
Results of Operations
During the period from August 10, 1995 (inception) through September
30, 2000, the Company has engaged in no significant operations other than
organizational activities and acquisition of capital. During this period, the
Company received no significant revenues other than incidental commission
revenues totaling $27,500, in 1999.
For the current fiscal year, the Company anticipates incurring a loss
as a result of expenses associated with registration and compliance with
reporting obligations under the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates. The Company
anticipates that until a business combination is completed with an acquisition
candidate, it will not generate any significant revenues.
Liquidity and Capital Resources
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholders' equity other than the receipt of proceeds from the sale of stock
in the amount of $55,706. Substantially all of such funds have been used to pay
expenses incurred by the Company.
The Company intends to enter into a business combination. In order to
do so, it will require additional capital to pay ongoing expenses, including
particularly legal and accounting fees incurred in conjunction with preparation
and filing of this registration statement on Form 10-SB, and in conjunction with
future compliance with its on-going reporting obligations.
9
<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 May
1996. 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. 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, existing
shareholders have expressed an interest in additional funding if necessary to
continue the Company as a going concern, and to provide funding for required
future filings under the Securities Exchange Act of 1934.
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
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
10
<PAGE>
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
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<PAGE>
trends, current conditions and expected future developments as well as other
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(i).1 Articles of Incorporation of RCA Trading Co. (1)
3(ii).1 By-Laws of RCA Trading Co. (1)
27.1 Financial Data Schedule *
(1) Incorporated by reference from the Form 10-SB filed by the
Company on May 17, 2000.
* Filed herewith
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(b) No Reports on Form 8-K were filed during the quarter ended
September 30, 2000
12
<PAGE>
SIGNATURES
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 on
its behalf by the undersigned, thereunto duly authorized.
Dated Novemer 16, 2000
RCA TRADING CO.
By:/s/ Dominick Pope
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Dominick Pope, President
/s/ James Season
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James Season, Secretary
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