UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
____________________________________________________________
(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
------- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
------- EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
_____________________________________________________________________
Commission File Number: 0-31619
MILLENNIUM QUEST, INC.
(Exact Name of small business issuer as specified in its charter)
Delaware 87-0430320
_______________________ ______________________
(State of Incorporation) (IRS Employer ID Number)
4089 Mount Olympus Way, Salt Lake City, Utah 84124
__________________________________________________________
(Address of principal executive offices)
(801) 278-6990
_____________________________________
(Issuer's telephone number)
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 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 [XX] NO [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
1,961,643 Shares as of the date of this report.
Transitional Small Business Disclosure Format (check one): YES [ ] NO [XX]
<PAGE>
MILLENNIUM QUEST, INC.
Form 10-QSB for the Quarter ended September 30, 2000
Table of Contents
Part I - Financial Information Page
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis or Plan of Operation 10
Part II - Other Information
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 12
<PAGE> 2
Part I - Financial Information
Item 1 - Financial Statements
MILLENNIUM QUEST, INC.
(Formerly Dix Hills Equities Group, Inc.)
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
September 30, December 31,
2000 1999
------------- -------------
CURRENT ASSETS:
Cash in bank $ 32,878 $ 35,620
------------- -------------
Total Current Assets 32,878 35,620
------------- -------------
$ 32,878 $ 35,620
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,865 $ 2,399
------------- -------------
Total Current Liabilities 3,865 2,399
------------- -------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, 5,000,000
shares authorized, no shares issued and
outstanding - -
Common stock, $.001 par value, 20,000,000
shares authorized, 1,961,643 shares issued
and outstanding 1,962 1,962
Capital in excess of par value 161,088 161,088
Deficit accumulated during the development
stage (134,037) (129,829)
------------- -------------
Total Stockholders' Equity 29,013 33,221
------------- -------------
$ 32,878 $ 35,620
============= =============
Note: The balance sheet as of December 31, 1999 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these
unaudited financial statements.
<PAGE> 3
MILLENNIUM QUEST, INC.
(Formerly Dix Hills Equities Group, Inc.)
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
<TABLE>
<CAPTION>
For the For the
Three Months Nine Months From Inception
Ended Ended on February 4,
September 30, September 30, 1986, Through
--------------------------------------------------- September 30,
2000 1999 2000 1999 2000
------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
REVENUE: $ - $ - $ - $ - $ -
OPERATING EXPENSES:
General and Administrative - 7,500 5,000 8,006 68,726
------------ ------------ ------------ ------------ --------------
LOSS FROM OPERATIONS - (7,500) (5,000) (8,006) (68,726)
------------ ------------ ------------ ------------ --------------
OTHER INCOME:
Interest Income 259 279 792 891 20,515
------------ ------------ ------------ ------------ --------------
Total Other Income 259 279 792 891 20,515
------------ ------------ ------------ ------------ --------------
LOSS BEFORE INCOME TAXES 259 (7,221) (4,208) (7,115) (48,211)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
------------ ------------ ------------ ------------ --------------
INCOME (LOSS) FROM
CONTINUING OPERATIONS 259 (7,221) (4,208) (7,115) (48,211)
------------ ------------ ------------ ------------ --------------
DISCONTINUED OPERATIONS:
Loss from operations of
discontinued subsidiary - - - - (131,258)
Gain on disposal of
discontinued subsidiary - - - - 45,432
------------ ------------ ------------ ------------ --------------
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS - - - - (85,826)
------------ ------------ ------------ ------------ --------------
NET INCOME (LOSS) $ 259 $ (7,221) $ (4,208) $ (7,115) $ (134,037)
============ ============ ============ ============ ==============
INCOME (LOSS) PER COMMON SHARE:
Income (loss) from
continuing operations $ .00 $ (.00) $ (.00) $ (.00) $ (.02)
(Loss) from discontinued
operations - - - - (.05)
Gain on disposal of subsidiary - - - - .02
------------ ------------ ------------ ------------ --------------
GAIN (LOSS) PER COMMON SHARE $ .00 $ (.00) $ (.00) $ (.00) $ (.05)
============ ============ ============ ============ ==============
The accompanying notes are an integral part of these unaudited financial statements.
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
MILLENNIUM QUEST, INC.
(Formerly Dix Hills Equities Group, Inc.)
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
[Unaudited]
For the Nine From Inception
Months Ended on February 4,
September 30,1986 1986 Through
--------------------------- September 30,
2000 1999 2000
------------- ------------- --------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income (loss) $ (4,208) $ (7,115) $ (134,037)
Adjustments to reconcile net loss to net
cash used by operating activities:
Non-cash expense - - 10,000
Amortization expense - - 200
Changes in assets and liabilities:
Increase (decrease) in accounts payable 1,466 - 3,865
------------- ------------- --------------
Net Cash Flows (Used) by
Operating Activities (2,742) (7,115) (119,972)
------------- ------------- --------------
Cash Flows from Investing Activities:
Organization costs - - (200)
------------- ------------- --------------
Net Cash (Used) by Investing Activities - - (200)
------------- ------------- --------------
Cash Flows from Financing Activities:
Proceeds from common stock issuance - - 181,350
Stock offering costs - - (28,300)
------------- ------------- --------------
Net Cash Provided by Financing Activities - - 153,050
------------- ------------- --------------
Net Increase (decrease) in cash (2,742) (7,115) 32,878
Cash at Beginning of Period 35,620 42,552 -
------------- ------------- --------------
Cash at End of Period $ 32,878 $ 35,437 $ 32,878
============= ============= ==============
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the nine months ended September 30, 2000:
None
For the nine months ended September 30, 1999:
None.
The accompanying notes are an integral part of these unaudited financial statements.
</TABLE>
<PAGE> 5
MILLENNIUM QUEST, INC.
(Formerly Dix Hills Equities Group, Inc.)
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the State of
Delaware on February 4, 1986 as Teracom, Inc. The name was subsequently
changed to Dix Hills Equities Group, Inc. in connection with an acquisition of
a subsidiary in December, 1988. The acquisition was subsequently rescinded
during 1994. During April 2000 the name of the Company was changed to
Millennium Quest, Inc. The Company has not commenced planned principal
operations and is considered a development stage company as defined in SFAS
No. 7. The Company has, at the present time, not paid any dividends and any
dividends that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors.
Condensed Financial Statements - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows at
September 30, 2000 and 1999 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 1999
audited financial statements. The results of operations for the periods ended
September 30, 2000 are not necessarily indicative of the operating results for
the full year.
Organization Costs - The Company previously amortized its organization costs,
which reflect amounts expended to organize the Company, over sixty [60] months
using the straight line method.
Restatement of Financial Statements - During January, 1989, the company
effected a 1 for 10 reverse split of its common stock. The financial
statements have been restated to reflect these changes for all periods
presented [See Note 3].
Cash and Cash Equivalents - For purposes of the financial statements, the
Company considers all highly liquid debt investments purchased with a maturity
of three months or less to be cash equivalents.
Accounting Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date
of the financial statements and the reported amount of revenues and expenses
during the reporting period. Actual results could differ from those
estimated.
Income (Loss) Per Share - The computation of loss per share is based on the
weighted average number of shares outstanding during the period presented [See
Note 4].
<PAGE> 6
MILLENNIUM QUEST, INC.
(Formerly Dix Hills Equities Group, Inc.)
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]
Income Taxes -The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting for Income
Taxes" which requires an asset/liability approach for the effect of income
taxes [See Note 2].
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards (SFAS) No. 136, "Transfers of Assets to a not for profit
organization or charitable trust that raises or holds contributions for
others", SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities deferral of the effective date of FASB Statement No. 133 (an
amendment of FASB Statement No. 133.),", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities and Amendment of SFAS
No. 133", SFAS No. 139, "Recission of SFAS No. 53 and Amendment to SFAS No 63,
89 and 21", and SFAS No. 140, "Accounting to Transfer and Servicing of
Financial Assets and Extinguishment of Liabilities", were recently issued SFAS
No. 136, 137, 138, 139 and 140 have no current applicability to the Company or
their effect on the financial statements would not have been significant.
NOTE 2 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability equal
to the expected future tax benefit/expense of temporary reporting differences
between book and tax accounting methods and any available operating loss or
tax credit carryforwards. At September 30, 2000 the Company has available
unused operating loss carryforwards of approximately $114,000, which may be
applied against future taxable income and which expire in various years
through 2020.
The amount of and ultimate realization of the benefits from the operating loss
carryforwards for income tax purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company, and other future events, the
effects of which cannot be determined. Because of the uncertainty surrounding
the realization of the loss carryforwards the Company has established a
valuation allowance equal to the tax effect of the loss carryforwards and,
therefore, no deferred tax asset has been recognized in the financial
statements for the loss carryforwards. The net deferred tax assets are
approximately $38,500 as of September 30, 2000 with an offsetting valuation
allowance at period end of the same amount, resulting in a change in the
valuation allowance of approximately $1,500 during the nine months ending
September 30, 2000.
NOTE 3 - CAPITAL STOCK
Public Offering of Common Stock - During March, 1987, the Company completed a
public offering of 806,750 shares of its previously authorized, but unissued
common stock. This offering was registered by qualification in the State of
Utah and was made in reliance on Rule 504 of Regulation D under the Securities
Act of 1933. An offering price of $.20 per share was arbitrarily determined
by the Company and the sales agent. Total proceeds of the offering amounted
to $161,350 and stock offering costs of $28,300 were offset against capital in
excess of par value.
<PAGE> 7
MILLENNIUM QUEST, INC.
(Formerly Dix Hills Equities Group, Inc.)
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK [CONTINUED]
Stock Split - In January, 1989, the Board of Directors authorized a 1 for 10
reverse stock split, thereby decreasing the number of shares issued and
outstanding to 5,740,000. All references in the accompanying financial
statements to the number of common shares and per-share amounts have been
restated to reflect the stock split for all periods presented.
Preferred Stock - The Company has 5,000,000 shares of preferred stock
authorized $.001 par value with such rights, preferences and designations and
to be issued in such series as determined by the Board of Directors. No
shares are issued and outstanding at September 30, 2000.
Cancellation of Common Stock - During 1994, 4,778,360 shares of common stock
were returned for cancellation due to the recission of the acquisition which
had occurred in 1988.
Common Stock - During February 1999, the Company issued 1,000,000 shares of
its previously authorized, but unissued common stock. This stock was issued
for services rendered and is valued at $10,000 (or $.01 per share).
NOTE 4 - LOSS PER SHARE
The following data show the amounts used in computing income/(loss) per share
for the periods presented:
<TABLE>
<CAPTION
For the Three For the Nine From Inception
Months Ended Months Ended on February 4,
September 30, September 30, 1986, Through
--------------------- --------------------- September 30,
2000 1999 2000 1999 2000
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Income (loss) from
continuing operations
available to common
shareholders (numerator) $ 259 $ (7,221) $ (4,208) $ (7,115) $ (48,211)
---------- ---------- ---------- ---------- ------------
(Loss) from discontinued
operations available to
common shareholders
(numerator) $ - $ - $ - $ - $ (131,258)
---------- ---------- ---------- ---------- ------------
Gain on disposal of
discontinued subsidiary
(numerator) $ - $ - $ - $ - $ 45,432
---------- ---------- ---------- ---------- ------------
Weighted average number of
common shares outstanding
used in loss per share for
the period (denominator) 1,961,643 1,961,643 1,961,643 1,760,175 2,800,641
---------- ---------- ---------- ---------- ------------
</TABLE>
<PAGE> 8
MILLENNIUM QUEST, INC.
(Formerly Dix Hills Equities Group, Inc.)
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
Company as a going concern. However, the Company has incurred losses since
inception and has not yet been successful in establishing profitable
operations. These factors raise substantial doubt about the ability of the
Company to continue as a going concern. In this regard, management is
proposing to raise additional funds through loans, or through additional sales
of its common stock or through the acquisition of other companies. There is
no assurance that the Company will be successful in raising this additional
capital or in achieving profitable operations.
NOTE 6 - RELATED PARTY TRANSACTIONS
Management Compensation During the year ended December 31, 1999 the Company
issued 1,000,000 shares of common stock for services rendered valued at
$10,000. During the period ended September 30, 2000 the Company did not pay
any compensation to its officers or directors.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his home as
a mailing address, as needed, at no expense to the Company.
NOTE 7 - ACQUISITION / RECISSION
In December, 1988, the Company entered into an acquisition agreement wherein
the Company issued 4,592,000 shares of common stock to acquire all of the
issued and outstanding shares of Dix Hills Equities Group, Inc., making it a
wholly owned subsidiary of the Company. The Company changed its name to Dix
Hills Equities Group, Inc. A Class Action Securities fraud lawsuit was
subsequently filed against the Company and its officers (post acquisition) in
October, 1991. In September of 1993 an agreement was reached to rescind the
acquisition agreement and to return the control and status of the parent
company back to its pre-acquisition officers. In May, 1994, 4,592,000 shares
of common stock issued for the acquisition were returned for cancellation
along with an additional 186,360 shares owned by former management.
<PAGE> 9
Part I - Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the
Company or management as well as assumptions made by and information currently
available to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view
of the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered
in light of the accompanying meaningful cautionary statements herein.
(2) Results of Operations
For the past several years, the Company has had no active business
operations, and has been seeking to acquire an interest in a business with
long-term growth potential. The Company currently has no commitment or
arrangement to participate in a business and cannot now predict what type of
business it may enter into or acquire. It is emphasized that the business
objectives discussed herein are extremely general and are not intended to be
restrictive on the discretion of the Company's management.
The Company is not aware of any trends that have or are reasonably likely
to have a material impact on its liquidity, net sales, revenues, or income
from continuing operations. There have been no events which have caused
material changes from period to period in one or more line items of the
financial statements or any seasonal aspects that have had a material effect
on the financial condition or results of operation.
During the preceding year, the Company has not experienced any material
changes in results of operation. During the quarter ended September 30, 2000,
the Company had no general and administrative expenses, as compared to $7,500
in expenses for the quarter ended September 30, 1999. All of such expenses
were incurred in connection with the Company's ongoing reporting activities.
The Company has realized net income for the three months ended September
30, 2000 of $259, resulting from interest income; a net loss for the three
months ended September 30, 1999, of $7,221; and a net loss since inception of
$134,037.
<PAGE> 10
(3) Liquidity and Capital Resources
The Company has not experienced a material change in financial condition
over the past year. At September 30, 2000, the Company had working capital of
approximately $32,900, which has not changed significantly since December 31,
1999. Working capital as of both dates consists of cash. The Company is
dependent upon management and/or significant shareholders to provide
sufficient working capital to preserve the integrity of the corporate entity
during this phase. It is the intent of management and significant
shareholders to provide sufficient working capital necessary to support and
preserve the integrity of the corporate entity.
Although the Company's assets consist of cash, the Company has no intent
to become, or hold itself out to be, engaged primarily in the business of
investing, reinvesting, or trading in securities. Accordingly, the Company
does not anticipate being required to register pursuant to the Investment
Company Act of 1940, and expects to be limited in its ability to invest in
securities, other than cash equivalents and government securities, in the
aggregate amount of over 40% of its assets. There can be no assurance that
any investment made by the Company will not result in losses.
The Company has very limited liquid assets, and such assets may not be
sufficient for the Company to meet its operating needs over the next twelve
months. The Company does not anticipate, however, that it will require
substantial revenue, or additional cash assets, until it enters into an
acquisition or reorganization transaction with a business opportunity. The
Company has no material revenues and its needs for capital will in all
likelihood change dramatically if it acquires an interest in a business
opportunity in the next twelve months. The Company's current operating plan
is to (a) cover the administrative and reporting requirements of a public
company; and (b) search for, and investigate, potential businesses, products,
technologies and companies for acquisition. At present, the Company has no
understandings, commitments or agreements with respect to the acquisition of
any business, product, technology or company, and there can be no assurance
that the Company will be able to identify any such business, product,
technology or entity suitable for an acquisition or reorganization
transaction. Moreover, there can be no assurance the Company will be
successful in its efforts to enter into consummate an acquisition or
reorganization transaction on terms favorable or beneficial to the Company and
its shareholders, or that it, or its successor, will be able to effectively
manage the business opportunity the Company acquires or becomes engaged in.
<PAGE> 11
Part II - Other Information
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
None.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
During the quarter ended September 30, 2000, the Company held no
regularly scheduled, called or special meetings of shareholders during the
reporting period, nor were any matters submitted to a vote of this Company's
security holders.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
MILLENNIUM QUEST, INC.
November 14, 2000 /s/ Dimitri Cocorinis
-----------------------------------
Dimitri Cocorinis, President
MILLENNIUM QUEST, INC.
November 14, 2000 /s/ Terry Cononelos
-----------------------------------
Terry Cononelos, Secretary/Treasurer
