UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended November 30, 1999
|_| TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT
For the transition period from ___________ to __________
Commission file number 2-90519
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Century Laboratories, Inc.
--------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 75-0510027
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
c/o Edwin Mendlinger, President, 160 East 65th Street - Suite 12F,
------------------------------------------------------------------
New York, New York 10021
------------------------
(Address of principal executive offices)
(212) 249-4900
--------------
(Issuer's telephone number)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
The number of shares outstanding of the issuer's common stock, par value $.01
per share, as of January 5, 2000 was 5,233,594.
Transitional Small Business Disclosure Format (Check One): Yes |_| No |X|
<PAGE>
CENTURY LABORATORIES, INC.
Page
PART I. FINANCIAL INFORMATION
Financial Statements:
Consolidated Balance Sheet
November 30, 1999 (Unaudited) 4
Consolidated Statements of Operations
Six Months Ended November 30, 1999
and 1998 (Unaudited) 5
Consolidated Statements of Cash Flows
Six Months Ended November 30, 1999
and 1998 (Unaudited) 6
Management's Discussion and Analysis or Plan
of Operation 7-8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
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<PAGE>
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-QSB that
are not statements of historical fact constitute forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. These statements involve risks and uncertainties that may cause actual
results to differ materially from those in such statements.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying interim unaudited financial statements have been prepared
in accordance with the instructions to Form 10-QSB and 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 of normal recurring adjustments) considered necessary for a fair
presentation have been included, and the disclosures are adequate to make the
information presented not misleading. Operating results for the six months ended
November 30, 1999 are not necessarily indicative of the results that may be
expected for the year ended May 31, 2000. These statements should be read in
conjunction with the financial statements and notes thereto included in the
Annual Report on Form 10-KSB filed with the Securities and Exchange Commission
for the year ended May 31, 1999.
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<PAGE>
Century Laboratories, Inc.
Consolidated Balance Sheet
(Unaudited)
ASSETS
November 30,1999
----------------
Cash $ 22,865
Total Assets 22,865
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts Payable and Accrued Expenses $ 19,500
Total Liabilities 19,500
Shareholders' Equity
Common Stock, $.01 par value
per share; 10,000,000 shares
authorized, 5,233,594 shares
issued and outstanding 52,336
Additional paid-in Capital 7,287,774
Retained Earnings (deficit) 7,336,745
Total Shareholders' Equity (Deficit) 3,365
----------
Total Liabilities and
Shareholders' Equity $ 22,865
==========
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<PAGE>
Century Laboratories, Inc.
Consolidated Statements of Operations
(Unaudited)
For the Six Months ended
November 30,
-------------------------
1999 1998
---- ----
Revenue: $ 45,000 $ -0-
Total Revenue 45,000 -0-
========= =========
Expenses:
Commissions 16,875 -0-
Professional Fees 5,250 -0-
Regulatory Expense -0- -0-
Advertising and Marketing -0- -0-
Miscellaneous Expense -0- -0-
Office Supplies -0- -0-
--------- ---------
Total Expenses 22,135 -0-
--------- ---------
Net Income (Loss) Before Taxes 22,865 -0-
Net Income (Loss) 22,865 -0-
========= =========
Primary Earnings Per Common Share .004 -0-
========= =========
Net Earnings (Loss) -0- -0-
========= =========
Fully Diluted Earnings Per
Common Share .004 -0-
========= =========
Net Earnings (Loss) Per
Common Share $ .004 $ -0-
========= =========
Weighted Average Number of
Common Shares Outstanding 5,233,594 5,233,594
========= =========
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<PAGE>
Century Laboratories, Inc.
Consolidated Statements of Cash Flows (Unaudited)
Six Months ended
November 30,
-----------------------
1999 1998
---- ----
Cash Flows from Operating
Activities $ 22,865 $ -0-
-------- --------
Increase in Accrued Liabilities -0- -0-
New Cash Used from
Operating Activities -0- -0-
-------- --------
Cash Flows from Investing
Activities -0- -0-
-------- --------
Total Cash Flow from
Financing Activities -0- -0-
-------- --------
Cash at Beginning of Period -0- -0-
-------- --------
Net increase (decrease) 22,865 -0-
Cash at End of Period $ 22,865 $ -0-
======== ========
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<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Discussion of Financial Condition
Century Laboratories, Inc. (the "Company") has little revenues. We have no
operations and own no assets. During the current period, our Company received a
nonrefundable deposit of approximately $45,000 pursuant to terms set forth in a
purchase agreement to acquire certain shares of capital stock in our Company.
The deposit was turned over to the our Company as liquidated damages when the
other party defaulted on the proposed purchase. Our Company will continue to
seek a sale or a business combination transaction. No prediction of the future
financial condition of our Company can be made.
Plan of Business
Within the next twelve months, we intend to restructure ourselves in order
to be used as a "public shell" for a suitable privately-held company with both a
business history and operating assets that has the intention to become public.
We do not intend to combine with a privately-held company determined to be an
investment company which would then subject our Company to the Investment
Company Act of 1940, as amended. We believe a privately-held company will
combine with our "public shell" in either a merger, consolidation,
reorganization, or any other form which will subsequently create a publicly-held
company when the two companies combine.
We believe a combination will create the advantage of acquiring an
ownership interest in a public company without the costs or the time that would
be incurred when conducting an initial public offering.
We believe that the process of selecting a suitable privately-held company
and the subsequent merger or business transaction with us to become a public
company may be extremely complex and risky. In our search for a suitable
privately-held company to combine with us, we are determined to consider only
companies we believe have growth potential and opportunities. There may be
significant changes in the number of our employees if a business combination
occurs. Because we will rely on the information as provided by the management of
the potential company, there may be information concerning the potential company
that we may not have discovered through our own investigative research of the
management, key personnel, financial structure and facilities, or there may be
information which might have been concealed by the potential company.
We have little revenues. We have no operations and own no assets. We
received a non-refundable deposit of approximately $45,000, during the current
period, pursuant to terms set forth in a purchase agreement to acquire certain
shares of capital stock in our Company. The deposit was turned over to our
Company as liquidated damages when the other party defaulted on the proposed
purchase. We will continue to seek a sale or business combination transaction.
We are an inactive Delaware corporation and may remain dormant if we do not
merge or combine with another business company. We cannot predict the future
financial condition of our
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<PAGE>
Company. We may be unable to satisfy any liabilities incurred prior to the
combination with a privately-held company. If negotiations and transactions fail
prior to a successful consummation, we may not be able to continue to pursue
business opportunities with other privately-held companies. If this occurs, it
is foreseeable that our Company's Common Stock may become worthless and our
stockholders may receive a nominal distribution, if any, upon our Company's
liquidation and dissolution.
We can not predict the resulting value of the merger or business
transaction for the owners of the privately-held company selected for the
business combination. The privately-held company selected for the business
combination may incur significant expenses and costs associated with the
business transaction including legal, accounting and administrative fees and
expenses. Further, it may be difficult for the combined companies to afford
marketing campaigns, new developments or the ability to manufacture, if any.
We can not provide any assurance that the combined company will be able to
receive additional equity or debt financing or funding from a third-party if the
combined company subsequently requires it.
Under Delaware Law our certificate of incorporation permits our Board of
Directors to issue up to 1,000,000 shares of "blank check" preferred stock. Our
Board of Directors also has the authority to determine the price, rights,
preferences, privileges and restrictions of those shares without any further
vote or action by our stockholders. If we issue preferred stock with voting and
conversion rights, the rights of our common stockholders could be adversely
affected by, among other things, the loss of their voting control to others. Any
additional issuances could also delay, defer or prevent a change in our control,
even if these actions would benefit our stockholders.
Accordingly, our Board of Directors is empowered, without stockholder
approval, to issue preferred stock with dividend, liquidation, conversion,
voting or other rights that could adversely affect the rights of holders of our
common stock.
-8-
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) None.
(b) No reports on Form 8-K were filed during the quarter ended November
30, 1999.
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<PAGE>
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.
Date: January 7, 2000 Century Laboratories, Inc.
-------------------------------------
(Registrant)
By: /s/ Edwin Mendlinger
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Edwin Mendlinger
President (principal executive officer
and principal financial and accounting
officer)
EXHIBIT 11
Century Laboratories, Inc.
EPS Calculations for period September 1, 1999 to November 30, 1999
Basic ($.004)
Diluted ($.004)
EPS Calculations for period June 1, 1999 to November 30, 1999
Basic ($.004)
Diluted ($.004)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
consolidated financial statements and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-01-1999
<PERIOD-END> NOV-30-1999
<CASH> 22,865
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,865
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 22,865
<CURRENT-LIABILITIES> 19,500
<BONDS> 0
0
0
<COMMON> 52,336
<OTHER-SE> (48,971)
<TOTAL-LIABILITY-AND-EQUITY> 22,865
<SALES> 0
<TOTAL-REVENUES> 45,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 22,135
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 22,865
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,865
<EPS-BASIC> .004
<EPS-DILUTED> .004
</TABLE>
