Manually Executed
As filed with the United States Securities and Exchange Commission
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the third quarter ended June 30, 1999 Commission File Number 0-9071
E.T. CAPITAL, INC.
(Exact name of registrant as specified in its charter)
Colorado
74-2026624
(State of incorporation) (I.R.S. Employer Identification No.)
3525 South Tamarac Drive, Suite 320, Denver, CO
80237
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code:
(604)691-0538
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $0.01 par value NASDAQ OTC (Electronic bulletin board)
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 all
such filing requirements for the past 90 days.
Yes X No
As of June 30, 1999 there were 58,787,216 shares of Common Stock, $0.01 par
value, outstanding.
Documents incorporated by reference: None
Item 1.
INDEX
Page of
Report
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Unaudited Consolidated Balance Sheets:
As at June 30th, 1999 and 1998.....................1.
Unaudited Consolidated Statement of Operations:
For the nine months ended June 30th, 1999 and
1998..............................................2.
Unaudited Consolidated Statement of Cash Flow:
For the nine months ended June 30th, 1999 and
1998..............................................3.
Unaudited Statement of Stockholders' Equity:
As at June 30th, 1999.............................4.
Item 2. Management's Discussion and Analysis of:
Financial Condition and Results of Operations.....5.
PART II OTHER INFORMATION
Other Information.................................6.
Signatures ..................................7.
E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(Unaudited)
ASSETS
June 30, June 30,
1999 1998
CURRENT ASSETS:
Cash on Hand$ 50,327$ 0
FIXED ASSETS:
Equipment534,886 534,886
Less accumulated
depreciation (534,886) (534,886)
Net Fixed Assets
(Note 1) 0$ 0
OTHER ASSETS:
Internet Time Share
Rights 1000
Rights' Title, net of
amortization11
Product Development
Expenditures 182,882 243,841
Total Other Assets 182,983 243,842
TOTAL ASSETS$ 233,310$ 243,842
E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, June 30,
1999 1998
CURRENT LIABILITIES:
Accounts Payable $120,207 107,577
LONG-TERM LIABILITIES:
Debenture Payable, 717,217 335,450
Bearer
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value
10,000,000,000 shares
authorized, 58,787,216
shares issued and
outstanding 4,516,079 4,516,079
Paid-In-Capital in excess
of par value 20,069,86920,069,869
(Deficit) Accumulated during
the Development Stage (25,190,062) ( 24,785,133)
TOTAL STOCKHOLDERS' EQUITY ( 604,114) ( 199,185)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 233,310 $ 243,842)
E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(Unaudited)
For the 9 mos.For the 9 mos.
Ended Ended
June 30, 1999June 30, 1998
REVENUES$ 0 $ 0
GENERAL AND
ADMINISTRATIVE EXPENSES:
Auto Expenses,
gas and repairs 9,000 9,000
Consulting Fees 0 72,890
Rent Expense 37,800 37,800
Telephone Expense 27,000 27,000
Travel and Promotions 135,000 135,000
TOTAL GENERAL AND
ADMINISTRATIVE EXPENSES 208,800 281,690
OTHER EXPENSES
Interest Expense 43,684 15,525
NET (LOSS) for the period$ 252,484$ 297,215
DEFICIT - OPENING BALANCE$ 24,937,578$ 24,487,918
DEFICIT - CLOSING BALANCE$ 25,190,062$ 24,785,133
NET (LOSS) per share $ .004 .005
E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW
(Unaudited)
For the 9 mos.For the 9 mos.
Ended Ended
June 30, 1999 June 30, 1998
Net Cash Flows From Operating
Activities:
Net (Loss)$ (252,484)$ (297,215)
Adjustments to Reconcile
Net (Loss) to Cash (Loss)
From Operating Activities: 0 0
Sub-total (252,484) (297,215)
Increase (decrease) in
Debenture payable,
Xanthos Management Corp. 252,584 297,215
Purchase of Internet
Time Share Interests (100) 0
INCREASE (DECREASE) IN CASH00
CASH BEGINNING OF PERIOD 50,327 0
CASH, END OF THE PERIOD$ 50,327$ 0
E.T. CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Common
Class Stock Additional
DevelopmentStockholders
$0.01 Par ValuePaid-In StageEquity
Shares AmountCapital(Deficit)(Deficit)
Balances,
September 30,
199658,787,216$4,516,079$18,429,869$(23,341,645)$ (395,697)
Issue
1,500,000,000
shares @ $0.234
on October 1,
1996 1,500,000,00015,000,000335,000,000 0 3,500,000,000
Cancellation of
1,500,000,000
shares @ $0.234
on February 15,
19971,500,000,00015,000,000335,000,000 0 3,500,000,000
Sale of 8,000,000
shares @$0.15
Sept. 21, 1997 0 0 1,640,000 0 1,640,000
Net (Loss) for the
year ended
Sept. 30, 1997 0 0 0 (1,146,273) (1,146,273)
Balance,
Sept. 30, 1997 58,787,216$4,516,079$20,069,869$(24,487,918)$ 98,030
Net (Loss) for
the year ended
Sept.30, 1998 0 0 0$ (449,660)$ (449,660)
Balance,
Sept. 30, 1998 58,787,216$4,516,079$20,069,869$(24,937,578)$ (351,630)
Net (Loss) for
the 9 months
ended June 30,
1999 (252,484) (252,484)
Balances
June 30, 1998 58,787,216 $4,516,079$20,069,869$(25,190,062)$
(604,114)
Note 1:
Whereas the Company's independent Auditor has depreciated equipment on an
accelerated basis, the equipment is still operating well and will continue to
do so for several years.
Management's Discussion and Analysis
of
Financial Condition and Results of Operations
Results of Operations
March 31, 1999 v. March 31, 1998
Overall
The Company's entry into the "not-for-profit" fund raising using 1 900
"pay-per-call" telephone numbers is continuing as outlined in the Company
business plan. With political election campaign reform being in the forefront
of both the Senate and Congress, the Company is ready to conclude agreements
for the use of the company's two political 1 900 numbers, 1 900 'DEMOCRAT" and
1 900 "REPUBLICAN". These numbers could raise hundreds of millions of dollars
for both the Democratic and Republican candidates and parties and, at the same
time, the Company could earn substantial revenues from each number.
Until the Company develops a positive cash flow from its operations, the
development stage of the Company will continue to rely on Xanthos Management
Corporation to finance the Company's ongoing overhead under the terms of the
bearer debenture it holds. (See notes to September 30, 1998 Audit as filed and
as part of the September 30,1998 10K, (Note 3, " As the Corporation was unable
to meet its financial obligations as they became due, one of the major
shareholders of the Company, Xanthos Management Corporation, offered to pay
the obligations of behalf of the Company and to make payments as required,
such payments secured by and subject to the terms of a debenture duly filed
and registered with the Secretary of State for the State of Colorado" from the
Company's Audited Financial Statements as of September 30, 1998 reflects the
current status of the Company.)) Cash assets at the close of the third
quarter were $50,327 as compared to $0 at June 30, 1998; fixed assets were $0
at June 30, 1999 as compared to $0 at June 30, 1998.; the Rights and
associated product development expenditures (subject to the amortization
schedule set forth in the Financial Statements) were $1 at June 30, 1999
compared to $1 at June 30, 1998.
The Company is continuing to attempt to proceed with the Paraguayan
hydrocarbon concessions. In 1998 and early 1999, the Asian economic crisis
adversely affected the world price of hydrocarbons, however, activity in this
field has historically been cyclical and the Company considers that this
crisis has already been discounted and should not adversely affect ongoing
negotiations. During the fiscal year, the Company and its counsel have taken
the position that individuals, corporations and/or financial institutions that
either profited from or participated in the Private Placement through
Barclay's Bank to finance the Paraguayan hydrocarbon concessions should
compensate the Company for the unauthorized use of its securities and for
breach of the original contractual arrangements to the Company's detriment.
The Company's lawyers are investigating the Company's remedies as a result of
these transactions and are confident that the Company will be successful.
Extraordinary Items
E.T. Capital, Inc. acquired Resort Magic Vacations, Inc., of Las Vegas,
Nevada for US$2.5 million, transferred the Internet Timeshare Rights to E.T.
Capital, Inc. and then sold Resort Magic Vacations, Inc. to Xanthos Management
Corp., a Company controlled by a Director of the Company, for US$2.5 million,
exactly what E.T. paid for it. E.T. Capital, Inc. will be relocating its
offices to the offices of Resort Magic in Las Vegas, Nevada and will
reincorporate the Company in the State of Nevada. Resort Magic is a Timeshare
and real estate marketing company headquartered in Las Vegas, Nevada and is a
licensed real estate broker in thirteen states. Resort Magic's management
team has extensive Timeshare experience and has been responsible for over
$300 million in Timeshare sales. Resort Magic has prepared a business plan
that addresses the lack of a secondary, or re-sale, market for timeshare
properties. Resort Magic has estimated that in excess of 100 million
timeshare units have been sold world wide, and that over 1/3 of these could be
available for listing as a sale or an exchange. Until now, the resale market
for timeshare properties have had no viable market place for either sales or
exchanges. A fee of $150 will be charged for every listing accepted by the
Resort Magic to list Timeshare properties with it. Resort Magic is negotiating
a 100% financing package on any properties accepted by the company for
listing. This package will facilitate both the immediate closing of the
transaction, and transfer of the properties to the successful purchaser.
Resort Magic is under contract to market the Timeshare inventory for the Pahio
Group on the Island of Kauai, Hawaii and is also negotiating a Joint Venture
of timeshare properties in key locations in Las Vegas, Nevada located in the pro
ximity of the new "Bellagio" and "Paris" mega-resorts.
As a result of these Agreements, any real estate transactions that are sold or
accessed through the Internet facilities of E.T's Internet Timeshare Web Site,
"ebuyauctions.com", will contribute to the cash flow of E.T.
During the quarter, the Company offered US$350 million of Preferred shares to
facilitate the financing of the Paraguayan Hydrocarbon concessions. US$100
million was subscribed for, however the subscription was canceled as the total
subscription was not met.
Subsequent Events
In July, the Company offered 5 million Series "D" Preferred shares at US$100
per share to finance the Paraguayan Hydrocarbon concessions and other
potential acquisitions. As of July 27, 1999, 125,000 Series "D" Preferred
Shares @ US$100 per share have been subscribed for. No Preferred shares will
be issued until the total number of Preferred shares offered has been
subscribed.
Liquidity and Capital Resources
At June 30, 1999, the Company had cash assets of $50,327, but total
assets of $233,310, compared with no cash assets and total assets of $243,842
at June 30, 1998. The Company is not aware of any known trends, demands,
commitments, events or uncertainties that will result in or that are
reasonably likely to result in the Company's liquidity increasing or
decreasing in any material way.
Capital Resources and Expenditure
There were no significant capital expenditures made by the Company during
the quarter ended June 30, 1999. Management of the Company knows of no
material trends, favorable or unfavorable, with respect to the Company's
capital resources.
Inflation
The results of the Company's operations have not been significantly
affected by inflation during the quarter ended June 30, 1999.
Other Information
Part II. Other Information
Items 1, 2, 3, 4, 5, and 6 are not applicable and have been omitted.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant as duly caused this report to be signed
on its behalf by the undersigned, duly authorized.
Dated: July 27, 1999
E.T. CAPITAL, INC. (the "Company")
By: /s/ Sidney B. Fowlds
Chairman of Board of Directors
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.
Date: July 27, 1999/s/ Sidney B. Fowlds
Director
Date: July 27, 1999 /s/ John Johnston
Director
Date: July 27, 1999/s/ Robert Miller
Director
