<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ____________ to ____________
Commission file number 0-10909
CORNICHE GROUP INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 22-2343568
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
610 SOUTH INDUSTRIAL BLVD., SUITE 220
EULESS, TEXAS 76040
(Address of principal executive office) (zip code)
Registrant's telephone number, including area code: 817-283-4250
NOT APPLICABLE
(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
--- ---
14,213,471 SHARES, $.001 PAR VALUE, AS OF JULY 1, 2000
(Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date)
Page 1 of 31
<PAGE> 2
CORNICHE GROUP INCORPORATED AND SUBSIDIARY
JUNE 30, 2000
(Unaudited)
I N D E X
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C> <C>
Part I - Financial Information:
Item 1. Consolidated Financial Statements (Unaudited):
Balance Sheets
At June 30, 2000 and December 31, 1999 ....................... 3-4
Statements of Operations
For the Six and Three Months
Ended June 30, 2000 and 1999 ................................. 5
Statements of Convertible Redeemable Preferred
Stock, Common Stock, Other Stockholders' Equity
and Accumulated Deficit
For the Six Months Ended June 30, 2000 ....................... 6
Statements of Cash Flows
For the Six Months Ended June 30, 2000 and 1999 .............. 7-8
Notes to Consolidated Financial Statements ................... 9-23
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ................ 24-27
Part II - Other Information:
Items 2, 4, and 6 ............................................ 28-29
Signatures ................................................... 30
</TABLE>
Page 2 of 31
<PAGE> 3
CORNICHE GROUP INCORPORATED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
A S S E T S
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
---------- ------------
<S> <C> <C>
Current assets:
Cash and equivalents $1,082,014 $1,639,473
Marketable securities 3,765,618 2,733,319
Prepaid expenses and other current assets 276,340 71,622
---------- ----------
Total current assets 5,123,972 4,444,414
Property and equipment, net 579,055 655,002
Deferred acquisition costs 32,161 41,946
License, net of accumulated amortization 16,167 16,777
Other assets 12,525 12,525
---------- ----------
$5,763,880 $5,170,664
========== ==========
</TABLE>
See accompanying notes to financial statements.
Page 3 of 31
<PAGE> 4
CORNICHE GROUP INCORPORATED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- -----------
<S> <C> <C>
Current liabilities:
Dividends payable - preferred stock $ 271,742 $ 288,334
Accounts payable, accrued expenses
and other current liabilities 203,903 561,870
Current portion of long-term debt 23,689 22,662
----------- -----------
Total current liabilities 499,334 872,866
----------- -----------
Unearned revenues 587,766 298,801
----------- -----------
Long-term debt 64,116 76,591
----------- -----------
Series A Convertible Preferred Stock:
Series A $0.07 cumulative convertible preferred
stock - stated value - $1.00 per share,
authorized - 1,000,000 shares, outstanding -
694,974 shares at June 30, 2000 and
810,054 shares at December 31, 1999 694,974 810,054
----------- -----------
Convertible Redeemable Preferred Stock,
Common Stock, Other Stockholders'
Equity and Accumulated Deficit:
Preferred stock - authorized - 5,000,000 shares
Series B convertible redeemable preferred
stock, $0.1 par value, authorized, issued
and outstanding - 825,000 shares 8,250 8,250
Common stock, $.001 par value, authorized -
75,000,000 shares, issued and outstanding -
14,222,971 shares at June 30, 2000 and
12,513,127 shares at December 31, 1999 14,223 12,513
Additional paid-in capital 8,806,734 7,421,944
Accumulated deficit (4,911,517) (4,330,355)
----------- -----------
Total convertible redeemable preferred stock,
common stock, other stockholders' equity 3,917,690 3,112,352
----------- -----------
$ 5,763,880 $ 5,170,664
=========== ===========
</TABLE>
See accompanying notes to financial statements.
Page 4 of 31
<PAGE> 5
CORNICHE GROUP INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Six For the Three
Months Ended Months Ended
June 30, June 30,
------------------------------ ------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Earned revenues $ 275,549 $ -- $ 129,949 $ --
Direct costs 106,580 -- 63,080 --
------------ ------------ ------------ ------------
Gross profit 168,969 -- 66,869 --
General and administrative
expenses 824,041 999,763 496,765 600,641
------------ ------------ ------------ ------------
Operating loss (655,072) (999,763) (429,896) (600,641)
------------ ------------ ------------ ------------
Other income (expense):
Unrealized gain on
marketable securities 11,660 -- 7,478 --
Interest income 91,259 5,965 54,958 1,512
Interest expense (4,639) -- (2,399) --
------------ ------------ ------------ ------------
Total other income (expense) 98,280 5,965 60,037 1,512
------------ ------------ ------------ ------------
Loss before preferred dividend (556,792) (993,798) (369,859) (599,129)
Preferred dividend 24,370 28,714 12,162 14,268
------------ ------------ ------------ ------------
Net loss $ (581,162) $ (1,022,512) $ (382,021) $ (613,397)
============ ============ ============ ============
Net loss per share of
common stock $ (0.04) $ (0.16) $ (0.03) $ (0.10)
============ ============ ============ ============
Weighted average number of
common shares outstanding 13,820,536 6,377,357 14,211,840 6,380,997
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
Page 5 of 31
<PAGE> 6
CORNICHE GROUP INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONVERTIBLE REDEEMABLE PREFERRED STOCK, COMMON STOCK,
OTHER STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Series B
Convertible
Preferred Stock Common Stock Additional
--------------------------- --------------------------- Paid-In Accumulated
Shares Amount Shares Amount Capital Deficit Total
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance - January 1, 2000 825,000 $ 8,250 12,513,127 $ 12,513 $ 7,421,944 $(4,330,355) $ 3,112,352
Issuance of common stock for
cash, net of offering costs -- -- 1,676,250 1,676 1,205,094 -- 1,206,770
Issuance of common stock for
services rendered -- -- 2,000 2 5,873 -- 5,875
Conversion of Series A
Convertible Preferred
Stock into Common Stock -- -- 22,094 22 156,020 -- 156,042
Series A Convertible
Stock dividends -- -- -- -- -- (24,370) (24,370)
Net loss before preferred
stock dividend -- -- -- -- -- (556,792) (556,792)
Shares to be issued for
services rendered -- -- 9,500 10 17,803 -- 17,813
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance - June 30, 2000 825,000 $ 8,250 14,222,971 $ 14,223 $ 8,806,734 $(4,911,517) $ 3,917,690
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
Page 6 of 31
<PAGE> 7
CORNICHE GROUP INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six
Months Ended
June 30,
----------------------------
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (581,162) $(1,022,512)
----------- -----------
Adjustments to reconcile net loss to net
cash used in operating activities:
Unrealized gain on marketable securities (11,660) --
Issuance of common stock for
services rendered 23,688 --
Series A preferred stock dividends 24,370 28,714
Depreciation and amortization 76,557 10,866
Unearned revenues 288,965 --
Deferred acquisition costs 9,785 --
Increase (decrease) in cash flows as
a result of changes in asset and
liability account balances:
Prepaid expenses and other current assets (204,718) (22,464)
Accounts payable, accrued expenses
and other current liabilities (357,967) 107,325
----------- -----------
Total adjustments (150,980) 124,441
----------- -----------
Net cash used in operating activities (732,142) (898,071)
----------- -----------
Cash flows from investing activities:
(Increase) decrease in marketable securities (1,020,639) 545,689
Acquisition of property assets -- (103,618)
----------- -----------
Net cash provided by (used in) investment activities (1,020,639) 442,071
----------- -----------
Cash flows from financing activities:
Net proceeds from issuance of capital stock - net 1,206,770 556,527
Payments of capital lease obligations (2,944) (2,328)
Proceeds from notes payable -- 97,336
Repayments of notes payable (8,504) --
----------- -----------
Net cash provided by financing activities 1,195,322 651,535
----------- -----------
Net increase (decrease) in cash (557,459) 195,535
Cash and cash equivalents at beginning of period 1,639,473 206,313
----------- -----------
Cash and cash equivalents at end of period $ 1,082,014 $ 401,848
=========== ===========
</TABLE>
See notes to financial statements.
Page 7 of 31
<PAGE> 8
CONRICHE GROUP INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Six
Months Ended
June 30,
----------------------------
2000 1999
---------- ----------
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period:
Income taxes $ -- $ --
========== ==========
Interest $ 4,639 $ 719
========== ==========
Supplemental Schedules of Noncash Financing Activities:
Series A Preferred Stock and dividends thereon
converted to common stock and additional
paid-in capital upon conversion $ 156,020 $ 28,714
========== ==========
Issuance of common stock for
services rendered $ 23,688 $ --
========== ==========
</TABLE>
See notes to financial statements.
Page 8 of 31
<PAGE> 9
CORNICHE GROUP INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
NOTE 1 - THE COMPANY.
Corniche Group Incorporated (hereinafter referred to as the
"Company" or "CGI") as a result of a reverse acquisition with
Corniche Distribution Limited and its Subsidiaries ("Corniche"), was
engaged in the retail sale and wholesale distribution of stationery
products and related office products, including office furniture, in
the United Kingdom. In February 1996, the Company was placed in
receivership by its creditors. Through March 1998, the Company had no
activity.
On March 4, 1998, the Company entered into a Stock Purchase
Agreement ("Agreement"), approved by the Company's stockholders on
May 18, 1998, with certain individuals (the "Initial Purchasers")
whereby the Initial Purchasers acquired an aggregate of 765,000
shares of a newly created Series B Convertible Redeemable Preferred
Stock, par value $0.01 per share. Thereafter the Initial Purchasers
have been endeavoring to establish for the Company new business
operations in the property and casualty specialty insurance and the
service contract markets.
On September 30, 1998, the Company acquired all of the capital
stock of Stamford Insurance Company, Ltd. ("Stamford") from
Warrantech Corporation for $37,000 in cash in a transaction accounted
for as a purchase. Warrantech's chairman is the former chairman of
the Company. Stamford was charted under the Laws of, and is licensed
to conduct business as an insurance company by, the Cayman Islands.
Although Stamford has incurred expenses since its inception, it first
generated revenues in the fourth quarter of 1999.
Page 9 of 31
<PAGE> 10
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
(a) Basis of Presentation:
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions for Form
10-Q and Article 10 of Regulation S-X. 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, the statements contain all adjustments
(consisting only of normal recurring accruals) necessary to present
fairly the financial position as of June 30, 2000 and the results of
operations and cash flows for the six and three months ended June 30,
2000 and 1999. The results of operations for the six and three months
ended June 30, 2000 and 1999 are not necessarily indicative of the
results to be expected for the full year.
The December 31, 1999 balance sheet has been derived from the
audited financial statements at that date included in the Company's
annual report on Form 10-K. These unaudited financial statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's annual report on Form 10-K.
(b) Cash Equivalents:
Short-term cash investments which have a maturity of ninety
days or less when purchased are considered cash equivalents in the
statement of cash flows.
(c) Estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
(d) Concentrations of Credit-Risk:
Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist principally of cash
and marketable securities. The Company places its domestic operations
cash accounts with high credit quality financial institutions, which
at times may be in excess of the FDIC insurance limit. The Company's
subsidiary places its cash in the Cayman Island subsidiaries of
domestic banks whose net worth exceeds $100,000,000. The Company's
marketable securities are primarily comprised of investments in
municipal bank funds. The Company employs the services of an
investment advisor to assist in monitoring its investments.
Page 10 of 31
<PAGE> 11
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. (Continued)
(e) Marketable Securities:
Marketable securities are classified as trading securities and
are reported at market value at December 31, 1999. At June 30, 2000,
the market value of securities exceeded their cost by $11,660. The
market value of the investment approximated cost at December 31,
1999.
(f) Property and Equipment:
The cost of property and equipment is depreciated over the
estimated useful lives of the related assets of 5 to 7 years. The
cost of computer software programs is amortized over their estimated
useful lives of five years. Depreciation is computed on the
straight-line method. Repairs and maintenance expenditures which do
not extend original asset lives are charged to income as incurred.
(g) Intangibles:
The excess of the purchase price for the capital stock of
Stamford over the net assets acquired has been attributed to the
subsidiary's license to conduct business as an insurance carrier in
the Cayman Islands. Amortization charged to operations in the six
months ended June 30, 2000 and 1999 was $610, in each period, and for
the three months ended March 31, 2000 and 1999 was $305, in each
period.
(h) Income Taxes:
The Company adopted SFAS 109, "Accounting for Income Taxes",
which recognizes (a) the amount of taxes payable or refundable for
the current year and, (b) deferred tax liabilities and assets for the
future tax consequences of events that have been recognized in an
enterprise's financial statement or tax returns. There is no
difference as to financial and tax basis of assets and liabilities.
(i) Fair Value of Financial Statements:
The Company adopted Statement of Financial Accounting
Standards No. 121 ("SFAS No. 121"), "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of". The
statement requires that the Company recognizes and measures
impairment losses of long-lived assets, certain identifiable
intangibles, value long-lived assets to be disposed of and long-term
liabilities. At June 30, 2000 and December 31, 1999, the carrying
values of the Company's other assets and liabilities approximate
their estimated fair values.
Page 11 of 31
<PAGE> 12
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. (Continued)
(j) Advertising Costs:
The Company expenses advertising costs as incurred.
Advertising costs amounted to $282,521 and $276,752 for the six and
three months ended June 30, 2000 and none for the six and three
months ended June 30, 1999.
(k) Earnings Per Share:
The Company adopted Statement of Financial Accounting
Standards No. 128, "Earnings Per Share". Basic earnings per share is
based on the weighted effect of all common shares issued and
outstanding, and is calculated by dividing net income available to
common stockholders by the weighted average shares outstanding during
the period. Diluted earnings per share, which is calculated by
dividing net income available to common stockholders by the weighted
average number of common shares that would be issued assuming
conversion of all potentially dilutive securities outstanding, is not
presented as it is anti-dilutive in all periods.
(l) Recently Issued Accounting Pronouncements:
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130 - "Reporting Comprehensive
Income", No. 131 - "Disclosures about Segments of an Enterprise and
Related Information", No. 132 - "Employer's Disclosures about Pension
and Other Postretirement Benefits" and No. 133 - "Accounting for
Derivative Instruments and Hedging Activities". Management does not
believe that the effect of implementing these new standards will be
material to the Company's financial position, results of operations
and cash flows.
(m) Revenue Recognition:
Stamford is a property and casualty reinsurance company
writing reinsurance coverages for one domestic carrier's consumer
products service contracts. The domestic carrier is rated "A-"
Excellent by A.M. Best.
Premiums are recognized on a pro rata basis over the policy
term. The deferred policy acquisition costs are the net cost of
acquiring new and renewal insurance contracts. These costs are
charged to expense in proportion to net premium revenue recognized.
Page 12 of 31
<PAGE> 13
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. (Continued)
(m) Revenue Recognition: (Continued)
The provisions for losses and loss-adjustment expenses include
an amount determined from loss reports on individual cases and an
amount based on past experience for losses incurred but not reported.
Such liabilities are necessarily based on estimates, and while
management believes that the amount is adequate, the ultimate
liability may be in excess of or less than the amounts provided. The
methods for making such estimates and for establishing the resulting
liability are continually reviewed, and any adjustments are reflected
in earnings currently.
The parent company sells via the Internet directly to
consumers automotive vehicle services contracts. The Company
recognizes revenue ratably over the length of the contract. The
Company purchases insurance to fully cover any losses under the
service contracts from the domestic carrier referred to above. The
insurance premium and other costs related to the sale are amortized
over the contract.
NOTE 3 - PROPERTY AND EQUIPMENT.
Property and equipment consists of the following:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
---------- ------------
<S> <C> <C>
Computer equipment $ 116,660 $ 116,660
Furniture and fixtures 23,266 23,266
Computer software 582,585 582,585
---------- ----------
722,511 722,511
Less: Accumulated depreciation 150,875 77,896
---------- ----------
571,636 644,615
---------- ----------
Lease property under capital lease:
Office equipment 17,806 17,806
Less: Accumulated depreciation 10,387 7,419
---------- ----------
7,419 10,387
---------- ----------
$ 579,055 $ 655,002
========== ==========
</TABLE>
Depreciation and amortization charged to operations was
$76,577 and $10,866 for the six months ended June 30, 2000 and 1999,
respectively, and $38,269 and $3,580 for the three months ended June
30, 2000 and 1999, respectively.
Page 13 of 31
<PAGE> 14
NOTE 3 - PROPERTY AND EQUIPMENT. (Continued)
The estimated present value of the capital lease obligations
at June 30, 2000 reflects imputed interest calculated at 12.7% and
19.32%. The obligations are payable in equal monthly installments
through February 2002 as follows:
<TABLE>
<CAPTION>
Years Ending
June 30,
------------
<S> <C>
2001 $ 5,750
2002 2,721
--------
8,471
Amount representing interest 1,431
--------
Present value of minimum
lease payments 7,040
Present value of minimum lease
payments due within one year 5,519
--------
Present value of minimum lease
payments due after one year $ 1,521
========
</TABLE>
The aggregate maturities of the present value of the
minimum lease obligation is as follows:
<TABLE>
<CAPTION>
Years Ending
June 30,
------------
<S> <C>
2001 $ 5,519
2002 1,521
--------
$ 7,040
========
</TABLE>
NOTE 4 - ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES.
Accounts payable, accrued expenses and other current
liabilities consist of the following at:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
---------- ------------
<S> <C> <C>
Accrued offering costs $ -- $ 419,120
Accrued professional fees 43,006 41,534
Advertising 30,000 69,427
Insurance 7,118 --
Other 118,779 26,789
Accrued claims losses 5,000 5,000
---------- ----------
$ 203,903 $ 561,870
========== ==========
</TABLE>
Page 14 of 31
<PAGE> 15
NOTE 5 - NOTES PAYABLE.
In October 1999, the Company sold to accredited investors 10
units of its promissory notes and common stock for $25,025 each. Each
unit was comprised of a 5% interest bearing $25,000 note and 25,000
shares. The variance between the fair market value of the 25,000
common shares issued in the aggregate of $27,969 and the cash
received of $250 was deemed to be additional interest and was charged
to operations over the life of the notes. The notes were repaid in
full in December 31, 1999. At December 31, 1999, accrued interest on
the notes of $3,025 remained outstanding and was repaid in January,
2000.
NOTE 6 - LONG-TERM DEBT.
Long-term debt consists of the following at June 30, 2000 and
December 31, 1999:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
-------- ------------
<S> <C> <C>
Capital lease obligations $ 7,040 $ 9,983
Note payable - bank - in equal monthly
installments of $2,043 including interest
at 8-3/4%. The notes are collateralized
by computer equipment having an
undepreciated cost of $78,927 80,765 89,270
-------- --------
87,805 99,253
Portion payable within one year 23,689 22,662
-------- --------
$ 64,116 $ 76,591
======== ========
</TABLE>
The aggregate maturities of the obligations are as
follows:
<TABLE>
<CAPTION>
Years Ending
June 30,
------------
<S> <C>
2001 $ 23,689
2002 21,347
2003 21,631
2004 21,138
--------
$ 87,805
========
</TABLE>
Page 15 of 31
<PAGE> 16
NOTE 7 - SERIES A CONVERTIBLE PREFERRED STOCK.
In connection with the settlement of a securities class action
litigation in 1994, the Company issued 1,000,000 shares of Series A
$0.07 Convertible Preferred Stock (the "Series A Preferred Stock")
with an aggregate value of $1,000,000. The following summarizes the
terms of the Series A Preferred Stock as more fully set forth in the
Certificates of Designation. The Series A Preferred Stock has a
liquidation value of $1 per share, is non-voting and convertible into
common stock of the Company at a price of $5.20 per share. Holders of
Series A Preferred Stock are entitled to receive cumulative cash
dividends of $0.07 per share, per year, payable semi-annually. Until
November 30, 1999 the Series A Preferred Stock was callable by the
Company at a price of $1.04 per share, plus accrued and unpaid
dividends, and thereafter at a price of $1.05 per share, plus accrued
and unpaid dividends. In addition, if the closing price of the
Company's common stock exceeds $13.80 per share for a period of 20
consecutive trade days, the Series A Preferred Stock is callable by
the Company at a price equal to $0.01 per share, plus accrued and
unpaid dividends. The Certificate of Designation for the Series A
Preferred Stock also states that at any time after December 1, 1999
the holders of the Series A Preferred Stocks may require the Company
to redeem their shares of Series A Preferred Stock (if there are funds
with which the Company may do so) at a price of $1.00 per share.
Notwithstanding any of the foregoing redemption provisions, if any
dividends on the Series A Preferred Stock are past due, no shares of
Series A Preferred Stock may be redeemed by the Company unless all
outstanding shares of Series A Preferred Stock are simultaneously
redeemed. During the year ended December 31, 1999, 18,711 shares of
Series A Preferred Stock were converted into 3,586 shares of common
stock. During the six months ended June 30, 2000, holders of 115,080
shares of the Series A Preferred Stock converted such shares into
22,094 shares of the Company's common stock. At June 30, 2000 and
December 31, 1999, 694,974 and 810,054 shares of Series A Preferred
Stock were outstanding, respectively. At June 30, 2000 and 1999, and
accrued dividends on these outstanding shares were $271,742 and
$288,334, respectively.
NOTE 8 - STOCKHOLDERS' EQUITY.
(a) Series B Convertible Redeemable Preferred Stock:
On March 4, 1998, the Company entered into a Stock Purchase
Agreement ("Agreement"), approved by the Company's stockholders on May
18, 1998, with certain individuals (the "Initial Purchasers") whereby
the Initial Purchasers and two other persons acquired an aggregate of
825,000 shares of a newly created Series B Convertible Redeemable
Preferred Stock ("Series B Stock"), par value $0.01 per share.
Page 16 of 31
<PAGE> 17
NOTE 8 - STOCKHOLDERS' EQUITY. (Continued)
(a) Series B Convertible Redeemable Preferred Stock: (Continued)
Pursuant to the Agreement and Subsequent transactions, the Initial
Purchasers acquired 765,000 shares of Series B Stock for $76,500 in
cash. The Company incurred certain legal expenses of the Initial
Purchasers equaling approximately $50,000 in connection with the
transaction. In addition, the Company issued 50,000 shares of Series B
Stock to a consultant as compensation valued at $5,000 for his
assistance to the Company in the identification and review of business
opportunities and this transaction and for his assistance in bring the
transaction to fruition. Additionally, the Company issued 10,000
shares of Series B Stock to James Fyfe as compensation valued at
$1,000 for his work in bringing this transaction to fruition. These
issuances diluted the voting rights of the then existing stockholders
by approximately 57%. The total authorized shares of Series B
Convertible Redeemable Preferred Stock is 825,000.
The following summarizes the terms of the Series B Stock whose
terms are more fully set forth in the Certificate of Designation. The
Series B Stock carries a zero coupon and each share of the Series B
Stock is convertible into ten shares of the Company's common stock.
The holder of a share of the Series B Stock is entitled to ten times
any dividends paid on the common stock and such stock has ten votes
per share and vote as one class with the common stock. Accordingly,
the Initial Purchasers have sufficient voting power to elect all of
the Board of Directors.
The holder of any share of Series B Convertible Redeemable
Preferred Stock has the right, at such holder's option, exercisable on
or after September 30, 2000, to convert such share into ten (10) fully
paid and non-assessable shares of common stock (the "Conversion
Rate"). The Conversion Rate is subject to adjustment as stipulated in
the Agreement. Upon liquidation, the Series B Stock would be junior to
the Corporation's Series A Preferred Stock and would share ratably
with the common stock with respect to liquidating distributions.
The Company's right to repurchase or redeem shares of Series B
Stock was eliminated in fiscal 1999 pursuant to the terms of the
Agreement and the Certificate of Designation.
Page 17 of 31
<PAGE> 18
NOTE 8 - STOCKHOLDERS' EQUITY. (Continued)
(b) Common Stock:
On May 15, 1997, the Company commenced a private securities
offering pursuant to Rule 506 of Regulation D of the Securities Act of
1933, as amended, of up to 400 units, each unit consisting of 10,000
shares of common stock being offered at a price of $5,000 per unit.
The Company used a placement agent for such offering who received a
sales commission equal to 10% of the offering price of each unit sold.
In connection with the offering, 369 units were sold for gross
receipts of $1,845,000 from which the agent was paid a commission of
$184,500 for net of $1,660,500 to the Company.
In March 1998, the Company sold 250,000 shares of common stock at
$.50 per share realizing $125,000.
The stockholders at the 1998 annual meeting approved the reduction
of the par value of the common stock from $0.10 per share to $0.001
per share.
The stockholders at the 2000 annual meeting approved amending the
authorized common stock to 75 million shares from 30 million shares.
Commencing in May 1999 through July 1999, the Company sold 688,335
shares of its common stock to accredited investors for $538,492 net of
offering costs. In December 1999, accredited investors purchased
5,187,500 shares of the Company's common stock for $3,715,744, net of
offering costs. During the six months ended June 30, 2000, the Company
sold 1,676,250 shares of common stock at $.80 per share realizing
$1,206,770, net of offering costs.
The Company in 1999 issued 5,000 shares of its common stock whose
fair value was $5,000 to its President as a signing bonus, which was
charged to operations at the time of issuance. The Company also issued
in 1999, 25,000 shares of its common stock whose fair value was
$25,000 at the date of issuance to a public relations consultant for
future services. The arrangement with the consultant was terminated in
1999 and the fair value of the shares was charged to operations in
1999.
During the quarter ended June 30, 2000, the Company issued 2000
shares of its common stock to a consultant for promotional activities
amounting to $5,875.
Page 18 of 31
<PAGE> 19
NOTE 8 - STOCKHOLDERS' EQUITY. (Continued)
(c) Warrants:
The Company has issued common stock purchase warrants from time to
time to investors in private placements, certain vendors,
underwriters, and directors and officers of the Company.
A total of 101,308 shares of common stock are reserved for
issuance upon exercise of warrants as of December 31, 1998 and March
31, 1998. Of these outstanding warrants, warrants for 9,375 common
shares at $46.40 per share expired in April 1999. The remaining
warrants to acquire 91,933 common shares at exercise prices ranging
from $3.20 to $8.10 per share were granted in March 1995 to certain
directors, officers and employees who converted previously outstanding
stock options under a now-expired stock option plan into warrants on
substantially the same terms as the previously held stock options,
except the warrants were immediately vested. During fiscal 1999,
warrants to acquire 22,308 common shares at prices ranging from $3.90
to $46.40 per share expired. No warrants were exercised during any of
the periods presented. A total of 79,000 shares of common stock are
reserved for issuance upon exercise of outstanding warrants as of
December 31, 1999 at prices ranging from $3.20 to $27.50 and expiring
through October 2004.
(d) Stock Options Plans:
The Company has two stock option plans. The 1998 Employee
Incentive Stock Option Plan provides for the grant of options to
purchase shares of the Company's common stock to employees. The 1992
Stock Option Plan provides for the grant of options to directors.
Under the 1998 Plan, the maximum aggregate number of shares which may
be issued under options is 300,000 shares of common stock. The
aggregate fair market value (determined at the time the option is
granted) of the shares for which incentive stock options are
exercisable for the first time under the terms of the 1998 Plan by any
eligible employee during any calendar year cannot exceed $100,000. The
option exercise price of each option is 100% of the fair market value
of the underlying stock on the date the options are granted, except
that no option will be granted to any employee who, at the time the
option is granted, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation or
any subsidiary unless (a) at the time the options are granted, the
option exercise price is at least 110% of the fair market value of the
shares of common stock subject to the options and (b) the option by
its terms is not exercisable after the fifth anniversary of the date
on which the option is granted.
The 1998 Plan is administered by the Compensation Committee of the
Board of Directors. In 1999, options to acquire 100,000 common shares
at $1.00 per share and options to acquire 75,000 common shares at
$1.097 were granted to an officer. Additionally, an option to acquire
25,000 common shares at $0.6875 per share was issued to a consultant.
In June 2000, options to acquire 100,000 common shares at $1.88 per
share and
Page 19 of 31
<PAGE> 20
NOTE 8 - STOCKHOLDERS' EQUITY. (Continued)
(d) Stock Options Plans: (Continued)
options to acquire 100,000 common shares at $1.94 per share were
granted to two officers.
Information with respect to options under the 1992 and 1998 Stock
Option Plans is summarized as follows:
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
2000 1999
------------------------------- ----------------------------
Shares Prices Shares Prices
------ -------------- ------ --------------
<S> <C> <C> <C> <C>
Outstanding at beginning
of period 128,000 $0.31 to $1.00 3,000 $0.31 to $0.40
============== ==============
Options issued 75,000 $1.10 -
------- ===== -----
Outstanding at end
of period 203,000 $0.31 to $1.10 3,000 $0.31 to $0.40
======= ============== ===== ==============
</TABLE>
Page 20 of 31
<PAGE> 21
NOTE 8 - STOCKHOLDERS' EQUITY. (Continued)
(d) Stock Options Plans: (Continued)
Outstanding options expire 90 days after termination of holder's
status as employee or director.
All options were granted at an exercise price equal to the fair
value of the common stock at the grant date. Therefore, in accordance
with the provisions of APB Opinion No. 25 related to fixed stock
options, no compensation expense is recognized with respect to options
granted or exercised. Under the alternative fair-value based method
defined in SFAS No. 123, the fair value of all fixed stock options on
the grant date would be recognized as expense over the vesting period.
Assuming the fair market value of the stock at the date of grant to be
$.3125 per share in May 1996, $.40625 per share in May 1997, $.6875 in
January 1999 and $1.00 per share in September 1999, the life of the
options to be from three to ten years, the expected volatility at
200%, expected dividends are none, and the risk-free interest rate of
10%, the Company would have recorded compensation expense of $10,523
for the six months ended June 30, 2000 and $1,938 for the three months
ended June 30, 2000 as calculated by the Black-Scholes option pricing
model. As such, pro-forma net loss and loss per share would be as
follows:
<TABLE>
<CAPTION>
For the Six For the Three
Months Ended Months Ended
June 30, 2000 June 30, 2000
------------- -------------
<S> <C> <C>
Net loss as reported $ (581,162) $ (382,021)
Additional compensation 10,523 1,938
------------ ------------
$ (591,685) $ (383,959)
============ ============
Loss per share as reported $ (0.04) $ (0.03)
============ ============
Adjusted loss per share $ (0.04) $ (0.03)
============ ============
</TABLE>
As the number of options granted at December 31, 1998 and March
31, 1998 is immaterial, recognizing the expense would not have a
material effect on the Company's financial statements for the three
months and six months ended June 30, 1999.
Page 21 of 31
<PAGE> 22
NOTE 9 - INCOME TAXES.
The Company has received permission from the Internal Revenue
Service to change its taxable year-end from March 31, to December 31,
effective with the December 31, 1998 period.
The differences between income taxes computed using the statutory
federal income tax rate and that shown in the financial statements are
summarized as follows:
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
----------------------------------------------------------
2000 % 1999 %
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Loss before income taxes
and preferred dividend $ 556,792 -- $ (993,798) --
========== ========== ========== ==========
Computed tax benefit at
statutory rate $ (189,300) (34.0) $ (337,900) (34.0)
Foreign subsidiary income
not subject to U.S. taxes (49,700) (9.2) (7,560) (.8)
Net operating loss
valuation reserve 239,000 43.2 345,460 34.8
---------- ---------- ---------- ----------
Total tax benefits $ -- -- $ -- --
========== ========== ========== ==========
</TABLE>
There are no significant differences between the financial
statement and tax basis of assets and liabilities and, accordingly, no
deferred tax provision/benefit is required.
The Tax Reform Act of 1986 enacted a complex set of rules limiting
the utilization of net operating loss carryforwards to offset future
taxable income following a corporate ownership change. The Company's
ability to utilize its NOL carryforwards is limited following a change
in ownership in excess of fifty percentage points during any three
year period. Upon receipt of the proceeds from the last foreign
purchasers of the Company's common stock in January 2000, common stock
ownership changed in excess of 50% during the three year period then
ended. The utilization of the Company's net operating loss
carryforward at December 31, 1999 of $2,063,000 was not negatively
impacted by this ownership change. The future tax benefit of the net
operating loss carryforward aggregated $701,000 at December 31, 1999
has been fully reserved as it is not more likely than not that the
Company will be able to use the operating loss in the future.
Page 22 of 31
<PAGE> 23
NOTE 10 - COMMITMENTS, CONTINGENICES AND OTHER.
(a) Leases:
Commencing in August 1998, the Company entered into short-term
operating leases for its general office space and certain office
equipment. Prior to August 1998, the Company did not incur rent
expense as it was inactive. Rent expense charged to operations for
the six and three months ended June 30, 2000 and 1999 was $25,050 and
$12,525, respectively in each period. Future minimum annual rent
commitments under operating leases as of June 30, 2000 are as
follows:
<TABLE>
<CAPTION>
Years Ending
June 30,
------------
<S> <C>
2001 $50,000
2002 4,167
-------
$54,167
=======
</TABLE>
(b) Investment Contract:
The Corporation has entered into an investment advisory agreement
with AIG Global Investment Corporation ("AIG") under which AIG will
function as investment advisor and manager of all the Corporation's
investable assets. AIG provides management services to all affiliated
insurance companies of American International Group and other
third-party institutions on a world-wide basis.
(c) Year 2000:
Although the Company has had limited operations through December
31, 1999, it recognized the need to ensure that its operations will
not be adversely effected by Year 2000 software or hardware failures.
The Company in developing its software and hardware made certain that
all its systems were compliant with Year 2000 requirements. The
Company has not experienced any adverse computer hardware or software
effect to date. If, despite the Company's effects under its Year 2000
related failures affecting the Company from outside sources,
management at the present time does not believe the impact will be
substantial.
Page 23 of 31
<PAGE> 24
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
financial statements and notes contained elsewhere in this Form 10-Q. Certain
statements under this caption "Management's Discussion and Analysis of
Financial Conditions and Results of Operations," constitute "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995.
PLAN OF OPERATION
In May 1998, the Company sold to certain individuals through a stock purchase
agreement an aggregate of 765,000 shares of a newly created Series B
Convertible Redeemable Preferred Stock, par value for 0.01 per share of
$76,500. In May 1999, the Company sold 688,335 common shares for $558,000 after
offering costs. These funds were principally used to acquire property assets
and software to develop its service contract businesses, and to fund its
operating losses. In December 1999 and during the six months ended June 30,
2000, the Company sold 5,187,500 and 1,676,250 common shares for $3,691,000 and
$1,206,000, respectively, which will be used to expand its businesses.
On September 30, 1998, the Company acquired Stamford Insurance Company Ltd.,
which was then an inactive foreign corporation that is licensed in the Cayman
Islands as a casualty and property insurer. In the first quarter of 2000,
Stamford commenced underwriting as a reinsurer generating premiums written of
$536,000 of which $240,000 was earned by June 30, 2000. Also in the six months
ended June 30, 2000, the Company's sales of its automotive vehicle and consumer
products service contracts through its website amounted to $28,600 of which
$10,000 was earned in 2000.
The Company's plan of operations for the next twelve months is principally to
continue its endeavors to establish itself in the vehicle and consumer products
service contract business through its Internet website,
www.warrantysuperstore.com, and to continue to seek additional property
casualty reinsurance opportunities for its wholly owned insurance company,
Stamford Insurance Co. Ltd.
Page 24 of 31
<PAGE> 25
RESULTS OF OPERATIONS
The Company did not generate any operating revenues until the fourth quarter of
fiscal 1999, when its reinsurance subsidiary commenced generating premium
revenues and the Company began the sale of its service contracts.
In the six months ended June 30, 2000 continued reinsuring contractual
liability insurance policies from one United States carrier that is rated "A-"
Excellent by A.M. Best. This insurance generated approximately $536,000 in
premiums, of which $296,000 was unearned at June 30, 2000. Policy acquisition
costs were $67,000 of which $49,000 was expensed in the six months ended June
30, 2000. Income from operations in the six months ended June 30, 2000 was
$169,000 of which $5,000 is management's estimate of incurred but not reported
losses at June 30, 2000. Corniche sales of extended service contracts for new
and used service contracts for new and used automotive vehicles in the six
months 2000 generated $28,600 in revenues of which $10,000 was recognized
within the current period with the balance deferred over the life of the
contract. Direct costs associated with the sale of the service contracts are
being recognized pro rata over the length of the contract.
General and administrative costs decreased by 17.6% to $824,000 for the six
months ended June 30, 2000 compared to $1,000,000 for the six months ended June
30, 1999. For the three months ended June 30, 2000, general and administrative
costs decreased by 17.3% to $497,000 compared to $601,000 for the comparable
period in 1999. The decreases are primarily attributable to reduced website
development costs.
Interest income increased 1416.7% to $91,000 for the six months ended June 30,
2000 compared to $6,000 for the six months ended June 30, 1999. For the three
months ended June 30, 2000 interest income increased 3600% to $55,000 compared
to $1,500 for the comparable period in 1999. Interest expense increased $4,600
for the six months and $2,400 for the three months ended June 30, 2000 from
$-0- for the both periods in 1999. The increase in interest income and interest
expense is the result of the cash, cash equivalents, and investments used to
fund the Company's increased operating costs in the current period and the
incidence of debt in a prior period.
The preferred stock dividend of $24,000 in June 2000 is $5,000 less than the
$29,000 accrued during the same period in 1999 principally because of the
reduction of the average number of Series A preferred stock outstanding in the
current year.
Net loss for the six months ended June 30, 2000 decreased 43.2% to $581,000
from the comparable loss of $1,023,000 incurred in 1999. For the three months
ended June 30, 200, the net loss decreased 37.7% to $382,000 from the
comparable loss of $613,000 in 1999. These decreases are a result of the
reasons cited above.
Page 25 of 31
<PAGE> 26
FINANCIAL CONDITION
The Company's cash condition decreased $557,000 to $1,082,000 at June 30, 2000
from $1,639,000 at December 31, 1999. The investments in marketable securities
increased $1,033,000 to $3,766,000 from $2,733,000 during the same time period.
The net increase is the result of proceeds from the sale of the Company's
common stock.
Even though the acquisition of Stamford may enable the Company to generate
limited reinsurance revenues, management's business plan requires additional
funding through future sales of the Company's securities and/or other financing
alternative. Management anticipates a continued deterioration in the Company's
financial condition in the near term due to ongoing general and administrative
costs, which will exceed the Company's revenues. This situation will continue
until the Company raises the sufficient financing to fully capitalize its
service contract sales and reinsurance business.
There can be no assurance that the Company will be successful in its efforts to
raise any funds from any of the operations under evaluation or that it will
avail itself of other alternative sources of funds.
LIQUIDITY AND CAPITAL RESOURCES
The Company has relied solely on the proceeds from the sales of its securities
in October 1997, May 1998, and May 1999, December 1999 and during the six
months ended June 30, 2000 for the primary source of its funds. In the six
months ended June 30, 2000, the Company generated its revenues from its
businesses, both earned and unearned, of $757,000. These funds were and will be
utilized to fund the Company's operating expenses. Management anticipates it
will require additional funds from future sales of its securities and/or other
financing alternatives in order to fund its future operational costs and at the
same time fully develop its insurance and service contract sales businesses.
At June 30, 2000 working capital was $4,625,000 an increase of $1,053,000 from
working capital of $3,572,000 at December 31, 1999. The increase in working
capital results primarily from the increase in capital through the sale of the
Company's securities of $1,206,000.
The Company has committed to acquire computer hardware and software and to
develop a website for approximately $1,500,000 of which $1,000,000 has been
expended through June 30, 2000. Although the Company is not contractually
obligated to fulfill the remaining $500,000 of the project, it intends to do so
over the next 1 to 2 years as and if funding permits. The project will enable
the Company to fully utilize the Internet in the sales, advertising, marketing,
collections and other functions of its extended service contract sales for
automotive vehicles and other products such as brown and white consumer
products. There can be no assurance that the Company will have the funds
available to fund its hardware and/or software requirements required to
successfully develop this project nor can there be assurance that if it is
developed such project will aid in the intended results of additional revenues.
Page 26 of 31
<PAGE> 27
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Certificate of Designation for the Series A Preferred Stock states that at
any time after December 1, 1999 any holder of Series A Preferred Stock may
require the Company to redeem his shares of Series A Preferred Stock (if there
are funds with which the Company may legally do so) at a price of $1.00 per
share. Notwithstanding the foregoing redemption provisions, if any dividends on
the Series A Preferred Stock are past due, no shares of Series A Preferred
Stock may be redeemed by the Company unless all outstanding shares of Series A
Preferred Stock are simultaneously redeemed. The holders of Series A Preferred
Stock may convert their Series A Preferred Stock into shares of common stock of
the Company at a price of $5.20 per share. At June 30, 2000, 694,971 shares of
Series A Preferred Stock were outstanding. If the preferred shareholders do not
convert their shares into common stock, and if the Company were required to
redeem any significant number of shares of Series A Preferred Stock, the
Company's financial condition would be materially affected.
INFLATION
Inflation has not had a significant effect on the Company's operations or
financial position and management believes that the future effects of inflation
on the Company's operations and financial position will be insignificant.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Certain statements included in this report, including the words "believes",
"anticipates", "expects" and similar expressions, are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to republish revised forward-looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrences of unanticipated events. Readers are also urged to carefully review
and consider the various disclosures made by the Company in this report, as
well as the Company's periodic reports on other fillings with the Securities
and Exchange Commission.
Page 27 of 31
<PAGE> 28
CORNICHE GROUP INCORPORATED
PART II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) Corniche sold the following unregistered equity securities during
the period covered by this report in a private placement under Section 4(2) of
the Securities Act of 1933:
<TABLE>
<CAPTION>
Number of Shares Expenses
Date of Common Stock Gross Proceeds of Sale Net Proceeds
---- ---------------- -------------- -------- ------------
<S> <C> <C> <C> <C>
6/30/2000 2,000 $5,875 $0 $5,875
</TABLE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company's annual stockholders meeting was held on June
27, 2000.
(b) The following individuals were elected or re-elected at the annual
meeting: James J. Fyfe, Robert F. Benoit, Robert H. Hutchins,
Paul L. Harrison, and Joseph P. Raftery.
(c) The following other matters were voted upon at the meeting:
(1) The following nominees for Director received the number of
votes set forth opposite their names, constituting in each case
a plurality of the votes cast at the Meeting for the election
of Directors:
<TABLE>
<CAPTION>
Number of Number of
Name Common Shares Series B Preferred Shares
---- ------------- -------------------------
<S> <C> <C>
James J. Fyfe 5,626,034 7,950,000
Robert F. Benoit 5,626,049 7,950,000
Robert H. Hutchins 5,626,046 7,950,000
Paul L. Harrison 5,626,046 7,950,000
Joseph P. Raftery 5,626,046 7,950,000
Others: 0 0
</TABLE>
Page 28 of 31
<PAGE> 29
(2) The proposal to approve an amendment to the Certificate of
Incorporation to increase the number of shares that the Company
is authorized to issued received the following votes:
<TABLE>
<CAPTION>
For Against Abstain
---------- ---------- ----------
<S> <C> <C> <C>
Number of Common Shares 5,586,535 76,204 18,514
Number of 7,950,000 0 0
Series B Preferred Shares
Total Votes 13,536,535 76,204 76,204
</TABLE>
(3) The proposal to approve an amendment to the 1998 Employees
Incentive Stock Option Plan to increase the number of shares
available for issuance under that plan received the following
votes:
<TABLE>
<CAPTION>
For Against Abstain
---------- ---------- ----------
<S> <C> <C> <C>
Number of Common Shares 787,801 86,383 4,774,103
Number of 7,950,000 0 0
Series B Preferred Shares
Total Votes 8,737,801 86,383 4,774,103
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(c) The following exhibit is filed as part of this report:
27 Financial Data Schedule
(d) No reports on Form 8-K were filed during the quarter ended June 30,
2000.
Page 29 of 31
<PAGE> 30
SIGNATURES
Pursuant to the requirements 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.
CORNICHE GROUP INCORPORATED
(Registrant)
By /s/ Robert Hutchins
------------------------------
Robert Hutchins, President and
Principal Financial Officer
Date: August 14, 2000
Page 30 of 31
<PAGE> 31
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
