FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1998
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: 0-13347
ARINCO COMPUTER SYSTEMS INC
_____________________________________________________
(Exact name of small business issuer in its charter)
New Mexico 85-0272154
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1650 UNIVERSITY BLVD., N.E. SUITE 100
ALBUQUERQUE, NEW MEXICO 87102
(Address of principal executive offices) (Zip Code)
505-242-4561
Issuer's telephone number, including area code
Not Applicable
(Former names, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the issuer (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 issuer was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
The number of shares outstanding of the Issuer's common stock,
par value $ 0.001 par value common stock, its only class of
equity securities, as of May 7, 1998 was 4,396,000 shares.
_________
PART I
Item 1. FINANCIAL STATEMENTS
ARINCO COMPUTER SYSTEMS INC.
BALANCE SHEET
<TABLE>
UNAUDITED
ASSETS March 31, 1998
CURRENT ASSETS
Cash and Interest Bearing Deposit $ 272,000
_________
Total Assets $ 272,000
=========
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES
Other Debt
Non-related parties 252,000
Accrued expenses 414,000
_________
Total current liabilities $ 666,000
SHAREHOLDERS' DEFICIT:
Preferred stock, .06 cumulative,
convertible share for share into common
stock, $.10 par value, $896,000 liquidation
perference, common stock, $.10 par value,
$ 896,000 liquidation preference, 5,000,000
shares authorized, 396,000 shares $ 40,000
Common stock,$.01 par value, 4,500,00 shares
authorized 4,396,000 shares 44,000
Additional paid-in-capital
Preferred stock 1,250,000
Common stock 1,273,000
Accumulated deficit (3,001,000)
__________
Total shareholders' deficit
Total liabilities and
shareholders' deficit $ 272,000
==========
See accompanying notes to consolidated financial statements
ARINCO COMPUTER SYSTEMS, INC.
CONDENSED STATEMENT OF OPERATIONS
UNAUDITED
<CAPTION>
<S> <S>
Three Months Three Months
Ended Ended
Mar. 31, 1998 Mar. 31,1997
</TABLE>
<TABLE>
<S> <C> <C>
OPERATING EXPENSES
General and administrative 0 0
___________ ____________
Total operating expenses 0 0
___________ ____________
OPERATING LOSS (0) (0)
INTEREST EXPENSE (10,000) (9,000)
___________ ____________
(10,000) (9,000)
OTHER INCOME 2,000 2,000
___________ ____________
NET INCOME LOSS FROM OPERATIONS (8,000) (7,000)
DEFICIT AT BEGINNING OF PERIOD $(2,960,000) $(2,925,000)
____________ ____________
DEFICIT AT END OF PERIOD $(2,959,000) $(2,959,000)
============ ============
NET INCOME (LOSS) PER
COMMON SHARE $ (.000) $ (.000)
============ ============
WEIGHTED AVERAGE OF SHARES
OUTSTANDING 4,396,000 4,396,000
=========== ============
</TABLE>
See accompanying notes to consolidated financial statement
ARINCO COMPUTER SYSTEMS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED March 31, 1998 & 1997
<TABLE>
<S> <C> <C>
Operating Activities: 1998 1997
Net income (loss) (8,000) (7,000)
Adjustments to reconcile net
loss to cash provided (used) by
operating activities:
Changes in operating assets and
liabilities: 10,000 9,000
________ _______
Net cash provided by operating
activities: 2,000 2,000
Cash and cash equivalents at
beginning of period: 270,000 265,000
_______ ______
Cash and cash equivalents at
end period: 272,000 267,000
======= =======
</TABLE>
See accompanying notes to consolidated financial statement
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated balance sheet as of March 31, 1998, and the
consolidated statements of operations for the three month periods
ended March 31, 1998 and 1997 and the consolidated statements of
cash flows for the three month period then ended 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 March 31, 1998 and 1997,
and for the presented 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. Its suggested that these consolidated financial
statements be read in conjunction with the consolidated financial
filing of Securities & Exchange Commission Form 10-k. The
results of operations for the periods ended March 31, 1998 and
1995 are not necessarily indicative of the operating results for
the full year.
EARNINGS (LOSS) PER SHARE
Earnings (loss) per share are computed using the weighted
number of common shares outstanding of 4,396,000 for the three
month periods ended March 31, 1998 and 1997, respectively.
Weighted average number of shares is calculated as follows for
the three months ended March 31, 1998.
Outstanding Number Weighted Average
of Shares of Shares
(Unchanged) (Unchanged)
Date _________________ ________________
January 1, 1998 - March 31, 1998 4,396,000 4,396,000
=========== ===========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following is Management's discussions and analysis of the
financial condition and results of operations of the Company
during the quarter ended March 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity, as discussed herein, refers to the Company's
ability to generate adequate amounts of cash to meet its needs.
At March 31, 1998 the Company had cash of $272,000,
It also had liabilities of $666,000 resulting from litigation.
See Item 1. (a) of Part II hereof.
The Company is presently without significant income. To acquire
or develop any further new business interests, the Company must
obtain moneys, by borrowing or the sale of equities, There is no
assurance that the Company, however will be successful in raising
new capital or securing any new business.
RESULTS OF OPERATIONS
The Company's net loss of $8,000 for the period ended March
31, 1998 represents the excess of expense over revenue for the
period.
Operations for the quarter ended March 31, 1998 generated
income of $2,000 compared to $ 2,000 for the quarter ended March
31, 1997. The Company incurred an operating loss of $8,000
during the quarter ended March 31, 1998. The Company
incurred an operating loss of $7,000 during the quarter ended
March 31, 1997.
As the Company has incurred operating losses, no provision
for income taxes was required for the quarter ended March 31,
1998.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Registrant has been subjected to the following
judgments:
a) On July 21, 1988, a Judgment was entered in the First
Judicial District, County of Santa Fe, New Mexico for legal fees
in the amount of $5,869.97.
b) During fiscal 1987 pursuant to a stipulation the US
District Court for the Eastern District of New York, a prior
supplier of materials to a formally owned subsidiary, obtained
Judgment against the Registrant in the amount of $245,738, plus
interest.
These two judgments remain unpaid at the date of this
Report.
Insofar as is known to the Company's management, there are
no other proceedings now pending, threatened, or contemplated, or
unsatisfied judgments outstanding which have not been provided
for in any court or agency to which the Company or any of its
officers or directors, in such capacity, are or may be a party,
except as discussed above.
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS IN SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
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.
Arinco Computer Systems Inc.
March 10, 1998
s/James A. Arias
_____________________ James A. Arias
Interim Chief Executive Officer
DATE: MAY 14, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 272,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 272,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 272,000
<CURRENT-LIABILITIES> 666,000
<BONDS> 0
0
40,000
<COMMON> 44,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 666,000
<SALES> 0
<TOTAL-REVENUES> 2,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (10,000)
<INCOME-PRETAX> (18,000)
<INCOME-TAX> (8,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
