<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended DECEMBER 31, 1996
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ TO ______________
Commission file number 0-12962
CAMBRIDGE HOLDINGS, LTD.
(Exact name of small business issuer as specified in its charter)
Colorado 84-0826695
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
1722 Buffehr Creek Road, 81657
Vail, Colorado (Zip Code)
(Address of principal executive offices)
Issuer's telephone number, including area code (970) 479-2800
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 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
State the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at February 1, 1997
Common Stock, $.025 par value 3,388,400
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CAMBRIDGE HOLDINGS, LTD.
FORM 10-QSB
TABLE OF CONTENTS
Part I. Financial Information......................................... 3
Balance Sheets as of December 31, 1996 and June 30, 1996............... 4 & 5
Statements of Income for the six month period ended December 31,
1996 and December 31, 1995............................................. 6
Statements of Cash Flows for the six month periods ended December 31,
1996 and December 31, 1995............................................. 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................. 8 & 9
Part II. Other Information............................................ 9
Signature Page......................................................... 10
Form 10-QSB
Page 2 of 10
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CAMBRIDGE HOLDINGS, LTD.
FORM 10-QSB
DECEMBER 31, 1996
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
The unaudited financial statements reflect all adjustments and contain all
information necessary, in the opinion of management, for a fair presentation
of the financial position and results of operation for the interim periods
reported when these statements are read in conjunction with the notes to
financial statements included in the Registrant's Form 10-KSB for the year
ended June 30, 1996.
Form 10-QSB
Page 3 of 10
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CAMBRIDGE HOLDINGS, LTD.
BALANCE SHEET
(Unaudited)
DECEMBER 31, JUNE 30,
1996 1996
ASSETS
------
CURRENT:
Cash and cash equivalents $2,192,448 $1,304,273
Short-term investments, at cost which
approximates market value 0 1,493,687
Investment securities - available for sale 857,347 1,161,363
Notes receivable 525,000 250,000
Prepaids and other 82,071 36,498
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Total current assets 3,656,866 4,245,821
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- --------------------------------------------------------------------------
OTHER ASSETS
Real Estate Investments 401,893 0
Other 3,007 3,186
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$4,061,766 $4,249,007
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Form 10-QSB
Page 4 of 10
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CAMBRIDGE HOLDINGS, LTD.
BALANCE SHEET
(Unaudited)
DECEMBER 31, JUNE 30,
1996 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accrued liabilities $ 5,869 $ 3,149
Deferred income taxes 250,000 275,000
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Total current liabilities 255,869 278,149
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STOCKHOLDERS' EQUITY:
Common Stock - $.025 par value, 15,000,000
shares authorized: 3,388,400 shares issued and
outstanding as of December 31, 1996 and
3,348,400 shares issued and outstanding as
of June 30, 1996 84,696 83,695
Additional paid-in capital 3,173,335 3,163,562
Retained earnings 454,508 255,265
Net unrealized gain on investment securities
available for sale 93,358 468,336
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Total stockholders' equity 3,805,897 3,970,858
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$4,061,766 $4,249,007
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Form 10-QSB
Page 5 of 10
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CAMBRIDGE HOLDINGS, LTD.
STATEMENTS OF INCOME
(unaudited)
<TABLE>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
DEC. 31, 1996 DEC. 31, 1995 DEC. 31, 1996 DEC. 31, 1995
<S> <C> <C> <C> <C>
REVENUES:
Rental income $ - $156,692 $ - 312,265
Option extension fee - 75,000 - 75,000
Gain on sales of
investment securities 191,153 23,012 191,153 43,937
Interest and dividend income 45,362 13,515 87,388 24,959
Gain on sale of
subdivided land - 434,920 - 434,920
Misc. Income 577 400 577 400
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Total revenues 237,092 703,539 279,118 891,481
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EXPENSES:
Operating, general, and
administrative 39,168 148,289 79,844 291,034
Interest - 17,831 30 35,776
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Total expenses 39,168 166,120 79,874 326,810
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- -------------------------------------------------------------------------------------------------
INCOME BEFORE TAXES $197,924 $537,419 $199,244 $564,671
TAXES ON INCOME - - - -
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NET INCOME $197,924 $537,419 $199,244 $564,671
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE: $.06 $.17 $.06 $.18
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING 3,388,400 3,107,940 3,374,813 3,102,015
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
Form 10-QSB
Page 6 of 10
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CAMBRIDGE HOLDINGS, LTD.
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
SIX MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 199,244 $ 564,671
Adjustment to reconcile net income
to cash provided by operating activities:
Gain on sale of Land - (500,000)
Depreciation and amortization 177 52,303
Gain on sales of investment securities - (43,937)
Changes in operating assets and liabilities:
Prepaids and other (45,573) (16,721)
Accounts payable and accrued liabilities 2,720 31,002
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NET CASH PROVIDED BY OPERATING
ACTIVITIES 156,568 87,318
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INVESTING ACTIVITIES:
Proceeds from sales of land - 700,000
Purchase of land (401,893)
Purchase of investment securities (617,459) (435,511)
Proceeds from sales of investment
securities 196,498 159,110
Net proceeds upon maturity of
short term investments 1,493,687 -
Collections on note receivable 50,000 1,603
Purchase of convertible note - (100,000)
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NET CASH PROVIDED
BY INVESTING ACTIVITIES 720,833 325,202
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FINANCING ACTIVITIES:
Principal payments on notes payable - (9,294)
Proceeds from the sale of common stock - 6,600
Proceeds from exercise of stock options
net of repurchases 10,774 -
- -------------------------------------------------------------------------------------
Net cash provided (used) by
financing activities 10,774 (2,694)
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INCREASE (DECREASE) IN CASH 888,175 409,826
CASH AND CASH EQUIVALENTS,
beginning of period 1,304,273 698,635
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CASH AND CASH EQUIVALENTS,
end of period $2,192,448 $1,108,461
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</TABLE>
Form 10-QSB
Page 7 of 10
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
In December 1996 the Company closed on a contract for the purchase of raw
land near Vail, Colorado in the amount of $366,400. The Company held a
contract on the second parcel of raw land near Vail at December 31, 1996 and
had deposited $35,500 into escrow. This contract closed in January 1997 for
$356,700. The Company intends to consider plans to build luxury residences on
these sites, which residential real estate would be offered for sale. The
Company is in the process of creating a Limited Liability Company with an
experienced real estate developer in the Vail area to build these luxury
residences. The Company does not intend to limit its prospective business
activities to the development of residential real estate.
For the six month period ended December 31, 1996, operating activities
generated positive cash flow of $156,600 as compared to $87,300 in the six
month period ended December 31, 1995. Prepaid expenses increased by
approximately $45,573 in the six month period ended December 31, 1996. The
Company sold investment securities during the six month period ended December
31, 1996 resulting in realized gains of $191,200.
Cash provided in investing activities was $720,800 during the six month
period ended December 31, 1996, of which approximately $1,493,700 was the net
proceeds upon maturity of short-term investments, $196,500 was proceeds from
the sale of investment securities and $50,000 was the collection of notes
receivable. Approximately $292,500 was used to purchase investment
securities, $325,000 was lent as a secured bridge loan and $401,900 was used
to purchase land. The prices of the securities held by the Company are often
highly volatile. In addition, trading in these securities may be thin or
there may be other impediments to, or restrictions on transfer.
Financing activities during the three month period ended December 31,
1996 provided cash of approximately $10,800 which was generated from the
exercise of stock options net of repurchases.
At December 31, 1996, the Company had cash and cash equivalents of
$2,192,448 and working capital of $3,400,997. The Company believes that its
working capital is adequate for its presently contemplated real estate
expenditures near Vail as described above. The Company expects to obtain
debt financing for construction of the residences. The Company believes such
financing should be available, but has no commitments for such financing.
In its consideration of potential business opportunities, the Company expects
to consider the potential effect on its liquidity.
Form 10-QSB
Page 8 of 10
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RESULTS OF OPERATIONS.
SIX MONTH PERIOD ENDED DECEMBER 31, 1996 COMPARED TO SIX MONTH PERIOD ENDED
DECEMBER 31, 1995
The Company's revenues for the six month period ended December 31, 1996
totaled approximately $279,118, consisting of gains on the sale of
securities, interest on temporary cash and other money market instruments and
dividend income. Revenues for the six month period ended December 31, 1995
totaled approximately $891,500, of which approximately $435,000 was gain on
sale of subdivided land, $75,000 was a non-refundable earnest deposit on the
sale of Corporate Centre, $312,300 was rental income, gains from the sale of
investment securities of approximately $43,900, and approximately $25,300 was
interest and dividend income.
During the six month periods ended December 31, 1996 and December 31,
1995, the Company incurred operating, general and administrative costs of
approximately $79,900 and $291,000, respectively. The decrease of
approximately $211,100 resulted from the reduced overhead and other expenses
due to sale of the Corporate Centre and undeveloped lot in Colorado Springs,
Colorado. Interest expense decreased to approximately $30 for the period from
$35,800 in the comparable period in 1995 due to the retirement of the
mortgage on the Corporate Centre. The Company had income before taxes for
the six month period ended December 31, 1996 of approximately $199,244 as
compared with income before taxes of approximately $564,700 for the six month
period ended December 31, 1995.
PART II. OTHER INFORMATION
Not Applicable
Form 10-QSB
Page 9 of 10
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CAMBRIDGE HOLDINGS, LTD.
FORM 10-QSB
DECEMBER 31, 1996
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.
CAMBRIDGE HOLDINGS, LTD.
February 12, 1997 By: /s/ Gregory Pusey
---------------------------------
Gregory Pusey
President, Treasurer and Director
Form 10-QSB
Page 10 of 10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,192,448
<SECURITIES> 857,347
<RECEIVABLES> 525,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 20,759
<DEPRECIATION> (17,752)
<TOTAL-ASSETS> 4,061,766
<CURRENT-LIABILITIES> 255,869
<BONDS> 0
0
0
<COMMON> 3,258,031
<OTHER-SE> 547,866
<TOTAL-LIABILITY-AND-EQUITY> 4,061,766
<SALES> 0
<TOTAL-REVENUES> 279,118
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 79,844
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30
<INCOME-PRETAX> 199,244
<INCOME-TAX> 0
<INCOME-CONTINUING> 199,244
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 199,244
<EPS-PRIMARY> .06
<EPS-DILUTED> 0
</TABLE>
