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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 SEPTEMBER 30, 2000
( ) 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 Identification Number)
incorporation or organization)
7315 East Peakview Avenue, 80111
Englewood, Colorado (Zip Code)
(Address of principal executive offices)
Issuer's telephone number, including area code (720) 529-3550
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.
<TABLE>
<CAPTION>
Class Outstanding at November 8, 2000
<S> <C>
Common Stock, $.025 par value 3,029,870
</TABLE>
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CAMBRIDGE HOLDINGS, LTD.
FORM 10-QSB
TABLE OF CONTENTS
<TABLE>
<S> <C>
Part I. Financial Information..........................................................3
Balance Sheets as of September 30, 2000 and June 30, 2000...............................4
Statements of Operations for the three-month periods ended September 30,
2000 and September 30, 1999.............................................................5
Statements of Cash Flows for the three-month periods ended September 30,
2000 and September 30, 1999.............................................................6
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................................7-9
Part II. Other Information.............................................................9
Signature Page.........................................................................10
</TABLE>
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Form 10-QSB
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CAMBRIDGE HOLDINGS, LTD.
FORM 10-QSB
SEPTEMBER 30, 2000
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
The accompanying unaudited financial statements include the accounts of
Cambridge Holdings, Ltd. (the "Company"). The financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles.
In the opinion of management, the unaudited interim financial statements for the
period ended September 30, 2000 are presented on a basis consistent with the
audited financial statements and reflect all adjustments, consisting only of
normal recurring accruals, necessary for fair presentation of the results of
such period.
The results for the three months ended September 30, 2000 are not necessarily
indicative of the results of operations for the full year. These financial
statements and related footnotes should be read in conjunction with the
financial statements and footnotes thereto included in the Company's financial
statements of the year ended June 30, 2000.
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Form 10-QSB
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CAMBRIDGE HOLDINGS, LTD.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
2000 2000
(UNAUDITED)
ASSETS
<S> <C> <C>
CURRENT:
Cash and cash equivalents $ 1,629,944 $ 499,673
Investment securities - available for sale 563,263 507,125
Notes receivable-related party 570,779 550,000
Prepaid other 3,030 --
Deferred tax asset 75,000 75,000
Real estate developments -- 939,199
--------------- ---------------
Total current assets 2,842,016 2,570,997
--------------- ---------------
LONG-TERM ASSETS
Fixed assets 21,867 26,315
--------------- ---------------
$ 2,863,883 $ 2,597,312
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 31,905 $ 4,878
--------------- ---------------
Total current liabilities 31,905 4,878
--------------- ---------------
STOCKHOLDERS' EQUITY:
Common Stock - $.025 par value, 15,000,000
shares authorized: 3,029,870 shares issued and
outstanding as of September 30, 2000 and
June 30, 2000 75,747 75,747
Additional paid-in capital 2,997,292 2,997,292
Retained earnings (deficit) (265,298) (458,970)
Net unrealized gain (loss) on investment
securities available for sale 24,237 (21,635)
--------------- ---------------
Total stockholders' equity 2,831,978 2,592,434
--------------- ---------------
$ 2,863,883 $ 2,597,312
=============== ===============
</TABLE>
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Form 10-QSB
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CAMBRIDGE HOLDINGS, LTD.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
ended ended
September 30, 2000 September 30, 1999
<S> <C> <C>
REVENUES:
Sale of real estate $ 1,300,000 --
Net realized losses on sales of
investment securities -- $ (7,289)
Interest and dividend income 13,227 19,094
------------ ------------
Total revenues 1,313,227 11,805
------------ ------------
EXPENSES:
Operating, general, and administrative 67,251 37,641
Costs of real estate sold 1,057,304 --
Interest expense -- 10,464
Other (income) (5,000) --
------------ ------------
Total Expenses 1,119,555 48,105
------------ ------------
NET INCOME (LOSS) 193,672 (36,300)
Other Comprehensive income (loss), net of income tax-
Unrealized holding gains (losses) 45,872 (13,204)
------------ ------------
COMPREHENSIVE INCOME (LOSS) $ 239,544 $ (49,504)
============ ============
NET INCOME (LOSS) PER COMMON SHARE,
BASIC AND DILUTED: $ .08 $ (.02)
============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 3,029,870 3,029,870
============ ============
</TABLE>
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Form 10-QSB
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CAMBRIDGE HOLDINGS, LTD.
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
SEPT. 30, 2000 SEPT. 30, 1999
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 193,672 $ (36,300)
Adjustments to reconcile net income (loss) to cash
provided by (used in) operating activities:
Interest paid on investment securities (136) (15,428)
Depreciation and amortization 4,448 4,894
Realized gains on sales of marketable securities -- (2,700)
Changes in operating assets and liabilities:
Prepaids and other (3,030) 1,729
Accounts payable and accrued liabilities 27,027 (4,105)
--------------- ----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 221,981 (51,910)
--------------- ----------
INVESTING ACTIVITIES:
Purchase of investment securities (11,500) (59,976)
Proceeds from sales of investment securities -- 377,841
Proceeds from sale of real estate 939,199 --
Additions to note receivable-related party (20,779) (24,772)
Purchase of fixed assets -- (17,423)
Increase in value of trading securities 1,370 --
--------------- ----------
NET CASH PROVIDED BY INVESTING ACTIVITIES 908,290 275,670
--------------- ----------
FINANCING ACTIVITIES:
Principal payments on notes payable -- (305,840)
--------------- ----------
Net cash (used in) financing activities -- (305,840)
--------------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,130,271 (82,080)
CASH AND CASH EQUIVALENTS, beginning of period 499,673 194,447
--------------- ----------
Cash and cash equivalents, end of period $ 1,629,944 $ 112,367
=============== ==========
</TABLE>
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Form 10-QSB
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information set forth in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" below includes "forward looking statements"
within the meaning of Section 27A of the Securities Act, and is subject to the
safe harbor created by that section. Factors that could cause actual results to
differ materially from these contained in the forward looking statements are set
forth in "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
LIQUIDITY AND CAPITAL RESOURCES
During the fiscal year ended June 30, 1997, the Company purchased in two
separate transactions from two different unaffiliated sellers, raw land in an
area known as Cordillera Valley Club in Eagle County, Colorado west of Vail.
Each lot was conveyed to a limited liability company in which the Company is a
member with a 50% interest (CVC Lot 2 LLC and CVC Lot 19 LLC). Each lot has been
developed with a separate luxury residence and is offered for sale. Construction
on the properties was completed in early 1998. Due to the delay on the sale of
these properties, it is presently expected that when sold, these properties will
be sold at a loss. Management recorded an allowance for the loss on these note
receivables in the amount of $470,400 during the year ended June 30, 2000.
CVC Lot 19, LLC rented the CVC Lot 19 home at a monthly rental fee of $5,700 for
a nine-month period ending in May 2000. The CVC Lot 19 home is now vacant and
management anticipates some structural changes to attempt to make it more
salable.
A contract to sell the CVC Lot 2 property for $1,565,000 was received and
accepted in September 2000. Earnest money of $15,000 was deposited by the
prospective buyers. The sale of the house is scheduled to close on April 16,
2001. This home being sold is currently rented at $7,000 per month expiring in
April 2001, the approximate time the closing is scheduled to take place.
The lots are located in Cordillera Valley Club, a mountain golf community of 1
to 11-acre home sites and custom-designed residences, tennis courts, 15 miles of
hiking and cross-country ski trails, a fly-fishing river, mountain bike and
nature trails. The development is in a golf community planned with care for
natural aesthetic values. Accordingly, the home sites in the community are being
developed to minimize the impact of development upon the varied vegetation and
indigenous wildlife unique to the area. Deer and elk grazing and calving areas
have been carefully preserved along with native grasses, shrubs and trees. The
home sites in the community have been planned to maximize mountain views, as
well as the extensive aspen groves, forests of fir and spruce, and varied
terrain of adjacent canyons and draws which is characteristic of the area.
In July 1997, the Company purchased approximately three acres of raw land in
Glenwood Springs, Colorado for $925,000 which property was sold in July 2000 for
$1,300,000 less
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Form 10-QSB
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property costs, closing fees and reimbursements, resulting in a net gain of
approximately $252,500.
The Company is currently considering other real estate development activities,
as well as other business opportunities. In addition to real property
acquisitions, the Company may consider the possible acquisition of, or merger
with, another business entity, or other types of business transactions. The
Company does not intend to limit its search to companies engaged in real estate
activities. A substantial amount of time may lapse and the Company may expend
considerable funds for consulting, legal, accounting and other fees before the
Company is able, if at all, to acquire businesses within or outside the real
estate industry. From time to time, the Company also acquires equity securities,
which have a potential for capital gains and losses or, in some cases, current
income potential. The Company has no limitations on the percentage of assets
that may be invested in any one instrument, or type of investment, nor is the
Company limited in the types of real estate in which the Company may invest. The
Company's determination of the method of operating and financing its properties
is not fixed, and will, instead depend on the type of property purchased and the
Company's objective in operating or developing a particular property.
In August 2000 the Company organized a new corporation in Colorado, CamCap, Inc.
("CamCap"). CamCap's business purpose is to identify and complete a merger or
acquisition with a private entity. CamCap is currently a wholly owned subsidiary
of the Company, but the Company intends to spin off these shares to the
shareholders of the Company. A registration statement covering the CamCap
shares, was filed with the Securities and Exchange Commission (the "Commission")
in October 2000, but is not complete and may be amended. The spin off will be
completed following the CamCap registration statement being declared effective
by the Commission.
For the three-month period ended September 30, 2000, operating activities
generated cash flow of $222,000. The majority was generated through net income,
combined with an increase in accounts payable and accrued liabilities of
$27,000.
Cash provided by investing activities was $908,000 during the three-month period
ended September 30, 2000, of which approximately $939,200 was provided by the
proceeds from the sale of real estate. The Company used $11,500 to purchase
investment securities and approximately $20,800 was loaned to related parties.
There were no financing activities during the three-month period ended September
30, 2000.
At September 30, 2000, the Company had cash and cash equivalents of $1,629,900
and working capital of $2,810,100. The Company believes that its working capital
is adequate for its present real estate expenditures as described above. The
Company has no understandings or agreements regarding the possible acquisition
of any other particular property or business. Any such future acquisitions or
other business arrangements could involve substantial expenditures. Moreover,
the Company could incur substantial
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Form 10-QSB
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expenses in connection with the evaluation of business opportunities. In its
consideration of potential business opportunities, the Company expects to
consider the potential effect on its liquidity.
COMPREHENSIVE INCOME (LOSS)
The following table presents the components of other comprehensive income
(loss), net of tax:
<TABLE>
<CAPTION>
Quarters ended September 30, 2000 1999
---- ----
<S> <C> <C>
Holding gains (losses) $ 45,872 $(20,493)
Reclassification for realized gains -- 7,289
-------- --------
Increase (decrease) recognized in
Other Comprehensive income $ 45,872 $(13,204)
======== ========
</TABLE>
RESULTS OF OPERATIONS
THREE MONTH PERIOD ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTH PERIOD ENDED
SEPTEMBER 30, 1999
The Company's revenues for the three-month period ended September 30, 2000
totaled approximately $1,313,200, consisting of proceeds from the sale of the
Glenwood Springs property of $1,300,000 and interest on temporary cash on hand
and other money market instruments of $13,200. Revenues for the three-month
period ended September 30, 1999 totaled approximately $11,800, consisting of
interest earned of $19,100, offset by realized losses on investment securities
of $7,300.
During the three-month periods ended September 30, 2000 and September 30, 1999,
the Company incurred operating, general and administrative costs of
approximately $76,700 and $37,600, respectively. The increase in operating,
general and administrative costs related primarily to increases in legal and
accounting expenses. The cost of the Glenwood Springs property that was sold
during the quarter was $1,047,900. The Company had net income for the
three-month period ended September 30, 2000 of approximately $193,700 as
compared with a loss of $36,300 for the three-month period ended September 30,
1999.
PART II. OTHER INFORMATION
Not Applicable.
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Form 10-QSB
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CAMBRIDGE HOLDINGS, LTD.
FORM 10-QSB
SEPTEMBER 30, 2000
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.
November 10, 2000 By: /s/ Gregory Pusey
---------------------------------
Gregory Pusey
President, Treasurer and Director
Page 10 of 10
Form 10-QSB
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
27 Financial Data Schedule.
</TABLE>
