U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Quarterly Period Ended July 31, 1999.
Commission file number 0-12169
SOLAR SATELLITE COMMUNICATION, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84-0907644
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
630 South Syracuse Way, Suite 293, 80111
Englewood, Colorado (Zip Code)
(Address of principal executive offices)
(720)529-5518
(Issuer's telephone number)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
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 __ No X
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
As of July 31, 1999, 7,505,801 shares of common stock, no par value, were
outstanding.
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INDEX
PART I FINACNIAL INFORMATION.................................................1
Item 1. Financial Statements..............................................1
NOTES TO CONDENSED FINANCIAL STATEMENTS..................................4
Item 2. Plan of Operation.................................................5
PART II--OTHER INFORMATION....................................................6
Items 1. Legal Proceedings.................................................6
Item 2. Change in Securities..............................................6
Item 3. Defaults Upon Senior Securities...................................6
Item 4. Submission of Matter to a Vote of Security Holders................6
Item 5. Other Information.................................................6
Item 6. Exhibits and Reports on Form 8-K..................................6
*The accompanying financial statements are not covered by an Independent
Certified Public Accountant's report.
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PART I FINACNIAL INFORMATION
Item 1. Financial Statements
SOLAR SATELLITE COMMUNICATION, INC.
BALANCE SHEET
ASSETS
------
July 31, July 31,
1999 1998
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 386,722 $ 5,346
Marketable securities - trading -- 590,374
Amount due from directors 558,963 --
Accrued interest receivable, directors 5,633 --
Deferred tax asset -- 207,000
----------- -----------
$ 951,318 $ 802,720
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LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES $ -- $ --
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, 1,000,000 shares
authorized, none issued or outstanding -- --
Common stock, $.001 par value, 25,000,000 shares
authorized; 7,505,801 shares issued and
outstanding 7,506 7,506
Additional paid-in capital 2,775,986 2,775,986
Accumulated (deficit) (1,832,174) (1,980,772)
----------- -----------
Total Stockholders' Equity 951,318 802,720
----------- -----------
$ 951,318 $ 802,720
=========== ===========
1
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SOLAR SATELLITE COMMUNICATION, INC.
STATEMENT OF OPERATIONS
(Unaudited)
For the For the For the For the
Three Months Three Months Nine Months Nine Months
Ended July 31, Ended July 31, Ended July 31, Ended July 31,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Realized gain on sale of marketable
securities $ -- $ 1,044,219 $ 406,244 $ 1,044,219
Unrealized (loss) on marketable securities -- 164,748 -- 164,748
Interest and dividend income 7,160 -- 16,944 --
Interest income, directors 6,457 -- 10,827 --
----------- ----------- ----------- -----------
Total Revenues 13,617 1,208,967 434,015 1,208,967
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
General and administrative 13,946 18,253 78,417 18,253
Interest expense -- 1,980 -- 1,980
----------- ----------- ----------- -----------
Total Expenses 13,946 20,233 78,417 20,233
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAX
PROVISION BENEFIT) (329) 1,188,734 355,598 1,188,734
INCOME TAX PROVISION (BENEFIT) -- (412,878) 207,000 (412,878)
----------- ----------- ----------- -----------
NET INCOME $ (329) $ 1,601,612 $ 148,598 $ 1,601,612
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE
BASIC AND DILUTED $ * $ .21 $ .02 $ .21
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 7,505,801 7,505,801 7,505,801 7,505,801
=========== =========== =========== ===========
*Less than $(.01) per share
2
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SOLAR SATELLITE COMMUNICATION, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended July 31,
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 148,598 $ 1,601,612
Adjustments to reconcile net income to net cash
provided by operating activities:
Unrealized (gain) loss on marketable securities -- (164,748)
Proceeds from sales of marketable securities 996,618 2,776,773
Realized gain on marketable securities (406,244) (1,044,219)
Asset rehabilitation fee -- (2,637,189)
Deferred taxes 207,000 (412,878)
(Increase) decrease in amount due from directors (558,963) --
(Increase) decrease in accrued interest receivable,
directors (5,633) --
Increase (decrease) in accounts payable -- 546,014
----------- -----------
Net Cash Provided by Operating Activities 381,376 665,365
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CASH FLOWS FROM INVESTING ACTIVITIES -- --
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES -- --
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 381,376 665,365
CASH AND CASH EQUIVALENTS, beginning of period 5,346 --
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 386,722 $ 665,365
=========== ===========
Supplemental Cash Flow Information:
See Note 3
3
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SOLAR SATELLITE COMMUNICATION, INC
A Development Stage Company
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
July 31, 1999
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements include the accounts of Solar
Satellite Communication, Inc. (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 July 31, 1999 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 and nine months ended July 31, 1999 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 period ended October 31, 1998.
NOTE 2 - RELATED PARTY TRANSACTIONS
The Company paid $2,500,000 during the nine months ended July 31, 1998 to
Satellite Investment Group, LLC, a limited liability company, whose members are
the directors and management of the Company for an asset rehabilitation fee.
The Company paid $-0- and $57,022 of professional fees during the nine months
ended July 31, 1998 and 1999, respectively to Belaire Business Group, a
partnership whose partners are members of Satellite Investment Group, LLC, and
directors and management of the Company.
The Company paid $-0- and $5,610 during the nine months ended July 31, 1998 and
1999, respectively, of legal fees to a law firm, whose principal is a member of
Satellite Investment Group, LLC, and is a director and manager of the Company.
During 1999 the Company purchased and held certain securities. Subsequently, the
Company entered into a Recission and Reimbursement Agreement with its directors
to revoke and rescind ab initio the Company's acquisition of such securities and
to provide for the restoration by the directors of the Company to a position no
less favorable than they would have been as of the date of reimbursement if the
securities had not been purchased. The reimbursable costs of the securities were
recorded on the Company's financial statements as amount due from directors.
Interest is being accrued at the rate of 4.5% at October 31, 1999. All dividends
and interest paid with respect to the securities and proceeds from all sales of
the securities have been used to reduce the outstanding balance of principal and
accrued interest on the amount due from directors. The remaining balance of the
amount due from directors is due April 30, 2000.
4
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NOTE 3 - SUPPLEMENTAL INFORMATION TO STATEMENT OF CASH FLOWS AND NON-CASH
INVESTING AND FINANCING ACTIVITIES
For the Nine Months
Ended July 31,
------------------------
1999 1998
--------- ---------
Cash paid for interest $ -- $ 1,980
Cash paid for income taxes -- --
Item 2. Plan of Operation/ Liquidity and Capital Resources
(a) Plan of Operation
The Company's plan of operation is to seek out, investigate, and pursue a
merger, acquisition, or other business combination with an entity desiring the
perceived benefits offered by the Company as a result of its having a class of
securities registered under the Exchange Act. There have been no revenues from
operations since formation, and none are anticipated prior to completing a
business combination. The Company continues to have no full time employees, no
rent expenses, and no recurring operational expenses other than professional
fees incurred as necessary. The Company's president continues to devote
approximately twenty (20) hours per month to the affairs of the Company. The
Company does not anticipate raising any additional funds in the next twelve (12)
months, and has no present plans to acquire any assets or make any investments
prior to completing a business combination.
To date, the Company has not identified a suitable target entity for any type of
business combination, and management has no particular type of merger,
acquisition, or business opportunity in mind. No restrictions have been placed
on management's discretion to seek out and participate in an appropriate
business opportunity. Due to limited financial resources it is anticipated that
only a single potential business venture will be pursued.
Selection of an appropriate business opportunity is complex and risky due to the
Company's limited financial resources, the speculative nature of operations,
management's limited time commitment to the Company, management's potential
conflicts of interest, the burdens of being a reporting company, lack of market
research, and competition in the marketplace. The Company's success is dependent
upon locating and consummating a business combination, and there are no
assurances that this will occur.
(b) Liquidity and Capital Resources
At July 31, 1999, the Company had cash and cash equivalents of $386,722 an
increase of $381,376 from the Company's October 31, 1998 year end. This increase
is entirely a result of cash generated by the sale of the Accelr8 stock
previously held for investment but excludes the amount due from directors which
was subsequently paid. While the Company has no foreseeable capital commitments,
it also has no present expectations of generating any cash flow from operations
until such time as it may successfully complete the acquisition of a business,
operations or assets of an operating entity. At the present time, management has
no plans to raise additional funds through borrowings or the issuance of debt or
equity.
We believe that our current cash and cash equivalents and the additional
funds generated by the payment of the amount due from directors will satisfy our
expected working capital requirement through at least fiscal year 2000.
5
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Part II--OTHER INFORMATION
Items 1. Legal Proceedings
None
Item 2. Change in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matter to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
6
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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.
Solar Satellite Communication, Inc.
Date: July 20, 2000 By: /s/ Robert Guerra
---------------------
Robert Guerra, President and
Chief Accounting Officer
7
