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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended February 29, 1996
2-87709
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(Commission File Number)
THE 87 ACQUISITION CORP.
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(Exact name of registrant as specified in its charter)
Louisiana 59-2308161
- - ------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
245 Park Avenue, 40th Floor, New York, New York 10167
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(Address of principal executive offices)
(212) 692-1852
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether Registrant (1) has filed all reports 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 No X
--- ---
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the close of the period covered by this report. 509,980
shares of common stock, $.01 par value, were issued and outstanding as of
February 29, 1996.
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THE 87 ACQUISITION CORP.
INDEX
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet --
February 29, 1996 (unaudited), and
August 31, 1995
Statement of Operations --
Three months ended February 29, 1996 and February 28, 1995 (unaudited)
and six months ended February 29, 1996 and February 28, 1995
(unaudited).
Statement of Cash Flows --
Three months ended February 29, 1996 and February 28, 1995 (unaudited)
and six months ended February 29, 1996 and February 28, 1995
(unaudited).
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II OTHER INFORMATION
SIGNATURES
2
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Item 1. Financial Statements
THE 87 ACQUISITION CORP.
BALANCE SHEET
<TABLE>
<CAPTION>
AUGUST 31,1995
FEBRUARY 29, 1996 (DERIVED FROM AUDITED
(UNAUDITED) FINANCIAL STATEMENTS)
----------------- ---------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $5,020 $5,020
Due from affiliate, net of allowance of $7,000 in 1995 $0 $0
Total Current Assets 5,020 5,020
----------------- -----------
TOTAL ASSETS $5,020 $5,020
----------------- -----------
----------------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $8,726 $525
Due to Shareholder 544,314 532,243
Total Current Liabilities 553,040 532,768
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STOCKHOLDERS' EQUITY
Common stock - $.01 par value;
authorized 25,000,000 shares;
issued and outstanding - 509,980 shares
at November 30, 1995 and August 31, 1995 $5,100 $5,100
Additional paid in capital 488,063 488,063
Accumulated deficit (1,041,183) (1,020,911)
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(548,020) (527,748)
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $5,020 $5,020
----------------- -----------
----------------- -----------
</TABLE>
See accompanying notes to Financial Statements
3
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THE 87 ACQUISITION CORP.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
FEBRUARY 29, 1996 FEBRUARY 28, 1995 FEBRUARY 29, 1996 FEBRUARY 28, 1995
----------------- ----------------- ----------------- -----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING EXPENSES $12,116 $29,814 $20,391 $211,595
-------------- -------------- -------------- --------------
LOSS FROM OPERATIONS ($12,116) ($29,814) ($20,391) ($211,595)
OTHER INCOME - INTEREST $120 0 $120 0
-------------- -------------- -------------- --------------
OTHER EXPENSE - INTEREST $0 ($9,344) $0 ($14,011)
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NET LOSS ($11,996) ($39,158) ($20,272) ($225,606)
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-------------- -------------- -------------- --------------
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING 509,980 509,980 509,980 509,980
-------------- -------------- -------------- --------------
NET LOSS PER COMMON SHARE ($0.024) ($0.077) ($0.040) ($0.442)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
See accompanying notes to Financial Statements
4
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THE 87 ACQUISITION CORP.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
FEBRUARY 29, 1996 FEBRUARY 28, 1995 FEBRUARY 29, 1996 FEBRUARY 28, 1995
----------------- ----------------- ----------------- -----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) ($11,997) ($32,832) ($20,272) ($37,847)
Adjustments to reconcile net loss to net cash
used in operating activities:
Changes in operating assets and
liabilities:
Due from affiliate 0 0 0 0
Deposits Paid 0 0 0 0
Accounts payable and accrued expenses
increase 6,921 1,442 8,201 1,442
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NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (5,076) (31,390) (12,071) (36,405)
-------------- ------------- -------------- --------------
Cash flows from financing activities:
Proceeds from issuance of common stock 0 0 0 0
Principal payments on loans 0 0 0 0
Proceeds from Loan 5,075 0 12,070 50,000
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Net cash provided by (used in) financing
activities 5,075 0 12,070 50,000
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Net increases (decrease) in cash and cash
equivalents (0) (31,300) (0) 13,595
Cash and cash equivalents at beginning
of period 5,020 49,139 5,020 4,154
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Cash and cash equivalents at end of
period $5,020 $17,749 $5,020 $17,749
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-------------- ------------- -------------- --------------
</TABLE>
See accompanying notes to Financial Statements
5
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THE 87 ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
NOTE 1. FAIR PRESENTATION
The balance sheet as of February 29, 1996, the statement of operations
for the three month and six month periods ended February 29, 1996 and February
28, 1995, and the statement of cash flows for the three month and six month
periods ended February 29, 1996 and February 28, 1995, have been prepared by the
Company without audit. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary to present fairly the
financial position and results of operations at February 29, 1996 and for all
periods presented have been made. The operations for the three months and six
months ended are not necessarily indicative of the results of operations to be
expected for the Company's fiscal year. These statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's annual report on Form 10-K for the fiscal year ended August 31, 1995.
NOTE 2. CHANGE IN AUTHORIZED AND ISSUED CAPITAL STOCK
On January 18, 1994, the Company effected a reverse stock split whereby
each 100 shares of its Common Stock, $.001 par value per share, issued and
outstanding immediately prior thereto was converted into one share of its common
stock, par value $.01 per share. As a result, the total number of shares issued
and outstanding was reduced from 50,000,000 to 500,000. Because the Company
elected to pay cash in lieu of issuing fractional shares, the actual number of
shares issued and outstanding following the completion of the reverse split was
499,990. Retroactive effect has been given in the accompanying financial
statements to the reverse stock split.
On January 24, 1994, the Company changed its domicile from Delaware to
Louisiana by merging with and into its wholly-owned subsidiary, The 87 Merger
Corp., a Louisiana corporation (the "Surviving Corporation"). Simultaneously
with the merger, The 87 Merger Corp., as the Surviving Corporation, changed its
name to The 87 Acquisition Corp. The merger did not result in a change of
ownership as each shareholder of the Company received one share of the Surviving
Corporation's common stock, par value $.01 per share, for each share of The 87
Acquisition Corp.'s common stock, par value $.01 per share, held at the
effective time of the merger.
6
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NOTE 3. NOTE PAYABLE
Since November 1993, the Company has borrowed funds from its principal
stockholder, now Allied Marketing Holding Limited ("AMHL") and formerly AG
Strategic Holding Limited ("AG"), under a revolving credit line opened by AG and
continued by AMHL for the Company, with the proceeds of such borrowing being and
to be used for working capital purposes. The loan is repayable on demand and
accrued interest through December 31, 1994 at the prime rate (7.75% and 8.5% at
August 31, 1994 and December 31, 1994 respectively). Effective January 1, 1995,
the loan is non-interest bearing. Accrued interest payable through February 28,
1995 and February 29, 1996 is $20,194.82 and $14,027.10 respectively.
7
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This analysis of the Company's financial condition, capital resources
and operating results should be viewed in conjunction with the accompanying
financial statements, including the notes thereto.
Financial Condition - As of February 29, 1996 and as at August 31,
1995, the Company had current assets (consisting of cash) of $5,020. The Company
had current liabilities of $553,040 as of February 29, 1996, compared to current
liabilities of $532,768 at August 31, 1995. Total assets of the Company at
February 29, 1996 and at August 31, 1995 amounted to $5,020, and the Company had
a negative net worth of $548,020 at February 29, 1996 compared to a negative net
worth of $527,748 at August 31, 1995. The decrease in net worth was the result
of incurring operating expenses, primarily professional and stock transfer fees
and other operating expenses, and not receiving any income.
Liquidity and Capital Resources - At February 29, 1996, the Company had
cash of $5,020. The Company's operating expenses for the six months ended
February 29, 1996 consisted primarily of professional and stock transfer fees
and other operating expenses. The Company has no business operations other than
the seeking of suitable investment opportunities and its expenses will consist
primarily of fees and expenses in connection with seeking such opportunities.
The Company knows of no trend, additional demand, event or
uncertainties that will result in, or that are reasonably likely to result in,
its current liquidity increasing or decreasing in any material way.
The Company had no outstanding resource commitments as of February 29,
1996. The Company has no present material commitments for additional capital
expenditures. Except for the loan described in Note 3 to the accompanying
financial statements, the Company has no outstanding credit lines or commitments
in place and has no current need for financial credit.
Results of Operations - The Company had no revenue for the six month
periods ended February 29, 1996 and February 28, 1995. Operating expenses for
the six month period ended February 29, 1996 were $20,301, consisting of stock
transfer fees, professional fees and other operating expenses compared to
operating expenses for the six months ended February 28, 1995 of $211,595. The
decline in operating expenses is attributable to a decrease in professional fees
relating to the proposed redomicile of the company to The Bahamas and an
acquisition, both of which have been abandoned. Operating expenses of $12,116
during the three month period ended February 29, 1996 consisted of professional
and stock transfer fees and other operating expenses.
8
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ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K
None.
9
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SIGNATURES
Pursuant to 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.
THE 87 ACQUISITION CORP.
(Registrant)
Date: June 25, 1996 By:/s/Chung Tze Hien
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Name: Chung Tze Hien
Title: Chairman and Chief Executive Officer
By:/s/Kenneth Li
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Name: Kenneth Li
Title: Principal Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The following is a summary of certain selected financial
information regarding Registrant. Reader is referred to
Registrant's financial statements.
</LEGEND>
<S> <C>
<MULTIPLIER> 1
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1995
<PERIOD-END> FEB-29-1996
<CASH> 5,020
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,020
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,020
<CURRENT-LIABILITIES> 553,040
<BONDS> 0
0
0
<COMMON> 5,100
<OTHER-SE> (553,120)
<TOTAL-LIABILITY-AND-EQUITY> 5,020
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 20,392
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (20,272)
<INCOME-TAX> 0
<INCOME-CONTINUING> (20,272)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,272)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
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