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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 31,2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission file number O-13635
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SFG FINANCIAL CORPORATION
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(Exact name of small business issuer as specified in its charter)
Delaware 13-3208094
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
85 Amherst Street, Garden City, New York 11530
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(Address of principal executive offices)
(516) 327-0843
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(Issuer's telephone number)
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(Former name, former address and former fiscal year, if changed since last
report)
3,406,856 Common shares were outstanding as of October 31,2000.
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Transitional Small Business Disclosure Format Yes [ ] No [X]
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PART I FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS.
The Financial Statements listed on the accompanying index are filed with
and included with this report.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
2000 Compared to 1999
Revenues for the nine months ended October 31,2000 decreased 89.6% to $9,620
from $107,423 in 1999.The decrease is primarily attributable to a decrease in
firm term lease rentals generated by existing equipment leases.
Operating and administrative expenses and interest decreased $46,013 and $19,374
respectively. .These decreases are due to reduced personnel and operating
expenses.
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
None
SIGNATURES
SFG FINANCIAL CORPORATION
(Registrant)
Date December 13, 2000 By: /s/ John A.Dugan
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John A.Dugan-Chairman and Chief Executive
Date December 13, 2000 By: /s/ Anthony S. Pintauro
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Anthony S. Pintauro-Director
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INDEX TO EXHIBITS
DESCRIPTION
The following exhibit is incorporated by reference.
1.01 Financial Statements for the nine months ending October 31,2000 and October
31,1999
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SFG CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 2000 AND 1999
<TABLE>
<CAPTION>
ASSETS: 2000 1999
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<S> <C> <C>
Cash ................................................................ $ 16,810 $ (53)
Due from officers ................................................... 0 560
Loans Receivable .................................................... 11,500
Equipment on operating leases, net of accumulated depreciation ...... 0 0
Furniture and equipment, net of accumulated depreciation ............ 0 0
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Total ................................................ $28,310 $507
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LIABILITIES AND SHAREHOLDERS' DEFICIENCY:
Liabilities:
Notes payable .................................................... $ $ 269,622
Accounts payable and accrued expenses ............................ 114,538 119,132
Advance rentals .................................................. 0 9,174
Due to officers .................................................. 2,095 3,455
Sales tax payable ................................................ 221,695 222,006
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Total liabilities .................................... 338,328 623,389
Shareholders' Deficiency:
Common stock - $.001 par value, 100,000,000 shares authorized;
3,406,856 and 2,955,856 shares issued and outstanding at
October 31, 2000 and 1999, respectively .................... 3,407 2,956
Capital in excess of par ......................................... 2,209,769 1,793,350
Accumulated deficit .............................................. (2,523,194) (2,419,188)
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Total shareholders' deficiency .......................... (310,018) (622,882)
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Total ................................................ $ 28,310 $ 507
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</TABLE>
The accompanying notes are an integral
part of the financial statements
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SFG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED OCTOBER 31, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Revenues:
Rental income ...................................... $ 9,620 $ 96,734
Residual income .................................... - -
Sale of equipment and other income ................. - 10,689
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Total revenues .................................. 9,620 107,423
Expenses:
Professional fees .................................. 110,475 130,225
Administrative expenses ............................ 48,572 41,560
Salaries ........................................... 13,100 39,791
Interest ........................................... 0 19,374
Leasing expense .................................... 0 6,584
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Total expenses .................................. 172,147 237,534
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Loss Before Income Taxes .............................. (162,527) (130,111)
Provision For Income Taxes ............................ 0 0
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Net Loss .............................................. $ (162,527) $ (130,111)
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Net Loss Per Common Share ............................. (0.05) (0.04)
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Weighted Number of Common Shares Outstanding .......... 3,306,856 2,922,523
============= ==============
</TABLE>
The accompanying notes are an integral
part of the financial statements
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SFG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
Nine Months Ended
October 31,
2000 1999
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<S> <C> <C>
Cash Flows From Operating Activities:
Net loss................................................ $ (162,527) $ (130,111)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Gain on sale of assets............................... (10,689)
Common stock issued for services..................... 22,783 100,000
Changes in assets and liabilities:
(Increase) decrease in assets:
Loans receivable................................... 11,500
Due from officers..................................
Increase (decrease) in liabilities:
Accounts payable and accrued expenses.............. 2,745 22,354
Advance rentals....................................
Due to officers.................................... (616)
Sales tax payable.................................. (248)
Total adjustments....................................... 13,164 111,665
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Net cash provided by (used in) operating activities.. $ (149,363) $ (18,446)
Cash Flows Provided By Investing Activities:
Proceeds from sale of operating lease equipment......... 10,689
Proceeds from sale of Common stock...................... 125,000
Cash Flows Used in Financing Activities:
Payments on long term debt.............................. (1,529)
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Net Increase (Decrease) in Cash........................... $ (24,363) $ (9,286)
Cash -- February 1........................................ 41,173 9,233
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Cash -- October 31........................................ $ 16,810 $ (53)
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Supplemental Disclosure of Cash Flows Information:
Cash paid during the period for:
Interest............................................. -- $ 19,374
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Income taxes......................................... -- --
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Supplemental Schedule of Noncash Financing Activities:
Common Stock issued for services........................ $ 22,783 $ 100,000
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Common Stock issued to retire debt...................... -- --
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</TABLE>
The accompanying notes are an integral
part of the financial statements.
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SFG CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31,
2000 AND 1999
Note #1 - Organization and Significant Accounting Policies.
Summary of Accounting Policies.
This summary of accounting policies of SFG Corporation and Subsidiaries
(the Company) is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management who is responsible for the integrity and objectivity of the
financial statements. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the presentation of
the financial statements.
Basis of Consolidation.
The consolidated financial statements include the accounts of SFG
Corporation and its wholly owned subsidiaries. All significant inter company
accounts and transactions have been eliminated in consolidation.
Leasing Arrangements.
The Company's leasing operations consist of operating leases of computers
and peripheral equipment. The company recognizes rental income, as earned, over
the lives of the leases.
Equipment Under Operating Leases and Furniture and Equipment.
Equipment under operating leases and furniture and equipment are stated at
cost. Expenditures for major renewals and betterments that extend the useful
lives of property and equipment are capitalized. Expenditures for maintenance
and repairs are charged to expense as incurred.
<TABLE>
<CAPTION>
October 31,
2000 1999
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<S> <C> <C>
Equipment under operating leases $ 335,907 $ 445,057
Furniture and equipment 1,655 1,655
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337,562 446,712
Accumulated depreciation (337,562) (446,712)
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Net $ 0 $ 0
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</TABLE>
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Note #1 -- Organization and Significant Accounting Policies. (continued)
Net Income (Loss) Per Common Share.
Net income (loss) per common share is computed using the weighted average
number of common shares outstanding during each period.
Cash and Cash Equivalents.
For purposes of reporting the statements of cash flows, cash and cash
equivalents include money market accounts and all highly liquid debt
instruments purchased with a maturity of three months or less.
Income Taxes.
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist primarily of taxes currently due.
Use of Estimates.
The preparation of financial statements in conformity with generally
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
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