SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 2054
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1997 Commission File Number 2-94117-D
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ECLIPSE CORPORATION
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(Exact name of registrant as specified in its charter)
COLORADO 84-0867911
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2 North Cascade Avenue, Suite 330, Colorado Springs, Colorado 80903
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (719) 520-1800
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(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) Yes _X_
of the Securities Exchange Act of 1934 during the pre-
ceding 12 months (or for such shorter period that the No ___
registrant was required to file such reports), and (2)
has been subject to such filing requirements for the
past 90 days.
Indicate the number of shares outstanding of each of
the issuer's classes of common stock, as of the latest
practicable date.
Number of shares outstanding
Class at June 30, 1997
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Common stock, $.0005 par value 87,349,400 shares
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<PAGE>
FORM 10-Q
2nd QUARTER
INDEX
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PAGE
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements *
Balance Sheets - June 30, 1997 (Unaudited) ............................ 3
Statements of Operations - Three months ended
June 30, 1997 and June 30, 1996 and Six months ended
June 30, 1997 and June 30, 1996 (Unaudited) ........................... 4
Statement of Cash Flows - Six months ended
June 30, 1997 and June 30, 1996 (Unaudited) ......................... 5
Notes to Financial Statements (Unaudited) ............................. 6
Item 2. Management's Discussion and Analysis (Unaudited) ............. 8
PART II - OTHER INFORMATION
Items 1 through 6 .................................................... 8
SIGNATURES ............................................................ 9
* The accompanying financial statements are not
covered by an independent certified public
accountant's report.
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<PAGE>
Part I. Item 1. Financial information
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ECLIPSE CORPORATION
<TABLE>
<CAPTION>
Condensed Balance Sheet
June 30, 1997
ASSETS
<S> <C>
Cash & Restricted Cash ........................................ $ 52,942
Trade receivables, net of allowance of $5,080 ................. 64,650
Notes receivable, related party, net of discount $3,971 ....... 204,162
Other current assets, related party ........................... 72,903
Accrued interest .............................................. 2,915
Inventory, at cost ............................................ 1,220,244
Notes receivable, net ......................................... 663,675
Land held for sale ............................................ 754,403
Property & Equipment .......................................... 144,731
Accumulated depreciation ...................................... (5,289)
Deferred charges .............................................. 13,200
Accumulated amortization ...................................... (5,500)
Other ......................................................... 1,476
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$ 3,184,512
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses .................... $ 427,335
Flooring lines ........................................... 1,011,923
Notes payable ............................................ 528,793
Other current liabilities-related parties ................ 191,810
Customer deposits ........................................ 62,643
Deferred revenue ......................................... 131,328
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TOTAL LIABILITIES ............... 2,353,832
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SHAREHOLDERS' EQUITY
Common stock ............................................. 37,578
Additional paid in capital ............................... 1,179,731
Retained earnings ........................................ 11,522
Current earning (loss) ................................... (398,151)
--------
TOTAL SHAREHOLDERS EQUITY ................. 830,680
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$ 3,184,512
</TABLE>
See accompanying notes to condensed financial statements
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<PAGE>
ECLIPSE CORPORATION
<TABLE>
<CAPTION>
Condensed Statements of Operations
Three months ended Six months ended
June 30, June 30,
-------- --------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES ...................................... $ 139,012 $ -- $ 282,580 $ --
COST OF SALES .................................. 104,695 -- 221,439 --
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GROSS PROFIT ................................... 34,317 -- 61,141 --
OPERATING EXPENSES
Management fees-related party ............. 137,000 -- 240,000 --
Selling, general & administrative ......... 86,438 30,693 173,285 30,693
------ ------ ------- ------
223,438 30,693 413,285 30,693
------- ------ ------- ------
INCOME (LOSS) FROM OPERATIONS .................. (189,121) (30,693) (352,144) (30,693)
OTHER INCOME (EXPENSE)
Interest and dividend income .............. 8,541 12,846 35,715 12,846
Interest expense .......................... (47,794) -- (71,662) --
Other income (expense), net ............... (9,184) 532,437 (10,060) 532,437
------ ------- ------- -------
TOTAL OTHER INCOME (EXPENSE) ................... (48,437) 545,283 (46,007) 545,283
INCOME (LOSS) BEFORE INCOME TAXES .............. (237,558) 514,590 (398,151) 514,590
INCOME TAX (EXPENSE) BENEFIT ................... -- -- -- (141,000)
INCOME (LOSS) - CONTINUING OPERATIONS .......... (237,558) 514,590 (398,151) 373,590
DISCONTINUED OPERATIONS
Net income from medical product development
operations, net of income taxes ........... -- (21,863) -- 29,979
NET INCOME (LOSS) .............................. $ (237,558) $ 492,727 $ (398,151) $ 403,569
NET INCOME (LOSS ) PER SHARE
CONTINUING OPERATIONS ................ $ * $ * $ * $ *
NET INCOME (LOSS) PER SHARE .................... $ * $ * $ * $ *
WEIGHTED AVERAGE SHARES OUTSTANDING ............ 87,330,900 69,784,233 87,330,900 70,425,900
</TABLE>
* Less than $.01 per share
See accompanying notes to condensed financial statements
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<PAGE>
ECLIPSE CORPORATION
<TABLE>
<CAPTION>
Condensed Statements of Cash Flow
Six Months Ended
June 30,
1997 1996
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<S> <C> <C>
CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES ... (22,355) 51,483
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CASH FLOWS FROM INVESTING ACTIVITIES
Repayments, former president ................ -- 532,437
Repayments, notes receivable, net ........... 20,000 --
Purchase certificate of deposit ............. -- (50,000)
Purchase of property & equipment ............ (600) (1,998)
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NET CASH FROM INVESTING ..................... 19,400 480,439
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CASH FLOWS FROM FINANCING ACTIVITIES
Stock options exercised ...................... -- 16,501
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NET (DECREASE) INCREASE IN CASH .................. (2,955) 548,423
CASH, BEGINNING OF YEAR .......................... 55,897 506,519
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CASH, END OF PERIOD .............................. $ 52,942 $ 1,054,942
</TABLE>
See accompanying notes to condensed financial statements
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<PAGE>
ECLIPSE CORPORATION
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NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1997
Note A: Basis of presentation
---------------------
The financial statements presented herein have been prepared by the Company in
accordance with the accounting policies in its annual 10-KSB report dated
December 31, 1996 and should be read in conjunction with the notes thereto.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
Interim financial data presented herein are unaudited.
Note B: Income taxes
------------
The Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". Income tax benefit
due to continuing net operating losses during the quarter ended June 30, 1997
were offset by an increase to the valuation allowance, bringing the net deferred
tax asset balance to $0.
Note C: Sale of Former Officers' Common Stock
-------------------------------------
On June 27, 1996, the Company's former president, (Kilgore) sold 26,835,000
shares of his common stock, representing 40.3% of the Company's outstanding
common stock, to a new control group for approximately $562,000 in cash. Kilgore
used $498,346 of the proceeds to repay a then outstanding note receivable and
related interest from the Company to him. This note receivable had been
previously fully reserved, which along with other prior payments by Kilgore
resulted in other income of $532,000 being recorded in the financial statements.
In connection with the sale agreement, the two prior members of the Company's
Board of Directors resigned and four new Board members and three new officers
affiliated with the new control group were appointed. The prior directors and
Kilgore retained their currently outstanding options to purchase an aggregate of
7,000,000 share of common stock (4,000,000 options exercisable at $.001 and
3,000,000 options exercisable at $.02).
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<PAGE>
ECLIPSE CORPORATION
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NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1997
Note D: Land held for sale
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The Company acquired land to be developed and sold in conjunction with its
manufactured home sales activities. At December 31, 1996, the Company recorded
the land on its books as part of inventory. At June 30, 1997, the Company has
reclassified the land separate from inventory and is recorded as a long-term
asset to be sold as it is developed.
Note E: Related party transactions
--------------------------
The Company purchased a note receivable during 1996 at a discount due from a
company that is managed and partially owned by a board member. The note is
secured by property held by the related party. As of June 30, 1997, the note has
not performed and interest payments due for the six months ended June 30, 1997
total $7,800. The Company has not recorded an accrual for the past due interest.
The note becomes due and payable November 1997.
Note F: Notes Payable
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The Company has two notes payable $60,000 and $165,000 which became due on
December 2, 1996 and June 4, 1997, respectively. At June 30, 1997, the Company
is negotiating the extension of the $60,000 note and negotiating with respect to
the pay-off of the $165,000 note.
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<PAGE>
ECLIPSE CORPORATION
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
General
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The Company's financial condition and results of operations are directly
affected by the following transactions:
The Company has redesigned and re-engineered portions of platted and unplatted
lots acquired by the Company on September 30, 1996, when it purchased a portion
of the Community at Bear Creek modular home subdivision located in Colorado
Springs, Colorado. The platted lots number approximately 30, and the unplatted
lots approximately 25. During revision of its development plan, the Company has
negotiated with the City of Colorado Springs a reconfiguration of the Company's
subdivision. The Company initially expected this reconfiguration to be finalized
in June 1997. The Company now expects it to be finalized in September 1997.
The Company entered into a definitive purchase agreement with Technology
Learning Systems, Inc., to acquire certain assets of that company in exchange
for cash and stock considerations. The contract is still in the due diligence
phase. The Company anticipates the transaction will be closed or terminated
prior to September 30, 1997.
With respect to the Company's manufactured housing dealership, it has added new
product lines in the second quarter of 1997. New manufacturers represented are
Skyline Corporation and Showcase Homes, Inc. Additionally, the Company hired a
lot manager and sales manager to oversee the operation of its retail lot located
at 4326 N. Nevada, Colorado Springs, Colorado.
Financial Condition
- -------------------
As of June 30, 1997, the Company's working capital was approximately ($604,688),
a decrease of approximately $862,035 from March 30, 1997. The decrease is
primarily attributable to the reclassification of $754,403 of land held for sale
from a current asset to long-term assets, start-up of the manufactured home
sales dealership operations, and redesign of the Company's Bear Creek
Subdivision.
Result of Operations
- --------------------
The Company incurred net (losses) profits of ($237,558), and $492,727 for the
three months ended June 30, 1997 and 1996, respectively. Profits for the three
months ended June 30, 1996 were primarily from the receipt of payments totaling
$532,000 from a former president for amounts that had been reserved for in prior
years. Losses for the three months ended June 30, 1997 are primarily from the
start-up of the manufactured home sales dealership operations.
PART II - OTHER INFORMATION
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Item 1 Through 5 - No response required.
Item 6 - Exhibits and reports on Form 8-K.
(a) Exhibits
27* Financial Data Schedule.
(b) Reports on Form 8-K
None.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ECLIPSE CORPORATION
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(Registrant)
DATE: 8/15/97 BY: /s/ Kenneth M. Cahill
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KENNETH M. CAHILL, PRESIDENT
DATE: 8/15/97 BY: /s/ J. Royce Renfrow
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J. ROYCE RENFROW, SECRETARY
DATE: 8/15/97 BY: /s/ James A. Humpal
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JAMES A. HUMPAL, TREASURER
Principal Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
ECLIPSE CORPORATION UNAUDITED BALANCE SHEET AS OF JUNE 30, 1997 AND
THE RELATED STATEMENT OF INCOME FOR THE THREE MONTHS THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 52,942
<SECURITIES> 0
<RECEIVABLES> 69,730
<ALLOWANCES> 5,080
<INVENTORY> 1,220,244
<CURRENT-ASSETS> 1,617,816
<PP&E> 144,731
<DEPRECIATION> 5,289
<TOTAL-ASSETS> 3,184,512
<CURRENT-LIABILITIES> 2,222,504
<BONDS> 0
0
0
<COMMON> 37,578
<OTHER-SE> 793,102
<TOTAL-LIABILITY-AND-EQUITY> 3,184,512
<SALES> 139,012
<TOTAL-REVENUES> 139,012
<CGS> 104,695
<TOTAL-COSTS> 328,133
<OTHER-EXPENSES> 9,184
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 47,794
<INCOME-PRETAX> (237,558)
<INCOME-TAX> 0
<INCOME-CONTINUING> (237,558)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (237,558)
<EPS-PRIMARY> .00<F1>
<EPS-DILUTED> .00<F1>
<FN>
<F1>Less than $.01 per share
</FN>
</TABLE>
