UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File Number 033-01289-D
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Chapeau, Inc.
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(Exact name of small business issuer as specified in charter)
Utah 87-0431831
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 West Broadway, Suite 501
Salt Lake City, Utah 84101
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(Address of principal executive offices) (Zip Code)
(801) 323-0329
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(Issuer's Telephone number, including area code)
N/A
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(Former name, former address, and former fiscal
year, if changed since last report)
Check whether the issuer (1) has 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
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13, or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by court.
Yes X No
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APPLICABLE ONLY TO CORPORATE ISSUERS
As of May 11, 2000, the Issuer had 8,500,000 shares of its
common stock, par value $0.001 per share, issued and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes X No
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<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Chapeau, Inc. (the "Company"), has included the unaudited
balance sheet of the Company as of March 31, 2000, and unaudited
statements of operations, stockholders' equity (deficit), and
cash flows for the period from February 3, 2000 (date of
inception of the development stage), to March 31, 2000, together
with unaudited condensed notes thereto. In the opinion of
management of the Company, the financial statements reflect all
adjustments, all of which are normal recurring adjustments,
necessary to fairly present the financial condition, results of
operations, and cash flows of the Company for the interim period
presented. The financial statements included in this report on
Form 10-QSB should be read in conjunction with the audited
financial statements of the Company and the notes thereto
included in the annual report of the Company on Form 10-KSB for
the year ended June 30, 1999.
2
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CHAPEAU, INC.
(A Development Stage Company)
Balance Sheet
March 31, 2000
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 987,607
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Total Current Assets 987,607
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Total Assets $ 987,607
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 4,951
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Total Current Liabilities 4,951
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Stockholders' Equity
Preferred Stock, $0.001 par value;
5,000,000 shares authorized; none issued
and outstanding -
Common stock, $0.001 par value; 325,000,000
shares authorized; 8,500,000 shares issued
and outstanding 8,500
Additional paid-in capital 1,238,158
Deficit accumulated prior to date of
inception of the development stage (259,373)
Deficit accumulated from date of inception
of the development stage
(February 3, 2000) (4,629)
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Total Stockholders' Equity 982,656
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Total Liabilities and Stockholders'
Equity $ 987,607
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See the accompanying notes to the condensed financial statements.
3
<PAGE>
CHAPEAU, INC.
(A Development Stage Company)
Statement of Operations
For the Period From February 3, 2000
(Date of Inception of the Development Stage)
to March 31, 2000
(Unaudited)
General and Administrative Expense $ 4,629
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Net Loss $ (4,629)
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Basic Loss Per Share $ -
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Weighted-Average Common Shares Outstanding 6,648,035
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See the accompanying notes to the condensed financial statements.
4
<PAGE>
CHAPEAU, INC.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
For the Period From February 3, 2000
(Date of Inception of the Development Stage)
to March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Accumulated
Deficit From Date
Accumulated of Inception
Prior to of the
Inception Development Total
Common Stock Additional of the Stage Stockholders'
------------------------ Paid-In Development (February 3, Equity
Shares Amount Capital Stage 2000) (Deficit)
------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance-February 3, 2000
(Date of Inception of the
Development Stage) 12,320,049 $ 12,320 $ 230,451 $ (259,373) $ - $ (16,602)
Conversion of related party
note payable and accrued
interest into additional
paid-in capital - - 16,602 - - 16,602
Cancellation of stock (7,820,049) (7,820) 7,820 - - -
Common stock issued from
February 28, to March 13,
2000, at $0.25 per share
less offering costs 4,000,000 4,000 983,285 - - 987,285
Net loss - - - - (4,629) (4,629)
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Balance-March 31, 2000 8,500,000 $ 8,500 $1,238,158 $ (259,373) $ (4,629) $ 982,656
============ ========== ========== ========== ========== ==========
</TABLE>
See the accompanying notes to the condensed financial statements.
5
<PAGE>
CHAPEAU, INC.
(A Development Stage Company)
Statement of Cash Flows
For the Period From February 3, 2000
(Date of Inception of the Development Stage)
to March 31, 2000
(Unaudited)
Cash Flows From Operating Activities
Net loss $ (4,629)
Adjustments to reconcile net loss to net
cash from operating activities:
Changes in assets and liabilities:
Accounts payable 4,951
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Net Cash and Cash Equivalents Provided by
Operating Activities 322
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Cash Flows From Financing Activities
Proceeds from issuance of common stock 1,000,000
Stock offering costs (12,715)
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Net Cash and Cash Equivalents Provided by
Financing Activities 987,285
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Net Increase in Cash and Cash Equivalents 987,607
Cash and Cash Equivalents at February 3, 2000
(Date of Inception of the Development Stage) -
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Cash and Cash Equivalents at March 31, 2000 $ 987,607
==========
Supplemental Cash Flow Information
Noncash Financing Activities
Conversion of related party note payable and
accrued interest into additional paid-in capital $ 16,602
==========
See the accompanying notes to the condensed financial statements.
6
<PAGE>
CHAPEAU, INC.
(A Development State Company)
Condensed Notes to the Financial Statements
(A) Basis of Presentation
The accompanying unaudited financial statements of Chapeau, Inc.
(the "Company"), have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB. Accordingly, these
financial statements do not include all of the information and
footnote disclosures required by generally accepted accounting
principles for complete financial statements. These financial
statements and footnote disclosures should be read in conjunction
with the audited financial statements and the notes thereto
included in the Company's annual report on Form 10-KSB for the
year ended June 30, 1999. In the opinion of management, the
accompanying unaudited financial statements contain all
adjustments (consisting of only normal recurring adjustments)
necessary to fairly present the Company's financial position as
of March 31, 2000, its results of operations, and its cash flows
for the period from February 3, 2000 (date of inception of the
development stage), to March 31, 2000. The results of operations
for the period from February 3, 2000 (date of inception of the
development stage), to March 31, 2000, may not be indicative of
the results that may be expected for the period from February 3,
2000 (date of inception of the development stage), to June 30,
2000.
(B) History and Recent Events
History and Nature of Business -- The Company was organized under
the laws of the State of Utah on September 19, 1985. The Company
was engaged in the operation of sports clothing stores but was
unsuccessful and closed its final store in May 1989. The Company
was dormant from May 1989 until February 3, 2000.
Recapitalization -- On February 3, 2000, two principal
shareholders of the Company (the "Selling Shareholders") and the
Company entered into a Stock Purchase Agreement with a group of
investors (the "Purchasers"). Under the terms of the Stock
Purchase Agreement, the Selling Shareholders contributed notes
payable and accrued interest to the Selling Shareholders totaling
$16,602 as capital of the Company with no additional shares being
issued, the Purchasers acquired 5,000,000 shares of common stock
from the Selling Shareholders by a cash payment of $300,000, or
$0.06 per share, and the Selling Shareholders and one of the
Purchasers returned 7,820,049 shares of common stock to the
Company for cancellation for no consideration. No stated or
unstated rights were given in exchange for the cancellation of
the common stock. No gain or loss was recognized in connection
with the contribution of the notes payable and accrued interest
to capital.
Inception of the Development Stage -- In connection with the
recapitalization of the Company, the former board of directors
resigned and a new board of directors was appointed from the
Purchasers. Howard S. Landa was also appointed as the chief
executive officer and Andrew C. Bebbington was appointed as the
chief financial officer of the Company. As a result of the Stock
Purchase Agreement and the changes in management, the Company was
reactivated on February 3, 2000. The development stage
activities of the Company include raising capital and seeking
investment or merger opportunities.
(C) Related Party Transactions
Prior to the change in executive management in February 2000, the
Company borrowed money from directors or shareholders in order to
fund its continued existence. These notes were unsecured, were
due on demand, and bore interest at a rate of 8% per annum. On
February 3, 2000, notes in the amount of $16,602, including
accrued interest, were contributed to additional paid-in capital.
(D) Stockholders' Equity
In March 2000, the Company completed a private placement of
4,000,000 shares of common stock at $0.25 per share. The net
proceeds to the Company, after deducting associated offering
costs, were approximately $987,000.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
Historical and Recent Events
The Company was organized under the laws of the State of
Utah on September 19, 1985, to provide a capital resource fund to
be used to participate in business opportunities. The Company
completed a public offering of its common stock in March of 1986.
Initially, the Company engaged in the operation of sport clothing
stores, but was unsuccessful and closed its final store in May
1989. The Company was dormant from May 1989 until February 3,
2000.
Control and management of the Company changed on February 3,
2000, as reported on the Company's current report on Form 8-K as
of that date. On February 3, 2000, two principal shareholders of
the Company entered into a Stock Purchase Agreement with a group
of investors pursuant to which the following occurred:
(1) The investors purchased 5,000,000 shares of common
stock from the two principal shareholders;
(2) The two principal shareholders and one investor
returned 7,820,049 shares of common stock to the Company for
cancellation for no consideration; and
(3) The two principal shareholders contributed notes
payable and accrued interest totaling $16,602 as capital of
the Company for no consideration.
In conjunction with this transaction, the former board of
directors resigned and a new board of directors was appointed
from the new investor group. As a result of the stock purchase
and change in management, the Company was reactivated on February
3, 2000, representing the inception of a new development stage.
The development stage activities of the Company include raising
capital and seeking investment or merger opportunities.
Plan of Operations
The Company has no current operations or revenue. The
Company has only incidental expenses primarily associated with
reactivating the Company and maintaining its corporate status.
For the period from February 3, 2000 (date of inception of the
development stage), to March 31 2000, the Company's expenses were
$4,629, principally consisting of professional fees and travel
expenses.
During the period ended March 31, 2000, the Company
completed a private placement of 4,000,000 shares of common stock
resulting in net proceeds to the Company of approximately
$987,000. The offering was made to provide funding to the
Company to permit it to search for a business opportunity and to
provide the Company with sufficient capital to potentially make
it an attractive merger candidate.
As of March 31, 2000, the Company had cash of $987,607 and
liabilities of $4,951, resulting in working capital of $982,656.
Management of the Company has evaluated certain investment
or merger opportunities and continues to seek such opportunities.
Management believes that the current cash balance is sufficient
to meet its existing operating commitments and to conduct its
investigations of potential investment or merger opportunities.
The Company's need for additional capital beyond its current cash
balances will depend on the financial condition and capital needs
of the potential investment or merger candidate.
8
<PAGE>
ITEM 5. OTHER INFORMATION
On May 6, 2000, the board of directors of the Company
authorized a change in the independent accountants of the Company
from Jones, Jensen & Company to Hansen Barnett & Maxwell.
The report of Jones, Jensen & Company on the Company's
financial statements as of June 30, 1999, and the two years then
ended did not contain an adverse opinion, or a disclaimer of
opinion, nor was its report qualified or modified as to
uncertainty, audit scope, or accounting principles, other than a
limitation as to the presentation of the financials on a going
concern basis at a time that the Company was a development stage
company with no operating capital. During the engagement of
Jones, Jensen & Company, there were no disagreements on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which disagreements,
if not resolved to the satisfaction of Jones, Jensen & Company,
would have caused the Company to make reference to the subject
matter of the disagreements in connection with its reports.
The Company was not advised by Jones, Jensen & Company that
internal controls necessary for the Company to develop reliable
financial statements did not exist nor that any information had
come to its attention that led it to no longer be able to rely on
management's representations or that made it unwilling to be
associated with the financial statements prepared by management.
The Company was not advised by Jones, Jensen & Company of the
need to expand significantly the scope of the Company's audit.
Jones, Jensen & Company has not advised the Company that any
information has come to its attention that Jones, Jensen &
Company concluded would materially impact the fairness or
reliability of either (i) a previously issued audit report or the
underlying financial statements; or (ii) any financial statements
issued or to be issued subsequent to the most recent audit
report. The Company provided its former auditors, Jones, Jensen
& Company with a copy of the foregoing disclosures. The Company
has filed a letter from the former auditors concurring with the
foregoing statements as an exhibit to this report on Form 10-QSB.
Neither the Company nor anyone acting on its behalf
consulted Hansen Barnett & Maxwell prior to its appointment
regarding the application of accounting principles to a specific
completed or contemplated transaction, the type of audit opinion,
or other accounting advice that was considered by the Company in
reaching a decision as to an accounting, auditing, or financial
reporting issue. The Company requested that Hansen Barnett &
Maxwell review the foregoing disclosure and provided it with an
opportunity to furnish the Company with a letter containing any
new information, clarification of its views, or respects in which
it disagreed with the Company's disclosure. Hansen Barnett &
Maxwell indicated that it was unnecessary to provide such a
letter.
The Company and its current auditors have not disagreed on
any items of accounting treatment or financial disclosure.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
The following exhibits are included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document
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1 16 Letter from Jones, Jensen & Company
Reports on Form 8-K
During the quarter ended March 31, 2000, the Company filed a
current report on Form 8-K dated February 3, 2000, reporting the
changes in control and management of the Company.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of 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.
CHAPEAU, INC.
Dated: September 27, 2000 By /s/ Andrew C. Bebbington
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Andrew C. Bebbington,
Chief Financial Officer
(Principal Financial and
Accounting Officer)
