U.S. 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 SEPTEMBER 30, 1999
[ ] 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 0-25901
CONCEPT CAPITAL CORPORATION
(Exact name of small business issuer as specified in charter)
UTAH 87-0422564
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
175 South Main Street, Suite 1210, Salt Lake City, Utah 84111
(Address of principal executive offices) (Zip Code)
(801) 364-2538
(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 X No
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 a court. Yes No
Applicable only to corporate issuers
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date
As of October 12, 1999, the issuer had outstanding 4,375,000 shares of
common stock, par value $0.001
Transitional Small Business Disclosure Format
(Check one):
Yes No X
<PAGE>
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Such statements reflect the
Company's views with respect to future events based upon information available
to it at this time. These forward-looking statements are subject to certain
uncertainties and other factors that could cause actual results to differ
materially from such statements. These uncertainties and other factors
include, but are not limited to: the ability of the Company to locate a
business opportunity for acquisition or participation by the Company; the
terms of the Company's acquisition of or participation in a business
opportunity; and the operating and financial performance of any business
opportunity following its acquisition or participation by the Company. The
words "anticipates," "believes," "estimates," "expects," "plans," "projects,"
"targets" and similar expressions identify forward looking statements.
Readers are cautioned not to place undue reliance on these forward looking
statements, which speak only as of the date the statement was made. The
Company undertakes no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, changes in
assumptions, future events or otherwise.
Part I--Financial Information
Item 1. Financial Statements
Concept Capital Corporation (the "Issuer"), files herewith balance
sheets of the Issuer as of September 30, 1999 and December 31, 1998, the
related statements of operations and statements of comprehensive income (loss)
for the three and nine month periods ended September 30, 1999 and 1998, and
for the period from May 21, 1985 (inception) through September 30, 1999, and
the related statements of cash flows for the nine month periods ended
September 30, 1999 and 1998, and for the period from May 21, 1985 (inception)
through September 30, 1999. In the opinion of management of the Issuer, the
financial statements reflect all adjustments, all of which are normal
recurring adjustments, necessary to fairly present the financial condition of
the Issuer for the interim periods presented. The financial statements
included in this report on Form 10-Q should be read in conjunction with the
audited financial statements of the Issuer and the notes thereto included in
Amendment No. 1 to the Registration Statement on Form 10-SB for the year ended
December 31, 1998.
2
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
September 30, December 31,
1999 1998
__________ __________
CURRENT ASSETS:
Cash in bank $ 252,335 $ 29,853
Available-for-sale securities,
at fair value - 144,300
Prepaid rent 541 -
__________ __________
Total Current Assets $ 252,876 $ 174,153
__________ __________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ - $ 600
Income taxes payable - 1,623
Deferred income taxes - 4,359
__________ __________
Total Current Liabilities - 6,582
__________ __________
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value,
50,000,000 shares authorized,
4,375,000 and 1,750,000 shares
issued and outstanding, respectively 4,375 1,750
Capital in excess of par value 244,380 142,005
Earnings accumulated during
the development stage 4,121 6,374
Unrealized gain on available-for-sale
securities, net of tax effect - 17,442
__________ __________
Total Stockholders' Equity 252,876 167,571
__________ __________
$ 252,876 $ 174,153
__________ __________
Note: The balance sheet at December 31, 1998 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
3
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED STATEMENTS OF OPERATIONS
[Unaudited]
For the Three For the Nine From Inception
Months Ended Months Ended on May 21,
September 30, September 30, 1985 Through
_________________ _________________ September 30,
1999 1998 1999 1998 1999
________ ________ ________ ________ _____________
REVENUE:
Interest, dividends,
and capital gain
distributions $ 2,967 $ 2,941 $ 8,563 $11,300 $ 129,563
Gain from sale of
available-for-sale
securities - - 10,138 - 19,334
________ ________ ________ ________ _____________
Total Revenues 2,967 2,941 18,701 11,300 148,897
________ ________ ________ ________ _____________
EXPENSES:
General and
administrative 1,581 64 20,954 2,677 76,204
Loss on sale or
abandonment of
available-for-sale
securities - - - - 61,763
Amortization - - - - 500
________ ________ ________ ________ _____________
Total Expenses 1,581 64 20,954 2,677 138,467
________ ________ ________ ________ _____________
INCOME (LOSS) BEFORE
INCOME TAXES 1,386 2,877 (2,253) 8,623 10,430
CURRENT TAX
EXPENSE - - - - 6,309
DEFERRED TAX
EXPENSE - - - - -
________ ________ ________ ________ _____________
NET INCOME (LOSS) $ 1,386 $ 2,877 $(2,253) $ 8,623 $ 4,121
________ ________ ________ ________ _____________
INCOME (LOSS) PER
COMMON SHARE $ .00 $ .00 $ (.00) $ .00 $ .00
________ ________ ________ ________ _____________
The accompanying notes are an integral part of these unaudited financial
statements.
4
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
[Unaudited]
For the Three For the Nine From Inception
Months Ended Months Ended on May 21,
September 30, September 30, 1985 Through
_________________ _________________ September 30,
1999 1998 1999 1998 1999
________ ________ ________ ________ _____________
NET INCOME (LOSS) $ 1,386 $ 2,877 $ (2,253)$ 8,623 $ 4,121
OTHER
COMPREHENSIVE
INCOME:
Net unrealized gain(loss)
on available-for-sale
securities, net of tax
($2,332 tax at
September 30, 1999) - (3,120) (9,331) 6,438 (33,943)
Reclassification
adjustment for realized
gains on available-for-
sale securities, net of
tax ($2,027 tax at
September 30, 1999) - - (8,111) - 33,943
________ ________ ________ ________ _____________
COMPREHENSIVE
INCOME (LOSS) $ 1,386 $ (243)$(19,695)$ 15,061 $ 4,121
________ ________ ________ ________ _____________
The accompanying notes are an integral part of these unaudited financial
statements.
5
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED STATEMENTS OF CASH FLOWS
[Unaudited]
For the Nine From Inception
Months Ended on May 21,
September 30, 1985 Through
___________________ September 30,
1999 1998 1999
_________ _________ _______________
Cash Flows From Operating Activities:
Net income (loss) $ (2,253) $ 8,623 $ 4,121
Adjustments to reconcile net income
(loss) to net cash used by operating
activities:
Amortization expense - - 500
Net realized (gain) loss on
disposition of securities (10,138) - 42,429
Changes in assets and liabilities:
(Decrease)in accounts payable (600) (600) -
(Increase)in prepaid rent (541) - (541)
(Decrease)in income taxes payable (1,623) (100) -
_________ _________ _______________
Net Cash Provided (Used) by
Operating Activities (15,155) 7,923 46,509
_________ _________ _______________
Cash Flows From Investing Activities:
Payment of organization costs - - (500)
Proceeds from sale of securities 132,637 - 259,032
Purchase of securities - (23,832) (301,461)
_________ _________ _______________
Net Cash Provided (Used) by
Investing Activities 132,637 (23,832) (42,929)
_________ _________ _______________
Cash Flows From Financing Activities:
Proceeds from common stock issuance 105,000 - 262,000
Payments for stock offering costs - - (13,245)
_________ _________ _______________
Net Cash Provided by Financing
Activities 105,000 - 248,755
_________ _________ _______________
Net Increase (Decrease) in Cash 222,482 (15,909) 252,335
Cash at Beginning of Period 29,853 36,932 -
_________ _________ _______________
Cash at End of Period $252,335 $ 21,023 $ 252,335
_________ _________ _______________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ 1,659 $ - $ 6,309
Supplemental Schedule of Noncash Investing and Financing Activities:
For the nine months ended September 30, 1999:
Unrealized gains on available-for-sale securities in the amount of $21,801
were realized due to the sale of the underlying securities.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
6
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Concept Capital Corporation (the Company) was organized under
the laws of the State of Utah on May 21, 1985. The Company is seeking
potential business opportunities for acquisition or participation. The
Company has not yet generated significant revenues from its planned principal
operations and is considered a development stage company as defined in
Statement of Financial Accounting Standards (SFAS) No. 7. The Company has, at
the present time, not paid any dividends and any dividends that may be paid in
the future will depend upon the financial requirements of the Company and
other relevant factors.
Financial Statements - The accompanying financial statements have been
prepared by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows at
September 30, 1999 and for all the periods presented have been made.
Accounting Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimated
by management.
Cash and Cash Equivalents - For purposes of the financial statements, the
Company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.
Concentration of Credit Risk - At September 30, 1999 the Company maintained
its cash balances primarily at one bank. The Company's cash balances are
insured by the Federal Deposit Insurance Corporation up to a maximum of
$100,000.
Investments - Investments in available-for-sale securities are carried at fair
value. Unrealized gains and losses, net of the deferred tax effects, are
included as a separate element of stockholders' equity. Realized gains and
losses are based on the difference between sales price and actual cost of the
securities and are included in earnings.
Earnings(Loss) Per Share - The computation of income (loss) per share is based
on the weighted average number of shares outstanding during the period
presented in accordance with Statement of Financial Standards No. 128,
"Earnings Per Share" [See Note 7].
Comprehensive Income - The Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income", during 1999.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standtards (SFAS) No. 132, "Employer's Disclosure about Pensions and Other
Postretirement Benefits", SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", SFAS No. 134, "Accounting for
Mortgage-Backed Securities..." and SFAS No. 135, "Rescission of FASB
Statement No. 75 and Technical Corrections" were recently issued. SFAS No.
132, 133, 134 and 135 have no current applicability to the Company or their
effect on the financial statements would not have been significant.
7
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - AVAILABLE-FOR-SALE SECURITIES
The Company had previously invested in mutual fund shares which were accounted
for as investments available-for-sale. At December 31, 1998, these shares had
unrealized gains of $21,801 (with an estimated tax effect of $4,359). During
the three months ended March 31, 1999 the Company sold all of its holdings and
realized a gain of $10,138 from the proceeds of $132,637.
NOTE 3 - COMMON STOCK
During March 1999, the Company issued 2,625,000 shares of common stock for
cash proceeds of $105,000 ($.04 per share) to an individual and six other
investors. The issuance of common stock resulted in a change of control of
the Company [See Note 5].
During 1985, the Company completed a public offering of 1,450,000 shares of
common stock for gross proceeds of $145,000, or $.10 per share. Offering
costs of $13,245 were offset against the proceeds of the offering.
In connection with its organization, the Company issued 300,000 shares of
common stock to its original officers and directors and their associates for
total proceeds of $12,000, or $.04 per share.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". SFAS
109 requires the Company to provide a net deferred tax asset/liability equal
to the expected future tax benefit/expense of temporary reporting differences
between book and tax accounting methods and any available operating loss or
tax credit carryforwards. At September 30, 1999, the Company has estimated
available unused operating loss carryforwards of approximately $1,500, which
may be applied against future taxable income and which expire in to 2019. The
amount of the net operating loss carryforward which can be utilized by the
Company will be subject to annual limitations due to the substantial change in
ownership which has occurred in the Company.
The amount of and ultimate realization of the benefits from the operating loss
carryforwards for income tax purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company, and other future events, the
effects of which cannot be determined. Because of the uncertainty surrounding
the realization of the loss carryforwards the Company has established a
valuation allowance equal to the amount of the loss carryforwards and,
therefore, no deferred tax asset has been recognized for the loss
carryforwards. The net deferred tax asset is approximately $1,200 as of
September 30, 1999, with an offsetting valuation allowance at September 30,
1999 of the same amount. The change in the valuation allowance for 1999 is
approximately $1,200.
8
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - CHANGE IN CONTROL
During March 1999, an individual and six other investors purchased 2,625,000
shares of common stock of the Company [See Note 3] giving them a 60%
controlling interest in the company. The former officers and directors
resigned and the individual was elected as the new president and member of the
board of directors.
NOTE 6 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company did not pay compensation to its officers
and directors during the nine months ended September 30, 1999.
Rent - The Company shares office space with entities related to an
officer/shareholder of the Company. Beginning in April 1999, the Company has
agreed to pay $180 rent per month for its share of the office space plus its
portion of office expenses. The Company paid approximately $1,080 for the nine
months ended September 30, 1999 for its share of the office space.
NOTE 7 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income (loss) per share
and the effect on income and the weighted average number of shares of dilutive
potential common stock for the three and nine months ended September 30, 1999
and 1998, and from inception on May 21, 1985 through September 30, 1999:
For the Three For the Nine From Inception
Months Ended Months Ended on May 21,
September 30, September 30, 1985 Through
___________________ ___________________ September 30,
1999 1998 1999 1998 1999
_________ _________ _________ _________ _____________
Income (loss) from
continuing operations
applicable to common
stockholders
(numerator) $ 1,386 $ 2,877 $ (2,253) $ 8,623 $ 4,121
_________ _________ _________ _________ _____________
Weighted average
number of common
shares outstanding
used in earnings per
share during the
period (denominator) 4,375,000 1,750,000 3,788,462 1,750,000 1,738,055
_________ _________ _________ _________ _____________
Dilutive earnings per share was not presented, as the Company had no common
equivalent shares for all periods presented that would effect the computation
of diluted earnings (loss) per share.
9
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
Plan of Operation
During the next twelve months, and thereafter if required, the officers
and directors of the Company will utilize their business contacts in an effort
to locate a business opportunity for acquisition or participation by the
Company. Such contacts may include investment bankers and other securities
professionals, lawyers, accountants, industry consultants, members of
management of public and private companies, business brokers, and personal
acquaintances. When and if a potential business opportunity is located, the
Company's officers and directors may incur travel expenses in connection with
their review of such opportunity and, if they determine to proceed further,
may also incur expenses for the engagement of professionals such as lawyers
and accountants to assist in a Adue diligence@ review of the opportunity and
the negotiation and preparation of the necessary legal documents. While the
precise nature and amount of such expenses cannot be foreseen at this time,
the Company anticipates that its current assets will be adequate to pay such
expenses during the next twelve months. As of September 30, 1999, the Company
had net assets in the form of cash and cash equivalents in the approximate
amount of $253,000. The Company anticipates that the interest income it earns
on such amount will be sufficient to pay the majority of the Company's limited
operating expenses including rent, filing fees, and routine legal and
accounting fees for the next twelve months, leaving the majority of such
assets available for expenses incurred in connection with the location,
evaluation, and acquisition of a business opportunity.
The Company cannot presently foresee the cash requirements of any
business opportunity which may ultimately be acquired by the Company.
However, since it is likely that any such business will be involved in active
business operations, the Company anticipates that any such acquisition will
result in increased cash requirements as well as increases in the number of
employees of the Company.
Part II--Other Information
Item 1. Legal Proceedings
The Issuer is not a party to any material pending legal proceedings and,
to the best of its knowledge, its properties are not the subject of any such
proceedings.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
10
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
No exhibits are being filed with this report.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for which this
report is filed.
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.
Concept Capital Corporation
Date: October 15, 1999 By /s/ T. Kent Rainey
T. Kent Rainey, President
(Principal Accounting and
Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements for the nine month period ended September 30, 1999,
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 252,335
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 252,876
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 252,876
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 4,375
<OTHER-SE> 248,501
<TOTAL-LIABILITY-AND-EQUITY> 252,876
<SALES> 0
<TOTAL-REVENUES> 18,701
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 20,954
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,253)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,253)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,253)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
