<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to____________
Commission File No. 033-02441-D
Draco Holding Corp.
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(Name of Small Business Issuer in its Charter)
NEVADA 87-0638750
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
4843 Wallace Lane
Salt Lake City, Utah 84117
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(Address of Principal Executive offices)
Issuer's Telephone Number: (801) 209-0545
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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.
(1) Yes X No (2) Yes X No
--- --- --- ---
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
March 31, 2000
2,034,751
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Registrant required to be filed
with this 10-QSB Quarterly Report were prepared by management, and commence of
the following page, together with Related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Registrant.
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and December 31, 1999
<PAGE>
C O N T E N T S
Independent Accountants' Review Report . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations. . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Stockholders' Equity. . . . . . . . . . . . . 6
Consolidated Statements of Cash Flows. . . . . . . . . . . . . . . . . . 7
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . 9
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors
Draco Holdings Corporation
Salt Lake City, Utah
We have reviewed the accompanying consolidated balance sheet of Draco Holdings
Corporation as of March 31, 2000 and the related consolidated statements of
operations, stockholders' equity and cash flows for the periods ended March 31,
2000 and 1999. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed financial statements referred to above for
them to be in conformity with accounting principles generally accepted in the
United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet of Draco Holding Corporation as
of December 31, 1999, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended (not presented herein) and in our
report dated January 14, 2000, we expressed an unqualified opinion on those
financial statements.
HJ & Associates, LLC
Salt Lake City, Utah
May 3, 2000
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> <C>
CURRENT ASSETS
Cash $ 40,688 $ 42,344
Total Current Assets 40,688 42,344
TOTAL ASSETS $ 40,688 $ 42,344
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,756 $ -
Total Liabilities 2,756 -
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value
500,000,000 shares authorized; 2,034,750
shares issued and outstanding 2,035 2,035
Additional paid-in capital 133,795 133,795
Deficit accumulated during the
development stage (97,898) (93,486)
Total Stockholders' Equity 37,932 42,344
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 40,688 $ 42,344
</TABLE>
See Accountant's Review Report and the accompanying notes to the reviewed
consolidated financial statements.
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Consolidated Statements of Operations
<TABLE>
<CAPTION>
From
Inception on
For the December 17,
Three Months Ended 1985 Through
March 31, March 31,
2000 1999 2000
<S> <C> <C> <C>
REVENUES $ 205 $ - $ 205
EXPENSES
General and administrative 4,617 - 98,103
Total Expenses 4,617 - 98,103
LOSS FROM OPERATIONS (4,412) - (97,898)
NET LOSS $ (4,412) $ - $ (97,898)
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 1,341,599 934,750
</TABLE>
See Accountant's Review Report and the accompanying notes to the reviewed
consolidated financial statements.
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
From Inception on December 17, 1985 Through March 31, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
Balance at inception on
December 17, 1985 - $ - $ - $ -
common stock issued for
cash at $0.02 400,000 400 7,600 -
Common stock issued for
cash at $0.20 per share 534,750 535 106,415 -
Stock offering costs - - (34,220) -
Net loss from inception
on December 17, 1985
through December 31, 1996 - - - (80,830)
Balance, December 31, 1996 934,750 935 79,795 (80,830)
Contributed capital for
expenses - - 100 -
Net loss for the year ended
December 31, 1997 - - - (100)
Balance, December 31, 1997 934,750 935 79,895 (80,930)
Net loss for the year ended
December 31, 1998 - - - (150)
Balance, December 31, 1998 934,750 935 79,895 (81,080)
Common stock issued for cash
at $0.05 per share 1,000,000 1,000 49,000 -
Common stock issued for
services at $0.05 per share 100,000 100 4,900 -
Net loss for the year ended
December 31, 1999 - - - (12,406)
Balance, December 31, 1999 2,034,750 2,035 133,795 (93,486)
Net loss for the three months
ended March 31, 2000
(unaudited) - - - (4,412)
Balance, March 31, 2000
(unaudited) 2,034,750 $ 2,035 $ 133,795 $ (97,898)
</TABLE>
See Accountant's Review Report and the accompanying notes to the reviewed
consolidated financial statements.
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
For the December 17,
Three Months Ended 1985 Through
March 31, March 31,
2000 1999 2000
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (4,412) $ - $ (97,898)
Adjustments to reconcile net loss to
net cash used by operating activities:
Contributed capital for expenses - - 100
Common stock issued for services - - 5,000
Changes in operating assets and
liabilities:
Increase (decrease) in accounts
payable 2,756 - 2,756
Net Cash Used by Operating
Activities (1,656) - (90,042)
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
CASH FLOWS FROM FINANCING
ACTIVITIES
Stock offering costs - - (34,220)
Proceeds from issuance of common
stock - - 164,950
Net Cash Provided by Financing
Activities - - 130,730
INCREASE (DECREASE) IN CASH (1,656) - 40,688
CASH AT BEGINNING OF PERIOD 42,344 - -
CASH AT END OF PERIOD $ 40,688 $ - $ 40.688
</TABLE>
See Accountant's Review Report and the accompanying notes to the reviewed
consolidated financial statements.
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
From
Inception on
For the December 17,
Three Months Ended 1985 Through
March 31, March 31,
2000 1999 2000
<S> <C> <C> <C>
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid for:
Taxes $ - $ - $ -
Interest $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for services $ - $ - $ 5,000
</TABLE>
See Accountants' Review Report and the accompanying notes to the reviewed
consolidated financial statements.
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Draco Holding Corporation (the Company) was organized August 20, 1999 under the
laws of the State of Nevada for the purpose of engaging in any lawful activity.
On September 13, 1999, Draco Holding Corporation filed articles of merger
whereby Draco Corporation (a Utah corporation formed on December 17, 1985)
(Draco-Utah)
merged into Draco Holding Corporation (the Company). The Company became the
surviving corporation, assuming all the assets and obligations of Draco-Utah.
At the time of merger, each outstanding share of common stock of Draco-Utah was
converted into one share of common stock of the Company, and all fractional
shares were rounded to the nearest whole share. The Company has had no
significant operations since inception and is considered a development stage
company in accordance with Statement of Financial Accounting Standards No. 7.
The Company is the surviving entity for legal purposes and the historical
financial statements of Draco-Utah became the Company's financial statements for
accounting purposes.
The Company incorporated Jump'n Jax, Inc., a wholly-owned subsidiary. The
Subsidiary is in the business of equipment rental and the leasing of inflatable
bounce houses for parties and entertainment.
b. Provision for Taxes
At March 31, 2000, the Company had net operating loss carryforwards of
approximately $98,000 that may be offset against future taxable income through
2019. No tax benefit has been reported in the financial statements, because the
Company believes there is a 50% or greater chance the carryforwards will expire
unused. Accordingly, the potential tax benefits of the net operating loss
carryforwards are offset by a valuation allowance of the same amount.
c. Accounting Method
The financial statements are prepared using the accrual method of accounting.
The Company has elected a calendar year end.
d. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure 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 estimates.
e. Cash and Cash Equivalents
The Company considers all highly liquid investment with a maturity of three
months or less when purchased to be cash equivalents.
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Revenue Recognition Policy
The Company currently has no significant source of revenues. Revenue
recognition policies will be determined when principal operations begin.
g. Basic Loss Per Share
For the Three Months Ended
March 31, 2000
Loss Shares Per Share
(Numerator) (Denominator) Amount
Net loss $(4,412) 1,341,599 $(0.00)
For the Three Months Ended
March 31, 1999
Loss Shares Per Share
(Numerator) (Denominator) Amount
Net loss $ - 934,750 $(0.00)
The computations of basic loss per share of common stock are based on the
weighted average number of shares of common stock outstanding during the period
of the financial statements.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. Management intends
to seek a merger with an existing, operating company; in the interim, it has
committed to meeting the Company minimal operating expenses.
NOTE 3 - STOCK TRANSACTIONS
On August 18, 1999, the Company issued 1,000,000 unrestricted shares of common
voting stock for cash consideration of $50,000 and 100,000 shares of common
voting stock for services rendered valued at $5,000.
On September 13, 1999, the Company effected a reverse split of the issued and
outstanding common stock on the basis of one share for 10, while retaining the
authorized shares at 500,000,000 shares and retaining the par value of one mill
($0.001) per share. The reverse stock split has been applied retroactively to
the financial statements.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable.
Item 5. Other Information.
On March 3, 2000, the Board of Directors of Draco Holding Corp., a Nevada
corporation (the "Company"), unanimously voted to purchase 1,000 shares of
common stock of Jump'n Jax, Inc., a Utah corporation, in order to make Jump'n
Jax a
wholly-owned subsidiary. Jump'n Jax will operate the Company's business of
leasing inflatable balloon houses for parties and outdoor activities in southern
Utah. The Company's Board of Directors further resolved to loan $10,000 to
Jump'n Jax to allow it to commence operations, and to elect Steven D. Moulton as
Jump'n Jax' director, with James Wheeler; Richard Lamb; and Michelle Wheeler to
serve as its President, Vice President and Secretary/Treasurer, respectively.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Financial Data Schedule.
(b) Reports on Form 8-K.
None.
<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.
DRACO HOLDING CORP.
Date: 5/9/00 By: /s/ Lane Clissold
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Lane Clissold
Director and
President
Date: May 9, 2000 By: /s/ Steven D. Moulton
------------ ---------------------
Steven D. Moulton
Director and
Secretary/Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000787251
<NAME> DRACO HOLDING CORP.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 40688
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 40688
<CURRENT-LIABILITIES> 2756
<BONDS> 0
0
0
<COMMON> 2035
<OTHER-SE> 35897
<TOTAL-LIABILITY-AND-EQUITY> 40688
<SALES> 0
<TOTAL-REVENUES> 205
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4617
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (4412)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4412)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
