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 quarterly period ended January 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from November 1, 1996 to January 31, 1997
Date of Report: March 20, 1997
NEMDACO, INC.
(Exact name of small business issuer as specified in its charter)
COLORADO 0-19064 84-1027731
(State of incorporation) (Commission File No.) (I.R.S. ID No)
9 Buckskin Road, Bell Canyon, CA 91307
(Address of principal executive offices)
(Issuer's telephone number) (818) 884-4770
(Former name or former address, if changed since last report.)
Indicate by check whether 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. [X] Yes [ ]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 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:
Common stock, $.01 par value 10,096,400 shares
NEMDACO, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
Consolidated Balance Sheet as of January 31, 1997 3
Consolidated Statements of Operations for the
three months ended January 31, 1997 and 1996 4
Consolidated Statement of Changes in Stockholders'
Equity for the period from November 1, 1996 to
January 31, 1997 5
Consolidated Statements of Cash Flows for the three
months ended January 31, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II - OTHER INFORMATION
ITEMS 1 through 6 11
NEMDACO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JANUARY 31, 1997
(UNAUDITED)
ASSETS
Property and equipment
Furniture & fixtures $ 18,000
Less accumulated depreciation 4,000
------
Total Assets $ 14,000
======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses: $ 171,000
Accrued payroll and payroll taxes(Note 2) 344,000
-------
Total current liabilities 515,000
Commitments and contingencies (Note 5)
Stockholders' equity (deficit):
Common stock, $.01 par value; 12,000,000
shares authorized;
issued 10,086,400 shares 101,000
Additional paid-in capital 4,003,000
Receivable - shareholder (Note 3) (396,000)
Deficit (4,209,000)
---------
Total stockholders' equity (deficit) (501,000)
-------
Total Liabilities and Stockholders' Equity (Deficit) $ 14,000
========
NEMDACO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
January 31, January 31,
1997 1996 1997 1996
Operating expenses:
General and
administrative $ 110,000 $ 171,000 $ 383,000 $ 450,000
Rent expense,
related party 4,000 11,000
------- ------- ------- -------
110,000 175,000 383,000 461,000
------- ------- ------- -------
Net income (loss) $(109,000) $(175,000) $(383,000) $(461,000)
Earnings per
common share:
Net income (loss) $ (.011) $ (.029) $ (.038) $ (.076)
Weighted average
of common shares
outstanding 10,096,400 6,095,400 10,096,400 6,095,400
NEMDACO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MAY 1, 1996 TO JANUARY 31, 1997
(UNAUDITED)
ADDITIONAL
COMMON STOCK PAID-IN
SHARES AMOUNT CAPITAL (DEFICIT)
BALANCE,
May 1, 1996 10,096,400 $ 101,000 $3,826,000 $(3,826,000)
Net loss (383,000)
---------- -------- ---------- ---------
BALANCE,
January 31, 1997 10,096,400 $ 101,000 $3,826,000 $(4,209,000)
========== ======= ========= =========
NEMDACO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended Nine Months Ended
January 31, January 31,
1997 1996 1997 1996
Cash Flows
From Operating Activities:
Net income (loss) $(110,000) $(175,000) $(383,000) $(461,000)
Adjustments to reconcile
net income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and amortization 1,000 3,000
Decrease in Prepaid Expenses
Changes in assets and liabilities:
Decrease(Increase) in
Note Receivable-Shareholder 13,000
Increase in wages and
payroll taxes payable 80,000 215,000
Increase (decrease) in
accounts payable and other
accrued expenses 29,000 243,000 152,000 452,000
------- ------- ------- -------
Total adjustments 110,000 243,000 273,000 452,000
------- ------- ------- -------
Net cash provided by
(used in) operating activities 0 (68,000) 0 ( 9,000)
------- ------- ------ ------
Net cash flows from investing
actitivies (118,000) (118,000)
Net increase (decrease)
in cash and cash equivalents 0 (50,000) 0 (127,000)
Cash and cash equivalents,
beginning 0 50,000 0 127,000
------- -------- --------- -------
Cash and cash equivalents,
ending $ 0 $ 0 $ 0 $ 0
======= ======= ===== ====
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year
for interest $ 0 $ 0 $ 0 $ 0
NEMDACO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS AND NINE MONTHS ENDED JANUARY 31, 1997 AND 1996
1.BASIS OF PRESENTATION:
Unaudited Information - The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB. They do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
However, except as disclosed herein, there has been no material change in the
information disclosed in the notes to consolidated financial statements
included in the Annual Report on Form 10-KSB for the year ended April 30, 1996.
In the opinion of Management, all adjustments consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months and six months ended January 31, 1997
are not necessarily indicative of the results that may be expected for the
year ending April 30, 1997
Principles of Consolidation - The unaudited financial statements as of
January 31, 1997, include the accounts of the Company and its subsidiaries.
All intercompany accounts have been eliminated.
2. ACCRUED PAYROLL AND PAYROLL TAXES
Accrued payroll and payroll taxes include federal and state payroll taxes
payable for the first, second, and third calendar quarters of 1996 in the
amount of $61,000; wages due officers accrued as of April 30, 1996, but not
paid in an amount of $115,000; and wages due officers and other employees for
the period November 1, 1996 to January 31, 1997, which have not been paid due
to lack of funds. Payroll taxes payable to the Internal Revenue Service for
the first and second quarters of 1996 is secured by a tax lien in an amount of
$30,000. See also note on subsequent events.
3. NOTE RECEIVABLE - SHAREHOLDER
The Company holds a Note Receivable in the amount of $396,000 due from
Coubert Dennis, Ltd., an Irish corporation and shareholder of Company.
The Company has made demand for payment from the shareholder. Since there is
no assurance that these funds will be collected, the note receivable has been
deducted from shareholders equity, consistent with the treatment in the
audited financial statements for the year ended April 30, 1996.
4. GOING CONCERN
As shown in the accompanying financial statements, the Company has
incurred a losses of $110,000, and $383,000 during the three months and six
months ended January 31, 1997, respectively, and has a $501,000 deficit in
stockholders' equity as of January 31, 1997. In addition, as of the date of
these financial statements, the Company had no continuing revenue generating
operations resulting in projected cash flow deficiencies. These factors
raise substantial doubt about the Company's ability to continue as a going
concern.
Management is attempting to resolve these deficiencies by raising financing
necessary to acquire interests in on-going businesses and to satisfy its
working capital requirements.
The Company is currently exploring various possibilities for obtaining
financing, including possible private placements and public offerings and debt
secured by assets acquired. If adequate financing can be obtained, the
Company intends to consider the possibilities of investing in various joint
ventures or acquisitions that management is currently investigating.
5. COMMITMENTS AND CONTINGENCIES:
1.
2 Form 8-K's have been filed as required for significant changes to the
Company's Operations and Business Interests. Matters covered by these 8-K's
include the following subsequent events:
(1) Hydroponix share transfer
(2) Woleko share transfer
(3) Gulpac USA
2.
(A) WOLEKO INDUSTRIES, INC.
The Company has transferred one share of its Woleko stock for each four shares
of Nemdaco, Inc. stock to its shareholders of record as of February 28, 1997.
This is pursuant the Company's policy of increasing shareholder value by
transferring shares directly to the shareholders in each of the Company's
holdings. Woleko has designed, tested and patented a revolutionary add-on air
bag for automobiles, which solves many of the problems with the existing air
bags. It fits on the seat belt and expands away from the wearer. Because of
the negative press on the existing air bags, Woleko has several standing
offers for appearances on national television shows. Woleko and its agents
are currently focusing on funding the start-up and operations. Upon this
funding, they are ready to begin production of the Angel Air bag in Nevada.
(B) GULFPAC USA
Nemdaco, Inc. through one of its subsidiaries has acquired the assets and
liabilities of GulfPac USA. These assets are agreements in Malaysia to be the
Program Manager and Operator of Oil Exploration and Refinery Projects. The
Company, subject to further due diligence, will seek sources of financing for
the projects.
(C) HYDROPONIX, INC.
A subsidiary of Nemdaco has acquired the assets of Hydroponix, Inc., a Puerto
Rican corporation. Subject to further due diligence, the Company will seek
sources of financing for the project.
MANAGEMENT'S DISCUSSIONS
The Company is focused on funding and operating profitably the above ventures.
It will also continue to look at other viable businesses with marketable
products that may be suitable to be traded as public companies. The Company
is also seeking funding for its own operations.
The stock dividend of the Company's subsidiaries to Nemdaco shareholder will
continue as the Company's way of increasing the shareholders' value through
the transferring of shares in the subsidiary. The Company believes its plans
to become profitable as well as its subsidiaries becoming profitable will
insure the shareholders in Nemdaco and each subsidiary and good value.
II - OTHER INFORMATION
ITEMS 1 THROUGH 6: NONE
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the under signed,
thereunto duly authorized.
NEMDACO, INC.
(Registrant)
Dated: March 17, 1997 By:/s/ Jeff Bender
Jeff Bender,
Chairman of The Board
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