U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1996
___ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXHANGE ACT
Commission File No. 0-24262
ADVEN, INC.
(Exact name of registrant as specified in its charter)
Washington 91-1363905
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
89509
3653 Hemlock Court (Zip Code)
Reno, Nevada
(Address of principal executive (702)829-8812
offices) (Registrants telephone number including
area code)
_________________________________________________________________________
Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding twelve months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject
to such filing requirement for the past ninety days.
Yes X No ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
The number of shares of Registrant's Common Stock, $.0001 par, outstanding
on September 30, 1996 was 1,640,001.
<PAGE>
PART I - FINANCIAL INFORMATION
ADVEN, INC.
The financial statements of the Registrant included herein have
been prepared, without audit, pursuant to the rules and regulation.
of the Securities and Exchange Commission. Althouqh certain
information normally included in financial statements prepared in
accordance with generally accepted accounting principles has been
condensed or omitted, the registrant believes that the disclosures
are adequate to make the information presented not misleading. It
is suggested that these consolidated financial statements be read
in conjunction with the financial statements and the notes thereto
included in the Annual Report on Form 10-K of the Registrant.
The financial statements included herein reflect all adjustments
(consisting only of normal recurring accruals) which, in the
opinion of management, are necessary to present a fair statemeut of
the results for the interim periods.
The results for interim period. are not necessarily indicative of
trends or of results to be expected for a full year.
<PAGE>
ADVEN, INC.
BALANCE SHEET
September 30, 1996 and December 31, 1995
ASSETS
Sept. 30,
1996 Dec 31,
(Unaudited) 1995
CURRENT ASSETS
Cash $ 13,426 $ 15,635
OTHER ASSETS
TOTAL ASSETS $ 13,426 $ 45,635
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Aaaounts payable $ 3,218 $ 3,618
Loan payable-non related party 4,125 4,125
Total Current Liabilities 7,343 7,743
STOCKHOLDERS' EQUITY
Coimmon stock, $.OOOl par value,
20,000,000 shares authorized,
1,640,001 shares issued 164 164
preferred stock, $.0001 par value
20,000,000 shares authorized, -0-
shares issued
Additional paid-in capital 169,848 169,848
Accumulated (Deficit) (163,620) (162,120)
Total Stockholders' Equity 6,083 7,892
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $13,426 $ 15,635
The accompaning notes are an integral part of these financial statements
<PAGE>
ADVEN, Inc.
STATMENT OF OPERATIONS
for the three and six months ended September 30, 1996 and 1995
(Unaudited)
THREE MONTHS NINE MONTHS
1996 1995 1996 1995
REVENUES $ -- $ -- $ -- $ --
OPERATING EXPENSES
Administrative expenses 309 309 1,809 5,766
OPERATING (LOSS) (309) (309) (1,809) (5,766)
OTHER INCOME (EXPENSES)
INCOME (LOSS) BEFORE PROVISION
FOR FEDERAL INCOME TAX (309) (309) (1,809) (5,766)
PROVISION FOR FEDERAL INCOME TAX -- -- -- --
NET INCOME (LOSS) $(309) $(309) $(1,809) $(5,766)
EARNINGS (LOSS) PER SHARE NIL NIL NIL NIL
The accompanying notes are an integral part of these financial statements
<PAGE>
ADVEN, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Inception (August 22, 1986) through September 30, 1996
(Unaudited)
Total
Retained Stockholders
Common Stock Paid - In Earnings Equity
Shares Amount Ca~ital (Deficit) (Deficit~
Stock issued for
cash at $.0064 2,500,000 $ 250 $ 15,750 $ 16,000
Net (loss) for 1986 __________ _______ ________ (61) (61)
Balances, December
31, 1986 2,500,000 250 15,750 (61) 15,939
Stock issued for
cash at $.03 5,000,000 500 149,500 150,000
Costs of stock
offering (55,258) (55,258)
Stock issued for
all of the out-
standing capital
stock of Surface
Technologies,Inc. 21,500,000 2,150 137,850 (149,941) (9,941)
Stock issued for
services at
$10001 1,200,000 120 120
Net (loss) for 1987 __________ _______ ________ (137,539) (137,539)
Balances, December
31, 1987 30,200,000 3,020 247,842 (287,541) (36,679)
Stock issued for
services 5,000,000 500 500
Net (loss) for 1988 __________ _______ ________ (12.906) (12.906)
Balances, December
31, 1988 35,200,000 3,520 247,842 (300,447) (49,085)
Net (loss) for 1989 __________ _______ ________ (69,516) (69,516)
Balances, December
31, 1989 35,200,000 3,520 247,842 (369,963) (118,601)
Stock issued for
cash at
$.0009375 4,800,000 480 4,020 4,500
Effect of sale of
all interest in
Surface Technologies,
Inc1 (note 4) (137,850) 308,305 170,455
Net (loss) for 1990 (56,308) (56,308)
Effect of reverse
stock split of
25 to 1 (38.400.000) (3,840) 3,840 ________ _______
Balances, December
31, 1990 1,600,000 160 117,852 (117,966) 46
Net (loss) for 1991 __________ ______ _______ (592) (592)
Balances, December
31, 1991 1,600,000 160 117,852 (118,558) (546)
Net (loss) for 1992 __________ ______ _______ (415) (415)
Balances, December
31, 1992 1,600,000 160 117,852 (118,973) (961)
The accompanying notes are an integral part of these financial statements
<PAGE>
ADVEN, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
Inception (August 22, 1986) through September 30, 1996
(Unaudited)
Retained Total
Common Stock Paid-in Earnings Stockholders'
Balances, December Sbares Amount Capital (Deficit) Eqiuity
31, 1992 1,600,000 160 117,852 (118,973) (961)
Net (1oss) for 1993 (7,824) (7,824)
Effect of Reverse
stock split of 4
to 1 on 12-31-93 (1,999,999) (120) 120 ________ ________
Balances, December
31, 1993 400,001 40 117,972 (126,797) (9,785)
Sale of common
stock 1,240,000 124 51,876 52,000
Net (1oss) for 1994 _________ _______ _______ (28,907) (28,907)
Balances, December,
31, 1994 1,640,001 164 169,848 (155,704) 14,308
Net (loss) for 1995 _________ _______ _______ (6,416) (6,416)
Balances, December
31, 1995 1,640,001 164 169,848 (162,120) 7,892
Net (loss) for the
nine months ended
September 30, 1996 _________ _______ _______ (1,809) (1,809)
Balances, September
30, 1996 1,640,00l $164 $169,848 $163,929 6,083
The accompanying notes are an integral part of these financial statements
<PAGE>
ADVEN, INC.
STATEMENT OF CASH FLOWS
for the six months ended June 30, 1996 and 1995
(Unaudited)
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (1,809) $ (5,766)
Adjustable to reconcile net income
(loss) to net cash provided (used)
by operating activities.
Increase (decrease) in accounts and
loans payable (400) (1,286)
Net Cash Provided (used) in
operating activities (2,209) (7,052)
CASH FLOWS FROM INVESTING ACTIVITIES -- --
CASH FLOWS FROM FINANCING ACTIVITIES -- --
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,209) (7,052)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 15,635 23,187
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 13,426 $ 16,135
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ -- $ --
Income taxes $ -- $ --
For purposes of this statement short term investments which have an initial
maturity of ninety days or less are considered cash eqivalents.
The accompanying notes are an integral part of these financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization: The Company was incorporated in the State of Washington on
August 22, 1986. In 1987 the Company entered into an agreement to exchange
21,500,000 shares of unregistered, restricted common stock of the Company
for all outstanding capital stock of Surface Technologies, Inc., which
became a wholly owned subsidiary of the Company until December 28, 1990.
On that date the Company exchanged 100% of its interest in Surface
Technologies, Inc. to Forsell Investors Limited Partnership (a related
party) in full satisfaction of all amounts owed by the Company to the
partnership.
Accounting Method: The Company uses the accrual method of accounting for
revenues and expenses.
2 - PUBLIC OFFERING
The Company registered 15,000,000 of its common stock shares with the
Securities and Exchange Commission and made an initial public offering of
5,000,000 shares at $.03 per share in 1987.
3 - CAPITALIZATION
The Company approved a 25 to 1 reverse stock split on December 28, 1990
which reduced the number of authorized shares from 100,000,000 to 4,000,000
and reduced the amount of issued and outstanding shares from 40,000,000 to
1,600,000 shares. Immediately after the reverse stock split the Company
approved an increase in the authorized common stock to 50,000,000 shares.
On December 29, 1993 the Company approved a 4 to I reverse split which
reduced the number of authorized shares from 50,000,000 to 12,500,000 and
reduced the amount of issued and outstanding shares from 1,600,000 to
400,000 shares. Immediately after the reverse stock split the Company
approved an increase in the authorized common stock to 20,000,000 shares.
4 - CONSOLIDATION
In 1987, the Company entered into an agreement to exchange 21,500,000
shares of stock for all of the outstanding capital stock of Surface
Technologies, Ince The consolidation was accounted for using the purchase
method of accounting. Where the ownership and operating control in the
combined entity reside in the shareholders of the acquired corporations,
generally accepted accounting principles require that the acquired
corporation be treated as the purchaser for accounting purposes.
Accordingly, the statement of changes in stockholders' equity includes an
adjustment in 1987 to record the additional paid-in capital and retained
earnings deficit of Surface Technologies, Inc. in the amount of $137,850
and $(149,941) respectively. Similarly, there is an adjustment in 1990 to
remove the additional paid in capital and retained earnings deficit of
Surface Technologies, Inc. in the amount of $(137,850) and $308,305
respectively upon the disposition of all interest in Surface Technologies,
Inc. stock as of December 28, 1990.
<PAGE>
ADVEN, INC.
NOTES TO FINANCIAL STATEMENTS
5 - RELATED PARTY TRANSACTIONS
Forsell Investors Limited Partnership (FILP) is a limited partnership
controlled by Richard Forsell, a shareholder and past president of Adven,
Inc. FILP loaned $50,000 to the Company in December 1988. No interest
payments had been made on the loan and by November 1990 there was in excess
of $13,000 accrued interest in arrearse FILP gave written notice of
default on the loan in 1990. FILP agreed to purchase 100% of the stock in
Surface Technologies, Inc. (A wholly owned subsidiary acquired in 1987.
See note 4) in full satisfaction of its $50,000 loan and all accrued
intereste Surface Technologies, Inc. had sustained repeated losses,
warranty work problems, and excessive debt which obviated any reasonable
prospect for Adven, Ince to acquire the funds from the subsidiary to
service the debt owned to FILP.
In conjunction with the sale of all interest in Surface Technologies, Inc.,
Richard Forsell agreed to purchase 4,800,000 shares of stock in 1990 (prior
to the reverse stock split of 25 to 1) for $4,500 to provide funds to pay
Adven's outstanding bills as of December 1990. The result of these
transactions was to eliminate virtually all assets and liabilities from
Adven, Ince which would facilitate the search for a merger candidate to
place in the public shell and thereby create value for the shareholders.
6 - FEDERAL INCOME TAXES
Effective as of January 1, 1990 the Corporation adopted Statement of
Financial Accounting Standards ("SFAS") No. 109 Accounting for Income Taxes
which establishes generally accepted accounting principles for the
financial accounting measurement and disclosure principles for income taxes
that are payable or refundable for the current year and for the future tax
consequences of events that have been recognized in the financial
statements of the Corporation and past and current tax returns. The change
had no effect on prior years results. There are no material timing
differences which would produce a deferred tax liability or asset.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
6 FEDERAL INCOME TAXES (continued)
The following net operating loss carryforeards as of March 31, 1996 will
expire if not applied by the dates scheduled below:
Year ending March 31, Net Operating Loss
2001 $ 61
2002 21,829
2003 21,740
2004 5,628
2005 4,571
2006 592
2007 415
2008 7,824
2009 28,907
2010 6,4l6
$97,983
7 EARNINGS PER SHARE
Earnings per share have been restated for 1993 to give effect of the 4
to 1 reverse stock split occurring on 12-31-93.
8 - UNCERTAINTIES
During the years presented in the financial statements, the Coppany has
sustained recurring losses, and the source of the Company's operating
income was disposed in the sale of all interest in Surface Technologies,
Inc. in 1990. As a result of this sale in 1990 the Company was reduced
to a public "shell" with virtually no assets, or operations.
The Company has been searching for a merger candidate in order to
acquire an operating Company. Managemnt is actively pursuing debt and
equity financing sources. However, there can be no assurance of the
success of these efforts.
<PAGE>
Item 2. Managements' Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
For more than the past four years, the Company has had no assets. In
1994, the Company raised $12,000 from the sale of 1,200,000 shares to Henri
Hornby and a company owned by Mr. Hornby, and $40,000 from a private placement
in November of 1994. Within the past three years, operation expenses have
been paid from the above mentioned sale of stock and the proceeds of two
loans: one non-interest bearing loan received on February 24, 1993 from an
unaffiliated party in the amount of $4,125, payable on demand; and one loan
made on July 8, 1994 by Henri Hornby in the amount of $3,000, which has
since been paid in full.
The Company believes that it will require an additional $25,000 to $100,000
to cover the costs (primarily legal and accounting) of meeting its reporting
obligations under the Exchange Act and effectuation an Acquisition. The
Company hopes to borrow such funds and/or raise such funds through the private
sale of its common stock. No assurance can be given that such financing will
be available, or that it can be obtained on terms satisfactory to the Company.
The foregoing estimate of necessary funding does not take into account the
funding requirements of any acquisition candidate. If an acquisition candidate
requires funding, it is possible that a condition to the consummation of an
Acquisition will be the raising of funds by the Company in a private offering
of its securities.
Results of Operations
The Company has had no revenues for the past three fiscal years, and does
not anticipate having revenues unless and until the Company acquires a business
or company. Aside from the cost of filing this Registration Statement, the
Company's expenses are minimal and administrative. For the years ended
December 31, 1995 and 1994 and the three months ended September 30, 1996 and
1995,the Company had net losses of $6,416, $28,907, $309, and $309
respectively.
The Company has had no substantive operations. Aside form preparing and
filing this Registration Statement, the Company, through its President and
majority stockholder, Henri Hornby, plans to seek and investigate a potential
business venture for the Company. Mr. Hornby will be doing this on a
part-time basis, devoting approximately 10% to 25% of his time to the Company.
Aside from the search for an Acquisition candidate, the Company's only other
anticipated activity will be complying with ;the reporting requirements under
the Exchange Act. If and when Mr. Hornby finds an Acquisition candidate and
the parties agree to go forward with an Acquisition Agreement and consummate
the Acquisition. Such activity will also require the filing of a Current
Report on Form 8-K with the Securities and Exchange Commission.
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings.
NONE.
Item 2. Changes in Securities.
NONE.
Item 3. Defaults upon Senior Securities.
NONE
Item 4. Submission of matters to Vote of Security Holders.
NONE.
Item 5. Other Information
NONE.
Item 6. Exhibits and Reports on Form 8-K
NONE.
<PAGE>
SIGNATURES
November 13, 1996
In accordance with requirements of the Securities Exchange Act of 1934, the
Registrant caused this Report to be signed on its behalf by the Undersigned,
thereunto duly authorized.
ADVEN, INC.
Registrant
Henri Hornby
Henri Hornby
President / Director
Neil F. Hornby
Neil F. Hornby
Secretary / Treasurer / Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 13,426
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13,426
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,426
<CURRENT-LIABILITIES> 7,343
<BONDS> 0
0
0
<COMMON> 1,640,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,426
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
