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 March 31, 1997
___ 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 March 31, 1997 was 5,469,667.
<PAGE>
PART I - FINANCIAL INFORMATION
The financial statements of the Registrant included herein have been
prepared, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Although 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 statement of the results for the interim periods.
The results for interim periods are not necessarily indicative of trends or
of results to be expected for a full year.
<PAGE>
ADVEN, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
ASSETS
March 31, Dec 31,
1997 1996
CURRENT ASSETS
Cash $ 512,112 13,391
OTHER ASSETS
Supply and Licensed Manufacturing
Agreement 1,206,250
TOTAL ASSETS $1,718,362 $13,391
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 8,507 $3,218
License agreement payable 500,000
Loan payable-non related party 4,125 4,125
Total Current Liabilities $512,632 $7,343
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value,
20,000,000, shares authorized,
5,469,667 and 1,640,001 issued 547 164
Perferred stock, $.001 par value
20,000,000 shares authorized, -0-
shares issued
Additional paid-in capital 1,377,715 169,848
Accumulated (Deficit) (172,532) (163,964)
Total Stockholders' Equity 1,205,730 6,408
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,718,362 $13,391
The accompanying notes are an integral part of these financial statements
<PAGE>
ADVEN, INC.
STATEMENT OF OPERATIONS
for the three months ended March 31, 1997 and 1996
1997 1996
REVENUES $ -- $
OPERATING EXPENSES
Administrative expenses 8,568 1,500
8,568 1,500
OPERATING (LOSS) (8,568) (1,500)
OTHER INCOME (EXPENSES)
INCOME (LOSS) BEFORE PROVISION
FOR FEDERAL INCOME TAX (8,568) (1,500)
PROVISION FOR FEDERAL INCOME TAX
NET INCOME (LOSS) $ (8,568) $ (1,500)
EARNINGS (LOSS) PER SHARE $ 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 March 31, 1997
Retained Total
Common Stock Paid - In Earnings Stockholders
Shares Amount Capital (Deficit) Equity
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
$.0001 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,
Inc. (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 STOCKHOLDERS' EQUITY-Continued
Inception (August 22, 1986) through March 31, 1997
Retained Total
Common Stock Paid - In Earnings Stockholders
Shares Amount Capital (Deficit) Equity
Balances, December
31,1992 1,600,000 160 117,852 (118,973) (961)
Net (loss) 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) (8,785)
Sale of common
stock 1,240,000 124 51,876 52,000
Net (loss) 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 1996 (1,844) (1,844)
Balances, December
31,1996 1,640,001 164 169,848 (163,964) 6,084
Sale of common st 2,666,666 267 999,733 1,000,000
Finders fee paid
by issuing common
stock 533,000 53 199,822 199,875
Finders fee charged
to paid-in capital (199,875) (199,875)
Payment on license
agreement by
issuing common
stock 550,000 55 206,195 206,250
Payment of legal fee
by issuing stock 80,000 8 1,992 2,000
Net (loss) for the
three months ended
March 31, 1997 (8,568) (8,568)
Balances, March, 31
1997 5,469,667 $547 $1,377,715 $172,532 $1,205,730
The accompanying notes are an integral part of these financial statements
<PAGE>
ADVEN, INC.
STATEMENT OF CASH FLOWS
for the three months ended March 31, 1997 and 1996
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (8,568) $ (1,500)
Adjustments to reconcile net income
to net cash provided (used)
by operating activities:
Payment of legal fees by issuing
common stock 2,000
Increase (decrease) in accounts payable (5,289) (400)
Net Cash Provided (used) in
Operating Activities (1,279) (1,900)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment on license agreement (500,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 1,000,000 --
NET INCREASE (DECREASE) IN CASH 498,721 (1,900)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 13,391 15,635
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 512,112 $13,735
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 equivalents.
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES
Legal fees for $2,000 were paid by issueing 80,000 shares of common stock.
A finder fee of $199,875 was paid by issuing 533,,OOO shares of common
stock.
Partial payment of the license agreement was made by issuing 550,000 shares
of common stock valued at $206,250.
The accompanying notes are an integral part of these financial statements
<PAGE>
ADVEN, INC.
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
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 1 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,
Inc. 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 arrears. 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 interest. Surface Technologies, Inc. had sustained repeated
losses, warranty work problems, and excessive debt which obviated any
reasonable prospect for Adven, Inc. 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, Inc. 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 (IISFAS'l) 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>
ADVEN, INC.
NOTES TO FINANCIAL STATEMENTS
6 - FEDERAL INCOME TAXES (continued)
The following net operating loss carry forwards as of December 31, 1994 will
expire if not applied by the dates scheduled below:
Year ending December 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 6,416
2011 1,844
$99,827
7 - UNCERTAINTIES
During the years presented in the financial statements, the Company 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 operations.
8 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial Accounting Standards Board ("FASBII) Statement No. 107 "Disclosure
about Fair Value of Financial Instruments," is a part of a continuing process
by the FASB to improve information on financial instruments. The following
methods and assumptions were used by the Company in estimating its fair
value disclosures for such financial instruments as defined by the Statement.
Cash: The carrying amount reported in the balance sheet for cash
approximates fair value.
Accounts Payable: The carrying amount reported in the balance sheet for
payables approximates fair value because the maturity is less than one
year in duration.
<PAGE>
ADVEN, INC.
NOTES TO FINANCIAL STATEMENTS
9 - SALES OF EQUITY SECURITIES PURSUANT TO REGULATIONS
On March 13, 1997, the Company sold an aggregate of 2,666,666 shares of its
Common Stock to a foreign company for an aggregate of $1,000,000. The
issued an aggregate of 533,000 shares to another foreign entity as finders
fee related to the aforementioned $1,000,000 sale.
All of the foregoing shares were issued to entities that are not "U.S.
persons" as that term is defined under Regulation S and were issued pursuant
to the exemption from registration provided be Regulation S.
10 - SUPPLY AND LICENSED MANUFACTURING AGREEMENT
On March 17, 1997 the Company entered into a supply and licensed
manufacturing agreement with DIS International, Inc., a Barbados Corporation.
Pursuant to the agreement the Company received the exclusive right to
formulate, manufacture, sell, distribute, and put into use an oil absorbent
urethane foam in Australia and New Zealand.
As consideration for the agreement, the Company paid $500,000 cash and is
obligated to pay an additional $500,000 cash within six months. The Company
also issued 550,000 shares of restricted common stock valued at $206,250.
<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 June 30, 1996 and 1995,
the Company had net losses of $6,416 , $28,907, $NIL, and $3,486
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.
On March 13, 1997, the Company sold an aggregate of 2,666,666 shares of
its Common Stock to a Vanutu International Trust Co. LTD for an
aggregate of $1,000,000. The Company issued an aggregate of 533,000
shares to Kennington Investment Ltd., and an aggregate of 550,000 shares
to DIS International Inc., both amounts were issued to these entities
as finders fee related to the aforementioned $1,000,000. All three of
these share issuances were filed with the SEC using the Edgar electronic
filing system and are incorporated by reference to such filings.
In addition, on January 15, 1997, 80,000 share of the Companies Common
Stock was issued and registered to John B. Lowy, in the form of an S-8
filing made with the SEC. (See Item 6. below.)
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
The Company filed an 8-K March 31, 1997, on the SEC Edgar Filing system,
which is incorporated by reference to such a filing.
<PAGE>
SIGNATURES
AUGUST 12, 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>
